Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2020 | May 13, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Entity Registrant Name | Pioneer Bancorp, Inc./MD | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 25,977,679 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001769663 | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONSOLIDATED STATEMENTS OF COND
CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Assets | ||
Cash and due from banks | $ 22,890 | $ 48,385 |
Federal funds sold | 4,006 | 2,083 |
Interest-earning deposits with banks | 163,305 | 179,641 |
Cash and cash equivalents | 190,201 | 230,109 |
Securities available for sale | 73,631 | 91,735 |
Securities held to maturity (fair value of $4,182 at March 31, 2020; and $3,887 at June 30, 2019) | 4,139 | 3,873 |
Equity securities | 2,884 | 3,618 |
Federal Home Loan Bank of New York stock | 1,824 | 924 |
Net loans receivable | 1,101,997 | 1,053,938 |
Accrued interest receivable | 4,026 | 4,374 |
Premises and equipment, net | 41,332 | 41,710 |
Bank-owned life insurance | 17,229 | 17,834 |
Goodwill | 7,292 | 7,292 |
Other intangible assets, net | 2,250 | 2,523 |
Other assets | 52,909 | 22,062 |
Total assets | 1,499,714 | 1,479,992 |
Deposits: | ||
Non-interest bearing deposits | 369,085 | 357,523 |
Interest bearing deposits | 868,590 | 973,795 |
Total deposits | 1,237,675 | 1,331,318 |
Mortgagors’ escrow deposits | 3,705 | 6,044 |
Borrowings from Federal Home Loan Bank of New York | 20,000 | |
Other liabilities | 9,802 | 7,665 |
Total liabilities | 1,271,182 | 1,345,027 |
Shareholders' Equity | ||
Preferred stock ($0.01 par value, 5,000,000 shares authorized, no shares issued or outstanding as of March 31, 2020) | ||
Common stock ($0.01 par value, 75,000,000 shares authorized, 25,977,679 shares issued and outstanding as of March 31, 2020) | 260 | |
Additional paid in capital | 114,015 | |
Retained earnings | 138,973 | 146,068 |
Unallocated common stock of Employee Stock Ownership Plan ("ESOP") | (12,791) | |
Accumulated other comprehensive loss | (11,925) | (11,103) |
Total shareholders' equity | 228,532 | 134,965 |
Total liabilities and shareholders' equity | $ 1,499,714 | $ 1,479,992 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) $ in Thousands | Mar. 31, 2020USD ($)$ / sharesshares |
CONSOLIDATED STATEMENTS OF CONDITION | |
Securities held to maturity, fair value | $ | $ 4,182 |
Preferred stock, par value (dollars per share) | $ / shares | $ 0.01 |
Preferred stock, authorized shares | 5,000,000 |
Preferred stock, issued shares | 0 |
Preferred stock, outstanding shares | 0 |
Common stock, par value (dollars per share) | $ / shares | $ 0.01 |
Common stock, authorized shares | 75,000,000 |
Common stock, issued shares | 25,977,679 |
Common stock, outstanding shares | 25,977,679 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Interest and dividend income: | ||||
Loans | $ 12,282 | $ 12,438 | $ 38,122 | $ 36,899 |
Securities | 518 | 649 | 1,715 | 1,918 |
Interest-earning deposits with banks and other | 488 | 512 | 1,866 | 1,115 |
Total interest and dividend income | 13,288 | 13,599 | 41,703 | 39,932 |
Interest expense: | ||||
Deposits | 1,213 | 1,082 | 3,761 | 2,986 |
Borrowings and other | 22 | 57 | 77 | 207 |
Total interest expense | 1,235 | 1,139 | 3,838 | 3,193 |
Net interest income | 12,053 | 12,460 | 37,865 | 36,739 |
Provision for loan losses | 2,550 | 570 | 20,440 | 1,780 |
Net interest income after provision for loan losses | 9,503 | 11,890 | 17,425 | 34,959 |
Noninterest income: | ||||
Bank fees and service charges | 1,718 | 2,232 | 6,730 | 5,969 |
Insurance and wealth management services | 1,809 | 1,568 | 5,233 | 4,850 |
Net loss on equity securities | (1,017) | (735) | ||
Net gain on available for sale securities transactions | 83 | 134 | ||
Net loss on disposal of assets | (7) | (27) | (28) | (575) |
Bank-owned life insurance | 10 | 30 | 537 | 95 |
Other | 69 | 169 | 200 | 203 |
Total noninterest income | 2,665 | 3,972 | 12,071 | 10,542 |
Noninterest expense: | ||||
Salaries and employee benefits | 6,213 | 5,741 | 18,764 | 16,731 |
Net occupancy and equipment | 1,559 | 1,522 | 4,597 | 4,456 |
Data processing | 829 | 734 | 2,374 | 2,182 |
Advertising and marketing | 162 | 282 | 551 | 720 |
FDIC insurance premiums | 119 | 196 | (8) | 551 |
Contribution to Pioneer Bank Charitable Foundation | 5,446 | |||
Fraudulent activity | 2,500 | |||
Professional fees | 966 | 81 | 2,864 | 268 |
Other | 1,260 | 1,090 | 3,888 | 3,245 |
Total noninterest expense | 11,108 | 9,646 | 40,976 | 28,153 |
Income (loss) before income taxes | 1,060 | 6,216 | (11,480) | 17,348 |
Income tax (benefit) expense | 211 | 1,437 | (3,495) | 3,326 |
Net income (loss) | $ 849 | $ 4,779 | $ (7,985) | $ 14,022 |
Income (Loss) per common share: | ||||
Basic | $ 0.03 | $ (0.32) | ||
Diluted | $ 0.03 | $ (0.32) | ||
Weighted average shares outstanding - basic and diluted | 25,016,634 | 25,006,027 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income (loss) | $ 849 | $ 4,779 | $ (7,985) | $ 14,022 |
Unrealized gains/losses on securities: | ||||
Unrealized holding (losses) gains arising during the period | (558) | 799 | (169) | (436) |
Reclassification adjustment for gains included in net income | (83) | (134) | ||
Unrealized losses/gains on securities, before tax | (641) | 799 | (303) | (436) |
Tax (benefit) expense | (168) | 209 | (80) | (114) |
Unrealized losses/gains on securities, net of tax | (473) | 590 | (223) | (322) |
Total other comprehensive (loss) income | (473) | 590 | (223) | (322) |
Comprehensive income (loss) | $ 376 | $ 5,369 | $ (8,208) | $ 13,700 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN NET WORTH AND SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common StockMutual Holding Company | Common StockInitial Public Offering | Common Stock | Additional Paid-in CapitalInitial Public Offering | Additional Paid-in Capital | Surplus | Undivided Profits | Retained Earnings | Unallocated Common Stock of ESOP | Accumulated Other Comprehensive Loss | Mutual Holding Company | Initial Public Offering | Total |
Balance at beginning of period at Jun. 30, 2018 | $ 10,658 | $ 116,394 | $ (8,989) | $ 118,063 | |||||||||
Increase (Decrease) in Shareholder's Equity | |||||||||||||
Net income (loss) | 4,443 | 4,443 | |||||||||||
Other comprehensive income (loss) | (82) | (82) | |||||||||||
Balance at end of period at Sep. 30, 2018 | 10,658 | 120,837 | (9,071) | 122,424 | |||||||||
Balance at beginning of period at Jun. 30, 2018 | 10,658 | 116,394 | (8,989) | 118,063 | |||||||||
Increase (Decrease) in Shareholder's Equity | |||||||||||||
Net income (loss) | 14,022 | ||||||||||||
Other comprehensive income (loss) | (322) | ||||||||||||
Balance at end of period at Mar. 31, 2019 | 10,658 | 130,416 | (9,311) | 131,763 | |||||||||
Balance at beginning of period at Sep. 30, 2018 | 10,658 | 120,837 | (9,071) | 122,424 | |||||||||
Increase (Decrease) in Shareholder's Equity | |||||||||||||
Net income (loss) | 4,800 | 4,800 | |||||||||||
Other comprehensive income (loss) | (830) | (830) | |||||||||||
Balance at end of period at Dec. 31, 2018 | 10,658 | 125,637 | (9,901) | 126,394 | |||||||||
Increase (Decrease) in Shareholder's Equity | |||||||||||||
Net income (loss) | 4,779 | 4,779 | |||||||||||
Other comprehensive income (loss) | 590 | 590 | |||||||||||
Balance at end of period at Mar. 31, 2019 | $ 10,658 | $ 130,416 | (9,311) | 131,763 | |||||||||
Balance at beginning of period at Jun. 30, 2019 | $ 146,068 | (11,103) | 134,965 | ||||||||||
Increase (Decrease) in Shareholder's Equity | |||||||||||||
Cumulative effect of change in accounting principle | ASU 2014-09 | 291 | 291 | |||||||||||
Cumulative effect of change in accounting principle | ASU 2016-01 | 599 | (599) | |||||||||||
Net income (loss) | (12,684) | (12,684) | |||||||||||
Other comprehensive income (loss) | 241 | 241 | |||||||||||
Issuance of common stock | $ 143 | $ 112 | $ 108,800 | $ 143 | $ 108,912 | ||||||||
Issuance of common stock (in shares) | 14,287,723 | 11,170,402 | |||||||||||
Issuance of common stock to the Pioneer Bank Charitable Foundation | $ 5 | $ 5,191 | 5,196 | ||||||||||
Issuance of common stock to the Pioneer Bank Charitable Foundation (in shares) | 519,554 | ||||||||||||
Purchase of common stock by the ESOP (1,018,325 shares) | $ (13,644) | (13,644) | |||||||||||
ESOP shares committed to be released (25,458 shares) | 16 | 341 | 357 | ||||||||||
Balance at end of period at Sep. 30, 2019 | $ 260 | 114,007 | 134,274 | (13,303) | (11,461) | 223,777 | |||||||
Balance at end of period (in shares) at Sep. 30, 2019 | 25,977,679 | ||||||||||||
Balance at beginning of period at Jun. 30, 2019 | 146,068 | (11,103) | 134,965 | ||||||||||
Increase (Decrease) in Shareholder's Equity | |||||||||||||
Net income (loss) | (7,985) | ||||||||||||
Other comprehensive income (loss) | (223) | ||||||||||||
Balance at end of period at Mar. 31, 2020 | $ 260 | 114,015 | 138,973 | (12,791) | (11,925) | $ 228,532 | |||||||
Balance at end of period (in shares) at Mar. 31, 2020 | 25,977,679 | 25,977,679 | |||||||||||
Balance at beginning of period at Sep. 30, 2019 | $ 260 | 114,007 | 134,274 | (13,303) | (11,461) | $ 223,777 | |||||||
Balance at beginning of period (in shares) at Sep. 30, 2019 | 25,977,679 | ||||||||||||
Increase (Decrease) in Shareholder's Equity | |||||||||||||
Net income (loss) | 3,850 | 3,850 | |||||||||||
Other comprehensive income (loss) | 9 | 9 | |||||||||||
ESOP shares committed to be released (25,458 shares) | 5 | 341 | 346 | ||||||||||
Balance at end of period at Dec. 31, 2019 | $ 260 | 114,012 | 138,124 | (12,962) | (11,452) | 227,982 | |||||||
Balance at end of period (in shares) at Dec. 31, 2019 | 25,977,679 | ||||||||||||
Increase (Decrease) in Shareholder's Equity | |||||||||||||
Net income (loss) | 849 | 849 | |||||||||||
Other comprehensive income (loss) | (473) | (473) | |||||||||||
ESOP shares committed to be released (25,458 shares) | 3 | 171 | 174 | ||||||||||
Balance at end of period at Mar. 31, 2020 | $ 260 | $ 114,015 | $ 138,973 | $ (12,791) | $ (11,925) | $ 228,532 | |||||||
Balance at end of period (in shares) at Mar. 31, 2020 | 25,977,679 | 25,977,679 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN NET WORTH AND SHAREHOLDERS' EQUITY (Parenthetical) - shares | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF CHANGES IN NET WORTH AND SHAREHOLDERS’ EQUITY | |||
Purchase of common stock by ESOP (in shares) | (1,018,325) | ||
ESOP shares committed to be released (in shares) | (12,729) | (25,458) | (25,458) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (7,985) | $ 14,022 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 2,172 | 2,101 |
Provision for loan losses | 20,440 | 1,780 |
Net accretion on securities | (305) | (400) |
ESOP compensation | 877 | |
Earnings on bank-owned life insurance | (537) | (95) |
Proceeds from sale of loans | 227 | |
Net loss on the sale, disposal or write-down of premises and equipment, and other real estate owned | 28 | 575 |
Net loss on equity securities | 735 | |
Net gain on available for sale securities transactions | (134) | |
Deferred tax (benefit) expense | (1,526) | 173 |
Decrease (increase) in accrued interest receivable | 348 | (421) |
Stock contribution to Pioneer Bank Charitable Foundation | 5,196 | |
Increase in other assets | (28,850) | (6,072) |
Increase (decrease) in other liabilities | 2,138 | (3,963) |
Net cash (used in) provided by operating activities | (7,403) | 7,927 |
Cash flows from investing activities: | ||
Proceeds from maturities, paydowns and calls of securities available for sale | 56,088 | 43,589 |
Proceeds from sales of securities available for sale | 5,030 | 0 |
Purchases of securities available for sale | (42,878) | (49,725) |
Proceeds from maturities and paydowns of securities held to maturity | 3,296 | 4,553 |
Purchases of securities held to maturity | (3,562) | (3,378) |
Net purchases of FHLBNY stock | (900) | |
Net increase in loans receivable | (68,760) | (56,925) |
Purchases of premises and equipment | (1,528) | (1,791) |
Proceeds from sale of premises and equipment, and other real estate owned | 138 | 578 |
Proceeds from bank-owned life insurance death benefit | 1,142 | |
Net cash used in investing activities | (51,934) | (63,099) |
Cash flows from financing activities: | ||
Net (decrease) increase in deposits | (93,643) | 93,579 |
Net decrease in mortgagors’ escrow deposits | (2,339) | (1,901) |
Net increase in borrowings from FHLBNY | 20,000 | |
Issuance of common stock | 109,055 | |
Purchase of shares by the ESOP | (13,644) | |
Net cash provided by financing activities | 19,429 | 91,678 |
Net (decrease) increase in cash and cash equivalents | (39,908) | 36,506 |
Cash and cash equivalents at beginning of period | 230,109 | 120,280 |
Cash and cash equivalents at end of period | 190,201 | 156,786 |
Cash paid during the period for: | ||
Interest | 3,818 | 3,189 |
Income taxes | 1,800 | 3,500 |
Non-cash investing and financing activity: | ||
Loans transferred to other real estate owned | $ 260 | $ 226 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. Nature of Operations and Principals of Consolidation Pioneer Bancorp, Inc. (the “Company”) is a mid-tier stock holding company whose wholly owned subsidiary is Pioneer Bank (the “Bank”). The Bank is a New York State chartered savings bank whose wholly owned subsidiaries are Pioneer Commercial Bank, Pioneer Financial Services, Inc., and Anchor Agency, Inc. The Company provides diversified financial services through the Bank and its subsidiaries, with 22 offices in the Capital Region of New York State. The Company, through its subsidiaries, offers a broad array of deposit, lending, and other financial services to individuals, businesses, and municipalities. There are no significant concentrations of loans to any one customer or industry. However, the customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the Bank’s market area. The consolidated financial statements include the accounts of the Company, the Bank, and the Bank’s wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Financial information for the periods before the Company’s mutual holding company reorganization and stock offering on July 17, 2019 are those of the Bank and its subsidiaries. The interim financial data as of March 31, 2020 and for the three and nine months ended March 31, 2020 and 2019, respectively, is unaudited and reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented in conformance with accounting principles generally accepted in the United States of America (“GAAP”). The results of operations for the three and nine months ended March 31, 2020 are not necessarily indicative of the results to be achieved for the remainder of fiscal 2020 or any other period. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s 2019 Annual Report on Form 10-K for the year ended June 30, 2019. Mutual Holding Company Reorganization and Minority Stock Issuance On July 17, 2019, Pioneer Bancorp, Inc. became the holding company of the Bank when it closed its stock offering in connection with the completion of the reorganization of the Bank into the two-tier mutual holding company form of organization. The Company sold 11,170,402 shares of common stock at a price of $10.00 per share, for net proceeds of $109.1 million, issued 14,287,723 shares to Pioneer Bancorp, MHC and contributed 519,554 shares of common stock and $250,000 in cash to the Pioneer Bank Charitable Foundation. The Company established an ESOP which owns 1,018,325 shares of common stock of the Company. The remaining amount of subscription proceeds received and recorded as a liability on June 30, 2019, was refunded to subscribers. Pioneer Bancorp, MHC now owns 55% of the common stock of the Company. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ substantially from those estimates. The allowance for loan losses, valuation of securities and other financial instruments, the funded status and expense of employee benefit plans, and the realizability of deferred tax assets are particularly subject to change. Reclassifications Amounts in the prior period’s consolidated financial statements are reclassified whenever necessary to conform to the current period’s presentation. Adoption of Recent Accounting Pronouncements On July 1, 2019, the Company adopted Accounting Standard Update (“ASU”) 2014-09 amending guidance on “Revenue from Contracts with Customers (Topic 606)” and all subsequent ASU’s that modified Topic 606. The objective of the ASU is to align the recognition of revenue with the transfer of promised goods or services provided to customers in an amount that reflects the consideration which the entity expects to be entitled in exchange for those goods or services. This ASU replaces most existing revenue recognition guidance under GAAP. A significant amount of the Company’s revenues are derived from net interest income on financial assets and liabilities, which are excluded from the scope of the amended guidance. With respect to noninterest income, the Company has identified revenue streams within the scope of the guidance, which include insurance revenues, wealth management services, service charges on deposits, interchange income, and gains (losses) from the transfer of other real estate owned. The Company recorded a net increase to beginning retained earnings of $291,000 as of July 1, 2019 due to the cumulative impact of adopting Topic 606, primarily driven by the recognition of insurance commission income. The adoption of Topic 606 did not have a significant impact on the Company’s consolidated financial statements as of and for the three and nine-month periods ended March 31, 2020. Refer to Note 10 for additional disclosures required by Topic 606. On July 1, 2019, the Company adopted ASU 2016-01 amending guidance on “Financial Instruments (Subtopic 825-10)”. This amendment addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. These amendments require equity securities to be measured at fair value with changes in the fair value to be recognized through net income. The amendments also simplify the impairment assessment of equity investments without readily determinable fair values by requiring assessment for impairment qualitatively at each reporting period. The Company evaluated its preferred stock holdings and concluded that the preferred stocks are not considered equity securities subject to ASU 2016-01. As of June 30, 2019, the Company had equity investments with a cost of $2.8 million and an estimated fair value of $3.6 million. On July 1, 2019, the Company recorded a cumulative-effect adjustment to increase retained earnings in the amount of $599,000 representing the unrealized gain, net of tax, on these equity securities. Changes in fair value during the three and nine-months ended March 31, 2020 have been recognized in net income (loss). On July 1, 2019, the Company adopted ASU 2016‑15 which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments are intended to reduce diversity in practice. The amendment covers the following cash flows: Cash payments for debt prepayment or extinguishment costs will be classified in financing activities. Upon settlement of zero-coupon bonds and bonds with insignificant cash coupons, the portion of the payment attributable to imputed interest will be classified as an operating activity, while the portion of the payment attributable to principal will be classified as a financing activity. Cash paid by an acquirer that is not soon after a business combination for the settlement of a contingent consideration liability will be separated between financing activities and operating activities. Cash payments up to the amount of the contingent consideration liability recognized at the acquisition date will be classified in financing activities; any excess will be classified in operating activities. Cash paid soon after the business combination will be classified in investing activities. Cash proceeds received from the settlement of insurance claims will be classified on the basis of the related insurance coverage (that is, the nature of the loss). Cash proceeds from lump-sum settlements will be classified based on the nature of each loss included in the settlement. Cash proceeds received from the settlement of corporate-owned life insurance (COLI) and bank-owned life insurance (BOLI) policies will be classified as cash inflows from investing activities. Cash payments for premiums on COLI and BOLI may be classified as cash outflows for investing, operating, or a combination of both. A transferor’s beneficial interest obtained in a securitization of financial assets will be disclosed as a noncash activity, and cash received from beneficial interests will be classified in investing activities. Distributions received from equity method investees will be classified using either a cumulative earnings approach or a look- through approach as an accounting policy election. The ASU contains additional guidance clarifying when an entity should separate cash receipts and cash payments and classify them into more than one class of cash flows (including when reasonable judgment is required to estimate and allocate cash flows) versus when an entity should classify the aggregate amount into one class of cash flows on the basis of predominance. The adoption of this guidance did not have a material impact on our consolidated results of operations or financial position. On July 1, 2019, the Company adopted ASU 2016‑18 related to guidance on “Statement of Cash Flows (Topic 230) Restricted Cash” which addresses diversity in practice from entities classifying and presenting transfers between cash and restricted cash as operating, investing or financing activities or as a combination of those activities in the statement of cash flows. The ASU requires entities to show the changes in the total cash, cash equivalents, restricted cash and restricted cash equivalents in the Statement of Cash Flows. As a result, transfers between such categories will no longer be presented in the Statement of Cash Flows. The adoption of this guidance did not have a material impact on our consolidated results of operations or financial position. On July 1, 2019, the Company adopted ASU 2017‑07 related to guidance on “Compensation - Retirement Benefits (Topic 715)” which improves the presentation of net periodic pension cost and net periodic postretirement benefit cost. ASU 2017‑07 requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The adoption of this guidance did not have a material impact on our consolidated results of operations or financial position. Impact of Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016‑02 to its guidance on “Leases (Topic 842)”. The new leases standard applies a right-of-use (ROU) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. For leases with a term of 12 months or less, a practical expedient is available whereby a lessee may elect, by class of underlying asset, not to recognize an ROU asset or lease liability. The new leases standard requires a lessor to classify leases as either sales-type, direct financing or operating, similar to existing U.S. GAAP. Classification depends on the same five criteria used by lessees plus certain additional factors. The subsequent accounting treatment for all three lease types is substantially equivalent to existing U.S. GAAP for sales-type leases, direct financing leases, and operating leases. However, the new standard updates certain aspects of the lessor accounting model to align it with the new lessee accounting model, as well as with the new revenue standard under Topic 606. Lessees and lessors are required to provide certain qualitative and quantitative disclosures to enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The amendments in ASU 2016‑02 are effective for the Company for the fiscal year beginning July 1, 2021. Early adoption is permitted. The adoption of this ASU will result in a gross up of the Consolidated Statements of Condition for right-of-use assets and associated lease liabilities for operating leases in which the Company is the lessee. In July 2018, the FASB issued ASU No. 2018‑10, Codification Improvements to Topic 842 - Leases to address certain narrow aspects of the guidance issued in ASU No. 2016‑02. In July 2018, the FASB issued ASU No. 2018‑11, Leases (Topic 842): Targeted Improvements, which amends FASB Accounting Standards Codification (ASC), Leases (Topic 842), to (1) add an optional transition method that would permit entities to apply the new requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption, and (2) provide a practical expedient for lessors regarding the separation of the lease and non-lease components of a contract. In December 2018, the FASB issued ASU No. 2018‑20, Narrow-Scope Improvements for Lessors, which addresses issues related to (1) sales tax and similar taxes collected from lessees, (2) certain lessor costs, and (3) recognition of variable payments for contracts with lease and non-lease components. The Company is evaluating the significance and other effects of adoption on the consolidated financial statements and related disclosures. The Company is performing its accounting analysis of its branch building and other leases underlying contracts. The Company is currently evaluating the potential impact on adoption of this ASU on our consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13 to its guidance on “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. ASU 2016‑13 requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using an expected credit loss model (referred to as the current expected credit loss (CECL) model). Under this model, entities will estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications unless reasonable expectation of a troubled debt restructuring exists) from the date of initial recognition of that instrument. The ASU also replaces the current accounting model for purchased credit impaired loans and debt securities. The allowance for credit losses for purchased financial assets with a more-than insignificant amount of credit deterioration since origination (“PCD assets”), should be determined in a similar manner to other financial assets measured on an amortized cost basis. However, upon initial recognition, the allowance for credit losses is added to the purchase price (“gross up approach”) to determine the initial amortized cost basis. The subsequent accounting for PCD financial assets is the same expected loss model described above. Further, the ASU made certain targeted amendments to the existing impairment model for available-for-sale (AFS) debt securities. For an AFS debt security for which there is neither the intent nor a more-likely-than-not requirement to sell, an entity will record credit losses as an allowance rather than a write-down of the amortized cost basis. The amendments in this ASU are effective for the Company for the fiscal year beginning July 1, 2023. An entity will apply the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). In November 2018, the FASB issued ASU 2018‑19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, which aligns the implementation date for nonpublic entities’ annual financial statements with the implementation date for their interim financial statements and clarifies the scope of the guidance in the amendments in ASU 2016‑13. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. ASU 2019-04 clarifies or addresses stakeholders’ specific issues about certain aspects of the amendments in Update 2016-13 related to measuring the allowance for loan losses under the new guidance. The effective dates and transition requirements for the amendments related to this Update are the same as the effective dates and transition requirements in Update 2016-13. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments Credit Losses clarifying certain amendments to various provisions of ASU No. 2016-13 relating to (1) purchased financial assets with credit deterioration, (2) financial assets secured by collateral maintenance agreements, (3) transition relief for troubled debt restructurings, and (4) disclosure relief when the practical expedient for accrued interest receivables is applied. The initial adjustment will not be reported in earnings and therefore will not have any material impact on our consolidated results of operations, but it is expected that it will have an impact on our consolidated financial position at the date of adoption of this ASU. At this time, we have not calculated the estimated impact that this ASU will have on our allowance for loan losses, however, we anticipate it will have a significant impact on the methodology process we utilize to calculate the allowance. Alternative methodologies are currently being considered. Data requirements and integrity are being reviewed and enhancements incorporated into standard processes. The Company is currently evaluating the potential impact on adoption of this ASU on our consolidated financial statements. In March 2017, the FASB issued ASU 2017‑08 to its guidance on “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310‑20) related to premium amortization on purchased callable debt securities. The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments in this ASU are effective for the Company for the fiscal year beginning July 1, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosure about a change in accounting principle. The adoption of this guidance is not expected to have a material impact on our consolidated results of operations or financial position. In August 2018, the FASB issued ASU 2018‑13 to its guidance on “Fair Value Measurement (Topic 820)”. This update modifies the disclosure requirements on fair value measurements. The following disclosure requirements were removed from Topic 820: (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (2) the policy for timing of transfers between levels; (3) the valuation processes for Level 3 fair value measurements; and (4) for nonpublic entities, the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period. The following disclosure requirements were modified in Topic 820: (1) in lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities; (2) for investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly; and (3) the amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. The following disclosure requirements were added to Topic 820; however, the disclosures are not required for nonpublic entities: (1) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and (2) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. In addition, the amendments eliminate at a minimum from the phrase “an entity shall disclose at a minimum” to promote the appropriate exercise of discretion by entities when considering fair value measurement disclosures and to clarify that materiality is an appropriate consideration of entities and their auditors when evaluating disclosure requirements. The amendments in ASU No. 2018‑13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU No. 2018‑13 and delay adoption of the additional disclosures until their effective date. The adoption of this guidance is not expected to have a material impact on our consolidated results of operations or financial position. In August 2018, the FASB has issued ASU 2018‑14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715‑20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans”, that applies to all employers that sponsor defined benefit pension or other postretirement plans. The amendments modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The following disclosure requirements were removed from Subtopic 715‑20: (1) the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year; (2) the amount and timing of plan assets expected to be returned to the employer; (3) the disclosures related to the June 2001 amendments to the Japanese Welfare Pension Insurance Law; related party disclosures about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan; (4) for nonpublic entities, the reconciliation of the opening balances to the closing balances of plan assets measured on a recurring basis in Level 3 of the fair value hierarchy. However, nonpublic entities will be required to disclose separately the amounts of transfers into and out of Level 3 of the fair value hierarchy and purchases of Level 3 plan assets; and (5) for public entities, the effects of a one-percentage-point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of net periodic benefit costs and (b) benefit obligation for postretirement health care benefits. The following disclosure requirements were added to Subtopic 715‑20: (1) the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates; and (2) an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The amendments also clarify the disclosure requirements in paragraph 715‑20‑50‑3, which state that the following information for defined benefit pension plans should be disclosed: (1) the projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets; and (2) the accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets. ASU No. 2018‑14 is effective for fiscal years ending after December 15, 2020, for public business entities and for fiscal years ending after December 15, 2021, for all other entities. Early adoption is permitted for all entities. The adoption of this guidance is not expected to have a material impact on our consolidated results of operations or financial position. In April 2019, the FASB issued an Update (ASU 2019-04), Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The amendments to Topic 326 and other Topics in this Update include items related to the amendments in Update 2016-13 discussed at the June 2018 and November 2018 Credit Losses TRG meetings. The amendments clarify or address stakeholders’ specific issues about certain aspects of the amendments in Update 2016-13 on a number of different topics, including the following: · Accrued Interest · Transfers between Classifications or Categories for Loans and Debt Securities · Recoveries · Consideration of Prepayments in Determining the Effective Interest Rate · Consideration of Estimated Costs to Sell When Foreclosure Is Probable · Vintage Disclosures— Line-of-Credit Arrangements Converted to Term Loans · Contractual Extensions and Renewals The ASU also covered a number of issues that related to hedge accounting including: · Partial-Term Fair Value Hedges of Interest Rate Risk · Amortization of Fair Value Hedge Basis Adjustments · Disclosure of Fair Value Hedge Basis Adjustments · Consideration of the Hedged Contractually Specified Interest Rate under the Hypothetical Derivative Method · Scoping for Not-for-Profit Entities · Hedge Accounting Provisions Applicable to Certain Private Companies and Not-for- Profit Entities · Application of a First- Payments-Received Cash Flow Hedging Technique to Overall Cash Flows on a Group of Variable Interest Payments · Transition Guidance For Codification Improvements specific to ASU 2016-01, the following topics were covered within ASU 2019-04: · Scope Clarifications · Held-to-Maturity Debt Securities Fair Value Disclosures · Applicability of Topic 820 to the Measurement Alternative · Remeasurement of Equity Securities at Historical Exchange Rates ASU 2019-04 has various implementation dates dependent on a number of factors as it pertains to the above items. In December 2019, the FASB issued ASU 2019-12, Income Taxes Topic 740. This update simplifies and improves accounting for income taxes by eliminating certain exceptions to the general rules and clarifying or amending other current guidance. The scope of FASB ASC Subtopic 740-10, Income Taxes -Overall, has been amended to require that, if a franchise (or similar tax) is partially based on income, (1) deferred tax assets and liabilities should be recognized and accounted for pursuant to FASB ASC 740, as should the amount of current tax expense that is based on income, and (2) any incremental amount incurred should be recorded as a non-income-based tax. Note that under the amended guidance, the effect of potentially paying a non-income-based tax in future years need not be considered in evaluating the realizability of deferred tax assets. The amendments in this ASU are effective for the Company for the fiscal year beginning July 1, 2022. Early adoption is permitted, including adoption in an interim period. If early adoption is elected, all of the amended guidance must be adopted in the same period. If early adoption is initially applied in an interim period, any adjustments should be reflected as of the beginning of the annual period that includes that interim period. The Company is currently evaluating the potential impact on adoption of this ASU on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments (1) apply to contract modifications that replace a reference rate affected by reference rate reform, (2) provide exceptions to existing guidance related to changes to the critical terms of a hedging relationship due to reference rate reform (3) provide optional expedients for fair value hedging relationships, cash flow hedging relationships, and net investment hedging relationships, and (4) provide a onetime election to sell, transfer, or both sell and transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform and that are classified as held to maturity before January 1, 2020. The amendments for contract modifications can be elected to be applied as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020. The amendments for existing hedging relationships can be elected to be applied as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company is currently evaluating the potential impact on adoption of this guidance on our consolidated financial statements. |
COVID-19 PANDEMIC
COVID-19 PANDEMIC | 9 Months Ended |
Mar. 31, 2020 | |
COVID-19 PANDEMIC | |
COVID-19 PANDEMIC | 2. In early January 2020, the World Health Organization issued an alert that a novel coronavirus outbreak was emanating from the Wuhan Province in China. Later in January, the first death related to the novel coronavirus, identified as Coronavirus Disease 2019 (“COVID-19”), occurred in the United States. Over the course of the next several weeks, the outbreak continued to spread to various regions of the World prompting the World Health Organization to declare COVID-19 a global pandemic on March 11, 2020. In the United States, the rapid spread of the COVID-19 virus invoked various Federal and State, including New York State, authorities to make emergency declarations and issue executive orders to limit the spread of the disease. Measures included restrictions on international and domestic travel, restrictions on business operations, limitations on public gatherings, implementation of social distancing protocols, school closings, orders to shelter in place and mandates to close all non-essential businesses to the public. These restrictions and other consequences of the pandemic have resulted in significant adverse effects for many different types of businesses and have resulted in a significant number of layoffs and furloughs of employees in the Company’s market area. The direct and indirect effects of the COVID-19 pandemic have resulted in dramatic reductions in the level of economic activity in the Company’s market area and have severely hampered the ability for businesses and consumers to meet their current repayment obligations. The Company’s third fiscal quarter of 2020 (the quarter ended March 31, 2020) results were adversely impacted by the effects of the pandemic, which contributed to an increase in the provision for loan losses, and the net loss on equity securities. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), in addition to providing financial assistance to both businesses and consumers, creates a forbearance program for federally-backed mortgage loans, protects borrowers from negative credit reporting due to loan accommodations related to the national emergency, and provides financial institutions the option to temporarily suspend certain requirements under GAAP related to troubled debt restructurings for a limited period of time to account for the effects of COVID-19. The Federal and New York State banking regulatory agencies have likewise issued guidance encouraging financial institutions to work prudently with borrowers who are, or may be, unable to meet their contractual payment obligations because of the effects of COVID-19. That guidance, with concurrence of the Financial Accounting Standards Board, and provisions of the CARES Act allow modifications made on a good faith basis in response to COVID-19 to borrowers who were generally current with their payments prior to any relief, to not be treated as troubled debt restructurings. Modifications may include payment deferrals, fee waivers, extensions of repayment term, or other delays in payment. The Company has begun working with its customers affected by COVID-19 and expects a significant amount of modifications across its loan portfolios in the near term. To the extent that such modifications meet the criteria previously described, such modifications are not expected to be classified as troubled debt restructurings. As a result of the spread of COVID-19, economic uncertainties have arisen which are likely to negatively impact the Company’s operational and financial performance. The extent of the impact of COVID-19 on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and impact on our customers, employees and vendors, all of which are uncertain and cannot be predicted. At this point, the extent to which COVID-19 may impact our future financial condition or results of operations is uncertain and not currently estimable, however the impact could be material. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 9 Months Ended |
Mar. 31, 2020 | |
INVESTMENT SECURITIES | |
INVESTMENT SECURITIES | 3. The amortized cost and estimated fair value of securities are as follows (dollars in thousands): March 31, 2020 Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value Securities available for sale: U.S. Government and agency obligations $ 61,915 $ 431 $ — $ 62,346 Mortgage-backed securities - residential 85 — — 85 Asset-backed securities 67 42 (4) 105 Collateralized mortgage obligations - residential 450 261 (56) 655 Municipal obligations 5,762 10 — 5,772 Total debt securities 68,279 744 (60) 68,963 Preferred stocks 6,007 21 (1,360) 4,668 Total available for sale securities $ 74,286 $ 765 $ (1,420) $ 73,631 Securities held to maturity: Municipal obligations $ 4,139 $ 43 $ — $ 4,182 June 30, 2019 Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value Securities available for sale: U.S. Government and agency obligations $ 70,706 $ 164 $ (3) $ 70,867 Mortgage-backed securities - residential 109 3 — 112 Asset-backed securities 75 55 (2) 128 Collateralized mortgage obligations - residential 525 401 (37) 889 Municipal obligations 14,666 33 — 14,699 Total debt securities 86,081 656 (42) 86,695 Preferred stocks 6,007 52 (1,019) 5,040 Total available for sale securities $ 92,088 $ 708 $ (1,061) $ 91,735 Securities held to maturity: Municipal obligations $ 3,873 $ 14 $ — $ 3,887 The estimated fair value and gross unrealized losses aggregated by security category and length of time such securities have been in a continuous unrealized loss position, is summarized as follows (dollars in thousands): March 31, 2020 Less than 12 Months 12 Months or Longer Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Securities available for sale: Mortgage-backed securities - residential (1) $ 14 $ — $ 1 $ — $ 15 $ — Asset-backed securities 5 (1) 4 (3) 9 (4) Collateralized mortgage obligations - residential 30 (2) 141 (54) 171 (56) Preferred stocks — — 4,645 (1,360) 4,645 (1,360) $ 49 $ (3) $ 4,791 $ (1,417) $ 4,840 $ (1,420) June 30, 2019 Less than 12 Months 12 Months or Longer Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Securities available for sale: U.S. Government and agency obligations $ 4,969 $ (1) $ 7,988 $ (2) $ 12,957 $ (3) Mortgage-backed securities - residential (1) 1 — 2 — 3 — Asset-backed securities — — 5 (2) 5 (2) Collateralized mortgage obligations - residential 15 (9) 160 (28) 175 (37) Preferred stocks — — 4,986 (1,019) 4,986 (1,019) $ 4,985 $ (10) $ 13,141 $ (1,051) $ 18,126 $ (1,061) (1) Unrealized losses on these securities are less than $500. At March 31, 2020, there were 48 securities with unrealized losses. Unrealized losses on debt securities are primarily related to increases in credit spreads since the securities were purchased. Unrealized losses on agency-backed and certain private-label mortgage-backed securities, asset-backed securities and collateralized mortgage obligation securities are not considered other-than-temporary based upon analysis completed by management considering credit rating of the instrument, length of time each security has spent in an unrealized loss position and the strength of the underlying collateral. Unrealized losses on two auction rate securities, consisting of U.S. Bancorp and Bank of America preferred stock, are not considered to be other-than-temporary based upon management’s evaluation of the underlying operating results and financial strength of the issuers. The U.S. Bancorp security is investment grade, whereas the Bank of America security, remains non-investment grade as of March 31, 2020. The Bank of America security had a cost basis of $2.2 million and an estimated fair value of $1.9 million, as of March 31, 2020. Management does not have the intent to sell, nor do they believe that they will be required to sell the above mentioned securities in an unrealized loss position before recovery of the amortized cost basis. In management’s opinion, the market conditions are temporary in nature and provide the basis for the Company’s belief that the declines are not other-than-temporary. At March 31, 2020, management reviewed all private-label mortgage-backed securities, asset-backed securities and collateralized mortgage obligations which were rated less than investment grade for impairment, resulting in no additional impairment charges during the nine months ended March 31, 2020. At March 31, 2020, 57 securities with an amortized cost of $0.4 million and remaining par value of $1.8 million were evaluated. The table below presents a rollforward of the credit losses recognized in earnings (dollars in thousands): Balance, July 1, 2019 $ 1,477 Reductions for amounts realized for securities transactions (117) Balance, March 31, 2020 $ 1,360 The fair value of debt securities and carrying amount, if different, by contractual maturity were as follows (dollars in thousands). Securities not due at a single maturity date are shown separately. March 31, 2020 Amortized Estimated Cost Fair Value Securities available for sale: Due in one year or less $ 67,677 $ 68,118 Due after one to five years — — Mortgage-backed securities - residential 85 85 Asset-backed securities 67 105 Collateralized mortgage obligations - residential 450 655 Preferred stocks 6,007 4,668 $ 74,286 $ 73,631 Securities held to maturity: Due in one year or less $ 3,803 $ 3,846 Due after one to five years 226 226 Due after five to ten years 110 110 $ 4,139 $ 4,182 During the three and nine months ended March 31, 2020, the Company received $5.0 million in proceeds from the sale of securities available for sale, realizing gross gains of $83,000. During the nine months ended March 31, 2020, the Company realized gross gains of $51,000 from other securities transactions. There were no sales of securities available for sale for the three and nine months ended March 31, 2019. There were no sales of securities held to maturity for the three and nine months ended March 31, 2020 and 2019. At March 31, 2020, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of our equity. As of March 31, 2020, and June 30, 2019, the carrying value of available for sale securities pledged to secure FHLBNY advances and municipal deposits was $67.0 million and $84.9 million, respectively. |
NET LOANS RECEIVABLE
NET LOANS RECEIVABLE | 9 Months Ended |
Mar. 31, 2020 | |
NET LOANS RECEIVABLE | |
NET LOANS RECEIVABLE | 4. A summary of net loans receivable is as follows (dollars in thousands): March 31, 2020 June 30, 2019 Commercial: Real estate $ 458,633 $ 414,375 Commercial and industrial 175,490 183,262 Construction 88,132 85,274 Total commercial 722,255 682,911 Residential mortgages 285,834 281,388 Home equity loans and lines 81,405 80,258 Consumer 30,563 21,482 1,120,057 1,066,039 Net deferred loan costs 2,640 2,398 Allowance for loan losses (20,700) (14,499) Net loans receivable $ 1,101,997 $ 1,053,938 The following tables present the activity in the allowance for loan losses by portfolio segment (dollars in thousands): For the Three Months Ended March 31, 2020 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses at beginning of period $ 12,760 $ 2,452 $ 868 $ 413 $ 16,493 Provisions charged to operations 1,411 813 205 121 2,550 Loans charged off — — — (64) (64) Recoveries on loans charged off (1) 1,707 — — 14 1,721 Allowance for loan losses at end of period $ 15,878 $ 3,265 $ 1,073 $ 484 $ 20,700 (1) The three months ended March 31, 2020 included a partial recovery in the amount of $1.7 million related to the charge-off of the entire principal balance owed to the Bank related to a business customer and various affiliated entities (collectively, the “Mann Entities”) commercial loan relationships in the first fiscal quarter of 2020. For the Three Months Ended March 31, 2019 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses at beginning of period $ 10,062 $ 2,459 $ 800 $ 279 $ 13,600 Provisions charged to operations 486 38 — 46 570 Loans charged off — (56) — (62) (118) Recoveries on loans charged off — — — 17 17 Allowance for loan losses at end of period $ 10,548 $ 2,441 $ 800 $ 280 $ 14,069 For the Nine Months Ended March 31, 2020 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses at beginning of period $ 11,057 $ 2,360 $ 813 $ 269 $ 14,499 Provisions charged to operations (1) 18,919 924 259 338 20,440 Loans charged off (1) (15,805) (19) — (153) (15,977) Recoveries on loans charged off (1) 1,707 — 1 30 1,738 Allowance for loan losses at end of period $ 15,878 $ 3,265 $ 1,073 $ 484 $ 20,700 (1) The nine months ended March 31, 2020 included a provision for loan losses in the amount of $15.8 million related to the charge-off of the entire principal balance owed to the Bank related to the Mann Entities commercial loan relationships which were recognized in the first fiscal quarter of 2020. The nine months ended March 31, 2020 also included a partial recovery in the amount of $1.7 million related to the charge-off of the Mann Entities commercial loan relationships which was recognized in the third fiscal quarter of 2020. For the Nine Months Ended March 31, 2019 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses at beginning of period $ 10,414 $ 2,166 $ 770 $ 160 $ 13,510 Provisions charged to operations 1,180 331 30 239 1,780 Loans charged off (1,046) (56) — (151) (1,253) Recoveries on loans charged off — — — 32 32 Allowance for loan losses at end of period $ 10,548 $ 2,441 $ 800 $ 280 $ 14,069 The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method (dollars in thousands): March 31, 2020 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses: Related to loans individually evaluated for impairment $ 533 $ — $ — $ — $ 533 Related to loans collectively evaluated for impairment 15,345 3,265 1,073 484 20,167 Ending balance $ 15,878 $ 3,265 $ 1,073 $ 484 $ 20,700 Loans: Individually evaluated for impairment $ 6,622 $ — $ — $ — $ 6,622 Loans collectively evaluated for impairment 715,633 285,834 81,405 30,563 1,113,435 Ending balance $ 722,255 $ 285,834 $ 81,405 $ 30,563 $ 1,120,057 June 30, 2019 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses: Related to loans individually evaluated for impairment $ 426 $ — $ — $ — $ 426 Related to loans collectively evaluated for impairment 10,631 2,360 813 269 14,073 Ending balance $ 11,057 $ 2,360 $ 813 $ 269 $ 14,499 Loans: Individually evaluated for impairment $ 8,067 $ — $ — $ — $ 8,067 Loans collectively evaluated for impairment 674,844 281,388 80,258 21,482 1,057,972 Ending balance $ 682,911 $ 281,388 $ 80,258 $ 21,482 $ 1,066,039 The following tables present information related to impaired loans by class as of (dollars in thousands): For the Nine Months Ended March 31, 2020 March 31, 2020 Unpaid Allowance for Average Interest Principal Recorded Loan Losses Recorded Income Balance Investment Allocated Investment Recognized With no related allowance recorded: Commercial: Real estate $ 2,390 $ 2,390 $ — $ 2,360 $ 231 Commercial and industrial 46 42 — 46 — Construction 1,298 1,298 — 1,324 — Subtotal 3,734 3,730 — 3,730 231 With an allowance recorded: Commercial: Real estate 1,523 1,463 30 1,584 — Commercial and industrial 1,437 1,429 503 1,463 69 Subtotal 2,960 2,892 533 3,047 69 Total $ 6,694 $ 6,622 $ 533 $ 6,777 $ 300 For the Year Ended June 30, 2019 June 30, 2019 Unpaid Allowance for Average Interest Principal Recorded Loan Losses Recorded Income Balance Investment Allocated Investment Recognized With no related allowance recorded: Commercial: Real estate $ 5,593 $ 5,376 $ — $ 5,608 $ — Commercial and industrial 59 48 — 59 — Construction 1,377 1,377 — 1,106 — Subtotal 7,029 6,801 — 6,773 — With an allowance recorded: Commercial: Real estate — — — — — Commercial and industrial 1,266 1,266 426 1,293 95 Subtotal 1,266 1,266 426 1,293 95 Total $ 8,295 $ 8,067 $ 426 $ 8,066 $ 95 Interest income on nonaccrual loans is recognized using the cost recovery method. Interest income on impaired loans that were on nonaccrual status and cash-basis interest income for the three and nine months ended March 31, 2020, and the year ended June 30, 2019 was nominal. The recorded investment in loans excludes accrued interest receivable and deferred loan fees, net due to immateriality. At various times, certain loan modifications are executed which are considered to be troubled debt restructurings. Substantially all of these modifications include one or a combination of the following: extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; temporary reduction in the interest rate; change in scheduled payment amount including interest only; or extensions of additional credit for payment of delinquent real estate taxes or other costs. During the quarter ended March 31, 2020, the Company implemented customer payment deferral programs to assist both consumer and commercial borrowers that may be experiencing financial hardship due to COVID-19 related challenges, whereby short-term deferrals of payments (generally three to six months) will be provided. Commercial, residential mortgage, home equity loans and lines, and consumer loans in deferment status will continue to accrue interest on the deferred principal during the deferment period unless otherwise classified as nonaccrual. Consistent with industry regulatory guidance, borrowers that were otherwise current on loan payments that were granted COVID-19 related financial hardship payment deferrals will continue to be reported as current loans throughout the agreed upon deferral period and therefore, not classified as troubled-debt restructured loans. Borrowers that are delinquent in their payments prior to requesting a COVID-19 related financial hardship payment deferral will be reviewed on a case by case basis for troubled debt restructure classification and non-performing loan status. There were no loans modified as troubled debt restructurings during the three an d nine months ended March 31, 2020, and 2019, respectively. There were no loans that had been modified as a troubled debt restructuring during the twelve months prior to March 31, 2020 and 2019 which have subsequently defaulted during the three and nine months ended March 31, 2020 and 2019, respectively. Loans subject to a troubled debt restructuring are evaluated as impaired loans for the purpose of determining the specific component of allowance for loan losses. The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans (dollars in thousands): March 31, June 30, 2020 2019 Past Due Past Due 90 Days 90 Days Still on Still on Nonaccrual Accrual Nonaccrual Accrual Commercial: Real estate $ 3,369 $ 56 $ 5,618 $ 58 Commercial and industrial 42 5 42 — Construction 1,298 — 1,377 — Residential mortgages 4,191 — 4,028 — Home equity loans and lines 1,511 54 1,497 41 Consumer 210 10 — 19 $ 10,621 $ 125 $ 12,562 $ 118 Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually evaluated impaired loans. The following tables present the aging of the recorded investment in loans by class of loans as of (dollars in thousands): March 31, 2020 30 - 59 60 - 89 90 or more Days Days Days Total Loans Not Past Due Past Due Past Due Past Due Past Due Total Commercial: Real estate $ 5,798 $ — $ 2,189 $ 7,987 $ 450,646 $ 458,633 Commercial and industrial 4,223 — 47 4,270 171,220 175,490 Construction 6,609 — 1,298 7,907 80,225 88,132 Residential mortgages 685 672 2,583 3,940 281,894 285,834 Home equity loans and lines 270 192 1,201 1,663 79,742 81,405 Consumer 3 — 10 13 30,550 30,563 Total $ 17,588 $ 864 $ 7,328 $ 25,780 $ 1,094,277 $ 1,120,057 June 30, 2019 30 - 59 60 - 89 90 or more Days Days Days Total Loans Not Past Due Past Due Past Due Past Due Past Due Total Commercial: Real estate $ 3 $ — $ 5,490 $ 5,493 $ 408,882 $ 414,375 Commercial and industrial — — 42 42 183,220 183,262 Construction — — 1,377 1,377 83,897 85,274 Residential mortgages 156 217 2,699 3,072 278,316 281,388 Home equity loans and lines 476 318 988 1,782 78,476 80,258 Consumer 5 — 19 24 21,458 21,482 Total $ 640 $ 535 $ 10,615 $ 11,790 $ 1,054,249 $ 1,066,039 The Company categorizes commercial loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. The Company uses the following definitions for risk ratings: Special Mention – Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Commercial loans not meeting the criteria above are considered to be pass rated loans. The following tables present commercial loans summarized by class of loans and the risk category (dollars in thousands): March 31, 2020 Special Pass Mention Substandard Doubtful Total Commercial Real estate $ 447,313 $ 484 $ 10,836 $ — $ 458,633 Commercial and industrial 161,059 6,583 7,848 — 175,490 Construction 86,216 — 1,916 — 88,132 $ 694,588 $ 7,067 $ 20,600 $ — $ 722,255 June 30, 2019 Special Pass Mention Substandard Doubtful Total Commercial Real estate $ 406,317 $ 2,440 $ 5,618 $ — $ 414,375 Commercial and industrial 179,099 226 3,937 — 183,262 Construction 83,897 — 1,377 — 85,274 $ 669,313 $ 2,666 $ 10,932 $ — $ 682,911 The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. As of March 31, 2020 and June 30, 2019, the Company had pledged $474.6 million and $485.6 million respectively, of residential mortgage, home equity and commercial loans as collateral for FHLBNY borrowings and stand-by letters of credit. |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Mar. 31, 2020 | |
DERIVATIVES | |
DERIVATIVES | 5. In the normal course of servicing our commercial customers, the Company acts as an interest rate swap counterparty for certain commercial borrowers. The Company manages its exposure to such interest rate swaps by entering into corresponding and offsetting interest rate swaps with third parties that match the terms of the interest rate swap with the commercial borrowers. These positions directly offset each other and the Company’s exposure is the fair value of the derivatives due to potential changes in credit risk of our commercial borrowers and third parties. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. At March 31, 2020, the Company held derivatives not designated as hedging instruments, comprised of back-to-back interest rate swaps, with a total notional amount of $697.8 million, consisting of $348.9 million of interest rate swaps with commercial borrowers and $348.9 million of offsetting interest rate swaps with third-party counterparties on substantially the same terms. At June 30, 2019, the Company held derivatives not designated as hedging instruments, comprised of back-to-back interest rate swaps, with a total notional amount of $515.4 million, consisting of $257.7 million of interest rate swaps with commercial borrowers and $257.7 million of offsetting interest rate swaps with third-party counterparties on substantially the same terms. The fair value of derivatives are classified as other assets and other liabilities on the consolidated statement of condition. The estimated fair value of derivatives not designated as hedging instruments are as follows (dollars in thousands): March 31, 2020 Derivative Derivative Assets Liabilities Gross interest rate swaps $ 40,096 $ 40,096 Less: master netting arrangements — — Less: cash collateral applied — (40,062) Net amount $ 40,096 $ 34 June 30, 2019 Derivative Derivative Assets Liabilities Gross interest rate swaps $ 13,550 $ 13,550 Less: master netting arrangements (88) (88) Less: cash collateral applied — (13,318) Net amount $ 13,462 $ 144 Under terms of the agreements with the third-party counterparties, the Company provides cash collateral to the counterparty for the initial trade. Subsequent to the trade, the margin is exchanged in either direction, based upon the estimated fair value of the underlying contracts. At March 31, 2020, the Company had deposited $40.1 million as collateral for swap agreements with third-party counterparties. At June 30, 2019, the Company had deposited $13.3 million as collateral for swap agreements with third-party counterparties. |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Mar. 31, 2020 | |
OTHER COMPREHENSIVE INCOME (LOSS) | |
OTHER COMPREHENSIVE INCOME (LOSS) | 6. Reclassifications out of accumulated other comprehensive loss were as follows (dollars in thousands): Details About Accumulated Other Amount Reclassified from Accumulated Affected Line Item in the Statement Comprehensive Loss Components Other Comprehensive Loss Where Net Income is Presented Three Months Ended Nine Months Ended March 31, March 31, 2020 2019 2020 2019 Unrealized gains/losses on securities (before tax): Net gains included in net income $ 83 $ — $ 134 $ — Net gain on available for sale securities transactions Tax expense (22) — (35) — Income tax expense Net of tax 61 — 99 — Amortization of defined benefit plan items (before tax): Net actuarial loss — — — — Salaries and employee benefits Tax benefit — — — — Income tax expense Net of tax — — — — Total reclassification for the period, net of tax $ 61 $ — $ 99 $ — The balances and changes in the components of accumulated other comprehensive income (loss), net of tax are as follows (dollars in thousands): For the Three Months Ended March 31, Accumulated Unrealized Other Gains/Losses Defined Comprehensive on Securities Benefit Plans Loss 2020: Accumulated other comprehensive income (loss) as of January 1, 2020 $ (11) (11,441) $ (11,452) Other comprehensive income (loss) before reclassifications (412) — (412) Amounts reclassified from accumulated other comprehensive income (loss) (61) — (61) Accumulated other comprehensive income (loss) as of March 31, 2020 $ (484) (11,441) $ (11,925) 2019: Accumulated other comprehensive income (loss) as of January 1, 2019 $ (502) (9,399) $ (9,901) Other comprehensive income (loss) before reclassifications 590 — 590 Accumulated other comprehensive income (loss) as of March 31, 2019 $ 88 (9,399) $ (9,311) For the Nine Months Ended March 31, Accumulated Unrealized Other Gains/Losses Defined Comprehensive on Securities Benefit Plans Loss 2020: Accumulated other comprehensive income (loss) as of July l, 2019 $ 338 (11,441) $ (11,103) Other comprehensive income (loss) before reclassifications (124) — (124) Amounts reclassified from accumulated other comprehensive income (loss) (99) — (99) Reclassification for change in accounting principle (1) (599) — (599) Accumulated other comprehensive income (loss) as of March 31, 2020 (484) (11,441) (11,925) 2019: Accumulated other comprehensive income (loss) as of July l, 2018 410 (9,399) (8,989) Other comprehensive income (loss) before reclassifications (322) — (322) Accumulated other comprehensive income (loss) as of March 31, 2019 $ 88 (9,399) $ (9,311) (1) Adoption of ASU 2016-01 – cumulative effect of change in measurement of equity securities. The amounts of income tax expense (benefit) allocated to each component of other comprehensive income (loss) were as follows (dollars in thousands): For the Three Months Ended March 31, 2020 2019 Unrealized gains/losses on securities: Unrealized holdings (losses) gains arising during the period $ (146) $ 209 Reclassification adjustment for gains included in net income (22) — (168) 209 Defined benefit plans: Change in funded status — — Reclassification adjustment for accretion of net prior service cost — — Reclassification adjustment for amortization of net actuarial loss — — — — $ (168) $ 209 For the Nine Months Ended March 31, 2020 2019 Unrealized gains/losses on securities: Unrealized holdings (losses) gains arising during the period $ (45) $ (114) Reclassification adjustment for gains included in net income (35) — (80) (114) Defined benefit plans: Change in funded status — — Reclassification adjustment for amortization of net actuarial loss — — — — $ (80) $ (114) |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Mar. 31, 2020 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | 7. The Company maintains a noncontributory defined benefit pension plan and a defined benefit post-retirement plan. Plan assets and obligations that determine the funded status are measured as of the end of the fiscal year. Pension Plan The Company maintains a noncontributory defined benefit pension plan covering substantially all of its full-time employees twenty-one years of age or older, with at least one year of service. Through December 31, 2009, pensions were paid as an annuity using a pension formula of 2.0% of the average of the five highest consecutive years of total compensation over the last ten years multiplied by credited service up to thirty years. Effective January 1, 2010, the plan was amended and service rendered thereafter is paid using a pension formula of 1.5%. Amounts contributed to the plan are determined annually on the basis of (a) the maximum amount allowable under Internal Revenue Service regulations and (b) the amount certified by a consulting actuary as necessary to avoid an accumulated funding deficiency as defined by the Employee Retirement Income Security Act of 1974 (“ERISA”) The defined benefit pension plan was amended, effective August 31, 2019, to close the plan to new employees hired on or after September 1, 2019, therefore, no new employees hired on or after September 1, 2019 would be eligible to participate in the defined benefit pension plan. Net periodic pension cost included in the Company’s consolidated statements of operations included the following components (dollars in thousands): For the Three Months Ended For the Nine Months Ended March 31, March 31, 2020 2019 2020 2019 Service cost $ 563 $ 431 $ 1,689 $ 1,050 Interest cost 492 314 1,476 1,281 Expected return on plan assets (926) (573) (2,777) (2,349) Amortization of net actuarial loss 270 73 810 508 Net periodic pension cost $ 399 $ 245 $ 1,198 $ 490 Contributions For the three and nine months ended March 31, 2020 and March 31, 2019, the Company made no cash contributions to the plan. Post-Retirement Healthcare Plan The Company offers a defined benefit post-retirement plan which provides medical and life insurance benefits to employees meeting certain requirements. Effective October 1, 2006, the plan was amended so that there have been no new plan participants for medical benefits. The cost of post-retirement plan benefits is recognized on an accrual basis as employees perform services. Active employees are eligible for retiree medical coverage upon reaching age sixty with twenty-five or more years of service. Employees with a minimum of thirty years of service are eligible for individual and spousal coverage. Retirees are eligible to participate in any bank-sponsored health insurance programs. The Company’s contributions for retiree medical are limited to a monthly premium of $210 for individual coverage and $420 for employee and spousal coverage. The Company’s funding policy is to pay insurance premiums as they come due. Net periodic post-retirement benefit cost included in the Company’s consolidated statements of operations included the following components (dollars in thousands): For the Three Months Ended For the Nine Months Ended March 31, March 31, 2020 2019 2020 2019 Service cost $ 9 $ 7 $ 27 $ 21 Interest cost 16 17 48 50 Amortization of net actuarial loss 1 — 2 — Net periodic post-retirement benefit cost $ 26 $ 24 $ 77 $ 71 Employee Stock Ownership Plan On July 17, 2019, the Company established an Employee Stock Ownership Plan (“ESOP”) to provide eligible employees the opportunity to own Company stock. The ESOP is a tax-qualified retirement plan for the benefit of Company employees. The Company granted loans to the ESOP for the purchase of 1,018,325 shares of the Company’s common stock at an average price of $13.40 per share. The loan obtained by the ESOP from the Company to purchase the common stock is payable annually over 20 years at a rate per annum equal to the Prime Rate. Loan payments are principally funded by cash contributions from the Bank. The loan is secured by the shares purchased, which are held in a suspense account for allocation among participants as the loan is repaid. The balance of the ESOP loan at March 31, 2020 was $12.9 million. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax limits. The number of shares committed to be released annually is 50,916 through the year 2038. Participants receive the shares at the end of employment. Shares held by the ESOP include the following (dollars in thousands): March 31, 2020 Allocated 50,916 Committed to be allocated 12,729 Unallocated 954,680 Total Shares 1,018,325 Total compensation expense recognized in connection with the ESOP for the three and nine months ended March 31, 2020 was $174,000 and $877,000, respectively. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 9 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENT LIABILITIES | |
COMMITMENTS AND CONTINGENT LIABILITIES | 8. Off-Balance-Sheet Financing and Concentrations of Credit The Company is a party to certain financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include the Company’s commitments to extend credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized on the consolidated statement of condition. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The Company’s exposure to credit loss in the event of nonperformance by the other party to the commitments to extend credit is represented by the contractual notional amounts of those instruments which are presented in the tables below (dollars in thousands). The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments. March 31, 2020 Fixed Rate Variable Rate Total Financial instruments whose contract amounts represent credit risk (including unused lines of credit and unadvanced loan funds): Commitments to extend credit $ 32,859 $ 205,008 $ 237,867 Standby letters of credit — 30,483 30,483 $ 32,859 $ 235,491 $ 268,350 June 30, 2019 Fixed Rate Variable Rate Total Financial instruments whose contract amounts represent credit risk (including unused lines of credit and unadvanced loan funds): Commitments to extend credit $ 23,892 $ 357,223 $ 381,115 Standby letters of credit — 33,385 33,385 $ 23,892 $ 390,608 $ 414,500 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and require payment of a fee. Since certain commitments are expected to expire without being fully drawn, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral, if any, required by the Company for the extension of credit is based on management’s credit evaluation of the customer. Commitments to extend credit may be written on a fixed rate basis thus exposing the Company to interest rate risk, given the possibility that market rates may change between commitment and actual extension of credit. Standby letters of credit are conditional commitments issued by the Company to guarantee payment on behalf of a customer or to guarantee the performance of a customer to a third party. The credit risk involved in issuing these instruments is essentially the same as that involved in extending loans to customers. Since a portion of these instruments will expire unused, the total amounts do not necessarily represent future cash requirements. Each customer is evaluated individually for creditworthiness under the same underwriting standards used for commitments to extend credit and on-balance-sheet instruments. Bank policies governing loan collateral apply to standby letters of credit at the time of credit extension. Certain residential mortgage loans are written on an adjustable basis and include interest rate caps which limit annual and lifetime increases in interest rates. Generally, adjustable rate mortgages have an annual rate increase cap of 2% and lifetime rate increase cap of 5% to 6% above the initial loan rate. These caps expose the Company to interest rate risk should market rates increase above these limits. At March 31, 2020, approximately $46.4 million of adjustable rate residential mortgage loans had interest rate caps. In addition, certain adjustable rate residential mortgage loans have a conversion option whereby the borrower may elect to convert the loan to a fixed rate during a designated time period. At March 31, 2020, approximately $3.6 million of the adjustable rate mortgage loans had conversion options. The Company periodically sells residential mortgage loans to FNMA and to the State of New York Mortgage Agency. At March 31, 2020 and June 30, 2019, the Bank had no loans held for sale. In addition, the Bank has no loan commitments with borrowers at March 31, 2020 and June 30, 2019 with rate lock agreements which are intended to be held for sale, if closed. The Company generally determines whether or not a loan is held for sale at the time that loan commitments are entered into or at the time a convertible adjustable rate mortgage loan converts to a fixed interest rate. In order to reduce the interest rate risk associated with the portfolio of loans held for sale, as well as loan commitments with locked interest rates which are intended to be held for sale if closed, the Company enters into agreements to sell loans in the secondary market. At March 31, 2020 and June 30, 2019, the Company had no commitments to sell loans to unrelated investors. Concentrations of Credit The Company primarily grants loans to customers located in the New York State counties of Albany, Greene, Rensselaer, Schenectady, Saratoga, and Warren. Although the Company has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent upon the real estate and construction-related sectors of the economy. Legal Proceeding and Other Contingent Liabilities The Company is involved in various pending and threatened claims and other legal proceedings in the ordinary course of business. The Company evaluates the possible impact of these matters, taking into consideration the most recent information available. A loss reserve is established for those matters for which the Company believes a loss is both probable and reasonably estimable. Once established, the reserve is adjusted as appropriate to reflect any new developments. Actual losses with respect to any such matter could be significantly more or less than the amount estimated by the Company. For matters where a loss is not probable, or the amount of loss cannot be reasonably estimated by the Company, no loss reserve is established. As of March 31, 2020, the Company believes that any liabilities individually or in the aggregate, which may result from the final outcomes of legal proceedings, is unlikely to have a material adverse effect on the Company’s consolidated financial statements. However, legal proceedings are often unpredictable, and it is possible that the ultimate resolution of any such matters, if unfavorable, may be material to the Company’s results of operations in any future period, depending, in part, upon the size of the loss or liability imposed and the operating results for the period, and could have a material adverse effect on the Company’s business, results of operations and financial condition. In addition, regardless of the ultimate outcome of any such legal or bankruptcy proceeding, inquiry or investigation, any such matter could cause the Company to incur additional expenses, which could be significant, and possibly material, to the Company’s results of operations in any future period. Potentially Fraudulent Activity As previously disclosed, during the first fiscal quarter of 2020 (the quarter ending September 30, 2019), the Company became aware of potentially fraudulent activity associated with transactions conducted in the Company’s first fiscal quarter of 2020 by an established business customer of the Bank. The customer and various affiliated entities (collectively, the “Mann Entities”) had numerous accounts with the Bank. The transactions in question relate both to deposit and lending activity with the Mann Entities. Several other parties are asserting claims against the Company and the Bank related to the series of transactions between the Company or the Bank, on the one hand, and the Mann Entities, on the other. The Company and the Bank continue to investigate these matters and it is possible that the Company and the Bank will be subject to additional liabilities which may have a material adverse effect on our financial condition, results of operations or cash flows. The Company is pursuing all available sources of recovery and other means of mitigating the potential loss and the Company and the Bank are vigorously defending all claims asserted against them arising out of or otherwise related to the fraudulent activity of the Mann Entities. See “Legal Proceedings,” below. For the fraudulent activity related to the Mann Entities, the Bank’s potential exposure with respect to its deposit activity is expected to be approximately $19.0 million and with respect to its lending activity with the Mann Entities, the Bank’s potential exposure is expected to be approximately $16.0 million (which represents the Bank’s participation interest in the approximately $36.0 million commercial loan relationships for which the Bank is the originating lender). In the first fiscal quarter of 2020, the Bank exercised its legal right of setoffs on the deposit accounts held by the Mann Entities at the Bank. The Bank recognized a charge to non-interest expense in the amount of $2.5 million, in the first fiscal quarter of 2020, based on the net negative deposit balance of the various Mann Entities’ accounts after the setoffs. In the first fiscal quarter of 2020, the Bank concluded that due to the impact of the potential fraudulent activity, it is more likely than not that the Bank will not be able to recover the loan balances. The Bank recorded a provision for loan losses in the amount of $15.8 million, in the first fiscal quarter of 2020, related to the charge-off of the entire principal balance owed to the Bank related to the customer’s commercial loan relationships. During the third fiscal quarter of 2020 (the quarter ended March 31, 2020), the Bank recognized a partial recovery in the amount of $1.7 million related to the charge-off of the Mann Entities commercial loan relationships. No additional charges to non-interest expense or the provision for loan losses were recognized in the third fiscal quarter of 2020 related to the transactions with the Mann Entities. For the other parties asserting claims against the Company and the Bank, in the second fiscal quarter of 2020, Southwestern Payroll Services, Inc. (“Southwestern”), a payroll company, and National Payment Corp. (“NatPay”), a third-party automated clearing house service provider, filed lawsuits against the Bank seeking recovery of allegedly wrongful seizure and retention of funds related to the Mann Entities. In February 2020, Berkshire Bank and Chemung Canal Trust Company, the participating lenders with the Bank in the Mann Entities commercial loan relationships, filed lawsuits against the Bank seeking recovery of their respective aggregate participation interest and additional damages. See “Legal Proceedings” below for additional information regarding these lawsuits. Legal Proceedings On October 31, 2019, Southwestern filed a complaint against the Company and the Bank (“Pioneer Parties”), Michael T. Mann, Valuewise Corporation, MyPayrollHR, LLC and Cloud Payroll, LLC (collectively, the “Mann Parties”) in the United States District Court for the Northern District of New York. The complaint alleges that the Pioneer Parties (i) wrongfully converted certain funds belonging to Southwestern, (ii) engaged in fraudulent and wrongful collection and retention of funds belonging to Southwestern, and (iii) committed gross negligence and that Southwestern is entitled to a constructive trust limiting how the Pioneer Parties distribute the funds in question, which are about $9.8 million. On November 26, 2019, the Pioneer Parties moved to dismiss Southwestern’s fraud claim, which also postponed the Pioneer Parties’ deadline to file an answer until 14 days after the court decides the motion to dismiss. On December 10, 2019, Southwestern filed both a response to the Pioneer Parties’ motion to dismiss and an amended complaint, which rendered the Pioneer Parties’ motion to dismiss moot. The amended complaint names several corporate entities affiliated with the Mann Parties as co-defendants and asserts claims against the Pioneer Parties for declaratory judgment, conversion, actual and constructive fraud, gross negligence, unjust enrichment and constructive trust, and an accounting. The amended complaint seeks a monetary judgment of at least $9.8 million. Each party has filed numerous motions in the proceedings. On January 10, 2020, the Pioneer Parties moved again to dismiss Southwestern’s fraud claim, which also postponed the Pioneer Parties’ deadline to file an answer until 14 days after the court decided the motion to dismiss. On April 16, 2020, the court granted the Pioneer Parties’ motion to dismiss Southwestern’s fraud claim. On April 30, 2020, Southwestern filed a motion to reconsider the court’s motion to dismiss, along with a second amended complaint. On May 1, 2020, the Pioneer Parties filed their answer. The Pioneer Parties asserted numerous affirmative defenses, and the Bank asserted counterclaims against Southwestern and cross-claims against certain of the Mann Parties based on common law fraud under New York law and violations of the federal Racketeer Influenced and Corrupt Organization Act (“RICO”). The Bank’s fraud counterclaim/cross-claim seeks damages of at least $15.6 million, plus pre-judgment interest, jointly and severally against Southwestern and the named Mann Parties. The Bank’s RICO counterclaim/cross-claim seeks treble damages of at least $46.5 million, plus pre-judgment interest and attorneys’ fees, jointly and severally against Southwestern and the named Mann Parties. On December 10, 2019, NatPay filed a motion to intervene as a plaintiff in Southwestern’s lawsuit against the Pioneer Parties and the Mann Parties as described above. Attached to NatPay’s motion to intervene is a proposed complaint, which includes, among other matters, a prayer for relief seeking “compensatory damages in an amount of no less than $4 million” (the complaint also seeks punitive damages and interest in unspecified amounts). On January 10, 2020, the Pioneer Parties filed their response opposing NatPay’s motion to intervene. NatPay’s motion to intervene remains pending. On February 4, 2020, Berkshire Hills Bancorp Inc.’s wholly owned subsidiary Berkshire Bank (“Berkshire Bank”), filed a complaint against the Bank in the Supreme Court of the State of New York, in the County of Albany, New York resulting from its participation interest in the commercial loan relationship to the Mann Entities. The complaint alleges that the Bank (1) breached the amended and restated loan participation agreement between the Bank and Berkshire Bank dated as of June 27, 2018, (2) breached the amended and restated loan participation agreement between the Bank and Berkshire Bank dated as of August 12, 2019, (3) engaged in constructive fraud, (4) engaged in fraudulent inducement, (5) engaged in fraudulent concealment, and (6) negligently misrepresented certain material information. The complaint seeks to recover $15.6 million and additional damages. The timeframe within which the Bank’s response is due has been extended. On February 4, 2020, Chemung Financial Corporation’s wholly owned subsidiary, Chemung Canal Trust Company (“Chemung”), filed a complaint against the Bank in the Supreme Court of the State of New York, in the County of Albany, New York resulting from its participation interest in the commercial loan relationship to the Mann Entities. The complaint alleges that the Bank (1) breached the participation agreement between the Bank and Chemung dated as of August 12, 2019, (2) engaged in fraudulent activities, (3) engaged in constructive fraud, and (4) negligently misrepresented and omitted certain material information. The complaint seeks to recover $4.2 million and additional damages. The timeframe within which the Bank’s response is due has been extended. During the quarter ended March 31, 2020, Cachet Financial Services (“Cachet”), a third-party automated clearing house service provider, filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in the Central District of California, Los Angeles Division. Cachet is currently involved in legal proceedings against certain Mann Parties and other related parties. The Bank is not listed as a creditor in the bankruptcy proceedings. However, in the filings with the bankruptcy court, Cachet asserts that the Bank is holding $7.0 million of its funds. The Company and the Bank dispute this assertion and, if necessary, intend to defend themselves vigorously. On April 30, 2020, the U.S. Department of Justice, with the authorization of a delegate of the Secretary of the Treasury, filed a civil complaint against the Company and the Bank (and Cloud Payroll, LLC) in the United States District Court, Northern District of New York (the “DOJ Complaint”). The complaint alleges, among other things, that the Company and the Bank wrongfully seized approximately $7.3 million from an account held by Cloud Payroll to apply towards debts allegedly owed to the Bank by Cloud Payroll and other affiliates of Michael Mann. The complaint alleges that the funds in question were comprised of payroll taxes withheld by Southwestern and thus subject to a statutory trust under 26 U.S.C. § 7501 that prohibited the Bank from seizing those funds to apply towards debts owed to the Bank. The complaint seeks return of any payroll taxes, plus interest. The Bank and the Company have not yet answered or otherwise responded to the government’s complaint. The DOJ Complaint relates to the same set of facts described above in– “Potentially Fraudulent Activity,” and the alleged payroll taxes, plus interest, sought in this proceeding may be part of the recovery sought in the Southwestern complaint described above. The Company and the Bank are defending each of these lawsuits vigorously, and management believes that the Company and the Bank have substantial defenses, including affirmative defenses, counterclaims and cross-claims to the various allegations that have been asserted. The Company and the Bank continue to investigate these matters and it is possible that the Company and the Bank will be subject to additional liabilities. The ultimate outcome of these lawsuits, or any other litigation or other similar proceedings, involving the Company, the Bank or the Pioneer Parties, cannot be predicted with certainty. It also remains possible that other parties will pursue additional claims against the Bank as a result of the Bank’s dealings with certain of the Mann Entities or as a result of the actions taken by the Pioneer Parties. The Company’s and the Bank’s legal fees and expenses related to these actions are expected to be significant. In addition, costs associated with potentially prosecuting, litigating or settling any litigation, satisfying any adverse judgments, if any, or other proceedings, could be significant. These costs, settlements, judgments or other expenses could have a material adverse effect on the Company’s financial condition, results of operations or cash flows. |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Mar. 31, 2020 | |
FAIR VALUE | |
FAIR VALUE | 9. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The fair values of securities are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). The fair value of interest rate swaps are based on valuation models using observable market data as of the measurement date (Level 2). The fair value of derivatives are classified as a component of other assets and other liabilities on the consolidated statements of condition. The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments result in a Level 3 classification of the inputs for determining fair value. Nonrecurring adjustments to certain commercial and residential real estate properties classified as OREO are measured at fair value, less costs to sell. Fair values are based on recent real estate appraisals. These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments result in a Level 3 classification of the inputs for determining fair value. Assets and Liabilities Measured on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are summarized below (dollars in thousands): Fair Value Measurements at March 31, 2020 Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Assets: Available for sale securities: U.S. Government and agency obligations $ 62,346 $ 62,346 $ — $ — Mortgage-backed securities - residential 85 — 85 — Asset-backed securities 105 — 105 — Collateralized mortgage obligations – residential 655 — 655 — Municipal obligations 5,772 — 5,772 — Total debt securities 68,963 62,346 6,617 — Preferred stocks 4,668 1,872 2,796 — Total available for sale securities 73,631 64,218 9,413 — Equity securities 2,884 2,884 — — Derivative assets 40,096 — 40,096 — Total $ 116,611 $ 67,102 $ 49,509 $ — Liabilities: Derivative liabilities $ 34 $ — $ 34 $ — Total $ 34 $ — $ 34 $ — Fair Value Measurements at June 30, 2019 Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Assets: Available for sale securities: U.S. Government and agency obligations $ 70,867 $ 70,867 $ — $ — Mortgage-backed securities - residential 112 — 112 — Asset-backed securities 128 — 128 — Collateralized mortgage obligations – residential 889 — 889 — Municipal obligations 14,699 — 14,699 — Total debt securities 86,695 70,867 15,828 — Preferred stocks 5,040 1,970 3,070 — Total available for sale securities 91,735 72,837 18,898 — Equity securities 3,618 3,618 — — Derivative assets 13,462 — 13,462 — Total $ 108,815 $ 76,455 $ 32,360 $ — Liabilities: Derivative liabilities $ 144 $ — $ 144 $ — Total $ 144 $ — $ 144 $ — Assets and Liabilities Measured on a Non-Recurring Basis Assets and liabilities measured at fair value on a non-recurring basis are summarized below (dollars in thousands): Fair Value Measurements Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) March 31, 2020 Impaired loans: Commercial loans $ 2,359 $ — $ — $ 2,359 OREO 260 — — 260 June 30, 2019 Impaired loans: Commercial loans $ 840 $ — $ — $ 840 OREO 158 — — 158 Impaired loans, which are assets measured at fair value on a non-recurring basis, using the fair value of collateral for collateral dependent loans, had a carrying amount of $2.9 million with a valuation allowance of $533,000 resulting in an estimated fair value of $2.4 million as of March 31, 2020. Impaired loans, which are assets measured at fair value on a non-recurring basis, using the fair value of collateral for collateral dependent loans, had a carrying amount of $1.3 million with a valuation allowance of $426,000 resulting in an estimated fair value of $840,000 as of June 30, 2019. Other real estate owned measured at fair value less costs to sell, had a carrying amount of $260,000 at March 31, 2020. There were write-downs of $8,000 for the nine months ended March 31, 2020. Other real estate owned measured at fair value less costs to sell, had a carrying amount of $158,000 at June 30, 2019. There were write-downs of $17,000 for the year ended June 30, 2019. The carrying and estimated fair values of financial assets and liabilities were as follows (dollars in thousands): March 31, 2020 Fair Value Measurements Using Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 190,201 $ 190,201 $ 190,201 $ — $ — Securities available for sale 73,631 73,631 64,218 9,413 — Securities held to maturity 4,139 4,182 — 4,182 — Equity securities 2,884 2,884 2,884 — — FHLBNY stock 1,824 1,824 — 1,824 — Net loans receivable 1,101,997 1,127,223 — — 1,127,223 Accrued interest receivable 4,026 4,026 — 4,026 — Derivatives 40,096 40,096 — 40,096 — Financial liabilities Deposits Savings, money market, and demand accounts $ 1,114,187 $ 1,114,187 $ — $ 1,114,187 $ — Time deposits 123,488 124,826 — 124,826 — Mortgagors’ escrow deposits 3,705 3,705 — 3,705 — FHLB advances 20,000 20,000 — 20,000 — Accrued interest payable 191 191 — 191 — Derivatives 34 34 — 34 — June 30, 2019 Fair Value Measurements Using Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 230,109 $ 230,109 $ 230,109 $ — $ — Securities available for sale 91,735 91,735 72,837 18,898 — Securities held to maturity 3,873 3,887 — 3,887 — Equity securities 3,618 3,618 3,618 — — FHLBNY stock 924 924 — 924 — Net loans receivable 1,053,938 1,065,328 — — 1,065,328 Accrued interest receivable 4,374 4,374 — 4,374 — Derivatives 13,462 13,462 — 13,462 — Financial liabilities Deposits Savings, money market, and demand accounts $ 1,200,753 $ 1,200,753 $ — $ 1,200,753 $ — Time deposits 130,565 130,680 — 130,680 — Mortgagors’ escrow deposits 6,044 6,044 — 6,044 — Accrued interest payable 17 17 — 17 — Derivatives 144 144 — 144 — Short-Term Financial Instruments The fair value of certain financial instruments are estimated to approximate their carrying amounts because the remaining term to maturity or period to repricing of the financial instrument is less than ninety days. Such financial instruments include cash and cash equivalents, accrued interest receivable and payable, and mortgagor’s escrow deposits. Securities Fair values of securities available for sale, securities held to maturity and equity securities are determined as outlined earlier in this footnote. FHLBNY Stock The fair value of FHLB stock approximates its carrying value due to transferability restrictions. Loans Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type, including residential real estate, commercial real estate, and consumer loans and whether the interest rates are fixed and/or variable. The estimated fair values of performing loans is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the respective loan portfolio. Estimated fair values for nonperforming loans are based on estimated cash flows discounted using a rate commensurate with the credit risk involved. Assumptions regarding credit risk, cash flows, and discount rates are judgmentally determined using available market information and specific borrower information. Derivatives Fair values of derivative assets and liabilities are determined as outlined earlier in this footnote. Deposits The estimated fair value of deposits with no stated maturity, such as savings, money market and demand deposits, is regarded to be the amount payable on demand. The estimated fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using market rates for time deposits with similar maturities. The fair value estimates for deposits do not include the benefit that results from the low-cost funding provided by the deposits as compared to the cost of borrowing funds in the market. Borrowings The estimated fair value of FHLB advances, if any, is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for borrowings with similar remaining maturities. The fair values of commitments to extend credit, unused lines of credit, and standby letters of credit are not considered material. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Mar. 31, 2020 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 10. On July 1, 2019, the Company adopted ASU 2014-09 “Revenue from Contracts with Customers” (Topic 606) and all subsequent ASUs that modified Topic 606. As stated in Note 1 – “Adoption of Recent Accounting Pronouncements,” results for reporting periods beginning after July 1, 2019 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. The Company recorded a net increase to beginning retained earnings of $291,000 as of July 1, 2019 due to the cumulative impact of adopting Topic 606, primarily driven by the recognition of insurance commission income. Under Topic 606, the Company made any necessary revisions to its policies related to the new revenue recognition guidance. In general, for revenue not associated with financial instruments, guarantees and lease contracts, we apply the following steps when recognizing revenue from contracts with customers: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when performance obligation is satisfied. Our contracts with customers are generally short term in nature, typically due within one year or less or cancellable by us or our customer upon a short notice period. Performance obligations for our customer contracts are generally satisfied at a single point in time, typically when the transaction is complete. In some cases, we act in an agent capacity, deriving revenue through assisting other entities in transactions with our customers. In such transactions, we recognized revenue and the related costs to provide our services on a net basis in our financial statements. These transactions primarily relate to insurance and brokerage commissions, and fees derived from our customers' use of various interchange and ATM/debit card networks. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of the new guidance. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, interchange fees, and insurance and wealth management services commissions. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Insurance Services Income: Prior to the adoption of Topic 606, commission revenue on insurance policies billed in installments were recognized on the latter of the policy effective date or the date that the premium was billed to the client. As a result of the adoption of Topic 606, revenue associated with the issuance of policies will be recognized upon the effective date of the associated policy regardless of the billing method, meaning that commission revenues billed on an installment basis will be now recognized earlier than they had been previously. Revenue will be accrued based upon the completion of the performance obligation creating a current asset for the unbilled revenue until such time as an invoice is generated, typically not to exceed twelve months. The Company does not expect the overall impact of these changes to be significant, but it will result in slight variances from quarter to quarter. Contingent commissions represent a form of variable consideration associated with the same performance obligation, which is the placement of coverage, for which we earn core commissions. The Company records a monthly accrual for contingent commissions. Wealth Management Services Income: The Company earns fees from investment brokerage services provided to its customers by a third-party service provider. The Company receives commissions from the third-party service provider on a monthly basis based upon customer activity for the respective month. The Company acts as an agent in arranging the relationship between the customer and the third-party service provider. Investment brokerage fees are presented net of related costs. Service Charges on Deposit Accounts: The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which included services such as ATM use fees, and stop payment charges, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are recognized at the time the maintenance occurs. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance. Card Services Fee Income: The Company earns interchange fees from debit cardholder transactions conducted through the Mastercard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to cardholder. Other service charges include revenue from processing wire transfers, check orders, and safe deposit box rental. Wire transfer fees are charged on per item basis, and are charged at the time of transfer and charged directly to the customer account. Check order charges are charged to the customer at the time the order is placed directly to the customer account. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three and nine months ended March 31, 2020. For the Three Months Ended For the Nine Months Ended March 31, 2020 March 31, 2020 (dollars in thousands) (dollars in thousands) Non-interest Income In scope of "ASC" Topic 606: Insurance services $ 1,060 $ 3,092 Wealth management services 748 2,141 Service charges on deposit accounts 784 2,559 Card services income 649 2,088 Other 69 200 Non-interest income in scope of "ASC" Topic 606 3,310 10,080 Non-interest income out of scope of "ASC" Topic 606 (645) 1,991 Total non-interest income $ 2,665 $ 12,071 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Mar. 31, 2020 | |
EARNINGS (LOSS) PER SHARE | |
EARNINGS (LOSS) PER SHARE | 11. Basic earnings (loss) per share represent income (loss) available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Unallocated ESOP shares are not deemed outstanding for earnings per share calculations. There were no potentially diluted common stock equivalents as of March 31, 2020. Earnings per share data is not applicable for the three and nine month periods ended March 31, 2019 as the Company had no shares outstanding. For the Three Months Ended For the Nine Months Ended March 31, March 31, 2020 2020 (Dollars in thousands, expect share and per share amounts) Net income (loss) applicable to common stock $ 849 $ (7,985) Average number of common shares outstanding 25,977,679 25,977,679 Less: Average unallocated ESOP shares 961,045 971,652 Average number of common shares outstanding used to calculate basic and diluted earnings per common share 25,016,634 25,006,027 Income (loss) per common share: Basic $ 0.03 $ (0.32) Diluted $ 0.03 $ (0.32) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 31, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 12. Potentially Fraudulent Activity As previously disclosed, during the first fiscal quarter of 2020, the Company became aware of potentially fraudulent activity associated with transactions conducted in the Company’s first fiscal quarter of 2020 by an established business customer of the Bank. The Mann Entities had numerous accounts with the Bank. The transactions in question relate to both deposit and lending activity with the Mann Entities. Several other parties are asserting claims against the Company and the Bank related to the series of transactions between the Company or the Bank, on the one hand, and the Mann Entities, on the other. The Company and the Bank continue to investigate these matters and it is possible that the Company and the Bank will be subject to additional liabilities which may have a material adverse effect on our financial condition, results of operations or cash flows. The Company is pursuing all available sources of recovery and other means of mitigating the potential loss, and the Company and the Bank are vigorously defending all claims asserted against them arising out of or otherwise related to the fraudulent activity of the Mann Entities. For the other parties asserting claims against the Company and the Bank, in the second fiscal quarter of 2020, Southwestern, a payroll company, and NatPay, a third-party automated clearing house service provider, filed lawsuits against the Bank seeking recovery of allegedly wrongful seizure and retention of funds related to the Mann Entities. In February 2020, Berkshire Bank and Chemung, the participating lenders with the Bank in the Mann Entities commercial loan relationships, filed lawsuits against the Bank seeking recovery of their respective aggregate participation interest and additional damages. In April 2020, the U.S. Department of Justice, with the authorizations of a delegate of the Secretary of the Treasury, filed a civil complaint alleging that the Company and the Bank wrongfully seized funds comprised of withheld payroll taxes to apply towards debts allegedly owed to the Bank by Cloud Payroll and other affiliates of Michael Mann. See “Note 8 – Commitments and Contingent Liabilities” for additional information regarding these legal proceedings. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations and Principals of Consolidation | Nature of Operations and Principals of Consolidation Pioneer Bancorp, Inc. (the “Company”) is a mid-tier stock holding company whose wholly owned subsidiary is Pioneer Bank (the “Bank”). The Bank is a New York State chartered savings bank whose wholly owned subsidiaries are Pioneer Commercial Bank, Pioneer Financial Services, Inc., and Anchor Agency, Inc. The Company provides diversified financial services through the Bank and its subsidiaries, with 22 offices in the Capital Region of New York State. The Company, through its subsidiaries, offers a broad array of deposit, lending, and other financial services to individuals, businesses, and municipalities. There are no significant concentrations of loans to any one customer or industry. However, the customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the Bank’s market area. The consolidated financial statements include the accounts of the Company, the Bank, and the Bank’s wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Financial information for the periods before the Company’s mutual holding company reorganization and stock offering on July 17, 2019 are those of the Bank and its subsidiaries. The interim financial data as of March 31, 2020 and for the three and nine months ended March 31, 2020 and 2019, respectively, is unaudited and reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented in conformance with accounting principles generally accepted in the United States of America (“GAAP”). The results of operations for the three and nine months ended March 31, 2020 are not necessarily indicative of the results to be achieved for the remainder of fiscal 2020 or any other period. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s 2019 Annual Report on Form 10-K for the year ended June 30, 2019. |
Mutual Holding Company Reorganization and Minority Stock Issuance | Mutual Holding Company Reorganization and Minority Stock Issuance On July 17, 2019, Pioneer Bancorp, Inc. became the holding company of the Bank when it closed its stock offering in connection with the completion of the reorganization of the Bank into the two-tier mutual holding company form of organization. The Company sold 11,170,402 shares of common stock at a price of $10.00 per share, for net proceeds of $109.1 million, issued 14,287,723 shares to Pioneer Bancorp, MHC and contributed 519,554 shares of common stock and $250,000 in cash to the Pioneer Bank Charitable Foundation. The Company established an ESOP which owns 1,018,325 shares of common stock of the Company. The remaining amount of subscription proceeds received and recorded as a liability on June 30, 2019, was refunded to subscribers. Pioneer Bancorp, MHC now owns 55% of the common stock of the Company. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ substantially from those estimates. The allowance for loan losses, valuation of securities and other financial instruments, the funded status and expense of employee benefit plans, and the realizability of deferred tax assets are particularly subject to change. |
Reclassifications | Reclassifications Amounts in the prior period’s consolidated financial statements are reclassified whenever necessary to conform to the current period’s presentation. |
Adoption and Impact of Recent Accounting Pronouncements | Adoption of Recent Accounting Pronouncements On July 1, 2019, the Company adopted Accounting Standard Update (“ASU”) 2014-09 amending guidance on “Revenue from Contracts with Customers (Topic 606)” and all subsequent ASU’s that modified Topic 606. The objective of the ASU is to align the recognition of revenue with the transfer of promised goods or services provided to customers in an amount that reflects the consideration which the entity expects to be entitled in exchange for those goods or services. This ASU replaces most existing revenue recognition guidance under GAAP. A significant amount of the Company’s revenues are derived from net interest income on financial assets and liabilities, which are excluded from the scope of the amended guidance. With respect to noninterest income, the Company has identified revenue streams within the scope of the guidance, which include insurance revenues, wealth management services, service charges on deposits, interchange income, and gains (losses) from the transfer of other real estate owned. The Company recorded a net increase to beginning retained earnings of $291,000 as of July 1, 2019 due to the cumulative impact of adopting Topic 606, primarily driven by the recognition of insurance commission income. The adoption of Topic 606 did not have a significant impact on the Company’s consolidated financial statements as of and for the three and nine-month periods ended March 31, 2020. Refer to Note 10 for additional disclosures required by Topic 606. On July 1, 2019, the Company adopted ASU 2016-01 amending guidance on “Financial Instruments (Subtopic 825-10)”. This amendment addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. These amendments require equity securities to be measured at fair value with changes in the fair value to be recognized through net income. The amendments also simplify the impairment assessment of equity investments without readily determinable fair values by requiring assessment for impairment qualitatively at each reporting period. The Company evaluated its preferred stock holdings and concluded that the preferred stocks are not considered equity securities subject to ASU 2016-01. As of June 30, 2019, the Company had equity investments with a cost of $2.8 million and an estimated fair value of $3.6 million. On July 1, 2019, the Company recorded a cumulative-effect adjustment to increase retained earnings in the amount of $599,000 representing the unrealized gain, net of tax, on these equity securities. Changes in fair value during the three and nine-months ended March 31, 2020 have been recognized in net income (loss). On July 1, 2019, the Company adopted ASU 2016‑15 which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments are intended to reduce diversity in practice. The amendment covers the following cash flows: Cash payments for debt prepayment or extinguishment costs will be classified in financing activities. Upon settlement of zero-coupon bonds and bonds with insignificant cash coupons, the portion of the payment attributable to imputed interest will be classified as an operating activity, while the portion of the payment attributable to principal will be classified as a financing activity. Cash paid by an acquirer that is not soon after a business combination for the settlement of a contingent consideration liability will be separated between financing activities and operating activities. Cash payments up to the amount of the contingent consideration liability recognized at the acquisition date will be classified in financing activities; any excess will be classified in operating activities. Cash paid soon after the business combination will be classified in investing activities. Cash proceeds received from the settlement of insurance claims will be classified on the basis of the related insurance coverage (that is, the nature of the loss). Cash proceeds from lump-sum settlements will be classified based on the nature of each loss included in the settlement. Cash proceeds received from the settlement of corporate-owned life insurance (COLI) and bank-owned life insurance (BOLI) policies will be classified as cash inflows from investing activities. Cash payments for premiums on COLI and BOLI may be classified as cash outflows for investing, operating, or a combination of both. A transferor’s beneficial interest obtained in a securitization of financial assets will be disclosed as a noncash activity, and cash received from beneficial interests will be classified in investing activities. Distributions received from equity method investees will be classified using either a cumulative earnings approach or a look- through approach as an accounting policy election. The ASU contains additional guidance clarifying when an entity should separate cash receipts and cash payments and classify them into more than one class of cash flows (including when reasonable judgment is required to estimate and allocate cash flows) versus when an entity should classify the aggregate amount into one class of cash flows on the basis of predominance. The adoption of this guidance did not have a material impact on our consolidated results of operations or financial position. On July 1, 2019, the Company adopted ASU 2016‑18 related to guidance on “Statement of Cash Flows (Topic 230) Restricted Cash” which addresses diversity in practice from entities classifying and presenting transfers between cash and restricted cash as operating, investing or financing activities or as a combination of those activities in the statement of cash flows. The ASU requires entities to show the changes in the total cash, cash equivalents, restricted cash and restricted cash equivalents in the Statement of Cash Flows. As a result, transfers between such categories will no longer be presented in the Statement of Cash Flows. The adoption of this guidance did not have a material impact on our consolidated results of operations or financial position. On July 1, 2019, the Company adopted ASU 2017‑07 related to guidance on “Compensation - Retirement Benefits (Topic 715)” which improves the presentation of net periodic pension cost and net periodic postretirement benefit cost. ASU 2017‑07 requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The adoption of this guidance did not have a material impact on our consolidated results of operations or financial position. Impact of Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016‑02 to its guidance on “Leases (Topic 842)”. The new leases standard applies a right-of-use (ROU) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. For leases with a term of 12 months or less, a practical expedient is available whereby a lessee may elect, by class of underlying asset, not to recognize an ROU asset or lease liability. The new leases standard requires a lessor to classify leases as either sales-type, direct financing or operating, similar to existing U.S. GAAP. Classification depends on the same five criteria used by lessees plus certain additional factors. The subsequent accounting treatment for all three lease types is substantially equivalent to existing U.S. GAAP for sales-type leases, direct financing leases, and operating leases. However, the new standard updates certain aspects of the lessor accounting model to align it with the new lessee accounting model, as well as with the new revenue standard under Topic 606. Lessees and lessors are required to provide certain qualitative and quantitative disclosures to enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The amendments in ASU 2016‑02 are effective for the Company for the fiscal year beginning July 1, 2021. Early adoption is permitted. The adoption of this ASU will result in a gross up of the Consolidated Statements of Condition for right-of-use assets and associated lease liabilities for operating leases in which the Company is the lessee. In July 2018, the FASB issued ASU No. 2018‑10, Codification Improvements to Topic 842 - Leases to address certain narrow aspects of the guidance issued in ASU No. 2016‑02. In July 2018, the FASB issued ASU No. 2018‑11, Leases (Topic 842): Targeted Improvements, which amends FASB Accounting Standards Codification (ASC), Leases (Topic 842), to (1) add an optional transition method that would permit entities to apply the new requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption, and (2) provide a practical expedient for lessors regarding the separation of the lease and non-lease components of a contract. In December 2018, the FASB issued ASU No. 2018‑20, Narrow-Scope Improvements for Lessors, which addresses issues related to (1) sales tax and similar taxes collected from lessees, (2) certain lessor costs, and (3) recognition of variable payments for contracts with lease and non-lease components. The Company is evaluating the significance and other effects of adoption on the consolidated financial statements and related disclosures. The Company is performing its accounting analysis of its branch building and other leases underlying contracts. The Company is currently evaluating the potential impact on adoption of this ASU on our consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13 to its guidance on “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. ASU 2016‑13 requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using an expected credit loss model (referred to as the current expected credit loss (CECL) model). Under this model, entities will estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications unless reasonable expectation of a troubled debt restructuring exists) from the date of initial recognition of that instrument. The ASU also replaces the current accounting model for purchased credit impaired loans and debt securities. The allowance for credit losses for purchased financial assets with a more-than insignificant amount of credit deterioration since origination (“PCD assets”), should be determined in a similar manner to other financial assets measured on an amortized cost basis. However, upon initial recognition, the allowance for credit losses is added to the purchase price (“gross up approach”) to determine the initial amortized cost basis. The subsequent accounting for PCD financial assets is the same expected loss model described above. Further, the ASU made certain targeted amendments to the existing impairment model for available-for-sale (AFS) debt securities. For an AFS debt security for which there is neither the intent nor a more-likely-than-not requirement to sell, an entity will record credit losses as an allowance rather than a write-down of the amortized cost basis. The amendments in this ASU are effective for the Company for the fiscal year beginning July 1, 2023. An entity will apply the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). In November 2018, the FASB issued ASU 2018‑19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, which aligns the implementation date for nonpublic entities’ annual financial statements with the implementation date for their interim financial statements and clarifies the scope of the guidance in the amendments in ASU 2016‑13. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. ASU 2019-04 clarifies or addresses stakeholders’ specific issues about certain aspects of the amendments in Update 2016-13 related to measuring the allowance for loan losses under the new guidance. The effective dates and transition requirements for the amendments related to this Update are the same as the effective dates and transition requirements in Update 2016-13. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments Credit Losses clarifying certain amendments to various provisions of ASU No. 2016-13 relating to (1) purchased financial assets with credit deterioration, (2) financial assets secured by collateral maintenance agreements, (3) transition relief for troubled debt restructurings, and (4) disclosure relief when the practical expedient for accrued interest receivables is applied. The initial adjustment will not be reported in earnings and therefore will not have any material impact on our consolidated results of operations, but it is expected that it will have an impact on our consolidated financial position at the date of adoption of this ASU. At this time, we have not calculated the estimated impact that this ASU will have on our allowance for loan losses, however, we anticipate it will have a significant impact on the methodology process we utilize to calculate the allowance. Alternative methodologies are currently being considered. Data requirements and integrity are being reviewed and enhancements incorporated into standard processes. The Company is currently evaluating the potential impact on adoption of this ASU on our consolidated financial statements. In March 2017, the FASB issued ASU 2017‑08 to its guidance on “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310‑20) related to premium amortization on purchased callable debt securities. The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments in this ASU are effective for the Company for the fiscal year beginning July 1, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosure about a change in accounting principle. The adoption of this guidance is not expected to have a material impact on our consolidated results of operations or financial position. In August 2018, the FASB issued ASU 2018‑13 to its guidance on “Fair Value Measurement (Topic 820)”. This update modifies the disclosure requirements on fair value measurements. The following disclosure requirements were removed from Topic 820: (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (2) the policy for timing of transfers between levels; (3) the valuation processes for Level 3 fair value measurements; and (4) for nonpublic entities, the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period. The following disclosure requirements were modified in Topic 820: (1) in lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities; (2) for investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly; and (3) the amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. The following disclosure requirements were added to Topic 820; however, the disclosures are not required for nonpublic entities: (1) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and (2) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. In addition, the amendments eliminate at a minimum from the phrase “an entity shall disclose at a minimum” to promote the appropriate exercise of discretion by entities when considering fair value measurement disclosures and to clarify that materiality is an appropriate consideration of entities and their auditors when evaluating disclosure requirements. The amendments in ASU No. 2018‑13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU No. 2018‑13 and delay adoption of the additional disclosures until their effective date. The adoption of this guidance is not expected to have a material impact on our consolidated results of operations or financial position. In August 2018, the FASB has issued ASU 2018‑14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715‑20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans”, that applies to all employers that sponsor defined benefit pension or other postretirement plans. The amendments modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The following disclosure requirements were removed from Subtopic 715‑20: (1) the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year; (2) the amount and timing of plan assets expected to be returned to the employer; (3) the disclosures related to the June 2001 amendments to the Japanese Welfare Pension Insurance Law; related party disclosures about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan; (4) for nonpublic entities, the reconciliation of the opening balances to the closing balances of plan assets measured on a recurring basis in Level 3 of the fair value hierarchy. However, nonpublic entities will be required to disclose separately the amounts of transfers into and out of Level 3 of the fair value hierarchy and purchases of Level 3 plan assets; and (5) for public entities, the effects of a one-percentage-point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of net periodic benefit costs and (b) benefit obligation for postretirement health care benefits. The following disclosure requirements were added to Subtopic 715‑20: (1) the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates; and (2) an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The amendments also clarify the disclosure requirements in paragraph 715‑20‑50‑3, which state that the following information for defined benefit pension plans should be disclosed: (1) the projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets; and (2) the accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets. ASU No. 2018‑14 is effective for fiscal years ending after December 15, 2020, for public business entities and for fiscal years ending after December 15, 2021, for all other entities. Early adoption is permitted for all entities. The adoption of this guidance is not expected to have a material impact on our consolidated results of operations or financial position. In April 2019, the FASB issued an Update (ASU 2019-04), Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The amendments to Topic 326 and other Topics in this Update include items related to the amendments in Update 2016-13 discussed at the June 2018 and November 2018 Credit Losses TRG meetings. The amendments clarify or address stakeholders’ specific issues about certain aspects of the amendments in Update 2016-13 on a number of different topics, including the following: · Accrued Interest · Transfers between Classifications or Categories for Loans and Debt Securities · Recoveries · Consideration of Prepayments in Determining the Effective Interest Rate · Consideration of Estimated Costs to Sell When Foreclosure Is Probable · Vintage Disclosures— Line-of-Credit Arrangements Converted to Term Loans · Contractual Extensions and Renewals The ASU also covered a number of issues that related to hedge accounting including: · Partial-Term Fair Value Hedges of Interest Rate Risk · Amortization of Fair Value Hedge Basis Adjustments · Disclosure of Fair Value Hedge Basis Adjustments · Consideration of the Hedged Contractually Specified Interest Rate under the Hypothetical Derivative Method · Scoping for Not-for-Profit Entities · Hedge Accounting Provisions Applicable to Certain Private Companies and Not-for- Profit Entities · Application of a First- Payments-Received Cash Flow Hedging Technique to Overall Cash Flows on a Group of Variable Interest Payments · Transition Guidance For Codification Improvements specific to ASU 2016-01, the following topics were covered within ASU 2019-04: · Scope Clarifications · Held-to-Maturity Debt Securities Fair Value Disclosures · Applicability of Topic 820 to the Measurement Alternative · Remeasurement of Equity Securities at Historical Exchange Rates ASU 2019-04 has various implementation dates dependent on a number of factors as it pertains to the above items. In December 2019, the FASB issued ASU 2019-12, Income Taxes Topic 740. This update simplifies and improves accounting for income taxes by eliminating certain exceptions to the general rules and clarifying or amending other current guidance. The scope of FASB ASC Subtopic 740-10, Income Taxes -Overall, has been amended to require that, if a franchise (or similar tax) is partially based on income, (1) deferred tax assets and liabilities should be recognized and accounted for pursuant to FASB ASC 740, as should the amount of current tax expense that is based on income, and (2) any incremental amount incurred should be recorded as a non-income-based tax. Note that under the amended guidance, the effect of potentially paying a non-income-based tax in future years need not be considered in evaluating the realizability of deferred tax assets. The amendments in this ASU are effective for the Company for the fiscal year beginning July 1, 2022. Early adoption is permitted, including adoption in an interim period. If early adoption is elected, all of the amended guidance must be adopted in the same period. If early adoption is initially applied in an interim period, any adjustments should be reflected as of the beginning of the annual period that includes that interim period. The Company is currently evaluating the potential impact on adoption of this ASU on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments (1) apply to contract modifications that replace a reference rate affected by reference rate reform, (2) provide exceptions to existing guidance related to changes to the critical terms of a hedging relationship due to reference rate reform (3) provide optional expedients for fair value hedging relationships, cash flow hedging relationships, and net investment hedging relationships, and (4) provide a onetime election to sell, transfer, or both sell and transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform and that are classified as held to maturity before January 1, 2020. The amendments for contract modifications can be elected to be applied as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020. The amendments for existing hedging relationships can be elected to be applied as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company is currently evaluating the potential impact on adoption of this guidance on our consolidated financial statements. |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
INVESTMENT SECURITIES | |
Summary of amortized cost and estimated fair value of securities | The amortized cost and estimated fair value of securities are as follows (dollars in thousands): March 31, 2020 Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value Securities available for sale: U.S. Government and agency obligations $ 61,915 $ 431 $ — $ 62,346 Mortgage-backed securities - residential 85 — — 85 Asset-backed securities 67 42 (4) 105 Collateralized mortgage obligations - residential 450 261 (56) 655 Municipal obligations 5,762 10 — 5,772 Total debt securities 68,279 744 (60) 68,963 Preferred stocks 6,007 21 (1,360) 4,668 Total available for sale securities $ 74,286 $ 765 $ (1,420) $ 73,631 Securities held to maturity: Municipal obligations $ 4,139 $ 43 $ — $ 4,182 June 30, 2019 Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value Securities available for sale: U.S. Government and agency obligations $ 70,706 $ 164 $ (3) $ 70,867 Mortgage-backed securities - residential 109 3 — 112 Asset-backed securities 75 55 (2) 128 Collateralized mortgage obligations - residential 525 401 (37) 889 Municipal obligations 14,666 33 — 14,699 Total debt securities 86,081 656 (42) 86,695 Preferred stocks 6,007 52 (1,019) 5,040 Total available for sale securities $ 92,088 $ 708 $ (1,061) $ 91,735 Securities held to maturity: Municipal obligations $ 3,873 $ 14 $ — $ 3,887 |
Summary of estimated fair value and gross unrealized losses aggregated by security category and length of time such securities have been in a continuous unrealized loss position | The estimated fair value and gross unrealized losses aggregated by security category and length of time such securities have been in a continuous unrealized loss position, is summarized as follows (dollars in thousands): March 31, 2020 Less than 12 Months 12 Months or Longer Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Securities available for sale: Mortgage-backed securities - residential (1) $ 14 $ — $ 1 $ — $ 15 $ — Asset-backed securities 5 (1) 4 (3) 9 (4) Collateralized mortgage obligations - residential 30 (2) 141 (54) 171 (56) Preferred stocks — — 4,645 (1,360) 4,645 (1,360) $ 49 $ (3) $ 4,791 $ (1,417) $ 4,840 $ (1,420) June 30, 2019 Less than 12 Months 12 Months or Longer Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Securities available for sale: U.S. Government and agency obligations $ 4,969 $ (1) $ 7,988 $ (2) $ 12,957 $ (3) Mortgage-backed securities - residential (1) 1 — 2 — 3 — Asset-backed securities — — 5 (2) 5 (2) Collateralized mortgage obligations - residential 15 (9) 160 (28) 175 (37) Preferred stocks — — 4,986 (1,019) 4,986 (1,019) $ 4,985 $ (10) $ 13,141 $ (1,051) $ 18,126 $ (1,061) (1) Unrealized losses on these securities are less than $500. |
Summary of rollforward of the credit losses recognized in earnings | The table below presents a rollforward of the credit losses recognized in earnings (dollars in thousands): Balance, July 1, 2019 $ 1,477 Reductions for amounts realized for securities transactions (117) Balance, March 31, 2020 $ 1,360 |
Summary of fair value of debt securities and carrying amount, if different, by contractual maturity | The fair value of debt securities and carrying amount, if different, by contractual maturity were as follows (dollars in thousands). Securities not due at a single maturity date are shown separately. March 31, 2020 Amortized Estimated Cost Fair Value Securities available for sale: Due in one year or less $ 67,677 $ 68,118 Due after one to five years — — Mortgage-backed securities - residential 85 85 Asset-backed securities 67 105 Collateralized mortgage obligations - residential 450 655 Preferred stocks 6,007 4,668 $ 74,286 $ 73,631 Securities held to maturity: Due in one year or less $ 3,803 $ 3,846 Due after one to five years 226 226 Due after five to ten years 110 110 $ 4,139 $ 4,182 |
NET LOANS RECEIVABLE (Tables)
NET LOANS RECEIVABLE (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
NET LOANS RECEIVABLE | |
Schedule of net loans receivable | A summary of net loans receivable is as follows (dollars in thousands): March 31, 2020 June 30, 2019 Commercial: Real estate $ 458,633 $ 414,375 Commercial and industrial 175,490 183,262 Construction 88,132 85,274 Total commercial 722,255 682,911 Residential mortgages 285,834 281,388 Home equity loans and lines 81,405 80,258 Consumer 30,563 21,482 1,120,057 1,066,039 Net deferred loan costs 2,640 2,398 Allowance for loan losses (20,700) (14,499) Net loans receivable $ 1,101,997 $ 1,053,938 |
Schedule of activity in allowance for loan losses by portfolio segment | March 31, 2020 June 30, 2019 Commercial: Real estate $ 458,633 $ 414,375 Commercial and industrial 175,490 183,262 Construction 88,132 85,274 Total commercial 722,255 682,911 Residential mortgages 285,834 281,388 Home equity loans and lines 81,405 80,258 Consumer 30,563 21,482 1,120,057 1,066,039 Net deferred loan costs 2,640 2,398 Allowance for loan losses (20,700) (14,499) Net loans receivable $ 1,101,997 $ 1,053,938 The following tables present the activity in the allowance for loan losses by portfolio segment (dollars in thousands): For the Three Months Ended March 31, 2020 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses at beginning of period $ 12,760 $ 2,452 $ 868 $ 413 $ 16,493 Provisions charged to operations 1,411 813 205 121 2,550 Loans charged off — — — (64) (64) Recoveries on loans charged off (1) 1,707 — — 14 1,721 Allowance for loan losses at end of period $ 15,878 $ 3,265 $ 1,073 $ 484 $ 20,700 (1) The three months ended March 31, 2020 included a partial recovery in the amount of $1.7 million related to the charge-off of the entire principal balance owed to the Bank related to a business customer and various affiliated entities (collectively, the “Mann Entities”) commercial loan relationships in the first fiscal quarter of 2020. For the Three Months Ended March 31, 2019 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses at beginning of period $ 10,062 $ 2,459 $ 800 $ 279 $ 13,600 Provisions charged to operations 486 38 — 46 570 Loans charged off — (56) — (62) (118) Recoveries on loans charged off — — — 17 17 Allowance for loan losses at end of period $ 10,548 $ 2,441 $ 800 $ 280 $ 14,069 For the Nine Months Ended March 31, 2020 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses at beginning of period $ 11,057 $ 2,360 $ 813 $ 269 $ 14,499 Provisions charged to operations (1) 18,919 924 259 338 20,440 Loans charged off (1) (15,805) (19) — (153) (15,977) Recoveries on loans charged off (1) 1,707 — 1 30 1,738 Allowance for loan losses at end of period $ 15,878 $ 3,265 $ 1,073 $ 484 $ 20,700 (1) The nine months ended March 31, 2020 included a provision for loan losses in the amount of $15.8 million related to the charge-off of the entire principal balance owed to the Bank related to the Mann Entities commercial loan relationships which were recognized in the first fiscal quarter of 2020. The nine months ended March 31, 2020 also included a partial recovery in the amount of $1.7 million related to the charge-off of the Mann Entities commercial loan relationships which was recognized in the third fiscal quarter of 2020. For the Nine Months Ended March 31, 2019 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses at beginning of period $ 10,414 $ 2,166 $ 770 $ 160 $ 13,510 Provisions charged to operations 1,180 331 30 239 1,780 Loans charged off (1,046) (56) — (151) (1,253) Recoveries on loans charged off — — — 32 32 Allowance for loan losses at end of period $ 10,548 $ 2,441 $ 800 $ 280 $ 14,069 |
Schedule of balance in allowance for loan losses and recorded investment | The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method (dollars in thousands): March 31, 2020 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses: Related to loans individually evaluated for impairment $ 533 $ — $ — $ — $ 533 Related to loans collectively evaluated for impairment 15,345 3,265 1,073 484 20,167 Ending balance $ 15,878 $ 3,265 $ 1,073 $ 484 $ 20,700 Loans: Individually evaluated for impairment $ 6,622 $ — $ — $ — $ 6,622 Loans collectively evaluated for impairment 715,633 285,834 81,405 30,563 1,113,435 Ending balance $ 722,255 $ 285,834 $ 81,405 $ 30,563 $ 1,120,057 June 30, 2019 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses: Related to loans individually evaluated for impairment $ 426 $ — $ — $ — $ 426 Related to loans collectively evaluated for impairment 10,631 2,360 813 269 14,073 Ending balance $ 11,057 $ 2,360 $ 813 $ 269 $ 14,499 Loans: Individually evaluated for impairment $ 8,067 $ — $ — $ — $ 8,067 Loans collectively evaluated for impairment 674,844 281,388 80,258 21,482 1,057,972 Ending balance $ 682,911 $ 281,388 $ 80,258 $ 21,482 $ 1,066,039 |
Schedule of impaired loans by class | The following tables present information related to impaired loans by class as of (dollars in thousands): For the Nine Months Ended March 31, 2020 March 31, 2020 Unpaid Allowance for Average Interest Principal Recorded Loan Losses Recorded Income Balance Investment Allocated Investment Recognized With no related allowance recorded: Commercial: Real estate $ 2,390 $ 2,390 $ — $ 2,360 $ 231 Commercial and industrial 46 42 — 46 — Construction 1,298 1,298 — 1,324 — Subtotal 3,734 3,730 — 3,730 231 With an allowance recorded: Commercial: Real estate 1,523 1,463 30 1,584 — Commercial and industrial 1,437 1,429 503 1,463 69 Subtotal 2,960 2,892 533 3,047 69 Total $ 6,694 $ 6,622 $ 533 $ 6,777 $ 300 For the Year Ended June 30, 2019 June 30, 2019 Unpaid Allowance for Average Interest Principal Recorded Loan Losses Recorded Income Balance Investment Allocated Investment Recognized With no related allowance recorded: Commercial: Real estate $ 5,593 $ 5,376 $ — $ 5,608 $ — Commercial and industrial 59 48 — 59 — Construction 1,377 1,377 — 1,106 — Subtotal 7,029 6,801 — 6,773 — With an allowance recorded: Commercial: Real estate — — — — — Commercial and industrial 1,266 1,266 426 1,293 95 Subtotal 1,266 1,266 426 1,293 95 Total $ 8,295 $ 8,067 $ 426 $ 8,066 $ 95 |
Schedule of recorded investment in nonaccrual and loans past due over 90 days still on accrual | The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans (dollars in thousands): March 31, June 30, 2020 2019 Past Due Past Due 90 Days 90 Days Still on Still on Nonaccrual Accrual Nonaccrual Accrual Commercial: Real estate $ 3,369 $ 56 $ 5,618 $ 58 Commercial and industrial 42 5 42 — Construction 1,298 — 1,377 — Residential mortgages 4,191 — 4,028 — Home equity loans and lines 1,511 54 1,497 41 Consumer 210 10 — 19 $ 10,621 $ 125 $ 12,562 $ 118 |
Schedule of aging of recorded investment | The following tables present the aging of the recorded investment in loans by class of loans as of (dollars in thousands): March 31, 2020 30 - 59 60 - 89 90 or more Days Days Days Total Loans Not Past Due Past Due Past Due Past Due Past Due Total Commercial: Real estate $ 5,798 $ — $ 2,189 $ 7,987 $ 450,646 $ 458,633 Commercial and industrial 4,223 — 47 4,270 171,220 175,490 Construction 6,609 — 1,298 7,907 80,225 88,132 Residential mortgages 685 672 2,583 3,940 281,894 285,834 Home equity loans and lines 270 192 1,201 1,663 79,742 81,405 Consumer 3 — 10 13 30,550 30,563 Total $ 17,588 $ 864 $ 7,328 $ 25,780 $ 1,094,277 $ 1,120,057 June 30, 2019 30 - 59 60 - 89 90 or more Days Days Days Total Loans Not Past Due Past Due Past Due Past Due Past Due Total Commercial: Real estate $ 3 $ — $ 5,490 $ 5,493 $ 408,882 $ 414,375 Commercial and industrial — — 42 42 183,220 183,262 Construction — — 1,377 1,377 83,897 85,274 Residential mortgages 156 217 2,699 3,072 278,316 281,388 Home equity loans and lines 476 318 988 1,782 78,476 80,258 Consumer 5 — 19 24 21,458 21,482 Total $ 640 $ 535 $ 10,615 $ 11,790 $ 1,054,249 $ 1,066,039 |
Commercial | |
NET LOANS RECEIVABLE | |
Schedule of loans by risk category | The following tables present commercial loans summarized by class of loans and the risk category (dollars in thousands): March 31, 2020 Special Pass Mention Substandard Doubtful Total Commercial Real estate $ 447,313 $ 484 $ 10,836 $ — $ 458,633 Commercial and industrial 161,059 6,583 7,848 — 175,490 Construction 86,216 — 1,916 — 88,132 $ 694,588 $ 7,067 $ 20,600 $ — $ 722,255 June 30, 2019 Special Pass Mention Substandard Doubtful Total Commercial Real estate $ 406,317 $ 2,440 $ 5,618 $ — $ 414,375 Commercial and industrial 179,099 226 3,937 — 183,262 Construction 83,897 — 1,377 — 85,274 $ 669,313 $ 2,666 $ 10,932 $ — $ 682,911 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
DERIVATIVES | |
Schedule of offsetting of derivative assets and liabilities | The estimated fair value of derivatives not designated as hedging instruments are as follows (dollars in thousands): March 31, 2020 Derivative Derivative Assets Liabilities Gross interest rate swaps $ 40,096 $ 40,096 Less: master netting arrangements — — Less: cash collateral applied — (40,062) Net amount $ 40,096 $ 34 June 30, 2019 Derivative Derivative Assets Liabilities Gross interest rate swaps $ 13,550 $ 13,550 Less: master netting arrangements (88) (88) Less: cash collateral applied — (13,318) Net amount $ 13,462 $ 144 |
OTHER COMPREHENSIVE INCOME (L_2
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
OTHER COMPREHENSIVE INCOME (LOSS) | |
Schedule of reclassifications out of accumulated other comprehensive loss | Reclassifications out of accumulated other comprehensive loss were as follows (dollars in thousands): Details About Accumulated Other Amount Reclassified from Accumulated Affected Line Item in the Statement Comprehensive Loss Components Other Comprehensive Loss Where Net Income is Presented Three Months Ended Nine Months Ended March 31, March 31, 2020 2019 2020 2019 Unrealized gains/losses on securities (before tax): Net gains included in net income $ 83 $ — $ 134 $ — Net gain on available for sale securities transactions Tax expense (22) — (35) — Income tax expense Net of tax 61 — 99 — Amortization of defined benefit plan items (before tax): Net actuarial loss — — — — Salaries and employee benefits Tax benefit — — — — Income tax expense Net of tax — — — — Total reclassification for the period, net of tax $ 61 $ — $ 99 $ — |
Schedule of changes in components of accumulated other comprehensive income (loss), net of tax | The balances and changes in the components of accumulated other comprehensive income (loss), net of tax are as follows (dollars in thousands): For the Three Months Ended March 31, Accumulated Unrealized Other Gains/Losses Defined Comprehensive on Securities Benefit Plans Loss 2020: Accumulated other comprehensive income (loss) as of January 1, 2020 $ (11) (11,441) $ (11,452) Other comprehensive income (loss) before reclassifications (412) — (412) Amounts reclassified from accumulated other comprehensive income (loss) (61) — (61) Accumulated other comprehensive income (loss) as of March 31, 2020 $ (484) (11,441) $ (11,925) 2019: Accumulated other comprehensive income (loss) as of January 1, 2019 $ (502) (9,399) $ (9,901) Other comprehensive income (loss) before reclassifications 590 — 590 Accumulated other comprehensive income (loss) as of March 31, 2019 $ 88 (9,399) $ (9,311) For the Nine Months Ended March 31, Accumulated Unrealized Other Gains/Losses Defined Comprehensive on Securities Benefit Plans Loss 2020: Accumulated other comprehensive income (loss) as of July l, 2019 $ 338 (11,441) $ (11,103) Other comprehensive income (loss) before reclassifications (124) — (124) Amounts reclassified from accumulated other comprehensive income (loss) (99) — (99) Reclassification for change in accounting principle (1) (599) — (599) Accumulated other comprehensive income (loss) as of March 31, 2020 (484) (11,441) (11,925) 2019: Accumulated other comprehensive income (loss) as of July l, 2018 410 (9,399) (8,989) Other comprehensive income (loss) before reclassifications (322) — (322) Accumulated other comprehensive income (loss) as of March 31, 2019 $ 88 (9,399) $ (9,311) (1) Adoption of ASU 2016-01 – cumulative effect of change in measurement of equity securities. |
Schedule of income tax expense (benefit) allocated to component of other comprehensive income (loss) | The amounts of income tax expense (benefit) allocated to each component of other comprehensive income (loss) were as follows (dollars in thousands): For the Three Months Ended March 31, 2020 2019 Unrealized gains/losses on securities: Unrealized holdings (losses) gains arising during the period $ (146) $ 209 Reclassification adjustment for gains included in net income (22) — (168) 209 Defined benefit plans: Change in funded status — — Reclassification adjustment for accretion of net prior service cost — — Reclassification adjustment for amortization of net actuarial loss — — — — $ (168) $ 209 For the Nine Months Ended March 31, 2020 2019 Unrealized gains/losses on securities: Unrealized holdings (losses) gains arising during the period $ (45) $ (114) Reclassification adjustment for gains included in net income (35) — (80) (114) Defined benefit plans: Change in funded status — — Reclassification adjustment for amortization of net actuarial loss — — — — $ (80) $ (114) |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Pension plan | |
EMPLOYEE BENEFIT PLANS | |
Summary of net periodic cost included in the Company’s consolidated statements of income | Net periodic pension cost included in the Company’s consolidated statements of operations included the following components (dollars in thousands): For the Three Months Ended For the Nine Months Ended March 31, March 31, 2020 2019 2020 2019 Service cost $ 563 $ 431 $ 1,689 $ 1,050 Interest cost 492 314 1,476 1,281 Expected return on plan assets (926) (573) (2,777) (2,349) Amortization of net actuarial loss 270 73 810 508 Net periodic pension cost $ 399 $ 245 $ 1,198 $ 490 |
Post-retirement benefit plan | |
EMPLOYEE BENEFIT PLANS | |
Summary of net periodic cost included in the Company’s consolidated statements of income | Net periodic post-retirement benefit cost included in the Company’s consolidated statements of operations included the following components (dollars in thousands): For the Three Months Ended For the Nine Months Ended March 31, March 31, 2020 2019 2020 2019 Service cost $ 9 $ 7 $ 27 $ 21 Interest cost 16 17 48 50 Amortization of net actuarial loss 1 — 2 — Net periodic post-retirement benefit cost $ 26 $ 24 $ 77 $ 71 |
Schedule of shares held by the ESOP | Shares held by the ESOP include the following (dollars in thousands): March 31, 2020 Allocated 50,916 Committed to be allocated 12,729 Unallocated 954,680 Total Shares 1,018,325 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENT LIABILITIES | |
Schedule of contractual amount of exposure to off-balance-sheet risk | March 31, 2020 Fixed Rate Variable Rate Total Financial instruments whose contract amounts represent credit risk (including unused lines of credit and unadvanced loan funds): Commitments to extend credit $ 32,859 $ 205,008 $ 237,867 Standby letters of credit — 30,483 30,483 $ 32,859 $ 235,491 $ 268,350 June 30, 2019 Fixed Rate Variable Rate Total Financial instruments whose contract amounts represent credit risk (including unused lines of credit and unadvanced loan funds): Commitments to extend credit $ 23,892 $ 357,223 $ 381,115 Standby letters of credit — 33,385 33,385 $ 23,892 $ 390,608 $ 414,500 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
FAIR VALUE | |
Schedule of financial assets and financial liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis are summarized below (dollars in thousands): Fair Value Measurements at March 31, 2020 Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Assets: Available for sale securities: U.S. Government and agency obligations $ 62,346 $ 62,346 $ — $ — Mortgage-backed securities - residential 85 — 85 — Asset-backed securities 105 — 105 — Collateralized mortgage obligations – residential 655 — 655 — Municipal obligations 5,772 — 5,772 — Total debt securities 68,963 62,346 6,617 — Preferred stocks 4,668 1,872 2,796 — Total available for sale securities 73,631 64,218 9,413 — Equity securities 2,884 2,884 — — Derivative assets 40,096 — 40,096 — Total $ 116,611 $ 67,102 $ 49,509 $ — Liabilities: Derivative liabilities $ 34 $ — $ 34 $ — Total $ 34 $ — $ 34 $ — Fair Value Measurements at June 30, 2019 Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Assets: Available for sale securities: U.S. Government and agency obligations $ 70,867 $ 70,867 $ — $ — Mortgage-backed securities - residential 112 — 112 — Asset-backed securities 128 — 128 — Collateralized mortgage obligations – residential 889 — 889 — Municipal obligations 14,699 — 14,699 — Total debt securities 86,695 70,867 15,828 — Preferred stocks 5,040 1,970 3,070 — Total available for sale securities 91,735 72,837 18,898 — Equity securities 3,618 3,618 — — Derivative assets 13,462 — 13,462 — Total $ 108,815 $ 76,455 $ 32,360 $ — Liabilities: Derivative liabilities $ 144 $ — $ 144 $ — Total $ 144 $ — $ 144 $ — |
Schedule of assets and liabilities measured at fair value on a non-recurring basis | Assets and liabilities measured at fair value on a non-recurring basis are summarized below (dollars in thousands): Fair Value Measurements Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) March 31, 2020 Impaired loans: Commercial loans $ 2,359 $ — $ — $ 2,359 OREO 260 — — 260 June 30, 2019 Impaired loans: Commercial loans $ 840 $ — $ — $ 840 OREO 158 — — 158 |
Schedule of carrying and estimated fair values of financial assets and liabilities | The carrying and estimated fair values of financial assets and liabilities were as follows (dollars in thousands): March 31, 2020 Fair Value Measurements Using Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 190,201 $ 190,201 $ 190,201 $ — $ — Securities available for sale 73,631 73,631 64,218 9,413 — Securities held to maturity 4,139 4,182 — 4,182 — Equity securities 2,884 2,884 2,884 — — FHLBNY stock 1,824 1,824 — 1,824 — Net loans receivable 1,101,997 1,127,223 — — 1,127,223 Accrued interest receivable 4,026 4,026 — 4,026 — Derivatives 40,096 40,096 — 40,096 — Financial liabilities Deposits Savings, money market, and demand accounts $ 1,114,187 $ 1,114,187 $ — $ 1,114,187 $ — Time deposits 123,488 124,826 — 124,826 — Mortgagors’ escrow deposits 3,705 3,705 — 3,705 — FHLB advances 20,000 20,000 — 20,000 — Accrued interest payable 191 191 — 191 — Derivatives 34 34 — 34 — June 30, 2019 Fair Value Measurements Using Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 230,109 $ 230,109 $ 230,109 $ — $ — Securities available for sale 91,735 91,735 72,837 18,898 — Securities held to maturity 3,873 3,887 — 3,887 — Equity securities 3,618 3,618 3,618 — — FHLBNY stock 924 924 — 924 — Net loans receivable 1,053,938 1,065,328 — — 1,065,328 Accrued interest receivable 4,374 4,374 — 4,374 — Derivatives 13,462 13,462 — 13,462 — Financial liabilities Deposits Savings, money market, and demand accounts $ 1,200,753 $ 1,200,753 $ — $ 1,200,753 $ — Time deposits 130,565 130,680 — 130,680 — Mortgagors’ escrow deposits 6,044 6,044 — 6,044 — Accrued interest payable 17 17 — 17 — Derivatives 144 144 — 144 — |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
REVENUE RECOGNITION | |
Schedule of revenue recognition | For the Three Months Ended For the Nine Months Ended March 31, 2020 March 31, 2020 (dollars in thousands) (dollars in thousands) Non-interest Income In scope of "ASC" Topic 606: Insurance services $ 1,060 $ 3,092 Wealth management services 748 2,141 Service charges on deposit accounts 784 2,559 Card services income 649 2,088 Other 69 200 Non-interest income in scope of "ASC" Topic 606 3,310 10,080 Non-interest income out of scope of "ASC" Topic 606 (645) 1,991 Total non-interest income $ 2,665 $ 12,071 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
EARNINGS (LOSS) PER SHARE | |
Schedule of earnings per share | For the Three Months Ended For the Nine Months Ended March 31, March 31, 2020 2020 (Dollars in thousands, expect share and per share amounts) Net income (loss) applicable to common stock $ 849 $ (7,985) Average number of common shares outstanding 25,977,679 25,977,679 Less: Average unallocated ESOP shares 961,045 971,652 Average number of common shares outstanding used to calculate basic and diluted earnings per common share 25,016,634 25,006,027 Income (loss) per common share: Basic $ 0.03 $ (0.32) Diluted $ 0.03 $ (0.32) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Other (Details) | 9 Months Ended |
Mar. 31, 2020Office | |
Nature of Operations and Principals of Consolidation | |
Number of offices in Capital Region of New York | 22 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Mutual Holding Company Reorganization and Minority Stock Issuance (Details) - USD ($) | Jul. 17, 2019 | Mar. 31, 2020 |
Mutual Holding Company Reorganization and Minority Stock Issuance | ||
Net proceeds from sale of stock | $ 109,055,000 | |
Stock contributed to Pioneer Bank Charitable Foundation (in shares) | 519,554 | |
Cash contributed to Pioneer Bank Charitable Foundation | $ 250,000 | |
Pioneer Bancorp, MHC | ||
Mutual Holding Company Reorganization and Minority Stock Issuance | ||
Sale of stock (in shares) | 14,287,723 | |
Ownership interest (as a percent) | 55.00% | |
Pioneer Bank ESOP | ||
Mutual Holding Company Reorganization and Minority Stock Issuance | ||
Numbers of shares owned by ESOP | 1,018,325 | |
Initial Public Offering | ||
Mutual Holding Company Reorganization and Minority Stock Issuance | ||
Sale of stock (in shares) | 11,170,402 | |
Share price | $ 10 | |
Net proceeds from sale of stock | $ 109,100,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Adoption of Recent Accounting Pronouncements (Details) - USD ($) | Mar. 31, 2020 | Jul. 01, 2019 | Jun. 30, 2019 |
Adoption of Recent Accounting Pronouncements | |||
Equity securities | $ 2,884,000 | $ 3,618,000 | |
Equity securities | |||
Adoption of Recent Accounting Pronouncements | |||
Amortized Cost | 2,800,000 | ||
Equity securities | $ 3,600,000 | ||
ASU 2014-09 | |||
Adoption of Recent Accounting Pronouncements | |||
Net increase to beginning retained earnings due to impact of adopting new ASU | $ 291,000 | ||
ASU 2016-01 | |||
Adoption of Recent Accounting Pronouncements | |||
Net increase to beginning retained earnings due to impact of adopting new ASU | $ 599,000 |
INVESTMENT SECURITIES - Amortiz
INVESTMENT SECURITIES - Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Securities available for sale | ||
Amortized Cost, Preferred stock | $ 6,007 | |
Estimated Fair Value, Preferred stock | 4,668 | |
Total Amortized Cost, Available-For-Sale Debt Securities and Preferred Stock | 74,286 | $ 92,088 |
Total Gross Unrealized Gain, Available-For-Sale Debt Securities and Preferred Stock | 765 | 708 |
Total Gross Unrealized Loss, Available-For-Sale Debt Securities and Preferred Stock | (1,420) | (1,061) |
Total Estimated Fair Value, Available-For-Sale Debt Securities and Preferred Stock | 73,631 | 91,735 |
Securities held to maturity: | ||
Amortized Cost | 4,139 | 3,873 |
Estimated fair value | 4,182 | 3,887 |
U.S. Government and agency obligations | ||
Securities available for sale | ||
Total Amortized Cost | 61,915 | 70,706 |
Total Gross Unrealized Gains | 431 | 164 |
Gross Unrealized Losses, Debt Securities | (3) | |
Estimated Fair Value, Debt Securities | 62,346 | 70,867 |
Mortgage-backed securities – residential | ||
Securities available for sale | ||
Total Amortized Cost | 85 | 109 |
Total Gross Unrealized Gains | 3 | |
Estimated Fair Value, Debt Securities | 85 | 112 |
Asset-backed securities | ||
Securities available for sale | ||
Total Amortized Cost | 67 | 75 |
Total Gross Unrealized Gains | 42 | 55 |
Gross Unrealized Losses, Debt Securities | (4) | (2) |
Estimated Fair Value, Debt Securities | 105 | 128 |
Collateralized mortgage obligations - residential | ||
Securities available for sale | ||
Total Amortized Cost | 450 | 525 |
Total Gross Unrealized Gains | 261 | 401 |
Gross Unrealized Losses, Debt Securities | (56) | (37) |
Estimated Fair Value, Debt Securities | 655 | 889 |
Municipal obligations | ||
Securities available for sale | ||
Total Amortized Cost | 5,762 | 14,666 |
Total Gross Unrealized Gains | 10 | 33 |
Estimated Fair Value, Debt Securities | 5,772 | 14,699 |
Securities held to maturity: | ||
Amortized Cost | 4,139 | 3,873 |
Gross Unrealized Gains | 43 | 14 |
Estimated fair value | 4,182 | 3,887 |
Debt Securities | ||
Securities available for sale | ||
Total Amortized Cost | 68,279 | 86,081 |
Total Gross Unrealized Gains | 744 | 656 |
Gross Unrealized Losses, Debt Securities | (60) | (42) |
Estimated Fair Value, Debt Securities | 68,963 | 86,695 |
Preferred stocks | ||
Securities available for sale | ||
Amortized Cost, Preferred stock | 6,007 | 6,007 |
Gross Unrealized Gains, Preferred stock | 21 | 52 |
Gross Unrealized Loss, Preferred stock | (1,360) | (1,019) |
Estimated Fair Value, Preferred stock | $ 4,668 | $ 5,040 |
INVESTMENT SECURITIES - Estimat
INVESTMENT SECURITIES - Estimated Fair Value and Gross Unrealized Losses (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Estimated Fair Value | ||
Less then 12 Months, Debt Securities and Preferred Stock | $ 49 | $ 4,985 |
12 Months or Longer, Debt Securities and Preferred Stock | 4,791 | 13,141 |
Total, Debt Securities and Preferred Stock | 4,840 | 18,126 |
Unrealized Losses | ||
Less than 12 Months, Debt Securities and Preferred Stock | (3) | (10) |
12 Months or Longer, Debt Securities and Preferred Stock | (1,417) | (1,051) |
Total, Debt Securities and Preferred Stock | (1,420) | (1,061) |
U.S. Government and agency obligations | ||
Estimated Fair Value | ||
Less than 12 Months | 4,969 | |
12 Months or Longer | 7,988 | |
Total | 12,957 | |
Unrealized Losses | ||
Less than 12 Months | (1) | |
12 Months or Longer | (2) | |
Total | (3) | |
Mortgage-backed securities – residential | ||
Estimated Fair Value | ||
Less than 12 Months | 14 | 1 |
12 Months or Longer | 1 | 2 |
Total | 15 | 3 |
Asset-backed securities | ||
Estimated Fair Value | ||
Less than 12 Months | 5 | |
12 Months or Longer | 4 | 5 |
Total | 9 | 5 |
Unrealized Losses | ||
Less than 12 Months | (1) | |
12 Months or Longer | (3) | (2) |
Total | (4) | (2) |
Collateralized mortgage obligations - residential | ||
Estimated Fair Value | ||
Less than 12 Months | 30 | 15 |
12 Months or Longer | 141 | 160 |
Total | 171 | 175 |
Unrealized Losses | ||
Less than 12 Months | (2) | (9) |
12 Months or Longer | (54) | (28) |
Total | (56) | (37) |
Preferred stocks | ||
Estimated Fair Value | ||
12 Months or Longer, Preferred Stock | 4,645 | 4,986 |
Total, Preferred Stock | 4,645 | 4,986 |
Unrealized Losses | ||
12 Months or Longer, Preferred Stock | (1,360) | (1,019) |
Total, Preferred Stock | $ (1,360) | $ (1,019) |
INVESTMENT SECURITIES - Other (
INVESTMENT SECURITIES - Other (Details) $ in Thousands | 9 Months Ended | |
Mar. 31, 2020USD ($)security | Jun. 30, 2019USD ($) | |
INVESTMENT SECURITIES | ||
Securities with unrealized losses | security | 48 | |
Equity securities | $ 2,884 | $ 3,618 |
Non-investment grade | ||
INVESTMENT SECURITIES | ||
Amortized Cost | 2,200 | |
Equity securities | $ 1,900 | |
Number of securities evaluated for impairment | security | 57 | |
Securities available for sale, amortized cost | $ 400 | |
Securities with remaining par value | $ 1,800 |
INVESTMENT SECURITIES - Rollfor
INVESTMENT SECURITIES - Rollforward of the credit losses (Details) $ in Thousands | 9 Months Ended |
Mar. 31, 2020USD ($) | |
Rollforward of the credit losses recognized in earnings | |
Balance at the beginning or period | $ 1,477 |
OTTI - securities | (117) |
Balance at the end of period | $ 1,360 |
INVESTMENT SECURITIES - Contrac
INVESTMENT SECURITIES - Contractual Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Securities available for sale, amortized cost | ||
Due in one year or less | $ 67,677 | |
Amortized Cost, Preferred stock | 6,007 | |
Total Amortized Cost, Available-For-Sale Debt Securities and Preferred Stock | 74,286 | $ 92,088 |
Securities available for sale, estimated fair value | ||
Due in one year or less | 68,118 | |
Estimated Fair Value, Preferred stock | 4,668 | |
Total Estimated Fair Value, Available-For-Sale Debt Securities and Preferred Stock | 73,631 | 91,735 |
Securities held to maturity, amortized cost | ||
Due in one year or less | 3,803 | |
Due after one to five years | 226 | |
Due after five to ten years | 110 | |
Amortized cost | 4,139 | 3,873 |
Securities held to maturity, estimated fair value | ||
Due in one year or less | 3,846 | |
Due after one to five years | 226 | |
Due after five to ten years | 110 | |
Estimated fair value | 4,182 | $ 3,887 |
Mortgage-backed securities – residential | ||
Securities available for sale, amortized cost | ||
Without single maturity date | 85 | |
Securities available for sale, estimated fair value | ||
Without single maturity date | 85 | |
Asset-backed securities | ||
Securities available for sale, amortized cost | ||
Without single maturity date | 67 | |
Securities available for sale, estimated fair value | ||
Without single maturity date | 105 | |
Collateralized mortgage obligations - residential | ||
Securities available for sale, amortized cost | ||
Without single maturity date | 450 | |
Securities available for sale, estimated fair value | ||
Without single maturity date | $ 655 |
INVESTMENT SECURITIES - Sales o
INVESTMENT SECURITIES - Sales of Securities, Realized Gain/Losses (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | |
INVESTMENT SECURITIES | |||||
Proceeds from the sale of securities available for sale | $ 5,000,000 | $ 0 | $ 5,030,000 | $ 0 | |
Realized gross gains | 83,000 | 83,000 | |||
Gross realized gains from other securities transactions | 51,000 | ||||
Proceeds from the sales of securities held to maturity | 0 | $ 0 | 0 | $ 0 | |
Carrying value of available for sale securities pledged to secure FHLBNY advances and municipal deposits | $ 67,000,000 | $ 67,000,000 | $ 84,900,000 |
NET LOANS RECEIVABLE - Summary
NET LOANS RECEIVABLE - Summary of Net Loans Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
NET LOANS RECEIVABLE | ||||||
Gross Loans Receivable | $ 1,120,057 | $ 1,066,039 | ||||
Net deferred loan costs | 2,640 | 2,398 | ||||
Allowance for loan losses | (20,700) | $ (16,493) | (14,499) | $ (14,069) | $ (13,600) | $ (13,510) |
Net Loans Receivable | 1,101,997 | 1,053,938 | ||||
Commercial | ||||||
NET LOANS RECEIVABLE | ||||||
Gross Loans Receivable | 722,255 | 682,911 | ||||
Allowance for loan losses | (15,878) | (12,760) | (11,057) | (10,548) | (10,062) | (10,414) |
Commercial | Real estate | ||||||
NET LOANS RECEIVABLE | ||||||
Gross Loans Receivable | 458,633 | 414,375 | ||||
Commercial | Commercial and industrial | ||||||
NET LOANS RECEIVABLE | ||||||
Gross Loans Receivable | 175,490 | 183,262 | ||||
Commercial | Construction | ||||||
NET LOANS RECEIVABLE | ||||||
Gross Loans Receivable | 88,132 | 85,274 | ||||
Residential mortgages | ||||||
NET LOANS RECEIVABLE | ||||||
Gross Loans Receivable | 285,834 | 281,388 | ||||
Allowance for loan losses | (3,265) | (2,452) | (2,360) | (2,441) | (2,459) | (2,166) |
Home equity loans and lines | ||||||
NET LOANS RECEIVABLE | ||||||
Gross Loans Receivable | 81,405 | 80,258 | ||||
Allowance for loan losses | (1,073) | (868) | (813) | (800) | (800) | (770) |
Consumer | ||||||
NET LOANS RECEIVABLE | ||||||
Gross Loans Receivable | 30,563 | 21,482 | ||||
Allowance for loan losses | $ (484) | $ (413) | $ (269) | $ (280) | $ (279) | $ (160) |
NET LOANS RECEIVABLE - Allowanc
NET LOANS RECEIVABLE - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Allowance for loan losses: | ||||
Allowance for loan losses at beginning of period | $ 16,493 | $ 13,600 | $ 14,499 | $ 13,510 |
Provision charged to operations | 2,550 | 570 | 20,440 | 1,780 |
Loans charged off | (64) | (118) | (15,977) | (1,253) |
Recoveries on loans charged off | 1,721 | 17 | 1,738 | 32 |
Allowance for loan losses at end of period | 20,700 | 14,069 | 20,700 | 14,069 |
Commercial | ||||
Allowance for loan losses: | ||||
Allowance for loan losses at beginning of period | 12,760 | 10,062 | 11,057 | 10,414 |
Provision charged to operations | 1,411 | 486 | 18,919 | 1,180 |
Loans charged off | (15,805) | (1,046) | ||
Recoveries on loans charged off | 1,707 | 1,707 | ||
Allowance for loan losses at end of period | 15,878 | 10,548 | 15,878 | 10,548 |
Residential mortgages | ||||
Allowance for loan losses: | ||||
Allowance for loan losses at beginning of period | 2,452 | 2,459 | 2,360 | 2,166 |
Provision charged to operations | 813 | 38 | 924 | 331 |
Loans charged off | (56) | (19) | (56) | |
Allowance for loan losses at end of period | 3,265 | 2,441 | 3,265 | 2,441 |
Home equity loans and lines | ||||
Allowance for loan losses: | ||||
Allowance for loan losses at beginning of period | 868 | 800 | 813 | 770 |
Provision charged to operations | 205 | 259 | 30 | |
Recoveries on loans charged off | 1 | |||
Allowance for loan losses at end of period | 1,073 | 800 | 1,073 | 800 |
Consumer | ||||
Allowance for loan losses: | ||||
Allowance for loan losses at beginning of period | 413 | 279 | 269 | 160 |
Provision charged to operations | 121 | 46 | 338 | 239 |
Loans charged off | (64) | (62) | (153) | (151) |
Recoveries on loans charged off | 14 | 17 | 30 | 32 |
Allowance for loan losses at end of period | $ 484 | $ 280 | $ 484 | $ 280 |
NET LOANS RECEIVABLE - Balance
NET LOANS RECEIVABLE - Balance in Allowance for Loan Losses and recorded Investment (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Allowance for loan losses: | ||||||
Related to loans individually evaluated for impairment | $ 533 | $ 426 | ||||
Related to loans collectively evaluated for impairment | 20,167 | 14,073 | ||||
Ending balance | 20,700 | $ 16,493 | 14,499 | $ 14,069 | $ 13,600 | $ 13,510 |
Loans: | ||||||
Individually evaluated for impairment | 6,622 | 8,067 | ||||
Loans collectively evaluated for impairment | 1,113,435 | 1,057,972 | ||||
Total | 1,120,057 | 1,066,039 | ||||
Commercial | ||||||
Allowance for loan losses: | ||||||
Related to loans individually evaluated for impairment | 533 | 426 | ||||
Related to loans collectively evaluated for impairment | 15,345 | 10,631 | ||||
Ending balance | 15,878 | 12,760 | 11,057 | 10,548 | 10,062 | 10,414 |
Loans: | ||||||
Individually evaluated for impairment | 6,622 | 8,067 | ||||
Loans collectively evaluated for impairment | 715,633 | 674,844 | ||||
Total | 722,255 | 682,911 | ||||
Residential mortgages | ||||||
Allowance for loan losses: | ||||||
Related to loans collectively evaluated for impairment | 3,265 | 2,360 | ||||
Ending balance | 3,265 | 2,452 | 2,360 | 2,441 | 2,459 | 2,166 |
Loans: | ||||||
Loans collectively evaluated for impairment | 285,834 | 281,388 | ||||
Total | 285,834 | 281,388 | ||||
Home equity loans and lines | ||||||
Allowance for loan losses: | ||||||
Related to loans collectively evaluated for impairment | 1,073 | 813 | ||||
Ending balance | 1,073 | 868 | 813 | 800 | 800 | 770 |
Loans: | ||||||
Loans collectively evaluated for impairment | 81,405 | 80,258 | ||||
Total | 81,405 | 80,258 | ||||
Consumer | ||||||
Allowance for loan losses: | ||||||
Related to loans collectively evaluated for impairment | 484 | 269 | ||||
Ending balance | 484 | $ 413 | 269 | $ 280 | $ 279 | $ 160 |
Loans: | ||||||
Loans collectively evaluated for impairment | 30,563 | 21,482 | ||||
Total | $ 30,563 | $ 21,482 |
NET LOANS RECEIVABLE - Impaired
NET LOANS RECEIVABLE - Impaired loans by Class (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Jun. 30, 2019 | |
NET LOANS RECEIVABLE | ||
With an allowance recorded, Allowance for Loan Losses Allocated | $ 533 | $ 426 |
Total: Unpaid Principal Balance | 6,694 | 8,295 |
Total: Recorded Investment | 6,622 | 8,067 |
Total: Allowance for Loan Losses Allocated | 533 | 426 |
Total: Average Recorded Investment | 6,777 | 8,066 |
Total: Interest Income Recognized | 300 | 95 |
Commercial | ||
NET LOANS RECEIVABLE | ||
With no related allowance recorded, Unpaid Principal Balance | 3,734 | 7,029 |
With no related allowance recorded, Recorded Investment | 3,730 | 6,801 |
With no related allowance recorded, Average Recorded Investment | 3,730 | 6,773 |
With no related allowance recorded, Interest Income Recognized | 231 | |
With an allowance recorded, Unpaid Principal Balance | 2,960 | 1,266 |
With an allowance recorded, Recorded Investment | 2,892 | 1,266 |
With an allowance recorded, Allowance for Loan Losses Allocated | 533 | 426 |
With an allowance recorded, Average Recorded Investment | 3,047 | 1,293 |
With an allowance recorded, Interest Income Recognized | 69 | 95 |
Total: Allowance for Loan Losses Allocated | 533 | 426 |
Commercial | Real estate | ||
NET LOANS RECEIVABLE | ||
With no related allowance recorded, Unpaid Principal Balance | 2,390 | 5,593 |
With no related allowance recorded, Recorded Investment | 2,390 | 5,376 |
With no related allowance recorded, Average Recorded Investment | 2,360 | 5,608 |
With no related allowance recorded, Interest Income Recognized | 231 | |
With an allowance recorded, Unpaid Principal Balance | 1,523 | |
With an allowance recorded, Recorded Investment | 1,463 | |
With an allowance recorded, Allowance for Loan Losses Allocated | 30 | |
With an allowance recorded, Average Recorded Investment | 1,584 | |
Total: Allowance for Loan Losses Allocated | 30 | |
Commercial | Commercial and industrial | ||
NET LOANS RECEIVABLE | ||
With no related allowance recorded, Unpaid Principal Balance | 46 | 59 |
With no related allowance recorded, Recorded Investment | 42 | 48 |
With no related allowance recorded, Average Recorded Investment | 46 | 59 |
With an allowance recorded, Unpaid Principal Balance | 1,437 | 1,266 |
With an allowance recorded, Recorded Investment | 1,429 | 1,266 |
With an allowance recorded, Allowance for Loan Losses Allocated | 503 | 426 |
With an allowance recorded, Average Recorded Investment | 1,463 | 1,293 |
With an allowance recorded, Interest Income Recognized | 69 | 95 |
Total: Allowance for Loan Losses Allocated | 503 | 426 |
Commercial | Construction | ||
NET LOANS RECEIVABLE | ||
With no related allowance recorded, Unpaid Principal Balance | 1,298 | 1,377 |
With no related allowance recorded, Recorded Investment | 1,298 | 1,377 |
With no related allowance recorded, Average Recorded Investment | $ 1,324 | $ 1,106 |
NET LOANS RECEIVABLE - TDR (Det
NET LOANS RECEIVABLE - TDR (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
NET LOANS RECEIVABLE | ||
Troubled debt restructurings | $ 0 | $ 0 |
NET LOANS RECEIVABLE - Nonaccru
NET LOANS RECEIVABLE - Nonaccrual and Loans Past Due Over 90 Days Still on Accrual (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
NET LOANS RECEIVABLE | ||
Nonaccrual | $ 10,621 | $ 12,562 |
Past Due 90 Days Still on Accrual | 125 | 118 |
Commercial | Real estate | ||
NET LOANS RECEIVABLE | ||
Nonaccrual | 3,369 | 5,618 |
Past Due 90 Days Still on Accrual | 56 | 58 |
Commercial | Commercial and industrial | ||
NET LOANS RECEIVABLE | ||
Nonaccrual | 42 | 42 |
Past Due 90 Days Still on Accrual | 5 | |
Commercial | Construction | ||
NET LOANS RECEIVABLE | ||
Nonaccrual | 1,298 | 1,377 |
Residential mortgages | ||
NET LOANS RECEIVABLE | ||
Nonaccrual | 4,191 | 4,028 |
Home equity loans and lines | ||
NET LOANS RECEIVABLE | ||
Nonaccrual | 1,511 | 1,497 |
Past Due 90 Days Still on Accrual | 54 | 41 |
Consumer | ||
NET LOANS RECEIVABLE | ||
Nonaccrual | 210 | |
Past Due 90 Days Still on Accrual | $ 10 | $ 19 |
NET LOANS RECEIVABLE - Aging of
NET LOANS RECEIVABLE - Aging of Recorded Investment (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
NET LOANS RECEIVABLE | ||
Total Past Due | $ 25,780 | $ 11,790 |
Loans Not Past Due | 1,094,277 | 1,054,249 |
Total | 1,120,057 | 1,066,039 |
30 to 59 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 17,588 | 640 |
60 to 89 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 864 | 535 |
90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 7,328 | 10,615 |
Commercial | ||
NET LOANS RECEIVABLE | ||
Total | 722,255 | 682,911 |
Commercial | Real estate | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 7,987 | 5,493 |
Loans Not Past Due | 450,646 | 408,882 |
Total | 458,633 | 414,375 |
Commercial | Real estate | 30 to 59 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 5,798 | 3 |
Commercial | Real estate | 90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 2,189 | 5,490 |
Commercial | Commercial and industrial | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 4,270 | 42 |
Loans Not Past Due | 171,220 | 183,220 |
Total | 175,490 | 183,262 |
Commercial | Commercial and industrial | 30 to 59 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 4,223 | |
Commercial | Commercial and industrial | 90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 47 | 42 |
Commercial | Construction | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 7,907 | 1,377 |
Loans Not Past Due | 80,225 | 83,897 |
Total | 88,132 | 85,274 |
Commercial | Construction | 30 to 59 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 6,609 | |
Commercial | Construction | 90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 1,298 | 1,377 |
Residential mortgages | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 3,940 | 3,072 |
Loans Not Past Due | 281,894 | 278,316 |
Total | 285,834 | 281,388 |
Residential mortgages | 30 to 59 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 685 | 156 |
Residential mortgages | 60 to 89 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 672 | 217 |
Residential mortgages | 90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 2,583 | 2,699 |
Home equity loans and lines | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 1,663 | 1,782 |
Loans Not Past Due | 79,742 | 78,476 |
Total | 81,405 | 80,258 |
Home equity loans and lines | 30 to 59 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 270 | 476 |
Home equity loans and lines | 60 to 89 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 192 | 318 |
Home equity loans and lines | 90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 1,201 | 988 |
Consumer | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 13 | 24 |
Loans Not Past Due | 30,550 | 21,458 |
Total | 30,563 | 21,482 |
Consumer | 30 to 59 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 3 | 5 |
Consumer | 90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | $ 10 | $ 19 |
NET LOANS RECEIVABLE - Risk (De
NET LOANS RECEIVABLE - Risk (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
NET LOANS RECEIVABLE | ||
Loans | $ 1,120,057 | $ 1,066,039 |
Commercial | ||
NET LOANS RECEIVABLE | ||
Loans | 722,255 | 682,911 |
Commercial | Pass | ||
NET LOANS RECEIVABLE | ||
Loans | 694,588 | 669,313 |
Commercial | Special Mention | ||
NET LOANS RECEIVABLE | ||
Loans | 7,067 | 2,666 |
Commercial | Substandard | ||
NET LOANS RECEIVABLE | ||
Loans | 20,600 | 10,932 |
Commercial | Real estate | ||
NET LOANS RECEIVABLE | ||
Loans | 458,633 | 414,375 |
Commercial | Real estate | Pass | ||
NET LOANS RECEIVABLE | ||
Loans | 447,313 | 406,317 |
Commercial | Real estate | Special Mention | ||
NET LOANS RECEIVABLE | ||
Loans | 484 | 2,440 |
Commercial | Real estate | Substandard | ||
NET LOANS RECEIVABLE | ||
Loans | 10,836 | 5,618 |
Commercial | Commercial and industrial | ||
NET LOANS RECEIVABLE | ||
Loans | 175,490 | 183,262 |
Commercial | Commercial and industrial | Pass | ||
NET LOANS RECEIVABLE | ||
Loans | 161,059 | 179,099 |
Commercial | Commercial and industrial | Special Mention | ||
NET LOANS RECEIVABLE | ||
Loans | 6,583 | 226 |
Commercial | Commercial and industrial | Substandard | ||
NET LOANS RECEIVABLE | ||
Loans | 7,848 | 3,937 |
Commercial | Construction | ||
NET LOANS RECEIVABLE | ||
Loans | 88,132 | 85,274 |
Commercial | Construction | Pass | ||
NET LOANS RECEIVABLE | ||
Loans | 86,216 | 83,897 |
Commercial | Construction | Substandard | ||
NET LOANS RECEIVABLE | ||
Loans | $ 1,916 | $ 1,377 |
NET LOANS RECEIVABLE - Others (
NET LOANS RECEIVABLE - Others (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Jun. 30, 2019 |
Residential mortgage, home equity and commercial loans | ||
NET LOANS RECEIVABLE | ||
Pledges loans receivable as collateral | $ 474.6 | $ 485.6 |
DERIVATIVES - Offsetting (Detai
DERIVATIVES - Offsetting (Details) - Not designated as hedging instruments - USD ($) $ in Millions | Mar. 31, 2020 | Jun. 30, 2019 |
Interest rate swap | ||
DERIVATIVES | ||
Derivative notional amount | $ 697.8 | $ 515.4 |
Interest rate swap - Commercial borrowers | ||
DERIVATIVES | ||
Derivative notional amount | 348.9 | 257.7 |
Interest rate swap - Third party counterparties | ||
DERIVATIVES | ||
Derivative notional amount | $ 348.9 | $ 257.7 |
DERIVATIVES - Hedging Instrumen
DERIVATIVES - Hedging Instruments (Details) - Interest rate swap - Not designated as hedging instruments - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Derivative Assets | ||
Gross interest rate swaps | $ 40,096 | $ 13,550 |
Less: master netting arrangements | (88) | |
Net amount | 40,096 | 13,462 |
Derivative Liabilities | ||
Gross interest rate swaps | 40,096 | 13,550 |
Less: master netting arrangements | (88) | |
Less: cash collateral applied | (40,062) | (13,318) |
Net amount | $ 34 | $ 144 |
DERIVATIVES - Collateral (Detai
DERIVATIVES - Collateral (Details) - Interest rate swap - Third party counterparties - Not designated as hedging instruments - USD ($) $ in Millions | Mar. 31, 2020 | Jun. 30, 2019 |
DERIVATIVES | ||
Received collateral | $ 13.3 | |
Deposited collateral | $ 40.1 |
OTHER COMPREHENSIVE INCOME (L_3
OTHER COMPREHENSIVE INCOME (LOSS) - Reclassifications (Details) - Amount Reclassified from Accumulated Other Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 31, 2020 | Mar. 31, 2020 | |
OTHER COMPREHENSIVE INCOME | ||
Reclassification, net of tax | $ 61 | $ 99 |
Unrealized gains/losses on securities | ||
OTHER COMPREHENSIVE INCOME | ||
Reclassification, before tax | 83 | 134 |
Reclassification, tax benefit | (22) | (35) |
Reclassification, net of tax | $ 61 | $ 99 |
OTHER COMPREHENSIVE INCOME (L_4
OTHER COMPREHENSIVE INCOME (LOSS) - Balances and Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Accumulated other comprehensive income (loss) | ||||
Balance at beginning of period | $ 227,982 | $ 126,394 | $ 134,965 | $ 118,063 |
Balance at end of period | 228,532 | 131,763 | 228,532 | 131,763 |
Accumulated Other Comprehensive Loss | ||||
Accumulated other comprehensive income (loss) | ||||
Balance at beginning of period | (11,452) | (9,901) | (11,103) | (8,989) |
Other comprehensive income (loss) before reclassifications | (412) | 590 | (124) | (322) |
Amounts reclassified from accumulated other comprehensive income (loss) | (61) | (99) | ||
Reclassification for change in accounting principle | (599) | |||
Balance at end of period | (11,925) | (9,311) | (11,925) | (9,311) |
Unrealized Gains/Losses on Securities | ||||
Accumulated other comprehensive income (loss) | ||||
Balance at beginning of period | (11) | (502) | 338 | 410 |
Other comprehensive income (loss) before reclassifications | (412) | 590 | (124) | (322) |
Amounts reclassified from accumulated other comprehensive income (loss) | (61) | (99) | ||
Reclassification for change in accounting principle | (599) | |||
Balance at end of period | (484) | 88 | (484) | 88 |
Defined Benefit Plan | ||||
Accumulated other comprehensive income (loss) | ||||
Balance at beginning of period | (11,441) | (9,399) | (11,441) | (9,399) |
Balance at end of period | $ (11,441) | $ (9,399) | $ (11,441) | $ (9,399) |
OTHER COMPREHENSIVE INCOME (L_5
OTHER COMPREHENSIVE INCOME (LOSS) - Allocated Component of OCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Unrealized gains/losses on securities: | ||||
Unrealized holdings (losses) gains arising during the period | $ (146) | $ 209 | $ (45) | $ (114) |
Reclassification adjustment for gains included in net income | (22) | (35) | ||
Tax amount on unrealized gains/losses on securities | (168) | 209 | (80) | (114) |
Total | $ (168) | $ 209 | $ (80) | $ (114) |
EMPLOYEE BENEFIT PLANS - Pensio
EMPLOYEE BENEFIT PLANS - Pension Plan - other (Details) | Jan. 01, 2010 | Dec. 31, 2009 | Mar. 31, 2020 |
Employee Benefit Plans | |||
Threshold age of employee who are eligible for pension plan | 21 years | ||
Threshold period of service of employee to be eligible for pension plan | 1 year | ||
Pension plan | |||
Employee Benefit Plans | |||
Pensions paid as annuity using pension formula | 1.50% | 2.00% | |
Average of highest consecutive years of total compensation over the last ten years multiplied by credited service up to thirty years to calculate pension formula | 5 years | ||
Total compensation year used for average of the five highest consecutive years multiplied by credited service up to thirty years to calculate pension formula | 10 years | ||
Maximum credited service (in years) | 30 years |
EMPLOYEE BENEFIT PLANS - Net Pe
EMPLOYEE BENEFIT PLANS - Net Periodic Pension Cost (Details) - Pension plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Net periodic pension cost included in the Bank’s consolidated statements of income | ||||
Service cost | $ 563 | $ 431 | $ 1,689 | $ 1,050 |
Interest cost | 492 | 314 | 1,476 | 1,281 |
Expected return on plan assets | (926) | (573) | (2,777) | (2,349) |
Amortization of net actuarial loss | 270 | 73 | 810 | 508 |
Net periodic cost | 399 | 245 | 1,198 | 490 |
Other disclosures | ||||
Employer contributions | $ 0 | $ 0 | $ 0 | $ 0 |
EMPLOYEE BENEFIT PLANS - Post-R
EMPLOYEE BENEFIT PLANS - Post-Retirement Healthcare Plan (Details) - Post-retirement benefit plan $ in Thousands | 9 Months Ended |
Mar. 31, 2020USD ($) | |
Employee Benefit Plans | |
Threshold age for eligibility for retiree medical coverage | 60 years |
Minimum year of service for eligibility for retiree medical coverage | 25 years |
Minimum year of service required for eligibility for individual and spousal coverage | 30 years |
Monthly premium for individual coverage | $ 210 |
Monthly premium for employee and spousal coverage | $ 420 |
EMPLOYEE BENEFIT PLANS - Net _2
EMPLOYEE BENEFIT PLANS - Net Periodic Post-retirement Benefit Cost (Details) - Post-retirement benefit plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Net periodic post-retirement benefit cost | ||||
Service cost | $ 9 | $ 7 | $ 27 | $ 21 |
Interest cost | 16 | 17 | 48 | 50 |
Amortization of net actuarial loss | 1 | 2 | ||
Net periodic cost | $ 26 | $ 24 | $ 77 | $ 71 |
EMPLOYEE BENEFIT PLANS - Employ
EMPLOYEE BENEFIT PLANS - Employee Stock Ownership Plan (Details) - Pioneer Bank ESOP - USD ($) | Jul. 17, 2019 | Mar. 31, 2020 | Mar. 31, 2020 |
Employee Stock Ownership Plan | |||
Number of shares purchased by the ESOP as a result of the Company granting a loan to the ESOP | 1,018,325 | ||
Average purchase price of shares (in dollars per share) | $ 13.40 | ||
Term of loan granted by Company to the ESOP | 20 years | ||
Balance of ESOP loan | $ 12,900,000 | ||
Number of shares committed to be released annually under the ESOP | 50,916 | ||
Compensation expense | $ 174,000 | $ 877,000 | |
Shares held by the ESOP include the following: | |||
Allocated | 50,916 | 50,916 | |
Committed to be allocated | 12,729 | 12,729 | |
Unallocated | 954,680 | 954,680 | |
Total Shares | 1,018,325 | 1,018,325 |
COMMITMENTS AND CONTINGENT LI_3
COMMITMENTS AND CONTINGENT LIABILITIES - Off-Balance Sheet Financing (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
Fixed Rate | $ 32,859 | $ 23,892 |
Variable Rate | 235,491 | 390,608 |
Total | 268,350 | 414,500 |
Commitments to extend credit | ||
COMMITMENTS AND CONTINGENT LIABILITIES | ||
Fixed Rate | 32,859 | 23,892 |
Variable Rate | 205,008 | 357,223 |
Total | 237,867 | 381,115 |
Standby letters of credit | ||
COMMITMENTS AND CONTINGENT LIABILITIES | ||
Variable Rate | 30,483 | 33,385 |
Total | $ 30,483 | $ 33,385 |
COMMITMENTS AND CONTINGENT LI_4
COMMITMENTS AND CONTINGENT LIABILITIES - Additional information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Mar. 31, 2020 | Jun. 30, 2019 | |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
Adjustable rate mortgages annual rate increase | 2.00% | |
Adjustable rate residential mortgage loans amount | $ 46.4 | |
Adjustable rate mortgage loans had conversion options | 3.6 | |
Loans held for sale | 0 | $ 0 |
Loan commitments with borrowers with rate lock agreements which are intended to be held for sale | 0 | 0 |
Amount of commitments to sell loans to unrelated investors | $ 0 | $ 0 |
Minimum | ||
COMMITMENTS AND CONTINGENT LIABILITIES | ||
Adjustable rate mortgages lifetime rate increase | 5.00% | |
Maximum | ||
COMMITMENTS AND CONTINGENT LIABILITIES | ||
Adjustable rate mortgages lifetime rate increase | 6.00% |
COMMITMENTS AND CONTINGENT LI_5
COMMITMENTS AND CONTINGENT LIABILITIES - Legal Proceeding and Other Contingent Liabilities (Details) - USD ($) $ in Thousands | May 01, 2020 | Feb. 04, 2020 | Jan. 10, 2020 | Dec. 10, 2019 | Nov. 26, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2020 | Apr. 30, 2020 | Oct. 31, 2019 |
Commitments and Contingent Liabilities | |||||||||||
Deposit activity, the Bank's potential exposure for fraudulent activity | $ 19,000 | $ 19,000 | |||||||||
Lending activity, the Bank's potential exposure for fraudulent activity | 16,000 | 16,000 | |||||||||
Amount of commercial loan relationships with a customer for which the Bank is the originating lender and which there is potentially fraudulent activity | 36,000 | 36,000 | |||||||||
Non-interest expense associated with potentially fraudulent activity | $ 0 | $ 2,500 | 2,500 | ||||||||
Provision for loan losses related to charge-off the entire principal balance owed to the Bank related to the customer's commercial loan relationship as it relates to the potentially fraudulent activity | $ 0 | $ 15,800 | |||||||||
Partial recovery recognized related to the charge-off of the Mann Entities commercial loan relationships | 1,700 | ||||||||||
Southwestern Complaint | |||||||||||
Commitments and Contingent Liabilities | |||||||||||
Constructive trust, funds in question, per complaint | $ 9,800 | ||||||||||
Number of days postponed in filing the answer | 14 days | 14 days | |||||||||
Berkshire Bank Complaint | |||||||||||
Commitments and Contingent Liabilities | |||||||||||
Complaint, damages sought | $ 15,600 | ||||||||||
Chemung Canal Trust Company Complaint | |||||||||||
Commitments and Contingent Liabilities | |||||||||||
Complaint, damages sought | $ 4,200 | ||||||||||
Cachet Assertion | |||||||||||
Commitments and Contingent Liabilities | |||||||||||
Value of funds Bank is holding per assertion made by Cachet | $ 7,000 | $ 7,000 | |||||||||
DOJ Complaint | |||||||||||
Commitments and Contingent Liabilities | |||||||||||
Value of funds in a third party account, claimed to be wrongfully seized by the Company and Bank to apply towards debts allegedly owed to the Bank | $ 7,300 | ||||||||||
Minimum | Southwestern Complaint | |||||||||||
Commitments and Contingent Liabilities | |||||||||||
Complaint, damages sought | $ 9,800 | ||||||||||
Amount of counterclaim/cross-claim damages sought by the defendant | $ 15,600 | ||||||||||
Amount of RICO counterclaim/cross-claim treble damages sought by the defendant | $ 46,500 | ||||||||||
Minimum | NatPay Complaint | |||||||||||
Commitments and Contingent Liabilities | |||||||||||
Complaint, damages sought | $ 4,000 |
FAIR VALUE - Recurring Basis (D
FAIR VALUE - Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
FAIR VALUE | ||
Preferred stocks | $ 4,668 | |
Equity securities | 2,884 | $ 3,618 |
Total available for sale securities | 73,631 | 91,735 |
Estimated Fair Value | 2,884 | 3,618 |
Mortgage-backed securities – residential | ||
FAIR VALUE | ||
Debt securities | 85 | 112 |
Asset-backed securities | ||
FAIR VALUE | ||
Debt securities | 105 | 128 |
Municipal obligations | ||
FAIR VALUE | ||
Debt securities | 5,772 | 14,699 |
Preferred stocks | ||
FAIR VALUE | ||
Preferred stocks | 4,668 | 5,040 |
Recurring basis | ||
FAIR VALUE | ||
Debt securities | 68,963 | 86,695 |
Equity securities | 2,884 | 3,618 |
Total available for sale securities | 73,631 | 91,735 |
Estimated Fair Value | 2,884 | 3,618 |
Derivative assets | 40,096 | 13,462 |
Total assets | 116,611 | 108,815 |
Derivative liabilities | 34 | 144 |
Total liabilities | 34 | 144 |
Recurring basis | U.S. Government and agency obligations | ||
FAIR VALUE | ||
Debt securities | 62,346 | 70,867 |
Recurring basis | Mortgage-backed securities – residential | ||
FAIR VALUE | ||
Debt securities | 85 | 112 |
Recurring basis | Asset-backed securities | ||
FAIR VALUE | ||
Debt securities | 105 | 128 |
Recurring basis | Collateralized mortgage obligations – residential | ||
FAIR VALUE | ||
Debt securities | 655 | 889 |
Recurring basis | Municipal obligations | ||
FAIR VALUE | ||
Debt securities | 5,772 | 14,699 |
Recurring basis | Preferred stocks | ||
FAIR VALUE | ||
Preferred stocks | 4,668 | |
Equity securities | 5,040 | |
Estimated Fair Value | 5,040 | |
Recurring basis | Level 1 | ||
FAIR VALUE | ||
Debt securities | 62,346 | 70,867 |
Equity securities | 2,884 | 3,618 |
Total available for sale securities | 64,218 | 72,837 |
Estimated Fair Value | 2,884 | 3,618 |
Total assets | 67,102 | 76,455 |
Recurring basis | Level 1 | U.S. Government and agency obligations | ||
FAIR VALUE | ||
Debt securities | 62,346 | 70,867 |
Recurring basis | Level 1 | Preferred stocks | ||
FAIR VALUE | ||
Preferred stocks | 1,872 | |
Equity securities | 1,970 | |
Estimated Fair Value | 1,970 | |
Recurring basis | Level 2 | ||
FAIR VALUE | ||
Debt securities | 6,617 | 15,828 |
Total available for sale securities | 9,413 | 18,898 |
Derivative assets | 40,096 | 13,462 |
Total assets | 49,509 | 32,360 |
Derivative liabilities | 34 | 144 |
Total liabilities | 34 | 144 |
Recurring basis | Level 2 | Mortgage-backed securities – residential | ||
FAIR VALUE | ||
Debt securities | 85 | 112 |
Recurring basis | Level 2 | Asset-backed securities | ||
FAIR VALUE | ||
Debt securities | 105 | 128 |
Recurring basis | Level 2 | Collateralized mortgage obligations – residential | ||
FAIR VALUE | ||
Debt securities | 655 | 889 |
Recurring basis | Level 2 | Municipal obligations | ||
FAIR VALUE | ||
Debt securities | 5,772 | 14,699 |
Recurring basis | Level 2 | Preferred stocks | ||
FAIR VALUE | ||
Preferred stocks | $ 2,796 | |
Equity securities | 3,070 | |
Estimated Fair Value | $ 3,070 |
FAIR VALUE - Non-Recurring Basi
FAIR VALUE - Non-Recurring Basis (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Jun. 30, 2019 | |
FAIR VALUE | ||
Valuation allowance of impaired loans | $ 533,000 | $ 426,000 |
Write-downs | 8,000 | 17,000 |
Non-recurring basis | ||
FAIR VALUE | ||
Impaired loans, Commercial | 2,359,000 | 840,000 |
Other real estate owned | 260,000 | 158,000 |
Non-recurring basis | Level 3 | ||
FAIR VALUE | ||
Impaired loans, Commercial | 2,359,000 | 840,000 |
Other real estate owned | 260,000 | 158,000 |
Carrying amount of impaired loans | 2,900,000 | 1,300,000 |
Valuation allowance of impaired loans | $ 533,000 | $ 426,000 |
FAIR VALUE - Carrying and Fair
FAIR VALUE - Carrying and Fair Values (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Financial assets | ||
Cash and cash equivalents | $ 190,201 | $ 230,109 |
Securities available for sale | 73,631 | 91,735 |
Securities available for sale | 73,631 | 91,735 |
Securities held to maturity, fair value | 4,182 | 3,887 |
Estimated Fair Value | 2,884 | 3,618 |
Loans, net | 1,101,997 | 1,053,938 |
FHLBNY stock | 1,824 | 924 |
Accrued interest receivable | 4,026 | 4,374 |
Carrying Amount | ||
Financial assets | ||
Cash and cash equivalents | 190,201 | 230,109 |
Securities available for sale | 73,631 | 91,735 |
Securities available for sale | 73,631 | 91,735 |
Securities held to maturity, fair value | 4,139 | 3,873 |
Estimated Fair Value | 2,884 | 3,618 |
Loans, net | 1,824 | 924 |
FHLBNY stock | 1,101,997 | 1,053,938 |
Accrued interest receivable | 4,026 | 4,374 |
Derivatives | 40,096 | 13,462 |
Financial liabilities | ||
Savings, money market, and demand accounts | 1,114,187 | 1,200,753 |
Time deposits | 123,488 | 130,565 |
Mortgagors’ escrow deposits | 3,705 | 6,044 |
FHLB advances | 20,000 | |
Accrued interest payable | 191 | 17 |
Derivatives | 34 | 144 |
Fair Value | ||
Financial assets | ||
Cash and cash equivalents | 190,201 | 230,109 |
Securities available for sale | 73,631 | 91,735 |
Securities available for sale | 73,631 | 91,735 |
Securities held to maturity, fair value | 4,182 | 3,887 |
Estimated Fair Value | 2,884 | 3,618 |
Loans, net | 1,824 | 924 |
FHLBNY stock | 1,127,223 | 1,065,328 |
Accrued interest receivable | 4,026 | 4,374 |
Derivatives | 40,096 | 13,462 |
Financial liabilities | ||
Savings, money market, and demand accounts | 1,114,187 | 1,200,753 |
Time deposits | 124,826 | 130,680 |
Mortgagors’ escrow deposits | 3,705 | 6,044 |
FHLB advances | 20,000 | |
Accrued interest payable | 191 | 17 |
Derivatives | 34 | 144 |
Fair Value | Level 1 | ||
Financial assets | ||
Cash and cash equivalents | 190,201 | 230,109 |
Securities available for sale | 64,218 | 72,837 |
Securities available for sale | 64,218 | 72,837 |
Estimated Fair Value | 2,884 | 3,618 |
Fair Value | Level 2 | ||
Financial assets | ||
Securities available for sale | 9,413 | 18,898 |
Securities available for sale | 9,413 | 18,898 |
Securities held to maturity, fair value | 4,182 | 3,887 |
Loans, net | 1,824 | 924 |
Accrued interest receivable | 4,026 | 4,374 |
Derivatives | 40,096 | 13,462 |
Financial liabilities | ||
Savings, money market, and demand accounts | 1,114,187 | 1,200,753 |
Time deposits | 124,826 | 130,680 |
Mortgagors’ escrow deposits | 3,705 | 6,044 |
FHLB advances | 20,000 | |
Accrued interest payable | 191 | 17 |
Derivatives | 34 | 144 |
Fair Value | Level 3 | ||
Financial assets | ||
FHLBNY stock | $ 1,127,223 | $ 1,065,328 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | Jul. 01, 2019 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Non-interest Income | ||||||
Non-interest income in scope of "ASC" Topic 606 | $ 3,310,000 | $ 10,080,000 | ||||
Non-interest income out of scope of "ASC" Topic 606 | (645,000) | 1,991,000 | ||||
Total noninterest income | 2,665,000 | $ 3,972,000 | 12,071,000 | $ 10,542,000 | ||
Insurance revenues | ||||||
Non-interest Income | ||||||
Non-interest income in scope of "ASC" Topic 606 | 1,060,000 | 3,092,000 | ||||
Wealth Management Services | ||||||
Non-interest Income | ||||||
Non-interest income in scope of "ASC" Topic 606 | 748,000 | 2,141,000 | ||||
Service charges on deposit accounts | ||||||
Non-interest Income | ||||||
Non-interest income in scope of "ASC" Topic 606 | 784,000 | 2,559,000 | ||||
Card services income | ||||||
Non-interest Income | ||||||
Non-interest income in scope of "ASC" Topic 606 | 649,000 | 2,088,000 | ||||
Other | ||||||
Non-interest Income | ||||||
Non-interest income in scope of "ASC" Topic 606 | $ 69,000 | $ 200,000 | ||||
ASU 2014-09 | ||||||
Non-interest Income | ||||||
Cumulative Effect on Retained Earnings, Net of Tax | $ 291,000 | |||||
Retained Earnings | ASU 2014-09 | ||||||
Non-interest Income | ||||||
Cumulative Effect on Retained Earnings, Net of Tax | $ 291,000 | $ 291,000 |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | |
EARNINGS (LOSS) PER SHARE | ||||||||
Net loss applicable to common stock | $ 849 | $ 3,850 | $ (12,684) | $ 4,779 | $ 4,800 | $ 4,443 | $ (7,985) | $ 14,022 |
Average number of common shares outstanding | 25,977,679 | 25,977,679 | ||||||
Less: Average unallocated ESOP shares | 961,045 | 971,652 | ||||||
Average number of common shares outstanding used to calculate basic and diluted earnings per common share | 25,016,634 | 25,006,027 | ||||||
Income (Loss) per common share: | ||||||||
Basic | $ 0.03 | $ (0.32) | ||||||
Diluted | $ 0.03 | $ (0.32) | ||||||
Potential dilutive equivalents | 0 |