What changed in this filing

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Item 1. Financial Statements

2022-02-11 compared with 2021-08-13 · 633 added, 914 removed, 118 unchanged (93% of the section changed)

Financial Statements

BANCORP, INC.

MAGYAR BANCORP, INC.

AND SUBSIDIARY

Balance Sheets

(In Thousands,

Except Share and Per Share Data)

Interest earning

deposits with banks

cash and cash equivalents

securities - available for sale, at fair value

securities - held to maturity, at amortized cost (fair value of $ 48,263

at June 30, 2021 and September 30, 2020, respectively)

Loan Bank of New York stock, at cost

receivable, net of allowance for loan losses of $ 7,800

at June 30, 2021 and September 30, 2020, respectively

life insurance

Accrued interest

equipment, net

estate owned ("OREO")

and Stockholders'

interest payable

payable and other liabilities

Stockholders'

Par Value, 1,000,000

shares authorized;

Par Value, 8,000,000

shares authorized;

shares outstanding at June 30, 2021 and September 30, 2020, at cost

paid-in capital

shares at June 30, 2021 and September 30, 2020 , at cost

Employee Stock Ownership Plan shares

other comprehensive loss

stockholders'

Consolidated Balance Sheets

(In Thousands, Except Share and Per Share Data)

September 30,

Interest earning deposits with banks

Total cash and cash equivalents

Investment securities - available for sale, at fair value

Investment securities - held to maturity, at amortized cost (fair value of $ 65,671 and $ 57,282 at December 31, 2021 and September 30, 2021, respectively)

Federal Home Loan Bank of New York stock, at cost

Loans receivable, net of allowance for loan losses of $ 8,228 and $ 8,075 at December 31, 2021 and September 30, 2021, respectively

Bank owned life insurance

Accrued interest receivable

Premises and equipment, net

Other real estate owned ("OREO")

Liabilities and Stockholders'

The accompanying

notes are an integral part of these consolidated financial statements.

BANCORP, INC.

Escrowed funds

Accrued interest payable

Accounts payable and other liabilities

Total liabilities

Stockholders'

Preferred stock:

01 Par Value, 500,000 shares authorized;

at December 31, 2021 and September 30, 2021, none issued

Common stock:

01 Par Value, 14,000,000 shares authorized;

7,097,825 shares issued;

7,097,825 shares outstanding at December 31, 2021 and September 30, 2021, at cost

Additional paid-in capital

Treasury stock:

112,996 shares at cost

Unearned Employee Stock Ownership Plan shares

Retained earnings

Accumulated other comprehensive loss

Total stockholders'

Total liabilities and stockholders'

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

MAGYAR BANCORP, INC.

AND SUBSIDIARY

Statements of Operations

(In Thousands,

Except Share and Per Share Data)

the Three Months

the Nine Months

dividend income

including fees

Home Loan Bank of New York stock

Consolidated Statements of Operations

(In Thousands, Except Share and Per Share Data)

For the Three Months

Ended December 31,

Interest and dividend income

Interest expense

Loans, including fees

Investment securities

Federal Home Loan Bank of New York stock

Total interest and dividend income

Interest expense

and dividend income

Provision for

interest and dividend income after provision for loan losses

on bank owned life insurance

for other customer services

rate swap fees

operating income

on sales of loans

on sales of investment securities

Total interest expense

Net interest and dividend income

Provision for loan losses

Net interest and dividend income after provision for loan losses

Service charges

Income on bank owned life insurance

Fees for other customer services

Interest rate swap fees

Other operating income

Gains on sales of loans

Total other income

Other expenses

and employee benefits

processing expenses

deposit insurance premiums

servicing expenses

Compensation and employee benefits

Occupancy expenses

Professional fees

Data processing expenses

Marketing and business development

OREO expenses

FDIC deposit insurance premiums

Loan servicing expenses

Other expenses

Income before

Total other expenses

Income before income tax expense

Income tax expense

per share-basic and diluted

Weighted average

basic and diluted shares outstanding

The accompanying

notes are an integral part of these consolidated financial statements.

BANCORP, INC.

Net income per share-basic and diluted

Weighted average basic and diluted shares outstanding

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

MAGYAR BANCORP, INC.

AND SUBSIDIARY

Statements of Comprehensive Income

Consolidated Statements of Comprehensive Income

(In Thousands)

the Three Months

the Nine Months

Other comprehensive

gain (loss) on securities available for sale

reclassification adjustments for:

gains realized on securities available for sale

unrealized gain (loss) on securities available for sale

comprehensive income (loss), before tax

income tax effect

comprehensive income (loss)

Total comprehensive

The accompanying

notes are an integral part of these consolidated financial statements.

BANCORP, INC.

For the Three Months

Ended December 31,

Other comprehensive income

Unrealized loss on securities available for sale

Other comprehensive loss, before tax

Deferred income tax effect

Total other comprehensive loss

Total comprehensive income

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

MAGYAR BANCORP, INC.

AND SUBSIDIARY

Statements of Changes in Stockholders'

For the Three

and Nine Months Ended June 30, 2021 and 2020

(In Thousands,

Except for Share Amounts)

Consolidated Statements of Changes in Stockholders'

For the Three Months Ended December 31, 2021 and 2020

(In Thousands, Except for Share Amounts)

Comprehensive

September 30,  2020

comprehensive  income

shares allocated

December 31,  2020

comprehensive  income

Balance, March

comprehensive  income

Balance, June

Balance, September 30,  2021

Dividends paid on common stock ($ 0.12 per share)

Other comprehensive  income

Common stock acquired by ESOP

ESOP shares allocated

Balance, December 31,  2021

Comprehensive

September 30,  2019

comprehensive  income

shares allocated

December 31,  2019

comprehensive  income

of treasury  stock

shares allocated

Balance, March

comprehensive  income

shares allocated

Balance, June

The accompanying

notes are an integral part of these consolidated financial statements.

BANCORP, INC.

Balance, September 30,  2020

Other comprehensive  income

ESOP shares allocated

Balance, December 31,  2020

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

MAGYAR BANCORP, INC.

AND SUBSIDIARY

Statements of Cash Flows

Consolidated Statements of Cash Flows

(In Thousands)

the Nine Months Ended

For the Three Months Ended

Operating activities

to reconcile net income to net cash provided by (used in) by operating activities

amortization on investment securities, net

for loan losses

for loss on other real estate owned

of SBA loans held for sale

from the sales of SBA loans

on sale of loans receivable

on sales of investment securities

on the sales of other real estate owned

on the sale of premises and equipment

compensation expense

income tax benefit

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

Depreciation expense

Premium amortization on investment securities, net

Provision for loan losses

Provision for loss on other real estate owned

Originations of SBA loans held for sale

Proceeds from the sales of SBA loans

Gains on sale of loans receivable

Gains on the sales of other real estate owned

ESOP compensation expense

Deferred income tax expense (benefit)

Increase in accrued interest receivable

in surrender value of bank owned life insurance

decrease in other assets

in accrued interest payable

(decrease) in accounts payable and other liabilities

cash provided by (used in) by operating activities

Increase in surrender value of bank owned life insurance

Decrease (increase) in other assets

Decrease in accrued interest payable

Increase in accounts payable and other liabilities

Net cash provided by operating activities

Investing activities

increase in loans receivable

of loans receivable

from the sale of loans receivable

of investment securities held to maturity

of investment securities available for sale

from calls of investment securities held to maturity

from calls of investment securities available for sale

repayments on investment securities held to maturity

repayments on investment securities available for sale

sales of premises and equipment

from the sale of premises and equipment

in other real estate owned

from other real estate owned

of Federal Home Loan Bank stock

cash used in in investing activities

Net decrease in loans receivable

Purchases of investment securities held to maturity

Purchases of investment securities available for sale

Principal repayments on investment securities held to maturity

Principal repayments on investment securities available for sale

Purchase of bank owned life insurance

Purchases of premises and equipment

Investment in other real estate owned

Proceeds from other real estate owned

Redemption of Federal Home Loan Bank stock

Net cash (used in) provided by investing activities

Financing activities

increase in deposits

increase in escrowed funds

from long-term advances

of long-term advances

of treasury stock

cash provided by financing activities

increase in cash and cash equivalents

Cash and cash

equivalents, beginning of year

Cash and cash

equivalents, end of year

disclosures of cash flow information

operating activities

estate acquired in full satisfaction of loans in foreclosure

recognition of lease liability and right-of-use asset

The accompanying

notes are an integral part of these consolidated financial statements.

BANCORP, INC.

Net increase (decrease) in deposits

Purchase of common stock for ESOP

Net increase in escrowed funds

Repayments of long-term advances

Cash paid on common stock dividends

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

Supplemental disclosures of cash flow information

Cash paid for

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

MAGYAR BANCORP, INC.

AND SUBSIDIARY

Consolidated Financial Statements

Notes to Consolidated Financial Statements

NOTE A –

BASIS OF PRESENTATION

consolidated financial statements include the accounts of Magyar Bancorp, Inc.

(the “Company”), its wholly owned subsidiary,

Magyar Bank (the “Bank”), and the Bank’s wholly owned subsidiaries Magyar Service Corporation, Hungaria Urban Renewal,

LLC, and MagBank Investment Company.

The consolidated financial statements include the accounts of Magyar Bancorp, Inc.

(the “Company”), its wholly owned subsidiary, Magyar Bank (the “Bank”), and the Bank’s wholly owned subsidiaries Magyar Service Corporation, Hungaria Urban Renewal, LLC, and MagBank Investment Company.

All material intercompany transactions and balances have been eliminated.

The Company prepares its

financial statements on the accrual basis and in conformity with accounting principles generally accepted in the United States of America

("US GAAP").

The unaudited information furnished herein reflects all adjustments (consisting of normal recurring accruals) that

are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.

results for the three and nine months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year

ending September 30, 2021.

The September 30, 2020 information has been derived from the audited consolidated financial statements at that

date but does not include all of the information and footnotes required by US GAAP for complete consolidated financial statements.

preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated

financial statements and the reported amounts of income and expenses during the reporting period.

Actual results could differ from those

Material estimates that are particularly susceptible to significant change in the near term relate to the determination of

the allowance for loan losses, the valuation of other real estate owned, and the assessment of realizability of deferred income tax assets.

Company has evaluated events and transactions occurring subsequent to the balance sheet date of June 30, 2021 for items that should potentially

be recognized or disclosed in these consolidated financial statements.

The evaluation was conducted through the date these consolidated

financial statements were issued.

The Company prepares its financial statements on the accrual basis and in conformity with accounting principles generally accepted in the United States of America ("US GAAP").

The unaudited information furnished herein reflects all adjustments (consisting of normal recurring accruals) that are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.

Operating results for the three months ended December 31, 2021 are not necessarily indicative of the results that may be expected for the year ending September 30, 2021.

The September 30, 2020 information has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by US GAAP for complete consolidated financial statements.

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period.

Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of other real estate owned (“OREO”), and the assessment of realizability of deferred income tax assets.

The Company has evaluated events and transactions occurring subsequent to the balance sheet date of December 31, 2021 for items that should potentially be recognized or disclosed in these consolidated financial statements.

The evaluation was conducted through the date these consolidated financial statements were issued.

NOTE B –

CORPORATE STRUCTURE

Company is a Delaware corporation.

On February 25, 2021, Magyar Bancorp, MHC (the “MHC”), the former parent mutual holding

company of Magyar Bancorp, Inc., adopted a Plan of Conversion and Reorganization (the “Plan”) pursuant to which the MHC

would undertake a “second-step”

conversion and Magyar Bank, the Company’s wholly owned subsidiary, will reorganize

from the two-tier mutual holding company structure to the fully-public stock holding company structure.

to the Plan, (i) the shares of the Company’s common stock held by persons other than the MHC (the shares held by the MHC were canceled)

were converted into new shares of the Company’s common stock based on an exchange ratio designed to preserve the percentage ownership

interests of such persons (excluding shares of Company common stock purchased in the stock offering described below and cash received

in lieu of issuance of fractional shares of Company common stock, and as adjusted to reflect certain assets held by the MHC), and (ii)

the Company offered and sold shares of common stock, representing the ownership interest of the MHC in the Company, in a subscription

The number and price of shares of Company common stock sold in the offering and the exchange ratio were be based on the Company’s

pro forma market value on a fully converted basis, as determined by an independent appraisal.

Plan was subject to regulatory approval as well as approval by the depositors of the Magyar Bank and by the Company’s stockholders

(including approval by the holders of a majority of the outstanding shares of the Company’s common stock held by persons other

than the MHC).

The Plan received all required regulatory, depositor and stockholder approval, and the conversion and offering were consummated

on July 14, 2021.

connection with the Conversion, the Company amended its certificate of incorporation to increase the number of authorized shares of its

common stock and to add a provision generally requiring any direct or derivative action brought against or on behalf of the Company to

be brought in state or federal court in the state of Delaware.

Conversion was consummated through the merger of the MHC into the Company which occurred on July 14, 2021.

In the Conversion offering,

the Company raised gross proceeds of $ 39.1

million by selling 3,910,000

shares of common stock at $ 10.00

Because the conversion offering was oversubscribed by eligible depositors, the Bank’s Employee Stock Ownership Plan

(“ESOP”) was unable to purchase shares in the offering.

As a result, the Company intends to use a portion of the proceeds

to fund a loan to ESOP for the ESOP’s acquisition of up to 312,800

shares of the Company’s common stock in the open market.

with the completion of the stock offering, each share of the Company’s common stock owned by public stockholders (stockholders

other than the MHC) was exchanged for 1.2213

shares of new Company common stock.

A total of 7,098,070

shares of common stock (subject to adjustment pursuant to cash being issued in lieu of fractional shares) were outstanding following the

completion of the stock offering.

NOTE C –

RECENT ACCOUNTING PRONOUNCEMENTS

June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments

- Credit Losses .

In connection with the preparation of quarterly and annual reports in accordance with the Securities and Exchange Commission’s (“SEC”) Securities Exchange Act of 1934, SEC Staff Accounting Bulletin Topic 11.M requires the disclosure of the impact that recently issued accounting standards will have on financial statements when they are adopted in the future.

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses .

ASU 2016-13 requires entities to report “expected”

credit losses on financial instruments and other

commitments to extend credit rather than the current “incurred loss”

These expected credit losses for financial assets

held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts.

ASU will also require enhanced disclosures to help investors and other financial statement users better understand significant estimates

and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio.

These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in

the financial statements.

October 2019, the FASB voted to defer the effective date of ASU 2016-13 for smaller reporting companies to fiscal years beginning after

December 15, 2022 (October 1, 2023 for the Company), and interim periods within those fiscal years.

The Company currently expects to continue

to qualify as a smaller reporting company, based upon the current SEC definition, and as a result, will be able to defer implementation

of the new standard for a period of time.

The Company did not early adopt as of June 30, 2021, but will continue to review factors that

might indicate that the full deferral time period should not be used.

The Company continues to evaluate the impact the new standard will

have on the accounting for credit losses, but the Company may recognize a one-time cumulative-effect adjustment to the allowance for loan

losses as of the beginning of the first reporting period in which the new standard is effective, consistent with regulatory expectations

set forth in interagency guidance issued at the end of 2016.

The Company cannot yet determine the magnitude of any such one-time cumulative

adjustment or of the overall impact of the new standard on its consolidated financial condition or results of operations.

August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit

Plans—General (Topic 715-20):

Disclosure Framework—Changes to the Disclosure Requirements

for Defined Benefit Plans.

The ASU removes the disclosures of 1) the amounts in accumulated other comprehensive income that the

entity expects to recognize in net periodic benefit cost during the next fiscal year, 2) the amount and timing of plan assets expected

to be returned to the employer and 3) certain related party disclosures.

The ASU clarifies the disclosure requirements for the projected

benefit obligation (“PBO”) and fair value of plan assets for plans with PBOs in excess of plan assets and the accumulated

benefit obligation (“ABO”) and fair value of plan assets for plans with ABOs in excess of plan assets.

The ASU adds disclosure

requirements for the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting

rates and for an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period.

ASU 2018-14 is effective for public business entities in fiscal years ending after December 15, 2020 (Beginning October 1, 2021 for the

Early adoption is permitted.

The Corporation is currently evaluating the impact this ASU will have on its consolidated financial

condition or results of operations.

NOTE D –

credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss”

These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts.

This ASU will also require enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio.

These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements.

In October 2019, the FASB voted to defer the effective date of ASU 2016-13 for smaller reporting companies to fiscal years beginning after December 15, 2022 (October 1, 2023 for the Company), and interim periods within those fiscal years.

The Company currently expects to continue to qualify as a smaller reporting company, based upon the current SEC definition, and as a result, will be able to defer implementation of the new standard for a period of time.

The Company did not early adopt as of December 31, 2021, but will continue to review factors that might indicate that the full deferral time period should not be used.

The Company continues to evaluate the impact the new standard will have on the accounting for credit losses, but the Company may recognize a one-time cumulative-effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, consistent with regulatory expectations set forth in interagency guidance issued at the end of 2016.

The Company cannot yet determine the magnitude of any such one-time cumulative adjustment or of the overall impact of the new standard on its consolidated financial condition or results of operations.

In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20):

Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans.

The ASU removes the disclosures of 1) the amounts in accumulated other comprehensive income that the entity expects to recognize in net periodic benefit cost during the next fiscal year, 2) the amount and timing of plan assets expected to be returned to the employer and 3) certain related party disclosures.

The ASU clarifies the disclosure requirements for the projected benefit obligation (“PBO”) and fair value of plan assets for plans with PBOs in excess of plan assets and the accumulated benefit obligation (“ABO”) and fair value of plan assets for plans with ABOs in excess of plan assets.

The ASU adds disclosure requirements for the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and for an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period.

ASU 2018-14 was effective for the Company beginning October 1, 2021 and did not have a material impact on its consolidated financial condition or results of operations.

In January 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, March 2020 , to provide temporary optional expedients and exceptions to the U.S.

GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate.

Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls “reference rate reform”

if certain criteria are met.

An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination.

Also, entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met, and can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform.

The amendments in this ASU are effective for all entities upon issuance through December 31, 2022.

The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position and results of operations.

NOTE C –

CONTINGENCIES

Company, from time to time, is a party to routine litigation that arises in the normal course of business.

In the opinion of management,

the resolution of this litigation, if any, would not have a material adverse effect on the Company’s consolidated financial position

or results of operations.

NOTE E –

The Company, from time to time, is a party to routine litigation that arises in the normal course of business.

In the opinion of management, the resolution of this litigation, if any, would not have a material adverse effect on the Company’s consolidated financial position or results of operations.

NOTE D –

EARNINGS PER SHARE

Basic and diluted earnings per share for the three and nine months ended June 30, 2021 and 2020 were calculated by dividing net income

by the weighted-average number of shares outstanding for the period considering the effect of dilutive equity options and stock awards

for the diluted earnings per share calculations.

(In thousands

except for per share data)

Income applicable

to common shares

Weighted average

number of common shares outstanding - basic

Stock options

and restricted stock

average number of common shares and common share equivalents - diluted

Basic earnings

Diluted earnings

were no outstanding stock awards or options to purchase common stock at June 30, 2021 and 2020.

NOTE F –

The following table presents a calculation of basic and diluted earnings per share for the three months ended December 31, 2021 and 2020.

Basic and diluted earnings per share were calculated by dividing net income by the weighted-average number of shares outstanding for the periods.

As a result of the second-step conversion completed on July 14, 2021, the previously reported number of shares for the year ended December 31, 2020 were adjusted to reflect the 1.2213 exchange ratio for comparative purposes.

For the Three Months Ended December 31,

(Dollars in thousands, except share and per share data)

Basic and diluted EPS

Net income available to weighted average common shareholders

There were no outstanding stock awards or options to purchase common stock at December 31, 2021 and 2020.

NOTE E –

STOCK-BASED COMPENSATION AND STOCK REPURCHASE PROGRAM

Company follows FASB Accounting Standards Codification (“ASC”) Section 718, Compensation-Stock

Compensation , which covers a wide range of share-based compensation arrangements including share options, restricted share plans,

performance-based awards, share appreciation rights, and employee share purchase plans.

ASC 718 requires that compensation cost relating

to share-based payment transactions be recognized in consolidated financial statements.

The cost is measured based on the fair value of

the equity or liability instruments issued.

options generally vest over a five-year

service period and expire ten

years from issuance.

The fair values of all option grants were estimated using the Black-Scholes option-pricing model.

Management recognizes compensation expense for the fair values of these awards, which have graded vesting, on a straight-line basis over

the vesting period of the awards.

Once vested, these awards are irrevocable.

were no grants, vested shares or forfeitures of non-vested restricted stock awards for the three and nine months ended June 30, 2021 and

There were no stock option and stock award expenses included with compensation expense for the three and nine months ended June

30, 2021 and 2020.

Company announced in November 2007 its second stock repurchase program of up to 5 %

of its publicly-held outstanding shares of common stock, or 129,924 shares.

Through June 30, 2021, the Company had repurchased a total

shares of its common stock at an average cost of $ 8.41

per share under this program.

No shares were repurchased during the three and nine months ended June 30, 2021 and 2020.

Under the stock

repurchase program, 38,924

shares of the 129,924

shares authorized remained available for repurchase as of June 30, 2021.

The Company held 112,996

total treasury stock shares at June 30, 2021.

Company has an Employee Stock Ownership Plan ("ESOP") for the benefit of employees of the Company and the Bank who meet the

eligibility requirements as defined in the plan.

2006 the ESOP trust purchased 217,863

shares of common stock in the open market using proceeds of a loan from the Company.

The total cost of shares purchased by the ESOP trust

million, reflecting an average cost per share of $ 10.58 .

The Bank makes cash contributions to the ESOP on an annual basis sufficient to enable the ESOP to make the required loan payments to the

The loan bears a variable interest rate that adjusts annually every January 1 st to the then published Prime Rate ( 3.25 %

at January 1, 2021) with principal and interest payable annually in equal installments over thirty years.

The loan is secured by shares

of the Company’s stock.

the debt is repaid, shares are released as collateral and allocated to qualified employees.

Accordingly, the shares pledged as collateral

are reported as unearned ESOP shares in the Consolidated Balance Sheets.

The Company accounts for its ESOP in accordance with FASB ASC

Topic 718, “Employer’s Accounting for Employee Stock Ownership Plans”.

As shares are released from collateral, the

Company reports compensation expense equal to the current market price of the shares, and the shares become outstanding for earnings per

share computations.

June 30, 2021, all 217,863

shares in the ESOP were allocated to participants.

The Company's contribution expense for the ESOP was $ 50,000

and $ 101,000

for the nine months ended June 30, 2021 and 2020, respectively.

NOTE G –

The Company follows FASB Accounting Standards Codification (“ASC”) Section 718, Compensation-Stock Compensation , which covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.

ASC 718 requires that compensation cost relating to share-based payment transactions be recognized in consolidated financial statements.

The cost is measured based on the fair value of the equity or liability instruments issued.

There were no grants, vested shares or forfeitures of non-vested restricted stock awards for the three months ended December 31, 2021 and 2020.

There were also no stock option and stock award expenses included with compensation expense for the three months ended December 31, 2021 and 2020.

The Company completed its first stock repurchase program of 130,927 shares in November 2007, and announced its second stock repurchase program of up to 5 % of its publicly-held outstanding shares of common stock, or 129,924 shares, in November 2007.

Through December 31, 2021, the Company had repurchased a total of 91,000 shares of its common stock at an average cost of $ 8.41 per share under this program.

Under current federal regulations, subject to limited exceptions, the Company may not repurchase shares of our common stock during the first year following the completion of its second-step conversion offering, which was completed on July 14, 2021.

The Company did not repurchase any shares of its common stock during the three months ended December 31, 2021 and 2020.

The Company held 112,996 total treasury stock shares at December 31, 2021.

The Company has an Employee Stock Ownership Plan ("ESOP") for the benefit of employees who meet certain eligibility requirements.

The ESOP trust purchases shares of common stock in the open market using proceeds of a loan from the Company.

The loan is secured by shares of the Company’s stock.

The Bank makes cash contributions to the ESOP on an annual basis sufficient to enable the ESOP to make the required loan payments to the Company.

As the debt is repaid, shares are released as collateral and allocated to qualified employees.

Accordingly, the shares pledged as collateral are reported as unearned ESOP shares in the Consolidated Balance Sheets.

The Company accounts for its ESOP in accordance with FASB ASC Topic 718, “Employer’s Accounting for Employee Stock Ownership Plans.”

As shares are released from collateral, the Company reports compensation expense equal to the current market price of the shares, and the shares become outstanding for earnings per share computations.

The Company’s ESOP (“2006 ESOP”) was established in 2006 as part of the Company’s initial public offering.

The total cost of the 217,863 shares purchased by the 2006 ESOP trust was $ 2.3 million, reflecting an average cost per share of $ 10.58 .

The 2006 ESOP loan was fully repaid during the year ended September 30, 2021, and all shares were allocated to participants.

In connection with the second-step conversion offering, the ESOP trustees purchased 8 % of the shares sold in the offering, or 312,800 shares (“2021 ESOP”).

As a result of the second-step conversion offering being oversubscribed in the first tier of subscription priorities, the ESOP trustees were unable to purchase shares of the Company’s common stock in the second-step conversion offering.

The total cost of the shares purchased by the 2021 ESOP trust was $ 3.4 million, reflecting an average cost per share of $ 10.77 .

The 2021 ESOP loan bears a variable interest rate that adjusts annually to Prime Rate ( 3.25 % at January 1, 2022) with principal and interest payable annually in equal installments over thirty years.

The Company's contribution expense for the ESOP was $ 61,000 and $ 50,000 for the three months ended December 31, 2021 and 2020, respectively.

NOTE F –

OTHER COMPREHENSIVE INCOME (LOSS)

The components of other comprehensive loss and the related income tax effects are as follows:

Months Ended June 30,

(In thousands)

holding gain arising during

Available-for-sale

Other comprehensive

Months Ended June 30,

Three Months Ended December 31,

(In thousands)

holding gain (loss) arising during period on:

Available-for-sale

reclassification adjustments for:

gains realized on securities available for sale (a) (b)

Other comprehensive

income (loss), net

gains on securities transactions included in gains on sales of investment securities in the accompanying Consolidated Statements

effect included in income tax expense in the accompanying Consolidated Statements of Operation

NOTE H –

Unrealized holding loss arising during

Available-for-sale investments

Other comprehensive loss, net

NOTE G –

FAIR VALUE DISCLOSURES

uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.

The securities available-for-sale are recorded at fair value on a recurring basis.

Additionally, from time to time, the Company may be

required to record at fair value other assets or liabilities on a non-recurring basis, such as held-to-maturity securities, mortgage servicing

rights, loans receivable and other real estate owned, or OREO.

These non-recurring fair value adjustments involve the application of lower-of-cost-or-market

accounting or write-downs of individual assets.

In accordance

with ASC 820, the Company groups its assets and liabilities at fair value in three levels, based on the markets in which the assets are

traded and the reliability of the assumptions used to determine fair value.

Additionally, from time to time, the Company may be required to record at fair value other assets or liabilities on a non-recurring basis, such as held-to-maturity securities, mortgage servicing rights, loans receivable and OREO.

These non-recurring fair value adjustments involve the application of lower-of-cost-or-market accounting or write-downs of individual assets.

In accordance with ASC 820, the Company groups its assets and liabilities at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value.

These levels are:

1 - Valuation is based upon quoted prices for identical instruments traded in active markets.

2 - Valuation is based upon quoted prices for similar instruments in active markets, quoted

prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant

assumptions are observable in the market.

3 - Valuation is generated from model-based techniques that use significant assumptions not

observable in the market.

These unobservable assumptions reflect estimates of assumptions that market participants would use in

pricing the asset or liability.

Valuation techniques include the use of option pricing models, discounted cash flow models and similar

The results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset

or liability.

based its fair values on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date.

ASC 820 requires the Company to maximize the use of observable inputs and minimize the use

of unobservable inputs when measuring fair value.

The following

is a description of valuation methodologies used for assets measured at fair value on a recurring basis.

available-for-sale

The securities

available-for-sale portfolio is carried at estimated fair value on a recurring basis, with any unrealized gains and losses, net of taxes,

reported as accumulated other comprehensive income/loss in stockholders’

The securities available-for-sale portfolio consists

of U.S government-sponsored mortgage-backed securities and private label mortgage-backed securities.

The fair values of these securities

are obtained from an independent nationally recognized pricing service.

An independent pricing service provides the Company with prices

which are categorized as Level 2, as quoted prices in active markets for identical assets are generally not available for the securities

in the Company’s portfolio.

Various modeling techniques are used to determine pricing for Company’s mortgage-backed securities,

including option pricing and discounted cash flow models.

The inputs to these models include benchmark yields, reported trades, broker/dealer

quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data.

executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies.

The fair values

of such derivatives are based on valuation models from a third party using current market terms (including interest rates and fees), the

remaining terms of the agreements and the credit worthiness of the counter party as of the measurement date (Level 2).

The following

tables provide the level of valuation assumptions used to determine the carrying value of the Company’s assets measured at fair

value on a recurring basis.

Value at June 30, 2021

Level 1 - Valuation is based upon quoted prices for identical instruments traded in active markets.

Level 2 - Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 - Valuation is generated from model-based techniques that use significant assumptions not observable in the market.

These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability.

Valuation techniques include the use of option pricing models, discounted cash flow models and similar techniques.

The results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability.

The Company based its fair values on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820 requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The following is a description of valuation methodologies used for assets measured at fair value on a recurring basis.

Securities available-for-sale

The securities available-for-sale portfolio is carried at estimated fair value on a recurring basis, with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income/loss in stockholders’

The securities available-for-sale portfolio consists of U.S government-sponsored mortgage-backed securities and private label mortgage-backed securities.

The fair values of these securities are obtained from an independent nationally recognized pricing service.

An independent pricing service provides the Company with prices which are categorized as Level 2, as quoted prices in active markets for identical assets are generally not available for the securities in the Company’s portfolio.

Various modeling techniques are used to determine pricing for Company’s mortgage-backed securities, including option pricing and discounted cash flow models.

The inputs to these models include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data.

Magyar Bank executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies.

The fair values of such derivatives are based on valuation models from a third party using current market terms (including interest rates and fees), the remaining terms of the agreements and the credit worthiness of the counter party as of the measurement date (Level 2).

The following tables provide the level of valuation assumptions used to determine the carrying value of the Company’s assets measured at fair value on a recurring basis.

December 31, 2021

(In thousands)

available for sale:

Mortgage-backed

Securities available for sale:

Value at September 30, 2020

Mortgage-backed securities

Debt securities

Total securities available for sale

Derivative assets

Derivative liabilities

Total Liabilities

September 30, 2021

(In thousands)

available for sale:

Mortgage-backed

Securities available for sale:

following is a description of valuation methodologies used for assets measured at fair value on a non-recurring basis.

Servicing Rights, net

Servicing Rights (MSRs) are carried at the lower of cost or estimated fair value.

The estimated fair value of MSRs is determined through

a calculation of future cash flows, incorporating estimates of assumptions market participants would use in determining fair value including

market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market driven data, including the

market’s perception of future interest rate movements and, as such, are classified as Level 3.

The Company had MSRs totaling $ 5,776

at June 30, 2021 and September 30, 2020, respectively.

which meet certain criteria are evaluated individually for impairment.

A loan is impaired when, based on current information and events,

it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.

amounts due according to the contractual terms means that both the contractual interest and principal payments of a loan will be collected

as scheduled in the loan agreement.

Obligations of U.S.

government agencies:

Mortgage-backed securities - residential

Obligations of U.S.

government-sponsored enterprises:

Mortgage-backed securities-residential

Total securities available for sale

Derivative assets

Derivative liabilities

Total Liabilities

The following is a description of valuation methodologies used for assets measured at fair value on a non-recurring basis.

Mortgage Servicing Rights, net

Mortgage Servicing Rights (MSRs) are carried at the lower of cost or estimated fair value.

The estimated fair value of MSRs is determined through a calculation of future cash flows, incorporating estimates of assumptions market participants would use in determining fair value including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market driven data, including the market’s perception of future interest rate movements and, as such, are classified as Level 3.

The Company had MSRs totaling $ 3,000 and $ 4,000 at December 31, 2021 and September 30, 2021, respectively.

Impaired Loans

Loans which meet certain criteria are evaluated individually for impairment.

A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.

All amounts due according to the contractual terms means that both the contractual interest and principal payments of a loan will be collected as scheduled in the loan agreement.

Three impairment measurement methods are used, depending upon the collateral securing the asset:

the present value of expected future cash flows discounted at the loan’s effective interest rate (the rate of return implicit in

1) the present value of expected future cash flows discounted at the loan’s effective interest rate (the rate of return implicit in the loan);

2) the asset’s observable market price;

or 3) the fair value of the collateral, less anticipated selling and disposition

costs, if the asset is collateral dependent.

The regulatory agencies require the last method for loans from which repayment is expected

to be provided solely by the underlying collateral.

The Company’s impaired loans are generally collateral dependent and, as such,

are carried at the estimated fair value of the collateral less estimated selling costs.

Fair value is estimated through current appraisals,

and adjusted by management as necessary, to reflect current market conditions and, as such, are generally classified as Level 3.

of collateral securing impaired loans are conducted by approved, qualified, and independent third-party appraisers.

Such appraisals are

ordered via the Company’s credit administration department, independent from the lender who originated the loan, once the loan

is deemed impaired, as described in the previous paragraph.

Impaired loans are generally re-evaluated with an updated appraisal within

one year of the last appraisal.

or 3) the fair value of the collateral, less anticipated selling and disposition costs, if the asset is collateral dependent.

The regulatory agencies require the last method for loans from which repayment is expected to be provided solely by the underlying collateral.

The Company’s impaired loans are generally collateral dependent and, as such, are carried at the estimated fair value of the collateral less estimated selling costs.

Fair value is estimated through current appraisals, and adjusted by management as necessary, to reflect current market conditions and, as such, are generally classified as Level 3.

Appraisals of collateral securing impaired loans are conducted by approved, qualified, and independent third-party appraisers.

Such appraisals are ordered via the Company’s credit administration department, independent from the lender who originated the loan, once the loan is deemed impaired, as described in the previous paragraph.

Impaired loans are generally re-evaluated with an updated appraisal within one year of the last appraisal.

The Company discounts the appraised “as is”

value of the collateral for estimated selling

and disposition costs and compares the resulting fair value of collateral to the outstanding loan amount.

If the outstanding loan amount

is greater than the discounted fair value, the Company requires a reduction in the outstanding loan balance or additional collateral before

considering an extension to the loan.

If the borrower is unwilling or unable to reduce the loan balance or increase the collateral securing

the loan, it is deemed impaired and the difference between the loan amount and the fair value of collateral, net of estimated selling

and disposition costs, is charged off through a reduction of the allowance for loan loss.

Real Estate Owned

fair value of other real estate owned is determined through current appraisals, and adjusted as necessary, by management, to reflect current

market conditions and anticipated selling and disposition costs.

As such, other real estate owned is generally classified as Level 3.

The following tables provide the level of valuation assumptions used to determine the carrying value of the Company’s assets measured

at fair value on a non-recurring basis at June 30, 2021 and September 30, 2020.

Value at June 30, 2021

value of the collateral for estimated selling and disposition costs and compares the resulting fair value of collateral to the outstanding loan amount.

If the outstanding loan amount is greater than the discounted fair value, the Company requires a reduction in the outstanding loan balance or additional collateral before considering an extension to the loan.

If the borrower is unwilling or unable to reduce the loan balance or increase the collateral securing the loan, it is deemed impaired and the difference between the loan amount and the fair value of collateral, net of estimated selling and disposition costs, is charged off through a reduction of the allowance for loan loss.

Other Real Estate Owned

The fair value of other real estate owned is determined through current appraisals, and adjusted as necessary, by management, to reflect current market conditions and anticipated selling and disposition costs.

As such, other real estate owned is generally classified as Level 3.

The following tables provide the level of valuation assumptions used to determine the carrying value of the Company’s assets measured at fair value on a non-recurring basis at December 31, 2021 and September 30, 2021.

December 31, 2021

(In thousands)

Impaired loans

Value at September 30, 2020

Other real estate owned

September 30, 2021

(In thousands)

Impaired loans

The following tables present additional quantitative information about assets measured at fair value on a nonrecurring basis and for which

Company has utilized Level 3 inputs to determine fair value:

Information about Level 3 Fair Value Measurements

in thousands)

Range (Weighted

Other real estate owned

The following tables present additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Company has utilized Level 3 inputs to determine fair value:

Quantitative Information about Level 3 Fair Value Measurements

(Dollars in thousands)

December 31, 2021

Unobservable Input

Range (Weighted Average)

Impaired loans

of collateral (1)

adjustments (2)

of collateral (1)

Information about Level 3 Fair Value Measurements

in thousands)

Range (Weighted

Appraisal of collateral (1)

Appraisal adjustments (2)

- 8.0 % to - 42.8 % (- 25.0 %)

Other real estate owned

Appraisal of collateral (1)

Liquidation expenses (2)

- 31.2 % to - 45.5 % (- 39.4 %)

September 30, 2021

Unobservable Input

Range (Weighted Average)

Impaired loans

of collateral (1)

adjustments (2)

of collateral (1)

value is generally determined through independent appraisals for the underlying collateral, which generally include various level

3 inputs which are not identifiable.

may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.

and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

The following

presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments carried

at cost or amortized cost as of June 30, 2021 and September 30, 2020.

For short-term financial assets such as cash and cash equivalents

and accrued interest receivable, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the

origination of the instrument and its expected realization.

For financial liabilities such as interest-bearing demand, NOW, and money

market savings deposits, the carrying amount is a reasonable estimate of fair value due to these products being payable on demand and

having no stated maturity.

Value Measurement Placement

Appraisal of collateral (1)

Appraisal adjustments (2)

- 8.0 % to - 42.8 % (- 23.6 %)

Other real estate owned

Appraisal of collateral (1)

Liquidation expenses (2)

- 31.2 % to - 45.5 % (- 39.4 %)

(1) Fair value is generally determined through independent appraisals for the underlying collateral, which generally include various level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.

The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments carried at cost or amortized cost as of December 31, 2021 and September 30, 2021.

For short-term financial assets such as cash and cash equivalents and accrued interest receivable, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization.

For financial liabilities such as interest-bearing demand, NOW, and money market savings deposits, the carrying amount is a reasonable estimate of fair value due to these products being payable on demand and having no stated maturity.

Fair Value Measurement Placement

(In thousands)

Financial instruments

securities held to maturity

Financial instruments

- liabilities

of deposit including retirement certificates

Financial instruments

securities held-to-maturity

Financial instruments

- liabilities

NOTE I –

Company accounts for its leases in accordance with ASU 2016-02, Leases (Topic 842) .

requires lessees to recognize a lease liability and a right-of-use (“ROU”) asset, measured at the present value of the future

minimum lease payments, at the lease commencement date.

Company has operating leases for five branch locations.

Our leases have remaining lease terms of up to 11

years, some of which include options to extend the leases for up to 10

additional years.

Operating leases are recorded as ROU assets and lease liabilities and are included within Other assets and Accounts

payable and other liabilities, respectively, on our Consolidated Balance Sheets.

lease ROU assets represent our right to use an underlying asset during the lease term and operating lease liabilities represent our obligation

to make lease payments arising from the lease.

ROU assets and lease liabilities are recognized at lease commencement base on the present

value of the remaining lease payments using a discount rate that represents our incremental borrowing rate.

The incremental borrowing

rate used by the Company to value its operating leases is based on the interpolated term advance rate available from the Federal Home

Loan Bank of New York, based on the remaining lease term.

June 30, 2021, the Company’s operating lease right-of-use assets and operating lease liabilities totaled $ 4.0

million and $ 4.4

million, respectively.

December 31, 2021

Financial instruments - assets

Investment securities held to maturity

Financial instruments - liabilities

Certificates of deposit including retirement certificates

September 30, 2021

Financial instruments - assets

Investment securities held-to-maturity

Financial instruments - liabilities

Certificates of deposit

NOTE H –

The Company accounts for its leases in accordance with ASU 2016-02, Leases (Topic 842) .

Topic 842 requires lessees to recognize a lease liability and a right-of-use (“ROU”) asset, measured at the present value of the future minimum lease payments, at the lease commencement date.

The Company holds operating leases for five branch locations.

Our leases have remaining lease terms of up to 11 years, some of which include options to extend the leases for up to 10 additional years.

Operating leases are recorded as ROU assets and lease liabilities and are included within Other assets and Accounts payable and other liabilities, respectively, on our Consolidated Balance Sheets.

Operating lease ROU assets represent our right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease.

ROU assets and lease liabilities are recognized at lease commencement base on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate.

The incremental borrowing rate used by the Company to value its operating leases is based on the interpolated term advance rate available from the Federal Home Loan Bank of New York, based on the remaining lease term.

At December 31, 2021, the Company’s operating lease right-of-use assets and operating lease liabilities totaled $ 3.7 million and $ 4.1 million, respectively.

The following table presents the balance sheet information related to our leases:

in thousands)

Operating lease

right-of-use asset

Operating lease

Weighted average

remaining lease term in years

Weighted average

discount rate

December 31, 2021

September 30, 2021

(Dollars in thousands)

Operating lease right-of-use asset

Operating lease liabilities

Weighted average remaining lease term in years

Weighted average discount rate

The following table summarizes the maturity of our remaining lease liabilities by year:

December 31, 2021

(In thousands)

For the Year Ending:

2027 and thereafter

Present value

of lease liabilities

lease expenses recorded on the Consolidated Statements of Income within Occupancy expense were $ 613,000

and $ 606,000

for the nine months ended June 30, 2021 and 2020, respectively.

NOTE J –

Total lease payments

Less imputed interest

Present value of lease liabilities

Total leases expense recorded on the Consolidated Statements of Income within Occupancy expense were $ 207,000 and $ 204,000 for the three months ended December 31, 2021 and 2020, respectively.

NOTE I –

INVESTMENT SECURITIES

The following tables summarize the amortized cost and fair values of securities available for sale at June 30, 2021 and September 30,

The following table summarizes the amortized cost and fair values of securities classified as available-for-sale and held-to-maturity at December 31, 2021:

(In thousands)

available for sale:

Securities available-for-sale:

Obligations of U.S.

government agencies:

Mortgage-backed

securities - residential

Mortgage-backed securities - residential

Obligations of U.S.

government-sponsored enterprises:

Mortgage-backed

securities - residential

securities available for sale

(In thousands)

available for sale:

Mortgage-backed securities-residential

Total securities available-for-sale

Securities held-to-maturity:

Obligations of U.S.

government agencies:

backed securities - residential

Mortgage-backed securities - residential

Mortgage-backed securities - commercial

Obligations of U.S.

government-sponsored enterprises:

Mortgage-backed

securities - residential

securities available for sale

The maturities of the debt securities and certain information regarding the mortgage-backed securities available for sale at June 30,

2021 are summarized in the following table:

(In thousands)

but within 5 years

but within 10 years

Mortgage-backed-securities - residential

Debt securities

Mortgage-backed

The following tables summarize the amortized cost and fair values of securities held to maturity at June 30, 2021 and September 30, 2020:

Private label mortgage-backed securities - residential

Obligations of state and political subdivisions

Corporate securities

Total securities held-to-maturity

Total investment securities

The contractual maturities of mortgage-backed securities generally exceed 10 years;

however, the effective lives are expected to be shorter due to anticipated prepayments.

The maturities of the debt securities, municipal bonds and certain information regarding the mortgage backed securities at December 31, 2021 are summarized in the following table:

(In thousands)

held to maturity:

government agencies:

Mortgage-backed

securities - residential

Mortgage-backed

securities - commercial

government-sponsored enterprises:

Securities available-for-sale:

Mortgage-backed securities:

- residential

label mortgage-backed securities - residential

of state and political subdivisions

Securities held-to-maturity

Due within 1 year

Due after 1 but within 5 years

Due after 5 but within 10 years

Due after 10 years

Total debt securities

Mortgage-backed securities:

The following table summarizes the amortized cost and fair values of securities classified as available-for-sale and held-to-maturity at September 30, 2021:

(In thousands)

held to maturity:

Securities available-for-sale:

Obligations of U.S.

government agencies:

Mortgage-backed

securities - residential

Mortgage-backed

securities - commercial

Mortgage backed securities - residential

Obligations of U.S.

government-sponsored enterprises:

backed securities - residential

label mortgage-backed securities - residential

Mortgage-backed securities-residential

Total securities available-for-sale

Securities-held to-maturity:

The maturities of the debt securities and certain information regarding the mortgage backed securities held to maturity at June 30, 2021

are summarized in the following table:

(In thousands)

but within 5 years

but within 10 years

Obligations of U.S.

government agencies:

Mortgage-backed securities - residential

Mortgage-backed securities - commercial

Obligations of U.S.

government-sponsored enterprises:

Mortgage backed securities - residential

Debt securities

Mortgage-backed

NOTE K –

Private label mortgage-backed securities - residential

Corporate securities

Total securities held-to-maturity

Total investment securities

NOTE J –

IMPAIRMENT OF INVESTMENT SECURITIES

Company recognizes credit-related other-than-temporary impairment on debt securities in earnings while noncredit-related other-than-temporary

impairment on debt securities not expected to be sold are recognized in other comprehensive income.

Company reviews its investment portfolio on a quarterly basis for indications of impairment.

This review includes analyzing the length

of time and the extent to which the fair value has been lower than the cost, the financial condition and near-term prospects of the issuer,

including any specific events which may influence the operations of the issuer and the intent and ability to hold the investment for a

period of time sufficient to allow for any anticipated recovery in the market.

The Company evaluates its intent and ability to hold debt

securities based upon its investment strategy for the particular type of security and its cash flow needs, liquidity position, capital

adequacy and interest rate risk position.

In addition, the risk of future other-than-temporary impairment may be influenced by prolonged

recession in the U.S.

The Company recognizes credit-related other-than-temporary impairment on debt securities in earnings while noncredit-related other-than-temporary impairment on debt securities not expected to be sold are recognized in other comprehensive income.

The Company reviews its investment portfolio on a quarterly basis for indications of impairment.

This review includes analyzing the length of time and the extent to which the fair value has been lower than the cost, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer and the intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in the market.

The Company evaluates its intent and ability to hold debt securities based upon its investment strategy for the particular type of security and its cash flow needs, liquidity position, capital adequacy and interest rate risk position.

In addition, the risk of future other-than-temporary impairment may be influenced by prolonged recession in the U.S.

economy, changes in real estate values and interest deferrals.

Investment securities with fair values greater than their amortized cost contain unrealized gains.

Investment securities with fair values

less than their amortized cost contain unrealized losses.

The following tables present the gross unrealized losses and fair value at June

30, 2021 and September 30, 2020 for both available for sale and held to maturity securities by investment category and time frame for

which the loss has been outstanding:

Than 12 Months

Investment securities with fair values less than their amortized cost contain unrealized losses.

The following tables present the gross unrealized losses and fair value at December 31, 2021 and September 30, 2021 for both available for sale and held to maturity securities by investment category and time frame for which the loss has been outstanding:

Less Than 12 Months

12 Months Or Greater

in thousands)

(Dollars in thousands)

December 31, 2021

Obligations of U.S.

government agencies:

Mortgage-backed

securities - residential

Mortgage-backed

securities - commercial

Mortgage-backed securities - residential

Mortgage-backed securities - commercial

Obligations of U.S.

government-sponsored enterprises

Mortgage-backed

securities - residential

of state and political subdivisions

Mortgage-backed securities - residential

Debt securities

Obligations of state and political subdivisions

Corporate securities

Than 12 Months

Months Or Greater

in thousands)

September 30, 2021

Obligations of U.S.

government agencies:

Mortgage-backed

securities - residential

Mortgage-backed

securities - commercial

Mortgage-backed securities - residential

Mortgage-backed securities - commercial

Obligations of U.S.

government-sponsored enterprises

Mortgage-backed

securities - residential

label mortgage-backed securities - residential

Mortgage-backed securities - residential

Debt securities

Obligations of state and political subdivisions

Corporate securities

Company evaluated these securities and determined that the decline in value was primarily related to fluctuations in the interest rate

environment and were not related to any company or industry specific event.

At June 30, 2021 and September 30, 2020, there were 27 and

nine, respectively, investment securities with unrealized losses.

Company anticipates full recovery of amortized costs with respect to these securities.

The Company does not intend to sell these securities

and has determined that it is not more likely than not that the Company would be required to sell these securities prior to maturity or

market price recovery.

Management has considered factors regarding other than temporarily impaired securities and determined that there

are no securities with impairment that is other than temporary as of June 30, 2021 and September 30, 2020.

NOTE L –

The Company evaluated these securities and determined that the decline in value was primarily related to fluctuations in the interest rate environment and were not related to any company or industry specific event.

At December 31, 2021 and September 30, 2021, there were 41 and 36, respectively, investment securities with unrealized losses.

The Company anticipates full recovery of amortized costs with respect to these securities.

The Company does not intend to sell these securities and has determined that it is not more likely than not that the Company would be required to sell these securities prior to maturity or market price recovery.

Management has considered factors regarding other than temporarily impaired securities and determined that there are no securities with impairment that is other than temporary as of December 31, 2021 and September 30, 2021.

NOTE K –

LOANS RECEIVABLE, NET AND RELATED ALLOWANCE FOR LOAN LOSSES

Loans receivable, net were comprised of the following:

September 30,

(In thousands)

family residential

lines of credit

loans receivable

Allowance for

loans receivable, net

Bank is a participant in the Paycheck Protection Program (“PPP”), which was designed by the U.S.

Treasury to provide liquidity

using the SBA’s platform to small businesses and self-employed individuals to maintain their staff and operations through the COVID-19

This liquidity is in the form of a loan, 100 %

guaranteed by the SBA, that is forgivable provided the funds are used on qualifying payroll costs, and to a lesser extent, rent, utilities

and interest on qualifying mortgage payments.

The PPP loans, which are included with the commercial business loans in the table above,

bear a fixed rate of 1.0 %

and loan payments are deferred for the first 10 months following the covered period, which is eight to twenty-four weeks following the

date the loan is made.

The Company originated 350 “First Draw”

loans totaling $ 56.0

million through June 30, 2021 for which it received $ 2.0

million in origination fees from the SBA.

These fees are being amortized over the contractual term of the loans, which is two

years for loans originated prior to June 4, 2020 and five

years for loans originated June 5, 2020 or later.

Through June 30, 2021, 276

loans totaling $ 46.1

million had been forgiven by the SBA.

December 27, 2020 the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues (“Economic Aid Act”) was signed

into law, extending the SBA’s authority to guarantee Second Draw PPP loans, under generally the same terms and conditions available

under the First Draw program, through March 31, 2021, subsequently extended by the Paycheck Protection Program Extension Act of 2021 to

May 31, 2021.

In order to qualify for a Second Draw PPP loan, an applicant must have experienced a revenue reduction of at least 25 %

in 2020 relative to 2019.

As of June 30, 2021, the Company originated 212

PPP loans totaling $ 35.3

million under the Economic Aid Act to its eligible customers, for which it received $ 1.5

million in origination fees from the SBA.

These fees are being amortized over the contractual term of the loans, which is five years.

The Economic Aid Act also expanded the eligible expenditures for which a business could use PPP proceeds for and provided for a simplified

forgiveness application for PPP loans $ 150,000

At June 30, 2021, our PPP loans totaled $ 44.7

million compared to $ 56.0

million at September 30, 2020.

segments of the Bank’s loan portfolio are disaggregated to a level that allows management to monitor risk and performance.

residential mortgage loan segment is further disaggregated into two classes:

amortizing term loans, which are primarily first liens, and

home equity lines of credit, which are generally second liens.

The commercial real estate loan segment is further disaggregated into three

One-to-four family residential

Commercial real estate

Home equity lines of credit

Commercial business

Total loans receivable

Net deferred loan costs

Allowance for loan losses

Total loans receivable, net

The Bank participated in the Paycheck Protection Program (“PPP”), which was designed by the U.S.

Treasury under the Coronavirus Aid, Relief and Economic Security Act of 2020 (subsequently extended by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act) to provide liquidity using the SBA’s platform to small businesses and self-employed individuals to maintain their staff and operations through the COVID-19 pandemic.

This liquidity is in the form of a loan, 100 % guaranteed by the SBA, that is forgivable provided the funds are used on qualifying payroll costs, and to a lesser extent, rent, utilities and interest on qualifying mortgage payments.

The loans bear a fixed rate of 1.0 % and loan payments are deferred through the date that the SBA remits the borrower’s loan forgiveness amount to the lender.

Included in commercial business loans at December 31, 2021 were 52 PPP loans totaling $ 14.8 million compared with 111 PPP loans totaling $ 25.1 million at September 30, 2021.

The Company expects most of these loans to be approved for full forgiveness by the SBA.

The segments of the Bank’s loan portfolio are disaggregated to a level that allows management to monitor risk and performance.

The residential mortgage loan segment is further disaggregated into two classes:

amortizing term loans, which are primarily first liens, and home equity lines of credit, which are generally second liens.

The commercial real estate loan segment is further disaggregated into three classes:

loans secured by multifamily structures, owner-occupied commercial structures, and non-owner occupied nonresidential properties.

The construction loan segment consists primarily of loans to developers or investors for the purpose of acquiring, developing and constructing

residential or commercial structures and to a lesser extent one-to-four family residential construction loans made to individuals for

the acquisition of and/or construction on a lot or lots on which a residential dwelling is to be built.

Construction loans to developers

and investors have a higher risk profile because the ultimate buyer, once development is completed, is generally not known at the time

The commercial business loan segment consists of loans made for the purpose of financing the activities of commercial customers

and consists primarily of revolving lines of credit.

The other loan segment consists primarily of stock-secured installment consumer loans,

but also includes unsecured personal loans and overdraft lines of credit connected with customer deposit accounts.

evaluates individual loans in all segments for possible impairment if the loan either is in nonaccrual status, or is risk rated Substandard

and is 90 days or more past due.

Loans are considered to be impaired when, based on current information and events, it is probable that

the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the

loan agreement.

Factors considered by management in evaluating impairment include payment status, collateral value, and the probability

of collecting scheduled principal and interest payments when due.

Management determines the significance of payment delays and payment

shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including

the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation

to the principal and interest owed.

the determination has been made that a loan is impaired, the recorded investment in the loan is compared to the fair value of the loan

using one of three methods:

The construction loan segment consists primarily of loans to developers or investors for the purpose of acquiring, developing and constructing residential or commercial structures and to a lesser extent one-to-four family residential construction loans made to individuals for the acquisition of and/or construction on a lot or lots on which a residential dwelling is to be built.

Construction loans to developers and investors have a higher risk profile because the ultimate buyer, once development is completed, is generally not known at the time of the loan.

The commercial business loan segment consists of loans made for the purpose of financing the activities of commercial customers and consists primarily of revolving lines of credit.

The other loan segment consists primarily of stock-secured installment consumer loans, but also includes unsecured personal loans and overdraft lines of credit connected with customer deposit accounts.

Management evaluates individual loans in all segments for possible impairment if the loan either is in nonaccrual status, or is risk rated Substandard and is 90 days or more past due.

Loans are considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.

Factors considered by management in evaluating impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.

Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Once the determination has been made that a loan is impaired, the recorded investment in the loan is compared to the fair value of the loan using one of three methods:

(a) the present value of expected future cash flows discounted at the loan’s effective interest rate;

(b) the loan’s observable market price;

or (c) the fair value of the collateral securing the loan, less anticipated selling and

disposition costs.

or (c) the fair value of the collateral securing the loan, less anticipated selling and disposition costs.

The method is selected on a loan by loan basis, with management primarily utilizing the fair value of collateral method.

If there is a shortfall between the fair value of the loan and the recorded investment in the loan, the Company charges the difference

to the allowance for loan loss as a charge-off and carries the impaired loan on its books at fair value.

It is the Company’s policy

to evaluate impaired loans on an annual basis to ensure the recorded investment in a loan does not exceed its fair value.

The following tables present impaired loans by class, segregated by those for which a specific allowance was required and charged-off

and those for which a specific allowance was not necessary at the dates presented:

Impaired Loans

(In thousands)

family residential

impaired loans

Impaired Loans

If there is a shortfall between the fair value of the loan and the recorded investment in the loan, the Company charges the difference to the allowance for loan loss as a charge-off and carries the impaired loan on its books at fair value.

It is the Company’s policy to evaluate impaired loans on an annual basis to ensure the recorded investment in a loan does not exceed its fair value.

The following tables present impaired loans by class, segregated by those for which a specific allowance was required and charged-off and those for which a specific allowance was not necessary at the dates presented:

Impaired Loans with

Specific Allowance

Total Impaired Loans

(In thousands)

family residential

impaired loans

average recorded investment in impaired loans was $12.6 million and $10.8 million for the nine months ended June 30, 2021 and 2020, respectively.

The Company’s impaired loans include delinquent non-accrual loans and performing Troubled Debt Restructurings (“TDRs”),

as TDRs remain impaired loans until fully repaid.

There were two TDRs totaling $330,000 during the nine months ended June 30, 2021 and

there were no TDRs during the nine months ended June 30, 2020.

The following tables present the average recorded investment in impaired loans for the three and nine months ended June 30, 2021 and 2020.

December 31, 2021

One-to-four family residential

Commercial real estate

Commercial business

Total impaired loans

September 30, 2021

One-to-four family residential

Commercial real estate

Commercial business

Total impaired loans

The average recorded investment in impaired loans was $10.8 million and $13.7 million for the three months ended December 31, 2021 and 2020, respectively.

The Company’s impaired loans include delinquent non-accrual loans and performing Troubled Debt Restructurings (“TDRs”), as TDRs remain impaired loans until fully repaid.

There were no TDRs during the three months ended December 31, 2021 and there was one TDR totaling $ 218,000 during the three months ended December 31, 2020.

The following tables present the average recorded investment in impaired loans for the three and nine months ended December 31, 2021 and 2020.

There was no interest income recognized on impaired loans during the periods presented.

June 30, 2021

Ended December 31, 2021

(In thousands)

family residential

Average investment

in impaired loans

June 30, 2020

One-to-four family residential

Commercial real estate

Commercial business

Average investment in impaired loans

Ended December 31, 2020

(In thousands)

family residential

Average investment

in impaired loans

uses a ten point internal risk rating system to monitor the credit quality of the overall loan portfolio.

The first six categories are

considered not criticized, and are aggregated as “Pass”

The criticized rating categories utilized by management generally

follow bank regulatory definitions.

The Special Mention category includes assets that are currently protected but are potentially weak,

resulting in an undue and unwarranted credit risk, but not to the point of justifying a Substandard classification.

Loans in the Substandard

category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will

be sustained if the weaknesses are not corrected.

Loans classified Doubtful have all the weaknesses inherent in loans classified Substandard

with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable.

One-to-four family residential

Commercial real estate

Commercial business

Average investment in impaired loans

Management uses a ten point internal risk rating system to monitor the credit quality of the overall loan portfolio.

The first six categories are considered not criticized, and are aggregated as “Pass”

The criticized rating categories utilized by management generally follow bank regulatory definitions.

The Special Mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a Substandard classification.

Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected.

Loans classified Doubtful have all the weaknesses inherent in loans classified Substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable.

All loans greater than three months past due are considered Substandard.

Any portion of a loan that has been charged off is placed in

the Loss category.

help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Bank

has a structured loan rating process with several layers of internal and external oversight.

Generally, consumer and residential mortgage

loans are included in the Pass categories unless a specific action, such as severe delinquency, bankruptcy, repossession, or death occurs

to raise awareness of a possible credit event.

The Bank’s Commercial Loan Officers are responsible for the timely and accurate

risk rating of the loans in their portfolios at origination and on an ongoing basis.

The Asset Review Committee performs monthly reviews

of all commercial relationships internally rated 6 (“Watch”) or worse.

Confirmation of the appropriate risk grade is performed

by an external loan review company that semi-annually reviews and assesses loans within the portfolio.

Generally, the external consultant

reviews commercial relationships greater than $500,000 and/or criticized relationships greater than $250,000.

Detailed reviews, including

plans for resolution, are performed on loans classified as Substandard on a monthly basis.

The following tables present the classes of the loan portfolio summarized by the aggregate Pass and the criticized categories of Special

Mention, Substandard and Doubtful within the Bank’s internal risk rating system at the dates presented:

(In thousands)

June 30, 2021

family residential

equity lines of credit

Any portion of a loan that has been charged off is placed in the Loss category.

To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Bank has a structured loan rating process with several layers of internal and external oversight.

Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as severe delinquency, bankruptcy, repossession, or death occurs to raise awareness of a possible credit event.

The Bank’s Commercial Loan Officers are responsible for the timely and accurate risk rating of the loans in their portfolios at origination and on an ongoing basis.

The Asset Review Committee performs monthly reviews of all commercial relationships internally rated 6 (“Watch”) or worse.

Confirmation of the appropriate risk grade is performed by an external loan review company that semi-annually reviews and assesses loans within the portfolio.

Generally, the external consultant reviews commercial relationships greater than $500,000 and/or criticized relationships greater than $250,000.

Detailed reviews, including plans for resolution, are performed on loans classified as Substandard on a monthly basis.

The following tables present the classes of the loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the Bank’s internal risk rating system at the dates presented:

(In thousands)

December 31, 2021

One-to-four family residential

Commercial real estate

Home equity lines of credit

Commercial business

September 30, 2021

family residential

equity lines of credit

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined

by the length of time a recorded payment is past due.

The following tables present the classes of the loan portfolio summarized by the

aging categories of performing loans and nonaccrual loans at the dates presented:

(In thousands)

June 30, 2021

family residential

equity lines of credit

One-to-four family residential

Commercial real estate

Home equity lines of credit

Commercial business

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due.

The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans at the dates presented:

(In thousands)

December 31, 2021

One-to-four family residential

Commercial real estate

Home equity lines of credit

Commercial business

September 30, 2021

family residential

equity lines of credit

allowance for loan losses (“ALL”) is maintained to absorb losses from the loan portfolio.

The ALL is based on management’s

continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions,

diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience, and the amount of non-performing

Bank’s methodology for determining the ALL is based on the requirements of ASC Section 310-10-35 for loans individually evaluated

for impairment (discussed above) and ASC Subtopic 450-20 for loans collectively evaluated for impairment, as well as the Interagency Policy

Statements on the Allowance for Loan and Lease Losses and other bank regulatory guidance.

that are collectively evaluated for impairment are analyzed with general allowances being made as appropriate.

For general allowances,

historical loss trends are used in the estimation of losses in the current portfolio.

These historical loss amounts are modified by other

qualitative and economic factors.

loans are segmented into classes based on their inherent varying degrees of risk, as described above.

Management tracks the historical

net charge-off activity by segment and utilizes this figure, as a percentage of the segment, as the general reserve percentage for pooled,

homogenous loans that have not been deemed impaired.

Typically, an average of losses incurred over a defined number of consecutive historical

years is used.

credits are segregated for the application of qualitative factors.

Management has identified a number of additional qualitative factors

which it uses to supplement the historical charge-off factor because these factors are likely to cause estimated credit losses associated

with the existing loan pools to differ from historical loss experience.

The additional factors that are evaluated quarterly and updated

using information obtained from internal, regulatory, and governmental sources include:

One-to-four family residential

Commercial real estate

Home equity lines of credit

Commercial business

An allowance for loan losses (“ALL”) is maintained to absorb losses from the loan portfolio.

The ALL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience, and the amount of non-performing loans.

The Bank’s methodology for determining the ALL is based on the requirements of ASC Section 310-10-35 for loans individually evaluated for impairment (discussed above) and ASC Subtopic 450-20 for loans collectively evaluated for impairment, as well as the Interagency Policy Statements on the Allowance for Loan and Lease Losses and other bank regulatory guidance.

Loans that are collectively evaluated for impairment are analyzed with general allowances being made as appropriate.

For general allowances, historical loss trends are used in the estimation of losses in the current portfolio.

These historical loss amounts are modified by other qualitative and economic factors.

The loans are segmented into classes based on their inherent varying degrees of risk, as described above.

Management tracks the historical net charge-off activity by segment and utilizes this figure, as a percentage of the segment, as the general reserve percentage for pooled, homogenous loans that have not been deemed impaired.

Typically, an average of losses incurred over a defined number of consecutive historical years is used.

Non-impaired credits are segregated for the application of qualitative factors.

Management has identified a number of additional qualitative factors which it uses to supplement the historical charge-off factor because these factors are likely to cause estimated credit losses associated with the existing loan pools to differ from historical loss experience.

The additional factors that are evaluated quarterly and updated using information obtained from internal, regulatory, and governmental sources include:

national and local economic trends and conditions;

4 unchanged sentences

value of underlying collateral;

and concentrations of credit from a loan type, industry

and/or geographic standpoint.

reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely

adjustments to the ALL.

When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged

off against the ALL.

Since loans individually evaluated for impairment are promptly written down to their fair value, typically there

is no portion of the ALL for loans individually evaluated for impairment.

The following table summarizes the ALL by loan category and the related activity for the nine months ended June 30, 2021:

(In thousands)

September 30,  2020

December 31,  2020

Balance- March

Balance- June

following table summarizes the ALL by loan category and the related activity for the nine months ended June 30, 2020:

and concentrations of credit from a loan type, industry and/or geographic standpoint.

Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ALL.

When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ALL.

Since loans individually evaluated for impairment are promptly written down to their fair value, typically there is no portion of the ALL for loans individually evaluated for impairment.

The following table summarizes the ALL by loan category and the related activity for the three months ended December 31, 2021 and 2020:

(In thousands)

September 30,  2019

December 31,  2019

Balance- March

Balance- June

following tables summarize the ALL by loan category, segregated into the amount required for loans individually evaluated for impairment

and the amount required for loans collectively evaluated for impairment as of June 30, 2021 and September 30, 2020:

Balance- September 30,  2021

Provision (credit)

Balance- December 31,  2021

Balance- September 30,  2020

Provision (credit)

Balance- December 31,  2020

The following tables summarize the ALL by loan category, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of December 31, 2021 and September 30, 2021:

(In thousands)

for Loan  Losses:

Balance - June

evaluated for impairment

Allowance for Loan  Losses:

Balance - December 31, 2021

Individually evaluated for impairment

Collectively evaluated for impairment

Loans receivable:

Balance - June

evaluated for impairment

Balance - December 31, 2021

Individually evaluated for impairment

Collectively evaluated for impairment

(In thousands)

for Loan Losses:

- September 30, 2020

evaluated for impairment

Allowance for Loan Losses:

Balance - September 30, 2021  

Individually evaluated for impairment

Collectively evaluated for impairment

Loans receivable:

- September 30, 2020

evaluated for impairment

allowance for loan losses is based on estimates, and actual losses will vary from current estimates.

Management believes that the segmentation

of the loan portfolio into homogeneous pools and the related historical loss ratios and other qualitative factors, as well as the consistency

in the application of assumptions, result in an ALL that is representative of the risk found in the components of the portfolio at any

TDR is a loan that has been modified whereby the Bank has agreed to make certain concessions to a borrower to meet the needs of both the

borrower and the Bank to maximize the ultimate recovery of a loan.

A TDR occurs when a borrower is experiencing, or is expected to experience,

financial difficulties and the loan is modified using a modification that would otherwise not be granted to the borrower.

concessions granted generally include, but are not limited to, interest rate reductions, limitations on the accrued interest charged,

term extensions, and deferment of principal.

A default on a TDR loan for purposes of this disclosure occurs when a borrower is 90 days past due or a foreclosure or repossession of

the applicable collateral has occurred.

There was one TDR totaling $ 112,000

for the three months ended June 30, 2021, and there were no TDRs for the three months ended June 30, 2020.

There were two TDRs totaling

for the nine months ended June 30, 2021, and there were no TDRs for the nine months ended June 30, 2020.

The TDR during the nine months

ended June 30, 2021 was performing in accordance with its restructured terms at June 30, 2021.

Months Ended June 30, 2021

TDR Modification

in thousands)

family residential

Months Ended June 30, 2021

Balance - September 30, 2021  

Individually evaluated for impairment

Collectively evaluated for impairment

The allowance for loan losses is based on estimates, and actual losses will vary from current estimates.

Management believes that the segmentation of the loan portfolio into homogeneous pools and the related historical loss ratios and other qualitative factors, as well as the consistency in the application of assumptions, result in an ALL that is representative of the risk found in the components of the portfolio at any given date.

A Troubled Debt Restructuring (“TDR”) is a loan that has been modified whereby the Bank has agreed to make certain concessions to a borrower to meet the needs of both the borrower and the Bank to maximize the ultimate recovery of a loan.

TDR occurs when a borrower is experiencing, or is expected to experience, financial difficulties and the loan is modified using a modification that would otherwise not be granted to the borrower.

The types of concessions granted generally include, but are not limited to, interest rate reductions, limitations on the accrued interest charged, term extensions, and deferment of principal.

A default on a TDR loan for purposes of this disclosure occurs when a borrower is 90 days past due or a foreclosure or repossession of the applicable collateral has occurred.

There were no TDRs for the three months ended December 31, 2021, and there was one TDR totaling $218,000 during the three months ended December 31, 2020.

Three Months Ended December 31, 2020

Investment Before

Investment After

TDR Modification

in thousands)

family residential

NOTE M –

(Dollars in thousands)

One-to-four family residential

NOTE L –

A summary of deposits by type of account are summarized as follows:

September 30,

(In thousands)

1 unchanged sentence

Savings accounts

connection with the Company’s second-step conversion and related stock offering, cash proceeds of $ 109.6

million from stock subscription deposits were received during the three months ended June 30, 2021 and are included as savings deposits

as of June 30, 2021.

NOTE N –

Company records income taxes using the asset and liability method.

Money market accounts

Certificates of deposit

Retirement certificates

Total deposits

NOTE M –

The Company records income taxes using the asset and liability method.

Accordingly, deferred tax assets and liabilities:

(i) are recognized

for the expected future tax consequences of events that have been recognized in the financial statements or tax returns;

(ii) are attributable

to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases;

(iii) are measured using enacted tax rates expected to apply in the years when those temporary differences are expected to be recovered

applicable, deferred tax assets are reduced by a valuation allowance for any portions determined not likely to be realized.

The valuation

allowance is assessed by management on a quarterly basis and adjusted, by a charge or credit to income tax expense, as changes in facts

and circumstances warrant.

In assessing whether it is more likely than not that some portion or all of the deferred tax assets will not

be realized, management considers projections of future taxable income, the projected periods in which current temporary differences will

be deductible, the availability of carry forwards, feasible and permissible tax planning strategies and existing tax laws and regulations.

The Company did not have a valuation allowance against its net deferred tax assets at June 30, 2021 or September 30, 2020.

A reconciliation of income tax between the amounts calculated based upon pre-tax income at the Company’s federal statutory rate

and the amounts reflected in the consolidated statements of operations are as follows:

the Three Months

the Nine Months

(i) are recognized for the expected future tax consequences of events that have been recognized in the financial statements or tax returns;

(ii) are attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases;

and (iii) are measured using enacted tax rates expected to apply in the years when those temporary differences are expected to be recovered or settled.

Where applicable, deferred tax assets are reduced by a valuation allowance for any portions determined not likely to be realized.

The valuation allowance is assessed by management on a quarterly basis and adjusted, by a charge or credit to income tax expense, as changes in facts and circumstances warrant.

In assessing whether it is more likely than not that some portion or all of the deferred tax assets will not be realized, management considers projections of future taxable income, the projected periods in which current temporary differences will be deductible, the availability of carry forwards, feasible and permissible tax planning strategies and existing tax laws and regulations.

The Company did not have a valuation allowance against its net deferred tax assets at December 31, 2021 or September 30, 2021.

A reconciliation of income tax between the amounts calculated based upon pre-tax income at the Company’s federal statutory rate and the amounts reflected in the consolidated statements of operations are as follows:

For the Three Months

Ended December 31,

(In thousands)

tax expense at the statutory federal tax rate of 21 %

for the three and nine months ended June 30, 2021 and 2020

Income tax expense at the statutory federal tax rate of 21 % for the three months ended December 31, 2021 and 2020

State tax expense

September 29, 2020, the State of New Jersey extended its temporary 2.5 %

surtax rate through December 31, 2023.

Accordingly, the Company is using an 11.5 %

State tax rate for the calculation of its State income tax expense for the three and nine months ended June 30, 2021.

NOTE O –

Income tax expense

The Company’s statutory income tax rate in the State of New Jersey was 9.0 % for the three months ending December 31, 2021 and 2020.

The State of New Jersey imposed a temporary surtax on corporations earning New Jersey allocated income in excess of $ 1 million.

The surtax is set at a rate of 2.5 % and is currently effective through December 31, 2023.

Accordingly, the Company used an 11.5 % State tax rate for the calculation of its State income tax expense the three months ended December 31, 2021 and 2020.

NOTE N –

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

Bank occasionally uses derivative financial instruments, such as interest rate swaps and interest rate floors and caps, as part of its

interest rate risk management.

Interest rate caps and floors are agreements whereby one party agrees to pay or receive a floating rate

of interest on a notional principal amount for a predetermined period of time if certain market interest rate thresholds are met.

Bank considers the credit risk inherent in these contracts to be negligible.

Bank is a party to interest rate derivatives that are not designated as hedging instruments.

Under a program, the Bank executes interest

rate swaps with commercial lending customers to facilitate their respective risk management strategies.

These interest rate swaps with

customers are simultaneously offset by interest rate swaps that the Bank executes with a third-party financial institution, such that

the Bank minimizes its net risk exposure resulting from such transactions.

Because the interest rate swaps associated with this program

do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are

recognized directly in earnings.

The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties,

which is determined by taking into consideration the risk rating, probability of default and loss given default for all counterparties.

The Bank had $ 200,000

in cash pledged for collateral on its interest rate swaps with financial institutions at June 30, 2021 and none

in cash pledged for collateral on its interest rate swaps with financial institutions at September 30, 2020.

of June 30, 2021 and September 30, 2020, the Company did not hold any interest rate floors or collars.

The following table presents summary information regarding these derivatives for June 30, 2021.

There were no derivatives as of September

Maturity (Years)

Average Fixed Rate

Average Variable Rate

in thousands)

June 30, 2021

in Other Assets:

interest rate swaps

in Other Liabilities:

Party interest rate swaps

the normal course of business the Bank is a party to financial instruments with off-balance-sheet risk and in only to meet the financing

needs of its customers.

The Company may use derivative financial instruments, such as interest rate swaps and interest rate floors and caps, as part of its interest rate risk management.

Interest rate caps and floors are agreements whereby one party agrees to pay or receive a floating rate of interest on a notional principal amount for a predetermined period of time if certain market interest rate thresholds are met.

The Company considers the credit risk inherent in these contracts to be negligible.

The Company is a party to interest rate derivatives that are not designated as hedging instruments.

Under a program, the Company executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies.

These interest rate swaps with customers are simultaneously offset by interest rate swaps that the Company executes with a third-party financial institution, such that the Company minimizes its net risk exposure resulting from such transactions.

Because the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings.

The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties, which is determined by taking into consideration the risk rating, probability of default and loss given default for all counterparties.

The Company had $ 300,000 in cash pledged for collateral on its interest rate swaps with financial institutions at December 31, 2021 and September 30, 2021.

The following table presents summary information regarding these derivatives as of December 31, 2021 and September 30, 2021.

Notional Amount

Average Maturity (Years)

Weighted Average Fixed Rate

Weighted Average Variable Rate

(Dollars in thousands)

December 31, 2021

Classified in Other Assets:

Customer interest rate swaps

Classified in Other Liabilities:

3rd Party interest rate swaps

September 30, 2021

Classified in Other Assets:

Customer interest rate swaps

Classified in Other Liabilities:

3rd Party interest rate swaps

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers.

These financial instruments are commitments to extend credit are summarized in the below table.

Those instruments

involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated balance

Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated balance sheets.

September 30,

(In thousands)

Financial instruments

whose contract amounts represent credit risk

lines of credit

rate loan commitments

Financial instruments whose contract amounts represent credit risk

Letters of credit

Unused lines of credit

Fixed rate loan commitments

Variable rate loan commitments

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements