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LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS
6 Months Ended
Jun. 30, 2022
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS  
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS

NOTE 3 - LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS

The composition of the loan portfolio was as follows at the dates indicated:

​

​

​

​

​

​

​

​

​

    

June 30, 

    

December 31, 

REAL ESTATE LOANS

​

2022

    

2021

Commercial

​

$

299,181

​

$

264,429

Construction and development

​

 

304,387

​

 

240,553

Home equity

​

 

49,292

​

 

41,017

One-to-four-family (excludes loans held for sale)

​

 

390,791

​

 

366,146

Multi-family

​

 

204,862

​

 

178,158

Total real estate loans

​

 

1,248,513

​

 

1,090,303

CONSUMER LOANS

​

 

​

​

 

​

Indirect home improvement

​

 

396,459

​

 

336,285

Marine

​

 

85,806

​

 

82,778

Other consumer

​

 

3,062

​

 

2,980

Total consumer loans

​

 

485,327

​

 

422,043

COMMERCIAL BUSINESS LOANS

​

 

​

​

 

​

Commercial and industrial (includes Paycheck Protection Program ("PPP") loans)

​

 

203,331

​

 

208,552

Warehouse lending

​

 

33,868

​

 

33,277

Total commercial business loans

​

 

237,199

​

 

241,829

Total loans receivable, gross

​

 

1,971,039

​

 

1,754,175

Allowance for credit losses on loans (1)

​

 

(24,967)

​

 

(25,635)

Total loans receivable, net

​

$

1,946,072

​

$

1,728,540

_________________________________

(1)Allowance for credit losses on loans in 2022 is reported using the CECL method and the allowance for loan losses in 2021 is reported using the incurred loss method.

Loan amounts are net of unearned loan fees in excess of unamortized costs and premiums of $5.8 million as of June 30, 2022 and $4.9 million as of December 31, 2021. Net loans include unamortized net discounts on acquired loans of $568,000 and $751,000 as of June 30, 2022 and December 31, 2021, respectively. Net loans does not include accrued interest receivable. Accrued interest receivable on loans was $7.2 million as of June 30, 2022 and $6.3 million as of December 31, 2021 and was reported in accrued interest receivable on the Consolidated Balance Sheets.

Most of the Company’s commercial and multi-family real estate, construction, residential, and/or commercial business lending activities are with customers located in Western Washington, near our newest loan production office in Vancouver, Washington, or near our loan production office located in the Tri-Cities, Washington. The Company originates real estate, consumer, and commercial business loans and has concentrations in these areas, however, indirect home improvement loans, including solar-related home improvement loans, are originated through a network of home improvement contractors and dealers located throughout Washington, Oregon, California, Idaho, Colorado, Arizona, Minnesota,  Nevada, and most recently, Texas and Utah.  Loans are generally secured by collateral and rights to collateral vary and are legally documented to the extent practicable. Local economic conditions may affect borrowers’ ability to meet the stated repayment terms.

At June 30, 2022, the Bank held approximately $718.6 million in loans that are pledged as collateral for FHLB advances, compared to approximately $761.6 million at December 31, 2021. The Bank held approximately $491.4 million in loans that are pledged as collateral for the Federal Reserve Bank of San Francisco (“FRB”) line of credit at June 30, 2022, compared to approximately $428.7 million at December 31, 2021.  

The Company has defined its loan portfolio into three segments that reflect the structure of the lending function, the Company’s strategic plan and the manner in which management monitors performance and credit quality. The three loan portfolio segments are: (a) Real Estate Loans, (b) Consumer Loans, and (c) Commercial Business Loans. Each of these segments is disaggregated into classes based on the risk characteristics of the borrower and/or the collateral type securing the loan. The following is a summary of each of the Company’s loan portfolio segments and classes:

Real Estate Loans

Commercial Lending. Loans originated by the Company primarily secured by income producing properties, including retail centers, warehouses, and office buildings located in our market areas.

Construction and Development Lending. Loans originated by the Company for the construction of, and secured by, commercial real estate, one-to-four-family, and multi-family residences and tracts of land for development that are not pre-sold. A portion of the one-to-four-family construction portfolio is custom construction loans to the intended occupant of the residence.

Home Equity Lending. Loans originated by the Company secured by second mortgages on one-to-four-family residences, including home equity lines of credit in our market areas.

One-to-Four-Family Real Estate Lending. One-to-four-family residential loans include owner occupied properties (including second homes), and non-owner-occupied properties with four or less units. These loans originated by the Company or periodically purchased from banks are secured by first mortgages on one-to-four-family residences in our market areas that the Company intends to hold (excludes loans held for sale).

Multi-Family Lending. Apartment term lending (five or more units) to current banking customers and community reinvestment loans for low to moderate income individuals in the Company’s footprint.

Consumer Loans

Indirect Home Improvement. Fixture secured loans for home improvement are originated by the Company through its network of home improvement contractors and dealers and are secured by the personal property installed in, on, or at the borrower’s real property, and may be perfected with a UCC-2 financing statement filed in the county of the borrower’s residence. These indirect home improvement loans include replacement windows, siding, roofing, pools, spas, and other home fixture installations, including solar related home improvement projects.

Marine. Loans originated by the Company, secured by boats, to borrowers primarily located in the states the Company originates consumer loans.

Other Consumer. Loans originated by the Company to consumers in our retail branch footprint, including automobiles, recreational vehicles, direct home improvement loans, loans on deposits, and other consumer loans, primarily consisting of personal lines of credit and credit cards.

Commercial Business Loans

Commercial and Industrial Lending (“C&I”). Loans originated by the Company to local small- and mid-sized businesses in our Puget Sound market area are secured primarily by accounts receivable, inventory, or personal property, plant and equipment. Some of the C&I loans purchased by the Company are outside of the greater Puget Sound market area.  C&I loans are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business.  PPP loans originated by the Company are also included in this loan class.

Warehouse Lending. Loans originated to non-depository financial institutions and secured by notes originated by the non-depository financial institution.  The Company has two distinct warehouse lending divisions: commercial warehouse re-lending secured by notes on construction loans and mortgage warehouse re-lending secured by notes on one-to-four-family loans.  The Company’s commercial construction warehouse lines are secured by notes on construction loans and typically guaranteed by principals with experience in construction lending.  Mortgage warehouse lending loans are funded through third-party residential mortgage bankers.  Under this program the Company provides short-term funding to the mortgage banking companies for the purpose of originating residential mortgage loans for sale into the secondary market.

​

The following tables detail activity in the allowance for credit losses on loans by loan categories at or for the three and six months ended June 30, 2022 and in the allowance for loan losses under the incurred loss methodology for the three and six months ended June 30, 2021:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At or For the Three Months Ended June 30, 2022

​

    

Real

    

​

​

    

Commercial

    

​

​

    

​

​

ALLOWANCE FOR CREDIT LOSSES ON LOANS

​

Estate

​

Consumer

​

Business

​

Unallocated

​

Total

Beginning balance

​

$

10,560

​

$

9,792

​

$

3,013

​

$

—

​

$

23,365

Provision (recapture) for credit losses on loans

​

​

952

​

​

830

​

​

(163)

​

​

—

​

​

1,619

Loans charged-off

​

 

—

​

 

(297)

​

 

—

​

 

—

​

 

(297)

Recoveries

​

​

—

​

​

280

​

​

—

​

​

—

​

​

280

Total ending allowance balance

​

$

11,512

​

$

10,605

​

$

2,850

​

$

—

​

$

24,967

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At or For the Three Months Ended June 30, 2021

​

    

Real

    

​

​

    

Commercial

    

​

​

    

​

​

ALLOWANCE FOR LOAN LOSSES

​

Estate

​

Consumer

​

Business

​

Unallocated

​

Total

Beginning balance

​

$

13,615

​

$

6,815

​

$

5,669

​

$

1,276

​

$

27,375

Provision (recapture) for loan losses

​

​

693

​

​

349

​

​

5

​

​

(1,047)

​

​

—

Loans charged-off

​

 

—

​

 

(349)

​

 

—

​

 

—

​

 

(349)

Recoveries

​

​

—

​

​

208

​

​

—

​

​

—

​

​

208

Total ending allowance balance

​

$

14,308

​

$

7,023

​

$

5,674

​

$

229

​

$

27,234

Period end amount allocated to:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans individually evaluated for impairment

​

$

—

​

$

269

​

$

988

​

$

—

​

$

1,257

Loans collectively evaluated for impairment

​

​

14,308

​

​

6,754

​

​

4,686

​

​

229

​

​

25,977

Ending balance

​

$

14,308

​

$

7,023

​

$

5,674

​

$

229

​

$

27,234

LOANS RECEIVABLE

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans individually evaluated for impairment

​

$

1,049

​

$

768

​

$

4,487

​

$

—

​

$

6,304

Loans collectively evaluated for impairment

​

​

980,414

​

​

395,686

​

​

290,494

​

​

—

​

​

1,666,594

Ending balance

​

$

981,463

​

$

396,454

​

$

294,981

​

$

—

​

$

1,672,898

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At or For the Six Months Ended June 30, 2022

​

    

Real

    

​

​

    

Commercial

    

​

​

    

​

​

ALLOWANCE FOR CREDIT LOSSES ON LOANS

​

Estate

​

Consumer

​

Business

​

Unallocated

​

Total

Beginning balance, prior to adoption of ASC 326

​

$

14,798

​

$

4,280

​

$

6,536

​

$

21

​

$

25,635

Impact of adopting ASC 326

​

​

(5,234)

​

​

6,078

​

​

(3,682)

​

​

(21)

​

​

(2,859)

Provision (recapture) for credit losses on loans

​

​

1,948

​

​

527

​

​

(4)

​

​

—

​

​

2,471

Loans charged-off

​

 

—

​

 

(820)

​

 

—

​

 

—

​

 

(820)

Recoveries

​

​

—

​

​

540

​

​

—

​

​

—

​

​

540

Total ending allowance balance

​

$

11,512

​

$

10,605

​

$

2,850

​

$

—

​

$

24,967

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At or For the Six Months Ended June 30, 2021

​

    

Real

    

​

​

    

Commercial

    

​

​

    

​

​

ALLOWANCE FOR LOAN LOSSES

​

Estate

​

Consumer

​

Business

​

Unallocated

​

Total

Beginning balance

​

$

13,846

​

$

6,696

​

$

4,939

​

$

691

​

$

26,172

Provision (recapture) for loan losses

​

​

462

​

​

727

​

​

773

​

​

(462)

​

​

1,500

Loans charged-off

​

 

—

​

 

(852)

​

 

(38)

​

 

—

​

 

(890)

Recoveries

​

​

—

​

​

452

​

​

—

​

​

—

​

​

452

Total ending allowance balance

​

$

14,308

​

$

7,023

​

$

5,674

​

$

229

​

$

27,234

Period end amount allocated to:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans individually evaluated for impairment

​

$

—

​

$

269

​

$

988

​

$

—

​

$

1,257

Loans collectively evaluated for impairment

​

​

14,308

​

​

6,754

​

​

4,686

​

​

229

​

​

25,977

Ending balance

​

$

14,308

​

$

7,023

​

$

5,674

​

$

229

​

$

27,234

LOANS RECEIVABLE

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans individually evaluated for impairment

​

$

1,049

​

$

768

​

$

4,487

​

$

—

​

$

6,304

Loans collectively evaluated for impairment

​

​

980,414

​

​

395,686

​

​

290,494

​

​

—

​

​

1,666,594

Ending balance

​

$

981,463

​

$

396,454

​

$

294,981

​

$

—

​

$

1,672,898

​

Nonaccrual and Past Due Loans. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are automatically placed on nonaccrual once the loan is 90-days past due or sooner if, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, or as required by regulatory authorities.  

At June 30, 2022 and December 31, 2021, the Company had no TDRs. There were no TDRs which incurred a payment default within twelve months of the restructure date during the three and six months ended June 30, 2022 and 2021.

​

The following tables provide information pertaining to the aging analysis of contractually past due loans and nonaccrual loans at June 30, 2022 and December 31, 2021:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2022

​

    

30-59

    

60-89

    

​

    

​

    

​

    

​

    

​

​

​

 Days

​

 Days

​

90 Days

​

Total

​

​

​

Total

​

​

​

​

 Past

​

 Past

​

 or More

​

Past

​

​

​

 Loans

​

Non-

REAL ESTATE LOANS

​

 Due

​

 Due

​

 Past Due

​

Due

​

Current

​

Receivable

​

Accrual

Commercial

​

$

—

​

$

—

​

$

—

​

$

—

​

$

299,181

​

$

299,181

​

$

—

Construction and development

​

 

—

​

 

—

​

 

—

​

 

—

​

 

304,387

​

 

304,387

​

 

—

Home equity

​

 

6

​

 

32

​

 

151

​

 

189

​

 

49,103

​

 

49,292

​

 

151

One-to-four-family

​

 

—

​

 

—

​

 

331

​

 

331

​

 

390,460

​

 

390,791

​

 

799

Multi-family

​

 

—

​

 

—

​

 

—

​

 

—

​

 

204,862

​

 

204,862

​

 

—

Total real estate loans

​

 

6

​

 

32

​

 

482

​

 

520

​

 

1,247,993

​

 

1,248,513

​

 

950

CONSUMER LOANS

​

 

  

​

 

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Indirect home improvement

​

 

787

​

 

439

​

 

218

​

 

1,444

​

 

395,015

​

 

396,459

​

 

558

Marine

​

 

48

​

 

—

​

 

34

​

 

82

​

 

85,724

​

 

85,806

​

 

91

Other consumer

​

 

19

​

 

13

​

 

—

​

 

32

​

 

3,030

​

 

3,062

​

 

—

Total consumer loans

​

 

854

​

 

452

​

 

252

​

 

1,558

​

 

483,769

​

 

485,327

​

 

649

COMMERCIAL BUSINESS LOANS

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Commercial and industrial

​

 

—

​

 

—

​

 

1,087

​

 

1,087

​

 

202,244

​

 

203,331

​

 

5,059

Warehouse lending

​

 

—

​

 

—

​

 

—

​

 

—

​

 

33,868

​

 

33,868

​

 

—

Total commercial business loans

​

 

—

​

 

—

​

 

1,087

​

 

1,087

​

 

236,112

​

 

237,199

​

 

5,059

Total loans

​

$

860

​

$

484

​

$

1,821

​

$

3,165

​

$

1,967,874

​

$

1,971,039

​

$

6,658

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2021

​

    

30-59

    

60-89

    

​

    

​

    

​

    

​

    

​

​

​

 Days

​

 Days

​

90 Days

​

Total

​

​

​

Total

​

​

​

​

 Past

​

 Past

​

 or More

​

Past

​

​

​

Loans

​

Non-

REAL ESTATE LOANS

​

 Due

​

 Due

​

 Past Due

​

Due

​

Current

​

Receivable

​

Accrual

Commercial

​

$

—

​

$

—

​

$

—

​

$

—

​

$

264,429

​

$

264,429

​

$

—

Construction and development

​

 

—

​

 

—

​

 

—

​

 

—

​

 

240,553

​

 

240,553

​

 

—

Home equity

​

 

—

​

 

—

​

 

179

​

 

179

​

 

40,838

​

 

41,017

​

 

301

One-to-four-family

​

 

593

​

 

264

​

 

480

​

 

1,337

​

 

364,809

​

 

366,146

​

 

480

Multi-family

​

 

—

​

 

—

​

 

—

​

 

—

​

 

178,158

​

 

178,158

​

 

—

Total real estate loans

​

 

593

​

 

264

​

 

659

​

 

1,516

​

 

1,088,787

​

 

1,090,303

​

 

781

CONSUMER LOANS

​

 

  

​

 

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Indirect home improvement

​

 

1,047

​

 

280

​

 

295

​

 

1,622

​

 

334,663

​

 

336,285

​

 

554

Marine

​

 

119

​

 

—

​

 

—

​

 

119

​

 

82,659

​

 

82,778

​

 

57

Other consumer

​

 

11

​

 

2

​

 

18

​

 

31

​

 

2,949

​

 

2,980

​

 

18

Total consumer loans

​

 

1,177

​

 

282

​

 

313

​

 

1,772

​

 

420,271

​

 

422,043

​

 

629

COMMERCIAL BUSINESS LOANS

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Commercial and industrial

​

 

791

​

 

—

​

 

—

​

 

791

​

 

207,761

​

 

208,552

​

 

4,419

Warehouse lending

​

 

—

​

 

—

​

 

—

​

 

—

​

 

33,277

​

 

33,277

​

 

—

Total commercial business loans

​

 

791

​

 

—

​

 

—

​

 

791

​

 

241,038

​

 

241,829

​

 

4,419

Total loans

​

$

2,561

​

$

546

​

$

972

​

$

4,079

​

$

1,750,096

​

$

1,754,175

​

$

5,829

​

There were no loans 90 days or more past due and still accruing interest at both June 30, 2022 and December 31, 2021.

Impaired Loans and the Allowance for Loan Losses -  Prior to the implementation of Financial Instruments - Credit Losses (Topic 326) on January 1, 2022, a loan was considered impaired when, based on current information and circumstances, the Company determines it was probable that it would be unable to collect all amounts due according to the contractual terms of the loan agreement, including scheduled interest payments.  Factors involved in determining impairment included, but were not limited to, the financial condition of the borrower, the value of the underlying collateral and the status of the economy. Impaired loans were comprised of loans on nonaccrual, TDRs that were performing under their restructured terms, and loans that were 90 days or more past due, but were still on accrual.

The following table provides additional information on impaired loans with and without allowance reserves at December 31, 2021. Recorded investment includes the unpaid principal balance or the carrying amount of loans less charge-offs and net deferred loan fees (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2021

​

    

Unpaid

    

​

​

    

​

​

WITH NO RELATED ALLOWANCE RECORDED

​

Principal

​

Recorded

​

Related

Real estate loans:

​

Balance

​

Investment

​

Allowance

Home equity

​

$

259

​

$

227

​

$

—

One-to-four-family

​

​

497

​

​

480

​

​

—

​

​

​

756

​

 

707

​

​

—

WITH RELATED ALLOWANCE RECORDED

​

​

​

​

​

​

​

​

​

Real estate loans:

​

​

​

​

​

​

​

​

​

Home equity

​

​

92

​

​

74

​

​

23

Consumer loans:

​

​

​

​

​

​

​

​

​

Indirect

​

​

551

​

​

554

​

​

193

Marine

​

​

56

​

​

57

​

​

20

Other consumer

​

​

18

​

​

18

​

​

6

Commercial business loans:

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

4,417

​

​

4,419

​

​

921

​

​

​

5,134

​

​

5,122

​

​

1,163

Total

​

$

5,890

​

$

5,829

​

$

1,163

​

The following tables present the average recorded investment in loans individually evaluated for impairment and the interest income recognized and received for the three  and six months ended June 30, 2021:

​

​

​

​

​

​

​

​

​

​

At or For the Three Months Ended

​

​

June 30, 2021

WITH NO RELATED ALLOWANCE RECORDED

    

Average Recorded

    

Interest Income

Real estate loans:

​

 Investment

​

 Recognized

Construction and development

​

$

1,233

​

$

—

Home equity

​

​

506

​

​

7

One-to-four-family

​

 

645

​

 

4

​

​

​

2,384

​

​

11

WITH AN ALLOWANCE RECORDED

​

​

​

​

​

​

Real estate loans:

​

​

​

​

​

​

One-to-four-family

​

​

20

​

​

—

Consumer loans:

​

​

​

​

​

​

Indirect

​

​

671

​

​

8

Marine

​

​

102

​

​

2

Other consumer

​

​

19

​

​

1

Commercial business loans:

​

​

​

​

​

​

Commercial and industrial

​

​

4,487

​

​

105

​

​

​

5,299

​

​

116

Total

​

$

7,683

​

$

127

​

​

​

​

​

​

​

​

​

​

​

At or For the Six Months Ended

​

​

June 30, 2021

WITH NO RELATED ALLOWANCE RECORDED

    

Average Recorded

    

Interest Income

Real estate loans:

​

 Investment

​

 Recognized

Commercial

​

$

1,541

​

$

—

Home equity

​

​

579

​

​

9

One-to-four-family

​

 

594

​

 

6

​

​

​

2,714

​

​

15

WITH RELATED ALLOWANCE RECORDED

​

​

​

​

​

​

Real estate loans:

​

​

​

​

​

​

One-to-four-family

​

​

40

​

​

—

Consumer loans:

​

​

​

​

​

​

Indirect

​

​

728

​

​

22

Marine

​

​

69

​

​

3

Other consumer

​

​

11

​

​

1

Commercial business loans:

​

​

​

​

​

​

Commercial and industrial

​

​

5,082

​

​

105

​

​

​

5,930

​

​

131

Total

​

$

8,644

​

$

146

​

Credit Quality Indicators

As part of the Company’s on-going monitoring of credit quality of the loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grading of loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) non-performing loans, and (v) the general economic conditions in the Company’s markets.  

The Company utilizes a risk grading matrix to assign a risk grade to its real estate and commercial business loans. Loans are graded on a scale of 1 to 10, with loans in risk grades 1 to 6 considered “Pass” and loans in risk grades 7 to 10 are reported as classified loans in the Company’s allowance for credit loan loss analysis.

A description of the 10 risk grades is as follows:

●Grades 1 and 2 - These grades include loans to very high-quality borrowers with excellent or desirable business credit.
●Grade 3 - This grade includes loans to borrowers of good business credit with moderate risk.
●Grades 4 and 5 - These grades include “Pass” grade loans to borrowers of average credit quality and risk.
●Grade 6 - This grade includes loans on management’s “Watch” list and is intended to be utilized on a temporary basis for “Pass” grade borrowers where frequent and thorough monitoring is required due to credit weaknesses and where significant risk-modifying action is anticipated in the near term.
●Grade 7 - This grade is for “Other Assets Especially Mentioned (“OAEM”)” in accordance with regulatory guidelines and includes borrowers where performance is poor or significantly less than expected.
●Grade 8 - This grade includes “Substandard” loans in accordance with regulatory guidelines which represent an unacceptable business credit where a loss is possible if loan weakness is not corrected.
●Grade 9 - This grade includes “Doubtful” loans in accordance with regulatory guidelines where a loss is highly probable.
●Grade 10 - This grade includes “Loss” loans in accordance with regulatory guidelines for which total loss is expected and when identified are charged off.

Consumer, Home Equity, and One-to-Four-Family Real Estate Loans

Homogeneous loans are risk rated based upon the Federal Financial Institutions Examination Council’s Uniform Retail Credit Classification and Account Management Policy. Loans classified under this policy at the Company are consumer loans which include indirect home improvement, solar, marine, other consumer, and one-to-four-family first and second liens. Under the Uniform Retail Credit Classification Policy, loans that are current or less than 90 days past due are graded “Pass” and risk rated “4” or “5” internally. Loans that are past due more than 90 days are classified “Substandard” and risk graded “8” internally until the loan has demonstrated consistent performance, typically six months of contractual payments. Closed-end loans that are 120 days past due and open-end loans that are 180 days past due are charged off based on the value of the collateral less cost to sell.  Management may more conservatively risk rate credits even if paying in accordance with the loan’s repayment terms.

Commercial real estate, construction and development, multi-family and commercial business loans are evaluated individually for their risk classification and may be classified as “Substandard” even if current on their loan payment obligations.

The following tables summarize risk rated loan balances by category as of June 30, 2022.  Revolving loans that are converted to term loans are presented by year of origination.  Term loans that are renewed or extended for periods longer than 90 days are presented as a new origination in the year of the most recent renewal or extension.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2022

REAL ESTATE LOANS

 

Term Loans by Year of Origination

​

​

​

​

​

​

Commercial

​

2022

 

2021

 

2020

 

2019

 

2018

 

Prior

 

Revolving Loans

 

Total Loans

Pass

​

$

44,338

​

$

77,669

​

$

49,204

​

$

40,786

​

$

14,987

​

$

63,451

​

$

229

​

$

290,664

Watch

​

​

—

​

​

—

​

​

220

​

​

409

​

​

—

​

​

132

​

​

—

​

​

761

Special mention

​

​

—

​

​

—

​

​

1,704

​

​

304

​

​

590

​

​

5,158

​

​

—

​

​

7,756

Total commercial

​

$

44,338

​

$

77,669

​

$

51,128

​

$

41,499

​

$

15,577

​

$

68,741

​

$

229

​

$

299,181

Construction and development

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

Pass

​

​

87,315

​

​

146,937

​

​

50,098

​

​

19,325

​

​

—

​

​

712

​

​

—

​

​

304,387

Total construction and development

​

$

87,315

​

$

146,937

​

$

50,098

​

$

19,325

​

$

—

​

$

712

​

$

—

​

$

304,387

Home equity

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

​

4,308

​

​

2,088

​

​

7,138

​

​

4

​

​

1,411

​

​

1,939

​

​

32,253

​

​

49,141

Substandard

​

​

—

​

​

—

​

​

—

​

​

—

​

​

12

​

​

139

​

​

—

​

​

151

Total home equity

​

$

4,308

​

$

2,088

​

$

7,138

​

$

4

​

$

1,423

​

$

2,078

​

$

32,253

​

$

49,292

One-to-four-family

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

​

71,358

​

​

140,226

​

​

84,623

​

​

32,577

​

​

16,443

​

​

42,805

​

​

—

​

​

388,032

Special mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

1,960

​

​

—

​

​

—

​

​

1,960

Substandard

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

799

​

​

—

​

​

799

Total one-to-four-family

​

$

71,358

​

$

140,226

​

$

84,623

​

$

32,577

​

$

18,403

​

$

43,604

​

$

—

​

$

390,791

Multi-family

​

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

​

29,298

​

​

63,418

​

​

33,971

​

​

48,319

​

​

4,236

​

​

25,620

​

​

—

​

​

204,862

Total multi-family

​

$

29,298

​

$

63,418

​

$

33,971

​

$

48,319

​

$

4,236

​

$

25,620

​

$

—

​

$

204,862

Total real estate loans

​

$

236,617

​

$

430,338

​

$

226,958

​

$

141,724

​

$

39,639

​

$

140,755

​

$

—

​

$

1,248,513

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2022

CONSUMER LOANS

 

Term Loans by Year of Origination

​

​

​

​

​

​

Indirect home improvement

​

2022

 

2021

 

2020

 

2019

 

2018

 

Prior

 

Revolving Loans

 

Total Loans

Pass

​

$

115,241

​

$

142,356

​

$

55,040

​

$

35,897

​

$

21,115

​

$

26,242

​

$

10

​

$

395,901

Substandard

​

​

—

​

​

134

​

​

92

​

​

97

​

​

83

​

​

152

​

​

—

​

​

558

Total indirect home improvement

​

$

115,241

​

$

142,490

​

$

55,132

​

$

35,994

​

$

21,198

​

$

26,394

​

$

10

​

$

396,459

Marine

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

​

15,020

​

​

16,430

​

​

23,266

​

​

9,376

​

​

11,373

​

​

10,250

​

​

—

​

​

85,715

Substandard

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

91

​

​

—

​

​

91

Total marine

​

$

15,020

​

$

16,430

​

$

23,266

​

$

9,376

​

$

11,373

​

$

10,341

​

$

—

​

$

85,806

Other consumer

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

​

532

​

​

800

​

​

203

​

​

45

​

​

43

​

​

208

​

​

1,231

​

​

3,062

Total other consumer

​

$

532

​

$

800

​

$

203

​

$

45

​

$

43

​

$

208

​

$

1,231

​

$

3,062

Total consumer loans

​

$

130,793

​

$

159,720

​

$

78,601

​

$

45,415

​

$

32,614

​

$

36,943

​

$

1,241

​

$

485,327

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

COMMERCIAL

​

June 30, 2022

BUSINESS LOANS

​

Term Loans by Year of Origination

​

​

​

​

​

​

Commercial and industrial

 

2022

 

2021

 

2020

 

2019

 

2018

 

Prior

 

Revolving Loans

 

Total Loans

Pass

​

$

17,244

​

$

30,206

​

$

22,527

​

$

2,909

​

$

4,154

​

$

8,438

​

$

100,584

​

$

186,062

Watch

​

​

—

​

​

14

​

​

—

​

​

1,325

​

​

—

​

​

222

​

​

607

​

​

2,168

Special mention

​

​

—

​

​

1,602

​

​

1,652

​

​

585

​

​

21

​

​

59

​

​

2,154

​

​

6,073

Substandard

​

​

—

​

​

1,087

​

​

—

​

​

2,267

​

​

193

​

​

4,559

​

​

922

​

​

9,028

Total commercial and industrial

​

$

17,244

​

$

32,909

​

$

24,179

​

$

7,086

​

$

4,368

​

$

13,278

​

$

104,267

​

$

203,331

Warehouse lending

​

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

33,868

​

​

33,868

Total warehouse lending

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

33,868

​

$

33,868

Total commercial business loans

​

$

17,244

​

$

32,909

​

$

24,179

​

$

7,086

​

$

4,368

​

$

13,278

​

$

138,135

​

$

237,199

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

TOTAL LOANS RECEIVABLE, GROSS

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

Pass

​

$

384,654

​

$

620,130

​

$

326,070

​

$

189,238

​

$

73,762

​

$

179,665

​

$

168,175

​

$

1,941,694

Watch

​

​

—

​

​

14

​

​

220

​

​

1,734

​

​

—

​

​

354

​

​

607

​

​

2,929

Special mention

​

​

—

​

​

1,602

​

​

3,356

​

​

889

​

​

2,571

​

​

5,217

​

​

2,154

​

​

15,789

Substandard

​

​

—

​

​

1,221

​

​

92

​

​

2,364

​

​

288

​

​

5,740

​

​

922

​

​

10,627

Total loans receivable, gross

​

$

384,654

​

$

622,967

​

$

329,738

​

$

194,225

​

$

76,621

​

$

190,976

​

$

171,858

​

$

1,971,039

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2021

​

​

​

​

​

​

Special

​

​

​

​

​

​

​

​

​

​

Pass

​

Watch

​

Mention 

​

Substandard

​

Doubtful

​

Loss

​

​

REAL ESTATE LOANS

    

(1 - 5)

    

 (6)

    

 (7)

    

 (8)

    

(9)

    

 (10)

    

Total

Commercial

​

$

253,092

​

$

4,652

​

$

5,769

​

$

916

​

$

—

​

$

—

​

$

264,429

Construction and development

​

 

240,553

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

240,553

Home equity

​

 

40,716

​

 

—

​

 

—

​

 

301

​

 

—

​

 

—

​

 

41,017

One-to-four-family

​

 

363,682

​

 

—

​

 

—

​

 

2,464

​

 

—

​

 

—

​

 

366,146

Multi-family

​

 

178,158

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

178,158

Total real estate loans

​

 

1,076,201

​

 

4,652

​

 

5,769

​

 

3,681

​

 

—

​

 

—

​

 

1,090,303

CONSUMER LOANS

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Indirect home improvement

​

 

335,731

​

 

—

​

 

—

​

 

554

​

 

—

​

 

—

​

 

336,285

Marine

​

 

82,721

​

 

—

​

 

—

​

 

57

​

 

—

​

 

—

​

 

82,778

Other consumer

​

 

2,962

​

 

—

​

 

—

​

 

18

​

 

—

​

 

—

​

 

2,980

Total consumer loans

​

 

421,414

​

 

—

​

 

—

​

 

629

​

 

—

​

 

—

​

 

422,043

COMMERCIAL BUSINESS LOANS

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Commercial and industrial

​

 

188,767

​

 

4,182

​

 

1,829

​

 

13,774

​

 

—

​

 

—

​

 

208,552

Warehouse lending

​

 

33,277

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

33,277

Total commercial business loans

​

 

222,044

​

 

4,182

​

 

1,829

​

 

13,774

​

 

—

​

 

—

​

 

241,829

Total loans receivable, gross

​

$

1,719,659

​

$

8,834

​

$

7,598

​

$

18,084

​

$

—

​

$

—

​

$

1,754,175

​

The following table presents the amortized cost basis of loans on nonaccrual status and loans 90 days or more past due and still accruing interest as of June 30, 2022:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2022

​

​

Nonaccrual with No

​

Nonaccrual with

​

​

​

90-Days or More

​

​

Allowance for Credit

    

Allowance for Credit

    

Total

  

Past Due and Still

REAL ESTATE LOANS

​

Losses

​

Losses

​

Nonaccrual

​

Accruing Interest

Home equity

​

$

16

​

$

135

​

$

151

​

$

—

One-to-four-family

​

 

799

​

 

—

​

 

799

​

 

—

​

​

 

815

​

 

135

​

 

950

​

 

—

CONSUMER LOANS

​

​

​

​

​

​

​

​

​

​

​

​

Indirect home improvement

​

​

—

​

​

558

​

​

558

​

​

—

Marine

​

​

—

​

​

91

​

​

91

​

​

—

​

​

​

—

​

​

649

​

​

649

​

​

—

COMMERCIAL BUSINESS LOANS

​

 

​

​

 

​

​

 

​

​

 

​

Commercial and industrial

​

 

1,087

​

 

3,972

​

 

5,059

​

 

—

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

1,902

​

$

4,756

​

$

6,658

​

$

—

​

The Company recognized interest income on nonaccrual loans of $128,000 and $127,000 during the three months ended June 30, 2022 and 2021, respectively and $226,000 and $146,000 during the six months ended June 30, 2022 and 2021, respectively.

​

The following table presents the amortized cost basis of collateral dependent loans by class of loans as of June 30, 2022:

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2022

​

​

​

​

​

​

​

​

​

​

REAL ESTATE LOANS

​

Real Estate

​

Equipment

​

Total

Home equity

​

$

151

​

$

—

​

$

151

One-to-four-family

​

​

799

​

​

—

​

​

799

​

​

​

950

​

​

—

​

​

950

CONSUMER LOANS

​

​

​

​

​

​

​

​

​

Indirect home improvement

​

​

—

​

​

558

​

​

558

Marine

​

​

—

​

​

91

​

​

91

​

​

​

—

​

​

649

​

​

649

COMMERCIAL BUSINESS LOANS

​

 

​

​

 

​

​

 

​

Commercial and industrial

​

 

1,087

​

 

3,972

​

 

5,059

​

​

 

​

​

 

​

​

 

​

Total

​

$

2,037

​

$

4,621

​

$

6,658

​