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Note 3 - Loans Receivable

12 Months Ended

Dec. 31, 2021

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 3 - Loans Receivable

Loans receivable consist of the following at the dates indicated:

	December 31, 2021			December 31, 2020
	(In thousands)
Real Estate:
One- to four-family	$	294,965		$	309,828
Multi-family		172,409			162,467
Commercial real estate		363,299			296,574
Construction and land		224,709			123,627
Total real estate loans		1,055,382			892,496

Consumer:
Home equity		39,172			33,103
Auto and other consumer		182,769			128,233
Total consumer loans		221,941			161,336

Commercial business loans		79,838			100,201

Total loans		1,357,161			1,154,033

Less:
Net deferred loan fees		4,772			4,346
Premium on purchased loans, net		(12,995	)		(6,129	)
Allowance for loan losses		15,124			13,847

Total loans receivable, net	$	1,350,260		$	1,141,969

Loans, by the earlier of next repricing date or maturity, at the dates indicated:

	December 31, 2021		December 31, 2020
	(In thousands)
Adjustable-rate loans
Due within one year	$	302,187	$	149,701
After one but within five years		258,094		231,491
After five but within ten years		54,351		83,286
After ten years		19,098		16,608
		633,730		481,086
Fixed-rate loans
Due within one year	$	31,970		54,903
After one but within five years		148,233		107,785
After five but within ten years		194,245		219,014
After ten years		348,983		291,245
		723,431		672,947
Total loans	$	1,357,161	$	1,154,033

The adjustable-rate loans have interest rate adjustment limitations and are generally indexed to multiple indices. Future market factors may affect the correlation of adjustable loan interest rates with the rates First Fed pays on the short-term deposits that have been primarily used to fund such loans.

The following tables summarize changes in the ALLL and the loan portfolio by segment and impairment method at or for the periods shown:

	At or For the Year Ended December 31, 2021
	One- to four-family			Multi-family		Commercial real estate		Construction and land		Home equity			Auto and other consumer			Commercial business		Unallocated		Total
	(In thousands)
ALLL:
Beginning balance	$	3,469		$	1,764	$	3,420	$	1,461	$	368		$	2,642		$	429	$	294	$	13,847
(Recapture of) provision for loan losses		(291	)		52		576		1,203		(25	)		(270	)		41		64		1,350
Charge-offs		—			—		—		—		(12	)		(865	)		—		—		(877	)
Recoveries		6			—		—		8		76			714			—		—		804
Ending balance	$	3,184		$	1,816	$	3,996	$	2,672	$	407		$	2,221		$	470	$	358	$	15,124

	At December 31, 2021
	One- to four-family		Multi-family		Commercial real estate		Construction and land		Home equity		Auto and other consumer		Commercial business		Unallocated		Total
	(In thousands)
Total ALLL	$	3,184	$	1,816	$	3,996	$	2,672	$	407	$	2,221	$	470	$	358	$	15,124
General reserve		3,159		1,816		3,996		2,672		402		2,138		470		358		15,011
Specific reserve		25		—		—		—		5		83		—		—		113

Total loans	$	294,965	$	172,409	$	363,299	$	224,709	$	39,172	$	182,769	$	79,838	$	—	$	1,357,161
General reserves (1)		292,708		172,409		363,228		224,687		38,839		182,257		79,838		—		1,353,966
Specific reserves (2)		2,257		—		71		22		333		512		—		—		3,195

⁽¹⁾ Loans collectively evaluated for general reserves.

⁽²⁾ Loans individually evaluated for specific reserves.

	At or For the Year Ended December 31, 2020
	One- to four-family		Multi-family		Commercial real estate		Construction and land			Home equity			Auto and other consumer			Commercial business		Unallocated		Total
	(In thousands)
ALLL:
Beginning balance	$	3,024	$	888	$	2,243	$	399		$	454		$	2,261		$	208	$	151	$	9,628
Provision for (recapture of) loan losses		387		876		1,177		1,062			(99	)		1,279			221		143		5,046
Charge-offs		—		—		—		(5	)		—			(992	)		—		—		(997	)
Recoveries		58		—		—		5			13			94			—		—		170
Ending balance	$	3,469	$	1,764	$	3,420	$	1,461		$	368		$	2,642		$	429	$	294	$	13,847

	At December 31, 2020
	One- to four-family		Multi-family		Commercial real estate		Construction and land		Home equity		Auto and other consumer		Commercial business		Unallocated		Total
	(In thousands)
Total ALLL	$	3,469	$	1,764	$	3,420	$	1,461	$	368	$	2,642	$	429	$	294	$	13,847
General reserve		3,433		1,764		3,419		1,461		364		2,366		429		294		13,530
Specific reserve		36		—		1		—		4		276		—		—		317

Total loans	$	309,828	$	162,467	$	296,574	$	123,627	$	33,103	$	128,233	$	100,201	$	—	$	1,154,033
General reserves (1)		306,862		162,183		295,296		123,601		32,968		127,411		100,201		—		1,148,522
Specific reserves (2)		2,966		284		1,278		26		135		822		—		—		5,511

⁽¹⁾ Loans collectively evaluated for general reserves.

⁽²⁾ Loans individually evaluated for specific reserves.

The following table presents a summary of loans individually evaluated for impairment by portfolio segment including the average recorded investment in and interest income recognized on impaired loans at or for the periods shown:

							Year Ended
	December 31, 2021						December 31, 2021
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no allowance recorded:
One- to four-family	$	212	$	247	$	—	$	219	$	12
Multi-family		—		—		—		94		—
Commercial real estate		71		177		—		1,016		—
Construction and land		—		24		—		—		—
Home equity		26		59		—		32		1
Auto and other consumer		—		77		—		29		7
Commercial business		—		—		—		—		—
Total		309		584		—		1,390		20

With an allowance recorded:
One- to four-family		2,045		2,245		25		2,281		138
Multi-family		—		—		—		—		—
Commercial real estate		—		—		—		121		—
Construction and land		22		22		—		24		1
Home equity		307		329		5		155		9
Auto and other consumer		512		512		83		653		13
Commercial business		—		—		—		—		—
Total		2,886		3,108		113		3,234		161

Total impaired loans:
One- to four-family		2,257		2,492		25		2,500		150
Multi-family		—		—		—		94		—
Commercial real estate		71		177		—		1,137		—
Construction and land		22		46		—		24		1
Home equity		333		388		5		187		10
Auto and other consumer		512		589		83		682		20
Commercial business		—		—		—		—		—
Total	$	3,195	$	3,692	$	113	$	4,624	$	181

							Year Ended
	December 31, 2020						December 31, 2020
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no allowance recorded:
One- to four-family	$	227	$	257	$	—	$	168	$	13
Commercial real estate		1,216		1,308		—		1,213		33
Construction and land		—		29		—		9		—
Home equity		37		94		—		41		1
Auto and other consumer		—		224		—		—		13
Commercial business		—		—		—		68		—
Total		1,764		2,196		—		1,718		60

With an allowance recorded:
One- to four-family		2,739		2,941		36		3,197		177
Multi-family		—		—		—		119		—
Commercial real estate		62		62		1		301		3
Construction and land		26		26		—		27		3
Home equity		98		157		4		186		9
Auto and other consumer		822		953		276		721		33
Commercial business		—		—		—		109		—
Total		3,747		4,139		317		4,660		225

Total impaired loans:
One- to four-family		2,966		3,198		36		3,365		190
Multi-family		284		284		—		338		—
Commercial real estate		1,278		1,370		1		1,514		36
Construction and land		26		55		—		36		3
Home equity		135		251		4		227		10
Auto and other consumer		822		1,177		276		721		46
Commercial business		—		—		—		177		—
Total	$	5,511	$	6,335	$	317	$	6,378	$	285

Interest income recognized on a cash basis on impaired loans for the years ended December 31, 2021 and 2020, was $162,000 and $256,000, respectively.

The following table presents the recorded investment in nonaccrual loans by class of loan at the dates indicated:

	December 31, 2021		December 31, 2020
	(In thousands)
One- to four-family	$	494	$	912
Multi-family		—		284
Commercial real estate		71		157
Construction and land		22		26
Home equity		282		73
Auto and other consumer		512		821

Total nonaccrual loans	$	1,381	$	2,273

Past due loans - There were no loans past due 90 days or more and still accruing interest at December 31, 2021 and 2020.

The following table presents the recorded investment of past due loans, by class, as of December 31, 2021:

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Real Estate:
One- to four-family	$	786	$	—	$	—	$	786	$	294,179	$	294,965
Multi-family		—		—		—		—		172,409		172,409
Commercial real estate		—		—		—		—		363,299		363,299
Construction and land		293		—		—		293		224,416		224,709
Total real estate loans		1,079		—		—		1,079		1,054,303		1,055,382

Consumer:
Home equity		83		—		—		83		39,089		39,172
Auto and other consumer		469		368		99		936		181,833		182,769
Total consumer loans		552		368		99		1,019		220,922		221,941

Commercial business loans		7		—		—		7		79,831		79,838

Total loans	$	1,638	$	368	$	99	$	2,105	$	1,355,056	$	1,357,161

The following table presents the recorded investment of past due loans, by class, as of December 31, 2020:

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Real Estate:
One- to four-family	$	406	$	132	$	29	$	567	$	309,261	$	309,828
Multi-family		—		—		—		—		162,467		162,467
Commercial real estate		—		—		—		—		296,574		296,574
Construction and land		56		—		26		82		123,545		123,627
Total real estate loans		462		132		55		649		891,847		892,496

Consumer:
Home equity		94		—		—		94		33,009		33,103
Auto and other consumer		815		138		137		1,090		127,143		128,233
Total consumer loans		909		138		137		1,184		160,152		161,336

Commercial business loans		—		—		—		—		100,201		100,201

Total loans	$	1,371	$	270	$	192	$	1,833	$	1,152,200	$	1,154,033

Credit quality indicator - Federal regulations provide for the classification of lower quality loans and other assets, such as debt and equity securities, as substandard, doubtful, or loss; risk ratings 6, 7, and 8 in our 8-point risk rating system, respectively. An asset is considered substandard if it is inadequately protected by the current net worth and pay capacity of the borrower or of any collateral pledged. Substandard assets include those characterized by the distinct possibility that First Fed will sustain some loss if the deficiencies are not corrected. Assets classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions, and values. Assets classified as loss are those considered uncollectible and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.

When First Fed classifies problem assets as either substandard or doubtful, it may establish a specific allowance to address the risk specifically or First Fed may allow the loss to be addressed in the general allowance. General allowances represent loss allowances that have been established to recognize the inherent risk associated with lending activities but that, unlike specific allowances, have not been specifically allocated to particular problem assets. When an insured institution classifies problem assets as a loss, it is required to charge off such assets in the period in which they are deemed uncollectible. Assets that do not currently expose First Fed to sufficient risk to warrant classification as substandard or doubtful but possess identified weaknesses are designated as either watch or special mention assets; risk ratings 4 and 5 in our risk rating system, respectively. Loans not otherwise classified are considered pass graded loans and are rated 1-3 in our risk rating system.

Additionally, First Fed categorizes loans as performing or nonperforming based on payment activity. Loans that are more than 90 days past due and nonaccrual loans are considered nonperforming.

The following table represents the internally assigned grade as of December 31, 2021, by class of loans:

	Pass		Watch		Special Mention		Substandard		Total
	(In thousands)
Real Estate:
One- to four-family	$	291,421	$	2,727	$	53	$	764	$	294,965
Multi-family		153,704		18,705		—		—		172,409
Commercial real estate		326,444		22,850		3,057		10,948		363,299
Construction and land		215,262		295		9,130		22		224,709
Total real estate loans		986,831		44,577		12,240		11,734		1,055,382

Consumer:
Home equity		38,739		83		—		350		39,172
Auto and other consumer		181,356		835		65		513		182,769
Total consumer loans		220,095		918		65		863		221,941

Commercial business loans		79,616		222		—		—		79,838

Total loans	$	1,286,542	$	45,717	$	12,305	$	12,597	$	1,357,161

The following table represents the internally assigned grade as of December 31, 2020, by class of loans:

	Pass		Watch		Special Mention		Substandard		Total
	(In thousands)
Real Estate:
One- to four-family	$	303,840	$	2,487	$	1,730	$	1,771	$	309,828
Multi-family		146,536		15,647		—		284		162,467
Commercial real estate		250,970		20,759		20,690		4,155		296,574
Construction and land		114,575		8,914		74		64		123,627
Total real estate loans		815,921		47,807		22,494		6,274		892,496

Consumer:
Home equity		32,500		349		100		154		33,103
Auto and other consumer		124,115		2,034		1,216		868		128,233
Total consumer loans		156,615		2,383		1,316		1,022		161,336

Commercial business loans		92,010		7,791		168		232		100,201

Total loans	$	1,064,546	$	57,981	$	23,978	$	7,528	$	1,154,033

The following table represents the credit risk profile based on payment activity as of December 31, 2021, by class of loans:

	Nonperforming		Performing		Total
	(In thousands)
Real Estate:
One- to four-family	$	494	$	294,471	$	294,965
Multi-family		—		172,409		172,409
Commercial real estate		71		363,228		363,299
Construction and land		22		224,687		224,709

Consumer:
Home equity		282		38,890		39,172
Auto and other consumer		512		182,257		182,769

Commercial business loans		—		79,838		79,838

Total loans	$	1,381	$	1,355,780	$	1,357,161

The following table represents the credit risk profile based on payment activity as of December 31, 2020, by class of loans:

	Nonperforming		Performing		Total
	(In thousands)
Real Estate:
One- to four-family	$	912	$	308,916	$	309,828
Multi-family		284		162,183		162,467
Commercial real estate		157		296,417		296,574
Construction and land		26		123,601		123,627

Consumer:
Home equity		73		33,030		33,103
Auto and other consumer		821		127,412		128,233

Commercial business loans		—		100,201		100,201

Total loans	$	2,273	$	1,151,760	$	1,154,033

The Coronavirus Aid, Relief, and Economic Security Act of 2020 signed into law on March 27, 2020, ("CARES Act") provided guidance around the modification of loans as a result of the COVID-19 pandemic, which outlined, among other criteria, that short-term modifications made on a good faith basis to borrowers who were current as defined under the CARES Act prior to any relief, are not TDRs. This included short-term (i.e., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers were considered current under the CARES Act and related regulatory guidance if they are less than 30 days past due on their contractual payments at the time a modification program is implemented. Through December 31, 2020, the Company had granted COVID-19 pandemic related temporary loan modifications on a total of 357 loans aggregating to $177.6 million. Loan modifications in accordance with the CARES Act and related regulatory guidance are still subject to an evaluation in regard to determining whether or not a loan is deemed to be impaired. As of December 31, 2021, no loans remain on deferral.

The following is a summary of information pertaining to TDR loans included in impaired loans at the dates indicated:

	December 31, 2021		December 31, 2020
	(In thousands)
Total TDR loans	$	1,843	$	2,224
Allowance for loan losses related to TDR loans		21		26
Total nonaccrual TDR loans		29		108

There were no newly restructured and renewals or modifications of existing TDR loans that occurred during the year ended December 31, 2021.

The following is a summary of TDR loans that incurred a payment default within 12 months of the restructure date during the year ended December 31, 2021.

	Number of Contracts		Rate Modification		Term Modification		Combination Modification		Total Modifications
			(Dollars in thousands)
TDR loans that subsequently defaulted
One- to four-family		1	$	29	$	—	$	—	$	29

The following table presents newly restructured and renewals or modifications of existing TDR loans by class that occurred during the year ended December 31, 2020, by type of concession granted:

	Number of Contracts		Rate Modification		Term Modification		Combination Modification		Total Modifications
			(Dollars in thousands)
Pre-modification outstanding recorded investment
One- to four-family		1	$	29	$	—	$	—	$	29

Post-modification outstanding recorded investment
One- to four-family		1	$	29	$	—	$	—	$	29

There were no TDR loans that incurred a payment default within 12 months of the restructure date during the year ended December 31, 2020.

No additional funds are committed to be advanced in connection with TDR loans at December 31, 2021.

The following table presents TDR loans by class at the dates indicated by accrual and nonaccrual status.

	December 31, 2021						December 31, 2020
	Accrual		Nonaccrual		Total		Accrual		Nonaccrual		Total
	(In thousands)
One- to four-family	$	1,763	$	29	$	1,792	$	2,054	$	108	$	2,162
Home equity		51		—		51		62		—		62

Total TDR loans	$	1,814	$	29	$	1,843	$	2,116	$	108	$	2,224