Loans Receivable

Loans receivable consist of the following at the dates indicated:



	December 31, 2019			December 31, 2018
	(In thousands)
Real Estate:
One- to four-family	$	306,014		$	336,178
Multi-family	96,098			82,331
Commercial real estate	255,722			253,235
Construction and land	37,187			54,102
Total real estate loans	695,021			725,846

Consumer:
Home equity	35,046			37,629
Auto and other consumer	112,119			87,357
Total consumer loans	147,165			124,986

Commercial business loans	41,571			18,898

Total loans	883,757			869,730

Less:
Net deferred loan fees	206			292
Premium on purchased loans, net	(4,514		)	(3,947		)
Allowance for loan losses	9,628			9,533

Total loans receivable, net	$	878,437		$	863,852

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



	December 31, 2019		December 31, 2018
	(In thousands)
Adjustable-rate loans
Due within one year	$	99,494	$	84,284
After one but within five years	238,244		263,118
After five but within ten years	53,142		59,922
After ten years	5,054		5,202
	395,934		412,526
Fixed-rate loans
Due within one year	37,110		1,698
After one but within five years	67,786		83,407
After five but within ten years	124,683		120,094
After ten years	258,244		252,005
	487,823		457,204
	$	883,757	$	869,730

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 Federal 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, 2019
	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	$	3,297		$	762	$	2,289		$	585		$	480		$	1,611		$	334		$	175		$	9,533
Provision for (recapture of) loan losses	(278		)	126		(46		)	(188		)	(71		)	1,275			(125		)	(24		)	669
Charge-offs	—			—		—			—			—			(884		)	(3		)	—			(887		)
Recoveries	5			—		—			2			45			259			2			—			313
Ending balance	$	3,024		$	888	$	2,243		$	399		$	454		$	2,261		$	208		$	151		$	9,628



	At December 31, 2019
	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	$	3,024	$	888	$	2,243	$	399	$	454	$	2,261	$	208	$	151	$	9,628
General reserve	2,993		887		2,235		399		439		2,119		203		151		9,426
Specific reserve	31		1		8		—		15		142		5		—		202

Total loans	$	306,014	$	96,098	$	255,722	$	37,187	$	35,046	$	112,119	$	41,571	$	—	$	883,757
General reserves ⁽¹⁾	303,026		95,991		253,839		37,158		34,775		111,271		41,308		—		877,368
Specific reserves ⁽²⁾	2,988		107		1,883		29		271		848		263		—		6,389


⁽¹⁾ Loans collectively evaluated for general reserves.
⁽²⁾ Loans individually evaluated for specific reserves.



	At or For the Year Ended December 31, 2018
	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	$	3,061		$	648	$	1,847	$	648		$	787		$	712		$	265	$	792		$	8,760
Provision for (recapture of) loan losses	249			114		442		(65		)	(332		)	1,315			68		(617		)	1,174
Charge-offs	(18		)	—		—		—			—			(638		)	—		—			(656		)
Recoveries	5			—		—		2			25			222			1		—			255
Ending balance	$	3,297		$	762	$	2,289	$	585		$	480		$	1,611		$	334	$	175		$	9,533



	At December 31, 2018
	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	$	3,297	$	762	$	2,289	$	585	$	480	$	1,611	$	334	$	175	$	9,533
General reserve	3,262		761		2,281		584		474		1,552		168		175		9,257
Specific reserve	35		1		8		1		6		59		166		—		276

Total loans	$	336,178	$	82,331	$	253,235	$	54,102	$	37,629	$	87,357	$	18,898	$	—	$	869,730
General reserves ⁽¹⁾	333,062		82,221		251,263		54,058		37,002		87,113		18,453		—		863,172
Specific reserves ⁽²⁾	3,116		110		1,972		44		627		244		445		—		6,558


⁽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, 2019						December 31, 2019
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no allowance recorded:
One- to four-family	$	297	$	332	$	—	$	237	$	11
Multi-family	—		—		—		—		—
Commercial real estate	1,240		1,320		—		1,271		54
Construction and land	—		33		—		—		—
Home equity	45		110		—		120		2
Auto and other consumer	251		548		—		20		18
Commercial business	—		—		—		—		4
Total	1,833		2,343		—		1,648		89

With an allowance recorded:
One- to four-family	2,691		2,911		31		2,801		178
Multi-family	107		107		1		109		5
Commercial real estate	643		643		8		654		34
Construction and land	29		29		—		50		3
Home equity	226		286		15		281		19
Auto and other consumer	597		690		142		372		19
Commercial business	263		263		5		290		13
Total	4,556		4,929		202		4,557		271

Total impaired loans:
One- to four-family	2,988		3,243		31		3,038		189
Multi-family	107		107		1		109		5
Commercial real estate	1,883		1,963		8		1,925		88
Construction and land	29		62		—		50		3
Home equity	271		396		15		401		21
Auto and other consumer	848		1,238		142		392		37
Commercial business	263		263		5		290		17
Total	$	6,389	$	7,272	$	202	$	6,205	$	360



							Year Ended
	December 31, 2018						December 31, 2018
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no allowance recorded:
One- to four-family	$	306	$	339	$	—	$	381	$	15
Multi-family	—		—		—		—		—
Commercial real estate	1,308		1,374		—		1,942		47
Construction and land	—		1		—		1,243		—
Home equity	330		478		—		349		12
Auto and other consumer	—		276		—		—		14
Commercial business	—		3		—		—		—
Total	1,944		2,471		—		3,915		88

With an allowance recorded:
One- to four-family	2,810		3,085		35		3,016		181
Multi-family	110		110		1		113		6
Commercial real estate	664		663		8		738		35
Construction and land	44		71		1		66		5
Home equity	297		364		6		275		22
Auto and other consumer	244		244		59		126		8
Commercial business	445		445		166		777		64
Total	4,614		4,982		276		5,111		321

Total impaired loans:
One- to four-family	3,116		3,424		35		3,397		196
Multi-family	110		110		1		113		6
Commercial real estate	1,972		2,037		8		2,680		82
Construction and land	44		72		1		1,309		5
Home equity	627		842		6		624		34
Auto and other consumer	244		520		59		126		22
Commercial business	445		448		166		777		64
Total	$	6,558	$	7,453	$	276	$	9,026	$	409

Interest income recognized on a cash basis on impaired loans for the years ended December 31, 2019 and 2018, was $318,000 and $371,000, respectively.

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



	December 31, 2019		December 31, 2018
	(In thousands)
One- to four-family	$	698	$	759
Commercial real estate	109		133
Construction and land	29		44
Home equity	112		369
Auto and other consumer	848		245
Commercial business loans	—		173

Total nonaccrual loans	$	1,796	$	1,723

Past due loans - There were no loans past due 90 days or more and still accruing interest at December 31, 2019 and 2018.

The following table presents the recorded investment of past due loans, by class, as of December 31, 2019:



	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	$	928	$	92	$	116	$	1,136	$	304,878	$	306,014
Multi-family	—		—		—		—		96,098		96,098
Commercial real estate	—		—		—		—		255,722		255,722
Construction and land	38		—		—		38		37,149		37,187
Total real estate loans	966		92		116		1,174		693,847		695,021

Consumer:
Home equity	299		24		—		323		34,723		35,046
Auto and other consumer	1,423		370		614		2,407		109,712		112,119
Total consumer loans	1,722		394		614		2,730		144,435		147,165

Commercial business loans	—		115		—		115		41,456		41,571

Total loans	$	2,688	$	601	$	730	$	4,019	$	879,738	$	883,757

The following table presents the recorded investment of past due loans, by class, as of December 31, 2018:



	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	$	289	$	176	$	164	$	629	$	335,549	$	336,178
Multi-family	—		—		—		—		82,331		82,331
Commercial real estate	—		—		—		—		253,235		253,235
Construction and land	35		14		31		80		54,022		54,102
Total real estate loans	324		190		195		709		725,137		725,846

Consumer:
Home equity	97		30		9		136		37,493		37,629
Auto and other consumer	471		92		—		563		86,794		87,357
Total consumer loans	568		122		9		699		124,287		124,986

Commercial business loans	923		—		—		923		17,975		18,898

Total loans	$	1,815	$	312	$	204	$	2,331	$	867,399	$	869,730

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 Federal 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 Federal classifies problem assets as either substandard or doubtful, it may establish a specific allowance to address the risk specifically or First Federal 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 Federal 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 Federal 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, 2019, by class of loans:



	Pass		Watch		Special Mention		Sub- Standard		Total
	(In thousands)
Real Estate:
One- to four-family	$	301,312	$	2,685	$	1,148	$	869	$	306,014
Multi-family	95,694		—		107		297		96,098
Commercial real estate	251,531		97		2,800		1,294		255,722
Construction and land	35,897		1,184		77		29		37,187
Total real estate loans	684,434		3,966		4,132		2,489		695,021

Consumer:
Home equity	34,260		470		89		227		35,046
Auto and other consumer	107,327		3,243		594		955		112,119
Total consumer loans	141,587		3,713		683		1,182		147,165

Commercial business loans	39,653		376		263		1,279		41,571

Total loans	$	865,674	$	8,055	$	5,078	$	4,950	$	883,757

The following table represents the internally assigned grade as of December 31, 2018, by class of loans:



	Pass		Watch		Special Mention		Sub- Standard		Total
	(In thousands)
Real Estate:
One- to four-family	$	330,476	$	3,767	$	957	$	978	$	336,178
Multi-family	82,221		—		110		—		82,331
Commercial real estate	244,919		6,281		663		1,372		253,235
Construction and land	51,480		2,578		—		44		54,102
Total real estate loans	709,096		12,626		1,730		2,394		725,846

Consumer:
Home equity	36,559		465		123		482		37,629
Auto and other consumer	85,579		1,310		151		317		87,357
Total consumer loans	122,138		1,775		274		799		124,986

Commercial business loans	16,520		1,733		472		173		18,898

Total loans	$	847,754	$	16,134	$	2,476	$	3,366	$	869,730

The following table represents the credit risk profile based on payment activity as of December 31, 2019, by class of loans:



	Nonperforming		Performing		Total
	(In thousands)
Real Estate:
One- to four-family	$	698	$	305,316	$	306,014
Multi-family	—		96,098		96,098
Commercial real estate	109		255,613		255,722
Construction and land	29		37,158		37,187

Consumer:
Home equity	112		34,934		35,046
Auto and other consumer	848		111,271		112,119

Commercial business loans	—		41,571		41,571

Total loans	$	1,796	$	881,961	$	883,757

The following table represents the credit risk profile based on payment activity as of December 31, 2018, by class of loans:



	Nonperforming		Performing		Total
	(In thousands)
Real Estate:
One- to four-family	$	759	$	335,419	$	336,178
Multi-family	—		82,331		82,331
Commercial real estate	133		253,102		253,235
Construction and land	44		54,058		54,102

Consumer:
Home equity	369		37,260		37,629
Auto and other consumer	245		87,112		87,357

Commercial business loans	173		18,725		18,898

Total loans	$	1,723	$	868,007	$	869,730

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



	December 31, 2019		December 31, 2018
	(In thousands)
Total TDR loans	$	3,544	$	3,745
Allowance for loan losses related to TDR loans	41		43
Total nonaccrual TDR loans	81		84

The following table presents newly restructured and renewals or modifications of existing TDR loans by class that occurred during the year ended December 31, 2019, 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	$	—	$	—	$	50	$	50

	1	$	—	$	—	$	50	$	50
Post-modification outstanding recorded investment
One- to four-family	1	$	—	$	—	$	51	$	51

	1	$	—	$	—	$	51	$	51

The following is a summary of TDR loans which incurred a payment default within 12 months of the restructure date during the year ended December 31, 2019.



	Number of Contracts	Rate Modification		Term Modification		Combination Modification		Total Modifications
		(Dollars in thousands)
TDR loans that subsequently defaulted
One- to four-family	2	$	—	$	—	$	99	$	99

The following table presents newly restructured and renewals or modifications of existing TDR loans by class that occurred during the year ended December 31, 2018, 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	3	$	—	$	—	$	229	$	229

	3	$	—	$	—	$	229	$	229
Post-modification outstanding recorded investment
One- to four-family	3	$	—	$	—	$	228	$	228

	3	$	—	$	—	$	228	$	228

The following is a summary of TDR loans which incurred a payment default within 12 months of the restructure date during the year ended December 31, 2018.



	Number of Contracts	Rate Modification		Term Modification		Combination Modification		Total Modifications
		(Dollars in thousands)
TDR loans that subsequently defaulted
One- to four-family	2	$	—	$	—	$	140	$	140

No additional funds are committed to be advanced in connection with TDR loans at December 31, 2019.

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



	December 31, 2019						December 31, 2018
	Accrual		Nonaccrual		Total		Accrual		Nonaccrual		Total
	(In thousands)
One- to four-family	$	2,290	$	81	$	2,371	$	2,358	$	84	$	2,442
Multi-family	107		—		107		110		—		110
Commercial real estate	643		—		643		663		—		663
Home equity	160		—		160		258		—		258
Commercial business loans	263		—		263		272		—		272

Total TDR loans	$	3,463	$	81	$	3,544	$	3,661	$	84	$	3,745