Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 11, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Entity Registrant Name | First Financial Northwest, Inc. | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001401564 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 10,196,611 | ||
Entity Public Float | $ 128,570,975 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes |
FIRST FINANCIAL NORTHWEST, INC.
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash on hand and in banks | $ 10,094 | $ 8,122 |
Interest-earning deposits with banks | 12,896 | 8,888 |
Investments available-for-sale, at fair value | 136,601 | 142,170 |
Loans and Leases Receivable, Net Amount | 1,108,462 | 1,022,904 |
Federal Home Loan Bank (“FHLB”) stock, at cost | 7,009 | 7,310 |
Accrued interest receivable | 4,138 | 4,068 |
Deferred tax assets, net | 1,501 | 1,844 |
Other real estate owned (“OREO”) | 454 | 483 |
Premises and equipment, net | 22,466 | 21,331 |
Bank owned life insurance (“BOLI”), net | 31,982 | 29,841 |
Prepaid expenses and other assets | 2,216 | 3,458 |
Operating Lease, Right-of-Use Asset | 2,209 | 0 |
Goodwill | 889 | 889 |
Core deposit intangible | 968 | 1,116 |
Total assets | 1,341,885 | 1,252,424 |
Liabilities and Stockholders’ Equity | ||
Interest-bearing deposits | 52,849 | 46,108 |
Interest-bearing Deposit Liabilities | 980,685 | 892,924 |
Total deposits | 1,033,534 | 939,032 |
FHLB advances | 137,700 | 146,500 |
Advance payments from borrowers for taxes and insurance | 2,921 | 2,933 |
Operating Lease, Liability, Current | 2,279 | 0 |
Accrued interest payable | 285 | 478 |
Other liabilities | 8,847 | 9,743 |
Total liabilities | 1,185,566 | 1,098,686 |
Stockholders’ Equity | ||
Preferred stock, $0.01 par value; authorized 10,000,000 shares, no shares issued or outstanding | 0 | 0 |
Common stock, $0.01 par value; authorized 90,000,000 shares; issued and outstanding 15,167,381 shares at December 31, 2014, and 16,392,139 shares at December 31, 2013 | 103 | 107 |
Additional paid-in capital | 87,370 | 93,773 |
Retained earnings, substantially restricted | 73,321 | 66,343 |
Accumulated other comprehensive loss, net of tax benefit | (1,371) | (2,253) |
Unearned Employee Stock Ownership Plan (“ESOP”) shares | (3,104) | (4,232) |
Total stockholders’ equity | 156,319 | 153,738 |
Total liabilities and stockholders’ equity | $ 1,341,885 | $ 1,252,424 |
FIRST FINANCIAL NORTHWEST, IN_2
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Loans receivable allowance for loan losses | $ 13,218 | $ 13,347 |
Stockholders’ Equity | ||
Preferred stock par value per share | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock par value per share | $ 0.01 | $ 0.01 |
Common stock shares authorized | 90,000,000 | 90,000,000 |
Common stock shares issued | 10,252,953 | 10,710,656 |
Common stock shares outstanding | 10,252,953 | 10,710,656 |
FIRST FINANCIAL NORTHWEST, IN_3
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Interest income | ||
Loans, including fees | $ 54,636 | $ 51,127 |
Investments available-for-sale | 4,329 | 4,126 |
Interest-earning deposits | 293 | 202 |
Dividends on FHLB stock | 362 | 458 |
Total interest income | 59,620 | 55,913 |
Interest expense | ||
Deposits | 17,996 | 11,218 |
FHLB advances | 2,716 | 3,520 |
Total interest expense | 20,712 | 14,738 |
Net interest income | 38,908 | 41,175 |
Recapture of provision for loan losses | (300) | (4,000) |
Net interest income after recapture of provision for loan losses | 39,208 | 45,175 |
Noninterest income | ||
Net gain (loss) on sale of investments | 151 | (20) |
Bank Owned Life Insurance Income | 994 | 814 |
Brokerage Commissions Revenue | 879 | 611 |
Deposit Fees | 733 | 681 |
Loan Revenue | 1,344 | 768 |
Other | 40 | 24 |
Total noninterest income | 4,141 | 2,878 |
Noninterest expense | ||
Salaries and employee benefits | 19,595 | 19,302 |
Occupancy and equipment | 3,712 | 3,283 |
Professional fees | 1,690 | 1,538 |
Data processing | 2,031 | 1,392 |
OREO market value adjustments | 29 | 0 |
Foreclosed Real Estate Recovery Expense, Net | 34 | 7 |
Regulatory assessments | 307 | 502 |
Insurance and bond premiums | 375 | 443 |
Marketing | 339 | 344 |
Other general and administrative | 2,335 | 2,650 |
Total noninterest expense | 30,418 | 29,461 |
Income before provision for federal income taxes | 12,931 | 18,592 |
Federal income tax provision | 2,562 | 3,693 |
Net income | $ 10,369 | $ 14,899 |
Basic earnings (loss) per share (usd per share) | $ 1.04 | $ 1.44 |
Diluted earnings (loss) per share (usd per share) | $ 1.03 | $ 1.43 |
Weighted average number of common shares outstanding (in shares) | 9,976,056 | 10,306,835 |
Weighted average number of diluted shares outstanding (in shares) | 10,075,906 | 10,424,187 |
FIRST FINANCIAL NORTHWEST, IN_4
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Net income | $ 10,369 | $ 14,899 |
Other Comprehensive Income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising During Period, before Tax | 2,504 | (1,834) |
Other Comprehensive Income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising During Period, Tax | 526 | (385) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax | 151 | (20) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | 32 | (4) |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | (1,237) | 137 |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | 260 | (29) |
Other comprehensive income (loss), net of tax | 882 | (1,325) |
Total comprehensive income | $ 11,251 | $ 13,574 |
FIRST FINANCIAL NORTHWEST, IN_5
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income, net of tax | Unearned ESOP Shares |
Balances at beginning of period - shares at Dec. 31, 2017 | 10,748,437 | |||||
Balances at beginning of period - amount at Dec. 31, 2017 | $ 142,634 | $ 107 | $ 94,173 | $ 54,642 | $ (928) | $ (5,360) |
Increase (Decrease) in Stockholders' Equity | ||||||
Total other comprehensive income, net of tax - amount | 13,574 | |||||
Cash dividends declared and paid | (3,198) | |||||
Net income | 14,899 | 14,899 | ||||
Other comprehensive income | $ (1,325) | (1,325) | ||||
Exercise of stock options - shares | 137,940 | |||||
Exercise of stock options - amount | $ 1,365 | 1 | 1,364 | |||
Repurchase and retirement of common stock (shares) | (203,900) | |||||
Repurchase and retirement of common stock | $ (3,153) | (2) | (3,151) | |||
Allocation of ESOP shares | $ 1,906 | 778 | 1,128 | |||
Issuance of common stock - restricted stock awards, net | 30,179 | |||||
Issuance of common stock - restricted stock awards, net | $ (40) | $ (1) | 41 | |||
Stock compensation expense | $ 650 | 650 | ||||
Canceled common stock - restricted stock awards | (2,000) | |||||
Canceled common stock - restricted stock awards | $ 0 | |||||
Cash dividends declared and paid | $ 3,198 | |||||
Balances at end of period - shares at Dec. 31, 2018 | 10,710,656 | 10,710,656 | ||||
Balances at end of period - amount at Dec. 31, 2018 | $ 153,738 | $ 107 | 93,773 | 66,343 | (2,253) | (4,232) |
Increase (Decrease) in Stockholders' Equity | ||||||
Total other comprehensive income, net of tax - amount | 11,251 | |||||
Cash dividends declared and paid | (3,478) | |||||
Net income | 10,369 | 10,369 | ||||
Other comprehensive income | $ 882 | 882 | ||||
Exercise of stock options - shares | 2,000 | |||||
Exercise of stock options - amount | $ 21 | 21 | ||||
Repurchase and retirement of common stock (shares) | (479,052) | |||||
Repurchase and retirement of common stock | $ (7,406) | $ (4) | (7,402) | |||
Allocation of ESOP shares | $ 1,698 | 570 | 1,128 | |||
Issuance of common stock - restricted stock awards, net | 25,278 | |||||
Issuance of common stock - restricted stock awards, net | $ (93) | 93 | ||||
Stock compensation expense | $ 501 | 501 | ||||
Canceled common stock - restricted stock awards | (5,929) | |||||
Canceled common stock - restricted stock awards | $ 0 | |||||
Cash dividends declared and paid | 3,478 | |||||
Beginning balance adjustment from adoption of Topic 842 | $ 87 | 87 | ||||
Balances at end of period - shares at Dec. 31, 2019 | 10,252,953 | 10,252,953 | ||||
Balances at end of period - amount at Dec. 31, 2019 | $ 156,319 | $ 103 | $ 87,370 | $ 73,321 | $ (1,371) | $ (3,104) |
FIRST FINANCIAL NORTHWEST, IN_6
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMETNS OF STOCKHOLDERS' EQUITY (PARENTHETICALS) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividend declared and paid per share (usd per share) | $ 0.0035 | $ 0.0031 |
Allocated shares | 112,853 | 112,853 |
FIRST FINANCIAL NORTHWEST, IN_7
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | ||
Net income | $ 10,369,000 | $ 14,899,000 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Recapture of provision for loan losses | (300,000) | (4,000,000) |
OREO market value adjustments | 29,000 | 0 |
Net amortization of premiums and discounts on investments | 835,000 | 1,022,000 |
(Gain) loss on sale of investments available-for-sale | (151,000) | 20,000 |
Depreciation of premises and equipment | 1,840,000 | 1,630,000 |
Loss on sale of premises and equipment | 5,000 | 0 |
Decrease (increase) in deferred federal income taxes | 109,000 | (281,000) |
Allocation of ESOP shares | 1,698,000 | 1,906,000 |
Stock compensation expense | 501,000 | 650,000 |
Increase in cash surrender value of BOLI | (994,000) | (814,000) |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | 153,000 | 2,567,000 |
Right of use asset | (2,209,000) | 0 |
Advance payments from borrowers for taxes and insurance | (12,000) | 418,000 |
Accrued interest receivable | (70,000) | 16,000 |
Lease liability | 2,279,000 | 0 |
Accrued interest payable | (193,000) | 152,000 |
Other liabilities | (809,000) | 491,000 |
Net cash provided by operating activities | 13,080,000 | 18,676,000 |
Cash flows from investing activities | ||
Proceeds from sales and call of investments | 14,260,000 | 17,159,000 |
Principal repayments on investments | 7,395,000 | 7,078,000 |
Purchases of investments | (14,417,000) | (37,021,000) |
Net increase in loans receivable | (85,258,000) | (30,242,000) |
Purchases of premises and equipment | (2,980,000) | (2,347,000) |
Redemption of FHLB stock | 301,000 | 2,572,000 |
Proceeds from Life Insurance Policy | 310,000 | 0 |
Purchase of BOLI | (1,457,000) | 0 |
Net cash provided in investing activities | (81,846,000) | (42,801,000) |
Cash flows from financing activities | ||
Net increase in deposits | 94,502,000 | 99,530,000 |
Advances from the FHLB | 350,200,000 | 187,500,000 |
Repayments of advances from the FHLB | (359,000,000) | (257,000,000) |
Proceeds from stock options exercises | 21,000 | 1,365,000 |
Issuance of common stock - restricted stock awards, net | (93,000) | (40,000) |
Repurchase and retirement of common stock | (7,406,000) | (3,153,000) |
Dividends paid | (3,478,000) | (3,198,000) |
Net cash provided by financing activities | 74,746,000 | 25,004,000 |
Cash and cash equivalents: | ||
Net increase in cash and cash equivalents | 5,980,000 | 879,000 |
Cash and cash equivalents at beginning of year | 17,010,000 | 16,131,000 |
Cash and cash equivalents at end of year | 22,990,000 | 17,010,000 |
Cash paid during the period for: | ||
Interest | 21,383,000 | 14,586,000 |
Federal income taxes | 2,175,000 | 3,890,000 |
Noncash transactions: | ||
Change in unrealized gain (loss) on investments available-for-sale | 2,353,000 | (1,814,000) |
Change in unrealized (losses) gain on cash flow hedge | (1,237,000) | $ 137,000 |
Initial recognition of right-of-use asset | 2,762,000 | |
Initial recognition of lease liability | $ 2,762,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of Operations and Principles of Consolidation First Financial Northwest, Inc. (“First Financial Northwest”), a Washington corporation, was formed on June 1, 2007 for the purpose of becoming the holding company for First Financial Northwest Bank (“the Bank”) in connection with the conversion from a mutual holding company structure to a stock holding company structure completed on October 9, 2007. First Financial Northwest’s business activities generally are limited to passive investment activities and oversight of its investment in First Financial Northwest Bank. Accordingly, the information presented in the consolidated financial statements and related data, relates primarily to First Financial Northwest Bank. First Financial Northwest converted from a savings and loan holding company to a bank holding company in 2015 and is subject to regulation by the Board of Governors of the Federal Reserve Bank of San Francisco (“FRB”). First Financial Northwest Bank is regulated by the Federal Deposit Insurance Corporation (“FDIC”) and the Washington State Department of Financial Institutions (“DFI”). First Financial Northwest Bank was organized in 1923 as a Washington state-chartered savings and loan association, converted to a federal mutual savings and loan association in 1935, and converted to a Washington state-chartered mutual savings bank in 1992. In 2002, First Financial Northwest Bank reorganized into a two-tier mutual holding company structure, became a stock savings bank and became the wholly-owned subsidiary of First Financial of Renton, Inc. In connection with the mutual to stock conversion in 2007, the Bank changed its name to First Savings Bank Northwest. In August 2015, the Bank changed its name to First Financial Northwest Bank to support the expansion of focus to being more than a traditional “savings” bank. In February 2016, the Bank changed its charter from a Washington chartered stock savings bank to a Washington chartered commercial bank. First Financial Northwest Bank is a community-based commercial bank primarily serving King and Snohomish Counties, and to a lesser extent, Pierce and Kitsap Counties, Washington. In King County, the headquarters and full-service banking office, as well as one branch office, are located in Renton. Additional King County branch offices are located in Bellevue, Woodinville, Bothell, and Kent. In Snohomish County, five additional branch offices serve Mill Creek, Edmonds, Clearview, Smokey Point, and Lake Stevens. First Financial Northwest Bank’s business consists of attracting deposits from the public and utilizing these deposits to originate one-to-four family residential, multifamily, commercial real estate, construction/land, business and consumer loans. First Financial Diversified Corporation (“FFD”), a wholly-owned subsidiary of First Financial Northwest, held a portfolio of one-to-four family, land and consumer loans that were serviced by the Bank, however, at December 31, 2019, FFD’s loan portfolio had been fully paid off. The accompanying consolidated financial statements include the accounts of First Financial Northwest and its wholly‑owned subsidiaries First Financial Northwest Bank and First Financial Diversified Corporation (collectively, “the Company”). All significant intercompany balances and transactions between First Financial Northwest and its subsidiaries have been eliminated in consolidation. Basis of Presentation and Use of Estimates The accounting and reporting policies of First Financial Northwest and its subsidiaries conform to U.S. generally accepted accounting principles (“GAAP”). In preparing the consolidated financial statements, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided. Actual results could differ from these estimates. Material estimates particularly subject to change include the allowance for loan and lease losses (“ALLL”), other real estate owned (“OREO”), deferred tax assets and the fair values of financial instruments. Subsequent Events The Company has evaluated events and transactions subsequent to December 31, 2019 for potential recognition or disclosure. For more information, see Note 19 - Subsequent Events. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand and in banks, interest-bearing deposits and federal funds sold all with maturities of three months or less. The Bank is required to maintain an average reserve balance with the FRB or maintain such reserve balance in the form of cash. At December 31, 2019, a $750,000 reserve was required and was maintained with the FRB. At December 31, 2018, cash balances were sufficient where no additional reserve was required. Investments Investments are classified into one of three categories: (1) held-to-maturity, (2) available-for-sale, or (3) trading. We had no held-to-maturity or trading securities at December 31, 2019, or 2018. Investments are categorized as held-to-maturity when we have the positive intent and ability to hold them to maturity. Investments are classified as available-for-sale if the Company intends to hold the securities for an indefinite period of time, but not necessarily to maturity. Investments available-for-sale are reported at fair value. Unrealized holding gains and losses on investments available-for-sale are excluded from earnings and are reported in other comprehensive income (loss), net of applicable taxes. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Amortization or accretion of purchase premiums and discounts are included in investment income using the level-yield method over the remaining period to contractual maturity. Dividend or interest income is recognized when it is earned. The estimated fair value of investments is based on quoted market prices for investments traded in active markets or dealer quotes. Mortgage-backed investments represent participation interest in pools of first mortgage loans originated and serviced by the issuers of the investments. Management makes an assessment to determine whether there have been any events or economic circumstances to indicate that a security on which there is an unrealized loss is impaired on an other-than-temporary basis. Management considers many factors including the severity and duration of the impairment, recent events specific to the issuer or industry, and for debt securities, external credit ratings and recent downgrades. Securities on which there is an unrealized loss that is deemed to be an other-than-temporary impairment (“OTTI”) are written down to fair value. For equity securities, the write-down is recorded as a realized loss in noninterest income in the Consolidated Income Statements. For debt securities, if management intends to sell the security or it is likely that management will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings as an OTTI. If management does not intend to sell the security and it is not likely that management will be required to sell the security but management does not expect to recover the entire amortized cost basis of the security, only the portion of the impairment loss representing credit losses would be recognized in earnings. The credit loss on a security is measured as the difference between the amortized cost basis and the present value of the cash flows expected to be collected. Projected cash flows are discounted by the original or current effective interest rate depending on the nature of the security being measured for potential OTTI. The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to other comprehensive income (“OCI”). Impairment losses related to all other factors are presented as separate categories within OCI. Loans Receivable Loans are recorded at their outstanding principal balance adjusted for charge-offs, the ALLL and net deferred fees or costs. Interest on loans is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. The accrual of interest on loans is discontinued at the time the loan is 90 days delinquent unless the loan is well secured and in the process of collection. Consumer and other loans are typically managed in the same manner. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is doubtful. All interest accrued but not collected on loans that are placed on nonaccrual is reversed against interest income. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. In order to return a nonaccrual loan to accrual status, each loan is evaluated on a case-by-case basis. We evaluate the borrower’s financial condition to ensure that future loan payments are reasonably assured. We also take into consideration the borrower’s willingness and ability to make the loan payments and historical repayment performance. We require the borrower to make the loan payments consistently for a period of at least six months as agreed to under the terms of any modified loan agreement before we will consider reclassifying the loan to accrual status. Impaired Loans A loan is considered 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 determining impairment include payment status, collateral value, market conditions, rent rolls and the financial strength of the borrower(s) and guarantor(s), if any. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrowers, including the length of the delay, the reasons for the delay, the borrower’s prior payment history and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured by the fair value method on a loan-by-loan basis. When a loan is identified as impaired, its impairment is measured using the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole (remaining) source of repayment for the loan is the operation or liquidation of the collateral. In these cases, the Company uses an observable market price or current fair value of the collateral, less certain completion costs and closing costs when foreclosure is probable, instead of discounted cash flows. The Company obtains annual updated appraisals for impaired collateral dependent loans that exceed $1.0 million . In addition, the Company may order appraisals on properties not included within these guidelines when there are extenuating circumstances where the Company is not otherwise able to determine the fair value of the property. Appraised values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation and/or management’s expertise and knowledge of the borrower. If management determines that the value of the impaired loan is less than the recorded investment in the loan, an impairment is recognized through an allowance estimate or a charge-off to the ALLL. Troubled Debt Restructurings Certain loan modifications or restructurings are accounted for as troubled debt restructurings (“TDR”). In general, the modification or restructuring of a debt is considered a TDR if, for economic or legal reasons related to the borrower’s financial difficulties, a concession is granted to the borrower that the Company would not otherwise consider. Examples of these modifications or restructurings include advancement of maturity date, accepting interest only payments for a period of time, or granting an interest rate concession for a period of time. The impaired portion of the loan with an interest rate concession and/or interest-only payments for a specific period of time are calculated based on the present value of expected future cash flows discounted at the loan’s effective interest rate. The effective interest rate is the rate of return implicit on the original loan. This impaired amount reduces the ALLL and a valuation allowance is established to reduce the loan balance. As loan payments are received in future periods, the ALLL entry is reversed and the valuation allowance is reduced utilizing the level-yield method over the modification period. A loan that is determined to be classified as a TDR is generally reported as a TDR until the loan is paid in full or otherwise settled, sold, or charged-off. Allowance for Loan and Lease Losses The allowance for loan and lease losses (“ALLL”) is a valuation allowance for probable incurred credit losses. Losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Any subsequent recoveries are credited to the allowance. The ALLL is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans and factors such as the nature and volume of the loan portfolio, historical loss considerations, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. The evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions or changes to the credit quality of the loan portfolio. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s ALLL. Such agencies may require management to make adjustments to the allowance based on their judgments about information available to them at the time of their examination. Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives used to compute depreciation and amortization is 15 to 40 years for buildings and building improvements, and is three to seven years for furniture, fixtures, and equipment. Leasehold improvements are amortized over the life of the lease. Management reviews buildings, improvements and equipment for impairment on an annual basis or whenever events or changes in the circumstances indicate that the undiscounted cash flows for the property are less than its carrying value. If identified, an impairment loss is recognized through a charge to earnings based on the fair value of the property. Federal Home Loan Bank Stock As a member of the Federal Home Loan Bank System, the Bank is required to maintain a minimum level of investment in the Federal Home Loan Bank of Des Moines (“FHLB”) stock, based on specified percentages of total assets and the Bank’s outstanding FHLB advances. Ownership of FHLB stock is restricted to the FHLB and member institutions. The Bank’s investment in FHLB stock is carried at par value ( $100 per share), which reasonably approximates its fair value. Transfer of Financial Assets Transfers of an entire financial asset, a group of entire financial assets, or participating interest in an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Bank, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Bank does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Other Real Estate Owned OREO consists principally of properties acquired through foreclosure and is stated at the lower of cost or estimated market value less selling costs. Losses arising from the acquisition of property, in full or partial satisfaction of loans, are charged to the ALLL. Subsequent to the transfer of foreclosed assets held for sale, the assets continue to be recorded at the lower of cost or fair value (less estimated costs to sell), based on periodic evaluations. Subsequent write-downs in value are charged to noninterest expense. Generally, legal and professional fees associated with foreclosures are expensed as incurred. Costs incurred to improve property prior to sale are capitalized; however, in no event are recorded costs allowed to exceed estimated fair value. Subsequent gains, losses, or expenses recognized on the sale of these properties are included in noninterest expense. The amounts that will ultimately be recovered from foreclosed assets may differ substantially from the carrying value of the assets because of future market factors beyond management’s control. Bank-Owned Life Insurance The Company has purchased life insurance on certain key executives and officers. Bank-owned life insurance (“BOLI”) is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Increases to the cash surrender value are recorded as noninterest income and partially offset expenses for employee benefits. Certain BOLI contracts contain endorsement split-dollar life agreements. In these circumstances, the Bank accrues a reserve liability and related compensation expense for the expected future benefit payout. Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as unused lines of credit and commercial letters of credit issued to meet customer financing needs. The face amount of these items represents the exposure to loss before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Reserve for Unfunded Commitments Management maintains a reserve for unfunded commitments to absorb probable losses associated with our off-balance sheet commitments to lend funds such as unused lines of credit and the undisbursed portion of construction loans. Management determines the adequacy of the reserve based on reviews of individual exposures, current economic conditions, and other relevant factors. The reserve is based on estimates and ultimate losses may vary from the current estimates. The reserve is evaluated on a regular basis and necessary adjustments are reported in earnings during the period in which they become known. The reserve for unfunded commitments is included in the other liabilities section of the consolidated balance sheets. Stock-Based Compensation Compensation cost is recognized for stock options and restricted stock awards, based on the fair value of these awards at the grant date. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the grant date is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Federal Income Taxes The Company files a consolidated Federal income tax return and records its provision for income taxes under the asset and liability method. Deferred taxes result from temporary differences in the recognition of certain income and expense amounts between the Company’s financial statements and its tax return. The principal items giving rise to these differences include net operating losses, valuation adjustments on foreclosed properties, and allowance for credit losses. Deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not that all or some portion of the potential deferred tax asset will not be realized. The Company’s policy is to recognize interest and penalties associated with income tax matters in income tax expense. Employee Stock Ownership Plan The cost of shares issued to the Employee Stock Ownership Plan (“ESOP”), but not yet allocated to participants, is shown as a reduction of stockholders’ equity. Compensation expense is based on the market price of shares as they are committed to be released to participant accounts. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce debt and accrued interest. Earnings Per Share Nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are included in the computation of earnings per share (“EPS”) pursuant to the two-class method. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared or accumulated and participation rights in undistributed earnings. Certain shares of the Company’s nonvested restricted stock awards qualify as participating securities. Net income is allocated between the common stock and participating securities pursuant to the two-class method, based on their rights to receive dividends, participate in earnings or absorb losses. Basic earnings per common share is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period, excluding participating nonvested restricted shares. As ESOP shares are committed to be released, they are included in the outstanding shares used in the basic EPS calculation. Diluted earnings per share is computed in a similar manner, except that first the denominator is increased to include the number of additional shares that would have been outstanding if potentially dilutive shares, excluding the participating securities, were issued using the treasury stock method. For all periods presented, stock options and certain restricted stock awards are potentially dilutive non-participating instruments issued by the Company. Undistributed losses are not allocated to the nonvested share-based payment awards (the participating securities) under the two-class method as the holders are not contractually obligated to share in the losses of the Company. Comprehensive Income Comprehensive income consists of net income and unrealized gains and losses on investments available-for-sale and derivatives, which are also recognized as separate components of equity, net of tax. Advertising Expenses Advertising costs are generally expensed as incurred and are not material. Fair Value of Financial Instruments Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Segment Information The Company’s activities are considered to be a single industry segment for financial reporting purposes. The Company is engaged in the business of attracting deposits from the general public and providing lending services. Substantially all income is derived from a diverse base of investments and commercial, construction, mortgage, and consumer lending activities. Reclassification Certain amounts in the consolidated financial statements for prior years have been reclassified to conform to the current consolidated financial statement presentation. The results of the reclassifications are not considered material and have no effect on previously reported net income or stockholders’ equity. Derivatives The Company designates certain interest rate swap agreements as a cash flow hedge, and as such, reports the net fair value as an asset or liability. The hedge is utilized to mitigate the risk of variability in future interest payments. The fair value of the cash flow hedge is based on dealer quotes, pricing models, discounted cash flow methodologies or similar techniques for which the determination of fair value may require significant management judgment or estimation. The derivative is marked to its fair value, with the change in fair value recorded as other comprehensive income or loss. The gain or loss on the derivative is reclassified into earnings in the same income statement line item that is used to present the earnings effect of the hedged item. Goodwill Goodwill is recorded from a business combination as the difference in purchase price and fair value of the assets acquired and liabilities assumed. Goodwill has an indefinite useful life, and as such, is not amortized. The Company performs a goodwill impairment analysis on an annual basis as of December 31. Additionally, the Company performs an impairment analysis as needed when circumstances indicate impairment potentially exists. Any impairment will be recorded as a noninterest expense and corresponding reduction in intangible asset on the consolidated financial statements. Core Deposit Intangible A core deposit intangible (“CDI”) asset is recognized from the assumption of core deposit liabilities in connection with the acquisition of four branches from Opus Bank, a California state-chartered commercial bank (the “Branch Acquisition”). The asset was valued by a third party and is amortized into noninterest expense over ten years . The CDI is evaluated for impairment annually with any additional decline recorded as a noninterest expense on the Consolidated Income Statement. Recent Accounting Pronouncements Adopted in 2019 In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) . ASU No. 2016-02 requires lessees to recognize on the balance sheet the assets and liabilities arising from operating leases. In July 2018, FASB issued ASU No. 2018-11, Leases (Topic 842) to address the comparative reporting requirements when this ASU is adopted. In March 2019, FASB issued ASU 2019-01, Leases (Topic 842), Codification Improvements. Under these ASUs, a lessee should recognize a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. A lessee should include payments to be made in an optional period only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease. For a finance lease, interest payments should be recognized separately from amortization of the right-of-use asset in the statement of comprehensive income. For operating leases, the lease cost should be allocated over the lease term on a generally straight-line basis. The Company adopted this ASU on January 1, 2019, and according to ASU 2018-11, elected to recognize the related cumulative-effect adjustment as an adjustment to the opening balance of retained earnings. Adoption of ASU 2016-02 resulted in the addition of a right-of-use asset and lease liability related to certain banking offices under noncancelable operating lease agreements. The resulting increase did not have a material impact on the Company’s consolidated financial statements or regulatory capital ratios. For more information see Note 10 - Leases. In March 2017, FASB issued ASU No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The ASU shortens the amortization period for certain callable debt securities held at a premium. The Company adopted this ASU as of January 1, 2019, with no material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) as amended by ASU 2018-19, ASU 2019-04 and ASU 2019-05, was originally issued in June 2016 . This ASU replaces the existing incurred loss impairment methodology that recognizes credit losses when a probable loss has been incurred with new methodology where loss estimates are based upon lifetime expected credit losses. The amendments in this ASU require a financial asset that is measured at amortized cost to be presented at the net amount expected to be collected. The income statement would then reflect the measurement of credit losses for newly recognized financial assets as well as changes to the expected credit losses that have taken place during the reporting period. The measurement of expected credit losses will be based on historical information, current conditions, and reasonable and supportable forecasts that impact the collectability of the reported amount. Available-for-sale securities will bifurcate the fair value mark and establish an allowance for credit losses through the income statement for the credit portion of that mark. The interest portion will continue to be recognized through accumulated other comprehensive income or loss. The change in allowance recognized as a result of adoption will occur through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the ASU is adopted. This ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted for smaller reporting companies, such as the Company. The Company is evaluating its current expected loss methodology on the loan and investment portfolios to identify the necessary modifications in accordance with this standard and expects a change in the processes and procedures to calculate the ALLL, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. A valuation adjustment to the ALLL or investment portfolio that is identified in this process will be reflected as a one-time adjustment in equity rather than earnings. ASU 2019-05 issued in April 2019 further provides that entities that have certain financial instruments measured at amortized cost that has credit losses, to irrevocably elect the fair value option in Subtopic 825-10, upon adoption of Topic 326. The fair value option applies to available-for-sale debt securities. This ASU is effective upon adoption of ASU 2016-13, and should be applied on a modified-retrospective basis as a cumulative-effect adjustment to the opening balance of retained earnings in the statement of financial condition as of the adoption date. The Company is in the process of compiling historical and industry data that will be used to calculate expected credit losses on the loan portfolio to ensure that it is fully compliant with the ASU at the adoption date and is evaluating the potential impact adoption of this ASU will have on its consolidated financial statements. The Company intends to adopt ASU 2016-13 in the first quarter of 2023, and as a result, the ALLL may increase. Until the evaluation is complete, however, the magnitude of the increase will not be known. In August 2018, FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) - Disclosure Fr |
Investments
Investments | 12 Months Ended |
Dec. 31, 2019 | |
Investments [Abstract] | |
Investments | Investments The following tables summarize the amortized cost and fair value of investments available-for-sale at December 31, 2019 and 2018 , and the corresponding amounts of gross unrealized gains and losses. December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Mortgage-backed investments: Fannie Mae $ 15,605 $ 128 $ (104 ) $ 15,629 Freddie Mac 4,196 96 — 4,292 Ginnie Mae 23,239 140 (329 ) 23,050 Other 11,407 66 (25 ) 11,448 Municipal bonds 10,675 272 (36 ) 10,911 U.S. Government agencies 46,672 13 (935 ) 45,750 Corporate bonds 25,500 372 (351 ) 25,521 $ 137,294 $ 1,087 $ (1,780 ) $ 136,601 December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Mortgage-backed investments: Fannie Mae $ 24,276 $ 24 $ (657 ) $ 23,643 Freddie Mac 6,351 10 (74 ) 6,287 Ginnie Mae 23,311 — (1,250 ) 22,061 Other 8,983 17 (21 ) 8,979 Municipal bonds 10,615 49 (120 ) 10,544 U.S. Government agencies 48,190 73 (825 ) 47,438 Corporate bonds 23,490 399 (671 ) 23,218 $ 145,216 $ 572 $ (3,618 ) $ 142,170 There were no investments classified as held-to-maturity at December 31, 2019 or 2018 . The amortized cost and estimated fair value of investments available-for-sale at December 31, 2019 , by expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Investments not due at a single maturity date, primarily mortgage‑backed investments are shown separately. December 31, 2019 Amortized Cost Fair Value (In thousands) Due within one year $ 496 $ 498 Due after one year through five years 6,597 6,738 Due after five years through ten years 18,664 18,613 Due after ten years 57,090 56,333 82,847 82,182 Mortgage-backed investments 54,447 54,419 $ 137,294 $ 136,601 Under Washington State law, in order to participate in the public funds program the Company is required to pledge eligible securities as collateral in an amount equal to 50% of the public deposits held. Investments with a carrying value of $19.0 million and $15.6 million were pledged as collateral for public deposits at December 31, 2019 , and 2018 , respectively, both of which exceeded the minimum collateral requirements established by the Washington Public Deposit Protection Commission. At December 31, 2019 , and 2018 , there were no investments pledged as collateral for FHLB advances. Sales and other redemptions of available-for-sale investments were as follows: Year Ended December 31, 2019 2018 (In thousands) Proceeds $ 14,260 $ 17,159 Gross gains 190 9 Gross losses (39 ) (29 ) The following tables summarize the aggregate fair value and gross unrealized loss by length of time those investments have been continuously in an unrealized loss position at December 31, 2019 and 2018 . December 31, 2019 Less Than 12 Months 12 Months or Longer Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (In thousands) Mortgage-backed investments: Fannie Mae $ 8,340 $ (104 ) $ — $ — $ 8,340 $ (104 ) Freddie Mac — — — — — — Ginnie Mae 156 — 12,921 (329 ) 13,077 (329 ) Other 2,843 (7 ) 6,000 (18 ) 8,843 (25 ) Municipal bonds 3,257 (36 ) — — 3,257 (36 ) U.S. Government agencies 12,266 (201 ) 31,490 (734 ) 43,756 (935 ) Corporate bonds 1,996 (12 ) 7,161 (339 ) 9,157 (351 ) $ 28,858 $ (360 ) $ 57,572 $ (1,420 ) $ 86,430 $ (1,780 ) December 31, 2018 Less Than 12 Months 12 Months or Longer Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (In thousands) Mortgage-backed investments: Fannie Mae $ 5,480 $ (32 ) $ 16,721 $ (625 ) $ 22,201 $ (657 ) Freddie Mac 1,994 (23 ) 3,185 (51 ) 5,179 (74 ) Ginnie Mae 2,867 (8 ) 19,194 (1,242 ) 22,061 (1,250 ) Other 6,008 (21 ) — — 6,008 (21 ) Municipal bonds 4,161 (46 ) 934 (74 ) 5,095 (120 ) U.S. Government agencies 5,985 (13 ) 30,779 (812 ) 36,764 (825 ) Corporate bonds — — 6,828 (671 ) 6,828 (671 ) $ 26,495 $ (143 ) $ 77,641 $ (3,475 ) $ 104,136 $ (3,618 ) At December 31, 2019 , and 2018 , the Company had 37 and 51 securities, respectively, with a gross unrealized loss position. Management reviewed the financial condition of the entities underlying the securities at both December 31, 2019 , and December 31, 2018 , and determined that no OTTI was required. Management believes that, while actual fluctuation in unrealized losses will occur over the life of an investment security, the temporary impairment on the investment securities that were in an unrealized loss position at December 31, 2019 and 2018 , will be incrementally relieved as the individual investment securities approach their respective contractual maturity dates. The unrealized losses relate principally to the general change in interest rate and illiquidity, and not credit quality. As management does not intend to sell the security, and it is likely that it will not be required to sell the security before its anticipated recovery, no declines are deemed to be other-than-temporary. |
Loans Receivable
Loans Receivable | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Loans Receivable | Loans Receivable Loans receivable net of loans in process (“LIP”) at December 31, 2019 , and 2018 are summarized as follows: December 31, 2019 2018 (In thousands) One-to-four family residential: Permanent owner occupied $ 210,898 $ 194,141 Permanent non-owner occupied 161,630 147,825 372,528 341,966 Multifamily: Permanent 172,915 169,355 172,915 169,355 Commercial real estate: Permanent 395,152 373,798 395,152 373,798 Construction/land: (1) One-to-four family residential 44,491 51,747 Multifamily 40,954 40,502 Commercial 19,550 9,976 Land 8,670 6,629 113,665 108,854 Business 37,779 30,486 Consumer 30,199 12,970 Total loans 1,122,238 1,037,429 Less: Deferred loan fees, net 558 1,178 Allowance for loan and lease losses ("ALLL") 13,218 13,347 Loans receivable, net $ 1,108,462 $ 1,022,904 ____________ (1) Included in the construction/land category are “rollover” loans, which are loans that will convert upon completion of the construction period to permanent loans. At that time, the loans will be classified according to the underlying collateral. In addition, raw land or buildable lots, where the Company does not intend to finance the construction are included in the construction/land category. At December 31, 2019 , we classified $38.6 million of multifamily loans, $8.7 million of commercial land loans, $3.5 million of one-to-four family residential and $18.3 million of commercial real estate loans as construction/land loans to facilitate the review of the composition of our loan portfolio. At December 31, 2018 , $25.2 million of multifamily loans, $6.2 million of commercial land loans, $602,000 one-to-four family residential and $10.0 million of commercial real estate loans were reclassified to the construction/land category. At December 31, 2019 , and 2018 , there were no loans classified as held for sale. Concentrations of credit. Most of the Bank’s lending activity occurs within the state of Washington. The primary market areas include King and to a lesser extent Pierce, Snohomish and Kitsap counties. At December 31, 2019 , the Company’s loan portfolio consists of one-to-four family residential loans which comprised 33.2% , commercial real estate and multifamily loans were 35.2% and 15.4% , respectively, and construction/land loans were 10.1% of the total loan portfolio. Consumer and business loans accounted for the remaining 6.1% of the loan portfolio. Included in the one-to-four family residential, multifamily, and commercial real estate loan portfolios at December 31, 2019 were $432,000 , $8.4 million , and $78.0 million , respectively, to the Company’s five largest borrowing relationships. The Company originates both adjustable and fixed interest rate loans. The composition of loans receivable at December 31, 2019 , and 2018 , was as follows: December 31, 2019 Fixed Rate Adjustable Rate Term to Maturity Principal Balance Term to Rate Adjustment Principal Balance (In thousands) Due within one year $ 29,997 Due within one year $ 297,221 After one year through three years 63,055 After one year through three years 102,248 After three years through five years 68,659 After three years through five years 137,487 After five years through ten years 126,762 After five years through ten years 86,404 Thereafter 207,055 Thereafter 3,350 $ 495,528 $ 626,710 December 31, 2018 Fixed Rate Adjustable Rate Term to Maturity Principal Balance Term to Rate Adjustment Principal Balance (In thousands) Due within one year $ 44,445 Due within one year $ 248,739 After one year through three years 53,076 After one year through three years 98,652 After three years through five years 56,194 After three years through five years 105,929 After five years through ten years 125,884 After five years through ten years 112,449 Thereafter 192,061 Thereafter — $ 471,660 $ 565,769 Our adjustable-rate loans are tied to various indexes, including LIBOR, the prime rate as published in The Wall Street Journal, and the FHLB. Certain adjustable‑rate loans have interest rate adjustment limitations and are generally indexed to the FHLB Long-Term Bullet advance rates published by the FHLB. Future market factors may affect the correlation of the interest rate adjustment with the rates paid on short‑term deposits that have been primarily utilized to fund these loans. Credit Quality Indicators . The Company assigns a risk rating to all credit exposures based on the risk rating system designed to define the basic characteristics and identified risk elements of each credit extension. The Company utilizes a nine‑point risk rating system. A description of the general characteristics of the risk grades is as follows: • Grades 1 through 5: These grades are considered to be “pass” credits. These include assets where there is virtually no credit risk, such as cash secured loans with funds on deposit with the Bank. Pass credits also include credits that are on the Company’s watch list, where the borrower exhibits potential weaknesses, which may, if not checked or corrected, negatively affect the borrower’s financial capacity and threaten their ability to fulfill debt obligations in the future. • Grade 6: These credits, classified as ”special mention”, possess weaknesses that deserve management’s close attention. Special mention assets do not expose the Company to sufficient risk to warrant adverse classification in the substandard, doubtful or loss categories. If left uncorrected, these potential weaknesses may result in deterioration in the Company’s credit position at a future date. • Grade 7: These credits, classified as “substandard”, present a distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. These credits have well defined weaknesses which jeopardize the orderly liquidation of the debt and are inadequately protected by the current net worth and payment capacity of the borrower or of any collateral pledged. • Grade 8: These credits are classified as “doubtful” have well defined weaknesses which make the full collection or liquidation of the loan highly questionable and improbable. This classification is used where significant risk exposures are perceived but the exact amount of the loss cannot yet be determined due to pending events. • Grade 9: Assets classified as “loss” are considered uncollectible and cannot be justified as a viable asset for the Company. There is little or no prospect of near term recovery and no realistic strengthening action of significance is pending. As of December 31, 2019 , and 2018 , the Company had no loans rated as doubtful or loss. The following tables represent a summary of loans at December 31, 2019 , and 2018 by type and risk category: December 31, 2019 One-to-Four Family Residential Multifamily Commercial Real Estate Construction/ Land Business Consumer Total (In thousands) Risk Rating: Pass $ 371,363 $ 170,810 $ 394,627 $ 101,141 $ 37,779 $ 30,199 $ 1,105,919 Special mention 536 2,105 525 12,524 — — 15,690 Substandard 629 — — — — — 629 Total $ 372,528 $ 172,915 $ 395,152 $ 113,665 $ 37,779 $ 30,199 $ 1,122,238 December 31, 2018 One-to-Four Family Residential Multifamily Commercial Real Estate Construction / Land Business Consumer Total (In thousands) Risk Rating: Pass $ 339,310 $ 169,355 $ 372,690 $ 108,854 $ 30,486 $ 12,926 $ 1,033,621 Special mention 1,737 — 782 — — — 2,519 Substandard 919 — 326 — — 44 1,289 Total $ 341,966 $ 169,355 $ 373,798 $ 108,854 $ 30,486 $ 12,970 $ 1,037,429 ALLL . When the Company classifies problem assets as either substandard or doubtful, pursuant to Federal regulations, it may establish a specific reserve in an amount deemed prudent to address the risk specifically or may allow the loss to be addressed in the general allowance. General allowances represent loss allowances which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been specifically allocated to the particular problem assets. When an insured institution classifies problem assets as a loss, pursuant to Federal regulations, it is required to charge-off such assets in the period in which they are deemed uncollectible. The determination as to the classification of the Company’s assets and the amount of valuation allowances is subject to review by bank regulators, who can require the establishment of additional loss allowances. Loan grades are used by the Company to identify and track potential problem loans which do not rise to the levels described for substandard, doubtful, or loss. The grades for watch and special mention are assigned to loans which have been criticized based upon known characteristics such as periodic payment delinquency or stale financial information from the borrower and/or guarantors. Loans identified as criticized (watch and special mention) or classified (substandard, doubtful or loss) are subject to problem loan reporting every three months. The following tables summarize changes in the ALLL and loan portfolio by type of loan and reserve method for the periods indicated. At or For the Year Ended December 31, 2019 One-to-Four Family Residential Multifamily Commercial Real Estate Construction/ Land Business Consumer Total ALLL: (In thousands) Beginning balance $ 3,387 $ 1,680 $ 4,777 $ 2,331 $ 936 $ 236 $ 13,347 Charge-offs — — — — — — — Recoveries 73 45 — — — 53 171 (Recapture) provision (426 ) (118 ) (218 ) (109 ) 204 367 (300 ) Ending balance $ 3,034 $ 1,607 $ 4,559 $ 2,222 $ 1,140 $ 656 $ 13,218 General reserve $ 3,003 $ 1,607 $ 4,559 $ 2,222 $ 1,140 $ 656 $ 13,187 Specific reserve 31 — — — — — 31 Loans: Total Loans $ 372,528 $ 172,915 $ 395,152 $ 113,665 $ 37,779 $ 30,199 $ 1,122,238 Loans collectively evaluated for impairment (1) $ 368,453 170,810 393,886 101,141 37,779 30,199 1,102,268 Loans individually evaluated for impairment (2) 4,075 2,105 1,266 12,524 — — 19,970 ____________ (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 Residential Multifamily Commercial Real Estate Construction/ Land Business Consumer Total ALLL: (In thousands) Beginning balance $ 2,837 $ 1,820 $ 4,418 $ 2,816 $ 694 $ 297 $ 12,882 Charge-offs — — — — — — — Recoveries 4,279 — 14 171 — 1 4,465 (Recapture) provision (3,729 ) (140 ) 345 (656 ) 242 (62 ) (4,000 ) Ending balance $ 3,387 $ 1,680 $ 4,777 $ 2,331 $ 936 $ 236 $ 13,347 General reserve $ 3,328 $ 1,680 $ 4,774 $ 2,331 $ 936 $ 236 $ 13,285 Specific reserve 59 — 3 — — — 62 Loans: Total Loans $ 341,966 $ 169,355 $ 373,798 $ 108,854 $ 30,486 $ 12,970 $ 1,037,429 Loans collectively evaluated for impairment (1) 334,644 169,355 371,058 108,854 30,486 12,883 1,027,280 Loans individually evaluated for impairment (2) 7,322 — 2,740 — — 87 10,149 _____________ (1) Loans collectively evaluated for general reserves. (2) Loans individually evaluated for specific reserves. Past Due Loans. At December 31, 2019 , total past due loans comprised 0.19% of total loans as compared to 0.08% at December 31, 2018 . The following tables represent a summary at December 31, 2019 , and 2018 , of the aging of loans by type: Loans Past Due as of December 31, 2019 30-59 Days 60-89 Days 90 Days and Greater Total Current Total Loans (1) (In thousands) Real estate: One-to-four family residential: Owner occupied $ 79 $ — $ — $ 79 $ 210,819 $ 210,898 Non-owner occupied — — — — 161,630 161,630 Multifamily 2,105 — — 2,105 170,810 172,915 Commercial real estate — — — — 395,152 395,152 Construction/land — — — — 113,665 113,665 Total real estate 2,184 — — 2,184 1,052,076 1,054,260 Business — — — — 37,779 37,779 Consumer — — — — 30,199 30,199 Total $ 2,184 $ — $ — $ 2,184 $ 1,120,054 $ 1,122,238 _________________________ (1) There were no loans 90 days past due and still accruing interest at December 31, 2019. Loans Past Due as of December 31, 2018 30-59 Days 60-89 Days 90 Days and Greater Total Current Total Loans (1) (In thousands) Real estate: One-to-four family residential: Owner occupied $ 223 $ — $ 272 $ 495 $ 193,646 $ 194,141 Non-owner occupied — — — — 147,825 147,825 Multifamily — — — — 169,355 169,355 Commercial real estate — — 326 326 373,472 373,798 Construction/land — — — — 108,854 108,854 Total real estate 223 — 598 821 993,152 993,973 Business — — — — 30,486 30,486 Consumer — — — — 12,970 12,970 Total $ 223 $ — $ 598 $ 821 $ 1,036,608 $ 1,037,429 ________________________ (1) There were no loans 90 days past due and still accruing interest at December 31, 2018. Nonaccrual Loans. The following table is a summary of nonaccrual loans at December 31, 2019 , and 2018 , by type of loan: December 31, 2019 2018 (In thousands) One-to-four family residential $ 95 $ 382 Commercial real estate — 326 Consumer — 44 Total nonaccrual loans $ 95 $ 752 Nonperforming loans were $95,000 and $752,000 at December 31, 2019 , and 2018 , respectively. Foregone interest on nonaccrual loans for the years ended December 31, 2019 , and 2018 , were $12,000 and $18,000 , respectively. The following tables summarize the loan portfolio at December 31, 2019 , and 2018 , by type and payment activity: December 31, 2019 One-to-Four Family Residential Multifamily Commercial Real Estate Construction / Land Business Consumer Total (In thousands) Performing (1) $ 372,433 $ 172,915 $ 395,152 $ 113,665 $ 37,779 $ 30,199 $ 1,122,143 Nonperforming (2) 95 — — — — — 95 Total $ 372,528 $ 172,915 $ 395,152 $ 113,665 $ 37,779 $ 30,199 $ 1,122,238 ____________ (1) There were $210.8 million of owner-occupied one-to-four family residential loans and $161.6 million of non-owner occupied one to-four family residential loans classified as performing. (2) There were $95,000 of owner-occupied one-to-four family residential loans and no non-owner occupied one-to-four family residential loans classified as nonperforming. December 31, 2018 One-to-Four Family Residential Multifamily Commercial Real Estate Construction/ Land Business Consumer Total (In thousands) Performing (1) $ 341,584 $ 169,355 $ 373,472 $ 108,854 $ 30,486 $ 12,926 $ 1,036,677 Nonperforming (2) 382 — 326 — — 44 752 Total $ 341,966 $ 169,355 $ 373,798 $ 108,854 $ 30,486 $ 12,970 $ 1,037,429 _____________ (1) There were $193.8 million of owner-occupied one-to-four family residential loans and $147.8 million of non-owner occupied one-to-four family residential loans classified as performing. (2) There were $382,000 of owner-occupied one-to-four family residential loans and no non-owner occupied one-to-four family residential loans classified as nonperforming. Impaired loans. The loan portfolio is constantly being monitored by management for delinquent loans and changes in the financial condition of each borrower. When an issue is identified with a borrower and it is determined that the loan needs to be classified as nonperforming and/or impaired, an evaluation of the collateral is performed prior to the end of the financial reporting period and, if necessary, an appraisal is ordered in accordance with the Company’s appraisal policy guidelines. Based on this evaluation, any additional provision for loan loss or charge-offs that may be needed is recorded prior to the end of the financial reporting period. At December 31, 2019, there was $3.1 million committed to be advanced on an impaired $12.5 million construction loan. At December 31, 2018, there were no commitments to advance funds related to impaired loans. The following tables present a summary of loans individually evaluated for impairment at December 31, 2019 , and 2018 , by the type of loan: At December 31, 2019 Recorded Investment (1) Unpaid Principal Balance (2) Related Allowance (In thousands) Loans with no related allowance: One-to-four family residential: Owner occupied $ 437 $ 582 $ — Non-owner occupied 1,486 1,486 — Multifamily 2,105 2,105 — Commercial real estate 1,266 1,266 — Construction/land 12,524 15,650 — Total 17,818 21,089 — Loans with an allowance: One-to-four family residential: Owner occupied 505 552 13 Non-owner occupied 1,647 1,647 18 Total 2,152 2,199 31 Total impaired loans: One-to-four family residential: Owner occupied 942 1,134 13 Non-owner occupied 3,133 3,133 18 Multifamily 2,105 2,105 — Commercial real estate 1,266 1,266 — Construction/land 12,524 15,650 — Total $ 19,970 $ 23,288 $ 31 _________________ (1) Represents the loan balance less charge-offs. (2) Contractual loan principal balance. At December 31, 2018 Recorded Investment (1) Unpaid Principal Balance (2) Related Allowance (In thousands) Loans with no related allowance: One-to-four family residential: Owner occupied $ 1,308 $ 1,477 $ — Non-owner occupied 2,375 2,375 — Commercial real estate 2,499 2,499 — Consumer 87 141 — Total 6,269 6,492 — Loans with an allowance: One-to-four family residential: Owner occupied 513 560 22 Non-owner occupied 3,126 3,148 37 Commercial real estate 241 241 3 Total 3,880 3,949 62 Total impaired loans: One-to-four family residential: Owner occupied 1,821 2,037 22 Non-owner occupied 5,501 5,523 37 Commercial real estate 2,740 2,740 3 Consumer 87 141 — Total $ 10,149 $ 10,441 $ 62 _____________ (1) Represents the loan balance less charge-offs. (2) Contractual loan principal balance. The following table presents a summary of the average recorded investment in impaired loans, and interest income recognized on impaired loans for the years ended December 31, 2019 and 2018 , by the type of loan: Year Ended December 31, 2019 2018 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (In thousands) Loans with no related allowance: One-to-four family residential: Owner occupied $ 852 $ 36 $ 1,207 $ 82 Non-owner occupied 1,833 94 5,583 146 Multifamily 421 111 900 — Commercial real estate 2,038 90 1,885 172 Construction/land 7,143 834 — — Consumer 43 — 91 8 Total 12,330 1,165 9,666 408 Loans with an allowance: One-to-four family residential: Owner occupied 509 34 518 35 Non-owner occupied 2,092 93 3,211 162 Commercial real estate 48 — 1,046 27 Total 2,649 127 4,775 224 Total impaired loans: One-to-four family residential: Owner occupied 1,361 70 1,725 117 Non-owner occupied 3,925 187 8,794 308 Multifamily 421 111 900 — Commercial real estate 2,086 90 2,931 199 Construction/land 7,143 834 — — Consumer 43 — 91 8 Total $ 14,979 $ 1,292 $ 14,441 $ 632 Troubled Debt Restructurings . The following is a summary of information pertaining to TDRs: December 31, 2019 2018 (In thousands) Performing TDRs $ 5,246 $ 9,399 Nonaccrual TDRs — — Total TDRs $ 5,246 $ 9,399 The accrual status of a loan may change after it has been classified as a TDR. Management considers the following in determining the accrual status of restructured loans: (1) if the loan was on accrual status prior to the restructuring, the borrower has demonstrated performance under the previous terms, and a credit evaluation shows the borrower’s capacity to continue to perform under the restructured terms (both principal and interest payments), the loan will remain on accrual at the time of the restructuring; (2) if the loan was on nonaccrual status before the restructuring, and the Company’s credit evaluation shows the borrower’s capacity to meet the restructured terms, the loan would remain as nonaccrual for a minimum of six months until the borrower has demonstrated a reasonable period of sustained repayment performance (thereby providing reasonable assurance as to the ultimate collection of principal and interest in full under the modified terms). The following table presents for the periods indicated TDRs and their recorded investment prior to the modification and after the modification: Year Ended December 31, 2019 2018 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment (Dollars in thousands) TDRs that occurred during the period: One-to-four family residential: Principal and interest with interest rate concession 7 $ 1,360 $ 1,360 1 $ 563 $ 563 Advancement of maturity date 3 694 694 — — — Commercial real estate: Advancement of maturity date 1 855 855 — — — Total 11 $ 2,909 $ 2,909 1 $ 563 $ 563 At December 31, 2019 and 2018 , the Company had no commitments to extend additional credit to borrowers whose loan terms have been modified in a TDR. All TDRs are also classified as impaired loans and are included in the loans individually evaluated for impairment in the calculation of the ALLL. TDRs resulted in no charge-offs to the ALLL for the years ended December 31, 2019 and 2018 . For the years ended December 31, 2019 and 2018 , there were no payment defaults on loans modified as TDRs within the previous 12 months. At December 31, 2019, and 2018, the Bank had no loans outstanding with executive officers or directors. The change in the aggregate dollar amount of these loans outstanding to related parties is summarized as follows: Year Ended December 31, 2019 2018 (In thousands) Balance at beginning of year $ — $ 9 Repayments — (9 ) Balance at end of year $ — $ — |
Other Real Estate Owned
Other Real Estate Owned | 12 Months Ended |
Dec. 31, 2019 | |
Other Real Estate [Abstract] | |
Other Real Estate Owned | Other Real Estate Owned The following table is a summary of OREO activity for the periods indicated: Year Ended December 31, 2019 2018 (In thousands) Balance at beginning of year $ 483 $ 483 Market value adjustments (29 ) — Balance at end of year $ 454 $ 483 OREO at December 31, 2019 , consisted of $454,000 in commercial real estate properties. At December 31, 2019 , there were no mortgage loans secured by residential real estate in the process of foreclosure. |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Premises and Equipment Premises and equipment consisted of the following at December 31, 2019 , and 2018 : December 31, 2019 2018 (In thousands) Land $ 2,226 $ 2,226 Buildings and improvements 20,213 19,566 Leasehold improvements 4,040 3,076 Furniture, fixtures and equipment 5,506 4,971 Computer hardware and software 3,297 2,342 35,282 32,181 Less accumulated depreciation and amortization (13,043 ) (11,357 ) Construction in process 227 507 Total premises and equipment, net $ 22,466 $ 21,331 Depreciation and amortization expense was $1.8 million and $1.6 million for the years ended December 31, 2019 and 2018 , respectively. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value of Financial Instruments The Company has adopted ASU 2016-01, and therefore, is measuring the fair value of loans receivable under the exit price notion. The methodology used to estimate the fair values of other financial instruments did not change from the adoption of ASU 2016-01. Under the exit price notion used at December 31, 2019, and 2018, the fair value estimate of loans receivable was based on similar techniques, with the addition of current origination spreads, liquidity premiums, or credit adjustments. The fair value of nonperforming loans is based on the underlying value of the collateral for periods prior to and after adoption of ASU 2016-01. The Company determines the fair values of its financial instruments based on the fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair values. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect its estimate for market assumptions. Valuation inputs refer to the assumptions market participants would use in pricing a given asset or liability using one of the three valuation techniques. Inputs can be observable or unobservable. Observable inputs are those assumptions that market participants would use in pricing the particular asset or liability. These inputs are based on market data and are obtained from an independent source. Unobservable inputs are assumptions based on the Company’s own information or estimate of assumptions used by market participants in pricing the asset or liability. Unobservable inputs are based on the best and most current information available on the measurement date. All inputs, whether observable or unobservable, are ranked in accordance with a prescribed fair value hierarchy: • Level 1 - Quoted prices for identical instruments in active markets. • Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable. • Level 3 - Instruments whose significant value drivers are unobservable. The Company used the following methods to measure fair value on a recurring or nonrecurring basis. • Investments available-for-sale: The fair value of all investments, excluding FHLB stock, was based upon quoted market prices for similar investments in active markets, identical or similar investments in markets that are not active, and model-derived valuations whose inputs are observable. • OREO: The fair value of OREO properties is measured at the lower of the carrying amount or fair value, less costs to sell. Fair values are generally based on third party appraisals of the property, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized. • Derivatives: The fair value of derivatives is based on dealer quotes, pricing models, discounted cash flow methodologies or similar techniques for which the determination of fair value may require significant management judgment or estimation. The tables below present the balances of assets and liabilities measured at fair value on a recurring basis (there were no transfers between Level 1, Level 2 and Level 3 recurring measurements during the periods presented): December 31, 2019 Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Available-for-sale investments: Mortgage-backed investments: Fannie Mae $ 15,629 $ — $ 15,629 $ — Freddie Mac 4,292 — 4,292 — Ginnie Mae 23,050 — 23,050 — Other 11,448 — 11,448 — Municipal bonds 10,911 — 10,911 — U.S. Government agencies 45,750 — 45,750 — Corporate bonds 25,521 — 25,521 — Total available-for-sale investments 136,601 — 136,601 — Derivative fair value asset 426 — 426 — $ 137,027 $ — $ 137,027 $ — December 31, 2018 Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Available-for-sale investments: Mortgage-backed investments: Fannie Mae $ 23,643 $ — $ 23,643 $ — Freddie Mac 6,287 — 6,287 — Ginnie Mae 22,061 — 22,061 — Other 8,979 — 8,979 Municipal bonds 10,544 — 10,544 — U.S. Government agencies 47,438 — 47,438 — Corporate bonds 23,218 — 23,218 — Total available-for-sale investments 142,170 — 142,170 $ — Derivative fair value asset 1,662 — 1,662 — $ 143,832 $ — $ 143,832 — The estimated fair value of Level 2 investments is based on quoted prices for similar investments in active markets, identical or similar investments in markets that are not active, and model-derived valuations whose inputs are observable. The tables below present the balances of assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2019 , and 2018 . December 31, 2019 Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Impaired loans (included in loans receivable, net) (1) $ 19,939 $ — $ — $ 19,939 OREO 454 — — 454 Total $ 20,393 $ — $ — $ 20,393 _______________ (1) Total value of impaired loans is net of $ 31,000 of specific reserves on performing TDRs. December 31, 2018 Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Impaired loans (included in loans receivable, net) (1) $ 10,087 $ — $ — $ 10,087 OREO 483 — — 483 Total $ 10,570 $ — $ — $ 10,570 ________________ (1) Total value of impaired loans is net of $ 62,000 of specific reserves on performing TDRs. The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at December 31, 2019 and 2018 . December 31, 2019 Fair Value Valuation Technique(s) Unobservable Input(s) Range (Weighted Average Change in Fair Value) (Dollars in thousands) Impaired Loans $ 19,939 Market approach Appraised value discounted by market or borrower conditions 0.0% (0.00%) OREO $ 454 Market approach Appraised value less selling costs 0.0% (0.00%) December 31, 2018 Fair Value Valuation Technique(s) Unobservable Input(s) Range (Weighted Average Change in Fair Value) (Dollars in thousands) Impaired Loans $ 10,087 Market approach Appraised value discounted by market or borrower conditions 0.0% (0.00%) OREO $ 483 Market approach Appraised value less selling costs 0.0% (0.00%) The fair value calculation of the Company’s financial instruments are an attempt to incorporate market conditions at a specific point in time. The underlying assumptions are generally subjective and involve uncertainties. Therefore, these fair value estimates are not intended to represent the underlying value of the Company as a whole. The carrying amounts and estimated fair values of financial instruments at December 31, 2019 , and 2018 , were as follows: December 31, 2019 Fair Value Measurements Using: Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 (In thousands) Financial Assets: Cash on hand and in banks $ 10,094 $ 10,094 $ 10,094 $ — $ — Interest-earning deposits 12,896 12,896 12,896 — — Investments available-for-sale 136,601 136,601 — 136,601 — Loans receivable, net 1,108,462 1,096,499 — — 1,096,499 FHLB stock 7,009 7,009 — 7,009 — Accrued interest receivable 4,138 4,138 — 4,138 — Derivative fair value asset 426 426 — 426 — Financial Liabilities: Deposits 513,959 513,959 513,959 — — Certificates of deposit, retail 425,103 430,418 — 430,418 — Certificates of deposit, brokered 94,472 94,556 — 94,556 — Advances from the FHLB 137,700 137,706 — 137,706 — Accrued interest payable 285 285 — 285 — December 31, 2018 Fair Value Measurements Using: Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 (In thousands) Financial Assets: Cash on hand and in banks $ 8,122 $ 8,122 $ 8,122 $ — $ — Interest-earning deposits 8,888 8,888 8,888 — — Investments available-for-sale 142,170 142,170 — 142,170 — Loans receivable, net 1,022,904 1,012,114 — — 1,012,114 FHLB stock 7,310 7,310 — 7,310 — Accrued interest receivable 4,068 4,068 — 4,068 — Derivative fair value asset 1,662 1,662 — 1,662 — Financial Liabilities: Deposits 450,033 450,033 450,033 — — Certificates of deposit, retail 391,174 390,101 — 390,101 — Certificates of deposit, brokered 97,825 97,466 — 97,466 — Advances from the FHLB 146,500 146,357 — 146,357 — Accrued interest payable 478 478 — 478 — Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the value of anticipated future business. The fair value has not been estimated for assets and liabilities that are not considered financial instruments. |
Accrued Interest Receivable
Accrued Interest Receivable | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Interest Receivable [Abstract] | |
Accrued Interest Receivable | Note 7 - Accrued Interest Receivable Accrued interest receivable consisted of the following at December 31, 2019 and 2018 : December 31, 2019 2018 (In thousands) Loans receivable $ 3,518 $ 3,366 Investments 603 699 Interest-earning deposits 17 3 $ 4,138 $ 4,068 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2019 | |
Deposits [Abstract] | |
Deposits | Deposits Deposit accounts consisted of the following at December 31, 2019 and 2018 : December 31, 2019 2018 (In thousands) Noninterest-bearing $ 52,849 $ 46,108 Interest-bearing demand 65,897 40,079 Statement savings 17,447 24,799 Money market 377,766 339,047 Certificates of deposit, retail (1) 425,103 391,174 Certificates of deposit, brokered 94,472 97,825 $ 1,033,534 $ 939,032 _______________ (1) Shown net of $28,000 and $58,000 fair value adjustment on December 31, 2019 and 2018, respectively. At December 31, 2019 , scheduled maturities of certificates of deposit were as follows: December 31, Amount (In thousands) 2020 $ 222,059 2021 185,208 2022 47,075 2023 50,220 2024 15,013 thereafter — $ 519,575 Deposits included public funds of $34.0 million and $28.5 million at December 31, 2019 and 2018 , respectively. Certificates of deposit equal to or exceeding the FDIC insured amount of $250,000 included in deposits at December 31, 2019 , and 2018 , were $130.6 million and $129.3 million , respectively. Interest expense on certificates equal to or exceeding $250,000 totaled $2.9 million and $1.8 million for the years ended December 31, 2019 and 2018 , respectively. Included in total deposits are accounts of $2.1 million and $16.0 million at December 31, 2019 , and 2018 , respectively which are controlled by related parties. Interest expense on deposits for the periods indicated was as follows: Year Ended December 31, 2019 2018 (In thousands) Interest-bearing demand $ 108 $ 79 Statement savings 29 34 Money market 5,027 3,550 Certificates of deposit, retail 9,549 5,825 Certificates of deposit, brokered 3,283 1,730 $ 17,996 $ 11,218 |
Other Borrowings
Other Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Other Borrowings [Abstract] | |
Other Borrowings | Other Borrowings At December 31, 2019 , and 2018 , the Bank maintained credit facilities with the FHLB totaling $588.7 million and $554.8 million , respectively. The credit facility was collateralized by $240.8 million of single-family residential mortgages, $186.9 million of commercial real estate loans and $79.0 million of multifamily loans under a blanket lien arrangement at December 31, 2019 . At December 31, 2018 , the credit facility was collateralized by $216.4 million of single-family residential mortgages, $180.8 million of commercial real estate loans, and $74.2 million of multifamily loans under a blanket lien arrangement. The Bank also had $115.1 million unused line-of-credit facilities with other financial institutions at December 31, 2019 , with interest payable at the then stated rate. Summary information related to outstanding advances at the FHLB during the years ended December 31, 2019 , and 2018 consisted of the following: Year ended December 31, 2019 2018 (Dollars in thousands) Maximum borrowing outstanding at any month end $ 184,500 $ 224,000 Average borrowing outstanding during year 129,899 183,667 Balance outstanding at end of year 137,700 146,500 Average rate paid during the year 2.09 % 1.92 % Weighted-average rate paid at end of year 1.84 2.62 Scheduled maturities of Federal Home Loan Bank outstanding advances at December 31, 2019 , were as follows: Year Ended December 31, Balance Due Weighted Average Interest Rate at December 31, 2019 (Dollars in thousands) FHLB overnight Fed Funds $ 26,700 1.73 % 2020 111,000 1.87 $ 137,700 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company adopted ASU 2016-02 and ASU 2018-11 using the modified retrospective approach with an effective date of January 1, 2019, and recognized on the consolidated balance sheets a right-of-use asset (“ROU”) included in prepaid expenses and other assets and lease liabilities included in other liabilities. As such, prior year financial statements were not restated under the new standard. At December 31, 2019, the Company had ten operating leases for retail branch locations. The remaining initial lease terms range from 8 months to 5.25 years , with most leases carrying optional extensions of 3 - 5 years . The Company will include optional lease term extensions in the ROU assets and lease liabilities when management believes it is reasonably certain that the term extension will be exercised, and will be determined based on indicators that the Company would have an economic incentive to extend the lease. The Company has elected to not apply ASU 2016-02 to short term leases, which are those that have a term of one year or less. To calculate the present value of lease payments not yet paid, the Company uses the incremental borrowing rate, which is equal to the FHLB advance rate for the remaining term of the lease that was in place at January 1, 2019, or for leases added after that date, at the time of lease inception. The minimum monthly lease payments are generally based on square footage of the leased premises, with escalating minimum rent over the lease term. At December 31, 2019, the Company was committed to paying $53,000 per month in minimum monthly lease payments. The minimum monthly lease payment over the initial lease term, including any free rent period, was used to calculate the ROU and lease liability. The Company’s current leases do not include any non-lease components. Total lease expense included in the Company’s Consolidated Income Statement for the year ended December 31, 2019, was $752,000 . Lease expense includes the amortized lease expense under ASU 2016-02 combined with variable lease expenses for maintenance or other expenses as defined in the individual lease agreements. At December 31, 2019, the Company’s consolidated balance sheet included a $2.2 million right-of-use asset and a $2.3 million lease liability. The lease liability is amortizing over a weighted-average remaining term of 6.1 years. The weighted-average discount rate used to calculate the present value of future minimum lease payments was 2.94% at December 31, 2019. The following table provides a reconciliation between the undiscounted minimum lease payments at December 31, 2019 and the discounted lease liability at that date: December 31, 2019 (in thousands) Due through one year $ 609 Due after one year through two years 433 Due after two years through three years 399 Due after three years through four years 291 Due after four years through five years 230 Due after five years 532 Total minimum lease payments 2,494 Less: present value discount 215 Lease liability $ 2,279 The Company has secured a lease for a new retail branch in University Place, Washington, which commenced in March 2020. The initial lease term is for 65 months and includes options to extend the lease. The minimum rent will be determined at commencement and will increase annually thereafter. This lease was not included in the calculation of discounted lease payments at December 31, 2019. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives The Company uses derivative financial instruments in the form of interest rate swap agreements, which qualify as cash flow hedges, to manage the risk of changes in future cash flows due to interest rate fluctuations. The hedged items have a total notional amount of $75.0 million , and consist of rolling one-month or three-month FHLB advances that are renewed at the fixed interest rate at each renewal date. The hedging instruments have four to five years terms and stipulate that the counterparty will pay the Company interest at one-month or three-month LIBOR and the Company will pay fixed interest of 1.34% on a $50.0 million notional amount, 1.44% on a $15.0 million notional amount, and 1.585% on a $10.0 million notional amount. The Company pays or receives the net interest amount quarterly based on the respective hedge agreement and includes this amount as part of FHLB advances interest expense on the Consolidated Income Statement. Quarterly, the effectiveness evaluation is based upon the fluctuation of the interest the Company pays to the FHLB for the debt as compared to the one-month or three-month LIBOR interest received from the counterparty. At December 31, 2019, the $426,000 fair value of the cash flow hedges was reported with other assets. The tax effected amount of $336,000 was included in Accumulated Other Comprehensive Income. There were no amounts recorded in the Consolidated Income Statements for the years ended December 31, 2019 or 2018, related to ineffectiveness. Fair value for these derivative instruments, which generally changes as a result of changes in the level of market interest rates, is estimated based on dealer quotes and secondary market sources. The following table presents the fair value of derivative instruments as of December 31, 2019 and 2018 : Balance Sheet Location 2019 Fair Value 2018 Fair Value (In thousands) Interest rate swaps on FHLB debt designated as cash flow hedges Other assets $ 426 $ 1,662 Total derivatives $ 426 $ 1,662 The following table presents the net unrealized gains (losses) on derivative instruments included on the Consolidated Statements of Comprehensive Income for the years ended December 31, 2019 and 2018: Balance Sheet Location 2019 Amount of Loss Recognized In OCI 2018 Amount of Gain Recognized In OCI (In thousands) Interest rate swaps on FHLB debt designated as cash flow hedge Equity $ (977 ) $ 108 |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans Multi-employer Pension Plans The Company participates in the Pentegra Defined Benefit Plan for Financial Institutions (“The Pentegra DB Plan”), a tax-qualified defined-benefit pension plan that covers substantially all employees after one year of continuous employment. Pension benefits vest over a period of five years of credited service. The Pentegra DB Plan’s Employer Identification Number is 13-5645888 and the Plan Number is 333. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code. There are no collective bargaining agreements in place that require contributions to the Pentegra DB Plan. The Pentegra DB Plan is a single plan under Internal Revenue Code Section 413(c) and, as a result, all of the assets stand behind all of the liabilities. Accordingly, under the Pentegra DB Plan, contributions made by a participating employer may be used to provide benefits to participants of other participating employers. As of March 31, 2013, the Pentegra DB Plan was frozen, eliminating all future benefit accruals for employees. Each employee’s accrued benefit was determined as of March 31, 2013. The funding target is the present value of all benefits that have accrued as of the first day of the current plan year (July 1). Because interest rates used to calculate the present value of all benefits ( 5.51% for 2019 and 5.71% for 2018 ) is significantly higher than current market rates, the funding target does not represent the Company’s actual liability upon withdrawal from participation in the Pentegra DB Plan, which is significantly larger than the funding target. The table below presents the funded status (market value of plan assets divided by funding target) of the plan as of July 1: 2019 2018 Source Valuation Report Valuation Report First Financial Northwest’s Plan (1) 101.7 % 102.7 % _________________ (1) Market value of plan assets reflects any contributions received through June 30, 2019, or 2018, respectively. Total contributions made to the Pentegra DB Plan, as reported on Form 5500, equal $164.6 million and $367.1 million for the plan years ended June 30, 2018 and June 30, 2017 respectively. The Company’s contributions to the Pentegra DB Plan are not more than 5% of the total contributions to the Pentegra DB Plan. The Company’s policy is to fund pension costs as accrued. Total contributions during the years ended December 31, 2019 and 2018 were: 2019 2018 Date Paid Amount Date Paid Amount (in thousands) 10/8/2019 $ 37 10/9/2018 $ 43 12/6/2019 503 11/13/2018 497 Total $ 540 Total $ 540 Supplemental Executive Retirement Plan The Company has entered into post-employment agreements with certain key officers to provide supplemental retirement benefits. The Company recorded $74,000 and $18,000 of compensation expense for the years ended December 31, 2019, and 2018 , respectively. 401(k) Plan The Company has a savings plan under Section 401(k) of the Internal Revenue Code, covering substantially all employees after 90 days of continuous employment. Under the plan, employee contributions up to 6% will be matched 50% by the Company. Such matching becomes vested over a period of five years of credited service. Employees may make investments in various stock, money market, or fixed income plans. The Company contributed $333,000 and $312,000 to the plan for the years ended December 31, 2019 , and 2018 , respectively. Employee Stock Ownership Plan The Company provides an ESOP for the benefit of substantially all employees. The ESOP borrowed $16.9 million from First Financial Northwest and used those funds to acquire 1,692,800 shares of First Financial Northwest’s stock at the time of the initial public offering at a price of $10.00 per share. The loan matures on October 8, 2022 and has a fixed interest rate of 4.88% . Shares purchased by the ESOP with the loan proceeds are held in a suspense account and are allocated to ESOP participants on a pro rata basis as principal and interest payments are made by the ESOP to First Financial Northwest. The loan is secured by shares purchased with the loan proceeds and will be repaid by the ESOP with funds from the Company’s discretionary contributions to the ESOP and earnings on the ESOP assets. Annual principal and interest payments of $1.6 million were made by the ESOP during 2019, and 2018. As shares are committed to be released from collateral, the Company reports compensation expense equal to the daily average market prices of the shares and the shares become outstanding for EPS computations. The compensation expense is accrued throughout the year. A summary of key transactions for the ESOP for the periods indicated follows: 2019 2018 (in thousands) ESOP contribution expense $ 1,698 $ 1,906 Dividends on unallocated ESOP shares used to reduce ESOP contribution 148 166 Shares held by the ESOP at December 31, 2019 and 2018 , are as follows: December 31, 2019 2018 (Dollars in thousands, except share data) Allocated shares 1,382,453 1,269,600 Unallocated shares 310,347 423,200 Total ESOP shares 1,692,800 1,692,800 Fair value of unallocated shares $ 4,637 $ 6,547 Stock-Based Compensation In June 2016, First Financial Northwest’s shareholders approved the First Financial Northwest, Inc. 2016 Equity Incentive Plan (“2016 Plan”). This plan provides for the granting of incentive stock options (“ISO”), non-qualified stock options (“NQSO”), restricted stock and restricted stock units. The 2016 Plan expires in June 2026. The 2016 Plan established 1,400,000 shares available to grant with a maximum of 400,000 of these shares available to grant as restricted stock awards. Each share issued as a restricted stock award counts as two shares towards the total shares available to be awarded. As a result of the approval of the 2016 Plan, the First Financial Northwest, Inc. 2008 Equity Incentive Plan (“2008 Plan”) was frozen and no additional awards will be made. Restricted stock awards and stock options that were granted under the 2008 Plan will continue to vest and be available for exercise, subject to the 2008 Plan provisions. At December 31, 2019, there were 1,240,114 total shares available for grant under the 2016 Plan, including 320,057 shares available to be granted as restricted stock. Under the 2016 Plan, the vesting date for each option award or restricted stock award is determined by an award committee and specified in the award agreement. In the case of restricted stock awards granted in lieu of cash payments of directors’ fees, the grant date is used as the vesting date. Total compensation expense for the both the 2008 Plan and 2016 Plan for the years ended December 31, 2019, and 2018, was $501,000 and $650,000 , respectively. The related income tax benefit was $105,000 and $137,000 for the years ended December 31, 2019 , and 2018 , respectively. Stock Options Under the 2008 Plan, stock option awards were granted with an exercise price equal to the market price of First Financial Northwest's common stock at the grant date. These option awards have a vesting period of five years, with 20% vesting on the anniversary date of each grant date, and a contractual life of ten years. Any unexercised stock options will expire ten years after the grant date, or sooner in the event of the award recipient’s death, disability or termination of service with the Company. Under the 2016 Plan, the exercise price and vesting period for stock options are determined by the award committee and specified in the award agreement, however, the exercise price shall not be less than the fair market value of a share as of the grant date. Any unexercised stock option will expire 10 years after the award date or sooner in the event of the award recipient’s death, disability, retirement, or termination of service. A cashless exercise of vested stock options may occur by the option holder surrendering the number of options valued at the current stock price at the time of exercise to cover the total cost to exercise. The surrendered options are canceled and are unavailable for reissue. The fair value of each option award is estimated on the grant date using a Black-Scholes model that uses the assumptions noted in the table below. The dividend yield is based on the current quarterly dividend in effect at the time of the grant. Historical employment data is used to estimate the forfeiture rate. The historical volatility of the Company’s stock price over a specified period of time is used for the expected volatility assumption. First Financial Northwest bases the risk-free interest rate on the U.S. Treasury Constant Maturity Indices in effect on the date of the grant. First Financial Northwest elected to use the “simplified” method permitted by the U.S. Securities and Exchange Commission to calculate the expected term. This method uses the vesting term of an option along with the contractual term, setting the expected life at the midpoint. There were 50,000 stock options granted in 2019, however, these shares were forfeited later in the year. There were no stock options granted in 2018. A summary of the Company’s stock option plan awards activity for the year ended December 31, 2019 follows: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding at December 31, 2018 315,000 $ 10.34 $ 1,615,600 Granted 50,000 15.80 — Exercised (2,000 ) 10.77 7,240 Forfeited or expired (50,000 ) 15.80 — Outstanding at December 31, 2019 313,000 10.34 3.98 $ 1,440,310 Expected to vest assuming a 3% forfeiture rate over the vesting term 312,760 10.34 3.98 1,439,854 Exercisable at December 31, 2019 305,000 10.27 3.93 1,425,110 As of December 31, 2019 , there was $32,000 of total unrecognized compensation cost related to nonvested stock options. The cost is expected to be recognized over the remaining weighted-average vesting period of 11 months . Restricted Stock Awards A summary of changes in nonvested restricted stock awards for the year ended December 31, 2019 , follows: Nonvested Shares Shares Weighted Average Grant Date Fair Value Nonvested at December 31, 2018 20,987 $ 15.90 Granted 25,278 15.88 Vested (29,567 ) 15.53 Nonvested at December 31, 2019 16,698 16.53 Expected to vest assuming a 3% forfeiture rate over the vesting term 16,197 16.53 As of December 31, 2019 , there was $46,000 of total unrecognized compensation costs related to nonvested shares granted as restricted stock awards. The cost is expected to be recognized over the remaining weighted-average vesting period of two months. The total fair value of shares vested during the years ended December 31, 2019 , and 2018 were $459,000 and $238,000 , respectively. |
Federal Income Taxes
Federal Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Federal Income Taxes | Federal Income Taxes The components of income tax expense for the years indicated are as follows: Year Ended December 31, 2019 2018 (In thousands) Current $ 2,453 $ 3,973 Deferred 109 (280 ) Total income tax expense $ 2,562 $ 3,693 A reconciliation of the tax provision based on the statutory corporate rate of 21% for the year ended December 31, 2019, and 2018, on pretax income is as follows: Year Ended December 31, 2019 2018 (In thousands) Income tax expense at statutory rate $ 2,715 $ 3,904 Income tax effect of: Tax exempt interest, net (25 ) (53 ) BOLI income, net (203 ) (150 ) Other, net 75 (8 ) Total income tax expense $ 2,562 $ 3,693 The deferred tax assets and liabilities, included in the accompanying consolidated balance sheets, consisted of the following at the dates indicated: December 31, 2019 2018 (In thousands) Deferred tax assets: ALLL $ 2,775 $ 2,801 Reserve for unfunded commitments 90 96 Deferred compensation 272 293 Net unrealized loss on investments available-for-sale 146 640 Employee benefit plans 487 527 OREO market value adjustments 10 4 Accrued expenses 93 111 Core deposit intangible 30 18 Expenses to facilitate branch acquisition 24 26 Split dollar life insurance 67 51 Deferred lease — 18 Lease liability 479 — Total deferred tax assets $ 4,473 $ 4,585 Deferred tax liabilities: FHLB stock dividends 16 110 Loan origination fees and costs 940 903 Gain on fair value of cash flow hedge 89 349 Fixed assets 1,387 1,271 Goodwill 29 17 Right of use asset 464 — Other, net 47 91 Total deferred tax liabilities $ 2,972 $ 2,741 Deferred tax assets, net $ 1,501 $ 1,844 Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. These calculations are based on many complex factors including estimates of the timing of reversals of temporary differences, the interpretation of federal income tax laws, and a determination of the differences between the tax and the financial reporting basis of assets and liabilities. Actual results could differ significantly from the estimates and interpretations used in determining the current and deferred income tax assets and liabilities. At December 31, 2019 and 2018 , the Company had no net operating loss carryforward. As a result of the bad debt deductions taken in years prior to 1988, retained earnings includes accumulated earnings of approximately $4.5 million , on which federal income taxes have not been provided. If, in the future, this portion of retained earnings is used for any purpose other than to absorb losses on loans or on property acquired through foreclosure, federal income taxes may be imposed at the then-prevailing corporate tax rates. The Bank does not contemplate that such amounts will be used for any purpose that would create a federal income tax liability; therefore no provision has been made. Under GAAP, a valuation allowance is required to be recognized if it is “more likely than not” that a portion of the deferred tax asset will not be realized. In order to support a conclusion that a valuation allowance is not needed, management evaluates both positive and negative evidence under the “more likely than not” standard. The weight given to the potential effect of negative and positive evidence should be commensurate with the extent to which the strength of the evidence can be objectively verified. As of December 31, 2019, it was determined the full deferred tax asset would be realized in future periods and a valuation allowance would not be necessary. The Company had no unrecognized tax benefits at December 31, 2019 or 2018, and recognized no interest or tax penalties. The Company has filed U.S. federal income tax returns as well as California state income tax returns. Income tax returns filed are subject to examination by the U.S. federal, state, and local income tax authorities. While no income tax returns are currently being examined, the Company is no longer subject to tax examination by tax authorities for years prior to 2016. |
Regulatory Capital Requirements
Regulatory Capital Requirements | 12 Months Ended |
Dec. 31, 2019 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Regulatory Capital Requirements | Regulatory Capital Requirements Under Federal regulations, pre-conversion retained earnings are restricted for the protection of pre-conversion depositors. The Company is a bank holding company under the supervision of the Federal Reserve Bank of San Francisco. Bank holding companies are subject to capital adequacy requirements of the Board of Governors of the Federal Reserve System (the “Federal Reserve”) under the Bank Holding Company Act of 1956, as amended, and the regulations of the Federal Reserve Board, except that, pursuant to the Economic Growth, Regulatory Relief and Consumer Protection Act, effective August 30, 2018, a bank holding company with consolidated assets of less than $3 billion is generally not subject to the Federal Reserve’s capital regulations, which parallel the FDIC’s capital regulations. The Bank is a federally insured institution and thereby is subject to the capital requirements established by the FDIC. Failure to meet minimum capital requirements can initiate certain mandatory and, possibly, additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital regulations that involve quantitative measures of their assets, liabilities, and certain off-balance- sheet items as calculated under regulatory accounting practices, and until August 30, 2018, First Financial Northwest was subject to similar capital regulations. The Company was not subject to regulatory requirements for bank holding companies at December 31, 2019, and 2018, as its assets were less than the $3.0 billion threshold. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table that follows) of total and Tier 1 capital to risk-weighted assets (as defined in the regulations) and of Tier 1 capital to average assets. As of December 31, 2019, according to the most recent notification from the FDIC, the Bank was categorized as well‑capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since the notification that management believes have changed the Bank’s category. First Financial Northwest Bank’s actual capital amounts and ratios at December 31, 2019 , and 2018 , are presented in the following table. To be Well Capitalized For Capital Adequacy Under Prompt Corrective Actual Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2019: Total risk-based capital $ 148,048 14.38 % $ 82,359 8.00 % $ 102,949 10.00 % Tier 1 risk-based capital 135,170 13.13 61,769 6.00 82,359 8.00 Common equity tier 1 capital (“CET1”) 135,170 13.13 46,327 4.50 66,917 6.50 Tier 1 leverage capital 135,170 10.27 52,630 4.00 65,787 5.00 December 31, 2018: Total risk-based capital $ 140,220 14.68 % $ 76,417 8.00 % $ 95,521 10.00 % Tier 1 risk-based capital 128,257 13.43 57,313 6.00 76,417 8.00 Common equity tier 1 capital 128,257 13.43 42,985 4.50 62,089 6.50 Tier 1 leverage capital 128,257 10.37 49,491 4.00 61,863 5.00 In addition to the minimum CET1, Tier 1, total capital and leverage ratios, the Bank must maintain a capital conservation buffer consisting of additional CET1 capital greater than 2.5% of risk-weighted assets above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. As of December 31, 2019, the Bank’s conservation buffer was 6.38% . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Financial Instruments with Off-Balance-Sheet Risk. In the normal course of business, the Company makes loan commitments, typically unfunded loans and unused lines of credit, to accommodate the financial needs of its customers. These arrangements have credit risk essentially the same as that involved in extending loans to customers and are subject to the Company’s normal credit policies, including collateral requirements, where appropriate. Commitments to extend credit are agreements to lend to customers in accordance with predetermined contractual provisions. These commitments are for specific periods or, may contain termination clauses and may require the payment of a fee. The total amounts of unused commitments do not necessarily represent future credit exposure or cash requirements, in that commitments can expire without being drawn upon. Unfunded commitments to originate loans or extend credit totaled $129.7 million at December 31, 2019 , and $126.1 million at December 31, 2018 . Lease Commitments. First Financial Northwest Bank has entered into lease commitments for its branches located in Mill Creek, Edmonds, Renton, Bellevue, Woodinville, Smokey Point, Lake Stevens, Bothell, Kent and Kirkland, all in Washington. For more information on the Company’s lease commitments, see Note 10 - Leases. Legal Proceedings . The Company and its subsidiaries are from time to time defendants in and are threatened with various legal proceedings arising from their regular business activities. Management, after consulting with legal counsel, is of the opinion that the ultimate liability, if any, resulting from these pending or threatened actions and proceedings will not have a material effect on the consolidated financial statements of the Company. Employment Contracts and Severance Agreements. The Company has change in control severance agreements with key officers that offer specified terms of salary coverage. In addition, the Company has employment contracts with certain executives that include specified terms of salary coverage as a result of involuntary termination due to change in control or other circumstances. At December 31, 2019, the Company had a $238,000 liability under a severance agreement that will be fully paid during 2020. |
Parent Company Only Financial S
Parent Company Only Financial Statements | 12 Months Ended |
Dec. 31, 2019 | |
Parent Company Only Financial Statements [Abstract] | |
Parent Company Only Financial Statements | Parent Company Only Financial Statements Presented below are the condensed balance sheets, income statements and statements of cash flows for First Financial Northwest. FIRST FINANCIAL NORTHWEST, INC. Condensed Balance Sheets December 31, 2019 2018 (In thousands) Assets Cash and cash equivalents $ 235 $ 140 Interest-bearing deposits 18,456 22,362 Investment in subsidiaries 136,907 130,209 Receivable from subsidiaries 990 1,207 Other assets 46 52 Total assets $ 156,634 $ 153,970 Liabilities and Stockholders’ Equity Liabilities: Payable to subsidiaries $ 128 $ 47 Deferred tax liability, net 2 2 Other liabilities 185 183 Total liabilities 315 232 Stockholders’ equity 156,319 153,738 Total liabilities and stockholders’ equity $ 156,634 $ 153,970 FIRST FINANCIAL NORTHWEST, INC. Condensed Income Statements Year Ended December 31, 2019 2018 (In thousands) Operating income: Interest income: Interest-bearing deposits with banks $ 153 $ 157 Total operating income 153 157 Operating expenses: Other expenses 1,732 1,557 Total operating expenses 1,732 1,557 Loss before benefit for federal income taxes and equity in undistributed earnings of subsidiaries (1,579 ) (1,400 ) Federal income tax benefit (363 ) (311 ) Loss before equity in undistributed loss of subsidiaries (1,216 ) (1,089 ) Equity in undistributed earnings of subsidiaries 11,585 15,988 Net income $ 10,369 $ 14,899 FIRST FINANCIAL NORTHWEST, INC. Condensed Statements of Cash Flows Year Ended December 31, 2019 2018 (In thousands) Cash flows from operating activities: Net income $ 10,369 $ 14,899 Adjustments to reconcile net income to net cash from operating activities: Equity in undistributed earnings of subsidiaries (11,585 ) (15,988 ) Dividends received from subsidiary 6,525 10,858 ESOP, stock options, and restricted stock compensation 19 28 Change in deferred tax liability, net — (7 ) Change in receivables from subsidiaries (9 ) 7 Change in payables to subsidiaries 81 (50 ) Change in other assets 6 (5 ) Changes in other liabilities 2 (47 ) Net cash provided by operating activities 5,408 9,695 Cash flows from investing activities: Investments in subsidiaries 277 334 ESOP loan repayment 1,354 2,833 Net cash provided in investing activities 1,631 3,167 Cash flows from financing activities: Proceeds from exercise of stock options 21 1,365 Proceeds for vested awards 106 206 Net share settlement of stock awards (93 ) (40 ) Repurchase and retirement of common stock (7,406 ) (3,153 ) Dividends paid (3,478 ) (3,198 ) Net cash used by financing activities (10,850 ) (4,820 ) Net increase (decrease) in cash (3,811 ) 8,042 Cash and cash equivalents at beginning of year 22,502 14,460 Cash and cash equivalents at end of year $ 18,691 $ 22,502 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table presents a reconciliation of the components used to compute basic and diluted EPS for the periods indicated. Year Ended December 31, 2019 2018 (Dollars in thousands, except share data) Net income $ 10,369 $ 14,899 Earnings allocated to participating securities (16 ) (28 ) Earnings allocated to common shareholders $ 10,353 $ 14,871 Basic weighted-average common shares outstanding 9,976,056 10,306,835 Dilutive effect of stock options 93,446 108,503 Dilutive effect of restricted stock grants 6,404 8,849 Diluted weighted-average common shares outstanding 10,075,906 10,424,187 Basic earnings per share $ 1.04 $ 1.44 Diluted earnings per share $ 1.03 $ 1.43 Potential dilutive shares are excluded from the computation of EPS if their effect is anti-dilutive. For the years ended December 31, 2019 and 2018 there were no anti-dilutive shares outstanding related to options to acquire common stock. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition In accordance with Topic 606, revenues are recognized when goods or services are transferred to the customer in exchange for the consideration the Company expects to be entitled to receive. To determine the appropriate recognition of revenue for transactions within the scope of Topic 606, the Company performs the following five steps: (i) identify the contract(s) with the customer; (ii) identify the separate performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the separate performance obligations in the contract; and (v) recognize revenue when the entity satisfies a performance obligation. A contract may not exist if there are doubts as to collectability of the amounts the Company is entitled to in exchange for the goods or services transferred. If a contract is determined to be within the scope of Topic 606, the Company recognizes revenue as it satisfies a performance obligation. The largest portion of the Company’s revenue is from net interest income which is not within the scope of Topic 606. Disaggregation of Revenue The following table includes the Company’s noninterest income disaggregated by type of service for the years ended December 31, 2019 and 2018 : Year Ended December 31, 2019 2018 (In thousands) Gain (loss) on sales of investment securities (1) $ 151 $ (20 ) BOLI income (1) 994 814 Wealth management revenue 879 611 Deposit servicing fees 284 265 Debit card and ATM fees 449 416 Loan servicing fees 681 425 Loan interest swap servicing fees 663 343 Other 40 24 Total noninterest income $ 4,141 $ 2,878 ____________ (1) Not in scope of Topic 606 For the year ended December 31, 2019, substantially all of the Company’s revenues under the scope of Topic 606 are for performance obligations satisfied at a specified date. Revenues recognized within scope of Topic 606 Wealth management revenue: Our wealth management revenue consists of commissions received on the investment portfolio managed by Bank personnel but held by a third party. Commissions are earned on brokerage services and advisory services based on contract terms at the onset of a new customer’s investment agreement or quarterly for ongoing services. Commissions are paid by the third party to the Bank when the performance obligation has been completed by both entities. Deposit related fees: Fees are earned on our deposit accounts for various products or services performed for our customers. Fees include business account fees, non-sufficient fund fees, stop payment fees, wire services, safe deposit box, and others. These fees are recognized on a daily, monthly or annual basis, depending on the type of service. Debit card and ATM fees: Fees are earned when a debit card issued by the Bank is used or when other bank’s customers use our ATM services. Revenue is recognized at the time the fees are collected from the customer’s account or remitted by the VISA interchange network. Loan related fees: Noninterest fee income is earned on our loans for servicing or annual fees on certain loan types. Fees are also earned on the prepayment of certain loans, and are recognized at the time the loan is paid off. Loan interest swap fees: For loans participating in an interest rate swap agreement, servicing fees are earned at the onset of the agreement and are not contingent on any future performance or term length of the loan itself. The performance obligation is satisfied by entering into the contract and receipt of the fees from the counterparty. Other: Fees earned on other services, such as merchant services or occasional non-recurring type services, are recognized at the time of the event or the applicable billing cycle. Contract Balances At December 31, 2019, the Company had no contract liabilities where the Company had an obligation to transfer goods or services for which the Company had already received consideration. In addition, the Company had no material performance obligations as of this date. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 6, 2020, the Company’s Board of Directors authorized the repurchase of up to five percent (5%) of the Company’s outstanding common stock, or approximately 513,000 shares beginning no earlier than January 27, 2020 and ending no later than July 27, 2020. The Company will purchase the shares from time to time in the open market or through privately negotiated depending on market conditions and other corporate considerations. On January 10, 2020, the Company entered into new post-employment benefit agreements with certain key officers to provide supplemental retirement benefits. Under the terms of the agreement, total annuities of $2.4 million were purchased. These annuities will be reported as held-to-maturity investments on the Company’s balance sheet. In addition, a rider endorsement is attached to the annuity policy which provides continued benefit payments for the life of the annuitant. The annual cost of the rider will be offset against the annuity balance. Post-retirement benefits will be paid out of the annuity until the balance is exhausted. At that time, the rider endorsement continues payments for the life of the annuitant. During the remaining service period of each officer covered by these agreements, a benefit liability will accrue and a compensation expense will be recognized. A deferred tax asset will also be recognized at 21% of the compensation expense. As post-retirement benefits are paid from the annuity, the benefit liability will amortize until it is fully depleted when the policy rider is activated. The deferred compensation recognized in the deferred tax asset will be recognized as a tax benefit during the post-retirement payment period. On February 14, 2020, the Company announced that its Board of Directors has declared a quarterly cash dividend of $0.10 per share on the Company’s outstanding common stock, an increase of $0.01 per share from its previous quarterly payout. The payout results in an annualized dividend yield of approximately 2.63% based on the stock price as of February 13, 2020. The cash dividend will be payable on March 27, 2020, to shareholders of record on March 13, 2020. On March 2, 2020, the Bank entered into three $15.0 million cash flow hedges wherein the Bank will pay a fixed rate and receive a floating rate based on one month LIBOR (or an alternative substitute if LIBOR becomes unavailable in the future.) Specific terms are as follows: Notional amount Fixed rate Term $ 15,000,000 0.911 % 6 years 15,000,000 0.937 7 years 15,000,000 0.984 8 years |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Transfer of Financial Assets | Transfer of Financial Assets Transfers of an entire financial asset, a group of entire financial assets, or participating interest in an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Bank, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Bank does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Basis of Presentation and Use of Estimates | Nature of Operations and Principles of Consolidation First Financial Northwest, Inc. (“First Financial Northwest”), a Washington corporation, was formed on June 1, 2007 for the purpose of becoming the holding company for First Financial Northwest Bank (“the Bank”) in connection with the conversion from a mutual holding company structure to a stock holding company structure completed on October 9, 2007. First Financial Northwest’s business activities generally are limited to passive investment activities and oversight of its investment in First Financial Northwest Bank. Accordingly, the information presented in the consolidated financial statements and related data, relates primarily to First Financial Northwest Bank. First Financial Northwest converted from a savings and loan holding company to a bank holding company in 2015 and is subject to regulation by the Board of Governors of the Federal Reserve Bank of San Francisco (“FRB”). First Financial Northwest Bank is regulated by the Federal Deposit Insurance Corporation (“FDIC”) and the Washington State Department of Financial Institutions (“DFI”). First Financial Northwest Bank was organized in 1923 as a Washington state-chartered savings and loan association, converted to a federal mutual savings and loan association in 1935, and converted to a Washington state-chartered mutual savings bank in 1992. In 2002, First Financial Northwest Bank reorganized into a two-tier mutual holding company structure, became a stock savings bank and became the wholly-owned subsidiary of First Financial of Renton, Inc. In connection with the mutual to stock conversion in 2007, the Bank changed its name to First Savings Bank Northwest. In August 2015, the Bank changed its name to First Financial Northwest Bank to support the expansion of focus to being more than a traditional “savings” bank. In February 2016, the Bank changed its charter from a Washington chartered stock savings bank to a Washington chartered commercial bank. First Financial Northwest Bank is a community-based commercial bank primarily serving King and Snohomish Counties, and to a lesser extent, Pierce and Kitsap Counties, Washington. In King County, the headquarters and full-service banking office, as well as one branch office, are located in Renton. Additional King County branch offices are located in Bellevue, Woodinville, Bothell, and Kent. In Snohomish County, five additional branch offices serve Mill Creek, Edmonds, Clearview, Smokey Point, and Lake Stevens. First Financial Northwest Bank’s business consists of attracting deposits from the public and utilizing these deposits to originate one-to-four family residential, multifamily, commercial real estate, construction/land, business and consumer loans. First Financial Diversified Corporation (“FFD”), a wholly-owned subsidiary of First Financial Northwest, held a portfolio of one-to-four family, land and consumer loans that were serviced by the Bank, however, at December 31, 2019, FFD’s loan portfolio had been fully paid off. The accompanying consolidated financial statements include the accounts of First Financial Northwest and its wholly‑owned subsidiaries First Financial Northwest Bank and First Financial Diversified Corporation (collectively, “the Company”). All significant intercompany balances and transactions between First Financial Northwest and its subsidiaries have been eliminated in consolidation. Basis of Presentation and Use of Estimates The accounting and reporting policies of First Financial Northwest and its subsidiaries conform to U.S. generally accepted accounting principles (“GAAP”). In preparing the consolidated financial statements, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided. Actual results could differ from these estimates. Material estimates particularly subject to change include the allowance for loan and lease losses (“ALLL”), other real estate owned (“OREO”), deferred tax assets and the fair values of financial instruments. |
Subsequent Events | Subsequent Events The Company has evaluated events and transactions subsequent to December 31, 2019 for potential recognition or disclosure. For more information, see Note 19 - Subsequent Events. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand and in banks, interest-bearing deposits and federal funds sold all with maturities of three months or less. The Bank is required to maintain an average reserve balance with the FRB or maintain such reserve balance in the form of cash. At December 31, 2019, a $750,000 reserve was required and was maintained with the FRB. At December 31, 2018, cash balances were sufficient where no additional reserve was required. |
Investments | Investments Investments are classified into one of three categories: (1) held-to-maturity, (2) available-for-sale, or (3) trading. We had no held-to-maturity or trading securities at December 31, 2019, or 2018. Investments are categorized as held-to-maturity when we have the positive intent and ability to hold them to maturity. Investments are classified as available-for-sale if the Company intends to hold the securities for an indefinite period of time, but not necessarily to maturity. Investments available-for-sale are reported at fair value. Unrealized holding gains and losses on investments available-for-sale are excluded from earnings and are reported in other comprehensive income (loss), net of applicable taxes. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Amortization or accretion of purchase premiums and discounts are included in investment income using the level-yield method over the remaining period to contractual maturity. Dividend or interest income is recognized when it is earned. The estimated fair value of investments is based on quoted market prices for investments traded in active markets or dealer quotes. Mortgage-backed investments represent participation interest in pools of first mortgage loans originated and serviced by the issuers of the investments. Management makes an assessment to determine whether there have been any events or economic circumstances to indicate that a security on which there is an unrealized loss is impaired on an other-than-temporary basis. Management considers many factors including the severity and duration of the impairment, recent events specific to the issuer or industry, and for debt securities, external credit ratings and recent downgrades. Securities on which there is an unrealized loss that is deemed to be an other-than-temporary impairment (“OTTI”) are written down to fair value. For equity securities, the write-down is recorded as a realized loss in noninterest income in the Consolidated Income Statements. For debt securities, if management intends to sell the security or it is likely that management will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings as an OTTI. If management does not intend to sell the security and it is not likely that management will be required to sell the security but management does not expect to recover the entire amortized cost basis of the security, only the portion of the impairment loss representing credit losses would be recognized in earnings. The credit loss on a security is measured as the difference between the amortized cost basis and the present value of the cash flows expected to be collected. Projected cash flows are discounted by the original or current effective interest rate depending on the nature of the security being measured for potential OTTI. The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to other comprehensive income (“OCI”). Impairment losses related to all other factors are presented as separate categories within OCI. |
Loans Receivable | Loans Receivable Loans are recorded at their outstanding principal balance adjusted for charge-offs, the ALLL and net deferred fees or costs. Interest on loans is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. The accrual of interest on loans is discontinued at the time the loan is 90 days delinquent unless the loan is well secured and in the process of collection. Consumer and other loans are typically managed in the same manner. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is doubtful. All interest accrued but not collected on loans that are placed on nonaccrual is reversed against interest income. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. In order to return a nonaccrual loan to accrual status, each loan is evaluated on a case-by-case basis. We evaluate the borrower’s financial condition to ensure that future loan payments are reasonably assured. We also take into consideration the borrower’s willingness and ability to make the loan payments and historical repayment performance. We require the borrower to make the loan payments consistently for a period of at least six months as agreed to under the terms of any modified loan agreement before we will consider reclassifying the loan to accrual status. |
Allowance for Loan and Lease Losses (ALLL) | Allowance for Loan and Lease Losses The allowance for loan and lease losses (“ALLL”) is a valuation allowance for probable incurred credit losses. Losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Any subsequent recoveries are credited to the allowance. The ALLL is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans and factors such as the nature and volume of the loan portfolio, historical loss considerations, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. The evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions or changes to the credit quality of the loan portfolio. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s ALLL. Such agencies may require management to make adjustments to the allowance based on their judgments about information available to them at the time of their examination. |
Impaired Loans | Impaired Loans A loan is considered 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 determining impairment include payment status, collateral value, market conditions, rent rolls and the financial strength of the borrower(s) and guarantor(s), if any. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrowers, including the length of the delay, the reasons for the delay, the borrower’s prior payment history and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured by the fair value method on a loan-by-loan basis. When a loan is identified as impaired, its impairment is measured using the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole (remaining) source of repayment for the loan is the operation or liquidation of the collateral. In these cases, the Company uses an observable market price or current fair value of the collateral, less certain completion costs and closing costs when foreclosure is probable, instead of discounted cash flows. The Company obtains annual updated appraisals for impaired collateral dependent loans that exceed $1.0 million . In addition, the Company may order appraisals on properties not included within these guidelines when there are extenuating circumstances where the Company is not otherwise able to determine the fair value of the property. Appraised values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation and/or management’s expertise and knowledge of the borrower. If management determines that the value of the impaired loan is less than the recorded investment in the loan, an impairment is recognized through an allowance estimate or a charge-off to the ALLL. |
Troubled Debt Restructurings | Troubled Debt Restructurings Certain loan modifications or restructurings are accounted for as troubled debt restructurings (“TDR”). In general, the modification or restructuring of a debt is considered a TDR if, for economic or legal reasons related to the borrower’s financial difficulties, a concession is granted to the borrower that the Company would not otherwise consider. Examples of these modifications or restructurings include advancement of maturity date, accepting interest only payments for a period of time, or granting an interest rate concession for a period of time. The impaired portion of the loan with an interest rate concession and/or interest-only payments for a specific period of time are calculated based on the present value of expected future cash flows discounted at the loan’s effective interest rate. The effective interest rate is the rate of return implicit on the original loan. This impaired amount reduces the ALLL and a valuation allowance is established to reduce the loan balance. As loan payments are received in future periods, the ALLL entry is reversed and the valuation allowance is reduced utilizing the level-yield method over the modification period. A loan that is determined to be classified as a TDR is generally reported as a TDR until the loan is paid in full or otherwise settled, sold, or charged-off. |
Premises and Equipment | Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives used to compute depreciation and amortization is 15 to 40 years for buildings and building improvements, and is three to seven years for furniture, fixtures, and equipment. Leasehold improvements are amortized over the life of the lease. Management reviews buildings, improvements and equipment for impairment on an annual basis or whenever events or changes in the circumstances indicate that the undiscounted cash flows for the property are less than its carrying value. If identified, an impairment loss is recognized through a charge to earnings based on the fair value of the property. |
Federal Home Loan Bank Stock | Federal Home Loan Bank Stock As a member of the Federal Home Loan Bank System, the Bank is required to maintain a minimum level of investment in the Federal Home Loan Bank of Des Moines (“FHLB”) stock, based on specified percentages of total assets and the Bank’s outstanding FHLB advances. Ownership of FHLB stock is restricted to the FHLB and member institutions. The Bank’s investment in FHLB stock is carried at par value ( $100 per share), which reasonably approximates its fair value. |
Other Real Estate Owned | Other Real Estate Owned OREO consists principally of properties acquired through foreclosure and is stated at the lower of cost or estimated market value less selling costs. Losses arising from the acquisition of property, in full or partial satisfaction of loans, are charged to the ALLL. Subsequent to the transfer of foreclosed assets held for sale, the assets continue to be recorded at the lower of cost or fair value (less estimated costs to sell), based on periodic evaluations. Subsequent write-downs in value are charged to noninterest expense. Generally, legal and professional fees associated with foreclosures are expensed as incurred. Costs incurred to improve property prior to sale are capitalized; however, in no event are recorded costs allowed to exceed estimated fair value. Subsequent gains, losses, or expenses recognized on the sale of these properties are included in noninterest expense. The amounts that will ultimately be recovered from foreclosed assets may differ substantially from the carrying value of the assets because of future market factors beyond management’s control. |
Bank-Owned Life Insurance | Bank-Owned Life Insurance The Company has purchased life insurance on certain key executives and officers. Bank-owned life insurance (“BOLI”) is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Increases to the cash surrender value are recorded as noninterest income and partially offset expenses for employee benefits. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as unused lines of credit and commercial letters of credit issued to meet customer financing needs. The face amount of these items represents the exposure to loss before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. |
Reserve for Unfunded Commitments | Reserve for Unfunded Commitments Management maintains a reserve for unfunded commitments to absorb probable losses associated with our off-balance sheet commitments to lend funds such as unused lines of credit and the undisbursed portion of construction loans. Management determines the adequacy of the reserve based on reviews of individual exposures, current economic conditions, and other relevant factors. The reserve is based on estimates and ultimate losses may vary from the current estimates. The reserve is evaluated on a regular basis and necessary adjustments are reported in earnings during the period in which they become known. The reserve for unfunded commitments is included in the other liabilities section of the consolidated balance sheets. |
Stock-Based Compensation | Stock-Based Compensation Compensation cost is recognized for stock options and restricted stock awards, based on the fair value of these awards at the grant date. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the grant date is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. |
Federal Income Taxes | Federal Income Taxes The Company files a consolidated Federal income tax return and records its provision for income taxes under the asset and liability method. Deferred taxes result from temporary differences in the recognition of certain income and expense amounts between the Company’s financial statements and its tax return. The principal items giving rise to these differences include net operating losses, valuation adjustments on foreclosed properties, and allowance for credit losses. Deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not that all or some portion of the potential deferred tax asset will not be realized. The Company’s policy is to recognize interest and penalties associated with income tax matters in income tax expense. |
Employee Stock Ownership Plan | Employee Stock Ownership Plan The cost of shares issued to the Employee Stock Ownership Plan (“ESOP”), but not yet allocated to participants, is shown as a reduction of stockholders’ equity. Compensation expense is based on the market price of shares as they are committed to be released to participant accounts. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce debt and accrued interest. |
Earnings Per Share (EPS) | Earnings Per Share Nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are included in the computation of earnings per share (“EPS”) pursuant to the two-class method. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared or accumulated and participation rights in undistributed earnings. Certain shares of the Company’s nonvested restricted stock awards qualify as participating securities. Net income is allocated between the common stock and participating securities pursuant to the two-class method, based on their rights to receive dividends, participate in earnings or absorb losses. Basic earnings per common share is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period, excluding participating nonvested restricted shares. As ESOP shares are committed to be released, they are included in the outstanding shares used in the basic EPS calculation. Diluted earnings per share is computed in a similar manner, except that first the denominator is increased to include the number of additional shares that would have been outstanding if potentially dilutive shares, excluding the participating securities, were issued using the treasury stock method. For all periods presented, stock options and certain restricted stock awards are potentially dilutive non-participating instruments issued by the Company. Undistributed losses are not allocated to the nonvested share-based payment awards (the participating securities) under the two-class method as the holders are not contractually obligated to share in the losses of the Company. |
Comprehensive Income | Comprehensive Income Comprehensive income consists of net income and unrealized gains and losses on investments available-for-sale and derivatives, which are also recognized as separate components of equity, net of tax. |
Advertising Expenses | Advertising Expenses Advertising costs are generally expensed as incurred and are not material. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. |
Segment Information | Segment Information The Company’s activities are considered to be a single industry segment for financial reporting purposes. The Company is engaged in the business of attracting deposits from the general public and providing lending services. Substantially all income is derived from a diverse base of investments and commercial, construction, mortgage, and consumer lending activities. |
Reclassification | Reclassification Certain amounts in the consolidated financial statements for prior years have been reclassified to conform to the current consolidated financial statement presentation. The results of the reclassifications are not considered material and have no effect on previously reported net income or stockholders’ equity. |
Derivatives | Derivatives The Company designates certain interest rate swap agreements as a cash flow hedge, and as such, reports the net fair value as an asset or liability. The hedge is utilized to mitigate the risk of variability in future interest payments. The fair value of the cash flow hedge is based on dealer quotes, pricing models, discounted cash flow methodologies or similar techniques for which the determination of fair value may require significant management judgment or estimation. The derivative is marked to its fair value, with the change in fair value recorded as other comprehensive income or loss. The gain or loss on the derivative is reclassified into earnings in the same income statement line item that is used to present the earnings effect of the hedged item. |
Recently Issued Accounting Pronouncements | Recent Accounting Pronouncements Adopted in 2019 In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) . ASU No. 2016-02 requires lessees to recognize on the balance sheet the assets and liabilities arising from operating leases. In July 2018, FASB issued ASU No. 2018-11, Leases (Topic 842) to address the comparative reporting requirements when this ASU is adopted. In March 2019, FASB issued ASU 2019-01, Leases (Topic 842), Codification Improvements. Under these ASUs, a lessee should recognize a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. A lessee should include payments to be made in an optional period only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease. For a finance lease, interest payments should be recognized separately from amortization of the right-of-use asset in the statement of comprehensive income. For operating leases, the lease cost should be allocated over the lease term on a generally straight-line basis. The Company adopted this ASU on January 1, 2019, and according to ASU 2018-11, elected to recognize the related cumulative-effect adjustment as an adjustment to the opening balance of retained earnings. Adoption of ASU 2016-02 resulted in the addition of a right-of-use asset and lease liability related to certain banking offices under noncancelable operating lease agreements. The resulting increase did not have a material impact on the Company’s consolidated financial statements or regulatory capital ratios. For more information see Note 10 - Leases. In March 2017, FASB issued ASU No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The ASU shortens the amortization period for certain callable debt securities held at a premium. The Company adopted this ASU as of January 1, 2019, with no material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) as amended by ASU 2018-19, ASU 2019-04 and ASU 2019-05, was originally issued in June 2016 . This ASU replaces the existing incurred loss impairment methodology that recognizes credit losses when a probable loss has been incurred with new methodology where loss estimates are based upon lifetime expected credit losses. The amendments in this ASU require a financial asset that is measured at amortized cost to be presented at the net amount expected to be collected. The income statement would then reflect the measurement of credit losses for newly recognized financial assets as well as changes to the expected credit losses that have taken place during the reporting period. The measurement of expected credit losses will be based on historical information, current conditions, and reasonable and supportable forecasts that impact the collectability of the reported amount. Available-for-sale securities will bifurcate the fair value mark and establish an allowance for credit losses through the income statement for the credit portion of that mark. The interest portion will continue to be recognized through accumulated other comprehensive income or loss. The change in allowance recognized as a result of adoption will occur through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the ASU is adopted. This ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted for smaller reporting companies, such as the Company. The Company is evaluating its current expected loss methodology on the loan and investment portfolios to identify the necessary modifications in accordance with this standard and expects a change in the processes and procedures to calculate the ALLL, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. A valuation adjustment to the ALLL or investment portfolio that is identified in this process will be reflected as a one-time adjustment in equity rather than earnings. ASU 2019-05 issued in April 2019 further provides that entities that have certain financial instruments measured at amortized cost that has credit losses, to irrevocably elect the fair value option in Subtopic 825-10, upon adoption of Topic 326. The fair value option applies to available-for-sale debt securities. This ASU is effective upon adoption of ASU 2016-13, and should be applied on a modified-retrospective basis as a cumulative-effect adjustment to the opening balance of retained earnings in the statement of financial condition as of the adoption date. The Company is in the process of compiling historical and industry data that will be used to calculate expected credit losses on the loan portfolio to ensure that it is fully compliant with the ASU at the adoption date and is evaluating the potential impact adoption of this ASU will have on its consolidated financial statements. The Company intends to adopt ASU 2016-13 in the first quarter of 2023, and as a result, the ALLL may increase. Until the evaluation is complete, however, the magnitude of the increase will not be known. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments [Abstract] | |
Available-for-sale Securities | The following tables summarize the amortized cost and fair value of investments available-for-sale at December 31, 2019 and 2018 , and the corresponding amounts of gross unrealized gains and losses. December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Mortgage-backed investments: Fannie Mae $ 15,605 $ 128 $ (104 ) $ 15,629 Freddie Mac 4,196 96 — 4,292 Ginnie Mae 23,239 140 (329 ) 23,050 Other 11,407 66 (25 ) 11,448 Municipal bonds 10,675 272 (36 ) 10,911 U.S. Government agencies 46,672 13 (935 ) 45,750 Corporate bonds 25,500 372 (351 ) 25,521 $ 137,294 $ 1,087 $ (1,780 ) $ 136,601 December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Mortgage-backed investments: Fannie Mae $ 24,276 $ 24 $ (657 ) $ 23,643 Freddie Mac 6,351 10 (74 ) 6,287 Ginnie Mae 23,311 — (1,250 ) 22,061 Other 8,983 17 (21 ) 8,979 Municipal bonds 10,615 49 (120 ) 10,544 U.S. Government agencies 48,190 73 (825 ) 47,438 Corporate bonds 23,490 399 (671 ) 23,218 $ 145,216 $ 572 $ (3,618 ) $ 142,170 |
Schedule of Available for sale Securities, Debt Maturities | Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Investments not due at a single maturity date, primarily mortgage‑backed investments are shown separately. December 31, 2019 Amortized Cost Fair Value (In thousands) Due within one year $ 496 $ 498 Due after one year through five years 6,597 6,738 Due after five years through ten years 18,664 18,613 Due after ten years 57,090 56,333 82,847 82,182 Mortgage-backed investments 54,447 54,419 $ 137,294 $ 136,601 |
Gain (Loss) on Investments | Sales and other redemptions of available-for-sale investments were as follows: Year Ended December 31, 2019 2018 (In thousands) Proceeds $ 14,260 $ 17,159 Gross gains 190 9 Gross losses (39 ) (29 ) |
Schedule of Available for sale Securities in Continuous Unrealized Loss positions | The following tables summarize the aggregate fair value and gross unrealized loss by length of time those investments have been continuously in an unrealized loss position at December 31, 2019 and 2018 . December 31, 2019 Less Than 12 Months 12 Months or Longer Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (In thousands) Mortgage-backed investments: Fannie Mae $ 8,340 $ (104 ) $ — $ — $ 8,340 $ (104 ) Freddie Mac — — — — — — Ginnie Mae 156 — 12,921 (329 ) 13,077 (329 ) Other 2,843 (7 ) 6,000 (18 ) 8,843 (25 ) Municipal bonds 3,257 (36 ) — — 3,257 (36 ) U.S. Government agencies 12,266 (201 ) 31,490 (734 ) 43,756 (935 ) Corporate bonds 1,996 (12 ) 7,161 (339 ) 9,157 (351 ) $ 28,858 $ (360 ) $ 57,572 $ (1,420 ) $ 86,430 $ (1,780 ) December 31, 2018 Less Than 12 Months 12 Months or Longer Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (In thousands) Mortgage-backed investments: Fannie Mae $ 5,480 $ (32 ) $ 16,721 $ (625 ) $ 22,201 $ (657 ) Freddie Mac 1,994 (23 ) 3,185 (51 ) 5,179 (74 ) Ginnie Mae 2,867 (8 ) 19,194 (1,242 ) 22,061 (1,250 ) Other 6,008 (21 ) — — 6,008 (21 ) Municipal bonds 4,161 (46 ) 934 (74 ) 5,095 (120 ) U.S. Government agencies 5,985 (13 ) 30,779 (812 ) 36,764 (825 ) Corporate bonds — — 6,828 (671 ) 6,828 (671 ) $ 26,495 $ (143 ) $ 77,641 $ (3,475 ) $ 104,136 $ (3,618 ) |
Loans Receivable (Tables)
Loans Receivable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Loans receivable net of loans in process (“LIP”) at December 31, 2019 , and 2018 are summarized as follows: December 31, 2019 2018 (In thousands) One-to-four family residential: Permanent owner occupied $ 210,898 $ 194,141 Permanent non-owner occupied 161,630 147,825 372,528 341,966 Multifamily: Permanent 172,915 169,355 172,915 169,355 Commercial real estate: Permanent 395,152 373,798 395,152 373,798 Construction/land: (1) One-to-four family residential 44,491 51,747 Multifamily 40,954 40,502 Commercial 19,550 9,976 Land 8,670 6,629 113,665 108,854 Business 37,779 30,486 Consumer 30,199 12,970 Total loans 1,122,238 1,037,429 Less: Deferred loan fees, net 558 1,178 Allowance for loan and lease losses ("ALLL") 13,218 13,347 Loans receivable, net $ 1,108,462 $ 1,022,904 ____________ (1) Included in the construction/land category are “rollover” loans, which are loans that will convert upon completion of the construction period to permanent loans. At that time, the loans will be classified according to the underlying collateral. In addition, raw land or buildable lots, where the Company does not intend to finance the construction are included in the construction/land category. At December 31, 2019 , we classified $38.6 million of multifamily loans, $8.7 million of commercial land loans, $3.5 million of one-to-four family residential and $18.3 million of commercial real estate loans as construction/land loans to facilitate the review of the composition of our loan portfolio. At December 31, 2018 , $25.2 million of multifamily loans, $6.2 million of commercial land loans, $602,000 one-to-four family residential and $10.0 million of commercial real estate loans were reclassified to the construction/land category. Accrued interest receivable consisted of the following at December 31, 2019 and 2018 : December 31, 2019 2018 (In thousands) Loans receivable $ 3,518 $ 3,366 Investments 603 699 Interest-earning deposits 17 3 $ 4,138 $ 4,068 |
Financing Receivables, Summary of Loans By Maturity and Interest Rate Type | The Company originates both adjustable and fixed interest rate loans. The composition of loans receivable at December 31, 2019 , and 2018 , was as follows: December 31, 2019 Fixed Rate Adjustable Rate Term to Maturity Principal Balance Term to Rate Adjustment Principal Balance (In thousands) Due within one year $ 29,997 Due within one year $ 297,221 After one year through three years 63,055 After one year through three years 102,248 After three years through five years 68,659 After three years through five years 137,487 After five years through ten years 126,762 After five years through ten years 86,404 Thereafter 207,055 Thereafter 3,350 $ 495,528 $ 626,710 December 31, 2018 Fixed Rate Adjustable Rate Term to Maturity Principal Balance Term to Rate Adjustment Principal Balance (In thousands) Due within one year $ 44,445 Due within one year $ 248,739 After one year through three years 53,076 After one year through three years 98,652 After three years through five years 56,194 After three years through five years 105,929 After five years through ten years 125,884 After five years through ten years 112,449 Thereafter 192,061 Thereafter — $ 471,660 $ 565,769 |
Schedule of Allowance for Loan and Lease Losses, Roll Forward | The following tables summarize changes in the ALLL and loan portfolio by type of loan and reserve method for the periods indicated. At or For the Year Ended December 31, 2019 One-to-Four Family Residential Multifamily Commercial Real Estate Construction/ Land Business Consumer Total ALLL: (In thousands) Beginning balance $ 3,387 $ 1,680 $ 4,777 $ 2,331 $ 936 $ 236 $ 13,347 Charge-offs — — — — — — — Recoveries 73 45 — — — 53 171 (Recapture) provision (426 ) (118 ) (218 ) (109 ) 204 367 (300 ) Ending balance $ 3,034 $ 1,607 $ 4,559 $ 2,222 $ 1,140 $ 656 $ 13,218 General reserve $ 3,003 $ 1,607 $ 4,559 $ 2,222 $ 1,140 $ 656 $ 13,187 Specific reserve 31 — — — — — 31 Loans: Total Loans $ 372,528 $ 172,915 $ 395,152 $ 113,665 $ 37,779 $ 30,199 $ 1,122,238 Loans collectively evaluated for impairment (1) $ 368,453 170,810 393,886 101,141 37,779 30,199 1,102,268 Loans individually evaluated for impairment (2) 4,075 2,105 1,266 12,524 — — 19,970 ____________ (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 Residential Multifamily Commercial Real Estate Construction/ Land Business Consumer Total ALLL: (In thousands) Beginning balance $ 2,837 $ 1,820 $ 4,418 $ 2,816 $ 694 $ 297 $ 12,882 Charge-offs — — — — — — — Recoveries 4,279 — 14 171 — 1 4,465 (Recapture) provision (3,729 ) (140 ) 345 (656 ) 242 (62 ) (4,000 ) Ending balance $ 3,387 $ 1,680 $ 4,777 $ 2,331 $ 936 $ 236 $ 13,347 General reserve $ 3,328 $ 1,680 $ 4,774 $ 2,331 $ 936 $ 236 $ 13,285 Specific reserve 59 — 3 — — — 62 Loans: Total Loans $ 341,966 $ 169,355 $ 373,798 $ 108,854 $ 30,486 $ 12,970 $ 1,037,429 Loans collectively evaluated for impairment (1) 334,644 169,355 371,058 108,854 30,486 12,883 1,027,280 Loans individually evaluated for impairment (2) 7,322 — 2,740 — — 87 10,149 _____________ (1) Loans collectively evaluated for general reserves. (2) Loans individually evaluated for specific reserves. |
Financing Receivables, Aging of loans | The following tables represent a summary at December 31, 2019 , and 2018 , of the aging of loans by type: Loans Past Due as of December 31, 2019 30-59 Days 60-89 Days 90 Days and Greater Total Current Total Loans (1) (In thousands) Real estate: One-to-four family residential: Owner occupied $ 79 $ — $ — $ 79 $ 210,819 $ 210,898 Non-owner occupied — — — — 161,630 161,630 Multifamily 2,105 — — 2,105 170,810 172,915 Commercial real estate — — — — 395,152 395,152 Construction/land — — — — 113,665 113,665 Total real estate 2,184 — — 2,184 1,052,076 1,054,260 Business — — — — 37,779 37,779 Consumer — — — — 30,199 30,199 Total $ 2,184 $ — $ — $ 2,184 $ 1,120,054 $ 1,122,238 _________________________ (1) There were no loans 90 days past due and still accruing interest at December 31, 2019. Loans Past Due as of December 31, 2018 30-59 Days 60-89 Days 90 Days and Greater Total Current Total Loans (1) (In thousands) Real estate: One-to-four family residential: Owner occupied $ 223 $ — $ 272 $ 495 $ 193,646 $ 194,141 Non-owner occupied — — — — 147,825 147,825 Multifamily — — — — 169,355 169,355 Commercial real estate — — 326 326 373,472 373,798 Construction/land — — — — 108,854 108,854 Total real estate 223 — 598 821 993,152 993,973 Business — — — — 30,486 30,486 Consumer — — — — 12,970 12,970 Total $ 223 $ — $ 598 $ 821 $ 1,036,608 $ 1,037,429 ________________________ (1) There were no loans 90 days past due and still accruing interest at December 31, 2018. |
Schedule of non-accrual loans | The following table is a summary of nonaccrual loans at December 31, 2019 , and 2018 , by type of loan: December 31, 2019 2018 (In thousands) One-to-four family residential $ 95 $ 382 Commercial real estate — 326 Consumer — 44 Total nonaccrual loans $ 95 $ 752 |
Financing Receivables, Summary of loans by type and payment activity | The following tables summarize the loan portfolio at December 31, 2019 , and 2018 , by type and payment activity: December 31, 2019 One-to-Four Family Residential Multifamily Commercial Real Estate Construction / Land Business Consumer Total (In thousands) Performing (1) $ 372,433 $ 172,915 $ 395,152 $ 113,665 $ 37,779 $ 30,199 $ 1,122,143 Nonperforming (2) 95 — — — — — 95 Total $ 372,528 $ 172,915 $ 395,152 $ 113,665 $ 37,779 $ 30,199 $ 1,122,238 ____________ (1) There were $210.8 million of owner-occupied one-to-four family residential loans and $161.6 million of non-owner occupied one to-four family residential loans classified as performing. (2) There were $95,000 of owner-occupied one-to-four family residential loans and no non-owner occupied one-to-four family residential loans classified as nonperforming. December 31, 2018 One-to-Four Family Residential Multifamily Commercial Real Estate Construction/ Land Business Consumer Total (In thousands) Performing (1) $ 341,584 $ 169,355 $ 373,472 $ 108,854 $ 30,486 $ 12,926 $ 1,036,677 Nonperforming (2) 382 — 326 — — 44 752 Total $ 341,966 $ 169,355 $ 373,798 $ 108,854 $ 30,486 $ 12,970 $ 1,037,429 _____________ (1) There were $193.8 million of owner-occupied one-to-four family residential loans and $147.8 million of non-owner occupied one-to-four family residential loans classified as performing. (2) There were $382,000 of owner-occupied one-to-four family residential loans and no non-owner occupied one-to-four family residential loans classified as nonperforming. |
Schedule of Impaired Financing Receivables, Average Recorded Investment and Interest Income | The following tables present a summary of loans individually evaluated for impairment at December 31, 2019 , and 2018 , by the type of loan: At December 31, 2019 Recorded Investment (1) Unpaid Principal Balance (2) Related Allowance (In thousands) Loans with no related allowance: One-to-four family residential: Owner occupied $ 437 $ 582 $ — Non-owner occupied 1,486 1,486 — Multifamily 2,105 2,105 — Commercial real estate 1,266 1,266 — Construction/land 12,524 15,650 — Total 17,818 21,089 — Loans with an allowance: One-to-four family residential: Owner occupied 505 552 13 Non-owner occupied 1,647 1,647 18 Total 2,152 2,199 31 Total impaired loans: One-to-four family residential: Owner occupied 942 1,134 13 Non-owner occupied 3,133 3,133 18 Multifamily 2,105 2,105 — Commercial real estate 1,266 1,266 — Construction/land 12,524 15,650 — Total $ 19,970 $ 23,288 $ 31 _________________ (1) Represents the loan balance less charge-offs. (2) Contractual loan principal balance. At December 31, 2018 Recorded Investment (1) Unpaid Principal Balance (2) Related Allowance (In thousands) Loans with no related allowance: One-to-four family residential: Owner occupied $ 1,308 $ 1,477 $ — Non-owner occupied 2,375 2,375 — Commercial real estate 2,499 2,499 — Consumer 87 141 — Total 6,269 6,492 — Loans with an allowance: One-to-four family residential: Owner occupied 513 560 22 Non-owner occupied 3,126 3,148 37 Commercial real estate 241 241 3 Total 3,880 3,949 62 Total impaired loans: One-to-four family residential: Owner occupied 1,821 2,037 22 Non-owner occupied 5,501 5,523 37 Commercial real estate 2,740 2,740 3 Consumer 87 141 — Total $ 10,149 $ 10,441 $ 62 _____________ (1) Represents the loan balance less charge-offs. (2) Contractual loan principal balance. The following table presents a summary of the average recorded investment in impaired loans, and interest income recognized on impaired loans for the years ended December 31, 2019 and 2018 , by the type of loan: Year Ended December 31, 2019 2018 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (In thousands) Loans with no related allowance: One-to-four family residential: Owner occupied $ 852 $ 36 $ 1,207 $ 82 Non-owner occupied 1,833 94 5,583 146 Multifamily 421 111 900 — Commercial real estate 2,038 90 1,885 172 Construction/land 7,143 834 — — Consumer 43 — 91 8 Total 12,330 1,165 9,666 408 Loans with an allowance: One-to-four family residential: Owner occupied 509 34 518 35 Non-owner occupied 2,092 93 3,211 162 Commercial real estate 48 — 1,046 27 Total 2,649 127 4,775 224 Total impaired loans: One-to-four family residential: Owner occupied 1,361 70 1,725 117 Non-owner occupied 3,925 187 8,794 308 Multifamily 421 111 900 — Commercial real estate 2,086 90 2,931 199 Construction/land 7,143 834 — — Consumer 43 — 91 8 Total $ 14,979 $ 1,292 $ 14,441 $ 632 |
Schedule of Non-performing assets and troubled debt restructured loans | The following is a summary of information pertaining to TDRs: December 31, 2019 2018 (In thousands) Performing TDRs $ 5,246 $ 9,399 Nonaccrual TDRs — — Total TDRs $ 5,246 $ 9,399 |
Troubled Debt Restructurings on Financing Receivables | The following table presents for the periods indicated TDRs and their recorded investment prior to the modification and after the modification: Year Ended December 31, 2019 2018 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment (Dollars in thousands) TDRs that occurred during the period: One-to-four family residential: Principal and interest with interest rate concession 7 $ 1,360 $ 1,360 1 $ 563 $ 563 Advancement of maturity date 3 694 694 — — — Commercial real estate: Advancement of maturity date 1 855 855 — — — Total 11 $ 2,909 $ 2,909 1 $ 563 $ 563 |
Schedule of Loans to Related Parties | The change in the aggregate dollar amount of these loans outstanding to related parties is summarized as follows: Year Ended December 31, 2019 2018 (In thousands) Balance at beginning of year $ — $ 9 Repayments — (9 ) Balance at end of year $ — $ — |
Other Real Estate Owned (Tables
Other Real Estate Owned (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Real Estate [Abstract] | |
Other Real Estate, Roll Forward | The following table is a summary of OREO activity for the periods indicated: Year Ended December 31, 2019 2018 (In thousands) Balance at beginning of year $ 483 $ 483 Market value adjustments (29 ) — Balance at end of year $ 454 $ 483 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Premises and equipment consisted of the following at December 31, 2019 , and 2018 : December 31, 2019 2018 (In thousands) Land $ 2,226 $ 2,226 Buildings and improvements 20,213 19,566 Leasehold improvements 4,040 3,076 Furniture, fixtures and equipment 5,506 4,971 Computer hardware and software 3,297 2,342 35,282 32,181 Less accumulated depreciation and amortization (13,043 ) (11,357 ) Construction in process 227 507 Total premises and equipment, net $ 22,466 $ 21,331 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The tables below present the balances of assets and liabilities measured at fair value on a recurring basis (there were no transfers between Level 1, Level 2 and Level 3 recurring measurements during the periods presented): |
Schedule of balances of assets and liabilities, measured at fair value on a non-recurring basis | The tables below present the balances of assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2019 , and 2018 . December 31, 2019 Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Impaired loans (included in loans receivable, net) (1) $ 19,939 $ — $ — $ 19,939 OREO 454 — — 454 Total $ 20,393 $ — $ — $ 20,393 _______________ (1) Total value of impaired loans is net of $ 31,000 of specific reserves on performing TDRs. December 31, 2018 Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Impaired loans (included in loans receivable, net) (1) $ 10,087 $ — $ — $ 10,087 OREO 483 — — 483 Total $ 10,570 $ — $ — $ 10,570 ________________ (1) Total value of impaired loans is net of $ 62,000 of specific reserves on performing TDR |
Schedule of quantitative information about Level 3 Fair Value Measurements on a nonrecurring basis | The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at December 31, 2019 and 2018 . |
Fair Value, by Balance Sheet Grouping | December 31, 2018 Fair Value Valuation Technique(s) Unobservable Input(s) Range (Weighted Average Change in Fair Value) (Dollars in thousands) Impaired Loans $ 10,087 Market approach Appraised value discounted by market or borrower conditions 0.0% (0.00%) OREO $ 483 Market approach Appraised value less selling costs 0.0% (0.00%) The fair value calculation of the Company’s financial instruments are an attempt to incorporate market conditions at a specific point in time. The underlying assumptions are generally subjective and involve uncertainties. Therefore, these fair value estimates are not intended to represent the underlying value of the Company as a whole. The carrying amounts and estimated fair values of financial instruments at December 31, 2019 , and 2018 , were as follows: December 31, 2019 Fair Value Measurements Using: Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 (In thousands) Financial Assets: Cash on hand and in banks $ 10,094 $ 10,094 $ 10,094 $ — $ — Interest-earning deposits 12,896 12,896 12,896 — — Investments available-for-sale 136,601 136,601 — 136,601 — Loans receivable, net 1,108,462 1,096,499 — — 1,096,499 FHLB stock 7,009 7,009 — 7,009 — Accrued interest receivable 4,138 4,138 — 4,138 — Derivative fair value asset 426 426 — 426 — Financial Liabilities: Deposits 513,959 513,959 513,959 — — Certificates of deposit, retail 425,103 430,418 — 430,418 — Certificates of deposit, brokered 94,472 94,556 — 94,556 — Advances from the FHLB 137,700 137,706 — 137,706 — Accrued interest payable 285 285 — 285 — |
Accrued Interest Receivable (Ta
Accrued Interest Receivable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Interest Receivable [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Loans receivable net of loans in process (“LIP”) at December 31, 2019 , and 2018 are summarized as follows: December 31, 2019 2018 (In thousands) One-to-four family residential: Permanent owner occupied $ 210,898 $ 194,141 Permanent non-owner occupied 161,630 147,825 372,528 341,966 Multifamily: Permanent 172,915 169,355 172,915 169,355 Commercial real estate: Permanent 395,152 373,798 395,152 373,798 Construction/land: (1) One-to-four family residential 44,491 51,747 Multifamily 40,954 40,502 Commercial 19,550 9,976 Land 8,670 6,629 113,665 108,854 Business 37,779 30,486 Consumer 30,199 12,970 Total loans 1,122,238 1,037,429 Less: Deferred loan fees, net 558 1,178 Allowance for loan and lease losses ("ALLL") 13,218 13,347 Loans receivable, net $ 1,108,462 $ 1,022,904 ____________ (1) Included in the construction/land category are “rollover” loans, which are loans that will convert upon completion of the construction period to permanent loans. At that time, the loans will be classified according to the underlying collateral. In addition, raw land or buildable lots, where the Company does not intend to finance the construction are included in the construction/land category. At December 31, 2019 , we classified $38.6 million of multifamily loans, $8.7 million of commercial land loans, $3.5 million of one-to-four family residential and $18.3 million of commercial real estate loans as construction/land loans to facilitate the review of the composition of our loan portfolio. At December 31, 2018 , $25.2 million of multifamily loans, $6.2 million of commercial land loans, $602,000 one-to-four family residential and $10.0 million of commercial real estate loans were reclassified to the construction/land category. Accrued interest receivable consisted of the following at December 31, 2019 and 2018 : December 31, 2019 2018 (In thousands) Loans receivable $ 3,518 $ 3,366 Investments 603 699 Interest-earning deposits 17 3 $ 4,138 $ 4,068 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deposits [Abstract] | |
Schedule of Deposit Liabilities | Deposit accounts consisted of the following at December 31, 2019 and 2018 : December 31, 2019 2018 (In thousands) Noninterest-bearing $ 52,849 $ 46,108 Interest-bearing demand 65,897 40,079 Statement savings 17,447 24,799 Money market 377,766 339,047 Certificates of deposit, retail (1) 425,103 391,174 Certificates of deposit, brokered 94,472 97,825 $ 1,033,534 $ 939,032 _______________ (1) Shown net of $28,000 and $58,000 fair value adjustment on December 31, 2019 and 2018, respectively. |
Maturities of Certificates of Deposit | At December 31, 2019 , scheduled maturities of certificates of deposit were as follows: December 31, Amount (In thousands) 2020 $ 222,059 2021 185,208 2022 47,075 2023 50,220 2024 15,013 thereafter — $ 519,575 |
Schedule of Interest Expense on Deposits | Interest expense on deposits for the periods indicated was as follows: Year Ended December 31, 2019 2018 (In thousands) Interest-bearing demand $ 108 $ 79 Statement savings 29 34 Money market 5,027 3,550 Certificates of deposit, retail 9,549 5,825 Certificates of deposit, brokered 3,283 1,730 $ 17,996 $ 11,218 |
Other Borrowings (Tables)
Other Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Borrowings [Abstract] | |
Schedule of Federal Home Loan Bank Advances | nformation related to outstanding advances at the FHLB during the years ended December 31, 2019 , and 2018 consisted of the following: Year ended December 31, 2019 2018 (Dollars in thousands) Maximum borrowing outstanding at any month end $ 184,500 $ 224,000 Average borrowing outstanding during year 129,899 183,667 Balance outstanding at end of year 137,700 146,500 Average rate paid during the year 2.09 % 1.92 % Weighted-average rate paid at end of year 1.84 2.62 Scheduled maturities of Federal Home Loan Bank outstanding advances at December 31, 2019 , were as follows: Year Ended December 31, Balance Due Weighted Average Interest Rate at December 31, 2019 (Dollars in thousands) FHLB overnight Fed Funds $ 26,700 1.73 % 2020 111,000 1.87 $ 137,700 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lessee, Operating Lease, Liability, Maturity | The following table provides a reconciliation between the undiscounted minimum lease payments at December 31, 2019 and the discounted lease liability at that date: December 31, 2019 (in thousands) Due through one year $ 609 Due after one year through two years 433 Due after two years through three years 399 Due after three years through four years 291 Due after four years through five years 230 Due after five years 532 Total minimum lease payments 2,494 Less: present value discount 215 Lease liability $ 2,279 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table presents the fair value of derivative instruments as of December 31, 2019 and 2018 : Balance Sheet Location 2019 Fair Value 2018 Fair Value (In thousands) Interest rate swaps on FHLB debt designated as cash flow hedges Other assets $ 426 $ 1,662 Total derivatives $ 426 $ 1,662 |
Derivative Instruments, Gain (Loss) | The following table presents the net unrealized gains (losses) on derivative instruments included on the Consolidated Statements of Comprehensive Income for the years ended December 31, 2019 and 2018: Balance Sheet Location 2019 Amount of Loss Recognized In OCI 2018 Amount of Gain Recognized In OCI (In thousands) Interest rate swaps on FHLB debt designated as cash flow hedge Equity $ (977 ) $ 108 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Multiemployer Plans [Line Items] | |
Schedule of Employee Stock Ownership Plan (ESOP) Disclosures | A summary of key transactions for the ESOP for the periods indicated follows: 2019 2018 (in thousands) ESOP contribution expense $ 1,698 $ 1,906 Dividends on unallocated ESOP shares used to reduce ESOP contribution 148 166 Shares held by the ESOP at December 31, 2019 and 2018 , are as follows: December 31, 2019 2018 (Dollars in thousands, except share data) Allocated shares 1,382,453 1,269,600 Unallocated shares 310,347 423,200 Total ESOP shares 1,692,800 1,692,800 Fair value of unallocated shares $ 4,637 $ 6,547 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | There were 50,000 stock options granted in 2019, however, these shares were forfeited later in the year. There were no stock options granted in 2018. |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | A summary of the Company’s stock option plan awards activity for the year ended December 31, 2019 follows: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding at December 31, 2018 315,000 $ 10.34 $ 1,615,600 Granted 50,000 15.80 — Exercised (2,000 ) 10.77 7,240 Forfeited or expired (50,000 ) 15.80 — Outstanding at December 31, 2019 313,000 10.34 3.98 $ 1,440,310 Expected to vest assuming a 3% forfeiture rate over the vesting term 312,760 10.34 3.98 1,439,854 Exercisable at December 31, 2019 305,000 10.27 3.93 1,425,110 |
Schedule of Nonvested Restricted Stock Units Activity | A summary of changes in nonvested restricted stock awards for the year ended December 31, 2019 , follows: Nonvested Shares Shares Weighted Average Grant Date Fair Value Nonvested at December 31, 2018 20,987 $ 15.90 Granted 25,278 15.88 Vested (29,567 ) 15.53 Nonvested at December 31, 2019 16,698 16.53 Expected to vest assuming a 3% forfeiture rate over the vesting term 16,197 16.53 |
Multiemployer Plans, Pension | |
Multiemployer Plans [Line Items] | |
Schedule of Funded Status | The table below presents the funded status (market value of plan assets divided by funding target) of the plan as of July 1: 2019 2018 Source Valuation Report Valuation Report First Financial Northwest’s Plan (1) 101.7 % 102.7 % _________________ (1) Market value of plan assets reflects any contributions received through June 30, 2019, or 2018, respectively. |
Schedule of Net Benefit Costs | Total contributions during the years ended December 31, 2019 and 2018 were: 2019 2018 Date Paid Amount Date Paid Amount (in thousands) 10/8/2019 $ 37 10/9/2018 $ 43 12/6/2019 503 11/13/2018 497 Total $ 540 Total $ 540 |
Federal Income Taxes (Tables)
Federal Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense for the years indicated are as follows: Year Ended December 31, 2019 2018 (In thousands) Current $ 2,453 $ 3,973 Deferred 109 (280 ) Total income tax expense $ 2,562 $ 3,693 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the tax provision based on the statutory corporate rate of 21% for the year ended December 31, 2019, and 2018, on pretax income is as follows: Year Ended December 31, 2019 2018 (In thousands) Income tax expense at statutory rate $ 2,715 $ 3,904 Income tax effect of: Tax exempt interest, net (25 ) (53 ) BOLI income, net (203 ) (150 ) Other, net 75 (8 ) Total income tax expense $ 2,562 $ 3,693 |
Schedule of Deferred Tax Assets and Liabilities | The deferred tax assets and liabilities, included in the accompanying consolidated balance sheets, consisted of the following at the dates indicated: December 31, 2019 2018 (In thousands) Deferred tax assets: ALLL $ 2,775 $ 2,801 Reserve for unfunded commitments 90 96 Deferred compensation 272 293 Net unrealized loss on investments available-for-sale 146 640 Employee benefit plans 487 527 OREO market value adjustments 10 4 Accrued expenses 93 111 Core deposit intangible 30 18 Expenses to facilitate branch acquisition 24 26 Split dollar life insurance 67 51 Deferred lease — 18 Lease liability 479 — Total deferred tax assets $ 4,473 $ 4,585 Deferred tax liabilities: FHLB stock dividends 16 110 Loan origination fees and costs 940 903 Gain on fair value of cash flow hedge 89 349 Fixed assets 1,387 1,271 Goodwill 29 17 Right of use asset 464 — Other, net 47 91 Total deferred tax liabilities $ 2,972 $ 2,741 Deferred tax assets, net $ 1,501 $ 1,844 |
Regulatory Capital Requiremen_2
Regulatory Capital Requirements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Schedule of Capital Amounts and Ratios | Bank’s actual capital amounts and ratios at December 31, 2019 , and 2018 , are presented in the following table. To be Well Capitalized For Capital Adequacy Under Prompt Corrective Actual Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2019: Total risk-based capital $ 148,048 14.38 % $ 82,359 8.00 % $ 102,949 10.00 % Tier 1 risk-based capital 135,170 13.13 61,769 6.00 82,359 8.00 Common equity tier 1 capital (“CET1”) 135,170 13.13 46,327 4.50 66,917 6.50 Tier 1 leverage capital 135,170 10.27 52,630 4.00 65,787 5.00 December 31, 2018: Total risk-based capital $ 140,220 14.68 % $ 76,417 8.00 % $ 95,521 10.00 % Tier 1 risk-based capital 128,257 13.43 57,313 6.00 76,417 8.00 Common equity tier 1 capital 128,257 13.43 42,985 4.50 62,089 6.50 Tier 1 leverage capital 128,257 10.37 49,491 4.00 61,863 5.00 |
Parent Company Only Financial_2
Parent Company Only Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Parent Company Only Financial Statements [Abstract] | |
Schedule of Condensed Balance Sheet | FIRST FINANCIAL NORTHWEST, INC. Condensed Balance Sheets December 31, 2019 2018 (In thousands) Assets Cash and cash equivalents $ 235 $ 140 Interest-bearing deposits 18,456 22,362 Investment in subsidiaries 136,907 130,209 Receivable from subsidiaries 990 1,207 Other assets 46 52 Total assets $ 156,634 $ 153,970 Liabilities and Stockholders’ Equity Liabilities: Payable to subsidiaries $ 128 $ 47 Deferred tax liability, net 2 2 Other liabilities 185 183 Total liabilities 315 232 Stockholders’ equity 156,319 153,738 Total liabilities and stockholders’ equity $ 156,634 $ 153,970 |
Schedule of Condensed Income Statement | FIRST FINANCIAL NORTHWEST, INC. Condensed Income Statements Year Ended December 31, 2019 2018 (In thousands) Operating income: Interest income: Interest-bearing deposits with banks $ 153 $ 157 Total operating income 153 157 Operating expenses: Other expenses 1,732 1,557 Total operating expenses 1,732 1,557 Loss before benefit for federal income taxes and equity in undistributed earnings of subsidiaries (1,579 ) (1,400 ) Federal income tax benefit (363 ) (311 ) Loss before equity in undistributed loss of subsidiaries (1,216 ) (1,089 ) Equity in undistributed earnings of subsidiaries 11,585 15,988 Net income $ 10,369 $ 14,899 |
Schedule of Condensed Cash Flow Statement | FIRST FINANCIAL NORTHWEST, INC. Condensed Statements of Cash Flows Year Ended December 31, 2019 2018 (In thousands) Cash flows from operating activities: Net income $ 10,369 $ 14,899 Adjustments to reconcile net income to net cash from operating activities: Equity in undistributed earnings of subsidiaries (11,585 ) (15,988 ) Dividends received from subsidiary 6,525 10,858 ESOP, stock options, and restricted stock compensation 19 28 Change in deferred tax liability, net — (7 ) Change in receivables from subsidiaries (9 ) 7 Change in payables to subsidiaries 81 (50 ) Change in other assets 6 (5 ) Changes in other liabilities 2 (47 ) Net cash provided by operating activities 5,408 9,695 Cash flows from investing activities: Investments in subsidiaries 277 334 ESOP loan repayment 1,354 2,833 Net cash provided in investing activities 1,631 3,167 Cash flows from financing activities: Proceeds from exercise of stock options 21 1,365 Proceeds for vested awards 106 206 Net share settlement of stock awards (93 ) (40 ) Repurchase and retirement of common stock (7,406 ) (3,153 ) Dividends paid (3,478 ) (3,198 ) Net cash used by financing activities (10,850 ) (4,820 ) Net increase (decrease) in cash (3,811 ) 8,042 Cash and cash equivalents at beginning of year 22,502 14,460 Cash and cash equivalents at end of year $ 18,691 $ 22,502 |
Earnings Per Share_ Schedule of
Earnings Per Share: Schedule of Earnings Per Share Reconciliation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Reconciliation | The following table presents a reconciliation of the components used to compute basic and diluted EPS for the periods indicated. Year Ended December 31, 2019 2018 (Dollars in thousands, except share data) Net income $ 10,369 $ 14,899 Earnings allocated to participating securities (16 ) (28 ) Earnings allocated to common shareholders $ 10,353 $ 14,871 Basic weighted-average common shares outstanding 9,976,056 10,306,835 Dilutive effect of stock options 93,446 108,503 Dilutive effect of restricted stock grants 6,404 8,849 Diluted weighted-average common shares outstanding 10,075,906 10,424,187 Basic earnings per share $ 1.04 $ 1.44 Diluted earnings per share $ 1.03 $ 1.43 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table includes the Company’s noninterest income disaggregated by type of service for the years ended December 31, 2019 and 2018 : Year Ended December 31, 2019 2018 (In thousands) Gain (loss) on sales of investment securities (1) $ 151 $ (20 ) BOLI income (1) 994 814 Wealth management revenue 879 611 Deposit servicing fees 284 265 Debit card and ATM fees 449 416 Loan servicing fees 681 425 Loan interest swap servicing fees 663 343 Other 40 24 Total noninterest income $ 4,141 $ 2,878 ____________ (1) Not in scope of Topic 606 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | ||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | [2] | $ 1,122,238,000 | [1] | $ 1,037,429,000 | [3] |
Federal reserve bank minimum reserve required | $ 750,000 | $ 0 | |||
Number of days delinquent at which accrual of interest on loan is discontinued | 90 days | ||||
Federal home loan bank stock, par value (usd per share) | $ 100 | ||||
Subsidiaries [Member] | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | $ 1,000,000 | ||||
[1] | (1) There were no loans 90 days past due and still accruing interest at December 31, 2018. | ||||
[2] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmM4OGZhYWIzOTNiODRlMjdiYjMyMzc3NDdmYzYwZmJifFRleHRTZWxlY3Rpb246NjNERUZGNEVGRTk2MTQ3MUQ1OUExRjAyRTk4MzU1RUMM} | ||||
[3] | (1) There were no loans 90 days past due and still accruing interest at December 31, 201 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Premisis and Equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Building and building improvements | Minimum | |
Property, Plant and Equipment | |
Property, plant and equipment, useful life | 15 years |
Building and building improvements | Maximum | |
Property, Plant and Equipment | |
Property, plant and equipment, useful life | 40 years |
Furniture, fixtures and equipment | Minimum | |
Property, Plant and Equipment | |
Property, plant and equipment, useful life | 3 years |
Furniture, fixtures and equipment | Maximum | |
Property, Plant and Equipment | |
Property, plant and equipment, useful life | 7 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Operating lease, right-of-use asset | $ 2,209 | $ 0 |
Investments_ Narrative (Details
Investments: Narrative (Details) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Investments [Abstract] | ||
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged As Percent of Public Deposits Held | 50.00% | |
Investments pledged as collateral for public deposits | $ 19,000,000 | $ 15,600,000 |
Unrealized loss | 1,780,000 | 3,618,000 |
Fair Value | 86,430,000 | 104,136,000 |
Trading Securities Pledged as Collateral | $ 0 | $ 0 |
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | 37 | 51 |
Investments_ Available-for-sale
Investments: Available-for-sale Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 137,294 | $ 145,216 |
Gross Unrealized Gains | 1,087 | 572 |
Gross Unrealized Losses | (1,780) | (3,618) |
Investments available-for-sale, at fair value | 136,601 | 142,170 |
Mortgage-backed investments, Fannie Mae | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 15,605 | 24,276 |
Gross Unrealized Gains | 128 | 24 |
Gross Unrealized Losses | (104) | (657) |
Investments available-for-sale, at fair value | 15,629 | 23,643 |
Mortgage-backed investments, Freddie Mac | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 4,196 | 6,351 |
Gross Unrealized Gains | 96 | 10 |
Gross Unrealized Losses | 0 | (74) |
Investments available-for-sale, at fair value | 4,292 | 6,287 |
Mortgage backed investments Ginnie Mae | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 23,239 | 23,311 |
Gross Unrealized Gains | 140 | 0 |
Gross Unrealized Losses | (329) | (1,250) |
Investments available-for-sale, at fair value | 23,050 | 22,061 |
Other | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 11,407 | 8,983 |
Gross Unrealized Gains | 66 | 17 |
Gross Unrealized Losses | (25) | (21) |
Investments available-for-sale, at fair value | 11,448 | 8,979 |
Municipal Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,675 | 10,615 |
Gross Unrealized Gains | 272 | 49 |
Gross Unrealized Losses | (36) | (120) |
Investments available-for-sale, at fair value | 10,911 | 10,544 |
US Government agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 46,672 | 48,190 |
Gross Unrealized Gains | 13 | 73 |
Gross Unrealized Losses | (935) | (825) |
Investments available-for-sale, at fair value | 45,750 | 47,438 |
Corporate Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 25,500 | 23,490 |
Gross Unrealized Gains | 372 | 399 |
Gross Unrealized Losses | (351) | (671) |
Investments available-for-sale, at fair value | $ 25,521 | $ 23,218 |
Investments_ Schedule of Availa
Investments: Schedule of Available for sale Securities, Debt Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investments [Abstract] | ||
Due within one year, Amortized Cost | $ 496 | |
Due after one year through five years, Amortized Cost | 6,597 | |
Due after five years through ten years, Amortized Cost | 18,664 | |
Due after ten years, Amortized Cost | 57,090 | |
Debt maturities, Amortized Cost | 82,847 | |
Mortgage-backed investments, Amortized Cost | 54,447 | |
Amortized Cost | 137,294 | $ 145,216 |
Due within one year, Fair Value | 498 | |
Due after one year through five years, Fair Value | 6,738 | |
Due after five years through ten years, Fair Value | 18,613 | |
Due after ten years, Fair Value | 56,333 | |
Debt maturities, Fair Value | 82,182 | |
Mortgage-backed investments, Fair Value | 54,419 | |
Fair Value | $ 136,601 |
Investments_ Gain_Loss on Inves
Investments: Gain/Loss on Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investments [Abstract] | ||
Proceeds | $ 14,260 | $ 17,159 |
Gross gains | 190 | 9 |
Gross losses | $ (39) | $ (29) |
Investments_ Schedule of Avai_2
Investments: Schedule of Available for sale Securities in Continuous Unrealized Loss positions (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | $ 28,858 | $ 26,495 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 360 | 143 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 57,572 | 77,641 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 1,420 | 3,475 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 86,430 | 104,136 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | 1,780 | 3,618 |
Mortgage-backed investments, Fannie Mae | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 8,340 | 5,480 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 104 | 32 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 0 | 16,721 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 0 | 625 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 8,340 | 22,201 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | 104 | 657 |
Mortgage-backed investments, Freddie Mac | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 0 | 1,994 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | 23 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 0 | 3,185 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 0 | 51 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 0 | 5,179 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | 0 | 74 |
Mortgage backed investments Ginnie Mae | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 156 | 2,867 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | 8 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 12,921 | 19,194 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 329 | 1,242 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 13,077 | 22,061 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | 329 | 1,250 |
Other | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 2,843 | 6,008 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 7 | 21 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 6,000 | 0 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 18 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 8,843 | 6,008 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | 25 | 21 |
Municipal Bonds | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 3,257 | 4,161 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 36 | 46 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 0 | 934 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 0 | 74 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 3,257 | 5,095 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | 36 | 120 |
US Government agencies | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 12,266 | 5,985 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 201 | 13 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 31,490 | 30,779 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 734 | 812 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 43,756 | 36,764 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | 935 | 825 |
Corporate Bonds | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 1,996 | 0 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 12 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 7,161 | 6,828 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 339 | 671 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 9,157 | 6,828 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | $ 351 | $ 671 |
Loans Receivable_ Schedule of A
Loans Receivable: Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Troubled Debt Restructuring, Commitment to Lend | $ 3,100,000 | $ 0 | |
Loans receivable | 1,122,238,000 | 1,037,429,000 | |
Deferred loan fees, net | 558,000 | 1,178,000 | |
Loans receivable allowance for loan losses | 13,218,000 | 13,347,000 | |
Loans receivable, net | 1,108,462,000 | 1,022,904,000 | |
One-to-four family, residential, owner occupied | |||
Loans receivable | 210,898,000 | 194,141,000 | |
One-to-four family residential non-owner occupied | |||
Loans receivable | 161,630,000 | 147,825,000 | |
One-to-four family construction | |||
Loans excluded from category | 3,500,000 | 602,000 | |
Commercial Real Estate Construction [Member] | |||
Loans excluded from category | 18,300,000 | 10,000,000 | |
One-to-four family | |||
Loans receivable | 372,528,000 | 341,966,000 | |
Multifamily Permanent | |||
Loans receivable | 172,915,000 | 169,355,000 | |
Multifamily Construction | |||
Loans excluded from category | 38,600,000 | 25,200,000 | |
Multifamily | |||
Loans receivable | 172,915,000 | 169,355,000 | |
Loans receivable allowance for loan losses | 1,607,000 | 1,680,000 | $ 1,820,000 |
Commercial Real Estate Permanent | |||
Loans receivable | 395,152,000 | 373,798,000 | |
Commercial Real Estate | |||
Loans receivable | 395,152,000 | 373,798,000 | |
Construction/Land Development One-to-four family residential | |||
Loans receivable | 44,491,000 | 51,747,000 | |
Construction Land Development Multifamily | |||
Loans receivable | 40,954,000 | 40,502,000 | |
Construction Land Development Commercial | |||
Loans excluded from category | 8,700,000 | 6,200,000 | |
Loans receivable | 19,550,000 | 9,976,000 | |
Construction Land Development Land Development | |||
Loans receivable | 8,670,000 | 6,629,000 | |
Construction Land Development | |||
Loans receivable | 113,665,000 | 108,854,000 | |
Loans receivable allowance for loan losses | 2,222,000 | 2,331,000 | 2,816,000 |
Business | |||
Loans receivable | 37,779,000 | 30,486,000 | |
Loans receivable allowance for loan losses | 1,140,000 | 936,000 | 694,000 |
Consumer | |||
Loans receivable | 30,199,000 | 12,970,000 | |
Loans receivable allowance for loan losses | $ 656,000 | $ 236,000 | $ 297,000 |
Loans Receivable_ Narratives (D
Loans Receivable: Narratives (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Loans and Leases Receivable, Ratio of Nonperforming Loans to All Loans | 0.19% | 0.08% |
Loans Receivable, Percentage of Loan Portfolio | 6.10% | |
Loans and Leases Receivable, Net Amount | $ 1,108,462,000 | $ 1,022,904,000 |
Loans Receivable, non-performing | 95,000 | 752,000 |
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans | 12,000 | 18,000 |
Financing Receivable, Troubled Debt Restructuring, Commitment to Lend | 3,100,000 | 0 |
Troubled debt restructuring, charge to Allowance for Loan and Lease Losses | 0 | 0 |
Troubled Debt Restructuring Commitment To Extend Additional Credit | $ 0 | 0 |
One-to-four family residential | ||
Loans Receivable, Percentage of Loan Portfolio | 33.20% | |
Loans and Leases Receivable, Net Amount | $ 432,000 | |
Multifamily | ||
Loans Receivable, Percentage of Loan Portfolio | 15.40% | |
Loans and Leases Receivable, Net Amount | $ 8,400,000 | |
Commercial Real Estate | ||
Loans Receivable, Percentage of Loan Portfolio | 35.20% | |
Loans and Leases Receivable, Net Amount | $ 78,000,000 | |
Construction Land Development | ||
Loans Receivable, Percentage of Loan Portfolio | 10.10% | |
Construction Loans [Member] | ||
Loans and Leases Receivable, Net Amount | $ 12,500,000 | |
Multifamily Construction | ||
Loans excluded from category | 38,600,000 | 25,200,000 |
Construction Land Development Commercial | ||
Loans excluded from category | 8,700,000 | 6,200,000 |
One-to-four family construction | ||
Loans excluded from category | 3,500,000 | 602,000 |
Commercial Real Estate Construction [Member] | ||
Loans excluded from category | $ 18,300,000 | $ 10,000,000 |
Loans Receivable Loans Receivab
Loans Receivable Loans Receivable: Schedule of Loans by Maturity and Interest Rate Type (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fixed Rate | ||
Schedule of Maturity of Loans and Financing Receivables [Abstract] | ||
Due within one year | $ 29,997 | $ 44,445 |
After one year through three years | 63,055 | 53,076 |
After three years through five years | 68,659 | 56,194 |
After five years through ten years | 126,762 | 125,884 |
Thereafter | 207,055 | 192,061 |
Loans receivable, outstanding maturities, by rate type | 495,528 | 471,660 |
Adjustable Rate | ||
Schedule of Maturity of Loans and Financing Receivables [Abstract] | ||
Due within one year | 297,221 | 248,739 |
After one year through three years | 102,248 | 98,652 |
After three years through five years | 137,487 | 105,929 |
After five years through ten years | 86,404 | 112,449 |
Thereafter | 3,350 | 0 |
Loans receivable, outstanding maturities, by rate type | $ 626,710 | $ 565,769 |
Loans Receivable_ Financing Rec
Loans Receivable: Financing Receivables, Summary of loans by type and risk category (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |||
Loans receivable, net of allowance of $13,347 and $12,882 | [2] | $ 1,122,238 | [1] | $ 1,037,429 | [3] |
Pass | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | [2] | 1,105,919 | 1,033,621 | ||
Special Mention | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | [2] | 15,690 | 2,519 | ||
Substandard | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | [2] | 629 | 1,289 | ||
One-to-four family residential | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 372,528 | 341,966 | |||
One-to-four family residential | Pass | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 371,363 | 339,310 | |||
One-to-four family residential | Special Mention | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 536 | 1,737 | |||
One-to-four family residential | Substandard | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 629 | 919 | |||
Multifamily | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 172,915 | [1],[2] | 169,355 | [3] | |
Multifamily | Pass | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 170,810 | 169,355 | |||
Multifamily | Special Mention | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 2,105 | 0 | |||
Multifamily | Substandard | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 0 | 0 | |||
Commercial Real Estate | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 395,152 | [1],[2] | 373,798 | [3] | |
Commercial Real Estate | Pass | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 394,627 | 372,690 | |||
Commercial Real Estate | Special Mention | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 525 | 782 | |||
Commercial Real Estate | Substandard | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 0 | 326 | |||
Construction Land Development | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 113,665 | [1],[2] | 108,854 | [3] | |
Construction Land Development | Pass | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 101,141 | 108,854 | |||
Construction Land Development | Special Mention | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 12,524 | 0 | |||
Construction Land Development | Substandard | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 0 | 0 | |||
Business | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 37,779 | [1],[2] | 30,486 | [3] | |
Business | Pass | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 37,779 | 30,486 | |||
Business | Special Mention | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 0 | 0 | |||
Business | Substandard | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 0 | 0 | |||
Consumer | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 30,199 | [1],[2] | 12,970 | [3] | |
Consumer | Pass | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 30,199 | 12,926 | |||
Consumer | Special Mention | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | 0 | 0 | |||
Consumer | Substandard | |||||
Loans receivable, net of allowance of $13,347 and $12,882 | $ 0 | $ 44 | |||
[1] | (1) There were no loans 90 days past due and still accruing interest at December 31, 2018. | ||||
[2] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmM4OGZhYWIzOTNiODRlMjdiYjMyMzc3NDdmYzYwZmJifFRleHRTZWxlY3Rpb246NjNERUZGNEVGRTk2MTQ3MUQ1OUExRjAyRTk4MzU1RUMM} | ||||
[3] | (1) There were no loans 90 days past due and still accruing interest at December 31, 201 |
Loans Receivable_ Schedule of_2
Loans Receivable: Schedule of Allowance for Loan and Lease Losses, Roll Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | $ 13,347 | ||||
(Recapture) provision | (300) | $ (4,000) | |||
Loans and Leases Receivable, Allowance, Ending Balance | 13,218 | 13,347 | |||
Loans receivable allowance for loan losses | 13,218 | 13,347 | $ 13,218 | $ 13,347 | |
One-to-four family residential | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 3,387 | 2,837 | |||
Charge-offs | 0 | 0 | |||
Recoveries | 73 | 4,279 | |||
(Recapture) provision | (426) | (3,729) | |||
Loans and Leases Receivable, Allowance, Ending Balance | 3,034 | 3,387 | |||
Loans receivable allowance for loan losses | 3,034 | 3,387 | 3,034 | 3,387 | |
Total Loans | 372,528 | 341,966 | |||
One-to-four family residential | General Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 3,328 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 3,003 | 3,328 | |||
Loans receivable allowance for loan losses | 3,003 | 3,328 | 3,003 | 3,328 | |
Total Loans | [1] | 368,453 | 334,644 | ||
One-to-four family residential | Specific Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 59 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 31 | 59 | |||
Loans receivable allowance for loan losses | 31 | 59 | 31 | 59 | |
Total Loans | [2] | 4,075 | 7,322 | ||
Multifamily | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 1,680 | 1,820 | |||
Charge-offs | 0 | 0 | |||
Recoveries | 45 | 0 | |||
(Recapture) provision | (118) | (140) | |||
Loans and Leases Receivable, Allowance, Ending Balance | 1,607 | 1,680 | |||
Loans receivable allowance for loan losses | 1,607 | 1,680 | 1,607 | 1,680 | |
Total Loans | 172,915 | 169,355 | |||
Multifamily | General Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 1,680 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 1,607 | 1,680 | |||
Loans receivable allowance for loan losses | 1,607 | 1,680 | 1,607 | 1,680 | |
Total Loans | [1] | 170,810 | 169,355 | ||
Multifamily | Specific Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 0 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 0 | 0 | |||
Loans receivable allowance for loan losses | 0 | 0 | 0 | 0 | |
Total Loans | [2] | 2,105 | 0 | ||
Commercial Real Estate | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 4,777 | 4,418 | |||
Charge-offs | 0 | 0 | |||
Recoveries | 0 | 14 | |||
(Recapture) provision | (218) | 345 | |||
Loans and Leases Receivable, Allowance, Ending Balance | 4,559 | 4,777 | |||
Loans receivable allowance for loan losses | 4,559 | 4,777 | 4,559 | 4,777 | |
Total Loans | 395,152 | 373,798 | |||
Commercial Real Estate | General Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 4,774 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 4,559 | 4,774 | |||
Loans receivable allowance for loan losses | 4,559 | 4,774 | 4,559 | 4,774 | |
Total Loans | [1] | 393,886 | 371,058 | ||
Commercial Real Estate | Specific Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 3 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 0 | 3 | |||
Loans receivable allowance for loan losses | 0 | 3 | 0 | 3 | |
Total Loans | [2] | 1,266 | 2,740 | ||
Construction Land Development | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 2,331 | 2,816 | |||
Charge-offs | 0 | 0 | |||
Recoveries | 0 | 171 | |||
(Recapture) provision | (109) | (656) | |||
Loans and Leases Receivable, Allowance, Ending Balance | 2,222 | 2,331 | |||
Loans receivable allowance for loan losses | 2,222 | 2,331 | 2,222 | 2,331 | |
Total Loans | 113,665 | 108,854 | |||
Construction Land Development | General Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 2,331 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 2,222 | 2,331 | |||
Loans receivable allowance for loan losses | 2,222 | 2,331 | 2,222 | 2,331 | |
Total Loans | [1] | 101,141 | 108,854 | ||
Construction Land Development | Specific Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 0 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 0 | 0 | |||
Loans receivable allowance for loan losses | 0 | 0 | 0 | 0 | |
Total Loans | [2] | 12,524 | 0 | ||
Business | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 936 | 694 | |||
Charge-offs | 0 | 0 | |||
Recoveries | 0 | 0 | |||
(Recapture) provision | 204 | 242 | |||
Loans and Leases Receivable, Allowance, Ending Balance | 1,140 | 936 | |||
Loans receivable allowance for loan losses | 1,140 | 936 | 1,140 | 936 | |
Total Loans | 37,779 | 30,486 | |||
Business | General Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 936 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 1,140 | 936 | |||
Loans receivable allowance for loan losses | 1,140 | 936 | 1,140 | 936 | |
Total Loans | [1] | 37,779 | 30,486 | ||
Business | Specific Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 0 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 0 | 0 | |||
Loans receivable allowance for loan losses | 0 | 0 | 0 | 0 | |
Total Loans | [2] | 0 | 0 | ||
Consumer | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 236 | 297 | |||
Charge-offs | 0 | 0 | |||
Recoveries | 53 | 1 | |||
(Recapture) provision | 367 | (62) | |||
Loans and Leases Receivable, Allowance, Ending Balance | 656 | 236 | |||
Loans receivable allowance for loan losses | 656 | 236 | 656 | 236 | |
Total Loans | 30,199 | 12,970 | |||
Consumer | General Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 236 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 656 | 236 | |||
Loans receivable allowance for loan losses | 656 | 236 | 656 | 236 | |
Total Loans | [1] | 30,199 | 12,883 | ||
Consumer | Specific Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 0 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 0 | 0 | |||
Loans receivable allowance for loan losses | 0 | 0 | 0 | 0 | |
Total Loans | [2] | 0 | 87 | ||
Property total | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 13,347 | 12,882 | |||
Charge-offs | 0 | 0 | |||
Recoveries | 171 | 4,465 | |||
(Recapture) provision | (300) | (4,000) | |||
Loans and Leases Receivable, Allowance, Ending Balance | 13,218 | 13,347 | |||
Loans receivable allowance for loan losses | 13,218 | 13,347 | 13,218 | 13,347 | |
Total Loans | 1,122,238 | 1,037,429 | |||
Property total | General Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 13,285 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 13,187 | 13,285 | |||
Loans receivable allowance for loan losses | 13,187 | 13,285 | 13,187 | 13,285 | |
Total Loans | [1] | 1,102,268 | 1,027,280 | ||
Property total | Specific Reserve | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 62 | ||||
Loans and Leases Receivable, Allowance, Ending Balance | 31 | 62 | |||
Loans receivable allowance for loan losses | $ 31 | $ 62 | 31 | 62 | |
Total Loans | [2] | $ 19,970 | $ 10,149 | ||
[1] | Loans collectively evaluated for general reserves. | ||||
[2] | Loans individually evaluated for specific reserves. |
Loans Receivable_ Financing R_2
Loans Receivable: Financing Receivables, Aging of loans (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | |||
Financing Receivable, Past Due [Line Items] | |||||
Financing Receivable, 90 Days or More Past Due, Still Accruing | $ 0 | $ 0 | |||
Total | 2,184,000 | 821,000 | |||
Current | 1,120,054,000 | 1,036,608,000 | |||
Total Loans | [2] | 1,122,238,000 | [1] | 1,037,429,000 | [3] |
One-to-four family, residential, owner occupied | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 79,000 | 495,000 | |||
Current | 210,819,000 | 193,646,000 | |||
Total Loans | 210,898,000 | [1],[2] | 194,141,000 | [3] | |
One-to-four family residential non-owner occupied | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Current | 161,630,000 | 147,825,000 | |||
Total Loans | 161,630,000 | [1],[2] | 147,825,000 | [3] | |
Multifamily | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 2,105,000 | 0 | |||
Current | 170,810,000 | 169,355,000 | |||
Total Loans | 172,915,000 | [1],[2] | 169,355,000 | [3] | |
Commercial Real Estate | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 326,000 | |||
Current | 395,152,000 | 373,472,000 | |||
Total Loans | 395,152,000 | [1],[2] | 373,798,000 | [3] | |
Construction Land Development | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Current | 113,665,000 | 108,854,000 | |||
Total Loans | 113,665,000 | [1],[2] | 108,854,000 | [3] | |
Real Estate, Total | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 2,184,000 | 821,000 | |||
Current | 1,052,076,000 | 993,152,000 | |||
Total Loans | 1,054,260,000 | [1],[2] | 993,973,000 | [3] | |
Business | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Current | 37,779,000 | 30,486,000 | |||
Total Loans | 37,779,000 | [1],[2] | 30,486,000 | [3] | |
Consumer | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Current | 30,199,000 | 12,970,000 | |||
Total Loans | 30,199,000 | [1],[2] | 12,970,000 | [3] | |
Financial Asset, 30 to 59 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 2,184,000 | 223,000 | |||
Financial Asset, 30 to 59 Days Past Due [Member] | One-to-four family, residential, owner occupied | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 79,000 | 223,000 | |||
Financial Asset, 30 to 59 Days Past Due [Member] | One-to-four family residential non-owner occupied | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, 30 to 59 Days Past Due [Member] | Multifamily | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 2,105,000 | 0 | |||
Financial Asset, 30 to 59 Days Past Due [Member] | Commercial Real Estate | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, 30 to 59 Days Past Due [Member] | Construction Land Development | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, 30 to 59 Days Past Due [Member] | Real Estate, Total | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 2,184,000 | 223,000 | |||
Financial Asset, 30 to 59 Days Past Due [Member] | Business | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, 30 to 59 Days Past Due [Member] | Consumer | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, 60 to 89 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, 60 to 89 Days Past Due [Member] | One-to-four family, residential, owner occupied | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, 60 to 89 Days Past Due [Member] | One-to-four family residential non-owner occupied | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, 60 to 89 Days Past Due [Member] | Multifamily | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, 60 to 89 Days Past Due [Member] | Commercial Real Estate | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, 60 to 89 Days Past Due [Member] | Construction Land Development | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, 60 to 89 Days Past Due [Member] | Real Estate, Total | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, 60 to 89 Days Past Due [Member] | Business | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, 60 to 89 Days Past Due [Member] | Consumer | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 598,000 | |||
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | One-to-four family, residential, owner occupied | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 272,000 | |||
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | One-to-four family residential non-owner occupied | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Multifamily | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Commercial Real Estate | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 326,000 | |||
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Construction Land Development | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Real Estate, Total | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 598,000 | |||
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Business | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | 0 | 0 | |||
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Consumer | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total | $ 0 | $ 0 | |||
[1] | (1) There were no loans 90 days past due and still accruing interest at December 31, 2018. | ||||
[2] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmM4OGZhYWIzOTNiODRlMjdiYjMyMzc3NDdmYzYwZmJifFRleHRTZWxlY3Rpb246NjNERUZGNEVGRTk2MTQ3MUQ1OUExRjAyRTk4MzU1RUMM} | ||||
[3] | (1) There were no loans 90 days past due and still accruing interest at December 31, 201 |
Loans Receivable_ Schedule of n
Loans Receivable: Schedule of non-accrual loans (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Total nonaccrual loans | $ 95 | $ 752 |
One-to-four family, residential, owner occupied | ||
Total nonaccrual loans | 95 | 382 |
Commercial Portfolio Segment [Member] | ||
Total nonaccrual loans | 0 | 326 |
Consumer | ||
Total nonaccrual loans | $ 0 | $ 44 |
Loans Receivable_ Non-performin
Loans Receivable: Non-performing Loans, Foregone interest, and loans committed (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | [2] | $ 1,122,238,000 | [1] | $ 1,037,429,000 | [3] |
One-to-four family residential | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 372,528,000 | 341,966,000 | |||
Multifamily | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 172,915,000 | [1],[2] | 169,355,000 | [3] | |
Commercial Real Estate | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 395,152,000 | [1],[2] | 373,798,000 | [3] | |
Construction Land Development | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 113,665,000 | [1],[2] | 108,854,000 | [3] | |
Business | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 37,779,000 | [1],[2] | 30,486,000 | [3] | |
Consumer | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 30,199,000 | [1],[2] | 12,970,000 | [3] | |
One-to-four family residential non-owner occupied | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 161,630,000 | [1],[2] | 147,825,000 | [3] | |
One-to-four family, residential, owner occupied | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 210,898,000 | [1],[2] | 194,141,000 | [3] | |
Performing Financing Receivable | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 1,122,143,000 | 1,036,677,000 | |||
Performing Financing Receivable | One-to-four family residential | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 372,433,000 | 341,584,000 | |||
Performing Financing Receivable | Multifamily | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 172,915,000 | 169,355,000 | |||
Performing Financing Receivable | Commercial Real Estate | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 395,152,000 | 373,472,000 | |||
Performing Financing Receivable | Construction Land Development | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 113,665,000 | 108,854,000 | |||
Performing Financing Receivable | Business | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 37,779,000 | 30,486,000 | |||
Performing Financing Receivable | Consumer | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 30,199,000 | 12,926,000 | |||
Performing Financing Receivable | One-to-four family residential non-owner occupied | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 161,600,000 | 147,800,000 | |||
Performing Financing Receivable | One-to-four family, residential, owner occupied | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 210,800,000 | 193,800,000 | |||
Nonperforming Financing Receivable | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 95,000 | 752,000 | |||
Nonperforming Financing Receivable | One-to-four family residential | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 95,000 | 382,000 | |||
Nonperforming Financing Receivable | Multifamily | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 0 | 0 | |||
Nonperforming Financing Receivable | Commercial Real Estate | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 0 | 326,000 | |||
Nonperforming Financing Receivable | Construction Land Development | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 0 | 0 | |||
Nonperforming Financing Receivable | Business | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 0 | 0 | |||
Nonperforming Financing Receivable | Consumer | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 0 | 44,000 | |||
Nonperforming Financing Receivable | One-to-four family residential non-owner occupied | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | 0 | 0 | |||
Nonperforming Financing Receivable | One-to-four family, residential, owner occupied | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | $ 95,000 | $ 382,000 | |||
[1] | (1) There were no loans 90 days past due and still accruing interest at December 31, 2018. | ||||
[2] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmM4OGZhYWIzOTNiODRlMjdiYjMyMzc3NDdmYzYwZmJifFRleHRTZWxlY3Rpb246NjNERUZGNEVGRTk2MTQ3MUQ1OUExRjAyRTk4MzU1RUMM} | ||||
[3] | (1) There were no loans 90 days past due and still accruing interest at December 31, 201 |
Loans Receivable_ Schedule of I
Loans Receivable: Schedule of Impaired Financing Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | ||
One-to-four family, residential, owner occupied | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | [1] | $ 437 | $ 1,308 | |
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | [2] | 582 | 1,477 | |
Impaired Financing Receivable, with Related Allowance, Recorded Investment | [1] | 505 | 513 | |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | [2] | 552 | 560 | |
Impaired Financing Receivable, Related Allowance | 13 | 22 | ||
Impaired Financing Receivable, Recorded Investment | [1] | 942 | 1,821 | |
Impaired Financing Receivable, Unpaid Principal Balance | [2] | 1,134 | 2,037 | |
One-to-four family residential non-owner occupied | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | [1] | 1,486 | 2,375 | |
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | [2] | 1,486 | 2,375 | |
Impaired Financing Receivable, with Related Allowance, Recorded Investment | [1] | 1,647 | 3,126 | |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | [2] | 1,647 | 3,148 | |
Impaired Financing Receivable, Related Allowance | 18 | 37 | ||
Impaired Financing Receivable, Recorded Investment | [1] | 3,133 | 5,501 | |
Impaired Financing Receivable, Unpaid Principal Balance | [2] | 3,133 | 5,523 | |
Multifamily | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | [1] | 2,105 | ||
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | [2] | 2,105 | ||
Impaired Financing Receivable, Related Allowance | 0 | |||
Impaired Financing Receivable, Recorded Investment | [1] | 2,105 | ||
Impaired Financing Receivable, Unpaid Principal Balance | [2] | 2,105 | ||
Commercial Real Estate | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | [1] | 1,266 | 2,499 | |
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | [2] | 1,266 | 2,499 | |
Impaired Financing Receivable, with Related Allowance, Recorded Investment | [1] | 241 | ||
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | [2] | 241 | ||
Impaired Financing Receivable, Related Allowance | 0 | 3 | ||
Impaired Financing Receivable, Recorded Investment | [1] | 1,266 | 2,740 | |
Impaired Financing Receivable, Unpaid Principal Balance | [2] | 1,266 | 2,740 | |
Construction Land Development | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | [1] | 12,524 | ||
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | [2] | 15,650 | ||
Impaired Financing Receivable, Related Allowance | 0 | |||
Impaired Financing Receivable, Recorded Investment | [1] | 12,524 | ||
Impaired Financing Receivable, Unpaid Principal Balance | [2] | 15,650 | ||
Consumer | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | [1] | 87 | ||
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | [2] | 141 | ||
Impaired Financing Receivable, Related Allowance | 0 | |||
Impaired Financing Receivable, Recorded Investment | [1] | 87 | ||
Impaired Financing Receivable, Unpaid Principal Balance | [2] | 141 | ||
Property total | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | [1] | 17,818 | 6,269 | |
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | [2] | 21,089 | 6,492 | |
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 2,152 | 3,880 | [1] | |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 2,199 | 3,949 | [2] | |
Impaired Financing Receivable, Related Allowance | 31 | 62 | ||
Impaired Financing Receivable, Recorded Investment | [1] | 19,970 | 10,149 | |
Impaired Financing Receivable, Unpaid Principal Balance | [2] | $ 23,288 | $ 10,441 | |
[1] | (1) Represents the loan balance less charge-offs. | |||
[2] | (2) Contractual loan principal balance. |
Loans Receivable Loans Receiv_2
Loans Receivable Loans Receivable: Average Recorded Investment and Interest Income Recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Financing Receivable, Impaired [Line Items] | ||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | $ 12,330 | $ 9,666 |
Impaired Financing Receivable, with No Related Allowance, Interest Income Recognized | 1,165 | 408 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 2,649 | 4,775 |
Impaired Financing Receivable, with Related Allowance, Interest Income Recognized | 127 | 224 |
Impaired Financing Receivable, Average Recorded Investment | 14,979 | 14,441 |
Impaired Financing Receivable, Interest Income, Accrual Method | 1,292 | 632 |
One-to-four family, residential, owner occupied | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 852 | 1,207 |
Impaired Financing Receivable, with No Related Allowance, Interest Income Recognized | 36 | 82 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 509 | 518 |
Impaired Financing Receivable, with Related Allowance, Interest Income Recognized | 34 | 35 |
Impaired Financing Receivable, Average Recorded Investment | 1,361 | 1,725 |
Impaired Financing Receivable, Interest Income, Accrual Method | 70 | 117 |
One-to-four family residential non-owner occupied | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 1,833 | 5,583 |
Impaired Financing Receivable, with No Related Allowance, Interest Income Recognized | 94 | 146 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 2,092 | 3,211 |
Impaired Financing Receivable, with Related Allowance, Interest Income Recognized | 93 | 162 |
Impaired Financing Receivable, Average Recorded Investment | 3,925 | 8,794 |
Impaired Financing Receivable, Interest Income, Accrual Method | 187 | 308 |
Multifamily | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 421 | 900 |
Impaired Financing Receivable, with No Related Allowance, Interest Income Recognized | 111 | 0 |
Impaired Financing Receivable, Average Recorded Investment | 421 | 900 |
Impaired Financing Receivable, Interest Income, Accrual Method | 111 | 0 |
Commercial Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 2,038 | 1,885 |
Impaired Financing Receivable, with No Related Allowance, Interest Income Recognized | 90 | 172 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 48 | 1,046 |
Impaired Financing Receivable, with Related Allowance, Interest Income Recognized | 0 | 27 |
Impaired Financing Receivable, Average Recorded Investment | 2,086 | 2,931 |
Impaired Financing Receivable, Interest Income, Accrual Method | 90 | 199 |
Construction Land Development | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 7,143 | 0 |
Impaired Financing Receivable, with No Related Allowance, Interest Income Recognized | 834 | 0 |
Impaired Financing Receivable, Average Recorded Investment | 7,143 | 0 |
Impaired Financing Receivable, Interest Income, Accrual Method | 834 | 0 |
Consumer | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 43 | 91 |
Impaired Financing Receivable, with No Related Allowance, Interest Income Recognized | 0 | 8 |
Impaired Financing Receivable, Average Recorded Investment | 43 | 91 |
Impaired Financing Receivable, Interest Income, Accrual Method | $ 0 | $ 8 |
Loans Receivable_ Schedule of_3
Loans Receivable: Schedule of Non-performing assets and troubled debt restructured loans (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Performing TDRs | $ 5,246 | $ 9,399 |
Nonaccrual TDRs | 0 | 0 |
Total TDRs | $ 5,246 | $ 9,399 |
Loans Receivable_ Troubled Debt
Loans Receivable: Troubled Debt Restructurings on Financing Receivables (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Number of Loans | loan | 11 | 1 |
Pre-Modification Outstanding Recorded Investment | $ 2,909 | $ 563 |
Post-Modification Outstanding Recorded Investment | $ 2,909 | $ 563 |
One-to-four family residential | Principal and Interest with Interest Rate Concession | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Number of Loans | loan | 7 | 1 |
Pre-Modification Outstanding Recorded Investment | $ 1,360 | $ 563 |
Post-Modification Outstanding Recorded Investment | $ 1,360 | $ 563 |
One-to-four family residential | Advancement of Maturity Date | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Number of Loans | loan | 3 | 0 |
Pre-Modification Outstanding Recorded Investment | $ 694 | $ 0 |
Post-Modification Outstanding Recorded Investment | $ 694 | $ 0 |
Commercial Real Estate | Advancement of Maturity Date | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Number of Loans | loan | 1 | 0 |
Pre-Modification Outstanding Recorded Investment | $ 855 | $ 0 |
Post-Modification Outstanding Recorded Investment | $ 855 | $ 0 |
Loans Receivable Loans Receiv_3
Loans Receivable Loans Receivable: Rollforward of Loans with Related Parties (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Loans with Related Parties Rollforward | ||
Balance at beginning of year | $ 0 | $ 9 |
Repayments | 0 | (9) |
Balance at end of year | $ 0 | $ 0 |
Other Real Estate Owned - Other
Other Real Estate Owned - Other Real Estate, Roll Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Other Real Estate [Roll Forward] | ||
Balance at beginning of year | $ 483 | $ 483 |
Market value adjustments | (29) | 0 |
Balance at end of year | $ 454 | $ 483 |
Other Real Estate Owned (Detail
Other Real Estate Owned (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Other Real Estate | $ 454,000 | $ 483,000 | $ 483,000 |
Commercial Real Estate | |||
Other Real Estate | $ 454,000 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 35,282,000 | $ 32,181,000 |
Less accumulated depreciation and amortization | (13,043,000) | (11,357,000) |
Payments for Construction in Process | 227,000 | 507,000 |
Property, plant and equipment, net | 22,466,000 | 21,331,000 |
Depreciation of premises and equipment | 1,840,000 | 1,630,000 |
Land | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 2,226,000 | 2,226,000 |
Buildings and improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 20,213,000 | 19,566,000 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 4,040,000 | 3,076,000 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 5,506,000 | 4,971,000 |
Computer Equipment [Member] | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 3,297,000 | $ 2,342,000 |
Fair Value_ Schedule of Fair Va
Fair Value: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | $ 136,601,000 | $ 142,170,000 |
Derivative Asset, Fair Value, Gross Asset | 426,000 | 1,662,000 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 136,601,000 | 142,170,000 |
Derivative Asset, Fair Value, Gross Asset | 426 | 1,662,000 |
Mortgage-backed investments, Fannie Mae | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 15,629,000 | 23,643,000 |
Mortgage-backed investments, Fannie Mae | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 15,629,000 | 23,643,000 |
Mortgage-backed investments, Freddie Mac | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 4,292,000 | 6,287,000 |
Mortgage-backed investments, Freddie Mac | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 4,292,000 | 6,287,000 |
Mortgage-backed investments, Ginnie Mae | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 23,050,000 | 22,061,000 |
Mortgage-backed investments, Ginnie Mae | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 23,050,000 | 22,061,000 |
Other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 11,448,000 | 8,979,000 |
Other | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 11,448,000 | 8,979,000 |
Municipal Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 10,911,000 | 10,544,000 |
Municipal Bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 10,911,000 | 10,544,000 |
US Government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 45,750,000 | 47,438,000 |
US Government agencies | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 45,750,000 | 47,438,000 |
Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 25,521,000 | 23,218,000 |
Corporate Bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value disclosure | 25,521,000 | 23,218,000 |
Derivative Financial Instruments, Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 1,662,000 | |
Derivative Financial Instruments, Assets [Member] | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 426,000 | 1,662,000 |
Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure, Recurring (Deprecated 2018-01-31) | 137,027,000 | 143,832,000 |
Fair Value, Recurring [Member] | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure, Recurring (Deprecated 2018-01-31) | $ 137,027,000 | $ 143,832,000 |
Fair Value_ Schedule of balance
Fair Value: Schedule of balances of assets and liabilities, measured at fair value on a non-recurring basis (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
OREO, Fair Value | $ 454,000 | $ 483,000 | $ 483,000 |
Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired loans (included in loans receivable, net), recorded investment | 19,939,000 | 10,087,000 | |
OREO, Fair Value | 454,000 | 483,000 | |
Total, Fair Value | 20,393,000 | 10,570,000 | |
Fair Value, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired loans (included in loans receivable, net), recorded investment | 19,939,000 | 10,087,000 | |
OREO, Fair Value | 454,000 | 483,000 | |
Total, Fair Value | 20,393,000 | 10,570,000 | |
Impaired loans (included in loans receivable, net), Fair Value | $ 31,000 | $ 62,000 |
Fair Value_ Schedule of quantit
Fair Value: Schedule of quantitative information about Level 3 Fair Value Measurements on a nonrecurring basis (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Other Real Estate | $ 454,000 | $ 483,000 | $ 483,000 |
Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Obligations, Fair Value Disclosure, Brokered | 0 | 0 | |
Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Obligations, Fair Value Disclosure, Brokered | 94,556,000 | 97,466,000 | |
Level 3 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Obligations, Fair Value Disclosure, Brokered | 0 | 0 | |
Impaired Financing Receivable, Recorded Investment | 19,939,000 | 10,087,000 | |
Other Real Estate | 454,000 | 483,000 | |
Impaired Loans Receivable and other real estate owned Fair Value Measurement | $ 20,393,000 | $ 10,570,000 | |
Level 3 | Market Approach Valuation Technique | Loans Receivable | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Unobservable Input(s) | Appraised value discounted by market or borrower conditions | Appraised value discounted by market or borrower conditions | |
Level 3 | Market Approach Valuation Technique | Loans Receivable | Minimum | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Fair value of financial instruments, range | 0.00% | 0.00% | |
Level 3 | Market Approach Valuation Technique | Loans Receivable | Maximum | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Fair value of financial instruments, range | 0.00% | 0.00% | |
Level 3 | Market Approach Valuation Technique | Loans Receivable | Weighted Average | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Fair value of financial instruments, range | 0.00% | 0.00% | |
Level 3 | Market Approach Valuation Technique | Other Real Estate Owned | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Unobservable Input(s) | Appraised value less selling costs | Appraised value less selling costs | |
Level 3 | Market Approach Valuation Technique | Other Real Estate Owned | Minimum | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Fair value of financial instruments, range | 0.00% | 0.00% | |
Level 3 | Market Approach Valuation Technique | Other Real Estate Owned | Maximum | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Fair value of financial instruments, range | 0.00% | 0.00% | |
Level 3 | Market Approach Valuation Technique | Other Real Estate Owned | Weighted Average | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Fair value of financial instruments, range | 0.00% | 0.00% | |
Fair Value, Nonrecurring [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Impaired Financing Receivable, Related Allowance | $ 31,000 | $ 62,000 | |
Impaired Financing Receivable, Recorded Investment | 19,939,000 | 10,087,000 | |
Other Real Estate | 454,000 | 483,000 | |
Impaired Loans Receivable and other real estate owned Fair Value Measurement | 20,393,000 | 10,570,000 | |
Fair Value, Nonrecurring [Member] | Level 3 | Market Approach Valuation Technique | Loans Receivable | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 19,939,000 | 10,087,000 | |
Fair Value, Nonrecurring [Member] | Level 3 | Market Approach Valuation Technique | Other Real Estate Owned | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | $ 454,000 | $ 483,000 |
Fair Value_ Fair Value, by Bala
Fair Value: Fair Value, by Balance Sheet Grouping (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investments available-for-sale | $ 136,601,000 | $ 142,170,000 |
FHLB stock | 7,009,000 | 7,310,000 |
Derivative Asset, Fair Value, Gross Asset | 426,000 | 1,662,000 |
Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash on hand and in banks | 10,094,000 | 8,122,000 |
Interest-earning deposits | 12,896,000 | 8,888,000 |
Investments available-for-sale | 136,601,000 | 142,170,000 |
Loans receivable, net | 1,096,499,000 | 1,012,114,000 |
FHLB stock | 7,009,000 | 7,310,000 |
Accrued interest receivable | 4,138,000 | 4,068,000 |
Derivative Asset, Fair Value, Gross Asset | 426 | 1,662,000 |
Deposits | 513,959,000 | 450,033,000 |
Certificates of deposit, retail | 430,418,000 | 390,101,000 |
Certificates of deposit, brokered | 94,556,000 | 97,466,000 |
Advances from the FHLB | 137,706,000 | 146,357,000 |
Accrued interest payable | 285,000 | 478,000 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash on hand and in banks | 10,094,000 | 8,122,000 |
Interest-earning deposits | 12,896,000 | 8,888,000 |
Investments available-for-sale | 136,601,000 | 142,170,000 |
Loans receivable, net | 1,108,462,000 | 1,022,904,000 |
FHLB stock | 7,009,000 | 7,310,000 |
Accrued interest receivable | 4,138,000 | 4,068,000 |
Derivative Asset, Fair Value, Gross Asset | 426 | 1,662,000 |
Deposits | 513,959,000 | 450,033,000 |
Certificates of deposit, retail | 425,103,000 | 391,174,000 |
Certificates of deposit, brokered | 94,472,000 | 97,825,000 |
Advances from the FHLB | 137,700,000 | 146,500,000 |
Accrued interest payable | 285,000 | 478,000 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash on hand and in banks | 10,094,000 | 8,122,000 |
Interest-earning deposits | 12,896,000 | 8,888,000 |
Investments available-for-sale | 0 | 0 |
Loans receivable, net | 0 | 0 |
FHLB stock | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Derivative Asset, Fair Value, Gross Asset | 0 | 0 |
Deposits | 513,959,000 | 450,033,000 |
Certificates of deposit, retail | 0 | 0 |
Certificates of deposit, brokered | 0 | 0 |
Advances from the FHLB | 0 | 0 |
Accrued interest payable | 0 | 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash on hand and in banks | 0 | 0 |
Interest-earning deposits | 0 | 0 |
Investments available-for-sale | 136,601,000 | 142,170,000 |
Loans receivable, net | 0 | 0 |
FHLB stock | 7,009,000 | 7,310,000 |
Accrued interest receivable | 4,138,000 | 4,068,000 |
Derivative Asset, Fair Value, Gross Asset | 426 | 1,662,000 |
Deposits | 0 | 0 |
Certificates of deposit, retail | 430,418,000 | 390,101,000 |
Certificates of deposit, brokered | 94,556,000 | 97,466,000 |
Advances from the FHLB | 137,706,000 | 146,357,000 |
Accrued interest payable | 285,000 | 478,000 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash on hand and in banks | 0 | 0 |
Interest-earning deposits | 0 | 0 |
Investments available-for-sale | 0 | 0 |
Loans receivable, net | 1,096,499,000 | 1,012,114,000 |
FHLB stock | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Derivative Asset, Fair Value, Gross Asset | 0 | 0 |
Deposits | 0 | 0 |
Certificates of deposit, retail | 0 | 0 |
Certificates of deposit, brokered | 0 | 0 |
Advances from the FHLB | 0 | 0 |
Accrued interest payable | $ 0 | $ 0 |
Accrued Interest Receivable (De
Accrued Interest Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable | ||
Interest Receivable | $ 4,138 | $ 4,068 |
Loans receivable | ||
Accounts, Notes, Loans and Financing Receivable | ||
Interest Receivable | 3,518 | 3,366 |
Investments | ||
Accounts, Notes, Loans and Financing Receivable | ||
Interest Receivable | 603 | 699 |
Interest-earning deposits | ||
Accounts, Notes, Loans and Financing Receivable | ||
Interest Receivable | $ 17 | $ 3 |
Deposits - Components of Deposi
Deposits - Components of Deposits (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Noninterest-bearing | $ 52,849,000 | $ 46,108,000 |
Interest-bearing demand | 65,897,000 | 40,079,000 |
Statement savings | 17,447,000 | 24,799,000 |
Money market | 377,766,000 | 339,047,000 |
Certificates of deposit, retail (1) | 425,103,000 | 391,174,000 |
Certificates of deposit, brokered | 94,472,000 | 97,825,000 |
Total deposits | 1,033,534,000 | 939,032,000 |
Opus Bank [Member] | Adjustments [Member] | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Interest Bearing Deposits | $ 28,000 | $ 58,000 |
Deposits - Maturities of Certif
Deposits - Maturities of Certificates of Deposit (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Deposits [Abstract] | |
2015 | $ 222,059 |
2016 | 185,208 |
2017 | 47,075 |
2018 | 50,220 |
2019 | 15,013 |
Thereafter | 0 |
Time Deposits | $ 519,575 |
Deposits - Narrative (Details)
Deposits - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Deposits [Abstract] | ||
Deposits, public funds | $ 34 | $ 28.5 |
Time Deposits at or Above FDIC Insurance Limit | 130.6 | 129.3 |
Interest Expense, Time Deposits, at or Above FDIC Insurance Limit | 2.9 | 1.8 |
Deposits controlled by management, members of the Board of Directors and related entities | $ 2.1 | $ 16 |
Deposits - Interest Expense on
Deposits - Interest Expense on Deposit Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Deposits [Abstract] | ||
Interest-bearing demand | $ 108 | $ 79 |
Statement savings | 29 | 34 |
Money market | 5,027 | 3,550 |
Certificates of deposit, retail | 9,549 | 5,825 |
Certificates of deposit, brokered | 3,283 | 1,730 |
Interest expense, deposits | $ 17,996 | $ 11,218 |
Other Borrowings (Details)
Other Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Federal Home Loan Bank, Advances, Floating Rate, under One Year | $ 26,700 | |
Federal Home Loan Bank, Advances, Activity for Year, Maximum Outstanding at any Month End | 184,500 | $ 224,000 |
Federal Home Loan Bank, Advances, Activity for Year, Average Outstanding | 129,899 | 183,667 |
Maximum line of credit with FHLB | 588,700 | 554,800 |
Outstanding advances from FHLB | $ 137,700 | $ 146,500 |
Federal Home Loan Bank, Advances, Activity for Year, Average Interest Rate During Period | 2.09% | 1.92% |
Federal Home Loan Bank, Advances, Maturities Summary, Average Interest Rate of Amounts Due within One Year of Balance Sheet Date | 1.87% | |
Unused credit facility with another financial institution | $ 115,100 | |
Federal Home Loan Bank, Advances, Maturities Summary, in Next Rolling Twelve Months | $ 111,000 | |
Federal Home Loan Bank, Advances, Activity for Year, Average Interest Rate at Period End | 1.84% | 2.62% |
Single Family Residential Mortgages | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Investments pledged as collateral for FHLB advances | $ 240,800 | $ 216,400 |
Commercial Real Estate | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Investments pledged as collateral for FHLB advances | 186,900 | 180,800 |
Mulitfamily Loans Under Blanket Lien Arrangement | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Investments pledged as collateral for FHLB advances | $ 79,000 | $ 74,200 |
Adjustable Rate [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Federal Home Loan Bank, Advances, Activity for Year, Average Interest Rate at Period End | 1.73% |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Monthly Lease Payment | $ 53,000 | |
Operating Lease, Expense | 752,000 | |
Operating Lease, Right-of-Use Asset | 2,209,000 | $ 0 |
Operating Lease, Liability, Current | $ 2,279,000 | $ 0 |
Operating Lease, Weighted Average Remaining Lease Term | 6 years 1 month | |
Lessee, Operating Lease, Discount Rate | 2.94% | |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 65 months | |
Minimum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 8 months | |
Lessee, Operating Lease, Renewal Term | 3 years | |
Maximum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 5 years 3 months | |
Lessee, Operating Lease, Renewal Term | 5 years |
Leases - Lease Liabilities (Det
Leases - Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Due through one year | $ 609 |
Due after one year through two years | 433 |
Due after two years through three years | 399 |
Due after three years through four years | 291 |
Due after four years through five years | 230 |
Due after five years | 532 |
Total minimum lease payments | 2,494 |
Less: present value discount | 215 |
Lease liability | $ 2,279 |
Derivatives (Details)
Derivatives (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | ||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | $ (977,000) | $ 108,000 |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | 336,000 | |
Derivative Asset, Fair Value, Gross Asset | 426,000 | 1,662,000 |
FHLB of Des Moines [Member] | ||
Derivative [Line Items] | ||
Debt Instrument, Face Amount | 75,000,000 | |
Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | $ 426,000 | $ 1,662,000 |
1.34% Derivative | Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Fixed rate | 1.34% | |
Notional amount | $ 50,000,000 | |
1.44% Derivative | Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Fixed rate | 1.44% | |
Notional amount | $ 15,000,000 | |
1.585% Derivative | Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Fixed rate | 1.585% | |
Notional amount | $ 10,000,000 | |
Minimum [Member] | ||
Derivative [Line Items] | ||
Term | 4 years | |
Maximum [Member] | ||
Derivative [Line Items] | ||
Term | 5 years |
Benefit Plans Multiemployer Pen
Benefit Plans Multiemployer Pension Plans (Details) - USD ($) | Nov. 13, 2018 | Oct. 09, 2018 | Nov. 30, 2017 | Oct. 12, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2015 | Jun. 30, 2014 | |
Multiemployer Plans [Line Items] | |||||||||
First Financial Northwest’s Plan(1) | 101.70% | [1] | 102.70% | ||||||
Deferred compensation expense | $ 74,000 | $ 18,000 | |||||||
Pentegra DB Plan | |||||||||
Multiemployer Plans [Line Items] | |||||||||
Contributions by employer | $ 503,000 | $ 37,000 | $ 497,000 | $ 43,000 | $ 540,000 | $ 540,000 | |||
Multiemployer Plans, Pension | Pentegra DB Plan | |||||||||
Multiemployer Plans [Line Items] | |||||||||
Assumptions used calculating net periodic benefit cost | 5.51% | 5.71% | |||||||
Maximum contribution rate | 5.00% | ||||||||
Total contributions made to plan | $ 164,600,000 | $ 367,100,000 | |||||||
[1] | Market value of plan assets reflects any contributions received through June 30, 2019, or 2018, respectively. |
Benefit Plans 401(K) Plan (Deta
Benefit Plans 401(K) Plan (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Number of days of continuous employment to be eligible | 90 days | |
Maximum annual contribution by employee | 6.00% | |
Employer match | 50.00% | |
Contributions by employer | $ 333,000 | $ 312,000 |
Benefit Plans Employee Stock Ow
Benefit Plans Employee Stock Ownership Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
ESOP contribution expense | $ 1,698 | $ 1,906 | |
Dividends on unallocated ESOP shares used to reduce ESOP contribution | $ 148 | $ 166 | |
Allocated shares | 1,382,453 | 1,269,600 | |
Unallocated shares | 310,347 | 423,200 | |
Total ESOP shares | 1,692,800 | 1,692,800 | |
Fair value of unallocated shares | $ 4,637 | $ 6,547 | |
Textuals [Abstract] | |||
Amount borrowed by ESOP | $ 16,900 | ||
Shares acquired by ESOP | 1,692,800 | ||
Price per share of shares acquired by ESOP | $ 10 | ||
Fixed interest rate ESOP debt | 4.88% | ||
Principal and interest payments from ESOP | $ 1,600 | $ 1,600 | $ 1,600 |
Benefit Plans Stock-Based Compe
Benefit Plans Stock-Based Compensation - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total compensation expense | $ 501,000 | $ 650,000 |
First Financial Northwest, Inc. 2008 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense, related tax benefit | $ 105,000 | $ 137,000 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Description | The Plan authorized the grant of stock options amounting to 2,285,280 shares to Company directors, advisory directors, officers, and employees. Option awards are granted with an exercise price equal to the market price of First Financial Northwest’s common stock at the grant date. | |
Share-based Compensation Arrangement by Share-based Payment | These option awards have a vesting period of five years, with 20% vesting on the anniversary date of each grant date, and a contractual life of ten years. Any unexercised stock options will expire ten years after the grant date, or sooner in the event of the award recipient’s death, disability or termination of service with the Company. | |
Stock Options | First Financial Northwest, Inc. 2008 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted | 50,000 | 0 |
Award vesting period | 5 years | |
Percentage vesting per annum | 20.00% | |
Contractual life | 10 years | |
Unrecognized compensation cost | $ 32,000 | |
Unrecognized compensation cost recognition period | 11 months | |
Stock Options | First Financial Northwest Inc 2016 Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options granted (shares) | 1,400,000 | |
Number of shares remaining for grant | 1,240,114 | |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Description | The Plan authorized the grant of restricted stock awards amounting to 914,112 shares to directors, advisory directors, officers and employees. Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at the grant date. The restricted stock awards’ fair value is equal to the value on the grant date. Shares awarded as restricted stock vest ratably over a five-year period beginning at the grant date with 20% vesting on the anniversary date of each grant date. | |
Restricted Stock | First Financial Northwest, Inc. 2008 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ 46,000 | |
Unrecognized compensation cost recognition period | 2 months | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value | $ 459,000 | $ 238,000 |
Restricted Stock | First Financial Northwest Inc 2016 Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options granted (shares) | 400,000 | |
Number of shares remaining for grant | 320,057 |
Benefit Plans Fair Value Method
Benefit Plans Fair Value Methodology (Details) | 12 Months Ended |
Dec. 31, 2019 | |
First Financial Northwest Inc 2008 Equity Incentive Plan [Member] | Share-based Payment Arrangement, Option [Member] | |
Fair Value, Option, Changes in Instrument Specific Credit Risk, Gains (Losses) on Liabilities, Methodology | Black-Scholes model |
Benefit Plans Disclosure of Sha
Benefit Plans Disclosure of Share-based Compensation Arrangements by Share-based Payment Award (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Exercised | (2,000) | (137,940) |
First Financial Northwest, Inc. 2008 Equity Incentive Plan | Stock Options | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ | $ 32,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at beginning balance | 315,000 | |
Granted | 50,000 | 0 |
Exercised | (2,000) | |
Outstanding at ending balance | 313,000 | 315,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Outstanding beginning balance, Weighted Average Exercise Price | $ / shares | $ 10.34 | |
Granted | $ / shares | 15.80 | |
Exercised | $ / shares | 10.77 | |
Outstanding ending balance, Weighted Average Exercise Price | $ / shares | $ 10.34 | $ 10.34 |
Share-based Compensations Arrangement by Share-based Payment Award, Options Outstanding, Weighted Average Remaining Contractual Term [Roll Forward] | ||
Outstanding ending balance, Weighted Average Remaining Contractual Term | 3 years 11 months 24 days | |
Share Based Compensation, Stock Option Plan, Additional Disclosures [Abstract] | ||
Outstanding beginning balance, Agregate Intrinsic Value | $ | $ 1,615,600 | |
Exercised | $ | 7,240 | |
Outstanding ending balance, Agregate Intrinsic Value | $ | $ 1,440,310 | $ 1,615,600 |
Expected to Vest, Shares | 312,760 | |
Expected to Vest, Weighted Average Exercise Price | $ / shares | $ 10.34 | |
Expected to Vest, Weighted Average Remaining Contracutal Term in Years | 3 years 11 months 24 days | |
Expected to Vest, Aggregate Intrinsic Value | $ | $ 1,439,854 | |
Exercisable ending balance, Shares | 305,000 | |
Exercisable ending balance, Weighted Average Exercise Price | 10.27 | |
Exercisable ending balance, Weighted Average Remaining Contracutal Term in Years | 3 years 11 months 5 days | |
Exercisable ending balance, Aggregate Intrinsic Value | $ | $ 1,425,110 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | 50,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | $ / shares | $ 15.80 | |
First Financial Northwest, Inc. 2008 Equity Incentive Plan | Restricted Stock | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ | $ 46,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Nonvested beginning balance, Shares | 20,987 | |
Granted, Shares | 25,278 | |
Vested, Shares | (29,567) | |
Nonvested ending balance, Shares | 16,698 | 20,987 |
Expected to vest assuming a 3% forfeiture rate over the vesting term, Shares | 16,197 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Nonvested beginning balance, Weighted-Average Grant Date Fair Value | $ / shares | $ 15.90 | |
Granted, Weighted-Average Grant Date Fair Value | $ / shares | 15.88 | |
Vested, Weighted-Average Grant Date Fair Value | $ / shares | 15.53 | |
Nonvested ending balance, Weighted-Average Grant Date Fair Value | $ / shares | $ 16.53 | $ 15.90 |
Federal Income Taxes (Details)
Federal Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Tax Credit Carryforward [Line Items] | |||
Federal statutory income tax rate | 21.00% | 35.00% | 35.00% |
Unrecognized taxable temporary difference | $ 4,500,000 | ||
Operating Loss Carryforwards | $ 0 | $ 0 |
Federal Income Taxes_ Component
Federal Income Taxes: Components of The Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current | $ 2,453 | $ 3,973 |
Deferred | 109 | (280) |
Total income tax expense | $ 2,562 | $ 3,693 |
Federal Income Taxes_ Reconcili
Federal Income Taxes: Reconciliation From Tax At the Statutory Rate to the Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense at statutory rate | $ 2,715 | $ 3,904 |
Tax exempt interest, net | (25) | (53) |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Life Insurance, Amount | (203) | (150) |
Other, net | 75 | (8) |
Total income tax expense | $ 2,562 | $ 3,693 |
Federal Income Taxes_ Deferred
Federal Income Taxes: Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
ALLL | $ 2,775 | $ 2,801 |
Reserve for unfunded commitments | 90 | 96 |
Deferred compensation | 272 | 293 |
Net unrealized loss on investments available-for-sale | 146 | 640 |
Employee benefit plans | 487 | 527 |
OREO market value adjustments | 10 | 4 |
Accrued expenses | 93 | 111 |
Core deposit intangible | 30 | 18 |
Expenses to facilitate branch acquisition | 24 | 26 |
Deferred Tax Assets, Split Dollar Life Insurance | 67 | 51 |
Deferred Tax Assets, Deferred Rent | 0 | 18 |
Deferred Tax Assets, Lease Liability | 479 | 0 |
Total deferred tax assets | 4,473 | 4,585 |
Deferred tax liabilities: | ||
FHLB stock dividends | 16 | 110 |
Loan origination fees and costs | 940 | 903 |
Gain on fair value of cash flow hedge | 89 | 349 |
Fixed assets | 1,387 | 1,271 |
Goodwill | 29 | 17 |
Deferred Tax Liability, Right Of Use Asset | 464 | 0 |
Goodwill | 47 | 91 |
Total deferred tax liabilities | 2,972 | 2,741 |
Deferred tax assets, net | $ 1,501 | $ 1,844 |
Regulatory Capital Requiremen_3
Regulatory Capital Requirements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | ||
Capital | $ 148,048 | $ 140,220 |
Capital to Risk Weighted Assets | 14.38% | 14.68% |
Capital Required for Capital Adequacy | $ 82,359 | $ 76,417 |
Capital Required for Capital Adequacy to Risk Weighted Assets | 8.00% | 8.00% |
Capital Required to be Well Capitalized | $ 102,949 | $ 95,521 |
Capital Required to be Well Capitalized to Risk Weighted Assets | 10.00% | 10.00% |
Tier One Risk Based Capital | $ 135,170 | $ 128,257 |
Tier One Risk Based Capital to Risk Weighted Assets | 13.13% | 13.43% |
Tier One Risk Based Capital Required for Capital Adequacy | $ 61,769 | $ 57,313 |
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets | 6.00% | 6.00% |
Tier One Risk Based Capital Required to be Well Capitalized | $ 82,359 | $ 76,417 |
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets | 8.00% | 8.00% |
Common Equity Tier One Capital | $ 135,170 | $ 128,257 |
Common Equity Tier One Capital to Risk Weighted Assets | 13.13% | 13.43% |
Common Equity Tier One Capital For Capital Adequacy | $ 46,327 | $ 42,985 |
Common Equity Tier one Capital to Risk Weighted Assets For Capital Adequacy | 4.50% | 4.50% |
Common Equity Tier One Capital to be Well Capitalized to Risk Weighted Assets | $ 66,917 | $ 62,089 |
Common Equity Tier One Capital to be Well Capitalized to Risk Weighted Assets | 6.50% | 6.50% |
Tier One Leverage Capital | $ 135,170 | $ 128,257 |
Tier One Leverage Capital to Average Assets | 10.27% | 10.37% |
Tier One Leverage Capital Required for Capital Adequacy | $ 52,630 | $ 49,491 |
Tier One Leverage Capital Required for Capital Adequacy to Average Assets | 4.00% | 4.00% |
Tier One Leverage Capital Required to be Well Capitalized | $ 65,787 | $ 61,863 |
Tier One Leverage Capital Required to be Well Capitalized to Average Assets | 5.00% | 5.00% |
Conservation Buffer | 6.38% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] | ||
Committment to extend credit | $ 129,700,000 | $ 126,100,000 |
Loss Contingency Accrual | $ 238,000 |
Parent Company Only Financial_3
Parent Company Only Financial Statements Condensed Parent Company Only Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Condensed Financial Statements, Captions [Line Items] | |||
Cash and cash equivalents | $ 10,094 | $ 8,122 | |
Interest-earning deposits with banks | 12,896 | 8,888 | |
Deferred tax assets, net | 1,501 | 1,844 | |
Total assets | 1,341,885 | 1,252,424 | |
Other liabilities | 8,847 | 9,743 | |
Total liabilities | 1,185,566 | 1,098,686 | |
Total stockholders’ equity | 156,319 | 153,738 | $ 142,634 |
Total liabilities and stockholders’ equity | 1,341,885 | 1,252,424 | |
Parent Company [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Cash and cash equivalents | 235 | 140 | |
Interest-earning deposits with banks | 18,456 | 22,362 | |
Investment in subsidiaries | 136,907 | 130,209 | |
Receivable from subsidiaries | 990 | 1,207 | |
Other assets | 46 | 52 | |
Total assets | 156,634 | 153,970 | |
Payable to subsidiaries | 128 | 47 | |
Deferred Tax Liabilities, Net | 2 | 2 | |
Other liabilities | 185 | 183 | |
Total liabilities | 315 | 232 | |
Total stockholders’ equity | 156,319 | 153,738 | |
Total liabilities and stockholders’ equity | $ 156,634 | $ 153,970 |
Parent Company Only Financial_4
Parent Company Only Financial Statements Condensed Parent Company Only Income Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Financial Statements, Captions [Line Items] | ||
Interest-bearing deposits with banks | $ 293 | $ 202 |
Total interest income | 59,620 | 55,913 |
Total interest expense | 20,712 | 14,738 |
Loss before provision for federal income taxes and equity in undistributed earnings of subsidiaries | 12,931 | 18,592 |
Federal income tax provision | 2,562 | 3,693 |
Net income | 10,369 | 14,899 |
Parent Company [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Interest-bearing deposits with banks | 153 | 157 |
Total interest income | 153 | 157 |
Total interest expense | 1,732 | 1,557 |
Loss before provision for federal income taxes and equity in undistributed earnings of subsidiaries | (1,579) | (1,400) |
Federal income tax provision | (363) | (311) |
Loss before equity in undistributed loss of subsidiaries | (1,216) | (1,089) |
Equity in undistributed earnings of subsidiaries | 11,585 | 15,988 |
Net income | $ 10,369 | $ 14,899 |
Parent Company Only Financial_5
Parent Company Only Financial Statements Condensed Parent Company Only Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Financial Statements, Captions [Line Items] | ||
Net income | $ 10,369 | $ 14,899 |
ESOP, stock options, and restricted stock compensation | 501 | 650 |
Change in deferred tax liability, net | 109 | (281) |
Change in other assets | 153 | 2,567 |
Changes in other liabilities | (809) | 491 |
Net cash provided by operating activities | 13,080 | 18,676 |
Net cash provided in investing activities | (81,846) | (42,801) |
Proceeds from stock options exercises | 21 | 1,365 |
Issuance of common stock - restricted stock awards, net | (93) | (40) |
Repurchase and retirement of common stock | (7,406) | (3,153) |
Dividends paid | (3,478) | (3,198) |
Net cash provided by financing activities | 74,746 | 25,004 |
Net increase in cash and cash equivalents | 5,980 | 879 |
Cash and cash equivalents at beginning of year | 17,010 | 16,131 |
Cash and cash equivalents at end of year | 22,990 | 17,010 |
Parent Company [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net income | 10,369 | 14,899 |
Equity in undistributed earnings of subsidiaries | (11,585) | (15,988) |
Dividends received from subsidiary | 6,525 | 10,858 |
ESOP, stock options, and restricted stock compensation | 19 | 28 |
Change in deferred tax liability, net | 0 | (7) |
Change in receivables from subsidiaries | (9) | 7 |
Change in payables to subsidiaries | 81 | (50) |
Change in other assets | 6 | (5) |
Changes in other liabilities | 2 | (47) |
Net cash provided by operating activities | 5,408 | 9,695 |
Investments in subsidiaries | 277 | 334 |
ESOP loan repayment | 1,354 | 2,833 |
Net cash provided in investing activities | 1,631 | 3,167 |
Proceeds from stock options exercises | 21 | 1,365 |
Proceeds for vested awards | 106 | 206 |
Issuance of common stock - restricted stock awards, net | (93) | (40) |
Repurchase and retirement of common stock | (7,406) | (3,153) |
Dividends paid | (3,478) | (3,198) |
Net cash provided by financing activities | (10,850) | (4,820) |
Net increase in cash and cash equivalents | (3,811) | 8,042 |
Cash and cash equivalents at beginning of year | 22,502 | 14,460 |
Cash and cash equivalents at end of year | $ 18,691 | $ 22,502 |
Earnings Per Share_ Schedule _2
Earnings Per Share: Schedule of Earnings Per Share Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net income | $ 10,369 | $ 14,899 |
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic | (16) | (28) |
Earnings allocated to common shareholders | $ 10,353 | $ 14,871 |
Basic weighted-average common shares outstanding | 9,976,056 | 10,306,835 |
Dilutive effect of stock options | 93,446 | 108,503 |
Dilutive effect of restricted stock grants | 6,404 | 8,849 |
Diluted weighted-average common shares outstanding | 10,075,906 | 10,424,187 |
Basic earnings (loss) per share (usd per share) | $ 1.04 | $ 1.44 |
Diluted earnings (loss) per share (usd per share) | $ 1.03 | $ 1.43 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share | 0 | 0 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Contract with Customer, Liability | $ 0 | |
Gain (Loss) on Sale of Investments | 151,000 | $ (20,000) |
Revenue from Contract with Customer, Excluding Assessed Tax | 4,141,000 | 2,878,000 |
Revenue, Remaining Performance Obligation, Amount | 0 | |
BOLI [Member] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 994,000 | 814,000 |
Wealth Management Revenue [Member] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 879,000 | 611,000 |
Other Deposit Related Fees [Member] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 284,000 | 265,000 |
Debit Card and ATM Fees [Member] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 449,000 | 416,000 |
Other Loan Related Fees [Member] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 681,000 | 425,000 |
Loan Interest Swap Fees [Member] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 663,000 | 343,000 |
Other Noninterest Income [Member] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 40,000 | $ 24,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | Mar. 10, 2020 | Mar. 02, 2020 | Feb. 14, 2020 | Jan. 10, 2020 | Jan. 06, 2020 |
Subsequent Event [Line Items] | |||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 513,000 | ||||
Equity securities | $ 2,400,000 | ||||
Common Stock, Dividends, Per Share, Declared | $ 0.10 | ||||
Notional amount | $ 15,000,000 | ||||
Cash Flow Hedging [Member] | |||||
Subsequent Event [Line Items] | |||||
Notional amount | $ 25,000,000 | ||||
0.911% Derivative [Member] | Cash Flow Hedging [Member] | |||||
Subsequent Event [Line Items] | |||||
Notional amount | $ 15,000,000 | ||||
Fixed rate | 0.911% | ||||
Term | 6 years | ||||
0.793% Derivative [Member] | Cash Flow Hedging [Member] | |||||
Subsequent Event [Line Items] | |||||
Notional amount | $ 15,000,000 | ||||
Fixed rate | 0.793% | ||||
Term | 7 years | ||||
0.937% Derivative [Member] | Cash Flow Hedging [Member] | |||||
Subsequent Event [Line Items] | |||||
Notional amount | $ 15,000,000,000 | ||||
Fixed rate | 93700.00% | ||||
Term | 7 years | ||||
0.984 % Derivative [Member] | Cash Flow Hedging [Member] | |||||
Subsequent Event [Line Items] | |||||
Notional amount | $ 15,000,000,000 | ||||
Fixed rate | 98400.00% | ||||
Term | 8 years | ||||
0.800% Derivative [Member] | Cash Flow Hedging [Member] | |||||
Subsequent Event [Line Items] | |||||
Notional amount | $ 10,000,000 | ||||
Fixed rate | 80000.00% | ||||
Term | 8 years |