Loans | Loans The Company’s loans, net of unearned income, consisted of the following as of December 31 of the years indicated. (dollars in thousands) 2022 2021 Real estate loans: One- to four-family first mortgage $ 389,616 $ 350,843 Home equity loans and lines 61,863 60,312 Commercial real estate 1,152,537 801,624 Construction and land 313,175 259,652 Multi-family residential 100,588 90,518 Total real estate loans 2,017,779 1,562,949 Other loans: Commercial and industrial 377,894 244,123 Consumer 35,077 33,021 Total other loans 412,971 277,144 Total loans $ 2,430,750 $ 1,840,093 In January 2022, the Bank sold its former branch office in Vicksburg, Mississippi, and transferred approximately $2.8 million in loans from that office. The net discount on the Company’s acquired loans was $6,866,000 and $4,289,000 at December 31, 2022 and 2021, respectively. In addition, loan balances as of December 31, 2022 and 2021 are reported net of unearned income of $4,580,000 and $4,924,000, respectively. Unearned income at December 31, 2022 and December 31, 2021 included $94,000 and $1,301,000 of deferred lender fees related to PPP loans, respectively. The total recorded investment in PPP loans was $6,692,000 and $43,637,000 at December 31, 2022 and 2021, respectively, which is included in commercial and industrial loans. Accrued interest receivable on the Company's loans was $9,520,000 and $6,496,000 at December 31, 2022 and 2021, respectively, and is excluded from the estimate of the ACL. These amounts are recorded in accrued interest receivable and other assets on the Consolidated Statements of Financial Condition. A summary of activity in the ACL for the years ended December 31, 2022, 2021 and 2020 follows. For the Year Ended December 31, 2022 (dollars in thousands) Beginning Balance Allowance for Acquired PCD Loans (1) Charge-offs Recoveries Provision Ending Balance Allowance for credit losses: One- to four-family first mortgage $ 1,944 $ — $ (80) $ 39 $ 980 $ 2,883 Home equity loans and lines 508 — — 14 102 624 Commercial real estate 10,454 1,220 (270) — 2,410 13,814 Construction and land 3,572 — — — 1,108 4,680 Multi-family residential 457 — — — 115 572 Commercial and industrial 3,520 195 (792) 509 2,592 6,024 Consumer 634 — (256) 142 182 702 Total allowance for loan losses $ 21,089 $ 1,415 $ (1,398) $ 704 $ 7,489 $ 29,299 Unfunded lending commitments 1,815 — — — 278 2,093 Total allowance for credit losses $ 22,904 $ 1,415 $ (1,398) $ 704 $ 7,767 $ 31,392 For the Year Ended December 31, 2021 (dollars in thousands) Beginning Balance Charge-offs Recoveries Provision (Reversal) Ending Balance Allowance for credit losses: One- to four-family first mortgage $ 3,065 $ (176) $ 45 $ (990) $ 1,944 Home equity loans and lines 676 (6) 25 (187) 508 Commercial real estate 18,851 (1,337) — (7,060) 10,454 Construction and land 4,155 — 63 (646) 3,572 Multi-family residential 1,077 — — (620) 457 Commercial and industrial 4,276 (599) 313 (470) 3,520 Consumer 863 (187) 146 (188) 634 Total allowance for loan losses $ 32,963 $ (2,305) $ 592 $ (10,161) $ 21,089 Unfunded lending commitments 1,425 — — 390 1,815 Total allowance for credit losses $ 34,388 $ (2,305) $ 592 $ (9,771) $ 22,904 For the Year Ended December 31, 2020 (dollars in thousands) Beginning Balance ASC 326 Adoption Impact (1) Charge-offs Recoveries Provision (Reversal) Ending Balance Allowance for credit losses: One- to four-family first mortgage $ 2,715 $ 986 $ (99) $ 13 $ (550) $ 3,065 Home equity loans and lines 1,084 (1) (575) 16 152 676 Commercial real estate 6,541 1,974 (5) 55 10,286 18,851 Construction and land 2,670 519 (688) — 1,654 4,155 Multi-family residential 572 (245) — — 750 1,077 Commercial and industrial 3,694 1,243 (984) 106 217 4,276 Consumer 592 157 (250) 145 219 863 Total allowance for loan losses $ 17,868 $ 4,633 $ (2,601) $ 335 $ 12,728 $ 32,963 Unfunded lending commitments — 1,425 — — — 1,425 Total allowance for credit losses $ 17,868 $ 6,058 $ (2,601) $ 335 $ 12,728 $ 34,388 (1) On January 1, 2020, the Company adopted ASC 326, Financial Instruments - Credit Losses , which introduced a new model known as CECL. Refer to Note 2 for more information on the adoption of ASC 326. The ACL, which includes the ALL and the ACL on unfunded lending commitments, and recorded investment in loans as of the dates indicated are as follows. As of December 31, 2022 (dollars in thousands) Collectively Evaluated Individually Evaluated Total Allowance for credit losses: One- to four-family first mortgage $ 2,883 $ — $ 2,883 Home equity loans and lines 624 — 624 Commercial real estate 13,264 550 13,814 Construction and land 4,680 — 4,680 Multi-family residential 572 — 572 Commercial and industrial 5,853 171 6,024 Consumer 702 — 702 Total allowance for loan losses $ 28,578 $ 721 $ 29,299 Unfunded lending commitments (1) $ 2,093 $ — $ 2,093 Total allowance for credit losses $ 30,671 $ 721 $ 31,392 As of December 31, 2022 (dollars in thousands) Collectively Evaluated Individually Evaluated (2) Total Loans: One- to four-family first mortgage $ 389,616 $ — $ 389,616 Home equity loans and lines 61,863 — 61,863 Commercial real estate 1,147,794 4,743 1,152,537 Construction and land 313,175 — 313,175 Multi-family residential 100,588 — 100,588 Commercial and industrial 377,690 204 377,894 Consumer 34,991 86 35,077 Total loans $ 2,425,717 $ 5,033 $ 2,430,750 As of December 31, 2021 (dollars in thousands) Collectively Evaluated Individually Evaluated Total Allowance for credit losses: One- to four-family first mortgage $ 1,944 $ — $ 1,944 Home equity loans and lines 508 — 508 Commercial real estate 10,207 247 10,454 Construction and land 3,572 — 3,572 Multi-family residential 457 — 457 Commercial and industrial 3,095 425 3,520 Consumer 634 — 634 Total allowance for loan losses $ 20,417 $ 672 $ 21,089 Unfunded lending commitments (3) $ 1,815 $ — $ 1,815 Total allowance for credit losses $ 22,232 $ 672 $ 22,904 As of December 31, 2021 (dollars in thousands) Collectively Evaluated Individually Evaluated (2) Total Loans: One- to four-family first mortgage $ 350,843 $ — $ 350,843 Home equity loans and lines 60,312 — 60,312 Commercial real estate 797,751 3,873 801,624 Construction and land 259,652 — 259,652 Multi-family residential 90,518 — 90,518 Commercial and industrial 243,379 744 244,123 Consumer 33,021 — 33,021 Total loans $ 1,835,476 $ 4,617 $ 1,840,093 (1) At December 31, 2022, $2.1 million of the ACL related to noncancellable unfunded lending commitments of $520.7 million. The ACL on unfunded lending commitments is recorded within accrued interest payable and other liabilities on the Consolidated Statements of Financial Condition. (2) PCD loans individually evaluated totaled $1.5 million and none at December 31, 2022 and December 31, 2021, respectively. (3) At December 31, 2021, $1.8 million of the ACL related to noncancellable unfunded lending commitments of $434.6 million. The ACL on unfunded lending commitments is recorded within accrued interest payable and other liabilities on the Consolidated Statements of Financial Condition. Although the Company has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate and is dependent, in part, on values in the real estate market. The following table presents the Company’s loan portfolio by credit quality classification and origination year as of December 31, 2022. Term Loans by Origination Year (dollars in thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Revolving Loans Converted to Term Loans Total One- to four-family first mortgage: Pass $ 107,546 $ 78,744 $ 37,876 $ 34,114 $ 26,455 $ 94,729 $ 5,387 $ 348 $ 385,199 Special Mention 150 189 — — — 355 — 500 1,194 Substandard 272 56 368 145 372 2,010 — — 3,223 Doubtful — — — — — — — — — Total one- to four-family first mortgages $ 107,968 $ 78,989 $ 38,244 $ 34,259 $ 26,827 $ 97,094 $ 5,387 $ 848 $ 389,616 Home equity loans and lines: Pass $ 1,898 $ 1,453 $ 783 $ 1,142 $ 604 $ 3,453 $ 51,502 $ 995 $ 61,830 Special Mention — — — — — — — — — Substandard — — — — — 33 — — 33 Doubtful — — — — — — — — — Total home equity loans and lines $ 1,898 $ 1,453 $ 783 $ 1,142 $ 604 $ 3,486 $ 51,502 $ 995 $ 61,863 Commercial real estate: Pass $ 292,894 $ 279,397 $ 210,983 $ 159,169 $ 64,554 $ 95,083 $ 35,918 $ 586 $ 1,138,584 Special Mention — 179 345 — — — — — 524 Substandard 97 — 167 5,579 294 7,292 — — 13,429 Doubtful — — — — — — — — — Total commercial real estate loans $ 292,991 $ 279,576 $ 211,495 $ 164,748 $ 64,848 $ 102,375 $ 35,918 $ 586 $ 1,152,537 Construction and land: Pass $ 170,744 $ 101,321 $ 19,620 $ 8,912 $ 2,534 $ 2,716 $ 4,434 $ 1,727 $ 312,008 Special Mention — 520 — — — — — — 520 Substandard 417 — 152 — — 78 — — 647 Doubtful — — — — — — — — — Total construction and land loans $ 171,161 $ 101,841 $ 19,772 $ 8,912 $ 2,534 $ 2,794 $ 4,434 $ 1,727 $ 313,175 Multi-family residential: Pass $ 33,822 $ 15,775 $ 25,661 $ 13,070 $ 2,241 $ 2,491 $ 1,302 $ 2,840 $ 97,202 Special Mention — — — — 3,312 — — — 3,312 Substandard — — — — 74 — — — 74 Doubtful — — — — — — — — — Total multi-family residential loans $ 33,822 $ 15,775 $ 25,661 $ 13,070 $ 5,627 $ 2,491 $ 1,302 $ 2,840 $ 100,588 Commercial and industrial: Pass $ 108,464 $ 50,850 $ 16,043 $ 8,599 $ 11,203 $ 2,759 $ 174,145 $ 712 $ 372,775 Special Mention 338 — — — 7 — 1,188 — 1,533 Substandard 590 — 2,317 8 — 293 328 50 3,586 Doubtful — — — — — — — — — Total commercial and industrial loans $ 109,392 $ 50,850 $ 18,360 $ 8,607 $ 11,210 $ 3,052 $ 175,661 $ 762 $ 377,894 Consumer: Pass $ 10,012 $ 2,048 $ 1,577 $ 536 $ 136 $ 12,785 $ 7,420 $ 29 $ 34,543 Special Mention — — — — — — — — — Substandard 9 298 — — — 227 — — 534 Doubtful — — — — — — — — — Total consumer loans $ 10,021 $ 2,346 $ 1,577 $ 536 $ 136 $ 13,012 $ 7,420 $ 29 $ 35,077 Total loans: Pass $ 725,380 $ 529,588 $ 312,543 $ 225,542 $ 107,727 $ 214,016 $ 280,108 $ 7,237 $ 2,402,141 Special Mention 488 888 345 — 3,319 355 1,188 500 7,083 Substandard 1,385 354 3,004 5,732 740 9,933 328 50 21,526 Doubtful — — — — — — — — — Total loans $ 727,253 $ 530,830 $ 315,892 $ 231,274 $ 111,786 $ 224,304 $ 281,624 $ 7,787 $ 2,430,750 The following table presents the Company’s loan portfolio by credit quality classification and origination year as of December 31, 2021. Term Loans by Origination Year (dollars in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Revolving Loans Converted to Term Loans Total One- to four-family first mortgage: Pass $ 77,865 $ 44,152 $ 45,542 $ 34,301 $ 35,048 $ 96,975 $ 12,412 $ 351 $ 346,646 Special Mention — — — — — 369 — — 369 Substandard — 347 716 266 463 2,036 — — 3,828 Doubtful — — — — — — — — — Total one- to four-family first mortgages $ 77,865 $ 44,499 $ 46,258 $ 34,567 $ 35,511 $ 99,380 $ 12,412 $ 351 $ 350,843 Home equity loans and lines: Pass $ 1,688 $ 873 $ 1,114 $ 919 $ 816 $ 3,567 $ 50,323 $ 975 $ 60,275 Special Mention — — — — — — — — — Substandard — — — — 37 — — — 37 Doubtful — — — — — — — — — Total home equity loans and lines $ 1,688 $ 873 $ 1,114 $ 919 $ 853 $ 3,567 $ 50,323 $ 975 $ 60,312 Commercial real estate: Pass $ 226,989 $ 193,637 $ 142,045 $ 68,949 $ 73,555 $ 59,396 $ 23,310 $ 1,699 $ 789,580 Special Mention — — — — 1,841 366 — — 2,207 Substandard 437 821 381 1,741 306 5,991 — 160 9,837 Doubtful — — — — — — — — — Total commercial real estate loans $ 227,426 $ 194,458 $ 142,426 $ 70,690 $ 75,702 $ 65,753 $ 23,310 $ 1,859 $ 801,624 Construction and land: Pass $ 148,054 $ 50,062 $ 48,432 $ 4,832 $ 2,867 $ 1,738 $ 2,845 $ — $ 258,830 Special Mention 575 — — — — — — — 575 Substandard — — — — 5 242 — — 247 Doubtful — — — — — — — — — Total construction and land loans $ 148,629 $ 50,062 $ 48,432 $ 4,832 $ 2,872 $ 1,980 $ 2,845 $ — $ 259,652 Multi-family residential: Pass $ 31,236 $ 31,805 $ 14,467 $ 6,363 $ 2,588 $ 2,762 $ 1,297 $ — $ 90,518 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful — — — — — — — — — Total multi-family residential loans $ 31,236 $ 31,805 $ 14,467 $ 6,363 $ 2,588 $ 2,762 $ 1,297 $ — $ 90,518 Commercial and industrial: Pass $ 82,765 $ 32,465 $ 14,794 $ 8,737 $ 3,066 $ 1,690 $ 96,648 $ 296 $ 240,461 Special Mention — — — — — — 267 — 267 Substandard — 2,013 — 417 5 18 942 — 3,395 Doubtful — — — — — — — — — Total commercial and industrial loans $ 82,765 $ 34,478 $ 14,794 $ 9,154 $ 3,071 $ 1,708 $ 97,857 $ 296 $ 244,123 Consumer: Pass $ 5,472 $ 2,627 $ 1,211 $ 411 $ 1,041 $ 15,530 $ 6,488 $ 37 $ 32,817 Special Mention — — — — — 2 — — 2 Substandard 16 — — — 7 179 — — 202 Doubtful — — — — — — — — — Total consumer loans $ 5,488 $ 2,627 $ 1,211 $ 411 $ 1,048 $ 15,711 $ 6,488 $ 37 $ 33,021 Total loans: Pass $ 574,069 $ 355,621 $ 267,605 $ 124,512 $ 118,981 $ 181,658 $ 193,323 $ 3,358 $ 1,819,127 Special Mention 575 — — — 1,841 737 267 — 3,420 Substandard 453 3,181 1,097 2,424 823 8,466 942 160 17,546 Doubtful — — — — — — — — — Total loans $ 575,097 $ 358,802 $ 268,702 $ 126,936 $ 121,645 $ 190,861 $ 194,532 $ 3,518 $ 1,840,093 Age analysis of past due loans, as of the dates indicated, is as follows. December 31, 2022 (dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Past Due Total Past Due Current Loans Total Loans Originated loans: Real estate loans: One- to four-family first mortgage $ 490 $ 147 $ 646 $ 1,283 $ 298,547 $ 299,830 Home equity loans and lines 40 — — 40 52,950 52,990 Commercial real estate 3,210 179 27 3,416 853,096 856,512 Construction and land 345 160 147 652 284,740 285,392 Multi-family residential — — — — 96,400 96,400 Total real estate loans 4,085 486 820 5,391 1,585,733 1,591,124 Other loans: Commercial and industrial 152 — 210 362 338,418 338,780 Consumer 264 7 191 462 31,059 31,521 Total other loans 416 7 401 824 369,477 370,301 Total originated loans $ 4,501 $ 493 $ 1,221 $ 6,215 $ 1,955,210 $ 1,961,425 Acquired loans: Real estate loans: One- to four-family first mortgage $ 1,591 $ 136 $ 519 $ 2,246 $ 87,540 $ 89,786 Home equity loans and lines 116 — 1 117 8,756 8,873 Commercial real estate 294 — 566 860 295,165 296,025 Construction and land — — 132 132 27,651 27,783 Multi-family residential — — — — 4,188 4,188 Total real estate loans 2,001 136 1,218 3,355 423,300 426,655 Other loans: Commercial and industrial — 225 38 263 38,851 39,114 Consumer 41 3 21 65 3,491 3,556 Total other loans 41 228 59 328 42,342 42,670 Total acquired loans $ 2,042 $ 364 $ 1,277 $ 3,683 $ 465,642 $ 469,325 Total loans: Real estate loans: One- to four-family first mortgage $ 2,081 $ 283 $ 1,165 $ 3,529 $ 386,087 $ 389,616 Home equity loans and lines 156 — 1 157 61,706 61,863 Commercial real estate 3,504 179 593 4,276 1,148,261 1,152,537 Construction and land 345 160 279 784 312,391 313,175 Multi-family residential — — — — 100,588 100,588 Total real estate loans 6,086 622 2,038 8,746 2,009,033 2,017,779 Other loans: Commercial and industrial 152 225 248 625 377,269 377,894 Consumer 305 10 212 527 34,550 35,077 Total other loans 457 235 460 1,152 411,819 412,971 Total loans $ 6,543 $ 857 $ 2,498 $ 9,898 $ 2,420,852 $ 2,430,750 December 31, 2021 (dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Past Due Total Past Due Current Loans Total Loans Originated loans: Real estate loans: One- to four-family first mortgage $ 1,267 $ 266 $ 1,151 $ 2,684 $ 254,880 $ 257,564 Home equity loans and lines — — — — 48,561 48,561 Commercial real estate 438 — 4,854 5,292 682,323 687,615 Construction and land 428 — — 428 249,802 250,230 Multi-family residential — — — — 87,316 87,316 Total real estate loans 2,133 266 6,005 8,404 1,322,882 1,331,286 Other loans: Commercial and industrial 51 31 271 353 232,569 232,922 Consumer 289 — 25 314 29,247 29,561 Total other loans 340 31 296 667 261,816 262,483 Total originated loans $ 2,473 $ 297 $ 6,301 $ 9,071 $ 1,584,698 $ 1,593,769 Acquired loans: Real estate loans: One- to four-family first mortgage $ 1,233 $ 428 $ 1,322 $ 2,983 $ 90,296 $ 93,279 Home equity loans and lines 141 — — 141 11,610 11,751 Commercial real estate 54 — 2,139 2,193 111,816 114,009 Construction and land — — 241 241 9,181 9,422 Multi-family residential — — — — 3,202 3,202 Total real estate loans 1,428 428 3,702 5,558 226,105 231,663 Other loans: Commercial and industrial 81 — 430 511 10,690 11,201 Consumer 53 3 21 77 3,383 3,460 Total other loans 134 3 451 588 14,073 14,661 Total acquired loans $ 1,562 $ 431 $ 4,153 $ 6,146 $ 240,178 $ 246,324 Total loans: Real estate loans: One- to four-family first mortgage $ 2,500 $ 694 $ 2,473 $ 5,667 $ 345,176 $ 350,843 Home equity loans and lines 141 — — 141 60,171 60,312 Commercial real estate 492 — 6,993 7,485 794,139 801,624 Construction and land 428 — 241 669 258,983 259,652 Multi-family residential — — — — 90,518 90,518 Total real estate loans 3,561 694 9,707 13,962 1,548,987 1,562,949 Other loans: Commercial and industrial 132 31 701 864 243,259 244,123 Consumer 342 3 46 391 32,630 33,021 Total other loans 474 34 747 1,255 275,889 277,144 Total loans $ 4,035 $ 728 $ 10,454 $ 15,217 $ 1,824,876 $ 1,840,093 Loans greater than 90 days past due and accruing interest were $2,000 and $6,000 at December 31, 2022 and December 31, 2021, respectively. The Company reviews its significant nonaccrual loans (i.e., loans with balances of $500,000 or greater) for specific impairment in accordance with its allowance for credit loss methodology. If it is determined that it is probable that all amounts due will not be collected when other credit quality indicators are considered, the loan is considered impaired and the Company individually evaluates those loans to determine the expected credit losses. The following table summarizes information pertaining to nonaccrual loans as of dates indicated. December 31, 2022 December 31, 2021 (dollars in thousands) Total Without Related Allowance Total Without Related Allowance Nonaccrual loans (1) : One- to four-family first mortgage $ 2,300 $ — $ 3,575 $ — Home equity loans and lines 34 — 38 — Commercial real estate 6,945 2,914 8,431 116 Construction and land 315 — 258 — Multi-family residential — — — — Commercial and industrial 378 13 763 20 Consumer 541 86 204 — Total $ 10,513 $ 3,013 $ 13,269 $ 136 (1) Nonaccrual acquired loans include PCD loans of $1,530,000 at December 31, 2022. There were no nonaccrual acquired PCD loans at December 31, 2021. All interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. All payments received while on nonaccrual status are applied against the principal balance of nonaccrual loans. The Company does not recognize interest income while loans are on nonaccrual status. As of December 31, 2022, the Company was not committed to lend additional funds to any customer whose loan was individually evaluated for impairment. Collateral Dependent Loans The Company held loans that were individually evaluated for impairment at December 31, 2022 and 2021 for which the repayments, on the basis of our assessment at the reporting date, were expected to be provided substantially through the operation or sale of the collateral and the borrower was experiencing financial difficulty. The ACL for these collateral-dependent loans is primarily based on the fair value of the underlying collateral at the reporting date. The following describes the types of collateral that secure collateral dependent loans: • One- to four-family first mortgages are primarily secured by first liens on residential real estate. • Home equity loans and lines are primarily secured by first and junior liens on residential real estate. • Commercial real estate loans are primarily secured by office and industrial buildings, warehouses, retail shopping facilities and various special purpose properties, including hotels and restaurants. • Construction and land loans are primarily secured by residential and commercial properties, which are under construction and/or redevelopment, and by raw land. • Commercial and industrial loans considered collateral dependent are primarily secured by accounts receivable, inventory and equipment. The table below summarizes collateral dependent loans and the related ACL as of the periods indicated for which the borrower was experiencing financial difficulty. December 31, 2022 December 31, 2021 (dollars in thousands) Loans ACL Loans ACL One- to four-family first mortgage $ — $ — $ — $ — Home equity loans and lines — — — — Commercial real estate 4,743 550 3,873 247 Construction and land — — — — Multi-family residential — — — — Commercial and industrial 204 171 744 425 Consumer 86 — — — Total $ 5,033 $ 721 $ 4,617 $ 672 Foreclosed Assets and ORE Foreclosed assets and ORE include real property and other assets that have been acquired as a result of foreclosure, and real property no longer used in the Bank's business. Foreclosed assets and ORE totaled $461,000 and $1,189,000 at December 31, 2022 and December 31, 2021, respectively. These amounts are recorded in accrued interest receivable and other assets on the Consolidated Statements of Financial Condition. The carrying amount of foreclosed residential real estate properties held at December 31, 2022 and December 31, 2021 totaled $231,000 and $136,000, respectively. Loans secured by single family residential real estate that were in the process of foreclosure at December 31, 2022 and December 31, 2021 totaled $179,000 and $505,000, respectively. Foreclosed assets and ORE included certain bank buildings that meet the criteria to be classified as assets held for sale. The carrying value of these assets totaled $423,000 at December 31, 2021. During the year ended December 31, 2022, the Company sold the asset held for sale at the recorded carrying value of $423,000. Troubled Debt Restructurings During the course of its lending operations, the Company periodically grants concessions to its customers in an attempt to protect as much of its investment as possible and to minimize risk of loss. These concessions may include restructuring the terms of a customer loan to alleviate the burden of the customer’s near-term cash requirements. Loans are TDRs when the Company agrees to restructure a loan to a borrower who is experiencing financial difficulties in a manner that is deemed to be a “concession”. The Company defines a concession as a modification of existing terms granted to a borrower for economic or legal reasons related to the borrower’s financial difficulties that the Company would otherwise not consider. The concession either is granted through an agreement with the customer or is imposed by a court or by law. Concessions include modifying original loan terms to reduce or defer cash payments required as part of the loan agreement, including but not limited to: • a reduction of the stated interest rate for the remaining original life of the debt, • an extension of the maturity date or dates at an interest rate lower than the current market rate for new debt with similar risk characteristics, • a reduction of the face amount or maturity amount of the debt or • a reduction of accrued interest receivable on the debt. In its determination of whether the customer is experiencing financial difficulties, the Company considers numerous indicators, including, but not limited to: • whether the customer is currently in default on its existing loan, or is in an economic position where it is probable the customer will be in default on its loan in the foreseeable future without a modification, • whether the customer has declared or is in the process of declaring bankruptcy, • whether there is substantial doubt about the customer’s ability to continue as a going concern, • whether, based on its projections of the customer’s current capabilities, the Company believes the customer’s future cash flows will be insufficient to service the debt, including interest, in accordance with the contractual terms of the existing agreement for the foreseeable future and • whether, without modification, the customer cannot obtain sufficient funds from other sources at an effective interest rate equal to the current market rate for similar debt for a non-troubled debtor. If the Company concludes that both a concession has been granted and the concession was granted to a customer experiencing financial difficulties, the Company identifies the loan as a TDR. The ACL for loans that are individually evaluated is based on a comparison of the recorded investment in the loan with either the expected cash flows discounted using the loan’s original effective interest rate, observable market price for the loan or the fair value of the collateral underlying certain collateral-dependent loans. Residential, consumer and smaller balance commercial TDRs are included in the Company's pooled-loan analysis to calculate the ACL and, generally, do not have a material impact on the overall ACL. A summary of information pertaining to loans modified as of the periods indicated is as follows. For the Year Ended December 31 2022 2021 (dollars in thousands) Number of Contracts Pre-modification Outstanding Recorded Investment Post-modification Outstanding Recorded Investment Number of Contracts Pre-modification Outstanding Recorded Investment Post-modification Outstanding Recorded Investment Troubled debt restructurings: One- to four-family first mortgage 6 $ 1,196 $ 1,188 2 $ 77 $ 73 Home equity loans and lines — — — — — — Commercial real estate 3 428 415 3 520 478 Construction and land — — — — — — Multi-family residential — — — — — — Commercial and industrial 1 7 7 2 2,397 2,245 Consumer 1 19 15 1 6 1 Total 11 $ 1,650 $ 1,625 8 $ 3,000 $ 2,797 As of December 31, 2022 and 2021, the Company had no unfunded commitments to borrowers whose loan terms had been modified through troubled debt restructurings. None of the the loans modified during the year ended December 31, 2022 defaulted during the same period. |