Loans Receivable | Loans Receivable Loans receivable consisted of the following at the dates indicated: March 31, 2016 June 30, 2015 (In thousands) Real Estate: One-to-four family $ 298,830 $ 256,696 Multi-family 47,562 33,086 Commercial real estate 141,116 125,623 Construction and land 34,633 19,127 Total real estate loans 522,141 434,532 Consumer: Home equity 34,201 36,387 Other consumer 8,309 8,198 Total consumer loans 42,510 44,585 Commercial business loans 15,638 14,764 Total loans 580,289 493,881 Less: Net deferred loan fees 1,173 840 Premium on purchased loans, net (2,253 ) (1,957 ) Allowance for loan losses 6,988 7,111 Total loans receivable, net $ 574,381 $ 487,887 Allowance for Loan Losses. The Company maintains a general allowance for loan losses based on evaluating known and inherent risks in the loan portfolio, including management’s continuing analysis of the factors underlying the quality of the loan portfolio. These factors include changes in the size and composition of the loan portfolio, actual loan loss experience, and current and anticipated economic conditions. The reserve is an estimate based upon factors and trends identified by management at the time the financial statements are prepared. The following tables summarize changes in the ALLL and loan portfolio by segment and impairment method for the periods shown: At or For the Three Months Ended March 31, 2016 One-to- four family Multi-family Commercial real estate Construction and land Home equity Other consumer Commercial business Unallocated Total (In thousands) ALLL: Beginning balance $ 2,863 $ 287 $ 1,006 $ 390 $ 1,030 $ 287 $ 139 $ 972 $ 6,974 Provision for loan losses (344 ) 27 53 64 (138 ) (4 ) 130 212 — Charge-offs — — — — 1 (28 ) — — (27 ) Recoveries 12 — — — 10 19 — — 41 Ending balance $ 2,531 $ 314 $ 1,059 $ 454 $ 903 $ 274 $ 269 $ 1,184 $ 6,988 At or For the Nine Months Ended March 31, 2016 One-to- four family Multi-family Commercial real estate Construction and land Home equity Other consumer Commercial business Unallocated Total (In thousands) ALLL: Beginning balance $ 3,143 $ 251 $ 998 $ 336 $ 1,052 $ 321 $ 251 $ 759 $ 7,111 Provision for loan losses (572 ) 63 61 117 (134 ) 56 (16 ) 425 — Charge-offs (60 ) — — — (68 ) (150 ) (7 ) — (285 ) Recoveries 20 — — 1 53 47 41 — 162 Ending balance $ 2,531 $ 314 $ 1,059 $ 454 $ 903 $ 274 $ 269 $ 1,184 $ 6,988 At March 31, 2016 One-to- four family Multi-family Commercial real estate Construction and land Home equity Other consumer Commercial business Unallocated Total (In thousands) Total ALLL $ 2,531 $ 314 $ 1,059 $ 454 $ 903 $ 274 $ 269 $ 1,184 $ 6,988 General reserve 2,355 313 1,002 434 871 220 114 1,184 6,493 Specific reserve 176 1 57 20 32 54 155 — 495 Total loans $ 298,830 $ 47,562 $ 141,116 $ 34,633 $ 34,201 $ 8,309 $ 15,638 $ — $ 580,289 General reserves (1) 291,940 47,439 139,559 34,468 33,450 8,195 15,260 — 570,311 Specific reserves (2) 6,890 123 1,557 165 751 114 378 — 9,978 (1) Loans collectively evaluated for general reserves. (2) Loans individually evaluated for specific reserves. At or For the Three Months Ended March 31, 2015 One-to- four family Multi-family Commercial real estate Construction and land Home equity Other consumer Commercial business Unallocated Total ALLL: (In thousands) Beginning balance $ 3,397 $ 281 $ 1,034 $ 280 $ 1,168 $ 349 $ 405 $ 510 $ 7,424 Provision for loan losses — — — — — — — — — Charge-offs — — — — — — — — — Recoveries — — — (1 ) 1 — — — — Ending balance $ 3,397 $ 281 $ 1,034 $ 279 $ 1,169 $ 349 $ 405 $ 510 $ 7,424 At or For the Nine Months Ended March 31, 2015 One-to- four family Multi-family Commercial real estate Construction and land Home equity Other consumer Commercial business Unallocated Total ALLL: (In thousands) Beginning balance $ 3,408 $ 475 $ 1,491 $ 397 $ 1,289 $ 389 $ 388 $ 235 $ 8,072 Provision for loan losses 229 (194 ) (457 ) (85 ) 171 47 14 275 — Charge-offs (305 ) — — (49 ) (325 ) (124 ) — — (803 ) Recoveries 65 — — 16 34 37 3 — 155 Ending balance $ 3,397 $ 281 $ 1,034 $ 279 $ 1,169 $ 349 $ 405 $ 510 $ 7,424 At June 30, 2015 One-to- four family Multi-family Commercial real estate Construction and land Home equity Other consumer Commercial business Unallocated Total (In thousands) Total ALLL $ 3,143 $ 251 $ 998 $ 336 $ 1,052 $ 321 $ 251 $ 759 $ 7,111 General reserve 2,982 251 923 318 998 244 207 759 6,682 Specific reserve 161 — 75 18 54 77 44 — 429 Total loans $ 256,696 $ 33,086 $ 125,623 $ 19,127 $ 36,387 $ 8,198 $ 14,764 $ — $ 493,881 General reserves (1) 249,290 32,456 124,260 18,968 35,752 8,034 14,361 — 483,121 Specific reserves (2) 7,406 630 1,363 159 635 164 403 — 10,760 (1) Loans collectively evaluated for general reserves. (2) Loans individually evaluated for specific reserves. Impaired loans. A loan is considered impaired when First Federal has determined that it may be unable to collect payments of principal or interest when due under the contractual terms of the loan. In the process of identifying loans as impaired, management takes into consideration factors that include payment history and status, collateral value, financial condition of the borrower, and the probability of collecting scheduled payments in the future. Minor payment delays and insignificant payment shortfalls typically do not result in a loan being classified as impaired. The significance of payment delays and shortfalls is considered by management on a case-by-case basis after taking into consideration the totality of circumstances surrounding the loans and the borrowers, including payment history and amounts of any payment shortfall, length and reason for delay, and likelihood of return to stable performance. Impairment is measured on a loan-by-loan basis for all loans in the portfolio except smaller balance homogeneous loans and certain qualifying troubled debt restructuring ("TDR") loans. The following table presents a summary of loans individually evaluated for impairment by portfolio segment at the dates indicated: March 31, 2016 June 30, 2015 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance (In thousands) With no allowance recorded: One-to-four family $ 1,867 $ 2,414 $ — $ 3,502 $ 4,162 $ — Multi-family — — — 503 503 — Commercial real estate 345 409 — 355 416 — Construction and land 15 46 — 17 48 — Home equity 152 216 — 209 322 — Other consumer — 36 — — 10 — Commercial business — — — — 180 — Total 2,379 3,121 — 4,586 5,641 — With an allowance recorded: One-to-four family 5,023 5,221 176 3,904 4,157 161 Multi-family 123 123 1 127 126 — Commercial real estate 1,212 1,212 57 1,008 1,008 75 Construction and land 150 173 20 142 166 18 Home equity 599 661 32 426 441 54 Other consumer 114 139 54 164 181 77 Commercial business 378 378 155 403 403 44 Total 7,599 7,907 495 6,174 6,482 429 Total impaired loans: One-to-four family 6,890 7,635 176 7,406 8,319 161 Multi-family 123 123 1 630 629 — Commercial real estate 1,557 1,621 57 1,363 1,424 75 Construction and land 165 219 20 159 214 18 Home equity 751 877 32 635 763 54 Other consumer 114 175 54 164 191 77 Commercial business 378 378 155 403 583 44 Total $ 9,978 $ 11,028 $ 495 $ 10,760 $ 12,123 $ 429 The following tables present the average recorded investment in loans individually evaluated for impairment and the related interest income recognized for the periods shown: Three Months Ended Nine Months Ended March 31, 2016 March 31, 2016 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (In thousands) With no allowance recorded: One-to-four family $ 1,740 $ 37 $ 2,307 $ 60 Multi-family 247 — 343 — Commercial real estate 346 6 350 14 Construction and land 15 1 15 2 Home equity 160 3 207 10 Other consumer — 1 4 2 Commercial business loans 52 — 26 — Total 2,560 48 3,252 88 With an allowance recorded: One-to-four family 4,307 96 3,779 175 Multi-family 124 2 180 4 Commercial real estate 1,062 12 1,020 41 Construction and land 160 9 154 9 Home equity 626 12 503 23 Other consumer 126 3 151 5 Commercial business 329 5 366 15 Total 6,734 139 6,153 272 Total impaired loans: One-to-four family 6,047 133 6,086 235 Multi-family 371 2 523 4 Commercial real estate 1,408 18 1,370 55 Construction and land 175 10 169 11 Home equity 786 15 710 33 Other consumer 126 4 155 7 Commercial business 381 5 392 15 Total $ 9,294 $ 187 $ 9,405 $ 360 Interest income recognized on a cash basis on impaired loans for the three and nine months ended March 31, 2016 , was $105,000 and $277,000 , respectively. The following tables present the average recorded investment in loans individually evaluated for impairment and the related interest income recognized for the periods shown: Three Months Ended Nine Months Ended March 31, 2015 March 31, 2015 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (In thousands) With no allowance recorded: One-to-four family $ 4,326 $ 126 $ 4,276 $ 183 Multi-family 507 4 555 13 Commercial real estate 769 5 1,593 16 Construction and land 18 1 19 3 Home equity 168 2 228 5 Other consumer — 2 — 3 Total 5,788 140 6,671 223 With an allowance recorded: One-to-four family 3,178 70 3,273 133 Multi-family 128 2 129 5 Commercial real estate 1,082 12 1,657 36 Construction and land 234 9 184 14 Home equity 601 12 636 26 Other consumer 101 3 76 5 Commercial business 600 7 482 18 Total 5,924 115 6,437 237 Total impaired loans: One-to-four family 7,504 196 7,549 316 Multi-family 635 6 684 18 Commercial real estate 1,851 17 3,250 52 Construction and land 252 10 203 17 Home equity 769 14 864 31 Other consumer 101 5 76 8 Commercial business 600 7 482 18 Total $ 11,712 $ 255 $ 13,108 $ 460 Interest income recognized on a cash basis on impaired loans for the three and nine months ended March 31, 2015 , was $146,000 , and $352,000 , respectively. The following table presents the recorded investment in nonaccrual loans by class of loan at the dates indicated: March 31, 2016 June 30, 2015 (In thousands) One-to-four family $ 2,978 $ 4,232 Commercial real estate 366 147 Construction and land 165 159 Home equity 250 181 Other consumer 114 164 Total nonaccrual loans $ 3,873 $ 4,883 Past due loans. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. There were no loans past due 90 days or more and still accruing interest at March 31, 2016 and June 30, 2015 . The following table presents past due loans, net of partial loan charge-offs, by class, as of March 31, 2016 : 30-59 Past Due 60-89 Past Due 90 Days Past Due Total Past Due Current Total Loans (In thousands) Real Estate: One-to-four family $ 1,635 $ 675 $ 969 $ 3,279 $ 295,551 $ 298,830 Multi-family — — — — 47,562 47,562 Commercial real estate 230 148 — 378 140,738 141,116 Construction and land 127 — 117 244 34,389 34,633 Total real estate loans 1,992 823 1,086 3,901 518,240 522,141 Consumer: Home equity 513 — 65 578 33,623 34,201 Other consumer 215 — — 215 8,094 8,309 Total consumer loans 728 — 65 793 41,717 42,510 Commercial business loans — — — — 15,638 15,638 Total loans $ 2,720 $ 823 $ 1,151 $ 4,694 $ 575,595 $ 580,289 The following table presents past due loans, net of partial loan charge-offs, by class, as of June 30, 2015 : 30-59 Past Due 60-89 Past Due 90 Days Past Due Total Past Due Current Total Loans (In thousands) Real Estate: One-to-four family $ — $ 1,230 $ 704 $ 1,934 $ 254,762 $ 256,696 Multi-family — — — — 33,086 33,086 Commercial real estate — — — — 125,623 125,623 Construction and land — 114 23 137 18,990 19,127 Total real estate loans — 1,344 727 2,071 432,461 434,532 Consumer: Home equity 81 15 98 194 36,193 36,387 Other consumer 58 89 10 157 8,041 8,198 Total consumer loans 139 104 108 351 44,234 44,585 Commercial business loans — — — — 14,764 14,764 Total loans $ 139 $ 1,448 $ 835 $ 2,422 $ 491,459 $ 493,881 Credit quality indicator. Federal regulations provide for the classification of lower quality loans and other assets, such as debt and equity securities, as substandard, doubtful, or loss; risk ratings 6, 7, and 8 in our 8-point risk rating system, respectively. An asset is considered substandard if it is inadequately protected by the current net worth and pay capacity of the borrower or of any collateral pledged. Substandard assets include those characterized by the distinct possibility that First Federal will sustain some loss if the deficiencies are not corrected. Assets classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions, and values. Assets classified as loss are those considered uncollectible and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. When First Federal classifies problem assets as either substandard or doubtful, it may establish a specific allowance to address the risk specifically or First Federal may allow the loss to be addressed in the general allowance. General allowances represent loss allowances that have been established to recognize the inherent risk associated with lending activities but that, unlike specific allowances, have not been specifically allocated to particular problem assets. When an insured institution classifies problem assets as a loss, it is required to charge off such assets in the period in which they are deemed uncollectible. Assets that do not currently expose First Federal to sufficient risk to warrant classification as substandard or doubtful but possess identified weaknesses are designated as either watch or special mention assets; risk ratings 4 and 5 in our risk rating system, respectively. At March 31, 2016 and June 30, 2015 , First Federal had $4.9 million and $9.9 million , respectively, of loans classified as substandard and no loans classified as doubtful or loss. Loans not otherwise classified are considered pass graded loans and are rated 1-3 in our risk rating system. Additionally, First Federal categorizes loans as performing or nonperforming based on payment activity. Loans that are more than 90 days past due and nonaccrual loans are considered nonperforming. The following table represents the internally assigned grade as of March 31, 2016 , by class of loans: Pass Watch Special Mention Sub- Standard Total (In thousands) Real Estate: One-to-four family $ 291,917 $ 2,861 $ 804 $ 3,248 $ 298,830 Multi-family 41,363 6,076 123 — 47,562 Commercial real estate 134,597 4,729 1,190 600 141,116 Construction and land 30,490 3,216 687 240 34,633 Total real estate loans 498,367 16,882 2,804 4,088 522,141 Consumer: Home equity 31,969 1,538 84 610 34,201 Other consumer 7,888 201 78 142 8,309 Total consumer loans 39,857 1,739 162 752 42,510 Commercial business loans 10,301 4,924 378 35 15,638 Total loans $ 548,525 $ 23,545 $ 3,344 $ 4,875 $ 580,289 The following table represents the internally assigned grade as of June 30, 2015 , by class of loans: Pass Watch Special Mention Sub- Standard Total (In thousands) Real Estate: One-to-four family $ 247,491 $ 2,458 $ 794 $ 5,953 $ 256,696 Multi-family 22,907 9,550 — 629 33,086 Commercial real estate 106,072 12,960 5,134 1,457 125,623 Construction and land 18,426 351 113 237 19,127 Total real estate loans 394,896 25,319 6,041 8,276 434,532 Consumer: Home equity 34,969 501 86 831 36,387 Other consumer 7,622 213 77 286 8,198 Total consumer loans 42,591 714 163 1,117 44,585 Commercial business loans 8,449 5,795 62 458 14,764 Total loans $ 445,936 $ 31,828 $ 6,266 $ 9,851 $ 493,881 The following table represents the credit risk profile based on payment activity as of March 31, 2016 , by class of loans: Nonperforming Performing Total (In thousands) Real Estate: One-to-four family $ 2,978 $ 295,852 $ 298,830 Multi-family — 47,562 47,562 Commercial real estate 366 140,750 141,116 Construction and land 165 34,468 34,633 Consumer: Home equity 250 33,951 34,201 Other consumer 114 8,195 8,309 Commercial business loans — 15,638 15,638 Total loans $ 3,873 $ 576,416 $ 580,289 The following table represents the credit risk profile based on payment activity as of June 30, 2015 , by class of loans: Nonperforming Performing Total (In thousands) Real Estate: One-to-four family $ 4,232 $ 252,464 $ 256,696 Multi-family — 33,086 33,086 Commercial real estate 147 125,476 125,623 Construction and land 159 18,968 19,127 Consumer: Home equity 181 36,206 36,387 Other consumer 164 8,034 8,198 Commercial business loans — 14,764 14,764 Total loans $ 4,883 $ 488,998 $ 493,881 Troubled debt restructuring. A TDR is a loan to a borrower who is experiencing financial difficulty that has been modified from its original terms and conditions in such a way that First Federal is granting the borrower a concession of some kind. First Federal has granted a variety of concessions to borrowers in the form of loan modifications. The modifications granted can generally be described in the following categories: Rate modification - A modification in which the interest rate is changed. Term modification - A modification in which the maturity date, timing of payments, or frequency of payments is changed. Payment modification - A modification in which the dollar amount of the payment is changed. Interest-only modifications in which a loan is converted to interest-only payments for a period of time are included in this category. Combination modification - Any other type of modification, including the use of multiple categories above. Upon identifying a receivable as a TDR loan, First Federal classifies the loan as impaired for purposes of determining the allowance for loan losses. This requires the loan to be evaluated individually for impairment, generally based on the expected cash flows under the new terms discounted at the loan’s original effective interest rates. For TDR loans that subsequently default, the method of determining impairment is generally the fair value of the collateral less estimated selling costs. TDR loans may be upgraded in their classification and placed on accrual status once there is a sustained period of repayment performance, usually six months or longer, and there is a reasonable assurance that repayment will continue. First Federal allows reclassification of a troubled debt restructuring back into the general loan pool (as a non-troubled debt restructuring) if the borrower is able to refinance the loan at then-current market rates and meet all of the underwriting criteria of First Federal required of other borrowers. The refinance must be based on the borrower’s ability to repay the debt and no special concessions of rate and/or term are granted to the borrower. The following is a summary of information pertaining to TDR loans included in impaired loans at the dates indicated: March 31, June 30, 2016 2015 (In thousands) Total TDR loans $ 7,028 $ 7,746 Allowance for loan losses related to TDR loans 287 272 Total nonaccrual TDR loans 1,118 5,676 The following table presents newly restructured and renewals or modifications of existing TDR loans by class that occurred during the three months ended March 31, 2016 , by type of concession granted. No other TDR modifications occurred during the nine months ended March 31, 2016 . Number of Contracts Rate Modification Term Modification Combination Total Modifications (Dollars in thousands) Pre-modification outstanding recorded investment One- to four-family 4 $ — $ 86 $ 149 $ 235 4 $ — $ 86 $ 149 $ 235 Post-modification outstanding recorded investment One- to four-family 2 $ — $ 86 $ 154 $ 240 2 $ — $ 86 $ 154 $ 240 The following is a summary of TDR loans which incurred a payment default within 12 months of the restructure date during the three and nine months ended March 31, 2016 . Number of Contracts Rate Modification Term Modification Combination Total Modifications (Dollars in thousands) TDR loans that subsequently defaulted One- to four-family 3 $ — $ 86 $ 374 $ 460 There were no new TDR loans, or renewals or modifications of existing TDR loans during the three and nine months ended March 31, 2015 . There were no TDR loans which incurred a payment default within 12 months of the restructure date during the three and nine months ended March 31, 2015 . No additional funds are committed to be advanced in connection with impaired loans at March 31, 2016 . The following table presents TDR loans by class at the dates indicated by accrual and nonaccrual status. March 31, 2016 June 30, 2015 Accrual Nonaccrual Total Accrual Nonaccrual Total (In thousands) One-to-four family $ 3,717 $ 982 $ 4,699 $ 1,844 $ 3,079 $ 4,923 Multi-family 123 — 123 — 629 629 Commercial real estate 1,191 136 1,327 147 1,216 1,363 Construction and land — — — — — — Home equity 501 — 501 79 349 428 Other consumer — — — — — — Commercial business loans 378 — 378 — 403 403 Total TDR loans $ 5,910 $ 1,118 $ 7,028 $ 2,070 $ 5,676 $ 7,746 |