Loans Receivable | Loans Receivable Loans receivable consist of the following at the dates indicated: June 30, 2016 2015 (In thousands) Real Estate: One- to four-family $ 308,471 $ 256,696 Multi-family 46,125 33,086 Commercial real estate 161,182 125,623 Construction and land 50,351 19,127 Total real estate loans 566,129 434,532 Consumer: Home equity 33,909 36,387 Other consumer 9,023 8,198 Total consumer loans 42,932 44,585 Commercial business loans 16,924 14,764 Total loans 625,985 493,881 Less: Net deferred loan fees 1,182 840 Premium on purchased loans, net (2,280 ) (1,957 ) Allowance for loan losses 7,239 7,111 Total loans receivable, net $ 619,844 $ 487,887 Loans, by the earlier of next repricing date or maturity, at the dates indicated: June 30, 2016 2015 (In thousands) Adjustable-rate loans Due within one year $ 91,638 $ 64,577 After one but within five years 180,031 119,709 After five but within ten years 58,812 46,678 After ten years — — 330,481 230,964 Fixed-rate loans Due within one year 9,035 6,102 After one but within five years 38,202 23,974 After five but within ten years 43,059 42,458 After ten years 205,208 190,383 295,504 262,917 $ 625,985 $ 493,881 The adjustable-rate loans have interest rate adjustment limitations and are generally indexed to multiple indices. Future market factors may affect the correlation of adjustable loan interest rates with the rates First Federal pays on the short-term deposits that have been primarily used to fund such loans. The following table summarizes changes in the ALLL and the loan portfolio by segment and impairment method for the periods shown: At or For the Year Ended June 30, 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 (140 ) 90 288 247 (205 ) 102 49 (198 ) 233 Charge-offs (75 ) — (18 ) (17 ) (77 ) (172 ) (7 ) — (366 ) Recoveries 64 — — 33 63 59 42 — 261 Ending balance $ 2,992 $ 341 $ 1,268 $ 599 $ 833 $ 310 $ 335 $ 561 $ 7,239 The following tables summarize changes in the ALLL and loan portfolio by segment and impairment method for the periods shown: At June 30, 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 $ 2,992 $ 341 $ 1,268 $ 599 $ 833 $ 310 $ 335 $ 561 $ 7,239 General reserve 2,932 340 1,257 588 814 247 139 561 6,878 Specific reserve 60 1 11 11 19 63 196 — 361 Total loans $ 308,471 $ 46,125 $ 161,182 $ 50,351 $ 33,909 $ 9,023 $ 16,924 $ — $ 625,985 General reserves (1) 302,370 46,003 159,525 50,260 33,279 8,912 16,564 — 616,913 Specific reserves (2) 6,101 122 1,657 91 630 111 360 — 9,072 (1) Loans collectively evaluated for general reserves. (2) Loans individually evaluated for specific reserves. At or For the Year Ended 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) ALLL: Beginning balance $ 3,408 $ 475 $ 1,491 $ 397 $ 1,289 $ 389 $ 388 $ 235 $ 8,072 Provision for loan losses 81 (224 ) (493 ) (29 ) 40 64 37 524 — Charge-offs (430 ) — — (49 ) (325 ) (178 ) (177 ) — (1,159 ) Recoveries 84 — — 17 48 46 3 — 198 Ending balance $ 3,143 $ 251 $ 998 $ 336 $ 1,052 $ 321 $ 251 $ 759 $ 7,111 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. The following table summarizes changes in the ALLL and loan portfolio by segment and impairment method for the periods shown: At or For the Year Ended June 30, 2014 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 $ 3,667 $ 230 $ 1,321 $ 297 $ 1,562 $ 453 $ 223 $ 221 $ 7,974 Provision for loan losses 311 245 295 133 75 75 159 14 1,307 Charge-offs (662 ) — (125 ) (35 ) (434 ) (181 ) (10 ) — (1,447 ) Recoveries 92 — — 2 86 42 16 — 238 Ending balance $ 3,408 $ 475 $ 1,491 $ 397 $ 1,289 $ 389 $ 388 $ 235 $ 8,072 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 TDR loans. The following table presents a summary of loans individually evaluated for impairment by portfolio segment at the dates indicated: June 30, 2016 2015 Recorded Less Charge-off) Unpaid Balance Related Allowance Recorded Unpaid Balance Related (In thousands) With no allowance recorded: One- to four-family $ 2,386 $ 2,728 $ — $ 3,502 $ 4,162 $ — Multi-family — — — 503 503 — Commercial real estate 475 558 — 355 416 — Construction and land — — — 17 48 — Home equity 138 203 — 209 322 — Other consumer — 47 — — 10 — Commercial business — — — — 180 — Total 2,999 3,536 — 4,586 5,641 — With an allowance recorded: One- to four-family 3,715 3,910 60 3,904 4,157 161 Multi-family 122 122 1 127 126 — Commercial real estate 1,182 1,187 11 1,008 1,008 75 Construction and land 91 115 11 142 166 18 Home equity 492 527 19 426 441 54 Other consumer 111 137 63 164 181 77 Commercial business 360 360 196 403 403 44 Total 6,073 6,358 361 6,174 6,482 429 Total impaired loans: One- to four-family 6,101 6,638 60 7,406 8,319 161 Multi-family 122 122 1 630 629 — Commercial real estate 1,657 1,745 11 1,363 1,424 75 Construction and land 91 115 11 159 214 18 Home equity 630 730 19 635 763 54 Other consumer 111 184 63 164 191 77 Commercial business 360 360 196 403 583 44 Total $ 9,072 $ 9,894 $ 361 $ 10,760 $ 12,123 $ 429 The following table presents the average recorded investment in loans individually evaluated for impairment and the related interest income recognized for the periods shown: Years Ended June 30, 2016 2015 2014 Average Recorded Investment Interest Average Recorded Investment Interest Average Recorded Investment Interest (In thousands) With no allowance recorded: One- to four-family $ 2,178 $ 69 $ 4,018 $ 162 $ 5,101 $ 173 Multi-family 284 — 543 17 — — Commercial real estate 325 12 1,284 21 3,015 40 Construction and land 14 — 237 4 61 12 Home equity 186 7 221 8 601 18 Other consumer 3 3 — 2 — — Commercial business 19 — 26 4 — — Total 3,009 91 6,329 218 8,778 243 With an allowance recorded: One- to four-family 3,928 200 3,223 227 3,780 206 Multi-family 166 6 128 6 — — Commercial real estate 1,098 69 1,504 49 3,277 283 Construction and land 141 9 185 14 226 16 Home equity 503 31 593 28 786 26 Other consumer 149 9 101 8 — — Commercial business 367 22 454 23 — — Total 6,352 346 6,188 355 8,069 531 Total impaired loans: One- to four-family 6,106 269 7,241 389 8,881 379 Multi-family 450 6 671 23 — — Commercial real estate 1,423 81 2,788 70 6,292 323 Construction and land 155 9 422 18 287 28 Home equity 689 38 814 36 1,387 44 Other consumer 152 12 101 10 — — Commercial business 386 22 480 27 — — Total $ 9,361 $ 437 $ 12,517 $ 573 $ 16,847 $ 774 Interest income recognized on a cash basis on impaired loans for the years ended June 30, 2016 , 2015 and 2014 , was $376,000 , $473,000 , and $594,000 , respectively. The following table presents the recorded investment in nonaccrual loans by class of loan at the dates indicated: June 30, 2016 2015 (In thousands) One- to four-family $ 2,413 $ 4,232 Commercial real estate 474 147 Construction and land 91 159 Home equity 167 181 Other consumer 112 164 Total nonaccrual loans $ 3,257 $ 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 June 30, 2016 and June 30, 2015 . The following table presents past due loans, net of partial loan charge-offs, by class, as of June 30, 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 $ 662 $ 88 $ 466 $ 1,216 $ 307,255 $ 308,471 Multi-family — — — — 46,125 46,125 Commercial real estate — — — — 161,182 161,182 Construction and land — — 46 46 50,305 50,351 Total real estate loans 662 88 512 1,262 564,867 566,129 Consumer: Home equity 344 — 2 346 33,563 33,909 Other consumer 105 — — 105 8,918 9,023 Total consumer loans 449 — 2 451 42,481 42,932 Commercial business loans — — — — 16,924 16,924 Total loans $ 1,111 $ 88 $ 514 $ 1,713 $ 624,272 $ 625,985 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 June 30, 2016 and June 30, 2015 , First Federal had $4.6 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 June 30, 2016 , by class of loans: Pass Watch Special Mention Sub- Standard Total (In thousands) Real Estate: One- to four-family $ 302,841 $ 2,100 $ 367 $ 3,163 $ 308,471 Multi-family 39,955 6,048 122 — 46,125 Commercial real estate 153,783 5,736 1,105 558 161,182 Construction and land 45,986 3,560 643 162 50,351 Total real estate loans 542,565 17,444 2,237 3,883 566,129 Consumer: Home equity 32,661 634 76 538 33,909 Other consumer 8,632 190 83 118 9,023 Total consumer loans 41,293 824 159 656 42,932 Commercial business loans 15,080 1,454 360 30 16,924 Total loans $ 598,938 $ 19,722 $ 2,756 $ 4,569 $ 625,985 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 June 30, 2016 , by class of loans: Nonperforming Performing Total (In thousands) Real Estate: One- to four-family $ 2,413 $ 306,058 $ 308,471 Multi-family — 46,125 46,125 Commercial real estate 474 160,708 161,182 Construction and land 91 50,260 50,351 Consumer: Home equity 167 33,742 33,909 Other consumer 112 8,911 9,023 Commercial business loans — 16,924 16,924 Total loans $ 3,257 $ 622,728 $ 625,985 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 troubled debt restructuring, 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. The following is a summary of information pertaining to TDR loans included in impaired loans at the dates indicated: June 30, 2016 2015 (In thousands) Total TDR loans $ 6,545 $ 7,746 Allowance for loan losses related to TDR loans 267 272 Total nonaccrual TDR loans 944 2,070 The following table presents newly restructured and renewals or modifications of existing TDR loans by class that occurred during the year ended June 30, 2016 , by type of concession granted: Number of Contracts Rate Modification Term Modification Combination Total Modifications (Dollars in thousands) Pre-modification outstanding recorded investment One- to four-family 6 $ 19 $ — $ 481 $ 500 6 $ 19 $ — $ 481 $ 500 Post-modification outstanding recorded investment One- to four-family 4 $ 18 $ — $ 484 $ 502 4 $ 18 $ — $ 484 $ 502 The following is a summary of TDR loans which incurred a payment default within 12 months of the restructure date during the year ended June 30, 2016 . Number of Contracts Rate Modification Term Modification Combination Total Modifications (Dollars in thousands) TDR loans that subsequently defaulted One- to four-family 1 $ — $ — $ 86 $ 86 The following table presents newly restructured and renewals or modifications of existing TDR loans by class that occurred during the year ended June 30, 2015 , by type of concession granted: Number of Contracts Rate Modification Term Modification Combination Total Modifications (Dollars in thousands) Pre-modification outstanding recorded investment One- to four-family 1 $ — $ 151 $ — $ 151 Home equity 1 — 50 — 50 Commercial business 1 — 105 — 105 3 $ — $ 306 $ — $ 306 Post-modification outstanding recorded investment One- to four-family 1 $ — $ 154 $ — $ 154 Home equity 1 — 50 — 50 Commercial business 1 — 105 — 105 3 $ — $ 309 $ — $ 309 There were no TDR loans which incurred a payment default within 12 months of the restructure date during the year ended June 30, 2015 . The following table presents newly restructured and renewals or modifications of existing TDR loans by class that occurred during the year ended June 30, 2014 , by type of concession granted: Number of Contracts Rate Modification Term Modification Combination Total Modifications (Dollars in thousands) Pre-modification outstanding recorded investment One- to four-family 14 $ 950 $ — $ 1,493 $ 2,443 Multifamily 5 — — 610 610 Home equity 2 — 29 44 73 Consumer other 1 — — 1 1 22 $ 950 $ 29 $ 2,148 $ 3,127 Post-modification outstanding recorded investment One- to four-family 14 $ 947 $ — $ 1,500 $ 2,447 Multifamily 1 — — 597 597 Home equity 2 — 29 44 73 Consumer other 1 — — 1 1 18 $ 947 $ 29 $ 2,142 $ 3,118 The following is a summary of TDR loans which incurred a payment default within 12 months of the restructure date during the year ended June 30, 2014 . Number of Contracts Rate Modification Term Modification Combination Total Modifications (Dollars in thousands) TDR loans that subsequently defaulted One- to four-family 1 $ — $ — $ 229 $ 229 No additional funds are committed to be advanced in connection with impaired loans at June 30, 2016 . The following table presents TDR loans by class at the dates indicated by accrual and nonaccrual status. June 30, 2016 June 30, 2015 Accrual Nonaccrual Total Accrual Nonaccrual Total (In thousands) One- to four-family $ 3,473 $ 812 $ 4,285 $ 3,079 $ 1,844 $ 4,923 Multi-family 122 — 122 629 — 629 Commercial real estate 1,182 132 1,314 1,216 147 1,363 Construction and land — — — — — — Home equity 464 — 464 349 79 428 Other consumer — — — — — — Commercial business loans 360 — 360 403 — 403 Total TDR loans $ 5,601 $ 944 $ 6,545 $ 5,676 $ 2,070 $ 7,746 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. |