Loans Receivable | Loans Receivable Loans receivable consisted of the following at the dates indicated: September 30, 2016 June 30, 2016 (In thousands) Real Estate: One-to-four family $ 328,772 $ 308,471 Multi-family 48,042 46,125 Commercial real estate 179,642 161,182 Construction and land 52,303 50,351 Total real estate loans 608,759 566,129 Consumer: Home equity 33,753 33,909 Other consumer 10,627 9,023 Total consumer loans 44,380 42,932 Commercial business loans 17,036 16,924 Total loans 670,175 625,985 Less: Net deferred loan fees 1,137 1,182 Premium on purchased loans, net (2,703 ) (2,280 ) Allowance for loan losses 7,682 7,239 Total loans receivable, net $ 664,059 $ 619,844 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 September 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 $ 2,992 $ 341 $ 1,268 $ 599 $ 833 $ 310 $ 335 $ 561 $ 7,239 Provision for loan losses (128 ) 14 143 (14 ) (32 ) 23 590 (246 ) 350 Charge-offs — — — — (2 ) (23 ) — — (25 ) Recoveries 85 — — — 11 21 1 — 118 Ending balance $ 2,949 $ 355 $ 1,411 $ 585 $ 810 $ 331 $ 926 $ 315 $ 7,682 At September 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 $ 2,949 $ 355 $ 1,411 $ 585 $ 810 $ 331 $ 926 $ 315 $ 7,682 General reserve 2,887 354 1,400 577 799 303 730 315 7,365 Specific reserve 62 1 11 8 11 28 196 — 317 Total loans $ 328,772 $ 48,042 $ 179,642 $ 52,303 $ 33,753 $ 10,627 $ 17,036 $ — $ 670,175 General reserves (1) 322,820 47,921 178,006 52,215 33,270 10,599 16,678 — 661,509 Specific reserves (2) 5,952 121 1,636 88 483 28 358 — 8,666 (1) Loans collectively evaluated for general reserves. (2) Loans individually evaluated for specific reserves. At or For the Three Months Ended September 30, 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 $ 3,143 $ 251 $ 998 $ 336 $ 1,052 $ 321 $ 251 $ 759 $ 7,111 Provision for loan losses (113 ) 9 42 36 (79 ) 2 (122 ) 225 — Charge-offs (7 ) — — — (39 ) (50 ) (7 ) — (103 ) Recoveries 4 — — — 12 11 41 — 68 Ending balance $ 3,027 $ 260 $ 1,040 $ 372 $ 946 $ 284 $ 163 $ 984 $ 7,076 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. 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: September 30, 2016 June 30, 2016 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance (In thousands) With no allowance recorded: One-to-four family $ 2,084 $ 2,422 $ — $ 2,386 $ 2,728 $ — Multi-family — — — — — — Commercial real estate 462 553 — 475 558 — Construction and land — — — — — — Home equity 146 213 — 138 203 — Other consumer — 13 — — 47 — Commercial business — — — — — — Total 2,692 3,201 — 2,999 3,536 — With an allowance recorded: One-to-four family 3,868 4,088 62 3,715 3,910 60 Multi-family 121 121 1 122 122 1 Commercial real estate 1,174 1,177 11 1,182 1,187 11 Construction and land 88 112 8 91 115 11 Home equity 337 371 11 492 527 19 Other consumer 28 71 28 111 137 63 Commercial business 358 358 196 360 360 196 Total 5,974 6,298 317 6,073 6,358 361 Total impaired loans: One-to-four family 5,952 6,510 62 6,101 6,638 60 Multi-family 121 121 1 122 122 1 Commercial real estate 1,636 1,730 11 1,657 1,745 11 Construction and land 88 112 8 91 115 11 Home equity 483 584 11 630 730 19 Other consumer 28 84 28 111 184 63 Commercial business 358 358 196 360 360 196 Total $ 8,666 $ 9,499 $ 317 $ 9,072 $ 9,894 $ 361 The following table presents the average recorded investment in loans individually evaluated for impairment and the related interest income recognized for the periods shown: Three Months Ended Three Months Ended September 30, 2016 September 30, 2015 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (In thousands) With no allowance recorded: One-to-four family $ 2,274 $ 32 $ 3,003 $ 42 Multi-family — — 334 4 Commercial real estate 468 2 354 6 Construction and land — — 16 1 Home equity 139 2 283 5 Other consumer — — 11 — Commercial business — — — — Total 2,881 36 4,001 58 With an allowance recorded: One-to-four family 3,705 66 3,399 60 Multi-family 121 2 293 1 Commercial real estate 1,177 17 1,002 12 Construction and land 89 8 148 5 Home equity 370 7 368 7 Other consumer 84 1 167 5 Commercial business 358 5 401 6 Total 5,904 106 5,778 96 Total impaired loans: One-to-four family 5,979 98 6,402 102 Multi-family 121 2 627 5 Commercial real estate 1,645 19 1,356 18 Construction and land 89 8 164 6 Home equity 509 9 651 12 Other consumer 84 1 178 5 Commercial business 358 5 401 6 Total $ 8,785 $ 142 $ 9,779 $ 154 Interest income recognized on a cash basis on impaired loans for the three months ended September 30, 2016 and 2015 , was $91,000 and $87,000 , respectively. The following table presents the recorded investment in nonaccrual loans by class of loan at the dates indicated: September 30, 2016 June 30, 2016 (In thousands) One-to-four family $ 2,143 $ 2,413 Commercial real estate 462 474 Construction and land 88 91 Home equity 143 167 Other consumer 29 112 Total nonaccrual loans $ 2,865 $ 3,257 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 September 30, 2016 and June 30, 2016 . The following table presents past due loans, net of partial loan charge-offs, by class, as of September 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 $ — $ 125 $ 280 $ 405 $ 328,367 $ 328,772 Multi-family — — — — 48,042 48,042 Commercial real estate — — — — 179,642 179,642 Construction and land — 36 46 82 52,221 52,303 Total real estate loans — 161 326 487 608,272 608,759 Consumer: Home equity 348 — — 348 33,405 33,753 Other consumer 50 42 — 92 10,535 10,627 Total consumer loans 398 42 — 440 43,940 44,380 Commercial business loans — — — — 17,036 17,036 Total loans $ 398 $ 203 $ 326 $ 927 $ 669,248 $ 670,175 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 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 September 30, 2016 and June 30, 2016 , First Federal had $4.0 million and $4.6 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 September 30, 2016 , by class of loans: Pass Watch Special Mention Sub- Standard Total (In thousands) Real Estate: One-to-four family $ 323,664 $ 1,567 $ 797 $ 2,744 $ 328,772 Multi-family 41,900 6,021 121 — 48,042 Commercial real estate 172,663 4,114 2,321 544 179,642 Construction and land 51,442 35 684 142 52,303 Total real estate loans 589,669 11,737 3,923 3,430 608,759 Consumer: Home equity 32,574 629 59 491 33,753 Other consumer 10,245 209 138 35 10,627 Total consumer loans 42,819 838 197 526 44,380 Commercial business loans 15,526 — 1,485 25 17,036 Total loans $ 648,014 $ 12,575 $ 5,605 $ 3,981 $ 670,175 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 credit risk profile based on payment activity as of September 30, 2016 , by class of loans: Nonperforming Performing Total (In thousands) Real Estate: One-to-four family $ 2,143 $ 326,629 $ 328,772 Multi-family — 48,042 48,042 Commercial real estate 462 179,180 179,642 Construction and land 88 52,215 52,303 Consumer: Home equity 143 33,610 33,753 Other consumer 29 10,598 10,627 Commercial business — 17,036 17,036 Total loans $ 2,865 $ 667,310 $ 670,175 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 — 16,924 16,924 Total loans $ 3,257 $ 622,728 $ 625,985 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 initially 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. Certain qualifying TDR loans are subsequently measured for impairment using the factor for the corresponding segment and risk rating. 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: September 30, June 30, 2016 2016 (In thousands) Total TDR loans $ 6,265 $ 6,545 Allowance for loan losses related to TDR loans 274 267 Total nonaccrual TDR loans 566 944 There were no new TDR loans, or renewals or modifications of existing TDR loans during the three months ended September 30, 2016 and 2015 . The following is a summary of TDR loans which incurred a payment default within 12 months of the restructure date during the three months ended September 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 There were no TDR loans which incurred a payment default within 12 months of the restructure date during the three months ended September 30, 2015 . No additional funds are committed to be advanced in connection with impaired loans at September 30, 2016 . The following table presents TDR loans by class at the dates indicated by accrual and nonaccrual status. September 30, 2016 June 30, 2016 Accrual Nonaccrual Total Accrual Nonaccrual Total (In thousands) One-to-four family $ 3,707 $ 438 $ 4,145 $ 3,473 $ 812 $ 4,285 Multi-family 121 — 121 122 — 122 Commercial real estate 1,173 128 1,301 1,182 132 1,314 Home equity 340 — 340 464 — 464 Commercial business 358 — 358 360 — 360 Total TDR loans $ 5,699 $ 566 $ 6,265 $ 5,601 $ 944 $ 6,545 |