Loans Receivable | Loans Receivable Loans receivable consist of the following at the dates indicated: June 30, 2017 2016 (In thousands) Real Estate: One- to four-family $ 328,243 $ 308,471 Multi-family 58,101 46,125 Commercial real estate 202,038 161,182 Construction and land 71,630 50,351 Total real estate loans 660,012 566,129 Consumer: Home equity 35,869 33,909 Other consumer 21,043 9,023 Total consumer loans 56,912 42,932 Commercial business loans 17,073 16,924 Total loans 733,997 625,985 Less: Net deferred loan fees 904 1,182 Premium on purchased loans, net (2,216 ) (2,280 ) Allowance for loan losses 8,523 7,239 Total loans receivable, net $ 726,786 $ 619,844 Loans, by the earlier of next repricing date or maturity, at the dates indicated: June 30, 2017 2016 (In thousands) Adjustable-rate loans Due within one year $ 109,039 $ 91,638 After one but within five years 213,265 180,031 After five but within ten years 90,873 58,812 After ten years 5,299 — 418,476 330,481 Fixed-rate loans Due within one year 7,632 9,035 After one but within five years 34,436 38,202 After five but within ten years 58,360 43,059 After ten years 215,093 205,208 315,521 295,504 $ 733,997 $ 625,985 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 tables summarize changes in the ALLL and the loan portfolio by segment and impairment method at or for the periods shown: At or For the Year Ended June 30, 2017 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 (34 ) 170 467 82 (90 ) 376 836 (547 ) 1,260 Charge-offs — — — — (81 ) (252 ) (5 ) (338 ) Recoveries 113 — — 2 156 89 2 362 Ending balance $ 3,071 $ 511 $ 1,735 $ 683 $ 818 $ 523 $ 1,168 $ 14 $ 8,523 At June 30, 2017 One-to- four family Multi-family Commercial real estate Construction and land Home equity Other consumer Commercial business Unallocated Total (In thousands) Total ALLL $ 3,071 $ 511 $ 1,735 $ 683 $ 818 $ 523 $ 1,168 $ 14 $ 8,523 General reserve 2,988 510 1,718 682 797 501 961 14 8,171 Specific reserve 83 1 17 1 21 22 207 — 352 Total loans $ 328,243 $ 58,101 $ 202,038 $ 71,630 $ 35,869 $ 21,043 $ 17,073 $ — $ 733,997 General reserves (1) 323,592 57,983 200,467 71,602 35,160 21,021 16,784 — 726,609 Specific reserves (2) 4,651 118 1,571 28 709 22 289 — 7,388 (1) Loans collectively evaluated for general reserves. (2) Loans individually evaluated for specific reserves. 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 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 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, 2017 2016 Recorded Less Charge-off) Unpaid Balance Related Allowance Recorded Unpaid Balance Related (In thousands) With no allowance recorded: One- to four-family $ 646 $ 845 $ — $ 2,386 $ 2,728 $ — Multi-family — — — — — — Commercial real estate 297 406 — 475 558 — Construction and land — — — — — — Home equity 379 410 — 138 203 — Other consumer — 124 — — 47 — Commercial business — — — — — — Total 1,322 1,785 — 2,999 3,536 — With an allowance recorded: One- to four-family 4,005 4,295 83 3,715 3,910 60 Multi-family 118 118 1 122 122 1 Commercial real estate 1,274 1,278 17 1,182 1,187 11 Construction and land 28 52 1 91 115 11 Home equity 330 398 21 492 527 19 Other consumer 22 50 22 111 137 63 Commercial business 289 289 207 360 360 196 Total 6,066 6,480 352 6,073 6,358 361 Total impaired loans: One- to four-family 4,651 5,140 83 6,101 6,638 60 Multi-family 118 118 1 122 122 1 Commercial real estate 1,571 1,684 17 1,657 1,745 11 Construction and land 28 52 1 91 115 11 Home equity 709 808 21 630 730 19 Other consumer 22 174 22 111 184 63 Commercial business 289 289 207 360 360 196 Total $ 7,388 $ 8,265 $ 352 $ 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: Years Ended June 30, 2017 2016 2015 Average Recorded Investment Interest Average Recorded Investment Interest Average Recorded Investment Interest (In thousands) With no allowance recorded: One- to four-family $ 1,623 $ 12 $ 2,178 $ 69 $ 4,018 $ 162 Multi-family — — 284 — 543 17 Commercial real estate 383 — 325 12 1,284 21 Construction and land — — 14 — 237 4 Home equity 232 6 186 7 221 8 Other consumer — 4 3 3 — 2 Commercial business — — 19 — 26 4 Total 2,238 22 3,009 91 6,329 218 With an allowance recorded: One- to four-family 3,897 213 3,928 200 3,223 227 Multi-family 120 6 166 6 128 6 Commercial real estate 1,229 68 1,098 69 1,504 49 Construction and land 39 2 141 9 185 14 Home equity 353 23 503 31 593 28 Other consumer 53 — 149 9 101 8 Commercial business 338 15 367 22 454 23 Total 6,029 327 6,352 346 6,188 355 Total impaired loans: One- to four-family 5,520 225 6,106 269 7,241 389 Multi-family 120 6 450 6 671 23 Commercial real estate 1,612 68 1,423 81 2,788 70 Construction and land 39 2 155 9 422 18 Home equity 585 29 689 38 814 36 Other consumer 53 4 152 12 101 10 Commercial business 338 15 386 22 480 27 Total $ 8,267 $ 349 $ 9,361 $ 437 $ 12,517 $ 573 Interest income recognized on a cash basis on impaired loans for the years ended June 30, 2017 , 2016 and 2015 , was $313,000 , $376,000 , and $473,000 , respectively. The following table presents the recorded investment in nonaccrual loans by class of loan at the dates indicated: June 30, 2017 2016 (In thousands) One- to four-family $ 1,042 $ 2,413 Commercial real estate 426 474 Construction and land 28 91 Home equity 398 167 Other consumer 21 112 Total nonaccrual loans $ 1,915 $ 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 June 30, 2017 and June 30, 2016 . The following table presents past due loans, net of partial loan charge-offs, by class, as of June 30, 2017 : 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 $ — $ 206 $ — $ 206 $ 328,037 $ 328,243 Multi-family — — — — 58,101 58,101 Commercial real estate — — — — 202,038 202,038 Construction and land — 34 20 54 71,576 71,630 Total real estate loans — 240 20 260 659,752 660,012 Consumer: Home equity 21 294 10 325 35,544 35,869 Other consumer 28 73 — 101 20,942 21,043 Total consumer loans 49 367 10 426 56,486 56,912 Commercial business loans — — — — 17,073 17,073 Total loans $ 49 $ 607 $ 30 $ 686 $ 733,311 $ 733,997 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 June 30, 2017 and June 30, 2016 , First Federal had $3.3 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 June 30, 2017 , by class of loans: Pass Watch Special Mention Sub- Standard Total (In thousands) Real Estate: One- to four-family $ 321,596 $ 3,680 $ 1,153 $ 1,814 $ 328,243 Multi-family 56,103 1,880 118 — 58,101 Commercial real estate 188,956 10,243 2,232 607 202,038 Construction and land 65,175 2,197 4,161 97 71,630 Total real estate loans 631,830 18,000 7,664 2,518 660,012 Consumer: Home equity 34,913 215 57 684 35,869 Other consumer 20,676 159 173 35 21,043 Total consumer loans 55,589 374 230 719 56,912 Commercial business loans 14,143 1,464 1,451 15 17,073 Total loans $ 701,562 $ 19,838 $ 9,345 $ 3,252 $ 733,997 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 June 30, 2017 , by class of loans: Nonperforming Performing Total (In thousands) Real Estate: One- to four-family $ 1,042 $ 327,201 $ 328,243 Multi-family — 58,101 58,101 Commercial real estate 426 201,612 202,038 Construction and land 28 71,602 71,630 Consumer: Home equity 398 35,471 35,869 Other consumer 21 21,022 21,043 Commercial business loans — 17,073 17,073 Total loans $ 1,915 $ 732,082 $ 733,997 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 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, 2017 2016 (In thousands) Total TDR loans $ 6,145 $ 6,545 Allowance for loan losses related to TDR loans 315 267 Total nonaccrual TDR loans 673 944 The following table presents newly restructured and renewals or modifications of existing TDR loans by class that occurred during the year ended June 30, 2017 , 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 3 $ 95 $ 89 $ 244 $ 428 Commercial real estate 1 — — 134 134 4 $ 95 $ 89 $ 378 $ 562 Post-modification outstanding recorded investment One- to four-family 3 $ 92 $ 87 $ 236 $ 415 Commercial real estate 1 — — 129 129 4 $ 92 $ 87 $ 365 $ 544 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, 2017 . Number of Contracts Rate Modification Term Modification Combination Total Modifications (Dollars in thousands) TDR loans that subsequently defaulted One- to four-family 1 $ — $ — $ 50 $ 50 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 . No additional funds are committed to be advanced in connection with impaired loans at June 30, 2017 . The following table presents TDR loans by class at the dates indicated by accrual and nonaccrual status. June 30, 2017 June 30, 2016 Accrual Nonaccrual Total Accrual Nonaccrual Total (In thousands) One- to four-family $ 3,608 $ 421 $ 4,029 $ 3,473 $ 812 $ 4,285 Multi-family 118 — 118 122 — 122 Commercial real estate 1,145 252 1,397 1,182 132 1,314 Home equity 312 — 312 464 — 464 Commercial business loans 289 — 289 360 — 360 Total TDR loans $ 5,472 $ 673 $ 6,145 $ 5,601 $ 944 $ 6,545 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. |