Loans Receivable | Loans Receivable Loans receivable consisted of the following at the dates indicated: September 30, 2017 June 30, 2017 (In thousands) Real Estate: One-to-four family $ 323,675 $ 328,243 Multi-family 58,989 58,101 Commercial real estate 194,813 202,038 Construction and land 81,985 71,630 Total real estate loans 659,462 660,012 Consumer: Home equity 35,059 35,869 Other consumer 23,329 21,043 Total consumer loans 58,388 56,912 Commercial business loans 16,385 17,073 Total loans 734,235 733,997 Less: Net deferred loan fees 858 904 Premium on purchased loans, net (2,122 ) (2,216 ) Allowance for loan losses 8,608 8,523 Total loans receivable, net $ 726,891 $ 726,786 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, 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 $ 3,071 $ 511 $ 1,735 $ 683 $ 818 $ 523 $ 1,168 $ 14 $ 8,523 Provision for loan losses (263 ) 8 (93 ) 75 (71 ) 87 (1,043 ) 1,300 — Charge-offs — — — — — (70 ) — (70 ) Recoveries 100 — — — 16 39 — 155 Ending balance $ 2,908 $ 519 $ 1,642 $ 758 $ 763 $ 579 $ 125 $ 1,314 $ 8,608 At September 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 $ 2,908 $ 519 $ 1,642 $ 758 $ 763 $ 579 $ 125 $ 1,314 $ 8,608 General reserve 2,859 518 1,631 757 752 576 122 1,314 8,529 Specific reserve 49 1 11 1 11 3 3 — 79 Total loans $ 323,675 $ 58,989 $ 194,813 $ 81,985 $ 35,059 $ 23,329 $ 16,385 $ — $ 734,235 General reserves (1) 319,111 58,873 193,479 81,958 34,372 23,317 16,099 — 727,209 Specific reserves (2) 4,564 116 1,334 27 687 12 286 — 7,026 (1) Loans collectively evaluated for general reserves. (2) Loans individually evaluated for specific reserves. 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 ALLL: (In thousands) 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 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. 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, 2017 June 30, 2017 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance (In thousands) With no allowance recorded: One-to-four family $ 1,010 $ 1,118 $ — $ 646 $ 845 $ — Multi-family — — — — — — Commercial real estate 278 394 — 297 406 — Construction and land — 3 — — — — Home equity 377 526 — 379 410 — Other consumer — 139 — — 124 — Commercial business — 5 — — — — Total 1,665 2,185 — 1,322 1,785 — With an allowance recorded: One-to-four family 3,554 3,834 49 4,005 4,295 83 Multi-family 116 116 1 118 118 1 Commercial real estate 1,056 1,061 11 1,274 1,278 17 Construction and land 27 51 1 28 52 1 Home equity 310 377 11 330 398 21 Other consumer 12 21 3 22 50 22 Commercial business 286 286 3 289 289 207 Total 5,361 5,746 79 6,066 6,480 352 Total impaired loans: One-to-four family 4,564 4,952 49 4,651 5,140 83 Multi-family 116 116 1 118 118 1 Commercial real estate 1,334 1,455 11 1,571 1,684 17 Construction and land 27 54 1 28 52 1 Home equity 687 903 11 709 808 21 Other consumer 12 160 3 22 174 22 Commercial business 286 291 3 289 289 207 Total $ 7,026 $ 7,931 $ 79 $ 7,388 $ 8,265 $ 352 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, 2017 September 30, 2016 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (In thousands) With no allowance recorded: One-to-four family $ 778 $ 12 $ 2,274 $ 32 Multi-family — — — — Commercial real estate 318 — 468 2 Construction and land — — — — Home equity 379 5 139 2 Other consumer — 3 — — Commercial business — — — — Total 1,475 20 2,881 36 With an allowance recorded: One-to-four family 3,800 72 3,705 66 Multi-family 117 1 121 2 Commercial real estate 1,061 10 1,177 17 Construction and land 27 2 89 8 Home equity 312 7 370 7 Other consumer 20 — 84 1 Commercial business 288 4 358 5 Total 5,625 96 5,904 106 Total impaired loans: One-to-four family 4,578 84 5,979 98 Multi-family 117 1 121 2 Commercial real estate 1,379 10 1,645 19 Construction and land 27 2 89 8 Home equity 691 12 509 9 Other consumer 20 3 84 1 Commercial business 288 4 358 5 Total $ 7,100 $ 116 $ 8,785 $ 142 Interest income recognized on a cash basis on impaired loans for the three months ended September 30, 2017 and 2016 , was $80,000 and $91,000 , respectively. The following table presents the recorded investment in nonaccrual loans by class of loan at the dates indicated: September 30, 2017 June 30, 2017 (In thousands) One-to-four family $ 975 $ 1,042 Commercial real estate 403 426 Construction and land 27 28 Home equity 377 398 Other consumer 12 21 Total nonaccrual loans $ 1,794 $ 1,915 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, 2017 and June 30, 2017 . The following table presents past due loans, net of partial loan charge-offs, by class, as of September 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 $ — $ 155 $ 45 $ 200 $ 323,475 $ 323,675 Multi-family — — — — 58,989 58,989 Commercial real estate — — — — 194,813 194,813 Construction and land — 34 19 53 81,932 81,985 Total real estate loans — 189 64 253 659,209 659,462 Consumer: Home equity 394 43 — 437 34,622 35,059 Other consumer 83 — — 83 23,246 23,329 Total consumer loans 477 43 — 520 57,868 58,388 Commercial business loans — — — — 16,385 16,385 Total loans $ 477 $ 232 $ 64 $ 773 $ 733,462 $ 734,235 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 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, 2017 and June 30, 2017 , First Federal had $3.3 million and $3.3 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, 2017 , by class of loans: Pass Watch Special Mention Sub- Standard Total (In thousands) Real Estate: One-to-four family $ 316,469 $ 4,340 $ 959 $ 1,907 $ 323,675 Multi-family 56,756 2,117 116 — 58,989 Commercial real estate 182,417 9,611 2,209 576 194,813 Construction and land 74,011 3,460 4,421 93 81,985 Total real estate loans 629,653 19,528 7,705 2,576 659,462 Consumer: Home equity 34,076 318 33 632 35,059 Other consumer 22,805 306 172 46 23,329 Total consumer loans 56,881 624 205 678 58,388 Commercial business loans 14,004 1,410 971 — 16,385 Total loans $ 700,538 $ 21,562 $ 8,881 $ 3,254 $ 734,235 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 credit risk profile based on payment activity as of September 30, 2017 , by class of loans: Nonperforming Performing Total (In thousands) Real Estate: One-to-four family $ 975 $ 322,700 $ 323,675 Multi-family — 58,989 58,989 Commercial real estate 403 194,410 194,813 Construction and land 27 81,958 81,985 Consumer: Home equity 377 34,682 35,059 Other consumer 12 23,317 23,329 Commercial business — 16,385 16,385 Total loans $ 1,794 $ 732,441 $ 734,235 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 — 17,073 17,073 Total loans $ 1,915 $ 732,082 $ 733,997 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 same factor applied to unimpaired loans in 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, 2017 2017 (In thousands) Total TDR loans $ 5,790 $ 6,145 Allowance for loan losses related to TDR loans 71 315 Total nonaccrual TDR loans 558 673 There were no newly restructured and renewals or modifications of existing TDR loans during the three months ended September 30, 2017 and 2016 . 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, 2017 . Number of Contracts Rate Modification Term Modification Combination Total Modifications (Dollars in thousands) TDR loans that subsequently defaulted One- to four-family 1 $ — $ 87 $ — $ 87 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 No additional funds were committed to be advanced in connection with impaired loans at September 30, 2017 . The following table presents TDR loans by class at the dates indicated by accrual and nonaccrual status. September 30, 2017 June 30, 2017 Accrual Nonaccrual Total Accrual Nonaccrual Total (In thousands) One-to-four family $ 3,590 $ 323 $ 3,913 $ 3,608 $ 421 $ 4,029 Multi-family 116 — 116 118 — 118 Commercial real estate 931 235 1,166 1,145 252 1,397 Home equity 309 — 309 312 — 312 Commercial business 286 — 286 289 — 289 Total TDR loans $ 5,232 $ 558 $ 5,790 $ 5,472 $ 673 $ 6,145 |