Loans Receivable | Loans Receivable Loans receivable consisted of the following at the dates indicated: September 30, 2018 December 31, 2017 (In thousands) Real Estate: One-to-four family $ 336,739 $ 355,391 Multi-family 85,229 73,767 Commercial real estate 239,431 202,956 Construction and land 59,219 71,145 Total real estate loans 720,618 703,259 Consumer: Home equity 38,744 38,473 Auto and other consumer 70,003 28,106 Total consumer loans 108,747 66,579 Commercial business loans 16,432 16,303 Total loans 845,797 786,141 Less: Net deferred loan fees (821 ) 724 Premium on purchased loans, net (2,175 ) (2,454 ) Allowance for loan losses 9,335 8,760 Total loans receivable, net $ 839,458 $ 779,111 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, 2018 One-to- four family Multi-family Commercial real estate Construction and land Home equity Auto and other consumer Commercial business Unallocated Total (In thousands) ALLL: Beginning balance $ 3,050 $ 841 $ 2,160 $ 514 $ 642 $ 1,332 $ 716 $ 27 $ 9,282 Provision for loan losses 3 (31 ) (47 ) 28 (81 ) 179 (31 ) 177 197 Charge-offs (2 ) — — — — (265 ) — — (267 ) Recoveries 2 — — — 7 114 — — 123 Ending balance $ 3,053 $ 810 $ 2,113 $ 542 $ 568 $ 1,360 $ 685 $ 204 $ 9,335 At or For the Nine Months Ended September 30, 2018 One-to- four family Multi-family Commercial real estate Construction and land Home equity Auto and other consumer Commercial business Unallocated Total (In thousands) ALLL: Beginning balance $ 3,061 $ 648 $ 1,847 $ 648 $ 787 $ 712 $ 265 $ 792 $ 8,760 Provision for loan losses 6 162 266 (107 ) (242 ) 986 419 (588 ) 902 Charge-offs (18 ) — — — — (522 ) — — (540 ) Recoveries 4 — — 1 23 184 1 — 213 Ending balance $ 3,053 $ 810 $ 2,113 $ 542 $ 568 $ 1,360 $ 685 $ 204 $ 9,335 At September 30, 2018 One-to- four family Multi-family Commercial real estate Construction and land Home equity Auto and other consumer Commercial business Unallocated Total (In thousands) Total ALLL $ 3,053 $ 810 $ 2,113 $ 542 $ 568 $ 1,360 $ 685 $ 204 $ 9,335 General reserve 3,013 809 2,105 541 563 1,334 125 204 8,694 Specific reserve 40 1 8 1 5 26 560 — 641 Total loans $ 336,739 $ 85,229 $ 239,431 $ 59,219 $ 38,744 $ 70,003 $ 16,432 $ — $ 845,797 Loans collectively evaluated (1) 332,948 85,117 237,430 59,102 38,139 69,873 15,594 — 838,203 Loans individually evaluated (2) 3,791 112 2,001 117 605 130 838 — 7,594 (1) Loans collectively evaluated for general reserves. (2) Loans individually evaluated for specific reserves. At or For the Three Months Ended September 30, 2017 One-to- four family Multi-family Commercial real estate Construction and land Home equity Auto and other consumer Commercial business Unallocated Total ALLL: (In thousands) 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 or For the Nine Months Ended September 30, 2017 One-to- four family Multi-family Commercial real estate Construction and land Home equity Auto and other consumer Commercial business Unallocated Total ALLL: (In thousands) Beginning balance $ 2,892 $ 370 $ 1,488 $ 585 $ 794 $ 361 $ 652 $ 918 $ 8,060 Provision for loan losses (111 ) 149 154 172 (103 ) 366 (523 ) 396 500 Charge-offs — — — — (79 ) (239 ) (5 ) — (323 ) Recoveries 127 — — 1 151 91 1 — 371 Ending balance $ 2,908 $ 519 $ 1,642 $ 758 $ 763 $ 579 $ 125 $ 1,314 $ 8,608 At December 31, 2017 One-to- four family Multi-family Commercial real estate Construction and land Home equity Auto and other consumer Commercial business Unallocated Total (In thousands) Total ALLL $ 3,061 $ 648 $ 1,847 $ 648 $ 787 $ 712 $ 265 $ 792 $ 8,760 General reserve 3,014 647 1,719 647 779 703 262 792 8,563 Specific reserve 47 1 128 1 8 9 3 — 197 Total loans $ 355,391 $ 73,767 $ 202,956 $ 71,145 $ 38,473 $ 28,106 $ 16,303 $ — $ 786,141 Loans collectively evaluated (1) 351,545 73,652 201,885 71,093 37,838 28,047 16,020 — 780,080 Loans individually evaluated (2) 3,846 115 1,071 52 635 59 283 — 6,061 (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, 2018 December 31, 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 $ 310 $ 343 $ — $ 382 $ 407 $ — Commercial real estate 1,329 1,389 — 256 378 — Construction and land — 2 — — 3 — Home equity 340 442 — 365 515 — Auto and other consumer — 283 — — 124 — Commercial business — 4 — — 4 — Total 1,979 2,463 — 1,003 1,431 — With an allowance recorded: One-to-four family 3,481 3,768 40 3,464 3,718 47 Multi-family 112 112 1 115 115 1 Commercial real estate 672 672 8 815 821 128 Construction and land 117 143 1 52 76 1 Home equity 265 333 5 270 338 8 Auto and other consumer 130 130 26 59 67 9 Commercial business 838 838 560 283 283 3 Total 5,615 5,996 641 5,058 5,418 197 Total impaired loans: One-to-four family 3,791 4,111 40 3,846 4,125 47 Multi-family 112 112 1 115 115 1 Commercial real estate 2,001 2,061 8 1,071 1,199 128 Construction and land 117 145 1 52 79 1 Home equity 605 775 5 635 853 8 Auto and other consumer 130 413 26 59 191 9 Commercial business 838 842 560 283 287 3 Total $ 7,594 $ 8,459 $ 641 $ 6,061 $ 6,849 $ 197 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 Nine Months Ended September 30, 2018 September 30, 2018 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (In thousands) With no allowance recorded: One-to-four family $ 401 $ 9 $ 405 $ 12 Commercial real estate 1,334 13 2,148 34 Construction and land — — 1,658 — Home equity 344 3 353 3 Auto and other consumer — 7 — 11 Total 2,079 32 4,564 60 With an allowance recorded: One-to-four family 2,978 74 3,046 156 Multi-family 112 1 113 4 Commercial real estate 708 9 763 26 Construction and land 71 5 57 6 Home equity 266 7 274 16 Auto and other consumer 76 3 98 4 Commercial business 852 14 796 50 Total 5,063 113 5,147 262 Total impaired loans: One-to-four family 3,379 83 3,451 168 Multi-family 112 1 113 4 Commercial real estate 2,042 22 2,911 60 Construction and land 71 5 1,715 6 Home equity 610 10 627 19 Auto and other consumer 76 10 98 15 Commercial business 852 14 796 50 Total $ 7,142 $ 145 $ 9,711 $ 322 Interest income recognized on a cash basis on impaired loans for the three and nine months ended September 30, 2018 , was $101,000 and $278,000 , respectively. 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 Nine Months Ended September 30, 2017 September 30, 2017 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (In thousands) With no allowance recorded: One-to-four family $ 778 $ 12 $ 1,069 $ 48 Commercial real estate 318 — 310 1 Home equity 379 5 356 17 Auto and other consumer — 3 — 6 Total 1,475 20 1,735 72 With an allowance recorded: One-to-four family 3,800 72 3,922 219 Multi-family 117 1 119 3 Commercial real estate 1,061 10 1,211 44 Construction and land 27 2 19 3 Home equity 312 7 336 21 Auto and other consumer 20 — 24 — Commercial business 288 4 310 12 Total 5,625 96 5,941 302 Total impaired loans: One-to-four family 4,578 84 4,991 267 Multi-family 117 1 119 3 Commercial real estate 1,379 10 1,521 45 Construction and land 27 2 19 3 Home equity 691 12 692 38 Auto and other consumer 20 3 24 6 Commercial business 288 4 310 12 Total $ 7,100 $ 116 $ 7,676 $ 374 Interest income recognized on a cash basis on impaired loans for the three and nine months ended September 30, 2017 , was $80,000 and $251,000 , respectively. The following table presents the recorded investment in nonaccrual loans by class of loan at the dates indicated: September 30, 2018 December 31, 2017 (In thousands) One-to-four family $ 1,175 $ 681 Commercial real estate 143 378 Construction and land 117 52 Home equity 344 365 Auto and other consumer 131 59 Commercial business 563 — Total nonaccrual loans $ 2,473 $ 1,535 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, 2018 and December 31, 2017 . The following table presents past due loans, net of partial loan charge-offs, by class, as of September 30, 2018 : 30-59 Days 60-89 Days 90 Days or More Total Current Total Loans (In thousands) Real Estate: One-to-four family $ 571 $ — $ 168 $ 739 $ 336,000 $ 336,739 Multi-family — — — — 85,229 85,229 Commercial real estate — — — — 239,431 239,431 Construction and land — — 72 72 59,147 59,219 Total real estate loans 571 — 240 811 719,807 720,618 Consumer: Home equity 4 78 4 86 38,658 38,744 Auto and other consumer 351 59 — 410 69,593 70,003 Total consumer loans 355 137 4 496 108,251 108,747 Commercial business loans — — — — 16,432 16,432 Total loans $ 926 $ 137 $ 244 $ 1,307 $ 844,490 $ 845,797 The following table presents past due loans, net of partial loan charge-offs, by class, as of December 31, 2017 : 30-59 Days 60-89 Days 90 Days or More Total Current Total Loans (In thousands) Real Estate: One-to-four family $ 213 $ — $ 231 $ 444 $ 354,947 $ 355,391 Multi-family — — — — 73,767 73,767 Commercial real estate 91 — — 91 202,865 202,956 Construction and land 1,187 — 19 1,206 69,939 71,145 Total real estate loans 1,491 — 250 1,741 701,518 703,259 Consumer: Home equity 383 78 — 461 38,012 38,473 Auto and other consumer 77 30 — 107 27,999 28,106 Total consumer loans 460 108 — 568 66,011 66,579 Commercial business loans 648 — — 648 15,655 16,303 Total loans $ 2,599 $ 108 $ 250 $ 2,957 $ 783,184 $ 786,141 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 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 do possess identified weaknesses are designated as either watch or special mention assets; risk ratings 4 and 5 in our risk rating system, respectively. 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, 2018 , by class of loans: Pass Watch Special Mention Substandard Doubtful Total (In thousands) Real Estate: One-to-four family $ 330,600 $ 4,314 $ 975 $ 850 $ — $ 336,739 Multi-family 85,117 — 112 — — 85,229 Commercial real estate 232,986 4,317 672 1,456 — 239,431 Construction and land 52,251 6,851 — 117 — 59,219 Total real estate loans 700,954 15,482 1,759 2,423 — 720,618 Consumer: Home equity 37,422 771 93 458 — 38,744 Auto and other consumer 68,696 936 146 216 9 70,003 Total consumer loans 106,118 1,707 239 674 9 108,747 Commercial business loans 14,972 622 275 563 — 16,432 Total loans $ 822,044 $ 17,811 $ 2,273 $ 3,660 $ 9 $ 845,797 The following table represents the internally assigned grade as of December 31, 2017 , by class of loans: Pass Watch Special Mention Substandard Total (In thousands) Real Estate: One-to-four family $ 348,273 $ 4,134 $ 1,580 $ 1,404 $ 355,391 Multi-family 71,535 2,117 115 — 73,767 Commercial real estate 188,251 9,893 964 3,848 202,956 Construction and land 59,360 8,040 3,662 83 71,145 Total real estate loans 667,419 24,184 6,321 5,335 703,259 Consumer: Home equity 37,502 323 93 555 38,473 Auto and other consumer 27,646 202 146 112 28,106 Total consumer loans 65,148 525 239 667 66,579 Commercial business loans 14,230 653 772 648 16,303 Total loans $ 746,797 $ 25,362 $ 7,332 $ 6,650 $ 786,141 The following table represents the credit risk profile based on payment activity as of September 30, 2018 , by class of loans: Nonperforming Performing Total (In thousands) Real Estate: One-to-four family $ 1,175 $ 335,564 $ 336,739 Multi-family — 85,229 85,229 Commercial real estate 143 239,288 239,431 Construction and land 117 59,102 59,219 Consumer: Home equity 344 38,400 38,744 Auto and other consumer 131 69,872 70,003 Commercial business 563 15,869 16,432 Total loans $ 2,473 $ 843,324 $ 845,797 The following table represents the credit risk profile based on payment activity as of December 31, 2017 , by class of loans: Nonperforming Performing Total (In thousands) Real Estate: One-to-four family $ 681 $ 354,710 $ 355,391 Multi-family — 73,767 73,767 Commercial real estate 378 202,578 202,956 Construction and land 52 71,093 71,145 Consumer: Home equity 365 38,108 38,473 Auto and other consumer 59 28,047 28,106 Commercial business — 16,303 16,303 Total loans $ 1,535 $ 784,606 $ 786,141 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 are generally related to the loan's interest rate, term and payment amount or a combination thereof. 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. 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 table is a summary of information pertaining to TDR loans included in impaired loans at the dates indicated: September 30, 2018 December 31, 2017 (In thousands) Total TDR loans $ 3,907 $ 4,919 Allowance for loan losses related to TDR loans 44 182 Total nonaccrual TDR loans 84 393 The following table presents newly restructured and renewals or modifications of existing TDR loans by class that occurred during the three months ended September 30, 2018 , by type of concession granted. Number of Contracts Rate Modification Term Modification Combination Modification Total Modifications (Dollars in thousands) Pre-modification outstanding recorded investment One- to four-family 1 $ — $ — $ 49 $ 49 1 $ — $ — $ 49 $ 49 Post-modification outstanding recorded investment One- to four-family 1 $ — $ — $ 47 $ 47 1 $ — $ — $ 47 $ 47 The following table presents newly restructured and renewals or modifications of existing TDR loans by class that occurred during the nine months ended September 30, 2018 , by type of concession granted. Number of Contracts Rate Modification Term Modification Combination Modification Total Modifications (Dollars in thousands) Pre-modification outstanding recorded investment One- to four-family 3 $ — $ — $ 229 $ 229 3 $ — $ — $ 229 $ 229 Post-modification outstanding recorded investment One- to four-family 3 $ — $ — $ 260 $ 260 3 $ — $ — $ 260 $ 260 There were no TDR loans which incurred a payment default within 12 months of the restructure date during the three and nine months ended September 30, 2018 . There were no newly restructured and renewals or modifications of existing TDR loans by class that occurred during the three months ended September 30, 2017 , by type of concession granted. The following table presents newly restructured and renewals or modifications of existing TDR loans by class that occurred during the nine months ended September 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 $ 237 $ 416 Commercial real estate 1 — — 129 129 4 $ 92 $ 87 $ 366 $ 545 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 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 No additional funds were committed to be advanced in connection with impaired loans at September 30, 2018 . The following table presents TDR loans by class at the dates indicated by accrual and nonaccrual status. September 30, 2018 December 31, 2017 Accrual Nonaccrual Total Accrual Nonaccrual Total (In thousands) One-to-four family $ 2,503 $ 84 $ 2,587 $ 3,165 $ 176 $ 3,341 Multi-family 112 — 112 115 — 115 Commercial real estate 672 — 672 693 217 910 Home equity 261 — 261 270 — 270 Commercial business 275 — 275 283 — 283 Total TDR loans $ 3,823 $ 84 $ 3,907 $ 4,526 $ 393 $ 4,919 |