10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024        

or

☐         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

Commission File Number: 001-35589

FS BANCORP, INC.

(Exact name of registrant as specified in its charter)

Washington	45-4585178
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

6920 220th Street SW, Mountlake Terrace, Washington  98043

(Address of principal executive offices; Zip Code)

(425) 771‑5299

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	FSBW	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒          No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒          No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).    Yes ☐          No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of August 8, 2024, there were 7,747,760 outstanding shares of the registrant’s common stock.

FS Bancorp, Inc.

Form 10‑Q

Table of Contents

		Page Number
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets at June 30, 2024 (Unaudited) and December 31, 2023	3
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	4
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	5
	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	6
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (Unaudited)	8 - 9
	Notes to Consolidated Financial Statements	10 - 45
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46 - 61
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61
Item 4.	Controls and Procedures	61
PART II	OTHER INFORMATION	62
Item 1.	Legal Proceedings	62
Item 1A.	Risk Factors	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 3.	Defaults Upon Senior Securities	63
Item 4.	Mine Safety Disclosures	63
Item 5.	Other Information	63
Item 6.	Exhibits	64
SIGNATURES		65

When we refer to “FS Bancorp” in this report, we are referring to FS Bancorp, Inc. When we refer to “Bank” or “1st Security Bank” in this report, we are referring to 1st Security Bank of Washington, the wholly owned subsidiary of FS Bancorp. As used in this report, the terms “we,” “our,” “us,” and “Company” refer to FS Bancorp, Inc. and its consolidated subsidiary, 1st Security Bank of Washington, unless the context indicates otherwise.

2

Item 1. Financial Statements

FS BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(In thousands, except shares and per share amounts) (Unaudited)

	June 30,			December 31,
ASSETS	2024			2023
Cash and due from banks	$	20,005		$	17,083
Interest-bearing deposits at other financial institutions		13,006			48,608
Total cash and cash equivalents		33,011			65,691
Certificates of deposit at other financial institutions		12,707			24,167
Securities available-for-sale, at fair value (amortized cost of $250,648 and $328,695, net of allowance for credit losses of $0 and $0, respectively)		221,182			292,933
Securities held-to-maturity, net of allowance for credit losses of $45 (fair value of $7,867 and $7,666, respectively)		8,455			8,455
Loans held for sale, at fair value		53,811			25,668
Loans receivable, net of allowance for credit losses of $31,238 and $31,534 (includes $13,868 and $15,088, at fair value, respectively)		2,457,184			2,401,481
Accrued interest receivable		13,792			14,005
Premises and equipment, net		29,999			30,578
Operating lease right-of-use (“ROU”) assets		5,784			6,627
Federal Home Loan Bank (“FHLB”) stock, at cost		10,322			2,114
Deferred tax asset, net		4,590			6,725
Bank owned life insurance (“BOLI”), net		38,201			37,719
Mortgage servicing rights (“MSRs”), held at the lower of cost or fair value		9,352			9,090
MSRs held for sale, held at the lower of cost or fair value		—			8,086
Goodwill		3,592			3,592
Core deposit intangible, net		15,483			17,343
Other assets		23,912			18,395
TOTAL ASSETS	$	2,941,377		$	2,972,669
LIABILITIES
Deposits:
Noninterest-bearing accounts	$	623,349		$	670,831
Interest-bearing accounts		1,759,454			1,851,492
Total deposits		2,382,803			2,522,323
Borrowings		181,895			93,746
Subordinated notes:
Principal amount		50,000			50,000
Unamortized debt issuance costs		(439	)		(473	)
Total subordinated notes less unamortized debt issuance costs		49,561			49,527
Operating lease liabilities		5,979			6,848
Other liabilities		37,113			35,737
Total liabilities		2,657,351			2,708,181
COMMITMENTS AND CONTINGENCIES (NOTE 9)
STOCKHOLDERS’ EQUITY
Preferred stock, $.01 par value; 5,000,000 shares authorized; none issued or outstanding		—			—
Common stock, $.01 par value; 45,000,000 shares authorized; 7,742,607 and 7,800,545 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		77			78
Additional paid-in capital		55,834			57,362
Retained earnings		243,651			230,354
Accumulated other comprehensive loss, net of tax		(15,536	)		(23,306	)
Total stockholders’ equity		284,026			264,488
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,941,377		$	2,972,669

See accompanying notes to these consolidated financial statements.

3

FS BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except shares and per share amounts) (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
INTEREST INCOME
Loans receivable, including fees	$	42,406		$	38,216		$	83,403		$	74,208
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions		3,534			2,651			7,417			5,271
Total interest and dividend income		45,940			40,867			90,820			79,479
INTEREST EXPENSE
Deposits		13,252			7,610			26,134			14,234
Borrowings		1,801			1,219			2,968			2,060
Subordinated notes		486			486			971			971
Total interest expense		15,539			9,315			30,073			17,265
NET INTEREST INCOME		30,401			31,552			60,747			62,214
PROVISION FOR CREDIT LOSSES		1,077			716			2,476			2,824
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		29,324			30,836			58,271			59,390
NONINTEREST INCOME
Service charges and fee income		2,479			2,862			5,031			5,470
Gain on sale of loans		2,463			1,947			4,301			3,423
Gain on sale of MSRs		—			—			8,215			—
Gain (loss) on sale of investment securities		151			—			(7,847	)		—
Earnings on cash surrender value of BOLI		242			227			482			448
Other noninterest income		533			(203	)		797			711
Total noninterest income		5,868			4,833			10,979			10,052
NONINTEREST EXPENSE
Salaries and benefits		13,378			13,513			26,935			27,377
Operations		3,519			3,643			6,527			6,335
Occupancy		1,669			1,562			3,374			3,082
Data processing		2,058			1,683			4,016			3,251
Loan costs		653			1,043			1,238			1,513
Professional and board fees		888			657			1,811			1,335
Federal Deposit Insurance Corporation (“FDIC”) insurance		450			591			982			1,171
Marketing and advertising		377			430			604			620
Acquisition cost		—			61			—			1,562
Amortization of core deposit intangible		919			1,023			1,860			1,482
(Recovery) impairment of MSRs		(54	)		(2	)		39			—
Total noninterest expense		23,857			24,204			47,386			47,728
INCOME BEFORE PROVISION FOR INCOME TAXES		11,335			11,465			21,864			21,714
PROVISION FOR INCOME TAXES		2,376			2,349			4,508			4,386
NET INCOME	$	8,959		$	9,116		$	17,356		$	17,328
Basic earnings per share	$	1.15		$	1.17		$	2.23		$	2.23
Diluted earnings per share	$	1.13		$	1.16		$	2.20		$	2.19

See accompanying notes to these consolidated financial statements.

4

FS BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands) (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net income	$	8,959		$	9,116		$	17,356		$	17,328
Other comprehensive income:
Securities available-for-sale:
Unrealized gain (loss) during period		1,001			(3,715	)		(1,551	)		2,421
Income tax (provision) benefit related to unrealized holding gain (loss)		(216	)		799			333			(521	)
Reclassification adjustment for realized (gain) loss, net included in net income		(151	)		—			7,847			—
Income tax provision related to reclassification for realized (gain) loss, net		32			—			(1,687	)		—
Derivative financial instruments:
Unrealized derivative gain during period		1,422			5,335			6,472			3,818
Income tax provision related to unrealized derivative gain		(305	)		(1,142	)		(1,391	)		(820	)
Reclassification adjustment for realized gain, net included in net income		(1,148	)		(1,271	)		(2,870	)		(2,178	)
Income tax provision related to reclassification, net		247			273			617			468
Other comprehensive income, net of tax		882			279			7,770			3,188
COMPREHENSIVE INCOME	$	9,841		$	9,395		$	25,126		$	20,516

See accompanying notes to these consolidated financial statements.

5

FS BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars in thousands, except per share amounts) (Unaudited)

Three Months Ended June 30, 2024 and 2023

													Accumulated
													Other
							Additional						Comprehensive			Total
	Common Stock						Paid-in			Retained			Loss,			Stockholders'
	Shares			Amount			Capital			Earnings			Net of Tax			Equity
BALANCE, April 1, 2023		7,743,283		$	77		$	56,138		$	208,342		$	(22,723	)	$	241,834
Net income		—		$	—			—			9,116			—		$	9,116
Dividends paid ($0.25 per share)		—		$	—			—			(1,939	)		—		$	(1,939	)
Share-based compensation		—		$	—			364			—			—		$	364
Issuance of common stock-employee stock purchase plan		9,099		$	—			268			—			—		$	268
Stock options exercised, net		1,225		$	—			11			—			—		$	11
Other comprehensive income, net of tax		—		$	—			—			—			279		$	279
BALANCE, June 30, 2023		7,753,607		$	77		$	56,781		$	215,519		$	(22,444	)	$	249,933
BALANCE, April 1, 2024		7,805,795		$	78		$	57,552		$	236,720		$	(16,418	)	$	277,932
Net income		—		$	—			—			8,959			—		$	8,959
Dividends paid ($0.26 per share)		—		$	—			—			(2,028	)		—		$	(2,028	)
Share-based compensation		—		$	—			389			—			—		$	389
Issuance of common stock- employee stock purchase plan		8,690		$	—			278			—			—		$	278
Common stock repurchased - repurchase plan		(72,878	)	$	(1	)		(2,360	)		—			—		$	(2,361	)
Stock options exercised, net		1,000		$	—			(25	)		—			—		$	(25	)
Other comprehensive income, net of tax		—		$	—			—			—			882		$	882
BALANCE, June 30, 2024		7,742,607		$	77		$	55,834		$	243,651		$	(15,536	)	$	284,026

6

Six Months Ended June 30, 2024 and 2023

													Accumulated
													Other
							Additional						Comprehensive			Total
	Common Stock						Paid-in			Retained			Income (Loss),			Stockholders'
	Shares			Amount			Capital			Earnings			Net of Tax			Equity
BALANCE, January 1, 2023		7,736,185		$	77		$	55,187		$	202,065		$	(25,632	)	$	231,697
Net income		—		$	—			—			17,328			—		$	17,328
Dividends paid ($0.50 per share)		—		$	—			—			(3,874	)		—		$	(3,874	)
Share-based compensation		—		$	—			1,018			—			—		$	1,018
Issuance of common stock-employee stock purchase plan		16,449		$	—			539			—					$	539
Restricted stock awards forfeited		(4,812	)	$	—			—			—			—		$	—
Common stock repurchased for employee/director taxes paid on restricted stock awards		(440	)	$	—			(16	)		—			—		$	(16	)
Stock options exercised, net		6,225		$	—			53			—			—		$	53
Other comprehensive income, net of tax		—		$	—			—			—			3,188		$	3,188
BALANCE, June 30, 2023		7,753,607		$	77		$	56,781		$	215,519		$	(22,444	)	$	249,933
BALANCE, January 1, 2024		7,800,545		$	78		$	57,362		$	230,354		$	(23,306	)	$	264,488
Net income		—		$	—			—			17,356			—		$	17,356
Dividends paid ($0.52 per share)		—		$	—			—			(4,059	)		—		$	(4,059	)
Share-based compensation		—		$	—			784			—			—		$	784
Issuance of common stock-employee stock purchase plan		17,940		$	—			580			—			—		$	580
Common stock repurchased - repurchase plan		(90,490	)	$	(1	)		(2,360	)		—			—		$	(2,361	)
Restricted stock awards forfeited		(4,000	)	$	—			—			—			—		$	—
Stock options exercised, net		18,612		$	—			(532	)		—			—		$	(532	)
Other comprehensive income, net of tax		—		$	—			—			—			7,770		$	7,770
BALANCE, June 30, 2024		7,742,607		$	77		$	55,834		$	243,651		$	(15,536	)	$	284,026

See accompanying notes to these consolidated financial statements.

7

FS BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

	Six Months Ended June 30,
CASH FLOWS FROM OPERATING ACTIVITIES	2024			2023
Net income	$	17,356		$	17,328
Adjustments to reconcile net income to net cash from operating activities
Provision for credit losses		2,476			2,824
Depreciation, amortization and accretion		5,774			6,219
Compensation expense related to stock options and restricted stock awards		784			1,018
Change in cash surrender value of BOLI		(482	)		(448	)
Gain on sale of loans held for sale		(4,301	)		(3,423	)
Gain on sale of MSRs		(8,215	)		—
Loss on sale of investment securities, net		7,847			—
Origination of loans held for sale		(271,158	)		(185,041	)
Proceeds from sale of loans held for sale		261,171			206,392
Impairment of MSRs		39			—
Changes in operating assets and liabilities
Accrued interest receivable		213			(570	)
Other assets		(2,076	)		(4,168	)
Other liabilities		943			2,025
Net cash from operating activities		10,371			42,156
CASH FLOWS FROM INVESTING ACTIVITIES
Activity in securities available-for-sale:
Proceeds from sale of investment securities		98,459			—
Maturities, prepayments, and calls		9,046			8,758
Purchases		(38,009	)		(3,933	)
Maturities of certificates of deposit at other financial institutions		12,680			—
Purchase of certificates of deposit at other financial institutions		(1,220	)		(10,035	)
Portfolio loan originations and principal collections, net		(45,298	)		(105,739	)
Net cash from acquisitions		—			336,157
Proceeds from sale of mortgage servicing rights		16,168			—
Purchase of portfolio loans		(28,208	)		(2,231	)
Purchase of premises and equipment		(632	)		(1,113	)
Change in FHLB stock, net		(8,208	)		4,056
Net cash from investing activities		14,778			225,920
CASH FLOWS USED BY FINANCING ACTIVITIES
Net decrease in deposits		(139,606	)		(187,484	)
Proceeds from borrowings		557,804			1,043,500
Repayments of borrowings		(469,655	)		(1,030,132	)
Dividends paid on common stock		(4,059	)		(3,874	)
(Disbursements) proceeds from stock options exercised, net		(532	)		53
Common stock repurchased for employee/director taxes paid on restricted stock awards		—			(16	)
Issuance of common stock - employee stock purchase plan		580			539
Common stock repurchased		(2,361	)		—
Net cash used by financing activities		(57,829	)		(177,414	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(32,680	)		90,662
CASH AND CASH EQUIVALENTS, beginning of period		65,691			41,437
CASH AND CASH EQUIVALENTS, end of period	$	33,011		$	132,099

8

FS BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In thousands) (Unaudited)

SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest on deposits and borrowings	$	31,459	$	15,183
Income taxes		2,062		5,985
SUPPLEMENTARY DISCLOSURES OF NONCASH OPERATING, INVESTING AND FINANCING ACTIVITIES
Change in fair value on available-for-sale investment securities	$	6,296	$	2,421
Change in fair value on fair value and cash flow hedges		3,598		1,640
Change in fair value on portfolio loans measured under the fair value option		186		57
Retention in gross MSRs from loan sales		1,393		1,325
ROU assets in exchange for lease liabilities		—		2,034
Acquisitions:
Assets acquired		—		87,512
Liabilities assumed		—		424,949

See accompanying notes to these consolidated financial statements.

9

FS BANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Table Dollar Amounts in Thousands, Except Per Share Amounts)

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations – FS Bancorp, Inc. (the “Company”) was incorporated in September 2011 as the holding company for 1st Security Bank of Washington (the “Bank” or “1st Security Bank”) in connection with the Bank’s conversion from the mutual to stock form of ownership which was completed on July 9, 2012. The Bank is a community-based savings bank with 27 full-service bank branches, a headquarters that also originates loans and accepts deposits, and loan production offices in suburban communities in the greater Puget Sound area, the Kennewick-Pasco-Richland metropolitan area of Washington, also known as the Tri-Cities, Goldendale, Vancouver, and White Salmon, Washington and Manzanita, Newport, Ontario, Tillamook, and Waldport, Oregon. The Bank’s branches located in the communities of Goldendale and White Salmon, Washington and Manzanita, Newport, Ontario, Tillamook, and Waldport, Oregon were acquired from Columbia State Bank on February 24, 2023, and opened as 1st Security Bank branches on February 27, 2023. The Bank provides loan and deposit services to customers who are predominantly small- and middle-market businesses and individuals. The Company and its subsidiary are subject to regulation by certain federal and state agencies and undergo periodic examination by these regulatory agencies.

Financial Statement Presentation – The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10‑Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). These unaudited interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10‑K which includes all the audited financial statements and footnotes required by U.S. GAAP for complete financial statements for the year ended December 31, 2023, as filed with the SEC on March 15, 2024. In the opinion of management, all normal adjustments and recurring accruals considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included.

The results for the three and six months ended June 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, or any other future period. The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect amounts reported in the financial statements. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses (“ACL”).

Amounts presented in the consolidated financial statements and footnote tables are rounded and presented to the nearest thousands of dollars except per share amounts. If the amounts are above $1.0 million, they are rounded one decimal point, and if they are above $1.0 billion, they are rounded two decimal points.

Principles of Consolidation – The consolidated financial statements include the accounts of FS Bancorp and its wholly owned subsidiary, 1st Security Bank. All material intercompany accounts have been eliminated in consolidation.

Segment Reporting – The Company operates in two business segments through the Bank: commercial and consumer banking and home lending. The Company’s business segments are determined based on the products and services provided, as well as the nature of the related business activities, and they reflect the way financial information is regularly reviewed for the purpose of allocating resources and evaluating performance of the Company’s businesses. The results for these business segments are based on management’s accounting process, which assigns income statement items and assets to each responsible operating segment. This process is dynamic and is based on management’s view of the Company’s operations. See “Note 14 – Business Segments.”

Subsequent Events – The Company has evaluated events and transactions after  June 30, 2024, for potential recognition or disclosure.

10

 

RECENT ACCOUNTING PRONOUNCEMENTS

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform” (“Topic 848”). This ASU provides optional guidance for a limited period to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU apply to modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) that replace a reference rate affected by reference rate reform (including rates referenced in fallback provisions) and contemporaneous modifications of other contract terms related to the replacement of the reference rate (including contract modifications to add or change fallback provisions). The following optional expedients for applying the requirements of certain Topics or Industry Subtopics in the Codification are permitted for contracts that are modified because of reference rate reform and that meet certain scope guidance: 1) Modifications of contracts within the scope of Topics 310, Receivables, and 470, Debt, should be accounted for by prospectively adjusting the effective interest rate; 2) Modifications of contracts within the scope of Topics 840, Leases, and 842, Leases, should be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate (for example, the incremental borrowing rate) or remeasurements of lease payments that otherwise would be required under those Topics for modifications not accounted for as separate contracts; and 3) Modifications of contracts do not require an entity to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract under Subtopic 815-15, Derivatives and Hedging – Embedded Derivatives. In January 2021, ASU 2021-01 updated amendments in the new ASU to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in this ASU and the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. An entity may elect to apply the amendments in this ASU on a full retrospective basis as of any date from the effective dates. The amendments in this ASU have differing effective dates, beginning with an interim period including and subsequent to March 12, 2020 through December 31, 2022, deferred now until December 31, 2024. The Company does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements and related disclosures.

In November 2023, the FASB issued guidance within ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU and all existing disclosures in Topic 280. The amendments in this ASU are intended to improve segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The key amendments included in this ASU:

● Require disclosure on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and are included within each reported measure of segment profit and loss.

● Require disclosure on an annual and interim basis, an amount for other segment items (defined in the ASU) and a description of its composition.

● Clarify that if the CODM uses more than one measure of the segment's profit or loss in assessing performance, one or more of those additional measures may be reported.

● Require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing performance.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the effect that ASU 2023-07 will have on the Company’s consolidated financial statements and related disclosures.

In December 2023, the FASB issued guidance within ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in the ASU are intended to provide more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The ASU requires disclosure in the rate reconciliation of specific categories as well as provide additional information for reconciling items that meet a quantitative threshold.

Those amendments require disclosure of the following information about income taxes paid on an annual basis:

● Income taxes paid (net of refunds received), disaggregated by federal and state taxes and by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than five percent of total income taxes paid (net refunds received).

● Income tax expense (or benefit) from continuing operations disaggregated by federal and state jurisdictions.

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The ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied on a prospective basis. The Company is evaluating the effect that ASU 2023-09 will have on its consolidated financial statements and related disclosures. 

Application of New Accounting Guidance Adopted in 2024

On January 1, 2024, the Company adopted ASU No.2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security should not be considered in measuring fair value, nor should the contractual restriction be recognized and measured separately.  Further, this ASU requires disclosure of the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet, the nature and remaining duration of the restrictions(s), and the circumstances that could cause a lapse in the restriction(s).  ASU 2022-03 is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The adoption of ASU 2022-03 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

On January 1, 2024, the Company adopted ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323):  Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, a consensus of the Emerging Issues Task Force.  ASU 2023-02 allows an entity the option to apply the proportional amortization method of accounting to other equity investments that are made for the primary purpose of receiving tax credits or other income tax benefits if certain conditions are met.  Prior to this ASU, the application of the proportional amortization method of accounting was limited to investments in low-income housing tax credit structures.  The proportional amortization method of accounting results in the amortization of applicable investments, as well as the related income tax credits or other income tax benefits received, being presented on a single line in the statements of income, income tax expense.  Under this ASU, an entity has the option to apply the proportional amortization method of accounting to applicable investments on a tax-credit-program-by-tax-credit program basis.  In addition, the amendments in this ASU require that all tax equity investments accounted for using the proportional amortization method use the delayed equity contribution guidance in paragraph 323-740-25-3, requiring a liability to be recognized for delayed equity contributions that are unconditional and legally binding or for equity contributions that are contingent upon a future event when that contingent event becomes probable. Under this ASU, low-income housing tax credit investments for which the proportional amortization method is not applied can no longer be accounted for using the delayed equity contribution guidance.  Further, this ASU specifies that impairment of low-income housing tax credit investments not accounted for using the equity method must apply the impairment guidance in Subtopic 323-10: Investments - Equity Method and Joint Ventures - Overall.  This ASU also clarifies that for low-income housing tax credit investments not accounted for under the proportional amortization method or the equity method, an entity shall account for them under Topic 321: Investments - Equity Securities. The amendments in the ASU also require additional disclosures in interim and annual periods concerning investments for which the proportional amortization method is applied, including (i) the nature of tax equity investments, and (ii) the effect of tax equity investments and related income tax credits and other income tax benefits on the financial position and results of operations.  ASU 2023-02 is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.  The adoption of ASU 2023-02 did not have a material impact on the Company's consolidated financial statements and related disclosures.

12

  

NOTE 2 – INVESTMENTS

The following tables present the amortized costs, unrealized gains, unrealized losses, estimated fair values of securities available-for-sale and held-to-maturity, and the ACL on securities available-for-sale and held-to-maturity at  June 30, 2024 and December 31, 2023:

	June 30, 2024
								Estimated
	Amortized		Unrealized		Unrealized			Fair
SECURITIES AVAILABLE-FOR-SALE	Cost		Gains		Losses			Values		ACL
U.S. agency securities	$	20,238	$	45	$	(3,167	)	$	17,116	$	—
Corporate securities		16,000		51		(866	)		15,185		—
Municipal bonds		84,345		—		(12,700	)		71,645		—
Mortgage-backed securities		112,462		168		(11,909	)		100,721		—
U.S. Small Business Administration securities		17,603		79		(1,167	)		16,515		—
Total securities available-for-sale		250,648		343		(29,809	)		221,182		—
SECURITIES HELD-TO-MATURITY
Corporate securities		8,500		—		(633	)		7,867		45
Total securities held-to-maturity		8,500		—		(633	)		7,867		45
Total securities	$	259,148	$	343	$	(30,442	)	$	229,049	$	45

	December 31, 2023
								Estimated
	Amortized		Unrealized		Unrealized			Fair
SECURITIES AVAILABLE-FOR-SALE	Cost		Gains		Losses			Values		ACL
U.S. agency securities	$	21,151	$	46	$	(3,179	)	$	18,018	$	—
Corporate securities		13,000		613		(741	)		12,872		—
Municipal bonds		138,803		42		(19,398	)		119,447		—
Mortgage-backed securities		112,855		238		(11,845	)		101,248		—
U.S. Small Business Administration securities		42,886		—		(1,538	)		41,348		—
Total securities available-for-sale		328,695		939		(36,701	)		292,933		—
SECURITIES HELD-TO-MATURITY
Corporate securities		8,500		—		(834	)		7,666		45
Total securities held-to-maturity		8,500		—		(834	)		7,666		45
Total securities	$	337,195	$	939	$	(37,535	)	$	300,599	$	45

The following table presents the activity in the ACL on securities held-to-maturity by major security type for the three and six months ended June 30, 2024 and 2023:

SECURITIES HELD-TO-MATURITY	For the Three Months Ended June 30,
Corporate Securities	2024		2023
Beginning ACL balance	$	45	$	31
Provision for (recapture of) credit losses		—		—
Total ending ACL balance	$	45	$	31

SECURITIES HELD-TO-MATURITY	For the Six Months Ended June 30,
Corporate Securities	2024		2023
Beginning ACL balance	$	45	$	31
Provision for (recapture of) credit losses		—		—
Total ending ACL balance	$	45	$	31

Management measures expected credit losses on held-to-maturity debt securities on an individual basis. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Accrued interest receivable on held-to-maturity debt securities totaled $114,000 and $116,000 at  June 30, 2024 and December 31, 2023, and was $1.0 million and $1.5 million on available-for-sale debt securities as of June 30, 2024 and December 31, 2023, respectively. Accrued interest receivable on securities is reported in “Accrued interest receivable” on the Consolidated Balance Sheets and is excluded from the calculation of the ACL.

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The Company monitors the credit quality of debt securities held-to-maturity quarterly using credit rating, material event notices, and changes in market value. The following table summarizes the amortized cost of debt securities held-to-maturity at the dates indicated, aggregated by credit quality indicator:

	June 30,		December 31,
Corporate securities	2024		2023
BBB/BBB-	$	7,000	$	7,000
BB+		1,500		1,500
Total	$	8,500	$	8,500

At June 30, 2024 and  December 31, 2023, there were no debt securities held-to-maturity that were classified as either nonaccrual or 90 days or more past due and still accruing interest.

The following table presents, as of June 30, 2024, investment securities which were pledged to secure borrowings, public deposits or other obligations as permitted or required by law:

	June 30, 2024
Purpose or beneficiary	Carrying Value		Amortized Cost		Fair Value
State and local government public deposits	$	34,729	$	40,641	$	34,729

Investment securities that were in an unrealized loss position at the dates indicated are presented in the following tables, based on the length of time individual securities have been in an unrealized loss position.

	June 30, 2024
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
SECURITIES AVAILABLE-FOR-SALE	Value		Losses			Value		Losses			Value		Losses
U.S. agency securities	$	—	$	—		$	15,071	$	(3,167	)	$	15,071	$	(3,167	)
Corporate securities		7,874		(126	)		4,260		(740	)		12,134		(866	)
Municipal bonds		884		(9	)		70,761		(12,691	)		71,645		(12,700	)
Mortgage-backed securities		11,908		(41	)		65,462		(11,868	)		77,370		(11,909	)
U.S. Small Business Administration securities		—		—			7,593		(1,167	)		7,593		(1,167	)
Total securities available-for-sale		20,666		(176	)		163,147		(29,633	)		183,813		(29,809	)
SECURITIES HELD-TO-MATURITY
Corporate securities		—		—			7,867		(633	)		7,867		(633	)
Total securities held-to-maturity		—		—			7,867		(633	)		7,867		(633	)
Total securities	$	20,666	$	(176	)	$	171,014	$	(30,266	)	$	191,680	$	(30,442	)

14

 

	December 31, 2023
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
SECURITIES AVAILABLE-FOR-SALE	Value		Losses			Value		Losses			Value		Losses
U.S. agency securities	$	—	$	—		$	15,972	$	(3,179	)	$	15,972	$	(3,179	)
Corporate securities		959		(41	)		4,300		(700	)		5,259		(741	)
Municipal bonds		3,922		(23	)		113,577		(19,375	)		117,499		(19,398	)
Mortgage-backed securities		20,662		(113	)		67,376		(11,732	)		88,038		(11,845	)
U.S. Small Business Administration securities		33,211		(460	)		8,137		(1,078	)		41,348		(1,538	)
Total securities available-for-sale		58,754		(637	)		209,362		(36,064	)		268,116		(36,701	)
SECURITIES HELD-TO-MATURITY
Corporate securities		—		—			7,666		(834	)		7,666		(834	)
Total securities held-to-maturity		—		—			7,666		(834	)		7,666		(834	)
Total securities	$	58,754	$	(637	)	$	217,028	$	(36,898	)	$	275,782	$	(37,535	)

There were no held-to-maturity debt securities in an unrealized loss position of less than one year and seven held-to-maturity debt securities in an unrealized loss position of more than one year at  June 30, 2024.

There were nine available-for-sale securities in an unrealized loss position of less than one year, and 128 available-for-sale securities in an unrealized loss position of more than one year at June 30, 2024. The unrealized losses associated with these securities are believed to be caused by changing market conditions and considered to be temporary, and the Company does not intend and is not likely to be required to sell these securities prior to maturity. Management monitors the published credit ratings of the issuers of the debt securities for material ratings or outlook changes. Substantially all the Company’s municipal bond portfolio is comprised of obligations of states and political subdivisions located within the Company’s geographic footprint that are monitored through quarterly or annual financial review utilizing published credit ratings. All the municipal bond securities are investment grade.

All the available-for-sale mortgage-backed securities and U.S. Small Business Administration securities in an unrealized loss position are issued or guaranteed by government-sponsored enterprises, and the available-for-sale corporate securities are all investment grade and monitored for rating or outlook changes. Based on the Company’s evaluation of these securities, no credit impairment was recorded for the six months ended June 30, 2024, or for the year ended December 31, 2023.

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The contractual maturities of securities available-for-sale and held-to-maturity at the dates indicated are listed below. Expected maturities of mortgage-backed securities may differ from contractual maturities because borrowers may have the right to call or prepay the obligations; therefore, these securities are classified separately with no specific maturity date.

	June 30,				December 31,
	2024				2023
SECURITIES AVAILABLE-FOR-SALE	Amortized		Fair		Amortized		Fair
U.S. agency securities	Cost		Value		Cost		Value
Due within one year	$	—	$	—	$	922	$	914
Due after one year through five years		4,954		4,499		3,947		3,544
Due after five years through ten years		10,973		9,207		11,972		10,139
Due after ten years		4,311		3,410		4,310		3,421
Subtotal		20,238		17,116		21,151		18,018
Corporate securities
Due within one year		—		—		1,000		1,004
Due after one year through five years		10,000		9,960		6,000		6,609
Due after five years through ten years		4,000		3,839		4,000		3,839
Due after ten years		2,000		1,386		2,000		1,420
Subtotal		16,000		15,185		13,000		12,872
Municipal bonds
Due within one year		1,000		1,000		1,013		1,003
Due after one year through five years		78		78		757		751
Due after five years through ten years		6,316		5,852		7,603		7,101
Due after ten years		76,951		64,715		129,430		110,592
Subtotal		84,345		71,645		138,803		119,447
Mortgage-backed securities
Federal National Mortgage Association (“FNMA”)		83,261		73,097		76,369		66,275
Federal Home Loan Mortgage Corporation (“FHLMC”)		21,351		20,331		32,311		31,376
Government National Mortgage Association (“GNMA”)		7,850		7,293		4,175		3,597
Subtotal		112,462		100,721		112,855		101,248
U.S. Small Business Administration securities
Due within one year		42		41		198		196
Due after one year through five years		1,434		1,373		1,860		1,824
Due after five years through ten years		6,858		6,648		21,420		20,929
Due after ten years		9,269		8,453		19,408		18,399
Subtotal		17,603		16,515		42,886		41,348
Total securities available-for-sale		250,648		221,182		328,695		292,933
SECURITIES HELD-TO-MATURITY
Corporate securities
Due after five years through ten years		8,500		7,867		8,500		7,666
Total securities held-to-maturity		8,500		7,867		8,500		7,666
Total securities	$	259,148	$	229,049	$	337,195	$	300,599

The proceeds and resulting gains and losses from sales of securities available-for-sale for the three and six months ended June 30, 2024:

	For the Three Months Ended
	June 30, 2024
			Gross		Gross
	Proceeds		Gains		(Losses)
Securities available-for-sale	$	54,423	$	204	$	(53)

	For the Six Months Ended
	June 30, 2024
			Gross		Gross
	Proceeds		Gains		(Losses)
Securities available-for-sale	$	98,459	$	204	$	(8,051	)

There were no sales proceeds, or gains or losses for the sale of securities available-for-sale for the three and six months ended June 30, 2023.

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NOTE 3 – LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES – LOANS

The composition of the loan portfolio was as follows at the dates indicated:

	June 30,			December 31,
REAL ESTATE LOANS	2024			2023
Commercial ("CRE")	$	359,404		$	366,328
Construction and development		274,209			303,054
Home equity		73,749			69,488
One-to-four-family (excludes loans held for sale)		588,966			567,742
Multi-family		239,675			223,769
Total real estate loans		1,536,003			1,530,381
CONSUMER LOANS
Indirect home improvement		563,621			569,903
Marine		74,627			73,310
Other consumer		3,440			3,540
Total consumer loans		641,688			646,753
COMMERCIAL BUSINESS LOANS
Commercial and industrial ("C&I")		285,183			238,301
Warehouse lending		25,548			17,580
Total commercial business loans		310,731			255,881
Total loans receivable, gross		2,488,422			2,433,015
ACL on loans		(31,238	)		(31,534	)
Total loans receivable, net	$	2,457,184		$	2,401,481

Loan amounts are net of unearned loan fees in excess of unamortized costs and premiums of $7.2 million as of June 30, 2024 and $8.4 million as of December 31, 2023. Net loans include unamortized net discounts on acquired loans of $2.2 million and $2.6 million as of  June 30, 2024 and December 31, 2023, respectively. Net loans do not include accrued interest receivable. Accrued interest receivable on loans was $11.8 million and $11.5 million as of June 30, 2024 and December 31, 2023, respectively, and was reported in “Accrued interest receivable” on the Consolidated Balance Sheets.

Most of the Company’s CRE and multi-family real estate, construction, residential, and/or commercial business lending activities are with customers located in Western Washington, the Oregon Coast, and near our loan production offices in Vancouver and the Tri-Cities, Washington. The Company originates real estate, consumer, and commercial business loans and has concentrations in these areas, however, indirect home improvement loans, including solar-related home improvement loans, are originated through a network of home improvement contractors and dealers located throughout Washington, Oregon, California, Idaho, Colorado, Arizona, Minnesota, Nevada, Texas, Utah, Massachusetts, Montana, and New Hampshire.  Loans are generally secured by collateral and rights to collateral vary and are legally documented to the extent practicable. Local economic conditions may affect borrowers’ ability to meet the stated repayment terms.

At June 30, 2024, the Bank held approximately $1.11 billion in loans that are pledged as collateral for FHLB advances, compared to approximately $1.07 billion at December 31, 2023. The Bank held approximately $627.1 million in loans that are pledged as collateral for the Federal Reserve Bank of San Francisco (the “FRB”) line of credit at June 30, 2024, compared to approximately $631.1 million at December 31, 2023.

The Company has defined its loan portfolio into three segments that reflect the structure of the lending function, the Company’s strategic plan and the way management monitors performance and credit quality. The three loan portfolio segments are: (a) real estate, (b) consumer, and (c) commercial business. Each of these segments is disaggregated into classes based on the risk characteristics of the borrower and/or the collateral type securing the loan. The following is a summary of each of the Company’s loan portfolio segments and classes:

Real Estate Loans

CRE Lending. Loans originated by the Company primarily secured by income-producing properties, including retail centers, warehouses, and office buildings located in our market areas.

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Construction and Development Lending. Loans originated by the Company for the construction of, and secured by, commercial real estate, one-to-four-family, and multi-family residences and tracts of land for development that are not pre-sold. A portion of the one-to-four-family construction portfolio is custom construction loans to the intended occupant of the residence.

Home Equity Lending. Loans originated by the Company secured by second mortgages on one-to-four-family residences, including home equity lines of credit in our market areas.

One-to-Four-Family Real Estate Lending. One-to-four-family residential loans include owner occupied properties (including second homes), and non-owner-occupied properties with four or less units. These loans originated by the Company or periodically purchased from banks are secured by first mortgages on one-to-four-family residences in our market areas that the Company intends to hold (excludes loans held for sale).

Multi-Family Lending. Apartment term lending (five or more units) to current banking customers and community reinvestment loans for low to moderate income individuals in the Company’s footprint.

Consumer Loans

Indirect Home Improvement. Fixture secured loans for home improvement are originated by the Company through its network of home improvement contractors and dealers and are secured by the personal property installed in, on, or at the borrower’s real property, and may be perfected with a UCC‑2 financing statement filed in the county of the borrower’s residence. These indirect home improvement loans include replacement windows, siding, roofing, spas, and other home fixture installations, including solar related home improvement projects.

Marine. Loans originated by the Company, secured by boats, to borrowers primarily located in states where the Company originates consumer loans.

Other Consumer. Loans originated by the Company to consumers in our retail branch footprint, including automobiles, recreational vehicles, direct home improvement loans, loans on deposits, and other consumer loans, primarily consisting of personal lines of credit and credit cards.

Commercial Business Loans

C&I Lending. C&I loans originated by the Company to local small- and mid-sized businesses in our Puget Sound market area are secured primarily by accounts receivable, inventory, or personal property, plant and equipment. Some C&I loans purchased by the Company are outside of the greater Puget Sound market area. C&I loans are made based on the borrower’s ability to make repayment from the cash flow of the borrower’s business. Certain C&I loans also include SBA/USDA guaranteed certificates of $35.2 million at  June 30, 2024, compared to $10.6 million at  December 31, 2023.

Warehouse Lending. Loans originated to non-depository financial institutions and secured by notes originated by the non-depository financial institution.  The Company has two distinct warehouse lending divisions: commercial warehouse re-lending secured by notes on construction loans and mortgage warehouse re-lending secured by notes on one-to-four-family loans. The Company’s commercial construction warehouse lines are secured by notes on construction loans and typically guaranteed by principals with experience in construction lending.  Mortgage warehouse lending loans are funded through third-party residential mortgage bankers. Under this program the Company provides short-term funding to the mortgage banking companies for the purpose of originating residential mortgage loans for sale into the secondary market.

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Allowance for Credit Losses

The main drivers of the provision for credit losses on loans recorded in the first six months of 2024 were increases in the loan portfolio, as well as an increase in nonperforming loans, and higher net charge-offs. 

The following tables detail activity in the ACL on loans by loan categories at or for the three and six months ended June 30, 2024 and 2023:

	At or For the Three Months Ended June 30, 2024
	Real						Commercial
ACL ON LOANS	Estate			Consumer			Business			Unallocated		Total
Beginning balance	$	14,253		$	12,933		$	4,293		$	—	$	31,479
(Reversal of) provision for credit losses on loans		(165	)		914			252			—		1,001
Charge-offs		—			(1,015	)		(733	)		—		(1,748	)
Recoveries		—			421			85			—		506
Net charge-offs		—			(594	)		(648	)		—		(1,242	)
Total ending ACL balance	$	14,088		$	13,253		$	3,897		$	—	$	31,238

	At or For the Three Months Ended June 30, 2023
	Real						Commercial
ACL ON LOANS	Estate			Consumer			Business		Unallocated		Total
Beginning balance	$	12,572		$	13,401		$	3,964	$	—	$	29,937
(Reversal of) provision for credit losses on loans		(265	)		1,266			62		—		1,063
Charge-offs		—			(876	)		—		—		(876	)
Recoveries		—			226			—		—		226
Net charge-offs		—			(650	)		—		—		(650	)
Total ending ACL balance	$	12,307		$	14,017		$	4,026	$	—	$	30,350

	At or For the Six Months Ended June 30, 2024
	Real						Commercial
ACL ON LOANS	Estate			Consumer			Business			Unallocated		Total
Beginning balance	$	14,107		$	13,357		$	4,070		$	—	$	31,534
(Reversal of) provision for credit losses on loans		(19	)		1,558			883			—		2,422
Charge-offs		—			(2,501	)		(1,141	)		—		(3,642	)
Recoveries		—			839			85			—		924
Net Charge-offs		—			(1,662	)		(1,056	)		—		(2,718	)
Total ending ACL balance	$	14,088		$	13,253		$	3,897		$	—	$	31,238

	At or For the Six Months Ended June 30, 2023
	Real						Commercial
ACL ON LOANS	Estate			Consumer			Business			Unallocated		Total
Beginning balance	$	12,123		$	12,109		$	3,760		$	—	$	27,992
Provision for credit losses on loans		194			2,957			267			—		3,418
Charge-offs		(10	)		(1,585	)		(1	)		—		(1,596	)
Recoveries		—			536			—			—		536
Net charge-offs		(10	)		(1,049	)		(1	)		—		(1,060	)
Total ending ACL balance	$	12,307		$	14,017		$	4,026		$	—	$	30,350

Nonaccrual and 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. Loans are automatically placed on nonaccrual once the loan is 90 days past due or sooner if, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, or as required by regulatory authorities.

Loan Modifications to Borrowers Experiencing Financial Difficulty

The Company may modify the contractual terms of a loan to a borrower experiencing financial difficulty as a part of ongoing loss mitigation strategies. These modifications may result in an interest rate reduction, term extension, an other-than-insignificant payment delay, or a combination thereof. The Company typically does not offer principal forgiveness. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. The effect of most modifications made to borrowers experiencing financial difficulty is already included in the ACL on loans because of the measurement methodologies used to estimate the allowance.

The following tables present the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty at the end of the reporting periods by loan class and modification type.

	Payment Deferral
	Amortized Cost		% of Total Loan
June 30, 2024	Basis		Type			Financial Effect
CRE	$	1,116		0.3	%	Deferred payments and capitalized interest for a weighted-average period of 2.0 years.
December 31, 2023
CRE	$	1,088		0.3	%	Deferred payments and capitalized interest for a weighted-average period of 1.5 years.

	Combination - Term Extension and Interest Rate Reduction
	Amortized Cost		% of Total Loan
December 31, 2023	Basis		Type			Financial Effect
C&I	$	2,940		1.2	%	Reduced weighted-average contractual interest rate from 7.5% to 4.1% and added a weighted-average 5 years to the life of the loans.

At  June 30, 2024 and  December 31, 2023, the loans were in compliance with their modified terms and were classified as current. For the three and six months ended June 30, 2024 and 2023, no loans experienced a default subsequent to being granted a modification in the last twelve months. There were no unfunded commitments associated with loans modified for borrowers experiencing financial distress as of June 30, 2024.

19

 

Nonaccrual and Past Due Loans

The following tables provide information pertaining to the aging analysis of contractually past due loans and nonaccrual loans at June 30, 2024 and December 31, 2023:

	June 30, 2024
	30-59		60-89
	Days		Days		90 Days		Total				Total
	Past		Past		or More		Past				Loans		Non-
REAL ESTATE LOANS	Due		Due		Past Due		Due		Current		Receivable		Accrual (1)
CRE	$	—	$	323	$	—	$	323	$	359,081	$	359,404	$	1,116
Construction and development		—		—		4,737		4,737		269,472		274,209		4,737
Home equity		24		—		156		180		73,569		73,749		156
One-to-four-family		78		—		—		78		588,888		588,966		170
Multi-family		—		—		—		—		239,675		239,675		—
Total real estate loans		102		323		4,893		5,318		1,530,685		1,536,003		6,179
CONSUMER LOANS
Indirect home improvement		2,265		1,041		901		4,207		559,414		563,621		2,319
Marine		181		239		85		505		74,122		74,627		327
Other consumer		5		5		5		15		3,425		3,440		6
Total consumer loans		2,451		1,285		991		4,727		636,961		641,688		2,652
COMMERCIAL BUSINESS LOANS
C&I		—		—		1,701		1,701		283,482		285,183		2,575
Warehouse lending		—		—		—		—		25,548		25,548		—
Total commercial business loans		—		—		1,701		1,701		309,030		310,731		2,575
Total loans	$	2,553	$	1,608	$	7,585	$	11,746	$	2,476,676	$	2,488,422	$	11,406

	December 31, 2023
	30-59		60-89
	Days		Days		90 Days		Total				Total
	Past		Past		or More		Past				Loans		Non-
REAL ESTATE LOANS	Due		Due		Past Due		Due		Current		Receivable		Accrual (1)
CRE	$	—	$	—	$	—	$	—	$	366,328	$	366,328	$	1,088
Construction and development		—		—		—		—		303,054		303,054		4,699
Home equity		79		25		136		240		69,248		69,488		173
One-to-four-family		—		96		—		96		567,646		567,742		96
Multi-family		—		—		—		—		223,769		223,769		—
Total real estate loans		79		121		136		336		1,530,045		1,530,381		6,056
CONSUMER LOANS
Indirect home improvement		1,759		1,248		777		3,784		566,119		569,903		1,863
Marine		373		243		137		753		72,557		73,310		342
Other consumer		57		18		6		81		3,459		3,540		8
Total consumer loans		2,189		1,509		920		4,618		642,135		646,753		2,213
COMMERCIAL BUSINESS LOANS
C&I		—		—		2,514		2,514		235,787		238,301		2,683
Warehouse lending		—		—		—		—		17,580		17,580		—
Total commercial business loans		—		—		2,514		2,514		253,367		255,881		2,683
Total loans	$	2,268	$	1,630	$	3,570	$	7,468	$	2,425,547	$	2,433,015	$	10,952

(1) Includes loans less than 90 days past due as applicable.

There were no loans 90 days or more past due and still accruing interest at both June 30, 2024 and December 31, 2023.

20

 

Credit Quality Indicators

As part of the Company’s on-going monitoring of credit quality of the loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grading of loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) non-performing loans, and (v) the general economic conditions in the Company’s markets.

The Company utilizes a risk grading matrix to assign a risk grade to its real estate and commercial business loans. Loans are graded on a scale of 1 to 10, with loans in risk grades 1 to 6 reported as “Pass” and loans in risk grades 7 to 10 reported as classified loans in the Company’s ACL analysis.

A description of the 10 risk grades is as follows:

● Grades 1 and 2 - These grades include loans to very high-quality borrowers with excellent or desirable business credit.

● Grade 3 - This grade includes loans to borrowers of good business credit with moderate risk.

● Grades 4 and 5 - These grades include “Pass” grade loans to borrowers of average credit quality and risk.

● Grade 6 - This grade includes loans on management’s “Watch” list and is intended to be utilized on a temporary basis for “Pass” grade borrowers where frequent and thorough monitoring is required due to credit weaknesses and where significant risk-modifying action is anticipated in the near term.

● Grade 7 - This grade is for “Other Assets Especially Mentioned (“OAEM”)” or “Special Mention” in accordance with regulatory guidelines and includes borrowers where performance is poor or significantly less than expected.

● Grade 8 - This grade includes “Substandard” loans in accordance with regulatory guidelines which represent an unacceptable business credit where a loss is possible if loan weakness is not corrected.

● Grade 9 - This grade includes “Doubtful” loans in accordance with regulatory guidelines where a loss is highly probable.

● Grade 10 - This grade includes “Loss” loans in accordance with regulatory guidelines for which total loss is expected and when identified are charged off.

Homogeneous loans are risk rated based upon the Federal Financial Institutions Examination Council’s Uniform Retail Credit Classification and Account Management Policy. Loans classified under this policy at the Company are consumer loans which include indirect home improvement, solar, marine, other consumer, and one-to-four-family first and second liens. Under the Uniform Retail Credit Classification and Account Management Policy, loans that are current or less than 90 days past due are graded “Pass” and risk rated “4” or “5” internally. Loans that are past due more than 90 days are classified “Substandard” and risk graded “8” internally until the loan has demonstrated consistent performance, typically six months of contractual payments. Closed-end loans that are 120 days past due and open-end loans that are 180 days past due are charged off based on the value of the collateral less cost to sell. Management may choose to conservatively risk rate credits even if paying in accordance with the loan’s repayment terms.

CRE, construction and development, multi-family and commercial business loans are evaluated individually for their risk classification and may be classified as “Substandard” even if current on their loan payment obligations. We regularly review our credits for accuracy of risk grades whenever we receive new information. Borrowers are generally required to submit financial information at regular intervals. Typically, commercial borrowers with lines of credit are required to submit financial information with reporting intervals ranging from monthly to annually depending on credit size, risk, and complexity. In addition, nonowner-occupied CRE borrowers with loans exceeding a certain dollar threshold are usually required to submit rent rolls or property income statements annually. We monitor construction loans monthly. We also review loans graded “Watch” or worse, regardless of loan type, no less than quarterly.

21

 

The following tables summarize risk rated loan balances and total current period gross charge-offs by category, as of the dates indicated. Term loans that were renewed or extended for periods longer than 90 days are presented as new originations in the year of the most recent renewal or extension.

	June 30, 2024
															Revolving Loans
REAL ESTATE LOANS	Term Loans by Year of Origination														Converted
CRE	2024		2023		2022		2021		2020		Prior		Revolving Loans		to Term		Total Loans
Pass	$	13,315	$	47,571	$	84,920	$	58,041	$	44,659	$	76,866	$	—	$	769	$	326,141
Watch		—		3,168		10,793		12,776		—		2,199		—		—		28,936
Special mention		—		—		—		—		—		401		—		—		401
Substandard		—		—		—		—		1,631		2,295		—		—		3,926
Total CRE		13,315		50,739		95,713		70,817		46,290		81,761		—		769		359,404
Construction and development
Pass		67,600		111,041		45,515		33,272		747		508		10,311		—		268,994
Watch		—		—		—		478		—		—		—		—		478
Substandard		—		—		4,737		—		—		—		—		—		4,737
Total construction and development		67,600		111,041		50,252		33,750		747		508		10,311		—		274,209
Home equity
Pass		6,570		2,796		374		1,561		6,089		1,806		54,328		69		73,593
Substandard		—		—		—		—		—		15		141		—		156
Total home equity		6,570		2,796		374		1,561		6,089		1,821		54,469		69		73,749
One-to-four-family
Pass		33,629		103,630		175,294		118,545		79,405		75,609		—		—		586,112
Substandard		—		—		792		—		—		2,062		—		—		2,854
Total one-to-four-family		33,629		103,630		176,086		118,545		79,405		77,671		—		—		588,966
Multi-family
Pass		93		7,069		20,253		90,611		60,311		61,338		—		—		239,675
Total multi-family		93		7,069		20,253		90,611		60,311		61,338		—		—		239,675
Total real estate loans	$	121,207	$	275,275	$	342,678	$	315,284	$	192,842	$	223,099	$	64,780	$	838	$	1,536,003

	June 30, 2024
															Revolving Loans
CONSUMER LOANS	Term Loans by Year of Origination														Converted
Indirect home improvement	2024		2023		2022		2021		2020		Prior		Revolving Loans		to Term		Total Loans
Pass	$	58,842	$	150,237	$	189,391	$	83,787	$	31,830	$	47,213	$	2	$	—	$	561,302
Substandard		42		534		795		515		214		219		—		—		2,319
Total indirect home improvement		58,884		150,771		190,186		84,302		32,044		47,432		2		—		563,621
Indirect home improvement gross charge-offs		38		480		721		219		225		306		—		—		1,989
Marine
Pass		7,798		12,440		21,823		9,240		12,119		10,880		—		—		74,300
Substandard		—		—		—		—		41		286		—		—		327
Total marine		7,798		12,440		21,823		9,240		12,160		11,166		—		—		74,627
Marine gross charge-offs		—		21		128		51		83		105		—		—		388
Other consumer
Pass		120		186		433		105		51		139		2,400		—		3,434
Substandard		—		—		1		—		—		—		5		—		6
Total other consumer		120		186		434		105		51		139		2,405		—		3,440
Other consumer gross charge-offs		—		33		6		—		—		24		61		—		124
Total consumer loans	$	66,802	$	163,397	$	212,443	$	93,647	$	44,255	$	58,737	$	2,407	$	—	$	641,688

22

 

	June 30, 2024
COMMERCIAL															Revolving Loans
BUSINESS LOANS	Term Loans by Year of Origination														Converted
C&I	2024		2023		2022		2021		2020		Prior		Revolving Loans		to Term		Total Loans
Pass	$	32,106	$	22,395	$	31,209	$	17,593	$	10,159	$	11,716	$	128,359	$	744	$	254,281
Watch		—		4,978		—		743		2,082		502		10,711		—		19,016
Special mention		—		—		—		565		—		654		713		—		1,932
Substandard		—		2,718		—		2,280		1,290		1,552		2,114		—		9,954
Total C&I		32,106		30,091		31,209		21,181		13,531		14,424		141,897		744		285,183
C&I gross charge-offs		—		—		—		—		—		380		761		—		1,141
Warehouse lending
Pass		—		—		—		—		—		—		22,287		—		22,287
Special mention		—		—		—		—		—		—		3,261		—		3,261
Total warehouse lending		—		—		—		—		—		—		25,548		—		25,548
Total commercial business loans	$	32,106	$	30,091	$	31,209	$	21,181	$	13,531	$	14,424	$	167,445	$	744	$	310,731
TOTAL LOANS RECEIVABLE, GROSS
Pass	$	220,073	$	457,365	$	569,212	$	412,755	$	245,370	$	286,075	$	217,687	$	1,582	$	2,410,119
Watch		—		8,146		10,793		13,997		2,082		2,701		10,711		—		48,430
Special mention		—		—		—		565		—		1,055		3,974		—		5,594
Substandard		42		3,252		6,325		2,795		3,176		6,429		2,260		—		24,279
Total loans receivable, gross	$	220,115	$	468,763	$	586,330	$	430,112	$	250,628	$	296,260	$	234,632	$	1,582	$	2,488,422
Total gross charge-offs	$	38	$	534	$	855	$	270	$	308	$	815	$	822	$	—	$	3,642

	December 31, 2023
															Revolving Loans
REAL ESTATE LOANS	Term Loans by Year of Origination														Converted
CRE	2023		2022		2021		2020		2019		Prior		Revolving Loans		to Term		Total Loans
Pass	$	48,551	$	91,144	$	61,689	$	46,117	$	27,957	$	61,764	$	499	$	—	$	337,721
Watch		3,201		5,446		12,894		—		453		2,226		45		—		24,265
Special mention		—		—		—		—		409		—		—		—		409
Substandard		—		—		—		1,650		—		1,957		—		326		3,933
Total CRE		51,752		96,590		74,583		47,767		28,819		65,947		544		326		366,328
Construction and development
Pass		120,155		106,168		46,989		15,219		—		540		9,284		—		298,355
Substandard		—		4,699		—		—		—		—		—		—		4,699
Total construction and development		120,155		110,867		46,989		15,219		—		540		9,284		—		303,054
Home equity
Pass		4,583		398		1,584		6,525		11		2,137		54,077		—		69,315
Substandard		—		—		—		—		—		36		137		—		173
Total home equity		4,583		398		1,584		6,525		11		2,173		54,214		—		69,488
Home equity gross charge-offs														10				10
One-to-four-family														—
Pass		103,165		175,412		122,406		80,815		30,595		52,008		—		472		564,873
Substandard		—		866		—		—		—		2,003		—		—		2,869
Total one-to-four-family		103,165		176,278		122,406		80,815		30,595		54,011		—		472		567,742
Multi-family
Pass		7,106		20,404		91,047		42,511		37,990		24,711		—		—		223,769
Total multi-family		7,106		20,404		91,047		42,511		37,990		24,711		—		—		223,769
Total real estate loans	$	286,761	$	404,537	$	336,609	$	192,837	$	97,415	$	147,382	$	64,042	$	798	$	1,530,381

23

 

	December 31, 2023
															Revolving Loans
CONSUMER LOANS	Term Loans by Year of Origination														Converted
Indirect home improvement	2023		2022		2021		2020		2019		Prior		Revolving Loans		to Term		Total Loans
Pass	$	171,208	$	212,661	$	93,664	$	36,032	$	23,977	$	30,492	$	6	$	—	$	568,040
Substandard		212		663		448		141		258		141		—		—		1,863
Total indirect home improvement		171,420		213,324		94,112		36,173		24,235		30,633		6		—		569,903
Indirect home improvement gross charge-offs		204		1,386		567		290		145		336		—		—		2,928
Marine
Pass		13,619		23,963		9,987		13,082		5,267		7,050		—		—		72,968
Substandard		—		—		52		85		—		205		—		—		342
Total marine		13,619		23,963		10,039		13,167		5,267		7,255		—		—		73,310
Marine gross charge-offs		—		47		93		—		7		256		—		—		403
Other consumer
Pass		309		559		175		69		3		159		2,258		—		3,532
Substandard		—		—		—		—		—		—		8		—		8
Total other consumer		309		559		175		69		3		159		2,266		—		3,540
Other consumer gross charge-offs		—		2		12		—		—		—		120		—		134
Total consumer loans	$	185,348	$	237,846	$	104,326	$	49,409	$	29,505	$	38,047	$	2,272	$	—	$	646,753

	December 31, 2023
COMMERCIAL															Revolving Loans
BUSINESS LOANS	Term Loans by Year of Origination														Converted
C&I	2023		2022		2021		2020		2019		Prior		Revolving Loans		to Term		Total Loans
Pass	$	13,971	$	32,334	$	19,634	$	11,537	$	5,122	$	9,707	$	119,844	$	145	$	212,294
Watch		2,322		—		1,382		2,366		—		953		5,754		—		12,777
Special mention		143		—		—		—		498		253		1,345		—		2,239
Substandard		2,940		—		2,321		1,391		1,766		169		2,005		—		10,592
Doubtful		—		—		—		—		—		—		399		—		399
Total C&I		19,376		32,334		23,337		15,294		7,386		11,082		129,347		145		238,301
C&I gross charge-offs		—		—		1		—		—		—		—		—		1
Warehouse lending
Pass		—		—		—		—		—		—		17,003		—		17,003
Watch		—		—		—		—		—		—		577		—		577
Total warehouse lending		—		—		—		—		—		—		17,580		—		17,580
Total commercial business loans	$	19,376	$	32,334	$	23,337	$	15,294	$	7,386	$	11,082	$	146,927	$	145	$	255,881
TOTAL LOANS RECEIVABLE, GROSS
Pass	$	482,667	$	663,043	$	447,175	$	251,907	$	130,922	$	188,568	$	202,971	$	617	$	2,367,870
Watch		5,523		5,446		14,276		2,366		453		3,179		6,376		—		37,619
Special mention		143		—		—		—		907		253		1,345		—		2,648
Substandard		3,152		6,228		2,821		3,267		2,024		4,511		2,150		326		24,479
Doubtful		—		—		—		—		—		—		399		—		399
Total loans receivable, gross	$	491,485	$	674,717	$	464,272	$	257,540	$	134,306	$	196,511	$	213,241	$	943	$	2,433,015
Total gross charge-offs	$	204	$	1,435	$	673	$	290	$	152	$	592	$	130	$	—	$	3,476

24

 

The following table presents the amortized cost basis of loans on nonaccrual status as of the dates indicated:

	June 30, 2024						December 31, 2023
	Nonaccrual with		Nonaccrual with		Total		Nonaccrual with		Nonaccrual with		Total
REAL ESTATE LOANS	No ACL		ACL		Nonaccrual		No ACL		ACL		Nonaccrual
CRE	$	1,116	$	—	$	1,116	$	1,088	$	—	$	1,088
Construction and development		—		4,737		4,737		—		4,699		4,699
Home equity		156		—		156		173		—		173
One-to-four-family		170		—		170		96		—		96
		1,442		4,737		6,179		1,357		4,699		6,056
CONSUMER LOANS
Indirect home improvement		—		2,319		2,319		—		1,863		1,863
Marine		—		327		327		—		342		342
Other consumer		—		6		6		—		8		8
		—		2,652		2,652		—		2,213		2,213
COMMERCIAL BUSINESS LOANS
C&I		263		2,312		2,575		—		2,683		2,683
Total	$	1,705	$	9,701	$	11,406	$	1,357	$	9,595	$	10,952

The Company recognized interest income on a cash basis for nonaccrual loans of $92,000 and $106,000 during the three months ended June 30, 2024 and 2023, and $203,000 and $168,000 during the six months ended  June 30, 2024 and 2023,respectively.

The following table presents the amortized cost basis of collateral dependent loans by class of loans as of the dates indicated:

	June 30, 2024								December 31, 2023
	Commercial		Residential		Other				Commercial		Residential		Other
REAL ESTATE LOANS	Real Estate		Real Estate		Non-Real Estate		Total		Real Estate		Real Estate		Non-Real Estate		Total
CRE	$	1,116	$	—	$	—	$	1,116	$	1,088	$	—	$	—	$	1,088
Construction and development		4,737		—		—		4,737		4,699		—				4,699
Home equity		—		156		—		156		—		173		—		173
One-to-four-family		—		170		—		170		—		96		—		96
		5,853		326		—		6,179		5,787		269		—		6,056
CONSUMER LOANS
Indirect home improvement		—		—		2,319		2,319		—		—		1,863		1,863
Marine		—		—		327		327		—		—		342		342
		—		—		2,646		2,646		—		—		2,205		2,205
COMMERCIAL BUSINESS LOANS
C&I		—		—		2,575		2,575		—		—		2,683		2,683
Total	$	5,853	$	326	$	5,221	$	11,400	$	5,787	$	269	$	4,888	$	10,944

NOTE 4 – MORTGAGE SERVICING RIGHTS

Loans serviced for others are not included on the Consolidated Balance Sheets. The unpaid principal balance of permanent loans serviced for others was $1.60 billion and $2.83 billion at June 30, 2024 and December 31, 2023, respectively.

The following table summarizes MSRs activity at or for the dates indicated:

	At or For the Three Months Ended
	June 30,
	2024			2023
Beginning balance, at the lower of cost or fair value	$	9,009		$	17,599
Additions		817			920
MSRs amortized		(528	)		(894	)
Recovery of MSRs		54			2
Ending balance, at the lower of cost or fair value	$	9,352		$	17,627

	At or For the Six Months Ended
	June 30,
	2024			2023
Beginning balance, at the lower of cost or fair value	$	17,176		$	18,017
Additions		1,393			1,325
Sales		(7,953	)		—
MSRs amortized		(1,225	)		(1,715	)
Impairment of MSRs		(39	)		—
Ending balance, at the lower of cost or fair value	$	9,352		$	17,627

25

 

The fair value of the MSRs’ assets was $20.8 million and $38.2 million at  June 30, 2024 and December 31, 2023, respectively.  Fair value adjustments to MSRs are mainly due to market-based assumptions associated with discounted cash flows, loan prepayment speeds, and changes in interest rates.  A significant change in prepayments of the loans in the MSRs portfolio could result in significant changes in the valuation adjustments, thus creating potential volatility in the carrying amount of MSRs.

The following provides valuation assumptions used in determining the fair value of MSRs at the dates indicated:

	At June 30,			At December 31,
Key assumptions:	2024			2023
Weighted average discount rate		10.0	%		9.4	%
Conditional prepayment rate (“CPR”)		8.5	%		7.2	%
Weighted average life in years		7.9			8.4

Key economic assumptions of the current fair value for single family MSRs are presented in the table below. Also presented is the sensitivity to market rate changes for the par rate coupon for a conventional one-to-four-family FNMA, FHLMC, GNMA, or FHLB serviced home loan. The table below references a 50 basis point and 100 basis point adverse rate change and the impact on prepayment speeds and discount rates at the dates indicated:

	June 30, 2024			December 31, 2023
Aggregate portfolio principal balance	$	1,598,388		$	2,832,016
Weighted average rate of loans in MSRs portfolio		4.1	%		3.6	%

At June 30, 2024	Base			0.5% Adverse Rate Change			1.0% Adverse Rate Change
Conditional prepayment rate		8.5	%		10.1	%		12.4	%
Fair value MSRs	$	20,788		$	20,062		$	19,188
Percentage of MSRs		1.3	%		1.3	%		1.2	%
Discount rate		10.0	%		10.5	%		11.0	%
Fair value MSRs	$	20,788		$	20,340		$	19,910
Percentage of MSRs		1.3	%		1.3	%		1.2	%

At December 31, 2023	Base			0.5% Adverse Rate Change			1.0% Adverse Rate Change
Conditional prepayment rate		7.2	%		8.0	%		9.3	%
Fair value MSRs	$	38,163		$	37,268		$	35,819
Percentage of MSRs		1.3	%		1.3	%		1.3	%
Discount rate		9.4	%		9.9	%		10.4	%
Fair value MSRs	$	38,163		$	37,301		$	36,476
Percentage of MSRs		1.3	%		1.3	%		1.3	%

These sensitivities are hypothetical and should be used with caution as the tables above demonstrate the Company’s methodology for estimating the fair value of MSRs which is extremely sensitive to changes in key assumptions. For example, actual prepayment experience may differ and any difference may have a material effect on the fair value of MSRs. Changes in fair value resulting from changes in assumptions generally cannot be extrapolated because the relationship of the change in the assumption to the change in fair value may not be linear. Also, in these tables, the effects of a variation in a particular assumption on the fair value of MSRs is calculated without changing any other assumption; in reality, changes in one factor may be associated with changes in another (for example, decreases in market interest rates may provide an incentive to refinance, however, this may also indicate a slowing economy and an increase in the unemployment rate, which reduces the number of borrowers who qualify for refinancing), which may magnify or counteract the sensitivities. Thus, any measurement of the fair value of MSRs is limited by the conditions existing and assumptions made at a particular point in time. Those assumptions may not be appropriate if they are applied to a different time.

The Company recorded $1.1 million and $1.8 million of gross contractually specified servicing fees, late fees, and other ancillary fees resulting from servicing of loans for the three months ended June 30, 2024 and 2023, respectively, and $2.5 million and $3.6 million for the six months ended  June 30, 2024 and 2023. The income, net of amortization of MSRs, is reported in “Service charges and fee income” on the Consolidated Statements of Income.

26

 

NOTE 5 – DERIVATIVES

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

The Company’s predominant derivative and hedging activities involve interest rate swaps related to certain borrowings, brokered deposits, investment securities, forward sales contracts, and commitments to extend credit associated with mortgage banking activities. Generally, these instruments help the Company manage exposure to market risk. Market risk represents the possibility that economic value or net interest income will be adversely affected by fluctuations in external factors such as market-driven interest rates and prices or other economic factors.

Mortgage Banking Derivatives Not Designated as Hedges

The Company regularly enters into commitments to originate and sell loans held for sale. The Company has exposure to movements in interest rates associated with written interest rate lock commitments with potential borrowers to originate one-to four-family loans that are intended to be sold and for closed one-to-four-family mortgage loans held for sale for which fair value accounting has been elected, that are awaiting sale and delivery into the secondary market. The Company economically hedges the risk of changing interest rates associated with these mortgage loan commitments by entering into forward sales contracts to sell one-to-four-family mortgage loans or into contracts to sell forward To-Be-Announced (“TBA”) mortgage-backed securities. These commitments and contracts are considered derivatives but have not been designated as hedging instruments for reporting purposes under U.S. GAAP. Rather, they are accounted for as free-standing derivatives, or economic hedges, with changes in the fair value of the derivatives reported in noninterest income or noninterest expense. The Bank recognizes all derivative instruments as either “Other assets” or “Other liabilities” on the Consolidated Balance Sheets and measures those instruments at fair value.

Customer Swaps Not Designated as Hedges

The Company also enters into derivative contracts, which consist of interest rate swaps, to facilitate the needs of clients desiring to manage interest rate risk. These swaps are not designated as accounting hedges under ASC 815, Derivatives and Hedging. To economically hedge the interest rate risk associated with offering this product, the Company simultaneously enters into derivative contracts with third parties to offset the customer contracts such that the Company minimizes its net risk exposure resulting from such transactions. The derivative contracts are structured such that the notional amounts reduce over time to generally match the expected amortization of the underlying loans. These derivatives are not speculative and arise from a service provided to clients.

Cash Flow Hedges

The Company has entered into interest rate swaps to reduce the exposure to variability in interest-related cash outflows attributable to changes in forecasted Secured Overnight Financing Rate (“SOFR”) based brokered deposits. These derivative instruments are designated as cash flow hedges. The hedged item is the SOFR portion of the series of future adjustable-rate borrowings and deposits over the term of the interest rate swap.  Accordingly, changes to the amount of interest payment cash flows for the hedged transactions attributable to a change in credit risk are excluded from management’s assessment of hedge effectiveness. The Company tests for hedging effectiveness on a quarterly basis. The accumulated other comprehensive income is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company has not recorded any hedge ineffectiveness since inception.

The Company expects that approximately $3.9 million will be reclassified from accumulated other comprehensive loss as a decrease to interest expense over the next 12 months related to these cash flow hedges.

Fair Value Hedges

The Company is exposed to changes in the fair value of certain of its pools of prepayable fixed-rate assets due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate, the SOFR. Interest rate swaps designated as fair value hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without the exchange of the underlying notional amount. For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.

27

 

The following amounts were recorded on the balance sheet related to cumulative-basis adjustment for fair value hedges for the dates indicated:

			Cumulative Amount of Fair Value
Line item in the statement of financial			Hedging Adjustment Included in
position in which the hedged Item is	Carrying Amount of the		the Carrying Amount of the
included	Hedged Assets		Hedged Assets
June 30, 2024
Investment securities (1)	$	55,397	$	4,603
Total	$	55,397	$	4,603
December 31, 2023
Investment securities (1)	$	56,785	$	3,215
Total	$	56,785	$	3,215

(1) These amounts include the amortized cost basis of closed portfolios used in designated hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At June 30, 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $223.1 million; the cumulative basis adjustments associated with these hedging relationships was $4.6 million; and the amounts of the designated hedged items was $60.0 million.

The following tables summarize the Company’s derivative instruments at the dates indicated. The Company recognizes derivative assets and liabilities in “Other assets” and “Other liabilities,” respectively, on the Consolidated Balance Sheets, as follows:

	June 30, 2024
			Fair Value
Cash flow hedges:	Notional		Asset		Liability
Interest rate swaps - brokered deposits and borrowings	$	235,000	$	5,072	$	—
Fair value hedges:
Interest rate swaps - securities		60,000		4,582		—
Non-hedging derivatives:
Fallout adjusted interest rate lock commitments with customers		43,041		378		—
Mandatory and best effort forward commitments with investors		34,337		—		316
Forward TBA mortgage-backed securities		58,000		122		—
Interest rate swaps - customer swap positions		801		—		71
Interest rate swaps - dealer offsets to customer swap positions		801		71		—

	December 31, 2023
			Fair Value
Cash flow hedges:	Notional		Asset		Liability
Interest rate swaps - brokered deposits	$	250,000	$	3,233	$	375
Fair value hedges:
Interest rate swaps - securities		60,000		3,198		—
Non-hedging derivatives:
Fallout adjusted interest rate lock commitments with customers		22,334		329		—
Mandatory and best effort forward commitments with investors		10,070		—		188
Forward TBA mortgage-backed securities		33,000		—		284
Interest rate swaps - customer swap positions		801		—		63
Interest rate swaps - dealer offsets to customer swap positions		801		64		—

28

 

The following table summarizes the effect of fair value and cash flow hedge accounting on the Consolidated Statements of Income for the three and six months ended June 30, 2024 and 2023:

	Three Months Ended June 30,
	2024					2023
	Interest					Interest
	Expense		Interest			Expense		Interest
	Deposits and Borrowings		Income Securities			Deposits and Borrowings		Income Securities
Total amounts presented on the Consolidated Statements of Income	$	15,053	$	3,534		$	8,829	$	2,651
Net gains (losses) on fair value hedging relationships:
Interest rate swaps - securities
Recognized on hedged items	$	—	$	(163	)	$	—	$	1,559
Recognized on derivatives designated as hedging instruments		—		163			—		(1,559	)
Net interest income recognized on cash flows of derivatives designated as hedging instruments		—		421			—		363
Net income recognized on fair value hedges	$	—	$	421		$	—	$	363
Net gain on cash flow hedging relationships:
Interest rate swaps - brokered deposits and borrowings
Realized gains (pre-tax) reclassified from AOCI into net income	$	1,148	$	—		$	1,271	$	—
Net income recognized on cash flow hedges	$	1,148	$	—		$	1,271	$	—

	Six Months Ended June 30,
	2024					2023
	Interest					Interest
	Expense		Interest			Expense		Interest
	Deposits and Borrowings		Income Securities			Deposits and Borrowings		Income Securities
Total amounts presented on the Consolidated Statements of Income	$	29,102	$	7,417		$	16,294	$	5,271
Net gains (losses) on fair value hedging relationships:
Interest rate swaps - securities
Recognized on hedged items	$	—	$	(1,388	)	$	—	$	(60	)
Recognized on derivatives designated as hedging instruments		—		1,388			—		60
Net interest income recognized on cash flows of derivatives designated as hedging instruments		—		839			—		656
Net income recognized on fair value hedges	$	—	$	839		$	—	$	656
Net gain on cash flow hedging relationships:
Interest rate swaps - brokered deposits and borrowings
Realized gains (pre-tax) reclassified from AOCI into net income	$	2,870	$	—		$	2,178	$	—
Net income recognized on cash flow hedges	$	2,870	$	—		$	2,178	$	—

Changes in the fair value of the non-hedging derivatives recognized in “Noninterest income” on the Consolidated Statements of Income and included in gain on sale of loans resulted in net gains of $19,000 and net losses of $51,000 for the three months ended June 30, 2024 and 2023, and net gains of $201,000 and $373,000 for the six months ended  June 30, 2024 and 2023, respectively.

The following tables present a summary of amounts outstanding in derivative financial instruments, including those entered into in connection with the same counterparty under master netting agreements at the dates indicated. While these agreements are typically over-collateralized, GAAP requires disclosures in this table to limit the amount of such collateral to the amount of the related asset or liability for each counterparty.

			Gross Amounts		Net Amounts of Assets		Gross Amounts Not Offset
	Gross Amounts		Offset in the		Presented in the		in the Statement of Financial Position
	of Recognized		Statement of		Statement of		Financial		Cash Collateral
Offsetting of derivative assets	Assets		Financial Position		Financial Position		Instruments		Received		Net Amount
At June 30, 2024
Interest rate swaps	$	9,811	$	86	$	9,725	$	—	$	1,120	$	8,605
At December 31, 2023
Interest rate swaps	$	6,648	$	153	$	6,495	$	—	$	—	$	6,495

			Gross Amounts		Net Amounts of		Gross Amounts Not Offset
	Gross Amounts		Offset in the		Liabilities		in the Statement of Financial Position
	of Recognized		Statement of		Presented in the Statement		Financial		Cash Collateral
Offsetting of derivative liabilities	Liabilities		Financial Position		of Financial Position		Instruments		Posted		Net Amount
At June 30, 2024
Interest rate swaps	$	—	$	—	$	—	$	—	$	—	$	—
At December 31, 2023
Interest rate swaps	$	(722)	$	(347)	$	(375)	$	—	$	270	$	(105)

29

 

Credit Risk–Related Contingent Features

The Company has derivative contracts with its derivative counterparties that contain a provision to post collateral to the counterparties when these contracts are in a net liability position.  At June 30, 2024, the Company had no collateral posted due to this provision.  Receivables related to cash collateral that has been paid to counterparties is included in “Cash and cash equivalents” on the Consolidated Balance Sheets.  In certain cases, the Company will have posted excess collateral, compared to total exposure due to initial margin requirements or day-to-day rate volatility.

NOTE 6 – LEASES

The Company has operating leases for retail bank and home lending branches, loan production offices, and certain equipment. The Company’s leases have remaining lease terms of five months to six years, some of which include options to extend the leases for up to five years.

The components of lease cost (included in occupancy expense on the Consolidated Statements of Income) for the three and six months ended June 30, 2024 and 2023 are as follows:

	Three Months Ended		Three Months Ended
Lease cost:	June 30, 2024		June 30, 2023
Operating lease cost	$	475	$	471
Short-term lease cost		2		5
Total lease cost	$	477	$	476

	Six Months Ended		Six Months Ended
Lease cost:	June 30, 2024		June 30, 2023
Operating lease cost	$	949	$	881
Short-term lease cost		5		9
Total lease cost	$	954	$	890

The following tables provide supplemental information related to operating leases at or for the three and six months ended June 30, 2024 and 2023:

	At or For the			At or For the
	Three Months Ended			Three Months Ended
Cash paid for amounts included in the measurement of lease liabilities:	June 30, 2024			June 30, 2023
Operating cash flows from operating leases	$	490		$	482
Weighted average remaining lease term- operating leases (in years)		3.7			4.4
Weighted average discount rate- operating leases		2.99	%		2.92	%

	At or For the			At or For the
	Six Months Ended			Six Months Ended
Cash paid for amounts included in the measurement of lease liabilities:	June 30, 2024			June 30, 2023
Operating cash flows from operating leases	$	980		$	906
Weighted average remaining lease term- operating leases (in years)		3.7			4.4
Weighted average discount rate- operating leases		2.99	%		2.92	%

The Company’s leases typically do not contain a discount rate implicit in the lease contract.  As an alternative, the discount rate used in determining the lease liability for each individual lease was the FHLB of Des Moines’ fixed-advance rate.

Maturities of operating lease liabilities at  June 30, 2024 for future periods are as follows:

Remainder of 2024	$	963
2025		1,628
2026		1,475
2027		1,173
2028		428
Thereafter		954
Total lease payments		6,621
Less imputed interest		(642	)
Total	$	5,979

30

 

NOTE 7 – OTHER REAL ESTATE OWNED (“OREO”)

The following table presents the activity related to OREO at or for the three and six months ended June 30, 2024 and 2023:

	At or For the Three Months Ended				At or For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Beginning balance	$	—	$	570	$	—	$	570
Additions		—		—		—		—
Loans transferred to OREO		—		—		—		—
Ending balance	$	—	$	570	$	—	$	570

There were no OREO properties at June 30, 2024 and December 31, 2023. There were no OREO holding costs for the three and six months ended June 30, 2024 and 2023.

There were $19,000 and $96,000 in portfolio mortgage loans collateralized by residential real estate in the process of foreclosure at June 30, 2024 and at December 31, 2023, respectively.

NOTE 8 – DEPOSITS

Deposits are summarized as follows at the dates indicated:

	June 30,		December 31,
	2024		2023
Noninterest-bearing checking	$	613,137	$	654,048
Interest-bearing checking (1)		166,839		244,028
Savings		151,398		151,630
Money market (2)		343,995		359,063
Certificates of deposit less than $100,000 (3)		530,537		587,858
Certificates of deposit of $100,000 through $250,000		427,893		429,373
Certificates of deposit greater than $250,000		138,792		79,540
Escrow accounts related to mortgages serviced (4)		10,212		16,783
Total	$	2,382,803	$	2,522,323

(1) Includes $0.0 and $70.2 million of brokered deposits at June 30, 2024 and December 31, 2023, respectively.

(2) Includes $4.0 million and $1,000 of brokered deposits at June 30, 2024 and December 31, 2023, respectively.

(3) Includes $261.0 million and $361.3 million of brokered deposits at June 30, 2024 and December 31, 2023, respectively.

(4) Noninterest-bearing accounts.

Scheduled maturities of certificates of deposits at June 30, 2024 for future periods ending are as follows:

Maturing in 2024	$	615,361
Maturing in 2025		369,984
Maturing in 2026		87,246
Maturing in 2027		21,019
Maturing in 2028		3,208
Thereafter		404
Total	$	1,097,222

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Interest expense by deposit category for the periods indicated is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Interest-bearing checking	$	555	$	370	$	1,339	$	468
Savings and money market		1,951		1,344		3,612		2,542
Certificates of deposit		10,746		5,896		21,183		11,224
Total	$	13,252	$	7,610	$	26,134	$	14,234

NOTE 9 – COMMITMENTS AND CONTINGENCIES

Commitments – The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized on the Consolidated Balance Sheets.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

The following table provides a summary of the Company’s commitments at the dates indicated:

COMMITMENTS TO EXTEND CREDIT	June 30,		December 31,
REAL ESTATE LOANS	2024		2023
CRE	$	964	$	3,472
Construction and development		195,775		154,611
One-to-four-family (includes locks for saleable loans)		49,866		23,751
Home equity		97,751		94,026
Multi-family		2,893		2,945
Total real estate loans		347,249		278,805
CONSUMER LOANS		28,886		29,517
COMMERCIAL BUSINESS LOANS
C&I		155,200		164,873
Warehouse lending		51,215		61,837
Total commercial business loans		206,415		226,710
Total commitments to extend credit	$	582,550	$	535,032

Commitments to extend credit are agreements to lend to a customer provided there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the amount of the total commitments does not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon an extension of credit, is based on management’s credit evaluation of the party. Collateral held varies, but may include accounts receivable, inventory, property and equipment, residential real estate, and income-producing commercial properties.

Unfunded commitments under commercial lines of credit, revolving credit lines, and overdraft protection agreements are commitments for possible future extensions of credit to existing customers. These lines of credit usually do not contain a specified maturity date and ultimately may not be drawn upon to the total extent to which the Company is committed. The Company’s ACL – unfunded loan commitments at June 30, 2024 and December 31, 2023 was $1.6 million and $1.5 million, respectively. The Company recorded a provision for credit losses – unfunded loan commitments of $77,000 and $54,000 for the three and six months ended  June 30, 2024, respectively, as compared to a recovery from the ACL of $347,000 and $596,000 for the three and six months ended June 30, 2023, respectively.

The Company also sells one-to-four-family loans to the FHLB of Des Moines that require a limited level of recourse if the loans default and exceed a certain loss exposure. Specific to that recourse, the FHLB of Des Moines established a first loss account (“FLA”) related to the loans and required a credit enhancement (“CE”) obligation by the Bank to be utilized after the FLA is used. Based on loans sold through June 30, 2024, total loans serviced on behalf of the FHLB of Des Moines were $8.8 million with the FLA totaling $581,000 and the CE obligation at $389,000 or 4.4% of the loans outstanding. Management has established a holdback of 10% of the outstanding CE, or $39,000, which is a part of the off-balance sheet holdback for loans sold. At both June 30, 2024 and December 31, 2023, there were no loans sold and serviced on behalf of the FHLB of Des Moines that were greater than 90 days past their contractual payment due date.

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Contingent liabilities for loans held for sale – In the ordinary course of business, loans are sold with limited recourse against the Company and may have to subsequently be repurchased due to defects that occurred during the origination of the loan. The defects are categorized as documentation errors, underwriting errors, early payoff, early payment defaults, breach of representation or warranty, servicing errors, and/or fraud. When a loan sold to an investor without recourse fails to perform according to its contractual terms, the investor will typically review the loan file to determine whether defects in the origination process occurred. If a defect is identified, the Company may be required to either repurchase the loan or indemnify the investor for losses sustained. If there are no such defects, the Company has no commitment to repurchase the loan. The Company has recorded a holdback reserve of $2.0 million and $2.1 million to cover loss exposure related to these guarantees for one-to-four-family loans sold into the secondary market at June 30, 2024 and December 31, 2023, respectively, which is included in “Other liabilities” on the Consolidated Balance Sheets.

The Company has entered into a severance agreement with its Chief Executive Officer (“CEO”). The severance agreement, subject to certain requirements, generally includes a lump sum payment to the CEO equal to 24 months of base compensation in the event his employment is involuntarily terminated, other than for cause or the executive terminates his employment with good reason, as defined in the severance agreement.

The Company has entered into change of control agreements with its executives and select key personnel. The change of control agreements, subject to certain requirements, generally remain in effect until canceled by either party upon at least 24 months prior written notice. Under the change of control agreements, the executive generally will be entitled to a change of control payment from the Company if the executive is involuntarily terminated within six months preceding or 12 months after a change in control (as defined in the change of control agreements). In such an event, the executives would each be entitled to receive a cash payment in an amount equal to 12 months of their then current salary, subject to certain requirements in the change of control agreements.

As a result of the nature of our activities, the Company is subject to various pending and threatened legal actions, which arise in the ordinary course of business. From time to time, subordination liens may create litigation which requires us to defend our lien rights. In the opinion of management, liabilities arising from these claims, if any, will not have a material effect on our financial position. The Company had no material pending legal actions at June 30, 2024.

NOTE 10 – FAIR VALUE MEASUREMENTS

The Company determines fair value based on the requirements established in Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements, which provides a framework for measuring fair value in accordance with U.S. GAAP and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC Topic 820 defines fair value as the exit price, or the price that would be received for an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date under current market conditions.

The following definitions describe the levels of inputs that may be used to measure fair value:

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

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The following methods were used to estimate the fair value of certain assets and liabilities on a recurring and nonrecurring basis:

Securities – The fair value of securities available-for-sale are recorded on a recurring basis. The fair value of investments and mortgage-backed securities are provided by a third-party pricing service. These valuations are based on market data using pricing models that vary by asset class and incorporate available current trade, bid, and other market information, and for structured securities, cash flow, and loan performance data. The pricing processes utilize benchmark curves, benchmarking of similar securities, sector groupings, and matrix pricing. Option adjusted spread models are also used to assess the impact of changes in interest rates and to develop prepayment scenarios (Level 2). Transfers between the fair value hierarchy are determined through the third-party service provider which, from time to time will transfer between levels based on market conditions per the related security. All models and processes used consider market convention.

Mortgage Loans Held for Sale – The fair value of loans held for sale reflects the value of commitments with investors and/or the relative price as delivered into a TBA mortgage-backed security (Level 2).

Loans Receivable – Certain residential mortgage loans were initially originated for sale and measured at fair value; after origination, the loans were transferred to loans held for investment. As of June 30, 2024 and December 31, 2023, there were $13.9 million and $15.1 million, respectively, in residential mortgage loans recorded at fair value as they were previously transferred from held for sale, at fair value to loans held for investment. The aggregate unpaid principal balance of these loans was $14.6 million and $16.3 million as of June 30, 2024 and December 31, 2023, respectively. Gains and losses from changes in fair value for these loans are reported in earnings as a component of “Other noninterest income” on the Consolidated Statements of Income. For the three months ended June 30, 2024, the Company recorded a net increase in fair value of $184,000, as compared to a net decrease in fair value of $520,000 for the three months ended June 30, 2023. For the six months ended  June 30, 2024 and  June 30, 2023. the Company recorded net increases in fair value of $186,000 and $57,000, respectively.  For loans originated as held for sale and transferred into loans held for investment, the fair value is determined based on quoted secondary market prices for similar loans (Level 2).

Derivative Instruments – Fair values for derivative assets and liabilities are measured on a recurring basis. The primary use of derivative instruments is related to the mortgage banking activities of the Company. The fair value of the interest rate lock commitments and forward sales commitments are estimated using quoted or published market prices for similar instruments, adjusted for factors such as pull-though rate assumptions based on historical information, where appropriate. TBA mortgage-backed securities are fair valued on similar contracts in active markets (Level 2), while locks and forwards with customers and investors are fair valued using similar contracts in the market and changes in the market interest rates (Level 2 and 3). Derivative instruments not related to mortgage banking activities include interest rate swap agreements. The fair values of interest rate swap agreements are based on valuation models using observable market data as of the measurement date (Level 2). The Company’s derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of the market inputs we use are actively quoted and can be validated through external sources, including market transactions and third-party pricing services. The fair values of all interest rate swaps are determined from third-party pricing services without adjustment.

Other Real Estate Owned – Fair value adjustments to OREO are recorded at the lower of carrying amount of the loan or fair value of the collateral less selling costs. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the ACL on loans. After foreclosure, management periodically performs valuations such that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell (Level 3).

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Collateral Dependent Loans– Expected credit losses on collateral dependent loans are measured based on the fair value of collateral as of the reporting date, less estimated selling costs, as applicable.  If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will recognize an allowance as the difference between the fair value of the collateral, less costs to sell (if applicable) at the reporting date and the amortized cost basis of the loan. If the fair value of the collateral exceeds the amortized cost basis of the loan, any expected recovery added to the amortized cost basis will be limited to the amount previously charged-off by the subsequent changes in the expected credit losses on collateral dependent loans.  Subsequent adjustments in the expected credit losses for collateral-dependent loans are included within the provision for credit losses in the same way the expected credit loss initially was recognized or as a reduction in the provision that would otherwise be reported (Level 3).

Mortgage Servicing Rights – The fair value of MSRs is estimated using net present value of expected cash flows using a third-party model that incorporates assumptions used in the industry to value such rights, adjusted for factors such as weighted average prepayments speeds based on historical information where appropriate (Level 3).

The following tables present securities available-for-sale, mortgage loans held for sale, loans receivable, at fair value, and derivative assets and liabilities measured at fair value on a recurring basis at the dates indicated:

Financial Assets	At June 30, 2024
Securities available-for-sale:	Level 1		Level 2		Level 3			Total
U.S. agency securities	$	—	$	17,116	$	—		$	17,116
Corporate securities		—		15,185		—			15,185
Municipal bonds		—		71,645		—			71,645
Mortgage-backed securities		—		100,721		—			100,721
U.S. Small Business Administration securities		—		16,515		—			16,515
Mortgage loans held for sale, at fair value		—		53,811		—			53,811
Loans receivable, at fair value		—		13,868		—			13,868
Derivatives:
Interest rate lock commitments with customers		—		—		378			378
Forward TBA mortgage-backed securities		—		122		—			122
Interest rate swaps - cash flow and fair value hedges		—		9,654		—			9,654
Interest rate swaps - dealer offsets to customer swap positions		—		—		—			—
Total assets measured at fair value	$	—	$	298,637	$	378		$	299,015
Financial Liabilities
Derivatives:
Interest rate swaps - customer swap positions	$	—	$	—	$	—		$	—
Mandatory and best effort forward commitments with investors		—		—		(316	)		(316	)
Total liabilities measured at fair value	$	—	$	—	$	(316	)	$	(316	)

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Financial Assets	At December 31, 2023
Securities available-for-sale:	Level 1		Level 2			Level 3			Total
U.S. agency securities	$	—	$	18,018		$	—		$	18,018
Corporate securities		—		12,872			—			12,872
Municipal bonds		—		119,447			—			119,447
Mortgage-backed securities		—		101,248			—			101,248
U.S. Small Business Administration securities		—		41,348			—			41,348
Mortgage loans held for sale, at fair value		—		25,668			—			25,668
Loans receivable, at fair value		—		15,088			—			15,088
Derivatives:
Interest rate lock commitments with customers		—		—			329			329
Interest rate swaps- cash flow and fair value hedges		—		6,431			—			6,431
Interest rate swaps - dealer offsets to customer swap positions		—		64			—			64
Total assets measured at fair value	$	—	$	340,184		$	329		$	340,513
Financial Liabilities
Derivatives:
Mandatory and best effort forward commitments with investors	$	—	$	—		$	(188	)	$	(188	)
Forward TBA mortgage-backed securities		—		(284	)		—			(284	)
Interest rate swaps - cash flow and fair value hedges		—		(375	)		—			(375	)
Interest rate swaps - customer swap positions		—		(63	)		—			(63	)
Total liabilities measured at fair value	$	—	$	(722	)	$	(188	)	$	(910	)

The following table presents financial assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy at June 30, 2024 and  December 31, 2023.

	June 30, 2024
	Level 1		Level 2		Level 3		Total
MSRs	$	—	$	—	$	20,788	$	20,788

	December 31, 2023
	Level 1		Level 2		Level 3		Total
MSRs		—		—		38,163		38,163

Quantitative Information about Level 3 Fair Value Measurements – Shown in the table below is the fair value of financial instruments measured under a Level 3 unobservable input on a recurring and nonrecurring basis at the dates indicated:

Level 3		Significant			Weighted Average Rate
Fair Value	Valuation	Unobservable			June 30,			December 31,
Instruments	Techniques	Inputs	Range		2024			2023
RECURRING
Interest rate lock commitments with customers	Quoted market prices	Pull-through expectations		80% - 99%		90.8	%		90.5	%
Individual forward sale commitments with investors	Quoted market prices	Pull-through expectations		80% - 99%		90.8	%		90.5	%
NONRECURRING
MSR	Industry sources	Pre-payment speeds		0% - 50%		8.5	%		7.2	%

The pull-through rate is based on historical loan closing rates for similar interest rate lock commitments. An increase or decrease in the pull-through rate would have a corresponding positive or negative fair value adjustment.

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The following table provides a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the dates indicated:

				Purchases								Net change in			Net change in
Three Months Ended	Beginning			and		Sales and			Ending			fair value for			fair value for
June 30, 2024	Balance			Issuances		Settlements			Balance			gains/(losses) (1)			gains/(losses) (2)
Interest rate lock commitments with customers	$	251		$	693	$	(566	)	$	378		$	127		$	—
Individual forward sale commitments with investors		(73	)		36		(279	)		(316	)		(243	)		—
June 30, 2023
Interest rate lock commitments with customers	$	565		$	948	$	(1,240	)	$	273		$	(292	)	$	—
Individual forward sale commitments with investors		(13	)		188		(52	)		123			136			—

				Purchases								Net change in		Net change in
Six Months Ended	Beginning			and		Sales and			Ending			fair value for		fair value for
June 30, 2024	Balance			Issuances		Settlements			Balance			gains/(losses) (1)		gains/(losses) (2)
Interest rate lock commitments with customers	$	329		$	1,658	$	(1,609	)	$	378		$	49	$	—
Individual forward sale commitments with investors		(188	)		21		(149	)		(316	)		128		—
June 30, 2023
Interest rate lock commitments with customers	$	107		$	1,942	$	(1,776	)	$	273		$	166	$	—
Individual forward sale commitments with investors		(38	)		410		(249	)		123			161		—

(1) Relating to items held at end of period included in income.

(2) Relating to items held at end of period included in other comprehensive income.

Gains on interest rate lock commitments and on forward sale commitments with investors carried at fair value are recorded in “Gain on sale of loans held for sale” on the Consolidated Statements of Income.

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The following table provides estimated fair values of the Company’s financial instruments at the dates indicated, whether recognized at fair value or not on the Consolidated Balance Sheets:

	June 30,				December 31,
	2024				2023
Financial Assets	Carrying		Fair		Carrying		Fair
Level 1 inputs:	Amount		Value		Amount		Value
Cash and cash equivalents	$	33,011	$	33,011	$	65,691	$	65,691
Certificates of deposit at other financial institutions		12,707		12,707		24,167		24,167
Level 2 inputs:
Securities available-for-sale, at fair value		221,182		221,182		292,933		292,933
Securities held-to-maturity, gross		8,500		7,867		8,500		7,666
Loans held for sale, at fair value		53,811		53,811		25,668		25,668
FHLB stock, at cost		10,322		10,322		2,114		2,114
Forward TBA mortgage-backed securities		122		122		—		—
Loans receivable, at fair value		13,868		13,868		15,088		15,088
Interest rate swaps - cash flow and fair value hedges		9,654		9,654		6,431		6,431
Accrued interest receivable		13,792		13,792		14,005		14,005
Interest rate swaps - dealer offsets to customer swap positions		71		71		64		64
Level 3 inputs:
Loans receivable, gross		2,474,554		2,364,761		2,417,927		2,276,397
MSRs, held at lower of cost or fair value		9,352		20,788		9,090		20,552
MSRs held for sale, held at lower of cost or fair value		—		—		8,086		17,611
Fair value interest rate locks with customers		378		378		—		—
Financial Liabilities
Level 2 inputs:
Deposits		2,382,803		2,374,574		2,522,323		2,515,026
Borrowings		181,895		180,748		93,746		93,416
Subordinated notes, excluding unamortized debt issuance costs		50,000		44,151		50,000		43,480
Accrued interest payable		3,116		3,116		5,473		5,473
Interest rate swaps - cash flow and fair value hedges		—		—		375		375
Forward TBA mortgage-backed securities		—		—		284		284
Interest rate swaps - customer swap positions		71		71		63		63
Level 3 inputs:
Mandatory and best effort forward commitments with investors		316		316		188		188

NOTE 11 – EARNINGS PER SHARE

The Company computes earnings per share using the two-class method, which is an earnings allocation method for computing earnings per share that treats a participating security as having rights to earnings that would otherwise have been available to common shareholders. Basic earnings per share are computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Unvested share-based awards containing non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.

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The following table presents a reconciliation of the components used to compute basic and diluted earnings per share at or for the dates indicated:

	At or For the Three Months Ended June 30,						At or For the Six Months Ended June 30,
Numerator	2024			2023			2024			2023
Net income	$	8,959		$	9,116		$	17,356		$	17,328
Dividends and undistributed earnings allocated to participating securities		(138	)		(160	)		(270	)		(307	)
Net income available to common shareholders	$	8,821		$	8,956		$	17,086		$	17,021
Denominator (shown as actual):
Basic weighted average common shares outstanding		7,688,246			7,637,210			7,664,368			7,635,647
Dilutive shares		108,007			109,126			114,354			133,870
Diluted weighted average common shares outstanding		7,796,253			7,746,336			7,778,722			7,769,517
Basic earnings per share	$	1.15		$	1.17		$	2.23		$	2.23
Diluted earnings per share	$	1.13		$	1.16		$	2.20		$	2.19
Potentially dilutive weighted average share options that were not included in the computation of diluted earnings per share because to do so would be anti-dilutive.		37,949			67,675			33,000			50,555

NOTE 12 – STOCK-BASED COMPENSATION

Stock Options and Restricted Stock

On May 17, 2018, the shareholders of FS Bancorp approved the 2018 Equity Incentive Plan (the “2018 Plan”) that authorized 1.3 million shares of the Company’s common stock to be awarded. The 2018 Plan provides for the grant of incentive stock options, nonqualified stock options, and up to 326,000 shares as restricted stock awards (“RSAs”) to directors, emeritus directors, officers, employees or advisory directors of the Company. At June 30, 2024, there were 265,532 stock option awards and 80,622 RSAs available for future grants under the 2018 Plan.

Total share-based compensation expense was $389,000 and $784,000 for the three and six months ended  June 30, 2024, respectively, and $364,000 and $1.0 million for the three and six months ended  June 30, 2023, respectively.

Stock Options

The 2018 Plan consists of stock option awards that may be granted as incentive stock options or nonqualified stock options. Stock option awards generally vest over a one-year period for independent directors or over a five-year period for employees and officers with 20% vesting on the anniversary date of each grant date as long as the award recipient remains in service to the Company. The options are exercisable after vesting for up to the remaining term of the original grant. The maximum term of the options granted is 10 years. Any unexercised stock options will expire 10 years after the grant date or sooner in the event of the award recipient’s termination of service with the Company or the Bank. The fair value of each stock option award is estimated on the grant date using a Black-Scholes Option pricing model that uses the following assumptions. The dividend yield is based on the current quarterly dividend in effect at the time of the grant. Historical employment data is used to estimate the forfeiture rate. The historical volatility of the Company's stock price over a specified period of time is used for the expected volatility.  The Company bases the risk-free interest rate on the comparable U.S. Treasury rate for the discount rate associated with the stock in effect on the date of the grant. The Company elected to use Staff Accounting Bulletin 107, simplified expected term calculation for the “Share-Based Payments” method permitted by the SEC to calculate the expected term. This method uses the vesting term of an option along with the contractual term, setting the expected life at 5.5 years for one-year vesting and 6.5 years for five-year vesting.

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The following table presents a summary of the Company’s stock option awards during the dates indicated (shown as actual):

					Weighted-Average
			Weighted-		Remaining
			Average		Contractual Term In		Aggregate
	Shares		Exercise Price		Years		Intrinsic Value
Outstanding at January 1, 2024		662,279	$	28.12		6.69	$	5,852,975
Granted		—	$	—		—		—
Less exercised		18,612	$	8.45		—	$	531,699
Less forfeited		12,000		30.73		—		—
Outstanding at June 30, 2024		631,667	$	28.65		6.32	$	4,925,343
Expected to vest, assuming a 0.31% annual forfeiture rate at June 30, 2024 (1)		624,770	$	28.65		6.24	$	4,872,165
Exercisable at June 30, 2024		364,850	$	27.88		5.28	$	3,125,310

(1) Forfeiture rate has been calculated and estimated to assume a forfeiture of 3.1% of the options over 10 years.

At June 30, 2024, there was $1.3 million of total unrecognized forfeiture adjusted compensation cost related to nonvested stock options granted under the 2018 Plan. The cost is expected to be recognized over the remaining weighted-average vesting period of 3.0 years.

Restricted Stock Awards

The RSAs’ fair value is equal to the value of the market price of FS Bancorp’s common stock on the grant date and compensation expense is recognized over the vesting period of the awards based on the fair value of the restricted stock. Shares granted under the 2018 Plan generally vest over a one-year period for independent directors and a five-year period for employees and officers beginning on the grant date. Any nonvested RSAs will be forfeited in the event of the award recipient’s termination of service with the Company or the Bank.

The following table presents a summary of the Company’s nonvested awards during the dates indicated (shown as actual):

			Weighted-Average
			Grant-Date Fair Value
Nonvested Shares	Shares		Per Share
Nonvested at January 1, 2024		102,144	$	29.61
Granted		—		—
Less vested		—		—
Less forfeited		4,000		30.73
Nonvested at June 30, 2024		98,144	$	29.57

At June 30, 2024, there was $2.0 million of total unrecognized forfeiture adjusted compensation cost related to nonvested shares granted under the 2018 Plan as RSAs. The cost is expected to be recognized over the remaining weighted-average vesting period of 3.0 years.

NOTE 13 – REGULATORY CAPITAL

The Bank is subject to various regulatory capital requirements administered by the Federal Reserve and the FDIC. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines of the regulatory framework for prompt corrective action, the Bank must meet specific capital adequacy guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital classification is also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

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Under the risk-based capital adequacy framework, quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of Tier 1 capital (as defined in the regulations) to total average assets (as defined), and minimum ratios of Tier 1 total capital (as defined) and common equity Tier 1 (“CET 1”) capital to risk-weighted assets (as defined).

The Bank must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage, and CET 1 capital ratios as set forth in the table below to be categorized as well capitalized. At June 30, 2024, the Bank was categorized as well capitalized under applicable regulatory requirements. There are no conditions or events since that notification that management believes have changed the Bank’s category. Management believes, at June 30, 2024, that the Bank met all capital adequacy requirements.

The following tables compare the Bank’s actual capital amounts and ratios to their minimum regulatory capital requirements and well capitalized regulatory capital at the dates indicated:

																To be Well Capitalized
																Under Prompt
						For Capital					For Capital Adequacy					Corrective
	Actual					Adequacy Purposes					with Capital Buffer					Action Provisions
Bank Only	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
At June 30, 2024
Total risk-based capital
(to risk-weighted assets)	$	355,165		13.85	%	$	205,122		8.00	%	$	269,223		10.50	%	$	256,403		10.00	%
Tier 1 risk-based capital
(to risk-weighted assets)	$	323,105		12.60	%	$	153,842		6.00	%	$	217,943		8.50	%	$	205,122		8.00	%
Tier 1 leverage capital
(to average assets)	$	323,105		10.94	%	$	118,153		4.00	%	$	N/A		N/A		$	147,691		5.00	%
CET 1 capital
(to risk-weighted assets)	$	323,105		12.60	%	$	115,381		4.50	%	$	179,482		7.00	%	$	166,662		6.50	%
At December 31, 2023
Total risk-based capital
(to risk-weighted assets)	$	339,436		13.37	%	$	203,094		8.00	%	$	266,561		10.50	%	$	253,868		10.00	%
Tier 1 risk-based capital
(to risk-weighted assets)	$	307,686		12.12	%	$	152,321		6.00	%	$	215,787		8.50	%	$	203,094		8.00	%
Tier 1 leverage capital
(to average assets)	$	307,686		10.39	%	$	118,488		4.00	%	$	N/A		N/A		$	148,109		5.00	%
CET 1 capital
(to risk-weighted assets)	$	307,686		12.12	%	$	114,240		4.50	%	$	177,707		7.00	%	$	165,014		6.50	%

In addition to the minimum CET 1, Tier 1, total capital and leverage ratios, the Bank is required to maintain a capital conservation buffer consisting of additional CET 1 capital greater than 2.5% of risk-weighted assets above the required minimum capital levels to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. At June 30, 2024, the Bank’s capital exceeded the minimum required capital with the required conservation buffer.

The Company is a bank holding company registered with the Federal Reserve. Bank holding companies are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended, and the regulations of the Federal Reserve. Bank holding companies with less than $3.0 billion in assets are generally not subject to compliance with the Federal Reserve’s capital regulations, which are generally the same as the capital regulations applicable to the Bank. The Federal Reserve has a policy that a bank holding company is required to serve as a source of financial and managerial strength to the holding company’s subsidiary bank and expects the holding company’s subsidiary bank to be well capitalized under the prompt corrective action regulations. If the Company were subject to regulatory guidelines for bank holding companies with $3.0 billion or more in assets at June 30, 2024, it would have exceeded all regulatory capital requirements. For informational purposes, the regulatory capital ratios calculated for the Company at  June 30, 2024 were 9.5% for Tier 1 leverage-based capital, 10.9% for Tier 1 risk-based capital, 14.1% for total risk-based capital, and 10.9% for CET 1 capital ratio. The regulatory capital ratios calculated for the Company at December 31, 2023 were 9.0% for Tier 1 leverage-based capital, 10.5% for Tier 1 risk-based capital, 13.7% for total risk-based capital, and 10.5% for CET 1 capital ratio.

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NOTE 14 – BUSINESS SEGMENTS

The Company’s business segments are determined based on the products and services provided, as well as the nature of the related business activities, and they reflect the way financial information is currently evaluated by management. This process is dynamic and is based on management’s current view of the Company’s operations and is not necessarily comparable with similar information for other financial institutions. The Company defines its business segments by product type and customer segment which it has organized into two lines of business: commercial and consumer banking and home lending.

The Company uses various management accounting methodologies to assign certain income statement items to the responsible operating segment, including:

● a funds transfer pricing (“FTP”) system, which allocates interest income credits and funding charges between the segments, assigning to each segment a funding credit for its liabilities, such as deposits, and a charge to fund its assets. The FTP methodology is based on management's estimated cost of originating funds including the cost of overhead for deposit generation;

● a cost per loan serviced allocation based on the number of loans being serviced on the balance sheet and the number of loans serviced for third parties;

● an allocation based upon the approximate square footage utilized by the home lending segment in Company owned locations;

● an allocation of charges for services rendered to the segments by centralized functions, such as corporate overhead, which are generally based on the number of full-time employees (“FTEs”) in each segment; and

● an allocation of the Company’s consolidated income taxes which are based on the effective tax rate applied to the segment’s pretax income or loss.

A description of the Company’s business segments and the products and services that they provide is as follows:

Commercial and Consumer Banking Segment

The commercial and consumer banking segment provides diversified financial products and services to our commercial and consumer customers through Bank branches, online banking platforms, mobile banking apps, and telephone banking. These products and services include deposit products; residential, consumer, business and commercial real estate lending portfolios and cash management services. The Company originates consumer loans, commercial and multi-family real estate loans, construction loans for residential and multi-family construction, and commercial business loans. At June 30, 2024, the Company’s retail deposit branch network consisted of 27 branches in the Pacific Northwest. This segment is also responsible for the management of the investment portfolio and other assets of the Bank.

Home Lending Segment

The home lending segment originates one-to-four-family residential mortgage loans primarily for sale in the secondary markets as well as loans held for investment. A majority of these mortgage loans are sold to or securitized by FNMA, FHLMC, GNMA, or the FHLB of Des Moines, while the Company generally retains the right to service these loans. Loans originated under the guidelines of the Federal Housing Administration or (“FHA”), US Department of Veterans Affairs or VA, and United States Department of Agriculture or USDA are generally sold servicing released to a correspondent bank or mortgage company. The Company has the option to sell loans on a servicing-released or servicing-retained basis to correspondent lenders. A small percentage of its loans are brokered to other lenders. On occasion, the Company may sell a portion of its MSRs portfolio and may sell small pools of loans initially originated to be held in the loan portfolio. The Company manages the loan funding and the interest rate risk associated with the secondary market loan sales and the retained one-to-four-family MSRs within this business segment. One-to-four-family loans originated for investment and held in this segment are allocated to the home lending segment with a corresponding provision expense and FTP for cost of funds.

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Segment Financial Results

The tables below summarize the financial results for each segment based on the factors mentioned above within each segment for the three and six months ended June 30, 2024 and 2023:

	At or For the Three Months Ended June 30, 2024
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income (1)	$	28,051		$	2,350		$	30,401
(Provision) benefit for credit losses		(1,214	)		137			(1,077	)
Noninterest income (2)		2,269			3,599			5,868
Noninterest expense (3)		(19,043	)		(4,814	)		(23,857	)
Income before provision for income taxes		10,063			1,272			11,335
Provision for income taxes		(2,113	)		(263	)		(2,376	)
Net income	$	7,950		$	1,009		$	8,959
Total average assets for period ended	$	2,359,741		$	588,090		$	2,947,831
Full-time employees ("FTEs")		450			121			571

	At or For the Three Months Ended June 30, 2023
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income (1)	$	28,269		$	3,283		$	31,552
Provision for credit losses		(629	)		(87	)		(716	)
Noninterest income (2)		2,706			2,127			4,833
Noninterest expense (3)		(18,950	)		(5,254	)		(24,204	)
Income before provision for income taxes		11,396			69			11,465
Provision for income taxes		(2,335	)		(14	)		(2,349	)
Net income	$	9,061		$	55		$	9,116
Total average assets for period ended	$	2,313,228		$	528,662		$	2,841,890
FTEs		444			137			581

	At or For the Six Months Ended June 30, 2024
	Commercial
	and Consumer
Condensed income statement:	Banking			Home Lending			Total
Net interest income (1)	$	56,137		$	4,610		$	60,747
Provision for credit losses		(2,465	)		(11	)		(2,476	)
Noninterest income (2)		4,662			6,317			10,979
Noninterest expense (3)		(38,051	)		(9,335	)		(47,386	)
Income before provision for income taxes		20,283			1,581			21,864
Provision for income taxes		(4,182	)		(326	)		(4,508	)
Net income	$	16,101		$	1,255		$	17,356
Total average assets for period ended	$	2,380,803		$	572,386		$	2,953,189
FTEs		450			121			571

	At or For the Six Months Ended June 30, 2023
	Commercial
	and Consumer
Condensed income statement:	Banking			Home Lending			Total
Net interest income (1)	$	55,769		$	6,445		$	62,214
Provision for credit losses		(2,118	)		(706	)		(2,824	)
Noninterest income (2)		5,086			4,966			10,052
Noninterest expense (3)		(37,560	)		(10,168	)		(47,728	)
Income before provision for income taxes		21,177			537			21,714
Provision for income taxes		(4,278	)		(108	)		(4,386	)
Net income	$	16,899		$	429		$	17,328
Total average assets for period ended	$	2,281,815		$	510,419		$	2,792,234
FTEs		444			137			581

(1) Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets.

(2) Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value, and subsequently transferred to loans held for investment. Gains and losses from changes in fair value for these loans are reported in earnings as a component of noninterest income. For the three and six months ended June 30, 2024, the Company recorded a net increase in fair value of $184,000 and $186,000, and a net decrease in fair value of $520,000 and net increase in fair value of $57,000 for the three and six months ended June 30, 2023, respectively. As of June 30, 2024 and 2023, there was $13.9 million and $14.3 million, respectively, in residential mortgage loans recorded at fair value as they were previously transferred from loans held for sale to loans held for investment.

(3) Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three and six months ended June 30, 2024, the Home Lending segment included allocated overhead expenses of $1.5 million and $3.0 million, compared to the three and six months ended June 30, 2023, of $1.6 million and $3.2 million, respectively.    

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NOTE 15 – GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and certain other intangibles generally arise from business combinations accounted for under the acquisition method of accounting. Goodwill totaled $3.6 million at both  June 30, 2024, and December 31, 2023, and represents the excess of the total acquisition price paid over the fair value of the assets acquired, net of the fair values of liabilities assumed in the Branch Purchase on February 24, 2023, and the purchase of four retail bank branches from Bank of America on January 22, 2016. Goodwill is not amortized but is evaluated for impairment on an annual basis at December 31 of each year or whenever events or changes in circumstances indicate the carrying value may not be recoverable. The Company performed an impairment analysis at December 31, 2023, and determined that no impairment of goodwill existed.

Core deposit intangible (“CDI”) is evaluated for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable, with any changes in estimated useful life accounted for prospectively over the revised remaining life. As of June 30, 2024, management believes that there have been no events or changes in the circumstances that would indicate a potential impairment of CDI.

The following table summarizes the changes in the Company’s other intangible assets comprised solely of CDI for the year ended  December 31, 2023, and the six months ended June 30, 2024.

	Other Intangible Assets
			Accumulated
	Gross CDI		Amortization			Net CDI
Balance, December 31, 2022	$	7,490	$	(4,121	)	$	3,369
Additions as a result of the Branch Purchase		17,438		—			17,438
Amortization		—		(3,464	)		(3,464	)
Balance, December 31, 2023		24,928		(7,585	)		17,343
Amortization		—		(1,860	)		(1,860	)
Balance, June 30, 2024	$	24,928	$	(9,445	)	$	15,483

The CDI represents the fair value of the intangible core deposit base acquired in business combinations. The CDI will be amortized on an accelerated basis over 10 years for the CDI related to the Branch Purchase, on a straight-line basis over 10 years for the CDI related to the Anchor Bank acquisition in  November 2018 (“Anchor Acquisition”) and on an accelerated basis over approximately nine years for the CDI related to the purchase of four retail bank branches from Bank of America on January 22, 2016. Total amortization expense was $919,000 and $1.9 million for the three and six months ended June 30, 2024, and $1.0 million and $1.5 million for the same periods in 2023, respectively.

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Amortization expense for CDI is expected to be as follows at June 30, 2024:

Remainder of 2024	$	1,773
2025		3,191
2026		2,846
2027		2,500
2028		2,110
Thereafter		3,063
Total	$	15,483

NOTE 16 – REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition

In accordance with Topic 606, revenues are recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services that are promised within each contract and identifies those that contain performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

All the Company’s revenue from contracts with customers in-scope of ASC 606 is recognized in noninterest income and included in our commercial and consumer banking segment. The following table presents noninterest income, segregated by revenue streams in-scope and out-of-scope and/or immaterial to Topic 606, for the dates indicated.

	At or For the Three Months Ended June 30,				For the Six Months Ended June 30,
Noninterest income	2024		2023		2024		2023
In-scope of Topic 606:
Debit card interchange fees	$	815	$	882	$	1,577	$	1,520
Deposit service and account maintenance fees		358		388		723		664
Noninterest income (in-scope of Topic 606)		1,173		1,270		2,300		2,184
Noninterest income (out-of-scope and/or immaterial to Topic 606)		4,695		3,563		8,679		7,868
Total noninterest income	$	5,868	$	4,833	$	10,979	$	10,052

Deposit Service and Account Maintenance Fees

The Bank earns fees from its deposit customers for account maintenance, transaction-based services, and overdraft charges.  Account maintenance fees consist primarily of account fees and analyzed account fees charged on deposit accounts monthly.  The performance obligation is satisfied, and the fees are recognized monthly as the service period is completed. Transaction-based fees on deposit accounts are charged to deposit customers for specific services provided to the customer, such as wire fees, as well as charges against the account, such as fees for non-sufficient funds and overdrafts. The performance obligation is completed as the transaction occurs and the fees are recognized at the time each specific service is provided to the customer.

Debit Interchange Income

Debit and ATM interchange income represent fees earned when a debit card issued by the Bank is used.  The Bank earns interchange fees from debit cardholder transactions through the Visa payment network.  Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. The performance obligation is satisfied, and the fees are earned when the cost of the transaction is charged to the cardholders’ debit card.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward–Looking Statements

This report contains forward-looking statements, which can be identified by the use of words such as “believes,” “expects,” “anticipates,” “estimates,” or similar expressions. Forward-looking statements include, but are not limited to:

● statements of our goals, intentions, and expectations;

● statements regarding our business plans, prospects, growth, and operating strategies;

● statements regarding the quality of our loan and investment portfolios; and

● estimates of our risks and future costs and benefits.

These forward-looking statements are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements due to, among others, the following factors:

● adverse impacts to economic conditions in our local markets or other markets where we have lending relationships;

● effects of employment levels, labor shortages, inflation, a recession or slowed economic growth;

● changes in the interest rate environment, including the past increases in the Board of Governors of the Federal Reserve System (“Federal Reserve”) benchmark rate and duration of such increased levels, which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity;

● the impact of inflation and the Federal Reserve monetary policies;

● the effects of any Federal government shutdown;

● credit risks of lending activities, including loan delinquencies, write offs, changes in our allowance for credit losses (“ACL”), and provision for credit losses;

● secondary market conditions and our ability to originate loans for sale and sell loans in the secondary market;

● fluctuations in loan demand, unsold homes, and land, and property values;

● staffing fluctuations in response to product demand or corporate implementation strategies;

● use of estimates in determining the fair value of assets, which may prove incorrect;

● effects of employment levels, labor shortages, inflation, a recession or slowed economic growth;

● increased competitive pressures among financial services companies;

● our ability to execute our plans to grow our residential construction lending, our home lending operations, our warehouse lending, and the geographic expansion of our indirect home improvement lending;

● our ability to attract and retain deposits;

● our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may in the future acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto;

● our ability to control operating costs and expenses;

● expectations regarding key growth initiatives and strategic priorities;

● retention of key members of our senior management team;

● changes in consumer spending, borrowing, and savings habits;

● our ability to successfully manage our growth;

● bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment;

● legislative or regulatory changes including changes in banking, securities and tax law, and in regulatory policies and principles, or the interpretation of regulatory capital or other rules;

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● our ability to pay dividends on our common stock;

● quality and composition of our securities portfolio and the impact of adverse changes in the securities markets;

● changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Public Company Accounting Oversight Board or the Financial Accounting Standards Board (“FASB”);

● costs and effects of litigation, including settlements and judgments;

● disruptions or security breaches, or other adverse events, failures, or interruptions in, or attacks on, our information technology systems or on the third-party vendors;

● inability of key third-party vendors to perform their obligations to us;

● effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest, and other external events;

● environmental, social and governance goals and targets;

● other economic, competitive, governmental, bank regulatory, consumer and technical factors affecting our operations, pricing, products and services, and

● other risks described elsewhere in this Form 10‑Q and our other reports filed with or furnished to SEC, including our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”).

Any of the forward-looking statements made in this Form 10‑Q and in other public statements may turn out to be wrong because of inaccurate assumptions we might make, because of the factors illustrated above or because of other factors that we cannot foresee. Forward-looking statements are based upon management’s beliefs and assumptions at the time they are made. The Company undertakes no obligation to update or revise any forward-looking statement included in this report or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this report might not occur and you should not put undue reliance on any forward-looking statements.

Overview

1st Security Bank, has been serving the Puget Sound area since 1907, including its bank acquisitions, when the predecessor to Anchor Bank was formed. On July 9, 2012, the Bank converted from mutual to stock ownership and became the wholly owned subsidiary of FS Bancorp.

The Company is relationship-driven, delivering banking and financial services to local families, local and regional businesses and industry niches in suburban communities in the greater Puget Sound area, the Kennewick-Pasco-Richland metropolitan area of Washington, also known as the Tri-Cities, Goldendale, Vancouver, and White Salmon, Washington and Manzanita, Newport, Ontario, Tillamook and Waldport, Oregon.

On February 24, 2023, the Company completed its purchase of seven retail bank branches from Columbia State Bank (the “Branch Acquisition”) and acquired approximately $425.5 million in deposits and $66.1 million in loans. The seven acquired branches are in the communities of Goldendale, and White Salmon, Washington, and Manzanita, Newport, Ontario, Tillamook, and Waldport, Oregon. The Branch Acquisition expanded our Puget Sound-focused retail footprint into southeast Washington and the state of Oregon as well as providing an opportunity to extend our unique brand of community banking into those communities.

The Company also maintains its long-standing indirect consumer lending platform which operates primarily throughout the Western United States. The Company emphasizes long-term relationships with families and businesses within the communities served, working with them to meet their financial needs. The Company is also actively involved in community activities and events within these market areas, which further strengthens our relationships within those markets.

The Company's strategic focus involves diversifying revenues, expanding lending channels, and enhancing the banking franchise. Management is committed to establishing varied revenue streams considering credit, interest rate, and concentration risks. The business plan includes:

● Growing and diversifying our loan portfolio;

● Maintaining strong asset quality;

● Emphasizing lower cost core deposits to reduce the costs of funding our loan growth;

● Capturing customers’ complete relationships through a broad array of products and services, leveraging community involvement, and selectively emphasizing offerings aligned with customers’ banking needs; and

● Expanding into new markets.

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As a diversified lender, the Company specializes in originating one-to-four-family loans, commercial real estate (“CRE”) mortgages, second mortgages, consumer loans, marine lending, and commercial business loans.

At June 30, 2024, the Company's loan portfolio included real estate loans, consumer loans, and commercial business loans representing 61.7%, 25.8%, and 12.5% of the portfolio, respectively. 

Fixture secured loans to finance window, gutter, siding replacement, solar panels, spas, and other improvement renovations are a large segment of the consumer loan portfolio. These fixture-secured consumer loans are dependent on the Company’s contractor/dealer network of 84 active fixture dealerships that funded a loan during the three months ended June 30, 2024, located throughout Washington, Oregon, California, Idaho, Colorado, Nevada, Arizona, Minnesota, Texas, Utah, Massachusetts, Montana, and New Hampshire. Five of these contractor/dealers were responsible for 74.8% of the dollar volume of funded loans for the three months ended June 30, 2024.  The Company funded $32.6 million, consisting of approximately 1,500 loans in the fixture-secured consumer loan category during the quarter ended June 30, 2024.

The following table details fixture secured loan originations by state for the periods indicated:

(Dollars in thousands)	For the Six Months Ended					For the Year Ended
	June 30, 2024					December 31, 2023
State	Amount		Percent			Amount		Percent
Washington	$	25,045		37.1	%	$	72,166		35.1	%
Oregon		14,180		21.0			48,831		23.8
California		7,127		10.5			34,219		16.7
Idaho		4,063		6.0			13,787		6.7
Colorado		4,241		6.3			7,442		3.6
Arizona		2,416		3.6			5,846		2.8
Nevada		2,302		3.4			4,697		2.3
Minnesota		1,163		1.7			8,312		4.0
Texas		1,122		1.7			1,685		0.8
Utah		2,956		4.4			5,062		2.5
Massachusetts		1,206		1.8			778		0.4
Montana		1,299		1.9			2,200		1.1
New Hampshire		466		0.6			322		0.2
Total fixture secured loans	$	67,586		100.0	%	$	205,347		100.0	%

The Company originates one-to-four-family residential mortgage loans through referrals from real estate agents, financial planners, builders, and from existing customers. Retail banking customers are also an important source of the Company’s loan originations. The Company originated $206.1 million of one-to-four-family loans (which included loans held for sale, loans held for investment and fixed seconds) in addition to $3.8 million of loans brokered to other institutions through the home lending segment during the three months ended June 30, 2024, of which $164.5 million were sold to investors. Of the loans sold to investors, $68.3 million were sold to the FNMA, FHLMC, FHLB, and/or GNMA with servicing rights retained for the purpose of further developing these customer relationships. At June 30, 2024, one-to-four-family residential mortgage loans held for investment totaled $589.0 million, or 23.7%, of the total gross loan portfolio, while loans held for sale totaled $53.8 million and residential home equity loans totaled $73.7 million at that date.

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For the three months ended June 30, 2024, one-to-four-family loan originations and refinancing activity increased compared to the prior quarter as a result of slightly decreased market interest rates and seasonal activity. Residential construction and development lending, while not as common as other loan origination options like one-to-four-family loans, continues to be an important element in our total loan portfolio, and we continue to take a disciplined approach by concentrating our efforts on loans to builders and developers in our market areas known to us. These short-term loans typically have a maturity period of six to 18 months, with disbursements not fully realized at origination, leading to a short-term reduction in net loans receivable.

The Company is significantly affected by prevailing economic conditions, as well as government policies and regulations concerning, among other things, monetary and fiscal affairs. Deposit flows are influenced by a number of factors, including interest rates paid on time deposits, other investments, account maturities, and the overall level of personal income and savings. Lending activities are influenced by the demand for funds, the number and quality of lenders, and regional economic cycles. Sources of funds for lending activities include primarily deposits, including brokered deposits, borrowings, payments on loans, and income provided from operations.

The Company’s earnings are primarily dependent upon net interest income, the difference between interest income and interest expense. Interest income is a function of the balances of loans and investments outstanding during a given period and the yield earned on these loans and investments. Interest expense is a function of the amount of deposits and borrowings outstanding during the same period and interest rates paid on these deposits and borrowings.

The Company’s earnings are also affected by fee income from mortgage banking activities, the provision for (recapture of) credit losses, service charges and fees, gains from sales of assets, operating expenses and income taxes. 

Critical Accounting Estimates

We prepare our consolidated financial statements in accordance with GAAP. In doing so, we must make estimates and assumptions. Our critical accounting estimates are those estimates that involve a significant level of uncertainty at the time the estimate was made, and changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. Accordingly, actual results could differ materially from our estimates. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Management believes that its critical accounting policies include the following:

ACL on Held-to-Maturity Securities. Management measures expected credit losses on held-to-maturity securities by individual security. Accrued interest receivable on held-to-maturity debt securities is excluded from the estimate of credit losses. The estimate of expected credit losses considers credit ratings and historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

The held-to-maturity portfolio consists entirely of corporate securities. Securities are generally rated investment grade or higher. Securities are analyzed individually to establish a reserve.

ACL on Available-for-Sale Securities. For available-for-sale securities in an unrealized loss position, management first assesses whether it intends to sell, or is more likely than not to be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded, limited by the amount that the fair value is less than the amortized cost basis.

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Changes in the ACL are recorded as a provision for (recapture of) credit losses. Losses are charged against the ACL when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale debt securities is not included in the estimate of credit losses.

ACL on Loans. The ACL on loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed and recaptures are credited to the ACL when received. In the case of recaptures, amounts may not exceed the aggregate of amounts previously charged off.

Management utilizes relevant available information, from internal and external sources, relating to past events, current conditions, historical loss experience, and reasonable and supportable forecasts. The lookback period in the analysis includes historical data from 2009 to present. Adjustments to historical loss information are made when management determines historical data is not likely reflective of the current portfolio such as limited data sets or lack of default or loss history. Management may selectively apply external market data to subjectively adjust the Company’s own loss history including index or peer data. Accrued interest receivable is excluded from the estimate of credit losses on loans.

The ACL on loans is measured on a collective cohort basis when similar risk characteristics exist. Generally, collectively assessed loans are grouped by call report code and then risk-grade grouping. Risk grade is grouped within each call report code by pass, watch, special mention, substandard, and doubtful. Other loan types are separated into their own cohorts due to specific risk characteristics for that pool of loans.

The Company has elected a non-discounted cash flow methodology with probability of default (“PD”) and loss given default (“LGD”) for all call report code cohorts (“cohorts”), except for the indirect and marine portfolios which are evaluated under a vintage methodology. The vintage methodology measures the expected loss calculation for future periods based on historical performance by the origination period of loans with similar life cycles and risk characteristics. Guaranteed portions of loans are measured with zero risk due to cash collateral and full government agency guaranty.

The PD calculation looks at the historical loan portfolio at points in time (each month during the lookback period) to determine the probability that loans in a certain cohort will default over the next 12-month period. A default is defined as a loan that has moved to past due 90 days and greater, nonaccrual status, or experienced a charge-off during the period. In cohorts where the Company’s historical data is insufficient due to a minimal amount of default activity or zero defaults, management uses index PDs comprised of rates derived from the PD experience of other community banks in place of the Company’s historical PDs. Additionally, management reviews all other cohorts to determine if index PDs should be used outside of these criteria.

The LGD calculation looks at actual losses (net charge-offs) experienced over the entire lookback period for each cohort of loans. The aggregate loss amount is divided by the exposure at default to determine an LGD rate. All defaults (non-accrual, charge-off, or greater than 90 days past due) occurring during the lookback period are included in the denominator, whether a loss occurred or not and exposure at default is determined by the loan balance immediately preceding the default event (i.e., nonaccrual or charge-off). Due to limited charge-off history, management uses index LGDs comprised of rates derived from the LGD experience of other community banks in place of the Company’s historical LGDs.

The Company utilizes reasonable and supportable forecasts of future economic conditions when estimating the ACL on loans. The calculation includes a 12-month PD forecast based on the Company’s regression model comparing peer nonperforming loan ratios to the national unemployment rate. After the forecast period, PD rates revert on a straight-line basis back to long-term historical average rates over a 12-month period. Due to limited default history, management uses index PDs comprised of rates derived from the PD experience of other community banks in place of the Company’s historical PDs.

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The Company recognizes that all significant factors that affect the collectability of the loan portfolio must be considered to determine the estimated credit losses as of the evaluation date. Furthermore, the methodology, in and of itself and even when selectively adjusted by comparison to market and peer data, does not provide a sufficient basis to determine the estimated credit losses. The Company adjusts the modeled historical losses by qualitative and environmental adjustments to incorporate all significant risks to form a sufficient basis to estimate the credit losses.

Loans classified as nonaccrual, are reviewed quarterly for potential individual assessment. Any loan classified as a nonaccrual that is not determined to need individual assessment is evaluated collectively within its respective cohort.

Where the primary and/or expected source of repayment of a specific loan is believed to be the future liquidation of available collateral, impairment will generally be measured based upon expected future collateral proceeds, net of disposition expenses including sales commissions as well as other costs potentially necessary to sell the asset(s) (i.e., past due taxes, liens, etc.). Estimates of future collateral proceeds will be based upon available appraisals, reference to recent valuations of comparable properties, use of consultants or other professionals with relevant market and/or property-specific knowledge, and any other sources of information believed appropriate by management under the specific circumstances. When appraisals are ordered to support the impairment analysis of an impaired loan, the appraisal is reviewed by the Company’s internal appraisal reviewer.

Where the primary and/or expected source of repayment of a specific loan is believed to be the receipt of principal and interest payments from the borrower and/or the refinancing of the loan by another creditor, impairment will generally be measured based upon the present value of expected proceeds discounted at the contractual interest rate. Expected refinancing proceeds may be estimated from review of term sheets received by the borrower from other creditors and/or from the Company’s knowledge of terms generally available from other banks.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications. Prepayment assumptions will be determined by analysis of historical behavior by loan cohort.

ACL on Unfunded Commitments. The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit unless that obligation is unconditionally cancellable by the Company. The ACL for unfunded commitments is adjusted through a provision for (recapture of) credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The estimate utilizes the same factors and assumptions as the ACL on loans and is applied at the same collective cohort level.

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In whole bank or bank branch acquisitions, the primary identifiable intangible asset recorded is the value of the core deposit intangibles, representing the estimated value of the long-term deposit relationships acquired. The determination involves assumptions and estimates, typically determined through discounted cash flow analysis, considering customer attrition/runoff, alternative funding costs, deposit servicing costs, and discount rates. Amortization of core deposit intangibles occurs over estimated useful lives reviewed periodically for reasonableness.  These estimated useful lives, typically ranging from seven to 10 years with an accelerated rate of amortization are periodically reviewed for reasonableness. Identifiable intangible assets, including core deposit intangibles, are assessed for impairment when events or changes suggest the carrying value may not be recoverable. The Company's policy dictates recognition of an impairment loss equal to the difference between the asset’s carrying amount and its fair value if the expected undiscounted future cash flows are less than the carrying amount. Estimating future cash flows involves the use of multiple estimates and assumptions, as previously mentioned.

The ACL on purchase credit deteriorated (“PCD”) assets is recognized within business combination accounting with no initial impact to net income. Subsequent changes in estimates of expected credit losses on PCD loans are recognized through a provision for (recapture of) credit losses in subsequent periods as they arise. The ACL on non-PCD assets is recognized as provision expense in the same reporting period as the business combination. Estimated loan losses for acquired loans are determined using methodologies and applying estimates and assumptions that were described previously in the section above entitled, “Allowance for Credit Losses on Loans.”

Non-PCD loans acquired are generally estimated at fair value using a discounted cash flow approach with differences from contractual unpaid principal balances referred to as “discounts.”  These discounts are accreted to interest income over the loans' estimated remaining lives.

Similar adjustments are made for premiums or discounts on acquired debt impacting interest expense over their remaining lives. Actual accretion or amortization may differ materially from our estimates impacting our operating results.

Goodwill arising from business combinations represents the excess of the purchase price over the sum of the estimated fair values of the tangible and identifiable intangible assets acquired less the estimated fair value of the liabilities assumed. Goodwill has an indefinite useful life and is evaluated for impairment annually or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. Accounting for goodwill also involves a higher degree of judgment than most other significant accounting policies. ASC 350–10 establishes standards for an impairment assessment of goodwill.

The initial recognition of goodwill and other intangible assets, along with subsequent analyses, necessitates subjective judgments from management.  These judgements involve estimating how acquired assets will perform in the future using valuation methods including discounted cash flow analysis. Additionally, the challenge arises as estimated cash flows may extend beyond 10 years, making them difficult to determine over an extended timeframe. Significant events and factors influencing these estimates include competitive forces, customer behaviors, attrition, changes in revenue growth trends, cost structures, technology, alterations in discount rates, and specific industry and market conditions. To validate assumptions in its estimates, the Company reviews the historical performance of underlying or similar assets, ensuring the reasonableness of cash flow estimates.

The Company’s annual assessment of potential goodwill impairment was completed during the fourth quarter of 2023. Based on the results of this assessment, no goodwill impairment was recognized. Because of current economic conditions the Company continues to monitor goodwill and other intangible assets for impairment indicators throughout the year.

On an on-going basis, the Company evaluates its estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company’s accounting policies are discussed in detail in “Note 1 – Basis of Presentation and Summary” of the Notes to Consolidated Financial Statements included in Item 8. “Financial Statement and Supplementary Data” of Form 10–K.

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Comparison of Financial Condition at June 30, 2024 and December 31, 2023

Assets. Total assets decreased $31.3 million to $2.94 billion at June 30, 2024, from $2.97 billion at December 31, 2023, primarily due to decreases of $71.8 million in securities available-for-sale, $32.7 million in total cash and cash equivalents, and $11.5 million in certificates of deposit at other financial institutions, partially offset by increases of $55.7 million in loans receivable, net, $28.1 million in loans held for sale, and $8.2 million in FHLB stock.

Loans receivable, net increased $55.7 million to $2.46 billion at June 30, 2024, from $2.40 billion at December 31, 2023, Total real estate loans increased $5.6 million to $1.54 billion at  June 30, 2024, compared to December 31, 2023, reflecting increases in one-to-four-family loans (excluding loans held for sale) of $21.2 million, multi-family loans of $15.9 million, and home equity loans of $4.3 million, partially offset by decreases in construction and development loans of $28.8 million and CRE loans of $6.9 million. Undisbursed construction and development loan commitments increased $41.2 million to $195.8 million at June 30, 2024, as compared to $154.6 million at December 31, 2023. Similarly, commercial business loans increased $54.9 million to $310.7 million at June 30, 2024, compared to December 31, 2023, as a result of increases in C&I loans of $46.9 million and in warehouse lending of $8.0 million. Consumer loans decreased $5.1 million to $641.7 million at June 30, 2024, compared to December 31, 2023, primarily due to a decrease of $6.3 million in indirect home improvement loans, partially offset by an increase of $1.3 million in marine loans.

Loans held for sale, consisting of one-to-four-family loans, increased by $28.1 million to $53.8 million at June 30, 2024, from $25.7 million at December 31, 2023. The Company continues to invest in its home lending operations and strategically manage production capacity in the markets we serve.

One-to-four-family loan originations for the six months ended June 30, 2024, included $271.2 million of loans originated for sale, $86.3 million of portfolio loans including first and second liens, and $6.4 million of loans brokered to other institutions.

Originations of one-to-four-family loans for the periods indicated were as follows:

(Dollars in thousands)	For the Six Months Ended June 30,
	2024					2023
	Amount		Percent			Amount		Percent			$ Change		% Change
Purchase	$	329,292		90.5	%	$	247,866		91.6	%	$	81,426		32.9	%
Refinance		34,545		9.5			22,634		8.4			11,911		52.6	%
Total	$	363,837		100.0	%	$	270,500		100.0	%	$	93,337		34.5	%

During the six months ended June 30, 2024, the Company sold $258.4 million of one-to-four-family loans compared to $204.3 million for the same period one year ago. Gross margin on home loan sales increased to 3.14% for the six months ended June 30, 2024, compared to 3.06% for the six months ended June 30, 2023. Gross margin is defined as the margin on loans sold (cash sales) without the impact of deferred costs.

The ACL on loans totaled $31.2 million or 1.26% of gross loans receivable (excluding loans held for sale) at June 30, 2024, compared to $31.5 million or 1.30% of gross loans receivable (excluding loans held for sale, at December 31, 2023. The ACL on unfunded loan commitments was $1.6 million and $1.5 million at June 30, 2024 and December 31, 2023, respectively.

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Classified loans totaled $24.3 million at  June 30, 2024, all of which were classified as substandard, compared to $24.9 million at  December 31, 2023, of which $24.5 million were classified as substandard and $399,000 were classified as doubtful. Nonperforming loans, consisting solely of nonaccrual loans, increased $454,000 to $11.4 million at  June 30, 2024, from $11.0 million at  December 31, 2023, primarily due to an increase in indirect home improvement loans of $456,000.  The ratio of nonperforming loans to total gross loans was 0.46% at June 30, 2024, compared to 0.45% at  December 31, 2023. There were no OREO properties at both  June 30, 2024 and  December 31, 2023.

Liabilities. Total liabilities decreased $50.8 million to $2.66 billion at June 30, 2024, from $2.71 billion at December 31, 2023, primarily due to a decrease of $139.5 million in deposits, offset by increases of $88.1 million in borrowings and $1.4 million in other liabilities.

Total deposits decreased $139.5 million to $2.38 billion at June 30, 2024, from $2.52 billion at December 31, 2023. CDs, which include retail and non-retail CDs, increased $451,000 to $1.10 billion at June 30, 2024, from December 31, 2023, with non-retail CDs representing 24.9% and 34.2% of total CDs at such dates, respectively. At June 30, 2024, non-retail CDs, which include brokered CDs, online CDs and public funds CDs decreased $101.1 million to $273.4 million, compared to $374.5 million at December 31, 2023, primarily due to a decrease of $100.3 million in brokered CDs.  The decrease in brokered CDs primarily relates to the utilization of FHLB Advances due to overall better rates and factoring FHLB Activity Stock Dividends. 

Transactional accounts (noninterest-bearing checking, interest-bearing checking and escrow accounts) decreased $124.7 million to $790.2 million at June 30, 2024, from $914.9 million at December 31, 2023, due to decreases of $77.2 million in interest-bearing checking and $40.9 million in noninterest-bearing checking and decrease of $6.6 million in escrow accounts related to mortgages serviced. Money market and savings accounts decreased $15.3 million to $495.4 million at June 30, 2024, from $510.7 million at December 31, 2023.

Deposits are summarized as follows at the dates indicated:

(Dollars in thousands)	June 30,		December 31,
	2024		2023
Noninterest-bearing checking	$	613,137	$	654,048
Interest-bearing checking (1)		166,839		244,028
Savings		151,398		151,630
Money market (2)		343,995		359,063
CDs less than $100,000 (3)		530,537		587,858
CDs of $100,000 through $250,000		427,893		429,373
CDs greater than $250,000 (4)		138,792		79,540
Escrow accounts related to mortgages serviced (5)		10,212		16,783
Total	$	2,382,803	$	2,522,323

(1)	Includes $0.0 and $70.2 million of brokered deposits at June 30, 2024 and December 31, 2023, respectively.
(2)	Includes $4.0 million and $1,000 of brokered deposits at June 30, 2024 and December 31, 2023, respectively.
(3)	Includes $261.0 million and $361.3 million of brokered CDs at June 30, 2024 and December 31, 2023, respectively.
(4)	CDs that meet or exceed the FDIC insurance limit.
(5)	Noninterest-bearing checking.

The Bank had uninsured deposits of approximately $586.6 million or 24.6% of total deposits, at June 30, 2024, compared to approximately $606.5 million or 24.0% of total deposits at December 31, 2023. The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements.

Borrowings increased $88.1 million to $181.9 million at June 30, 2024, from $93.7 million at December 31, 2023.  The increased borrowings were primarily attributable to a decrease in total brokered deposits. At June 30, 2024, borrowings totaled $181.9 million and were comprised of FHLB advances of $154.9 million and overnight borrowings of $27.0 million.

Stockholders’ Equity. Total stockholders’ equity increased $19.5 million to $284.0 million at June 30, 2024, from $264.5 million at December 31, 2023.  The increase in stockholders' equity reflects net income of $17.4 million, partially offset by cash dividends totaling $4.1 million and stock repurchases totaling $2.4 million during the six months ended June 30, 2024.  Additionally, stockholders' equity was positively impacted by decreases in unrealized net losses in securities available-for-sale of $4.9 million, net of tax, and unrealized net gains on fair value and cash flow hedges of $2.8 million, net of tax, reflecting sales of investment securities in unrealized loss positions and changes in market interest rates benefiting hedges during the quarter, resulting in a $7.8 million decline in accumulated other comprehensive loss.

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Book value per common share was $37.15 at June 30, 2024, compared to $34.36 at December 31, 2023.  The calculation of book value per share at June 30, 2024, was based on 7,764,463 common shares, after deducting the 98,144 unvested restricted stock shares from the 7,742,607 reported common shares outstanding as of that date. Similarly, the book value per share at December 31, 2023, was calculated based on 7,698,401 common shares, after deducting the 102,144 unvested restricted stock shares from the 7,800,545 reported common shares outstanding as of that date.

Comparison of Results of Operations for the Three Months Ended June 30, 2024 and 2023

General. Net income was $9.0 million for the three months ended June 30, 2024, compared to $9.1 million for the three months ended June 30, 2023. The slight decrease in net income was primarily due to a $1.2 million, or 3.6% decrease in net interest income and a $361,000, or 50.4% increase in the provision for loan losses, partially offset by a $1.0 million or 21.4% increase in noninterest income and a $347,000, or 1.4% decrease in noninterest expense.   

Average Balances, Interest and Average Yields/Cost

The following table sets forth for the periods indicated, information regarding average balances of assets and liabilities, as well as the total dollar amounts of interest income from average interest-earning assets and interest expense on average interest-bearing liabilities, resultant yields, interest rate spread, net interest margin (otherwise known as net yield on interest-earning assets), and the ratio of average interest-earning assets to average interest-bearing liabilities. Also presented is the weighted average yield on interest-earning assets, rates paid on interest-bearing liabilities and the resultant spread at for the periods presented. Average balances are daily average balances. The yields on tax-exempt municipal bonds have not been computed on a tax equivalent basis.

(Dollars in thousands)	For the Three Months Ended								For the Three Months Ended
	June 30, 2024								June 30, 2023
Average Balances	Average Balance Outstanding			Interest Earned/ Paid		Yield/ Rate			Average Balance Outstanding			Interest Earned/ Paid		Yield/ Rate
ASSETS
Loans receivable, net and loans held for sale (1) (2)	$	2,511,326		$	42,406		6.79	%	$	2,371,156		$	38,216		6.46	%
Taxable AFS mortgage-backed securities (3)		124,678			1,147		3.70	%		80,505			401		2.00	%
Taxable AFS investment securities (3)(4)		79,185			1,296		6.58	%		55,496			785		5.67	%
Tax-exempt AFS investment securities (3)		79,559			382		1.93	%		129,423			629		1.95	%
Taxable HTM investment securities		8,500			107		5.06	%		8,500			107		5.05	%
FHLB stock		7,040			154		8.80	%		4,628			60		5.20	%
Interest-bearing deposits at other financial institutions		41,613			448		4.33	%		63,470			669		4.23	%
Total interest-earning assets		2,851,901			45,940		6.48	%		2,713,178			40,867		6.04	%
Noninterest-earning assets		95,930								128,712
Total assets	$	2,947,831							$	2,841,890
LIABILITIES
Savings and money market	$	508,243			1,951		1.54	%	$	659,097			1,344		0.82	%
Interest-bearing checking		170,444			555		1.31	%		179,930			370		0.82	%
Certificates of deposit		1,116,279			10,746		3.87	%		842,157			5,896		2.81	%
Borrowings		140,964			1,801		5.14	%		103,764			1,219		4.71	%
Subordinated notes		49,550			486		3.94	%		49,484			486		3.94	%
Total interest-bearing liabilities		1,985,480			15,539		3.15	%		1,834,432			9,315		2.04	%
Noninterest-bearing accounts		637,345								696,270
Other noninterest-bearing liabilities		41,785								34,434
Total liabilities	$	2,664,610							$	2,565,136
Net interest income				$	30,401							$	31,552
Net interest rate spread							3.33	%							4.00	%
Net earning assets	$	866,421							$	878,746
Net interest margin							4.29	%							4.66	%
Average interest-earning assets to average interest-bearing liabilities		143.64	%							147.90	%

(1)	The average loans receivable, net balances include nonaccrual loans carrying a zero yield.
(2)	Includes net deferred fee recognition of $2.1 million and $2.1 million for the three months ended June 30, 2024 and 2023, respectively.
(3)	Shown at amortized cost.
(4)	Includes income from fair value hedges of $422,000 and $367,000 for the three months ended June 30, 2024 and 2023, respectively.

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Net Interest Income. Net interest income decreased $1.2 million to $30.4 million for the three months ended June 30, 2024, from $31.6 million for the three months ended June 30, 2023, due to increases in interest expense on deposits and borrowings outpacing increases in interest and dividend income. Total interest income increased $5.1 million for the three months ended June 30, 2024, compared to the same period in 2023, primarily due to an increase of $4.2 million in interest income on loans receivable, including fees, impacted primarily as a result of 33 basis point increase in the average yield earned on loans receivable due to new loans being originated at higher rates and variable-rate loans repricing higher, and a higher average balance of loans outstanding. Total interest expense increased $6.2 million for the three months ended June 30, 2024, compared to the same period in 2023, primarily as a result of higher market interest rates, higher utilization of borrowings, and a shift in deposit mix from transactional accounts to higher cost CDs.

Net interest margin (“NIM”) decreased 37 basis points to 4.29% for the three months ended June 30, 2024, from 4.66% for the same period the prior year. The change in NIM reflects the increased costs of deposits and borrowings which outpaced the increased yields earned on interest-earning assets. 

Interest Income. Interest income for the three months ended June 30, 2024, increased $5.1 million to $45.9 million, from $40.9 million for the three months ended June 30, 2023. The increase was primarily attributable to a $138.7 million increase in the average balance of total interest-earning assets and a 44-basis point increase in the average yield on total interest-earning assets.

The following table compares average interest-earning asset balances, associated yields, and resulting changes in interest income for the three months ended June 30, 2024 and 2023:

(Dollars in thousands)	Three Months Ended June 30,
	2024					2023
	Average					Average					$ Change
	Balance					Balance					in Interest
	Outstanding		Yield			Outstanding		Yield			Income
Loans receivable, net and loans held for sale (1)(2)	$	2,511,326		6.79	%	$	2,371,156		6.46	%	$	4,190
Taxable AFS mortgage-backed securities (3)		124,678		3.70			80,505		2.00			746
Taxable AFS investment securities (3)(4)		79,185		6.58			55,496		5.67			511
Tax-exempt AFS investment securities (3)		79,559		1.93			129,423		1.95			(247	)
Taxable HTM investment securities		8,500		5.06			8,500		5.05			—
FHLB stock		7,040		8.80			4,628		5.20			94
Interest-bearing deposits at other financial institutions		41,613		4.33			63,470		4.23			(221	)
Total interest-earning assets	$	2,851,901		6.48	%	$	2,713,178		6.04	%	$	5,073

(1)	The average loans receivable, net balances include nonaccrual loans carrying a zero yield.
(2)	Includes net deferred fee recognition of $2.1 million and $2.1 million for the three months ended June 30, 2024 and 2023, respectively.
(3)	Shown at amortized cost.
(4)	Includes income from fair value hedges of $422,000 and $367,000 for the three months ended June 30, 2024 and 2023, respectively.

Interest Expense. Interest expense increased $6.2 million to $15.5 million for the three months ended June 30, 2024, from $9.3 million for the comparable quarter in 2023, due to an increase of interest expense on deposits of $5.6 million and on borrowings of $582,000. The average cost of funds for total interest-bearing liabilities increased 111 basis points to 3.15% for the three months ended June 30, 2024, from 2.04% for the three months ended June 30, 2023. The increase was predominantly due to an increase in cost for deposits and borrowings as well as an increase in the average balances of CDs and borrowings. The average cost of total interest-bearing deposits increased 115 basis points to 2.97%, for the three months ended June 30, 2024, compared to 1.82%, for the three months ended June 30, 2023. The average balance of total interest-bearing deposits increased $113.8 million to $1.79 billion for the three months ended June 30, 2024, compared to $1.68 billion for the three months ended June 30, 2023.  The average cost of funds, including noninterest-bearing checking, increased 90 basis points to 2.38% for the three months ended June 30, 2024, from 1.48% for the three months ended June 30, 2023.  

The following table details average balances of interest-bearing liabilities, associated rates, and resulting change in interest expense for the three months ended June 30, 2024 and 2023:

(Dollars in thousands)	Three Months Ended June 30,
	2024					2023
	Average					Average					$ Change
	Balance					Balance					in Interest
	Outstanding		Rate			Outstanding		Rate			Expense
Savings and money market	$	508,243		1.54	%	$	659,097		0.82	%	$	607
Interest-bearing checking		170,444		1.31			179,930		0.82			185
Certificates of deposit		1,116,279		3.87			842,157		2.81			4,850
Borrowings		140,964		5.14			103,764		4.71			582
Subordinated note		49,550		3.94			49,484		3.94			—
Total interest-bearing liabilities	$	1,985,480		3.15	%	$	1,834,432		2.04	%	$	6,224

56

Provision for Credit Losses. For the three months ended June 30, 2024, the provision for credit losses was $1.1 million, consisting of a $1.0 million provision for credit losses on loans, and a $77,000 provision for credit losses on unfunded loan commitments, compared to $716,000 provision for credit losses for the three months ended June 30, 2023, consisting of a $1.1 million provision for credit losses on loans, offset by a $347,000 recapture of the ACL on unfunded loan commitments. The provision for credit losses on loans reflects the increase in the loan portfolio, as well as an increase in nonperforming loans, and higher net charge-offs.

During the three months ended June 30, 2024, net loan charge-offs totaled $1.2 million, compared to $650,000 during the three months ended June 30, 2023.  This increase was the result of increased net charge-offs of $648,000 in C&I loans and $42,000 in indirect home improvement loans, partially offset by a net recovery of $105,000 in marine loans. A decline in national and local economic conditions, as a result the effects of inflation, a potential recession or slowed economic growth, among other economic factors, could result in a material increase in the ACL on loans and may adversely affect the Company’s financial condition and result of operations.

Noninterest Income. Noninterest income increased $1.0 million to $5.9 million for the three months ended June 30, 2024, from $4.8 million for the three months ended June 30, 2023. The increase reflects a $736,000 increase in other noninterest income is partially due to a favorable $704,000 of fair value option for loan income, and a $120,000 VISA incentive, a $516,000 increase in gain on sale of loans primarily due to the increased volume of loans sold, and a $151,000 increase in gain on sale of investment securities, partially offset by a $383,000 decrease in service charges and fee income. Gross margin on home loan sales decreased to 2.96% for the three months ended June 30, 2024, from 3.07% for the three months ended June 30, 2023.

Noninterest Expense. Noninterest expense decreased $347,000 to $23.9 for the three months ended June 30, 2024, from $24.2 million for the three months ended June 30, 2023. The decrease was primarily due to decreases of $390,000 in loans costs, $141,000 in FDIC insurance, $135,000 in salaries and benefits, $124,000 in operations, and $104,000 in amortization of core deposit intangible, partially offset by increases of $375,000 in data processing, $231,000 in professional and board fees, and $107,000 in occupancy expense.

The efficiency ratio, which is calculated by dividing noninterest expense by total net interest income and noninterest income, improved to 65.78% for the three months ended June 30, 2024, compared to 66.52% for the three months ended June 30, 2023, due to a slight decline in noninterest expense as total revenues remained relatively unchanged. 

Provision for Income Taxes. For the three months ended June 30, 2024, the Company recorded a provision for income taxes of $2.4 million as compared to $2.3 million for the three months ended June 30, 2023. The increase in the income taxes provision was primarily due to a decrease in nontaxable income between periods, which included an increase in non-deductible interest expense attributable to the related assets due to rising funding cost. during the three months ended June 30, 2024, as compared to the same quarter last year. The effective corporate income tax rates for the three months ended June 30, 2024 and 2023 were 21.0% and 20.5%, respectively. 

Comparison of Results of Operations for the Six Months Ended June 30, 2024 and 2023

General. Net income was $17.4 million for the six months ended June 30, 2024, compared to $17.3 million for the six months ended June 30, 2023. The increase in net income was primarily due to a $927,000 or 9.2% increase in noninterest income, a $348,000 or 12.3% decrease in the provision for loan losses, and a $342,000 or 0.70% decrease in noninterest expense, partially offset by a $1.5 million, or 2.4% decrease in net interest income and a $122,000 or 2.8% increase in the provision for income taxes.    

Average Balances, Interest and Average Yields/Cost

The following table sets forth for the periods indicated, information regarding average balances of assets and liabilities, as well as the total dollar amounts of interest income from average interest-earning assets and interest expense on average interest-bearing liabilities, resultant yields, interest rate spread, net interest margin (otherwise known as net yield on interest-earning assets), and the ratio of average interest-earning assets to average interest-bearing liabilities. Also presented is the weighted average yield on interest-earning assets, rates paid on interest-bearing liabilities and the resultant spread at for the periods presented. Average balances are daily average balances.  The yields on tax-exempt municipal bonds have not been computed on a tax equivalent basis.

(Dollars in thousands)	For the Six Months Ended								For the Six Months Ended
	June 30, 2024								June 30, 2023
Average Balances	Average Balance Outstanding			Interest Earned/ Paid		Yield/ Rate			Average Balance Outstanding			Interest Earned/ Paid		Yield/ Rate
ASSETS
Loans receivable, net and loans held for sale (1) (2)	$	2,487,964		$	83,403		6.74	%	$	2,331,978		$	74,208		6.42	%
Taxable AFS mortgage-backed securities (3)		119,738			2,123		3.57	%		81,147			746		1.85	%
Taxable AFS investment securities (3)(4)		86,958			2,756		6.37	%		57,257			1,527		5.38	%
Tax-exempt AFS investment securities (3)		100,721			983		1.96	%		129,632			1,264		1.97	%
Taxable HTM investment securities		8,500			215		5.09	%		8,500			215		5.10	%
FHLB stock		4,607			186		8.12	%		5,477			157		5.78	%
Interest-bearing deposits at other financial institutions		50,563			1,154		4.59	%		66,550			1,362		4.13	%
Total interest-earning assets		2,859,051			90,820		6.39	%		2,680,541			79,479		5.98	%
Noninterest-earning assets		94,138								111,693
Total assets	$	2,953,189							$	2,792,234
LIABILITIES
Savings and money market	$	507,514			3,612		1.43	%	$	675,876			2,542		0.76	%
Interest-bearing checking		179,711			1,339		1.50	%		162,777			468		0.58	%
Certificates of deposit		1,126,640			21,183		3.78	%		845,938			11,224		2.68	%
Borrowings		121,057			2,968		4.93	%		91,619			2,060		4.53	%
Subordinated notes		49,542			971		3.94	%		49,475			971		3.96	%
Total interest-bearing liabilities		1,984,464			30,073		3.05	%		1,825,685			17,265		1.91	%
Noninterest-bearing accounts		647,214								658,381
Other noninterest-bearing liabilities		42,516								34,436
Total liabilities	$	2,674,194							$	2,518,502
Net interest income				$	60,747							$	62,214
Net interest rate spread							3.34	%							4.07	%
Net earning assets	$	874,587							$	854,856
Net interest margin							4.27	%							4.68	%
Average interest-earning assets to average interest-bearing liabilities		144.07	%							146.82	%

(1)	The average loans receivable, net balances include nonaccrual loans carrying a zero yield.
(2)	Includes net deferred fee recognition of $4.0 million and $4.3 million for the six months ended June 30, 2024 and 2023, respectively.
(3)	Shown at amortized cost.
(4)	Includes income from fair value hedges of $839,000 and $656,000 for the six months ended June 30, 2024 and 2023, respectively.

57

Net Interest Income. Net interest income decreased $1.5 million to $60.7 million for the six months ended June 30, 2024, from $62.2 million for the six months ended June 30, 2023, due to an increase in interest expense on deposits and, to a lesser extent, borrowings, partially offset by an increase in interest and dividend income. Total interest income increased $11.3 million for the six months ended June 30, 2024, compared to the same period in 2023, primarily due to an increase of $9.2 million in interest income on loans receivable, including fees, impacted primarily as a result of a 32 basis point increase in the average yield earned on loans receivable due to new loans being originated at higher rates and variable-rate loans repricing higher, and a higher average balance of loans outstanding.  In addition, interest income on investment securities, excluding FHLB stock, increased $2.3 million, partially offset by a decrease in interest-bearing deposits at other financial institutions of $177,000, during the six months ended June 30, 2024, compared to the same period in 2023.  The increase in interest income on investment securities, excluding FHLB stock, was primarily due to higher market interest rates generally, while the decrease in interest income on interest-bearing deposits at other financial institutions was due to a decrease in the average balance outstanding of such deposits.  Total interest expense increased $12.8 million for the six months ended June 30, 2024, compared to the same period in 2023, primarily as a result of higher market interest rates, higher utilization of borrowings and a shift in deposit mix from transactional accounts to higher cost CDs.

Net interest margin (“NIM”) decreased 41 basis points to 4.27% for the six months ended June 30, 2024, from 4.68% for the same period in the prior year. The change in NIM reflects the increased costs of deposits and borrowings which outpaced the increased yields earned on interest-earning assets, as well as an increase in the average balance of interest-earning assets, as well as an increase in the average balance of interest-earning assets. 

Interest Income. Interest income for the six months ended June 30, 2024, increased $11.3 million to $90.8 million, from $79.5 million for the six months ended June 30, 2023. The increase was primarily attributable to a $178.5 million increase in the average balance of total interest-earning assets and a 41-basis point increase in the average yield on total interest-earning assets.

The following table compares average interest-earning asset balances, associated yields, and resulting changes in interest income for the six months ended June 30, 2024 and 2023:

(Dollars in thousands)	Six Months Ended June 30,
	2024					2023
	Average					Average					$ Change
	Balance					Balance					in Interest
	Outstanding		Yield			Outstanding		Yield			Income
Loans receivable, net and loans held for sale (1)(2)	$	2,487,964		6.74	%	$	2,331,978		6.42	%	$	9,195
Taxable AFS mortgage-backed securities (3)		119,738		3.57			81,147		1.85			1,377
Taxable AFS investment securities (3)(4)		86,958		6.37			57,257		5.38			1,229
Tax-exempt AFS investment securities (3)		100,721		1.96			129,632		1.97			(281	)
Taxable HTM investment securities		8,500		5.09			8,500		5.10			—
FHLB stock		4,607		8.12			5,477		5.78			29
Interest-bearing deposits at other financial institutions		50,563		4.59			66,550		4.13			(208	)
Total interest-earning assets	$	2,859,051		6.39	%	$	2,680,541		5.98	%	$	11,341

(1)	The average loans receivable, net balances include nonaccrual loans carrying a zero yield.
(2)	Includes net deferred fee recognition of $4.0 million and $4.3 million for the six months ended June 30, 2024 and 2023, respectively.
(3)	Shown at amortized cost.
(4)	Includes income from fair value hedges of $839,000 and $656,000 for the six months ended June 30, 2024 and 2023, respectively.

Interest Expense. Interest expense increased $12.8 million to $30.1 million for the six months ended June 30, 2024, from $17.3 million for the comparable quarter in 2023, primarily due to an increase of interest expense on deposits of $11.9 million and on borrowings of $908,000. The average cost of funds for total interest-bearing liabilities increased 114 basis points to 3.05% for the six months ended June 30, 2024, from 1.91% for the six months ended June 30, 2023. The increase in interest expense was due to both an increase in cost for deposits and borrowings, and as an increase in the average balances of CDs and borrowings. The average cost of total interest-bearing deposits increased 120 basis points to 2.90%, for the six months ended June 30, 2024, compared to 1.70%, for the six months ended June 30, 2023. The average balance of total interest-bearing deposits increased $129.3 million to $1.81 billion for the six months ended June 30, 2024, compared to $1.68 billion for the six months ended June 30, 2023.  The average cost of funds, including noninterest-bearing checking, increased 90 basis points to 2.30% for the six months ended June 30, 2024, from 1.40% for the six months ended June 30, 2023.  

The following table details average balances of interest-bearing liabilities, associated rates, and resulting change in interest expense for the six months ended June 30, 2024 and 2023:

(Dollars in thousands)	Six Months Ended June 30,
	2024					2023
	Average					Average					$ Change
	Balance					Balance					in Interest
	Outstanding		Rate			Outstanding		Rate			Expense
Savings and money market	$	507,514		1.43	%	$	675,876		0.76	%	$	1,070
Interest-bearing checking		179,711		1.50			162,777		0.58			871
Certificates of deposit		1,126,640		3.78			845,938		2.68			9,959
Borrowings		121,057		4.93			91,619		4.53			908
Subordinated note		49,542		3.94			49,475		3.96			—
Total interest-bearing liabilities	$	1,984,464		3.05	%	$	1,825,685		1.91	%	$	12,808

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Provision for Credit Losses. For the six months ended June 30, 2024, the provision for credit losses was $2.5 million, consisting of a $2.4 million provision for credit losses on loans and a $54,000 provision for credit losses on unfunded loan commitments, compared to $2.8 million provision for credit losses for the six months ended June 30, 2023, consisting of a $3.4 million provision for credit losses on loans, offset by a $596,000 recapture of the ACL on unfunded loan commitments. The provision for credit losses on loans reflects the increase in the loan portfolio, as well as an increase in nonperforming loans and higher net charge-offs.

During the six months ended June 30, 2024, net loan charge-offs increased $1.6 million to $2.7 million, compared to $1.1 million during the six months ended June 30, 2023. This increase included $1.1 million in C&I loan charge-offs, along with net charge-off increases of $482,000 in indirect home improvement loans, $65,000 in other consumer loans, and $64,000 in marine loans. A decline in national and local economic conditions, as a result the effects of inflation, a recession or slowed economic growth, among other economic factors, could result in a material increase in the ACL on loans and may adversely affect the Company’s financial condition and result of operations.

Noninterest Income. Noninterest income increased $927,000 to $11.0 million for the six months ended June 30, 2024, from $10.1 million for the six months ended June 30, 2023. The increase was primarily the result of an $8.2 million increase in gain on sale of MSRs recorded during the first six months of 2024 with no similar transaction occurring in the comparable six month period in 2023, and an $878,000 in gain on sale of loans, partially offset by a $7.8 million loss on sale of investment securities resulting from management's strategic decision to increase the yields earned on and reduce the duration of the securities portfolio by selling $98.5 million of lower-yielding securities, and a $439,000 decrease in service charges and fee income. Gross margin on home loan sales increased to 3.14% for the six months ended June 30, 2024, from 3.06% for the six months ended June 30, 2023.

Noninterest Expense. Noninterest expense decreased $342,000 to $47.4 million for the six months ended June 30, 2024, from $47.7 million for the six months ended June 30, 2023. The decrease was primarily due to the absence of acquisition costs in the current period, in contrast to $1.6 million incurred in the prior year.  Additionally, there was a decrease of $442,000 in salaries and benefits and $275,000 in loan costs, partially offset by increases of $765,000 in data processing primarily related to the Branch Purchase, $476,000 in professional and board fees, $378,000 in amortization of core deposit intangible, $292,000 in occupancy expense, and $192,000 in operations.

The efficiency ratio, which is calculated by dividing noninterest expense by total net interest income and noninterest income, remained relatively unchanged at 66.07% for the six months ended June 30, 2024, compared to 66.04% for the six months ended June 30, 2023.

Provision for Income Taxes. For the six months ended June 30, 2024, the Company recorded a provision for income taxes of $4.5 million as compared to $4.4 million for the six months ended June 30, 2023. The effective corporate income tax rates for the six months ended June 30, 2024 and 2023 were 20.6% and 20.2%, respectively.   

Liquidity

Management maintains a liquidity position that it believes will adequately provide funding for loan demand and deposit runoff that may occur in the normal course of business. The Company relies on several different sources to meet potential liquidity demands. The primary sources are increases in deposit accounts, FHLB advances, purchases of federal funds, sale of securities available-for-sale, cash flows from loan payments, sales of one-to-four-family loans held for sale, and maturing securities. While the maturities and the scheduled amortization of loans are a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.

The Bank must maintain an adequate level of liquidity to ensure the availability of sufficient funds to fund its operations. The Bank generally maintains sufficient cash and short-term investments to meet short-term liquidity needs. At June 30, 2024, the Bank’s total borrowing capacity was $694.1 million with the FHLB of Des Moines, with unused borrowing capacity of $511.8 million. The FHLB borrowing limit is based on certain categories of loans, primarily real estate loans that qualify as collateral for FHLB advances. At June 30, 2024, the Bank held approximately $1.11 billion in loans that qualify as collateral for FHLB advances.

59

In addition to the availability of liquidity from the FHLB of Des Moines, the Bank maintains a short-term borrowing line with the FRB with a limit of $267.6 million and a combined credit limit of $101.0 million in written federal funds lines of credit through correspondent banking relationships at June 30, 2024. The FRB borrowing limit is based on certain categories of loans, primarily consumer loans that qualify as collateral for FRB line of credit. At June 30, 2024, the Bank held approximately $627.1 million in loans that qualify as collateral for the FRB line of credit. Subject to market conditions, we expect to utilize these borrowing facilities from time to time in the future to fund loan originations and deposit withdrawals, to satisfy other financial commitments, repay maturing debt and to take advantage of investment opportunities to the extent feasible.

The Bank’s Asset and Liability Management Policy permits management to utilize brokered deposits up to 20% of deposits or $478.1 million at June 30, 2024. Total brokered deposits at June 30, 2024 were $265.0 million. Management utilizes brokered deposits to mitigate interest rate risk and to enhance liquidity when appropriate.

Liquidity management is both a daily and long-term function of the Company’s management. Excess liquidity is generally invested in short-term investments, such as overnight deposits and federal funds. On a longer-term basis, a strategy is maintained of investing in various lending products and investment securities, including U.S. Government obligations and U.S. agency securities. The Company uses sources of funds primarily to meet ongoing commitments, pay maturing deposits, fund withdrawals, and to fund loan commitments. At June 30, 2024, outstanding loan commitments, including unused lines of credit totaled $582.6 million. The Company purchased $38.0 million in securities during the six months ended June 30, 2024. The Company purchased $3.9 million in securities during the six months ended June 30, 2023. Proceeds from securities repayments, maturities and sales were $107.5 million and $8.8 million during the six months ended June 30, 2024 and 2023,  respectively.

The Bank’s liquidity is also affected by the volume of loans sold and loan principal payments. During the six months ended June 30, 2024 and 2023, the Bank sold $258.4 million and $204.3 million in loans, respectively.

Total deposits decreased $139.6 million during the six months ended June 30, 2024 primarily driven by a net decrease in brokered deposits of $166.6 million. CDs scheduled to mature in three months or less at June 30, 2024, totaled $365.8 million. It is management’s policy to offer deposit rates that are competitive with other local financial institutions. Based on this strategy, management believes that a majority of maturing relationship deposits will remain with the Bank. 

For the remainder of 2024, we project that fixed commitments will include $963,000 of operating lease payments. For information regarding our operating leases, see “Note 6 – Leases” of the Notes to Consolidated Financial Statements included in this report. FHLB advances of $133.1 million are scheduled to mature within the next twelve months. 

As a separate legal entity from the Bank, FS Bancorp, Inc. must provide for its own liquidity. In addition to its own operating expenses (many of which are paid to the Bank), FS Bancorp is responsible for paying for any stock repurchases, dividends declared to its stockholders, interest and principal on outstanding debt, and other general corporate expenses. Sources of capital and liquidity for FS Bancorp include distributions from the Bank and the issuance of debt or equity securities, although there are regulatory restrictions on the ability of the Bank to make distributions.

Dividends and other capital distributions from the Bank are subject to regulatory notice and certain restrictions. The unrestricted cash of FS Bancorp held at the Bank on an unconsolidated basis totaled $7.6 million at June 30, 2024. The Company currently expects to continue the current practice of paying quarterly cash dividends on common stock subject to the Board of Directors' discretion to modify or terminate this practice at any time and for any reason without prior notice. Our current quarterly common stock dividend rate is $0.27 per share, which we believe is a dividend rate per share which enables us to balance our multiple objectives of managing and investing in the Bank and returning a substantial portion of our cash to our shareholders. Assuming continued payment during 2024 at this rate of $0.27 per share, our total dividends paid each quarter would be approximately $2.1 million based on the number of the current outstanding shares as of June 30, 2024.

60

Under FS Bancorp’s existing stock repurchase program, approximately $630,000 remained available for future repurchases as of June 30, 2024.  On July 11, 2024, the Company publicly announced that its Board of Directors approved an additional stock repurchase program, authorizing the repurchase up to $5.0 million shares of Company common stock.  The repurchases may be executed, from time to time, in the open market, through privately negotiated transactions, or by withholding shares upon the exercise of equity awards over a 12-month period until July 31, 2025.  See “Unregistered Sales of Equity Securities and Use of Proceeds” in Item 2, Part II of this Form 10-Q for additional information relating to stock repurchases.

Capital Resources

The Bank is subject to minimum capital requirements imposed by the FDIC. Based on its capital levels at June 30, 2024, the Bank exceeded these requirements as of that date. Consistent with our goals to operate a sound and profitable organization, our policy is for the Bank to maintain a well-capitalized status under the capital categories of the FDIC. Based on capital levels at June 30, 2024, the Bank was considered to be well capitalized. At June 30, 2024, the Bank exceeded all regulatory capital requirements with Tier 1 leverage-based capital, Tier 1 risk-based capital, total risk-based capital, and common equity Tier 1 capital ratios of 10.9%, 12.6%, 13.9%, and 12.6%, respectively.

As a bank holding company registered with the Federal Reserve, the Company is subject to the capital adequacy requirements of the Federal Reserve. Bank holding companies with less than $3.0 billion in assets are generally not subject to compliance with the Federal Reserve’s capital regulations, which are generally the same as the capital regulations applicable to the Bank. The Federal Reserve has a policy that a bank holding company is required to serve as a source of financial and managerial strength to the holding company’s subsidiary bank and the Federal Reserve expects the holding company’s subsidiary bank to be well capitalized under the prompt corrective action regulations. If FS Bancorp were subject to regulatory capital guidelines for bank holding companies with $3.0 billion or more in assets at June 30, 2024, FS Bancorp would have exceeded all regulatory capital requirements. For informational purposes, the regulatory capital ratios calculated for FS Bancorp at June 30, 2024 were 9.5% for Tier 1 leverage-based capital, 10.9% for Tier 1 risk-based capital, 14.1% for total risk-based capital, and 10.9% for CET 1 capital ratio. For additional information regarding regulatory capital compliance, see the discussion included in “Note 13 – Regulatory Capital” to the Notes to Consolidated Financial Statements included in Part I. Item 1 of this report.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the market risk disclosures contained in FS Bancorp’s 2023 Form 10-K.

Item 4.  Controls and Procedures

(a)         Evaluation of Disclosure Controls and Procedures

An evaluation of the disclosure controls and procedures as defined in Rule 13a‑15(e) of the Exchange Act was carried out as of June 30, 2024, under the supervision and with the participation of the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) and several other members of the Company’s senior management. In designing and evaluating the Company’s disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based upon the foregoing evaluation, the Company’s CEO and CFO concluded that as of June 30, 2024, the Company’s disclosure controls and procedures were effective in ensuring that information we are required to disclose in the reports we file or submit under the Exchange Act is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (2) accumulated and communicated to FS Bancorp management, including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure, specified in the SEC’s rules and forms.

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(b)         Changes in Internal Controls

There were no changes in the Company’s internal control over financial reporting that occurred during the three months ended June 30, 2024, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. The Company does not expect that its disclosure controls and procedures and internal control over financial reporting will prevent all error and all fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls may be circumvented by the individual acts of some persons, by collusion of two or more people, or by override of the control. The design of any control procedure is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected.

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

In the normal course of business, the Company occasionally becomes involved in various legal proceedings. In the opinion of management, any liability from such proceedings would not have a material adverse effect on the business or financial condition of the Company.

Item 1A.  Risk Factors

There have been no material changes in the Risk Factors previously disclosed in FS Bancorp’s 2023 Form 10-K.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable

(b) Not applicable

(c) The following table summarizes common stock repurchases during the three months ended June 30, 2024:

							Maximum
					Total Number		Dollar Value of
					of Shares		Shares that
			Average		Repurchased as		May Yet Be
	Total Number		Price		Part of Publicly		Repurchased
	of Shares		Paid per		Announced		Under the
Period	Purchased		Share		Plan or Program		Plan or Program
April 1, 2024 - April 30, 2024		5,058	$	31.62		5,058	$	2,863,688
May 1, 2024 - May 31, 2024 (1)		30,031		32.57		30,031		1,885,451
June 1, 2024 - June 30, 2024		37,789		33.22		37,789		630,205
Total for the quarter		72,878	$	32.84		72,878	$	630,205

____________________________

(1) Includes 1,000 shares surrendered to the Company to pay for the option exercise price for participants exercising options.

On July 11, 2024, the Company publicly announced that its Board of Directors approved an additional stock repurchase program, authorizing the repurchase up to $5.0 million of Company common stock.  The repurchases may be executed, from time to time, in the open market, through privately negotiated transactions, or by withholding shares upon the exercise of equity awards over a 12-month period until July 31, 2025.

The actual timing, price, and number of shares repurchased under the program will depend on a number of factors, including constraints specified pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, price, general business and market conditions, and alternative investment opportunities.  The share repurchase program does not obligate the Company to acquire any specific number of shares in any period, and may be expanded, extended, modified or discontinued at any time. 

62

Item 3.  Defaults Upon Senior Securities

Not applicable.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

(a) None.

(b) None.

(c) Trading Plans. During the three months ended  June 30, 2024, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

63

 

Item 6.   Exhibits

3.1	Articles of Incorporation of FS Bancorp, Inc. (1)
3.2	Bylaws of FS Bancorp, Inc. (2)
4.1	Form of Common Stock Certificate of FS Bancorp, Inc. (1)
4.2	Indenture dated February 10, 2021, by and between FS Bancorp, Inc. and U.S. Bank National Association, as trustee (3)
4.3	Forms of 3.75 Fixed-to-Floating Rate Subordinated Notes due 2031 (included as Exhibit A-1 and Exhibit A-2 to the Indenture filed as Exhibit 4.2 hereto (3)
10.1	Severance Agreement between 1st Security Bank of Washington and Joseph C. Adams (1)
10.2	Form of Change of Control Agreement between 1st Security Bank of Washington and Matthew D. Mullet (1)
10.3	FS Bancorp, Inc. 2013 Equity Incentive Plan (the “2013 Plan”) (4)
10.4	Form of Incentive Stock Option Agreement under the 2013 Plan (4)
10.5	Form of Non-Qualified Stock Option Agreement under the 2013 Plan (4)
10.6	Form of Restricted Stock Agreement under the 2013 Plan (4)
10.9	Form of change of control agreement with Donn C. Costa, Dennis O’Leary, Erin Burr, Victoria Jarman, Kelli Nielsen, and May-Ling Sowell (5)
10.10	FS Bancorp, Inc. 2018 Equity Incentive Plan (6)
10.11	Form of Incentive Stock Option Award Agreement under the 2018 Equity Incentive Plan (6)
10.12	Form of Non-Qualified Stock Option Award Agreement under the 2018 Equity Incentive Plan (6)
10.13	Form of Restricted Stock Award Agreement under the 2018 Equity Incentive Plan (6)
10.14	FS Bancorp, Inc. Nonqualified 2022 Stock Purchase Plan (7)
10.15	Form of Enrollment/Change Form under the FS Bancorp, Inc. Nonqualified 2022 Stock Purchase Plan (7)
10.16	Form of Change of Control Agreement with Shana Allen, Stephanie Nicklaus, and Benjamin Crowl (8)
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials from the Company’s Quarterly Report on Form 10‑Q for the quarter ended June 30, 2024 formatted in Inline Extensible Business Reporting Language (IXBRL): (1) Consolidated Balance Sheets; (2) Consolidated Statements of Income; (3) Consolidated Statements of Comprehensive Income (Loss); (4) Consolidated Statements of Changes in Stockholders’ Equity; (5) Consolidated Statements of Cash Flows; and (6) Notes to Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
(1)	Filed as an exhibit to the Registrant’s Registration Statement on Form S‑1 (333‑177125) filed on October 3, 2011, and incorporated by reference.
(2)	Filed as an exhibit to the Registrant’s Current Report on Form 8‑K filed on July 10, 2013 (File No. 001‑355589).
(3)	Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed on February 11, 2021 (File No. 001-35589).
(4)	Filed as an exhibit to the Registrant’s Registration Statement on Form S-8 (333-192990) filed on December 20, 2013 and incorporated by reference.
(5)	Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed on February 1, 2016 (File No. 001‑35589).
(6)	Filed as an exhibit to the Registrant’s Registration Statement on Form S-8 (333-22513) filed on May 23, 2018.
(7)	Filed as an exhibit to the Registrant’s Registration Statement on Form S-8 (333-265729) filed on June 21, 2022.
(8)	Filed as an exhibit to the Registrant's Current Report on Form 8-K filed on February 2, 2024 (File No. 001-35589).

64

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FS BANCORP, INC.
Date: August 9, 2024	By:	/s/Joseph C. Adams
		Joseph C. Adams,
		Chief Executive Officer
		(Principal Executive Officer)
Date: August 9, 2024	By:	/s/Matthew D. Mullet
		Matthew D. Mullet
		President, Secretary, Treasurer and
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

65

EX-31.1

EXHIBIT 31.1

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph C. Adams, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of FS Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15-(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 9, 2024	/s/Joseph C. Adams
		Joseph C. Adams
		Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Matthew D. Mullet, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of FS Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15-(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 9, 2024	/s/Matthew D. Mullet
		Matthew D. Mullet
		President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Quarterly Report on Form 10-Q of FS Bancorp, Inc. (the “Company”) for the quarter ended June 30, 2024 (the “Report”), I, Joseph C. Adams, in my capacity as Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in the Report.

Date:	August 9, 2024	/s/Joseph C. Adams
		Joseph C. Adams
		Chief Executive Officer

EX-32.2

EXHIBIT 32.2

Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Quarterly Report on Form 10-Q of FS Bancorp, Inc. (the “Company”) for the quarter ended June 30, 2024 (the “Report”), I, Matthew D. Mullet, in my capacity as President and Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in the Report.

Date:	August 9, 2024	/s/Matthew D. Mullet
		Matthew D. Mullet
		President and Chief Financial Officer

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2024	Aug. 08, 2024
Document Information [Line Items]
Entity Central Index Key	0001530249
Entity Registrant Name	FS Bancorp, Inc.
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	001-35589
Entity Incorporation, State or Country Code	WA
Entity Tax Identification Number	45-4585178
Entity Address, Address Line One	6920 220th Street SW
Entity Address, City or Town	Mountlake Terrace
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98043
City Area Code	425
Local Phone Number	771‑5299
Title of 12(b) Security	Common Stock, par value $.01 per share
Trading Symbol	FSBW
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,747,760

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Cash and due from banks	$ 20,005	$ 17,083
Interest-bearing deposits at other financial institutions	13,006	48,608
Total cash and cash equivalents	33,011	65,691
Certificates of deposit at other financial institutions	12,707	24,167
Securities available-for-sale, at fair value (amortized cost of $250,648 and $328,695, net of allowance for credit losses of $0 and $0, respectively)	221,182	292,933
Securities held-to-maturity, net of allowance for credit losses of $45 (fair value of $7,867 and $7,666, respectively)	8,455	8,455
Loans held for sale, at fair value	53,811	25,668
Loans receivable, net of allowance for credit losses of $31,238 and $31,534 (includes $13,868 and $15,088, at fair value, respectively)	2,457,184	2,401,481
Interest Receivable	13,792	14,005
Premises and equipment, net	29,999	30,578
Operating lease right-of-use (“ROU”) assets	5,784	6,627
Federal Home Loan Bank (“FHLB”) stock, at cost	10,322	2,114
Deferred tax asset, net	4,590	6,725
Bank owned life insurance (“BOLI”), net	38,201	37,719
MSRs held for sale, held at the lower of cost or fair value	0	8,086
Goodwill	3,592	3,592
Core deposit intangible, net	15,483	17,343
Other assets	23,912	18,395
TOTAL ASSETS	2,941,377	2,972,669
LIABILITIES
Noninterest-bearing accounts	623,349	670,831
Interest-bearing accounts	1,759,454	1,851,492
Total deposits	2,382,803	2,522,323
Borrowings	181,895	93,746
Principal amount	50,000	50,000
Unamortized debt issuance costs	(439)	(473)
Total subordinated notes less unamortized debt issuance costs	49,561	49,527
Total, operating lease	5,979	6,848
Other liabilities	37,113	35,737
Total liabilities	2,657,351	2,708,181
COMMITMENTS AND CONTINGENCIES (NOTE 9)
STOCKHOLDERS’ EQUITY
Preferred stock, $.01 par value; 5,000,000 shares authorized; none issued or outstanding	0	0
Common stock, $.01 par value; 45,000,000 shares authorized; 7,742,607 and 7,800,545 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	77	78
Additional paid-in capital	55,834	57,362
Retained earnings	243,651	230,354
Accumulated other comprehensive loss, net of tax	(15,536)	(23,306)
Total stockholders’ equity	284,026	264,488
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	2,941,377	2,972,669
Mortgage Servicing Rights [Member]
Mortgage servicing rights (“MSRs”), held at the lower of cost or fair value	$ 9,352	$ 9,090

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Available-for-Sale, Amortized Cost	$ 250,648	$ 328,695
Available-for-Sale, Allowance for Credit Loss	0	0
Securities held-to-maturity, allowance for losses	45	45
Securities held-to-maturity, at fair value	7,867	7,666
Financing Receivable, Allowance for Credit Loss	31,238	31,534
Loans receivable, at fair value	$ 13,868	$ 15,088
Preferred Stock, Par Value (in dollars per share)	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized (in shares)	5,000,000	5,000,000
Preferred Stock, Shares Issued (in shares)	0	0
Preferred Stock, Shares Outstanding (in shares)	0	0
Common Stock, Par Value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, Shares Authorized (in shares)	45,000,000	45,000,000
Common Stock, Shares, Issued (in shares)	7,742,607	7,800,545
Common Stock, Shares, Outstanding (in shares)	7,742,607	7,800,545

XML

Consolidated Statements of Income (Unaudited) - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
INTEREST INCOME
Loans receivable, including fees		$ 42,406,000	$ 38,216,000	$ 83,403,000	$ 74,208,000
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions		3,534,000	2,651,000	7,417,000	5,271,000
Total interest and dividend income		45,940,000	40,867,000	90,820,000	79,479,000
INTEREST EXPENSE
Deposits		13,252,000	7,610,000	26,134,000	14,234,000
Borrowings		1,801,000	1,219,000	2,968,000	2,060,000
Subordinated notes		486,000	486,000	971,000	971,000
Total interest expense		15,539,000	9,315,000	30,073,000	17,265,000
NET INTEREST INCOME	[1]	30,401,000	31,552,000	60,747,000	62,214,000
PROVISION FOR CREDIT LOSSES		1,077,000	716,000	2,476,000	2,824,000
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		29,324,000	30,836,000	58,271,000	59,390,000
NONINTEREST INCOME
Service charges and fee income		2,479,000	2,862,000	5,031,000	5,470,000
Gain on sale of loans		2,463,000	1,947,000	4,301,000	3,423,000
Gain on sale of MSRs		0	0	8,215,000	0
Gain (loss) on sale of investment securities		151,000	0	(7,847,000)	0
Earnings on cash surrender value of BOLI		242,000	227,000	482,000	448,000
Other noninterest income		533,000	(203,000)	797,000	711,000
Total noninterest income	[2]	5,868,000	4,833,000	10,979,000	10,052,000
NONINTEREST EXPENSE
Salaries and benefits		13,378,000	13,513,000	26,935,000	27,377,000
Operations		3,519,000	3,643,000	6,527,000	6,335,000
Occupancy		1,669,000	1,562,000	3,374,000	3,082,000
Data processing		2,058,000	1,683,000	4,016,000	3,251,000
Loan costs		653,000	1,043,000	1,238,000	1,513,000
Professional and board fees		888,000	657,000	1,811,000	1,335,000
Federal Deposit Insurance Corporation (“FDIC”) insurance		450,000	591,000	982,000	1,171,000
Marketing and advertising		377,000	430,000	604,000	620,000
Acquisition cost		0	61,000	0	1,562,000
Amortization of core deposit intangible		919,000	1,023,000	1,860,000	1,482,000
Impairment of MSRs		(54,000)	(2,000)	39,000	0
Total noninterest expense	[3]	23,857,000	24,204,000	47,386,000	47,728,000
Income before provision for income taxes		11,335,000	11,465,000	21,864,000	21,714,000
PROVISION FOR INCOME TAXES		2,376,000	2,349,000	4,508,000	4,386,000
Net income		$ 8,959,000	$ 9,116,000	$ 17,356,000	$ 17,328,000
Basic earnings per share (in dollars per share)		$ 1.15	$ 1.17	$ 2.23	$ 2.23
Diluted earnings per share (in dollars per share)		$ 1.13	$ 1.16	$ 2.2	$ 2.19

[1] Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets.

[2] Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value, and subsequently transferred to loans held for investment. Gains and losses from changes in fair value for these loans are reported in earnings as a component of noninterest income. For the three and six months ended June 30, 2024, the Company recorded a net increase in fair value of $184,000 and $186,000, and a net decrease in fair value of $520,000 and net increase in fair value of $57,000 for the three and six months ended June 30, 2023, respectively. As of June 30, 2024 and 2023, there was $13.9 million and $14.3 million, respectively, in residential mortgage loans recorded at fair value as they were previously transferred from loans held for sale to loans held for investment.

[3] Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three and six months ended June 30, 2024, the Home Lending segment included allocated overhead expenses of $1.5 million and $3.0 million, compared to the three and six months ended June 30, 2023, of $1.6 million and $3.2 million, respectively.

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Net income	$ 8,959	$ 9,116	$ 17,356	$ 17,328
Securities available-for-sale:
Unrealized gain (loss) during period	1,001	(3,715)	(1,551)	2,421
Income tax (provision) benefit related to unrealized holding gain (loss)	(216)	799	333	(521)
Reclassification adjustment for realized (gain) loss, net included in net income	(151)	0	7,847	0
Income tax provision related to reclassification for realized (gain) loss, net	32	0	(1,687)	0
Derivative financial instruments:
Unrealized derivative gain during period	1,422	5,335	6,472	3,818
Income tax provision related to unrealized derivative gain	(305)	(1,142)	(1,391)	(820)
Reclassification adjustment for realized gain, net included in net income	(1,148)	(1,271)	(2,870)	(2,178)
Income tax provision related to reclassification, net	247	273	617	468
Other comprehensive income, net of tax	882	279	7,770	3,188
COMPREHENSIVE INCOME	$ 9,841	$ 9,395	$ 25,126	$ 20,516

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2022	7,736,185
Balance at Dec. 31, 2022	$ 77	$ 55,187	$ 202,065	$ (25,632)	$ 231,697
Net income	0	0	17,328	0	17,328
Dividends paid	0	0	(3,874)	0	(3,874)
Share-based compensation	$ 0	1,018	0	0	1,018
Issuance of common stock-employee stock purchase plan (in shares)	16,449
Issuance of common stock-employee stock purchase plan	$ 0	539	0		539
Stock options exercised, net (in shares)	6,225
Stock options exercised, net	$ 0	53	0	0	53
Other comprehensive income, net of tax	$ 0	0	0	3,188	3,188
Restricted stock awards forfeited (in shares)	(4,812)
Restricted stock awards forfeited	$ 0	0	0	0	0
Common stock repurchased for employee/director taxes paid on restricted stock awards (in shares)	(440)
Common stock repurchased for employee/director taxes paid on restricted stock awards	$ 0	(16)	0	0	(16)
Balance (in shares) at Jun. 30, 2023	7,753,607
Balance at Jun. 30, 2023	$ 77	56,781	215,519	(22,444)	249,933
Balance (in shares) at Mar. 31, 2023	7,743,283
Balance at Mar. 31, 2023	$ 77	56,138	208,342	(22,723)	241,834
Net income	0	0	9,116	0	9,116
Dividends paid	0	0	(1,939)	0	(1,939)
Share-based compensation	$ 0	364	0	0	364
Issuance of common stock-employee stock purchase plan (in shares)	9,099
Issuance of common stock-employee stock purchase plan	$ 0	268	0	0	268
Stock options exercised, net (in shares)	1,225
Stock options exercised, net	$ 0	11	0	0	11
Other comprehensive income, net of tax	$ 0	0	0	279	279
Balance (in shares) at Jun. 30, 2023	7,753,607
Balance at Jun. 30, 2023	$ 77	56,781	215,519	(22,444)	249,933
Balance (in shares) at Dec. 31, 2023	7,800,545
Balance at Dec. 31, 2023	$ 78	57,362	230,354	(23,306)	264,488
Net income	0	0	17,356	0	17,356
Dividends paid	0	0	(4,059)	0	(4,059)
Share-based compensation	$ 0	784	0	0	784
Issuance of common stock-employee stock purchase plan (in shares)	17,940
Issuance of common stock-employee stock purchase plan	$ 0	580	0	0	580
Stock options exercised, net (in shares)	18,612
Stock options exercised, net	$ 0	(532)	0	0	(532)
Other comprehensive income, net of tax	$ 0	0	0	7,770	7,770
Common stock repurchased - repurchase plan (in shares)	(90,490)
Common stock repurchased - repurchase plan	$ (1)	(2,360)	0	0	(2,361)
Restricted stock awards forfeited (in shares)	(4,000)
Restricted stock awards forfeited	$ 0	0	0	0	0
Balance (in shares) at Jun. 30, 2024	7,742,607
Balance at Jun. 30, 2024	$ 77	55,834	243,651	(15,536)	284,026
Balance (in shares) at Mar. 31, 2024	7,805,795
Balance at Mar. 31, 2024	$ 78	57,552	236,720	(16,418)	277,932
Net income	0	0	8,959	0	8,959
Dividends paid	0	0	(2,028)	0	(2,028)
Share-based compensation	$ 0	389	0	0	389
Issuance of common stock-employee stock purchase plan (in shares)	8,690
Issuance of common stock-employee stock purchase plan	$ 0	278	0	0	278
Stock options exercised, net (in shares)	1,000
Stock options exercised, net	$ 0	(25)	0	0	(25)
Other comprehensive income, net of tax	$ 0	0	0	882	882
Common stock repurchased - repurchase plan (in shares)	(72,878)
Common stock repurchased - repurchase plan	$ (1)	(2,360)	0	0	(2,361)
Balance (in shares) at Jun. 30, 2024	7,742,607
Balance at Jun. 30, 2024	$ 77	$ 55,834	$ 243,651	$ (15,536)	$ 284,026

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Dividends paid, per share (in dollars per share)	$ 0.26	$ 0.25	$ 0.52	$ 0.5

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Net income	$ 17,356	$ 17,328
Adjustments to reconcile net income to net cash from operating activities
Provision for credit losses	2,476	2,824
Depreciation, amortization and accretion	5,774	6,219
Compensation expense related to stock options and restricted stock awards	784	1,018
Change in cash surrender value of BOLI	(482)	(448)
Gain on sale of loans held for sale	(4,301)	(3,423)
Gain on sale of MSRs	(8,215)	0
Loss on sale of investment securities, net	7,847	0
Origination of loans held for sale	(271,158)	(185,041)
Proceeds from sale of loans held for sale	261,171	206,392
Impairment of MSRs	39	0
Changes in operating assets and liabilities
Accrued interest receivable	213	(570)
Other assets	(2,076)	(4,168)
Other liabilities	943	2,025
Net cash from operating activities	10,371	42,156
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investment securities	98,459	0
Maturities, prepayments, and calls	9,046	8,758
Purchases	(38,009)	(3,933)
Maturities of certificates of deposit at other financial institutions	12,680	0
Purchase of certificates of deposit at other financial institutions	(1,220)	(10,035)
Portfolio loan originations and principal collections, net	(45,298)	(105,739)
Net cash from acquisitions	0	336,157
Proceeds from sale of mortgage servicing rights	16,168	0
Purchase of portfolio loans	(28,208)	(2,231)
Purchase of premises and equipment	(632)	(1,113)
Change in FHLB stock, net	(8,208)	4,056
Net cash from investing activities	14,778	225,920
CASH FLOWS USED BY FINANCING ACTIVITIES
Net decrease in deposits	(139,606)	(187,484)
Proceeds from borrowings	557,804	1,043,500
Repayments of borrowings	(469,655)	(1,030,132)
Dividends paid on common stock	(4,059)	(3,874)
(Disbursements) proceeds from stock options exercised, net	(532)	53
Common stock repurchased for employee/director taxes paid on restricted stock awards	0	(16)
Issuance of common stock - employee stock purchase plan	580	539
Common stock repurchased	(2,361)	0
Net cash used by financing activities	(57,829)	(177,414)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(32,680)	90,662
CASH AND CASH EQUIVALENTS, beginning of period	65,691	41,437
CASH AND CASH EQUIVALENTS, end of period	33,011	132,099
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
Interest on deposits and borrowings	31,459	15,183
Income taxes	2,062	5,985
SUPPLEMENTARY DISCLOSURES OF NONCASH OPERATING, INVESTING AND FINANCING ACTIVITIES
Change in fair value on available-for-sale investment securities	6,296	2,421
Change in fair value on fair value and cash flow hedges	3,598	1,640
Change in fair value on portfolio loans measured under the fair value option	186	57
Retention in gross MSRs from loan sales	1,393	1,325
ROU assets in exchange for lease liabilities	0	2,034
Acquisitions:
Assets acquired	0	87,512
Liabilities assumed	$ 0	$ 424,949

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Note 1 - Basis of Presentation and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Basis of Presentation and Significant Accounting Policies [Text Block]

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations – FS Bancorp, Inc. (the “Company”) was incorporated in September 2011 as the holding company for 1st Security Bank of Washington (the “Bank” or “1st Security Bank”) in connection with the Bank’s conversion from the mutual to stock form of ownership which was completed on July 9, 2012. The Bank is a community-based savings bank with 27 full-service bank branches, a headquarters that also originates loans and accepts deposits, and loan production offices in suburban communities in the greater Puget Sound area, the Kennewick-Pasco-Richland metropolitan area of Washington, also known as the Tri-Cities, Goldendale, Vancouver, and White Salmon, Washington and Manzanita, Newport, Ontario, Tillamook, and Waldport, Oregon. The Bank’s branches located in the communities of Goldendale and White Salmon, Washington and Manzanita, Newport, Ontario, Tillamook, and Waldport, Oregon were acquired from Columbia State Bank on February 24, 2023, and opened as 1st Security Bank branches on February 27, 2023. The Bank provides loan and deposit services to customers who are predominantly small- and middle-market businesses and individuals. The Company and its subsidiary are subject to regulation by certain federal and state agencies and undergo periodic examination by these regulatory agencies.

Financial Statement Presentation – The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10‑Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). These unaudited interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10‑K which includes all the audited financial statements and footnotes required by U.S. GAAP for complete financial statements for the year ended December 31, 2023, as filed with the SEC on March 15, 2024. In the opinion of management, all normal adjustments and recurring accruals considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included.

The results for the three and six months ended June 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, or any other future period. The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect amounts reported in the financial statements. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses (“ACL”).

Amounts presented in the consolidated financial statements and footnote tables are rounded and presented to the nearest thousands of dollars except per share amounts. If the amounts are above $1.0 million, they are rounded one decimal point, and if they are above $1.0 billion, they are rounded two decimal points.

Principles of Consolidation – The consolidated financial statements include the accounts of FS Bancorp and its wholly owned subsidiary, 1st Security Bank. All material intercompany accounts have been eliminated in consolidation.

Segment Reporting – The Company operates in two business segments through the Bank: commercial and consumer banking and home lending. The Company’s business segments are determined based on the products and services provided, as well as the nature of the related business activities, and they reflect the way financial information is regularly reviewed for the purpose of allocating resources and evaluating performance of the Company’s businesses. The results for these business segments are based on management’s accounting process, which assigns income statement items and assets to each responsible operating segment. This process is dynamic and is based on management’s view of the Company’s operations. See “Note 14 – Business Segments.”

Subsequent Events – The Company has evaluated events and transactions after  June 30, 2024, for potential recognition or disclosure.

RECENT ACCOUNTING PRONOUNCEMENTS

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform” (“Topic 848”). This ASU provides optional guidance for a limited period to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU apply to modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) that replace a reference rate affected by reference rate reform (including rates referenced in fallback provisions) and contemporaneous modifications of other contract terms related to the replacement of the reference rate (including contract modifications to add or change fallback provisions). The following optional expedients for applying the requirements of certain Topics or Industry Subtopics in the Codification are permitted for contracts that are modified because of reference rate reform and that meet certain scope guidance: 1) Modifications of contracts within the scope of Topics 310, Receivables, and 470, Debt, should be accounted for by prospectively adjusting the effective interest rate; 2) Modifications of contracts within the scope of Topics 840, Leases, and 842, Leases, should be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate (for example, the incremental borrowing rate) or remeasurements of lease payments that otherwise would be required under those Topics for modifications not accounted for as separate contracts; and 3) Modifications of contracts do not require an entity to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract under Subtopic 815-15, Derivatives and Hedging – Embedded Derivatives. In January 2021, ASU 2021-01 updated amendments in the new ASU to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in this ASU and the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. An entity may elect to apply the amendments in this ASU on a full retrospective basis as of any date from the effective dates. The amendments in this ASU have differing effective dates, beginning with an interim period including and subsequent to March 12, 2020 through December 31, 2022, deferred now until December 31, 2024. The Company does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements and related disclosures.

In November 2023, the FASB issued guidance within ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU and all existing disclosures in Topic 280. The amendments in this ASU are intended to improve segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The key amendments included in this ASU:

● Require disclosure on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and are included within each reported measure of segment profit and loss.

● Require disclosure on an annual and interim basis, an amount for other segment items (defined in the ASU) and a description of its composition.

● Clarify that if the CODM uses more than one measure of the segment's profit or loss in assessing performance, one or more of those additional measures may be reported.

● Require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing performance.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the effect that ASU 2023-07 will have on the Company’s consolidated financial statements and related disclosures.

In December 2023, the FASB issued guidance within ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in the ASU are intended to provide more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The ASU requires disclosure in the rate reconciliation of specific categories as well as provide additional information for reconciling items that meet a quantitative threshold.

Those amendments require disclosure of the following information about income taxes paid on an annual basis:

● Income taxes paid (net of refunds received), disaggregated by federal and state taxes and by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than five percent of total income taxes paid (net refunds received).

● Income tax expense (or benefit) from continuing operations disaggregated by federal and state jurisdictions.

The ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied on a prospective basis. The Company is evaluating the effect that ASU 2023-09 will have on its consolidated financial statements and related disclosures. 

Application of New Accounting Guidance Adopted in 2024

On January 1, 2024, the Company adopted ASU No.2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security should not be considered in measuring fair value, nor should the contractual restriction be recognized and measured separately.  Further, this ASU requires disclosure of the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet, the nature and remaining duration of the restrictions(s), and the circumstances that could cause a lapse in the restriction(s).  ASU 2022-03 is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The adoption of ASU 2022-03 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

On January 1, 2024, the Company adopted ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323):  Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, a consensus of the Emerging Issues Task Force.  ASU 2023-02 allows an entity the option to apply the proportional amortization method of accounting to other equity investments that are made for the primary purpose of receiving tax credits or other income tax benefits if certain conditions are met.  Prior to this ASU, the application of the proportional amortization method of accounting was limited to investments in low-income housing tax credit structures.  The proportional amortization method of accounting results in the amortization of applicable investments, as well as the related income tax credits or other income tax benefits received, being presented on a single line in the statements of income, income tax expense.  Under this ASU, an entity has the option to apply the proportional amortization method of accounting to applicable investments on a tax-credit-program-by-tax-credit program basis.  In addition, the amendments in this ASU require that all tax equity investments accounted for using the proportional amortization method use the delayed equity contribution guidance in paragraph 323-740-25-3, requiring a liability to be recognized for delayed equity contributions that are unconditional and legally binding or for equity contributions that are contingent upon a future event when that contingent event becomes probable. Under this ASU, low-income housing tax credit investments for which the proportional amortization method is not applied can no longer be accounted for using the delayed equity contribution guidance.  Further, this ASU specifies that impairment of low-income housing tax credit investments not accounted for using the equity method must apply the impairment guidance in Subtopic 323-10: Investments - Equity Method and Joint Ventures - Overall.  This ASU also clarifies that for low-income housing tax credit investments not accounted for under the proportional amortization method or the equity method, an entity shall account for them under Topic 321: Investments - Equity Securities. The amendments in the ASU also require additional disclosures in interim and annual periods concerning investments for which the proportional amortization method is applied, including (i) the nature of tax equity investments, and (ii) the effect of tax equity investments and related income tax credits and other income tax benefits on the financial position and results of operations.  ASU 2023-02 is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.  The adoption of ASU 2023-02 did not have a material impact on the Company's consolidated financial statements and related disclosures.

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Note 2 - Investments

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Investment [Text Block]

NOTE 2 – INVESTMENTS

The following tables present the amortized costs, unrealized gains, unrealized losses, estimated fair values of securities available-for-sale and held-to-maturity, and the ACL on securities available-for-sale and held-to-maturity at  June 30, 2024 and December 31, 2023:

	June 30, 2024
								Estimated
	Amortized		Unrealized		Unrealized			Fair
SECURITIES AVAILABLE-FOR-SALE	Cost		Gains		Losses			Values		ACL
U.S. agency securities	$	20,238	$	45	$	(3,167	)	$	17,116	$	—
Corporate securities		16,000		51		(866	)		15,185		—
Municipal bonds		84,345		—		(12,700	)		71,645		—
Mortgage-backed securities		112,462		168		(11,909	)		100,721		—
U.S. Small Business Administration securities		17,603		79		(1,167	)		16,515		—
Total securities available-for-sale		250,648		343		(29,809	)		221,182		—
SECURITIES HELD-TO-MATURITY
Corporate securities		8,500		—		(633	)		7,867		45
Total securities held-to-maturity		8,500		—		(633	)		7,867		45
Total securities	$	259,148	$	343	$	(30,442	)	$	229,049	$	45

	December 31, 2023
								Estimated
	Amortized		Unrealized		Unrealized			Fair
SECURITIES AVAILABLE-FOR-SALE	Cost		Gains		Losses			Values		ACL
U.S. agency securities	$	21,151	$	46	$	(3,179	)	$	18,018	$	—
Corporate securities		13,000		613		(741	)		12,872		—
Municipal bonds		138,803		42		(19,398	)		119,447		—
Mortgage-backed securities		112,855		238		(11,845	)		101,248		—
U.S. Small Business Administration securities		42,886		—		(1,538	)		41,348		—
Total securities available-for-sale		328,695		939		(36,701	)		292,933		—
SECURITIES HELD-TO-MATURITY
Corporate securities		8,500		—		(834	)		7,666		45
Total securities held-to-maturity		8,500		—		(834	)		7,666		45
Total securities	$	337,195	$	939	$	(37,535	)	$	300,599	$	45

The following table presents the activity in the ACL on securities held-to-maturity by major security type for the three and six months ended June 30, 2024 and 2023:

SECURITIES HELD-TO-MATURITY	For the Three Months Ended June 30,
Corporate Securities	2024		2023
Beginning ACL balance	$	45	$	31
Provision for (recapture of) credit losses		—		—
Total ending ACL balance	$	45	$	31

SECURITIES HELD-TO-MATURITY	For the Six Months Ended June 30,
Corporate Securities	2024		2023
Beginning ACL balance	$	45	$	31
Provision for (recapture of) credit losses		—		—
Total ending ACL balance	$	45	$	31

Management measures expected credit losses on held-to-maturity debt securities on an individual basis. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Accrued interest receivable on held-to-maturity debt securities totaled $114,000 and $116,000 at  June 30, 2024 and December 31, 2023, and was $1.0 million and $1.5 million on available-for-sale debt securities as of June 30, 2024 and December 31, 2023, respectively. Accrued interest receivable on securities is reported in “Accrued interest receivable” on the Consolidated Balance Sheets and is excluded from the calculation of the ACL.

The Company monitors the credit quality of debt securities held-to-maturity quarterly using credit rating, material event notices, and changes in market value. The following table summarizes the amortized cost of debt securities held-to-maturity at the dates indicated, aggregated by credit quality indicator:

	June 30,		December 31,
Corporate securities	2024		2023
BBB/BBB-	$	7,000	$	7,000
BB+		1,500		1,500
Total	$	8,500	$	8,500

At June 30, 2024 and  December 31, 2023, there were no debt securities held-to-maturity that were classified as either nonaccrual or 90 days or more past due and still accruing interest.

The following table presents, as of June 30, 2024, investment securities which were pledged to secure borrowings, public deposits or other obligations as permitted or required by law:

	June 30, 2024
Purpose or beneficiary	Carrying Value		Amortized Cost		Fair Value
State and local government public deposits	$	34,729	$	40,641	$	34,729

Investment securities that were in an unrealized loss position at the dates indicated are presented in the following tables, based on the length of time individual securities have been in an unrealized loss position.

	June 30, 2024
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
SECURITIES AVAILABLE-FOR-SALE	Value		Losses			Value		Losses			Value		Losses
U.S. agency securities	$	—	$	—		$	15,071	$	(3,167	)	$	15,071	$	(3,167	)
Corporate securities		7,874		(126	)		4,260		(740	)		12,134		(866	)
Municipal bonds		884		(9	)		70,761		(12,691	)		71,645		(12,700	)
Mortgage-backed securities		11,908		(41	)		65,462		(11,868	)		77,370		(11,909	)
U.S. Small Business Administration securities		—		—			7,593		(1,167	)		7,593		(1,167	)
Total securities available-for-sale		20,666		(176	)		163,147		(29,633	)		183,813		(29,809	)
SECURITIES HELD-TO-MATURITY
Corporate securities		—		—			7,867		(633	)		7,867		(633	)
Total securities held-to-maturity		—		—			7,867		(633	)		7,867		(633	)
Total securities	$	20,666	$	(176	)	$	171,014	$	(30,266	)	$	191,680	$	(30,442	)

	December 31, 2023
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
SECURITIES AVAILABLE-FOR-SALE	Value		Losses			Value		Losses			Value		Losses
U.S. agency securities	$	—	$	—		$	15,972	$	(3,179	)	$	15,972	$	(3,179	)
Corporate securities		959		(41	)		4,300		(700	)		5,259		(741	)
Municipal bonds		3,922		(23	)		113,577		(19,375	)		117,499		(19,398	)
Mortgage-backed securities		20,662		(113	)		67,376		(11,732	)		88,038		(11,845	)
U.S. Small Business Administration securities		33,211		(460	)		8,137		(1,078	)		41,348		(1,538	)
Total securities available-for-sale		58,754		(637	)		209,362		(36,064	)		268,116		(36,701	)
SECURITIES HELD-TO-MATURITY
Corporate securities		—		—			7,666		(834	)		7,666		(834	)
Total securities held-to-maturity		—		—			7,666		(834	)		7,666		(834	)
Total securities	$	58,754	$	(637	)	$	217,028	$	(36,898	)	$	275,782	$	(37,535	)

There were no held-to-maturity debt securities in an unrealized loss position of less than one year and seven held-to-maturity debt securities in an unrealized loss position of more than one year at  June 30, 2024.

There were nine available-for-sale securities in an unrealized loss position of less than one year, and 128 available-for-sale securities in an unrealized loss position of more than one year at June 30, 2024. The unrealized losses associated with these securities are believed to be caused by changing market conditions and considered to be temporary, and the Company does not intend and is not likely to be required to sell these securities prior to maturity. Management monitors the published credit ratings of the issuers of the debt securities for material ratings or outlook changes. Substantially all the Company’s municipal bond portfolio is comprised of obligations of states and political subdivisions located within the Company’s geographic footprint that are monitored through quarterly or annual financial review utilizing published credit ratings. All the municipal bond securities are investment grade.

All the available-for-sale mortgage-backed securities and U.S. Small Business Administration securities in an unrealized loss position are issued or guaranteed by government-sponsored enterprises, and the available-for-sale corporate securities are all investment grade and monitored for rating or outlook changes. Based on the Company’s evaluation of these securities, no credit impairment was recorded for the six months ended June 30, 2024, or for the year ended December 31, 2023.

The contractual maturities of securities available-for-sale and held-to-maturity at the dates indicated are listed below. Expected maturities of mortgage-backed securities may differ from contractual maturities because borrowers may have the right to call or prepay the obligations; therefore, these securities are classified separately with no specific maturity date.

	June 30,				December 31,
	2024				2023
SECURITIES AVAILABLE-FOR-SALE	Amortized		Fair		Amortized		Fair
U.S. agency securities	Cost		Value		Cost		Value
Due within one year	$	—	$	—	$	922	$	914
Due after one year through five years		4,954		4,499		3,947		3,544
Due after five years through ten years		10,973		9,207		11,972		10,139
Due after ten years		4,311		3,410		4,310		3,421
Subtotal		20,238		17,116		21,151		18,018
Corporate securities
Due within one year		—		—		1,000		1,004
Due after one year through five years		10,000		9,960		6,000		6,609
Due after five years through ten years		4,000		3,839		4,000		3,839
Due after ten years		2,000		1,386		2,000		1,420
Subtotal		16,000		15,185		13,000		12,872
Municipal bonds
Due within one year		1,000		1,000		1,013		1,003
Due after one year through five years		78		78		757		751
Due after five years through ten years		6,316		5,852		7,603		7,101
Due after ten years		76,951		64,715		129,430		110,592
Subtotal		84,345		71,645		138,803		119,447
Mortgage-backed securities
Federal National Mortgage Association (“FNMA”)		83,261		73,097		76,369		66,275
Federal Home Loan Mortgage Corporation (“FHLMC”)		21,351		20,331		32,311		31,376
Government National Mortgage Association (“GNMA”)		7,850		7,293		4,175		3,597
Subtotal		112,462		100,721		112,855		101,248
U.S. Small Business Administration securities
Due within one year		42		41		198		196
Due after one year through five years		1,434		1,373		1,860		1,824
Due after five years through ten years		6,858		6,648		21,420		20,929
Due after ten years		9,269		8,453		19,408		18,399
Subtotal		17,603		16,515		42,886		41,348
Total securities available-for-sale		250,648		221,182		328,695		292,933
SECURITIES HELD-TO-MATURITY
Corporate securities
Due after five years through ten years		8,500		7,867		8,500		7,666
Total securities held-to-maturity		8,500		7,867		8,500		7,666
Total securities	$	259,148	$	229,049	$	337,195	$	300,599

The proceeds and resulting gains and losses from sales of securities available-for-sale for the three and six months ended June 30, 2024:

	For the Three Months Ended
	June 30, 2024
			Gross		Gross
	Proceeds		Gains		(Losses)
Securities available-for-sale	$	54,423	$	204	$	(53)

	For the Six Months Ended
	June 30, 2024
			Gross		Gross
	Proceeds		Gains		(Losses)
Securities available-for-sale	$	98,459	$	204	$	(8,051	)

There were no sales proceeds, or gains or losses for the sale of securities available-for-sale for the three and six months ended June 30, 2023.

XML

Note 3 - Loans Receivable and Allowance for Credit Losses - Loans - USD ($)
$ in Thousands

6 Months Ended

Jun. 30, 2024

Dec. 31, 2023

Assets [Abstract]

Interest Receivable

$ 13,792

$ 14,005

Notes to Financial Statements

Financing Receivables [Text Block]

NOTE 3 – LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES – LOANS

The composition of the loan portfolio was as follows at the dates indicated:

	June 30,			December 31,
REAL ESTATE LOANS	2024			2023
Commercial ("CRE")	$	359,404		$	366,328
Construction and development		274,209			303,054
Home equity		73,749			69,488
One-to-four-family (excludes loans held for sale)		588,966			567,742
Multi-family		239,675			223,769
Total real estate loans		1,536,003			1,530,381
CONSUMER LOANS
Indirect home improvement		563,621			569,903
Marine		74,627			73,310
Other consumer		3,440			3,540
Total consumer loans		641,688			646,753
COMMERCIAL BUSINESS LOANS
Commercial and industrial ("C&I")		285,183			238,301
Warehouse lending		25,548			17,580
Total commercial business loans		310,731			255,881
Total loans receivable, gross		2,488,422			2,433,015
ACL on loans		(31,238	)		(31,534	)
Total loans receivable, net	$	2,457,184		$	2,401,481

Loan amounts are net of unearned loan fees in excess of unamortized costs and premiums of $7.2 million as of June 30, 2024 and $8.4 million as of December 31, 2023. Net loans include unamortized net discounts on acquired loans of $2.2 million and $2.6 million as of  June 30, 2024 and December 31, 2023, respectively. Net loans do not include accrued interest receivable. Accrued interest receivable on loans was $11.8 million and $11.5 million as of June 30, 2024 and December 31, 2023, respectively, and was reported in “Accrued interest receivable” on the Consolidated Balance Sheets.

Most of the Company’s CRE and multi-family real estate, construction, residential, and/or commercial business lending activities are with customers located in Western Washington, the Oregon Coast, and near our loan production offices in Vancouver and the Tri-Cities, Washington. The Company originates real estate, consumer, and commercial business loans and has concentrations in these areas, however, indirect home improvement loans, including solar-related home improvement loans, are originated through a network of home improvement contractors and dealers located throughout Washington, Oregon, California, Idaho, Colorado, Arizona, Minnesota, Nevada, Texas, Utah, Massachusetts, Montana, and New Hampshire.  Loans are generally secured by collateral and rights to collateral vary and are legally documented to the extent practicable. Local economic conditions may affect borrowers’ ability to meet the stated repayment terms.

At June 30, 2024, the Bank held approximately $1.11 billion in loans that are pledged as collateral for FHLB advances, compared to approximately $1.07 billion at December 31, 2023. The Bank held approximately $627.1 million in loans that are pledged as collateral for the Federal Reserve Bank of San Francisco (the “FRB”) line of credit at June 30, 2024, compared to approximately $631.1 million at December 31, 2023.

The Company has defined its loan portfolio into three segments that reflect the structure of the lending function, the Company’s strategic plan and the way management monitors performance and credit quality. The three loan portfolio segments are: (a) real estate, (b) consumer, and (c) commercial business. Each of these segments is disaggregated into classes based on the risk characteristics of the borrower and/or the collateral type securing the loan. The following is a summary of each of the Company’s loan portfolio segments and classes:

Real Estate Loans

CRE Lending. Loans originated by the Company primarily secured by income-producing properties, including retail centers, warehouses, and office buildings located in our market areas.

Construction and Development Lending. Loans originated by the Company for the construction of, and secured by, commercial real estate, one-to-four-family, and multi-family residences and tracts of land for development that are not pre-sold. A portion of the one-to-four-family construction portfolio is custom construction loans to the intended occupant of the residence.

Home Equity Lending. Loans originated by the Company secured by second mortgages on one-to-four-family residences, including home equity lines of credit in our market areas.

One-to-Four-Family Real Estate Lending. One-to-four-family residential loans include owner occupied properties (including second homes), and non-owner-occupied properties with four or less units. These loans originated by the Company or periodically purchased from banks are secured by first mortgages on one-to-four-family residences in our market areas that the Company intends to hold (excludes loans held for sale).

Multi-Family Lending. Apartment term lending (five or more units) to current banking customers and community reinvestment loans for low to moderate income individuals in the Company’s footprint.

Consumer Loans

Indirect Home Improvement. Fixture secured loans for home improvement are originated by the Company through its network of home improvement contractors and dealers and are secured by the personal property installed in, on, or at the borrower’s real property, and may be perfected with a UCC‑2 financing statement filed in the county of the borrower’s residence. These indirect home improvement loans include replacement windows, siding, roofing, spas, and other home fixture installations, including solar related home improvement projects.

Marine. Loans originated by the Company, secured by boats, to borrowers primarily located in states where the Company originates consumer loans.

Other Consumer. Loans originated by the Company to consumers in our retail branch footprint, including automobiles, recreational vehicles, direct home improvement loans, loans on deposits, and other consumer loans, primarily consisting of personal lines of credit and credit cards.

Commercial Business Loans

C&I Lending. C&I loans originated by the Company to local small- and mid-sized businesses in our Puget Sound market area are secured primarily by accounts receivable, inventory, or personal property, plant and equipment. Some C&I loans purchased by the Company are outside of the greater Puget Sound market area. C&I loans are made based on the borrower’s ability to make repayment from the cash flow of the borrower’s business. Certain C&I loans also include SBA/USDA guaranteed certificates of $35.2 million at  June 30, 2024, compared to $10.6 million at  December 31, 2023.

Warehouse Lending. Loans originated to non-depository financial institutions and secured by notes originated by the non-depository financial institution.  The Company has two distinct warehouse lending divisions: commercial warehouse re-lending secured by notes on construction loans and mortgage warehouse re-lending secured by notes on one-to-four-family loans. The Company’s commercial construction warehouse lines are secured by notes on construction loans and typically guaranteed by principals with experience in construction lending.  Mortgage warehouse lending loans are funded through third-party residential mortgage bankers. Under this program the Company provides short-term funding to the mortgage banking companies for the purpose of originating residential mortgage loans for sale into the secondary market.

Allowance for Credit Losses

The main drivers of the provision for credit losses on loans recorded in the first six months of 2024 were increases in the loan portfolio, as well as an increase in nonperforming loans, and higher net charge-offs. 

The following tables detail activity in the ACL on loans by loan categories at or for the three and six months ended June 30, 2024 and 2023:

	At or For the Three Months Ended June 30, 2024
	Real						Commercial
ACL ON LOANS	Estate			Consumer			Business			Unallocated		Total
Beginning balance	$	14,253		$	12,933		$	4,293		$	—	$	31,479
(Reversal of) provision for credit losses on loans		(165	)		914			252			—		1,001
Charge-offs		—			(1,015	)		(733	)		—		(1,748	)
Recoveries		—			421			85			—		506
Net charge-offs		—			(594	)		(648	)		—		(1,242	)
Total ending ACL balance	$	14,088		$	13,253		$	3,897		$	—	$	31,238

	At or For the Three Months Ended June 30, 2023
	Real						Commercial
ACL ON LOANS	Estate			Consumer			Business		Unallocated		Total
Beginning balance	$	12,572		$	13,401		$	3,964	$	—	$	29,937
(Reversal of) provision for credit losses on loans		(265	)		1,266			62		—		1,063
Charge-offs		—			(876	)		—		—		(876	)
Recoveries		—			226			—		—		226
Net charge-offs		—			(650	)		—		—		(650	)
Total ending ACL balance	$	12,307		$	14,017		$	4,026	$	—	$	30,350

	At or For the Six Months Ended June 30, 2024
	Real						Commercial
ACL ON LOANS	Estate			Consumer			Business			Unallocated		Total
Beginning balance	$	14,107		$	13,357		$	4,070		$	—	$	31,534
(Reversal of) provision for credit losses on loans		(19	)		1,558			883			—		2,422
Charge-offs		—			(2,501	)		(1,141	)		—		(3,642	)
Recoveries		—			839			85			—		924
Net Charge-offs		—			(1,662	)		(1,056	)		—		(2,718	)
Total ending ACL balance	$	14,088		$	13,253		$	3,897		$	—	$	31,238

	At or For the Six Months Ended June 30, 2023
	Real						Commercial
ACL ON LOANS	Estate			Consumer			Business			Unallocated		Total
Beginning balance	$	12,123		$	12,109		$	3,760		$	—	$	27,992
Provision for credit losses on loans		194			2,957			267			—		3,418
Charge-offs		(10	)		(1,585	)		(1	)		—		(1,596	)
Recoveries		—			536			—			—		536
Net charge-offs		(10	)		(1,049	)		(1	)		—		(1,060	)
Total ending ACL balance	$	12,307		$	14,017		$	4,026		$	—	$	30,350

Nonaccrual and 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. Loans are automatically placed on nonaccrual once the loan is 90 days past due or sooner if, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, or as required by regulatory authorities.

Loan Modifications to Borrowers Experiencing Financial Difficulty

The Company may modify the contractual terms of a loan to a borrower experiencing financial difficulty as a part of ongoing loss mitigation strategies. These modifications may result in an interest rate reduction, term extension, an other-than-insignificant payment delay, or a combination thereof. The Company typically does not offer principal forgiveness. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. The effect of most modifications made to borrowers experiencing financial difficulty is already included in the ACL on loans because of the measurement methodologies used to estimate the allowance.

The following tables present the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty at the end of the reporting periods by loan class and modification type.

	Payment Deferral
	Amortized Cost		% of Total Loan
June 30, 2024	Basis		Type			Financial Effect
CRE	$	1,116		0.3	%	Deferred payments and capitalized interest for a weighted-average period of 2.0 years.
December 31, 2023
CRE	$	1,088		0.3	%	Deferred payments and capitalized interest for a weighted-average period of 1.5 years.

	Combination - Term Extension and Interest Rate Reduction
	Amortized Cost		% of Total Loan
December 31, 2023	Basis		Type			Financial Effect
C&I	$	2,940		1.2	%	Reduced weighted-average contractual interest rate from 7.5% to 4.1% and added a weighted-average 5 years to the life of the loans.

At  June 30, 2024 and  December 31, 2023, the loans were in compliance with their modified terms and were classified as current. For the three and six months ended June 30, 2024 and 2023, no loans experienced a default subsequent to being granted a modification in the last twelve months. There were no unfunded commitments associated with loans modified for borrowers experiencing financial distress as of June 30, 2024.

Nonaccrual and Past Due Loans

The following tables provide information pertaining to the aging analysis of contractually past due loans and nonaccrual loans at June 30, 2024 and December 31, 2023:

	June 30, 2024
	30-59		60-89
	Days		Days		90 Days		Total				Total
	Past		Past		or More		Past				Loans		Non-
REAL ESTATE LOANS	Due		Due		Past Due		Due		Current		Receivable		Accrual (1)
CRE	$	—	$	323	$	—	$	323	$	359,081	$	359,404	$	1,116
Construction and development		—		—		4,737		4,737		269,472		274,209		4,737
Home equity		24		—		156		180		73,569		73,749		156
One-to-four-family		78		—		—		78		588,888		588,966		170
Multi-family		—		—		—		—		239,675		239,675		—
Total real estate loans		102		323		4,893		5,318		1,530,685		1,536,003		6,179
CONSUMER LOANS
Indirect home improvement		2,265		1,041		901		4,207		559,414		563,621		2,319
Marine		181		239		85		505		74,122		74,627		327
Other consumer		5		5		5		15		3,425		3,440		6
Total consumer loans		2,451		1,285		991		4,727		636,961		641,688		2,652
COMMERCIAL BUSINESS LOANS
C&I		—		—		1,701		1,701		283,482		285,183		2,575
Warehouse lending		—		—		—		—		25,548		25,548		—
Total commercial business loans		—		—		1,701		1,701		309,030		310,731		2,575
Total loans	$	2,553	$	1,608	$	7,585	$	11,746	$	2,476,676	$	2,488,422	$	11,406

	December 31, 2023
	30-59		60-89
	Days		Days		90 Days		Total				Total
	Past		Past		or More		Past				Loans		Non-
REAL ESTATE LOANS	Due		Due		Past Due		Due		Current		Receivable		Accrual (1)
CRE	$	—	$	—	$	—	$	—	$	366,328	$	366,328	$	1,088
Construction and development		—		—		—		—		303,054		303,054		4,699
Home equity		79		25		136		240		69,248		69,488		173
One-to-four-family		—		96		—		96		567,646		567,742		96
Multi-family		—		—		—		—		223,769		223,769		—
Total real estate loans		79		121		136		336		1,530,045		1,530,381		6,056
CONSUMER LOANS
Indirect home improvement		1,759		1,248		777		3,784		566,119		569,903		1,863
Marine		373		243		137		753		72,557		73,310		342
Other consumer		57		18		6		81		3,459		3,540		8
Total consumer loans		2,189		1,509		920		4,618		642,135		646,753		2,213
COMMERCIAL BUSINESS LOANS
C&I		—		—		2,514		2,514		235,787		238,301		2,683
Warehouse lending		—		—		—		—		17,580		17,580		—
Total commercial business loans		—		—		2,514		2,514		253,367		255,881		2,683
Total loans	$	2,268	$	1,630	$	3,570	$	7,468	$	2,425,547	$	2,433,015	$	10,952

(1) Includes loans less than 90 days past due as applicable.

There were no loans 90 days or more past due and still accruing interest at both June 30, 2024 and December 31, 2023.

Credit Quality Indicators

As part of the Company’s on-going monitoring of credit quality of the loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grading of loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) non-performing loans, and (v) the general economic conditions in the Company’s markets.

The Company utilizes a risk grading matrix to assign a risk grade to its real estate and commercial business loans. Loans are graded on a scale of 1 to 10, with loans in risk grades 1 to 6 reported as “Pass” and loans in risk grades 7 to 10 reported as classified loans in the Company’s ACL analysis.

A description of the 10 risk grades is as follows:

● Grades 1 and 2 - These grades include loans to very high-quality borrowers with excellent or desirable business credit.

● Grade 3 - This grade includes loans to borrowers of good business credit with moderate risk.

● Grades 4 and 5 - These grades include “Pass” grade loans to borrowers of average credit quality and risk.

● Grade 6 - This grade includes loans on management’s “Watch” list and is intended to be utilized on a temporary basis for “Pass” grade borrowers where frequent and thorough monitoring is required due to credit weaknesses and where significant risk-modifying action is anticipated in the near term.

● Grade 7 - This grade is for “Other Assets Especially Mentioned (“OAEM”)” or “Special Mention” in accordance with regulatory guidelines and includes borrowers where performance is poor or significantly less than expected.

● Grade 8 - This grade includes “Substandard” loans in accordance with regulatory guidelines which represent an unacceptable business credit where a loss is possible if loan weakness is not corrected.

● Grade 9 - This grade includes “Doubtful” loans in accordance with regulatory guidelines where a loss is highly probable.

● Grade 10 - This grade includes “Loss” loans in accordance with regulatory guidelines for which total loss is expected and when identified are charged off.

Homogeneous loans are risk rated based upon the Federal Financial Institutions Examination Council’s Uniform Retail Credit Classification and Account Management Policy. Loans classified under this policy at the Company are consumer loans which include indirect home improvement, solar, marine, other consumer, and one-to-four-family first and second liens. Under the Uniform Retail Credit Classification and Account Management Policy, loans that are current or less than 90 days past due are graded “Pass” and risk rated “4” or “5” internally. Loans that are past due more than 90 days are classified “Substandard” and risk graded “8” internally until the loan has demonstrated consistent performance, typically six months of contractual payments. Closed-end loans that are 120 days past due and open-end loans that are 180 days past due are charged off based on the value of the collateral less cost to sell. Management may choose to conservatively risk rate credits even if paying in accordance with the loan’s repayment terms.

CRE, construction and development, multi-family and commercial business loans are evaluated individually for their risk classification and may be classified as “Substandard” even if current on their loan payment obligations. We regularly review our credits for accuracy of risk grades whenever we receive new information. Borrowers are generally required to submit financial information at regular intervals. Typically, commercial borrowers with lines of credit are required to submit financial information with reporting intervals ranging from monthly to annually depending on credit size, risk, and complexity. In addition, nonowner-occupied CRE borrowers with loans exceeding a certain dollar threshold are usually required to submit rent rolls or property income statements annually. We monitor construction loans monthly. We also review loans graded “Watch” or worse, regardless of loan type, no less than quarterly.

The following tables summarize risk rated loan balances and total current period gross charge-offs by category, as of the dates indicated. Term loans that were renewed or extended for periods longer than 90 days are presented as new originations in the year of the most recent renewal or extension.

	June 30, 2024
															Revolving Loans
REAL ESTATE LOANS	Term Loans by Year of Origination														Converted
CRE	2024		2023		2022		2021		2020		Prior		Revolving Loans		to Term		Total Loans
Pass	$	13,315	$	47,571	$	84,920	$	58,041	$	44,659	$	76,866	$	—	$	769	$	326,141
Watch		—		3,168		10,793		12,776		—		2,199		—		—		28,936
Special mention		—		—		—		—		—		401		—		—		401
Substandard		—		—		—		—		1,631		2,295		—		—		3,926
Total CRE		13,315		50,739		95,713		70,817		46,290		81,761		—		769		359,404
Construction and development
Pass		67,600		111,041		45,515		33,272		747		508		10,311		—		268,994
Watch		—		—		—		478		—		—		—		—		478
Substandard		—		—		4,737		—		—		—		—		—		4,737
Total construction and development		67,600		111,041		50,252		33,750		747		508		10,311		—		274,209
Home equity
Pass		6,570		2,796		374		1,561		6,089		1,806		54,328		69		73,593
Substandard		—		—		—		—		—		15		141		—		156
Total home equity		6,570		2,796		374		1,561		6,089		1,821		54,469		69		73,749
One-to-four-family
Pass		33,629		103,630		175,294		118,545		79,405		75,609		—		—		586,112
Substandard		—		—		792		—		—		2,062		—		—		2,854
Total one-to-four-family		33,629		103,630		176,086		118,545		79,405		77,671		—		—		588,966
Multi-family
Pass		93		7,069		20,253		90,611		60,311		61,338		—		—		239,675
Total multi-family		93		7,069		20,253		90,611		60,311		61,338		—		—		239,675
Total real estate loans	$	121,207	$	275,275	$	342,678	$	315,284	$	192,842	$	223,099	$	64,780	$	838	$	1,536,003

	June 30, 2024
															Revolving Loans
CONSUMER LOANS	Term Loans by Year of Origination														Converted
Indirect home improvement	2024		2023		2022		2021		2020		Prior		Revolving Loans		to Term		Total Loans
Pass	$	58,842	$	150,237	$	189,391	$	83,787	$	31,830	$	47,213	$	2	$	—	$	561,302
Substandard		42		534		795		515		214		219		—		—		2,319
Total indirect home improvement		58,884		150,771		190,186		84,302		32,044		47,432		2		—		563,621
Indirect home improvement gross charge-offs		38		480		721		219		225		306		—		—		1,989
Marine
Pass		7,798		12,440		21,823		9,240		12,119		10,880		—		—		74,300
Substandard		—		—		—		—		41		286		—		—		327
Total marine		7,798		12,440		21,823		9,240		12,160		11,166		—		—		74,627
Marine gross charge-offs		—		21		128		51		83		105		—		—		388
Other consumer
Pass		120		186		433		105		51		139		2,400		—		3,434
Substandard		—		—		1		—		—		—		5		—		6
Total other consumer		120		186		434		105		51		139		2,405		—		3,440
Other consumer gross charge-offs		—		33		6		—		—		24		61		—		124
Total consumer loans	$	66,802	$	163,397	$	212,443	$	93,647	$	44,255	$	58,737	$	2,407	$	—	$	641,688

	June 30, 2024
COMMERCIAL															Revolving Loans
BUSINESS LOANS	Term Loans by Year of Origination														Converted
C&I	2024		2023		2022		2021		2020		Prior		Revolving Loans		to Term		Total Loans
Pass	$	32,106	$	22,395	$	31,209	$	17,593	$	10,159	$	11,716	$	128,359	$	744	$	254,281
Watch		—		4,978		—		743		2,082		502		10,711		—		19,016
Special mention		—		—		—		565		—		654		713		—		1,932
Substandard		—		2,718		—		2,280		1,290		1,552		2,114		—		9,954
Total C&I		32,106		30,091		31,209		21,181		13,531		14,424		141,897		744		285,183
C&I gross charge-offs		—		—		—		—		—		380		761		—		1,141
Warehouse lending
Pass		—		—		—		—		—		—		22,287		—		22,287
Special mention		—		—		—		—		—		—		3,261		—		3,261
Total warehouse lending		—		—		—		—		—		—		25,548		—		25,548
Total commercial business loans	$	32,106	$	30,091	$	31,209	$	21,181	$	13,531	$	14,424	$	167,445	$	744	$	310,731
TOTAL LOANS RECEIVABLE, GROSS
Pass	$	220,073	$	457,365	$	569,212	$	412,755	$	245,370	$	286,075	$	217,687	$	1,582	$	2,410,119
Watch		—		8,146		10,793		13,997		2,082		2,701		10,711		—		48,430
Special mention		—		—		—		565		—		1,055		3,974		—		5,594
Substandard		42		3,252		6,325		2,795		3,176		6,429		2,260		—		24,279
Total loans receivable, gross	$	220,115	$	468,763	$	586,330	$	430,112	$	250,628	$	296,260	$	234,632	$	1,582	$	2,488,422
Total gross charge-offs	$	38	$	534	$	855	$	270	$	308	$	815	$	822	$	—	$	3,642

	December 31, 2023
															Revolving Loans
REAL ESTATE LOANS	Term Loans by Year of Origination														Converted
CRE	2023		2022		2021		2020		2019		Prior		Revolving Loans		to Term		Total Loans
Pass	$	48,551	$	91,144	$	61,689	$	46,117	$	27,957	$	61,764	$	499	$	—	$	337,721
Watch		3,201		5,446		12,894		—		453		2,226		45		—		24,265
Special mention		—		—		—		—		409		—		—		—		409
Substandard		—		—		—		1,650		—		1,957		—		326		3,933
Total CRE		51,752		96,590		74,583		47,767		28,819		65,947		544		326		366,328
Construction and development
Pass		120,155		106,168		46,989		15,219		—		540		9,284		—		298,355
Substandard		—		4,699		—		—		—		—		—		—		4,699
Total construction and development		120,155		110,867		46,989		15,219		—		540		9,284		—		303,054
Home equity
Pass		4,583		398		1,584		6,525		11		2,137		54,077		—		69,315
Substandard		—		—		—		—		—		36		137		—		173
Total home equity		4,583		398		1,584		6,525		11		2,173		54,214		—		69,488
Home equity gross charge-offs														10				10
One-to-four-family														—
Pass		103,165		175,412		122,406		80,815		30,595		52,008		—		472		564,873
Substandard		—		866		—		—		—		2,003		—		—		2,869
Total one-to-four-family		103,165		176,278		122,406		80,815		30,595		54,011		—		472		567,742
Multi-family
Pass		7,106		20,404		91,047		42,511		37,990		24,711		—		—		223,769
Total multi-family		7,106		20,404		91,047		42,511		37,990		24,711		—		—		223,769
Total real estate loans	$	286,761	$	404,537	$	336,609	$	192,837	$	97,415	$	147,382	$	64,042	$	798	$	1,530,381

	December 31, 2023
															Revolving Loans
CONSUMER LOANS	Term Loans by Year of Origination														Converted
Indirect home improvement	2023		2022		2021		2020		2019		Prior		Revolving Loans		to Term		Total Loans
Pass	$	171,208	$	212,661	$	93,664	$	36,032	$	23,977	$	30,492	$	6	$	—	$	568,040
Substandard		212		663		448		141		258		141		—		—		1,863
Total indirect home improvement		171,420		213,324		94,112		36,173		24,235		30,633		6		—		569,903
Indirect home improvement gross charge-offs		204		1,386		567		290		145		336		—		—		2,928
Marine
Pass		13,619		23,963		9,987		13,082		5,267		7,050		—		—		72,968
Substandard		—		—		52		85		—		205		—		—		342
Total marine		13,619		23,963		10,039		13,167		5,267		7,255		—		—		73,310
Marine gross charge-offs		—		47		93		—		7		256		—		—		403
Other consumer
Pass		309		559		175		69		3		159		2,258		—		3,532
Substandard		—		—		—		—		—		—		8		—		8
Total other consumer		309		559		175		69		3		159		2,266		—		3,540
Other consumer gross charge-offs		—		2		12		—		—		—		120		—		134
Total consumer loans	$	185,348	$	237,846	$	104,326	$	49,409	$	29,505	$	38,047	$	2,272	$	—	$	646,753

	December 31, 2023
COMMERCIAL															Revolving Loans
BUSINESS LOANS	Term Loans by Year of Origination														Converted
C&I	2023		2022		2021		2020		2019		Prior		Revolving Loans		to Term		Total Loans
Pass	$	13,971	$	32,334	$	19,634	$	11,537	$	5,122	$	9,707	$	119,844	$	145	$	212,294
Watch		2,322		—		1,382		2,366		—		953		5,754		—		12,777
Special mention		143		—		—		—		498		253		1,345		—		2,239
Substandard		2,940		—		2,321		1,391		1,766		169		2,005		—		10,592
Doubtful		—		—		—		—		—		—		399		—		399
Total C&I		19,376		32,334		23,337		15,294		7,386		11,082		129,347		145		238,301
C&I gross charge-offs		—		—		1		—		—		—		—		—		1
Warehouse lending
Pass		—		—		—		—		—		—		17,003		—		17,003
Watch		—		—		—		—		—		—		577		—		577
Total warehouse lending		—		—		—		—		—		—		17,580		—		17,580
Total commercial business loans	$	19,376	$	32,334	$	23,337	$	15,294	$	7,386	$	11,082	$	146,927	$	145	$	255,881
TOTAL LOANS RECEIVABLE, GROSS
Pass	$	482,667	$	663,043	$	447,175	$	251,907	$	130,922	$	188,568	$	202,971	$	617	$	2,367,870
Watch		5,523		5,446		14,276		2,366		453		3,179		6,376		—		37,619
Special mention		143		—		—		—		907		253		1,345		—		2,648
Substandard		3,152		6,228		2,821		3,267		2,024		4,511		2,150		326		24,479
Doubtful		—		—		—		—		—		—		399		—		399
Total loans receivable, gross	$	491,485	$	674,717	$	464,272	$	257,540	$	134,306	$	196,511	$	213,241	$	943	$	2,433,015
Total gross charge-offs	$	204	$	1,435	$	673	$	290	$	152	$	592	$	130	$	—	$	3,476

The following table presents the amortized cost basis of loans on nonaccrual status as of the dates indicated:

	June 30, 2024						December 31, 2023
	Nonaccrual with		Nonaccrual with		Total		Nonaccrual with		Nonaccrual with		Total
REAL ESTATE LOANS	No ACL		ACL		Nonaccrual		No ACL		ACL		Nonaccrual
CRE	$	1,116	$	—	$	1,116	$	1,088	$	—	$	1,088
Construction and development		—		4,737		4,737		—		4,699		4,699
Home equity		156		—		156		173		—		173
One-to-four-family		170		—		170		96		—		96
		1,442		4,737		6,179		1,357		4,699		6,056
CONSUMER LOANS
Indirect home improvement		—		2,319		2,319		—		1,863		1,863
Marine		—		327		327		—		342		342
Other consumer		—		6		6		—		8		8
		—		2,652		2,652		—		2,213		2,213
COMMERCIAL BUSINESS LOANS
C&I		263		2,312		2,575		—		2,683		2,683
Total	$	1,705	$	9,701	$	11,406	$	1,357	$	9,595	$	10,952

The Company recognized interest income on a cash basis for nonaccrual loans of $92,000 and $106,000 during the three months ended June 30, 2024 and 2023, and $203,000 and $168,000 during the six months ended  June 30, 2024 and 2023,respectively.

The following table presents the amortized cost basis of collateral dependent loans by class of loans as of the dates indicated:

	June 30, 2024								December 31, 2023
	Commercial		Residential		Other				Commercial		Residential		Other
REAL ESTATE LOANS	Real Estate		Real Estate		Non-Real Estate		Total		Real Estate		Real Estate		Non-Real Estate		Total
CRE	$	1,116	$	—	$	—	$	1,116	$	1,088	$	—	$	—	$	1,088
Construction and development		4,737		—		—		4,737		4,699		—				4,699
Home equity		—		156		—		156		—		173		—		173
One-to-four-family		—		170		—		170		—		96		—		96
		5,853		326		—		6,179		5,787		269		—		6,056
CONSUMER LOANS
Indirect home improvement		—		—		2,319		2,319		—		—		1,863		1,863
Marine		—		—		327		327		—		—		342		342
		—		—		2,646		2,646		—		—		2,205		2,205
COMMERCIAL BUSINESS LOANS
C&I		—		—		2,575		2,575		—		—		2,683		2,683
Total	$	5,853	$	326	$	5,221	$	11,400	$	5,787	$	269	$	4,888	$	10,944

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Note 4 - Mortgage Servicing Rights

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Transfers and Servicing of Financial Assets [Text Block]

NOTE 4 – MORTGAGE SERVICING RIGHTS

Loans serviced for others are not included on the Consolidated Balance Sheets. The unpaid principal balance of permanent loans serviced for others was $1.60 billion and $2.83 billion at June 30, 2024 and December 31, 2023, respectively.

The following table summarizes MSRs activity at or for the dates indicated:

	At or For the Three Months Ended
	June 30,
	2024			2023
Beginning balance, at the lower of cost or fair value	$	9,009		$	17,599
Additions		817			920
MSRs amortized		(528	)		(894	)
Recovery of MSRs		54			2
Ending balance, at the lower of cost or fair value	$	9,352		$	17,627

	At or For the Six Months Ended
	June 30,
	2024			2023
Beginning balance, at the lower of cost or fair value	$	17,176		$	18,017
Additions		1,393			1,325
Sales		(7,953	)		—
MSRs amortized		(1,225	)		(1,715	)
Impairment of MSRs		(39	)		—
Ending balance, at the lower of cost or fair value	$	9,352		$	17,627

The fair value of the MSRs’ assets was $20.8 million and $38.2 million at  June 30, 2024 and December 31, 2023, respectively.  Fair value adjustments to MSRs are mainly due to market-based assumptions associated with discounted cash flows, loan prepayment speeds, and changes in interest rates.  A significant change in prepayments of the loans in the MSRs portfolio could result in significant changes in the valuation adjustments, thus creating potential volatility in the carrying amount of MSRs.

The following provides valuation assumptions used in determining the fair value of MSRs at the dates indicated:

	At June 30,			At December 31,
Key assumptions:	2024			2023
Weighted average discount rate		10.0	%		9.4	%
Conditional prepayment rate (“CPR”)		8.5	%		7.2	%
Weighted average life in years		7.9			8.4

Key economic assumptions of the current fair value for single family MSRs are presented in the table below. Also presented is the sensitivity to market rate changes for the par rate coupon for a conventional one-to-four-family FNMA, FHLMC, GNMA, or FHLB serviced home loan. The table below references a 50 basis point and 100 basis point adverse rate change and the impact on prepayment speeds and discount rates at the dates indicated:

	June 30, 2024			December 31, 2023
Aggregate portfolio principal balance	$	1,598,388		$	2,832,016
Weighted average rate of loans in MSRs portfolio		4.1	%		3.6	%

At June 30, 2024	Base			0.5% Adverse Rate Change			1.0% Adverse Rate Change
Conditional prepayment rate		8.5	%		10.1	%		12.4	%
Fair value MSRs	$	20,788		$	20,062		$	19,188
Percentage of MSRs		1.3	%		1.3	%		1.2	%
Discount rate		10.0	%		10.5	%		11.0	%
Fair value MSRs	$	20,788		$	20,340		$	19,910
Percentage of MSRs		1.3	%		1.3	%		1.2	%

At December 31, 2023	Base			0.5% Adverse Rate Change			1.0% Adverse Rate Change
Conditional prepayment rate		7.2	%		8.0	%		9.3	%
Fair value MSRs	$	38,163		$	37,268		$	35,819
Percentage of MSRs		1.3	%		1.3	%		1.3	%
Discount rate		9.4	%		9.9	%		10.4	%
Fair value MSRs	$	38,163		$	37,301		$	36,476
Percentage of MSRs		1.3	%		1.3	%		1.3	%

These sensitivities are hypothetical and should be used with caution as the tables above demonstrate the Company’s methodology for estimating the fair value of MSRs which is extremely sensitive to changes in key assumptions. For example, actual prepayment experience may differ and any difference may have a material effect on the fair value of MSRs. Changes in fair value resulting from changes in assumptions generally cannot be extrapolated because the relationship of the change in the assumption to the change in fair value may not be linear. Also, in these tables, the effects of a variation in a particular assumption on the fair value of MSRs is calculated without changing any other assumption; in reality, changes in one factor may be associated with changes in another (for example, decreases in market interest rates may provide an incentive to refinance, however, this may also indicate a slowing economy and an increase in the unemployment rate, which reduces the number of borrowers who qualify for refinancing), which may magnify or counteract the sensitivities. Thus, any measurement of the fair value of MSRs is limited by the conditions existing and assumptions made at a particular point in time. Those assumptions may not be appropriate if they are applied to a different time.

The Company recorded $1.1 million and $1.8 million of gross contractually specified servicing fees, late fees, and other ancillary fees resulting from servicing of loans for the three months ended June 30, 2024 and 2023, respectively, and $2.5 million and $3.6 million for the six months ended  June 30, 2024 and 2023. The income, net of amortization of MSRs, is reported in “Service charges and fee income” on the Consolidated Statements of Income.

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Note 5 - Derivatives

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

NOTE 5 – DERIVATIVES

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

The Company’s predominant derivative and hedging activities involve interest rate swaps related to certain borrowings, brokered deposits, investment securities, forward sales contracts, and commitments to extend credit associated with mortgage banking activities. Generally, these instruments help the Company manage exposure to market risk. Market risk represents the possibility that economic value or net interest income will be adversely affected by fluctuations in external factors such as market-driven interest rates and prices or other economic factors.

Mortgage Banking Derivatives Not Designated as Hedges

The Company regularly enters into commitments to originate and sell loans held for sale. The Company has exposure to movements in interest rates associated with written interest rate lock commitments with potential borrowers to originate one-to four-family loans that are intended to be sold and for closed one-to-four-family mortgage loans held for sale for which fair value accounting has been elected, that are awaiting sale and delivery into the secondary market. The Company economically hedges the risk of changing interest rates associated with these mortgage loan commitments by entering into forward sales contracts to sell one-to-four-family mortgage loans or into contracts to sell forward To-Be-Announced (“TBA”) mortgage-backed securities. These commitments and contracts are considered derivatives but have not been designated as hedging instruments for reporting purposes under U.S. GAAP. Rather, they are accounted for as free-standing derivatives, or economic hedges, with changes in the fair value of the derivatives reported in noninterest income or noninterest expense. The Bank recognizes all derivative instruments as either “Other assets” or “Other liabilities” on the Consolidated Balance Sheets and measures those instruments at fair value.

Customer Swaps Not Designated as Hedges

The Company also enters into derivative contracts, which consist of interest rate swaps, to facilitate the needs of clients desiring to manage interest rate risk. These swaps are not designated as accounting hedges under ASC 815, Derivatives and Hedging. To economically hedge the interest rate risk associated with offering this product, the Company simultaneously enters into derivative contracts with third parties to offset the customer contracts such that the Company minimizes its net risk exposure resulting from such transactions. The derivative contracts are structured such that the notional amounts reduce over time to generally match the expected amortization of the underlying loans. These derivatives are not speculative and arise from a service provided to clients.

Cash Flow Hedges

The Company has entered into interest rate swaps to reduce the exposure to variability in interest-related cash outflows attributable to changes in forecasted Secured Overnight Financing Rate (“SOFR”) based brokered deposits. These derivative instruments are designated as cash flow hedges. The hedged item is the SOFR portion of the series of future adjustable-rate borrowings and deposits over the term of the interest rate swap.  Accordingly, changes to the amount of interest payment cash flows for the hedged transactions attributable to a change in credit risk are excluded from management’s assessment of hedge effectiveness. The Company tests for hedging effectiveness on a quarterly basis. The accumulated other comprehensive income is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company has not recorded any hedge ineffectiveness since inception.

The Company expects that approximately $3.9 million will be reclassified from accumulated other comprehensive loss as a decrease to interest expense over the next 12 months related to these cash flow hedges.

Fair Value Hedges

The Company is exposed to changes in the fair value of certain of its pools of prepayable fixed-rate assets due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate, the SOFR. Interest rate swaps designated as fair value hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without the exchange of the underlying notional amount. For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.

The following amounts were recorded on the balance sheet related to cumulative-basis adjustment for fair value hedges for the dates indicated:

			Cumulative Amount of Fair Value
Line item in the statement of financial			Hedging Adjustment Included in
position in which the hedged Item is	Carrying Amount of the		the Carrying Amount of the
included	Hedged Assets		Hedged Assets
June 30, 2024
Investment securities (1)	$	55,397	$	4,603
Total	$	55,397	$	4,603
December 31, 2023
Investment securities (1)	$	56,785	$	3,215
Total	$	56,785	$	3,215

(1) These amounts include the amortized cost basis of closed portfolios used in designated hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At June 30, 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $223.1 million; the cumulative basis adjustments associated with these hedging relationships was $4.6 million; and the amounts of the designated hedged items was $60.0 million.

The following tables summarize the Company’s derivative instruments at the dates indicated. The Company recognizes derivative assets and liabilities in “Other assets” and “Other liabilities,” respectively, on the Consolidated Balance Sheets, as follows:

	June 30, 2024
			Fair Value
Cash flow hedges:	Notional		Asset		Liability
Interest rate swaps - brokered deposits and borrowings	$	235,000	$	5,072	$	—
Fair value hedges:
Interest rate swaps - securities		60,000		4,582		—
Non-hedging derivatives:
Fallout adjusted interest rate lock commitments with customers		43,041		378		—
Mandatory and best effort forward commitments with investors		34,337		—		316
Forward TBA mortgage-backed securities		58,000		122		—
Interest rate swaps - customer swap positions		801		—		71
Interest rate swaps - dealer offsets to customer swap positions		801		71		—

	December 31, 2023
			Fair Value
Cash flow hedges:	Notional		Asset		Liability
Interest rate swaps - brokered deposits	$	250,000	$	3,233	$	375
Fair value hedges:
Interest rate swaps - securities		60,000		3,198		—
Non-hedging derivatives:
Fallout adjusted interest rate lock commitments with customers		22,334		329		—
Mandatory and best effort forward commitments with investors		10,070		—		188
Forward TBA mortgage-backed securities		33,000		—		284
Interest rate swaps - customer swap positions		801		—		63
Interest rate swaps - dealer offsets to customer swap positions		801		64		—

The following table summarizes the effect of fair value and cash flow hedge accounting on the Consolidated Statements of Income for the three and six months ended June 30, 2024 and 2023:

	Three Months Ended June 30,
	2024					2023
	Interest					Interest
	Expense		Interest			Expense		Interest
	Deposits and Borrowings		Income Securities			Deposits and Borrowings		Income Securities
Total amounts presented on the Consolidated Statements of Income	$	15,053	$	3,534		$	8,829	$	2,651
Net gains (losses) on fair value hedging relationships:
Interest rate swaps - securities
Recognized on hedged items	$	—	$	(163	)	$	—	$	1,559
Recognized on derivatives designated as hedging instruments		—		163			—		(1,559	)
Net interest income recognized on cash flows of derivatives designated as hedging instruments		—		421			—		363
Net income recognized on fair value hedges	$	—	$	421		$	—	$	363
Net gain on cash flow hedging relationships:
Interest rate swaps - brokered deposits and borrowings
Realized gains (pre-tax) reclassified from AOCI into net income	$	1,148	$	—		$	1,271	$	—
Net income recognized on cash flow hedges	$	1,148	$	—		$	1,271	$	—

	Six Months Ended June 30,
	2024					2023
	Interest					Interest
	Expense		Interest			Expense		Interest
	Deposits and Borrowings		Income Securities			Deposits and Borrowings		Income Securities
Total amounts presented on the Consolidated Statements of Income	$	29,102	$	7,417		$	16,294	$	5,271
Net gains (losses) on fair value hedging relationships:
Interest rate swaps - securities
Recognized on hedged items	$	—	$	(1,388	)	$	—	$	(60	)
Recognized on derivatives designated as hedging instruments		—		1,388			—		60
Net interest income recognized on cash flows of derivatives designated as hedging instruments		—		839			—		656
Net income recognized on fair value hedges	$	—	$	839		$	—	$	656
Net gain on cash flow hedging relationships:
Interest rate swaps - brokered deposits and borrowings
Realized gains (pre-tax) reclassified from AOCI into net income	$	2,870	$	—		$	2,178	$	—
Net income recognized on cash flow hedges	$	2,870	$	—		$	2,178	$	—

Changes in the fair value of the non-hedging derivatives recognized in “Noninterest income” on the Consolidated Statements of Income and included in gain on sale of loans resulted in net gains of $19,000 and net losses of $51,000 for the three months ended June 30, 2024 and 2023, and net gains of $201,000 and $373,000 for the six months ended  June 30, 2024 and 2023, respectively.

The following tables present a summary of amounts outstanding in derivative financial instruments, including those entered into in connection with the same counterparty under master netting agreements at the dates indicated. While these agreements are typically over-collateralized, GAAP requires disclosures in this table to limit the amount of such collateral to the amount of the related asset or liability for each counterparty.

			Gross Amounts		Net Amounts of Assets		Gross Amounts Not Offset
	Gross Amounts		Offset in the		Presented in the		in the Statement of Financial Position
	of Recognized		Statement of		Statement of		Financial		Cash Collateral
Offsetting of derivative assets	Assets		Financial Position		Financial Position		Instruments		Received		Net Amount
At June 30, 2024
Interest rate swaps	$	9,811	$	86	$	9,725	$	—	$	1,120	$	8,605
At December 31, 2023
Interest rate swaps	$	6,648	$	153	$	6,495	$	—	$	—	$	6,495

			Gross Amounts		Net Amounts of		Gross Amounts Not Offset
	Gross Amounts		Offset in the		Liabilities		in the Statement of Financial Position
	of Recognized		Statement of		Presented in the Statement		Financial		Cash Collateral
Offsetting of derivative liabilities	Liabilities		Financial Position		of Financial Position		Instruments		Posted		Net Amount
At June 30, 2024
Interest rate swaps	$	—	$	—	$	—	$	—	$	—	$	—
At December 31, 2023
Interest rate swaps	$	(722)	$	(347)	$	(375)	$	—	$	270	$	(105)

Credit Risk–Related Contingent Features

The Company has derivative contracts with its derivative counterparties that contain a provision to post collateral to the counterparties when these contracts are in a net liability position.  At June 30, 2024, the Company had no collateral posted due to this provision.  Receivables related to cash collateral that has been paid to counterparties is included in “Cash and cash equivalents” on the Consolidated Balance Sheets.  In certain cases, the Company will have posted excess collateral, compared to total exposure due to initial margin requirements or day-to-day rate volatility.

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Note 6 - Leases

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

NOTE 6 – LEASES

The Company has operating leases for retail bank and home lending branches, loan production offices, and certain equipment. The Company’s leases have remaining lease terms of five months to six years, some of which include options to extend the leases for up to five years.

The components of lease cost (included in occupancy expense on the Consolidated Statements of Income) for the three and six months ended June 30, 2024 and 2023 are as follows:

	Three Months Ended		Three Months Ended
Lease cost:	June 30, 2024		June 30, 2023
Operating lease cost	$	475	$	471
Short-term lease cost		2		5
Total lease cost	$	477	$	476

	Six Months Ended		Six Months Ended
Lease cost:	June 30, 2024		June 30, 2023
Operating lease cost	$	949	$	881
Short-term lease cost		5		9
Total lease cost	$	954	$	890

The following tables provide supplemental information related to operating leases at or for the three and six months ended June 30, 2024 and 2023:

	At or For the			At or For the
	Three Months Ended			Three Months Ended
Cash paid for amounts included in the measurement of lease liabilities:	June 30, 2024			June 30, 2023
Operating cash flows from operating leases	$	490		$	482
Weighted average remaining lease term- operating leases (in years)		3.7			4.4
Weighted average discount rate- operating leases		2.99	%		2.92	%

	At or For the			At or For the
	Six Months Ended			Six Months Ended
Cash paid for amounts included in the measurement of lease liabilities:	June 30, 2024			June 30, 2023
Operating cash flows from operating leases	$	980		$	906
Weighted average remaining lease term- operating leases (in years)		3.7			4.4
Weighted average discount rate- operating leases		2.99	%		2.92	%

The Company’s leases typically do not contain a discount rate implicit in the lease contract.  As an alternative, the discount rate used in determining the lease liability for each individual lease was the FHLB of Des Moines’ fixed-advance rate.

Maturities of operating lease liabilities at  June 30, 2024 for future periods are as follows:

Remainder of 2024	$	963
2025		1,628
2026		1,475
2027		1,173
2028		428
Thereafter		954
Total lease payments		6,621
Less imputed interest		(642	)
Total	$	5,979

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Note 7 - Other Real Estate Owned ("OREO")

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Real Estate Owned [Text Block]

NOTE 7 – OTHER REAL ESTATE OWNED (“OREO”)

The following table presents the activity related to OREO at or for the three and six months ended June 30, 2024 and 2023:

	At or For the Three Months Ended				At or For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Beginning balance	$	—	$	570	$	—	$	570
Additions		—		—		—		—
Loans transferred to OREO		—		—		—		—
Ending balance	$	—	$	570	$	—	$	570

There were no OREO properties at June 30, 2024 and December 31, 2023. There were no OREO holding costs for the three and six months ended June 30, 2024 and 2023.

There were $19,000 and $96,000 in portfolio mortgage loans collateralized by residential real estate in the process of foreclosure at June 30, 2024 and at December 31, 2023, respectively.

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Note 8 - Deposits

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Deposit Liabilities Disclosures [Text Block]

NOTE 8 – DEPOSITS

Deposits are summarized as follows at the dates indicated:

	June 30,		December 31,
	2024		2023
Noninterest-bearing checking	$	613,137	$	654,048
Interest-bearing checking (1)		166,839		244,028
Savings		151,398		151,630
Money market (2)		343,995		359,063
Certificates of deposit less than $100,000 (3)		530,537		587,858
Certificates of deposit of $100,000 through $250,000		427,893		429,373
Certificates of deposit greater than $250,000		138,792		79,540
Escrow accounts related to mortgages serviced (4)		10,212		16,783
Total	$	2,382,803	$	2,522,323

(1) Includes $0.0 and $70.2 million of brokered deposits at June 30, 2024 and December 31, 2023, respectively.

(2) Includes $4.0 million and $1,000 of brokered deposits at June 30, 2024 and December 31, 2023, respectively.

(3) Includes $261.0 million and $361.3 million of brokered deposits at June 30, 2024 and December 31, 2023, respectively.

(4) Noninterest-bearing accounts.

Scheduled maturities of certificates of deposits at June 30, 2024 for future periods ending are as follows:

Maturing in 2024	$	615,361
Maturing in 2025		369,984
Maturing in 2026		87,246
Maturing in 2027		21,019
Maturing in 2028		3,208
Thereafter		404
Total	$	1,097,222

Interest expense by deposit category for the periods indicated is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Interest-bearing checking	$	555	$	370	$	1,339	$	468
Savings and money market		1,951		1,344		3,612		2,542
Certificates of deposit		10,746		5,896		21,183		11,224
Total	$	13,252	$	7,610	$	26,134	$	14,234

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Note 9 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE 9 – COMMITMENTS AND CONTINGENCIES

Commitments – The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized on the Consolidated Balance Sheets.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

The following table provides a summary of the Company’s commitments at the dates indicated:

COMMITMENTS TO EXTEND CREDIT	June 30,		December 31,
REAL ESTATE LOANS	2024		2023
CRE	$	964	$	3,472
Construction and development		195,775		154,611
One-to-four-family (includes locks for saleable loans)		49,866		23,751
Home equity		97,751		94,026
Multi-family		2,893		2,945
Total real estate loans		347,249		278,805
CONSUMER LOANS		28,886		29,517
COMMERCIAL BUSINESS LOANS
C&I		155,200		164,873
Warehouse lending		51,215		61,837
Total commercial business loans		206,415		226,710
Total commitments to extend credit	$	582,550	$	535,032

Commitments to extend credit are agreements to lend to a customer provided there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the amount of the total commitments does not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon an extension of credit, is based on management’s credit evaluation of the party. Collateral held varies, but may include accounts receivable, inventory, property and equipment, residential real estate, and income-producing commercial properties.

Unfunded commitments under commercial lines of credit, revolving credit lines, and overdraft protection agreements are commitments for possible future extensions of credit to existing customers. These lines of credit usually do not contain a specified maturity date and ultimately may not be drawn upon to the total extent to which the Company is committed. The Company’s ACL – unfunded loan commitments at June 30, 2024 and December 31, 2023 was $1.6 million and $1.5 million, respectively. The Company recorded a provision for credit losses – unfunded loan commitments of $77,000 and $54,000 for the three and six months ended  June 30, 2024, respectively, as compared to a recovery from the ACL of $347,000 and $596,000 for the three and six months ended June 30, 2023, respectively.

The Company also sells one-to-four-family loans to the FHLB of Des Moines that require a limited level of recourse if the loans default and exceed a certain loss exposure. Specific to that recourse, the FHLB of Des Moines established a first loss account (“FLA”) related to the loans and required a credit enhancement (“CE”) obligation by the Bank to be utilized after the FLA is used. Based on loans sold through June 30, 2024, total loans serviced on behalf of the FHLB of Des Moines were $8.8 million with the FLA totaling $581,000 and the CE obligation at $389,000 or 4.4% of the loans outstanding. Management has established a holdback of 10% of the outstanding CE, or $39,000, which is a part of the off-balance sheet holdback for loans sold. At both June 30, 2024 and December 31, 2023, there were no loans sold and serviced on behalf of the FHLB of Des Moines that were greater than 90 days past their contractual payment due date.

Contingent liabilities for loans held for sale – In the ordinary course of business, loans are sold with limited recourse against the Company and may have to subsequently be repurchased due to defects that occurred during the origination of the loan. The defects are categorized as documentation errors, underwriting errors, early payoff, early payment defaults, breach of representation or warranty, servicing errors, and/or fraud. When a loan sold to an investor without recourse fails to perform according to its contractual terms, the investor will typically review the loan file to determine whether defects in the origination process occurred. If a defect is identified, the Company may be required to either repurchase the loan or indemnify the investor for losses sustained. If there are no such defects, the Company has no commitment to repurchase the loan. The Company has recorded a holdback reserve of $2.0 million and $2.1 million to cover loss exposure related to these guarantees for one-to-four-family loans sold into the secondary market at June 30, 2024 and December 31, 2023, respectively, which is included in “Other liabilities” on the Consolidated Balance Sheets.

The Company has entered into a severance agreement with its Chief Executive Officer (“CEO”). The severance agreement, subject to certain requirements, generally includes a lump sum payment to the CEO equal to 24 months of base compensation in the event his employment is involuntarily terminated, other than for cause or the executive terminates his employment with good reason, as defined in the severance agreement.

The Company has entered into change of control agreements with its executives and select key personnel. The change of control agreements, subject to certain requirements, generally remain in effect until canceled by either party upon at least 24 months prior written notice. Under the change of control agreements, the executive generally will be entitled to a change of control payment from the Company if the executive is involuntarily terminated within six months preceding or 12 months after a change in control (as defined in the change of control agreements). In such an event, the executives would each be entitled to receive a cash payment in an amount equal to 12 months of their then current salary, subject to certain requirements in the change of control agreements.

As a result of the nature of our activities, the Company is subject to various pending and threatened legal actions, which arise in the ordinary course of business. From time to time, subordination liens may create litigation which requires us to defend our lien rights. In the opinion of management, liabilities arising from these claims, if any, will not have a material effect on our financial position. The Company had no material pending legal actions at June 30, 2024.

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Note 10 - Fair Value Measurements

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Fair Value Disclosures [Text Block]

NOTE 10 – FAIR VALUE MEASUREMENTS

The Company determines fair value based on the requirements established in Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements, which provides a framework for measuring fair value in accordance with U.S. GAAP and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC Topic 820 defines fair value as the exit price, or the price that would be received for an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date under current market conditions.

The following definitions describe the levels of inputs that may be used to measure fair value:

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The following methods were used to estimate the fair value of certain assets and liabilities on a recurring and nonrecurring basis:

Securities – The fair value of securities available-for-sale are recorded on a recurring basis. The fair value of investments and mortgage-backed securities are provided by a third-party pricing service. These valuations are based on market data using pricing models that vary by asset class and incorporate available current trade, bid, and other market information, and for structured securities, cash flow, and loan performance data. The pricing processes utilize benchmark curves, benchmarking of similar securities, sector groupings, and matrix pricing. Option adjusted spread models are also used to assess the impact of changes in interest rates and to develop prepayment scenarios (Level 2). Transfers between the fair value hierarchy are determined through the third-party service provider which, from time to time will transfer between levels based on market conditions per the related security. All models and processes used consider market convention.

Mortgage Loans Held for Sale – The fair value of loans held for sale reflects the value of commitments with investors and/or the relative price as delivered into a TBA mortgage-backed security (Level 2).

Loans Receivable – Certain residential mortgage loans were initially originated for sale and measured at fair value; after origination, the loans were transferred to loans held for investment. As of June 30, 2024 and December 31, 2023, there were $13.9 million and $15.1 million, respectively, in residential mortgage loans recorded at fair value as they were previously transferred from held for sale, at fair value to loans held for investment. The aggregate unpaid principal balance of these loans was $14.6 million and $16.3 million as of June 30, 2024 and December 31, 2023, respectively. Gains and losses from changes in fair value for these loans are reported in earnings as a component of “Other noninterest income” on the Consolidated Statements of Income. For the three months ended June 30, 2024, the Company recorded a net increase in fair value of $184,000, as compared to a net decrease in fair value of $520,000 for the three months ended June 30, 2023. For the six months ended  June 30, 2024 and  June 30, 2023. the Company recorded net increases in fair value of $186,000 and $57,000, respectively.  For loans originated as held for sale and transferred into loans held for investment, the fair value is determined based on quoted secondary market prices for similar loans (Level 2).

Derivative Instruments – Fair values for derivative assets and liabilities are measured on a recurring basis. The primary use of derivative instruments is related to the mortgage banking activities of the Company. The fair value of the interest rate lock commitments and forward sales commitments are estimated using quoted or published market prices for similar instruments, adjusted for factors such as pull-though rate assumptions based on historical information, where appropriate. TBA mortgage-backed securities are fair valued on similar contracts in active markets (Level 2), while locks and forwards with customers and investors are fair valued using similar contracts in the market and changes in the market interest rates (Level 2 and 3). Derivative instruments not related to mortgage banking activities include interest rate swap agreements. The fair values of interest rate swap agreements are based on valuation models using observable market data as of the measurement date (Level 2). The Company’s derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of the market inputs we use are actively quoted and can be validated through external sources, including market transactions and third-party pricing services. The fair values of all interest rate swaps are determined from third-party pricing services without adjustment.

Other Real Estate Owned – Fair value adjustments to OREO are recorded at the lower of carrying amount of the loan or fair value of the collateral less selling costs. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the ACL on loans. After foreclosure, management periodically performs valuations such that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell (Level 3).

Collateral Dependent Loans– Expected credit losses on collateral dependent loans are measured based on the fair value of collateral as of the reporting date, less estimated selling costs, as applicable.  If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will recognize an allowance as the difference between the fair value of the collateral, less costs to sell (if applicable) at the reporting date and the amortized cost basis of the loan. If the fair value of the collateral exceeds the amortized cost basis of the loan, any expected recovery added to the amortized cost basis will be limited to the amount previously charged-off by the subsequent changes in the expected credit losses on collateral dependent loans.  Subsequent adjustments in the expected credit losses for collateral-dependent loans are included within the provision for credit losses in the same way the expected credit loss initially was recognized or as a reduction in the provision that would otherwise be reported (Level 3).

Mortgage Servicing Rights – The fair value of MSRs is estimated using net present value of expected cash flows using a third-party model that incorporates assumptions used in the industry to value such rights, adjusted for factors such as weighted average prepayments speeds based on historical information where appropriate (Level 3).

The following tables present securities available-for-sale, mortgage loans held for sale, loans receivable, at fair value, and derivative assets and liabilities measured at fair value on a recurring basis at the dates indicated:

Financial Assets	At June 30, 2024
Securities available-for-sale:	Level 1		Level 2		Level 3			Total
U.S. agency securities	$	—	$	17,116	$	—		$	17,116
Corporate securities		—		15,185		—			15,185
Municipal bonds		—		71,645		—			71,645
Mortgage-backed securities		—		100,721		—			100,721
U.S. Small Business Administration securities		—		16,515		—			16,515
Mortgage loans held for sale, at fair value		—		53,811		—			53,811
Loans receivable, at fair value		—		13,868		—			13,868
Derivatives:
Interest rate lock commitments with customers		—		—		378			378
Forward TBA mortgage-backed securities		—		122		—			122
Interest rate swaps - cash flow and fair value hedges		—		9,654		—			9,654
Interest rate swaps - dealer offsets to customer swap positions		—		—		—			—
Total assets measured at fair value	$	—	$	298,637	$	378		$	299,015
Financial Liabilities
Derivatives:
Interest rate swaps - customer swap positions	$	—	$	—	$	—		$	—
Mandatory and best effort forward commitments with investors		—		—		(316	)		(316	)
Total liabilities measured at fair value	$	—	$	—	$	(316	)	$	(316	)

Financial Assets	At December 31, 2023
Securities available-for-sale:	Level 1		Level 2			Level 3			Total
U.S. agency securities	$	—	$	18,018		$	—		$	18,018
Corporate securities		—		12,872			—			12,872
Municipal bonds		—		119,447			—			119,447
Mortgage-backed securities		—		101,248			—			101,248
U.S. Small Business Administration securities		—		41,348			—			41,348
Mortgage loans held for sale, at fair value		—		25,668			—			25,668
Loans receivable, at fair value		—		15,088			—			15,088
Derivatives:
Interest rate lock commitments with customers		—		—			329			329
Interest rate swaps- cash flow and fair value hedges		—		6,431			—			6,431
Interest rate swaps - dealer offsets to customer swap positions		—		64			—			64
Total assets measured at fair value	$	—	$	340,184		$	329		$	340,513
Financial Liabilities
Derivatives:
Mandatory and best effort forward commitments with investors	$	—	$	—		$	(188	)	$	(188	)
Forward TBA mortgage-backed securities		—		(284	)		—			(284	)
Interest rate swaps - cash flow and fair value hedges		—		(375	)		—			(375	)
Interest rate swaps - customer swap positions		—		(63	)		—			(63	)
Total liabilities measured at fair value	$	—	$	(722	)	$	(188	)	$	(910	)

The following table presents financial assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy at June 30, 2024 and  December 31, 2023.

	June 30, 2024
	Level 1		Level 2		Level 3		Total
MSRs	$	—	$	—	$	20,788	$	20,788

	December 31, 2023
	Level 1		Level 2		Level 3		Total
MSRs		—		—		38,163		38,163

Quantitative Information about Level 3 Fair Value Measurements – Shown in the table below is the fair value of financial instruments measured under a Level 3 unobservable input on a recurring and nonrecurring basis at the dates indicated:

Level 3		Significant			Weighted Average Rate
Fair Value	Valuation	Unobservable			June 30,			December 31,
Instruments	Techniques	Inputs	Range		2024			2023
RECURRING
Interest rate lock commitments with customers	Quoted market prices	Pull-through expectations		80% - 99%		90.8	%		90.5	%
Individual forward sale commitments with investors	Quoted market prices	Pull-through expectations		80% - 99%		90.8	%		90.5	%
NONRECURRING
MSR	Industry sources	Pre-payment speeds		0% - 50%		8.5	%		7.2	%

The pull-through rate is based on historical loan closing rates for similar interest rate lock commitments. An increase or decrease in the pull-through rate would have a corresponding positive or negative fair value adjustment.

The following table provides a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the dates indicated:

				Purchases								Net change in			Net change in
Three Months Ended	Beginning			and		Sales and			Ending			fair value for			fair value for
June 30, 2024	Balance			Issuances		Settlements			Balance			gains/(losses) (1)			gains/(losses) (2)
Interest rate lock commitments with customers	$	251		$	693	$	(566	)	$	378		$	127		$	—
Individual forward sale commitments with investors		(73	)		36		(279	)		(316	)		(243	)		—
June 30, 2023
Interest rate lock commitments with customers	$	565		$	948	$	(1,240	)	$	273		$	(292	)	$	—
Individual forward sale commitments with investors		(13	)		188		(52	)		123			136			—

				Purchases								Net change in		Net change in
Six Months Ended	Beginning			and		Sales and			Ending			fair value for		fair value for
June 30, 2024	Balance			Issuances		Settlements			Balance			gains/(losses) (1)		gains/(losses) (2)
Interest rate lock commitments with customers	$	329		$	1,658	$	(1,609	)	$	378		$	49	$	—
Individual forward sale commitments with investors		(188	)		21		(149	)		(316	)		128		—
June 30, 2023
Interest rate lock commitments with customers	$	107		$	1,942	$	(1,776	)	$	273		$	166	$	—
Individual forward sale commitments with investors		(38	)		410		(249	)		123			161		—

(1) Relating to items held at end of period included in income.

(2) Relating to items held at end of period included in other comprehensive income.

Gains on interest rate lock commitments and on forward sale commitments with investors carried at fair value are recorded in “Gain on sale of loans held for sale” on the Consolidated Statements of Income.

The following table provides estimated fair values of the Company’s financial instruments at the dates indicated, whether recognized at fair value or not on the Consolidated Balance Sheets:

	June 30,				December 31,
	2024				2023
Financial Assets	Carrying		Fair		Carrying		Fair
Level 1 inputs:	Amount		Value		Amount		Value
Cash and cash equivalents	$	33,011	$	33,011	$	65,691	$	65,691
Certificates of deposit at other financial institutions		12,707		12,707		24,167		24,167
Level 2 inputs:
Securities available-for-sale, at fair value		221,182		221,182		292,933		292,933
Securities held-to-maturity, gross		8,500		7,867		8,500		7,666
Loans held for sale, at fair value		53,811		53,811		25,668		25,668
FHLB stock, at cost		10,322		10,322		2,114		2,114
Forward TBA mortgage-backed securities		122		122		—		—
Loans receivable, at fair value		13,868		13,868		15,088		15,088
Interest rate swaps - cash flow and fair value hedges		9,654		9,654		6,431		6,431
Accrued interest receivable		13,792		13,792		14,005		14,005
Interest rate swaps - dealer offsets to customer swap positions		71		71		64		64
Level 3 inputs:
Loans receivable, gross		2,474,554		2,364,761		2,417,927		2,276,397
MSRs, held at lower of cost or fair value		9,352		20,788		9,090		20,552
MSRs held for sale, held at lower of cost or fair value		—		—		8,086		17,611
Fair value interest rate locks with customers		378		378		—		—
Financial Liabilities
Level 2 inputs:
Deposits		2,382,803		2,374,574		2,522,323		2,515,026
Borrowings		181,895		180,748		93,746		93,416
Subordinated notes, excluding unamortized debt issuance costs		50,000		44,151		50,000		43,480
Accrued interest payable		3,116		3,116		5,473		5,473
Interest rate swaps - cash flow and fair value hedges		—		—		375		375
Forward TBA mortgage-backed securities		—		—		284		284
Interest rate swaps - customer swap positions		71		71		63		63
Level 3 inputs:
Mandatory and best effort forward commitments with investors		316		316		188		188

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Note 11 - Earnings Per Share

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE 11 – EARNINGS PER SHARE

The Company computes earnings per share using the two-class method, which is an earnings allocation method for computing earnings per share that treats a participating security as having rights to earnings that would otherwise have been available to common shareholders. Basic earnings per share are computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Unvested share-based awards containing non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.

The following table presents a reconciliation of the components used to compute basic and diluted earnings per share at or for the dates indicated:

	At or For the Three Months Ended June 30,						At or For the Six Months Ended June 30,
Numerator	2024			2023			2024			2023
Net income	$	8,959		$	9,116		$	17,356		$	17,328
Dividends and undistributed earnings allocated to participating securities		(138	)		(160	)		(270	)		(307	)
Net income available to common shareholders	$	8,821		$	8,956		$	17,086		$	17,021
Denominator (shown as actual):
Basic weighted average common shares outstanding		7,688,246			7,637,210			7,664,368			7,635,647
Dilutive shares		108,007			109,126			114,354			133,870
Diluted weighted average common shares outstanding		7,796,253			7,746,336			7,778,722			7,769,517
Basic earnings per share	$	1.15		$	1.17		$	2.23		$	2.23
Diluted earnings per share	$	1.13		$	1.16		$	2.20		$	2.19
Potentially dilutive weighted average share options that were not included in the computation of diluted earnings per share because to do so would be anti-dilutive.		37,949			67,675			33,000			50,555

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Note 12 - Stock-based Compensation

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

NOTE 12 – STOCK-BASED COMPENSATION

Stock Options and Restricted Stock

On May 17, 2018, the shareholders of FS Bancorp approved the 2018 Equity Incentive Plan (the “2018 Plan”) that authorized 1.3 million shares of the Company’s common stock to be awarded. The 2018 Plan provides for the grant of incentive stock options, nonqualified stock options, and up to 326,000 shares as restricted stock awards (“RSAs”) to directors, emeritus directors, officers, employees or advisory directors of the Company. At June 30, 2024, there were 265,532 stock option awards and 80,622 RSAs available for future grants under the 2018 Plan.

Total share-based compensation expense was $389,000 and $784,000 for the three and six months ended  June 30, 2024, respectively, and $364,000 and $1.0 million for the three and six months ended  June 30, 2023, respectively.

Stock Options

The 2018 Plan consists of stock option awards that may be granted as incentive stock options or nonqualified stock options. Stock option awards generally vest over a one-year period for independent directors or over a five-year period for employees and officers with 20% vesting on the anniversary date of each grant date as long as the award recipient remains in service to the Company. The options are exercisable after vesting for up to the remaining term of the original grant. The maximum term of the options granted is 10 years. Any unexercised stock options will expire 10 years after the grant date or sooner in the event of the award recipient’s termination of service with the Company or the Bank. The fair value of each stock option award is estimated on the grant date using a Black-Scholes Option pricing model that uses the following assumptions. The dividend yield is based on the current quarterly dividend in effect at the time of the grant. Historical employment data is used to estimate the forfeiture rate. The historical volatility of the Company's stock price over a specified period of time is used for the expected volatility.  The Company bases the risk-free interest rate on the comparable U.S. Treasury rate for the discount rate associated with the stock in effect on the date of the grant. The Company elected to use Staff Accounting Bulletin 107, simplified expected term calculation for the “Share-Based Payments” method permitted by the SEC to calculate the expected term. This method uses the vesting term of an option along with the contractual term, setting the expected life at 5.5 years for one-year vesting and 6.5 years for five-year vesting.

The following table presents a summary of the Company’s stock option awards during the dates indicated (shown as actual):

					Weighted-Average
			Weighted-		Remaining
			Average		Contractual Term In		Aggregate
	Shares		Exercise Price		Years		Intrinsic Value
Outstanding at January 1, 2024		662,279	$	28.12		6.69	$	5,852,975
Granted		—	$	—		—		—
Less exercised		18,612	$	8.45		—	$	531,699
Less forfeited		12,000		30.73		—		—
Outstanding at June 30, 2024		631,667	$	28.65		6.32	$	4,925,343
Expected to vest, assuming a 0.31% annual forfeiture rate at June 30, 2024 (1)		624,770	$	28.65		6.24	$	4,872,165
Exercisable at June 30, 2024		364,850	$	27.88		5.28	$	3,125,310

(1) Forfeiture rate has been calculated and estimated to assume a forfeiture of 3.1% of the options over 10 years.

At June 30, 2024, there was $1.3 million of total unrecognized forfeiture adjusted compensation cost related to nonvested stock options granted under the 2018 Plan. The cost is expected to be recognized over the remaining weighted-average vesting period of 3.0 years.

Restricted Stock Awards

The RSAs’ fair value is equal to the value of the market price of FS Bancorp’s common stock on the grant date and compensation expense is recognized over the vesting period of the awards based on the fair value of the restricted stock. Shares granted under the 2018 Plan generally vest over a one-year period for independent directors and a five-year period for employees and officers beginning on the grant date. Any nonvested RSAs will be forfeited in the event of the award recipient’s termination of service with the Company or the Bank.

The following table presents a summary of the Company’s nonvested awards during the dates indicated (shown as actual):

			Weighted-Average
			Grant-Date Fair Value
Nonvested Shares	Shares		Per Share
Nonvested at January 1, 2024		102,144	$	29.61
Granted		—		—
Less vested		—		—
Less forfeited		4,000		30.73
Nonvested at June 30, 2024		98,144	$	29.57

At June 30, 2024, there was $2.0 million of total unrecognized forfeiture adjusted compensation cost related to nonvested shares granted under the 2018 Plan as RSAs. The cost is expected to be recognized over the remaining weighted-average vesting period of 3.0 years.

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Note 13 - Regulatory Capital

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

NOTE 13 – REGULATORY CAPITAL

The Bank is subject to various regulatory capital requirements administered by the Federal Reserve and the FDIC. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines of the regulatory framework for prompt corrective action, the Bank must meet specific capital adequacy guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital classification is also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Under the risk-based capital adequacy framework, quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of Tier 1 capital (as defined in the regulations) to total average assets (as defined), and minimum ratios of Tier 1 total capital (as defined) and common equity Tier 1 (“CET 1”) capital to risk-weighted assets (as defined).

The Bank must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage, and CET 1 capital ratios as set forth in the table below to be categorized as well capitalized. At June 30, 2024, the Bank was categorized as well capitalized under applicable regulatory requirements. There are no conditions or events since that notification that management believes have changed the Bank’s category. Management believes, at June 30, 2024, that the Bank met all capital adequacy requirements.

The following tables compare the Bank’s actual capital amounts and ratios to their minimum regulatory capital requirements and well capitalized regulatory capital at the dates indicated:

																To be Well Capitalized
																Under Prompt
						For Capital					For Capital Adequacy					Corrective
	Actual					Adequacy Purposes					with Capital Buffer					Action Provisions
Bank Only	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
At June 30, 2024
Total risk-based capital
(to risk-weighted assets)	$	355,165		13.85	%	$	205,122		8.00	%	$	269,223		10.50	%	$	256,403		10.00	%
Tier 1 risk-based capital
(to risk-weighted assets)	$	323,105		12.60	%	$	153,842		6.00	%	$	217,943		8.50	%	$	205,122		8.00	%
Tier 1 leverage capital
(to average assets)	$	323,105		10.94	%	$	118,153		4.00	%	$	N/A		N/A		$	147,691		5.00	%
CET 1 capital
(to risk-weighted assets)	$	323,105		12.60	%	$	115,381		4.50	%	$	179,482		7.00	%	$	166,662		6.50	%
At December 31, 2023
Total risk-based capital
(to risk-weighted assets)	$	339,436		13.37	%	$	203,094		8.00	%	$	266,561		10.50	%	$	253,868		10.00	%
Tier 1 risk-based capital
(to risk-weighted assets)	$	307,686		12.12	%	$	152,321		6.00	%	$	215,787		8.50	%	$	203,094		8.00	%
Tier 1 leverage capital
(to average assets)	$	307,686		10.39	%	$	118,488		4.00	%	$	N/A		N/A		$	148,109		5.00	%
CET 1 capital
(to risk-weighted assets)	$	307,686		12.12	%	$	114,240		4.50	%	$	177,707		7.00	%	$	165,014		6.50	%

In addition to the minimum CET 1, Tier 1, total capital and leverage ratios, the Bank is required to maintain a capital conservation buffer consisting of additional CET 1 capital greater than 2.5% of risk-weighted assets above the required minimum capital levels to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. At June 30, 2024, the Bank’s capital exceeded the minimum required capital with the required conservation buffer.

The Company is a bank holding company registered with the Federal Reserve. Bank holding companies are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended, and the regulations of the Federal Reserve. Bank holding companies with less than $3.0 billion in assets are generally not subject to compliance with the Federal Reserve’s capital regulations, which are generally the same as the capital regulations applicable to the Bank. The Federal Reserve has a policy that a bank holding company is required to serve as a source of financial and managerial strength to the holding company’s subsidiary bank and expects the holding company’s subsidiary bank to be well capitalized under the prompt corrective action regulations. If the Company were subject to regulatory guidelines for bank holding companies with $3.0 billion or more in assets at June 30, 2024, it would have exceeded all regulatory capital requirements. For informational purposes, the regulatory capital ratios calculated for the Company at  June 30, 2024 were 9.5% for Tier 1 leverage-based capital, 10.9% for Tier 1 risk-based capital, 14.1% for total risk-based capital, and 10.9% for CET 1 capital ratio. The regulatory capital ratios calculated for the Company at December 31, 2023 were 9.0% for Tier 1 leverage-based capital, 10.5% for Tier 1 risk-based capital, 13.7% for total risk-based capital, and 10.5% for CET 1 capital ratio.

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Note 14 - Business Segments

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 14 – BUSINESS SEGMENTS

The Company’s business segments are determined based on the products and services provided, as well as the nature of the related business activities, and they reflect the way financial information is currently evaluated by management. This process is dynamic and is based on management’s current view of the Company’s operations and is not necessarily comparable with similar information for other financial institutions. The Company defines its business segments by product type and customer segment which it has organized into two lines of business: commercial and consumer banking and home lending.

The Company uses various management accounting methodologies to assign certain income statement items to the responsible operating segment, including:

● a funds transfer pricing (“FTP”) system, which allocates interest income credits and funding charges between the segments, assigning to each segment a funding credit for its liabilities, such as deposits, and a charge to fund its assets. The FTP methodology is based on management's estimated cost of originating funds including the cost of overhead for deposit generation;

● a cost per loan serviced allocation based on the number of loans being serviced on the balance sheet and the number of loans serviced for third parties;

● an allocation based upon the approximate square footage utilized by the home lending segment in Company owned locations;

● an allocation of charges for services rendered to the segments by centralized functions, such as corporate overhead, which are generally based on the number of full-time employees (“FTEs”) in each segment; and

● an allocation of the Company’s consolidated income taxes which are based on the effective tax rate applied to the segment’s pretax income or loss.

A description of the Company’s business segments and the products and services that they provide is as follows:

Commercial and Consumer Banking Segment

The commercial and consumer banking segment provides diversified financial products and services to our commercial and consumer customers through Bank branches, online banking platforms, mobile banking apps, and telephone banking. These products and services include deposit products; residential, consumer, business and commercial real estate lending portfolios and cash management services. The Company originates consumer loans, commercial and multi-family real estate loans, construction loans for residential and multi-family construction, and commercial business loans. At June 30, 2024, the Company’s retail deposit branch network consisted of 27 branches in the Pacific Northwest. This segment is also responsible for the management of the investment portfolio and other assets of the Bank.

Home Lending Segment

The home lending segment originates one-to-four-family residential mortgage loans primarily for sale in the secondary markets as well as loans held for investment. A majority of these mortgage loans are sold to or securitized by FNMA, FHLMC, GNMA, or the FHLB of Des Moines, while the Company generally retains the right to service these loans. Loans originated under the guidelines of the Federal Housing Administration or (“FHA”), US Department of Veterans Affairs or VA, and United States Department of Agriculture or USDA are generally sold servicing released to a correspondent bank or mortgage company. The Company has the option to sell loans on a servicing-released or servicing-retained basis to correspondent lenders. A small percentage of its loans are brokered to other lenders. On occasion, the Company may sell a portion of its MSRs portfolio and may sell small pools of loans initially originated to be held in the loan portfolio. The Company manages the loan funding and the interest rate risk associated with the secondary market loan sales and the retained one-to-four-family MSRs within this business segment. One-to-four-family loans originated for investment and held in this segment are allocated to the home lending segment with a corresponding provision expense and FTP for cost of funds.

Segment Financial Results

The tables below summarize the financial results for each segment based on the factors mentioned above within each segment for the three and six months ended June 30, 2024 and 2023:

	At or For the Three Months Ended June 30, 2024
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income (1)	$	28,051		$	2,350		$	30,401
(Provision) benefit for credit losses		(1,214	)		137			(1,077	)
Noninterest income (2)		2,269			3,599			5,868
Noninterest expense (3)		(19,043	)		(4,814	)		(23,857	)
Income before provision for income taxes		10,063			1,272			11,335
Provision for income taxes		(2,113	)		(263	)		(2,376	)
Net income	$	7,950		$	1,009		$	8,959
Total average assets for period ended	$	2,359,741		$	588,090		$	2,947,831
Full-time employees ("FTEs")		450			121			571

	At or For the Three Months Ended June 30, 2023
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income (1)	$	28,269		$	3,283		$	31,552
Provision for credit losses		(629	)		(87	)		(716	)
Noninterest income (2)		2,706			2,127			4,833
Noninterest expense (3)		(18,950	)		(5,254	)		(24,204	)
Income before provision for income taxes		11,396			69			11,465
Provision for income taxes		(2,335	)		(14	)		(2,349	)
Net income	$	9,061		$	55		$	9,116
Total average assets for period ended	$	2,313,228		$	528,662		$	2,841,890
FTEs		444			137			581

	At or For the Six Months Ended June 30, 2024
	Commercial
	and Consumer
Condensed income statement:	Banking			Home Lending			Total
Net interest income (1)	$	56,137		$	4,610		$	60,747
Provision for credit losses		(2,465	)		(11	)		(2,476	)
Noninterest income (2)		4,662			6,317			10,979
Noninterest expense (3)		(38,051	)		(9,335	)		(47,386	)
Income before provision for income taxes		20,283			1,581			21,864
Provision for income taxes		(4,182	)		(326	)		(4,508	)
Net income	$	16,101		$	1,255		$	17,356
Total average assets for period ended	$	2,380,803		$	572,386		$	2,953,189
FTEs		450			121			571

	At or For the Six Months Ended June 30, 2023
	Commercial
	and Consumer
Condensed income statement:	Banking			Home Lending			Total
Net interest income (1)	$	55,769		$	6,445		$	62,214
Provision for credit losses		(2,118	)		(706	)		(2,824	)
Noninterest income (2)		5,086			4,966			10,052
Noninterest expense (3)		(37,560	)		(10,168	)		(47,728	)
Income before provision for income taxes		21,177			537			21,714
Provision for income taxes		(4,278	)		(108	)		(4,386	)
Net income	$	16,899		$	429		$	17,328
Total average assets for period ended	$	2,281,815		$	510,419		$	2,792,234
FTEs		444			137			581

(1) Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets.

(2) Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value, and subsequently transferred to loans held for investment. Gains and losses from changes in fair value for these loans are reported in earnings as a component of noninterest income. For the three and six months ended June 30, 2024, the Company recorded a net increase in fair value of $184,000 and $186,000, and a net decrease in fair value of $520,000 and net increase in fair value of $57,000 for the three and six months ended June 30, 2023, respectively. As of June 30, 2024 and 2023, there was $13.9 million and $14.3 million, respectively, in residential mortgage loans recorded at fair value as they were previously transferred from loans held for sale to loans held for investment.

(3) Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three and six months ended June 30, 2024, the Home Lending segment included allocated overhead expenses of $1.5 million and $3.0 million, compared to the three and six months ended June 30, 2023, of $1.6 million and $3.2 million, respectively.    

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Note 15 - Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 15 – GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and certain other intangibles generally arise from business combinations accounted for under the acquisition method of accounting. Goodwill totaled $3.6 million at both  June 30, 2024, and December 31, 2023, and represents the excess of the total acquisition price paid over the fair value of the assets acquired, net of the fair values of liabilities assumed in the Branch Purchase on February 24, 2023, and the purchase of four retail bank branches from Bank of America on January 22, 2016. Goodwill is not amortized but is evaluated for impairment on an annual basis at December 31 of each year or whenever events or changes in circumstances indicate the carrying value may not be recoverable. The Company performed an impairment analysis at December 31, 2023, and determined that no impairment of goodwill existed.

Core deposit intangible (“CDI”) is evaluated for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable, with any changes in estimated useful life accounted for prospectively over the revised remaining life. As of June 30, 2024, management believes that there have been no events or changes in the circumstances that would indicate a potential impairment of CDI.

The following table summarizes the changes in the Company’s other intangible assets comprised solely of CDI for the year ended  December 31, 2023, and the six months ended June 30, 2024.

	Other Intangible Assets
			Accumulated
	Gross CDI		Amortization			Net CDI
Balance, December 31, 2022	$	7,490	$	(4,121	)	$	3,369
Additions as a result of the Branch Purchase		17,438		—			17,438
Amortization		—		(3,464	)		(3,464	)
Balance, December 31, 2023		24,928		(7,585	)		17,343
Amortization		—		(1,860	)		(1,860	)
Balance, June 30, 2024	$	24,928	$	(9,445	)	$	15,483

The CDI represents the fair value of the intangible core deposit base acquired in business combinations. The CDI will be amortized on an accelerated basis over 10 years for the CDI related to the Branch Purchase, on a straight-line basis over 10 years for the CDI related to the Anchor Bank acquisition in  November 2018 (“Anchor Acquisition”) and on an accelerated basis over approximately nine years for the CDI related to the purchase of four retail bank branches from Bank of America on January 22, 2016. Total amortization expense was $919,000 and $1.9 million for the three and six months ended June 30, 2024, and $1.0 million and $1.5 million for the same periods in 2023, respectively.

Amortization expense for CDI is expected to be as follows at June 30, 2024:

Remainder of 2024	$	1,773
2025		3,191
2026		2,846
2027		2,500
2028		2,110
Thereafter		3,063
Total	$	15,483

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Note 16 - Revenue From Contracts With Customers

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

NOTE 16 – REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition

In accordance with Topic 606, revenues are recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services that are promised within each contract and identifies those that contain performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

All the Company’s revenue from contracts with customers in-scope of ASC 606 is recognized in noninterest income and included in our commercial and consumer banking segment. The following table presents noninterest income, segregated by revenue streams in-scope and out-of-scope and/or immaterial to Topic 606, for the dates indicated.

	At or For the Three Months Ended June 30,				For the Six Months Ended June 30,
Noninterest income	2024		2023		2024		2023
In-scope of Topic 606:
Debit card interchange fees	$	815	$	882	$	1,577	$	1,520
Deposit service and account maintenance fees		358		388		723		664
Noninterest income (in-scope of Topic 606)		1,173		1,270		2,300		2,184
Noninterest income (out-of-scope and/or immaterial to Topic 606)		4,695		3,563		8,679		7,868
Total noninterest income	$	5,868	$	4,833	$	10,979	$	10,052

Deposit Service and Account Maintenance Fees

The Bank earns fees from its deposit customers for account maintenance, transaction-based services, and overdraft charges.  Account maintenance fees consist primarily of account fees and analyzed account fees charged on deposit accounts monthly.  The performance obligation is satisfied, and the fees are recognized monthly as the service period is completed. Transaction-based fees on deposit accounts are charged to deposit customers for specific services provided to the customer, such as wire fees, as well as charges against the account, such as fees for non-sufficient funds and overdrafts. The performance obligation is completed as the transaction occurs and the fees are recognized at the time each specific service is provided to the customer.

Debit Interchange Income

Debit and ATM interchange income represent fees earned when a debit card issued by the Bank is used.  The Bank earns interchange fees from debit cardholder transactions through the Visa payment network.  Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. The performance obligation is satisfied, and the fees are earned when the cost of the transaction is charged to the cardholders’ debit card.

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Insider Trading Arrangements

3 Months Ended

6 Months Ended

Jun. 30, 2024

Jun. 30, 2024

Insider Trading Arr Line Items

Material Terms of Trading Arrangement [Text Block]

Item 5.  Other Information

(a) None.

(b) None.

(c) Trading Plans. During the three months ended  June 30, 2024, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Rule 10b5-1 Arrangement Adopted [Flag]

false

Non-Rule 10b5-1 Arrangement Adopted [Flag]

false

Rule 10b5-1 Arrangement Terminated [Flag]

false

Non-Rule 10b5-1 Arrangement Terminated [Flag]

false

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Financial Statement Presentation – The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10‑Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). These unaudited interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10‑K which includes all the audited financial statements and footnotes required by U.S. GAAP for complete financial statements for the year ended December 31, 2023, as filed with the SEC on March 15, 2024. In the opinion of management, all normal adjustments and recurring accruals considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included.

The results for the three and six months ended June 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, or any other future period. The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect amounts reported in the financial statements. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses (“ACL”).

Amounts presented in the consolidated financial statements and footnote tables are rounded and presented to the nearest thousands of dollars except per share amounts. If the amounts are above $1.0 million, they are rounded one decimal point, and if they are above $1.0 billion, they are rounded two decimal points.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation – The consolidated financial statements include the accounts of FS Bancorp and its wholly owned subsidiary, 1st Security Bank. All material intercompany accounts have been eliminated in consolidation.

Segment Reporting, Policy [Policy Text Block]

Segment Reporting – The Company operates in two business segments through the Bank: commercial and consumer banking and home lending. The Company’s business segments are determined based on the products and services provided, as well as the nature of the related business activities, and they reflect the way financial information is regularly reviewed for the purpose of allocating resources and evaluating performance of the Company’s businesses. The results for these business segments are based on management’s accounting process, which assigns income statement items and assets to each responsible operating segment. This process is dynamic and is based on management’s view of the Company’s operations. See “Note 14 – Business Segments.”

Subsequent Events, Policy [Policy Text Block]

Subsequent Events – The Company has evaluated events and transactions after  June 30, 2024, for potential recognition or disclosure.

New Accounting Pronouncements, Policy [Policy Text Block]

RECENT ACCOUNTING PRONOUNCEMENTS

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform” (“Topic 848”). This ASU provides optional guidance for a limited period to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU apply to modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) that replace a reference rate affected by reference rate reform (including rates referenced in fallback provisions) and contemporaneous modifications of other contract terms related to the replacement of the reference rate (including contract modifications to add or change fallback provisions). The following optional expedients for applying the requirements of certain Topics or Industry Subtopics in the Codification are permitted for contracts that are modified because of reference rate reform and that meet certain scope guidance: 1) Modifications of contracts within the scope of Topics 310, Receivables, and 470, Debt, should be accounted for by prospectively adjusting the effective interest rate; 2) Modifications of contracts within the scope of Topics 840, Leases, and 842, Leases, should be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate (for example, the incremental borrowing rate) or remeasurements of lease payments that otherwise would be required under those Topics for modifications not accounted for as separate contracts; and 3) Modifications of contracts do not require an entity to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract under Subtopic 815-15, Derivatives and Hedging – Embedded Derivatives. In January 2021, ASU 2021-01 updated amendments in the new ASU to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in this ASU and the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. An entity may elect to apply the amendments in this ASU on a full retrospective basis as of any date from the effective dates. The amendments in this ASU have differing effective dates, beginning with an interim period including and subsequent to March 12, 2020 through December 31, 2022, deferred now until December 31, 2024. The Company does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements and related disclosures.

In November 2023, the FASB issued guidance within ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU and all existing disclosures in Topic 280. The amendments in this ASU are intended to improve segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The key amendments included in this ASU:

● Require disclosure on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and are included within each reported measure of segment profit and loss.

● Require disclosure on an annual and interim basis, an amount for other segment items (defined in the ASU) and a description of its composition.

● Clarify that if the CODM uses more than one measure of the segment's profit or loss in assessing performance, one or more of those additional measures may be reported.

● Require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing performance.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the effect that ASU 2023-07 will have on the Company’s consolidated financial statements and related disclosures.

In December 2023, the FASB issued guidance within ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in the ASU are intended to provide more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The ASU requires disclosure in the rate reconciliation of specific categories as well as provide additional information for reconciling items that meet a quantitative threshold.

Those amendments require disclosure of the following information about income taxes paid on an annual basis:

● Income taxes paid (net of refunds received), disaggregated by federal and state taxes and by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than five percent of total income taxes paid (net refunds received).

● Income tax expense (or benefit) from continuing operations disaggregated by federal and state jurisdictions.

The ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied on a prospective basis. The Company is evaluating the effect that ASU 2023-09 will have on its consolidated financial statements and related disclosures. 

Application of New Accounting Guidance Adopted in 2024

On January 1, 2024, the Company adopted ASU No.2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security should not be considered in measuring fair value, nor should the contractual restriction be recognized and measured separately.  Further, this ASU requires disclosure of the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet, the nature and remaining duration of the restrictions(s), and the circumstances that could cause a lapse in the restriction(s).  ASU 2022-03 is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The adoption of ASU 2022-03 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

On January 1, 2024, the Company adopted ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323):  Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, a consensus of the Emerging Issues Task Force.  ASU 2023-02 allows an entity the option to apply the proportional amortization method of accounting to other equity investments that are made for the primary purpose of receiving tax credits or other income tax benefits if certain conditions are met.  Prior to this ASU, the application of the proportional amortization method of accounting was limited to investments in low-income housing tax credit structures.  The proportional amortization method of accounting results in the amortization of applicable investments, as well as the related income tax credits or other income tax benefits received, being presented on a single line in the statements of income, income tax expense.  Under this ASU, an entity has the option to apply the proportional amortization method of accounting to applicable investments on a tax-credit-program-by-tax-credit program basis.  In addition, the amendments in this ASU require that all tax equity investments accounted for using the proportional amortization method use the delayed equity contribution guidance in paragraph 323-740-25-3, requiring a liability to be recognized for delayed equity contributions that are unconditional and legally binding or for equity contributions that are contingent upon a future event when that contingent event becomes probable. Under this ASU, low-income housing tax credit investments for which the proportional amortization method is not applied can no longer be accounted for using the delayed equity contribution guidance.  Further, this ASU specifies that impairment of low-income housing tax credit investments not accounted for using the equity method must apply the impairment guidance in Subtopic 323-10: Investments - Equity Method and Joint Ventures - Overall.  This ASU also clarifies that for low-income housing tax credit investments not accounted for under the proportional amortization method or the equity method, an entity shall account for them under Topic 321: Investments - Equity Securities. The amendments in the ASU also require additional disclosures in interim and annual periods concerning investments for which the proportional amortization method is applied, including (i) the nature of tax equity investments, and (ii) the effect of tax equity investments and related income tax credits and other income tax benefits on the financial position and results of operations.  ASU 2023-02 is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.  The adoption of ASU 2023-02 did not have a material impact on the Company's consolidated financial statements and related disclosures.

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Note 2 - Investments (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Investment [Table Text Block]

	June 30, 2024
								Estimated
	Amortized		Unrealized		Unrealized			Fair
SECURITIES AVAILABLE-FOR-SALE	Cost		Gains		Losses			Values		ACL
U.S. agency securities	$	20,238	$	45	$	(3,167	)	$	17,116	$	—
Corporate securities		16,000		51		(866	)		15,185		—
Municipal bonds		84,345		—		(12,700	)		71,645		—
Mortgage-backed securities		112,462		168		(11,909	)		100,721		—
U.S. Small Business Administration securities		17,603		79		(1,167	)		16,515		—
Total securities available-for-sale		250,648		343		(29,809	)		221,182		—
SECURITIES HELD-TO-MATURITY
Corporate securities		8,500		—		(633	)		7,867		45
Total securities held-to-maturity		8,500		—		(633	)		7,867		45
Total securities	$	259,148	$	343	$	(30,442	)	$	229,049	$	45

	December 31, 2023
								Estimated
	Amortized		Unrealized		Unrealized			Fair
SECURITIES AVAILABLE-FOR-SALE	Cost		Gains		Losses			Values		ACL
U.S. agency securities	$	21,151	$	46	$	(3,179	)	$	18,018	$	—
Corporate securities		13,000		613		(741	)		12,872		—
Municipal bonds		138,803		42		(19,398	)		119,447		—
Mortgage-backed securities		112,855		238		(11,845	)		101,248		—
U.S. Small Business Administration securities		42,886		—		(1,538	)		41,348		—
Total securities available-for-sale		328,695		939		(36,701	)		292,933		—
SECURITIES HELD-TO-MATURITY
Corporate securities		8,500		—		(834	)		7,666		45
Total securities held-to-maturity		8,500		—		(834	)		7,666		45
Total securities	$	337,195	$	939	$	(37,535	)	$	300,599	$	45

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Table Text Block]

SECURITIES HELD-TO-MATURITY	For the Three Months Ended June 30,
Corporate Securities	2024		2023
Beginning ACL balance	$	45	$	31
Provision for (recapture of) credit losses		—		—
Total ending ACL balance	$	45	$	31

SECURITIES HELD-TO-MATURITY	For the Six Months Ended June 30,
Corporate Securities	2024		2023
Beginning ACL balance	$	45	$	31
Provision for (recapture of) credit losses		—		—
Total ending ACL balance	$	45	$	31

Debt Securities, Held-to-Maturity, Credit Quality Indicator [Table Text Block]

	June 30,		December 31,
Corporate securities	2024		2023
BBB/BBB-	$	7,000	$	7,000
BB+		1,500		1,500
Total	$	8,500	$	8,500

Schedule of Financial Instruments Owned and Pledged as Collateral [Table Text Block]

	June 30, 2024
Purpose or beneficiary	Carrying Value		Amortized Cost		Fair Value
State and local government public deposits	$	34,729	$	40,641	$	34,729

Gain (Loss) on Securities [Table Text Block]

	June 30, 2024
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
SECURITIES AVAILABLE-FOR-SALE	Value		Losses			Value		Losses			Value		Losses
U.S. agency securities	$	—	$	—		$	15,071	$	(3,167	)	$	15,071	$	(3,167	)
Corporate securities		7,874		(126	)		4,260		(740	)		12,134		(866	)
Municipal bonds		884		(9	)		70,761		(12,691	)		71,645		(12,700	)
Mortgage-backed securities		11,908		(41	)		65,462		(11,868	)		77,370		(11,909	)
U.S. Small Business Administration securities		—		—			7,593		(1,167	)		7,593		(1,167	)
Total securities available-for-sale		20,666		(176	)		163,147		(29,633	)		183,813		(29,809	)
SECURITIES HELD-TO-MATURITY
Corporate securities		—		—			7,867		(633	)		7,867		(633	)
Total securities held-to-maturity		—		—			7,867		(633	)		7,867		(633	)
Total securities	$	20,666	$	(176	)	$	171,014	$	(30,266	)	$	191,680	$	(30,442	)

	December 31, 2023
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
SECURITIES AVAILABLE-FOR-SALE	Value		Losses			Value		Losses			Value		Losses
U.S. agency securities	$	—	$	—		$	15,972	$	(3,179	)	$	15,972	$	(3,179	)
Corporate securities		959		(41	)		4,300		(700	)		5,259		(741	)
Municipal bonds		3,922		(23	)		113,577		(19,375	)		117,499		(19,398	)
Mortgage-backed securities		20,662		(113	)		67,376		(11,732	)		88,038		(11,845	)
U.S. Small Business Administration securities		33,211		(460	)		8,137		(1,078	)		41,348		(1,538	)
Total securities available-for-sale		58,754		(637	)		209,362		(36,064	)		268,116		(36,701	)
SECURITIES HELD-TO-MATURITY
Corporate securities		—		—			7,666		(834	)		7,666		(834	)
Total securities held-to-maturity		—		—			7,666		(834	)		7,666		(834	)
Total securities	$	58,754	$	(637	)	$	217,028	$	(36,898	)	$	275,782	$	(37,535	)

Investments Classified by Contractual Maturity Date [Table Text Block]

	June 30,				December 31,
	2024				2023
SECURITIES AVAILABLE-FOR-SALE	Amortized		Fair		Amortized		Fair
U.S. agency securities	Cost		Value		Cost		Value
Due within one year	$	—	$	—	$	922	$	914
Due after one year through five years		4,954		4,499		3,947		3,544
Due after five years through ten years		10,973		9,207		11,972		10,139
Due after ten years		4,311		3,410		4,310		3,421
Subtotal		20,238		17,116		21,151		18,018
Corporate securities
Due within one year		—		—		1,000		1,004
Due after one year through five years		10,000		9,960		6,000		6,609
Due after five years through ten years		4,000		3,839		4,000		3,839
Due after ten years		2,000		1,386		2,000		1,420
Subtotal		16,000		15,185		13,000		12,872
Municipal bonds
Due within one year		1,000		1,000		1,013		1,003
Due after one year through five years		78		78		757		751
Due after five years through ten years		6,316		5,852		7,603		7,101
Due after ten years		76,951		64,715		129,430		110,592
Subtotal		84,345		71,645		138,803		119,447
Mortgage-backed securities
Federal National Mortgage Association (“FNMA”)		83,261		73,097		76,369		66,275
Federal Home Loan Mortgage Corporation (“FHLMC”)		21,351		20,331		32,311		31,376
Government National Mortgage Association (“GNMA”)		7,850		7,293		4,175		3,597
Subtotal		112,462		100,721		112,855		101,248
U.S. Small Business Administration securities
Due within one year		42		41		198		196
Due after one year through five years		1,434		1,373		1,860		1,824
Due after five years through ten years		6,858		6,648		21,420		20,929
Due after ten years		9,269		8,453		19,408		18,399
Subtotal		17,603		16,515		42,886		41,348
Total securities available-for-sale		250,648		221,182		328,695		292,933
SECURITIES HELD-TO-MATURITY
Corporate securities
Due after five years through ten years		8,500		7,867		8,500		7,666
Total securities held-to-maturity		8,500		7,867		8,500		7,666
Total securities	$	259,148	$	229,049	$	337,195	$	300,599

Schedule of Realized Gain (Loss) [Table Text Block]

	For the Three Months Ended
	June 30, 2024
			Gross		Gross
	Proceeds		Gains		(Losses)
Securities available-for-sale	$	54,423	$	204	$	(53)

	For the Six Months Ended
	June 30, 2024
			Gross		Gross
	Proceeds		Gains		(Losses)
Securities available-for-sale	$	98,459	$	204	$	(8,051	)

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Note 3 - Loans Receivable and Allowance for Credit Losses - Loans (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	June 30,			December 31,
REAL ESTATE LOANS	2024			2023
Commercial ("CRE")	$	359,404		$	366,328
Construction and development		274,209			303,054
Home equity		73,749			69,488
One-to-four-family (excludes loans held for sale)		588,966			567,742
Multi-family		239,675			223,769
Total real estate loans		1,536,003			1,530,381
CONSUMER LOANS
Indirect home improvement		563,621			569,903
Marine		74,627			73,310
Other consumer		3,440			3,540
Total consumer loans		641,688			646,753
COMMERCIAL BUSINESS LOANS
Commercial and industrial ("C&I")		285,183			238,301
Warehouse lending		25,548			17,580
Total commercial business loans		310,731			255,881
Total loans receivable, gross		2,488,422			2,433,015
ACL on loans		(31,238	)		(31,534	)
Total loans receivable, net	$	2,457,184		$	2,401,481

Financing Receivable, Allowance for Credit Loss [Table Text Block]

	At or For the Three Months Ended June 30, 2024
	Real						Commercial
ACL ON LOANS	Estate			Consumer			Business			Unallocated		Total
Beginning balance	$	14,253		$	12,933		$	4,293		$	—	$	31,479
(Reversal of) provision for credit losses on loans		(165	)		914			252			—		1,001
Charge-offs		—			(1,015	)		(733	)		—		(1,748	)
Recoveries		—			421			85			—		506
Net charge-offs		—			(594	)		(648	)		—		(1,242	)
Total ending ACL balance	$	14,088		$	13,253		$	3,897		$	—	$	31,238

	At or For the Three Months Ended June 30, 2023
	Real						Commercial
ACL ON LOANS	Estate			Consumer			Business		Unallocated		Total
Beginning balance	$	12,572		$	13,401		$	3,964	$	—	$	29,937
(Reversal of) provision for credit losses on loans		(265	)		1,266			62		—		1,063
Charge-offs		—			(876	)		—		—		(876	)
Recoveries		—			226			—		—		226
Net charge-offs		—			(650	)		—		—		(650	)
Total ending ACL balance	$	12,307		$	14,017		$	4,026	$	—	$	30,350

	At or For the Six Months Ended June 30, 2024
	Real						Commercial
ACL ON LOANS	Estate			Consumer			Business			Unallocated		Total
Beginning balance	$	14,107		$	13,357		$	4,070		$	—	$	31,534
(Reversal of) provision for credit losses on loans		(19	)		1,558			883			—		2,422
Charge-offs		—			(2,501	)		(1,141	)		—		(3,642	)
Recoveries		—			839			85			—		924
Net Charge-offs		—			(1,662	)		(1,056	)		—		(2,718	)
Total ending ACL balance	$	14,088		$	13,253		$	3,897		$	—	$	31,238

	At or For the Six Months Ended June 30, 2023
	Real						Commercial
ACL ON LOANS	Estate			Consumer			Business			Unallocated		Total
Beginning balance	$	12,123		$	12,109		$	3,760		$	—	$	27,992
Provision for credit losses on loans		194			2,957			267			—		3,418
Charge-offs		(10	)		(1,585	)		(1	)		—		(1,596	)
Recoveries		—			536			—			—		536
Net charge-offs		(10	)		(1,049	)		(1	)		—		(1,060	)
Total ending ACL balance	$	12,307		$	14,017		$	4,026		$	—	$	30,350

Financing Receivable, Modified [Table Text Block]

	Payment Deferral
	Amortized Cost		% of Total Loan
June 30, 2024	Basis		Type			Financial Effect
CRE	$	1,116		0.3	%	Deferred payments and capitalized interest for a weighted-average period of 2.0 years.
December 31, 2023
CRE	$	1,088		0.3	%	Deferred payments and capitalized interest for a weighted-average period of 1.5 years.

	Combination - Term Extension and Interest Rate Reduction
	Amortized Cost		% of Total Loan
December 31, 2023	Basis		Type			Financial Effect
C&I	$	2,940		1.2	%	Reduced weighted-average contractual interest rate from 7.5% to 4.1% and added a weighted-average 5 years to the life of the loans.

Financing Receivable, Past Due [Table Text Block]

	June 30, 2024
	30-59		60-89
	Days		Days		90 Days		Total				Total
	Past		Past		or More		Past				Loans		Non-
REAL ESTATE LOANS	Due		Due		Past Due		Due		Current		Receivable		Accrual (1)
CRE	$	—	$	323	$	—	$	323	$	359,081	$	359,404	$	1,116
Construction and development		—		—		4,737		4,737		269,472		274,209		4,737
Home equity		24		—		156		180		73,569		73,749		156
One-to-four-family		78		—		—		78		588,888		588,966		170
Multi-family		—		—		—		—		239,675		239,675		—
Total real estate loans		102		323		4,893		5,318		1,530,685		1,536,003		6,179
CONSUMER LOANS
Indirect home improvement		2,265		1,041		901		4,207		559,414		563,621		2,319
Marine		181		239		85		505		74,122		74,627		327
Other consumer		5		5		5		15		3,425		3,440		6
Total consumer loans		2,451		1,285		991		4,727		636,961		641,688		2,652
COMMERCIAL BUSINESS LOANS
C&I		—		—		1,701		1,701		283,482		285,183		2,575
Warehouse lending		—		—		—		—		25,548		25,548		—
Total commercial business loans		—		—		1,701		1,701		309,030		310,731		2,575
Total loans	$	2,553	$	1,608	$	7,585	$	11,746	$	2,476,676	$	2,488,422	$	11,406

	December 31, 2023
	30-59		60-89
	Days		Days		90 Days		Total				Total
	Past		Past		or More		Past				Loans		Non-
REAL ESTATE LOANS	Due		Due		Past Due		Due		Current		Receivable		Accrual (1)
CRE	$	—	$	—	$	—	$	—	$	366,328	$	366,328	$	1,088
Construction and development		—		—		—		—		303,054		303,054		4,699
Home equity		79		25		136		240		69,248		69,488		173
One-to-four-family		—		96		—		96		567,646		567,742		96
Multi-family		—		—		—		—		223,769		223,769		—
Total real estate loans		79		121		136		336		1,530,045		1,530,381		6,056
CONSUMER LOANS
Indirect home improvement		1,759		1,248		777		3,784		566,119		569,903		1,863
Marine		373		243		137		753		72,557		73,310		342
Other consumer		57		18		6		81		3,459		3,540		8
Total consumer loans		2,189		1,509		920		4,618		642,135		646,753		2,213
COMMERCIAL BUSINESS LOANS
C&I		—		—		2,514		2,514		235,787		238,301		2,683
Warehouse lending		—		—		—		—		17,580		17,580		—
Total commercial business loans		—		—		2,514		2,514		253,367		255,881		2,683
Total loans	$	2,268	$	1,630	$	3,570	$	7,468	$	2,425,547	$	2,433,015	$	10,952

Financing Receivable Credit Quality Indicators [Table Text Block]

	June 30, 2024
															Revolving Loans
REAL ESTATE LOANS	Term Loans by Year of Origination														Converted
CRE	2024		2023		2022		2021		2020		Prior		Revolving Loans		to Term		Total Loans
Pass	$	13,315	$	47,571	$	84,920	$	58,041	$	44,659	$	76,866	$	—	$	769	$	326,141
Watch		—		3,168		10,793		12,776		—		2,199		—		—		28,936
Special mention		—		—		—		—		—		401		—		—		401
Substandard		—		—		—		—		1,631		2,295		—		—		3,926
Total CRE		13,315		50,739		95,713		70,817		46,290		81,761		—		769		359,404
Construction and development
Pass		67,600		111,041		45,515		33,272		747		508		10,311		—		268,994
Watch		—		—		—		478		—		—		—		—		478
Substandard		—		—		4,737		—		—		—		—		—		4,737
Total construction and development		67,600		111,041		50,252		33,750		747		508		10,311		—		274,209
Home equity
Pass		6,570		2,796		374		1,561		6,089		1,806		54,328		69		73,593
Substandard		—		—		—		—		—		15		141		—		156
Total home equity		6,570		2,796		374		1,561		6,089		1,821		54,469		69		73,749
One-to-four-family
Pass		33,629		103,630		175,294		118,545		79,405		75,609		—		—		586,112
Substandard		—		—		792		—		—		2,062		—		—		2,854
Total one-to-four-family		33,629		103,630		176,086		118,545		79,405		77,671		—		—		588,966
Multi-family
Pass		93		7,069		20,253		90,611		60,311		61,338		—		—		239,675
Total multi-family		93		7,069		20,253		90,611		60,311		61,338		—		—		239,675
Total real estate loans	$	121,207	$	275,275	$	342,678	$	315,284	$	192,842	$	223,099	$	64,780	$	838	$	1,536,003

	June 30, 2024
															Revolving Loans
CONSUMER LOANS	Term Loans by Year of Origination														Converted
Indirect home improvement	2024		2023		2022		2021		2020		Prior		Revolving Loans		to Term		Total Loans
Pass	$	58,842	$	150,237	$	189,391	$	83,787	$	31,830	$	47,213	$	2	$	—	$	561,302
Substandard		42		534		795		515		214		219		—		—		2,319
Total indirect home improvement		58,884		150,771		190,186		84,302		32,044		47,432		2		—		563,621
Indirect home improvement gross charge-offs		38		480		721		219		225		306		—		—		1,989
Marine
Pass		7,798		12,440		21,823		9,240		12,119		10,880		—		—		74,300
Substandard		—		—		—		—		41		286		—		—		327
Total marine		7,798		12,440		21,823		9,240		12,160		11,166		—		—		74,627
Marine gross charge-offs		—		21		128		51		83		105		—		—		388
Other consumer
Pass		120		186		433		105		51		139		2,400		—		3,434
Substandard		—		—		1		—		—		—		5		—		6
Total other consumer		120		186		434		105		51		139		2,405		—		3,440
Other consumer gross charge-offs		—		33		6		—		—		24		61		—		124
Total consumer loans	$	66,802	$	163,397	$	212,443	$	93,647	$	44,255	$	58,737	$	2,407	$	—	$	641,688

	June 30, 2024
COMMERCIAL															Revolving Loans
BUSINESS LOANS	Term Loans by Year of Origination														Converted
C&I	2024		2023		2022		2021		2020		Prior		Revolving Loans		to Term		Total Loans
Pass	$	32,106	$	22,395	$	31,209	$	17,593	$	10,159	$	11,716	$	128,359	$	744	$	254,281
Watch		—		4,978		—		743		2,082		502		10,711		—		19,016
Special mention		—		—		—		565		—		654		713		—		1,932
Substandard		—		2,718		—		2,280		1,290		1,552		2,114		—		9,954
Total C&I		32,106		30,091		31,209		21,181		13,531		14,424		141,897		744		285,183
C&I gross charge-offs		—		—		—		—		—		380		761		—		1,141
Warehouse lending
Pass		—		—		—		—		—		—		22,287		—		22,287
Special mention		—		—		—		—		—		—		3,261		—		3,261
Total warehouse lending		—		—		—		—		—		—		25,548		—		25,548
Total commercial business loans	$	32,106	$	30,091	$	31,209	$	21,181	$	13,531	$	14,424	$	167,445	$	744	$	310,731
TOTAL LOANS RECEIVABLE, GROSS
Pass	$	220,073	$	457,365	$	569,212	$	412,755	$	245,370	$	286,075	$	217,687	$	1,582	$	2,410,119
Watch		—		8,146		10,793		13,997		2,082		2,701		10,711		—		48,430
Special mention		—		—		—		565		—		1,055		3,974		—		5,594
Substandard		42		3,252		6,325		2,795		3,176		6,429		2,260		—		24,279
Total loans receivable, gross	$	220,115	$	468,763	$	586,330	$	430,112	$	250,628	$	296,260	$	234,632	$	1,582	$	2,488,422
Total gross charge-offs	$	38	$	534	$	855	$	270	$	308	$	815	$	822	$	—	$	3,642

	December 31, 2023
															Revolving Loans
REAL ESTATE LOANS	Term Loans by Year of Origination														Converted
CRE	2023		2022		2021		2020		2019		Prior		Revolving Loans		to Term		Total Loans
Pass	$	48,551	$	91,144	$	61,689	$	46,117	$	27,957	$	61,764	$	499	$	—	$	337,721
Watch		3,201		5,446		12,894		—		453		2,226		45		—		24,265
Special mention		—		—		—		—		409		—		—		—		409
Substandard		—		—		—		1,650		—		1,957		—		326		3,933
Total CRE		51,752		96,590		74,583		47,767		28,819		65,947		544		326		366,328
Construction and development
Pass		120,155		106,168		46,989		15,219		—		540		9,284		—		298,355
Substandard		—		4,699		—		—		—		—		—		—		4,699
Total construction and development		120,155		110,867		46,989		15,219		—		540		9,284		—		303,054
Home equity
Pass		4,583		398		1,584		6,525		11		2,137		54,077		—		69,315
Substandard		—		—		—		—		—		36		137		—		173
Total home equity		4,583		398		1,584		6,525		11		2,173		54,214		—		69,488
Home equity gross charge-offs														10				10
One-to-four-family														—
Pass		103,165		175,412		122,406		80,815		30,595		52,008		—		472		564,873
Substandard		—		866		—		—		—		2,003		—		—		2,869
Total one-to-four-family		103,165		176,278		122,406		80,815		30,595		54,011		—		472		567,742
Multi-family
Pass		7,106		20,404		91,047		42,511		37,990		24,711		—		—		223,769
Total multi-family		7,106		20,404		91,047		42,511		37,990		24,711		—		—		223,769
Total real estate loans	$	286,761	$	404,537	$	336,609	$	192,837	$	97,415	$	147,382	$	64,042	$	798	$	1,530,381

	December 31, 2023
															Revolving Loans
CONSUMER LOANS	Term Loans by Year of Origination														Converted
Indirect home improvement	2023		2022		2021		2020		2019		Prior		Revolving Loans		to Term		Total Loans
Pass	$	171,208	$	212,661	$	93,664	$	36,032	$	23,977	$	30,492	$	6	$	—	$	568,040
Substandard		212		663		448		141		258		141		—		—		1,863
Total indirect home improvement		171,420		213,324		94,112		36,173		24,235		30,633		6		—		569,903
Indirect home improvement gross charge-offs		204		1,386		567		290		145		336		—		—		2,928
Marine
Pass		13,619		23,963		9,987		13,082		5,267		7,050		—		—		72,968
Substandard		—		—		52		85		—		205		—		—		342
Total marine		13,619		23,963		10,039		13,167		5,267		7,255		—		—		73,310
Marine gross charge-offs		—		47		93		—		7		256		—		—		403
Other consumer
Pass		309		559		175		69		3		159		2,258		—		3,532
Substandard		—		—		—		—		—		—		8		—		8
Total other consumer		309		559		175		69		3		159		2,266		—		3,540
Other consumer gross charge-offs		—		2		12		—		—		—		120		—		134
Total consumer loans	$	185,348	$	237,846	$	104,326	$	49,409	$	29,505	$	38,047	$	2,272	$	—	$	646,753

	December 31, 2023
COMMERCIAL															Revolving Loans
BUSINESS LOANS	Term Loans by Year of Origination														Converted
C&I	2023		2022		2021		2020		2019		Prior		Revolving Loans		to Term		Total Loans
Pass	$	13,971	$	32,334	$	19,634	$	11,537	$	5,122	$	9,707	$	119,844	$	145	$	212,294
Watch		2,322		—		1,382		2,366		—		953		5,754		—		12,777
Special mention		143		—		—		—		498		253		1,345		—		2,239
Substandard		2,940		—		2,321		1,391		1,766		169		2,005		—		10,592
Doubtful		—		—		—		—		—		—		399		—		399
Total C&I		19,376		32,334		23,337		15,294		7,386		11,082		129,347		145		238,301
C&I gross charge-offs		—		—		1		—		—		—		—		—		1
Warehouse lending
Pass		—		—		—		—		—		—		17,003		—		17,003
Watch		—		—		—		—		—		—		577		—		577
Total warehouse lending		—		—		—		—		—		—		17,580		—		17,580
Total commercial business loans	$	19,376	$	32,334	$	23,337	$	15,294	$	7,386	$	11,082	$	146,927	$	145	$	255,881
TOTAL LOANS RECEIVABLE, GROSS
Pass	$	482,667	$	663,043	$	447,175	$	251,907	$	130,922	$	188,568	$	202,971	$	617	$	2,367,870
Watch		5,523		5,446		14,276		2,366		453		3,179		6,376		—		37,619
Special mention		143		—		—		—		907		253		1,345		—		2,648
Substandard		3,152		6,228		2,821		3,267		2,024		4,511		2,150		326		24,479
Doubtful		—		—		—		—		—		—		399		—		399
Total loans receivable, gross	$	491,485	$	674,717	$	464,272	$	257,540	$	134,306	$	196,511	$	213,241	$	943	$	2,433,015
Total gross charge-offs	$	204	$	1,435	$	673	$	290	$	152	$	592	$	130	$	—	$	3,476

Financing Receivable, Nonaccrual [Table Text Block]

	June 30, 2024						December 31, 2023
	Nonaccrual with		Nonaccrual with		Total		Nonaccrual with		Nonaccrual with		Total
REAL ESTATE LOANS	No ACL		ACL		Nonaccrual		No ACL		ACL		Nonaccrual
CRE	$	1,116	$	—	$	1,116	$	1,088	$	—	$	1,088
Construction and development		—		4,737		4,737		—		4,699		4,699
Home equity		156		—		156		173		—		173
One-to-four-family		170		—		170		96		—		96
		1,442		4,737		6,179		1,357		4,699		6,056
CONSUMER LOANS
Indirect home improvement		—		2,319		2,319		—		1,863		1,863
Marine		—		327		327		—		342		342
Other consumer		—		6		6		—		8		8
		—		2,652		2,652		—		2,213		2,213
COMMERCIAL BUSINESS LOANS
C&I		263		2,312		2,575		—		2,683		2,683
Total	$	1,705	$	9,701	$	11,406	$	1,357	$	9,595	$	10,952

Financing Receivable, Collateral Dependent Loans [Table Text Block]

	June 30, 2024								December 31, 2023
	Commercial		Residential		Other				Commercial		Residential		Other
REAL ESTATE LOANS	Real Estate		Real Estate		Non-Real Estate		Total		Real Estate		Real Estate		Non-Real Estate		Total
CRE	$	1,116	$	—	$	—	$	1,116	$	1,088	$	—	$	—	$	1,088
Construction and development		4,737		—		—		4,737		4,699		—				4,699
Home equity		—		156		—		156		—		173		—		173
One-to-four-family		—		170		—		170		—		96		—		96
		5,853		326		—		6,179		5,787		269		—		6,056
CONSUMER LOANS
Indirect home improvement		—		—		2,319		2,319		—		—		1,863		1,863
Marine		—		—		327		327		—		—		342		342
		—		—		2,646		2,646		—		—		2,205		2,205
COMMERCIAL BUSINESS LOANS
C&I		—		—		2,575		2,575		—		—		2,683		2,683
Total	$	5,853	$	326	$	5,221	$	11,400	$	5,787	$	269	$	4,888	$	10,944

XML

Note 4 - Mortgage Servicing Rights (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Servicing Asset at Amortized Cost [Table Text Block]

	At or For the Three Months Ended
	June 30,
	2024			2023
Beginning balance, at the lower of cost or fair value	$	9,009		$	17,599
Additions		817			920
MSRs amortized		(528	)		(894	)
Recovery of MSRs		54			2
Ending balance, at the lower of cost or fair value	$	9,352		$	17,627

	At or For the Six Months Ended
	June 30,
	2024			2023
Beginning balance, at the lower of cost or fair value	$	17,176		$	18,017
Additions		1,393			1,325
Sales		(7,953	)		—
MSRs amortized		(1,225	)		(1,715	)
Impairment of MSRs		(39	)		—
Ending balance, at the lower of cost or fair value	$	9,352		$	17,627

Schedule of Servicing Assets at Fair Value [Table Text Block]

	At June 30,			At December 31,
Key assumptions:	2024			2023
Weighted average discount rate		10.0	%		9.4	%
Conditional prepayment rate (“CPR”)		8.5	%		7.2	%
Weighted average life in years		7.9			8.4

Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets [Table Text Block]

	June 30, 2024			December 31, 2023
Aggregate portfolio principal balance	$	1,598,388		$	2,832,016
Weighted average rate of loans in MSRs portfolio		4.1	%		3.6	%

At June 30, 2024	Base			0.5% Adverse Rate Change			1.0% Adverse Rate Change
Conditional prepayment rate		8.5	%		10.1	%		12.4	%
Fair value MSRs	$	20,788		$	20,062		$	19,188
Percentage of MSRs		1.3	%		1.3	%		1.2	%
Discount rate		10.0	%		10.5	%		11.0	%
Fair value MSRs	$	20,788		$	20,340		$	19,910
Percentage of MSRs		1.3	%		1.3	%		1.2	%

At December 31, 2023	Base			0.5% Adverse Rate Change			1.0% Adverse Rate Change
Conditional prepayment rate		7.2	%		8.0	%		9.3	%
Fair value MSRs	$	38,163		$	37,268		$	35,819
Percentage of MSRs		1.3	%		1.3	%		1.3	%
Discount rate		9.4	%		9.9	%		10.4	%
Fair value MSRs	$	38,163		$	37,301		$	36,476
Percentage of MSRs		1.3	%		1.3	%		1.3	%

XML

Note 5 - Derivatives (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block]

			Cumulative Amount of Fair Value
Line item in the statement of financial			Hedging Adjustment Included in
position in which the hedged Item is	Carrying Amount of the		the Carrying Amount of the
included	Hedged Assets		Hedged Assets
June 30, 2024
Investment securities (1)	$	55,397	$	4,603
Total	$	55,397	$	4,603
December 31, 2023
Investment securities (1)	$	56,785	$	3,215
Total	$	56,785	$	3,215

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

	June 30, 2024
			Fair Value
Cash flow hedges:	Notional		Asset		Liability
Interest rate swaps - brokered deposits and borrowings	$	235,000	$	5,072	$	—
Fair value hedges:
Interest rate swaps - securities		60,000		4,582		—
Non-hedging derivatives:
Fallout adjusted interest rate lock commitments with customers		43,041		378		—
Mandatory and best effort forward commitments with investors		34,337		—		316
Forward TBA mortgage-backed securities		58,000		122		—
Interest rate swaps - customer swap positions		801		—		71
Interest rate swaps - dealer offsets to customer swap positions		801		71		—

	December 31, 2023
			Fair Value
Cash flow hedges:	Notional		Asset		Liability
Interest rate swaps - brokered deposits	$	250,000	$	3,233	$	375
Fair value hedges:
Interest rate swaps - securities		60,000		3,198		—
Non-hedging derivatives:
Fallout adjusted interest rate lock commitments with customers		22,334		329		—
Mandatory and best effort forward commitments with investors		10,070		—		188
Forward TBA mortgage-backed securities		33,000		—		284
Interest rate swaps - customer swap positions		801		—		63
Interest rate swaps - dealer offsets to customer swap positions		801		64		—

Derivative Instruments, Gain (Loss) [Table Text Block]

	Three Months Ended June 30,
	2024					2023
	Interest					Interest
	Expense		Interest			Expense		Interest
	Deposits and Borrowings		Income Securities			Deposits and Borrowings		Income Securities
Total amounts presented on the Consolidated Statements of Income	$	15,053	$	3,534		$	8,829	$	2,651
Net gains (losses) on fair value hedging relationships:
Interest rate swaps - securities
Recognized on hedged items	$	—	$	(163	)	$	—	$	1,559
Recognized on derivatives designated as hedging instruments		—		163			—		(1,559	)
Net interest income recognized on cash flows of derivatives designated as hedging instruments		—		421			—		363
Net income recognized on fair value hedges	$	—	$	421		$	—	$	363
Net gain on cash flow hedging relationships:
Interest rate swaps - brokered deposits and borrowings
Realized gains (pre-tax) reclassified from AOCI into net income	$	1,148	$	—		$	1,271	$	—
Net income recognized on cash flow hedges	$	1,148	$	—		$	1,271	$	—

	Six Months Ended June 30,
	2024					2023
	Interest					Interest
	Expense		Interest			Expense		Interest
	Deposits and Borrowings		Income Securities			Deposits and Borrowings		Income Securities
Total amounts presented on the Consolidated Statements of Income	$	29,102	$	7,417		$	16,294	$	5,271
Net gains (losses) on fair value hedging relationships:
Interest rate swaps - securities
Recognized on hedged items	$	—	$	(1,388	)	$	—	$	(60	)
Recognized on derivatives designated as hedging instruments		—		1,388			—		60
Net interest income recognized on cash flows of derivatives designated as hedging instruments		—		839			—		656
Net income recognized on fair value hedges	$	—	$	839		$	—	$	656
Net gain on cash flow hedging relationships:
Interest rate swaps - brokered deposits and borrowings
Realized gains (pre-tax) reclassified from AOCI into net income	$	2,870	$	—		$	2,178	$	—
Net income recognized on cash flow hedges	$	2,870	$	—		$	2,178	$	—

Offsetting Assets [Table Text Block]

			Gross Amounts		Net Amounts of Assets		Gross Amounts Not Offset
	Gross Amounts		Offset in the		Presented in the		in the Statement of Financial Position
	of Recognized		Statement of		Statement of		Financial		Cash Collateral
Offsetting of derivative assets	Assets		Financial Position		Financial Position		Instruments		Received		Net Amount
At June 30, 2024
Interest rate swaps	$	9,811	$	86	$	9,725	$	—	$	1,120	$	8,605
At December 31, 2023
Interest rate swaps	$	6,648	$	153	$	6,495	$	—	$	—	$	6,495

Offsetting Liabilities [Table Text Block]

			Gross Amounts		Net Amounts of		Gross Amounts Not Offset
	Gross Amounts		Offset in the		Liabilities		in the Statement of Financial Position
	of Recognized		Statement of		Presented in the Statement		Financial		Cash Collateral
Offsetting of derivative liabilities	Liabilities		Financial Position		of Financial Position		Instruments		Posted		Net Amount
At June 30, 2024
Interest rate swaps	$	—	$	—	$	—	$	—	$	—	$	—
At December 31, 2023
Interest rate swaps	$	(722)	$	(347)	$	(375)	$	—	$	270	$	(105)

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Note 6 - Leases (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Lease, Cost [Table Text Block]

	Three Months Ended		Three Months Ended
Lease cost:	June 30, 2024		June 30, 2023
Operating lease cost	$	475	$	471
Short-term lease cost		2		5
Total lease cost	$	477	$	476

	Six Months Ended		Six Months Ended
Lease cost:	June 30, 2024		June 30, 2023
Operating lease cost	$	949	$	881
Short-term lease cost		5		9
Total lease cost	$	954	$	890

Lessee, Operating Lease, Supplemental Cash Flow Information [Table Text Block]

	At or For the			At or For the
	Three Months Ended			Three Months Ended
Cash paid for amounts included in the measurement of lease liabilities:	June 30, 2024			June 30, 2023
Operating cash flows from operating leases	$	490		$	482
Weighted average remaining lease term- operating leases (in years)		3.7			4.4
Weighted average discount rate- operating leases		2.99	%		2.92	%

	At or For the			At or For the
	Six Months Ended			Six Months Ended
Cash paid for amounts included in the measurement of lease liabilities:	June 30, 2024			June 30, 2023
Operating cash flows from operating leases	$	980		$	906
Weighted average remaining lease term- operating leases (in years)		3.7			4.4
Weighted average discount rate- operating leases		2.99	%		2.92	%

Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

Remainder of 2024	$	963
2025		1,628
2026		1,475
2027		1,173
2028		428
Thereafter		954
Total lease payments		6,621
Less imputed interest		(642	)
Total	$	5,979

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Note 7 - Other Real Estate Owned ("OREO") (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Other Real Estate, Roll Forward [Table Text Block]

	At or For the Three Months Ended				At or For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Beginning balance	$	—	$	570	$	—	$	570
Additions		—		—		—		—
Loans transferred to OREO		—		—		—		—
Ending balance	$	—	$	570	$	—	$	570

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Note 8 - Deposits (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Deposit Liabilities, Type [Table Text Block]

	June 30,		December 31,
	2024		2023
Noninterest-bearing checking	$	613,137	$	654,048
Interest-bearing checking (1)		166,839		244,028
Savings		151,398		151,630
Money market (2)		343,995		359,063
Certificates of deposit less than $100,000 (3)		530,537		587,858
Certificates of deposit of $100,000 through $250,000		427,893		429,373
Certificates of deposit greater than $250,000		138,792		79,540
Escrow accounts related to mortgages serviced (4)		10,212		16,783
Total	$	2,382,803	$	2,522,323

Time Deposit Maturities [Table Text Block]

Maturing in 2024	$	615,361
Maturing in 2025		369,984
Maturing in 2026		87,246
Maturing in 2027		21,019
Maturing in 2028		3,208
Thereafter		404
Total	$	1,097,222

Interest Income and Interest Expense Disclosure [Table Text Block]

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Interest-bearing checking	$	555	$	370	$	1,339	$	468
Savings and money market		1,951		1,344		3,612		2,542
Certificates of deposit		10,746		5,896		21,183		11,224
Total	$	13,252	$	7,610	$	26,134	$	14,234

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Note 9 - Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Schedule of Fair Value, off-Balance-Sheet Risks [Table Text Block]

COMMITMENTS TO EXTEND CREDIT	June 30,		December 31,
REAL ESTATE LOANS	2024		2023
CRE	$	964	$	3,472
Construction and development		195,775		154,611
One-to-four-family (includes locks for saleable loans)		49,866		23,751
Home equity		97,751		94,026
Multi-family		2,893		2,945
Total real estate loans		347,249		278,805
CONSUMER LOANS		28,886		29,517
COMMERCIAL BUSINESS LOANS
C&I		155,200		164,873
Warehouse lending		51,215		61,837
Total commercial business loans		206,415		226,710
Total commitments to extend credit	$	582,550	$	535,032

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Note 10 - Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

Financial Assets	At June 30, 2024
Securities available-for-sale:	Level 1		Level 2		Level 3			Total
U.S. agency securities	$	—	$	17,116	$	—		$	17,116
Corporate securities		—		15,185		—			15,185
Municipal bonds		—		71,645		—			71,645
Mortgage-backed securities		—		100,721		—			100,721
U.S. Small Business Administration securities		—		16,515		—			16,515
Mortgage loans held for sale, at fair value		—		53,811		—			53,811
Loans receivable, at fair value		—		13,868		—			13,868
Derivatives:
Interest rate lock commitments with customers		—		—		378			378
Forward TBA mortgage-backed securities		—		122		—			122
Interest rate swaps - cash flow and fair value hedges		—		9,654		—			9,654
Interest rate swaps - dealer offsets to customer swap positions		—		—		—			—
Total assets measured at fair value	$	—	$	298,637	$	378		$	299,015
Financial Liabilities
Derivatives:
Interest rate swaps - customer swap positions	$	—	$	—	$	—		$	—
Mandatory and best effort forward commitments with investors		—		—		(316	)		(316	)
Total liabilities measured at fair value	$	—	$	—	$	(316	)	$	(316	)

Financial Assets	At December 31, 2023
Securities available-for-sale:	Level 1		Level 2			Level 3			Total
U.S. agency securities	$	—	$	18,018		$	—		$	18,018
Corporate securities		—		12,872			—			12,872
Municipal bonds		—		119,447			—			119,447
Mortgage-backed securities		—		101,248			—			101,248
U.S. Small Business Administration securities		—		41,348			—			41,348
Mortgage loans held for sale, at fair value		—		25,668			—			25,668
Loans receivable, at fair value		—		15,088			—			15,088
Derivatives:
Interest rate lock commitments with customers		—		—			329			329
Interest rate swaps- cash flow and fair value hedges		—		6,431			—			6,431
Interest rate swaps - dealer offsets to customer swap positions		—		64			—			64
Total assets measured at fair value	$	—	$	340,184		$	329		$	340,513
Financial Liabilities
Derivatives:
Mandatory and best effort forward commitments with investors	$	—	$	—		$	(188	)	$	(188	)
Forward TBA mortgage-backed securities		—		(284	)		—			(284	)
Interest rate swaps - cash flow and fair value hedges		—		(375	)		—			(375	)
Interest rate swaps - customer swap positions		—		(63	)		—			(63	)
Total liabilities measured at fair value	$	—	$	(722	)	$	(188	)	$	(910	)

Fair Value Measurements, Nonrecurring [Table Text Block]

	June 30, 2024
	Level 1		Level 2		Level 3		Total
MSRs	$	—	$	—	$	20,788	$	20,788

	December 31, 2023
	Level 1		Level 2		Level 3		Total
MSRs		—		—		38,163		38,163

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

Level 3		Significant			Weighted Average Rate
Fair Value	Valuation	Unobservable			June 30,			December 31,
Instruments	Techniques	Inputs	Range		2024			2023
RECURRING
Interest rate lock commitments with customers	Quoted market prices	Pull-through expectations		80% - 99%		90.8	%		90.5	%
Individual forward sale commitments with investors	Quoted market prices	Pull-through expectations		80% - 99%		90.8	%		90.5	%
NONRECURRING
MSR	Industry sources	Pre-payment speeds		0% - 50%		8.5	%		7.2	%

Fair Value, Assets (Liabilities) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

				Purchases								Net change in			Net change in
Three Months Ended	Beginning			and		Sales and			Ending			fair value for			fair value for
June 30, 2024	Balance			Issuances		Settlements			Balance			gains/(losses) (1)			gains/(losses) (2)
Interest rate lock commitments with customers	$	251		$	693	$	(566	)	$	378		$	127		$	—
Individual forward sale commitments with investors		(73	)		36		(279	)		(316	)		(243	)		—
June 30, 2023
Interest rate lock commitments with customers	$	565		$	948	$	(1,240	)	$	273		$	(292	)	$	—
Individual forward sale commitments with investors		(13	)		188		(52	)		123			136			—

				Purchases								Net change in		Net change in
Six Months Ended	Beginning			and		Sales and			Ending			fair value for		fair value for
June 30, 2024	Balance			Issuances		Settlements			Balance			gains/(losses) (1)		gains/(losses) (2)
Interest rate lock commitments with customers	$	329		$	1,658	$	(1,609	)	$	378		$	49	$	—
Individual forward sale commitments with investors		(188	)		21		(149	)		(316	)		128		—
June 30, 2023
Interest rate lock commitments with customers	$	107		$	1,942	$	(1,776	)	$	273		$	166	$	—
Individual forward sale commitments with investors		(38	)		410		(249	)		123			161		—

Fair Value, by Balance Sheet Grouping [Table Text Block]

	June 30,				December 31,
	2024				2023
Financial Assets	Carrying		Fair		Carrying		Fair
Level 1 inputs:	Amount		Value		Amount		Value
Cash and cash equivalents	$	33,011	$	33,011	$	65,691	$	65,691
Certificates of deposit at other financial institutions		12,707		12,707		24,167		24,167
Level 2 inputs:
Securities available-for-sale, at fair value		221,182		221,182		292,933		292,933
Securities held-to-maturity, gross		8,500		7,867		8,500		7,666
Loans held for sale, at fair value		53,811		53,811		25,668		25,668
FHLB stock, at cost		10,322		10,322		2,114		2,114
Forward TBA mortgage-backed securities		122		122		—		—
Loans receivable, at fair value		13,868		13,868		15,088		15,088
Interest rate swaps - cash flow and fair value hedges		9,654		9,654		6,431		6,431
Accrued interest receivable		13,792		13,792		14,005		14,005
Interest rate swaps - dealer offsets to customer swap positions		71		71		64		64
Level 3 inputs:
Loans receivable, gross		2,474,554		2,364,761		2,417,927		2,276,397
MSRs, held at lower of cost or fair value		9,352		20,788		9,090		20,552
MSRs held for sale, held at lower of cost or fair value		—		—		8,086		17,611
Fair value interest rate locks with customers		378		378		—		—
Financial Liabilities
Level 2 inputs:
Deposits		2,382,803		2,374,574		2,522,323		2,515,026
Borrowings		181,895		180,748		93,746		93,416
Subordinated notes, excluding unamortized debt issuance costs		50,000		44,151		50,000		43,480
Accrued interest payable		3,116		3,116		5,473		5,473
Interest rate swaps - cash flow and fair value hedges		—		—		375		375
Forward TBA mortgage-backed securities		—		—		284		284
Interest rate swaps - customer swap positions		71		71		63		63
Level 3 inputs:
Mandatory and best effort forward commitments with investors		316		316		188		188

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Note 11 - Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	At or For the Three Months Ended June 30,						At or For the Six Months Ended June 30,
Numerator	2024			2023			2024			2023
Net income	$	8,959		$	9,116		$	17,356		$	17,328
Dividends and undistributed earnings allocated to participating securities		(138	)		(160	)		(270	)		(307	)
Net income available to common shareholders	$	8,821		$	8,956		$	17,086		$	17,021
Denominator (shown as actual):
Basic weighted average common shares outstanding		7,688,246			7,637,210			7,664,368			7,635,647
Dilutive shares		108,007			109,126			114,354			133,870
Diluted weighted average common shares outstanding		7,796,253			7,746,336			7,778,722			7,769,517
Basic earnings per share	$	1.15		$	1.17		$	2.23		$	2.23
Diluted earnings per share	$	1.13		$	1.16		$	2.20		$	2.19
Potentially dilutive weighted average share options that were not included in the computation of diluted earnings per share because to do so would be anti-dilutive.		37,949			67,675			33,000			50,555

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Note 12 - Stock-based Compensation (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Share-Based Payment Arrangement, Option, Activity [Table Text Block]

					Weighted-Average
			Weighted-		Remaining
			Average		Contractual Term In		Aggregate
	Shares		Exercise Price		Years		Intrinsic Value
Outstanding at January 1, 2024		662,279	$	28.12		6.69	$	5,852,975
Granted		—	$	—		—		—
Less exercised		18,612	$	8.45		—	$	531,699
Less forfeited		12,000		30.73		—		—
Outstanding at June 30, 2024		631,667	$	28.65		6.32	$	4,925,343
Expected to vest, assuming a 0.31% annual forfeiture rate at June 30, 2024 (1)		624,770	$	28.65		6.24	$	4,872,165
Exercisable at June 30, 2024		364,850	$	27.88		5.28	$	3,125,310

Nonvested Restricted Stock Shares Activity [Table Text Block]

			Weighted-Average
			Grant-Date Fair Value
Nonvested Shares	Shares		Per Share
Nonvested at January 1, 2024		102,144	$	29.61
Granted		—		—
Less vested		—		—
Less forfeited		4,000		30.73
Nonvested at June 30, 2024		98,144	$	29.57

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Note 13 - Regulatory Capital (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

																To be Well Capitalized
																Under Prompt
						For Capital					For Capital Adequacy					Corrective
	Actual					Adequacy Purposes					with Capital Buffer					Action Provisions
Bank Only	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
At June 30, 2024
Total risk-based capital
(to risk-weighted assets)	$	355,165		13.85	%	$	205,122		8.00	%	$	269,223		10.50	%	$	256,403		10.00	%
Tier 1 risk-based capital
(to risk-weighted assets)	$	323,105		12.60	%	$	153,842		6.00	%	$	217,943		8.50	%	$	205,122		8.00	%
Tier 1 leverage capital
(to average assets)	$	323,105		10.94	%	$	118,153		4.00	%	$	N/A		N/A		$	147,691		5.00	%
CET 1 capital
(to risk-weighted assets)	$	323,105		12.60	%	$	115,381		4.50	%	$	179,482		7.00	%	$	166,662		6.50	%
At December 31, 2023
Total risk-based capital
(to risk-weighted assets)	$	339,436		13.37	%	$	203,094		8.00	%	$	266,561		10.50	%	$	253,868		10.00	%
Tier 1 risk-based capital
(to risk-weighted assets)	$	307,686		12.12	%	$	152,321		6.00	%	$	215,787		8.50	%	$	203,094		8.00	%
Tier 1 leverage capital
(to average assets)	$	307,686		10.39	%	$	118,488		4.00	%	$	N/A		N/A		$	148,109		5.00	%
CET 1 capital
(to risk-weighted assets)	$	307,686		12.12	%	$	114,240		4.50	%	$	177,707		7.00	%	$	165,014		6.50	%

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Note 14 - Business Segments (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	At or For the Three Months Ended June 30, 2024
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income (1)	$	28,051		$	2,350		$	30,401
(Provision) benefit for credit losses		(1,214	)		137			(1,077	)
Noninterest income (2)		2,269			3,599			5,868
Noninterest expense (3)		(19,043	)		(4,814	)		(23,857	)
Income before provision for income taxes		10,063			1,272			11,335
Provision for income taxes		(2,113	)		(263	)		(2,376	)
Net income	$	7,950		$	1,009		$	8,959
Total average assets for period ended	$	2,359,741		$	588,090		$	2,947,831
Full-time employees ("FTEs")		450			121			571

	At or For the Three Months Ended June 30, 2023
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income (1)	$	28,269		$	3,283		$	31,552
Provision for credit losses		(629	)		(87	)		(716	)
Noninterest income (2)		2,706			2,127			4,833
Noninterest expense (3)		(18,950	)		(5,254	)		(24,204	)
Income before provision for income taxes		11,396			69			11,465
Provision for income taxes		(2,335	)		(14	)		(2,349	)
Net income	$	9,061		$	55		$	9,116
Total average assets for period ended	$	2,313,228		$	528,662		$	2,841,890
FTEs		444			137			581

	At or For the Six Months Ended June 30, 2024
	Commercial
	and Consumer
Condensed income statement:	Banking			Home Lending			Total
Net interest income (1)	$	56,137		$	4,610		$	60,747
Provision for credit losses		(2,465	)		(11	)		(2,476	)
Noninterest income (2)		4,662			6,317			10,979
Noninterest expense (3)		(38,051	)		(9,335	)		(47,386	)
Income before provision for income taxes		20,283			1,581			21,864
Provision for income taxes		(4,182	)		(326	)		(4,508	)
Net income	$	16,101		$	1,255		$	17,356
Total average assets for period ended	$	2,380,803		$	572,386		$	2,953,189
FTEs		450			121			571

	At or For the Six Months Ended June 30, 2023
	Commercial
	and Consumer
Condensed income statement:	Banking			Home Lending			Total
Net interest income (1)	$	55,769		$	6,445		$	62,214
Provision for credit losses		(2,118	)		(706	)		(2,824	)
Noninterest income (2)		5,086			4,966			10,052
Noninterest expense (3)		(37,560	)		(10,168	)		(47,728	)
Income before provision for income taxes		21,177			537			21,714
Provision for income taxes		(4,278	)		(108	)		(4,386	)
Net income	$	16,899		$	429		$	17,328
Total average assets for period ended	$	2,281,815		$	510,419		$	2,792,234
FTEs		444			137			581

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Note 15 - Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	Other Intangible Assets
			Accumulated
	Gross CDI		Amortization			Net CDI
Balance, December 31, 2022	$	7,490	$	(4,121	)	$	3,369
Additions as a result of the Branch Purchase		17,438		—			17,438
Amortization		—		(3,464	)		(3,464	)
Balance, December 31, 2023		24,928		(7,585	)		17,343
Amortization		—		(1,860	)		(1,860	)
Balance, June 30, 2024	$	24,928	$	(9,445	)	$	15,483

Core Deposits [Member]

Notes Tables

Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]

Remainder of 2024	$	1,773
2025		3,191
2026		2,846
2027		2,500
2028		2,110
Thereafter		3,063
Total	$	15,483

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Note 16 - Revenue From Contracts With Customers (Tables)

6 Months Ended

Jun. 30, 2024

Notes Tables

Disaggregation of Revenue [Table Text Block]

	At or For the Three Months Ended June 30,				For the Six Months Ended June 30,
Noninterest income	2024		2023		2024		2023
In-scope of Topic 606:
Debit card interchange fees	$	815	$	882	$	1,577	$	1,520
Deposit service and account maintenance fees		358		388		723		664
Noninterest income (in-scope of Topic 606)		1,173		1,270		2,300		2,184
Noninterest income (out-of-scope and/or immaterial to Topic 606)		4,695		3,563		8,679		7,868
Total noninterest income	$	5,868	$	4,833	$	10,979	$	10,052

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Note 1 - Basis of Presentation and Summary of Significant Accounting Policies (Details Textual)	6 Months Ended
	Jun. 30, 2024
Number of Bank Branches	27
Number of Operating Segments	2

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Note 2 - Investments (Details Textual)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Debt Securities, Held-to-Maturity, Accrued Interest, before Allowance for Credit Loss	$ 114,000		$ 114,000		$ 116,000
Debt Securities, Available-for-Sale, Accrued Interest, after Allowance for Credit Loss	1,000,000		1,000,000		1,500,000
Debt Securities, Held-to-Maturity, Nonaccrual	$ 0		$ 0		0
Debt Securities, Held-to-Maturity, Continuous Unrealized Loss Position, Less than 12 Months, Number of Positions	0		0
Debt Securities, Held-to-Maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Number of Positions	7		7
Debt Securities, Available-for-Sale, Continuous Unrealized Loss Position, Less than 12 Months, Number of Positions	9		9
Debt Securities, Available-for-Sale, Continuous Unrealized Loss Position, 12 Months or Longer, Number of Positions	128		128
Expected Credit Losses on Investments			$ 0		$ 0
Proceeds from Sale of Debt Securities, Available-for-Sale	$ 54,423,000	$ 0	$ 98,459,000	$ 0

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Note 2 - Investments - Schedule of Amortized Costs and Fair Values of Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Mar. 31, 2024	Dec. 31, 2023	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022
Amortized cost, available for sale securities	$ 250,648		$ 328,695
Gross unrealized gains, available for sale securities	343		939
Gross unrealized losses, available for sale securities	(29,809)		(36,701)
Fair value, available for sale securities	221,182		292,933
Available-for-Sale, Allowance for Credit Loss	0		0
Amortized cost, held to maturity securities	8,500		8,500
Gross unrealized gains, held to maturity securities	0		0
Gross unrealized losses, held to maturity securities	(633)		(834)
Securities held-to-maturity, at fair value	7,867		7,666
Securities available for sale, HTM, ACL	45	$ 45	45	$ 31	$ 31	$ 31
Amortized cost	259,148		337,195
Gross unrealized gains	343		939
Gross unrealized losses	(30,442)		(37,535)
Total securities, fair value	229,049		300,599
Total securities, allowance for credit loss	45		45
US Government Agencies Debt Securities [Member]
Amortized cost, available for sale securities	20,238		21,151
Gross unrealized gains, available for sale securities	45		46
Gross unrealized losses, available for sale securities	(3,167)		(3,179)
Fair value, available for sale securities	17,116		18,018
Available-for-Sale, Allowance for Credit Loss	0		0
Corporate Debt Securities [Member]
Amortized cost, available for sale securities	16,000		13,000
Gross unrealized gains, available for sale securities	51		613
Gross unrealized losses, available for sale securities	(866)		(741)
Fair value, available for sale securities	15,185		12,872
Available-for-Sale, Allowance for Credit Loss	0		0
Amortized cost, held to maturity securities	8,500		8,500
Gross unrealized gains, held to maturity securities	0		0
Gross unrealized losses, held to maturity securities	(633)		(834)
Securities held-to-maturity, at fair value	7,867		7,666
Securities available for sale, HTM, ACL	45		45
Municipal Bonds [Member]
Amortized cost, available for sale securities	84,345		138,803
Gross unrealized gains, available for sale securities	0		42
Gross unrealized losses, available for sale securities	(12,700)		(19,398)
Fair value, available for sale securities	71,645		119,447
Available-for-Sale, Allowance for Credit Loss	0		0
Collateralized Mortgage-Backed Securities [Member]
Amortized cost, available for sale securities	112,462		112,855
Gross unrealized gains, available for sale securities	168		238
Gross unrealized losses, available for sale securities	(11,909)		(11,845)
Fair value, available for sale securities	100,721		101,248
Available-for-Sale, Allowance for Credit Loss	0		0
U.S. Small Business Administration Securities [Member]
Amortized cost, available for sale securities	17,603		42,886
Gross unrealized gains, available for sale securities	79		0
Gross unrealized losses, available for sale securities	(1,167)		(1,538)
Fair value, available for sale securities	16,515		41,348
Available-for-Sale, Allowance for Credit Loss	$ 0		$ 0

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Note 2 - Investments - Schedule of Debt Securities, Held-to-Maturity, Allowance for Credit Loss Roll Forward (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Beginning ACL balance	$ 45	$ 31	$ 45	$ 31
Provision for (recapture of) credit losses	0	0	0	0
Total ending ACL balance	$ 45	$ 31	$ 45	$ 31

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Note 2 - Investments - Schedule of Debt Securities, Held-to-Maturity Credit Quality Indicators (Details) - USD ($) $ in Millions	Jun. 30, 2024	Dec. 31, 2023
Debt Securities, Held-to-Maturity, Amortized Cost	$ 8.5	$ 8.5
Standard & Poor's, BBB/BBB Minus Rating [Member]
Debt Securities, Held-to-Maturity, Amortized Cost	7.0	7.0
Standard & Poor's, BB+ Rating [Member]
Debt Securities, Held-to-Maturity, Amortized Cost	$ 1.5	$ 1.5

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Note 2 - Investments - Schedule of Securities Pledged as Collateral (Details) - State and Local Government Public Deposits [Member] - Asset Pledged as Collateral [Member] $ in Thousands	Jun. 30, 2024 USD ($)
Investment Securities, Cost	$ 34,729
Investment Securities, Amortized Cost	40,641
Investment Securities, Fair Value	$ 34,729

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Note 2 - Investments - Schedule of Investments in Unrealized Loss Position (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Less than 12 months, fair value, available for sale securities	$ 20,666	$ 58,754
Less than 12 months, unrealized loss, available for sale securities	(176)	(637)
12 months or longer, unrealized loss, fair value, available for sale securities	163,147	209,362
12 months or longer, unrealized loss, available for sale securities	(29,633)	(36,064)
Available for sale securities, fair value, total	183,813	268,116
Available for sale securities, unrealized losses total	(29,809)	(36,701)
Less than 12 months, fair value, held to maturity	0	0
Less than 12 months, held to maturity securities	0	0
12 months or longer, unrealized loss, fair value, held to maturity securities	7,867	7,666
12 months or longer, unrealized loss, held to maturity securities	(633)	(834)
Held to maturity securities, fair value, total	7,867	7,666
Held-to-maturity, total	(633)	(834)
Less than 12 months, fair value	20,666	58,754
Less than 12 months, unrealized loss	(176)	(637)
12 months or longer, fair value	171,014	217,028
12 months or longer, unrealized loss	(30,266)	(36,898)
Debt Securities, fair value, total	191,680	275,782
Debt securities, unrealized loss, total	(30,442)	(37,535)
US Government Agencies Debt Securities [Member]
Less than 12 months, fair value, available for sale securities	0	0
Less than 12 months, unrealized loss, available for sale securities	0	0
12 months or longer, unrealized loss, fair value, available for sale securities	15,071	15,972
12 months or longer, unrealized loss, available for sale securities	(3,167)	(3,179)
Available for sale securities, fair value, total	15,071	15,972
Available for sale securities, unrealized losses total	(3,167)	(3,179)
Corporate Debt Securities [Member]
Less than 12 months, fair value, available for sale securities	7,874	959
Less than 12 months, unrealized loss, available for sale securities	(126)	(41)
12 months or longer, unrealized loss, fair value, available for sale securities	4,260	4,300
12 months or longer, unrealized loss, available for sale securities	(740)	(700)
Available for sale securities, fair value, total	12,134	5,259
Available for sale securities, unrealized losses total	(866)	(741)
Less than 12 months, fair value, held to maturity	0	0
Less than 12 months, held to maturity securities	0	0
12 months or longer, unrealized loss, fair value, held to maturity securities	7,867	7,666
12 months or longer, unrealized loss, held to maturity securities	(633)	(834)
Held to maturity securities, fair value, total	7,867	7,666
Held-to-maturity, total	(633)	(834)
Municipal Bonds [Member]
Less than 12 months, fair value, available for sale securities	884	3,922
Less than 12 months, unrealized loss, available for sale securities	(9)	(23)
12 months or longer, unrealized loss, fair value, available for sale securities	70,761	113,577
12 months or longer, unrealized loss, available for sale securities	(12,691)	(19,375)
Available for sale securities, fair value, total	71,645	117,499
Available for sale securities, unrealized losses total	(12,700)	(19,398)
Collateralized Mortgage-Backed Securities [Member]
Less than 12 months, fair value, available for sale securities	11,908	20,662
Less than 12 months, unrealized loss, available for sale securities	(41)	(113)
12 months or longer, unrealized loss, fair value, available for sale securities	65,462	67,376
12 months or longer, unrealized loss, available for sale securities	(11,868)	(11,732)
Available for sale securities, fair value, total	77,370	88,038
Available for sale securities, unrealized losses total	(11,909)	(11,845)
U.S. Small Business Administration Securities [Member]
Less than 12 months, fair value, available for sale securities	0	33,211
Less than 12 months, unrealized loss, available for sale securities	0	(460)
12 months or longer, unrealized loss, fair value, available for sale securities	7,593	8,137
12 months or longer, unrealized loss, available for sale securities	(1,167)	(1,078)
Available for sale securities, fair value, total	7,593	41,348
Available for sale securities, unrealized losses total	$ (1,167)	$ (1,538)

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Note 2 - Investments - Schedule of Contractual Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Available-for-Sale, Amortized Cost	$ 250,648	$ 328,695
Fair value, available for sale securities	221,182	292,933
Total securities held-to-maturity, amortized cost	8,500	8,500
Total securities held-to-maturity, fair value	7,867	7,666
Total securities	259,148	337,195
Total securities, fair value	229,049	300,599
US Government Agencies Debt Securities [Member]
Due within one year, amortized cost	0	922
Due within one year, fair value	0	914
Due after one year through five years, amortized cost	4,954	3,947
Due after one year through five years, fair value	4,499	3,544
Due after five years through ten years, amortized cost	10,973	11,972
Due after five years through ten years, fair value	9,207	10,139
Due after ten years, amortized cost	4,311	4,310
Due after ten years, fair value	3,410	3,421
Subtotal, amortized cost	20,238	21,151
Subtotal, fair value	17,116	18,018
Available-for-Sale, Amortized Cost	20,238	21,151
Fair value, available for sale securities	17,116	18,018
Corporate Debt Securities [Member]
Due within one year, amortized cost	0	1,000
Due within one year, fair value	0	1,004
Due after one year through five years, amortized cost	10,000	6,000
Due after one year through five years, fair value	9,960	6,609
Due after five years through ten years, amortized cost	4,000	4,000
Due after five years through ten years, fair value	3,839	3,839
Due after ten years, amortized cost	2,000	2,000
Due after ten years, fair value	1,386	1,420
Subtotal, amortized cost	16,000	13,000
Subtotal, fair value	15,185	12,872
Available-for-Sale, Amortized Cost	16,000	13,000
Fair value, available for sale securities	15,185	12,872
Due after five years through ten years, amortized cost, held to maturity	8,500	8,500
Due after five years through ten years, fair value, held to maturity	7,867	7,666
Municipal Bonds [Member]
Due within one year, amortized cost	1,000	1,013
Due within one year, fair value	1,000	1,003
Due after one year through five years, amortized cost	78	757
Due after one year through five years, fair value	78	751
Due after five years through ten years, amortized cost	6,316	7,603
Due after five years through ten years, fair value	5,852	7,101
Due after ten years, amortized cost	76,951	129,430
Due after ten years, fair value	64,715	110,592
Subtotal, amortized cost	84,345	138,803
Subtotal, fair value	71,645	119,447
Available-for-Sale, Amortized Cost	84,345	138,803
Fair value, available for sale securities	71,645	119,447
Collateralized Mortgage-Backed Securities [Member]
Without single maturity date, amortized cost	112,462	112,855
Without single maturity date, fair value	100,721	101,248
Available-for-Sale, Amortized Cost	112,462	112,855
Fair value, available for sale securities	100,721	101,248
Collateralized Mortgage-Backed Securities [Member] | Federal National Mortgage Association (FNMA) [Member]
Without single maturity date, amortized cost	83,261	76,369
Without single maturity date, fair value	73,097	66,275
Collateralized Mortgage-Backed Securities [Member] | Federal Home Loan Mortgage Corporation (FHLMC) [Member]
Without single maturity date, amortized cost	21,351	32,311
Without single maturity date, fair value	20,331	31,376
Collateralized Mortgage-Backed Securities [Member] | Government National Mortgage Association (GNMA) [Member]
Without single maturity date, amortized cost	7,850	4,175
Without single maturity date, fair value	7,293	3,597
U.S. Small Business Administration Securities [Member]
Due within one year, amortized cost	42	198
Due within one year, fair value	41	196
Due after one year through five years, amortized cost	1,434	1,860
Due after one year through five years, fair value	1,373	1,824
Due after five years through ten years, amortized cost	6,858	21,420
Due after five years through ten years, fair value	6,648	20,929
Due after ten years, amortized cost	9,269	19,408
Due after ten years, fair value	8,453	18,399
Subtotal, amortized cost	17,603	42,886
Subtotal, fair value	16,515	41,348
Available-for-Sale, Amortized Cost	17,603	42,886
Fair value, available for sale securities	$ 16,515	$ 41,348

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Note 2 - Investments - Schedule of Gain or Loss of Securities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Proceeds from sale of investment securities	$ 54,423	$ 0	$ 98,459	$ 0
Realized gain	204		204
Realized loss	$ (53)		$ (8,051)

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Note 3 - Loans Receivable and Allowance for Credit Losses - Loans (Details Textual) Pure in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Assets [Abstract]
Interest Receivable	$ 13,792,000		$ 13,792,000		$ 14,005,000
Financing Receivable, Unamortized Loan Cost (Fee)	(7,200,000)		(7,200,000)		(8,400,000)
Financing Receivable, Unamortized Purchase Premium (Discount)	2,200,000		2,200,000		2,600,000
Financing Receivable, Accrued Interest, after Allowance for Credit Loss	11,800,000		11,800,000		11,500,000
Financing Receivable, before Allowance for Credit Loss	$ 2,488,422,000		$ 2,488,422,000		2,433,015,000
Financing Receivable, Modified, Subsequent Default, Number of Contracts	0	0	0	0
Financing Receivable, Modified, Commitment to Lend	$ 0		$ 0
Financing Receivable, 90 Days or More Past Due, Still Accruing	0		0		$ 0
Financing Receivable, Nonaccrual, Interest Income	$ 92,000	$ 106,000	$ 203,000	$ 168,000
Financing Receivable, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration]	Interest Receivable		Interest Receivable		Interest Receivable
Commercial Business Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss	$ 310,731,000		$ 310,731,000		$ 255,881,000
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member]
Financing Receivable, before Allowance for Credit Loss	285,183,000		285,183,000		238,301,000
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member] | SBA USDA Guaranteed Certificates [Member]
Financing Receivable, before Allowance for Credit Loss	35,200,000		35,200,000		10,600,000
Asset Pledged as Collateral [Member] | Federal Home Loan Bank Advances [Member]
Financing Receivable, before Allowance for Credit Loss	1,110,000,000		1,110,000,000		1,070,000,000.00
Asset Pledged as Collateral [Member] | Federal Home Loan Bank Advances [Member] | Federal Home Loan Bank of San Francisco [Member]
Financing Receivable, before Allowance for Credit Loss	$ 627,100,000		$ 627,100,000		$ 631,100,000

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Note 3 - Loans Receivable and Allowance for Credit Losses on Loans - Schedule of Portfolio Loan Composition (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Financing Receivable, Gross	$ 2,488,422	$ 2,433,015
ACL on loans	(31,238)	(31,534)
Total loans receivable, net	2,457,184	2,401,481
Real Estate Portfolio Segment [Member]
Financing Receivable, Gross	1,536,003	1,530,381
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Financing Receivable, Gross	359,404	366,328
Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, Gross	274,209	303,054
Real Estate Portfolio Segment [Member] | Home Equity Loan [Member]
Financing Receivable, Gross	73,749	69,488
Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member]
Financing Receivable, Gross	588,966	567,742
Real Estate Portfolio Segment [Member] | Multifamily [Member]
Financing Receivable, Gross	239,675	223,769
Consumer Portfolio Segment [Member]
Financing Receivable, Gross	641,688	646,753
Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member]
Financing Receivable, Gross	563,621	569,903
Consumer Portfolio Segment [Member] | Marine Loans [Member]
Financing Receivable, Gross	74,627	73,310
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Financing Receivable, Gross	3,440	3,540
Commercial Business Portfolio Segment [Member]
Financing Receivable, Gross	310,731	255,881
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member]
Financing Receivable, Gross	285,183	238,301
Commercial Business Portfolio Segment [Member] | Warehouse Lending Loan [Member]
Financing Receivable, Gross	$ 25,548	$ 17,580

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Note 3 - Loans Receivable and Allowance for Credit Losses on Loans - Schedule of Allowance for Credit Losses by Category (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Beginning balance	$ 31,479	$ 29,937	$ 31,534	$ 27,992	$ 27,992
(Reversal of) provision for credit losses on loans	1,001	1,063	2,422	3,418
Charge-offs	(1,748)	(876)	(3,642)	(1,596)	(3,476)
Recoveries	506	226	924	536
Net charge-offs	(1,242)	(650)	(2,718)	(1,060)
Total ending ACL balance	31,238	30,350	31,238	30,350	31,534
Real Estate Portfolio Segment [Member]
Beginning balance	14,253	12,572	14,107	12,123	12,123
(Reversal of) provision for credit losses on loans	(165)	(265)	(19)	194
Charge-offs	0	0	0	(10)
Recoveries	0	0	0	0
Net charge-offs	0	0	0	(10)
Total ending ACL balance	14,088	12,307	14,088	12,307	14,107
Consumer Portfolio Segment [Member]
Beginning balance	12,933	13,401	13,357	12,109	12,109
(Reversal of) provision for credit losses on loans	914	1,266	1,558	2,957
Charge-offs	(1,015)	(876)	(2,501)	(1,585)
Recoveries	421	226	839	536
Net charge-offs	(594)	(650)	(1,662)	(1,049)
Total ending ACL balance	13,253	14,017	13,253	14,017	13,357
Commercial Business Portfolio Segment [Member]
Beginning balance	4,293	3,964	4,070	3,760	3,760
(Reversal of) provision for credit losses on loans	252	62	883	267
Charge-offs	(733)	0	(1,141)	(1)
Recoveries	85	0	85	0
Net charge-offs	(648)	0	(1,056)	(1)
Total ending ACL balance	3,897	4,026	3,897	4,026	4,070
Unallocated Financing Receivables [Member]
Beginning balance	0	0	0	0	0
(Reversal of) provision for credit losses on loans	0	0	0	0
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Net charge-offs	0	0	0	0
Total ending ACL balance	$ 0	$ 0	$ 0	$ 0	$ 0

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Note 3 - Loans Receivable and Allowance for Credit Losses on Loans - Loan Modifications to Borrowers Experiencing Financial Difficulty (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Payment Deferral [Member] | Commercial Real Estate Portfolio Segment [Member]
Amortized cost basis	$ 1,116	$ 1,088
% of total loan type	0.30%	0.30%
Weighted-average period (Year)	2 years	1 year 6 months
Commercial And Industrial [Member] | Extended Maturity and Interest Rate Reduction [Member] | Commercial Business Portfolio Segment [Member]
Amortized cost basis		$ 2,940
% of total loan type		1.20%
Weighted-average period (Year)		5 years
Pre-modification %		7.50%
Post-modification %		4.10%

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Note 3 - Loans Receivable and Allowance for Credit Losses on Loans - Schedule of Past Due Loans (Details) - USD ($) $ in Thousands		Jun. 30, 2024	Dec. 31, 2023
Financing Receivable, before Allowance for Credit Loss		$ 2,488,422	$ 2,433,015
Financing Receivable, Nonaccrual	[1]	11,406	10,952
Real Estate Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		1,536,003	1,530,381
Financing Receivable, Nonaccrual	[1]	6,179	6,056
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Financing Receivable, before Allowance for Credit Loss		359,404	366,328
Financing Receivable, Nonaccrual		1,116	1,088
Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, before Allowance for Credit Loss		274,209	303,054
Financing Receivable, Nonaccrual	[1]	4,737	4,699
Real Estate Portfolio Segment [Member] | Home Equity Loan [Member]
Financing Receivable, before Allowance for Credit Loss		73,749	69,488
Financing Receivable, Nonaccrual	[1]	156	173
Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member]
Financing Receivable, before Allowance for Credit Loss		588,966	567,742
Financing Receivable, Nonaccrual	[1]	170	96
Real Estate Portfolio Segment [Member] | Multifamily [Member]
Financing Receivable, before Allowance for Credit Loss		239,675	223,769
Financing Receivable, Nonaccrual	[1]	0	0
Consumer Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		641,688	646,753
Financing Receivable, Nonaccrual	[1]	2,652	2,213
Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member]
Financing Receivable, before Allowance for Credit Loss		563,621	569,903
Financing Receivable, Nonaccrual	[1]	2,319	1,863
Consumer Portfolio Segment [Member] | Marine Loans [Member]
Financing Receivable, before Allowance for Credit Loss		74,627	73,310
Financing Receivable, Nonaccrual	[1]	327	342
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Financing Receivable, before Allowance for Credit Loss		3,440	3,540
Financing Receivable, Nonaccrual	[1]	6	8
Commercial Business Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		310,731	255,881
Financing Receivable, Nonaccrual	[1]	2,575	2,683
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member]
Financing Receivable, before Allowance for Credit Loss		285,183	238,301
Financing Receivable, Nonaccrual	[1]	2,575	2,683
Commercial Business Portfolio Segment [Member] | Warehouse Lending Loan [Member]
Financing Receivable, before Allowance for Credit Loss		25,548	17,580
Financing Receivable, Nonaccrual	[1]	0	0
Financial Asset, 30 to 59 Days Past Due [Member]
Financing Receivable, before Allowance for Credit Loss		2,553	2,268
Financial Asset, 30 to 59 Days Past Due [Member] | Real Estate Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		102	79
Financial Asset, 30 to 59 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, 30 to 59 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, 30 to 59 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | Home Equity Loan [Member]
Financing Receivable, before Allowance for Credit Loss		24	79
Financial Asset, 30 to 59 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member]
Financing Receivable, before Allowance for Credit Loss		78	0
Financial Asset, 30 to 59 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | Multifamily [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, 30 to 59 Days Past Due [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		2,451	2,189
Financial Asset, 30 to 59 Days Past Due [Member] | Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member]
Financing Receivable, before Allowance for Credit Loss		2,265	1,759
Financial Asset, 30 to 59 Days Past Due [Member] | Consumer Portfolio Segment [Member] | Marine Loans [Member]
Financing Receivable, before Allowance for Credit Loss		181	373
Financial Asset, 30 to 59 Days Past Due [Member] | Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Financing Receivable, before Allowance for Credit Loss		5	57
Financial Asset, 30 to 59 Days Past Due [Member] | Commercial Business Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, 30 to 59 Days Past Due [Member] | Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, 30 to 59 Days Past Due [Member] | Commercial Business Portfolio Segment [Member] | Warehouse Lending Loan [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, 60 to 89 Days Past Due [Member]
Financing Receivable, before Allowance for Credit Loss		1,608	1,630
Financial Asset, 60 to 89 Days Past Due [Member] | Real Estate Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		323	121
Financial Asset, 60 to 89 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Financing Receivable, before Allowance for Credit Loss		323	0
Financial Asset, 60 to 89 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, 60 to 89 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | Home Equity Loan [Member]
Financing Receivable, before Allowance for Credit Loss		0	25
Financial Asset, 60 to 89 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member]
Financing Receivable, before Allowance for Credit Loss		0	96
Financial Asset, 60 to 89 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | Multifamily [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, 60 to 89 Days Past Due [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		1,285	1,509
Financial Asset, 60 to 89 Days Past Due [Member] | Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member]
Financing Receivable, before Allowance for Credit Loss		1,041	1,248
Financial Asset, 60 to 89 Days Past Due [Member] | Consumer Portfolio Segment [Member] | Marine Loans [Member]
Financing Receivable, before Allowance for Credit Loss		239	243
Financial Asset, 60 to 89 Days Past Due [Member] | Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Financing Receivable, before Allowance for Credit Loss		5	18
Financial Asset, 60 to 89 Days Past Due [Member] | Commercial Business Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, 60 to 89 Days Past Due [Member] | Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, 60 to 89 Days Past Due [Member] | Commercial Business Portfolio Segment [Member] | Warehouse Lending Loan [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Financing Receivable, before Allowance for Credit Loss		7,585	3,570
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Real Estate Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		4,893	136
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, before Allowance for Credit Loss		4,737	0
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | Home Equity Loan [Member]
Financing Receivable, before Allowance for Credit Loss		156	136
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Real Estate Portfolio Segment [Member] | Multifamily [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		991	920
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member]
Financing Receivable, before Allowance for Credit Loss		901	777
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Consumer Portfolio Segment [Member] | Marine Loans [Member]
Financing Receivable, before Allowance for Credit Loss		85	137
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Financing Receivable, before Allowance for Credit Loss		5	6
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Commercial Business Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		1,701	2,514
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member]
Financing Receivable, before Allowance for Credit Loss		1,701	2,514
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Commercial Business Portfolio Segment [Member] | Warehouse Lending Loan [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, Past Due [Member]
Financing Receivable, before Allowance for Credit Loss		11,746	7,468
Financial Asset, Past Due [Member] | Real Estate Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		5,318	336
Financial Asset, Past Due [Member] | Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Financing Receivable, before Allowance for Credit Loss		323	0
Financial Asset, Past Due [Member] | Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, before Allowance for Credit Loss		4,737	0
Financial Asset, Past Due [Member] | Real Estate Portfolio Segment [Member] | Home Equity Loan [Member]
Financing Receivable, before Allowance for Credit Loss		180	240
Financial Asset, Past Due [Member] | Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member]
Financing Receivable, before Allowance for Credit Loss		78	96
Financial Asset, Past Due [Member] | Real Estate Portfolio Segment [Member] | Multifamily [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, Past Due [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		4,727	4,618
Financial Asset, Past Due [Member] | Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member]
Financing Receivable, before Allowance for Credit Loss		4,207	3,784
Financial Asset, Past Due [Member] | Consumer Portfolio Segment [Member] | Marine Loans [Member]
Financing Receivable, before Allowance for Credit Loss		505	753
Financial Asset, Past Due [Member] | Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Financing Receivable, before Allowance for Credit Loss		15	81
Financial Asset, Past Due [Member] | Commercial Business Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		1,701	2,514
Financial Asset, Past Due [Member] | Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member]
Financing Receivable, before Allowance for Credit Loss		1,701	2,514
Financial Asset, Past Due [Member] | Commercial Business Portfolio Segment [Member] | Warehouse Lending Loan [Member]
Financing Receivable, before Allowance for Credit Loss		0	0
Financial Asset, Not Past Due [Member]
Financing Receivable, before Allowance for Credit Loss		2,476,676	2,425,547
Financial Asset, Not Past Due [Member] | Real Estate Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		1,530,685	1,530,045
Financial Asset, Not Past Due [Member] | Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Financing Receivable, before Allowance for Credit Loss		359,081	366,328
Financial Asset, Not Past Due [Member] | Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, before Allowance for Credit Loss		269,472	303,054
Financial Asset, Not Past Due [Member] | Real Estate Portfolio Segment [Member] | Home Equity Loan [Member]
Financing Receivable, before Allowance for Credit Loss		73,569	69,248
Financial Asset, Not Past Due [Member] | Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member]
Financing Receivable, before Allowance for Credit Loss		588,888	567,646
Financial Asset, Not Past Due [Member] | Real Estate Portfolio Segment [Member] | Multifamily [Member]
Financing Receivable, before Allowance for Credit Loss		239,675	223,769
Financial Asset, Not Past Due [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		636,961	642,135
Financial Asset, Not Past Due [Member] | Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member]
Financing Receivable, before Allowance for Credit Loss		559,414	566,119
Financial Asset, Not Past Due [Member] | Consumer Portfolio Segment [Member] | Marine Loans [Member]
Financing Receivable, before Allowance for Credit Loss		74,122	72,557
Financial Asset, Not Past Due [Member] | Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Financing Receivable, before Allowance for Credit Loss		3,425	3,459
Financial Asset, Not Past Due [Member] | Commercial Business Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss		309,030	253,367
Financial Asset, Not Past Due [Member] | Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member]
Financing Receivable, before Allowance for Credit Loss		283,482	235,787
Financial Asset, Not Past Due [Member] | Commercial Business Portfolio Segment [Member] | Warehouse Lending Loan [Member]
Financing Receivable, before Allowance for Credit Loss		$ 25,548	$ 17,580

[1] Includes loans less than 90 days past due as applicable.

XML

Note 3 - Loans Receivable and Allowance for Credit Losses on Loans - Schedule of Risk Rated Loan by Category (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Financing Receivable, before Allowance for Credit Loss	$ 2,488,422		$ 2,488,422		$ 2,433,015
Financing Receivable, Year One, Originated, Current Fiscal Year	220,115		220,115		491,485
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	468,763		468,763		674,717
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	586,330		586,330		464,272
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	430,112		430,112		257,540
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	250,628		250,628		134,306
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	296,260		296,260		196,511
Financing Receivable, Revolving	234,632		234,632		213,241
Financing Receivable, Revolving, Converted to Term Loan	1,582		1,582		943
Total loans receivable, gross	2,488,422		2,488,422		2,433,015
Financing Receivable, Current Fiscal Year, Writeoff			38		204
Financing Receivable, Fiscal Year before Current Fiscal Year, Writeoff			534		1,435
Financing Receivable, Two Years before Current Fiscal Year, Writeoff			855		673
Financing Receivable, Three Years before Current Fiscal Year, Writeoff			270		290
Financing Receivable, Four Years before Current Fiscal Year, Writeoff			308		152
Financing Receivable, More than Five Years before Current Fiscal Year, Writeoff			815		592
Financing Receivable, Revolving, Writeoff			822		130
Financing Receivable, Revolving, Converted to Term Loan, Writeoff			0		0
Allowance for Credit Loss, Writeoff	1,748	$ 876	3,642	$ 1,596	3,476
Pass [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	220,073		220,073		482,667
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	457,365		457,365		663,043
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	569,212		569,212		447,175
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	412,755		412,755		251,907
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	245,370		245,370		130,922
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	286,075		286,075		188,568
Financing Receivable, Revolving	217,687		217,687		202,971
Financing Receivable, Revolving, Converted to Term Loan	1,582		1,582		617
Total loans receivable, gross	2,410,119		2,410,119		2,367,870
Watch [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		5,523
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	8,146		8,146		5,446
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	10,793		10,793		14,276
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	13,997		13,997		2,366
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	2,082		2,082		453
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	2,701		2,701		3,179
Financing Receivable, Revolving	10,711		10,711		6,376
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	48,430		48,430		37,619
Substandard [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	42		42		3,152
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	3,252		3,252		6,228
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	6,325		6,325		2,821
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	2,795		2,795		3,267
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	3,176		3,176		2,024
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	6,429		6,429		4,511
Financing Receivable, Revolving	2,260		2,260		2,150
Financing Receivable, Revolving, Converted to Term Loan	0		0		326
Total loans receivable, gross	24,279		24,279		24,479
Special Mention [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		143
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	565		565		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		907
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	1,055		1,055		253
Financing Receivable, Revolving	3,974		3,974		1,345
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	5,594		5,594		2,648
Doubtful [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year					0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year					0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year					0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year					0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year					0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year					0
Financing Receivable, Revolving					399
Financing Receivable, Revolving, Converted to Term Loan					0
Total loans receivable, gross					399
Real Estate Portfolio Segment [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	121,207		121,207		286,761
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	275,275		275,275		404,537
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	342,678		342,678		336,609
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	315,284		315,284		192,837
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	192,842		192,842		97,415
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	223,099		223,099		147,382
Financing Receivable, Revolving	64,780		64,780		64,042
Financing Receivable, Revolving, Converted to Term Loan	838		838		798
Financing Receivable, before Allowance for Credit Loss	1,536,003		1,536,003		1,530,381
Allowance for Credit Loss, Writeoff	(0)	(0)	(0)	10
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	13,315		13,315		51,752
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	50,739		50,739		96,590
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	95,713		95,713		74,583
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	70,817		70,817		47,767
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	46,290		46,290		28,819
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	81,761		81,761		65,947
Financing Receivable, Revolving	0		0		544
Financing Receivable, Revolving, Converted to Term Loan	769		769		326
Financing Receivable, before Allowance for Credit Loss	359,404		359,404		366,328
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member] | Pass [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	13,315		13,315		48,551
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	47,571		47,571		91,144
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	84,920		84,920		61,689
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	58,041		58,041		46,117
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	44,659		44,659		27,957
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	76,866		76,866		61,764
Financing Receivable, Revolving	0		0		499
Financing Receivable, Revolving, Converted to Term Loan	769		769		0
Financing Receivable, before Allowance for Credit Loss	326,141		326,141		337,721
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member] | Watch [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		3,201
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	3,168		3,168		5,446
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	10,793		10,793		12,894
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	12,776		12,776		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		453
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	2,199		2,199		2,226
Financing Receivable, Revolving	0		0		45
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Financing Receivable, before Allowance for Credit Loss	28,936		28,936		24,265
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member] | Substandard [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		1,650
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	1,631		1,631		0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	2,295		2,295		1,957
Financing Receivable, Revolving	0		0		0
Financing Receivable, Revolving, Converted to Term Loan	0		0		326
Financing Receivable, before Allowance for Credit Loss	3,926		3,926		3,933
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member] | Special Mention [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		409
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	401		401		0
Financing Receivable, Revolving	0		0		0
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Financing Receivable, before Allowance for Credit Loss	401		401		409
Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	67,600		67,600		120,155
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	111,041		111,041		110,867
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	50,252		50,252		46,989
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	33,750		33,750		15,219
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	747		747		0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	508		508		540
Financing Receivable, Revolving	10,311		10,311		9,284
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Financing Receivable, before Allowance for Credit Loss	274,209		274,209		303,054
Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Pass [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	67,600		67,600		120,155
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	111,041		111,041		106,168
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	45,515		45,515		46,989
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	33,272		33,272		15,219
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	747		747		0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	508		508		540
Financing Receivable, Revolving	10,311		10,311		9,284
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Financing Receivable, before Allowance for Credit Loss	268,994		268,994		298,355
Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Watch [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	478		478
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0		0
Financing Receivable, Revolving	0		0
Financing Receivable, Revolving, Converted to Term Loan	0		0
Financing Receivable, before Allowance for Credit Loss	478		478
Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Substandard [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		4,699
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	4,737		4,737		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0		0		0
Financing Receivable, Revolving	0		0		0
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Financing Receivable, before Allowance for Credit Loss	4,737		4,737		4,699
Real Estate Portfolio Segment [Member] | Home Equity Loan [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	6,570		6,570		4,583
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	2,796		2,796		398
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	374		374		1,584
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	1,561		1,561		6,525
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	6,089		6,089		11
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	1,821		1,821		2,173
Financing Receivable, Revolving	54,469		54,469		54,214
Financing Receivable, Revolving, Converted to Term Loan	69		69		0
Financing Receivable, before Allowance for Credit Loss	73,749		73,749		69,488
Financing Receivable, Revolving, Writeoff					10
Allowance for Credit Loss, Writeoff					10
Real Estate Portfolio Segment [Member] | Home Equity Loan [Member] | Pass [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	6,570		6,570		4,583
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	2,796		2,796		398
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	374		374		1,584
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	1,561		1,561		6,525
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	6,089		6,089		11
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	1,806		1,806		2,137
Financing Receivable, Revolving	54,328		54,328		54,077
Financing Receivable, Revolving, Converted to Term Loan	69		69		0
Financing Receivable, before Allowance for Credit Loss	73,593		73,593		69,315
Real Estate Portfolio Segment [Member] | Home Equity Loan [Member] | Substandard [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	15		15		36
Financing Receivable, Revolving	141		141		137
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Financing Receivable, before Allowance for Credit Loss	156		156		173
Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	33,629		33,629		103,165
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	103,630		103,630		176,278
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	176,086		176,086		122,406
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	118,545		118,545		80,815
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	79,405		79,405		30,595
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	77,671		77,671		54,011
Financing Receivable, Revolving	0		0		0
Financing Receivable, Revolving, Converted to Term Loan	0		0		472
Financing Receivable, before Allowance for Credit Loss	588,966		588,966		567,742
Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member] | Pass [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	33,629		33,629		103,165
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	103,630		103,630		175,412
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	175,294		175,294		122,406
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	118,545		118,545		80,815
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	79,405		79,405		30,595
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	75,609		75,609		52,008
Financing Receivable, Revolving	0		0		0
Financing Receivable, Revolving, Converted to Term Loan	0		0		472
Financing Receivable, before Allowance for Credit Loss	586,112		586,112		564,873
Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member] | Substandard [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		866
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	792		792		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	2,062		2,062		2,003
Financing Receivable, Revolving	0		0		0
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Financing Receivable, before Allowance for Credit Loss	2,854		2,854		2,869
Real Estate Portfolio Segment [Member] | Multifamily [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	93		93		7,106
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	7,069		7,069		20,404
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	20,253		20,253		91,047
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	90,611		90,611		42,511
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	60,311		60,311		37,990
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	61,338		61,338		24,711
Financing Receivable, Revolving	0		0		0
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Financing Receivable, before Allowance for Credit Loss	239,675		239,675		223,769
Real Estate Portfolio Segment [Member] | Multifamily [Member] | Pass [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	93		93		7,106
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	7,069		7,069		20,404
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	20,253		20,253		91,047
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	90,611		90,611		42,511
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	60,311		60,311		37,990
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	61,338		61,338		24,711
Financing Receivable, Revolving	0		0		0
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Financing Receivable, before Allowance for Credit Loss	239,675		239,675		223,769
Consumer Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss	641,688		641,688		646,753
Financing Receivable, Year One, Originated, Current Fiscal Year	66,802		66,802		185,348
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	163,397		163,397		237,846
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	212,443		212,443		104,326
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	93,647		93,647		49,409
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	44,255		44,255		29,505
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	58,737		58,737		38,047
Financing Receivable, Revolving	2,407		2,407		2,272
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	641,688		641,688		646,753
Allowance for Credit Loss, Writeoff	1,015	876	2,501	1,585
Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member]
Financing Receivable, before Allowance for Credit Loss	563,621		563,621		569,903
Financing Receivable, Year One, Originated, Current Fiscal Year	58,884		58,884		171,420
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	150,771		150,771		213,324
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	190,186		190,186		94,112
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	84,302		84,302		36,173
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	32,044		32,044		24,235
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	47,432		47,432		30,633
Financing Receivable, Revolving	2		2		6
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	563,621		563,621		569,903
Financing Receivable, Current Fiscal Year, Writeoff			38		204
Financing Receivable, Fiscal Year before Current Fiscal Year, Writeoff			480		1,386
Financing Receivable, Two Years before Current Fiscal Year, Writeoff			721		567
Financing Receivable, Three Years before Current Fiscal Year, Writeoff			219		290
Financing Receivable, Four Years before Current Fiscal Year, Writeoff			225		145
Financing Receivable, More than Five Years before Current Fiscal Year, Writeoff			306		336
Financing Receivable, Revolving, Writeoff			0		0
Financing Receivable, Revolving, Converted to Term Loan, Writeoff			0		0
Allowance for Credit Loss, Writeoff			1,989		2,928
Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member] | Pass [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	58,842		58,842		171,208
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	150,237		150,237		212,661
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	189,391		189,391		93,664
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	83,787		83,787		36,032
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	31,830		31,830		23,977
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	47,213		47,213		30,492
Financing Receivable, Revolving	2		2		6
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	561,302		561,302		568,040
Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member] | Substandard [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	42		42		212
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	534		534		663
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	795		795		448
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	515		515		141
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	214		214		258
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	219		219		141
Financing Receivable, Revolving	0		0		0
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	2,319		2,319		1,863
Consumer Portfolio Segment [Member] | Marine Loans [Member]
Financing Receivable, before Allowance for Credit Loss	74,627		74,627		73,310
Financing Receivable, Year One, Originated, Current Fiscal Year	7,798		7,798		13,619
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	12,440		12,440		23,963
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	21,823		21,823		10,039
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	9,240		9,240		13,167
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	12,160		12,160		5,267
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	11,166		11,166		7,255
Financing Receivable, Revolving	0		0		0
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	74,627		74,627		73,310
Financing Receivable, Current Fiscal Year, Writeoff			0		0
Financing Receivable, Fiscal Year before Current Fiscal Year, Writeoff			21		47
Financing Receivable, Two Years before Current Fiscal Year, Writeoff			128		93
Financing Receivable, Three Years before Current Fiscal Year, Writeoff			51		0
Financing Receivable, Four Years before Current Fiscal Year, Writeoff			83		7
Financing Receivable, More than Five Years before Current Fiscal Year, Writeoff			105		256
Financing Receivable, Revolving, Writeoff			0		0
Financing Receivable, Revolving, Converted to Term Loan, Writeoff			0		0
Allowance for Credit Loss, Writeoff			388		403
Consumer Portfolio Segment [Member] | Marine Loans [Member] | Pass [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	7,798		7,798		13,619
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	12,440		12,440		23,963
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	21,823		21,823		9,987
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	9,240		9,240		13,082
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	12,119		12,119		5,267
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	10,880		10,880		7,050
Financing Receivable, Revolving	0		0		0
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	74,300		74,300		72,968
Consumer Portfolio Segment [Member] | Marine Loans [Member] | Substandard [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		52
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		85
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	41		41		0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	286		286		205
Financing Receivable, Revolving	0		0		0
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	327		327		342
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Financing Receivable, before Allowance for Credit Loss	3,440		3,440		3,540
Financing Receivable, Year One, Originated, Current Fiscal Year	120		120		309
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	186		186		559
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	434		434		175
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	105		105		69
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	51		51		3
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	139		139		159
Financing Receivable, Revolving	2,405		2,405		2,266
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	3,440		3,440		3,540
Financing Receivable, Current Fiscal Year, Writeoff			0		0
Financing Receivable, Fiscal Year before Current Fiscal Year, Writeoff			33		2
Financing Receivable, Two Years before Current Fiscal Year, Writeoff			6		12
Financing Receivable, Three Years before Current Fiscal Year, Writeoff			0		0
Financing Receivable, Four Years before Current Fiscal Year, Writeoff			0		0
Financing Receivable, More than Five Years before Current Fiscal Year, Writeoff			24		0
Financing Receivable, Revolving, Writeoff			61		120
Financing Receivable, Revolving, Converted to Term Loan, Writeoff			0		0
Allowance for Credit Loss, Writeoff			124		134
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member] | Pass [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	120		120		309
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	186		186		559
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	433		433		175
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	105		105		69
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	51		51		3
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	139		139		159
Financing Receivable, Revolving	2,400		2,400		2,258
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	3,434		3,434		3,532
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member] | Substandard [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	1		1		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0		0		0
Financing Receivable, Revolving	5		5		8
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	6		6		8
Commercial Business Portfolio Segment [Member]
Financing Receivable, before Allowance for Credit Loss	310,731		310,731		255,881
Financing Receivable, Year One, Originated, Current Fiscal Year	32,106		32,106		19,376
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	30,091		30,091		32,334
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	31,209		31,209		23,337
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	21,181		21,181		15,294
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	13,531		13,531		7,386
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	14,424		14,424		11,082
Financing Receivable, Revolving	167,445		167,445		146,927
Financing Receivable, Revolving, Converted to Term Loan	744		744		145
Total loans receivable, gross	310,731		310,731		255,881
Allowance for Credit Loss, Writeoff	733	$ (0)	1,141	$ 1
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member]
Financing Receivable, before Allowance for Credit Loss	285,183		285,183		238,301
Financing Receivable, Year One, Originated, Current Fiscal Year	32,106		32,106		19,376
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	30,091		30,091		32,334
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	31,209		31,209		23,337
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	21,181		21,181		15,294
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	13,531		13,531		7,386
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	14,424		14,424		11,082
Financing Receivable, Revolving	141,897		141,897		129,347
Financing Receivable, Revolving, Converted to Term Loan	744		744		145
Total loans receivable, gross	285,183		285,183		238,301
Financing Receivable, Current Fiscal Year, Writeoff			0		0
Financing Receivable, Fiscal Year before Current Fiscal Year, Writeoff			0		0
Financing Receivable, Two Years before Current Fiscal Year, Writeoff			0		1
Financing Receivable, Three Years before Current Fiscal Year, Writeoff			0		0
Financing Receivable, Four Years before Current Fiscal Year, Writeoff			0		0
Financing Receivable, More than Five Years before Current Fiscal Year, Writeoff			380		0
Financing Receivable, Revolving, Writeoff			761		0
Financing Receivable, Revolving, Converted to Term Loan, Writeoff			0		0
Allowance for Credit Loss, Writeoff			1,141		1
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member] | Pass [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	32,106		32,106		13,971
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	22,395		22,395		32,334
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	31,209		31,209		19,634
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	17,593		17,593		11,537
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	10,159		10,159		5,122
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	11,716		11,716		9,707
Financing Receivable, Revolving	128,359		128,359		119,844
Financing Receivable, Revolving, Converted to Term Loan	744		744		145
Total loans receivable, gross	254,281		254,281		212,294
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member] | Watch [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		2,322
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	4,978		4,978		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		1,382
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	743		743		2,366
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	2,082		2,082		0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	502		502		953
Financing Receivable, Revolving	10,711		10,711		5,754
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	19,016		19,016		12,777
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member] | Substandard [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		2,940
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	2,718		2,718		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		2,321
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	2,280		2,280		1,391
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	1,290		1,290		1,766
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	1,552		1,552		169
Financing Receivable, Revolving	2,114		2,114		2,005
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	9,954		9,954		10,592
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member] | Special Mention [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		143
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	565		565		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		498
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	654		654		253
Financing Receivable, Revolving	713		713		1,345
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	1,932		1,932		2,239
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member] | Doubtful [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year					0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year					0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year					0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year					0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year					0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year					0
Financing Receivable, Revolving					399
Financing Receivable, Revolving, Converted to Term Loan					0
Total loans receivable, gross					399
Commercial Business Portfolio Segment [Member] | Warehouse Lending Loan [Member]
Financing Receivable, before Allowance for Credit Loss	25,548		25,548		17,580
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0		0		0
Financing Receivable, Revolving	25,548		25,548		17,580
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	25,548		25,548		17,580
Commercial Business Portfolio Segment [Member] | Warehouse Lending Loan [Member] | Pass [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0		0		0
Financing Receivable, Revolving	22,287		22,287		17,003
Financing Receivable, Revolving, Converted to Term Loan	0		0		0
Total loans receivable, gross	22,287		22,287		17,003
Commercial Business Portfolio Segment [Member] | Warehouse Lending Loan [Member] | Watch [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year					0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year					0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year					0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year					0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year					0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year					0
Financing Receivable, Revolving					577
Financing Receivable, Revolving, Converted to Term Loan					0
Total loans receivable, gross					$ 577
Commercial Business Portfolio Segment [Member] | Warehouse Lending Loan [Member] | Special Mention [Member]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year	0		0
Financing Receivable, Revolving	3,261		3,261
Financing Receivable, Revolving, Converted to Term Loan	0		0
Total loans receivable, gross	$ 3,261		$ 3,261

XML

Note 3 - Loans Receivable and Allowance for Credit Losses on Loans - Schedule of Amortized Cost of Nonaccrual Loans (Details) - USD ($) $ in Thousands		Jun. 30, 2024	Dec. 31, 2023
Financing Receivable, Nonaccrual, No Allowance		$ 1,705	$ 1,357
Financing Receivable, Nonaccrual, With Allowance		9,701	9,595
Financing Receivable, Nonaccrual	[1]	11,406	10,952
Real Estate Portfolio Segment [Member]
Financing Receivable, Nonaccrual, No Allowance		1,442	1,357
Financing Receivable, Nonaccrual, With Allowance		4,737	4,699
Financing Receivable, Nonaccrual	[1]	6,179	6,056
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Financing Receivable, Nonaccrual, No Allowance		1,116	1,088
Financing Receivable, Nonaccrual, With Allowance		0	0
Financing Receivable, Nonaccrual		1,116	1,088
Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, Nonaccrual, No Allowance		0	0
Financing Receivable, Nonaccrual, With Allowance		4,737	4,699
Financing Receivable, Nonaccrual	[1]	4,737	4,699
Real Estate Portfolio Segment [Member] | Home Equity Loan [Member]
Financing Receivable, Nonaccrual, No Allowance		156	173
Financing Receivable, Nonaccrual, With Allowance		0	0
Financing Receivable, Nonaccrual	[1]	156	173
Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member]
Financing Receivable, Nonaccrual, No Allowance		170	96
Financing Receivable, Nonaccrual, With Allowance		0	0
Financing Receivable, Nonaccrual	[1]	170	96
Consumer Portfolio Segment [Member]
Financing Receivable, Nonaccrual, No Allowance			0
Financing Receivable, Nonaccrual, With Allowance		2,652	2,213
Financing Receivable, Nonaccrual	[1]	2,652	2,213
Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member]
Financing Receivable, Nonaccrual, No Allowance		0	0
Financing Receivable, Nonaccrual, With Allowance		2,319	1,863
Financing Receivable, Nonaccrual	[1]	2,319	1,863
Consumer Portfolio Segment [Member] | Marine Loans [Member]
Financing Receivable, Nonaccrual, No Allowance		0	0
Financing Receivable, Nonaccrual, With Allowance		327	342
Financing Receivable, Nonaccrual	[1]	327	342
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Financing Receivable, Nonaccrual, No Allowance		0	0
Financing Receivable, Nonaccrual, With Allowance		6	8
Financing Receivable, Nonaccrual	[1]	6	8
Commercial Business Portfolio Segment [Member]
Financing Receivable, Nonaccrual	[1]	2,575	2,683
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member]
Financing Receivable, Nonaccrual, No Allowance		263	0
Financing Receivable, Nonaccrual, With Allowance		2,312	2,683
Financing Receivable, Nonaccrual	[1]	$ 2,575	$ 2,683

[1] Includes loans less than 90 days past due as applicable.

XML

Note 3 - Loans Receivable and Allowance for Credit Losses on Loans - Schedule of Collateral Dependent Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Financing Receivable, Gross	$ 2,488,422	$ 2,433,015
Commercial Real Estate [Member]
Financing Receivable, Gross	5,853	5,787
Residential Real Estate [Member]
Financing Receivable, Gross	326	269
Other Nonreal Estate [Member]
Financing Receivable, Gross	5,221	4,888
Collateral Dependent Loans [Member]
Financing Receivable, Gross	11,400	10,944
Real Estate Portfolio Segment [Member]
Financing Receivable, Gross	1,536,003	1,530,381
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Financing Receivable, Gross	5,853	5,787
Real Estate Portfolio Segment [Member] | Residential Real Estate [Member]
Financing Receivable, Gross	326	269
Real Estate Portfolio Segment [Member] | Other Nonreal Estate [Member]
Financing Receivable, Gross	0	0
Real Estate Portfolio Segment [Member] | Collateral Dependent Loans [Member]
Financing Receivable, Gross	6,179	6,056
Real Estate Portfolio Segment [Member] | Commercial Loan [Member] | Commercial Real Estate [Member]
Financing Receivable, Gross	1,116	1,088
Real Estate Portfolio Segment [Member] | Commercial Loan [Member] | Residential Real Estate [Member]
Financing Receivable, Gross	0	0
Real Estate Portfolio Segment [Member] | Commercial Loan [Member] | Other Nonreal Estate [Member]
Financing Receivable, Gross	0	0
Real Estate Portfolio Segment [Member] | Commercial Loan [Member] | Collateral Dependent Loans [Member]
Financing Receivable, Gross	1,116	1,088
Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, Gross	274,209	303,054
Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Commercial Real Estate [Member]
Financing Receivable, Gross	4,737	4,699
Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Residential Real Estate [Member]
Financing Receivable, Gross	0	0
Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Other Nonreal Estate [Member]
Financing Receivable, Gross	0
Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Collateral Dependent Loans [Member]
Financing Receivable, Gross	4,737	4,699
Real Estate Portfolio Segment [Member] | Home Equity Loan [Member]
Financing Receivable, Gross	73,749	69,488
Real Estate Portfolio Segment [Member] | Home Equity Loan [Member] | Commercial Real Estate [Member]
Financing Receivable, Gross	0	0
Real Estate Portfolio Segment [Member] | Home Equity Loan [Member] | Residential Real Estate [Member]
Financing Receivable, Gross	156	173
Real Estate Portfolio Segment [Member] | Home Equity Loan [Member] | Other Nonreal Estate [Member]
Financing Receivable, Gross	0	0
Real Estate Portfolio Segment [Member] | Home Equity Loan [Member] | Collateral Dependent Loans [Member]
Financing Receivable, Gross	156	173
Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member]
Financing Receivable, Gross	588,966	567,742
Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member] | Commercial Real Estate [Member]
Financing Receivable, Gross	0	0
Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member] | Residential Real Estate [Member]
Financing Receivable, Gross	170	96
Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member] | Other Nonreal Estate [Member]
Financing Receivable, Gross	0	0
Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member] | Collateral Dependent Loans [Member]
Financing Receivable, Gross	170	96
Consumer Portfolio Segment [Member]
Financing Receivable, Gross	641,688	646,753
Consumer Portfolio Segment [Member] | Commercial Real Estate [Member]
Financing Receivable, Gross	0	0
Consumer Portfolio Segment [Member] | Residential Real Estate [Member]
Financing Receivable, Gross	0	0
Consumer Portfolio Segment [Member] | Other Nonreal Estate [Member]
Financing Receivable, Gross	2,646	2,205
Consumer Portfolio Segment [Member] | Collateral Dependent Loans [Member]
Financing Receivable, Gross	2,646	2,205
Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member]
Financing Receivable, Gross	563,621	569,903
Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member] | Commercial Real Estate [Member]
Financing Receivable, Gross	0	0
Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member] | Residential Real Estate [Member]
Financing Receivable, Gross	0	0
Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member] | Other Nonreal Estate [Member]
Financing Receivable, Gross	2,319	1,863
Consumer Portfolio Segment [Member] | Indirect Home Improvement Loan [Member] | Collateral Dependent Loans [Member]
Financing Receivable, Gross	2,319	1,863
Consumer Portfolio Segment [Member] | Marine Loans [Member]
Financing Receivable, Gross	74,627	73,310
Consumer Portfolio Segment [Member] | Marine Loans [Member] | Commercial Real Estate [Member]
Financing Receivable, Gross	0	0
Consumer Portfolio Segment [Member] | Marine Loans [Member] | Residential Real Estate [Member]
Financing Receivable, Gross	0	0
Consumer Portfolio Segment [Member] | Marine Loans [Member] | Other Nonreal Estate [Member]
Financing Receivable, Gross	327	342
Consumer Portfolio Segment [Member] | Marine Loans [Member] | Collateral Dependent Loans [Member]
Financing Receivable, Gross	327	342
Commercial Business Portfolio Segment [Member]
Financing Receivable, Gross	310,731	255,881
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member]
Financing Receivable, Gross	285,183	238,301
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member] | Commercial Real Estate [Member]
Financing Receivable, Gross	0	0
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member] | Residential Real Estate [Member]
Financing Receivable, Gross	0	0
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member] | Other Nonreal Estate [Member]
Financing Receivable, Gross	2,575	2,683
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member] | Collateral Dependent Loans [Member]
Financing Receivable, Gross	$ 2,575	$ 2,683

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Note 4 - Mortgage Servicing Rights (Details Textual) - Mortgage Servicing Rights [Member] - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Fair Value Disclosure, off-Balance-Sheet Risks, Face Amount, Asset	$ 1,600.0		$ 1,600.0		$ 2,830.0
Servicing Asset at Fair Value, Amount	20.8		20.8		$ 38.2
Contractually Specified Servicing Fee, Late Fee, and Ancillary Fee Earned in Exchange for Servicing Financial Asset	$ 1.1	$ 1.8	$ 2.5	$ 3.6
Minimum [Member]
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of Other than 10 or 20 Percent Adverse Change in Other Assumption, Percent			0.50%
Maximum [Member]
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of Other than 10 or 20 Percent Adverse Change in Other Assumption, Percent			1.00%

XML

Note 4 - Mortgage Servicing Rights - Schedule of Mortgage Servicing Rights (Details) - Mortgage Servicing Rights [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Balance, MSR	$ 9,009	$ 17,599	$ 17,176	$ 18,017
Additions	817	920	1,393	1,325
MSRs amortized	(528)	(894)	(1,225)	(1,715)
Recovery (impairment) of MSRs	54	2	(39)	0
Balance, MSR	$ 9,352	$ 17,627	9,352	17,627
Sales			$ (7,953)	$ 0

XML

Note 4 - Mortgage Servicing Rights - Valuation Assumptions (Details) - Mortgage Servicing Rights [Member]	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Discount rate	10.00%	9.40%
Conditional prepayment rate	8.50%	7.20%
Weighted average life in years (Year)	7 years 10 months 24 days	8 years 4 months 24 days

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Note 4 - Mortgage Servicing Rights - Schedule of Sensitivity Analysis of Fair Value (Details) - Mortgage Servicing Rights [Member] - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Aggregate portfolio principal balance	$ 1,600,000	$ 2,830,000
Conditional prepayment rate	8.50%	7.20%
Fair value MSRs	$ 20,800	$ 38,200
Discount rate	10.00%	9.40%
Base Rate [Member]
Aggregate portfolio principal balance	$ 1,598,388	$ 2,832,016
Weighted average rate of loans in MSRs portfolio	4.10%	3.60%
Base Rate [Member] | Measurement Input, Prepayment Rate [Member]
Conditional prepayment rate	8.50%	7.20%
Fair value MSRs	$ 20,788	$ 38,163
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of Other than 10 or 20 Percent Adverse Change in Other Assumption, Percent	1.30%	1.30%
Base Rate [Member] | Measurement Input, Discount Rate [Member]
Fair value MSRs	$ 20,788	$ 38,163
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of Other than 10 or 20 Percent Adverse Change in Other Assumption, Percent	1.30%	1.30%
Discount rate	10.00%	9.40%
Sensitivity Analysis of Fair Value, Impact of 0.5 Percent Adverse Change in Other Assumption [Member] | Measurement Input, Prepayment Rate [Member]
Conditional prepayment rate	10.10%	8.00%
Fair value MSRs	$ 20,062	$ 37,268
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of Other than 10 or 20 Percent Adverse Change in Other Assumption, Percent	1.30%	1.30%
Sensitivity Analysis of Fair Value, Impact of 0.5 Percent Adverse Change in Other Assumption [Member] | Measurement Input, Discount Rate [Member]
Fair value MSRs	$ 20,340	$ 37,301
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of Other than 10 or 20 Percent Adverse Change in Other Assumption, Percent	1.30%	1.30%
Discount rate	10.50%	9.90%
Sensitivity Analysis of Fair Value, Impact of 1.0 Percent Adverse Change in Other Assumption [Member] | Measurement Input, Prepayment Rate [Member]
Conditional prepayment rate	12.40%	9.30%
Fair value MSRs	$ 19,188	$ 35,819
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of Other than 10 or 20 Percent Adverse Change in Other Assumption, Percent	1.20%	1.30%
Sensitivity Analysis of Fair Value, Impact of 1.0 Percent Adverse Change in Other Assumption [Member] | Measurement Input, Discount Rate [Member]
Fair value MSRs	$ 19,910	$ 36,476
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of Other than 10 or 20 Percent Adverse Change in Other Assumption, Percent	1.20%	1.30%
Discount rate	11.00%	10.40%

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Note 5 - Derivatives (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Unrealized Gain (Loss) on Derivatives			$ 3,598,000	$ 1,640,000
Asset Pledged as Collateral [Member] | Interest Rate Swap Agreements [Member]
Securities Received as Collateral	$ 0		0
Designated as Hedging Instrument [Member]
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net	223,100,000		223,100,000
Hedged Asset, Fair Value Hedge, Cumulative Increase (Decrease)	4,600,000		4,600,000
Derivative, Amount of Hedged Item	60,000,000		60,000,000
Not Designated as Hedging Instrument [Member]
Unrealized Gain (Loss) on Derivatives	19,000	$ (51,000)	201,000	$ 373,000
Interest Rate Swap [Member]
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net	$ 3,900,000		$ 3,900,000

XML

Note 5 - Derivatives - Schedule of Fair Value Hedges Cumulative-basis Adjustment (Details) - Designated as Hedging Instrument [Member] - Fair Value Hedging [Member] - USD ($) $ in Thousands		Jun. 30, 2024	Dec. 31, 2023
Cumulative Amount of Fair Value Hedging Adjustment		$ 4,603	$ 3,215
Securities Investment [Member]
Cumulative Amount of Fair Value Hedging Adjustment	[1]	4,603	3,215
Reported Value Measurement [Member]
Hedged Assets		55,397	56,785
Reported Value Measurement [Member] | Securities Investment [Member]
Hedged Assets	[1]	$ 55,397	$ 56,785

[1] These amounts include the amortized cost basis of closed portfolios used in designated hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At June 30, 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $223.1 million; the cumulative basis adjustments associated with these hedging relationships was $4.6 million; and the amounts of the designated hedged items was $60.0 million.

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Note 5 - Derivatives - Schedule of Derivative Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Interest Rate Swap [Member]
Derivative Asset	$ 9,725	$ 6,495
Derivative Liability	(0)	375
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Deposits [Member]
Notional	235,000	250,000
Derivative Asset	5,072	3,233
Derivative Liability	0	375
Interest Rate Swap [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | Securities Investment [Member]
Notional	60,000	60,000
Derivative Asset	4,582	3,198
Derivative Liability	0	0
Interest Rate Lock Commitments [Member] | Not Designated as Hedging Instrument [Member]
Notional	43,041	22,334
Derivative Asset	378	329
Derivative Liability	0	0
Mandatory and Best Effort Forward Commitments [Member] | Not Designated as Hedging Instrument [Member]
Notional	34,337	10,070
Derivative Asset	0	0
Derivative Liability	316	188
Forward TBA Mortgage-Backed Securities [Member] | Not Designated as Hedging Instrument [Member]
Notional	58,000	33,000
Derivative Asset	122	0
Derivative Liability	0	284
Customer Swap [Member] | Not Designated as Hedging Instrument [Member]
Notional	801	801
Derivative Asset	0	0
Derivative Liability	71	63
Dealer Offsets to Customer Swap [Member] | Not Designated as Hedging Instrument [Member]
Notional	801	801
Derivative Asset	71	64
Derivative Liability	$ 0	$ 0

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Note 5 - Derivatives - Schedule of Hedging Relationship (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Reclassification adjustment for realized gain, net included in net income	$ (1,148)	$ (1,271)	$ (2,870)	$ (2,178)
Interest Expense [Member]
Total amounts presented on the Consolidated Statements of Income	15,053	8,829	29,102	16,294
Net interest income recognized on cash flows of derivatives designated as hedging instruments	0	0	0	0
Interest Expense [Member] | Designated as Hedging Instrument [Member] | Securities Investment [Member] | Interest Rate Swap [Member]
Net gains (losses) on fair value hedging relationships: Interest rate swaps – securities, Recognized on hedged items	0	0	0	0
Recognized on derivatives designated as hedging instruments	0	0	0	0
Net income recognized on fair value hedges	0	0	0	0
Interest Expense [Member] | Designated as Hedging Instrument [Member] | Brokered Deposits and Borrowings [Member] | Interest Rate Swap [Member]
Reclassification adjustment for realized gain, net included in net income	1,148	1,271	2,870	2,178
Net income recognized on cash flow hedges	1,148	1,271	2,870	2,178
Interest Income [Member]
Total amounts presented on the Consolidated Statements of Income	3,534	2,651	7,417	5,271
Net interest income recognized on cash flows of derivatives designated as hedging instruments	421	363	839	656
Interest Income [Member] | Designated as Hedging Instrument [Member] | Securities Investment [Member] | Interest Rate Swap [Member]
Net gains (losses) on fair value hedging relationships: Interest rate swaps – securities, Recognized on hedged items	(163)	1,559	(1,388)	(60)
Recognized on derivatives designated as hedging instruments	163	(1,559)	1,388	60
Net income recognized on fair value hedges	421	363	839	656
Interest Income [Member] | Designated as Hedging Instrument [Member] | Brokered Deposits and Borrowings [Member] | Interest Rate Swap [Member]
Reclassification adjustment for realized gain, net included in net income	0	0	0	0
Net income recognized on cash flow hedges	$ 0	$ 0	$ 0	$ 0

XML

Note 5 - Derivatives - Schedule of Offsetting of Derivative Assets (Details) - Interest Rate Swap [Member] - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Derivative Asset, Before Offset	$ 9,811	$ 6,648
Derivative Asset, Offset	86	153
Derivative asset	9,725	6,495
Derivative Assets, Financial Instruments Collateral	0	0
Derivative Assets, Cash Collateral	1,120	0
Derivative Asset, Net	$ 8,605	$ 6,495

XML

Note 5 - Derivatives - Schedule of Offsetting of Derivative Liabilities (Details) - Interest Rate Swap [Member] - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Derivative Liability, Before Offset	$ 0	$ (722)
Derivative liability, offset	0	(347)
Derivatives liabilities	0	(375)
Financial Instrument	0	0
Derivative liability, cash collateral	0	270
Derivative liability, net	$ 0	$ (105)

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Note 6 - Leases (Details Textual)	Jun. 30, 2024
Lessee, Operating Lease, Renewal Term (Year)	5 years
Minimum [Member]
Lessee, Operating Lease, Remaining Lease Term (Month)	5 months
Maximum [Member]
Lessee, Operating Lease, Remaining Lease Term (Month)	6 years

XML

Note 6 - Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Operating lease cost	$ 475	$ 471	$ 949	$ 881
Short-term lease cost	2	5	5	9
Total lease cost	$ 477	$ 476	$ 954	$ 890

XML

Note 6 - Leases - Schedule of Supplemental Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Operating cash flows from operating leases	$ 490	$ 482	$ 980	$ 906
Weighted average remaining lease term- operating leases (in years) (Year)	3 years 8 months 12 days	4 years 4 months 24 days	3 years 8 months 12 days	4 years 4 months 24 days
Weighted average discount rate- operating leases	2.99%	2.92%	2.99%	2.92%

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Note 6 - Leases - Schedule of Maturity for Operating Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Remainder of 2024, operating lease	$ 963
2025, operating lease	1,628
2026, operating lease	1,475
2027, operating lease	1,173
2028, operating lease	428
Thereafter, operating lease	954
Total lease payments, operating lease	6,621
Less imputed interest, operating lease	(642)
Total, operating lease	$ 5,979	$ 6,848

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Note 7 - Other Real Estate Owned ("OREO") (Details Textual) - Real Estate Owned (OREO) [Member] Pure in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Number of Real Estate Properties	0		0		0
Custody Fees	$ 0	$ 0	$ 0	$ 0
Mortgage Loans in Process of Foreclosure, Amount	$ 19,000		$ 19,000		$ 96,000

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Note 7 - Other Real Estate Owned ("OREO") - Schedule of Other Real Estate Owned (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Balance, OREO	$ 0	$ 570	$ 0	$ 570
Additions	0	0	0	0
Loans transferred to OREO	0	0	0	0
Balance, OREO	$ 0	$ 570	$ 0	$ 570

XML

Note 8 - Deposits (Details Textual) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Deposit Liabilities, Checking [Member]
Interest-Bearing Domestic Deposit, Brokered	$ 0	$ 70,200,000
Deposit Liabilities, Money Market [Member]
Interest-Bearing Domestic Deposit, Brokered	4,000,000	1,000
Deposit Liabilities, Certificates of Deposits [Member]
Interest-Bearing Domestic Deposit, Brokered	$ 261,000,000	$ 361,300,000

XML

Note 8 - Deposits - Schedule of Deposit Liabilities (Details) - USD ($) $ in Thousands		Jun. 30, 2024	Dec. 31, 2023
Noninterest-bearing checking		$ 613,137	$ 654,048
Interest-bearing checking	[1]	166,839	244,028
Savings		151,398	151,630
Money market	[2]	343,995	359,063
Certificates of deposit less than $100,000	[3]	530,537	587,858
Certificates of deposit of $100,000 through $250,000		427,893	429,373
Certificates of deposit greater than $250,000		138,792	79,540
Escrow accounts related to mortgages serviced	[4]	10,212	16,783
Total deposits		$ 2,382,803	$ 2,522,323

[1] Includes $0.0 and $70.2 million of brokered deposits at June 30, 2024 and December 31, 2023, respectively.

[2] Includes $4.0 million and $1,000 of brokered deposits at June 30, 2024 and December 31, 2023, respectively.

[3] Includes $261.0 million and $361.3 million of brokered deposits at June 30, 2024 and December 31, 2023, respectively.

[4] Noninterest-bearing accounts.

XML

Note 8 - Deposits - Schedule of Maturity (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Maturing in 2024	$ 615,361
Maturing in 2025	369,984
Maturing in 2026	87,246
Maturing in 2027	21,019
Maturing in 2028	3,208
Thereafter	404
Total	$ 1,097,222

XML

Note 8 - Deposits - Schedule Interest Expense by Category (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Interest-bearing checking	$ 555	$ 370	$ 1,339	$ 468
Savings and money market	1,951	1,344	3,612	2,542
Certificates of deposit	10,746	5,896	21,183	11,224
Total	$ 13,252	$ 7,610	$ 26,134	$ 14,234

XML

Note 9 - Commitments and Contingencies (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Financing Receivable, Allowance for Credit Loss	$ 31,238,000		$ 31,238,000		$ 31,534,000
Other Liabilities	37,113,000		37,113,000		35,737,000
Holdback Reserve For Guaranteed Loans [Member]
Other Liabilities	2,000,000		2,000,000		2,100,000
Federal Home Loan Bank of Des Moines [Member]
Loans Serviced	$ 8,800,000		$ 8,800,000
Amount to Outstanding Credit Enhancement (CE) Obligation, Percentage	10.00%		10.00%
Escrow Holdback Relative to Outstanding Credit Enhancement (CE) Obligation	$ 39,000		$ 39,000
Federal Home Loan Bank of Des Moines [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Loans Serviced	0		0		0
Federal Home Loan Bank of Des Moines [Member] | Recourse [Member]
First Loss Account (FLA)	581,000		581,000
Credit Enhancement (CE) Obligation	$ 389,000		$ 389,000
Credit Enhancement (CE) Obligation, Percentage of Outstanding Loans	4.40%		4.40%
Unfunded Loan Commitment [Member]
Financing Receivable, Allowance for Credit Loss	$ 1,600,000		$ 1,600,000		$ 1,500,000
Financing Receivable, Allowance for Credit Loss, Recovery	$ 77,000	$ 347,000	$ 54,000	$ 596,000

XML

Note 9 - Commitments and Contingencies - Schedule of Commitments (Details) - Commitments to Extend Credit [Member] - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Aggregate portfolio principal balance	$ 582,550	$ 535,032
Real Estate Portfolio Segment [Member]
Aggregate portfolio principal balance	347,249	278,805
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Aggregate portfolio principal balance	964	3,472
Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Aggregate portfolio principal balance	195,775	154,611
Real Estate Portfolio Segment [Member] | One-to-four Family Loan [Member]
Aggregate portfolio principal balance	49,866	23,751
Real Estate Portfolio Segment [Member] | Home Equity Loan [Member]
Aggregate portfolio principal balance	97,751	94,026
Real Estate Portfolio Segment [Member] | Multifamily [Member]
Aggregate portfolio principal balance	2,893	2,945
Consumer Portfolio Segment [Member]
Aggregate portfolio principal balance	28,886	29,517
Commercial Business Portfolio Segment [Member]
Aggregate portfolio principal balance	206,415	226,710
Commercial Business Portfolio Segment [Member] | Commercial And Industrial [Member]
Aggregate portfolio principal balance	155,200	164,873
Commercial Business Portfolio Segment [Member] | Warehouse Lending Loan [Member]
Aggregate portfolio principal balance	$ 51,215	$ 61,837

XML

Note 10 - Fair Value Measurements (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Loans Receivable, Fair Value Disclosure	$ 13,868,000		$ 13,868,000		$ 15,088,000
Financing Receivable, before Allowance for Credit Loss	2,488,422,000		2,488,422,000		2,433,015,000
Residential Mortgage [Member]
Loans Receivable, Fair Value Disclosure	13,900,000	$ 14,300,000	13,900,000	$ 14,300,000
Increase (Decrease) in Finance Receivables	184,000	(520,000)	186,000	57,000
Residential Mortgage [Member] | Fair Value, Inputs, Level 2 [Member]
Loans Receivable, Fair Value Disclosure	13,900,000		13,900,000		15,100,000
Financing Receivable, before Allowance for Credit Loss	14,600,000		14,600,000		$ 16,300,000
Increase (Decrease) in Finance Receivables	$ 184,000	$ (520,000)	$ 186,000	$ 57,000

XML

Note 10 - Fair Value Measurements - Schedule of Financial Assets and Liabilities on a Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Securities available-for-sale	$ 221,182	$ 292,933
Loans receivable, at fair value	53,811	25,668
Interest Rate Swap [Member]
Derivative asset	9,725	6,495
Derivatives liabilities	0	(375)
US Government Agencies Debt Securities [Member]
Securities available-for-sale	17,116	18,018
Corporate Debt Securities [Member]
Securities available-for-sale	15,185	12,872
Collateralized Mortgage-Backed Securities [Member]
Securities available-for-sale	100,721	101,248
U.S. Small Business Administration Securities [Member]
Securities available-for-sale	16,515	41,348
Fair Value, Recurring [Member]
Mortgage loans held for sale, at fair value	53,811	25,668
Loans receivable, at fair value	13,868	15,088
Total assets measured at fair value	299,015	340,513
Financial liabilities	(316)	(910)
Fair Value, Recurring [Member] | Interest Rate Swap [Member]
Derivative asset	9,654	6,431
Derivatives liabilities		(375)
Fair Value, Recurring [Member] | Dealer Offsets to Customer Swap [Member]
Derivative asset	0	64
Fair Value, Recurring [Member] | Customer Swap [Member]
Derivatives liabilities	0	(63)
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Mortgage loans held for sale, at fair value	0	0
Loans receivable, at fair value	0	0
Total assets measured at fair value	0	0
Financial liabilities	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Interest Rate Swap [Member]
Derivative asset	0	0
Derivatives liabilities		0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Dealer Offsets to Customer Swap [Member]
Derivative asset	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Customer Swap [Member]
Derivatives liabilities	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Mortgage loans held for sale, at fair value	53,811	25,668
Loans receivable, at fair value	13,868	15,088
Total assets measured at fair value	298,637	340,184
Financial liabilities	0	(722)
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member]
Derivative asset	9,654	6,431
Derivatives liabilities		(375)
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Dealer Offsets to Customer Swap [Member]
Derivative asset	0	64
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Customer Swap [Member]
Derivatives liabilities	0	(63)
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Mortgage loans held for sale, at fair value	0	0
Loans receivable, at fair value	0	0
Total assets measured at fair value	378	329
Financial liabilities	(316)	(188)
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member]
Derivative asset	0	0
Derivatives liabilities		0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Dealer Offsets to Customer Swap [Member]
Derivative asset	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Customer Swap [Member]
Derivatives liabilities	0	0
Fair Value, Recurring [Member] | US Government Agencies Debt Securities [Member]
Securities available-for-sale	17,116	18,018
Fair Value, Recurring [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	0	0
Fair Value, Recurring [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	17,116	18,018
Fair Value, Recurring [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale	0	0
Fair Value, Recurring [Member] | Corporate Debt Securities [Member]
Securities available-for-sale	15,185	12,872
Fair Value, Recurring [Member] | Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	0	0
Fair Value, Recurring [Member] | Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	15,185	12,872
Fair Value, Recurring [Member] | Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale	0	0
Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member]
Securities available-for-sale	71,645	119,447
Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	0	0
Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	71,645	119,447
Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale	0	0
Fair Value, Recurring [Member] | Collateralized Mortgage-Backed Securities [Member]
Securities available-for-sale	100,721	101,248
Fair Value, Recurring [Member] | Collateralized Mortgage-Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	0	0
Fair Value, Recurring [Member] | Collateralized Mortgage-Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	100,721	101,248
Fair Value, Recurring [Member] | Collateralized Mortgage-Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale	0	0
Fair Value, Recurring [Member] | U.S. Small Business Administration Securities [Member]
Securities available-for-sale	16,515	41,348
Fair Value, Recurring [Member] | U.S. Small Business Administration Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	0	0
Fair Value, Recurring [Member] | U.S. Small Business Administration Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	16,515	41,348
Fair Value, Recurring [Member] | U.S. Small Business Administration Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale	0	0
Fair Value, Recurring [Member] | Interest Rate Lock Commitments [Member]
Derivative asset	378	329
Fair Value, Recurring [Member] | Interest Rate Lock Commitments [Member] | Fair Value, Inputs, Level 1 [Member]
Derivative asset	0	0
Fair Value, Recurring [Member] | Interest Rate Lock Commitments [Member] | Fair Value, Inputs, Level 2 [Member]
Derivative asset	0	0
Fair Value, Recurring [Member] | Interest Rate Lock Commitments [Member] | Fair Value, Inputs, Level 3 [Member]
Derivative asset	378	329
Fair Value, Recurring [Member] | Forward TBA Mortgage-Backed Securities [Member]
Derivative asset	122
Derivatives liabilities		(284)
Fair Value, Recurring [Member] | Forward TBA Mortgage-Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Derivative asset	0
Derivatives liabilities		0
Fair Value, Recurring [Member] | Forward TBA Mortgage-Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Derivative asset	122
Derivatives liabilities		(284)
Fair Value, Recurring [Member] | Forward TBA Mortgage-Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Derivative asset	0
Derivatives liabilities		0
Fair Value, Recurring [Member] | Mandatory and Best Effort Forward Commitments [Member]
Derivatives liabilities	(316)	(188)
Fair Value, Recurring [Member] | Mandatory and Best Effort Forward Commitments [Member] | Fair Value, Inputs, Level 1 [Member]
Derivatives liabilities	0	0
Fair Value, Recurring [Member] | Mandatory and Best Effort Forward Commitments [Member] | Fair Value, Inputs, Level 2 [Member]
Derivatives liabilities	0	0
Fair Value, Recurring [Member] | Mandatory and Best Effort Forward Commitments [Member] | Fair Value, Inputs, Level 3 [Member]
Derivatives liabilities	$ (316)	$ (188)

XML

Note 10 - Fair Value Measurements - Schedule of Financial Assets on a Non-recurring Basis (Details) - Mortgage Servicing Rights [Member] - Fair Value, Nonrecurring [Member] - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
MSRs	$ 20,788	$ 38,163
Fair Value, Inputs, Level 1 [Member]
MSRs	0	0
Fair Value, Inputs, Level 2 [Member]
MSRs	0	0
Fair Value, Inputs, Level 3 [Member]
MSRs	$ 20,788	$ 38,163

XML

Note 10 - Fair Value Measurements - Schedule of Schedule of Financial Assets and Liabilities on a Recurring and Non-recurring Basis (Details) - Fair Value, Inputs, Level 3 [Member]	Jun. 30, 2024	Dec. 31, 2023
Minimum [Member] | Interest Rate Lock Commitments [Member] | Fair Value, Recurring [Member] | Valuation, Market Approach [Member] | Pull-through Expectations Rate [Member]
Interest rate lock commitments with customers	0.80	0.80
Minimum [Member] | Mandatory and Best Effort Forward Commitments [Member] | Fair Value, Recurring [Member] | Valuation, Market Approach [Member] | Pull-through Expectations Rate [Member]
Interest rate lock commitments with customers	0.80	0.80
Minimum [Member] | Mortgage Servicing Rights [Member] | Fair Value, Nonrecurring [Member] | Industry Sources [Member] | Measurement Input, Prepayment Rate [Member]
MSR	0	0
Maximum [Member] | Interest Rate Lock Commitments [Member] | Fair Value, Recurring [Member] | Valuation, Market Approach [Member] | Pull-through Expectations Rate [Member]
Interest rate lock commitments with customers	0.99	0.99
Maximum [Member] | Mandatory and Best Effort Forward Commitments [Member] | Fair Value, Recurring [Member] | Valuation, Market Approach [Member] | Pull-through Expectations Rate [Member]
Interest rate lock commitments with customers	0.99	0.99
Maximum [Member] | Mortgage Servicing Rights [Member] | Fair Value, Nonrecurring [Member] | Industry Sources [Member] | Measurement Input, Prepayment Rate [Member]
MSR	0.50	0.50
Weighted Average [Member] | Interest Rate Lock Commitments [Member] | Fair Value, Recurring [Member] | Valuation, Market Approach [Member] | Pull-through Expectations Rate [Member]
Interest rate lock commitments with customers	0.908	0.905
Weighted Average [Member] | Mandatory and Best Effort Forward Commitments [Member] | Fair Value, Recurring [Member] | Valuation, Market Approach [Member] | Pull-through Expectations Rate [Member]
Interest rate lock commitments with customers	0.908	0.905
Weighted Average [Member] | Mortgage Servicing Rights [Member] | Fair Value, Nonrecurring [Member] | Industry Sources [Member] | Measurement Input, Prepayment Rate [Member]
MSR	0.085	0.072

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Note 10 - Fair Value Measurements - Schedule of Reconciliation of Financial Assets and Liabilities with Unobservable Inputs (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Interest Rate Lock Commitments [Member]
Beginning balance, derivative asset (liability)		$ 251	$ 565	$ 329	$ 107
Purchases and issuances, derivative asset (liability)		693	948	1,658	1,942
Sales and settlements, derivative asset (liability)		(566)	(1,240)	(1,609)	(1,776)
Ending balance, derivative asset (liability)		378	273	378	273
Gain (Loss) Included in Earnings, derivative asset (liability)	[1]	127	(292)	49	166
Gain (Loss) Included in Other Comprehensive Income (Loss), derivative asset (liability)	[2]	0	0	0	0
Mandatory and Best Effort Forward Commitments [Member]
Beginning balance, derivative asset (liability)		(73)	(13)	(188)	(38)
Purchases and issuances, derivative asset (liability)		36	188	21	410
Sales and settlements, derivative asset (liability)		(279)	(52)	(149)	(249)
Ending balance, derivative asset (liability)		(316)	123	(316)	123
Gain (Loss) Included in Earnings, derivative asset (liability)	[1]	(243)	136	128	161
Gain (Loss) Included in Other Comprehensive Income (Loss), derivative asset (liability)	[2]	$ 0	$ 0	$ 0	$ 0

[1] Relating to items held at end of period included in income.

[2] Relating to items held at end of period included in other comprehensive income.

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Note 10 - Fair Value Measurements - Schedule of Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Certificates of deposit at other financial institutions	$ 12,707	$ 24,167
Securities available-for-sale	221,182	292,933
Debt Securities, Held-to-Maturity, Amortized Cost	8,500	8,500
Loans receivable, at fair value	53,811	25,668
FHLB stock, at cost	10,322	2,114
Loans Receivable, Fair Value Disclosure	13,868	15,088
Accrued interest receivable	13,792	14,005
Financing Receivable, before Allowance for Credit Loss	2,488,422	2,433,015
Borrowings	181,895	93,746
Subordinated notes, excluding unamortized debt issuance costs	50,000	50,000
Interest Rate Swap [Member]
Derivative asset	9,725	6,495
Derivative liabilities, fair value	(0)	375
Mortgage Servicing Rights [Member]
Servicing Asset at Fair Value, Amount	20,800	38,200
Fair Value, Inputs, Level 1 [Member] | Reported Value Measurement [Member]
Cash and cash equivalents	33,011	65,691
Fair Value, Inputs, Level 1 [Member] | Reported Value Measurement [Member] | Certificates of Deposit [Member]
Certificates of deposit at other financial institutions	12,707	24,167
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value Measurement [Member]
Cash and cash equivalents	33,011	65,691
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value Measurement [Member] | Certificates of Deposit [Member]
Certificates of deposit at other financial institutions	12,707	24,167
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member]
Securities available-for-sale	221,182	292,933
Debt Securities, Held-to-Maturity, Amortized Cost	8,500	8,500
Loans receivable, at fair value	53,811	25,668
FHLB stock, at cost	10,322	2,114
Loans Receivable, Fair Value Disclosure	13,868	15,088
Accrued interest receivable	13,792	14,005
Deposits	2,382,803	2,522,323
Borrowings	181,895	93,746
Subordinated notes, excluding unamortized debt issuance costs	50,000	50,000
Accrued interest payable	3,116	5,473
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Interest Rate Swap [Member]
Derivative asset	9,654	6,431
Derivative liabilities, fair value	0	375
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Dealer Offsets to Customer Swap [Member]
Derivative asset	71	64
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Customer Swap [Member]
Derivative liabilities, fair value	71	63
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Forward TBA Mortgage-Backed Securities [Member]
Derivative asset	122	0
Derivative liabilities, fair value	0	284
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member]
Securities available-for-sale	221,182	292,933
Debt Securities, Held-to-Maturity, Amortized Cost	7,867	7,666
Loans receivable, at fair value	53,811	25,668
FHLB stock, at cost	10,322	2,114
Loans Receivable, Fair Value Disclosure	13,868	15,088
Accrued interest receivable	13,792	14,005
Deposits	2,374,574	2,515,026
Borrowings	180,748	93,416
Subordinated notes, excluding unamortized debt issuance costs	44,151	43,480
Accrued interest payable	3,116	5,473
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Interest Rate Swap [Member]
Derivative asset	9,654	6,431
Derivative liabilities, fair value	0	375
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Dealer Offsets to Customer Swap [Member]
Derivative asset	71	64
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Customer Swap [Member]
Derivative liabilities, fair value	71	63
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Forward TBA Mortgage-Backed Securities [Member]
Derivative asset	122	0
Derivative liabilities, fair value	0	284
Fair Value, Inputs, Level 3 [Member] | Reported Value Measurement [Member]
Financing Receivable, before Allowance for Credit Loss	2,474,554	2,417,927
Fair Value, Inputs, Level 3 [Member] | Reported Value Measurement [Member] | Mortgage Servicing Rights [Member]
Servicing Asset at Fair Value, Amount	9,352	9,090
Fair Value, Inputs, Level 3 [Member] | Reported Value Measurement [Member] | Mortgage Servicing Right, Held for Sale [Member]
Servicing Asset at Fair Value, Amount	0	8,086
Fair Value, Inputs, Level 3 [Member] | Reported Value Measurement [Member] | Interest Rate Lock Commitments [Member]
Derivative asset	378	0
Fair Value, Inputs, Level 3 [Member] | Reported Value Measurement [Member] | Mandatory and Best Effort Forward Commitments [Member]
Derivative liabilities, fair value	316	188
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member]
Financing Receivable, before Allowance for Credit Loss	2,364,761	2,276,397
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member] | Mortgage Servicing Rights [Member]
Servicing Asset at Fair Value, Amount	20,788	20,552
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member] | Mortgage Servicing Right, Held for Sale [Member]
Servicing Asset at Fair Value, Amount	0	17,611
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member] | Interest Rate Lock Commitments [Member]
Derivative asset	378	0
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member] | Mandatory and Best Effort Forward Commitments [Member]
Derivative liabilities, fair value	$ 316	$ 188

XML

Note 11 - Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Net income	$ 8,959	$ 9,116	$ 17,356	$ 17,328
Dividends and undistributed earnings allocated to participating securities	(138)	(160)	(270)	(307)
Net income available to common shareholders	$ 8,821	$ 8,956	$ 17,086	$ 17,021
Basic weighted average common shares outstanding (in shares)	7,688,246	7,637,210	7,664,368	7,635,647
Dilutive shares (in shares)	108,007	109,126	114,354	133,870
Diluted weighted average common shares outstanding (in shares)	7,796,253	7,746,336	7,778,722	7,769,517
Basic earnings per share (in dollars per share)	$ 1.15	$ 1.17	$ 2.23	$ 2.23
Diluted earnings per share (in dollars per share)	$ 1.13	$ 1.16	$ 2.2	$ 2.19
Potentially dilutive weighted average share options that were not included in the computation of diluted earnings per share because to do so would be anti-dilutive. (in shares)	37,949	67,675	33,000	50,555

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Note 12 - Stock-based Compensation (Details Textual) - The 2018 Equity Incentive Plan [Member] - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	May 17, 2018
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares)					1,300,000
Share-Based Payment Arrangement, Expense	$ 389,000	$ 364,000	$ 784,000	$ 1,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expected Contractual Term Forfeiture Rate			3.10%
Share-Based Payment Arrangement, Tranche One [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)			1 year
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term (Year)			5 years 6 months
Share-Based Payment Arrangement, Tranche Four [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)			5 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term (Year)			6 years 6 months
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares)					326,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)	80,622		80,622
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)			3 years
Share-Based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount	$ 2,000,000		$ 2,000,000
Restricted Stock [Member] | Director [Member] | Minimum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)			1 year
Restricted Stock [Member] | Officers And Employees [Member] | Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)			5 years
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)	265,532		265,532
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)			10 years
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount	$ 1,300,000		$ 1,300,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)			3 years
Share-Based Payment Arrangement, Option [Member] | Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)			10 years
Share-Based Payment Arrangement, Option [Member] | Director [Member] | Minimum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)			1 year
Share-Based Payment Arrangement, Option [Member] | Officers And Employees [Member] | Share-Based Payment Arrangement, Tranche One [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage			20.00%
Share-Based Payment Arrangement, Option [Member] | Officers And Employees [Member] | Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)			5 years

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Note 12 - Stock-based Compensation - Schedule of Stock Option Awards (Details) - The 2018 Equity Incentive Plan [Member]	6 Months Ended		12 Months Ended
	Jun. 30, 2024 USD ($) $ / shares shares		Dec. 31, 2023 USD ($) $ / shares shares
Beginning balance, options (in shares) | shares	662,279
Beginning balance, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 28.12
Outstanding, Weighted Average Remaining Contractual Term (Year)	6 years 3 months 25 days		6 years 8 months 8 days
Outstanding, Intrinsic Value | $	$ 4,925,343		$ 5,852,975
Granted, options (in shares) | shares	0
Granted, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 0
Granted, Intrinsic Value | $	$ 0
Less exercised, options (in shares) | shares	18,612
Less exercised, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 8.45
Less exercised, Intrinsic Value | $	$ 531,699
Less forfeited, options (in shares) | shares	12,000
Less forfeited, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 30.73
Less forfeited, Intrinsic Value | $	$ 0
Ending balance, options (in shares) | shares	631,667		662,279
Ending balance, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 28.65		$ 28.12
Expected to vest, options (in shares) | shares	624,770	[1]
Expected to vest, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 28.65	[1]
Expected to vest, Weighted Average Remaining Contractual Term (Year)	6 years 2 months 26 days	[1]
Expected to vest, Intrinsic Value | $	$ 4,872,165	[1]
Exercisable, options (in shares) | shares	364,850
Exercisable, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 27.88
Exercisable, Weighted Average Remaining Contractual Term (Year)	5 years 3 months 10 days
Exercisable, Intrinsic Value | $	$ 3,125,310

[1] Forfeiture rate has been calculated and estimated to assume a forfeiture of 3.1% of the options over 10 years

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Note 12 - Stock-based Compensation - Schedule of Stock Option Awards (Details) (Parentheticals)	6 Months Ended
	Jun. 30, 2024
The 2018 Equity Incentive Plan [Member]
Expected Forfeiture Rate	0.31%

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Note 12 - Stock-based Compensation - Schedule of Restricted Stock Awards (Details) - Restricted Stock [Member]	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Beginning balance, RSA (in shares) | shares	102,144
Beginning balance, Nonvested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 29.61
Granted, RSA (in shares) | shares	0
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 0
Less vested, RSA (in shares) | shares	0
Less vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 0
Less forfeited, RSA (in shares) | shares	4,000
Less forfeited, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 30.73
Ending balance, RSA (in shares) | shares	98,144
Ending balance, Nonvested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 29.57

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Note 13 - Regulatory Capital (Details Textual)	Jun. 30, 2024	Dec. 31, 2023
Banking Regulation, Capital Conservation Buffer, Capital Conserved, Minimum	0.025
Banking Regulation, Tier 1 Leverage Capital Ratio, Actual	0.095	0.09
Banking Regulation, Tier 1 Risk-Based Capital Ratio, Actual	0.109	0.105
Banking Regulation, Total Risk-Based Capital Ratio, Actual	0.141	0.137
Banking Regulation, Common Equity Tier 1 Risk-Based Capital Ratio, Actual	0.109	0.105

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Note 13 - Regulatory Capital - Schedule of Comparison (Details) $ in Thousands	Jun. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Actual, Capital, Rate	0.141	0.137
Actual, Tier 1 Risk-based Rate	0.109	0.105
Actual, Tier 1 Leverage Rate	0.095	0.09
Actual, CET 1 Rate	0.109	0.105
First Security Bank of Washington, Subsidiary [Member]
Actual, Capital	$ 355,165	$ 339,436
Actual, Capital, Rate	0.1385	0.1337
Capital Adequacy, Total	$ 205,122	$ 203,094
Capital Adequacy, Total Rate	0.08	0.08
Capital Adequacy, Total Risk-based with Buffer	$ 269,223	$ 266,561
Capital Adequacy, Total Risk-based with Buffer, Rate	0.105	0.105
Well Capitalized, Total Capital	$ 256,403	$ 253,868
Well Capitalized, Total Capital Rate	0.10	0.10
Actual, Tier 1 Risk-based	$ 323,105	$ 307,686
Actual, Tier 1 Risk-based Rate	0.126	0.1212
Capital Adequacy, Tier 1 Risk-based	$ 153,842	$ 152,321
Capital Adequacy, Tier 1 Risk-based Rate	0.06	0.06
Capital Adequacy, Tier 1 Risk-based with Buffer	$ 217,943	$ 215,787
Capital Adequacy, Tier 1 Risk-based with Buffer, Rate	0.085	0.085
Well Capitalized, Tier 1 Risk-based	$ 205,122	$ 203,094
Well Capitalized, Tier 1 Risk-based Rate	0.08	0.08
Actual, Tier 1 Leverage	$ 323,105	$ 307,686
Actual, Tier 1 Leverage Rate	0.1094	0.1039
Capital Adequacy, Tier 1 Leverage	$ 118,153	$ 118,488
Capital Adequacy, Tier 1 Leverage Rate	0.04	0.04
Well Capitalized, Tier 1 Leverage	$ 147,691	$ 148,109
Well Capitalized, Tier 1 Leverage Rate	0.05	0.05
Actual, CET 1	$ 323,105	$ 307,686
Actual, CET 1 Rate	0.126	0.1212
Capital Adequacy, CET 1	$ 115,381	$ 114,240
Capital Adequacy, CET 1 Rate	0.045	0.045
Capital Adequacy, CET 1 with Buffer	$ 179,482	$ 177,707
Capital Adequacy, CET 1 with Buffer, Rate	0.07	0.07
Well Capitalized, CET 1	$ 166,662	$ 165,014
Well Capitalized, CET 1 Rate	0.065	0.065

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Note 14 - Business Segments (Details Textual)		3 Months Ended		6 Months Ended
		Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Number of Operating Segments				2
Number of Bank Branches		27		27
Loans Receivable, Fair Value Disclosure		$ 13,868,000		$ 13,868,000		$ 15,088,000
Noninterest Expense	[1]	23,857,000	$ 24,204,000	47,386,000	$ 47,728,000
Home Lending [Member]
Noninterest Expense	[1]	4,814,000	5,254,000	9,335,000	10,168,000
Home Lending [Member] | Allocated Overhead Expense [Member]
Noninterest Expense		1,500,000	1,600,000	3,000,000	3,200,000
Residential Mortgage [Member]
Increase (Decrease) in Finance Receivables		184,000	(520,000)	186,000	57,000
Loans Receivable, Fair Value Disclosure		$ 13,900,000	$ 14,300,000	$ 13,900,000	$ 14,300,000

[1] Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three and six months ended June 30, 2024, the Home Lending segment included allocated overhead expenses of $1.5 million and $3.0 million, compared to the three and six months ended June 30, 2023, of $1.6 million and $3.2 million, respectively.

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Note 14 - Business Segments - Schedule of Segment Financial Results (Details) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)
Net interest income	[1]	$ 30,401	$ 31,552	$ 60,747	$ 62,214
(Provision) benefit for credit losses		(1,077)	(716)	(2,476)	(2,824)
Noninterest income	[2]	5,868	4,833	10,979	10,052
Noninterest expense	[3]	(23,857)	(24,204)	(47,386)	(47,728)
Income before provision for income taxes		11,335	11,465	21,864	21,714
Provision for income taxes		(2,376)	(2,349)	(4,508)	(4,386)
Net income		8,959	9,116	17,356	17,328
Total average assets for period ended		$ 2,947,831	$ 2,841,890	$ 2,953,189	$ 2,792,234
Number of Employees, Geographic Area [Member]
Full-time employees ("FTEs")		571	581	571	581
Commercial And Consumer Banking [Member]
Net interest income	[1]	$ 28,051	$ 28,269	$ 56,137	$ 55,769
(Provision) benefit for credit losses		(1,214)	(629)	(2,465)	(2,118)
Noninterest income	[2]	2,269	2,706	4,662	5,086
Noninterest expense	[3]	(19,043)	(18,950)	(38,051)	(37,560)
Income before provision for income taxes		10,063	11,396	20,283	21,177
Provision for income taxes		(2,113)	(2,335)	(4,182)	(4,278)
Net income		7,950	9,061	16,101	16,899
Total average assets for period ended		$ 2,359,741	$ 2,313,228	$ 2,380,803	$ 2,281,815
Commercial And Consumer Banking [Member] | Number of Employees, Geographic Area [Member]
Full-time employees ("FTEs")		450	444	450	444
Home Lending [Member]
Net interest income	[1]	$ 2,350	$ 3,283	$ 4,610	$ 6,445
(Provision) benefit for credit losses		137	(87)	(11)	(706)
Noninterest income	[2]	3,599	2,127	6,317	4,966
Noninterest expense	[3]	(4,814)	(5,254)	(9,335)	(10,168)
Income before provision for income taxes		1,272	69	1,581	537
Provision for income taxes		(263)	(14)	(326)	(108)
Net income		1,009	55	1,255	429
Total average assets for period ended		$ 588,090	$ 528,662	$ 572,386	$ 510,419
Home Lending [Member] | Number of Employees, Geographic Area [Member]
Full-time employees ("FTEs")		121	137	121	137

[1] Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets.

[2] Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value, and subsequently transferred to loans held for investment. Gains and losses from changes in fair value for these loans are reported in earnings as a component of noninterest income. For the three and six months ended June 30, 2024, the Company recorded a net increase in fair value of $184,000 and $186,000, and a net decrease in fair value of $520,000 and net increase in fair value of $57,000 for the three and six months ended June 30, 2023, respectively. As of June 30, 2024 and 2023, there was $13.9 million and $14.3 million, respectively, in residential mortgage loans recorded at fair value as they were previously transferred from loans held for sale to loans held for investment.

[3] Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three and six months ended June 30, 2024, the Home Lending segment included allocated overhead expenses of $1.5 million and $3.0 million, compared to the three and six months ended June 30, 2023, of $1.6 million and $3.2 million, respectively.

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Note 15 - Goodwill and Other Intangible Assets (Details Textual)		3 Months Ended			6 Months Ended		12 Months Ended
	Jan. 22, 2016	Jun. 30, 2024 USD ($)	Mar. 31, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Goodwill		$ 3,592,000			$ 3,592,000		$ 3,592,000
Goodwill, Impairment Loss			$ 0
Amortization of Intangible Assets		$ 919,000		$ 1,023,000	1,860,000	$ 1,482,000
Core Deposits [Member]
Impairment of Intangible Assets, Finite-Lived			$ 0
Amortization of Intangible Assets					$ 1,860,000		$ 3,464,000
Bank of America [Member]
Number of Businesses Acquired	4
Bank of America [Member] | Core Deposits [Member]
Number of Businesses Acquired					4
Finite-Lived Intangible Asset, Useful Life (Year)		9 years			9 years
Columbia State Bank [Member] | Core Deposits [Member]
Finite-Lived Intangible Asset, Useful Life (Year)		10 years			10 years
Anchor Bank [Member] | Core Deposits [Member]
Finite-Lived Intangible Asset, Useful Life (Year)		10 years			10 years

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Note 15 - Goodwill and Other Intangible Assets - Schedule of Changes in Intangible Assets (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Balance, net			$ 17,343,000
Amortization	$ (919,000)	$ (1,023,000)	(1,860,000)	$ (1,482,000)
Balance, net	15,483,000		15,483,000		$ 17,343,000
Core Deposits [Member]
Balance			24,928,000	7,490,000	7,490,000
Balance, accumulated amortization			(7,585,000)	(4,121,000)	(4,121,000)
Balance, net			17,343,000	$ 3,369,000	3,369,000
Additions as a result of the Branch Purchase					17,438,000
Amortization			(1,860,000)		(3,464,000)
Balance	24,928,000		24,928,000		24,928,000
Balance, accumulated amortization	(9,445,000)		(9,445,000)		(7,585,000)
Balance, net	$ 15,483,000		$ 15,483,000		17,343,000
Core Deposits [Member] | Net Amount [Member]
Amortization					$ (3,464,000)

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Note 15 - Goodwill and Other Intangible Assets - Schedule of Amortization (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Dec. 31, 2022
Total	$ 15,483	$ 17,343
Core Deposits [Member]
Remainder of 2024	1,773
2025	3,191
2026	2,846
2027	2,500
2028	2,110
Thereafter	3,063
Total	$ 15,483	$ 17,343	$ 3,369

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Note 16 - Revenue From Contracts With Customers - Schedule of Noninterest Income (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Noninterest income (in-scope of Topic 606)		$ 1,173	$ 1,270	$ 2,300	$ 2,184
Noninterest income (out-of-scope and/or immaterial to Topic 606)		4,695	3,563	8,679	7,868
Total noninterest income	[1]	5,868	4,833	10,979	10,052
Debit Card [Member]
Noninterest income (in-scope of Topic 606)		815	882	1,577	1,520
Bank Servicing [Member]
Noninterest income (in-scope of Topic 606)		$ 358	$ 388	$ 723	$ 664

[1] Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value, and subsequently transferred to loans held for investment. Gains and losses from changes in fair value for these loans are reported in earnings as a component of noninterest income. For the three and six months ended June 30, 2024, the Company recorded a net increase in fair value of $184,000 and $186,000, and a net decrease in fair value of $520,000 and net increase in fair value of $57,000 for the three and six months ended June 30, 2023, respectively. As of June 30, 2024 and 2023, there was $13.9 million and $14.3 million, respectively, in residential mortgage loans recorded at fair value as they were previously transferred from loans held for sale to loans held for investment.