
	December 31,
	2022		2021
Real estate loans:
One-to-four family	$	274,638	$	207,660
Home equity	19,548		13,250
Commercial and multifamily	313,358		278,175
Construction and land	116,878		63,105
Total real estate loans	724,422		562,190
Consumer loans:
Manufactured homes	26,953		21,636
Floating homes	74,443		59,268
Other consumer	17,923		16,748
Total consumer loans	119,319		97,652
Commercial business loans	23,815		28,026
Total loans	867,556		687,868
Premiums for purchased loans(1)	973		897
Deferred fees	(2,548)		(2,367)
Total loans, gross	865,981		686,398
Allowance for loan losses	(7,599)		(6,306)
Total loans, net	$	858,382	$	680,092

(1)Includes premiums resulting from purchased loans of $507 thousand related to one-to-four family loans, $320 thousand related to commercial and multifamily loans, and $146 thousand related to commercial business loans as of December 31, 2022. Includes premiums resulting from purchased loans of $556 thousand related to one-to-four family loans, $181 thousand related to commercial and multifamily loans, and $160 thousand related to commercial business loans as of December 31, 2021.

The Company was automatically authorized to participate in the U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”), as a qualified lender since the inception of the program. As of December 31, 2022, the Bank had funded PPP loans totaling $119.2 million, $17 thousand of which remained outstanding at December 31, 2022 compared to $4.2 million outstanding at December 31, 2021. PPP loans are included in commercial business loans above. PPP loans are 100% guaranteed by the SBA. The PPP ended May 31, 2021.

The Company purchased $2.6 million of commercial business loan participations with United States Department of Agriculture guarantees during the year ended December 31, 2022. During the year ended December 31, 2021, the Company purchased $24.1 million of one-to-four family real estate loans and $4.3 million of commercial business loan participations with United States Department of Agriculture guarantees.


	December 31, 2022
	Allowance: Individually Evaluated for Impairment		Allowance: Collectively Evaluated for Impairment		Ending Balance		Loans Held for Investment: Individually Evaluated for Impairment		Loans Held for Investment: Collectively Evaluated for Impairment		Ending Balance
One-to-four family	$	102	$	1,669	$	1,771	$	3,746	$	270,892	$	274,638
Home equity	5		127		132		210		19,338		19,548
Commercial and multifamily	—		2,501		2,501		—		313,358		313,358
Construction and land	3		1,206		1,209		358		116,520		116,878
Manufactured homes	52		410		462		187		26,766		26,953
Floating homes	—		456		456		—		74,443		74,443
Other consumer	22		302		324		343		17,580		17,923
Commercial business	—		256		256		—		23,815		23,815
Unallocated	—		488		488		—		—		—
Total	$	184	$	7,415	$	7,599	$	4,844	$	862,712	$	867,556


	December 31, 2021
	Allowance: Individually Evaluated for Impairment		Allowance: Collectively Evaluated for Impairment		Ending Balance		Loans Held for Investment: Individually Evaluated for Impairment		Loans Held for Investment: Collectively Evaluated for Impairment		Ending Balance
One-to-four family	$	112	$	1,290	$	1,402	$	4,066	$	203,594	$	207,660
Home equity	7		86		93		215		13,035		13,250
Commercial and multifamily	—		2,340		2,340		2,380		275,795		278,175
Construction and land	4		646		650		68		63,037		63,105
Manufactured homes	144		331		475		221		21,415		21,636
Floating homes	—		372		372		493		58,775		59,268
Other consumer	26		284		310		106		16,642		16,748
Commercial business	—		269		269		176		27,850		28,026
Unallocated	—		395		395		—		—		—
Total	$	293	$	6,013	$	6,306	$	7,725	$	680,143	$	687,868


	Year ended December 31, 2022
	Beginning Allowance		Charge-offs		Recoveries		Provision/(Recapture)		Ending Allowance
One-to-four family	$	1,402	$	—	$	99	$	270	$	1,771
Home equity	93		—		58		(19)		132
Commercial and multifamily	2,340		—		—		161		2,501
Construction and land	650		—		—		559		1,209
Manufactured homes	475		—		12		(25)		462
Floating homes	372		—		—		84		456
Other consumer	310		(118)		17		115		324
Commercial business	269		(6)		6		(13)		256
Unallocated	395		—		—		93		488
	$	6,306	$	(124)	$	192	$	1,225	$	7,599


	Year ended December 31, 2021
	Beginning Allowance		Charge-offs		Recoveries		Provision/(Recapture)		Ending Allowance
One-to-four family	$	1,063	$	(76)	$	—	$	415	$	1,402
Home equity	147		(8)		6		(52)		93
Commercial and multifamily	2,370		—		—		(30)		2,340
Construction and land	578		—		—		72		650
Manufactured homes	529		(2)		3		(55)		475
Floating homes	328		—		—		44		372
Other consumer	288		(50)		6		66		310
Commercial business	291		—		2		(24)		269
Unallocated	406		—		—		(11)		395
	$	6,000	$	(136)	$	17	$	425	$	6,306

Credit Quality Indicators. Federal regulations provide for the classification of lower quality loans and other assets (such as OREO and repossessed assets), debt and equity securities considered as "substandard," "doubtful" or "loss." An asset is considered "substandard" if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. "Substandard" assets include those characterized by the "distinct possibility" that the insured institution will sustain "some loss" if the deficiencies are not corrected. Assets classified as "doubtful" have all of the weaknesses in those classified "substandard," with the added characteristic that the weaknesses present make "collection or liquidation in full," on the basis of currently existing facts, conditions and values, "highly questionable and improbable." Assets classified as "loss" are those considered "uncollectible" and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.

When the Company classifies problem loans as either substandard or doubtful, it may establish a specific allowance in an amount we deem prudent to address the risk specifically (if the loan is impaired) or it may allow the loss to be addressed in the general allowance (if the loan is not impaired). General allowances represent loss reserves which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been specifically allocated to particular problem assets. When the Company classifies problem loans as a loss, it charges-off such loans in the period in which they are deemed uncollectible. Assets that do not currently expose the Company to sufficient risk to warrant classification as substandard or doubtful, but possess identified weaknesses are classified as either watch or special mention loans. Determination as to the classification of our assets and the amount of our valuation allowances is subject to review by the FDIC, the Bank's federal regulator, and the WDFI, the Bank's state banking regulator, both of whom can order the establishment of additional loss allowances. Pass rated loans are loans that are not otherwise classified or criticized.


	December 31, 2022
	One-to-four Family		Home Equity		Commercial and Multifamily		Construction and Land		Manufactured Homes		Floating Homes		Other Consumer		Commercial Business		Total
Grade:
Pass	$	271,295	$	19,230	$	291,677	$	109,484	$	26,583	$	74,443	$	17,661	$	22,853	$	833,226
Watch	279		2		7,538		4,037		134		—		—		161		12,151
Special Mention	—		—		4,096		—		—		—		—		—		4,096
Substandard	3,064		316		10,047		3,357		236		—		262		801		18,083


Total	$	274,638	$	19,548	$	313,358	$	116,878	$	26,953	$	74,443	$	17,923	$	23,815	$	867,556


	December 31, 2021
	One-to-four Family		Home Equity		Commercial and Multifamily		Construction and Land		Manufactured Homes		Floating Homes		Other Consumer		Commercial Business		Total
Grade:
Pass	$	203,883	$	12,904	$	233,300	$	56,310	$	21,137	$	58,171	$	16,728	$	23,713	$	626,146
Watch	363		23		32,770		4,347		305		—		—		3,561		41,369
Special Mention	—		—		4,553		830		—		604		—		211		6,198
Substandard	3,414		323		7,552		1,618		194		493		20		541		14,155


Total	$	207,660	$	13,250	$	278,175	$	63,105	$	21,636	$	59,268	$	16,748	$	28,026	$	687,868

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 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 of obligations as they become due, as well as when required by regulatory provisions.


	December 31,
	2022		2021
One-to-four family	$	2,135	$	2,207
Home equity	142		140
Commercial and multifamily	—		2,380
Construction and land	324		33
Manufactured homes	96		122
Floating homes	—		493
Other consumer	262		—
Commercial business	—		176
Total	$	2,959	$	5,552


	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Recorded Investment > 90 Days and Accruing		Total Past Due		Current		Total Loans
One-to-four family	$	393	$	289	$	1,934	$	—	$	2,616	$	272,022	$	274,638
Home equity	115		—		116		—		231		19,317		19,548
Commercial and multifamily	7,198		—		—		—		7,198		306,160		313,358
Construction and land	1,210		—		296		—		1,506		115,372		116,878
Manufactured homes	261		155		52		—		468		26,485		26,953
Floating homes	—		—		—		—		—		74,443		74,443
Other consumer	360		5		—		—		365		17,558		17,923
Commercial business	4		—		—		—		4		23,811		23,815
Total	$	9,542	$	449	$	2,398	$	—	$	12,389	$	855,167	$	867,556


	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Recorded Investment > 90 Days and Accruing		Total Past Due		Current		Total Loans
One-to-four family	$	1,805	$	58	$	87	$	—	$	1,950	$	205,710	$	207,660
Home equity	—		—		140		—		140		13,110		13,250
Commercial and multifamily	—		—		—		—		—		278,175		278,175
Construction and land	837		—		—		—		837		62,268		63,105
Manufactured homes	123		—		59		—		182		21,454		21,636
Floating homes	—		—		244		—		244		59,024		59,268
Other consumer	2		76		—		—		78		16,670		16,748
Commercial business	6		—		176		—		182		27,844		28,026
Total	$	2,773	$	134	$	706	$	—	$	3,613	$	684,255	$	687,868


	December 31, 2022
	One-to-four Family		Home Equity		Commercial and Multifamily		Construction and Land		Manufactured Homes		Floating Homes		Other Consumer		Commercial Business		Total
Performing	$	272,503	$	19,406	$	313,358	$	116,554	$	26,857	$	74,443	$	17,661	$	23,815	$	864,597
Nonperforming	2,135		142		—		324		96		—		262		—		2,959
Total	$	274,638	$	19,548	$	313,358	$	116,878	$	26,953	$	74,443	$	17,923	$	23,815	$	867,556


	December 31, 2021
	One-to-four Family		Home Equity		Commercial and Multifamily		Construction and Land		Manufactured Homes		Floating Homes		Other Consumer		Commercial Business		Total
Performing	$	205,453	$	13,110	$	275,795	$	63,072	$	21,514	$	58,775	$	16,748	$	27,850	$	682,316
Nonperforming	2,207		140		2,380		33		122		493		—		176		5,552
Total	$	207,660	$	13,250	$	278,175	$	63,105	$	21,636	$	59,268	$	16,748	$	28,026	$	687,868

Impaired Loans. A loan is considered impaired when it is determined that the Company may not be able to collect payments of principal or interest when due under the terms of the loan. In the process of identifying loans as impaired, the Company takes into consideration factors which include payment history and status, collateral value, financial condition of the borrower, and the probability of collecting scheduled payments in the future. Minor payment delays and insignificant payment shortfalls typically do not result in a loan being classified as impaired. The significance of payment delays and shortfalls is considered on a case-by-case basis, after taking into consideration the totality of circumstances surrounding the loan and the borrower, including payment history. Impairment is measured on a loan-by-loan basis for all loans in the portfolio. All TDRs are also classified as impaired loans and are included in the loans individually evaluated for impairment in the calculation of the allowance for loan losses.


	December 31, 2022
			Recorded Investment
	Unpaid Principal Balance		Without Allowance		With Allowance		Total Recorded Investment		Related Allowance
One-to-four family	$	3,758	$	3,038	$	708	$	3,746	$	102
Home equity	210		142		68		210		5

Construction and land	358		324		34		358		3
Manufactured homes	187		93		94		187		52

Other consumer	343		261		82		343		22

Total	$	4,856	$	3,858	$	986	$	4,844	$	184


	December 31, 2021
			Recorded Investment
	Unpaid Principal Balance		Without Allowance		With Allowance		Total Recorded Investment		Related Allowance
One-to-four family	$	4,177	$	3,109	$	957	$	4,066	$	112
Home equity	215		140		75		215		7
Commercial and multifamily	2,380		2,380		—		2,380		—
Construction and land	68		33		35		68		4
Manufactured homes	221		44		177		221		144
Floating homes	493		493		—		493		—
Other consumer	106		—		106		106		26
Commercial business	176		176		—		176		—
Total	$	7,836	$	6,375	$	1,350	$	7,725	$	293


	Year Ended December 31, 2022				Year Ended December 31, 2021
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
One-to-four family	$	3,628	$	106	$	3,471	$	198
Home equity	216		16		287		16
Commercial and multifamily	1,405		—		617		138
Construction and land	124		20		111		4
Manufactured homes	202		15		239		17
Floating homes	98		—		508		18
Other consumer	299		17		110		5
Commercial business	69		—		318		2
Total	$	6,041	$	174	$	5,661	$	398

Troubled debt restructurings. TDRs, accounted for under ASC 310-40, are loans which have renegotiated loan terms to assist borrowers who are unable to meet the original terms of their loans. Such modifications to loan terms may include a lower interest rate, a reduction in principal, or a longer term to maturity. Once a TDR has performed according to its modified terms for six months and the collection of principal and interest under the revised terms is deemed probable, we remove the TDR from nonperforming status. Loans classified as TDRs totaled $2.0 million and $2.6 million at December 31, 2022 and 2021, respectively, and are included in impaired loans. The Company has granted, in its TDRs, a variety of concessions to borrowers in the form of loan modifications. The modifications granted can generally be described in the following categories:

Related Parties and Regulatory Matters. In the ordinary course of business, the Company makes loans to its employees, officers and directors. Certain loans to employees, officers and directors are offered at discounted rates as compared to other clients as permitted by federal regulations. Employees, officers, and directors are eligible for mortgage loans with an adjustable rate that resets annually to 1.0% - 1.5% over the Bank's rolling cost of funds. Employees, officers and directors are also eligible for consumer loans that are 1.00% below the market loan rate at the time of origination. Director and officer loans are summarized as follows (in thousands):