Loans Receivable (Tables)

6 Months Ended

Jun. 30, 2019

Loans receivable at June 30, 2019 and December 31, 2018 are summarized as follows:

	June 30, 2019		December 31, 2018
	(In Thousands)
Mortgage loans:
Residential real estate:
One- to four-family	$	478,006	$	489,979
Multi-family		592,692		597,087
Home equity		19,242		19,956
Construction and land		25,491		13,361
Commercial real estate		223,553		225,522
Consumer		662		433
Commercial loans		31,081		32,810
	$	1,370,727	$	1,379,148

The Company provides several types of loans to its customers, including residential, construction, commercial and consumer loans. Significant loan concentrations are considered to exist for a financial institution when there are amounts loaned to one borrower or to multiple borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. While the Company's credit risks are geographically concentrated in the Milwaukee metropolitan area, there are no concentrations with individual or groups of related borrowers. While the real estate collateralizing these loans is primarily residential in nature, it ranges from owner-occupied single family homes to large apartment complexes.

Qualifying loans receivable totaling $1.08 billion and $1.01 billion at June 30, 2019 and December 31, 2018, respectively, are pledged as collateral against $495.0 million and $430.0 million in outstanding Federal Home Loan Bank of Chicago ("FHLB") advances under a blanket security agreement at June 30, 2019 and December 31, 2018.

Certain of the Company's executive officers, directors, employees, and their related interests have loans with the Bank. Loans outstanding to such parties were approximately $5.3 million as of June 30, 2019 and December 31, 2018. None of these loans were past due or considered impaired as of June 30, 2019 or December 31, 2018.

As of June 30, 2019 and December 31, 2018, there were no loans 90 or more days past due and still accruing interest.

Analysis of Past Due Loans Receivable

An analysis of past due loans receivable as of June 30, 2019 and December 31, 2018 follows:

	As of June 30, 2019
	1-59 Days Past Due⁽¹⁾			60-89 Days Past Due⁽²⁾		90 Days or Greater		Total Past Due		Current⁽³⁾		Total Loans
	(In Thousands)
Mortgage loans:
Residential real estate:
One- to four-family		$	3,517	$	599	$	2,884	$	7,000	$	471,006	$	478,006
Multi-family			-		-		576		576		592,116		592,692
Home equity			169		-		-		169		19,073		19,242
Construction and land			-		-		-		-		25,491		25,491
Commercial real estate			287		-		93		380		223,173		223,553
Consumer			-		-		-		-		662		662
Commercial loans			208		-		1		209		30,872		31,081
Total		$	4,181	$	599	$	3,554	$	8,334	$	1,362,393	$	1,370,727

	As of December 31, 2018
	1-59 Days Past Due⁽¹⁾			60-89 Days Past Due⁽²⁾		90 Days or Greater		Total Past Due		Current⁽³⁾		Total Loans
	(In Thousands)
Mortgage loans:
Residential real estate:
One- to four-family		$	1,523	$	76	$	3,834	$	5,433	$	484,546	$	489,979
Multi-family			-		-		937		937		596,150		597,087
Home equity			216		42		111		369		19,587		19,956
Construction and land			-		-		-		-		13,361		13,361
Commercial real estate			39		-		125		164		225,358		225,522
Consumer			29		-		-		29		404		433
Commercial loans			-		-		18		18		32,792		32,810
Total		$	1,807	$	118	$	5,025	$	6,950	$	1,372,198	$	1,379,148

⁽¹⁾Includes $162,000 and $422,000 at June 30, 2019 and December 31, 2018, respectively, which are on non-accrual status.

⁽²⁾Includes $203,000 and $118,000 at June 30, 2019 and December 31, 2018, respectively, which are on non-accrual status.

⁽³⁾Includes $1.8 million and $990,000 at June 30, 2019 and December 31, 2018, respectively, which are on non-accrual status.

Allowance for Loan Losses

A summary of the activity for the six months ended June 30, 2019 and 2018 in the allowance for loan losses follows:

	One- to Four- Family			Multi-Family			Home Equity			Construction and Land		Commercial Real Estate			Consumer			Commercial			Total
	(In Thousands)
Six months ended June 30, 2019
Balance at beginning of period	$	5,742		$	4,153		$	325		$	400	$	2,126		$	20		$	483		$	13,249
Provision (credit) for loan losses		(449	)		154			(54	)		12		(214	)		(3	)		(96	)		(650	)
Charge-offs		(25	)		(1	)		(8	)		-		-			(5	)		-			(39	)
Recoveries		35			9			12			-		1			-			-			57
Balance at end of period	$	5,303		$	4,315		$	275		$	412	$	1,913		$	12		$	387		$	12,617

Six months ended June 30, 2018
Balance at beginning of period	$	5,794		$	4,431		$	356		$	949		$	1,881	$	10		$	656		$	14,077
Provision (credit) for loan losses		102			(425	)		(62	)		(607	)		87		(1	)		(194	)		(1,100	)
Charge-offs		(62	)		-			-			-			-		-			-			(62	)
Recoveries		85			70			13			40			1		-			-			209
Balance at end of period	$	5,919		$	4,076		$	307		$	382		$	1,969	$	9		$	462		$	13,124

Allowance for Loan Loss for Loans Evaluated Individually and Collectively for Impairment

A summary of the allowance for loan loss for loans evaluated individually and collectively for impairment by collateral class as of June 30, 2019 follows:

	One- to Four- Family		Multi- Family		Home Equity		Construction and Land		Commercial Real Estate		Consumer		Commercial		Total
	(In Thousands)
Allowance related to loans individually evaluated for impairment	$	71	$	80	$	26	$	-	$	9	$	-	$	-	$	186
Allowance related to loans collectively evaluated for impairment		5,232		4,235		249		412		1,904		12		387		12,431
Balance at end of period	$	5,303	$	4,315	$	275	$	412	$	1,913	$	12	$	387	$	12,617

Loans individually evaluated for impairment	$	6,988	$	1,261	$	126	$	-	$	374	$	-	$	1	$	8,750
Loans collectively evaluated for impairment		471,018		591,431		19,116		25,491		223,179		662		31,080		1,361,977
Total gross loans	$	478,006	$	592,692	$	19,242	$	25,491	$	223,553	$	662	$	31,081	$	1,370,727

A summary of the allowance for loan loss for loans evaluated individually and collectively for impairment by collateral class as of December 31, 2018 follows:

	One- to Four-Family		Multi- Family		Home Equity		Construction and Land		Commercial Real Estate		Consumer		Commercial		Total
	(In Thousands)
Allowance related to loans individually evaluated for impairment	$	73	$	-	$	46	$	-	$	67	$	-	$	-	$	186
Allowance related to loans collectively evaluated for impairment		5,669		4,153		279		400		2,059		20		483		13,063
Balance at end of period	$	5,742	$	4,153	$	325	$	400	$	2,126	$	20	$	483	$	13,249

Loans individually evaluated for impairment	$	7,642	$	1,309	$	246	$	-	$	2,885	$	-	$	18	$	12,100
Loans collectively evaluated for impairment		482,337		595,778		19,710		13,361		222,637		433		32,792		1,367,048
Total gross loans	$	489,979	$	597,087	$	19,956	$	13,361	$	225,522	$	433	$	32,810	$	1,379,148

Internal Risk Rating of Loans Receivable

The following table presents information relating to the Company’s internal risk ratings of its loans receivable as of June 30, 2019 and December 31, 2018:

	One to Four- Family		Multi-Family		Home Equity		Construction and Land		Commercial Real Estate		Consumer		Commercial		Total
	(In Thousands)
At June 30, 2019
Substandard	$	7,376	$	1,261	$	320	$	-	$	918	$	-	$	875	$	10,750
Watch		5,628		486		-		-		1,442		-		608		8,164
Pass		465,002		590,945		18,922		25,491		221,193		662		29,598		1,351,813
	$	478,006	$	592,692	$	19,242	$	25,491	$	223,553	$	662	$	31,081	$	1,370,727

At December 31, 2018
Substandard	$	7,799	$	1,309	$	246	$	-	$	678	$	-	$	889	$	10,921
Watch		4,662		491		468		-		4,343		-		906		10,870
Pass		477,518		595,287		19,242		13,361		220,501		433		31,015		1,357,357
	$	489,979	$	597,087	$	19,956	$	13,361	$	225,522	$	433	$	32,810	$	1,379,148

Impaired Loan Receivables

The following tables present data on impaired loans at June 30, 2019 and December 31, 2018.

	As of June 30, 2019
	Recorded Investment		Unpaid Principal		Reserve		Cumulative Charge-Offs
	(In Thousands)
Total Impaired with Reserve
One- to four-family	$	349	$	349	$	71	$	-
Multi-family		344		344		80		-
Home equity		82		82		26		-
Construction and land		-		-		-		-
Commercial real estate		9		418		9		409
Consumer		-		-		-		-
Commercial		-		-		-		-
		784		1,193		186		409
Total Impaired with no Reserve
One- to four-family		6,639		7,579		-		940
Multi-family		917		1,745		-		828
Home equity		44		44		-		-
Construction and land		-		-		-		-
Commercial real estate		365		365		-		-
Consumer		-		-		-		-
Commercial		1		1		-		-
		7,966		9,734		-		1,768
Total Impaired
One- to four-family		6,988		7,928		71		940
Multi-family		1,261		2,089		80		828
Home equity		126		126		26		-
Construction and land		-		-		-		-
Commercial real estate		374		783		9		409
Consumer		-		-		-		-
Commercial		1		1		-		-
	$	8,750	$	10,927	$	186	$	2,177

	As of December 31, 2018
	Recorded Investment		Unpaid Principal		Reserve		Cumulative Charge-Offs
	(In Thousands)
Total Impaired with Reserve
One- to four-family	$	462	$	462	$	73	$	-
Multi-family		-		-		-		-
Home equity		107		107		46		-
Construction and land		-		-		-		-
Commercial real estate		2,493		2,902		67		409
Consumer		-		-		-		-
Commercial		-		-		-		-
		3,062		3,471		186		409
Total Impaired with no Reserve
One- to four-family		7,180		8,120		-		940
Multi-family		1,309		2,142		-		833
Home equity		139		139		-		-
Construction and land		-		-		-		-
Commercial real estate		392		392		-		-
Consumer		-		-		-		-
Commercial		18		18		-		-
		9,038		10,811		-		1,773
Total Impaired
One- to four-family		7,642		8,582		73		940
Multi-family		1,309		2,142		-		833
Home equity		246		246		46		-
Construction and land		-		-		-		-
Commercial real estate		2,885		3,294		67		409
Consumer		-		-		-		-
Commercial		18		18		-		-
	$	12,100	$	14,282	$	186	$	2,182

The difference between a loan’s recorded investment and the unpaid principal balance represents a partial charge-off resulting from a confirmed loss when the value of the collateral securing the loan is below the loan balance and management’s assessment that the full collection of the loan balance is not likely.

The following tables present data on impaired loans for the six months ended June 30, 2019 and 2018.

	Six months ended June 30,
	2019				2018
	Average Recorded Investment		Interest Paid		Average Recorded Investment		Interest Paid
	(In Thousands)
Total Impaired with Reserve
One- to four-family	$	353		11		444		15
Multi-family		348		16		-		-
Home equity		85		5		80		3
Construction and land		-		-		-		-
Commercial real estate		13		-		30		-
Consumer		-		-		-		-
Commercial		-		-		-		-
		799		32		554		18
Total Impaired with no Reserve
One- to four-family		6,727		213		7,307		193
Multi-family		935		41		791		26
Home equity		46		2		146		2
Construction and land		-		-		-		-
Commercial real estate		380		9		438		7
Consumer		-		-		-		-
Commercial		11		1		26		-
		8,099		266		8,708		228
Total Impaired
One- to four-family		7,080		224		7,751		208
Multi-family		1,283		57		791		26
Home equity		131		7		226		5
Construction and land		-		-		-		-
Commercial real estate		393		9		468		7
Consumer		-		-		-		-
Commercial		11		1		26		-
	$	8,898		298		9,262		246

Troubled Debt Restructurings on Loan Receivables

The following presents data on troubled debt restructurings:

		As of June 30, 2019
		Accruing				Non-accruing					Total
		Amount		Number		Amount			Number		Amount			Number
	(Dollars in Thousands)

One- to four-family		$	2,740		2		$	769		5		$	3,509		7
Multi-family			-		-			341		2			341		2
Commercial real estate			281		1			9		1			290		2
		$	3,021		3		$	1,119		8		$	4,140		11

		As of December 31, 2018
		Accruing				Non-accruing					Total
		Amount		Number		Amount			Number		Amount			Number
	(Dollars in Thousands)

One- to four-family		$	2,740		2		$	844		5		$	3,584		7
Multi-family			-		-			372		2			372		2
Commercial real estate			2,759		2			17		1			2,776		3
		$	5,499		4		$	1,233		8		$	6,732		12

Troubled Debt Restructurings by Concession Type

The following presents troubled debt restructurings by concession type:

		As of June 30, 2019
	Performing in accordance with modified terms					In Default				Total
	Amount			Number		Amount		Number		Amount		Number
	(Dollars in Thousands)
Interest reduction and principal forbearance		$	3,316		6	$	494		2	$	3,810		8
Interest reduction			330		3		-		-		330		3
		$	3,646		9	$	494		2	$	4,140		11

		As of December 31, 2018
	Performing in accordance with modified terms					In Default				Total
	Amount			Number		Amount		Number		Amount		Number
	(Dollars in Thousands)
Interest reduction and principal forbearance		$	5,848		7	$	546		2	$	6,394		9
Interest reduction			338		3		-		-		338		3
		$	6,186		10	$	546		2	$	6,732		12

There were no loans modified as troubled debt restructurings during the three or six months ended June 30, 2019 and June 30, 2018.

There were no troubled debt restructurings within the past twelve months for which there was a default during the three or six months ended June 30, 2019 and June 30, 2018.

Loans Receivables, Non Accrual Status

The following table presents data on non-accrual loans as of June 30, 2019 and December 31, 2018:

	June 30, 2019			December 31, 2018
	(Dollars in Thousands)
Non-accrual loans:
Residential real estate:
One- to four-family	$	4,249		$	4,902
Multi-family		1,261			1,309
Home equity		81			201
Construction and land		-			-
Commercial real estate		93			125
Commercial		1			18
Consumer		-			-
Total non-accrual loans	$	5,685		$	6,555
Total non-accrual loans to total loans receivable		0.41	%		0.48	%
Total non-accrual loans to total assets		0.28	%		0.34	%