Loans and Allowance for Credit Losses

12 Months Ended

Dec. 31, 2023

Loans and Allowance for Credit Losses

Loans and Allowance for Credit Losses

Note 3:      Loans and Allowance for Credit Losses

The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, effective January 1, 2021. The guidance replaces the incurred loss methodology with an expected loss methodology that is referred to as the CECL methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables. It also applies to off-balance sheet credit exposures not accounted for as insurance, including loan commitments, standby letters of credits, financial guarantees, and other similar instruments. The Company adopted ASC 326 using the modified retrospective method for loans and off-balance sheet credit exposures. The Company recorded a one-time cumulative-effect adjustment to the allowance for credit losses on loans of $11.6 million. This adjustment brought the balance of the allowance for credit losses on loans to $67.3 million as of January 1, 2021. In addition, the Company recorded an $8.7 million liability for unfunded commitments as of January 1, 2021. The after-tax effect decreased retained earnings by $14.2 million. The adjustment was based upon the Company’s analysis of then-current conditions, assumptions and economic forecasts at January 1, 2021.

Classes of loans at December 31, 2023 and 2022, included:

	December 31,		December 31,
	2023		2022
	(In Thousands)
One- to four-family residential construction	$	29,628	$	33,849
Subdivision construction		23,359		32,067
Land development		48,015		41,613
Commercial construction		703,407		757,690
Owner occupied one- to four-family residential		769,260		778,533
Non-owner occupied one- to four-family residential		121,275		124,870
Commercial real estate		1,521,032		1,530,663
Other residential		942,071		781,761
Commercial business		318,050		293,228
Industrial revenue bonds		12,047		12,852
Consumer auto		28,343		37,281
Consumer other		28,978		33,732
Home equity lines of credit		115,883		123,242
		4,661,348		4,581,381
Allowance for credit losses		(64,670)		(63,480)
Deferred loan fees and gains, net		(7,058)		(11,065)
	$	4,589,620	$	4,506,836

Classes of loans by aging were as follows as of the dates indicated:

	December 31, 2023
													Total Loans
					Over 90						Total		> 90 Days Past
	30-59 Days		60-89 Days		Days		Total Past				Loans		Due and
	Past Due		Past Due		Past Due		Due		Current		Receivable		Still Accruing
	(In Thousands)
One- to four-family residential construction	$	—	$	—	$	—	$	—	$	29,628	$	29,628	$	—
Subdivision construction		—		—		—		—		23,359		23,359		—
Land development		—		—		384		384		47,631		48,015		—
Commercial construction		—		—		—		—		703,407		703,407		—
Owner occupied one- to four- family residential		2,778		125		722		3,625		765,635		769,260		—
Non-owner occupied one- to four-family residential		—		—		—		—		121,275		121,275		—
Commercial real estate		187		92		10,552		10,831		1,510,201		1,521,032		—
Other residential		9,572		—		—		9,572		932,499		942,071		—
Commercial business		—		—		31		31		318,019		318,050		—
Industrial revenue bonds		—		—		—		—		12,047		12,047		—
Consumer auto		116		65		8		189		28,154		28,343		—
Consumer other		137		—		42		179		28,799		28,978		—
Home equity lines of credit		335		26		9		370		115,513		115,883		—
Total	$	13,125	$	308	$	11,748	$	25,181	$	4,636,167	$	4,661,348	$	—

	December 31, 2022
													Total Loans
					Over 90						Total		> 90 Days Past
	30-59 Days		60-89 Days		Days		Total Past				Loans		Due and
	Past Due		Past Due		Past Due		Due		Current		Receivable		Still Accruing
	(In Thousands)
One- to four-family residential construction	$	—	$	—	$	—	$	—	$	33,849	$	33,849	$	—
Subdivision construction		—		—		—		—		32,067		32,067		—
Land development		—		—		384		384		41,229		41,613		—
Commercial construction		—		—		—		—		757,690		757,690		—
Owner occupied one- to four- family residential		2,568		462		722		3,752		774,781		778,533		—
Non-owner occupied one- to four-family residential		—		63		—		63		124,807		124,870		—
Commercial real estate		196		—		1,579		1,775		1,528,888		1,530,663		—
Other residential		—		—		—		—		781,761		781,761		—
Commercial business		8		—		586		594		292,634		293,228		—
Industrial revenue bonds		—		—		—		—		12,852		12,852		—
Consumer auto		100		34		14		148		37,133		37,281		—
Consumer other		288		114		111		513		33,219		33,732		—
Home equity lines of credit		234		38		274		546		122,696		123,242		—
Total	$	3,394	$	711	$	3,670	$	7,775	$	4,573,606	$	4,581,381	$	—

Loans are placed on nonaccrual status at 90 days past due and interest is considered a loss unless the loan is well secured and in the process of collection. Payments received on nonaccrual loans are applied to principal until the loans are returned to accrual status. Loans are returned to accrual status when all payments contractually due are brought current, payment performance is sustained for a period of time, generally six months, and future payments are reasonably assured. With the exception of consumer loans, charge-offs

on loans are recorded when available information indicates a loan is not fully collectible and the loss is reasonably quantifiable. Consumer loans are charged-off at specified delinquency dates consistent with regulatory guidelines.

Non-accruing loans are summarized as follows:

	December 31,		December 31,
	2023		2022
	(In Thousands)
One- to four-family residential construction	$	—	$	—
Subdivision construction		—		—
Land development		384		384
Commercial construction		—		—
Owner occupied one- to four-family residential		722		722
Non-owner occupied one- to four-family residential		—		—
Commercial real estate		10,552		1,579
Other residential		—		—
Commercial business		31		586
Industrial revenue bonds		—		—
Consumer auto		8		14
Consumer other		42		111
Home equity lines of credit		9		274
Total non-accruing loans	$	11,748	$	3,670

No interest income was recorded on these loans for the years ended December 31, 2023 and 2022, respectively.

Nonaccrual loans for which there is no related allowance for credit losses as of December 31, 2023 had an amortized cost of $792,000. These loans are individually assessed and do not require an allowance due to being adequately collateralized under the collateral-dependent valuation method. A collateral-dependent loan is a financial asset for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Company’s assessment as of the reporting date. Collateral-dependent loans are identified primarily by a classified risk rating with a loan balance equal to or greater than $100,000, including, but not limited to, any loan in process of foreclosure or repossession.

The following table presents the activity in the allowance for credit losses by portfolio segment for the years ended December 31, 2023, 2022 and 2021. On January 1, 2021, the Company adopted the CECL methodology, which added $11.6 million to the total Allowance for Credit Loss, including $1.9 million of remaining discount on loans that were previously accounted for as PCI.

	One- to Four-
	Family
	Residential
	and		Other		Commercial		Commercial		Commercial
	Construction		Residential		Real Estate		Construction		Business		Consumer		Total
	(In Thousands)
Allowance for credit losses
Balance, January 1, 2023	$	11,171	$	12,110	$	27,096	$	2,865	$	5,822	$	4,416	$	63,480
Provision (credit) charged to expense		(1,390)		1,260		930		(27)		1,909		(432)		2,250
Losses charged off		(31)		—		—		—		(1,037)		(1,754)		(2,822)
Recoveries		70		—		145		6		241		1,300		1,762
Balance, December 31, 2023	$	9,820	$	13,370	$	28,171	$	2,844	$	6,935	$	3,530	$	64,670
Allowance for credit losses
Balance, December 31, 2021	$	9,364	$	10,502	$	28,604	$	2,797	$	4,142	$	5,345	$	60,754
Provision (credit) charged to expense		1,652		1,498		(1,465)		152		1,491		(328)		3,000
Losses charged off		(40)		—		(44)		(84)		(51)		(1,950)		(2,169)
Recoveries		195		110		1		—		240		1,349		1,895
Balance, December 31, 2022	$	11,171	$	12,110	$	27,096	$	2,865	$	5,822	$	4,416	$	63,480
Allowance for credit losses
Balance, December 31, 2020	$	4,536	$	9,375	$	33,707	$	3,521	$	2,390	$	2,214	$	55,743
CECL adoption		4,533		5,832		(2,531)		(1,165)		1,499		3,427		11,595
Balance, January 1, 2021		9,069		15,207		31,176		2,356		3,889		5,641		67,338
Provision (credit) charged to expense		—		(4,797)		(2,478)		575		—		—		(6,700)
Losses charged off		(190)		—		(142)		(154)		(81)		(2,054)		(2,621)
Recoveries		485		92		48		20		334		1,758		2,737
Balance, December 31, 2021	$	9,364	$	10,502	$	28,604	$	2,797	$	4,142	$	5,345	$	60,754

The following table presents the activity in the allowance for unfunded commitments by portfolio segment for the years ended December 31, 2023, 2022 and 2021. On January 1, 2021, the Company adopted the CECL methodology, which created an $8.7 million allowance for unfunded commitments.

	One- to Four-
	Family
	Residential
	and		Other		Commercial		Commercial		Commercial
	Construction		Residential		Real Estate		Construction		Business		Consumer		Total
	(In Thousands)
Allowance for unfunded commitments
Balance, January 1, 2023	$	736	$	8,624	$	416	$	802	$	1,734	$	504	$	12,816
Provision (credit) charged to expense		(30)		(4,618)		203		(61)		(775)		(48)		(5,329)
Balance, December 31, 2023	$	706	$	4,006	$	619	$	741	$	959	$	456	$	7,487
Allowance for unfunded commitments
Balance, December 31, 2021	$	687	$	5,703	$	367	$	908	$	1,582	$	382	$	9,629
Provision (credit) charged to expense		49		2,921		49		(106)		152		122		3,187
Balance, December 31, 2022	$	736	$	8,624	$	416	$	802	$	1,734	$	504	$	12,816
Allowance for unfunded commitments
Balance, December 31, 2020	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CECL adoption		917		5,227		354		910		935		347		8,690
Balance, January 1, 2021		917		5,227		354		910		935		347		8,690
Provision (credit) charged to expense		(230)		476		13		(2)		647		35		939
Balance, December 31, 2021	$	687	$	5,703	$	367	$	908	$	1,582	$	382	$	9,629

The portfolio segments used in the preceding tables correspond to the loan classes used in all other tables in Note 3 as follows:

● The one- to four-family residential and construction segment includes the one- to four-family residential construction, subdivision construction, owner occupied one- to four-family residential and non-owner occupied one- to four-family residential classes.

● The other residential (multi-family) segment corresponds to the other residential (multi-family) class.

● The commercial real estate segment includes the commercial real estate and industrial revenue bonds classes.

● The commercial construction segment includes the land development and commercial construction classes.

● The commercial business segment corresponds to the commercial business class.

● The consumer segment includes the consumer auto, consumer other and home equity lines of credit classes.

The weighted average interest rate on loans receivable at December 31, 2023 and 2022, was 6.25% and 5.54%, respectively.

Loans serviced for others are not included in the accompanying consolidated statements of financial condition. The unpaid principal balance of loans serviced for others at December 31, 2023, was $439.9 million, consisting of $334.6 million of commercial loan participations sold to other financial institutions and $105.3 million of residential mortgage loans sold. The unpaid principal balance of loans serviced for others at December 31, 2022, was $540.2 million, consisting of $422.3 million of commercial loan participations sold to other financial institutions and $117.9 million of residential mortgage loans sold. In addition, available lines of credit on these loans were $123.6 million and $104.1 million at December 31, 2023 and 2022, respectively.

The following tables present the amortized cost basis of collateral-dependent loans by class of loans at the dates indicated:

	December 31, 2023
	Principal		Specific
	Balance		Allowance
	(In Thousands)
One- to four-family residential construction	$	—	$	—
Subdivision construction		—		—
Land development		384		—
Commercial construction		—		—
Owner occupied one- to four-family residential		691		29
Non-owner occupied one- to four-family residential		—		—
Commercial real estate		10,548		1,200
Other residential		7,162		—
Commercial business		—		—
Industrial revenue bonds		—		—
Consumer auto		—		—
Consumer other		—		—
Home equity lines of credit		—		—
Total	$	18,785	$	1,229

	December 31, 2022
	Principal		Specific
	Balance		Allowance
	(In Thousands)
One- to four-family residential construction	$	—	$	—
Subdivision construction		—		—
Land development		384		—
Commercial construction		—		—
Owner occupied one- to four-family residential		1,637		40
Non-owner occupied one- to four-family residential		—		—
Commercial real estate		1,571		—
Other residential		—		—
Commercial business		586		125
Industrial revenue bonds		—		—
Consumer auto		—		—
Consumer other		160		80
Home equity lines of credit		135		—
Total	$	4,473	$	245

For loans that were non-accruing, interest of approximately $509,000, $292,000 and $432,000 would have been recognized on an accrual basis during the years ended December 31, 2023, 2022 and 2021, respectively.

Modified Loans. As indicated in Note 1, in March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the troubled debt restructuring (TDR) recognition and measurement guidance and, instead, requires that an entity evaluate whether the loan modification represents a new loan or a continuation of an existing loan. It also enhances existing disclosure requirements and introduces new disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2022-02 became effective for the Company on January 1, 2023.

Adoption of this ASU did not have a material impact on the Company’s results of operations, financial position or liquidity, but resulted in additional disclosure requirements related to gross charge offs by vintage year and the removal of TDR disclosures, replaced by additional disclosures on the types of modifications of loans to borrowers experiencing financial difficulties. The Company has adopted this update prospectively.

Under ASU 2022-02, loan modifications are reported if concessions have been granted to borrowers that are experiencing financial difficulty. Information on these loan modifications originated after the effective date is presented according to the new accounting guidance. Reporting periods prior to the adoption of ASU 2022-02 present information on TDRs under the previous disclosure requirements.

The estimate of lifetime expected losses utilized in the allowance for credit losses model is developed using average historical loss on loans with similar risk characteristics, which includes losses from modifications of loans to borrowers experiencing financial difficulty. As a result, a change to the allowance for credit losses is generally not recorded upon modification. For modifications to loans made to borrowers experiencing financial difficulty that are adversely classified, the Company determines the allowance for credit losses on an individual basis, using the same process that it utilizes for other adversely classified loans. If collection efforts have begun and the modified loan is subsequently deemed collateral-dependent, the loan is placed on non-accrual status and the allowance for credit losses is determined based on an individual evaluation. If necessary, the loan is charged down to fair market value less estimated sales costs.

The following table shows the composition of loan modifications made to borrowers experiencing financial difficulty by the loan portfolio and type of concessions granted during the year ended December 31, 2023. Each of the types of concessions granted comprised 2% or less of their respective classes of loan portfolios at December 31, 2023. During the year ended December 31, 2023, principal forgiveness of $563,000 was completed on commercial business loans and consumer loans.

	Year Ended December 31, 2023
	Interest Rate		Term				Total
	Reduction		Extension		Combination		Modifications
	(In Thousands)
Construction and land development	$	—	$	—	$	1,553	$	1,553
One- to four-family residential		—		—		—		—
Other residential		—		2,750		—		2,750
Commercial real estate		—		77		20,365		20,442
Commercial business		—		—		—		—
Consumer		5		7		—		12
	$	5	$	2,834	$	21,918	$	24,757

The Company closely monitors the performance of loans to borrowers experiencing financial difficulty that are modified to understand the effectiveness of its modification efforts. The following table depicts the performance (under modified terms) at December 31, 2023 of loans that were modified during the year ended December 31, 2023:

	December 31, 2023
			30-89 Days		Over 90 Days
	Current		Past Due		Past Due		Total
	(In Thousands)
Construction and land development	$	1,553	$	—	$	—	$	1,553
One- to four-family residential		—		—		—		—
Other residential		2,750		—		—		2,750
Commercial real estate		12,384		—		8,058		20,442
Commercial business		—		—		—		—
Consumer		12		—		—		12
	$	16,699	$	—	$	8,058	$	24,757

TDRs by class are presented below as of December 31, 2022.

	December 31, 2022
	Accruing TDR Loans			Non-accruing TDR Loans			Total TDR Loans
	Number	Balance		Number	Balance		Number	Balance
	(In Thousands)
Construction and land development	—	$	—	—	$	—	—	$	—
One- to four-family residential	13		1,028	3		98	16		1,126
Other residential	—		—	—		—	—		—
Commercial real estate	—		—	2		1,571	2		1,571
Commercial business	—		—	—		—	—		—
Consumer	13		210	5		42	18		252
	26	$	1,238	10	$	1,711	36	$	2,949

The following tables present newly restructured loans during the years ended December 31, 2022 and 2021 by type of modification:

	2022
							Total
	Interest Only		Term		Combination		Modification
	(In Thousands)
Residential one-to-four family	$	—	$	—	$	32	$	32
Commercial real estate		—		—		247		247
Commercial business		—		—		—		—
Consumer		—		4		3		7
	$	—	$	4	$	282	$	286

	2021
							Total
	Interest Only		Term		Combination		Modification
	(In Thousands)
Residential one-to-four family	$	31	$	202	$	134	$	367
Commercial real estate		1,768		—		—		1,768
Commercial business		—		—		—		—
Consumer		—		259		11		270
	$	1,799	$	461	$	145	$	2,405

At December 31, 2022, of the $2.9 million in TDRs, $1.7 million were classified as substandard using the Company’s internal grading system. The Company had no TDRs that were modified in the previous 12 months and subsequently defaulted during the year ended December 31, 2022.

Loan Risk Ratings. The nature and extent of impairments of modified loans, including those which have experienced a subsequent payment default, are considered in the determination of an appropriate level of the allowance for credit losses. The Company utilizes an internal risk rating system comprised of a series of grades to categorize loans according to perceived risk associated with the expectation of debt repayment. The analysis of the borrower’s ability to repay considers specific information, including but not limited to current financial information, historical payment experience, industry information, collateral levels and collateral types. A risk rating is assigned at loan origination and then monitored throughout the contractual term for possible risk rating changes.

Satisfactory loans range from Excellent to Moderate Risk, but generally are loans supported by strong recent financial statements. The character and capacity of the borrower are strong, including reasonable project performance, good industry experience, liquidity and/or net worth. The probability of financial deterioration seems unlikely. Repayment is expected from approved sources over a reasonable period of time.

Watch loans are identified when the borrower has capacity to perform according to terms; however, elements of uncertainty exist. Margins of debt service coverage may be narrow, historical patterns of financial performance may be erratic, collateral margins may be diminished and the borrower may be a new and/or thinly capitalized company. Some management weakness may also exist, the borrower may have somewhat limited access to other financial institutions, and that access may diminish in difficult economic times.

Special Mention loans have weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects or the Bank’s credit position at some future date. It is a transitional grade that is closely monitored for improvement or deterioration.

The Substandard rating is applied to loans where the borrower exhibits well-defined weaknesses that jeopardize its continued performance and are of a severity that the distinct possibility of default exists. Loans are placed on “non-accrual” when management does not expect to collect payments consistent with acceptable and agreed upon terms of repayment.

Doubtful loans have all the weaknesses inherent to those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.

The Loss category is used when loans are considered uncollectable and no longer included as an asset.

All loans are analyzed for risk rating updates regularly. For larger loans, rating assessments may be more frequent if relevant information is obtained earlier through debt covenant monitoring or overall relationship management. Smaller loans are monitored as identified by the loan officer based on the risk profile of the individual borrower or if the loan becomes past due related to credit issues. Loans rated Watch, Special Mention, Substandard or Doubtful are subject to quarterly review and monitoring processes. In addition to the regular monitoring performed by the lending personnel and credit committees, loans are subject to review by the credit review department, which verifies the appropriateness of the risk ratings for the loans chosen as part of its risk-based review plan.

The following tables present a summary of loans by category and risk rating separated by origination and loan class as of December 31, 2023 and 2022.

	Term Loans by Origination Year
													Revolving
	2023		2022		2021		2020		2019		Prior		Loans		Total
	(In Thousands)
One- to four-family residential construction
Satisfactory (1-4)	$	12,528	$	9,878	$	41	$	—	$	—	$	—	$	7,181	$	29,628
Watch (5)		—		—		—		—		—		—		—		—
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		—		—		—		—		—		—		—
Total		12,528		9,878		41		—		—		—		7,181		29,628
Current Period Gross Charge Offs		—		—		—		—		—		—		—		—
Subdivision construction
Satisfactory (1-4)		532		1,022		21,333		43		64		365		—		23,359
Watch (5)		—		—		—		—		—		—		—		—
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		—		—		—		—		—		—		—
Total		532		1,022		21,333		43		64		365		—		23,359
Current Period Gross Charge Offs		—		—		—		—		—		—		—		—
Construction and land development
Satisfactory (1-4)		14,860		12,564		5,658		3,682		5,458		4,531		878		47,631
Watch (5)		—		—		—		—		—		—		—		—
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		—		—		—		—		—		384		384
Total		14,860		12,564		5,658		3,682		5,458		4,531		1,262		48,015
Current Period Gross Charge Offs		—		—		—		—		—		—		—		—
Other construction
Satisfactory (1-4)		60,895		422,727		203,918		15,867		—		—		—		703,407
Watch (5)		—		—		—		—		—		—		—		—
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		—		—		—		—		—		—		—
Total		60,895		422,727		203,918		15,867		—		—		—		703,407
Current Period Gross Charge Offs		—		—		—		—		—		—		—		—
One- to four-family residential
Satisfactory (1-4)		66,733		330,489		203,781		108,232		60,288		118,570		483		888,576
Watch (5)		—		—		—		—		171		862		46		1,079
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		—		543		148		—		189		—		880
Total		66,733		330,489		204,324		108,380		60,459		119,621		529		890,535
Current Period Gross Charge Offs		—		—		—		—		—		11		20		31
Other residential
Satisfactory (1-4)		18,795		108,389		391,516		180,916		108,173		111,462		3,335		922,586
Watch (5)		—		—		—		—		—		—		—		—
Special Mention (6)		—		—		—		—		—		12,322		—		12,322
Classified (7-9)		—		—		—		—		—		7,163		—		7,163
Total		18,795		108,389		391,516		180,916		108,173		130,947		3,335		942,071
Current Period Gross Charge Offs		—		—		—		—		—		—		—		—
Commercial real estate
Satisfactory (1-4)		53,158		284,738		237,822		103,393		161,680		624,515		35,276		1,500,582
Watch (5)		—		—		—		—		154		5,348		—		5,502
Special Mention (6)		—		—		—		—		—		4,396		—		4,396
Classified (7-9)		—		—		—		—		—		10,552		—		10,552
Total		53,158		284,738		237,822		103,393		161,834		644,811		35,276		1,521,032
Current Period Gross Charge Offs		—		—		—		—		—		—		—		—
Commercial business
Satisfactory (1-4)		58,551		92,224		30,361		15,371		10,043		55,044		57,177		318,771
Watch (5)		—		—		—		—		—		1,369		—		1,369
Special Mention (6)		—		1,186		3,840		—		—		—		4,900		9,926
Classified (7-9)		—		—		4		27		—		—		—		31
Total		58,551		93,410		34,205		15,398		10,043		56,413		62,077		330,097
Current Period Gross Charge Offs		—		7		—		—		—		1,030		—		1,037
Consumer
Satisfactory (1-4)		16,629		12,010		6,163		2,811		828		12,089		122,166		172,696
Watch (5)		—		3		21		6		3		201		154		388
Special Mention (6)		—		—		—		—		—		—		8		8
Classified (7-9)		—		42		12		—		—		49		9		112
Total		16,629		12,055		6,196		2,817		831		12,339		122,337		173,204
Current Period Gross Charge Offs		4		135		24		3		18		1,493		97		1,754
Combined
Satisfactory (1-4)		302,681		1,274,041		1,100,593		430,315		346,534		926,576		226,496		4,607,236
Watch (5)		—		3		21		6		328		7,780		200		8,338
Special Mention (6)		—		1,186		3,840		—		—		16,718		4,908		26,652
Classified (7-9)		—		42		559		175		—		17,953		393		19,122
Total	$	302,681	$	1,275,272	$	1,105,013	$	430,496	$	346,862	$	969,027	$	231,997	$	4,661,348
Current Period Gross Charge Offs	$	4	$	142	$	24	$	3	$	18	$	2,534	$	97	$	2,822

	Term Loans by Origination Year
													Revolving
	2022		2021		2020		2019		2018		Prior		Loans		Total
	(In Thousands)
One- to four-family residential construction
Satisfactory (1-4)	$	21,885	$	7,265	$	1,391	$	—	$	—	$	—	$	3,308	$	33,849
Watch (5)		—		—		—		—		—		—		—		—
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		—		—		—		—		—		—		—
Total		21,885		7,265		1,391		—		—		—		3,308		33,849
Current Period Gross Charge Offs		—		—		—		—		—		—		—		—
Subdivision construction
Satisfactory (1-4)		4,478		25,864		800		203		134		588		—		32,067
Watch (5)		—		—		—		—		—		—		—		—
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		—		—		—		—		—		—		—
Total		4,478		25,864		800		203		134		588		—		32,067
Current Period Gross Charge Offs		—		—		—		—		—		—		—		—
Construction and land development
Satisfactory (1-4)		16,746		6,914		4,866		7,338		762		3,990		613		41,229
Watch (5)		—		—		—		—		—		—		—		—
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		—		—		—		—		—		384		384
Total		16,746		6,914		4,866		7,338		762		3,990		997		41,613
Current Period Gross Charge Offs		—		—		—		—		—		—		84		84
Other construction
Satisfactory (1-4)		113,512		446,125		176,340		21,713		—		—		—		757,690
Watch (5)		—		—		—		—		—		—		—		—
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		—		—		—		—		—		—		—
Total		113,512		446,125		176,340		21,713		—		—		—		757,690
Current Period Gross Charge Offs		—		—		—		—		—		—		—		—
One- to four-family residential
Satisfactory (1-4)		340,886		219,504		128,509		73,162		39,685		97,236		687		899,669
Watch (5)		—		—		—		179		88		1,341		57		1,665
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		—		158		—		—		1,832		79		2,069
Total		340,886		219,504		128,667		73,341		39,773		100,409		823		903,403
Current Period Gross Charge Offs		—		—		—		—		—		39		1		40
Other residential
Satisfactory (1-4)		83,822		133,648		168,232		142,630		122,614		123,538		3,939		778,423
Watch (5)		—		—		—		—		—		3,338		—		3,338
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		—		—		—		—		—		—		—
Total		83,822		133,648		168,232		142,630		122,614		126,876		3,939		781,761
Current Period Gross Charge Offs		—		—		—		—		—		—		—		—
Commercial real estate
Satisfactory (1-4)		221,341		171,484		109,939		203,426		185,682		577,216		36,658		1,505,746
Watch (5)		—		—		—		—		—		23,338		—		23,338
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		—		—		—		—		1,579		—		1,579
Total		221,341		171,484		109,939		203,426		185,682		602,133		36,658		1,530,663
Current Period Gross Charge Offs		—		—		—		—		—		44		—		44
Commercial business
Satisfactory (1-4)		45,349		66,258		39,645		15,505		9,309		65,307		64,088		305,461
Watch (5)		—		—		—		—		—		34		—		34
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		—		—		—		—		394		191		585
Total		45,349		66,258		39,645		15,505		9,309		65,735		64,279		306,080
Current Period Gross Charge Offs		—		—		—		—		—		—		51		51
Consumer
Satisfactory (1-4)		21,309		11,168		5,711		2,708		3,263		16,380		132,792		193,331
Watch (5)		—		28		—		7		—		160		100		295
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		11		9		—		2		248		359		629
Total		21,309		11,207		5,720		2,715		3,265		16,788		133,251		194,255
Current Period Gross Charge Offs		19		66		7		49		59		1,594		156		1,950
Combined
Satisfactory (1-4)		869,328		1,088,230		635,433		466,685		361,449		884,255		242,085		4,547,465
Watch (5)		—		28		—		186		88		28,211		157		28,670
Special Mention (6)		—		—		—		—		—		—		—		—
Classified (7-9)		—		11		167		—		2		4,053		1,013		5,246
Total	$	869,328	$	1,088,269	$	635,600	$	466,871	$	361,539	$	916,519	$	243,255	$	4,581,381
Current Period Gross Charge Offs	$	19	$	66	$	7	$	49	$	59	$	1,677	$	292	$	2,169

Certain of the Bank’s real estate loans are pledged as collateral for borrowings as set forth in Notes 9 and 11.

Certain directors and executive officers of the Company and the Bank, and their affiliates, are customers of and had transactions with the Bank in the ordinary course of business. Except for the interest rates on loans secured by personal residences, in the opinion of management, all loans included in such transactions were made on substantially the same terms as those prevailing at the time for comparable transactions with unrelated parties. Generally, residential first mortgage loans and home equity lines of credit to all employees and directors have been granted at interest rates equal to the Bank’s cost of funds, subject to annual adjustments in the case of residential first mortgage loans and monthly adjustments in the case of home equity lines of credit. At December 31, 2023 and 2022, loans outstanding to these directors and executive officers, and their related interests, are summarized as follows:

	2023		2022
	(In Thousands)
Balance, beginning of year	$	7,950	$	10,097
New loans		10,694		3,079
Payments		(2,618)		(5,226)
Balance, end of year	$	16,026	$	7,950