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Note 4 - Loans Receivable and Allowance for Credit Losses on Loans

12 Months Ended

Dec. 31, 2023

NOTE 4 – LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

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

	December 31,
REAL ESTATE LOANS	2023			2022
Commercial	$	366,328		$	334,059
Construction and development		303,054			342,591
Home equity		69,488			55,387
One-to-four-family (excludes loans held for sale)		567,742			469,485
Multi-family		223,769			219,738
Total real estate loans		1,530,381			1,421,260
CONSUMER LOANS
Indirect home improvement		569,903			495,941
Marine		73,310			70,567
Other consumer		3,540			3,064
Total consumer loans		646,753			569,572
COMMERCIAL BUSINESS LOANS
Commercial and industrial		238,301			196,791
Warehouse lending		17,580			31,229
Total commercial business loans		255,881			228,020
Total loans receivable, gross		2,433,015			2,218,852
ACL on loans		(31,534	)		(27,992	)
Total loans receivable, net	$	2,401,481		$	2,190,860

Loan amounts are net of unearned loan fees in excess of unamortized costs and premiums of $8.4 million as of December 31, 2023 and $7.8 million as of December 31, 2022. Net loans include unamortized net discounts on acquired loans of $2.6 million and $437,000 as of December 31, 2023 and 2022, respectively. Net loans do not include accrued interest receivable. Accrued interest receivable on loans was $11.5 million as of December 31, 2023 and $9.6 million as of December 31, 2022 and was reported in “Accrued interest receivable” on the Consolidated Balance Sheets.

Most of the Company’s commercial and multi-family real estate, construction, residential, and commercial business lending activities are with customers located in Western Washington, the Oregon Coast, and near our loan production offices in Vancouver, Washington 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 recently New Hampshire. Management reviewed dealer concentrations and determined as of December 31, 2023, any dealer owned by the same corporate entity will be included under that corporate entity and not as a separate dealer. 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 December 31, 2023, the Bank held approximately $1.07 billion in loans that are pledged as collateral for FHLB advances, compared to approximately $840.2 million at December 31, 2022. The Bank held approximately $631.1 million in loans that are pledged as collateral for the FRB line of credit at December 31, 2023, compared to approximately $579.8 million at December 31, 2022.

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 Loans, (b) Consumer Loans and (c) Commercial Business Loans. 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

Commercial 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 the 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

Commercial and Industrial (“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 of the C&I loans purchased by the Company are outside of the greater Puget Sound market area. C&I loans are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business.

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 2023 were increases in outstanding loans, net charge-offs, and specific reserves on individually evaluated loans.

The following tables detail activity in the ACL on loans and the allowance for loan losses by loan categories, at or for the years indicated:

	At or For the Year Ended December 31, 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		1,994			3,465			311			—		5,770
Charge-offs		(10	)		(3,465	)		(1	)		—		(3,476	)
Recoveries		—			1,248			—			—		1,248
Net charge-offs		(10	)		(2,217	)		(1	)		—		(2,228	)
Total ending ACL balance	$	14,107		$	13,357		$	4,070		$	—	$	31,534

	At or For the Year Ended December 31, 2022
	Real						Commercial
ACL ON LOANS	Estate			Consumer			Business			Unallocated			Total
Beginning balance, prior to adoption of ASC 326	$	14,798		$	4,280		$	6,536		$	21		$	25,635
Impact of adopting ASC 326		(5,234	)		6,078			(3,682	)		(21	)		(2,859	)
Provision for credit losses on loans		2,559			3,158			906			—			6,623
Charge-offs		—			(2,465	)		—			—			(2,465	)
Recoveries		—			1,058			—			—			1,058
Net charge-offs		—			(1,407	)		—			—			(1,407	)
Total ending ACL balance	$	12,123		$	12,109		$	3,760		$	—		$	27,992

The allowance for loan losses is reported using the incurred loss method at or for the year ended December 31, 2021:

	At or For the Year Ended December 31, 2021
						Commercial
ALLOWANCE FOR LOAN LOSSES	Real Estate		Consumer			Business			Unallocated			Total
Beginning balance	$	13,846	$	6,696		$	4,939		$	691		$	26,172
Provision for (recapture of) loan losses		952		(1,417	)		1,635			(670	)		500
Charge-offs		—		(1,755	)		(38	)		—			(1,793	)
Recoveries		—		756			—			—			756
Net charge-offs		—		(999	)		(38	)		—			(1,037	)
Total ending allowance for loan losses balance	$	14,798	$	4,280		$	6,536		$	21		$	25,635
Period end amount allocated to:
Loans individually evaluated for impairment	$	23	$	219		$	921		$	—		$	1,163
Loans collectively evaluated for impairment		14,775		4,061			5,615			21			24,472
Ending balance	$	14,798	$	4,280		$	6,536		$	21		$	25,635
LOANS RECEIVABLE
Loans individually evaluated for impairment	$	781	$	629		$	4,419		$	—		$	5,829
Loans collectively evaluated for impairment		1,089,522		421,414			237,410			—			1,748,346
Ending balance	$	1,090,303	$	422,043		$	241,829		$	—		$	1,754,175

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, payment deferral, or a combination thereof. The Company typically does not offer principal forgiveness.

The following tables present the amortized basis of loans that were modified to borrowers experiencing financial difficulty during the period by loan class and modification type.

	Payment Deferral
	Amortized Cost		% of Total Loan
December 31, 2023	Basis		Type			Financial Effect
Commercial real estate	$	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.

There were no loans that were modified on or after January 1, 2023, the date the Company adopted ASU 2022–02, through December 31, 2023 that subsequently defaulted during the period presented.

Troubled Debt Restructurings (“TDRs”)

At December 31, 2022, the Company had two TDRs, both of which were commercial business loans, on nonaccrual totaling $3.7 million. The Company had no commitments to lend additional funds on these TDRs. The Company has not forgiven any principal on these loans. There were no TDRs which incurred a payment default within twelve months of the restructure date during the year ended December 31, 2022.

Nonaccrual and Past Due Loans

The following tables provide information pertaining to the aging analysis of contractually past due loans and nonaccrual loans at the dates indicated:

	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⁾
Commercial	$	—	$	—	$	—	$	—	$	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

	December 31, 2022
	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⁾
Commercial	$	—	$	—	$	—	$	—	$	334,059	$	334,059	$	—
Construction and development		—		—		—		—		342,591		342,591		—
Home equity		29		104		16		149		55,238		55,387		46
One-to-four-family		—		—		463		463		469,022		469,485		920
Multi-family		—		—		—		—		219,738		219,738		—
Total real estate loans		29		104		479		612		1,420,648		1,421,260		966
CONSUMER LOANS
Indirect home improvement		2,298		685		532		3,515		492,426		495,941		1,076
Marine		650		385		86		1,121		69,446		70,567		267
Other consumer		32		37		5		74		2,990		3,064		9
Total consumer loans		2,980		1,107		623		4,710		564,862		569,572		1,352
COMMERCIAL BUSINESS LOANS
C&I		1		—		2,617		2,618		194,173		196,791		6,334
Warehouse lending		—		—		—		—		31,229		31,229		—
Total commercial business loans		1		—		2,617		2,618		225,402		228,020		6,334
Total loans	$	3,010	$	1,211	$	3,719	$	7,940	$	2,210,912	$	2,218,852	$	8,652

______________________________

(1)

Includes past due loans as applicable.

There were no loans 90 days or more past due and still accruing interest at both December 31, 2023 and 2022.

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) nonperforming 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)” 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 Policy, loans that are current or less than 90 days past due are graded “Pass” and risk graded “4” or “5” internally. Loans that are past due more than 90 days are classified “Substandard” 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.

Commercial real estate, 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 commercial real estate 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 by category as of December 31, 2023 and 2022. Term loans that are renewed or extended for periods longer than 90 days are presented as new originations in the year of the most recent renewal or extension.

	December 31, 2023
															Revolving Loans
REAL ESTATE LOANS	Term Loans by Year of Origination														Converted
Commercial	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 commercial		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

	December 31, 2022
															Revolving Loans
REAL ESTATE LOANS	Term Loans by Year of Origination														Converted
Commercial	2022		2021		2020		2019		2018		Prior		Revolving Loans		to Term		Total Loans
Pass	$	86,189	$	76,030	$	46,125	$	38,930	$	14,101	$	55,271	$	—	$	—	$	316,646
Watch		9,504		—		373		—		—		—		—		—		9,877
Special mention		—		—		—		2,113		—		—		—		—		2,113
Substandard		—		—		—		—		581		4,842		—		—		5,423
Total commercial		95,693		76,030		46,498		41,043		14,682		60,113		—		—		334,059
Construction and development
Pass		193,084		118,724		21,966		8,379		—		438		—		—		342,591
Total construction and development		193,084		118,724		21,966		8,379		—		438		—		—		342,591
Home equity
Pass		4,978		1,696		6,818		11		1,203		1,572		39,063		—		55,341
Watch		—		—		—		—		—		—		—		—		—
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		13		33		—		—		46
Total home equity		4,978		1,696		6,818		11		1,216		1,605		39,063		—		55,387
One-to-four-family
Pass		166,388		129,282		82,461		31,878		15,837		40,526		—		199		466,571
Watch		—		—		—		—		—		—		—		—		—
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		1,941		973		—		—		2,914
Total one-to-four-family		166,388		129,282		82,461		31,878		17,778		41,499		—		199		469,485
Multi-family
Pass		41,041		63,353		48,376		38,805		4,176		23,987		—		—		219,738
Total multi-family		41,041		63,353		48,376		38,805		4,176		23,987		—		—		219,738
Total real estate loans	$	501,184	$	389,085	$	206,119	$	120,116	$	37,852	$	127,642	$	39,063	$	199	$	1,421,260

	December 31, 2022
															Revolving Loans
CONSUMER LOANS	Term Loans by Year of Origination														Converted
Indirect home improvement	2022		2021		2020		2019		2018		Prior		Revolving Loans		to Term		Total Loans
Pass	$	253,495	$	123,264	$	46,476	$	31,251	$	18,165	$	22,205	$	9	$	—	$	494,865
Watch		—		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		347		213		137		62		169		148		—		—		1,076
Total indirect home improvement		253,842		123,477		46,613		31,313		18,334		22,353		9		—		495,941
Marine
Pass		27,904		11,762		15,139		6,224		5,415		3,856		—		—		70,300
Watch		—		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		151		61		55		—		—		267
Total marine		27,904		11,762		15,139		6,375		5,476		3,911		—		—		70,567
Other consumer
Pass		792		754		116		48		14		80		1,251		—		3,055
Substandard		1		5		—		—		—		—		3		—		9
Total other consumer		793		759		116		48		14		80		1,254		—		3,064
Total consumer loans	$	282,539	$	135,998	$	61,868	$	37,736	$	23,824	$	26,344	$	1,263	$	—	$	569,572

	December 31, 2022
COMMERCIAL															Revolving Loans
BUSINESS LOANS	Term Loans by Year of Origination														Converted
C&I	2022		2021		2020		2019		2018		Prior		Revolving Loans		to Term		Total Loans
Pass	$	24,337	$	22,561	$	12,461	$	3,940	$	3,074	$	7,701	$	104,524	$	—	$	178,598
Watch		—		1,127		2,932		—		—		746		1,327		—		6,132
Special mention		—		—		—		634		—		—		963		—		1,597
Substandard		—		1,586		1,265		2,291		190		3,739		1,093		300		10,464
Total C&I		24,337		25,274		16,658		6,865		3,264		12,186		107,907		300		196,791
Warehouse lending
Pass		—		—		—		—		—		—		31,227		—		31,227
Watch		—		—		—		—		—		—		2		—		2
Total warehouse lending		—		—		—		—		—		—		31,229		—		31,229
Total commercial business loans	$	24,337	$	25,274	$	16,658	$	6,865	$	3,264	$	12,186	$	139,136	$	300	$	228,020

TOTAL LOANS RECEIVABLE, GROSS
Pass	$	798,208	$	547,426	$	279,938	$	159,466	$	61,985	$	155,636	$	176,074	$	199	$	2,178,932
Watch		9,504		1,127		3,305		—		—		746		1,329		—		16,011
Special mention		—		—		—		2,747		—		—		963		—		3,710
Substandard		348		1,804		1,402		2,504		2,955		9,790		1,096		300		20,199
Total loans receivable, gross	$	808,060	$	550,357	$	284,645	$	164,717	$	64,940	$	166,172	$	179,462	$	499	$	2,218,852

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

	December 31, 2023						December 31, 2022
	Nonaccrual with		Nonaccrual with		Total		Nonaccrual with		Nonaccrual with		Total
REAL ESTATE LOANS	No ACL		ACL		Nonaccrual		No ACL		ACL		Nonaccrual
Commercial	$	1,088	$	—	$	1,088	$	—	$	—	$	—
Construction and development		—		4,699		4,699		—		—		—
Home equity		173		—		173		46		—		46
One-to-four-family		96		—		96		920		—		920
		1,357		4,699		6,056		966		—		966
CONSUMER LOANS
Indirect home improvement		—		1,863		1,863		—		1,076		1,076
Marine		—		342		342		—		267		267
Other consumer		—		8		8		—		9		9
		—		2,213		2,213		—		1,352		1,352
COMMERCIAL BUSINESS LOANS
C&I		—		2,683		2,683		—		6,334		6,334

Total	$	1,357	$	9,595	$	10,952	$	966	$	7,686	$	8,652

The Company recognized interest income on a cash basis for nonaccrual loans of $579,000, $506,000, and $351,000 during the years ended December 31, 2023, 2022, and 2021, respectively.

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

	December 31, 2023								December 31, 2022
					Other						Other
	Commercial		Residential		Non-Real				Residential		Non-Real
REAL ESTATE LOANS	Real Estate		Real Estate		Estate		Total		Real Estate		Estate		Total
Commercial	$	1,088	$	—	$	—	$	1,088	$	—	$	—	$	—
Construction and development		4,699		—		—		4,699		—		—		—
Home equity		—		173		—		173		46	$	—	$	46
One-to-four-family		—		96		—		96		920		—		920
		5,787		269		—		6,056		966		—		966
CONSUMER LOANS
Indirect home improvement		—		—		1,863		1,863		—		1,076		1,076
Marine		—		—		342		342		—		267		267
		—		—		2,205		2,205		—		1,343		1,343
COMMERCIAL BUSINESS LOANS
C&I		—		—		2,683		2,683		—		6,334		6,334
Total	$	5,787	$	269	$	4,888	$	10,944	$	966	$	7,677	$	8,643

Related Party Loans

Certain directors and executive officers or their related affiliates are customers of and have had banking transactions with the Company. Total loans to directors, executive officers, and their affiliates are subject to regulatory limitations.

Outstanding loan balances of related party loans were as follows and were within regulatory limitations:

	At December 31,
	2023			2022
Beginning balance	$	3,445		$	4,207
Additions		—			—
Repayments		(102	)		(762	)
Ending balance	$	3,343		$	3,445

The aggregate maximum loan balance of extended credit to related parties was $3.7 million and $3.4 million at December 31, 2023 and 2022, respectively, and includes the ending balances from the tables above. These loans and lines of credit were made in compliance with applicable laws on substantially the same terms (including interest rates and collateral) as those prevailing at the time for comparable transactions with unrelated third parties and do not involve more than the normal risk of collectability.