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Note 3 - Loans Receivable and Allowance for Credit Losses - Loans

9 Months Ended

Sep. 30, 2024

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

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

	September 30,			December 31,
REAL ESTATE LOANS	2024			2023
Commercial ("CRE")	$	352,933		$	366,328
Construction and development		292,366			303,054
Home equity		75,063			69,488
One-to-four-family (excludes loans held for sale)		591,666			567,742
Multi-family		238,462			223,769
Total real estate loans		1,550,490			1,530,381
CONSUMER LOANS
Indirect home improvement		552,226			569,903
Marine		76,845			73,310
Other consumer		3,346			3,540
Total consumer loans		632,417			646,753
COMMERCIAL BUSINESS LOANS
Commercial and industrial ("C&I")		296,773			238,301
Warehouse lending		15,249			17,580
Total commercial business loans		312,022			255,881
Total loans receivable, gross		2,494,929			2,433,015
ACL on loans		(31,232	)		(31,534	)
Total loans receivable, net	$	2,463,697		$	2,401,481

Loan amounts are net of unearned loan fees in excess of unamortized costs and premiums of $5.9 million as of September 30, 2024 and $8.4 million as of December 31, 2023. Net loans include unamortized net discounts on acquired loans of $2.1 million and $2.6 million as of September 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 September 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, or 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 September 30, 2024, the Bank held approximately $1.11 billion in loans that are pledged as collateral for FHLB borrowings, compared to approximately $1.07 billion at December 31, 2023. The Bank held approximately $617.9 million in loans that are pledged as collateral for the Federal Reserve Bank of San Francisco (the “FRB”) line of credit at September 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

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.

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.

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. At September 30, 2024 and December 31, 2023, C&I loans included Small Business Administration and United States Department of Agriculture guaranteed certificates of $54.8 million and $10.6 million, respectively.

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 reason for the provision for credit losses on loans recorded in the first nine months of 2024 was elevated net charge-offs.

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

	At or For the Three Months Ended September 30, 2024
	Real					Commercial
ACL ON LOANS	Estate		Consumer			Business			Unallocated		Total
Beginning balance	$	14,088	$	13,253		$	3,897		$	—	$	31,238
Provision for (reversal of) credit losses on loans		46		2,102			(557	)		—		1,591
Charge-offs		—		(1,964	)		—			—		(1,964	)
Recoveries		—		361			6			—		367
Net (charge-offs) recoveries		—		(1,603	)		6			—		(1,597	)
Total ending ACL balance	$	14,134	$	13,752		$	3,346		$	—	$	31,232

	At or For the Three Months Ended September 30, 2023
	Real					Commercial
ACL ON LOANS	Estate		Consumer			Business			Unallocated		Total
Beginning balance	$	12,307	$	14,017		$	4,026		$	—	$	30,350
Provision for (reversal of) credit losses on loans		496		426			(238	)		—		684
Charge-offs		—		(830	)		—			—		(830	)
Recoveries		—		297			—			—		297
Net charge-offs		—		(533	)		—			—		(533	)
Total ending ACL balance	$	12,803	$	13,910		$	3,788		$	—	$	30,501

	At or For the Nine Months Ended September 30, 2024
	Real					Commercial
ACL ON LOANS	Estate		Consumer			Business			Unallocated		Total
Beginning balance	$	14,107	$	13,357		$	4,070		$	—	$	31,534
Provision for credit losses on loans		27		3,660			326			—		4,013
Charge-offs		—		(4,465	)		(1,141	)		—		(5,606	)
Recoveries		—		1,200			91			—		1,291
Net Charge-offs		—		(3,265	)		(1,050	)		—		(4,315	)
Total ending ACL balance	$	14,134	$	13,752		$	3,346		$	—	$	31,232

	At or For the Nine Months Ended September 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		690			3,383			29			—		4,102
Charge-offs		(10	)		(2,415	)		(1	)		—		(2,426	)
Recoveries		—			833			—			—		833
Net charge-offs		(10	)		(1,582	)		(1	)		—		(1,593	)
Total ending ACL balance	$	12,803		$	13,910		$	3,788		$	—	$	30,501

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
September 30, 2024	Basis		Type			Financial Effect
CRE	$	1,130		0.3	%	Deferred payments and capitalized interest for a weighted-average period of 2.3 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 September 30, 2024 and December 31, 2023, the modified loans were in compliance with their modified terms and were classified as current. For the three and nine months ended September 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 September 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 September 30, 2024 and December 31, 2023:

	September 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	$	—	$	—	$	—	$	—	$	352,933	$	352,933	$	1,130
Construction and development		—		—		4,737		4,737		287,629		292,366		4,737
Home equity		173		—		156		329		74,734		75,063		156
One-to-four-family		—		794		1		795		590,871		591,666		166
Multi-family		—		—		—		—		238,462		238,462		—
Total real estate loans		173		794		4,894		5,861		1,544,629		1,550,490		6,189
CONSUMER LOANS
Indirect home improvement		2,074		1,051		718		3,843		548,383		552,226		1,770
Marine		113		130		142		385		76,460		76,845		233
Other consumer		5		3		—		8		3,338		3,346		5
Total consumer loans		2,192		1,184		860		4,236		628,181		632,417		2,008
COMMERCIAL BUSINESS LOANS
C&I		—		200		1,701		1,901		294,872		296,773		2,575
Warehouse lending		—		—		—		—		15,249		15,249		—
Total commercial business loans		—		200		1,701		1,901		310,121		312,022		2,575
Total loans	$	2,365	$	2,178	$	7,455	$	11,998	$	2,482,931	$	2,494,929	$	10,772

	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 September 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.

	September 30, 2024
															Revolving
															Loans
REAL ESTATE LOANS	Term Loans by Year of Origination												Revolving		Converted		Total
CRE	2024		2023		2022		2021		2020		Prior		Loans		to Term		Loans
Pass	$	13,453	$	47,964	$	84,510	$	57,376	$	44,025	$	67,735	$	—	$	691	$	315,754
Watch		—		3,152		10,742		12,716		—		6,568		—		—		33,178
Special mention		—		—		—		—		—		397		—		—		397
Substandard		—		—		—		—		1,625		1,979		—		—		3,604
Total CRE		13,453		51,116		95,252		70,092		45,650		76,679		—		691		352,933
Construction and development
Pass		116,349		91,803		38,290		30,046		—		394		10,324		—		287,206
Watch		—		—		—		423		—		—		—		—		423
Substandard		—		—		4,737		—		—		—		—		—		4,737
Total construction and development		116,349		91,803		43,027		30,469		—		394		10,324		—		292,366
Home equity
Pass		7,181		2,787		332		1,550		5,980		1,714		55,298		65		74,907
Substandard		—		—		—		—		—		14		142		—		156
Total home equity		7,181		2,787		332		1,550		5,980		1,728		55,440		65		75,063
One-to-four-family
Pass		45,301		106,192		177,351		112,198		78,300		69,528		—		—		588,870
Substandard		—		—		745		—		—		2,051		—		—		2,796
Total one-to-four-family		45,301		106,192		178,096		112,198		78,300		71,579		—		—		591,666
Multi-family
Pass		209		7,050		20,177		90,403		60,088		60,535		—		—		238,462
Total multi-family		209		7,050		20,177		90,403		60,088		60,535		—		—		238,462
Total real estate loans	$	182,493	$	258,948	$	336,884	$	304,712	$	190,018	$	210,915	$	65,764	$	756	$	1,550,490

	September 30, 2024
															Revolving
															Loans
CONSUMER LOANS	Term Loans by Year of Origination												Revolving		Converted		Total
Indirect home improvement	2024		2023		2022		2021		2020		Prior		Loans		to Term		Loans
Pass	$	80,016	$	140,198	$	177,755	$	78,798	$	29,826	$	43,861	$	2	$	—	$	550,456
Substandard		54		488		701		242		63		222		—		—		1,770
Total indirect home improvement		80,070		140,686		178,456		79,040		29,889		44,083		2		—		552,226
Indirect home improvement gross charge-offs		235		1,021		1,137		494		500		448		—		—		3,835
Marine
Pass		12,738		11,866		21,334		8,712		11,541		10,421		—		—		76,612
Substandard		—		—		—		—		41		192		—		—		233
Total marine		12,738		11,866		21,334		8,712		11,582		10,613		—		—		76,845
Marine gross charge-offs		—		21		128		51		128		151		—		—		479
Other consumer
Pass		219		145		384		83		43		146		2,321		—		3,341
Substandard		1		—		—		—		—		—		4		—		5
Total other consumer		220		145		384		83		43		146		2,325		—		3,346
Other consumer gross charge-offs		—		33		6		—		—		—		112		—		151
Total consumer loans	$	93,028	$	152,697	$	200,174	$	87,835	$	41,514	$	54,842	$	2,327	$	—	$	632,417

	September 30, 2024
COMMERCIAL															Revolving
															Loans
BUSINESS LOANS	Term Loans by Year of Origination												Revolving		Converted		Total
C&I	2024		2023		2022		2021		2020		Prior		Loans		to Term		Loans
Pass	$	56,627	$	20,708	$	30,522	$	17,288	$	9,750	$	11,787	$	119,310	$	846	$	266,838
Watch		—		4,982		—		773		1,941		—		9,792		—		17,488
Special mention		—		—		—		555		—		605		1,408		—		2,568
Substandard		—		2,546		—		2,260		1,256		1,552		2,265		—		9,879
Total C&I		56,627		28,236		30,522		20,876		12,947		13,944		132,775		846		296,773
C&I gross charge-offs		—		—		—		—		—		380		761		—		1,141
Warehouse lending
Pass		—		—		—		—		—		—		13,254		—		13,254
Special mention		—		—		—		—		—		—		1,995		—		1,995
Total warehouse lending		—		—		—		—		—		—		15,249		—		15,249
Total commercial business loans	$	56,627	$	28,236	$	30,522	$	20,876	$	12,947	$	13,944	$	148,024	$	846	$	312,022

TOTAL LOANS RECEIVABLE, GROSS
Pass	$	332,093	$	428,713	$	550,655	$	396,454	$	239,553	$	266,121	$	200,509	$	1,602	$	2,415,700
Watch		—		8,134		10,742		13,912		1,941		6,568		9,792		—		51,089
Special mention		—		—		—		555		—		1,002		3,403		—		4,960
Substandard		55		3,034		6,183		2,502		2,985		6,010		2,411		—		23,180
Total loans receivable, gross	$	332,148	$	439,881	$	567,580	$	413,423	$	244,479	$	279,701	$	216,115	$	1,602	$	2,494,929
Total gross charge-offs	$	235	$	1,075	$	1,271	$	545	$	628	$	979	$	873	$	—	$	5,606

	December 31, 2023
															Revolving
															Loans
REAL ESTATE LOANS	Term Loans by Year of Origination												Revolving		Converted		Total
CRE	2023		2022		2021		2020		2019		Prior		Loans		to Term		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												Revolving		Converted		Total
Indirect home improvement	2023		2022		2021		2020		2019		Prior		Loans		to Term		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
															Revolving
COMMERCIAL															Loans
BUSINESS LOANS	Term Loans by Year of Origination												Revolving		Converted		Total
C&I	2023		2022		2021		2020		2019		Prior		Loans		to Term		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:

	September 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	$	1,130	$	—	$	1,130	$	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		166		—		166		96		—		96
		1,452		4,737		6,189		1,357		4,699		6,056
CONSUMER LOANS
Indirect home improvement		—		1,770		1,770		—		1,863		1,863
Marine		—		233		233		—		342		342
Other consumer		—		5		5		—		8		8
		—		2,008		2,008		—		2,213		2,213
COMMERCIAL BUSINESS LOANS
C&I		1,650		925		2,575		—		2,683		2,683
Total	$	3,102	$	7,670	$	10,772	$	1,357	$	9,595	$	10,952

The Company recognized interest income on a cash basis for nonaccrual loans of $41,000 and $55,000 during the three months ended September 30, 2024 and 2023, and $244,000 and $164,000 during the nine months ended September 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:

	September 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	$	1,130	$	—	$	—	$	1,130	$	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		—		166		—		166		—		96		—		96
		5,867		322		—		6,189		5,787		269		—		6,056
CONSUMER LOANS
Indirect home improvement		—		—		1,770		1,770		—		—		1,863		1,863
Marine		—		—		233		233		—		—		342		342
		—		—		2,003		2,003		—		—		2,205		2,205
COMMERCIAL BUSINESS LOANS
C&I		—		—		2,575		2,575		—		—		2,683		2,683
Total	$	5,867	$	322	$	4,578	$	10,767	$	5,787	$	269	$	4,888	$	10,944