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Note 3 - Loans Receivable

6 Months Ended

Jun. 30, 2025

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 3 - Loans Receivable

Loans receivable at June 30, 2025 and December 31, 2024 are summarized as follows:

		*June 30, 2025*				*December 31, 2024*
		(In Thousands)
Mortgage loans:
Residential real estate:
One- to four-family		$	503,343			$	516,128
Multi-family			725,352				741,428
Home equity			13,362				13,188
Construction and land			69,760				61,427
Commercial real estate			321,977				313,494
Consumer			828				825
Commercial loans			29,651				34,086
Total		$	1,664,273			$	1,680,576

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 $1.23 billion and $1.23 billion at June 30, 2025 and December 31, 2024, respectively, were pledged as collateral against $452.2 million and $443.6 million in outstanding Federal Home Loan Bank of Chicago ("FHLB") advances under a blanket security agreement at June 30, 2025 and December 31, 2024.

An analysis of past due loans receivable as of June 30, 2025 and December 31, 2024 follows:

		*As of June 30, 2025*
		*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		$	3,800			$	1,008			$	6,085			$	10,893			$	492,450			$	503,343
Multi-family			246				-				182				428				724,924				725,352
Home equity			-				76				14				90				13,272				13,362
Construction and land			-				-				-				-				69,760				69,760
Commercial real estate			-				-				75				75				321,902				321,977
Consumer			-				-				-				-				828				828
Commercial loans			13				-				-				13				29,638				29,651
Total		$	4,059			$	1,084			$	6,356			$	11,499			$	1,652,774			$	1,664,273

		As of December 31, 2024
		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		$	9,107			$	1,405			$	3,955			$	14,467			$	501,661			$	516,128
Multi-family			183				-				-				183				741,245				741,428
Home equity			194				-				30				224				12,964				13,188
Construction and land			-				-				-				-				61,427				61,427
Commercial real estate			248				-				-				248				313,246				313,494
Consumer			-				-				-				-				825				825
Commercial loans			-				-				-				-				34,086				34,086
Total		$	9,732			$	1,405			$	3,985			$	15,122			$	1,665,454			$	1,680,576

⁽¹⁾ Includes $593,000 and $522,000 at June 30, 2025 and December 31, 2024, respectively, which are on non-accrual status.

⁽²⁾ Includes $ - and $1.1 million June 30, 2025 and December 31, 2024, respectively, which are on non-accrual status.

⁽³⁾ Includes $1.2 million and $28,000 at June 30, 2025 and December 31, 2024, respectively, which are on non-accrual status.

The following tables present the activity in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2025 and the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2024:

		*One- to Four-Family*				*Multi-Family*				*Home Equity*				*Land and Construction*				*Commercial Real Estate*				*Consumer*				*Commercial*				*Total*
		(In Thousands)
Six months ended June 30, 2025
Balance at beginning of period		$	5,286			$	7,079			$	212			$	1,205			$	3,920			$	79			$	466			$	18,247
Provision (credit) for credit losses - loans			(213	)			(424	)			(15	)			(26	)			267				15				(73	)			(469	)
Charge-offs			-				-				-				-				-				(25	)			-				(25	)
Recoveries			37				-				-				2				-				8				-				47
Balance at end of period		$	5,110			$	6,655			$	197			$	1,181			$	4,187			$	77			$	393			$	17,800

Six months ended June 30, 2024
Balance at beginning of period		$	6,886			$	7,318			$	211			$	983			$	2,561			$	56			$	534			$	18,549
Provision (credit) for credit losses - loans			(1,062	)			(47	)			62				243				664				20				(26	)			(146	)
Charge-offs			(3	)			-				-				-				-				(12	)			-				(15	)
Recoveries			17				5				-				2				2				-				-				26
Balance at end of period		$	5,838			$	7,276			$	273			$	1,228			$	3,227			$	64			$	508			$	18,414

		*One to-Four- Family*				*Multi-Family*				*Home Equity*				*Construction and Land*				*Commercial Real Estate*				*Consumer*				*Commercial*				*Total*
		(In Thousands)
Three months ended June 30, 2025
Balance at beginning of period		$	4,979			$	6,938			$	193			$	1,042			$	4,173			$	77			$	503			$	17,905
Provision (credit) for credit losses - loans			126				(283	)			4				138				14				(4	)			(110	)			(115	)
Charge-offs			-				-				-				-				-				(4	)			-				(4	)
Recoveries			5				-				-				1				-				8				-				14
Balance at end of period		$	5,110			$	6,655			$	197			$	1,181			$	4,187			$	77			$	393			$	17,800

Three months ended June 30, 2024
Balance at beginning of period		$	6,609			$	7,367			$	229			$	1,111			$	2,610			$	55			$	568			$	18,549
Provision (credit) for credit losses - loans			(778	)			(94	)			44				116				616				13				(60	)			(143	)
Charge-offs			-				-				-				-				-				(4	)			-				(4	)
Recoveries			7				3				-				1				1				-				-				12
Balance at end of period		$	5,838			$	7,276			$	273			$	1,228			$	3,227			$	64			$	508			$	18,414

The Company utilized the Vintage Loss Rate method in determining expected future credit losses. This technique considers losses over the full life cycle of loan pools. A vintage is a group of loans originated in the same annual time period. The loss rate method measures the amount of loan charge–offs, net of recoveries, (“loan losses”) recognized over the life of a pool by loan segment and vintage and compares those loan losses to the original loan balance of that pool as of a similar vintage.

To estimate a CECL loss rate for the pool, management first identifies the loan losses recognized between the pool date and the reporting date for the pool and determines which loan losses were related to loans outstanding at the pool date. The loss rate method then divides the loan losses recognized on loans outstanding as of the pool date by the outstanding loan balance as of the pool date.

The Company’s expected loss estimate is anchored in historical credit loss experience, with an emphasis on all available portfolio data. The Company's historical look–back period includes January 2012 through the current period, on an annual basis. When historical credit loss experience is not sufficient for a specific portfolio, the Company may supplement its own portfolio data with external models or data.

Additionally, the weighted average remaining maturity ("WARM") method is used for the Construction and Consumer loan pools. The WARM method considers an estimate of expected credit losses over the remaining life of the financial assets and uses average annual charge-off rates to estimate the allowance for credit losses. For amortizing assets, the remaining contractual life is adjusted by the expected scheduled payments and prepayments. The average annual charge-off rate is applied to the amortization-adjusted remaining life to determine the unadjusted lifetime historical charge-off rate.

Qualitative reserves reflect management’s overall estimate of the extent to which current expected credit losses on collectively evaluated loans will differ from historical loss experience. The analysis takes into consideration other analytics performed within the organization, such as enterprise and concentration management. Management attempts to quantify qualitative reserves whenever possible. The CECL methodology applied focuses on evaluation of qualitative and environmental factors, including but not limited to: (i) evaluation of facts and issues related to specific loans; (ii) management’s ongoing review and grading of the loan portfolio; (iii) consideration of historical loan loss and delinquency experience on each portfolio segment; (iv) trends in past due and nonperforming loans; (v) the risk characteristics of the various loan segments; (vi) changes in the size and character of the loan portfolio; (vii) concentrations of loans to specific borrowers or industries; (viii) existing economic conditions; (ix) the fair value of underlying collateral; and (x) other qualitative and quantitative factors which could affect expected credit losses.

The Company’s CECL estimate applies a forecast that incorporates macroeconomic trends and other environmental factors. Management utilized national, regional and local leading economic indexes, as well as management judgment, as the basis for the forecast period. The historical loss rate was utilized as the base rate, and qualitative adjustments were utilized to reflect the forecast and other relevant factors.

The Company segments the loan portfolio into pools based on the following risk characteristics: collateral type, credit characteristics, loan origination balance, and outstanding loan balances.

Allowance for Credit Losses-Unfunded Commitments:

In addition to the ACL-Loans, the Company has established an ACL-Unfunded commitments, classified in other liabilities on the consolidated statements of financial condition. This reserve is maintained at a level that management believes is sufficient to absorb losses arising from unfunded loan commitments, and is determined quarterly based on methodology similar to the methodology for determining the ACL-Loans. The allowance for unfunded commitments were $1.1 million and $1.2 million at June 30, 2025 and December 31, 2024, respectively.

Provision for Credit Losses:

The provision for credit losses is determined by the Company as the amount to be added to the ACL loss accounts for various types of financial instruments including loans, investment securities, and off-balance sheet credit exposures after net charge-offs have been deducted to bring the ACL to a level that, in management's judgment, is necessary to absorb expected credit losses over the lives of the respective financial instruments. See Note 2 - Securities Available for Sale for additional information regarding the ACL related to investment securities. The following table presents the components of the provision for credit losses.

		*Three months ended*								*Six months ended*
		*June 30, 2025*				*June 30, 2024*				*June 30, 2025*				*June 30, 2024*
		(In Thousands)
Provision (credit) for credit losses on:
Loans		$	(115	)		$	(143	)		$	(469	)		$	(146	)
Unfunded commitments			106				(82	)			(98	)			(12	)
Investment securities			-				-				-				-
Total		$	(9	)		$	(225	)		$	(567	)		$	(158	)

Collateral Dependent Loans:

A loan is considered to be collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. For collateral dependent loans, expected credit losses are based on the estimated fair value of the collateral at the balance sheet date, with consideration for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. The following tables present collateral dependent loans by portfolio segment and collateral type, including those loans with and without a related allowance allocation.

The following tables present collateral dependent loans by portfolio segment as of June 30, 2025 and December 31, 2024:

		*June 30, 2025*				*December 31, 2024*
		(In Thousands)
Collateral dependent loans
Residential real estate:
One- to four-family		$	5,025			$	3,323
Multi family			182				-
Home equity			196				150
Construction and land			-				-
Commercial real estate			11,493				5,015
Consumer			-				-
Commercial loans			1,471				1,605
Total loans receivable		$	18,367			$	10,093

The Company's procedures dictate that an updated valuation must be obtained with respect to underlying collateral at the time a loan is deemed impaired. Updated valuations may also be obtained upon transfer from loans receivable to real estate owned based upon the age of the prior appraisal, changes in market conditions or known changes to the physical condition of the property.

Estimated fair values are reduced to account for sales commissions, broker fees, unpaid property taxes and additional selling expenses to arrive at an estimated net realizable value. The adjustment factor is based upon the Company's actual experience with respect to sales of real estate owned over the prior two years. In situations in which the Company is placing reliance on an appraisal that is more than one year old, an additional adjustment factor is applied to account for downward market pressure since the date of appraisal. The additional adjustment factor is based upon relevant sales data available for the Company's general operating market as well as company-specific historical net realizable values as compared to the most recent appraisal prior to disposition.

With respect to multi-family income-producing real estate, appraisals are reviewed and estimated collateral values are adjusted by updating significant appraisal assumptions to reflect current real estate market conditions. Significant assumptions reviewed and updated include the capitalization rate, rental income and operating expenses. These adjusted assumptions are based upon recent appraisals received on similar properties as well as on actual experience related to real estate owned and currently under Company management.

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company establishes a risk rating at origination for all commercial loan and commercial real estate relationships. For relationships over $1 million, management monitors the loans on an ongoing basis for any changes in the borrower’s ability to service their debt. Management also affirms the risk ratings for the loans in their respective portfolios on an annual basis. The Company uses the following definitions for risk ratings:

Watch. Loans classified as watch have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Watch assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt and, additionally, the weakness or weaknesses to make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable or improbable. Substandard loans are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

The following table presents information relating to the Company’s internal risk ratings of its loans receivable as of June 30, 2025 and December 31, 2024:

		*One to Four-Family*				*Multi-Family*				*Home Equity*				*Construction and Land*				*Commercial Real Estate*				*Consumer*				*Commercial*				*Total*
		(In Thousands)
At June 30, 2025
Substandard		$	7,672			$	182			$	196			$	-			$	11,694			$	-			$	1,520			$	21,264
Watch			8,845				-				-				141				602				-				-				9,588
Pass			486,826				725,170				13,166				69,619				309,681				828				28,131				1,633,421
		$	503,343			$	725,352			$	13,362			$	69,760			$	321,977			$	828			$	29,651			$	1,664,273

At December 31, 2024
Substandard		$	5,515			$	-			$	150			$	-			$	11,721			$	-			$	1,605			$	18,991
Watch			9,675				183				-				143				743				-				75				10,819
Pass			500,938				741,245				13,038				61,284				301,030				825				32,406				1,650,766
		$	516,128			$	741,428			$	13,188			$	61,427			$	313,494			$	825			$	34,086			$	1,680,576

Credit Quality Information:

The following table presents total loans by risk categories and year of origination as of June 30, 2025:

		*2025*				*2024*				*2023*				*2022*				*2021*				*Prior*				*Revolving*				*Total*
		(In Thousands)
One- to four-family
Pass		$	9,621			$	30,246			$	162,336			$	148,639			$	39,486			$	96,086			$	412			$	486,826
Watch			6,566				75				894				705				-				605				-				8,845
Substandard			2,257				894				610				1,076				-				2,835				-				7,672
Total			18,444				31,215				163,840				150,420				39,486				99,526				412				503,343

Multi-family
Pass			51,784				72,954				122,569				174,469				128,173				174,848				373			$	725,170
Watch			-				-				-				-				-				-				-				-
Substandard			182				-				-				-				-				-				-				182
Total			51,966				72,954				122,569				174,469				128,173				174,848				373				725,352

Home equity
Pass			146				366				463				1,553				70				284				10,284			$	13,166
Watch			-				-				-				-				-				-				-				-
Substandard			-				-				-				15				14				-				167				196
Total			146				366				463				1,568				84				284				10,451				13,362

Construction and land
Pass			809				43,146				25,648				-				-				-				16			$	69,619
Watch			-				-				-				141				-				-				-				141
Substandard			-				-				-				-				-				-				-				-
Total			809				43,146				25,648				141				-				-				16				69,760

Commercial Real Estate
Pass			25,573				63,543				63,066				47,487				56,580				51,716				1,716			$	309,681
Watch			-				202				-				400				-				-				-				602
Substandard			11,385				75				234				-				-				-				-				11,694
Total			36,958				63,820				63,300				47,887				56,580				51,716				1,716				321,977

Consumer
Pass			-				-				-				-				-				-				828			$	828
Watch			-				-				-				-				-				-				-				-
Substandard			-				-				-				-				-				-				-				-
Total			-				-				-				-				-				-				828				828

Commercial
Pass			859				744				16,651				981				435				1,887				6,574			$	28,131
Watch			-				-				-				-				-				-				-				-
Substandard			-				-				-				70				-				-				1,450				1,520
Total			859				744				16,651				1,051				435				1,887				8,024				29,651

Total Loans		$	109,182			$	212,245			$	392,471			$	375,536			$	224,758			$	328,261			$	21,820			$	1,664,273

Gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	25			$	25

The following table presents total loans by risk categories and year of origination as of December 31, 2024:

		*2024*				*2023*				*2022*				*2021*				*2020*				*Prior*				*Revolving*				*Total*
		(In Thousands)
One- to four-family
Pass		$	33,349			$	172,934			$	146,069			$	41,704			$	26,323			$	79,948			$	611			$	500,938
Watch			7,504				106				1,286				-				72				707				-				9,675
Substandard			1,673				815				453				-				-				2,574				-				5,515
Total			42,526				173,855				147,808				41,704				26,395				83,229				611				516,128

Multi-family
Pass			81,119				138,231				196,939				125,252				108,779				90,155				770			$	741,245
Watch			-				183				-				-				-				-				-				183
Substandard			-				-				-				-				-				-				-				-
Total			81,119				138,414				196,939				125,252				108,779				90,155				770				741,428

Home equity
Pass			379				478				1,578				149				91				226				10,137			$	13,038
Watch			-				-				-				-				-				-				-				-
Substandard			-				-				16				14				-				-				120				150
Total			379				478				1,594				163				91				226				10,257				13,188

Construction and land
Pass			23,029				25,384				-				9,144				1,501				2,226				-			$	61,284
Watch			-				-				143				-				-				-				-				143
Substandard			-				-				-				-				-				-				-				-
Total			23,029				25,384				143				9,144				1,501				2,226				-				61,427

Commercial Real Estate
Pass			63,660				66,980				51,175				58,574				30,699				29,289				653			$	301,030
Watch			208				-				407				-				128				-				-				743
Substandard			11,484				237				-				-				-				-				-				11,721
Total			75,352				67,217				51,582				58,574				30,827				29,289				653				313,494

Consumer
Pass			-				-				-				-				-				-				825			$	825
Watch			-				-				-				-				-				-				-				-
Substandard			-				-				-				-				-				-				-				-
Total			-				-				-				-				-				-				825				825

Commercial
Pass			948				17,011				1,240				553				2,062				5,135				5,457			$	32,406
Watch			-				-				-				-				-				-				75				75
Substandard			-				-				30				-				-				-				1,575				1,605
Total			948				17,011				1,270				553				2,062				5,135				7,107				34,086

Total Loans		$	223,353			$	422,359			$	399,336			$	235,390			$	169,655			$	210,260			$	20,223			$	1,680,576

There were no borrowers experiencing financial difficulty as of June 30, 2025 and December 31, 2024.

There were no restructuring of financing receivables whose borrowers are experiencing financial difficulty during the three or six months ended June 30, 2025 or June 30, 2024.

There were no restructurings of financing receivables whose borrowers are experiencing financial difficulty within the past twelve months of which there was a default during the three or six months ended June 30, 2025 or June 30, 2024.

The following table presents data on non-accrual loans as of June 30, 2025 and December 31, 2024:

		*June 30, 2025*				*December 31, 2024*
		(Dollars in Thousands)
Non-accrual loans:
Residential
One- to four-family		$	7,673			$	5,515
Multi-family			182				-
Home equity			140				150
Construction and land			-				-
Commercial real estate			201				-
Commercial			-				-
Consumer			-				-
Total non-accrual loans		$	8,196			$	5,665
Total non-accrual loans to total loans receivable			0.49	%			0.34	%
Total non-accrual loans to total assets			0.36	%			0.26	%

Residential one- to four-family mortgage loans that were in the process of foreclosure were $3.1 million and $1.9 million at June 30, 2025 and December 31, 2024, respectively.