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Note 3 - Loans Receivable

9 Months Ended

Sep. 30, 2025

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

Note 3 - Loans Receivable

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

	*September 30, 2025*		*December 31, 2024*
	(In Thousands)
Mortgage loans:
Residential real estate:
One- to four-family	$	506,758	$	516,128
Multi-family		769,325		741,428
Home equity		13,382		13,188
Construction and land		69,152		61,427
Commercial real estate		323,613		313,494
Consumer		938		825
Commercial loans		31,668		34,086
Total	$	1,714,836	$	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 $1.22 billion and $1.23 billion at September 30, 2025 and December 31, 2024, respectively, were pledged as collateral against $460.2 million and $443.6 million in outstanding Federal Home Loan Bank of Chicago ("FHLB") advances under a blanket security agreement at September 30, 2025 and December 31, 2024.

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

	*As of September 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	$	2,208	$	1,962	$	4,002	$	8,172	$	498,586	$	506,758
Multi-family		-		-		182		182		769,143		769,325
Home equity		116		-		-		116		13,266		13,382
Construction and land		-		-		-		-		69,152		69,152
Commercial real estate		-		-		-		-		323,613		323,613
Consumer		-		-		-		-		938		938
Commercial loans		50		-		-		50		31,618		31,668
Total	$	2,374	$	1,962	$	4,184	$	8,520	$	1,706,316	$	1,714,836

	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 $489,000 and $522,000 at September 30, 2025 and December 31, 2024, respectively, which are on non-accrual status.

⁽²⁾ Includes $ 590,000 and $1.1 million September 30, 2025 and December 31, 2024, respectively, which are on non-accrual status.

⁽³⁾ Includes $733,000 and $28,000 at September 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 nine months ended September 30, 2025 and the activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2024:

	*One- to Four-Family*			*Multi-Family*			*Home Equity*			*Land and Construction*			*Commercial Real Estate*			*Consumer*			*Commercial*			*Total*
	(In Thousands)
Nine months ended September 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		(389	)		6			(24	)		(66	)		(11	)		45			(160	)		(599	)
Charge-offs		-			-			-			-			-			(42	)		-			(42	)
Recoveries		51			3			-			2			-			8			-			64
Balance at end of period	$	4,948		$	7,088		$	188		$	1,141		$	3,909		$	90		$	306		$	17,670

Nine months ended September 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		(1,661	)		(243	)		(12	)		271			1,204			43			(41	)		(439	)
Charge-offs		(3	)		-			-			-			-			(26	)		-			(29	)
Recoveries		104			8			-			2			3			-			-			117
Balance at end of period	$	5,326		$	7,083		$	199		$	1,256		$	3,768		$	73		$	493		$	18,198

	*One to-Four- Family*			*Multi-Family*			*Home Equity*			*Construction and Land*			*Commercial Real Estate*			*Consumer*			*Commercial*			*Total*
	(In Thousands)
Three months ended September 30, 2025
Balance at beginning of period	$	5,110		$	6,655		$	197		$	1,181		$	4,187		$	77		$	393		$	17,800
Provision (credit) for credit losses - loans		(176	)		430			(9	)		(40	)		(278	)		30			(87	)		(130	)
Charge-offs		-			-			-			-			-			(17	)		-			(17	)
Recoveries		14			3			-			-			-			-			-			17
Balance at end of period	$	4,948		$	7,088		$	188		$	1,141		$	3,909		$	90		$	306		$	17,670

Three months ended September 30, 2024
Balance at beginning of period	$	5,838		$	7,276		$	273		$	1,228		$	3,227		$	64		$	508		$	18,414
Provision (credit) for credit losses - loans		(599	)		(196	)		(74	)		28			540			23			(15	)		(293	)
Charge-offs		-			-			-			-			-			(14	)		-			(14	)
Recoveries		87			3			-			-			1			-			-			91
Balance at end of period	$	5,326		$	7,083		$	199		$	1,256		$	3,768		$	73		$	493		$	18,198

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 $1.0 million and $1.2 million at September 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*						*Nine months ended*
	*September 30, 2025*			*September 30, 2024*			*September 30, 2025*			*September 30, 2024*
	(In Thousands)
Provision (credit) for credit losses on:
Loans	$	(130	)	$	(293	)	$	(599	)	$	(439	)
Unfunded commitments		(139	)		(84	)		(237	)		(96	)
Investment securities		-			-			-			-
Total	$	(269	)	$	(377	)	$	(836	)	$	(535	)

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 September 30, 2025 and December 31, 2024:

	*September 30, 2025*		*December 31, 2024*
	(In Thousands)
Collateral dependent loans
Residential real estate:
One- to four-family	$	3,997	$	3,323
Multi family		182		-
Home equity		70		150
Construction and land		-		-
Commercial real estate		11,346		5,015
Consumer		-		-
Commercial loans		-		1,605
Total loans receivable	$	15,595	$	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 September 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 September 30, 2025
Substandard	$	5,674	$	182	$	70	$	-	$	11,346	$	-	$	-	$	17,272
Watch		9,489		332		-		-		232		-		1,316		11,369
Pass		491,595		768,811		13,312		69,152		312,035		938		30,352		1,686,195
	$	506,758	$	769,325	$	13,382	$	69,152	$	323,613	$	938	$	31,668	$	1,714,836

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 September 30, 2025:

	*2025*		*2024*		*2023*		*2022*		*2021*		*Prior*		*Revolving*		*Total*
	(In Thousands)
One- to four-family
Pass	$	17,145	$	30,180	$	163,079	$	148,995	$	38,731	$	92,180	$	1,285	$	491,595
Watch		6,848		45		295		1,072		-		1,229		-		9,489
Substandard		1,548		631		610		932		-		1,953		-		5,674
Total		25,541		30,856		163,984		150,999		38,731		95,362		1,285		506,758

Multi-family
Pass		177,341		64,069		114,501		149,928		116,879		145,274		819	$	768,811
Watch		-		-		332		-		-		-		-		332
Substandard		182		-		-		-		-		-		-		182
Total		177,523		64,069		114,833		149,928		116,879		145,274		819		769,325

Home equity
Pass		515		359		375		1,544		68		148		10,303	$	13,312
Watch		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		13		-		57		70
Total		515		359		375		1,544		81		148		10,360		13,382

Construction and land
Pass		1,437		50,375		17,185		140		-		15		-	$	69,152
Watch		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-
Total		1,437		50,375		17,185		140		-		15		-		69,152

Commercial Real Estate
Pass		48,648		56,789		62,126		44,360		54,798		41,976		3,338	$	312,035
Watch		-		-		232		-		-		-		-		232
Substandard		11,346		-		-		-		-		-		-		11,346
Total		59,994		56,789		62,358		44,360		54,798		41,976		3,338		323,613

Consumer
Pass		100		-		-		-		-		-		838	$	938
Watch		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-
Total		100		-		-		-		-		-		838		938

Commercial
Pass		3,726		582		16,530		870		379		1,379		6,886	$	30,352
Watch		-		-		-		16		-		-		1,300		1,316
Substandard		-		-		-		-		-		-		-		-
Total		3,726		582		16,530		886		379		1,379		8,186		31,668

Total Loans	$	268,836	$	203,030	$	375,265	$	347,857	$	210,868	$	284,154	$	24,826	$	1,714,836

Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	42	$	42

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

The following presents data on restructurings of financing receivables whose borrowers are experiencing financial difficulty:

	*As of September 30, 2025*
	*Accruing*				*Non-accruing*				*Total*
	*Amount*		*Number*		*Amount*		*Number*		*Amount*		*Number*
	(Dollars in Thousands)

Commercial Real Estate	$	6,706		1	$	-		-	$	6,706		1
One- to four-family		-		-		590		1		590		1
	$	6,706		1	$	590		1	$	7,296		2

The following presents restructurings of financing receivables whose borrowers are experiencing financial difficulty by concession type:

	*As of September 30, 2025*
	*Performing in accordance with modified terms*				*In Default*				*Total*
	*Amount*		*Number*		*Amount*		*Number*		*Amount*		*Number*
	(Dollars in Thousands)
Principal forbearance	$	7,296		2	$	-		-	$	7,296		2
	$	7,296		2	$	-		-	$	7,296		2

There were no borrowers experiencing financial difficulty as of December 31, 2024.

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

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

	*September 30, 2025*			*December 31, 2024*
	(Dollars in Thousands)
Non-accrual loans:
Residential
One- to four-family	$	5,674		$	5,515
Multi-family		182			-
Home equity		14			150
Construction and land		-			-
Commercial real estate		126			-
Commercial		-			-
Consumer		-			-
Total non-accrual loans	$	5,996		$	5,665
Total non-accrual loans to total loans receivable		0.35	%		0.34	%
Total non-accrual loans to total assets		0.26	%		0.26	%

Residential one- to four-family mortgage loans that were in the process of foreclosure were $1.8 million and $1.9 million at September 30, 2025 and December 31, 2024, respectively.