v3.26.1
Loans
 6 Months Ended
Jun. 30, 2026
Receivables [Abstract]  
Loans Loans
Loans-held-for portfolio (which excludes loans held-for-sale) at the dates indicated were as follows (in thousands):
June 30,
2026		December 31,
2025
Real estate loans:
One-to-four family$244,168 $253,841 
Home equity32,107 31,468 
Commercial and multifamily381,809 409,729 
Construction and land76,158 50,261 
Total real estate loans734,242 745,299 
Consumer loans:
Manufactured homes42,668 43,080 
Floating homes87,566 87,315 
Other consumer13,832 16,571 
Total consumer loans144,066 146,966 
Commercial business loans15,748 15,378 
Total loans held-for-portfolio894,056 907,643 
Premiums for purchased loans(1)
583 627 
Deferred fees, net(2,670)(2,737)
Total loans held-for-portfolio, gross891,969 905,533 
Allowance for credit losses — loans(8,420)(8,605)
Total loans held-for-portfolio, net$883,549 $896,928 
(1)Includes premiums resulting from purchased loans of $343 thousand related to one-to-four family loans, $196 thousand related to commercial and multifamily loans, and $43 thousand related to commercial business loans as of June 30, 2026. Includes premiums resulting from purchased loans of $367 thousand related to one-to-four family loans, $212 thousand related to commercial and multifamily loans, and $49 thousand related to commercial business loans as of December 31, 2025.
As of June 30, 2026, there were six collateral dependent one-to-four-family real estate loans, totaling $1.2 million, that were in process of foreclosure
The following table presents a summary of activity in the ACL on loans and the reserve for unfunded loan commitments for the periods indicated (in thousands):
Three Months Ended June 30,
20262025
ACL - LoansReserve for Unfunded Loan CommitmentsACL ACL - LoansReserve for Unfunded Loan CommitmentsACL
Balance at beginning of period$8,635 $222 $8,857 $8,393 $116 $8,509 
(Release of) provision for credit losses during the period(185)(38)(223)164 6 170 
Net charge-offs during the period(30)— (30)(21)— (21)
Balance at end of period$8,420 $184 $8,604 $8,536 $122 $8,658 
Six Months Ended June 30,
20262025
ACL - LoansReserve for Unfunded Loan CommitmentsACLACL - LoansReserve for Unfunded Loan CommitmentsACL
Balance at beginning of period$8,605 $148 $8,753 $8,499 $234 $8,733 
(Release of) provision for credit losses during the period(136)36 (100)79 (112)(33)
Net charge-offs during the period(49)— (49)(42)— (42)
Balance at end of period$8,420 $184 $8,604 $8,536 $122 $8,658 
Accrued interest receivable on loans receivable totaled $3.5 million at June 30, 2026 and $3.6 million December 31, 2025, in the accompanying Condensed Consolidated Balance Sheets. Accrued interest receivable is excluded from the ACL.
The ACL is measured using the current expected credit losses (“CECL”) approach for financial instruments measured at amortized cost and for other commitments to extend credit. CECL requires the immediate recognition of estimated credit losses expected to occur over the estimated remaining life of the asset. The forward-looking concept of CECL requires loss estimates to consider historical experience, current conditions and reasonable and supportable forecasts. We estimate the ACL using relevant information from internal and external sources, related to past events, current conditions, and a reasonable and supportable forecast. The ACL is measured on a collective (segment) basis when similar risk characteristics exist. Historical credit loss experience for both the Company and segment-specific peers provides the basis for the estimate of expected credit losses. Segments are based upon federal call report segmentation. The reserve was applied on a loan-by-loan basis and condensed into the applicable segments reported below. The ACL is determined using quantitative and qualitative analysis. The quantitative analysis utilizes macroeconomic variables to establish a quantitative relationship between economic conditions and loan performance through an economic cycle. Qualitative adjustments include but are not limited to changes in lending policies; changes in the nature and volume of the portfolio; changes in staff experience levels; changes in the volume or trends of classified loans, delinquencies, and nonaccrual loans; concentration risk; value of underlying collateral; competitive, legal, and regulatory factors; changes in the loan review system; and economic conditions. We evaluate our ACL policy and judgments on an ongoing basis and update them as necessary based on changing conditions. See “Note 1—Organization and Significant Accounting Policies” in the Company’s 2025 Form 10-K for further information on the Company’s ACL accounting policy.
The following tables summarize the activity in the ACL - loans for the periods indicated (in thousands):
Three Months Ended June 30, 2026
Beginning
Allowance		Charge-offsRecoveriesProvision for (Release of) Credit LossesEnding
Allowance
One-to-four family$3,264 $— $— $(82)$3,182 
Home equity363 — — (26)337 
Commercial and multifamily1,658 — — (171)1,487 
Construction and land584 — — 15 599 
Manufactured homes1,085 — — 70 1,155 
Floating homes1,225 — — 34 1,259 
Other consumer(1)
332 (3)3 (22)310 
Commercial business(2)
124 (30)— (3)91 
Total$8,635 $(33)$3 $(185)$8,420 
(1)During the three months ended June 30,2026, gross charge-offs of other consumer loans related entirely to deposit overdrafts.
(2)During the three months ended June 30,2026, there was one commercial business loan for $30 thousand originated in 2024 that was charged off.

Three Months Ended June 30, 2025
Beginning
Allowance		Charge-offsRecoveriesProvision for (Release of) Credit LossesEnding
Allowance
One-to-four family$3,328 $— $— $(1)$3,327 
Home equity362 — — (2)360 
Commercial and multifamily1,181 — — 55 1,236 
Construction and land279 — — (10)269 
Manufactured homes1,303 — — 92 1,395 
Floating homes1,409 — — 1 1,410 
Other consumer(1)
448 (23)2 24 451 
Commercial business83 — — 5 88 
Total$8,393 $(23)$2 $164 $8,536 
(1)During the three months ended June 30, 2025, there was one other consumer loan for $16 thousand originated in 2024 related to a consumer line of credit that was charged off with the remainder of the gross charge-offs of other consumer loans related entirely to deposit overdrafts.

Six Months Ended June 30, 2026
Beginning
Allowance		Charge-offsRecoveriesProvision for (Release of) Credit LossesEnding
Allowance
One-to-four family$3,340 $— $— $(158)$3,182 
Home equity343 — — (6)337 
Commercial and multifamily1,484 — — 3 1,487 
Construction and land519 — — 80 599 
Manufactured homes(1)
1,174 (20)— 1 1,155 
Floating homes1,259 — — — 1,259 
Other consumer(2)
370 (9)10 (61)310 
Commercial business(3)
116 (30)— 5 91 
Total$8,605 $(59)$10 $(136)$8,420 
(1)During the six months ended June 30, 2026, there was one manufactured home loan for $20 thousand originated in 2017 that was charged off.
(2)During the six months ended June 30, 2026, gross charge-offs of other consumer loans related entirely to deposit overdrafts
(3)During the six months ended June 30, 2026, there was one commercial business loan for $30 thousand originated in 2024 that was charged off.
Six Months Ended June 30, 2025
Beginning
Allowance		Charge-offsRecoveriesProvision for (Release of) Credit LossesEnding
Allowance
One-to-four family$3,025 $— $— $302 $3,327 
Home equity307 — — 53 360 
Commercial and multifamily1,218 — — 18 1,236 
Construction and land992 — — (723)269 
Manufactured homes(1)
1,172 (19)— 242 1,395 
Floating homes1,282 — — 128 1,410 
Other consumer(2)
401 (31)8 73 451 
Commercial business102 — — (14)88 
Total$8,499 $(50)$8 $79 $8,536 
(1)During the six months ended June 30, 2025, there was one manufactured home loan for $19 thousand originated in 2022 that was charged off and then subsequently foreclosed upon.
(2)During the six months ended June 30, 2025, there was one other consumer loan for $16 thousand originated in 2024 related to a consumer line of credit that was charged off, with the remainder of the gross charge-offs of other consumer loans related entirely to deposit overdrafts.
Credit Quality Indicators. Federal regulations provide for the classification of lower quality loans and other assets (such as OREO and repossessed assets), as well as debt and equity securities considered as "substandard," "doubtful" or "loss." An asset is considered "substandard" if it is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Substandard assets have well-defined weaknesses that could result in loss if the deficiencies are not corrected. Assets classified as "doubtful" have all of the weaknesses inherent in those classified as "substandard," with the added characteristic that the weaknesses make collection or liquidation in full, highly questionable and improbable. Assets classified as "loss" are considered "uncollectible" and of such little value that their continuance as assets is not warranted.
Management regularly reviews loans in the portfolio to assess credit quality and to determine appropriate loan classification and grading. The grades for "watch" and "special mention" loans are used by the Company to identify and track potential problem loans that warrant management’s close attention based upon known characteristics such as periodic payment delinquency, failure to comply with contractual terms of the loan, or collateral concerns. These loans do not rise to the level of regulatory classifications such as substandard, doubtful, or loss. Loans identified as watch, special mention, substandard, doubtful, or loss are subject to additional problem loan reporting to management quarterly.
When we classify problem assets as either substandard or doubtful, these assets are evaluated to determine whether they should be individually assessed if they no longer share common risk characteristics with the rest of the portfolio. When we classify problem assets as a loss, we are required to charge off those assets in the period in which they are deemed uncollectible. Our determination as to the classification of our assets and the amount of our allowance for credit losses is subject to review by the FDIC (the Bank’s federal banking regulator) and the Washington Department of Financial Institutions (the Bank’s state banking regulator), which can order the establishment of additional credit loss allowance. Assets which do not currently expose us to sufficient risk to warrant classification as substandard or doubtful but possess weaknesses are required to be designated as special mention. There were no loans classified as doubtful or loss as of June 30, 2026 and December 31, 2025.
The following tables present the internally assigned grades as of June 30, 2026 and December 31, 2025, by type of loan and origination year (in thousands):
At June 30, 2026
Term Loans Amortized Cost Basis by Origination YearRevolving Loans Amortized Cost BasisRevolving Loans Amortized Cost Basis Converted to Term
20262025202420232022PriorTotal
One-to-four family:
Pass$10,857 $12,739 $17,123 $16,243 $62,973 $121,613 $— $— $241,548 
Substandard— — — 1,473 286 894 — — 2,653 
Total one-to-four family$10,857 $12,739 $17,123 $17,716 $63,259 $122,507 $— $— $244,201 
Home equity:
Pass$228 $1,272 $2,149 $2,259 $2,046 $1,487 $21,181 $1,378 $32,000 
Substandard— — — — — — 313 — 313 
Total home equity$228 $1,272 $2,149 $2,259 $2,046 $1,487 $21,494 $1,378 $32,313 
Commercial and multifamily:
Pass$9,012 $90,437 $33,568 $19,429 $77,403 $130,519 $— $— $360,368 
Substandard— — — 4,990 4,956 10,034 — — 19,980 
Total commercial and multifamily$9,012 $90,437 $33,568 $24,419 $82,359 $140,553 $— $— $380,348 
Construction and land:
Pass$21,217 $31,423 $12,872 $7,479 $994 $1,501 $— $— $75,486 
Substandard— — — 27 147 78 — — 252 
Total construction and land$21,217 $31,423 $12,872 $7,506 $1,141 $1,579 $— $— $75,738 
Manufactured homes:
Pass$2,215 $7,769 $7,462 $10,130 $5,429 $8,662 $— $— $41,667 
Substandard— — 127 204 218 333 — — 882 
Total manufactured homes$2,215 $7,769 $7,589 $10,334 $5,647 $8,995 $— $— $42,549 
Floating homes:
Pass$4,558 $9,890 $18,136 $6,236 $13,536 $34,790 $— $— $87,146 
Total floating homes$4,558 $9,890 $18,136 $6,236 $13,536 $34,790 $— $— $87,146 
Other consumer:
Pass$816 $2,160 $1,311 $1,624 $298 $6,724 $692 $— $13,625 
Substandard— — — — — 240 1 — 241 
Total other consumer$816 $2,160 $1,311 $1,624 $298 $6,964 $693 $— $13,866 
Commercial business:
Pass$225 $3,068 $186 $49 $254 $3,207 $8,793 $— $15,782 
Substandard— — 26 — — — — — 26 
Total commercial business$225 $3,068 $212 $49 $254 $3,207 $8,793 $— $15,808 
Total loans
Pass$49,128 $158,758 $92,807 $63,449 $162,933 $308,503 $30,666 $1,378 $867,622 
Substandard— — 153 6,694 5,607 11,579 314 — 24,347 
Total loans$49,128 $158,758 $92,960 $70,143 $168,540 $320,082 $30,980 $1,378 $891,969 
At December 31, 2025
Term Loans Amortized Cost Basis by Origination YearRevolving Loans Amortized Cost BasisRevolving Loans Amortized Cost Basis
Converted to Term
20252024202320222021PriorTotal
One-to-four family:
Pass$17,896 $18,112 $17,717 $66,239 $93,367 $38,871 $— $— $252,202 
Substandard— — 1,117 289 91 200 — — 1,697 
Total one-to-four family$17,896 $18,112 $18,834 $66,528 $93,458 $39,071 $— $— $253,899 
Home equity:
Pass$1,292 $2,277 $2,534 $2,086 $771 $777 $20,827 $881 $31,445 
Substandard— — — — — 50 68 121 239 
Total home equity$1,292 $2,277 $2,534 $2,086 $771 $827 $20,895 $1,002 $31,684 
Commercial and multifamily:
Pass$97,005 $33,810 $24,641 $78,185 $87,836 $72,359 $— $— $393,836 
Substandard— — — 4,990 6,069 3,197 — — 14,256 
Total commercial and multifamily$97,005 $33,810 $24,641 $83,175 $93,905 $75,556 $— $— $408,092 
Construction and land:
Pass$22,342 $16,867 $7,785 $1,025 $668 $1,134 $— $— $49,821 
Substandard— — — 150 — — — — 150 
Total construction and land$22,342 $16,867 $7,785 $1,175 $668 $1,134 $— $— $49,971 
Manufactured homes:
Pass$8,124 $8,183 $10,684 $5,678 $3,265 $6,316 $— $— $42,250 
Substandard— — 228 219 — 254 — — 701 
Total manufactured homes$8,124 $8,183 $10,912 $5,897 $3,265 $6,570 $— $— $42,951 
Floating homes:
Pass$10,100 $18,833 $6,291 $14,636 $22,632 $14,404 $— $— $86,896 
Total floating homes$10,100 $18,833 $6,291 $14,636 $22,632 $14,404 $— $— $86,896 
Other consumer:
Pass$2,471 $1,604 $2,144 $327 $3,283 $5,837 $667 $— $16,333 
Substandard— — — — 6 256 — — 262 
Total other consumer$2,471 $1,604 $2,144 $327 $3,289 $6,093 $667 — $16,595 
Commercial business:
Pass$3,324 $255 $253 $288 $1,255 $2,747 $7,293 $— $15,415 
Substandard— — — — — — 30 — 30 
Total commercial business$3,324 $255 $253 $288 $1,255 $2,747 $7,323 $— $15,445 
Total loans
Pass$162,554 $99,941 $72,049 $168,464 $213,077 $142,445 $28,787 $881 $888,198 
Substandard— — 1,345 5,648 6,166 3,957 98 121 17,335 
Total loans$162,554 $99,941 $73,394 $174,112 $219,243 $146,402 $28,885 $1,002 $905,533 
Nonaccrual and Past Due Loans.  Loans are considered past due if the required principal and interest payments were not received as of the dates such payments were due.
The following table presents the amortized cost of nonaccrual loans as of the dates indicated, by type of loan (in thousands):
June 30, 2026December 31, 2025
Total
Nonaccrual
Loans		Total
Nonaccrual
Loans
with no ACL		Total
Nonaccrual
Loans		Total
Nonaccrual
Loans
with no ACL
One-to-four family$2,458 $2,458 $1,597 $1,597 
Home equity310 310 187 187 
Commercial and multifamily4,191 4,191 3,163 3,163 
Construction and land159 159 82 82 
Manufactured homes696 696 461 461 
Other consumer241 241 262 262 
Commercial business— — 30 — 
Total$8,055 $8,055 $5,782 $5,752 
The following tables present the aging of past due loans, based on amortized cost, as of the dates indicated, by type of loan (in thousands):
June 30, 2026
30-59 Days
Past Due		60-89 Days
Past Due		90 Days and Greater Past Due90 Days and Greater Past Due and AccruingTotal Past
Due		CurrentTotal Loans
One-to-four family$— $222 $2,362 $— $2,584 $241,617 $244,201 
Home equity422 6 — — 428 31,885 32,313 
Commercial and multifamily— 939 4,025 — 4,964 375,384 380,348 
Construction and land— — 158 — 158 75,580 75,738 
Manufactured homes— 346 623 — 969 41,580 42,549 
Floating homes— — — — — 87,146 87,146 
Other consumer7 152 — — 159 13,707 13,866 
Commercial business— — — — — 15,808 15,808 
Total$429 $1,665 $7,168 $— $9,262 $882,707 $891,969 
December 31, 2025
30-59 Days
Past Due		60-89 Days
Past Due		90 Days and Greater Past Due90 Days and Greater Past Due and AccruingTotal Past
Due		CurrentTotal Loans
One-to-four family$529 $491 $1,358 $— $2,378 $251,521 $253,899 
Home equity522 275 — — 797 30,887 31,684 
Commercial and multifamily2,228 — 2,993 — 5,221 402,871 408,092 
Construction and land— — 82 — 82 49,889 49,971 
Manufactured homes702 641 336 — 1,679 41,272 42,951 
Floating homes849 — — — 849 86,047 86,896 
Other consumer7 4 262 — 273 16,322 16,595 
Commercial business32 — 30 — 62 15,383 15,445 
Total$4,869 $1,411 $5,061 $— $11,341 $894,192 $905,533 
Loan Modifications to Borrowers Experiencing Financial Difficulty. The Company has granted modifications which can generally be described in the following categories:
Principal Forgiveness:  A modification in which the principal is reduced.
Rate Modification:  A modification in which the interest rate is changed.
Term Modification:  A modification in which the maturity date, timing of payments or frequency of payments is changed.
Payment Modification:  A modification in which the dollar amount of the payment is changed.  Interest-only modifications in which a loan is converted to interest-only payments for a period of time are included in this category.
Combination Modification:  Any other type of modification, including the use of multiple categories above.
At June 30, 2026, the Company had no commitments to extend additional credit to borrowers owing loan receivables with modified terms.
There were no loans modified within the three and six months ended June 30, 2026 and 2025.
We have no modified loan receivables that have subsequently defaulted within 12 months of modification at June 30, 2026 and December 31, 2025.
Troubled debt restructurings (“TDRs”). Prior to the adoption of ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, the Company had granted a variety of concessions to borrowers in the form of loan modifications that were considered TDRs. Loans classified as legacy TDRs totaled $1.1 million at both June 30, 2026 and December 31, 2025
Collateral Dependent Loans. Loans that have been classified as collateral dependent are loans where substantially all repayment of the loan is expected to come from the operation of or eventual liquidation of the collateral. Collateral dependent loans are evaluated individually for purposes of determining the ACL, which is determined based on the estimated fair value of the collateral. Estimates for costs to sell are included in the determination of the ACL when liquidation of the collateral is anticipated. In cases where the loan is well secured and the estimated fair value of the collateral exceeds the amortized cost of the loan, no ACL is recorded.
The following tables summarize collateral dependent loans by collateral type as of the dates indicated (in thousands):
June 30, 2026
Commercial Real EstateResidential Real EstateLandOther ResidentialRVs/AutomobilesBusiness Assets Total
Real estate loans:
One- to four- family$— $1,948 $— $654 $— $— $2,602 
Home equity— 372 — — — — 372 
Commercial and multifamily3,151 — — — — 1,040 4,191 
Construction and land— — 79 80 — — 159 
Total real estate loans3,151 2,320 79 734 — 1,040 7,324 
Consumer loans:
Manufactured homes— — — 696 — — 696 
Other consumer— — — 241 — — 241 
Total consumer loans— — — 937 — — 937 
Commercial business loans— — — — — — — 
Total loans$3,151 $2,320 $79 $1,671 $— $1,040 $8,261 
December 31, 2025
Commercial Real EstateResidential Real EstateLandOther ResidentialRVs/AutomobilesBusiness AssetsTotal
Real estate loans:
One- to four- family$— $1,416 $— $314 $— $— $1,730 
Home equity— 187 — — — — 187 
Commercial and multifamily2,123 — — — — 1,040 3,163 
Construction and land— — — 82 — — 82 
Total real estate loans2,123 1,603 — 396 — 1,040 5,162 
Consumer loans:
Manufactured homes— — — 480 — — 480 
Other consumer— — — 256 6 — 262 
Total consumer loans— — — 736 6 — 742 
Commercial business loans— — — — — 30 30 
Total loans$2,123 $1,603 $— $1,132 $6 $1,070 $5,934