Note 3 - Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2026

Allowance for Credit Losses [Text Block]

Note 3: Loans and allowance for credit losses

A summary of loans by major category as of June 30, 2026 and December 31, 2025 is as follows:

	*June 30, 2026*			*December 31, 2025*
	(Dollars in thousands)
First mortgage loans
1-4 family residential	$	116,514		$	118,222
Multi-family		3,775			3,240
Commercial		3,846			3,813
Construction		3,020			3,921
Total first mortgage loans		127,155			129,196
Consumer loans		312			268
Total loans		127,467			129,464
Net deferred loan costs		156			299
Allowance for credit losses on loans		(1,095	)		(1,128	)
Total loans, net	$	126,528		$	128,635

First mortgage loans serviced and subserviced for others are not included in the accompanying Consolidated Balance Sheets. The unpaid principal balance of these loans totaled $40.0 million and $41.0 million at June 30, 2026 and December 31, 2025, respectively. Custodial escrow balances maintained in connection with the loans serviced were $529,000 and $480,000 at June 30, 2026 and December 31, 2025, respectively.

The accrued interest receivable for loans, net, was $541,000 and $577,000 for June 30, 2026 and December 31, 2025, respectively

In the normal course of business, loans are made by the Bank to directors and officers of the Company and the Bank (related parties). The terms of these loans, including interest rate and collateral, are similar to those prevailing for comparable transactions with other customers and do not involve more than a normal risk of collectability. At June 30, 2026 and December 31, 2025, such borrowers were indebted to the Bank in the aggregate amount of $414,000 and $564,000, respectively.

The following tables present the activity in the allowance for credit losses ("ACL") for the three and six months ended June 30, 2026 and 2025:

	*June 30, 2026*
	*1-4 family*
	*residential*		*Multi-family*		*Commercial*		*Construction*			*Consumer*		*Total*
	(Dollars in thousands)
Three months ended
Beginning balance	$	956	$	39	$	34	$	63		$	3	$	1,095
Charge-offs		—		—		—		—			—		—
Recoveries		—		—		—		—			—		—
Net recoveries (charge-offs)		—		—		—		—			—		—
Provision for (release of) credit losses		11		5		3		(19	)		—		—
Ending balance	$	967	$	44	$	37	$	44		$	3	$	1,095

	*June 30, 2026*
	*1-4 family*
	*residential*			*Multi-family*		*Commercial*		*Construction*			*Consumer*		*Total*
	(Dollars in thousands)
Six months ended
Beginning balance	$	989		$	39	$	37	$	61		$	2	$	1,128
Charge-offs		—			—		—		—			—		—
Recoveries		—			—		—		—			—		—
Net recoveries (charge-offs)		—			—		—		—			—		—
(Release of) provision for credit losses		(22	)		5		—		(17	)		1		(33	)
Ending balance	$	967		$	44	$	37	$	44		$	3	$	1,095

	*June 30, 2025*
	*1-4 family*
	*residential*		*Multi-family*		*Commercial*		*Construction*		*Consumer*		*Total*
	(Dollars in thousands)
Three months ended
Beginning balance	$	1,034	$	37	$	38	$	45	$	2	$	1,156
Charge-offs		—		—		—		—		—		—
Recoveries		—		—		—		—		—		—
Net recoveries (charge-offs)		—		—		—		—		—		—
Provision for credit losses		22		—		6		16		—		44
Ending balance	$	1,056	$	37	$	44	$	61	$	2	$	1,200

	*June 30, 2025*
	*1-4 family*
	*residential*		*Multi-family*		*Commercial*		*Construction*			*Consumer*		*Total*
	(Dollars in thousands)
Six months ended
Beginning balance	$	1,056	$	37	$	41	$	65		$	2	$	1,201
Charge-offs		—		—		—		—			—		—
Recoveries		—		—		—		—			—		—
Net recoveries (charge-offs)		—		—		—		—			—		—
Provision for (release of) credit losses		—		—		3		(4	)		—		(1	)
Ending balance	$	1,056	$	37	$	44	$	61		$	2	$	1,200

The ACL on loans excludes the allowance for off-balance sheet exposures as of June 30, 2026 and 2025, respectively, recorded within Other Liabilities on the Consolidated Balance Sheets. Off-balance sheet exposures consist of unused lines of credit, the unused portion of construction loans and commitments to originate loans. The following tables present the activity in the ACL for off-balance sheet exposures for the three and six months ended June 30, 2026 and 2025:

	*Off-balance sheet exposures*
	(Dollars in thousands)
	*Three months ended June 30,*				*Six months ended June 30,*
	*2026*		*2025*		*2026*		*2025*
Beginning balance	$	46	$	67	$	40	$	59
Provision for credit losses		1		13		7		21
Ending balance	$	47	$	80	$	47	$	80

As of June 30, 2026, there were six collateral dependent loans totaling $2.4 million in the one to four-family residential loan segment. These loans are collateralized by residential real estate and have no ACL as of June 30, 2026. As of December 31, 2025, there were two collateral dependent loans totaling $284,000 in the one to four-family residential loan segment. These loans are collateralized by residential real estate and have no ACL as of December 31, 2025. There were no other collateral dependent loans as of June 30, 2026 and December 31, 2025.

The Bank evaluates collectability based on payment activity and other factors. The Bank uses a graded loan rating system as a means of identifying potential problem loans, as follows:

Pass

Loans in these categories are performing as expected with low to average risk.

Special Mention

Loans in this category are internally designated by management as “watch loans.” These loans are starting to show signs of potential weakness and are closely monitored by management.

Substandard

Loans in this category are internally designated by management as “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the paying capacity of the obligors or the current net worth of the collateral pledged. Substandard loans present a distinct possibility that the Bank will sustain losses if such weaknesses are not corrected.

Doubtful

Loans classified as doubtful have all the weaknesses inherent in those designated as “substandard” with the added characteristic that the weaknesses may make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.

On an annual basis, or more often if needed, the Bank formally reviews the ratings on commercial loans. In addition, the Bank performs an independent review of a significant portion of the commercial loan portfolio. Management uses the results of the independent review as part of its annual review process.

The following tables present the credit risk profile of the Company's loan portfolio based on risk rating category and year of origination as of June 30, 2026 and December 31, 2025.

	*As of June 30, 2026*
	*Term loans amortized cost basis by origination year*
	*2026*		*2025*		*2024*		*2023*		*2022*		*Prior*		*Revolving loans amortized cost basis*		*Revolving loans converted to term loans amortized cost basis*		*Total*
	(Dollars in thousands)
1-4 family residential
Pass	$	9,097	$	12,233	$	11,408	$	12,305	$	10,113	$	51,525	$	7,422	$	—	$	114,103
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		640		262		1,441		—		68		—		—		2,411
Total 1-4 family residential		9,097		12,873		11,670		13,746		10,113		51,593		7,422		—		116,514
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Multi-family
Pass		602		—		502		—		—		2,671		—		—	$	3,775
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total multi-family		602		—		502		—		—		2,671		—		—		3,775
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Commercial
Pass		—		—		—		160		—		2,796		890		—	$	3,846
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total commercial		—		—		—		160		—		2,796		890		—		3,846
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Construction
Pass		332		1,802		803		83		—		—		—		—	$	3,020
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total construction		332		1,802		803		83		—		—		—		—		3,020
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Consumer
Pass		98		117		30		34		30		3		—		—	$	312
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total consumer		98		117		30		34		30		3		—		—		312
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Total
Pass		10,129		14,152		12,743		12,582		10,143		56,995		8,312		—		125,056
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		640		262		1,441		—		68		—		—		2,411
Total		10,129		14,792		13,005		14,023		10,143		57,063		8,312		—		127,467
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—

	As of December 31, 2025
	Term loans amortized cost basis by origination year
	2025		2024		2023		2022		2021		Prior		Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis		Total
	(Dollars in thousands)
1-4 family residential
Pass	$	16,653	$	13,335	$	16,423	$	10,870	$	16,434	$	37,769	$	6,454	$	—		117,938
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		262		—		—		—		22		—		—		284
Total 1-4 family residential		16,653		13,597		16,423		10,870		16,434		37,791		6,454		—		118,222
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Multi-family
Pass		—		507		—		—		221		2,512		—		—		3,240
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total multi-family		—		507		—		—		221		2,512		—		—		3,240
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Commercial
Pass		—		—		165		—		92		2,834		722		—		3,813
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total commercial		—		—		165		—		92		2,834		722		—		3,813
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Construction
Pass		2,156		1,676		89		—		—		—		—		—		3,921
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total construction		2,156		1,676		89		—		—		—		—		—		3,921
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Consumer
Pass		130		46		47		40		3		2		—		—		268
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total consumer		130		46		47		40		3		2		—		—		268
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Total
Pass		18,939		15,564		16,724		10,910		16,750		43,117		7,176		—		129,180
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		262		—		—		—		22		—		—		284
Total		18,939		15,826		16,724		10,910		16,750		43,139		7,176		—		129,464
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—

The aging of the Bank’s loan portfolio as of June 30, 2026 and December 31, 2025, is as follows:

	*31-89 Days Past Due and Accruing*		*Greater than 90 Days Past Due and Accruing*		*Non-Accrual*		*Total Past Due and Non-Accrual*		*Current*		*Total Loan Balance*
	(Dollars in thousands)
June 30, 2026
1-4 family residential	$	89	$	—	$	2,411	$	2,500	$	114,014	$	116,514
Multi-family		—		—		—		—		3,775		3,775
Commercial		—		—		—		—		3,846		3,846
Construction		407		—		—		407		2,613		3,020
Consumer		—		—		—		—		312		312
Total	$	496	$	—	$	2,411	$	2,907	$	124,560	$	127,467

December 31, 2025
1-4 family residential	$	641	$	—	$	284	$	925	$	117,297	$	118,222
Multi-family		—		—		—		—		3,240		3,240
Commercial		—		—		—		—		3,813		3,813
Construction		—		—		—		—		3,921		3,921
Consumer		—		—		—		—		268		268
Total	$	641	$	—	$	284	$	925	$	128,539	$	129,464

The following table presents the amortized cost basis of loans on nonaccrual status recorded at June 30, 2026 and December 31, 2025. There was no interest recognized on non-accrual loans for the six months ended June 30, 2026 and 2025.

	*June 30, 2026*				*December 31, 2025*				*January 1, 2025*
	*Nonaccrual with no Allowance for Credit Losses*		*Total Nonaccrual*		*Nonaccrual with no Allowance for Credit Losses*		*Total Nonaccrual*		*Nonaccrual with no Allowance for Credit Losses*		*Total Nonaccrual*
	(Dollars in thousands)
First mortgage loans
1-4 family residential	$	2,411	$	2,411	$	284	$	284	$	—	$	—
Multi-family		—		—		—		—		—		—
Commercial		—		—		—		—		—		—
Construction		—		—		—		—		—		—
Consumer loans		—		—		—		—		—		—
Total loans	$	2,411	$	2,411	$	284	$	284	$	—	$	—

The Bank may modify loans to borrowers experiencing financial difficulty by providing modifications to repayment terms; more specifically, modifications to loan interest rates. Management performs an analysis at the time of loan modification. Any reserve required is recorded through a provision to the allowance for credit losses on loans. There were no modifications on loans to borrowers experiencing financial difficulty during the six months ended June 30, 2026 and 2025.