Attached files

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EX-32 - EX-32 - FFBW, Inc.ffbw-20191231xex32.htm
EX-31.2 - EX-31.2 - FFBW, Inc.ffbw-20191231ex3124b398f.htm
EX-31.1 - EX-31.1 - FFBW, Inc.ffbw-20191231ex311ef4fd1.htm
EX-23 - EX-23 - FFBW, Inc.ffbw-20191231xex23.htm
EX-21 - EX-21 - FFBW, Inc.ffbw-20191231ex217c784ad.htm
EX-4.2 - EX-4.2 - FFBW, Inc.ffbw-20191231ex42344d540.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the year ended December 31, 2019.

 

 

OR

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the transition period from                                to                           .

 

Commission file number: 001‑39182

 

FFBW, INC.

(Exact name of registrant as specified in its charter)

 

Maryland

    

37-1962248

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

 

 

 

1360 South Moorland Road

 

53005

Brookfield, Wisconsin

 

 

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (262) 542‑4448

 

Securities registered pursuant to Section 12(b) of the Act:

 

Common stock, par value $0.01 per share

    

The NASDAQ Stock Market, LLC

(Title of each class to be registered)

 

(Name of each exchange on which each class is to be registered)

 

Securities registered pursuant to Section 12(g) of the Act: None

 

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES      NO 

 

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES      NO 

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES      NO

 

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES      NO

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10‑K or any amendment to this Form 10‑K.

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

Non-accelerated filer 

Smaller reporting company

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b‑2 of the Act). YES      NO

 

 

As of March 25, 2020, there were 7,704,875 issued and outstanding shares of the Registrant’s Common Stock. The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, computed by reference to the closing price of the common stock on January 17, 2020 (the first date of trading in the Registrant’s common stock), was approximately $82.8 million.

 

DOCUMENTS INCORPORATED BY REFERENCE:

 

(1) Proxy Statement for the 2020 Annual Meeting of Stockholders of the Registrant (Part III).  

 

 

 

 

TABLE OF CONTENTS

 

ITEM 1. 

BUSINESS

3

 

 

 

ITEM 1A. 

RISK FACTORS

35

 

 

 

ITEM 1B. 

UNRESOLVED STAFF COMMENTS

35

 

 

 

ITEM 2. 

PROPERTIES

36

 

 

 

ITEM 3. 

LEGAL PROCEEDINGS

36

 

 

 

ITEM 4. 

MINE SAFETY DISCLOSURES

36

 

 

 

ITEM 5. 

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

36

 

 

 

ITEM 6. 

SELECTED FINANCIAL DATA

37

 

 

 

ITEM 7. 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

38

 

 

 

ITEM 7A. 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

47

 

 

 

ITEM 8. 

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

47

 

 

 

ITEM 9. 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

47

 

 

 

ITEM 9A. 

CONTROLS AND PROCEDURES

47

 

 

 

ITEM 9B. 

OTHER INFORMATION

48

 

 

 

ITEM 10. 

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

48

 

 

 

ITEM 11. 

EXECUTIVE COMPENSATION

48

 

 

 

ITEM 12. 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

49

 

 

 

ITEM 13. 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

49

 

 

 

ITEM 14. 

PRINCIPAL ACCOUNTANT FEES AND SERVICES

49

 

 

 

ITEM 15. 

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

50

 

 

 

ITEM 16. 

FORM 10 K SUMMARY

51

 

 

 

 

CONSOLIDATED FINANCIAL STATEMENTS

F-2

 

 

2

PART I

ITEM 1.        Business

FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “believe,” “contemplate,” “continue,” “target” and words of similar meaning. These forward-looking statements include, but are not limited to:

Statements of our goals, intentions and expectations;

Statements regarding our business plans, prospects, growth and operating strategies;

Statements regarding the asset quality of our loan and investment portfolios; and

Estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this Annual Report.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

General economic conditions, either nationally or in our market areas, that are worse than expected;

Changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses;

Our ability to access cost-effective funding;

Fluctuations in real estate values and both residential and commercial real estate market conditions;

Demand for loans and deposits in our market area;

Our ability to implement and change our business strategies;

Competition among depository and other financial institutions;

Inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make;

Adverse changes in the securities or secondary mortgage markets;

Changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements, including as a result of Basel III;

The impact of the Dodd-Frank Act and the implementing regulations;

Changes in the quality or composition of our loan or investment portfolios;

Technological changes that may be more difficult or expensive than expected;

The inability of third-party providers to perform as expected;

Our ability to manage market risk, credit risk and operational risk in the current economic environment;

Our ability to enter new markets successfully and capitalize on growth opportunities;

Our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames, and any goodwill charges related thereto;

Changes in consumer spending, borrowing and savings habits;

Changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;

3

Our ability to retain key employees;

Our compensation expense associated with equity allocated or awarded to our employees; and

Changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

BUSINESS OF FFBW, INC.

FFBW, Inc. (the “Company” or “New FFBW”) is a Maryland corporation that was incorporated in September 2019 to become the stock holding company for First Federal Bank of Wisconsin in connection with the conversion of the former FFBW, MHC from a mutual holding company to a stock holding company.  New FFBW is the successor to FFBW, Inc. a federal corporation, (“Old FFBW”), the former stock holding company of First Federal Bank of Wisconsin and majority-owned subsidiary of the former FFBW, MHC.  The conversion was completed effective January 16, 2020. In the conversion, New FFBW sold 4,268,570 shares of common stock at $10.00 per share, for net proceeds of approximately $41.5 million, and issued 3,436,430 shares of common stock in exchange for the shares of common stock of Old FFBW owned by stockholders of Old FFBW, other than FFBW, MHC, as of the effective date of the conversion.  As a result of the conversion, FFBW, MHC and Old FFBW have ceased to exist.

New FFBW conducts its business principally through its wholly owned subsidiary, First Federal Bank of Wisconsin.  Because the conversion was effective after December 31, 2019, the financial information contained in this Annual Report on Form 10-K is the consolidated financial information for Old FFBW, the predecessor of New FFBW.

The Company’s executive offices are located at 1360 South Moorland Road, Brookfield, Wisconsin 53005 and its telephone number is (262) 542-4448. Our website address is www.firstfederalwisconsin.com. Information on this website is not and should not be considered a part of this Annual Report on Form 10-K.  

 

The Company is subject to comprehensive regulation and examination by the Board of Governors of the Federal Reserve System.  At December 31, 2019, we had total assets of $292.2 million, total deposits of $217.3 million and total equity of $61.9. We recorded net income of $1.6 million for the year ended December 31, 2019.

 

The Company is authorized to pursue business activities permitted by applicable laws and regulations, which may include the acquisition of banking and financial services companies. See “Supervision and Regulation – Holding Company Regulation” for a discussion of the activities that are permitted for savings and loan holding companies. We currently have no understandings or agreements to acquire other financial institutions, although we may determine to do so in the future. We may also borrow funds including for reinvestment in First Federal Bank of Wisconsin.

We neither own nor lease any property, but pay a fee to First Federal Bank of Wisconsin for the use of its premises, equipment and furniture. At the present time, we employ only persons who are officers of First Federal Bank of Wisconsin who also serve as officers of the Company. We use the support staff of First Federal Bank of Wisconsin from time to time and pay a fee to First Federal Bank of Wisconsin for the time devoted to the Company by employees of First Federal Bank of Wisconsin. However, these persons are not separately compensated by the Company. The Company may hire additional employees, as appropriate, to the extent it expands its business in the future.

BUSINESS OF FIRST FEDERAL BANK OF WISCONSIN

General

First Federal Bank of Wisconsin is a federally chartered stock savings bank, with its home office in Waukesha, Wisconsin, which is in Waukesha County, located in southeastern Wisconsin approximately 18 miles west of Milwaukee. First Federal Bank of Wisconsin was originally organized in 1922, and has operated continuously in the Milwaukee metropolitan area since that time. In May 2014, we merged with Bay View Federal Savings and Loan

4

Association (“Bay View Federal”), a federal mutual saving association located in Milwaukee, Wisconsin, with approximately $135 million in assets as of the May 17, 2014 closing date of the merger. In the merger, Bay View Federal’s sole office located in the Bay View neighborhood of Milwaukee became a branch office of First Federal Bank of Wisconsin, thereby expanding our presence into Milwaukee County.

From our founding in 1922 until 2006, we operated as a traditional thrift institution, offering primarily residential mortgage loans and savings accounts. Beginning in 2006, we expanded our loan operations and began offering commercial products. Our commercial loan offerings have increased significantly in the last decade, including through our merger in 2014 with Bay View Federal.

In July 2016, we hired our current president and chief executive officer, Edward H. Schaefer, and since this time we have conducted an extensive review of our credit, underwriting, information technology and compliance operations. Under the leadership of Mr. Schaefer, we believe that we have significantly upgraded our loan operations, policies, procedures and controls. Among other areas, we have enhanced our commercial real estate and commercial and industrial lending infrastructure and have recently added a new senior vice president of commercial lending. Additionally, consistent with our strategy to grow our commercial loan operations, we have enhanced our suite of deposit products in order to accommodate business customers, and thereby grow our core deposits.

Subject to market conditions, we expect to continue to increase our focus on originating commercial real estate and commercial and industrial loans to continue to diversify our overall loan portfolio, increase the overall yield earned on our loans and assist in managing interest rate risk. We also invest in securities, which have historically consisted of mortgage-backed securities issued by U.S. government sponsored enterprises, municipal securities, corporate debt securities and U.S. government and agency securities. We offer a variety of deposit accounts, including checking accounts, savings accounts, health savings accounts and certificate of deposit accounts. Additionally, we have used advances from the Federal Home Loan Bank of Chicago and brokered certificates of deposit to fund our operations.

In October 2017, we consummated our reorganization in to a mutual holding company structure whereby First Federal Bank of Wisconsin became a stock bank and the wholly owned subsidiary of FFBW, Inc. Concurrently with this reorganization, FFBW, Inc. sold 44.6% of its stock to the general public, including First Federal Bank of Wisconsin’s employee stock ownership plan, and issued 55.0% of its stock to FFBW, MHC, our top tier mutual holding company. Additionally, as part of the reorganization, we established a charitable foundation called FFBW Community Foundation and funded it with $250,000 in cash and 25,000 shares. The purpose of this foundation is to make contributions to support various charitable organizations operating in our community now and in the future.

In January 2020, we consummated the mutual to stock conversion of FFBW, MHC. At the effective time of the second-step conversion, FFBW, MHC and Old FFBW ceased to exist and First Federal Bank of Wisconsin became the wholly owned subsidiary of New FFBW.

Our website address is www.firstfederalwisconsin.com. The Company makes available, through links on our website, its annual report on Form 10‑K, quarterly reports on Form 10‑Q, current reports on Form 8‑K, amendments to those reports filed or furnished pursuant to Section 13(a) of 15(d) of the Exchange Act, and statements of ownership on Forms 3, 4, 5, and 8. Investors are encouraged to access these reports and other information about our business on our website. The information found on the Company’s website is not incorporated by reference to this or any other report the Company files or furnishes to the SEC.

Market Area

We conduct our operations from our three full-service banking offices in Waukesha County, Wisconsin, which is located immediately west of Milwaukee, and our office in the Bay View neighborhood on Milwaukee’s south side. We consider our primary lending market area to be southeastern Wisconsin, however, we occasionally make loans secured by properties located outside of our primary lending market, usually to borrowers with whom we have an existing relationship and who have a presence within our primary market.

5

Waukesha County contains a diverse cross section of employment sectors, with a mix of services, manufacturing, wholesale/retail trade, federal and local government, health care facilities and finance-related employment. Waukesha County had an estimated population of 400,000 as of July 2017. The Bay View neighborhood of Milwaukee is a more urban community located in the southern portion of the city of Milwaukee.

Waukesha County is primarily a suburban community and is the second wealthiest county in Wisconsin. According to the United States Census, from 2014 through 2018:

the median household income in Waukesha County was $84,331 compared to a median household income for Wisconsin of $59,209;

The median home value was $272,100, compared to $173,600 in Wisconsin;

Approximately 43.8% of the population of Waukesha County held a bachelor’s degree or higher, compared to 29.5% of Wisconsin; and

Approximately 5.0% of the population of Waukesha County had incomes below the poverty level, compared to 11.0% of Wisconsin.

Competition

We face significant competition within our market both in making loans and attracting deposits. Our market area has a high concentration of financial institutions, including large money center and regional banks, community banks and credit unions. Some of our competitors offer products and services that we currently do not offer, such as trust services and private banking. Our competition for loans and deposits comes principally from commercial banks, savings institutions, mortgage banking firms, consumer finance companies and credit unions. We face additional competition for deposits from short-term money market funds, brokerage firms, mutual funds and insurance companies.

As of June 30, 2019 (the latest date for which information is available), our market share was 0.99% of total deposits in Waukesha County, Wisconsin, making us the 21st largest out of 35 banks in Waukesha County. Our market share was 0.12% of total deposits in Milwaukee County, Wisconsin, making us the 23rd largest out of 28 banks in Milwaukee County.

Lending Activities

Historically, we focused on originating one-to-four family owner-occupied residential real estate loans, one-to-four family investor-owned residential real estate loans, commercial real estate loans and multifamily loans. In recent years and going-forward, subject to market conditions and our asset-liability analysis, we expect to continue to increase our focus on originating commercial real estate and commercial and industrial loans, in an ongoing effort to diversify our overall loan portfolio and increase the overall yield earned on our loans.

 

Since 2016, we have hired a new president and chief executive officer who has extensive commercial lending experience, as well as a new senior vice president of lending and four new loan officers, including two commercial loan officers. We anticipate hiring additional loan officers, including experienced commercial and industrial lenders, following the conversion and offering. Additionally, we continually enhance our underwriting policies and procedures. We believe that these enhanced policies and procedures will further our business strategy of growing our commercial real estate and commercial and industrial loan portfolios while maintaining a strong credit and underwriting culture.

 

We sell the majority of the fixed-rate conforming and eligible jumbo one-to-four family owner-occupied residential real estate loans that we originate, generally on a servicing-released basis, with limited or no recourse, while retaining non-eligible jumbo fixed-rate and adjustable-rate one-to-four family owner-occupied residential real estate loans in order to manage the duration and time to repricing of our loan portfolio.

 

6

Loan Portfolio Composition. The following table sets forth the composition of our loan portfolio, by type of loan at the dates indicated, excluding loans held for sale of $200,000, $679,000, $109,000, $592,000 and $636,000 at December 31, 2019,  2018,  2017,  2016,  2015, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 

 

 

 

2019

 

2018

 

2017

 

 

    

Amount

    

Percent

    

Amount

    

Percent

    

Amount

    

Percent

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development

 

$

18,222

 

9.5

%

$

7,801

 

3.9

%

$

1,498

 

0.9

%

Real estate

 

 

68,621

 

35.8

 

 

69,425

 

34.6

 

 

53,202

 

30.7

 

Commercial and industrial

 

 

13,681

 

7.2

 

 

13,142

 

6.4

 

 

10,135

 

5.9

 

Residential real estate and consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One-to-four family owner-occupied

 

 

29,380

 

15.3

 

 

41,018

 

20.4

 

 

41,446

 

23.9

 

One-to-four family investor-owned

 

 

28,077

 

14.6

 

 

32,312

 

16.1

 

 

33,658

 

19.4

 

Multifamily

 

 

29,531

 

15.4

 

 

34,467

 

17.2

 

 

31,677

 

18.3

 

Consumer

 

 

4,230

 

2.2

 

 

2,733

 

1.4

 

 

1,613

 

0.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans

 

 

191,742

 

100.0

%

 

200,898

 

100.0

%

 

173,229

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred loan costs (fees)

 

 

(187)

 

 

 

 

(86)

 

 

 

 

(74)

 

 

 

Allowance for loan losses

 

 

(2,264)

 

 

 

 

(2,118)

 

 

 

 

(1,800)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans, net

 

$

189,291

 

 

 

$

198,694

 

 

 

$

171,355

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 

 

 

 

2016

 

2015

 

 

    

Amount

    

Percent

    

Amount

    

Percent

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

Development

 

$

2,526

 

1.5

%

$

4,340

 

2.5

%

Real estate

 

 

42,276

 

25.1

 

 

42,213

 

24.3

 

Commercial and industrial

 

 

7,617

 

4.6

 

 

8,972

 

5.1

 

Residential real estate and consumer:

 

 

 

 

 

 

 

 

 

 

 

One-to-four family owner-occupied

 

 

48,001

 

28.5

 

 

55,364

 

31.9

 

One-to-four family investor-owned

 

 

34,633

 

20.5

 

 

33,353

 

19.2

 

Multifamily

 

 

31,905

 

18.9

 

 

26,963

 

15.5

 

Consumer

 

 

1,582

 

0.9

 

 

2,555

 

1.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans

 

 

168,540

 

100.0

%

 

173,760

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Deferred loan costs (fees)

 

 

(88)

 

 

 

 

(77)

 

 

 

Allowance for loan losses

 

 

(1,478)

 

 

 

 

(1,551)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans, net

 

$

166,974

 

 

 

$

172,132

 

 

 

 

7

Loan Portfolio Maturities. The following table summarizes the scheduled repayments of our loan portfolio at December 31, 2019. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in the year ending December 31, 2019. Maturities are based on the final contractual payment date and do not reflect the impact of prepayments and scheduled principal amortization.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One-to-four

 

One-to-four

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

family

 

family

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

Commercial

 

and

 

owner-

 

investor-

 

 

 

 

 

 

 

 

 

 

 

development

 

real estate

 

industrial

 

occupied

 

owned

 

Multifamily

 

Consumer

 

Total

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Due During the Years Ending December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

$

4,873

 

$

11,394

 

$

5,069

 

$

917

 

$

4,738

 

$

1,978

 

$

428

 

$

29,397

2021

 

 

1,124

 

 

5,773

 

 

1,442

 

 

1,987

 

 

2,379

 

 

1,986

 

 

98

 

 

14,789

2022

 

 

2,010

 

 

8,905

 

 

2,722

 

 

183

 

 

2,612

 

 

5,042

 

 

11

 

 

21,485

2023 to 2024

 

 

6,581

 

 

30,666

 

 

3,437

 

 

724

 

 

5,238

 

 

11,105

 

 

555

 

 

58,306

2025 to 2029

 

 

3,634

 

 

6,116

 

 

1,011

 

 

1,582

 

 

4,219

 

 

7,715

 

 

3,138

 

 

27,415

2030 to 2034

 

 

 —

 

 

2,666

 

 

 —

 

 

6,080

 

 

2,529

 

 

662

 

 

 —

 

 

11,937

2035 and beyond

 

 

 —

 

 

3,101

 

 

 —

 

 

17,907

 

 

6,362

 

 

1,043

 

 

 —

 

 

28,413

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

18,222

 

$

68,621

 

$

13,681

 

$

29,380

 

$

28,077

 

$

29,531

 

$

4,230

 

$

191,742

 

The following table sets forth the fixed- and adjustable-rate loans at December 31, 2019 that are contractually due after December 31, 2020.

 

 

 

 

 

 

 

 

 

 

 

 

 

Due After December 31, 2020

 

    

Fixed

    

Adjustable

    

Total

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

Development

 

$

13,349

 

$

 —

 

$

13,349

Real estate

 

 

52,644

 

 

4,583

 

 

57,227

Commercial and industrial

 

 

8,420

 

 

192

 

 

8,612

Residential real estate and consumer:

 

 

 

 

 

 

 

 

 

One-to-four family owner-occupied

 

 

9,703

 

 

18,760

 

 

28,463

One-to-four family investor-owned

 

 

15,717

 

 

7,622

 

 

23,339

Multifamily

 

 

25,819

 

 

1,734

 

 

27,553

Consumer

 

 

871

 

 

2,931

 

 

3,802

Total

 

$

126,523

 

$

35,822

 

$

162,345

 

One-to-Four Family Owner-Occupied Residential Real Estate Lending. At December 31, 2019, we had $29.4 million of loans secured by one-to-four family owner-occupied residential real estate, representing 15.3% of our total loan portfolio. In addition, at December 31, 2019, we had $200,000 of residential mortgages held for sale. We originate both fixed-rate and adjustable-rate one-to-four family residential real estate loans. At December 31, 2019,  72.9% of our one-to-four family owner-occupied residential real estate loans were fixed-rate loans, and 27.1% of such loans were adjustable-rate loans.

8

Our fixed-rate one-to-four family residential real estate loans typically have terms of 10 to 15 years and are generally underwritten according to Fannie Mae guidelines when the loan balance meets such guidelines, and we refer to loans that conform to such guidelines as “conforming loans.” We generally originate both fixed- and adjustable-rate mortgage loans in amounts up to the maximum conforming loan limits as established by the Federal Housing Finance Agency, which as of December 31, 2019 was $484,350 for single-family homes in our market area. We typically sell, servicing-released, our conforming and eligible jumbo fixed-rate one-to-four family owner-occupied residential real estate loans. We also originate loans above the lending limit for conforming loans, which are referred to as “jumbo loans” that we retain in our portfolio. Jumbo loans that we originate typically have 15 to 30 year terms and maximum loan-to-value ratios of 80%. At December 31, 2019, we had $7.2 million in jumbo loans, which represented 24.4% of our one-to-four family owner-occupied residential real estate loans. Our average loan size for jumbo loans was $798,000 at December 31, 2019. Virtually all of our one-to-four family residential real estate loans are secured by properties located in Waukesha County or Milwaukee County, Wisconsin.

We generally limit the loan-to-value ratios of our mortgage loans without private mortgage insurance to 85% of the sales price or appraised value, whichever is lower. Loans where the borrower obtains private mortgage insurance may be made with loan-to-value ratios up to 100%.

Our adjustable-rate one-to-four family residential real estate loans carry terms to maturity ranging from 15 to 30 years and generally have fixed rates for initial terms of five years, although we also offer terms of three or seven years, and adjust annually thereafter at a margin, which in recent years has been tied to a margin above the 12‑month Treasury rate. The maximum amount by which the interest rate may be increased or decreased is generally 2% per adjustment period, with a lifetime interest rate cap of generally 6% over the initial interest rate of the loan and a rate floor. We typically hold in our loan portfolio our adjustable-rate one-to-four family residential real estate loans.

Although adjustable-rate mortgage loans may reduce to an extent our vulnerability to changes in market interest rates because they periodically re-price, as interest rates increase the required payments due from the borrower also increase (subject to rate caps), increasing the potential for default by the borrower. At the same time, the ability of the borrower to repay the loan and the marketability of the underlying collateral may be adversely affected by higher interest rates. Upward adjustments of the contractual interest rate are also limited by our maximum periodic and lifetime rate adjustments. Moreover, the interest rates on most of our adjustable-rate loans do not adjust for up to five years after origination. As a result, the effectiveness of adjustable-rate mortgage loans in compensating for changes in general interest rates may be limited during periods of rapidly rising interest rates.

We do not offer “interest only” mortgage loans on permanent one-to-four family residential real estate loans (where the borrower pays interest for an initial period, after which the loan converts to a fully amortizing loan). We also do not offer loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan. We do not have a “subprime lending” program for one-to-four family residential real estate loans (i.e., loans that generally target borrowers with weakened credit histories).

Generally, residential mortgage loans that we originate include “due-on-sale” clauses, which give us the right to declare a loan immediately due and payable in the event that, among other things, the borrower sells or otherwise disposes of the real property subject to the mortgage and the loan is not repaid. All borrowers are required to obtain title insurance for the benefit of First Federal Bank of Wisconsin. We also require homeowner’s insurance and fire and casualty insurance and, where circumstances warrant, flood insurance on properties securing real estate loans.

One-to-Four Family Investor-Owned Residential Real Estate Lending. At December 31, 2019, we had $28.1 million of loans secured by one-to-four family investor-owned residential real estate, representing 14.6% of our total loan portfolio. One-to-four family investor-owned residential real estate loans are underwritten pursuant to our commercial lending underwriting criteria. Generally, we require personal guarantees from the borrowers on these properties, and we will not make loans in excess of 80% loan to value on non-owner-occupied properties.

9

We believe that there is a greater credit risk inherent in investor-owned residential properties than in owner-occupied one-to-four family residential real estate loans since, similar to commercial real estate and multifamily loans, the repayment of these loans may depend, in part, on the successful management of the property and/or the borrower’s ability to lease the units of the property. In addition, the physical condition of investor-owned properties is often below that of owner-occupied properties due to lax property maintenance standards, which has a negative impact on the value of the collateral properties.

Multifamily Residential Real Estate Loans. At December 31, 2019, multifamily residential real estate loans were $29.5 million, or 15.4%, of our total loan portfolio. Our multifamily residential real estate loans are generally secured by properties consisting of five or more rental units in our market area. In addition to originating these loans, we also purchase and participate in multifamily residential real estate loans from other financial institutions. Such loans are independently underwritten according to our policies and require satisfactory documentation review by our legal counsel before we will purchase or participate in such loans. We believe our enhanced credit underwriting and loan administration policies and procedures should address these risks.

We originate a variety of adjustable-rate multifamily residential real estate loans with terms and amortization periods generally up to 20 years, which may include balloon loans. Interest rates and payments on our adjustable-rate generally are indexed to the prime rate plus a margin. We generally include pre-payment penalties on multi-family residential real estate loans we originate.

In underwriting multifamily residential real estate loans, we consider a number of factors, which include the projected net cash flow to the loan’s debt service requirement (generally requiring a minimum of 115%), the age and condition of the collateral, the financial resources and income level of the borrower and the borrower’s experience in owning or managing similar properties. Multifamily residential real estate loans are generally originated in amounts up to 75% of the appraised value or the purchase price of the property securing the loan, whichever is lower. When circumstances warrant, guarantees are obtained from multifamily residential real estate customers. In addition, the borrower’s and guarantor’s financial information on such loans is monitored on an ongoing basis by requiring periodic financial statement updates.

If we foreclose on a multifamily residential real estate loan, the marketing and liquidation period to convert the real estate asset to cash can be a lengthy process with substantial holding costs. In addition, vacancies, deferred maintenance, repairs and market stigma can result in prospective buyers expecting sale price concessions to offset their real or perceived economic losses for the time it takes them to return the property to profitability. Depending on the individual circumstances, initial charge-offs and subsequent losses on commercial real estate loans can be unpredictable and substantial.

At December 31, 2019, our largest multifamily residential real estate loan had an outstanding balance of $4.2 million and was secured by an apartment complex. At December 31, 2019, this loan was performing in accordance with its repayment terms.

Commercial Real Estate Lending. Consistent with our strategy to diversify our loan portfolio and increase our yield, we are focused on increasing our origination of commercial real estate loans. At December 31, 2019, we had $68.6 million in commercial real estate loans, representing 35.8% of our total loan portfolio. Our commercial real estate loans are generally secured by office and industrial buildings, warehouses, small retail facilities and restaurants and other special purpose commercial properties, primarily in southeastern Wisconsin.

Our commercial real estate loans generally have initial terms of 5 years and amortization terms of 5  to 20 years, with a balloon payment at the end of the initial term, and may be fixed-rate or adjustable-rate loans. Our adjustable-rate commercial real estate loans are generally tied to a margin above the prime rate. The maximum loan-to-value ratio of our commercial real estate loans is generally 80% of the lower of cost or appraised value of the property securing the loan.

At December 31, 2019, the average loan size of our outstanding commercial real estate loans was $647,000, and the largest of such loans was a $4.2 million loan secured by a hotel. This loan was performing in accordance with its repayment terms at December 31, 2019.

10

We consider a number of factors in originating commercial real estate loans. We evaluate the qualifications and financial condition of the borrower, including project-level and global cash flows, credit history, and management expertise, as well as the value and condition of the property securing the loan. When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in owning or managing similar property and the borrower’s payment history with us and other financial institutions. In evaluating the property securing the loan, the factors we consider include the net operating income of the mortgaged property before debt service and depreciation, the ratio of the loan amount to the appraised value of the mortgaged property and the debt service coverage ratio (the ratio of net operating income to debt service). We generally require a debt service ratio of at least 1.15x. All commercial real estate loans of $250,000 or more are appraised by outside independent appraisers.

Personal guarantees are generally obtained from the principals of commercial real estate loans. We require property and casualty insurance and flood insurance if the property is determined to be in a flood zone area.

Commercial real estate loans entail greater credit risks compared to one-to-four family owner-occupied residential real estate loans because they typically involve larger loan balances concentrated with single borrowers or groups of related borrowers. In addition, the payment of loans secured by income-producing properties typically depends on the successful operation of the property, as repayment of the loan generally is dependent, in large part, on sufficient income from the property to cover operating expenses and debt service. Changes in economic conditions that are not in the control of the borrower or lender could affect the value of the collateral for the loan or the future cash flow of the property. Additionally, any decline in real estate values may be more pronounced for commercial real estate than residential properties.

Commercial and Industrial Lending. At December 31, 2019, we had $13.7 million of commercial and industrial loans, representing 7.2% of our total loan portfolio. We originate commercial and industrial loans and lines of credit secured by non-real estate business assets. These loans are generally originated to small businesses in our primary market area. Our commercial and industrial loans are generally used by the borrowers for working capital purposes or for acquiring equipment, inventory or furniture, and are primarily secured by business assets other than real estate, such as business equipment, inventory and accounts receivable. Our commercial and industrial loans are generally term loans with terms of three to seven years and lines of credit with terms of one to two years, with a target loan size of $500,000 to $5.0 million. Our commercial and industrial lines of credit are generally priced on an adjustable-rate basis tied to the prime rate. Term loans are generally priced at a spread over the comparable term Federal Home Loan Bank of Chicago rate. We generally obtain personal guarantees with commercial and industrial loans.

At December 31, 2019, the average loan size of our outstanding commercial and industrial loans was $187,000, and our largest outstanding commercial and industrial loan balance was a $1.5 million loan to a graphics company. This loan was performing in accordance with its repayment terms at December 31, 2019.

We typically originate commercial and industrial loans on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business, the experience and stability of the borrower’s management team, earnings projections and their underlying assumptions, and the value and marketability of any collateral securing the loan. As a result, the availability of funds for the repayment of commercial and industrial loans may be substantially dependent on the success of the business itself and the general economic environment in our market area. Therefore, commercial and industrial loans that we originate have greater credit risk than one-to-four family residential real estate loans. In addition, commercial and industrial loans often result in larger outstanding balances to single borrowers, or related groups of borrowers, and also generally require substantially greater evaluation and oversight efforts.

As commercial and industrial loans typically help to drive deposit growth, we are increasing our focus on growing this segment of the loan portfolio. This will also improve diversification and increase loan portfolio yield.

11

Commercial Development Loans. At December 31, 2019, we had $18.2 million, or 9.5% of our total loan portfolio, in commercial development loans. Our commercial development loans may be made for the construction and development of both one-to-four family residential real estate and commercial real estate projects. Our commercial development loans generally have initial terms of up to 12 months, during which the borrower pays interest only. Upon completion of construction, these loans convert to permanent loans. Our commercial development loans are generally underwritten pursuant to the same guidelines used for originating permanent commercial real estate loans, and have rates and terms comparable to commercial real estate loans that we originate. The maximum loan-to-value of our commercial construction loans is 65% of the lesser of the appraised value of the completed property or the contract price for the land plus the value of the improvements. Before making a commitment to fund a construction loan, we require detailed cost estimates to complete the project and an appraisal of the property by an independent licensed appraiser. Each property is inspected before disbursement of funds during the term of the construction loan. Loan proceeds are disbursed after inspection based on the percentage of completion method. All borrowers are required to obtain title insurance, property and casualty insurance, and, if the property is determined to be located in a flood zone area, flood insurance. At December 31, 2019, the unadvanced portion of total commercial development loans totaled $6.2 million. At December 31, 2019, our largest commercial development loan had a balance of $3.7 million and was secured by a retail development project and was performing in accordance with its repayment terms.

Commercial development financing generally involves greater credit risk than long-term financing on improved, owner-occupied real estate. Risk of loss on a commercial development loan depends largely upon the accuracy of the initial estimate of the value of the property at completion of construction compared to the estimated cost (including interest) of construction and other assumptions. If the estimate of construction cost is inaccurate, we may be required to advance additional funds beyond the amount originally committed in order to protect the value of the property. Moreover, if the estimated value of the completed project is inaccurate, the borrower may hold a property with a value that is insufficient to assure full repayment of the construction loan upon the sale of the property. Commercial development loans also expose us to the risk that improvements will not be completed on time in accordance with specifications and projected costs. In addition, the ultimate sale or rental of the property may not occur as anticipated.

Consumer Lending. To a much lesser extent, we offer a variety of consumer loans to individuals who reside or work in our market area, including home equity lines of credit, new and used automobile loans, boat loans, recreational vehicle loans and loans secured by certificates of deposit. At December 31, 2019, our consumer loan portfolio totaled $4.2 million, or 2.2% of our total loan portfolio. At December 31, 2019, we had no unsecured consumer loans.

Consumer loans generally have shorter terms to maturity, which reduces our exposure to changes in interest rates. In addition, management believes that offering consumer loan products helps to expand and create stronger ties to our existing customer base by increasing the number of customer relationships and providing cross-marketing opportunities.

Originations, Sales and Purchases of Loans

Most of our loan originations are generated by our loan personnel operating at our banking office locations. While we originate both fixed-rate and adjustable-rate loans, our ability to generate each type of loan depends upon relative borrower demand and the pricing levels as set in the local marketplace by competing banks, thrifts, credit unions, and mortgage banking companies. Our volume of real estate loan originations is influenced significantly by market interest rates, and, accordingly, the volume of our real estate loan originations can vary from period to period.

We consider our balance sheet as well as market conditions on an ongoing basis in making decisions as to whether to hold loans we originate for investment or to sell such loans to investors, choosing the strategy that is most advantageous to us from a profitability and risk management standpoint. For the years ended December 31, 2019 and 2018, we sold $19.1 million and $13.0 million of one-to-four family owner-occupied residential real estate loans. Subject to market and economic conditions, management intends to continue this sales activity in future periods to generate gain on sale income.

12

From time to time, we may purchase loan participations secured by properties within and outside of our primary lending market area in which we are not the lead lender. In these circumstances, we follow our customary loan underwriting and approval policies. At December 31, 2019, we had eight loans with an aggregate balance of $18.4 million in which we were not the lead lender, all of which were performing in accordance with their original repayment terms. We also have participated out portions of loans that exceeded our loans-to-one borrower legal lending limit and for risk diversification. At December 31, 2019, we had participated out portions of six loans with an aggregate amount of $3.0 million. Historically, we have not purchased whole loans, however, pursuant to our growth strategy, we may purchase whole loans in the future.

The following table sets forth our loan origination, purchase, sale and principal repayment activity during the periods indicated.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31, 

 

    

2019

    

2018

    

2017

    

2016

    

2015

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans, including loans held for sale, at beginning of period

 

$

201,577

 

$

173,338

 

$

169,132

 

$

174,396

 

$

171,124

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans originated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial development

 

 

7,987

 

 

4,332

 

 

2,480

 

 

1,873

 

 

832

Commercial real estate

 

 

12,172

 

 

12,635

 

 

23,892

 

 

9,011

 

 

16,784

Commercial and industrial

 

 

5,899

 

 

6,434

 

 

3,904

 

 

2,637

 

 

2,582

Residential one-to-four family owner-occupied

 

 

24,819

 

 

30,461

 

 

30,742

 

 

33,688

 

 

26,885

Residential one-to-four family investor-owned

 

 

3,287

 

 

3,580

 

 

4,795

 

 

5,783

 

 

6,212

Multifamily

 

 

4,230

 

 

10,455

 

 

8,415

 

 

5,380

 

 

2,340

Consumer

 

 

456

 

 

781

 

 

368

 

 

76

 

 

70

Total loans originated

 

 

58,850

 

 

68,678

 

 

74,596

 

 

58,448

 

 

55,705

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans purchased:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial development

 

 

2,216

 

 

 —

 

 

4,000

 

 

 —

 

 

 —

Commercial real estate

 

 

 —

 

 

5,327

 

 

418

 

 

1,975

 

 

1,890

Commercial and industrial

 

 

606

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Multifamily

 

 

 —

 

 

 —

 

 

 —

 

 

4,000

 

 

 —

Consumer

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Total loans purchased

 

 

2,822

 

 

5,327

 

 

4,418

 

 

5,975

 

 

1,890

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans sold:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(3,529)

Residential one-to-four family owner-occupied

 

 

(19,092)

 

 

(13,003)

 

 

(14,440)

 

 

(20,175)

 

 

(14,434)

Total loans sold

 

 

(19,092)

 

 

(13,003)

 

 

(14,440)

 

 

(20,175)

 

 

(17,963)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal repayments

 

 

(52,215)

 

 

(32,763)

 

 

(60,368)

 

 

(49,512)

 

 

(36,360)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan activity

 

 

(9,635)

 

 

27,669

 

 

4,689

 

 

(5,220)

 

 

2,636

Total loans, including loans held for sale, at end of period

 

$

191,942

 

$

201,577

 

$

173,338

 

$

169,132

 

$

174,396

 

13

Loan Approval Procedures and Authority

Pursuant to federal law, the aggregate amount of loans that First Federal Bank of Wisconsin is permitted to make to any one borrower or a group of related borrowers is generally limited to 15% of First Federal Bank of Wisconsin’s unimpaired capital and surplus (25% if the amount in excess of 15% is secured by “readily marketable collateral” or 30% for certain residential development loans).  At December 31, 2019, based on the 15% limitation, First Federal Bank of Wisconsin’s loans-to-one-borrower limit was approximately $7.9 million.  On the same date, First Federal Bank of Wisconsin had no borrowers with outstanding balances in excess of this amount. At December 31, 2019, our largest loan relationship with one borrower was for $7.1 million, which was secured by commercial real estate, and the underlying loans were performing in accordance with their repayment terms on that date.

Our lending is subject to written underwriting standards and origination procedures.  Decisions on loan applications are made on the basis of detailed applications submitted by the prospective borrower, credit histories that we obtain, and property valuations (consistent with our appraisal policy) prepared by outside independent licensed appraisers approved by our board of directors.  The loan applications are designed primarily to determine the borrower’s ability to repay the requested loan, and the more significant items on the application are verified through use of credit reports, bank statements and tax returns.

All loan approval amounts are based on the aggregate loans, including total balances of outstanding loans and the proposed loan to the individual borrower and any related entity. Our president and chief executive officer has individual authorization to approve loans up to $2.0 million.  Our senior vice president of commercial lending has individual authorization to approve loans up to $1.0 million.  Our Officers Loan Committee, which consists of our president and chief executive officer, senior vice president of commercial lending, and all loan officers, can approve loans up to $3.0 million in the aggregate.  Our Board Credit Committee, which consists of our president and chief executive officer and three outside directors can approve loans up to $5.0 million. Loans in excess of $5.0 million require the approval of our full board of directors.

Generally, we require title insurance or abstracts on our mortgage loans as well as fire and extended coverage casualty insurance in amounts at least equal to the principal amount of the loan or the value of improvements on the property, depending on the type of loan.

Delinquencies and Non-Performing Assets

Delinquency Procedures. When a loan payment becomes 15 days past due, we contact the customer by mailing a late notice, and loan officers may contact their customers. If a loan payment becomes 30 days past due, we mail an additional late notice and a loan-specific letter written by a collection representative, and we also place telephone calls to the borrower. These loan collection efforts continue until a loan becomes 90 days past due, at which point we would refer the loan for foreclosure proceedings unless management determines that it is in the best interest of First Federal Bank of Wisconsin to work further with the borrower to arrange a workout plan. The foreclosure process would begin when a loan becomes 120 days delinquent. From time to time we may accept deeds in lieu of foreclosure.

Loans Past Due and Nonperforming Assets.  Loans are reviewed on a regular basis. Management determines that a loan is impaired or nonperforming when it is probable at least a portion of the loan will not be collected in accordance with the original terms due to a deterioration in the financial condition of the borrower or the value of the underlying collateral if the loan is collateral dependent.  When a loan is determined to be impaired, the measurement of the loan in the allowance for loan losses is based on present value of expected future cash flows, except that all collateral-dependent loans are measured for impairment based on the fair value of the collateral. Non-accrual loans are loans for which collectability is questionable and, therefore, interest on such loans will no longer be recognized on an accrual basis. All loans that become 90 days or more delinquent are placed on non-accrual status unless the loan is well secured and in the process of collection. When loans are placed on non-accrual status, unpaid accrued interest is fully reversed, and further income is recognized only to the extent received on a cash basis or cost recovery method.

14

When we acquire real estate as a result of foreclosure, the real estate is classified as foreclosed assets.  Foreclosed assets are recorded at the lower of carrying amount or fair value, less estimated costs to sell. Soon after acquisition, we order a new appraisal to determine the current market value of the property. Any excess of the recorded value of the loan satisfied over the market value of the property is charged against the allowance for loan losses, or, if the existing allowance is inadequate, charged to expense, in either case during the applicable period of such determination. After acquisition, all costs incurred in maintaining the property are expensed.  Costs relating to the development and improvement of the property, however, are capitalized to the extent of estimated fair value less estimated costs to sell.

Delinquent Loans. The following table sets forth our loan delinquencies by type, by amount and by percentage of type at the dates indicated.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans Delinquent For

    

 

    

 

 

 

 

30-89 Days

 

90 Days and Over

 

Total

 

    

Number

    

Amount

    

Number

    

Amount

    

Number

    

Amount

 

 

(Dollars in thousands)

At December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development

 

 —

 

$

 —

 

 —

 

$

 —

 

 —

 

$

 —

Real estate

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Commercial and industrial

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Residential real estate and consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One-to-four family owner-occupied

 

 —

 

 

 —

 

 1

 

 

346

 

 1

 

 

346

One-to-four family investor-owned

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Multifamily

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Consumer

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Total

 

 —

 

$

 —

 

 1

 

$

346

 

 1

 

$

346

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development

 

 —

 

$

 —

 

 —

 

$

 —

 

 —

 

$

 —

Real estate

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Commercial and industrial

 

 1

 

 

66

 

 —

 

 

 —

 

 1

 

 

66

Residential real estate and consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One-to-four family owner-occupied

 

 1

 

 

 5

 

 —

 

 

 —

 

 1

 

 

 5

One-to-four family investor-owned

 

 1

 

 

243

 

 —

 

 

 —

 

 1

 

 

243

Multifamily

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Consumer

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Total

 

 3

 

$

314

 

 —

 

$

 —

 

 3

 

$

314

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development