Note 5 - Loans Receivable | 9 Months Ended |
Sep. 30, 2013 |
Receivables [Abstract] | ' |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | ' |
5. LOANS RECEIVABLE |
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Loans receivable consisted of the following at September 30, 2013 and December 31, 2012 (in thousands): |
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| | September 30, | | | December 31, | | | | | | | | | | | | | | | | | |
2013 | 2012 | | | | | | | | | | | | | | | | |
Real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family residential | | $ | 134,341 | | | $ | 157,936 | | | | | | | | | | | | | | | | | |
Multifamily residential | | | 25,641 | | | | 20,790 | | | | | | | | | | | | | | | | | |
Nonfarm nonresidential | | | 161,434 | | | | 138,014 | | | | | | | | | | | | | | | | | |
Construction and land development | | | 18,372 | | | | 14,551 | | | | | | | | | | | | | | | | | |
Commercial | | | 17,414 | | | | 16,083 | | | | | | | | | | | | | | | | | |
Consumer | | | 4,827 | | | | 5,818 | | | | | | | | | | | | | | | | | |
Total loans receivable | | | 362,029 | | | | 353,192 | | | | | | | | | | | | | | | | | |
Unearned discounts and net deferred loan costs | | | (132 | ) | | | (188 | ) | | | | | | | | | | | | | | | | |
Allowance for loan and lease losses | | | (13,078 | ) | | | (15,676 | ) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Loans receivable—net | | $ | 348,819 | | | $ | 337,328 | | | | | | | | | | | | | | | | | |
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Mortgage loans serviced for others are not included in the accompanying consolidated statements of financial condition. The unpaid principal balances of such loans at September 30, 2013 and December 31, 2012 were $12.3 million and $8.7 million, respectively. Servicing loans for others generally consists of collecting payments, maintaining escrow accounts, if applicable, disbursing payments to investors, and foreclosure processing. Servicing income for the three and nine months ended September 30, 2013 and 2012 was not material. |
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As of September 30, 2013 and December 31, 2012, qualifying loans collateralized by first lien one- to four-family mortgages with balances totaling approximately $53.9 million and $67.3 million, respectively, were held in custody by the Federal Home Loan Bank of Dallas (“FHLB”) and were pledged for outstanding advances or available for future advances. |
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The FHLB has custody and endorsement of the loans that collateralize the Bank’s outstanding borrowings with the FHLB. Qualifying loans (i) must not be 90 days or more past due; (ii) must not have been in default within the most recent twelve-month period, unless such default has been cured in a manner acceptable to the FHLB; (iii) must relate to real property that is covered by fire and hazard insurance in an amount at least sufficient to discharge the mortgage loan in case of loss and as to which all real estate taxes are current; (iv) must not have been classified as substandard, doubtful, or loss by the Bank or its regulatory authority; and (v) must not secure the indebtedness to any director, officer, employee, attorney, or agent of the Bank or of any FHLB. The FHLB currently allows an aggregate lendable value on the qualifying loans of approximately 90% of the collateral value of loans pledged to the FHLB. |
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As of September 30, 2013 and December 31, 2012, qualifying loans collateralized by commercial real estate with balances of $8.4 million and $9.4 million, respectively, were pledged at the FRB and available for future borrowings. The Bank uses qualifying commercial real estate loans as collateral for the discount window. No FRB borrowings were outstanding at September 30, 2013 or December 31, 2012. |
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The following tables present age analyses of loans, including both accruing and nonaccrual loans, as of the dates indicated (in thousands): |
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30-Sep-13 | | 30-89 Days | | | 90 Days or | | | Current | | | Total | | | | | | | | | |
Past Due | More Past Due | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family residential | | $ | 694 | | | $ | 2,577 | | | $ | 131,070 | | | $ | 134,341 | | | | | | | | | |
Multifamily residential | | | -- | | | | -- | | | | 25,641 | | | | 25,641 | | | | | | | | | |
Nonfarm nonresidential | | | 257 | | | | 2,498 | | | | 158,679 | | | | 161,434 | | | | | | | | | |
Construction and land development | | | 300 | | | | 2,524 | | | | 15,548 | | | | 18,372 | | | | | | | | | |
Commercial | | | -- | | | | 22 | | | | 17,392 | | | | 17,414 | | | | | | | | | |
Consumer | | | 18 | | | | 4 | | | | 4,805 | | | | 4,827 | | | | | | | | | |
Total | | $ | 1,269 | | | $ | 7,625 | | | $ | 353,135 | | | $ | 362,029 | | | | | | | | | |
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31-Dec-12 | | 30-89 Days | | | 90 Days or | | | Current | | | Total | | | | | | | | | |
Past Due | More Past Due | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family residential | | $ | 7,411 | | | $ | 3,982 | | | $ | 146,543 | | | $ | 157,936 | | | | | | | | | |
Multifamily residential | | | 3,459 | | | | -- | | | | 17,331 | | | | 20,790 | | | | | | | | | |
Nonfarm nonresidential | | | -- | | | | 4,523 | | | | 133,491 | | | | 138,014 | | | | | | | | | |
Construction and land development | | | 241 | | | | 3,145 | | | | 11,165 | | | | 14,551 | | | | | | | | | |
Commercial | | | 341 | | | | 402 | | | | 15,340 | | | | 16,083 | | | | | | | | | |
Consumer | | | 15 | | | | 25 | | | | 5,778 | | | | 5,818 | | | | | | | | | |
Total | | $ | 11,467 | | | $ | 12,077 | | | $ | 329,648 | | | $ | 353,192 | | | | | | | | | |
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There were no loans over 90 days past due and still accruing at September 30, 2013 or December 31, 2012. Restructured loans totaled $2.4 million and $9.2 million as of September 30, 2013 and December 31, 2012, respectively, with $2.2 million and $3.4 million of such restructured loans on nonaccrual status at September 30, 2013 and December 31, 2012, respectively. |
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The following table presents age analyses of nonaccrual loans as of the dates indicated (in thousands): |
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30-Sep-13 | | 30-89 Days | | | 90 Days or | | | Current | | | Total | | | | | | | | | |
Past Due | More Past Due | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family residential | | $ | 339 | | | $ | 2,577 | | | $ | 2,244 | | | $ | 5,160 | | | | | | | | | |
Multifamily residential | | | -- | | | | -- | | | | -- | | | | -- | | | | | | | | | |
Nonfarm nonresidential | | | 257 | | | | 2,498 | | | | 1,740 | | | | 4,495 | | | | | | | | | |
Construction and land development | | | 299 | | | | 2,524 | | | | 555 | | | | 3,378 | | | | | | | | | |
Commercial | | | -- | | | | 22 | | | | 4 | | | | 26 | | | | | | | | | |
Consumer | | | -- | | | | 4 | | | | 5 | | | | 9 | | | | | | | | | |
Total | | $ | 895 | | | $ | 7,625 | | | $ | 4,548 | | | $ | 13,068 | | | | | | | | | |
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31-Dec-12 | | 30-89 Days | | | 90 Days or | | | Current | | | Total | | | | | | | | | |
Past Due | More Past Due | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family residential | | $ | 1,070 | | | $ | 3,982 | | | $ | 1,975 | | | $ | 7,027 | | | | | | | | | |
Multifamily residential | | | -- | | | | -- | | | | -- | | | | -- | | | | | | | | | |
Nonfarm nonresidential | | | -- | | | | 4,523 | | | | 2,713 | | | | 7,236 | | | | | | | | | |
Construction and land development | | | 241 | | | | 3,145 | | | | 747 | | | | 4,133 | | | | | | | | | |
Commercial | | | -- | | | | 402 | | | | -- | | | | 402 | | | | | | | | | |
Consumer | | | 1 | | | | 25 | | | | -- | | | | 26 | | | | | | | | | |
Total | | $ | 1,312 | | | $ | 12,077 | | | $ | 5,435 | | | $ | 18,824 | | | | | | | | | |
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The following tables summarize information pertaining to impaired loans as of September 30, 2013 and December 31, 2012 and for the three and nine months ended September 30, 2013 and 2012 (in thousands): |
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| | 30-Sep-13 | | | 31-Dec-12 | |
| | Unpaid | | | Recorded | | | Valuation | | | Unpaid | | | Recorded | | | Valuation | |
Principal Balance | Investment | Allowance | Principal | Investment | Allowance |
| | | Balance | | |
Impaired loans with a valuation allowance: | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family residential | | $ | 1,688 | | | $ | 1,499 | | | $ | 265 | | | $ | 1,517 | | | $ | 1,424 | | | $ | 275 | |
Multifamily residential | | | -- | | | | -- | | | | -- | | | | -- | | | | -- | | | | -- | |
Nonfarm nonresidential | | | 2,998 | | | | 2,833 | | | | 1,051 | | | | 3,718 | | | | 3,596 | | | | 779 | |
Construction and land development | | | 2,034 | | | | 1,679 | | | | 674 | | | | 921 | | | | 737 | | | | 130 | |
Commercial | | | 1 | | | | 1 | | | | 1 | | | | 380 | | | | 380 | | | | 380 | |
Consumer | | | 5 | | | | 5 | | | | 5 | | | | 5 | | | | 5 | | | | 1 | |
| | | 6,726 | | | | 6,017 | | | | 1,996 | | | | 6,541 | | | | 6,142 | | | | 1,565 | |
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Impaired loans without a valuation allowance: | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family residential | | | 4,607 | | | | 3,928 | | | | -- | | | | 7,283 | | | | 6,718 | | | | -- | |
Multifamily residential | | | -- | | | | -- | | | | -- | | | | 3,459 | | | | 3,459 | | | | -- | |
Nonfarm nonresidential | | | 1,791 | | | | 1,662 | | | | -- | | | | 4,992 | | | | 4,876 | | | | -- | |
Construction and land development | | | 2,440 | | | | 1,699 | | | | -- | | | | 4,377 | | | | 3,396 | | | | -- | |
Commercial | | | 53 | | | | 25 | | | | -- | | | | 22 | | | | 22 | | | | -- | |
Consumer | | | 7 | | | | 4 | | | | -- | | | | 29 | | | | 27 | | | | -- | |
| | | 8,898 | | | | 7,318 | | | | -- | | | | 20,162 | | | | 18,498 | | | | -- | |
Total impaired loans | | $ | 15,624 | | | $ | 13,335 | | | $ | 1,996 | | | $ | 26,703 | | | $ | 24,640 | | | $ | 1,565 | |
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| | Three and Nine Months Ended September 30, 2013 | | | | | | | | | |
| | Average | | | Average | | | Interest Income Recognized | | | Interest Income Recognized | | | | | | | | | |
Recorded | Recorded | | | | | | | | |
Investment | Investment | | | | | | | | |
| | (Three Months) | | | (Nine Months) | | | (Three Months) | | | (Nine Months) | | | | | | | | | |
Impaired loans with a valuation allowance: | | | | | | | | | | | | | | | | | | | | |
One- to four-family residential | | $ | 2,115 | | | $ | 2,093 | | | $ | 2 | | | $ | 7 | | | | | | | | | |
Multifamily residential | | | -- | | | | 857 | | | | -- | | | | -- | | | | | | | | | |
Nonfarm nonresidential | | | 3,045 | | | | 3,055 | | | | -- | | | | -- | | | | | | | | | |
Construction and land development | | | 1,977 | | | | 1,592 | | | | -- | | | | -- | | | | | | | | | |
Commercial | | | 1 | | | | 96 | | | | -- | | | | -- | | | | | | | | | |
Consumer | | | 5 | | | | 5 | | | | -- | | | | -- | | | | | | | | | |
| | | 7,143 | | | | 7,698 | | | | 2 | | | | 7 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans without a valuation allowance: | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family residential | | | 3,659 | | | | 4,693 | | | | -- | | | | -- | | | | | | | | | |
Multifamily residential | | | -- | | | | 865 | | | | -- | | | | -- | | | | | | | | | |
Nonfarm nonresidential | | | 1,382 | | | | 2,714 | | | | -- | | | | -- | | | | | | | | | |
Construction and land development | | | 1,453 | | | | 2,076 | | | | -- | | | | -- | | | | | | | | | |
Commercial | | | 26 | | | | 24 | | | | -- | | | | -- | | | | | | | | | |
Consumer | | | 5 | | | | 16 | | | | -- | | | | -- | | | | | | | | | |
| | | 6,525 | | | | 10,388 | | | | -- | | | | -- | | | | | | | | | |
Total impaired loans | | $ | 13,668 | | | $ | 18,086 | | | $ | 2 | | | $ | 7 | | | | | | | | | |
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Interest based on original terms | | | | | | | | | | $ | 478 | | | $ | 703 | | | | | | | | | |
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Interest income recognized on a cash basis on impaired loans | | | | | | | | | | $ | -- | | | $ | -- | | | | | | | | | |
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| | Three and Nine Months Ended September 30, 2012 | | | | | | | | | |
| | Average | | | Average | | | Interest Income | | | Interest Income | | | | | | | | | |
Recorded | Recorded | Recognized | Recognized | | | | | | | | |
Investment | Investment | | | | | | | | | | |
| | (Three Months) | | | (Nine Months) | | | (Three Months) | | | (Nine Months) | | | | | | | | | |
Impaired loans with a valuation allowance: | | | | | | | | | | | | | | | | | | | | |
One- to four-family residential | | $ | 1,759 | | | $ | 2,774 | | | $ | -- | | | $ | -- | | | | | | | | | |
Multifamily residential | | | -- | | | | 564 | | | | -- | | | | -- | | | | | | | | | |
Nonfarm nonresidential | | | 3,117 | | | | 2,987 | | | | -- | | | | 40 | | | | | | | | | |
Construction and land development | | | 1,366 | | | | 1,514 | | | | -- | | | | 9 | | | | | | | | | |
Commercial | | | 190 | | | | 95 | | | | -- | | | | -- | | | | | | | | | |
Consumer | | | -- | | | | 7 | | | | -- | | | | -- | | | | | | | | | |
| | | 6,432 | | | | 7,941 | | | | -- | | | | 49 | | | | | | | | | |
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Impaired loans without a valuation allowance: | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family residential | | | 7,137 | | | | 7,900 | | | | 18 | | | | 75 | | | | | | | | | |
Multifamily residential | | | 1,873 | | | | 3,173 | | | | 42 | | | | 49 | | | | | | | | | |
Nonfarm nonresidential | | | 5,570 | | | | 6,834 | | | | 18 | | | | 102 | | | | | | | | | |
Construction and land development | | | 5,327 | | | | 3,784 | | | | -- | | | | 89 | | | | | | | | | |
Commercial | | | 212 | | | | 245 | | | | -- | | | | -- | | | | | | | | | |
Consumer | | | 58 | | | | 55 | | | | -- | | | | 1 | | | | | | | | | |
| | | 20,177 | | | | 21,991 | | | | 78 | | | | 316 | | | | | | | | | |
Total impaired loans | | $ | 26,609 | | | $ | 29,932 | | | $ | 78 | | | $ | 365 | | | | | | | | | |
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Interest based on original terms | | | | | | | | | | $ | 405 | | | $ | 1,212 | | | | | | | | | |
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Interest income recognized on a cash | | | | | | | | | | | | | | | | | | | | | | | | |
basis on impaired loans | | | | | | | | | | $ | -- | | | $ | 203 | | | | | | | | | |
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Credit Quality Indicators. As part of its on-going monitoring of the credit quality of the loan portfolio, the Bank assigns loans into risk categories based on the ability of borrowers to service their debt as determined by available and relevant information such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Bank assigns a credit risk rating to certain non-homogeneous loans over $250,000 on at least an annual basis. Homogeneous loans and non-homogeneous loans under $250,000 are generally not risk rated. The Bank uses the following definitions for risk ratings: |
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Pass (Grades 1 to 5). Loans rated as pass generally meet or exceed normal credit standards and are rated on a scale from 1 to 5, with 1 being the highest quality loan and 5 being a pass/watch loan. Factors influencing the level of pass grade include repayment source and strength, collateral value, borrower cash flows, existence of and strength of guarantors, industry/business sector, financial trends, performance history, etc. |
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Special Mention (Grade 6). Loans rated as special mention, while still adequately protected by the borrower’s repayment capability, exhibit distinct weakening trends. If left unchecked or uncorrected, these potential weaknesses may result in deteriorated prospects of repayment. These exposures require management’s close attention so as to avoid becoming adversely classified credits. |
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Substandard (Grade 7). Loans rated as substandard are inadequately protected by the current sound net worth and repayment capacity of the borrower or the collateral pledged, if any. These assets must have a well-defined weakness based on objective evidence and be characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. |
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Doubtful (Grade 8). Loans rated as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances. |
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Loss (Grade 9). Loans rated as a loss are considered uncollectible and of such little value that continuance as an asset is not warranted. A loss classification does not mean that an asset has no recovery or salvage value, but that it is not practical or desirable to defer writing off all or a portion of the asset, even though partial recovery could occur in the future. |
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Based on analyses performed at September 30, 2013 and December 31, 2012, the risk categories of loans are as follows: |
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| | 30-Sep-13 | | | | | |
| | Pass | | | Special | | | Substandard | | | Not Rated | | | Total | | | | | |
Mention | | | | |
One- to four-family residential | | $ | 31,913 | | | $ | 2,571 | | | $ | 7,848 | | | $ | 92,009 | | | $ | 134,341 | | | | | |
Multifamily residential | | | 25,634 | | | | -- | | | | -- | | | | 7 | | | | 25,641 | | | | | |
Nonfarm nonresidential | | | 151,123 | | | | 5,032 | | | | 4,510 | | | | 769 | | | | 161,434 | | | | | |
Construction and land development | | | 11,191 | | | | 386 | | | | 4,087 | | | | 2,708 | | | | 18,372 | | | | | |
Commercial | | | 16,907 | | | | -- | | | | 362 | | | | 145 | | | | 17,414 | | | | | |
Consumer | | | 161 | | | | -- | | | | 14 | | | | 4,652 | | | | 4,827 | | | | | |
Total | | $ | 236,929 | | | $ | 7,989 | | | $ | 16,821 | | | $ | 100,290 | | | $ | 362,029 | | | | | |
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| | 31-Dec-12 | | | | | |
| | Pass | | | Special | | | Substandard | | | Not Rated | | | Total | | | | | |
Mention | | | | |
One- to four-family residential | | $ | 30,216 | | | $ | 3,698 | | | $ | 12,993 | | | $ | 111,029 | | | $ | 157,936 | | | | | |
Multifamily residential | | | 16,695 | | | | -- | | | | 4,078 | | | | 17 | | | | 20,790 | | | | | |
Nonfarm nonresidential | | | 117,604 | | | | 7,445 | | | | 12,045 | | | | 920 | | | | 138,014 | | | | | |
Construction and land development | | | 5,298 | | | | 867 | | | | 4,934 | | | | 3,452 | | | | 14,551 | | | | | |
Commercial | | | 15,127 | | | | 340 | | | | 425 | | | | 191 | | | | 16,083 | | | | | |
Consumer | | | 159 | | | | -- | | | | 45 | | | | 5,614 | | | | 5,818 | | | | | |
Total | | $ | 185,099 | | | $ | 12,350 | | | $ | 34,520 | | | $ | 121,223 | | | $ | 353,192 | | | | | |
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As of September 30, 2013 and December 31, 2012, the Bank did not have any loans classified as doubtful or loss. |
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Troubled Debt Restructurings. Troubled debt restructurings (“TDRs”) are loans where the contractual terms have been modified and both of the following conditions exist: (i) the borrower is experiencing financial difficulty and (ii) the restructuring constitutes a concession that the Bank would not otherwise make. The Bank assesses all loan modifications to determine if the modifications constitute a TDR. Restructurings resulting in an insignificant delay in payment are not considered to be TDRs. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. |
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All TDRs are considered impaired loans. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. |
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The following table summarizes TDRs as of September 30, 2013 and December 31, 2012: (dollars in thousands) |
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30-Sep-13 | | Number of | | | Balance | | | Number of Nonaccrual | | | Balance | | | Total | | | Total | |
Accruing | TDR Loans | Number of | Balance |
TDR Loans | | TDR Loans | |
One- to four-family residential | | | 2 | | | $ | 267 | | | | 8 | | | $ | 671 | | | | 10 | | | $ | 938 | |
Multifamily residential | | | -- | | | | -- | | | | -- | | | | -- | | | | -- | | | | -- | |
Nonfarm nonresidential | | | -- | | | | -- | | | | 3 | | | | 568 | | | | 3 | | | | 568 | |
Construction and land development | | | -- | | | | -- | | | | 5 | | | | 934 | | | | 5 | | | | 934 | |
Consumer | | | -- | | | | -- | | | | 1 | | | | 5 | | | | 1 | | | | 5 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 2 | | | $ | 267 | | | | 17 | | | $ | 2,178 | | | | 19 | | | $ | 2,445 | |
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31-Dec-12 | | Number of | | | Balance | | | Number of Nonaccrual | | | Balance | | | Total | | | Total | |
Accruing | TDR Loans | Number of | Balance |
TDR Loans | | TDR Loans | |
One- to four-family residential | | | 12 | | | $ | 1,115 | | | | 9 | | | $ | 1,461 | | | | 21 | | | $ | 2,576 | |
Multifamily residential | | | 1 | | | | 3,459 | | | | -- | | | | -- | | | | 1 | | | | 3,459 | |
Nonfarm nonresidential | | | 1 | | | | 1,235 | | | | 3 | | | | 606 | | | | 4 | | | | 1,841 | |
Construction and land development | | | -- | | | | -- | | | | 6 | | | | 1,315 | | | | 6 | | | | 1,315 | |
Consumer | | | 3 | | | | 7 | | | | -- | | | | -- | | | | 3 | | | | 7 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 17 | | | $ | 5,816 | | | | 18 | | | $ | 3,382 | | | | 35 | | | $ | 9,198 | |
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The Bank restructured one loan as a TDR during the three months ended September 30, 2013 in the amount of $111,000 and two loans in the nine months ended September 30, 2013 totaling $117,000. For the three and nine months ended September 30, 2012, there was one loan modified as a TDR with a balance after restructure of $172,000. |
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The Bank had no loans receivable for which a payment default occurred during the three or nine months ended September 30, 2013 or 2012 and that had been modified as a TDR within 12 months or less of the payment default. |