Loans | 3 Months Ended |
Mar. 31, 2014 |
Receivables [Abstract] | ' |
Loans | ' |
-5 | LOANS | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Set forth below is selected data relating to the composition of the loan portfolio by type of loan at March 31, 2014 and December 31, 2013. At March 31, 2014 and December 31, 2013, there were no concentrations of loans exceeding 10% of total loans other than as disclosed below: |
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| | March 31, 2014 | | | March 31, 2014 | | | December 31, 2013 | | | December 31, 2013 | | | | | | | | | | | | | |
| | Amount | | | Percent | | | Amount | | | Percent | | | | | | | | | | | | | |
| | (Dollars in thousands, except percentages) | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | |
One-to-four family (closed end) first mortgages | | $ | 153,957 | | | | 28.2 | % | | $ | 155,252 | | | | 28.1 | % | | | | | | | | | | | | |
Second mortgages (closed end) | | | 2,829 | | | | 0.5 | % | | | 3,248 | | | | 0.6 | % | | | | | | | | | | | | |
Home equity lines of credit | | | 33,947 | | | | 6.2 | % | | | 34,103 | | | | 6.2 | % | | | | | | | | | | | | |
Multi-family | | | 28,770 | | | | 5.3 | % | | | 29,736 | | | | 5.4 | % | | | | | | | | | | | | |
Construction | | | 11,278 | | | | 2.1 | % | | | 10,618 | | | | 1.9 | % | | | | | | | | | | | | |
Land | | | 34,154 | | | | 6.3 | % | | | 34,681 | | | | 6.3 | % | | | | | | | | | | | | |
Farmland | | | 47,608 | | | | 8.7 | % | | | 51,868 | | | | 9.4 | % | | | | | | | | | | | | |
Non-residential real estate | | | 154,083 | | | | 28.3 | % | | | 157,692 | | | | 28.5 | % | | | | | | | | | | | | |
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Total mortgage loans | | | 466,626 | | | | 85.6 | % | | | 477,198 | | | | 86.4 | % | | | | | | | | | | | | |
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Consumer loans | | | 15,260 | | | | 2.8 | % | | | 11,167 | | | | 2 | % | | | | | | | | | | | | |
Commercial loans | | | 63,098 | | | | 11.6 | % | | | 64,041 | | | | 11.6 | % | | | | | | | | | | | | |
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Total other loans | | | 78,358 | | | | 14.4 | % | | | 75,208 | | | | 13.6 | % | | | | | | | | | | | | |
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Total loans, gross | | | 544,984 | | | | 100 | % | | | 552,406 | | | | 100 | % | | | | | | | | | | | | |
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Deferred loan cost, net of income | | | (120 | ) | | | | | | | (92 | ) | | | | | | | | | | | | | | | | |
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Less allowance for loan losses | | | (8,913 | ) | | | | | | | (8,682 | ) | | | | | | | | | | | | | | | | |
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Total loans | | $ | 535,951 | | | | | | | $ | 543,632 | | | | | | | | | | | | | | | | | |
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The Bank assigns an industry standard NAICS code to each loan in the Bank’s portfolio. By assigning a standard code to each type of loan, management can more readily determine concentrations in risk by industry, location and loan type. This information is most useful when analyzing the Bank’s non-residential real estate loan portfolio. At March 31, 2014, and December 31, 2013, the Bank’s non-residential real estate loan portfolio was made up of the following loan types: |
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| | Balance | | | Balance | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2014 | | | December 31, 2013 | | | | | | | | | | | | | | | | | | | | | |
| | (Dollars in Thousands) | | | | | | | | | | | | | | | | | | | | | |
Land | | $ | 34,154 | | | $ | 34,681 | | | | | | | | | | | | | | | | | | | | | |
Manufacturing | | | 3,907 | | | | 3,962 | | | | | | | | | | | | | | | | | | | | | |
Professional, Technical | | | 1,784 | | | | 1,819 | | | | | | | | | | | | | | | | | | | | | |
Retail Trade | | | 11,902 | | | | 10,916 | | | | | | | | | | | | | | | | | | | | | |
Other Services | | | 18,846 | | | | 21,307 | | | | | | | | | | | | | | | | | | | | | |
Finance and Insurance | | | 2,439 | | | | 1,862 | | | | | | | | | | | | | | | | | | | | | |
Agricultural, Forestry, Fishing & Hunting | | | 47,608 | | | | 51,868 | | | | | | | | | | | | | | | | | | | | | |
Real Estate and Rental and Leasing | | | 55,778 | | | | 55,692 | | | | | | | | | | | | | | | | | | | | | |
Wholesale Trade | | | 21,486 | | | | 21,852 | | | | | | | | | | | | | | | | | | | | | |
Arts, Entertainment and Recreation | | | 3,656 | | | | 3,015 | | | | | | | | | | | | | | | | | | | | | |
Accommodations / Food Service | | | 24,004 | | | | 26,552 | | | | | | | | | | | | | | | | | | | | | |
Healthcare and Social Assistance | | | 6,668 | | | | 6,862 | | | | | | | | | | | | | | | | | | | | | |
Transportation and Warehousing | | | 1,069 | | | | 1,101 | | | | | | | | | | | | | | | | | | | | | |
Information | | | 2,309 | | | | 2,390 | | | | | | | | | | | | | | | | | | | | | |
Admin Support / Waste Mgmt | | | 235 | | | | 362 | | | | | | | | | | | | | | | | | | | | | |
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Total | | $ | 235,845 | | | $ | 244,241 | | | | | | | | | | | | | | | | | | | | | |
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The allowance for loan losses totaled $8.9 million at March 31, 2014, $8.7 million at December 31, 2013, and $10.6 million at March 31, 2013, respectively. The ratio of the allowance for loan losses to total loans was 1.63% at March 31, 2014, 1.57% at December 31, 2013, and 1.95% at March 31, 2013. |
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The following table indicates the type and level of non-accrual loans at the periods indicated below: |
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| | March 31, 2014 | | | December 31, 2013 | | | March 31, 2013 | | | | | | | | | | | | | | | | | |
| | (Dollars in Thousands) | | | | | | | | | | | | | | | | | |
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One-to-four family mortgages | | $ | 1,056 | | | | 945 | | | | 1,883 | | | | | | | | | | | | | | | | | |
Home equity line of credit | | | 49 | | | | 1 | | | | 66 | | | | | | | | | | | | | | | | | |
Junior lien | | | 1 | | | | 2 | | | | 3 | | | | | | | | | | | | | | | | | |
Multi-family | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | |
Construction | | | — | | | | 175 | | | | 177 | | | | | | | | | | | | | | | | | |
Land | | | 1,217 | | | | 1,218 | | | | 2,754 | | | | | | | | | | | | | | | | | |
Non-residential real estate | | | 6,585 | | | | 6,546 | | | | 951 | | | | | | | | | | | | | | | | | |
Farmland | | | 669 | | | | 703 | | | | 545 | | | | | | | | | | | | | | | | | |
Consumer loans | | | 2 | | | | 13 | | | | 65 | | | | | | | | | | | | | | | | | |
Commercial loans | | | 453 | | | | 463 | | | | 592 | | | | | | | | | | | | | | | | | |
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Total non-accrual loans | | $ | 10,032 | | | | 10,066 | | | | 7,036 | | | | | | | | | | | | | | | | | |
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The following table provides a detail of the Company’s activity in the allowance for loan loss account by loan type for the three month period ended March 31, 2014: |
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| | Balance | | | Charge off | | | Recovery | | | Specific | | | General | | | Ending | | | | | |
12/31/13 | 2014 | 2014 | Provision | Provision | Balance | | | | |
| | | 2014 | 2014 | 3/31/14 | | | | |
| | (Dollars in Thousands) | | | | | |
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One-to-four family mortgages | | $ | 2,048 | | | | (35 | ) | | | 8 | | | | (10 | ) | | | 125 | | | | 2,136 | | | | | |
Home equity line of credit | | | 218 | | | | — | | | | 1 | | | | — | | | | — | | | | 219 | | | | | |
Junior liens | | | 39 | | | | — | | | | 5 | | | | 4 | | | | (22 | ) | | | 26 | | | | | |
Multi-family | | | 466 | | | | — | | | | — | | | | — | | | | (134 | ) | | | 332 | | | | | |
Construction | | | 88 | | | | (8 | ) | | | 2 | | | | (6 | ) | | | 4 | | | | 80 | | | | | |
Land | | | 1,305 | | | | — | | | | — | | | | 41 | | | | (133 | ) | | | 1,213 | | | | | |
Non-residential real estate | | | 2,719 | | | | — | | | | — | | | | (80 | ) | | | 250 | | | | 2,889 | | | | | |
Farmland | | | 510 | | | | — | | | | — | | | | — | | | | 237 | | | | 747 | | | | | |
Consumer loans | | | 541 | | | | (103 | ) | | | 31 | | | | (137 | ) | | | 343 | | | | 675 | | | | | |
Commercial loans | | | 748 | | | | (50 | ) | | | — | | | | (50 | ) | | | (52 | ) | | | 596 | | | | | |
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Total | | $ | 8,682 | | | | (196 | ) | | | 47 | | | | (238 | ) | | | 618 | | | | 8,913 | | | | | |
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The following table provides a detail of the Company’s activity in the allowance for loan loss account by loan type for the year ended December 31, 2013: |
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| | Balance | | | Charge off | | | Recovery | | | Specific | | | General | | | Ending | | | | | |
12/31/12 | 2013 | 2013 | Provision | Provision | Balance | | | | |
| | | 2013 | 2013 | 12/31/13 | | | | |
| | (Dollars in Thousands) | | | | | |
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One-to-four family mortgages | | $ | 2,490 | | | | (852 | ) | | | 329 | | | | (285 | ) | | | 366 | | | | 2,048 | | | | | |
Home equity line of credit | | | 374 | | | | (22 | ) | | | 9 | | | | (88 | ) | | | (55 | ) | | | 218 | | | | | |
Junior liens | | | 230 | | | | (119 | ) | | | 71 | | | | 5 | | | | (148 | ) | | | 39 | | | | | |
Multi-family | | | 524 | | | | (38 | ) | | | 164 | | | | (20 | ) | | | (164 | ) | | | 466 | | | | | |
Construction | | | 256 | | | | — | | | | — | | | | (168 | ) | | | — | | | | 88 | | | | | |
Land | | | 2,184 | | | | (1,432 | ) | | | 9 | | | | (718 | ) | | | 1,262 | | | | 1,305 | | | | | |
Non-residential real estate | | | 2,921 | | | | (1,041 | ) | | | 14 | | | | 757 | | | | 68 | | | | 2,719 | | | | | |
Farmland | | | 712 | | | | — | | | | — | | | | (202 | ) | | | — | | | | 510 | | | | | |
Consumer loans | | | 338 | | | | (649 | ) | | | 246 | | | | 228 | | | | 378 | | | | 541 | | | | | |
Commercial loans | | | 619 | | | | (291 | ) | | | 32 | | | | 437 | | | | (49 | ) | | | 748 | | | | | |
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Total | | $ | 10,648 | | | | (4,444 | ) | | | 874 | | | | (54 | ) | | | 1,658 | | | | 8,682 | | | | | |
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The table below presents past due and non-accrual balances at March 31, 2014, by loan classification allocated between performing and non-performing: |
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March 31, 2014 | | Currently | | | 30 - 89 | | | Non-accrual | | | Special | | | Impaired Loans | | | | |
Days | Currently Performing |
| | Performing | | | Past Due | | | Loans | | | Mention | | | Substandard | | | Doubtful | | | Total | |
| | (Dollars in Thousands) | |
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One-to-four family mortgages | | $ | 150,107 | | | | 610 | | | | 1,056 | | | | 904 | | | | 1,280 | | | | — | | | | 153,957 | |
Home equity line of credit | | | 33,256 | | | | 148 | | | | 49 | | | | — | | | | 494 | | | | — | | | | 33,947 | |
Junior liens | | | 2,764 | | | | — | | | | 1 | | | | 42 | | | | 22 | | | | — | | | | 2,829 | |
Multi-family | | | 23,871 | | | | — | | | | — | | | | 4,899 | | | | — | | | | — | | | | 28,770 | |
Construction | | | 11,278 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 11,278 | |
Land | | | 15,982 | | | | 76 | | | | 1,217 | | | | 3,464 | | | | 13,415 | | | | — | | | | 34,154 | |
Non-residential real estate | | | 141,228 | | | | 47 | | | | 6,585 | | | | 488 | | | | 5,735 | | | | — | | | | 154,083 | |
Farmland | | | 41,605 | | | | — | | | | 669 | | | | 345 | | | | 4,989 | | | | — | | | | 47,608 | |
Consumer loans | | | 14,576 | | | | 28 | | | | 2 | | | | — | | | | 654 | | | | — | | | | 15,260 | |
Commercial loans | | | 58,633 | | | | 189 | | | | 453 | | | | 1,399 | | | | 2,424 | | | | — | | | | 63,098 | |
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Total | | $ | 493,300 | | | | 1,098 | | | | 10,032 | | | | 11,541 | | | | 29,013 | | | | — | | | | 544,984 | |
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The table below presents past due and non-accrual balances at December 31, 2013, by loan classification allocated between performing and non-performing: |
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| | Currently | | | 30 - 89 | | | Non-accrual | | | Special | | | Impaired Loans | | | | |
Days | Currently Performing |
December 31, 2013 | | Performing | | | Past Due | | | Loans | | | Mention | | | Substandard | | | Doubtful | | | Total | |
| | (Dollars in Thousands) | |
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One-to-four family mortgages | | $ | 148,759 | | | | 592 | | | | 945 | | | | 814 | | | | 4,142 | | | | — | | | | 155,252 | |
Home equity line of credit | | | 33,369 | | | | 93 | | | | 1 | | | | — | | | | 640 | | | | — | | | | 34,103 | |
Junior liens | | | 3,126 | | | | — | | | | 2 | | | | 43 | | | | 77 | | | | — | | | | 3,248 | |
Multi-family | | | 29,736 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 29,736 | |
Construction | | | 10,443 | | | | — | | | | 175 | | | | — | | | | — | | | | — | | | | 10,618 | |
Land | | | 19,899 | | | | — | | | | 1,218 | | | | 52 | | | | 13,512 | | | | — | | | | 34,681 | |
Non-residential real estate | | | 142,701 | | | | 343 | | | | 6,546 | | | | 515 | | | | 7,587 | | | | — | | | | 157,692 | |
Farmland | | | 46,042 | | | | — | | | | 703 | | | | 480 | | | | 4,643 | | | | — | | | | 51,868 | |
Consumer loans | | | 10,493 | | | | 234 | | | | 13 | | | | — | | | | 427 | | | | — | | | | 11,167 | |
Commercial loans | | | 61,379 | | | | 123 | | | | 463 | | | | 526 | | | | 1,550 | | | | — | | | | 64,041 | |
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Total | | $ | 505,947 | | | | 1,385 | | | | 10,066 | | | | 2,430 | | | | 32,578 | | | | — | | | | 552,406 | |
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All loans listed as 30-89 days past due and non-accrual are not performing as agreed. Loans listed as special mentioned, substandard and doubtful are paying as agreed. However, the customer’s financial statements may indicate weaknesses in their current cash flow, the customer’s industry may be in decline due to current economic conditions, collateral values used to secure the loan may be declining, or the Company may be concerned about the customer’s future business prospects. |
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The Company does not originate loans it considers sub-prime and is not aware of any exposure to the additional credit concerns associated with sub-prime lending in either the Company’s loan or investment portfolios. The Company does have a significant amount of construction and land development loans. Management reports to the Company’s Board of Directors on the status of the Company’s specific construction and development loans as well as the market trends in those markets in which the Company actively participates. |
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The Company’s annualized net charge off ratios for three month periods ended March 31, 2014, March 31, 2013, and the year ended December 31, 2013, was 0.11%, 0.33% and 0.66%, respectively. The ratios of allowance for loan losses to non-accrual loans at March 31, 2014, March 31, 2013, and December 31, 2013, were 88.85%, 150.35%, and 86.25%, respectively. |
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The determination of the allowance for loan losses is based on management’s analysis, performed on a quarterly basis. Various factors are considered, including the market value of the underlying collateral, growth and composition of the loan portfolio, the relationship of the allowance for loan losses to outstanding loans, historical loss experience, delinquency trends and prevailing economic conditions. Although management believes its allowance for loan losses is adequate, there can be no assurance that additional allowances will not be required or that losses on loans will not be incurred. |
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The Company conducts annual reviews on all loan relationships above one million to ascertain the borrowers continued ability to service their debt as agreed. In addition to the credit relationships mentioned above, management may classify any credit relationship once it becomes aware of adverse credit trends for that customer. Typically, the annual review consists of updated financial statements for borrowers and any guarantors, a review of the borrower’s credit history with the Company and other creditors, and current income tax information. |
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As a result of this review, management will classify loans based on their credit risk. Additionally, the Company provides a risk grade for all loans past due more than sixty days. The Company uses the following risk definitions for risk grades: |
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Satisfactory loans of average strength having some deficiency or vulnerability to changing economic or industry conditions. These customers should have reasonable amount of capital and operating ratios. Secured loans may lack in margin or liquidity. Loans to individuals, perhaps supported in dollars of net worth, but with supporting assets may be difficult to liquidate. |
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Watch loans are acceptable credits: (1) that need continual monitoring, such as out-of territory or asset-based loans (since the Bank does not have an asset-based lending department), or (2) with a marginal risk level to business concerns and individuals that; (a) have exhibited favorable performance in the past, though currently experiencing negative trends; |
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(b) are in an industry that is experiencing volatility or is declining, and their performance is less than industry norms; and (c) are experiencing unfavorable trends in their financial position, such as one-time net losses or declines in asset values. These marginal borrowers may have early warning signs of problems such as occasional overdrafts and minor delinquency. If considered marginal, a loan would be a “watch” until financial data demonstrated improved performance or further deterioration to a “substandard” grade usually within a 12-month period. In the table on page 23, Watch loans are included with satisfactory loans and classified as Pass. |
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Special Mention are currently protected but are potentially weak. These loans constitute an undue and unwarranted credit risk but not to the point of justifying a substandard classification. The credit risk may be relatively minor yet constitutes an unwarranted risk in light of the circumstances surrounding a specific loan. These credit weaknesses, if not checked or corrected, will weaken the loan or inadequately protect the Bank’s credit position at some future date. |
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A Substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. The loans are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. This does not imply ultimate loss of the principal, but may involve burdensome administrative expenses and the accompanying cost to carry the credit. Examples of substandard loans include those to borrowers with insufficient or negative cash flow, negative net worth coupled with inadequate guarantor support, inadequate working capital, and/or significantly past-due loans and overdrafts. |
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A loan classified Doubtful has all the weaknesses inherent in a substandard credit except that the weaknesses make collection or liquidation in full (on the basis of currently existing facts, conditions, and values) highly questionable and improbable. The possibility of loss is extremely high, but because of certain pending factors charge-off is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans. The doubtful classification is applied to that portion of the credit in which the full collection of principal and interest is questionable. |
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A loan is considered to be impaired when management determines that it is possible that the Company will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement. The value of individually impaired loans is measured based on the present value of expected payments or using the fair value of the collateral less cost to sell if the loan is collateral dependent. Currently, it is management’s practice to classify all substandard or doubtful loans as impaired. At March 31, 2014, December 31, 2013, and March 31, 2013, the Company’s impaired loans totaled $39.0 million, $42.6 million and $43.7 million, respectively. At March 31, 2014, December 31, 2013, and March 31, 2013, the Company’s specific reserve for impaired loans totaled $2.0 million, $1.9 million and $2.7 million, respectively. |
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A summary of the Company’s impaired loans, including their respective regulatory classification and their respective specific reserve at March 31, 2014, were as follows: |
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March 31, 2014 | | Pass | | | Special | | | | | | Total | | | Specific | | | Allowance | |
Mention | | Allowance | for |
| Impaired Loans | for | Performing |
| | | | Substandard | | | Doubtful | | | | Impairment | | Loans |
| | (Dollars in Thousands) | |
One-to-four family mortgages | | $ | 150,717 | | | | 904 | | | | 2,336 | | | | — | | | | 153,957 | | | | 580 | | | | 1,556 | |
Home equity line of credit | | | 33,404 | | | | — | | | | 543 | | | | — | | | | 33,947 | | | | — | | | | 219 | |
Junior liens | | | 2,764 | | | | 42 | | | | 23 | | | | — | | | | 2,829 | | | | — | | | | 26 | |
Multi-family | | | 23,871 | | | | 4,899 | | | | — | | | | — | | | | 28,770 | | | | — | | | | 332 | |
Construction | | | 11,278 | | | | — | | | | — | | | | — | | | | 11,278 | | | | — | | | | 80 | |
Land | | | 16,058 | | | | 3,464 | | | | 14,632 | | | | — | | | | 34,154 | | | | 730 | | | | 483 | |
Non-residential real estate | | | 141,275 | | | | 488 | | | | 12,320 | | | | — | | | | 154,083 | | | | 546 | | | | 2,343 | |
Farmland | | | 41,605 | | | | 345 | | | | 5,658 | | | | — | | | | 47,608 | | | | — | | | | 747 | |
Consumer loans | | | 14,604 | | | | — | | | | 656 | | | | — | | | | 15,260 | | | | 160 | | | | 515 | |
Commercial loans | | | 58,822 | | | | 1,399 | | | | 2,877 | | | | — | | | | 63,098 | | | | — | | | | 596 | |
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Total | | $ | 494,398 | | | | 11,541 | | | | 39,045 | | | | — | | | | 544,984 | | | | 2,016 | | | | 6,897 | |
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A summary of the Company’s impaired loans and their respective reserve at December 31, 2013, were as follows: |
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December 31, 2013 | | Pass | | | Special | | | | | | Total | | | Allowance | | | Allowance | |
Mention | | for | for |
| Impaired Loans | Impairment | Performing |
| | | | Substandard | | | Doubtful | | | | | | Loans |
| | (Dollars in Thousands) | |
One-to-four family mortgages | | $ | 149,351 | | | | 814 | | | | 5,087 | | | | — | | | | 155,252 | | | | 597 | | | | 1,451 | |
Home equity line of credit | | | 33,462 | | | | — | | | | 641 | | | | — | | | | 34,103 | | | | — | | | | 218 | |
Junior liens | | | 3,126 | | | | 43 | | | | 79 | | | | — | | | | 3,248 | | | | — | | | | 39 | |
Multi-family | | | 29,736 | | | | — | | | | — | | | | — | | | | 29,736 | | | | — | | | | 466 | |
Construction | | | 10,443 | | | | — | | | | 175 | | | | — | | | | 10,618 | | | | — | | | | 88 | |
Land | | | 19,899 | | | | 52 | | | | 14,730 | | | | — | | | | 34,681 | | | | 771 | | | | 534 | |
Non-residential real estate | | | 143,044 | | | | 515 | | | | 14,133 | | | | — | | | | 157,692 | | | | 465 | | | | 2,254 | |
Farmland | | | 46,042 | | | | 480 | | | | 5,346 | | | | — | | | | 51,868 | | | | — | | | | 510 | |
Consumer loans | | | 10,727 | | | | — | | | | 440 | | | | — | | | | 11,167 | | | | 96 | | | | 445 | |
Commercial loans | | | 61,502 | | | | 526 | | | | 2,013 | | | | — | | | | 64,041 | | | | — | | | | 748 | |
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Total | | $ | 507,332 | | | | 2,430 | | | | 42,644 | | | | — | | | | 552,406 | | | | 1,929 | | | | 6,753 | |
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Impaired loans by classification type and the related valuation allowance amounts at March 31, 2014, were as follows: |
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| | At March 31, 2014 | | | For the three month period ended | | | | | | | | | |
March 31, 2014 | | | | | | | | |
Impaired loans with no recorded reserve | | Recorded | | | Unpaid | | | Related | | | Average | | | Interest | | | | | | | | | |
Investment | Principal | Allowance | Recorded | Income | | | | | | | | |
| Balance | | Investment | Recognized | | | | | | | | |
| | | | | | | | | | | | | |
One-to-four family mortgages | | $ | 481 | | | | 481 | | | | — | | | | 1,849 | | | | 2 | | | | | | | | | |
Home equity line of credit | | | 543 | | | | 543 | | | | — | | | | 592 | | | | 3 | | | | | | | | | |
Junior liens | | | 23 | | | | 23 | | | | — | | | | 51 | | | | 1 | | | | | | | | | |
Multi-family | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Construction | | | — | | | | — | | | | — | | | | 88 | | | | — | | | | | | | | | |
Land | | | 11,106 | | | | 11,106 | | | | — | | | | 10,994 | | | | 201 | | | | | | | | | |
Farmland | | | 5,658 | | | | 5,658 | | | | | | | | 8,217 | | | | 102 | | | | | | | | | |
Non-residential real estate | | | 8,987 | | | | 8,987 | | | | — | | | | 7,167 | | | | 157 | | | | | | | | | |
Consumer loans | | | 14 | | | | 14 | | | | — | | | | 35 | | | | — | | | | | | | | | |
Commercial loans | | | 2,877 | | | | 2,877 | | | | — | | | | 2,445 | | | | 106 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 29,689 | | | | 29,689 | | | | — | | | | 31,438 | | | | 572 | | | | | | | | | |
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Impaired loans with recorded reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to-four family mortgages | | | 1,855 | | | | 1,855 | | | | 580 | | | | 1,863 | | | | 6 | | | | | | | | | |
Home equity line of credit | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Junior liens | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Multi-family | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Construction | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Land | | | 3,526 | | | | 5,039 | | | | 730 | | | | 3,687 | | | | 23 | | | | | | | | | |
Farmland | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Non-residential real estate | | | 3,333 | | | | 4,118 | | | | 546 | | | | 3,346 | | | | 76 | | | | | | | | | |
Consumer loans | | | 642 | | | | 642 | | | | 160 | | | | 513 | | | | — | | | | | | | | | |
Commercial loans | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 9,356 | | | | 11,654 | | | | 2,016 | | | | 9,409 | | | | 105 | | | | | | | | | |
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Total impaired loans | | $ | 39,045 | | | | 41,343 | | | | 2,016 | | | | 40,847 | | | | 677 | | | | | | | | | |
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Impaired loans by classification type and the related valuation allowance amounts at December 31, 2013, were as follows: |
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| | At December 31, 2013 | | | For the year ended | | | | | | | | | |
31-Dec-13 | | | | | | | | |
Impaired loans with no recorded reserve | | Recorded | | | Unpaid | | | Related | | | Average | | | Interest | | | | | | | | | |
Investment | Principal | Allowance | Recorded | Income | | | | | | | | |
| Balance | | Investment | Recognized | | | | | | | | |
| | | | | | | | | | | | | |
One-to-four family mortgages | | $ | 3,216 | | | | 3,216 | | | | — | | | | 2,361 | | | | 8 | | | | | | | | | |
Home equity line of credit | | | 641 | | | | 641 | | | | — | | | | 564 | | | | 3 | | | | | | | | | |
Junior liens | | | 79 | | | | 79 | | | | — | | | | 239 | | | | 1 | | | | | | | | | |
Multi-family | | | — | | | | — | | | | — | | | | 990 | | | | — | | | | | | | | | |
Construction | | | 175 | | | | 175 | | | | — | | | | 1,072 | | | | 5 | | | | | | | | | |
Land | | | 10,882 | | | | 12,315 | | | | — | | | | 10,668 | | | | 186 | | | | | | | | | |
Farmland | | | 5,346 | | | | 5,346 | | | | — | | | | 6,955 | | | | 149 | | | | | | | | | |
Non-residential real estate | | | 10,775 | | | | 10,775 | | | | — | | | | 6,196 | | | | 263 | | | | | | | | | |
Consumer loans | | | 56 | | | | 56 | | | | — | | | | 48 | | | | — | | | | | | | | | |
Commercial loans | | | 2,013 | | | | 2,013 | | | | — | | | | 2,391 | | | | 95 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 33,183 | | | | 34,616 | | | | — | | | | 31,484 | | | | 710 | | | | | | | | | |
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Impaired loans with recorded reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to-four family mortgages | | | 1,871 | | | | 1,871 | | | | 597 | | | | 2,501 | | | | 9 | | | | | | | | | |
Home equity line of credit | | | — | | | | — | | | | — | | | | 279 | | | | — | | | | | | | | | |
Junior liens | | | — | | | | — | | | | — | | | | 113 | | | | — | | | | | | | | | |
Multi-family | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Construction | | | — | | | | — | | | | — | | | | 1,385 | | | | — | | | | | | | | | |
Land | | | 3,848 | | | | 3,848 | | | | 771 | | | | 2,741 | | | | 29 | | | | | | | | | |
Farmland | | | — | | | | — | | | | — | | | | 1,601 | | | | — | | | | | | | | | |
Non-residential real estate | | | 3,358 | | | | 4,222 | | | | 465 | | | | 2,243 | | | | 111 | | | | | | | | | |
Consumer loans | | | 384 | | | | 384 | | | | 96 | | | | 401 | | | | — | | | | | | | | | |
Commercial loans | | | — | | | | — | | | | — | | | | 346 | | | | — | | | | | | | | | |
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Total | | $ | 9,461 | | | | 10,325 | | | | 1,929 | | | | 11,610 | | | | 149 | | | | | | | | | |
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Total impaired loans | | $ | 42,644 | | | | 44,941 | | | | 1,929 | | | | 43,094 | | | | 859 | | | | | | | | | |
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On a periodic basis, the Bank may modify the terms of certain loans. In evaluating whether a restructuring constitutes a troubled debt restructuring (TDR), Financial Accounting Standards Board has issued Accounting Standards Update 310 (ASU 310), A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring. In evaluating whether a restructuring constitutes a TDR, the Bank must separately conclude that both of the following exist: |
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| • | | The restructuring constitutes a concession | | | | | | | | | | | | | | | | | | | | | | | | | |
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| • | | The debtor is experiencing financial difficulties | | | | | | | | | | | | | | | | | | | | | | | | | |
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ASU 310 provides the following guidance for the Bank’s evaluation of whether it has granted a concession as follows: |
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| 1 | If a debtor does not otherwise have access to funds at a market interest rate for debt with similar risk characteristics as the restructured debt, the restructured debt would be considered a below market rate, which may indicate that the Bank may have granted a concession. In that circumstance, the Bank should consider all aspects of the restructuring in determining whether it has granted a concession, the creditor must make a separate assessment about whether the debtor is experiencing financial difficulties to determine whether the restructuring constitutes a TDR. | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| 2 | A temporary or permanent increase in the interest rate on a loan as a result of a restructuring does not eliminate the possibility of the restructuring from being considered a concession if the new interest rate on the loan is below the market interest rate for loans of similar risk characteristics. | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| 3 | A restructuring that results in a delay in payment that is insignificant is not a concession. However, the Bank must consider a variety of factors in assessing whether a restructuring resulting in a delay in payment is insignificant. | | | | | | | | | | | | | | | | | | | | | | | | | | |
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At March 31, 2014, and December 31, 2013, the Company has no loans classified as Troubled Debt Restructurings (TDR’s) that are reported as performing at March 31, 2014, and December 31, 2013, respectively. For the three month period ended March 31, 2014, no loans were classified as TDR and no loans were added or removed from TDR status during the three month period ended March 31, 2014. |