| Loans receivable | 4.
Loans receivable The
composition of the loan portfolio was as follows:
December 31, June 30,
(in thousands) 2019 2019
Residential real estate
One- to four-family $ 220,496 $ 216,066
Multi-family 12,626 15,928
Construction 4,193 3,757
Land 1,226 852
Farm 2,087 3,157
Nonresidential real estate 31,111 30,419
Commercial nonmortgage 1,502 2,075
Consumer and other:
Loans on deposits 1,372 1,415
Home equity 7,653 8,214
Automobile 83 91
Unsecured 666 451
283,015 282,425
Allowance for loan losses (1,447 ) (1,456 )
$ 281,568 $ 280,969 The
following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended December
31, 2019:
(in thousands) Beginning Provision for Loans Recoveries Ending
Residential real estate:
One- to four-family $ 685 $ 64 $ (65 ) $ – $ 684
Multi-family 200 (28 ) – – 172
Construction 6 – – – 6
Land 1 1 – – 2
Farm 6 (2 ) – – 4
Nonresidential real estate 336 25 – – 361
Commercial nonmortgage 5 (1 ) – – 4
Consumer and other:
Loans on deposits 3 (1 ) – – 2
Home equity 14 (3 ) – – 11
Automobile – 8 8 – –
Unsecured – 1 – – 1
Unallocated 200 – – – 200
Totals $ 1,456 $ 64 $ (73 ) $ – $ 1,447 The
following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended December
31, 2019:
(in thousands) Beginning Provision for Loans Recoveries Ending
Residential real estate:
One- to four-family $ 686 $ (2 ) $ – $ – $ 684
Multi-family 193 (21 ) – – 172
Construction 6 – – – 6
Land 1 1 – – 2
Farm 6 (2 ) – – 4
Nonresidential real estate 339 22 – – 361
Commercial nonmortgage 5 (1 ) – – 4
Consumer and other:
Loans on deposits 2 – – – 2
Home equity 12 (1 ) – – 11
Automobile – 8 (8 ) – –
Unsecured – 1 – – 1
Unallocated 200 – – – 200
Totals $ 1,450 $ 5 $ (8 ) $ – $ 1,447 The
following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended December
31, 2018:
(in thousands) Beginning Provision for Loans Recoveries Ending
Residential real estate:
One- to four-family $ 795 $ 17 $ (117 ) $ 39 $ 734
Multi-family 225 (5 ) – – 220
Construction 8 (5 ) – – 3
Land 1 – – – 1
Farm 6 (1 ) – – 5
Nonresidential real estate 321 25 – – 346
Commercial nonmortgage 3 – – – 3
Consumer and other:
Loans on deposits 3 – – – 3
Home equity 13 – – – 13
Automobile – – – – –
Unsecured 1 (20 ) – 20 1
Unallocated 200 – – – 200
Totals $ 1,576 $ 11 $ (117 ) $ 59 $ 1,529 The
following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended December
31, 2018:
(in thousands) Beginning Provision for Loans Recoveries Ending
Residential real estate:
One- to four-family $ 781 $ (5 ) $ (58 ) $ 16 $ 734
Multi-family 232 (12 ) – – 220
Construction 4 (1 ) – – 3
Land 1 – – – 1
Farm 6 (1 ) – – 5
Nonresidential real estate 323 23 – – 346
Commercial nonmortgage 4 (1 ) – – 3
Consumer and other:
Loans on deposits 3 – – – 3
Home equity 16 (3 ) – – 13
Automobile – – – – –
Unsecured 1 – – – 1
Unallocated 200 – – – 200
Totals $ 1,571 $ – $ (58 ) $ 16 $ 1,529 The
following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio class
and based on impairment method as of December 31, 2019. The recorded investment in loans excludes accrued interest receivable
due to immateriality.
December 31, 2019:
(in thousands) Loans Loans Unpaid Ending Unallocated Total
Loans individually evaluated for impairment:
Residential real estate:
One- to four-family $ 4,007 $ 924 $ 4,931 $ – $ – $ –
Multi-family 682 – 682 – – –
Farm 310 – 310 – – –
Nonresidential real estate 720 – 720 – – –
5,719 924 6,643 – – –
Loans collectively evaluated for impairment:
Residential real estate:
One- to four-family $ 215,565 $ 684 $ – $ 684
Multi-family 11,944 172 – 172
Construction 4,193 6 – 6
Land 1,226 2 – 2
Farm 1,777 4 – 4
Nonresidential real estate 30,391 361 – 361
Commercial nonmortgage 1,502 4 – 4
Consumer:
Loans on deposits 1,372 2 – 2
Home equity 7,653 11 – 11
Automobile 83 – – –
Unsecured 666 1 – 1
Unallocated – – 200 200
276,372 1,247 200 1,447
$ 283,015 $ 1,247 $ 200 $ 1,447 The
following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio class
and based on impairment method as of June 30, 2019.
June 30, 2019:
(in thousands) Loans Loans Unpaid Ending Unallocated Total
Loans individually evaluated for impairment:
Residential real estate:
One- to four-family $ 3,837 $ 949 $ 4,786 $ – $ – $ –
Multi-family 685 – 685 – – –
Farm 309 – 309 – – –
Nonresidential real estate 683 – 683 – – –
5,514 949 6,463 – – –
Loans collectively evaluated for impairment:
Residential real estate:
One- to four-family $ 210,595 $ 685 $ – $ 685
Multi-family 15,928 200 – 200
Construction 3,757 6 – 6
Land 852 1 – 1
Farm 2,848 6 – 6
Nonresidential real estate 29,736 336 – 336
Commercial nonmortgage 2,075 5 – 5
Consumer:
Loans on deposits 1,415 3 – 3
Home equity 8,214 14 – 14
Automobile 91 – – –
Unsecured 451 – – –
Unallocated – – 200 200
275,962 1,256 200 1,456
$ 282,425 $ 1,256 $ 200 $ 1,456 The
following table presents loans individually evaluated for impairment by class of loans as of and for the six months ended December
31:
(in thousands) Average Interest Cash Basis Average Interest Cash Basis
2019 2018
With no related allowance recorded:
Residential real estate:
One- to four-family $ 3,922 $ 62 $ 62 $ 3,654 $ 75 $ 75
Multi-family 684 17 17 – – –
Farm 309 5 5 310 – –
Nonresidential real estate 702 14 14 409 14 14
Purchased credit-impaired loans 936 35 35 1,066 36 36
6,553 133 133 5,439 125 125
With an allowance recorded:
One- to four-family – – – – – –
$ 6,553 $ 133 $ 133 $ 5,439 $ 125 $ 125 The
following table presents interest income on loans individually evaluated for impairment by class of loans for the three months
ended December 31:
(in thousands) Average Recorded Investment Interest Cash Basis Income Recognized Average Recorded Investment Interest Cash Basis Income Recognized
2019 2018
With no related allowance recorded:
Residential real estate:
One- to four-family $ 3,780 $ 28 $ 28 $ 4,432 $ 59 $ 59
Multi-family 682 6 6 – – –
Farm 309 5 5 310 – –
Nonresidential real estate 724 7 7 698 14 14
Purchased credit-impaired loans 913 17 17 982 28 28
6,408 63 63 6,422 101 101
With an allowance recorded:
One- to four-family – – – – – –
$ 6,408 $ 63 $ 63 $ 6,422 $ 101 $ 101 The
following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
as of December 31, 2019 and June 30, 2019:
December 31, 2019 June 30, 2019
(in thousands) Nonaccrual Loans Nonaccrual Loans
Residential real estate:
One- to four-family residential real estate $ 4,651 $ 1,228 $ 4,545 $ 1,747
Multifamily 682 – 685 –
Construction – 63 – –
Farm 310 – 309 –
Nonresidential real estate and land 720 – 683 49
Commercial and industrial 1 – 1 –
Consumer 5 – 9 –
$ 6,369 $ 1,291 $ 6,232 $ 1,796 One- to four-family loans in process of
foreclosure totaled $860,000 and $1.2 million at December 31, and June 30, 2019, respectively. Troubled
Debt Restructurings: A
Troubled Debt Restructuring ("TDR") is the situation where the Bank grants a concession to the borrower that the Banks
would not otherwise have considered due to the borrower's financial difficulties. All TDRs are considered "impaired." At
December 31, 2019 and June 30, 2019, the Company had $1.9 million and $1.6 million of loans classified as TDRs, respectively.
Of the TDRs at December 31, 2019, approximately 21.5% were related to the borrower's completion of Chapter 7 bankruptcy
proceedings with no reaffirmation of the debt to the Banks. During
the six months ended December 31, 2019, the Company had two loans restructured as TDRs. One borrower refinanced a piece of one-
to four-family, non-owner occupied, residential property to bring to current amounts owed on other loans with the Bank. Because
the borrower's financial condition had deteriorated, it was unlikely that the borrower could have secured financing elsewhere.
The restructured loan is collateralized and cross-collateralized by real estate. Another single family residential borrower filed
for Chapter 7 bankruptcy protection and did not reaffirm the debt personally, although the Company's collateral position
remains intact. During
the six months ended December 31, 2018, the Company had two loans restructured as TDRs. A second mortgage loan of $219,000
was renewed and an additional $30,000 was loaned to a borrower to finish construction of an 8-plex, because construction project
had experienced cost overruns. The Company carries the first mortgage on this project and both the primary and secondary loans
are secured by the 8-plex and additional real estate collateral. The Company also refinanced an existing single-family mortgage
loan and provided additional funds to a borrower attempting to consolidate his debt. The
following table summarizes TDR loan modifications that occurred during the six months ended December 31, 2019 and 2018, and their
performance, by modification type:
(in thousands) Troubled Debt Troubled Debt Total
Six months ended December 31, 2019
Residential real estate:
Terms extended $ 682 $ – $ 682
Terms extended and additional funds advanced $ 119 $ – $ 119
Chapter 7 bankruptcy $ 21 $ – $ 21
Six months ended December 31, 2018
Residential real estate:
Terms extended $ 324 $ – $ 324 The
following table summarizes TDR loan modifications that occurred during the three months ended December 31, 2019 and 2018, and
their performance, by modification type:
(in thousands) Troubled Debt Troubled Debt Total
Three months ended December 31, 2019
Residential real estate:
Terms extended $ 682 $ – $ 682
Chapter 7 bankruptcy $ 21 $ – $ 21
Three months ended December 31, 2018
Residential real estate:
Terms extended and additional funds advanced $ 75 $ – $ 75 No
TDRs defaulted during the six-month periods ended December 31, 2019 or 2018. The
following table presents the aging of the principal balance outstanding in past due loans as of December 31, 2019, by class of
loans:
(in thousands) 30-89 Days Past Due 90 Days or Total Past Loans Not Total
Residential real estate:
One-to four-family $ 2,563 $ 2,986 $ 5,549 $ 214,947 $ 220,496
Multi-family 250 – 250 12,376 12,626
Construction – 63 63 4,130 4,193
Land 76 – 76 1,150 1,226
Farm 109 310 419 1,668 2,087
Nonresidential real estate 333 303 636 30,475 31,111
Commercial non-mortgage – – – 1,502 1,502
Consumer and other:
Loans on deposits – – – 1,372 1,372
Home equity – – – 7,653 7,653
Automobile – – – 83 83
Unsecured – – – 666 666
Total $ 3,331 $ 3,662 $ 6,993 $ 276,022 $ 283,015 The
following tables present the aging of the principal balance outstanding in past due loans as of June 30, 2019, by class of loans:
(in thousands) 30-89 Days 90 Days or Total Past Loans Not Total
Residential real estate:
One-to four-family $ 4,021 $ 3,479 $ 7,500 $ 208,566 $ 216,066
Multi-family – 248 248 15,680 15,928
Construction 753 – 753 3,004 3,757
Land – – – 852 852
Farm 2 – 2 3,155 3,157
Nonresidential real estate 362 49 411 30,008 30,419
Commercial nonmortgage – – – 2,075 2,075
Consumer:
Loans on deposits – – – 1,415 1,415
Home equity 38 – 38 8,176 8,214
Automobile 8 – 8 83 91
Unsecured – – – 451 451
Total $ 5,184 $ 3,776 $ 8,960 $ 273,465 $ 282,425 Credit
Quality Indicators: The
Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt
such as: current financial information, historical payment experience, credit documentation, public information, and current economic
trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis
is performed on an annual basis. The Company uses the following definitions for risk ratings: Special
Mention. Substandard.
Doubtful.
Loans
not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass
rated loans. Loans listed that are not rated are included in groups of homogeneous loans and are evaluated for credit quality
based on performing status. See the aging of past due loan table above. As of December 31, 2019, and based on the most recent
analysis performed, the risk category of loans by class of loans is as follows:
(in thousands) Pass Special Substandard Doubtful
Residential real estate:
One- to four-family $ 212,106 $ 619 $ 7,771 $ –
Multi-family 11,944 – 682 –
Construction 4,193 – – –
Land 1,226 – – –
Farm 1,777 – 310 –
Nonresidential real estate 29,322 736 1,053 –
Commercial nonmortgage 1,267 – 235 –
Consumer:
Loans on deposits 1,372 – – –
Home equity 7,634 – 19 –
Automobile 83 – – –
Unsecured 661 – 5 –
$ 271,585 $ 1,355 $ 10,075 $ – At
June 30, 2019, the risk category of loans by class of loans was as follows:
(in thousands) Pass Special Substandard Doubtful
Residential real estate:
One- to four-family $ 206,489 $ 894 $ 8,683 $ –
Multi-family 15,243 – 685 –
Construction 3,757 – – –
Land 852 – – –
Farm 2,848 – 309 –
Nonresidential real estate 28,990 746 683 –
Commercial nonmortgage 1,584 – 491 –
Consumer:
Loans on deposits 1,415 – – –
Home equity 8,053 137 24 –
Automobile 91 – – –
Unsecured 446 – 5 –
$ 269,768 $ 1,777 $ 10,880 $ – Purchased
Credit Impaired Loans: The
Company purchased loans during fiscal year 2013 for which there was, at acquisition, evidence of deterioration of credit quality
since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying
amount of those loans, net of a purchase credit discount of $351,000 and $351,000 at December 31, 2019 and June 30, 2019, respectively,
is as follows:
(in
thousands) December 31, June
30,
One-
to four-family residential real estate $ 924 $ 949 Accretable
yield, or income expected to be collected, is as follows
(in thousands) Six months Twelve months
Balance at beginning of period $ 544 $ 634
Accretion of income (56 ) (90 )
Disposals, net of recoveries – –
Balance at end of period $ 488 $ 544 For
those purchased loans disclosed above, the Company made no increase in allowance for loan losses for the year ended June 30, 2019,
nor for the six-month period ended December 31, 2019. Neither were any allowance for loan losses reversed during those periods. |
