| Loans receivable | 4.
Loans receivable The
composition of the loan portfolio was as follows:
December 31, June 30,
(in thousands) 2020 2020
Residential real estate
One- to four-family $ 222,443 $ 222,489
Multi-family 18,991 12,373
Construction 4,055 4,045
Land 1,099 765
Farm 2,561 2,354
Nonresidential real estate 38,043 33,503
Commercial nonmortgage 1,321 2,214
Consumer and other:
Loans on deposits 1,235 1,245
Home equity 7,454 7,645
Automobile 90 67
Unsecured 594 675
297,886 287,375
Allowance for loan losses (1,622 ) (1,488 )
$ 296,264 $ 285,887 The
following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended December
31, 2020:
(in thousands) Beginning balance Provision for loan losses Loans charged off Recoveries Ending balance
Residential real estate:
One- to four-family $ 671 $ (1 ) $ (23 ) $ – $ 647
Multi-family 184 93 – – 277
Construction 6 -- – – 6
Land 1 1 – – 2
Farm 4 1 – – 5
Nonresidential real estate 405 64 – – 469
Commercial nonmortgage 3 (1 ) – – 2
Consumer and other:
Loans on deposits 2 – – – 2
Home equity 11 38 (45 ) 7 11
Automobile – – – – –
Unsecured 1 (3 ) – 3 1
Unallocated 200 – – – 200
Totals $ 1,488 $ 192 $ (68 ) $ 10 $ 1,622 The
following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended December
31, 2020:
(in thousands) Beginning balance Provision for loan losses Loans charged off Recoveries Ending balance
Residential real estate:
One- to four-family $ 670 $ -- $ (23 ) $ – $ 647
Multi-family 217 60 – – 277
Construction 7 (1 ) – – 6
Land 1 1 – – 2
Farm 5 – – – 5
Nonresidential real estate 418 51 – – 469
Commercial nonmortgage 4 (2 ) – – 2
Consumer and other:
Loans on deposits 2 -- – – 2
Home equity 11 -- – – 11
Automobile – – – – –
Unsecured 1 (1 ) – 1 1
Unallocated 200 – – – 200
Totals $ 1,536 $ 108 $ (23 ) $ 1 $ 1,622 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 balance Provision for loan losses Loans charged off Recoveries Ending balance
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 balance Provision for loan losses Loans charged off Recoveries Ending balance
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 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, 2020. The recorded investment in loans excludes accrued interest receivable
due to immateriality. December
31, 2020:
(in thousands) Loans individually evaluated Loans acquired with deteriorated credit quality Unpaid principal balance Ending allowance attributed to loans Unallocated allowance Total allowance
Loans individually evaluated for impairment:
Residential real estate:
One- to four-family $ 4,040 $ 685 $ 4,725 $ – $ – $ –
Multi-family 658 – 658 – – –
Farm 291 – 291 – – –
Nonresidential real estate 646 – 646 – – –
5,635 685 6,320 – – –
Loans collectively evaluated for impairment:
Residential real estate:
One- to four-family $ 217,718 $ 647 $ – $ 647
Multi-family 18,333 277 – 277
Construction 4,055 6 – 6
Land 1,099 2 – 2
Farm 2,270 5 – 5
Nonresidential real estate 37,397 469 – 469
Commercial nonmortgage 1,321 2 – 2
Consumer:
Loans on deposits 1,235 2 – 2
Home equity 7,454 11 – 11
Automobile 90 – – –
Unsecured 594 1 – 1
Unallocated – – 200 200
291,566 1,422 200 1,622
$ 297,886 $ 1,422 $ 200 $ 1,622 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, 2020. June
30, 2020:
(in thousands) Loans individually
evaluated Loans acquired with
deteriorated credit quality Unpaid principal balance Ending allowance attributed to loans Unallocated allowance Total allowance
Loans individually evaluated for impairment:
Residential real estate:
One- to four-family $ 3,983 $ 751 $ 4,734 $ – $ – $ –
Multi-family 671 – 671 – – –
Construction 63 – 63 – – –
Farm 309 – 309 – – –
Nonresidential real estate 660 – 660 – – –
5,686 751 6,437 – – –
Loans collectively evaluated for impairment:
Residential real estate:
One- to four-family $ 217,755 $ 671 $ – $ 671
Multi-family 11,702 184 – 184
Construction 3,982 6 – 6
Land 765 1 – 1
Farm 2,045 4 – 4
Nonresidential real estate 32,843 405 – 405
Commercial nonmortgage 2,214 3 – 3
Consumer:
Loans on deposits 1,245 2 – 2
Home equity 7,645 11 – 11
Automobile 67 – – –
Unsecured 675 1 – 1
Unallocated – – 200 200
280,938 1,288 200 1,488
$ 287,375 $ 1,288 $ 200 $ 1,488 The
following table presents interest income on loans individually evaluated for impairment by class of loans for the six months ended
December 31:
(in thousands) Average Interest Cash Basis Average Interest Cash Basis
2020 2019
With no related allowance recorded:
One- to four-family $ 4,011 $ 84 $ 84 $ 3,922 $ 62 $ 62
Multi-family 665 12 12 684 17 17
Construction 32 – – – – –
Farm 300 23 23 309 5 5
Nonresidential real estate 653 7 7 702 14 14
Purchased credit-impaired loans 718 24 24 936 35 35
6,379 150 150 6,553 133 133
With an allowance recorded:
One- to four-family – – – – – –
$ 6,379 $ 150 $ 150 $ 6,553 $ 133 $ 133 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
2020 2019
With no related allowance recorded:
Residential real estate:
One- to four-family $ 3,965 $ 39 $ 39 $ 3,780 $ 28 $ 28
Multi-family 662 6 6 682 6 6
Construction 32
Farm 292 -- -- 309 5 5
Nonresidential real estate 650 3 3 724 7 7
Purchased credit-impaired loans 711 10 10 913 17 17
6,312 58 58 6,408 63 63
With an allowance recorded:
One- to four-family – – – – – –
$ 6,312 $ 58 $ 58 $ 6,408 $ 63 $ 63 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, 2020 and June 30,
2020:
December 31, 2020 June 30, 2020
(in thousands) Nonaccrual Loans Past Due Over Nonaccrual Loans
Residential real estate:
One- to four-family residential real estate $ 4,430 $ 461 $ 4,458 $ 1,135
Multifamily 658 – 671 –
Construction -- – 63 –
Farm 291 – 309 –
Nonresidential real estate and land 646 – 660 –
Commercial and industrial – – 4 –
Consumer 67 -- 95 –
$ 6,092 $ 461 $ 6,260 $ 1,135 One- to four-family loans in process of
foreclosure totaled $790,000 and $694,000 at December 31, 2020 and June 30, 2020, 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." The provisions of the CARES Act included
an election to not apply the guidance on accounting for troubled debt restructurings to loan modifications, such as extensions
or deferrals, related to COVID-19 made between March 1, 2020 and the earlier of (i) December 31, 2020 or (ii) 60 days after the
end of the COVID-19 national emergency. The relief can only be applied to modifications for borrowers that were not more than 30
days past due as of December 31, 2019. The Company elected to adopt these provisions of the CARES Act. As of December 31,
2020, the Banks had granted deferrals to 101 loans totaling $18.4 million. Of those, five loans totaling $293,000 had not yet completed
the initial 3-month deferral period at December 31, 2020. One borrower who owes $859,000 had been granted an additional extension.
All other borrowers granted a deferral, composed of 95 loans totaling $17.2 million in principal had resumed regular payments. At December 31, 2020 and June 30, 2020,
the Company had $1.9 million and $1.9 million of loans classified as TDRs, respectively. Of the TDRs at December 31, 2020, approximately
29.6% 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,
2020, the Company had two loans, which were associated with a single borrower and were both secured by a single-family residence,
restructured as TDRs. The loans were classified as TDRs pursuant to court action under Chapter 7 bankruptcy proceedings without
the borrower reaffirming the debt personally, and totaled $144,000 at December 31, 2020, and were current on payments. 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. The following table summarizes TDR loan
modifications that occurred during the six months ended December 31, 2020 and 2019, and their performance, by modification type:
(in thousands) Troubled Debt Troubled Debt Total
Six months ended December 31, 2020
Residential real estate:
Chapter 7 bankruptcy $ 144 $ – $ 144
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 No TDRs defaulted during the six-month
periods ended December 31, 2020 or 2019. The following table summarizes TDR loan
modifications that occurred during the three months ended December 31, 2020 and 2019, and their performance, by modification type:
(in thousands) Troubled Debt Troubled Debt Total
Three months ended December 31, 2020
Residential real estate:
Chapter 7 bankruptcy $ 144 $ – $ 144
Three months ended December 31, 2019
Residential real estate:
Terms extended $ 682 $ – $ 682
Chapter 7 bankruptcy $ 21 $ – $ 21 The following table presents the aging
of the principal balance outstanding in past due loans as of December 31, 2020, by class of loans:
(in thousands) 30-89 Days 90 Days or Total Past Loans Not Total
Residential real estate:
One-to four-family $ 3,424 $ 2,086 $ 5,510 $ 216,933 $ 222,443
Multi-family – – – 18,991 18,991
Construction 378 -- 378 3,677 4,055
Land – – – 1,099 1,099
Farm 104 – 104 2,457 2,561
Nonresidential real estate -- 249 249 37,794 38,043
Commercial non-mortgage – – – 1,321 1,321
Consumer and other:
Loans on deposits – – – 1,235 1,235
Home equity -- -- -- 7,454 7,454
Automobile 1 – 1 89 90
Unsecured 9 – 9 585 594
Total $ 3,916 $ 2,335 $ 6,251 $ 291,635 $ 297,886 The following tables present the aging
of the principal balance outstanding in past due loans as of June 30, 2020, by class of loans:
(in thousands) 30-89 Days 90 Days or Total Past Loans Not Total
Residential real estate:
One-to four-family $ 2,546 $ 2,670 $ 5,216 $ 217,273 $ 222,489
Multi-family – – – 12,373 12,373
Construction 192 63 255 3,790 4,045
Land – – – 765 765
Farm 107 309 416 1,938 2,354
Nonresidential real estate 57 253 310 33,193 33,503
Commercial nonmortgage – – – 2,214 2,214
Consumer:
Loans on deposits – – – 1,245 1,245
Home equity 255 90 345 7,300 7,645
Automobile – – – 67 67
Unsecured – – – 675 675
Total $ 3,157 $ 3,385 $ 6,542 $ 280,833 $ 287,375 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, 2020, 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 $ 215,356 $ 690 $ 6,397 $ –
Multi-family 18,333 – 658 –
Construction 4,055 – -- –
Land 1,099 – – –
Farm 2,270 – 291 –
Nonresidential real estate 36,001 937 1,105 –
Commercial nonmortgage 1,321 – – –
Consumer:
Loans on deposits 1,235 – – –
Home equity 7,333 40 81 –
Automobile 90 – – –
Unsecured 594 – -- –
$ 287,687 $ 1,667 $ 8,532 $ – At June 30, 2020, 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 $ 215,010 $ 742 $ 6,737 $ –
Multi-family 11,702 – 671 –
Construction 3,982 – 63 –
Land 765 – – –
Farm 2,045 – 309 –
Nonresidential real estate 31,529 939 1,035 –
Commercial nonmortgage 2,188 – 26 –
Consumer:
Loans on deposits 1,245 – – –
Home equity 7,505 39 101 –
Automobile 67 – – –
Unsecured 670 – 5 –
$ 276,708 $ 1,720 $ 8,947 $ – 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, 2020 and June 30, 2020, respectively, is as follows:
(in thousands) December 31, June 30,
One- to four-family residential real estate $ 646 $ 751 Accretable yield, or income expected to be collected, is as
follows:
(in thousands) Six months Twelve months
Balance at beginning of period $ 447 $ 544
Accretion of income (29 ) (97 )
Disposals, net of recoveries – –
Balance at end of period $ 418 $ 447 For those purchased loans disclosed above,
the Company made no increase in allowance for loan losses for the year ended June 30, 2020, nor for the six-month period ended
December 31, 2020. Neither were any allowance for loan losses reversed during those periods. |
