Loans Receivable | 12 Months Ended |
Dec. 31, 2013 |
Receivables [Abstract] | ' |
Loans Receivable | ' |
Loans Receivable |
|
Loans receivable at December 31, 2013 and 2012 are summarized as follows: |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, | | | | | | | | | | | | | | | | | | | | |
| 2013 | | 2012 | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | | | | | | | | | |
One-to-four family residential: (1) | | | | | | | | | | | | | | | | | | | | | | | |
Permanent | $ | 280,674 | | | $ | 306,851 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Construction | — | | | 177 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| 280,674 | | | 307,028 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Multifamily: (2) | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Permanent | 106,152 | | | 105,936 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Construction | 12,360 | | | 5,585 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| 118,512 | | | 111,521 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Commercial real estate: (2) | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Permanent | 227,016 | | | 207,436 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Construction | 19,905 | | | 12,500 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Land | 1,831 | | | 1,942 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| 248,752 | | | 221,878 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Construction/land development: (2) | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
One-to-four family residential | 3,977 | | | 608 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Multifamily | 12,491 | | | 8,375 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Commercial | 6,726 | | | — | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Land development | 7,461 | | | 10,435 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| 30,655 | | | 19,418 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Business | 1,142 | | | 2,968 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Consumer | 9,201 | | | 11,110 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total loans | 688,936 | | | 673,923 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Less: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Loans in process ("LIP") | 10,209 | | | 8,856 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Deferred loan fees, net | 2,580 | | | 2,057 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
ALLL | 12,994 | | | 12,542 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Loans receivable, net | $ | 663,153 | | | $ | 650,468 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
___________ |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | Includes $121.9 million and $139.8 million of non-owner occupied loans at December 31, 2013 and 2012, respectively. | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
(2) | Excludes construction loans that will convert to permanent loans. The Company considers these loans to be "rollovers" in that one loan is originated for both the construction loan and permanent financing. These loans are classified according to the underlying collateral. At December 31, 2013, the Company had $19.9 million, or 8.0% of the total commercial real estate portfolio and $12.4 million, or 10.4% of the total multifamily loans in these "rollover" type of loans. At December 31, 2012, the Company had $12.5 million, or 5.6% of the total commercial real estate portfolio, $5.6 million, or 5.0% of the total multifamily loans and $177,000 or 0.1% of the total one-to-four family loan portfolio in these rollover type of loans. At December 31, 2013 and December 31, 2012, $1.8 million and $1.9 million, respectively, of commercial real estate loans were not included in the construction/land development category because the Company classifies raw land or buildable lots when it does not intend to finance the construction as commercial real estate land loans. | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
At December 31, 2013 and 2012 there were no loans classified as held for sale. |
|
Loan Origination/Risk Management |
|
One-to-four family residential loans are originated generally using secondary market underwriting guidelines. The Company originates both fixed-rate and adjustable-rate loans in its residential lending program. The Company is a portfolio lender, which means it originates loans for its portfolio and does not generally sell loans into the secondary market. This loan portfolio comprised 40.7% and 45.6% of total loans at December 31, 2013 and 2012, respectively. |
|
Multifamily loans have higher loan balances, are more difficult to evaluate and monitor and involve a greater degree of risk than one-to-four family residential loans. Often payments on loans secured by multifamily properties are dependent on the successful operation and management of the property; therefore, repayment of these loans may be affected by adverse conditions in the real estate market or the economy. The Company generally requires and obtains loan guarantees from financially capable parties based upon the review of personal financial statements. If the borrower is a corporation, the Company generally requires and obtains personal guarantees from the corporate principals based upon a review of their personal financial statements and individual credit reports. This loan portfolio comprised 17.2% and 16.5% of total loans at December 31, 2013 and 2012, respectively. |
|
Commercial real estate loans are subject to underwriting standards and processes similar to those of multifamily loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or the general economy. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans. This loan portfolio comprised 36.1% and 32.9% of total loans at December 31, 2013 and 2012, respectively. |
|
Construction/land development loans that are secured by non-owner occupied properties generally require the borrower to have had an existing relationship with the Bank and have a proven record of success. Construction/land development loans are underwritten utilizing feasibility studies, independent appraisal reviews, lease rates and financial analysis of the developers and property owners. Construction/land development loans are generally based upon estimates of costs and value associated with the completed project. These estimates may be inaccurate. These loans often involve the disbursement of funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing. This loan portfolio comprised 4.5% and 2.9% of total loans at December 31, 2013 and 2012, respectively. |
|
Historically the Company has generally not made business loans, however, it recently began to offer this type of lending. Business loans are generally secured by business equipment, accounts receivable, inventory or other property. Loan terms vary from typically one to five years. The interest rates on such loans are either fixed-rate or adjustable-rate indexed to The Wall Street Journal prime rate plus a margin. The business lending policy includes credit file documentation and requires analysis of the borrower's background, capacity to repay the loan, the adequacy of the borrower's capital and collateral, as well as an evaluation of other conditions affecting the borrower. Analysis of the borrower's past, present and future cash flows is also an important aspect of the credit analysis. The Company generally obtains personal guarantees on its business loans. This loan portfolio comprised 0.2% and 0.4% of total loans at December 31, 2013 and 2012, respectively. |
|
The Company originates consumer loans which consist of home equity loans, personal lines of credit and savings account loans. To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed. This activity, coupled with the relatively small loan amounts that are spread over many individual borrowers, minimizes risk. This loan portfolio comprised 1.3% and 1.7% of total loans at both December 31, 2013 and 2012. |
|
Concentrations of Credit |
|
Most of the Bank's lending activity occurs within the state of Washington. The primary market areas include King and to a lesser extent Pierce, Snohomish and Kitsap counties. The Company's loan portfolio consists of one-to-four family residential loans which comprised 40.7% of the total loan portfolio at December 31, 2013. Commercial real estate and multifamily loans were 36.1% and 17.2%, respectively, of the total loan portfolio at December 31, 2013, with construction/land development loans, consumer and business loans accounting for the remaining 6.0% of the loan portfolio. Included in the one-to-four family residential, multifamily, commercial real estate and construction/land development portfolios at December 31, 2013, were $39.0 million, $4.0 million, $33.6 million and $3.1 million of total loans, respectively, to the Company's five largest borrowing relationships. |
|
The Company originates both adjustable and fixed interest rate loans. The composition of loans receivable was as follows: |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2013 | | | | | | | | | | | | | | | | | |
Fixed Rate | | Adjustable Rate | | | | | | | | | | | | | | | | | |
Term to Maturity | | Book Value | | Term to Rate Adjustment | | Book Value | | | | | | | | | | | | | | | | | |
(In thousands) | | | | | | | | | | | | | | | | | |
Due within one year | | $ | 38,226 | | | Due within one year | | $ | 81,459 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
After one year through three years | | 50,788 | | | After one year through three years | | 33,802 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
After three years through five years | | 135,933 | | | After three years through five years | | 18,485 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
After five years through ten years | | 150,272 | | | After five years through ten years | | 46,134 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Thereafter | | 131,532 | | | Thereafter | | 2,305 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 506,751 | | | | | $ | 182,185 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2012 | | | | | | | | | | | | | | | | | |
Fixed Rate | | Adjustable Rate | | | | | | | | | | | | | | | | | |
Term to Maturity | | Book Value | | Term to Rate Adjustment | | Book Value | | | | | | | | | | | | | | | | | |
(In thousands) | | | | | | | | | | | | | | | | | |
Due within one year | | $ | 50,488 | | | Due within one year | | $ | 54,963 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
After one year through three years | | 80,609 | | | After one year through three years | | 25,236 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
After three years through five years | | 97,214 | | | After three years through five years | | 30,224 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
After five years through ten years | | 187,641 | | | After five years through ten years | | 5,025 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Thereafter | | 141,343 | | | Thereafter | | 1,180 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 557,295 | | | | | $ | 116,628 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
|
The majority of the adjustable-rate loans are tied to the prime rate as published in The Wall Street Journal. The remaining adjustable-rate loans have interest rate adjustment limitations and are generally indexed to the FHLB Long-Term Bullet advance rates published by the FHLB. Future market factors may affect the correlation of the interest rate adjustment with the rates paid on short‑term deposits that have been primarily utilized to fund these loans. |
|
When the Company classifies problem assets as either substandard or doubtful, pursuant to Federal regulations, it may establish a specific reserve in an amount deemed prudent to address the risk specifically or may allow the loss to be addressed in the general allowance. General allowances represent loss allowances which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been specifically allocated to the particular problem assets. When an insured institution classifies problem assets as a loss, pursuant to Federal regulations, it is required to charge-off such assets in the period in which they are deemed uncollectible. The determination as to the classification of the Company's assets and the amount of valuation allowances is subject to review by bank regulators, who can require the establishment of additional loss allowances. |
|
Loan grades are used by the Company to identify and track potential problem loans which do not rise to the levels described for substandard, doubtful or loss. The grades for watch and special mention are assigned to loans which have been criticized based upon known characteristics such as periodic payment delinquency or stale financial information from the borrower and/or guarantors. Loans identified as criticized (watch and special mention) or classified (substandard, doubtful or loss) are subject to problem loan reporting every three months. |
|
The following tables summarize changes in the ALLL and loan portfolio by type of loan and reserve method for the periods indicated. |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| At or For the Year Ended December 31, 2013 |
| One-to-Four | | Multifamily | | Commercial | | Construction/ | | Business | | Consumer | | Total |
Family | Real Estate | Land |
Residential | | Development |
ALLL: | (In thousands) |
Beginning balance | $ | 5,562 | | | $ | 1,139 | | | $ | 5,207 | | | $ | 437 | | | $ | 30 | | | $ | 167 | | | $ | 12,542 | |
|
Charge-offs | (456 | ) | | (346 | ) | | (98 | ) | | (582 | ) | | (13 | ) | | (101 | ) | | (1,596 | ) |
Recoveries | 1,303 | | | 237 | | | 7 | | | 455 | | | — | | | 146 | | | 2,148 | |
|
Provision (benefit) | (1,268 | ) | | 347 | | | 765 | | | 89 | | | (3 | ) | | (30 | ) | | (100 | ) |
|
Ending balance | $ | 5,141 | | | $ | 1,377 | | | $ | 5,881 | | | $ | 399 | | | $ | 14 | | | $ | 182 | | | $ | 12,994 | |
|
| | | | | | | | | | | | | |
General reserve | $ | 3,601 | | | $ | 1,292 | | | $ | 5,326 | | | $ | 399 | | | $ | 14 | | | $ | 182 | | | $ | 10,814 | |
|
Specific reserve | $ | 1,540 | | | $ | 85 | | | $ | 555 | | | $ | — | | | $ | — | | | $ | — | | | $ | 2,180 | |
|
| | | | | | | | | | | | | |
Loans: (1) | | | | | | | | | | | | | | | | | | | | |
|
Total Loans | $ | 280,674 | | | $ | 117,181 | | | $ | 247,402 | | | $ | 23,127 | | | $ | 1,142 | | | $ | 9,201 | | | $ | 678,727 | |
|
General reserve (2) | $ | 232,526 | | | $ | 114,740 | | | $ | 234,093 | | | $ | 22,904 | | | $ | 1,142 | | | $ | 9,157 | | | $ | 614,562 | |
|
Specific reserve (3) | $ | 48,148 | | | $ | 2,441 | | | $ | 13,309 | | | $ | 223 | | | $ | — | | | $ | 44 | | | $ | 64,165 | |
|
____________ |
(1) Net of LIP. |
(2) Loans collectively evaluated for impairment. |
(3) Loans individually evaluated for impairment. |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| At or For the Year Ended December 31, 2012 |
| One-to-Four Family Residential | | Multifamily | | Commercial | | Construction/ | | Business | | Consumer | | Total |
Real Estate | Land |
| Development |
ALLL: | (In thousands) |
Beginning balance | $ | 5,756 | | | $ | 950 | | | $ | 6,846 | | | $ | 2,503 | | | $ | 154 | | | $ | 350 | | | $ | 16,559 | |
|
Charge-offs | (2,229 | ) | | (153 | ) | | (6,088 | ) | | (630 | ) | | — | | | (491 | ) | | (9,591 | ) |
|
Recoveries | 119 | | | — | | | 477 | | | 1,914 | | | — | | | 14 | | | 2,524 | |
|
Provision | 1,916 | | | 342 | | | 3,972 | | | (3,350 | ) | | (124 | ) | | 294 | | | 3,050 | |
|
Ending balance | $ | 5,562 | | | $ | 1,139 | | | $ | 5,207 | | | $ | 437 | | | $ | 30 | | | $ | 167 | | | $ | 12,542 | |
|
| | | | | | | | | | | | | |
General reserve | $ | 4,311 | | | $ | 1,139 | | | $ | 4,855 | | | $ | 437 | | | $ | 30 | | | $ | 167 | | | $ | 10,939 | |
|
Specific reserve | $ | 1,251 | | | $ | — | | | $ | 352 | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,603 | |
|
| | | | | | | | | | | | | |
Loans: (1) | | | | | | | | | | | | | | | | | | | | |
|
Total Loans | $ | 306,933 | | | $ | 109,646 | | | $ | 221,878 | | | $ | 12,532 | | | $ | 2,968 | | | $ | 11,110 | | | $ | 665,067 | |
|
General reserve (2) | $ | 248,041 | | | $ | 103,696 | | | $ | 203,639 | | | $ | 7,765 | | | $ | 2,968 | | | $ | 10,351 | | | $ | 576,460 | |
|
Specific reserve (3) | $ | 58,892 | | | $ | 5,950 | | | $ | 18,239 | | | $ | 4,767 | | | $ | — | | | $ | 759 | | | $ | 88,607 | |
|
_____________ |
(1) Net of LIP. |
(2) Loans collectively evaluated for impairment. |
(3) Loans individually evaluated for impairment. |
|
Nonperforming loans, net of LIP, were $4.0 million, $22.8 million and $23.7 million at December 31, 2013, 2012 and 2011, respectively. Foregone interest on nonaccrual loans for the years ended December 31, 2013, 2012 and 2011 were $650,000, $1.4 million and $2.2 million, respectively. |
|
There were no commitments to advance funds related to impaired loans at December 31, 2013 and 2012. At December 31, 2011, $36,000 was committed to be advanced in connection with impaired loans. |
|
The loan portfolio is constantly being monitored by management for delinquent loans and changes in the financial condition of each borrower. When an issue is identified with a borrower and it is determined that the loan needs to be classified as nonperforming and/or impaired, an evaluation of the collateral is performed prior to the end of the financial reporting period and, if necessary, an appraisal is ordered in accordance with the Company's appraisal policy guidelines. Based on this evaluation, any additional provision for loan loss or charge-offs that may be needed is recorded prior to the end of the financial reporting period. |
|
A loan is considered impaired when it is determined that, based on current information and events, it is probable the Company will be unable to collect payments of principal or interest when due under the terms of the loan. When identifying loans as impaired, management takes into consideration factors which include payment history and status, collateral value, financial condition of the borrower and guarantor, if any, the probability of collecting scheduled payments in the future. Minor payment delays and insignificant payment shortfalls typically do not result in a loan being classified as impaired. The significance of payment delays and shortfalls is considered by management on a case-by-case basis, after taking into consideration the circumstances surrounding the loan and the borrower, including payment history and the amounts of any payment shortfall, length and reason for delay and the likelihood of a return to stable performance. Impairment is measured on a loan-by-loan basis for all loans in the portfolio. |
|
The following tables present a summary of loans individually evaluated for impairment by the type of loan: |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| At or For the Year Ended December 31, 2013 | | | | | | | | | | | | | | | | |
| Recorded Investment (1) | | Unpaid Principal Balance (2) | | Related Allowance | | | | | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | | | | | |
Loans with no related allowance: | | | | | | | | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | $ | 3,878 | | | $ | 4,281 | | | $ | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Non-owner occupied | 28,782 | | | 28,854 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Multifamily | 233 | | | 264 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Commercial real estate | 6,224 | | | 6,511 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Construction/land development | 223 | | | 4,812 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Consumer | 44 | | | 70 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total | 39,384 | | | 44,792 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Loans with an allowance: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Owner occupied | 3,191 | | | 3,238 | | | 263 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Non-owner occupied | 12,297 | | | 12,352 | | | 1,277 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Multifamily | 2,208 | | | 2,208 | | | 85 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Commercial real estate | 7,085 | | | 7,085 | | | 555 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total | 24,781 | | | 24,883 | | | 2,180 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total impaired loans: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Owner occupied | 7,069 | | | 7,519 | | | 263 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Non-owner occupied | 41,079 | | | 41,206 | | | 1,277 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Multifamily | 2,441 | | | 2,472 | | | 85 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Commercial real estate | 13,309 | | | 13,596 | | | 555 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Construction/land development | 223 | | | 4,812 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Consumer | 44 | | | 70 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total | $ | 64,165 | | | $ | 69,675 | | | $ | 2,180 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
_________________ |
(1) Represents the loan balance less charge-offs. |
(2) Contractual loan principal balance. |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| At or For the Year Ended December 31, 2012 | | | | | | | | | | | | | | | | |
| Recorded Investment (1)(3) | | Unpaid Principal | | Related Allowance | | | | | | | | | | | | | | | | |
Balance (2)(3) | | | | | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | | | | | |
Loans with no related allowance: | | | | | | | | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | $ | 4,741 | | | $ | 5,569 | | | $ | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Non-owner occupied | 34,318 | | | 34,442 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Multifamily | 5,950 | | | 6,131 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Commercial real estate | 10,126 | | | 12,502 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Construction/land development | 4,767 | | | 8,813 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Consumer | 759 | | | 798 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total | 60,661 | | | 68,255 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Loans with an allowance: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Owner occupied | 5,897 | | | 6,073 | | | 361 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Non-owner occupied | 13,936 | | | 14,150 | | | 890 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Commercial real estate | 8,113 | | | 8,113 | | | 352 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total | 27,946 | | | 28,336 | | | 1,603 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total impaired loans: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Owner occupied | 10,638 | | | 11,642 | | | 361 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Non-owner occupied | 48,254 | | | 48,592 | | | 890 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Multifamily | 5,950 | | | 6,131 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Commercial real estate | 18,239 | | | 20,615 | | | 352 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Construction/land development | 4,767 | | | 8,813 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Consumer | 759 | | | 798 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total | $ | 88,607 | | | $ | 96,591 | | | $ | 1,603 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
_____________ |
(1) Represents the loan balance less charge-offs. |
(2) Contractual loan principal balance. |
(3) Certain amounts in the table have been reclassified to conform to the current presentation. |
|
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, | | | | |
| 2013 | | 2012 | | 2011 | | | | |
| Average Recorded Investment | | Interest Income Recognized | | Average Recorded Investment | | Interest Income Recognized | | Average Recorded Investment | | Interest Income Recognized | | | | |
| (In thousands) | | | | |
Loans with no related allowance: | | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | | |
Owner occupied | $ | 4,773 | | | $ | 146 | | | $ | 6,997 | | | $ | 120 | | | $ | 8,333 | | | $ | 244 | | | | | |
| | | |
Non-owner occupied | 29,277 | | | 1,697 | | | 36,216 | | | 2,039 | | | 44,313 | | | 2,241 | | | | | |
| | | |
Multifamily | 1,143 | | | — | | | 4,659 | | | 254 | | | 3,068 | | | 188 | | | | | |
| | | |
Commercial real estate | 7,065 | | | 344 | | | 10,742 | | | 562 | | | 13,136 | | | 549 | | | | | |
| | | |
Construction/land development | 3,417 | | | — | | | 7,621 | | | — | | | 12,345 | | | — | | | | | |
| | | |
Consumer | 539 | | | — | | | 354 | | | 21 | | | 128 | | | 2 | | | | | |
| | | |
Total | 46,214 | | | 2,187 | | | 66,589 | | | 2,996 | | | 81,323 | | | 3,224 | | | | | |
| | | |
| | | | | | | | | | | | | | | |
Loans with an allowance: | | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | | |
Owner occupied | 4,249 | | | 169 | | | 4,944 | | | 284 | | | 4,530 | | | 207 | | | | | |
| | | |
Non-owner occupied | 14,545 | | | 623 | | | 11,579 | | | 694 | | | 8,715 | | | 476 | | | | | |
| | | |
Multifamily | 1,414 | | | 138 | | | — | | | — | | | 175 | | | — | | | | | |
| | | |
Commercial real estate | 7,817 | | | 356 | | | 5,459 | | | 455 | | | 4,427 | | | 121 | | | | | |
| | | |
Construction/land development | — | | | — | | | — | | | — | | | 2,719 | | | — | | | | | |
| | | |
Total | 28,025 | | | 1,286 | | | 21,982 | | | 1,433 | | | 20,566 | | | 804 | | | | | |
| | | |
| | | | | | | | | | | | | | | |
Total impaired loans: | | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | | |
Owner occupied | 9,022 | | | 315 | | | 11,941 | | | 404 | | | 12,863 | | | 451 | | | | | |
| | | |
Non-owner occupied | 43,822 | | | 2,320 | | | 47,795 | | | 2,733 | | | 53,028 | | | 2,717 | | | | | |
| | | |
Multifamily | 2,557 | | | 138 | | | 4,659 | | | 254 | | | 3,243 | | | 188 | | | | | |
| | | |
Commercial real estate | 14,882 | | | 700 | | | 16,201 | | | 1,017 | | | 17,563 | | | 670 | | | | | |
| | | |
Construction/land development | 3,417 | | | — | | | 7,621 | | | — | | | 15,064 | | | — | | | | | |
| | | |
Consumer | 539 | | | — | | | 354 | | | 21 | | | 128 | | | 2 | | | | | |
| | | |
Total | $ | 74,239 | | | $ | 3,473 | | | $ | 88,571 | | | $ | 4,429 | | | $ | 101,889 | | | $ | 4,028 | | | | | |
| | | |
|
|
Certain loan modifications or restructurings are accounted for as troubled debt restructured loans ("TDRs"). In general, the modification or restructuring of a debt is considered a TDR if, for economic or legal reasons related to the borrower's financial difficulties, a concession is granted to the borrower that the Company would not otherwise consider. Once the loan is restructured, a current, well-documented credit evaluation of the borrower's financial condition and prospects for repayment are performed to assess the likelihood that all principal and interest payments required under the terms of the modified agreement will be collected in full. A loan that is determined to be classified as a TDR is generally reported as a TDR until the loan is paid in full or otherwise settled, sold or charged-off. The following is a summary of information pertaining to nonperforming assets and TDRs: |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, | | | | | | | | | | | | | | | | | | | | |
| 2013 | | 2012 | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | | | | | | | | | |
Nonperforming assets: (1) | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Nonaccrual loans | $ | 3,027 | | | $ | 18,231 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Nonaccrual TDRs | 968 | | | 4,528 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total nonperforming loans | 3,995 | | | 22,759 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
OREO | 11,465 | | | 17,347 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total nonperforming assets | $ | 15,460 | | | $ | 40,106 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Performing TDRs | $ | 60,170 | | | $ | 65,848 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Nonaccrual TDRs | 968 | | | 4,528 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total TDRs | $ | 61,138 | | | $ | 70,376 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
_____________ |
(1) There were no loans 90 days or more past due and still accruing interest at December 31, 2013 and 2012. |
|
The accrual status of a loan may change after it has been classified as a TDR. Management considers the following in determining the accrual status of restructured loans: (1) if the loan was on accrual status prior to the restructuring, the borrower has demonstrated performance under the previous terms, and a credit evaluation shows the borrower's capacity to continue to perform under the restructured terms (both principal and interest payments), the loan will remain on accrual at the time of the restructuring; (2) if the loan was on nonaccrual status before the restructuring, and the Company's credit evaluation shows the borrower's capacity to meet the restructured terms, the loan would remain as nonaccrual for a minimum of six months until the borrower has demonstrated a reasonable period of sustained repayment performance (thereby providing reasonable assurance as to the ultimate collection of principal and interest in full under the modified terms). |
|
Nonaccrual and Past Due Loans. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual when they are 90 days delinquent or when, in management's opinion, the borrower is unable to meet scheduled payment obligations. |
|
In order to return a nonaccrual loan to accrual status, each loan is evaluated on a case-by-case basis. The Company evaluates the borrower's financial condition to ensure that future loan payments are reasonably assured. The Company also takes into consideration the borrower's willingness and ability to make the loan payments and historical repayment performance. The Company requires the borrower to make loan payments consistently for a period of at least six months as agreed to under the terms of the loan agreement before the Company will consider reclassifying the loan to accrual status. |
|
The following table is a summary of nonaccrual loans at December 31, 2013 and 2012 by type of loan: |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, | | | | | | | | | | | | | | | | | | | | |
| 2013 | | 2012 | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | | | | | | | | | |
One-to-four family residential | $ | 2,297 | | | $ | 6,248 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Multifamily | 233 | | | 4,711 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Commercial real estate | 1,198 | | | 6,274 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Construction/land development | 223 | | | 4,767 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Consumer | 44 | | | 759 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total nonaccrual loans | $ | 3,995 | | | $ | 22,759 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
|
The following tables represent a summary of the aging of loans by type: |
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans Past Due as of December 31, 2013 | | | | | | | | |
| 31-60 Days | | 61-90 Days | | Over 90 Days | | Total | | Current | | Total | | | | |
Loans (1) (2) | | | | |
| (In thousands) | | | | |
Real estate: | | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | | |
Owner occupied | $ | 923 | | | $ | 337 | | | $ | 575 | | | $ | 1,835 | | | $ | 156,962 | | | $ | 158,797 | | | | | |
| | | |
Non-owner occupied | — | | | — | | | 692 | | | 692 | | | 121,185 | | | 121,877 | | | | | |
| | | |
Multifamily | — | | | — | | | — | | | — | | | 117,181 | | | 117,181 | | | | | |
| | | |
Commercial real estate | 331 | | | — | | | 1,089 | | | 1,420 | | | 245,982 | | | 247,402 | | | | | |
| | | |
Construction/land development | — | | | — | | | 223 | | | 223 | | | 22,904 | | | 23,127 | | | | | |
| | | |
Total real estate | 1,254 | | | 337 | | | 2,579 | | | 4,170 | | | 664,214 | | | 668,384 | | | | | |
| | | |
Business | — | | | — | | | — | | | — | | | 1,142 | | | 1,142 | | | | | |
| | | |
Consumer | 103 | | | 34 | | | — | | | 137 | | | 9,064 | | | 9,201 | | | | | |
| | | |
Total | $ | 1,357 | | | $ | 371 | | | $ | 2,579 | | | $ | 4,307 | | | $ | 674,420 | | | $ | 678,727 | | | | | |
| | | |
________________ |
(1) There were no loans 90 days past due and still accruing interest at December 31, 2013. |
(2) Net of LIP. |
|
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans Past Due as of December 31, 2012 | | | | | | | | |
| 31-60 Days | | 61-90 Days | | Over 90 Days | | Total | | Current | | Total | | | | |
Loans (1) (2) | | | | |
| (In thousands) | | | | |
Real estate: | | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | | |
Owner occupied | $ | 1,974 | | | $ | 1,374 | | | $ | 2,653 | | | $ | 6,001 | | | $ | 161,100 | | | $ | 167,101 | | | | | |
| | | |
Non-owner occupied | 1,276 | | | 49 | | | 1,019 | | | 2,344 | | | 137,488 | | | 139,832 | | | | | |
| | | |
Multifamily | — | | | — | | | 4,711 | | | 4,711 | | | 104,935 | | | 109,646 | | | | | |
| | | |
Commercial real estate | 1,795 | | | — | | | 4,479 | | | 6,274 | | | 215,604 | | | 221,878 | | | | | |
| | | |
Construction/land development | — | | | — | | | 805 | | | 805 | | | 11,727 | | | 12,532 | | | | | |
| | | |
Total real estate | 5,045 | | | 1,423 | | | 13,667 | | | 20,135 | | | 630,854 | | | 650,989 | | | | | |
| | | |
Business | — | | | — | | | — | | | — | | | 2,968 | | | 2,968 | | | | | |
| | | |
Consumer | 20 | | | 47 | | | 690 | | | 757 | | | 10,353 | | | 11,110 | | | | | |
| | | |
Total | $ | 5,065 | | | $ | 1,470 | | | $ | 14,357 | | | $ | 20,892 | | | $ | 644,175 | | | $ | 665,067 | | | | | |
| | | |
_________________ |
(1) There were no loans 90 days past due and still accruing interest at December 31, 2012. |
(2) Net of LIP. |
|
Credit Quality Indicators. The Company utilizes a nine-point risk rating system and assign a risk rating for all credit exposures. The risk rating system is designed to define the basic characteristics and identify risk elements of each credit extension. Credits risk rated 1 through 5 are considered to be “pass” credits. Pass credits can be assets where there is virtually no credit risk, such as cash secured loans with funds on deposit with the Bank. Pass credits also include credits that are on the Company's watch list, where the borrower exhibits potential weaknesses, which may, if not checked or corrected, negatively affect the borrower’s financial capacity and threaten their ability to fulfill debt obligations in the future. Credits classified as special mention are risk rated 6 and possess weaknesses that deserve management’s close attention. Special mention assets do not expose the Company to sufficient risk to warrant adverse classification in the substandard, doubtful or loss categories. Substandard credits are risk rated 7. An asset is considered substandard if it is inadequately protected by the current net worth and payment capacity of the borrower or of any collateral pledged. Substandard assets include those characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Assets classified as doubtful are risk rated 8 and have all the weaknesses inherent in those credits classified as substandard with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions and values. Assets classified as loss are risk rated 9 and are considered uncollectible and cannot be justified as a viable asset for the Company. |
|
The following tables represent a summary of loans at December 31, 2013 and 2012 by type and risk category: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2013 |
| One-to-Four | | Multifamily | | Commercial | | Construction/ | | Business | | Consumer | | Total (1) |
Family | Real Estate | Land |
Residential | | Development |
| (In thousands) |
Risk Rating: | | | | | | | | | | | | | |
Pass | $ | 265,511 | | | $ | 114,525 | | | $ | 229,149 | | | $ | 22,904 | | | $ | 1,142 | | | $ | 8,934 | | | $ | 642,165 | |
|
Special mention | 5,825 | | | 1,203 | | | 15,134 | | | — | | | — | | | 1 | | | 22,163 | |
|
Substandard | 9,338 | | | 1,453 | | | 3,119 | | | 223 | | | — | | | 266 | | | 14,399 | |
|
Total | $ | 280,674 | | | $ | 117,181 | | | $ | 247,402 | | | $ | 23,127 | | | $ | 1,142 | | | $ | 9,201 | | | $ | 678,727 | |
|
_____________ |
(1) Net of LIP. |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2012 |
| One-to-Four | | Multifamily | | Commercial | | Construction / | | Business | | Consumer | | Total (1) |
Family | Real Estate | Land |
Residential | | Development |
| (In thousands) |
Risk Rating: | | | | | | | | | | | | | |
Pass | $ | 286,674 | | | $ | 103,696 | | | $ | 202,407 | | | $ | 7,600 | | | $ | 2,968 | | | $ | 10,129 | | | $ | 613,474 | |
|
Special mention | 10,433 | | | — | | | 11,666 | | | 165 | | | — | | | — | | | 22,264 | |
|
Substandard | 9,826 | | | 5,950 | | | 7,805 | | | 4,767 | | | — | | | 981 | | | 29,329 | |
|
Total | $ | 306,933 | | | $ | 109,646 | | | $ | 221,878 | | | $ | 12,532 | | | $ | 2,968 | | | $ | 11,110 | | | $ | 665,067 | |
|
______________ |
(1) Net of LIP. |
|
The following tables summarize the loan portfolio by type and payment activity: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2013 |
| One-to-Four | | Multifamily | | Commercial | | Construction / | | Business | | Consumer | | Total (3) |
Family | Real Estate | Land |
Residential | | Development |
| (In thousands) |
Performing (1) | $ | 278,377 | | | $ | 116,948 | | | $ | 246,204 | | | $ | 22,904 | | | $ | 1,142 | | | $ | 9,157 | | | $ | 674,732 | |
|
Nonperforming (2) | 2,297 | | | 233 | | | 1,198 | | | 223 | | | — | | | 44 | | | 3,995 | |
|
Total | $ | 280,674 | | | $ | 117,181 | | | $ | 247,402 | | | $ | 23,127 | | | $ | 1,142 | | | $ | 9,201 | | | $ | 678,727 | |
|
____________ |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | There were $157.3 million of owner-occupied one-to-four family residential loans and $121.1 million of non-owner occupied one-to-four family residential loans classified as performing. | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
(2) | There were $1.5 million of owner-occupied one-to-four family residential loans and $817,000 of non-owner occupied one-to-four family residential loans classified as nonperforming. | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
(3) | Net of LIP. | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2012 |
| One-to-Four | | Multifamily | | Commercial | | Construction/ | | Business | | Consumer | | Total (3) |
Family | Real Estate | Land |
Residential | | Development |
| (In thousands) |
Performing (1) | $ | 300,685 | | | $ | 104,935 | | | $ | 215,604 | | | $ | 7,765 | | | $ | 2,968 | | | $ | 10,351 | | | $ | 642,308 | |
|
Nonperforming (2) | 6,248 | | | 4,711 | | | 6,274 | | | 4,767 | | | — | | | 759 | | | 22,759 | |
|
Total | $ | 306,933 | | | $ | 109,646 | | | $ | 221,878 | | | $ | 12,532 | | | $ | 2,968 | | | $ | 11,110 | | | $ | 665,067 | |
|
_____________ |
(1) There were $163.1 million of owner-occupied one-to-four family residential loans and $137.6 million of non-owner occupied one-to-four family residential loans classified as performing. |
(2) There were $4.0 million of owner-occupied one-to-four family residential loans and $2.2 million of non-owner occupied one-to-four family residential loans classified as nonperforming. |
(3) Net of LIP. |
|
The following table presents for the periods indicated TDRs and their recorded investment prior to the modification and after the modification: |
| | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, | | | | | | |
| 2013 | | 2012 | | | | | | |
| Number | | Pre-Modification Outstanding | | Post-Modification Outstanding | | Number | | Pre-Modification Outstanding | | Post-Modification Outstanding | | | | | | |
of Loans | Recorded | Recorded | of Loans | Recorded | Recorded | | | | | | |
| Investment | Investment | | Investment | Investment | | | | | | |
| (Dollars in thousands) | | | | | | |
TDRs that Occurred During the Period: | | | | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | | | | |
Interest-only payments with no interest rate concession | 2 | | | $ | 682 | | | $ | 683 | | | — | | | $ | — | | | $ | — | | | | | | | |
| | | | | |
Principal and interest with interest rate concession | 2 | | | 1,620 | | | 1,620 | | | 23 | | | 4,596 | | | 4,561 | | | | | | | |
| | | | | |
Principal and interest reamortized with no interest rate | | | | | | | | | | | | | | | | | |
concession | 1 | | | 261 | | | 260 | | | 1 | | | 71 | | | 71 | | | | | | | |
| | | | | |
Advancement of maturity date | 3 | | | 480 | | | 473 | | | — | | | — | | | — | | | | | | | |
| | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | |
Principal and interest with interest rate concession | — | | | — | | | — | | | 2 | | | 2,369 | | | 2,339 | | | | | | | |
| | | | | |
Principal and interest reamortized with no interest rate | 1 | | | 335 | | | 331 | | | — | | | — | | | — | | | | | | | |
concession | | | | | | |
Advancement of maturity date | 1 | | | 437 | | | 432 | | | — | | | — | | | — | | | | | | | |
| | | | | |
Interest-only payments with interest rate concession | 2 | | | 3,484 | | | 3,482 | | | 2 | | | 2,508 | | | 2,504 | | | | | | | |
| | | | | |
Total | 12 | | | $ | 7,299 | | | $ | 7,281 | | | 28 | | | $ | 9,544 | | | $ | 9,475 | | | | | | | |
| | | | | |
|
At December 31, 2013 and 2012, the Company had no commitments to extend additional credit to borrowers whose loan terms have been modified in a TDR. All TDRs are also classified as impaired loans and are included in the loans individually evaluated for impairment in the calculation of the ALLL. |
|
The TDRs that occurred during the year ended December 31, 2013 and 2012 were primarily a result of granting the borrower interest rate concessions and/or interest-only payments for a period of time ranging from one to three years. The impaired portion of the loan with an interest rate concession and/or interest-only payments for a specific period of time are calculated based on the present value of expected future cash flows discounted at the loan’s effective interest rate. The effective interest rate is the rate of return implicit on the original loan. This impaired amount reduces the ALLL and a valuation allowance is established to reduce the loan balance. As loan payments are received in future periods, the ALLL entry is reversed and the valuation allowance is reduced utilizing the level yield method over the modification period. TDRs resulted in charge-offs to the ALLL of $89,000 and $832,000 for the years ended December 31, 2013 and 2012, respectively. |
|
The following is a summary of loans that were modified as TDRs within the previous 12 months and for which there was a payment default during the years ended December 31, 2013 and 2012: |
| | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, | | | | | | |
| 2013 | | 2012 | | | | | | |
| Types of Modifications | | Types of Modifications | | | | | | |
| Number of | | No Interest Rate Concession Modified Principal & Interest Payment | | Advancement of Maturity Date | | Number of | | Interest Only Payments | | Interest Rate Concession | | | | | | |
Loans | Loans | | | | | | |
| (Dollars in thousands) | | | | | | |
TDRs that Subsequently Defaulted: | | | | | | | | | | | | | | | | | |
One-to-four family residential | — | | | $ | — | | | $ | — | | | 1 | | | $ | — | | | $ | 71 | | | | | | | |
| | | | | |
Commercial | 2 | | | 331 | | | 432 | | | 2 | | | 1,884 | | | — | | | | | | | |
| | | | | |
Total | 2 | | | $ | 331 | | | $ | 432 | | | 3 | | | $ | 1,884 | | | $ | 71 | | | | | | | |
| | | | | |
|
TDRs that default after they have been modified are typically evaluated individually on a collateral basis. Any additional TDR charge-offs due to further impairment reduces the ALLL. |
|
Certain of the Bank’s executive officers and directors have loans with the Bank. The aggregate dollar amount of these loans outstanding to related parties is summarized as follows: |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, | | | | | | | | | | | | | | | | | | | | |
| 2013 | | 2012 | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | | | | | | | | | |
Balance at beginning of year | $ | 498 | | | $ | 545 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Additions | 353 | | | — | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Repayments | (303 | ) | | (47 | ) | | | | | | | | | | | | | | | | | | | | |
Balance at end of year | $ | 548 | | | $ | 498 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |