| Loans and Allowance for Loan Losses | Note 6: Loans and Allowance for Loan
Losses
Classes of loans include:
September 30, 2016 June 30, 2016
Real estate loans:
One- to four-family, including home equity loans $ 146,091 $ 149,538
Multi-family 82,303 84,200
Commercial 123,715 119,643
Home equity lines of credit 7,935 8,138
Construction 22,308 19,698
Commercial 53,767 57,826
Consumer 9,197 10,086
Total loans 445,316 449,129
Less:
Unearned fees and discounts, net (55 ) 30
Allowance for loan losses 5,445 5,351
Loans, net $ 439,926 $ 443,748
The Company believes that sound loans are a necessary and desirable
means of employing funds available for investment. Recognizing
the Company’s obligations to its depositors and to the
communities it serves, authorized personnel are expected to seek to
develop and make sound, profitable loans that resources permit and
that opportunity affords. The Company maintains lending
policies and procedures in place designed to focus our lending
efforts on the types, locations, and duration of loans most
appropriate for our business model and markets. The
Company’s principal lending activity is the origination of
one- to four-family real estate loans but also includes
multi-family loans, commercial real estate loans, home equity lines
of credits, commercial business loans, consumer (consisting
primarily of automobile loans), and, to a much lesser extent,
construction loans and land loans. The primary lending market
includes the Illinois counties of Vermilion, Iroquois and
Champaign, as well as the adjacent counties in Illinois and
Indiana. The Company also has a loan production and wealth
management office in Osage Beach, Missouri, which serves the
Missouri counties of Camden, Miller, and Morgan. Generally,
loans are collateralized by assets, primarily real estate, of the
borrowers and guaranteed by individuals. The loans are
expected to be repaid from cash flows of the borrowers or from
proceeds from the sale of selected assets of the borrowers.
Management reviews and approves the Company’s lending
policies and procedures on a routine basis. Management
routinely (at least quarterly) reviews our allowance for loan
losses and reports related to loan production, loan quality,
concentrations of credit, loan delinquencies and non-performing and
potential problem loans. Our underwriting standards are
designed to encourage relationship banking rather than
transactional banking. Relationship banking implies a primary
banking relationship with the borrower that includes, at a minimum,
an active deposit banking relationship in addition to the lending
relationship. The integrity and character of the borrower are
significant factors in our loan underwriting. As a part of
underwriting, tangible positive or negative evidence of the
borrower’s integrity and character are sought
out. Additional significant underwriting factors beyond
location, duration, the sound and profitable cash flow basis
underlying the loan and the borrower’s character are the
quality of the borrower’s financial history, the liquidity of
the underlying collateral and the reliability of the valuation of
the underlying collateral.
The Company’s policies and loan approval limits are
established by the Board of Directors. The loan officers
generally have authority to approve one- to four-family real estate
loans up to $100,000, other secured loans up to $50,000, and
unsecured loans up to $10,000. Managing Officers (those with
designated loan approval authority), generally have authority to
approve one- to four-family residential mortgage loans up to
$300,000, other secured loans up to $300,000, and unsecured loans
up to $100,000. In addition, any two individual officers may
combine their loan authority limits to approve a loan. Our
Loan Committee may approve one- to four-family real estate loans,
commercial real estate loans, multi-family real estate loans and
land loans up to $1,000,000 in aggregate loans and unsecured loans
up to $300,000. All loans above these limits must be approved
by the Operating Committee, consisting of the Chairman and up to
four other Board members. At no time is a borrower’s
total borrowing relationship to exceed our regulatory lending
limit. Loans to related parties, including executive officers
and the Company’s directors, are reviewed for compliance with
regulatory guidelines and the Board of Directors at least
annually.
The Company conducts internal loan reviews that validate the loans
against the Company’s loan policy quarterly for mortgage,
consumer, and small commercial loans on a sample basis, and all
larger commercial loans on an annual basis. The Association
also receives independent loan reviews performed by a third party
on larger commercial loans to be performed annually. In
addition to compliance with our policy, the loan review process
reviews the risk assessments made by our credit department, lenders
and loan committees. Results of these reviews are presented to
management and the Board of Directors.
The Company’s lending can be summarized into six primary
areas; one- to four-family residential mortgage loans, commercial
real estate and multi-family real estate loans, home equity lines
of credits, real estate construction, commercial business loans,
and consumer loans.
One- to four-family Real Estate Loans
The Company offers one- to four-family real estate loans that
conform to Fannie Mae and Freddie Mac underwriting standards
(conforming loans) as well as non-conforming loans. In recent
years there has been an increased demand for long-term fixed-rate
loans, as market rates have dropped and remained near historic
lows. As a result, the Company has sold a substantial portion
of the fixed-rate one- to four-family real estate loans with terms
of 15 years or greater. Generally, the Company retains
fixed-rate one- to four-family real estate loans with terms of less
than 15 years, although this has represented a small percentage of
the fixed-rate loans originated in recent years due to the
favorable long-term rates for borrower.
In addition, the Company also offers home equity loans that are
secured by a second mortgage on the borrower’s primary or
secondary residence. Home equity loans are generally
underwritten using the same criteria used to underwrite one- to
four-family real estate loans.
As one- to four-family residential mortgage and home equity loan
underwriting are subject to specific regulations, the Company
typically underwrites its one- to four-family residential mortgage
and home equity loans to conform to widely accepted
standards. Several factors are considered in underwriting
including the value of the underlying real estate and the debt to
income ratio and credit history of the borrower.
Commercial Real Estate and Multi-Family Real Estate
Loans
Commercial real estate mortgage loans are primarily secured by
office buildings, owner-occupied businesses, strip mall centers,
churches and farm loans secured by real estate. In
underwriting commercial real estate and multi-family real estate
loans, the Company considers a number of factors, which include the
projected net cash flow to the loan’s debt service
requirement, the age and condition of the collateral, the financial
resources and income level of the borrower and the borrower’s
experience in owning or managing similar properties. Personal
guarantees are typically obtained from commercial real estate and
multi-family real estate borrowers. In addition, the
borrower’s financial information on such loans is monitored
on an ongoing basis by requiring periodic financial statement
updates. The repayment of these loans is primarily dependent
on the cash flows of the underlying property. However, the
commercial real estate loan generally must be supported by an
adequate underlying collateral value. The performance and the
value of the underlying property may be adversely affected by
economic factors or geographical and/or industry specific
factors. These loans are subject to other industry guidelines
that are closely monitored by the Company.
Home Equity Lines of Credit
In addition to traditional one- to four-family real estate loans
and home equity loans, the Company offers home equity lines of
credit that are secured by the borrower’s primary or
secondary residence. Home equity lines of credit are generally
underwritten using the same criteria used to underwrite one- to
four-family residential mortgage loans. As home equity lines
of credit underwriting is subject to specific regulations, the
Company typically underwrites its home equity lines of credit to
conform to widely accepted standards. Several factors are
considered in underwriting including the value of the underlying
real estate and the debt to income ratio and credit history of the
borrower.
Commercial Business Loans
The Company originates commercial non-mortgage business (term)
loans and adjustable lines of credit. These loans are
generally originated to small- and medium-sized companies in the
Company’s primary market area. Commercial business loans
are generally used for working capital purposes or for acquiring
equipment, inventory or furniture, and are primarily secured by
business assets other than real estate, such as business equipment
and inventory, accounts receivable or stock. The Company also
offers agriculture loans that are not secured by real estate.
The commercial business loan portfolio consists primarily of
secured loans. When making commercial business loans, the
Company considers the financial statements, lending history and
debt service capabilities of the borrower, the projected cash flows
of the business and the value of any collateral. The cash
flows of the underlying borrower, however, may not perform
consistently with historical or projected
information. Further, the collateral securing loans may
fluctuate in value due to individual economic or other
factors. Loans are typically guaranteed by the principals of
the borrower. The Company has established minimum standards
and underwriting guidelines for all commercial loan types.
Real Estate Construction Loans
The Company originates construction loans for one- to four-family
residential properties and commercial real estate properties,
including multi-family properties. The Company generally
requires that a commitment for permanent financing be in place
prior to closing the construction loan. The repayment of these
loans is typically through permanent financing following completion
of the construction. Real estate construction loans are
inherently more risky than loans on completed properties as the
unimproved nature and the financial risks of construction
significantly enhance the risks of commercial real estate
loans. These loans are closely monitored and subject to other
industry guidelines.
Consumer Loans
Consumer loans consist of installment loans to individuals,
primarily automotive loans. These loans are underwritten
utilizing the borrower’s financial history, including the
Fair Isaac Corporation (“FICO”) credit scoring and
information as to the underlying collateral. Repayment is
expected from the cash flow of the borrower. Consumer loans
may be underwritten with terms up to seven years, fully
amortized. Unsecured loans are limited to twelve
months. Loan-to-value ratios vary based on the type of
collateral. The Company has established minimum standards and
underwriting guidelines for all consumer loan collateral types.
Loan Concentration
The loan portfolio includes a concentration of loans secured by
commercial real estate properties, including real estate
construction loans, amounting to $226,426,000 and $222,395,000 as
of September 30, 2016 and June 30, 2016,
respectively. Generally, these loans are collateralized by
multi-family and nonresidential properties. The loans are
expected to be repaid from cash flows or from proceeds from the
sale of the properties of the borrower.
Purchased Loans and Loan Participations
The Company’s loans receivable included purchased loans of
$9,651,000 and $9,772,000 at September 30, 2016 and June 30, 2016,
respectively. All of these purchased loans are secured by
single family homes located out of our primary market area,
primarily in the Midwest. The Company’s loans receivable
also include commercial loan participations of $43,576,000 and
$47,731,000 at September 30, 2016 and June 30, 2016, respectively,
of which $15,936,000 and $19,303,000, at September 30, 2016 and
June 30, 2016 were outside our primary market area. These
participation loans are secured by real estate and other business
assets.
Allowance for Loan Losses
The following tables present the balance in the allowance for loan
losses and the recorded investment in loans based on portfolio
segment and impairment method as of the three-month periods ended
September 30, 2016 and 2015 and the year ended June 30, 2016:
Three Months Ended September 30,
2016 Real Estate Loans
One- to Four- Family Multi-Family Commercial Home Equity
Allowance for loan losses:
Balance, beginning of period $ 1,198 $ 1,202 $ 1,399 $ 94
Provision charged to expense (40 ) 51 100 (2 )
Losses charged off
—
—
—
—
Recoveries 18
—
—
—
Balance, end of period $ 1,176 $ 1,253 $ 1,499 $ 92
Ending balance: individually evaluated for impairment $ 5 $
— $ 13 $
—
Ending balance: collectively evaluated for impairment $ 1,171 $ 1,253 $ 1,486 $ 92
Loans:
Ending balance $ 146,091 $ 82,303 $ 123,715 $ 7,935
Ending balance: individually evaluated for impairment $ 2,495 $ 1,598 $ 62 $ 326
Ending balance: collectively evaluated for impairment $ 143,596 $ 80,705 $ 123,653 $ 7,609
Three Months
Ended September 30, 2016 (Continued)
Construction Commercial Consumer Unallocated Total
Allowance for loan losses:
Balance, beginning of period $ 227 $ 1,140 $ 91 $
— $ 5,351
Provision charged to expense 47 (72 ) (5 )
— 79
Losses charged off
—
— (4 )
— (4 )
Recoveries
—
— 1
— 19
Balance, end of period $ 274 $ 1,068 $ 83 $
— $ 5,445
Ending balance: individually evaluated for impairment $
— $
— $
— $
— $ 18
Ending balance: collectively evaluated for impairment $ 274 $ 1,068 $ 83 $
— $ 5,427
Loans:
Ending balance $ 22,308 $ 53,767 $ 9,197 $
— $ 445,316
Ending balance: individually evaluated for impairment $
— $ 111 $
— $
— $ 4,592
Ending balance: collectively evaluated for impairment $ 22,308 $ 53,656 $ 9,197 $
— $ 440,724
Year Ended June 30, 2016 Real Estate Loans
One- to Multi-Family Commercial Home Equity
Allowance for loan losses:
Balance, beginning of year $ 1,216 $ 827 $ 1,246 $ 85
Provision charged to expense 165 375 156 41
Losses charged off (188 )
— (3 ) (32 )
Recoveries 5
—
—
—
Balance, end of year $ 1,198 $ 1,202 $ 1,399 $ 94
Ending balance: individually evaluated for impairment $ 6 $
— $ 14 $
—
Ending balance: collectively evaluated for impairment $ 1,192 $ 1,202 $ 1,385 $ 94
Loans:
Ending balance $ 149,538 $ 84,200 $ 119,643 $ 8,138
Ending balance: individually evaluated for impairment $ 2,405 $ 1,457 $ 63 $ 327
Ending balance: collectively evaluated for impairment $ 147,133 $ 82,743 $ 119,580 $ 7,811
Year Ended June
30, 2016 (Continued)
Construction Commercial Consumer Unallocated Total
Allowance for loan losses:
Balance, beginning of year $ 6 $ 744 $ 87 $
— $ 4,211
Provision charged to expense 221 396 12
— 1,366
Losses charged off
—
— (10 )
— (233 )
Recoveries
—
— 2
— 7
Balance, end of year $ 227 $ 1,140 $ 91 $
— $ 5,351
Ending balance: individually evaluated for impairment $
— $
— $
— $
— $ 20
Ending balance: collectively evaluated for impairment $ 227 $ 1,140 $ 91 $
— $ 5,331
Loans:
Ending balance $ 19,698 $ 57,826 $ 10,086 $
— $ 449,129
Ending balance: individually evaluated for impairment $
— $ 9 $
— $
— $ 4,261
Ending balance: collectively evaluated for impairment $ 19,698 $ 57,817 $ 10,086 $
— $ 444,868
Three Months Ended September 30,
2015 Real Estate Loans
One- to Multi-Family Commercial Home Equity
Allowance for loan losses:
Balance, beginning of year $ 1,216 $ 827 $ 1,246 $ 85
Provision charged to expense 54 237 106
—
Losses charged off (23 )
—
—
—
Recoveries
—
—
—
—
Balance, end of year $ 1,247 $ 1,064 $ 1,352 $ 85
Ending balance: individually evaluated for impairment $ 83 $
— $ 22 $
—
Ending balance: collectively evaluated for impairment $ 1,164 $ 1,064 $ 1,330 $ 85
Loans: $ 146,081 $ 74,721 $ 113,126 $ 7,741
Ending balance $ 3,314 $ 1,512 $ 73 $ 8
Ending balance: individually evaluated for impairment $ 142,767 $ 73,209 $ 113,053 $ 7,733
Three Months
Ended September 30, 2015 (Continued)
Construction Commercial Consumer Unallocated Total
Allowance for loan losses:
Balance, beginning of year $ 6 $ 744 $ 87 $
— $ 4,211
Provision charged to expense 31 54 (2 )
— 480
Losses charged off
—
— (1 )
— (24 )
Recoveries
—
—
—
—
—
Balance, end of year $ 37 $ 798 $ 84 $
— $ 4,667
Ending balance: individually evaluated for impairment $
— $
— $ 6 $
— $ 111
Ending balance: collectively evaluated for impairment $ 37 $ 798 $ 78 $
— $ 4,556
Loans:
Ending balance
Ending balance: individually evaluated for impairment $ 3,858 $ 40,718 $ 8,470 $
— $ 394,715
Ending balance: collectively evaluated for impairment $
— $ 17 $ 11 $
— $ 4,935
$ 3,858 $ 40,701 $ 8,459 $
— $ 389,780
Management’s opinion as to the ultimate collectability of
loans is subject to estimates regarding future cash flows from
operations and the value of property, real and personal, pledged as
collateral. These estimates are affected by changing economic
conditions and the economic prospects of borrowers.
The allowance for loan losses represents an estimate of the amount
of losses believed inherent in our loan portfolio at the balance
sheet date. The allowance calculation involves a high degree
of estimation that management attempts to mitigate through the use
of objective historical data where available. Loan losses are
charged against the allowance for loan losses when management
believes the uncollectability of the loan balance is
confirmed. Subsequent recoveries, if any, are credited to the
allowance. Overall, we believe the reserve to be consistent
with prior periods and adequate to cover the estimated losses in
our loan portfolio.
The Company’s methodology for assessing the appropriateness
of the allowance for loan losses consists of two key elements: (1)
specific allowances for estimated credit losses on individual loans
that are determined to be impaired through the Company’s
review for identified problem loans; and (2) a general allowance
based on estimated credit losses inherent in the remainder of the
loan portfolio.
The specific allowance is measured by determining the present value
of expected cash flows, the loan’s observable market value,
or, for collateral-dependent loans, the fair value of the
collateral adjusted for market conditions and selling
expense. Factors used in identifying a specific problem loan
include: (1) the strength of the customer’s personal or
business cash flows; (2) the availability of other sources of
repayment; (3) the amount due or past due; (4) the type and value
of collateral; (5) the strength of the collateral position; (6) the
estimated cost to sell the collateral; and (7) the borrower’s
effort to cure the delinquency. In addition for loans secured
by real estate, the Company also considers the extent of any past
due and unpaid property taxes applicable to the property serving as
collateral on the mortgage.
The Company establishes a general allowance for loans that are not
deemed impaired to recognize the inherent losses associated with
lending activities, but which, unlike specific allowances, has not
been allocated to particular problem assets. The general
valuation allowance is determined by segregating the loans by loan
category and assigning allowance percentages based on the
Company’s historical loss experience and management’s
evaluation of the collectability of the loan portfolio. The
allowance is then adjusted for qualitative factors that, in
management’s judgment, affect the collectability of the
portfolio as of the evaluation date. These qualitative factors
may include: (1) Management’s assumptions regarding the
minimal level of risk for a given loan category; (2) changes in
lending policies and procedures, including changes in underwriting
standards, and charge-off and recovery practices not considered
elsewhere in estimating credit losses; (3) changes in
international, national, regional and local economics and business
conditions and developments that affect the collectability of the
portfolio, including the conditions of various market segments; (4)
changes in the nature and volume of the portfolio and in the terms
of loans; (5) changes in the experience, ability, and depth of the
lending officers and other relevant staff; (6) changes in the
volume and severity of past due loans, the volume of non-accrual
loans, the volume of troubled debt restructured and other loan
modifications, and the volume and severity of adversely classified
loans; (7) changes in the quality of the loan review system; (8)
changes in the value of the underlying collateral for
collateral-dependent loans; (9) the existence and effect of any
concentrations of credit, and changes in the level of such
concentrations; and (10) the effect of other external factors such
as competition and legal and regulatory requirements on the level
of estimated credit losses in the existing portfolio. The
applied loss factors are re-evaluated quarterly to ensure their
relevance in the current environment.
Although the Company’s policy allows for a general valuation
allowance on certain smaller-balance, homogenous pools of loans
classified as substandard, the Company has historically evaluated
every loan classified as substandard, regardless of size, for
impairment as part of the review for establishing specific
allowances. The Company’s policy also allows for general
valuation allowance on certain smaller-balance, homogenous pools of
loans which are loans criticized as special mention or
watch. A separate general allowance calculation is made on
these loans based on historical measured weakness, and which is no
less than twice the amount of the general allowance calculated on
the non-classified loans.
There have been no changes to the Company’s accounting
policies or methodology from the prior periods.
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. All loans are
graded at inception of the loan. Subsequently, analyses are
performed on an annual basis and grade changes are made as
necessary. Interim grade reviews may take place if
circumstances of the borrower warrant a more timely
review. The Company utilizes an internal asset classification
system as a means of reporting problem and potential problem
loans. Under the Company’s risk rating system, the
Company classifies problem and potential problem loans as
“Watch,” “Substandard,”
“Doubtful,” and “Loss.” The Company
uses the following definitions for risk ratings:
Pass –
Watch –
Substandard –
Doubtful –
Loss –
Risk characteristics applicable to each segment of the loan
portfolio are described as follows.
Residential One- to Four-Family and Equity Lines of Credit Real
Estate:
Commercial and Multi-family Real Estate:
Construction Real Estate:
Commercial:
Consumer:
The following tables present the credit risk profile of the
Company’s loan portfolio based on rating category and payment
activity:
Real Estate Loans
One- to Four- Multi-Family Commercial Home Equity Construction Commercial Consumer Total
September 30, 2016 :
Pass $ 142,639 $ 81,808 $ 119,928 $ 7,609 $ 22,308 $ 50,954 $ 9,115 $ 434,361
Watch 1,099
— 3,435
—
— 2,683 71 7,288
Substandard 2,353 495 352 326
— 130 11 3,667
Doubtful
—
—
—
—
—
—
—
—
Loss
—
—
—
—
—
—
—
—
Total $ 146,091 $ 82,303 $ 123,715 $ 7,935 $ 22,308 $ 53,767 $ 9,197 $ 445,316
Real Estate Loans
One- to Four- Multi-Family Commercial Home Equity Construction Commercial Consumer Total
June 30, 2016:
Pass $ 146,924 $ 82,580 $ 115,787 $ 7,811 $ 19,698 $ 55,184 $ 10,073 $ 438,057
Watch 350 1,271 3,500
—
— 2,633
— 7,754
Substandard 2,264 349 356 327
— 9 13 3,318
Doubtful
—
—
—
—
—
—
—
—
Loss
—
—
—
—
—
—
—
—
Total $ 149,538 $ 84,200 $ 119,643 $ 8,138 $ 19,698 $ 57,826 $ 10,086 $ 449,129
The accrual of interest on loans is discontinued at the time the
loan is 90 days past due unless the credit is well-secured and in
process of collection. Past due status is based on contractual
terms of the loan. In all instances, loans are placed on
non-accrual or are charged off at an earlier date if collection of
principal and interest is considered doubtful.
All interest accrued but not collected for loans that are placed on
non-accrual or charged off are reversed against interest
income. The interest on these loans is accounted for on a
cash-basis or cost-recovery method, until qualifying for return to
accrual. Loans are returned to accrual status when all
principal and interest amounts contractually due are brought
current and future payments are reasonably assured.
The following tables present the Company’s loan portfolio
aging analysis:
30-59 Days
60-89 Days Past Due Greater Total Past Due Current Total Loans Total Loans
September 30, 2016:
Real estate loans:
One- to four-family $ 1,688 $ 563 $ 1,530 $ 3,781 $ 142,310 $ 146,091 $
—
Multi-family 158 401
— 559 81,744 82,303
—
Commercial 86 25 28 139 123,576 123,715
—
Home equity lines of credit 35
— 316 351 7,584 7,935
—
Construction
—
—
—
— 22,308 22,308
—
Commercial
— 16
— 16 53,751 53,767
—
Consumer 16 16 11 43 9,154 9,197 11
Total $ 1,983 $ 1,021 $ 1,885 $ 4,889 $ 440,427 $ 445,316 $ 11
30-59 Days 60-89 Days Past Due Greater Total Past Due Current Total Loans Total Loans
June 30, 2016:
Real estate loans:
One- to four-family $ 2,061 $ 148 $ 1,489 $ 3,698 $ 145,840 $ 149,538 $ 4
Multi-family 181
—
— 181 84,019 84,200
—
Commercial
— 97 27 124 119,519 119,643
—
Home equity lines of credit 39
— 316 355 7,783 8,138
—
Construction
—
—
—
— 19,698 19,698
—
Commercial 33 100
— 133 57,693 57,826
—
Consumer 16 5 8 29 10,057 10,086 8
Total $ 2,330 $ 350 $ 1,840 $ 4,520 $ 444,609 $ 449,129 $ 12
A loan is considered impaired, in accordance with the impairment
accounting guidance (ASC 310-10-35-16), when based on current
information and events, it is probable the Association will be
unable to collect all amounts due from the borrower in accordance
with the contractual terms of the loan. Factors considered by
management in determining impairment include payment status,
collateral value, and the probability of collecting scheduled
principal and interest payments when due. Loans that
experience insignificant payment delays and payment shortfalls
generally are not classified as impaired. Management
determines the significance of payment delays and payment
shortfalls on a case-by-case basis, taking into consideration all
of the circumstances surrounding the loans and the borrower,
including the length of the delay, the reasons for the delay, the
borrower’s prior payment record, and the amount of the
shortfall in relation to the principal and interest owed.
Impairment is measured on a loan-by-loan basis by either the
present value of the expected future cash flows, the loan’s
observable market value, or, for collateral-dependent loans, the
fair value of the collateral adjusted for market conditions and
selling expenses. Significant restructured loans are
considered impaired in determining the adequacy of the allowance
for loan losses.
The Company actively seeks to reduce its investment in impaired
loans. The primary tools to work through impaired loans are
settlements with the borrowers or guarantors, foreclosure of the
underlying collateral, or restructuring. Included in certain
loan categories in the impaired loans are $2.4 million in troubled
debt restructurings that were classified as impaired.
The following tables present impaired loans:
Three Months Ended September 30, 2016
Recorded Unpaid Specific Average Investment Interest Income Interest on
September 30, 2016:
Loans without a specific valuation allowance
Real estate loans:
One- to four-family $ 2,382 $ 2,382 $
— $ 2,390 $ 12 $ 13
Multi-family 1,598 1,598
— 1,608 24 24
Commercial 28 28
— 28
—
—
Home equity line of credit 326 326
— 327
—
—
Construction
—
—
—
—
—
—
Commercial 111 111
— 97 (1 )
—
Consumer
—
—
—
—
—
—
Loans with a specific allowance
Real estate loans:
One- to four-family 113 113 5 114
—
—
Multi-family
—
—
—
—
—
—
Commercial 34 34 13 34
—
—
Home equity line of credit
—
—
—
—
—
—
Construction
—
—
—
—
—
—
Commercial
—
—
—
—
—
—
Consumer
—
—
—
—
—
—
Total:
Real estate loans:
One- to four-family 2,495 2,495 5 2,504 12 13
Multi-family 1,598 1,598
— 1,608 24 24
Commercial 62 62 13 62
—
—
Home equity line of credit 326 326
— 327
—
—
Construction
—
—
—
—
—
—
Commercial 111 111
— 97 (1 )
—
Consumer
—
—
—
—
—
—
$ 4,592 $ 4,592 $ 18 $ 4,598 $ 35 $ 37
Year Ended June 30, 2016
Recorded Unpaid Specific Average Interest Interest on Cash
June 30, 2016:
Loans without a specific valuation allowance
Real estate loans:
One- to four-family $ 2,291 $ 2,291 $
— $ 2,338 $ 32 $ 42
Multi-family 1,457 1,457
— 1,497 67 90
Commercial 28 28
— 29
—
—
Home equity line of credit 327 327
— 346
— 2
Construction
—
—
—
—
—
—
Commercial 9 9
— 15
—
—
Consumer
—
—
— 3
—
—
Loans with a specific allowance
Real estate loans:
One- to four-family 114 114 6 117 1 2
Multi-family
—
—
—
—
—
—
Commercial 35 35 14 40
—
—
Home equity line of credit
—
—
—
—
—
—
Construction
—
—
—
—
—
—
Commercial
—
—
—
—
—
—
Consumer
—
—
—
—
—
—
Total:
Real estate loans:
One- to four-family 2,405 2,405 6 2,455 33 44
Multi-family 1,457 1,457
— 1,497 67 90
Commercial 63 63 14 69
—
—
Home equity line of credit 327 327
— 346
— 2
Construction
—
—
—
—
—
—
Commercial 9 9
— 15
—
—
Consumer
—
—
— 3
—
—
$ 4,261 $ 4,261 $ 20 $ 4,385 $ 100 $ 136
Three Months Ended September 30, 2015
Recorded Unpaid Specific Average Interest Income Interest on Cash
September 30, 2015:
Loans without a specific valuation allowance
Real estate loans:
One- to four-family $ 2,729 $ 2,729 $
— $ 2,736 $ 7 $ 6
Multi-family 1,512 1,512
— 1,524 23 23
Commercial 31 31
— 31
—
—
Home equity line of credit 8 8
— 8
—
—
Construction
—
—
—
—
—
—
Commercial 17 17
— 19
—
—
Consumer 5 5
— 6
—
—
Loans with a specific allowance
Real estate loans:
One- to four-family 585 585 83 589 2 3
Multi-family
—
—
—
—
—
—
Commercial 42 42 22 44
—
—
Home equity line of credit
—
—
—
—
—
—
Construction
—
—
—
—
—
—
Commercial
—
—
—
—
—
—
Consumer 6 6 6 7
—
—
Total:
Real estate loans:
One- to four-family 3,314 3,314 83 3,325 9 9
Multi-family 1,512 1,512
— 1,524 23 23
Commercial 73 73 22 75
—
—
Home equity line of credit 8 8
— 8
—
—
Construction
—
—
—
—
—
—
Commercial 17 17
— 19
—
—
Consumer 11 11 6 13
—
—
$ 4,935 $ 4,935 $ 111 $ 4,964 $ 32 $ 32
Interest income recognized on impaired loans includes interest
accrued and collected on the outstanding balances of accruing
impaired loans as well as interest cash collections on non-accruing
impaired loans for which the ultimate collectability of principal
is not uncertain.
The following table presents the Company’s nonaccrual loans
at September 30, 2016 and June 30, 2016:
September 30, 2016 June 30, 2016
Mortgages on real estate:
One- to four-family $ 1,701 $ 1,604
Multi-family 333 185
Commercial 62 63
Home equity lines of credit 316 316
Construction loans
—
—
Commercial business loans 111 9
Consumer loans
—
—
Total $ 2,523 $ 2,177
At September 30, 2016 and June 30, 2016, the Company had a number
of loans that were modified in troubled debt restructurings
(TDR’s) and impaired. The modification of terms of such
loans included one or a combination of the following: an extension
of maturity, a reduction of the stated interest rate or a permanent
reduction of the recorded investment in the loan.
The following table presents the recorded balance, at original
cost, of troubled debt restructurings, all of which were performing
according to the terms of the restructuring except for one one- to
four-family real estate loan for $168,000, as of September 30,
2016. As of September 30, 2016, all loans listed were on
nonaccrual except for twelve one- to four-family real estate loans
totaling $793,000, one multi-family real estate loan for $1.3
million, and two home equity lines of credit totaling
$10,000. All loans listed as of June 30, 2016 were on
nonaccrual except for twelve one- to four-family residential loans
totaling $802,000, one multi-family loan for $1.3 million, and one
home equity line of credit for $11,000.
September 30, 2016 June 30, 2016
Real estate loans
One- to four-family $ 970 $ 984
Multi-family 1,265 1,272
Commercial 8 9
Home equity |
