Loans | Loans Loans consist of the following at the dates indicated: December 31, 2015 June 30, 2015 Retail consumer loans: One-to-four family $ 644,433 $ 650,750 HELOCs - originated 161,559 161,204 HELOCs - purchased 94,112 72,010 Construction and land/lots 40,190 45,931 Indirect auto finance 86,972 52,494 Consumer 3,882 3,708 Total retail consumer loans 1,031,148 986,097 Commercial loans: Commercial real estate 453,068 441,620 Construction and development 78,540 64,573 Commercial and industrial 78,026 84,820 Municipal leases 106,778 108,574 Total commercial loans 716,412 699,587 Total loans 1,747,560 1,685,684 Deferred loan costs, net 207 23 Total loans, net of deferred loan fees and discount 1,747,767 1,685,707 Allowance for loan and lease losses (21,977 ) (22,374 ) Loans, net $ 1,725,790 $ 1,663,333 All the qualifying one-to-four family first mortgage loans, HELOCs - originated, and FHLB Stock are pledged as collateral by a blanket pledge to secure any outstanding FHLB advances. The Company's total non-purchased and purchased performing loans by segment, class, and risk grade at the dates indicated follow: Pass Special Mention Substandard Doubtful Loss Total December 31, 2015 Retail consumer loans: One-to-four family $ 598,936 $ 9,548 $ 27,262 $ 1,252 $ 8 $ 637,006 HELOCs - originated 156,306 679 4,072 198 7 161,262 HELOCs - purchased 94,112 — — — — 94,112 Construction and land/lots 37,228 610 1,649 20 — 39,507 Indirect auto finance 86,886 53 33 — — 86,972 Consumer 3,781 40 39 4 9 3,873 Commercial loans: Commercial real estate 408,070 7,425 10,610 — — 426,105 Construction and development 67,863 464 5,407 — — 73,734 Commercial and industrial 66,780 1,384 5,028 — 44 73,236 Municipal leases 104,522 1,705 551 — — 106,778 Total loans $ 1,624,484 $ 21,908 $ 54,651 $ 1,474 $ 68 $ 1,702,585 Pass Special Mention Substandard Doubtful Loss Total June 30, 2015 Retail consumer loans: One-to-four family $ 598,417 $ 11,563 $ 28,656 $ 1,772 $ 12 $ 640,420 HELOCs - originated 155,899 580 4,020 407 3 160,909 HELOCs - purchased 72,010 — — — — 72,010 Construction and land/lots 42,689 650 1,754 124 — 45,217 Indirect auto finance 52,396 59 39 — — 52,494 Consumer 3,610 16 32 — 39 3,697 Commercial loans: Commercial real estate 384,525 12,762 13,972 182 — 411,441 Construction and development 50,815 3,567 5,413 — — 59,795 Commercial and industrial 73,774 953 4,781 — 2 79,510 Municipal leases 106,260 1,733 581 — — 108,574 Total loans $ 1,540,395 $ 31,883 $ 59,248 $ 2,485 $ 56 $ 1,634,067 The Company's total PCI loans by segment, class, and risk grade at the dates indicated follow: Pass Special Mention Substandard Doubtful Loss Total December 31, 2015 Retail consumer loans: One-to-four family $ 4,852 $ 767 $ 1,793 $ 15 $ — $ 7,427 HELOCs - originated 259 — 38 — — 297 Construction and land/lots 555 — 128 — — 683 Consumer 9 — — — — 9 Commercial loans: Commercial real estate 16,050 7,255 3,658 — — 26,963 Construction and development 2,003 347 2,456 — — 4,806 Commercial and industrial 3,896 222 672 — — 4,790 Total loans $ 27,624 $ 8,591 $ 8,745 $ 15 $ — $ 44,975 Pass Special Mention Substandard Doubtful Loss Total June 30, 2015 Retail consumer loans: One-to-four family $ 5,176 $ 1,210 $ 3,890 $ 54 $ — $ 10,330 HELOCs - originated 259 — 36 — — 295 Construction and land/lots 571 — 143 — — 714 Consumer 11 — — — — 11 Commercial loans: Commercial real estate 21,550 3,454 5,175 — — 30,179 Construction and development 2,292 146 2,340 — — 4,778 Commercial and industrial 4,349 279 682 — — 5,310 Total loans $ 34,208 $ 5,089 $ 12,266 $ 54 $ — $ 51,617 The Company's total loans by segment, class, and delinquency status at the dates indicated follows: Past Due Total 30-89 Days 90 Days+ Total Current Loans December 31, 2015 Retail consumer loans: One-to-four family $ 3,269 $ 7,005 $ 10,274 $ 634,159 $ 644,433 HELOCs - originated 518 373 891 160,668 161,559 HELOCs - purchased — — — 94,112 94,112 Construction and land/lots 138 245 383 39,807 40,190 Indirect auto finance 98 — 98 86,874 86,972 Consumer 8 10 18 3,864 3,882 Commercial loans: Commercial real estate 1,315 4,791 6,106 446,962 453,068 Construction and development 156 4,849 5,005 73,535 78,540 Commercial and industrial 1,333 2,802 4,135 73,891 78,026 Municipal leases 121 — 121 106,657 106,778 Total loans $ 6,956 $ 20,075 $ 27,031 $ 1,720,529 $ 1,747,560 The table above includes PCI loans of $434 30-89 days past due and $7,761 90 days or more past due as of December 31, 2015 . Past Due Total 30-89 Days 90 Days+ Total Current Loans June 30, 2015 Retail consumer loans: One-to-four family $ 5,548 $ 8,261 $ 13,809 $ 636,941 $ 650,750 HELOCs - originated 695 808 1,503 159,701 161,204 HELOCs - purchased — — — 72,010 72,010 Construction and land/lots 102 307 409 45,522 45,931 Indirect auto finance — — — 52,494 52,494 Consumer 23 2 25 3,683 3,708 Commercial loans: Commercial real estate 2,758 4,636 7,394 434,226 441,620 Construction and development 166 2,992 3,158 61,415 64,573 Commercial and industrial 439 2,898 3,337 81,483 84,820 Municipal leases 202 — 202 108,372 108,574 Total loans $ 9,933 $ 19,904 $ 29,837 $ 1,655,847 $ 1,685,684 The table above includes PCI loans of $513 30-89 days past due and $3,198 90 days or more past due as of June 30, 2015 . The Company's recorded investment in loans, by segment and class, that are not accruing interest or are 90 days or more past due and still accruing interest at the dates indicated follow: December 31, 2015 June 30, 2015 Nonaccruing 90 Days + & still accruing Nonaccruing 90 Days + & still accruing Retail consumer loans: One-to-four family $ 10,665 $ — $ 10,523 $ — HELOCs - originated 1,555 — 1,856 — Construction and land/lots 344 — 465 — Indirect auto finance 14 — — — Consumer 28 — 49 — Commercial loans: Commercial real estate 5,898 — 5,103 — Construction and development 2,445 — 3,461 — Commercial and industrial 3,173 — 3,081 — Municipal leases 305 — 316 — Total loans $ 24,427 $ — $ 24,854 $ — PCI loans totaling $7,458 at December 31, 2015 and $8,158 at June 30, 2015 are excluded from nonaccruing loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations. Troubled debt restructurings ("TDRs") are loans which have renegotiated loan terms to assist borrowers who are unable to meet the original terms of their loans. Such modifications to loan terms may include a lower interest rate, a reduction in principal, or a longer term to maturity. Additionally, all TDRs are considered impaired. The Company's loans that were performing under the payment terms of TDRs that were excluded from nonaccruing loans above at the dates indicated follow: December 31, 2015 June 30, 2015 Performing TDRs included in impaired loans $ 26,929 $ 21,891 An analysis of the allowance for loan losses by segment for the periods shown is as follows: Three Months Ended December 31, 2015 Three Months Ended December 31, 2014 PCI Retail Consumer Commercial Total Retail Consumer Commercial Total Balance at beginning of period $ 328 $ 12,426 $ 9,358 $ 22,112 $ 14,945 $ 8,135 $ 23,080 Provision for (recovery of) loan losses 27 (553 ) 526 — (254 ) 254 — Charge-offs — (306 ) (543 ) (849 ) (577 ) (130 ) (707 ) Recoveries — 503 211 714 489 494 983 Balance at end of period $ 355 $ 12,070 $ 9,552 $ 21,977 $ 14,603 $ 8,753 $ 23,356 Six Months Ended December 31, 2015 Six Months Ended December 31, 2014 PCI Retail Consumer Commercial Total Retail Consumer Commercial Total Balance at beginning of period $ 401 $ 12,575 $ 9,398 $ 22,374 $ 15,731 $ 7,698 $ 23,429 Provision for (recovery of) loan losses (46 ) (480 ) 526 — (928 ) 678 (250 ) Charge-offs — (775 ) (877 ) (1,652 ) (1,056 ) (327 ) (1,383 ) Recoveries — 750 505 1,255 856 704 1,560 Balance at end of period $ 355 $ 12,070 $ 9,552 $ 21,977 $ 14,603 $ 8,753 $ 23,356 The Company's ending balances of loans and the related allowance, by segment and class, at the dates indicated follows: Allowance for Loan Losses Total Loans Receivable PCI Loans individually evaluated for impairment Loans collectively evaluated Total PCI Loans individually evaluated for impairment Loans collectively evaluated Total December 31, 2015 Retail consumer loans: One-to-four family $ 5 $ 309 $ 7,443 $ 7,757 $ 7,427 $ 15,490 $ 621,516 $ 644,433 HELOCs - originated 3 262 1,445 1,710 297 1,147 160,115 161,559 HELOCs - purchased — — 376 376 — — 94,112 94,112 Construction and land/lots — 441 995 1,436 683 1,202 38,305 40,190 Indirect auto finance — — 713 713 — — 86,972 86,972 Consumer — 9 77 86 9 — 3,873 3,882 Commercial loans: Commercial real estate 284 — 5,356 5,640 26,963 6,219 419,886 453,068 Construction and development — — 1,628 1,628 4,806 2,829 70,905 78,540 Commercial and industrial 63 1,198 716 1,977 4,790 4,153 69,083 78,026 Municipal leases — — 654 654 — 551 106,227 106,778 Total $ 355 $ 2,219 $ 19,403 $ 21,977 $ 44,975 $ 31,591 $ 1,670,994 $ 1,747,560 June 30, 2015 Retail consumer loans: One-to-four family $ 35 $ 492 $ 7,463 $ 7,990 $ 10,330 $ 22,841 $ 617,579 $ 650,750 HELCOs - originated 3 275 1,499 1,777 295 2,608 158,301 161,204 HELOCs - purchased — — 432 432 — — 72,010 72,010 Construction and land/lots — 531 1,291 1,822 714 1,926 43,291 45,931 Indirect auto finance — — 464 464 — — 52,494 52,494 Consumer — 39 89 128 11 45 3,652 3,708 Commercial loans: Commercial real estate 334 — 6,005 6,339 30,179 10,961 400,480 441,620 Construction and development — 119 1,462 1,581 4,778 5,161 54,634 64,573 Commercial and industrial 29 400 675 1,104 5,310 4,537 74,973 84,820 Municipal leases — — 737 737 — 316 108,258 108,574 Total $ 401 $ 1,856 $ 20,117 $ 22,374 $ 51,617 $ 48,395 $ 1,585,672 $ 1,685,684 During the quarter ended September 30, 2015, the Company increased its thresholds for loans individually evaluated for impairment under ASC 310-10. These changes primarily impacted the retail consumer loan segment, which contains loan that are more homogeneous in nature. This increase was appropriate given the growth in loans as well as the improvement in the overall credit quality of the portfolio. While these changes decreased the loans individually evaluated for impairment by $11,913 , it did not have a material impact on the Company’s allowance for loan losses at September 30, 2015 or provision for loan losses for the quarter ended September 30, 2015. Loans acquired from acquisitions are initially excluded from the allowance for loan losses in accordance with the acquisition method of accounting for business combinations. The Company records these loans at fair value, which includes a credit discount, therefore, no allowance for loan losses are established for these acquired loans at acquisition. A provision for loan losses is recorded for any further deterioration in these acquired loans subsequent to the acquisition. The Company's impaired loans and the related allowance, by segment and class, at the dates indicated follows: Total Impaired Loans Unpaid Principal Balance Recorded Investment With a Recorded Allowance Recorded Investment With No Recorded Allowance Total Related Recorded Allowance December 31, 2015 Retail consumer loans: One-to-four family $ 34,865 $ 13,270 $ 17,949 $ 31,219 $ 423 HELOCs - originated 5,120 2,937 697 3,634 281 Construction and land/lots 3,111 1,172 704 1,876 450 Indirect auto finance 14 14 — 14 — Consumer 659 16 20 36 9 Commercial loans: Commercial real estate 9,087 1,478 6,583 8,061 23 Construction and development 4,191 1,295 2,140 3,435 29 Commercial and industrial 9,464 3,996 1,011 5,007 1,223 Municipal leases 551 — 551 551 — Total impaired loans $ 67,062 $ 24,178 $ 29,655 $ 53,833 $ 2,438 June 30, 2015 Retail consumer loans: One-to-four family $ 31,590 $ 10,340 $ 19,164 $ 29,504 $ 598 HELOCs - originated 6,019 2,565 1,543 4,108 294 Construction and land/lots 3,303 1,225 758 1,983 533 Indirect auto finance 10 — — — — Consumer 1,966 13 45 58 39 Commercial loans: Commercial real estate 13,829 696 10,971 11,667 412 Construction and development 6,615 1,268 4,241 5,509 64 Commercial and industrial 5,668 688 4,051 4,739 431 Municipal leases 316 — 316 316 — Total impaired loans $ 69,316 $ 16,795 $ 41,089 $ 57,884 $ 2,371 Impaired loans above excludes $3,558 at December 31, 2015 and $644 at June 30, 2015 in PCI loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations. The table above includes $22,242 and $9,492 , of impaired loans that were not individually evaluated at December 31, 2015 and June 30, 2015 , respectively, because these loans did not meet the Company's threshold for individual impairment evaluation. The recorded allowance above includes $219 and $515 related to these loans that were not individually evaluated at December 31, 2015 and June 30, 2015 , respectively. The Company's average recorded investment in impaired loans and interest income recognized on impaired loans for the three and six months ended December 31, 2015 and 2014 was as follows: Three Months Ended December 31, 2015 December 31, 2014 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Retail consumer loans: One-to-four family $ 29,765 $ 382 $ 30,295 $ 389 HELOCs - originated 3,485 50 4,405 58 Construction and land/lots 1,940 38 2,186 34 Indirect auto finance 7 — — — Consumer 80 6 58 5 Commercial loans: Commercial real estate 8,919 40 16,144 113 Construction and development 3,594 20 5,646 29 Commercial and industrial 4,019 29 2,615 23 Municipal leases 428 14 441 20 Total loans $ 52,237 $ 579 $ 61,790 $ 671 Six Months Ended December 31, 2015 December 31, 2014 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Retail consumer loans: One-to-four family $ 29,869 $ 782 $ 33,445 $ 826 HELOCs - originated 3,942 100 5,001 126 Construction and land/lots 2,033 67 2,084 82 Indirect auto finance 3 — — — Consumer 66 15 41 10 Commercial loans: Commercial real estate 12,121 73 18,698 251 Construction and development 4,947 40 6,200 64 Commercial and industrial 3,463 61 2,710 52 Municipal leases 413 24 176 20 Total loans $ 56,857 $ 1,162 $ 68,355 $ 1,431 A summary of changes in the accretable yield for PCI loans for the three and six months ended December 31, 2015 and 2014 was as follows: Three Months Ended December 31, 2015 December 31, 2014 Accretable yield, beginning of period $ 9,763 $ 12,535 Reclass from nonaccretable yield (1) 236 — Other changes, net (2) 1,191 — Interest income (1,226 ) (2,200 ) Accretable yield, end of period $ 9,964 $ 10,335 Six Months Ended December 31, 2015 December 31, 2014 Accretable yield, beginning of period $ 11,096 $ 6,151 Addition from the Bank of Commerce acquisition — 7,315 Reclass from nonaccretable yield (1) 602 — Other changes, net (2) 1,080 — Interest income (2,814 ) (3,131 ) Accretable yield, end of period $ 9,964 $ 10,335 ______________________________________ (1) Represents changes attributable to expected losses assumptions. (2) Represents changes in cash flows expected to be collected due to the impact of modifications, changes in prepayment assumptions, and changes in interest rates. For the three and six months ended December 31, 2015 and 2014 , the following table presents a breakdown of the types of concessions made on TDRs by loan class: Three Months Ended December 31, 2015 Three Months Ended December 31, 2014 Number of Loans Pre Modification Outstanding Recorded Investment Post Modification Outstanding Recorded Investment Number of Loans Pre Modification Outstanding Recorded Investment Post Modification Outstanding Recorded Investment Below market interest rate: Retail consumer: One-to-four family 2 $ 108 $ 110 1 $ 61 $ 61 Construction and land/lots — — — 1 110 109 Total 2 $ 108 $ 110 2 $ 171 $ 170 Extended term: Retail consumer: One-to-four family 4 $ 92 $ 101 — $ — $ — HELOCs - originated — — — 2 44 44 Consumer — — — 2 10 9 Total 4 $ 92 $ 101 4 $ 54 $ 53 Other TDRs: Retail consumer: One-to-four family 10 $ 1,430 $ 1,420 6 $ 280 $ 251 Commercial: Commercial real estate 1 457 447 — — — Construction and development 1 250 253 — — — Commercial & Industrial 2 1,347 1,351 — — — Total 14 $ 3,484 $ 3,471 6 $ 280 $ 251 Total 20 $ 3,684 $ 3,682 12 $ 505 $ 474 Six Months Ended December 31, 2015 Six Months Ended December 31, 2014 Number of Loans Pre Modification Outstanding Recorded Investment Post Modification Outstanding Recorded Investment Number of Loans Pre Modification Outstanding Recorded Investment Post Modification Outstanding Recorded Investment Below market interest rate: Retail consumer: One-to-four family 2 $ 108 $ 110 1 $ 61 $ 61 HELOCs - originated — — — — — — Construction and land/lots — — — 1 110 109 Total 2 $ 108 $ 110 2 $ 171 $ 170 Extended term: Retail consumer: One-to-four family 4 $ 92 $ 101 1 $ 146 $ 147 HELOCs - originated 1 14 13 3 91 89 Consumer — — — 2 10 9 Commercial: Total 5 $ 106 $ 114 6 $ 247 $ 245 Other TDRs: Retail consumer: One-to-four family 16 $ 2,167 $ 1,969 10 $ 585 $ 571 HELOCs - originated — — — 1 100 99 Construction and land/lots — — — 1 106 104 Commercial: Commercial real estate 1 457 447 — — — Construction and development 1 250 253 — — — Commercial and industrial 2 1,347 1,351 — — — Total 20 $ 4,221 $ 4,020 12 $ 791 $ 774 Total 27 $ 4,435 $ 4,244 20 $ 1,209 $ 1,189 The following table presents loans that were modified as TDRs within the previous 12 months and for which there was a payment default during the three and six months ended December 31, 2015 and 2014 : Three Months Ended December 31, 2015 Three Months Ended December 31, 2014 Number of Loans Recorded Investment Number of Loans Recorded Investment Below market interest rate: Retail consumer: One-to-four family 1 $ 6 — $ — Total 1 $ 6 — $ — Extended payment terms: Retail consumer: One-to-four family 1 $ 31 — $ — Total 1 $ 31 — $ — Other TDRs: Retail consumer: One-to-four family 3 $ 330 3 $ 90 HELOCs - originated 2 16 — — Consumer 1 1 — — Total 6 $ 347 3 $ 90 Total 8 $ 384 3 $ 90 Six Months Ended December 31, 2015 Six Months Ended December 31, 2014 Number of Loans Recorded Investment Number of Loans Recorded Investment Below market interest rate: Retail consumer: One-to-four family 1 $ 6 — $ — Total 1 $ 6 — $ — Extended payment terms: One-to-four family 1 $ 31 — $ — Total 1 $ 31 — $ — Other TDRs: Retail consumer: One-to-four family 3 $ 330 7 $ 400 HELOCs - originated 2 16 — — Consumer 1 1 — — Commercial: Commercial real estate — — — — Total 6 $ 347 7 $ 400 Total 8 $ 384 7 $ 400 Other TDRs include TDRs that have a below market interest rate and extended payment terms. The Company does not typically forgive principal when restructuring troubled debt. In the determination of the allowance for loan losses, management considers TDRs for all loan classes, and the subsequent nonperformance in accordance with their modified terms, by measuring impairment on a loan-by-loan basis based on either the value of the loan's expected future cash flows discounted at the loan's original effective interest rate or on the collateral value, net of the estimated costs of disposal, if the loan is collateral dependent. |