Loans | Loans Loans consist of the following at the dates indicated: March 31, 2016 June 30, 2015 Retail consumer loans: One-to-four family $ 640,126 $ 650,750 HELOCs - originated 164,551 161,204 HELOCs - purchased 158,006 72,010 Construction and land/lots 35,088 45,931 Indirect auto finance 95,660 52,494 Consumer 4,195 3,708 Total retail consumer loans 1,097,626 986,097 Commercial loans: Commercial real estate 459,179 441,620 Construction and development 77,410 64,573 Commercial and industrial 77,052 84,820 Municipal leases 103,428 108,574 Total commercial loans 717,069 699,587 Total loans 1,814,695 1,685,684 Deferred loan costs, net 322 23 Total loans, net of deferred loan fees and discount 1,815,017 1,685,707 Allowance for loan and lease losses (21,761 ) (22,374 ) Loans, net $ 1,793,256 $ 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 March 31, 2016 Retail consumer loans: One-to-four family $ 602,666 $ 8,141 $ 21,365 $ 686 $ 7 $ 632,865 HELOCs - originated 160,026 615 3,562 55 7 164,265 HELOCs - purchased 158,006 — — — — 158,006 Construction and land/lots 33,114 434 943 9 — 34,500 Indirect auto finance 95,515 14 119 12 — 95,660 Consumer 3,958 2 215 2 8 4,185 Commercial loans: Commercial real estate 417,579 6,803 11,083 — — 435,465 Construction and development 67,745 548 5,130 — — 73,423 Commercial and industrial 65,269 1,304 5,803 — 3 72,379 Municipal leases 101,097 1,663 668 — — 103,428 Total loans $ 1,704,975 $ 19,524 $ 48,888 $ 764 $ 25 $ 1,774,176 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 March 31, 2016 Retail consumer loans: One-to-four family $ 5,234 $ 433 $ 1,580 $ 14 $ — $ 7,261 HELOCs - originated 259 — 27 — — 286 Construction and land/lots 530 — 58 — — 588 Consumer 8 — — — 2 10 Commercial loans: Commercial real estate 16,012 4,384 3,318 — — 23,714 Construction and development 1,617 339 2,031 — — 3,987 Commercial and industrial 3,778 206 689 — — 4,673 Total loans $ 27,438 $ 5,362 $ 7,703 $ 14 $ 2 $ 40,519 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 March 31, 2016 Retail consumer loans: One-to-four family $ 3,860 $ 5,540 $ 9,400 $ 630,726 $ 640,126 HELOCs - originated 544 348 892 163,659 164,551 HELOCs - purchased — — — 158,006 158,006 Construction and land/lots 198 226 424 34,664 35,088 Indirect auto finance 37 — 37 95,623 95,660 Consumer 5 8 13 4,182 4,195 Commercial loans: Commercial real estate 1,352 5,713 7,065 452,114 459,179 Construction and development — 3,465 3,465 73,945 77,410 Commercial and industrial 880 3,207 4,087 72,965 77,052 Municipal leases — 116 116 103,312 103,428 Total loans $ 6,876 $ 18,623 $ 25,499 $ 1,789,196 $ 1,814,695 The table above includes PCI loans of $1,253 30-89 days past due and $7,736 90 days or more past due as of March 31, 2016 . 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: March 31, 2016 June 30, 2015 Nonaccruing 90 Days + & still accruing Nonaccruing 90 Days + & still accruing Retail consumer loans: One-to-four family $ 9,006 $ — $ 10,523 $ — HELOCs - originated 1,535 — 1,856 — Construction and land/lots 321 — 465 — Indirect auto finance — — — — Consumer 24 — 49 — Commercial loans: Commercial real estate 4,703 — 5,103 — Construction and development 1,728 — 3,461 — Commercial and industrial 3,301 — 3,081 — Municipal leases 422 — 316 — Total loans $ 21,040 $ — $ 24,854 $ — PCI loans totaling $7,127 at March 31, 2016 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: March 31, 2016 June 30, 2015 Performing TDRs included in impaired loans $ 27,039 $ 21,891 An analysis of the allowance for loan losses by segment for the periods shown is as follows: Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 PCI Retail Consumer Commercial Total Retail Consumer Commercial Total Balance at beginning of period $ 355 $ 12,070 $ 9,552 $ 21,977 $ 14,603 $ 8,753 $ 23,356 Provision for (recovery of) loan losses (10 ) 339 (329 ) — 184 (184 ) — Charge-offs — (692 ) (500 ) (1,192 ) (1,313 ) (354 ) (1,667 ) Recoveries — 228 748 976 101 891 992 Balance at end of period $ 345 $ 11,945 $ 9,471 $ 21,761 $ 13,575 $ 9,106 $ 22,681 Nine Months Ended March 31, 2016 Nine Months Ended March 31, 2015 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 (56 ) (141 ) 197 — (745 ) 495 (250 ) Charge-offs — (1,466 ) (1,378 ) (2,844 ) (2,369 ) (682 ) (3,051 ) Recoveries — 977 1,254 2,231 958 1,595 2,553 Balance at end of period $ 345 $ 11,945 $ 9,471 $ 21,761 $ 13,575 $ 9,106 $ 22,681 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 March 31, 2016 Retail consumer loans: One-to-four family $ 23 $ 176 $ 6,819 $ 7,018 $ 7,261 $ 12,737 $ 620,128 $ 640,126 HELOCs - originated 3 286 1,918 2,207 286 1,146 163,119 164,551 HELOCs - purchased — — 632 632 — — 158,006 158,006 Construction and land/lots — 232 955 1,187 588 874 33,626 35,088 Indirect auto finance — — 843 843 — — 95,660 95,660 Consumer — 10 74 84 10 — 4,185 4,195 Commercial loans: Commercial real estate 267 — 5,526 5,793 23,714 5,123 430,342 459,179 Construction and development 17 — 1,621 1,638 3,987 1,162 72,261 77,410 Commercial and industrial 35 703 994 1,732 4,673 3,913 68,466 77,052 Municipal leases — — 627 627 — 551 102,877 103,428 Total $ 345 $ 1,407 $ 20,009 $ 21,761 $ 40,519 $ 25,506 $ 1,748,670 $ 1,814,695 June 30, 2015 Retail consumer loans: One-to-four family $ 35 $ 492 $ 7,463 $ 7,990 $ 10,330 $ 22,841 $ 617,579 $ 650,750 HELOCs - 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 March 31, 2016 Retail consumer loans: One-to-four family $ 32,644 $ 12,339 $ 16,828 $ 29,167 $ 276 HELOCs - originated 5,178 2,086 1,623 3,709 305 Construction and land/lots 3,054 951 666 1,617 243 Consumer 640 13 22 35 11 Commercial loans: Commercial real estate 8,025 1,174 6,186 7,360 18 Construction and development 3,986 573 2,296 2,869 13 Commercial and industrial 10,209 2,574 2,420 4,994 722 Municipal leases 667 116 551 667 — Total impaired loans $ 64,403 $ 19,826 $ 30,592 $ 50,418 $ 1,588 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 $5,425 at March 31, 2016 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 $24,912 and $9,492 , of impaired loans that were not individually evaluated at March 31, 2016 and June 30, 2015 , respectively, because these loans did not meet the Company's threshold for individual impairment evaluation. The recorded allowance above includes $181 and $515 related to these loans that were not individually evaluated at March 31, 2016 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 nine months ended March 31, 2016 and 2015 was as follows: Three Months Ended March 31, 2016 March 31, 2015 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Retail consumer loans: One-to-four family $ 30,193 $ 385 $ 30,155 $ 395 HELOCs - originated 3,671 48 4,316 66 Construction and land/lots 1,747 35 2,152 38 Indirect auto finance 7 1 — — Consumer 35 6 55 5 Commercial loans: Commercial real estate 7,711 34 15,551 147 Construction and development 3,151 17 6,019 55 Commercial and industrial 5,001 37 2,270 18 Municipal leases 609 1 447 12 Total loans $ 52,125 $ 564 $ 60,965 $ 736 Nine Months Ended March 31, 2016 March 31, 2015 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Retail consumer loans: One-to-four family $ 29,922 $ 1,141 $ 31,914 $ 1,283 HELOCs - originated 3,856 149 4,730 195 Construction and land/lots 1,952 102 2,153 125 Indirect auto finance 3 4 — 1 Consumer 56 20 37 16 Commercial loans: Commercial real estate 10,828 119 17,281 406 Construction and development 4,477 61 6,104 133 Commercial and industrial 4,029 107 2,622 74 Municipal leases 431 30 239 17 Total loans $ 55,554 $ 1,733 $ 65,080 $ 2,250 A summary of changes in the accretable yield for PCI loans for the three and nine months ended March 31, 2016 and 2015 was as follows: Three Months Ended March 31, 2016 March 31, 2015 Accretable yield, beginning of period $ 9,964 $ 10,335 Reclass from nonaccretable yield (1) 59 — Other changes, net (2) (36 ) — Interest income (840 ) (1,616 ) Accretable yield, end of period $ 9,147 $ 8,719 Nine Months Ended March 31, 2016 March 31, 2015 Accretable yield, beginning of period $ 11,096 $ 6,151 Addition from the Bank of Commerce acquisition — 7,315 Reclass from nonaccretable yield (1) 661 — Other changes, net (2) 1,044 — Interest income (3,654 ) (4,747 ) Accretable yield, end of period $ 9,147 $ 8,719 ______________________________________ (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 nine months ended March 31, 2016 and 2015 , the following table presents a breakdown of the types of concessions made on TDRs by loan class: Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 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 — $ — $ — 3 $ 388 $ 386 Commercial: Commercial real estate 1 590 586 — — — Total 1 $ 590 $ 586 3 $ 388 $ 386 Extended term: Retail consumer: HELOCs - originated 1 $ 14 $ 14 — $ — $ — Commercial: Commercial real estate 1 286 286 — — — Total 2 $ 300 $ 300 — $ — $ — Other TDRs: Retail consumer: One-to-four family 7 $ 485 $ 493 6 $ 3,091 $ 3,006 HELOCs - originated 1 8 8 2 41 9 Construction and land/lots 1 2 2 — — — Total 9 $ 495 $ 503 8 $ 3,132 $ 3,015 Total 12 $ 1,385 $ 1,389 11 $ 3,520 $ 3,401 Nine Months Ended March 31, 2016 Nine Months Ended March 31, 2015 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 1 $ 26 $ 28 4 $ 449 $ 473 Construction and land/lots — — — 1 110 103 Commercial: Commercial real estate 1 590 586 — — — Total 2 $ 616 $ 614 5 $ 559 $ 576 Extended term: Retail consumer: One-to-four family 4 $ 92 $ 99 — $ — $ — HELOCs - originated 2 28 27 3 91 87 Consumer — — — 2 10 9 Commercial: Commercial real estate 1 286 286 2 426 471 Total 7 $ 406 $ 412 7 $ 527 $ 567 Other TDRs: Retail consumer: One-to-four family 26 $ 2,860 $ 2,657 16 $ 3,684 $ 3,568 HELOCs - originated 2 8 8 4 155 121 Construction and land/lots — — — 1 106 103 Consumer 1 2 2 — — — Commercial: Construction and development 1 386 374 2 173 172 Commercial and industrial 1 997 978 — — — Total 31 $ 4,253 $ 4,019 23 $ 4,118 $ 3,964 Total 40 $ 5,275 $ 5,045 35 $ 5,204 $ 5,107 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 nine months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Number of Loans Recorded Investment Number of Loans Recorded Investment Below market interest rate: Retail consumer: One-to-four family — $ — 2 $ 380 Total — $ — 2 $ 380 Extended payment terms: Retail consumer: One-to-four family 1 $ 31 — $ — Total 1 $ 31 — $ — Other TDRs: Retail consumer: One-to-four family 6 $ 390 2 $ 716 HELOCs - originated 1 16 2 9 Total 7 $ 406 4 $ 725 Total 8 $ 437 6 $ 1,105 Nine Months Ended March 31, 2016 Nine Months Ended March 31, 2015 Number of Loans Recorded Investment Number of Loans Recorded Investment Below market interest rate: Retail consumer: One-to-four family — $ — 2 $ 380 Total — $ — 2 $ 380 Extended payment terms: Retail consumer: One-to-four family 3 $ 75 — $ — Total 3 $ 75 — $ — Other TDRs: Retail consumer: One-to-four family 14 $ 895 10 $ 1,116 HELOCs - originated 2 24 2 9 Construction and land/lots — — 1 172 Total 16 $ 919 13 $ 1,297 Total 19 $ 994 15 $ 1,677 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. |