Loans | Loans Loans consist of the following at the dates indicated: September 30, 2016 June 30, 2016 Retail consumer loans: One-to-four family $ 613,568 $ 623,701 HELOCs - originated 161,679 163,293 HELOCs - purchased 169,007 144,377 Construction and land/lots 40,100 38,102 Indirect auto finance 122,115 108,478 Consumer 5,348 4,635 Total retail consumer loans 1,111,817 1,082,586 Commercial loans: Commercial real estate 487,997 486,561 Construction and development 109,507 86,840 Commercial and industrial 70,393 73,289 Municipal leases 101,400 103,183 Total commercial loans 769,297 749,873 Total loans 1,881,114 1,832,459 Deferred loan costs, net 367 372 Total loans, net of deferred loan costs and discount 1,881,481 1,832,831 Allowance for loan and lease losses (20,951 ) (21,292 ) Loans, net $ 1,860,530 $ 1,811,539 All the qualifying one-to-four family first mortgage loans, HELOCs, 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 September 30, 2016 Retail consumer loans: One-to-four family $ 579,110 $ 7,542 $ 19,038 $ 1,610 $ 47 $ 607,347 HELOCs - originated 157,802 711 2,782 94 9 161,398 HELOCs - purchased 169,007 — — — — 169,007 Construction and land/lots 38,433 444 672 9 — 39,558 Indirect auto finance 121,990 13 101 10 1 122,115 Consumer 5,148 — 183 1 9 5,341 Commercial loans: Commercial real estate 453,449 6,862 9,476 1 — 469,788 Construction and development 102,035 681 3,869 — — 106,585 Commercial and industrial 61,685 995 4,472 — 3 67,155 Municipal leases 99,782 964 654 — — 101,400 Total loans $ 1,788,441 $ 18,212 $ 41,247 $ 1,725 $ 69 $ 1,849,694 Pass Special Mention Substandard Doubtful Loss Total June 30, 2016 Retail consumer loans: One-to-four family $ 587,440 $ 7,800 $ 20,129 $ 1,283 $ 11 $ 616,663 HELOCs - originated 159,275 678 2,997 55 10 163,015 HELOCs - purchased 144,377 — — — — 144,377 Construction and land/lots 36,298 542 679 9 — 37,528 Indirect auto finance 108,432 14 21 11 — 108,478 Consumer 4,390 1 224 2 9 4,626 Commercial loans: Commercial real estate 448,188 7,817 9,232 1 — 465,238 Construction and development 79,005 480 4,208 — — 83,693 Commercial and industrial 63,299 1,032 5,361 — 2 69,694 Municipal leases 100,867 1,651 665 — — 103,183 Total loans $ 1,731,571 $ 20,015 $ 43,516 $ 1,361 $ 32 $ 1,796,495 The Company's total PCI loans by segment, class, and risk grade at the dates indicated follow: Pass Special Mention Substandard Doubtful Loss Total September 30, 2016 Retail consumer loans: One-to-four family $ 4,244 $ 376 $ 1,397 $ 189 $ 15 $ 6,221 HELOCs - originated 257 — 24 — — 281 Construction and land/lots 501 — 41 — — 542 Consumer 7 — — — — 7 Commercial loans: Commercial real estate 10,439 3,133 4,637 — — 18,209 Construction and development 894 64 1,964 — — 2,922 Commercial and industrial 3,055 139 44 — — 3,238 Total loans $ 19,397 $ 3,712 $ 8,107 $ 189 $ 15 $ 31,420 Pass Special Mention Substandard Doubtful Loss Total June 30, 2016 Retail consumer loans: One-to-four family $ 5,039 $ 377 $ 1,593 $ 14 $ 15 $ 7,038 HELOCs - originated 258 — 20 — — 278 Construction and land/lots 522 — 52 — — 574 Consumer 8 — — — 1 9 Commercial loans: Commercial real estate 12,594 4,266 4,463 — — 21,323 Construction and development 1,136 292 1,719 — — 3,147 Commercial and industrial 3,234 194 167 — — 3,595 Total loans $ 22,791 $ 5,129 $ 8,014 $ 14 $ 16 $ 35,964 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 September 30, 2016 Retail consumer loans: One-to-four family $ 3,002 $ 5,160 $ 8,162 $ 605,406 $ 613,568 HELOCs - originated 726 374 1,100 160,579 161,679 HELOCs - purchased — — — 169,007 169,007 Construction and land/lots 51 61 112 39,988 40,100 Indirect auto finance 71 52 123 121,992 122,115 Consumer 9 8 17 5,331 5,348 Commercial loans: Commercial real estate 1,226 3,841 5,067 482,930 487,997 Construction and development 223 1,514 1,737 107,770 109,507 Commercial and industrial 70 1,732 1,802 68,591 70,393 Municipal leases — — — 101,400 101,400 Total loans $ 5,378 $ 12,742 $ 18,120 $ 1,862,994 $ 1,881,114 The table above includes PCI loans of $591 30-89 days past due and $5,580 90 days or more past due as of September 30, 2016 . Past Due Total 30-89 Days 90 Days+ Total Current Loans June 30, 2016 Retail consumer loans: One-to-four family $ 3,514 $ 5,476 $ 8,990 $ 614,711 $ 623,701 HELOCs - originated 220 377 597 162,696 163,293 HELOCs - purchased — — — 144,377 144,377 Construction and land/lots 100 119 219 37,883 38,102 Indirect auto finance 182 — 182 108,296 108,478 Consumer 4 4 8 4,627 4,635 Commercial loans: Commercial real estate 1,436 3,353 4,789 481,772 486,561 Construction and development 371 1,296 1,667 85,173 86,840 Commercial and industrial 216 2,819 3,035 70,254 73,289 Municipal leases — — — 103,183 103,183 Total loans $ 6,043 $ 13,444 $ 19,487 $ 1,812,972 $ 1,832,459 The table above includes PCI loans of $1,596 30-89 days past due and $5,776 90 days or more past due as of June 30, 2016 . 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: September 30, 2016 June 30, 2016 Nonaccruing 90 Days + & still accruing Nonaccruing 90 Days + & still accruing Retail consumer loans: One-to-four family $ 8,611 $ — $ 9,192 $ — HELOCs - originated 1,000 — 1,026 — Construction and land/lots 183 — 188 — Indirect auto finance 91 — 20 — Consumer 30 — 15 — Commercial loans: Commercial real estate 3,226 — 3,222 — Construction and development 1,275 — 1,417 — Commercial and industrial 2,195 — 3,019 — Municipal leases 408 — 419 — Total loans $ 17,019 $ — $ 18,518 $ — PCI loans totaling $6,149 at September 30, 2016 and $6,607 at June 30, 2016 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 had no commitments to lend additional funds on these TDR loans at September 30, 2016. 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: September 30, 2016 June 30, 2016 Performing TDRs included in impaired loans $ 27,635 $ 28,263 An analysis of the allowance for loan losses by segment for the periods shown is as follows: Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 PCI Retail Consumer Commercial Total PCI Retail Consumer Commercial Total Balance at beginning of period $ 361 $ 11,549 $ 9,382 $ 21,292 $ 401 $ 12,575 $ 9,398 $ 22,374 Provision for (recovery of) loan losses (5 ) (895 ) 900 — (73 ) 73 — — Charge-offs — (419 ) (607 ) (1,026 ) — (469 ) (334 ) (803 ) Recoveries — 211 474 685 — 247 294 541 Balance at end of period $ 356 $ 10,446 $ 10,149 $ 20,951 $ 328 $ 12,426 $ 9,358 $ 22,112 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 September 30, 2016 Retail consumer loans: One-to-four family $ 20 $ 364 $ 5,526 $ 5,910 $ 6,221 $ 11,209 $ 596,138 $ 613,568 HELOCs - originated — 9 1,736 1,745 281 14 161,384 161,679 HELOCs - purchased — — 676 676 — — 169,007 169,007 Construction and land/lots — — 1,038 1,038 542 388 39,170 40,100 Indirect auto finance — 1 1,045 1,046 — 1 122,114 122,115 Consumer — 9 42 51 7 9 5,332 5,348 Commercial loans: Commercial real estate 298 150 6,282 6,730 18,209 5,206 464,582 487,997 Construction and development 14 — 2,313 2,327 2,922 1,767 104,818 109,507 Commercial and industrial 24 3 754 781 3,238 2,773 64,382 70,393 Municipal leases — — 647 647 — 294 101,106 101,400 Total $ 356 $ 536 $ 20,059 $ 20,951 $ 31,420 $ 21,661 $ 1,828,033 $ 1,881,114 June 30, 2016 Retail consumer loans: One-to-four family $ 23 $ 187 $ 6,385 $ 6,595 $ 7,038 $ 12,411 $ 604,252 $ 623,701 HELOCs - originated — 288 1,709 1,997 278 1,145 161,870 163,293 HELOCs - purchased — — 558 558 — — 144,377 144,377 Construction and land/lots — 198 1,146 1,344 574 392 37,136 38,102 Indirect auto finance — — 1,016 1,016 — — 108,478 108,478 Consumer — 10 51 61 9 — 4,626 4,635 Commercial loans: Commercial real estate 288 — 6,142 6,430 21,323 5,376 459,862 486,561 Construction and development 17 — 1,891 1,908 3,147 1,789 81,904 86,840 Commercial and industrial 33 3 685 721 3,595 2,927 66,767 73,289 Municipal leases — — 662 662 — 305 102,878 103,183 Total $ 361 $ 686 $ 20,245 $ 21,292 $ 35,964 $ 24,345 $ 1,772,150 $ 1,832,459 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 September 30, 2016 Retail consumer loans: One-to-four family $ 29,613 $ 17,245 $ 9,015 $ 26,260 $ 846 HELOCs - originated 3,939 2,262 378 2,640 53 Construction and land/lots 2,633 852 494 1,346 27 Indirect auto finance 194 38 53 91 1 Consumer 576 4 22 26 9 Commercial loans: Commercial real estate 7,661 4,305 2,723 7,028 180 Construction and development 3,213 726 1,487 2,213 4 Commercial and industrial 9,044 839 2,772 3,611 19 Municipal leases 408 114 294 408 1 Total impaired loans $ 57,281 $ 26,385 $ 17,238 $ 43,623 $ 1,140 June 30, 2016 Retail consumer loans: One-to-four family $ 29,053 $ 12,348 $ 13,375 $ 25,723 $ 281 HELOCs - originated 4,486 1,999 1,178 3,177 305 Construction and land/lots 2,890 764 693 1,457 209 Indirect auto finance 45 20 — 20 — Consumer 514 9 13 22 10 Commercial loans: Commercial real estate 7,433 857 5,776 6,633 13 Construction and development 3,556 600 1,929 2,529 14 Commercial and industrial 9,710 1,197 2,930 4,127 17 Municipal leases 419 114 305 419 1 Total impaired loans $ 58,106 $ 17,908 $ 26,199 $ 44,107 $ 850 Impaired loans above excludes $0 at September 30, 2016 and $2,541 at June 30, 2016 in PCI loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations. For the quarter ended September 30, 2016, impaired loans with a recorded allowance increased primarily due to the change in methodology of measuring impairment for $5.2 million of loans from the collateral method to the present value of future cash flows method to better reflect the anticipated repayments of these loans. The table above includes $21,962 and $19,762 , of impaired loans that were not individually evaluated at September 30, 2016 and June 30, 2016 , respectively, because these loans did not meet the Company's threshold for individual impairment evaluation. The recorded allowance above includes $604 and $164 related to these loans that were not individually evaluated at September 30, 2016 and June 30, 2016 , respectively. The Company's average recorded investment in impaired loans and interest income recognized on impaired loans for the three months ended September 30, 2016 and 2015 was as follows: Three Months Ended September 30, 2016 September 30, 2015 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Retail consumer loans: One-to-four family $ 25,992 $ 326 $ 28,907 $ 338 HELOCs - originated 2,909 46 3,722 50 Construction and land/lots 1,402 32 1,993 28 Indirect auto finance 56 1 — 1 Consumer 24 5 91 14 Commercial loans: Commercial real estate 6,831 69 10,722 38 Construction and development 2,371 13 4,631 14 Commercial and industrial 3,869 45 3,885 13 Municipal leases 414 12 311 10 Total loans $ 43,868 $ 549 $ 54,262 $ 506 A summary of changes in the accretable yield for PCI loans for the three months ended September 30, 2016 and 2015 was as follows: Three Months Ended September 30, 2016 September 30, 2015 Accretable yield, beginning of period $ 9,532 $ 11,096 Reclass from nonaccretable yield (1) 887 366 Other changes, net (2) (459 ) (111 ) Interest income (1,621 ) (1,588 ) Accretable yield, end of period $ 8,339 $ 9,763 ______________________________________ (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 months ended September 30, 2016 and 2015 , the following table presents a breakdown of the types of concessions made on TDRs by loan class: Three Months Ended September 30, 2016 Three Months Ended September 30, 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 $ 29 $ 29 HELOCs - originated — — — 1 18 14 Total — $ — $ — 2 $ 47 $ 43 Extended term: Retail consumer: One-to-four family 2 $ 119 $ 119 — $ — $ — Total 2 $ 119 $ 119 — $ — $ — Other TDRs: Retail consumer: One-to-four family 3 $ 105 $ 105 6 $ 523 $ 528 HELOCs - originated 1 3 3 — — — Total 4 $ 108 $ 108 6 $ 523 $ 528 Total 6 $ 227 $ 227 8 $ 570 $ 571 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 months ended September 30, 2016 and 2015 : Three Months Ended Three Months Ended 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 $ 39 — $ — Total 1 $ 39 — $ — Other TDRs: Retail consumer: One-to-four family 3 $ 57 1 $ 182 HELOCs - originated — — 1 — Commercial: Construction and development 2 371 — — Commercial and industrial 3 970 — — Total 8 $ 1,398 2 $ 182 Total 9 $ 1,437 3 $ 188 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 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. |