Loans | Loans Loans consist of the following at the dates indicated: December 31, 2016 June 30, 2016 Retail consumer loans: One-to-four family $ 608,118 $ 623,701 HELOCs - originated 156,615 163,293 HELOCs - purchased 173,511 144,377 Construction and land/lots 42,628 38,102 Indirect auto finance 129,132 108,478 Consumer 5,852 4,635 Total retail consumer loans 1,115,856 1,082,586 Commercial loans: Commercial real estate 531,321 486,561 Construction and development 129,370 86,840 Commercial and industrial 77,352 73,289 Municipal leases 101,730 103,183 Total commercial loans 839,773 749,873 Total loans 1,955,629 1,832,459 Deferred loan costs (fees), net (25 ) 372 Total loans, net of deferred loan fees 1,955,604 1,832,831 Allowance for loan and lease losses (20,986 ) (21,292 ) Loans, net $ 1,934,618 $ 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 December 31, 2016 Retail consumer loans: One-to-four family $ 575,429 $ 8,320 $ 17,898 $ 1,239 $ 48 $ 602,934 HELOCs - originated 152,810 944 2,514 55 9 156,332 HELOCs - purchased 173,511 — — — — 173,511 Construction and land/lots 40,774 696 590 32 — 42,092 Indirect auto finance 128,903 25 203 — 1 129,132 Consumer 5,617 1 215 3 10 5,846 Commercial loans: Commercial real estate 498,507 6,445 9,847 1 — 514,800 Construction and development 121,946 819 3,824 — — 126,589 Commercial and industrial 69,119 850 4,264 — 1 74,234 Municipal leases 100,129 963 638 — — 101,730 Total loans $ 1,866,745 $ 19,063 $ 39,993 $ 1,330 $ 69 $ 1,927,200 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 December 31, 2016 Retail consumer loans: One-to-four family $ 3,175 $ 471 $ 1,358 $ 180 $ — $ 5,184 HELOCs - originated 257 — 26 — — 283 Construction and land/lots 494 — 42 — — 536 Consumer 6 — — — — 6 Commercial loans: Commercial real estate 8,800 3,612 4,109 — — 16,521 Construction and development 812 — 1,969 — — 2,781 Commercial and industrial 2,989 84 45 — — 3,118 Total loans $ 16,533 $ 4,167 $ 7,549 $ 180 $ — $ 28,429 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 December 31, 2016 Retail consumer loans: One-to-four family $ 3,733 $ 3,728 $ 7,461 $ 600,657 $ 608,118 HELOCs - originated 569 354 923 155,692 156,615 HELOCs - purchased — — — 173,511 173,511 Construction and land/lots 116 83 199 42,429 42,628 Indirect auto finance 353 30 383 128,749 129,132 Consumer 45 13 58 5,794 5,852 Commercial loans: Commercial real estate 128 4,486 4,614 526,707 531,321 Construction and development 638 1,222 1,860 127,510 129,370 Commercial and industrial 575 1,714 2,289 75,063 77,352 Municipal leases 114 — 114 101,616 101,730 Total loans $ 6,271 $ 11,630 $ 17,901 $ 1,937,728 $ 1,955,629 The table above includes PCI loans of $214 30-89 days past due and $5,382 90 days or more past due as of December 31, 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: December 31, 2016 June 30, 2016 Nonaccruing 90 Days + & still accruing Nonaccruing 90 Days + & still accruing Retail consumer loans: One-to-four family $ 7,361 $ — $ 9,192 $ — HELOCs - originated 654 — 1,026 — Construction and land/lots 173 — 188 — Indirect auto finance 176 — 20 — Consumer 31 — 15 — Commercial loans: Commercial real estate 3,374 — 3,222 — Construction and development 1,759 — 1,417 — Commercial and industrial 2,070 — 3,019 — Municipal leases 408 — 419 — Total loans $ 16,006 $ — $ 18,518 $ — PCI loans totaling $6,228 at December 31, 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 December 31, 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: December 31, 2016 June 30, 2016 Performing TDRs included in impaired loans $ 27,448 $ 28,263 An analysis of the allowance for loan losses by segment for the periods shown is as follows: Three Months Ended December 31, 2016 Three Months Ended December 31, 2015 PCI Retail Consumer Commercial Total PCI Retail Consumer Commercial Total Balance at beginning of period $ 356 $ 10,446 $ 10,149 $ 20,951 $ 328 $ 12,426 $ 9,358 $ 22,112 Provision for (recovery of) loan losses (20 ) (609 ) 629 — 27 (553 ) 526 — Charge-offs — (155 ) (67 ) (222 ) — (306 ) (543 ) (849 ) Recoveries — 131 126 257 — 503 211 714 Balance at end of period $ 336 $ 9,813 $ 10,837 $ 20,986 $ 355 $ 12,070 $ 9,552 $ 21,977 Six Months Ended December 31, 2016 Six Months Ended December 31, 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 (25 ) (1,505 ) 1,530 — (46 ) (480 ) 526 — Charge-offs — (574 ) (675 ) (1,249 ) — (775 ) (877 ) (1,652 ) Recoveries — 343 600 943 — 750 505 1,255 Balance at end of period $ 336 $ 9,813 $ 10,837 $ 20,986 $ 355 $ 12,070 $ 9,552 $ 21,977 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, 2016 Retail consumer loans: One-to-four family $ 16 $ 343 $ 5,097 $ 5,456 $ 5,184 $ 10,980 $ 591,954 $ 608,118 HELOCs - originated — 9 1,714 1,723 283 14 156,318 156,615 HELOCs - purchased — — 694 694 — — 173,511 173,511 Construction and land/lots — — 959 959 536 659 41,433 42,628 Indirect auto finance — — 942 942 — 31 129,101 129,132 Consumer — 10 45 55 6 10 5,836 5,852 Commercial loans: Commercial real estate 290 135 6,471 6,896 16,521 5,928 508,872 531,321 Construction and development 12 — 2,629 2,641 2,781 2,083 124,506 129,370 Commercial and industrial 18 3 949 970 3,118 2,726 71,508 77,352 Municipal leases — — 650 650 — 294 101,436 101,730 Total $ 336 $ 500 $ 20,150 $ 20,986 $ 28,429 $ 22,725 $ 1,904,475 $ 1,955,629 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 December 31, 2016 Retail consumer loans: One-to-four family $ 29,018 $ 17,836 $ 7,904 $ 25,740 $ 841 HELOCs - originated 3,504 1,986 311 2,297 42 Construction and land/lots 3,128 1,076 765 1,841 66 Indirect auto finance 196 145 31 176 2 Consumer 568 14 23 37 10 Commercial loans: Commercial real estate 8,576 4,086 3,638 7,724 152 Construction and development 3,847 1,089 1,759 2,848 13 Commercial and industrial 8,619 710 2,419 3,129 13 Municipal leases 408 114 294 408 1 Total impaired loans $ 57,864 $ 27,056 $ 17,144 $ 44,200 $ 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 $68 at December 31, 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. At December 31, 2016, impaired loans with a recorded allowance increased $9,148 during the six months ended December 31, 2016 primarily due to the change in methodology of measuring impairment during the first quarter of 2017 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 $21,475 and $19,762 , of impaired loans that were not individually evaluated at December 31, 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 $640 and $164 related to these loans that were not individually evaluated at December 31, 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 and six months ended December 31, 2016 and 2015 was as follows: Three Months Ended December 31, 2016 December 31, 2015 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Retail consumer loans: One-to-four family $ 26,673 $ 283 $ 29,765 $ 382 HELOCs - originated 2,544 33 3,485 50 Construction and land/lots 1,594 38 1,940 38 Indirect auto finance 134 1 7 — Consumer 32 5 80 6 Commercial loans: Commercial real estate 7,673 63 8,919 40 Construction and development 2,530 31 3,594 20 Commercial and industrial 3,372 22 4,019 29 Municipal leases 408 — 428 14 Total loans $ 44,960 $ 476 $ 52,237 $ 579 Six Months Ended December 31, 2016 December 31, 2015 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Retail consumer loans: One-to-four family $ 26,356 $ 585 $ 29,869 $ 782 HELOCs - originated 2,755 65 3,942 100 Construction and land/lots 1,548 75 2,033 67 Indirect auto finance 96 3 3 — Consumer 29 10 66 15 Commercial loans: Commercial real estate 7,326 130 12,121 73 Construction and development 2,530 49 4,947 40 Commercial and industrial 3,624 58 3,463 61 Municipal leases 412 12 413 24 Total loans $ 44,676 $ 987 $ 56,857 $ 1,162 A summary of changes in the accretable yield for PCI loans for the three and six months ended December 31, 2016 and 2015 was as follows: Three Months Ended December 31, 2016 December 31, 2015 Accretable yield, beginning of period $ 8,339 $ 9,763 Reclass from nonaccretable yield (1) 185 236 Other changes, net (2) (282 ) 1,191 Interest income (723 ) (1,226 ) Accretable yield, end of period $ 7,519 $ 9,964 Six Months Ended December 31, 2016 December 31, 2015 Accretable yield, beginning of period $ 9,532 $ 11,096 Reclass from nonaccretable yield (1) 1,072 602 Other changes, net (2) (741 ) 1,080 Interest income (2,344 ) (2,814 ) Accretable yield, end of period $ 7,519 $ 9,964 ______________________________________ (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, 2016 and 2015 , the following table presents a breakdown of the types of concessions made on TDRs by loan class: Three Months Ended December 31, 2016 Three Months Ended December 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 — $ — $ — 2 $ 108 $ 110 Total — $ — $ — 2 $ 108 $ 110 Extended term: Retail consumer: One-to-four family 1 $ 20 $ 20 4 $ 92 $ 101 Construction and land/lots 1 280 280 — — — Total 2 $ 300 $ 300 4 $ 92 $ 101 Other TDRs: Retail consumer: One-to-four family 5 $ 168 $ 171 10 $ 1,430 $ 1,420 Construction and land/lots 2 254 251 — — — Commercial: Commercial real estate — — — 1 457 447 Construction and development — — — 1 250 253 Commercial & Industrial 1 24 24 2 1,347 1,351 Total 8 $ 446 $ 446 14 $ 3,484 $ 3,471 Total 10 $ 746 $ 746 20 $ 3,684 $ 3,682 Six Months Ended December 31, 2016 Six Months Ended December 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 — $ — $ — 2 $ 108 $ 110 Total — $ — $ — 2 $ 108 $ 110 Extended term: Retail consumer: One-to-four family 3 $ 139 $ 137 4 $ 92 $ 101 HELOCs - originated — — — 1 14 13 Construction and land/lots 1 280 280 Total 4 $ 419 $ 417 5 $ 106 $ 114 Other TDRs: Retail consumer: One-to-four family 8 $ 273 $ 275 16 $ 2,167 $ 1,969 HELOCs - originated 1 3 3 — — — Construction and land/lots 2 254 251 — — — Commercial: Commercial real estate — — — 1 457 447 Construction and development — — — 1 250 253 Commercial and industrial 1 24 24 2 1,347 1,351 Total 12 $ 554 $ 553 20 $ 4,221 $ 4,020 Total 16 $ 973 $ 970 27 $ 4,435 $ 4,244 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, 2016 and 2015 : Three Months Ended December 31, 2016 Three Months Ended December 31, 2015 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 HELOCs - originated — — 2 16 Consumer — — 1 1 Commercial: Commercial and industrial 4 1,277 — — Total 4 $ 1,277 6 $ 347 Total 4 $ 1,277 8 $ 384 Six Months Ended December 31, 2016 Six Months Ended December 31, 2015 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 HELOCs - originated — — 2 16 Consumer — — 1 1 Commercial: Commercial and industrial 4 1,277 — — Total 4 $ 1,277 6 $ 347 Total 4 $ 1,277 8 $ 384 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. |