Loans | Loans Loans consist of the following at the dates indicated: June 30, June 30, Retail consumer loans: One-to-four family $ 684,089 $ 623,701 HELOCs - originated 157,068 163,293 HELOCs - purchased 162,407 144,377 Construction and land/lots 50,136 38,102 Indirect auto finance 140,879 108,478 Consumer 7,900 4,635 Total retail consumer loans 1,202,479 1,082,586 Commercial loans: Commercial real estate 730,408 486,561 Construction and development 197,966 86,840 Commercial and industrial 120,387 73,289 Municipal leases 101,175 103,183 Total commercial loans 1,149,936 749,873 Total loans 2,352,415 1,832,459 Deferred loan costs (fees), net (945 ) 372 Total loans, net of deferred loan fees and discount 2,351,470 1,832,831 Allowance for loan and lease losses (21,151 ) (21,292 ) Net loans $ 2,330,319 $ 1,811,539 All qualifying one-to-four family first mortgage loans, HELOCs, commercial real estate loans, and FHLB Stock are pledged as collateral by a blanket pledge to secure outstanding FHLB advances. Loans are made to the Company's executive officers and directors and their associates during the ordinary course of business. The aggregate amount of loans to related parties totaled approximately $338 and $837 at June 30, 2017 and 2016, respectively. In relation to these loans are unfunded commitments that totaled approximately $750 and $872 at June 30, 2016 and 2015, respectively. 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 June 30, 2017 Retail consumer loans: One-to-four family $ 655,424 $ 4,715 $ 14,769 $ 1,101 $ 11 $ 676,020 HELOCs - originated 153,676 809 2,100 188 7 156,780 HELOCs - purchased 162,215 — 192 — — 162,407 Construction and land/lots 48,728 479 341 60 — 49,608 Indirect auto finance 140,780 — 97 1 1 140,879 Consumer 7,828 12 34 — 8 7,882 Commercial loans: Commercial real estate 700,060 5,847 7,118 — — 713,025 Construction and development 192,025 992 2,320 — — 195,337 Commercial and industrial 113,923 883 2,954 — 1 117,761 Municipal leases 99,811 1,258 106 — — 101,175 Total loans $ 2,274,470 $ 14,995 $ 30,031 $ 1,350 $ 28 $ 2,320,874 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 June 30, 2017 Retail consumer loans: One-to-four family $ 3,115 $ 1,129 $ 3,615 $ 210 $ — $ 8,069 HELOCs - originated 258 — 30 — — 288 Construction and land/lots 487 — 41 — — 528 Consumer 4 14 — — — 18 Commercial loans: Commercial real estate 8,909 2,299 6,175 — — 17,383 Construction and development 338 — 2,291 — — 2,629 Commercial and industrial 2,460 44 122 — — 2,626 Total loans $ 15,571 $ 3,486 $ 12,274 $ 210 $ — $ 31,541 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 June 30, 2017 Retail consumer loans: One-to-four family $ 3,496 $ 3,990 $ 7,486 $ 676,603 $ 684,089 HELOCs - originated 1,037 274 1,311 155,757 157,068 HELOCs - purchased — — — 162,407 162,407 Construction and land/lots 132 129 261 49,875 50,136 Indirect auto finance 96 — 96 140,783 140,879 Consumer 5 14 19 7,881 7,900 Commercial loans: Commercial real estate 809 3,100 3,909 726,499 730,408 Construction and development 385 887 1,272 196,694 197,966 Commercial and industrial 37 831 868 119,519 120,387 Municipal leases — — — 101,175 101,175 Total loans $ 5,997 $ 9,225 $ 15,222 $ 2,337,193 $ 2,352,415 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 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: June 30, 2017 June 30, 2016 Nonaccruing 90 Days + & still accruing Nonaccruing 90 Days + & still accruing Retail consumer loans: One-to-four family $ 6,453 $ — $ 9,192 $ — HELOCs - originated 1,291 — 1,026 — HELOCs - purchased 192 — — — Construction and land/lots 245 — 188 — Indirect auto finance 1 — 20 — Consumer 29 — 15 — Commercial loans: Commercial real estate 2,756 — 3,222 — Construction and development 1,766 — 1,417 — Commercial and industrial 827 — 3,019 — Municipal leases 106 — 419 — Total loans $ 13,666 $ — $ 18,518 $ — PCI loans totaling $ 6,664 at June 30, 2017 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. 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: June 30, 2017 June 30, 2016 Performing TDRs included in impaired loans $ 27,043 $ 28,263 An analysis of the allowance for loan losses by segment for the periods shown is as follows: June 30, 2017 PCI Retail Consumer Commercial Total Balance at beginning of period $ 361 $ 11,549 $ 9,382 $ 21,292 Provision for (recovery of) loan losses 366 (2,829 ) 2,463 — Charge-offs — (1,219 ) (1,331 ) (2,550 ) Recoveries — 1,084 1,325 2,409 Balance at end of period $ 727 $ 8,585 $ 11,839 $ 21,151 June 30, 2016 PCI Retail Consumer Commercial Total Balance at beginning of period $ 401 $ 12,575 $ 9,398 $ 22,374 Provision for (recovery of) loan losses (40 ) (597 ) 637 — Charge-offs — (1,663 ) (2,041 ) (3,704 ) Recoveries — 1,234 1,388 2,622 Balance at end of period $ 361 $ 11,549 $ 9,382 $ 21,292 June 30, 2015 PCI Retail Consumer Commercial Total Balance at beginning of period $ — $ 15,731 $ 7,698 $ 23,429 Provision for (recovery of) loan losses 1,053 (1,258 ) 355 150 Charge-offs (652 ) (3,107 ) (1,101 ) (4,860 ) Recoveries — 1,209 2,446 3,655 Balance at end of period $ 401 $ 12,575 $ 9,398 $ 22,374 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 June 30, 2017 Retail consumer loans: One-to-four family $ 28 $ 863 $ 3,585 $ 4,476 $ 8,069 $ 10,305 $ 665,715 $ 684,089 HELOCs - originated — 44 1,340 1,384 288 12 156,768 157,068 HELOCs - purchased — — 838 838 — — 162,407 162,407 Construction and land/lots — 88 889 977 528 634 48,974 50,136 Indirect auto finance — 1 880 881 — 1 140,878 140,879 Consumer — 8 49 57 18 8 7,874 7,900 Commercial loans: Commercial real estate 512 239 6,600 7,351 17,383 6,284 706,741 730,408 Construction and development 171 13 2,982 3,166 2,629 2,184 193,153 197,966 Commercial and industrial 16 287 1,221 1,524 2,626 1,514 116,247 120,387 Municipal leases — — 497 497 — — 101,175 101,175 Total $ 727 $ 1,543 $ 18,881 $ 21,151 $ 31,541 $ 20,942 $ 2,299,932 $ 2,352,415 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 With a Recorded Allowance With No Recorded Allowance Total Related Recorded Allowance June 30, 2017 Retail consumer loans: One-to-four family $ 28,469 $ 17,353 $ 7,773 $ 25,126 $ 881 HELOCs - originated 4,070 2,270 532 2,802 49 HELOCs - purchased 192 192 192 — Construction and land/lots 2,817 1,310 468 1,778 88 Indirect auto finance 22 — 1 1 1 Consumer 552 15 27 42 8 Commercial loans: Commercial real estate 8,307 4,721 3,186 7,907 253 Construction and development 3,768 1,024 1,617 2,641 16 Commercial and industrial 7,757 845 1,231 2,076 288 Municipal leases 400 106 294 400 — Total impaired loans $ 56,354 $ 27,644 $ 15,321 $ 42,965 $ 1,584 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 $13,425 at June 30, 2017 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. During the year ended June 30, 2017, impaired loans with a recorded allowance increased $9,148 primarily due to the change in methodology of measuring impairment during the first quarter of fiscal 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 $22,023 and $19,762 of impaired loans that were not individually evaluated at June 30, 2017 and June 30, 2016 , respectively, because these loans did not meet the Company’s threshold for individual impairment evaluation. The recorded allowance above includes $41 and $164 related to these loans that were not individually evaluated at June 30, 2017 and June 30, 2016 , respectively. The Company’s average recorded investment in loans individually evaluated for impairment as of the dates indicated below, and interest income recognized on impaired loans for the year ended as follows: June 30, 2017 June 30, 2016 June 30, 2015 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Retail consumer loans: One-to-four family $ 25,814 $ 1,229 $ 28,479 $ 1,477 $ 30,089 $ 1,696 HELOCs - originated 2,555 157 3,593 200 4,373 238 HELOCs - purchased 48 12 — — — — Construction and land/lots 1,734 139 1,787 135 2,074 158 Indirect auto finance 106 2 7 2 — — Consumer 35 20 55 23 46 24 Commercial loans: Commercial real estate 8,035 346 8,506 440 14,718 243 Construction and development 2,622 98 3,469 84 5,654 167 Commercial and industrial 2,737 125 4,379 155 2,496 188 Municipal leases 406 18 452 22 303 24 Total loans $ 44,092 $ 2,146 $ 50,727 $ 2,538 $ 59,753 $ 2,738 A summary of changes in the accretable yield for PCI loans at the dates indicated below: Year Ended June 30, 2017 Year Ended June 30, 2016 Accretable yield, beginning of period $ 9,532 $ 11,096 Addition from TriSummit acquisition 1,288 — Reclass from nonaccretable yield (1) 1,537 1,452 Other changes, net (2) (427 ) 1,436 Interest income (4,850 ) (4,452 ) Accretable yield, end of period $ 7,080 $ 9,532 ______________________________ (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. The following table presents carrying values and unpaid principal balances for PCI loans at the dates indicated below: June 30, 2017 June 30, 2016 Carrying value of PCI loans $ 31,541 $ 35,964 Unpaid principal balance of PCI loans $ 37,955 $ 43,398 The following table presents a breakdown of the types of concessions made on TDRs by loan class: Year Ended June 30, 2017 Year Ended June 30, 2016 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 $ 288 $ 285 5 $ 234 $ 238 Construction and land/lots 2 80 79 — — — Commercial: Commercial real estate — $ — $ — 1 $ 590 578 Total 5 $ 368 $ 364 6 $ 824 $ 816 Extended payment terms: Retail consumer: One-to-four family 5 $ 186 $ 179 5 $ 142 $ 147 HELOCs - originated 1 37 37 2 28 25 Construction and land/lots 1 280 264 — — — Consumer 2 11 11 — — — Commercial: Commercial real estate — — — 1 286 284 Construction and development 1 439 439 1 128 128 Commercial and industrial 2 52 50 2 164 $ 155 Total 12 $ 1,005 $ 980 11 $ 748 $ 739 Other TDRs: Retail consumer: One-to-four family 13 $ 525 $ 517 30 $ 2,890 $ 2,498 HELOCs - originated 2 33 31 4 228 227 Construction and land/lots 4 404 318 — — — Consumer — — — 1 2 1 Commercial: Commercial real estate 3 2,349 2,035 — — — Construction and development — — — 2 386 371 Commercial and industrial 2 $ 231 $ 227 1 $ 997 $ 957 Total 24 $ 3,542 $ 3,128 38 $ 4,503 $ 4,054 Total 41 $ 4,915 $ 4,472 55 $ 6,075 $ 5,609 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 years ended June 30, 2017 and 2016 . Year Ended June 30, 2017 Year Ended June 30, 2016 Number of Loans Recorded Investment Number of Loans Recorded Investment Below market interest rate: Retail consumer: One-to-four family — $ — 2 $ 63 Total — $ — 2 $ 63 Extended payment terms: Retail consumer: One-to-four family — $ — 2 $ 43 Total — $ — 2 $ 43 Other TDRs: Retail consumer: One-to-four family 2 $ 27 11 $ 529 HELOCs - originated — — 1 8 Construction and land/lots 1 19 — — Commercial: Construction and development — — 2 371 Total 3 $ 46 14 $ 908 Total 3 $ 46 18 $ 1,014 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. |