Loans and Servicing | 6 Months Ended |
Jun. 30, 2014 |
Loans and Servicing | ' |
Loans and Servicing | ' |
(6) Loans and Servicing |
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Loans |
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A summary of loans is as follows. |
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| | At | | At | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | June 30, | | December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2014 | | 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Amount | | Percent | | Amount | | Percent | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (Dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | $ | 90,939 | | 40.23 | % | $ | 92,450 | | 40.93 | % | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity loans and lines of credit | | 15,422 | | 6.82 | | 15,399 | | 6.82 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total residential mortgage loans | | 106,361 | | 47.05 | | 107,849 | | 47.75 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family investment property | | 9,438 | | 4.17 | | 11,089 | | 4.91 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family real estate | | 13,729 | | 6.07 | | 14,462 | | 6.4 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | 53,884 | | 23.83 | | 54,272 | | 24.02 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial business | | 16,521 | | 7.31 | | 16,681 | | 7.39 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial loans | | 93,572 | | 41.38 | | 96,504 | | 42.72 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | 12,068 | | 5.34 | | 9,848 | | 4.36 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | 9,435 | | 4.18 | | 7,304 | | 3.24 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-residential | | 4,251 | | 1.88 | | 3,955 | | 1.75 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total construction loans | | 25,754 | | 11.4 | | 21,107 | | 9.35 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | 378 | | 0.17 | | 408 | | 0.18 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | | 226,065 | | 100 | % | 225,868 | | 100 | % | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other items: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net deferred loan costs | | 513 | | | | 440 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | (2,172 | ) | | | (2,396 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans, net | | $ | 224,406 | | | | $ | 223,912 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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An analysis of the allowance for loan losses at and for the six months ended June 30, 2014 and 2013 and at December 31, 2013 is below. For additional information please refer to Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
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| | Residential | | Commercial | | Construction | | | | | | | |
| | One- to four- | | Home equity | | One- to four- | | Multi-family | | Commercial | | Commercial | | One- to four- | | Multi-family | | Non- | | Consumer | | Unallocated | | Total | |
family | loans and | family | real estate | real estate | business | family | residential |
| lines of credit | investment | | | | | |
| | property | | | | | |
| | (In thousands) | |
Allowance for loan losses | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Six months ended June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning Balance | | $ | 284 | | $ | 274 | | $ | 61 | | $ | 108 | | $ | 1,056 | | $ | 291 | | $ | 133 | | $ | 66 | | $ | 63 | | $ | 15 | | $ | 45 | | $ | 2,396 | |
Charge-offs | | — | | (14 | ) | — | | — | | (211 | ) | — | | — | | — | | — | | (1 | ) | — | | (226 | ) |
Recoveries | | — | | 1 | | — | | — | | — | | — | | — | | — | | — | | 1 | | — | | 2 | |
(Benefit) provision | | (2 | ) | (28 | ) | (9 | ) | (5 | ) | (3 | ) | (7 | ) | (23 | ) | 19 | | 5 | | (5 | ) | 58 | | — | |
Ending Balance | | $ | 282 | | $ | 233 | | $ | 52 | | $ | 103 | | $ | 842 | | $ | 284 | | $ | 110 | | $ | 85 | | $ | 68 | | $ | 10 | | $ | 103 | | $ | 2,172 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Six months ended June 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning Balance | | $ | 378 | | $ | 254 | | $ | 62 | | $ | 40 | | $ | 668 | | $ | 159 | | $ | 149 | | $ | 34 | | $ | 25 | | $ | 11 | | $ | — | | $ | 1,780 | |
Charge-offs | | (130 | ) | — | | — | | — | | — | | — | | — | | — | | — | | (2 | ) | — | | (132 | ) |
Recoveries | | 13 | | — | | — | | — | | — | | — | | — | | — | | — | | 3 | | — | | 16 | |
Provision (benefit) | | 37 | | (8 | ) | 14 | | 5 | | 65 | | 13 | | (28 | ) | 2 | | 64 | | (1 | ) | — | | 163 | |
Ending Balance | | $ | 298 | | $ | 246 | | $ | 76 | | $ | 45 | | $ | 733 | | $ | 172 | | $ | 121 | | $ | 36 | | $ | 89 | | $ | 11 | | $ | — | | $ | 1,827 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
At June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 7 | | $ | — | | $ | — | | $ | — | | $ | 37 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 44 | |
Collectively evaluated for impairment | | 275 | | 233 | | 52 | | 103 | | 805 | | 284 | | 110 | | 85 | | 68 | | 10 | | 103 | | 2,128 | |
| | $ | 282 | | $ | 233 | | $ | 52 | | $ | 103 | | $ | 842 | | $ | 284 | | $ | 110 | | $ | 85 | | $ | 68 | | $ | 10 | | $ | 103 | | $ | 2,172 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 319 | | $ | 28 | | $ | — | | $ | — | | $ | 565 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 912 | |
Collectively evaluated for impairment | | 90,620 | | 15,394 | | 9,438 | | 13,729 | | 53,319 | | 16,521 | | 12,068 | | 9,435 | | 4,251 | | 378 | | — | | 225,153 | |
| | $ | 90,939 | | $ | 15,422 | | $ | 9,438 | | $ | 13,729 | | $ | 53,884 | | $ | 16,521 | | $ | 12,068 | | $ | 9,435 | | $ | 4,251 | | $ | 378 | | $ | — | | $ | 226,065 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 7 | | $ | 49 | | $ | — | | $ | — | | $ | 277 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 333 | |
Collectively evaluated for impairment | | 277 | | 225 | | 61 | | 108 | | 779 | | 291 | | 133 | | 66 | | 63 | | 15 | | 45 | | 2,063 | |
| | $ | 284 | | $ | 274 | | $ | 61 | | $ | 108 | | $ | 1,056 | | $ | 291 | | $ | 133 | | $ | 66 | | $ | 63 | | $ | 15 | | $ | 45 | | $ | 2,396 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 321 | | $ | 428 | | $ | — | | $ | — | | $ | 2,406 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 3,155 | |
Collectively evaluated for impairment | | 92,129 | | 14,971 | | 11,089 | | 14,462 | | 51,866 | | 16,681 | | 9,848 | | 7,304 | | 3,955 | | 408 | | — | | 222,713 | |
| | $ | 92,450 | | $ | 15,399 | | $ | 11,089 | | $ | 14,462 | | $ | 54,272 | | $ | 16,681 | | $ | 9,848 | | $ | 7,304 | | $ | 3,955 | | $ | 408 | | $ | — | | $ | 225,868 | |
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The following is a summary of past-due and non-accrual loans at June 30, 2014 and December 31, 2013. For additional information please refer to Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
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| | Loans delinquent for: | | | | | | | | 90 days | | | | | | | | | | | | | | | |
| | | | | | 90 days | | Total | | Total | | Total | | or more | | Non-accrual | | | | | | | | | | | | | |
| | 30 - 59 Days | | 60 - 89 Days | | or more | | Past Due | | Current | | Loans | | and accruing | | Loans | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | |
At June 30, 2014: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 90,939 | | $ | 90,939 | | $ | — | | $ | — | | | | | | | | | | | | | |
Home equity loans and lines of credit | | — | | — | | 74 | | 74 | | 15,348 | | 15,422 | | — | | 74 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family investment property | | — | | — | | — | | — | | 9,438 | | 9,438 | | — | | — | | | | | | | | | | | | | |
Multi-family real estate | | — | | — | | — | | — | | 13,729 | | 13,729 | | — | | — | | | | | | | | | | | | | |
Commercial real estate | | 298 | | — | | 267 | | 565 | | 53,319 | | 53,884 | | — | | 267 | | | | | | | | | | | | | |
Commercial business | | — | | — | | — | | — | | 16,521 | | 16,521 | | — | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | — | | — | | — | | — | | 12,068 | | 12,068 | | — | | — | | | | | | | | | | | | | |
Multi-family | | — | | — | | — | | — | | 9,435 | | 9,435 | | — | | — | | | | | | | | | | | | | |
Non-residential | | — | | — | | — | | — | | 4,251 | | 4,251 | | — | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | 1 | | — | | 2 | | 3 | | 375 | | 378 | | — | | 2 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 299 | | $ | — | | $ | 343 | | $ | 642 | | $ | 225,423 | | $ | 226,065 | | $ | — | | $ | 343 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2013: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | $ | — | | $ | 245 | | $ | — | | $ | 245 | | $ | 92,205 | | $ | 92,450 | | $ | — | | $ | — | | | | | | | | | | | | | |
Home equity loans and lines of credit | | 15 | | — | | 399 | | 414 | | 14,985 | | 15,399 | | — | | 399 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family investment property | | — | | — | | — | | — | | 11,089 | | 11,089 | | — | | — | | | | | | | | | | | | | |
Multi-family real estate | | — | | — | | — | | — | | 14,462 | | 14,462 | | — | | — | | | | | | | | | | | | | |
Commercial real estate | | — | | 267 | | — | | 267 | | 54,005 | | 54,272 | | — | | — | | | | | | | | | | | | | |
Commercial business | | — | | — | | — | | — | | 16,681 | | 16,681 | | — | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | — | | — | | — | | — | | 9,848 | | 9,848 | | — | | — | | | | | | | | | | | | | |
Multi-family | | — | | — | | — | | — | | 7,304 | | 7,304 | | — | | — | | | | | | | | | | | | | |
Non-residential | | — | | — | | — | | — | | 3,955 | | 3,955 | | — | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | 1 | | — | | — | | 1 | | 407 | | 408 | | — | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 16 | | $ | 512 | | $ | 399 | | $ | 927 | | $ | 224,941 | | $ | 225,868 | | $ | — | | $ | 399 | | | | | | | | | | | | | |
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The following is an analysis of impaired loans at June 30, 2014 and December 31, 2013. |
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| | | | Unpaid | | | | Average | | Interest | | | | | | | | | | | | | | | | | | | | | | |
| | Recorded | | Principal | | Related | | Recorded | | Income | | | | | | | | | | | | | | | | | | | | | | |
| | Investment | | Balance | | Allowance | | Investment | | Recognized | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans without a valuation allowance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | | | | | | | | | | | | | | | | | | | | | |
Home equity loans and lines of credit | | 28 | | 28 | | — | | 29 | | — | | | | | | | | | | | | | | | | | | | | | | |
Commercial loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family investment property | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Multi-family real estate | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | 298 | | 298 | | — | | 300 | | 9 | | | | | | | | | | | | | | | | | | | | | | |
Commercial business | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Non-residential | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired with no related allowance | | $ | 326 | | $ | 326 | | $ | — | | $ | 329 | | $ | 9 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans with a valuation allowance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | $ | 319 | | $ | 319 | | $ | 7 | | $ | 320 | | $ | 8 | | | | | | | | | | | | | | | | | | | | | | |
Home equity loans and lines of credit | | — | | — | | — | | 228 | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family investment property | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Multi-family real estate | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | 267 | | 267 | | 37 | | 754 | | 8 | | | | | | | | | | | | | | | | | | | | | | |
Commercial business | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Non-residential | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total with an allowance recorded | | $ | 586 | | $ | 586 | | $ | 44 | | $ | 1,302 | | $ | 16 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans without a valuation allowance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | | | | | | | | | | | | | | | | | | | | | |
Home equity loans and lines of credit | | 29 | | 29 | | — | | 31 | | 1 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family investment property | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Multi-family real estate | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | 301 | | 301 | | — | | 304 | | 18 | | | | | | | | | | | | | | | | | | | | | | |
Commercial business | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Non-residential | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired with no related allowance | | $ | 330 | | $ | 330 | | $ | — | | $ | 335 | | $ | 19 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans with a valuation allowance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | $ | 321 | | $ | 321 | | $ | 7 | | $ | 379 | | $ | 13 | | | | | | | | | | | | | | | | | | | | | | |
Home equity loans and lines of credit | | 399 | | 399 | | 49 | | 377 | | 2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family investment property | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Multi-family real estate | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | 2,105 | | 2,208 | | 277 | | 2,105 | | 104 | | | | | | | | | | | | | | | | | | | | | | |
Commercial business | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One- to four-family | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
Non-residential | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total with an allowance recorded | | $ | 2,825 | | $ | 2,928 | | $ | 333 | | $ | 2,861 | | $ | 119 | | | | | | | | | | | | | | | | | | | | | | |
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There were no loan modifications made that resulted in the classification of a troubled debt restructure (“TDR”) during the six months ended June 30, 2014 and 2013. |
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At June 30, 2014 and December 31, 2013 there were no TDRs in default of their modified terms. |
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The following table represents the Company’s loans by risk rating at June 30, 2014 and December 31, 2013. For additional information please refer to Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
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| | Residential | | Commercial | | Construction | | | | | | | | |
| | One- to four- | | Home equity | | One- to four- | | Multi-family | | Commercial | | Commercial | | One- to four- | | Multi-family | | Non- | | Consumer | | Total | | | | |
family | loans and | family | real estate | real estate | business | family | residential | | | |
| lines of credit | investment | | | | | | | | |
| | property | | | | | | | | |
| | (In thousands) | | | | |
At June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Classification: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Not formally rated | | $ | 90,620 | | $ | 15,348 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 376 | | $ | 106,344 | | | | |
Pass | | — | | — | | 9,438 | | 13,729 | | 53,617 | | 16,521 | | 12,068 | | 9,435 | | 4,251 | | — | | 119,059 | | | | |
Special mention | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | | | |
Substandard | | 319 | | 74 | | — | | — | | 267 | | — | | — | | — | | — | | 2 | | 662 | | | | |
Doubtful | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | | | |
Loss | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | | | |
Total loans | | $ | 90,939 | | $ | 15,422 | | $ | 9,438 | | $ | 13,729 | | $ | 53,884 | | $ | 16,521 | | $ | 12,068 | | $ | 9,435 | | $ | 4,251 | | $ | 378 | | $ | 226,065 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Classification: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Not formally rated | | $ | 92,129 | | $ | 15,000 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 408 | | $ | 107,537 | | | | |
Pass | | — | | — | | 11,089 | | 14,462 | | 51,900 | | 16,681 | | 9,848 | | 7,304 | | 3,955 | | — | | 115,239 | | | | |
Special mention | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | | | |
Substandard | | 321 | | 399 | | — | | — | | 2,372 | | — | | — | | — | | — | | — | | 3,092 | | | | |
Doubtful | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | | | |
Loss | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | | | |
Total loans | | $ | 92,450 | | $ | 15,399 | | $ | 11,089 | | $ | 14,462 | | $ | 54,272 | | $ | 16,681 | | $ | 9,848 | | $ | 7,304 | | $ | 3,955 | | $ | 408 | | $ | 225,868 | | | | |
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Credit Quality Information |
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The Bank utilizes a nine grade internal loan rating system for all commercial and construction loans as follows: |
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Loans rated 1 - 5: Loans in these categories are considered “pass” rated loans with low to average risk. |
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Loans rated 6: Loans in this category are considered “special mention.” These loans have risk profiles that are starting to show signs of potential weakness and are being closely monitored by management. |
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Loans rated 7: Loans in this category are considered “substandard.” These loans have a well defined weakness that jeopardizes the liquidation of the debt and is inadequately protected by the current sound worth and paying capacity of the borrower or pledged collateral. There is a distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. |
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Loans rated 8: Loans in this category are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. |
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Loans rated 9: Loans in this category are considered a “loss.” The loan has been determined to be uncollectible and the chance of loss is inevitable. Loans in this category will be charged-off. |
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On an annual basis, or more often if needed, the Bank formally reviews the ratings on all commercial and construction loans. For residential real estate and consumer loans, the Bank initially assesses credit quality based on the borrower’s ability to pay and subsequently monitors these loans based on the borrower’s payment activity; however, these loans are not formally risk-rated. |
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Loans serviced for others and mortgage servicing rights |
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Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of mortgage loans serviced for others were $115.7 million and $117.7 million at June 30, 2014 and December 31, 2013, respectively. |
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The risks inherent in the mortgage servicing assets relate primarily to changes in prepayments that result from shifts in mortgage interest rates. The fair value of servicing rights was $1.4 million at June 30, 2014 and December 31, 2013, and was determined using the moving average 10-year, U.S. Treasury rate plus 5.0%, adjusted to reflect the current credit spreads and conditions in the market as a discount rate. Prepayment assumptions, which are impacted by loan rates and terms, are calculated using a moving average of prepayment data published by the Securities Industry and Financial Markets Association and an independent third party proprietary analysis of prepayment rates embedded in liquid mortgage securities markets and modeled against the serviced loan portfolio by the independent third party valuation specialist. |
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The following summarizes mortgage servicing rights capitalized and amortized, along with the aggregate activity-related valuation allowances. |
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| | Six Months Ended | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | June 30, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2014 | | 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mortgage servicing rights: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | $ | 1,084 | | $ | 910 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Additions | | 48 | | 375 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Amortization | | (178 | ) | (163 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | 954 | | 1,122 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Valuation allowances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | 26 | | 20 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Additions | | — | | 3 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Recoveries | | (22 | ) | (15 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | 4 | | 8 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mortgage servicing assets, net | | $ | 950 | | $ | 1,114 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fair value of mortgage servicing assets | | $ | 1,386 | | $ | 1,429 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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