Loans Receivable and Allowance for Loan Losses | 6 Months Ended |
Sep. 30, 2014 |
Loans Receivable and Allowance for Loan Losses | ' |
Note 6: | Loans Receivable and Allowance for Loan Losses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans receivable consist of the following at September 30, 2014 and March 31, 2014: |
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| | September 30, | | | March 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2014 | | | 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to four-family: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | $ | 53,644,611 | | | $ | 57,673,450 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 2,432,718 | | | | 473,271 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Investor (1) | | | 13,371,075 | | | | 14,000,119 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 46,457,869 | | | | 41,406,424 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial construction | | | 1,461,037 | | | | 2,794,793 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 117,367,310 | | | | 116,348,057 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 18,747,843 | | | | 15,656,599 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity loans | | | 11,773,846 | | | | 11,660,531 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | 1,147,606 | | | | 1,154,007 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Loans | | | 149,036,605 | | | | 144,819,194 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net deferred loan origination fees and costs | | | (117,285 | ) | | | (119,630 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | | (2,093,808 | ) | | | (1,785,973 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 146,825,512 | | | $ | 142,913,591 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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-1 | “Investor” loans are residential mortgage loans secured by non-owner occupied one- to four-family properties | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential lending is generally considered to involve less risk than other forms of lending, although payment experience on these loans is dependent on economic and market conditions in the Bank’s lending area. Construction loan repayments are generally dependent on the related properties or the financial condition of its borrower or guarantor. Accordingly, repayment of such loans can be more susceptible to adverse conditions in the real estate market and the regional economy. |
A substantial portion of the Bank’s loan portfolio is mortgage loans secured by residential and commercial real estate properties located in the Baltimore metropolitan area. Loans are extended only after evaluation of a customer’s creditworthiness and other relevant factors on a case-by-case basis. The Bank generally does not lend more than 90% of the appraised value of a property and requires private mortgage insurance on residential mortgages with loan-to-value ratios in excess of 80%. In addition, the Bank generally obtains personal guarantees of repayment from borrowers and/or others for construction loans and disburses the proceeds of those and similar loans only as work progresses on the related projects. |
The following tables set forth for the six months ended September 30, 2014 and 2013 and for the year ended March 31, 2014, the balance of the allowance for loan losses by portfolio segment, disaggregated by impairment methodology, which is further segregated by amounts evaluated for impairment collectively and individually. The allowance for loan losses allocated to each portfolio segment is not necessarily indicative of future losses in any particular portfolio segment and does not restrict the use of the allowance to absorb losses in other portfolio segments. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | Allowance | | | Loan Balance | |
| | | | | | | | | | | | | | | | | Individually | | | Collectively | | | Individually | | | Collectively | |
| | | | | | | | | | | | | | | | | evaluated | | | evaluated | | | evaluated | | | evaluated | |
Six months ended: | | Allowance | | | Provision for | | | Charge | | | | | | Allowance | | | for | | | for | | | for | | | for | |
September 30, 2014 | | 3/31/14 | | | loan losses | | | offs | | | Recoveries | | | 9/30/14 | | | impairment | | | impairment | | | impairment | | | impairment | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to four-family | | $ | 528,362 | | | $ | 109,464 | | | $ | 105,498 | | | $ | 1,315 | | | $ | 533,643 | | | $ | 157,155 | | | $ | 376,488 | | | $ | 1,812,115 | | | $ | 67,636,289 | |
Commercial | | | 575,881 | | | | 7,706 | | | | — | | | | — | | | | 583,587 | | | | — | | | | 583,587 | | | | 3,359,813 | | | | 43,098,056 | |
Commercial Construction | | | 60,361 | | | | (60,361 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,461,037 | | | | — | |
Commercial | | | 590,975 | | | | 322,057 | | | | — | | | | 9,314 | | | | 922,346 | | | | 2,473 | | | | 919,873 | | | | 2,598,666 | | | | 16,149,177 | |
Home equity loans | | | 27,181 | | | | 92,859 | | | | 69,801 | | | | 2,505 | | | | 52,744 | | | | — | | | | 52,744 | | | | 49,283 | | | | 11,724,563 | |
Consumer | | | 3,213 | | | | (1,725 | ) | | | — | | | | — | | | | 1,488 | | | | — | | | | 1,488 | | | | 1,201 | | | | 1,146,405 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 1,785,973 | | | $ | 470,000 | | | $ | 175,299 | | | $ | 13,134 | | | $ | 2,093,808 | | | $ | 159,628 | | | $ | 1,934,180 | | | $ | 9,282,115 | | | $ | 139,754,490 | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | Allowance | | | Loan Balance | |
| | | | | | | | | | | | | | | | | Individually | | | Collectively | | | Individually | | | Collectively | |
| | | | | | | | | | | | | | | | | evaluated | | | evaluated | | | evaluated | | | evaluated | |
Six months ended: | | Allowance | | | Provision for | | | Charge | | | | | | Allowance | | | for | | | for | | | for | | | for | |
September 30, 2013 | | 3/31/13 | | | loan losses | | | offs | | | Recoveries | | | 9/30/13 | | | impairment | | | impairment | | | impairment | | | impairment | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to four-family | | $ | 372,390 | | | $ | 172,776 | | | $ | 64,206 | | | $ | 24,280 | | | $ | 505,240 | | | $ | 63,642 | | | $ | 441,598 | | | $ | 1,923,343 | | | $ | 72,829,264 | |
Commercial | | | 613,047 | | | | 43,004 | | | | — | | | | — | | | | 656,051 | | | | — | | | | 656,051 | | | | 4,768,676 | | | | 34,711,678 | |
Commercial Construction | | | 417,311 | | | | (84,222 | ) | | | — | | | | — | | | | 333,089 | | | | 249,587 | | | | 83,502 | | | | 2,541,587 | | | | 2,031,690 | |
Commercial | | | 635,840 | | | | 1,188,174 | | | | 707,739 | | | | 15,925 | | | | 1,132,200 | | | | — | | | | 1,132,200 | | | | 4,052,401 | | | | 17,786,744 | |
Home equity loans | | | 31,484 | | | | (2,649 | ) | | | — | | | | — | | | | 28,835 | | | | — | | | | 28,835 | | | | 57,024 | | | | 12,454,639 | |
Consumer | | | 1,152 | | | | 1,474 | | | | — | | | | 469 | | | | 3,095 | | | | — | | | | 3,095 | | | | — | | | | 1,175,103 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 2,071,224 | | | $ | 1,318,557 | | | $ | 771,945 | | | $ | 40,674 | | | $ | 2,658,510 | | | $ | 313,229 | | | $ | 2,345,281 | | | $ | 13,343,031 | | | $ | 140,989,118 | |
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| | | | | | | | | | | | | | | | | Allowance | | | Loan Balance | |
| | | | | | | | | | | | | | | | | Individually | | | Collectively | | | Individually | | | Collectively | |
| | | | | | | | | | | | | | | | | evaluated | | | evaluated | | | evaluated | | | evaluated | |
Year ended: | | Allowance | | | Provision for | | | Charge | | | | | | Allowance | | | for | | | for | | | for | | | for | |
31-Mar-14 | | 3/31/13 | | | loan losses | | | offs | | | Recoveries | | | 3/31/14 | | | impairment | | | impairment | | | impairment | | | impairment | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to four-family | | $ | 372,390 | | | $ | 337,416 | | | $ | 205,809 | | | $ | 24,365 | | | $ | 528,362 | | | $ | 168,487 | | | $ | 359,875 | | | $ | 1,913,630 | | | $ | 70,233,210 | |
Commercial | | | 613,047 | | | | (84,100 | ) | | | — | | | | 46,934 | | | | 575,881 | | | | — | | | | 575,881 | | | | 3,363,584 | | | | 38,042,840 | |
Commercial Construction | | | 417,311 | | | | 643,050 | | | | 1,000,000 | | | | — | | | | 60,361 | | | | — | | | | 60,361 | | | | 1,552,293 | | | | 1,242,500 | |
Commercial | | | 635,840 | | | | 968,537 | | | | 1,058,733 | | | | 45,331 | | | | 590,975 | | | | 259 | | | | 590,716 | | | | 3,953,618 | | | | 11,702,981 | |
Home equity loans | | | 31,484 | | | | 7,082 | | | | 11,385 | | | | — | | | | 27,181 | | | | — | | | | 27,181 | | | | 204,209 | | | | 11,456,322 | |
Consumer | | | 1,152 | | | | 1,572 | | | | — | | | | 489 | | | | 3,213 | | | | — | | | | 3,213 | | | | — | | | | 1,154,007 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 2,071,224 | | | $ | 1,873,557 | | | $ | 2,275,927 | | | $ | 117,119 | | | $ | 1,785,973 | | | $ | 168,746 | | | $ | 1,617,227 | | | $ | 10,987,334 | | | $ | 133,831,860 | |
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Past due loans, segregated by age and class of loans, as of September 30, 2014 and March 31, 2014, were as follows: |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | Loans | | | | | | | | | | | | Accruing | | | | | | Nonaccrual | |
| | Loans | | | Loans | | | 90 or more | | | | | | | | | | | | loans 90 or | | | | | | interest | |
| | 30-59 days | | | 60-89 days | | | days | | | Total past | | | Current | | | | | | more days | | | Nonaccrual | | | not | |
September 30, 2014 | | past due | | | past due | | | past due | | | due loans | | | loans | | | Total loans | | | past due | | | loans | | | accrued | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to four-family | | $ | 574,811 | | | $ | 1,200 | | | $ | 357,518 | | | $ | 933,529 | | | $ | 68,514,875 | | | $ | 69,448,404 | | | $ | — | | | $ | 358,718 | | | $ | 22,934 | |
Commercial | | | — | | | | — | | | | 274,285 | | | | 274,285 | | | | 46,183,584 | | | | 46,457,869 | | | | 274,285 | | | | — | | | | — | |
Commercial Construction | | | — | | | | — | | | | — | | | | — | | | | 1,461,037 | | | | 1,461,037 | | | | — | | | | 1,461,037 | | | | 11,497 | |
Commercial | | | 94,749 | | | | 585,000 | | | | 923,409 | | | | 1,603,158 | | | | 17,144,685 | | | | 18,747,843 | | | | — | | | | 1,557,934 | | | | 100,124 | |
Home equity loans | | | 46,923 | | | | 12,957 | | | | 49,283 | | | | 109,163 | | | | 11,664,683 | | | | 11,773,846 | | | | — | | | | 49,283 | | | | 5,786 | |
Consumer | | | 3,592 | | | | 579 | | | | 1,201 | | | | 5,372 | | | | 1,142,234 | | | | 1,147,606 | | | | — | | | | 1,201 | | | | 25 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 720,075 | | | $ | 599,736 | | | $ | 1,605,696 | | | $ | 2,925,507 | | | $ | 146,111,098 | | | $ | 149,036,605 | | | $ | 274,285 | | | $ | 3,428,173 | | | $ | 140,366 | |
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| | | | | | | | Loans | | | | | | | | | | | | Accruing | | | | | | Nonaccrual | |
| | Loans | | | Loans | | | 90 or more | | | | | | | | | | | | loans 90 or | | | | | | interest | |
| | 30-59 days | | | 60-89 days | | | days | | | Total past | | | Current | | | | | | more days | | | Nonaccrual | | | not | |
March 31, 2014 | | past due | | | past due | | | past due | | | due loans | | | loans | | | Total loans | | | past due | | | loans | | | accrued | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to four-family | | $ | 253,465 | | | $ | — | | | $ | 442,355 | | | $ | 695,820 | | | $ | 71,451,020 | | | $ | 72,146,840 | | | $ | — | | | $ | 442,355 | | | $ | 29,409 | |
Commercial | | | — | | | | — | | | | 301,295 | | | | 301,295 | | | | 41,105,129 | | | | 41,406,424 | | | | 301,295 | | | | — | | | | — | |
Commercial Construction | | | — | | | | 1,242,500 | | | | — | | | | 1,242,500 | | | | 1,552,293 | | | | 2,794,793 | | | | — | | | | 1,552,293 | | | | — | |
Commercial | | | 439,603 | | | | 2,172,968 | | | | 1,801,746 | | | | 4,414,317 | | | | 11,242,282 | | | | 15,656,599 | | | | 500,000 | | | | 2,040,864 | | | | 71,850 | |
Home equity loans | | | — | | | | — | | | | 204,209 | | | | 204,209 | | | | 11,456,322 | | | | 11,660,531 | | | | — | | | | 204,209 | | | | 9,697 | |
Consumer | | | 7,629 | | | | — | | | | — | | | | 7,629 | | | | 1,146,378 | | | | 1,154,007 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 700,697 | | | $ | 3,415,468 | | | $ | 2,749,605 | | | $ | 6,865,770 | | | $ | 137,953,424 | | | $ | 144,819,194 | | | $ | 801,295 | | | $ | 4,239,721 | | | $ | 110,956 | |
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Impaired Loans as of and for the six months ended September 30, 2014 and as of and for the year ended March 31, 2014 were as follows: |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Unpaid | | | Recorded | | | Recorded | | | | | | | | | | | | | | | | | | | | | |
| | contractual | | | investment | | | investment | | | Total | | | | | | Average | | | | | | | | | | | | |
| | principal | | | with no | | | with | | | recorded | | | Related | | | recorded | | | Interest | | | | | | | | | |
September 30, 2014 | | balance | | | allowance | | | allowance | | | investment | | | allowance | | | investment | | | recognized | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to four-family | | $ | 1,905,280 | | | $ | 352,766 | | | $ | 1,459,349 | | | $ | 1,812,115 | | | $ | 157,155 | | | $ | 1,853,390 | | | $ | 31,759 | | | | | | | | | |
Commercial | | | 3,435,065 | | | | 3,359,813 | | | | — | | | | 3,359,813 | | | | — | | | | 3,360,622 | | | | 73,221 | | | | | | | | | |
Commercial Construction | | | 2,549,027 | | | | 1,461,037 | | | | — | | | | 1,461,037 | | | | — | | | | 2,138,951 | | | | — | | | | | | | | | |
Commercial | | | 3,412,805 | | | | 2,542,281 | | | | 56,385 | | | | 2,598,666 | | | | 2,473 | | | | 2,902,975 | | | | 18,630 | | | | | | | | | |
Home equity loans | | | 69,095 | | | | 49,283 | | | | — | | | | 49,283 | | | | — | | | | 59,361 | | | | 112 | | | | | | | | | |
Consumer | | | 1,201 | | | | 1,201 | | | | — | | | | 1,201 | | | | — | | | | 1,192 | | | | 36 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 11,372,473 | | | $ | 7,766,381 | | | $ | 1,515,734 | | | $ | 9,282,115 | | | $ | 159,628 | | | $ | 10,316,491 | | | $ | 123,758 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Unpaid | | | Recorded | | | Recorded | | | | | | | | | | | | | | | | | | | | | |
| | contractual | | | investment | | | investment | | | Total | | | | | | Average | | | | | | | | | | | | |
| | principal | | | with no | | | with | | | recorded | | | Related | | | recorded | | | Interest | | | | | | | | | |
March 31, 2014 | | balance | | | allowance | | | allowance | | | investment | | | allowance | | | investment | | | recognized | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to four-family | | $ | 2,103,937 | | | $ | 442,355 | | | $ | 1,471,275 | | | $ | 1,913,630 | | | $ | 168,487 | | | $ | 2,015,371 | | | $ | 85,927 | | | | | | | | | |
Commercial | | | 3,363,584 | | | | 3,363,584 | | | | — | | | | 3,363,584 | | | | — | | | | 3,381,166 | | | | 278,249 | | | | | | | | | |
Commercial Construction | | | 2,552,293 | | | | 1,552,293 | | | | — | | | | 1,552,293 | | | | — | | | | 2,546,048 | | | | 174,501 | | | | | | | | | |
Commercial | | | 5,405,706 | | | | 3,886,889 | | | | 66,729 | | | | 3,953,618 | | | | 259 | | | | 4,664,305 | | | | 319,389 | | | | | | | | | |
Home equity loans | | | 215,594 | | | | 204,209 | | | | — | | | | 204,209 | | | | — | | | | 153,943 | | | | 8,315 | | | | | | | | | |
Consumer | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 13,641,114 | | | $ | 9,449,330 | | | $ | 1,538,004 | | | $ | 10,987,334 | | | $ | 168,746 | | | $ | 12,760,833 | | | $ | 866,381 | | | | | | | | | |
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Credit quality indicators |
As part of the ongoing monitoring of the credit quality of the Bank’s loan portfolio, management tracks certain credit quality indicators including trends related to the risk grade of loans, the level of classified loans, net charge offs, nonperforming loans, and the general economic conditions in the Bank’s market. |
The Bank utilizes a risk grading matrix to assign a risk grade to each of its loans. A description of the general characteristics of loans characterized as watch list or classified is as follows: |
Pass |
A pass loan is considered of sufficient quality to preclude a special mention or an adverse rating. Pass assets generally are well protected by the current net worth and paying capacity of the obligor or by the value of the asset or underlying collateral. |
Special Mention |
A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Bank’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Bank to sufficient risk to warrant adverse classification. |
Loans that would primarily fall into this notational category could have been previously classified adversely, but the deficiencies have since been corrected. Management should closely monitor recent payment history of the loan and value of the collateral. |
Borrowers may exhibit poor liquidity and leverage positions resulting from generally negative cash flow or negative trends in earnings. Access to alternative financing may be limited to finance companies for business borrowers and may be unavailable for commercial real estate borrowers. |
Substandard |
A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well defined weakness, or weaknesses, that jeopardize the collection or liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. This will be the measurement for determining if a loan is impaired. |
Borrowers may exhibit recent or unexpected unprofitable operations, an inadequate debt service coverage ratio, or marginal liquidity and capitalization. These loans require more intense supervision by Bank management. |
Foreclosed real estate will be treated as a classifiable asset. Generally, foreclosed real estate will be classified as substandard, except if the property is subject to an agreement of sale or if the asset is generating sufficient income. An appraisal may be performed on the asset to estimate its value. When the property is transferred to foreclosed real estate, a sufficient amount will be charged off against the allowance for loan losses in order to account for the property at its fair value, less estimated cost to sell. |
Doubtful |
A doubtful loan has all the weaknesses inherent as a substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. A loan classified as doubtful exhibits loss potential. However, there is still sufficient reason to permit the loan to remain on the books. A doubtful classification could reflect the deterioration of the primary source of repayment and serious doubt exists as to the quality of the secondary source of repayment. |
Doubtful classifications should be used only when a distinct and known possibility of loss exists. When identified, adequate loss should be recorded for the specific assets. The entire asset should not be classified as doubtful if a partial recovery is expected, such as liquidation of the collateral or the probability of a private mortgage insurance payment is likely. |
Loss |
Loans classified as loss are considered uncollectable and of such little value that their continuance as loans is unjustified. A loss classification does not mean a loan has absolutely no value; partial recoveries may be received in the future. When loans or portions of a loan are considered a loss, it will be the policy of the Bank to write-off the amount designated as a loss. Recoveries will be treated as additions to the allowance for loan losses. |
The following tables present the September 30, 2014 and March 31, 2014, balances of classified loans based on the risk grade. Classified loans include Special Mention, Substandard, Doubtful and Loss loans. The Bank had no loans classified as Doubtful or Loss as of September 30, 2014 or March 31, 2014. |
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| | | | | Special | | | | | | | | | | | | | | | | | | | | | | | | | | | |
September 30, 2014 | | Pass | | | mention | | | Substandard | | | Total | | | | | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to four-family | | $ | 67,046,457 | | | $ | 2,043,229 | | | $ | 358,718 | | | $ | 69,448,404 | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 39,833,036 | | | | 3,265,020 | | | | 3,359,813 | | | | 46,457,869 | | | | | | | | | | | | | | | | | | | | | |
Commercial Construction | | | — | | | | — | | | | 1,461,037 | | | | 1,461,037 | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 13,343,051 | | | | 2,806,126 | | | | 2,598,666 | | | | 18,747,843 | | | | | | | | | | | | | | | | | | | | | |
Home equity loans | | | 11,711,606 | | | | 12,957 | | | | 49,283 | | | | 11,773,846 | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | 1,145,826 | | | | 579 | | | | 1,201 | | | | 1,147,606 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 133,079,976 | | | $ | 8,127,911 | | | $ | 7,828,718 | | | $ | 149,036,605 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | Special | | | | | | | | | | | | | | | | | | | | | | | | | | | |
March 31, 2014 | | Pass | | | mention | | | Substandard | | | Total | | | | | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to four-family | | $ | 69,979,745 | | | $ | 1,724,740 | | | $ | 442,355 | | | $ | 72,146,840 | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 35,187,711 | | | | 2,855,129 | | | | 3,363,584 | | | | 41,406,424 | | | | | | | | | | | | | | | | | | | | | |
Commercial Construction | | | 1,242,500 | | | | — | | | | 1,552,293 | | | | 2,794,793 | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 8,462,441 | | | | 3,240,542 | | | | 3,953,616 | | | | 15,656,599 | | | | | | | | | | | | | | | | | | | | | |
Home equity loans | | | 11,456,322 | | | | — | | | | 204,209 | | | | 11,660,531 | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | 1,154,007 | | | | — | | | | — | | | | 1,154,007 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 127,482,726 | | | $ | 7,820,411 | | | $ | 9,516,057 | | | $ | 144,819,194 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Classified loans also include certain loans that have been modified in troubled debt restructurings (TDRs) where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Bank’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Generally, nonaccrual loans that are modified and considered TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. |
A summary of TDRs at September 30, 2014 and March 31, 2014 follows: |
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| | Number of | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
September 30, 2014 | | contracts | | | Performing | | | Nonperforming | | | Total | | | | | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to four-family | | | 5 | | | $ | 1,384,837 | | | $ | 74,607 | | | $ | 1,459,444 | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 2 | | | | 3,359,813 | | | | — | | | | 3,359,813 | | | | | | | | | | | | | | | | | | | | | |
Commercial Construction | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 3 | | | | 56,385 | | | | 640,088 | | | | 696,473 | | | | | | | | | | | | | | | | | | | | | |
Home equity loans | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 10 | | | $ | 4,801,035 | | | $ | 714,695 | | | $ | 5,515,730 | | | | | | | | | | | | | | | | | | | | | |
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| | Number of | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
March 31, 2014 | | contracts | | | Performing | | | Nonperforming | | | Total | | | | | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to four-family | | | 5 | | | $ | 1,471,275 | | | $ | 6,259 | | | $ | 1,477,534 | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | |
Commercial Construction | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 3 | | | | 66,729 | | | | 870,489 | | | | 937,218 | | | | | | | | | | | | | | | | | | | | | |
Home equity loans | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 8 | | | $ | 1,538,004 | | | $ | 876,748 | | | $ | 2,414,752 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The following table presents the number of contracts and the dollar amount of TDR’s that were added during the six month period ended September 30, 2014. The amount shown reflects the outstanding loan balance at the time of the modification. |
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| | Number of | | | Outstanding recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Six months ended September 30, 2014 | | contracts | | | investment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to four-family | | | — | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 2 | | | | 3,359,813 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial Construction | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity loans | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2 | | | $ | 3,359,813 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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In the normal course of business, the Bank has various outstanding commitments and contingent liabilities that are not reflected in the accompanying financial statements. Loan commitments and lines of credit are agreements to lend to a customer as long as there is no violation of any condition to the contract. Mortgage loan commitments generally have fixed interest rates, fixed expiration dates, and may require payment of a fee. Other loan commitments generally have fixed interest rates. Lines of credit generally have variable interest rates. Such lines do not represent future cash requirements because it is unlikely that all customers will draw upon their lines in full at any time. |
The Bank’s maximum exposure to credit loss in the event of nonperformance by the customer is the contractual amount of the credit commitment. Loan commitments, lines of credit, and letters of credit are made on the same terms, including collateral, as outstanding loans. Management is not aware of any accounting loss to be incurred by funding these loan commitments. |
The Bank had the following outstanding commitments and unused lines of credit as of September 30, 2014 and March 31, 2014: |
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| | September 30, | | | March 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2014 | | | 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Unused commercial lines of credit | | $ | 8,986,700 | | | $ | 2,614,410 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Unused home equity lines of credit | | | 16,113,690 | | | | 17,414,411 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Unused consumer lines of credit | | | 61,137 | | | | 59,029 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction loan commitments | | | 2,034,794 | | | | 976,829 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial construction loan commitments | | | — | | | | 47,021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity loan commitments | | | 352,000 | | | | 142,200 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial loan commitments | | | 500,000 | | | | 2,589,249 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Standby letter of credit | | | 50,000 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |