Loan Quality and Allowance for Loan Losses | Note 9 – Loan Quality and the Allowance for Loan Losses The following tables present the balance of the allowance for loan losses at June 30, 2015, 2014 and 2013 based upon the calculation methodology described in Note 1. The tables identify the valuation allowances attributable to specifically identified impairments on individually evaluated loans, including those acquired with deteriorated credit quality, as well as valuation allowances for impairments on loans evaluated collectively. The tables include the underlying balance of loans receivable applicable to each category as of those dates as well as the activity in the allowance for loan losses for the years ended June 30, 2015, 2014 and 2013. Unless otherwise noted, the balance of loans reported in the tables below excludes yield adjustments and the allowance for loan loss. Allowance for Loan Losses and Loans Receivable at June 30, 2015 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Balance of allowance for loan losses: Originated and purchased loans: Loans individually evaluated for impairment $ 116 $ 415 $ - $ 30 $ 12 $ - $ - $ 573 Loans collectively evaluated for impairment 2,031 10,162 29 989 184 33 15 13,443 Allowance for loan losses on originated and purchased loans 2,147 10,577 29 1,019 196 33 15 14,016 Loans acquired at fair value: Loans acquired with deteriorated credit quality - - - 81 - - - 81 Other acquired loans individually evaluated for impairment - 114 - 259 - 24 - 397 Acquired loans collectively evaluated for impairment 63 429 5 501 64 49 1 1,112 Allowance for loan losses on loans acquired at fair value 63 543 5 841 64 73 1 1,590 Total allowance for loan losses $ 2,210 $ 11,120 $ 34 $ 1,860 $ 260 $ 106 $ 16 $ 15,606 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Allowance for Loan Losses and Loans Receivable Year Ended June 30, 2015 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Changes in the allowance for loan losses for the year ended June 30, 2015: At June 30, 2014: Allocated $ 2,729 $ 7,737 $ 67 $ 1,284 $ 460 $ 88 $ 22 $ 12,387 Unallocated - - - - - - - - Total allowance for loan losses 2,729 7,737 67 1,284 460 88 22 12,387 Total charge offs (1,985 ) (650 ) - (491 ) (77 ) - (1 ) (3,204 ) Total recoveries 297 - - 18 - - - 315 Total allocated provisions 1,169 4,033 (33 ) 1,049 (123 ) 18 (5 ) 6,108 Total unallocated provisions - - - - - - - - At June 30, 2015: Allocated 2,210 11,120 34 1,860 260 106 16 15,606 Unallocated - - - - - - - - Total allowance for loan losses $ 2,210 $ 11,120 $ 34 $ 1,860 $ 260 $ 106 $ 16 $ 15,606 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Allowance for Loan Losses and Loans Receivable at June 30, 2015 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Balance of loans receivable: Originated and purchased loans: Loans individually evaluated for impairment $ 10,240 $ 3,439 $ - $ 1,861 $ 991 $ 26 $ - $ 16,557 Loans collectively evaluated for impairment 520,070 1,214,586 3,328 69,797 63,034 10,854 4,204 1,885,873 Total originated and purchased loans 530,310 1,218,025 3,328 71,658 64,025 10,880 4,204 1,902,430 Loans acquired at fair value: Loans acquired with deteriorated credit quality 116 318 - 7,929 - - - 8,363 Other acquired loans individually evaluated for impairment - 4,196 2,037 927 534 945 - 8,639 Acquired loans collectively evaluated for impairment 61,895 86,564 346 18,937 5,698 9,589 87 183,116 Total loans acquired at fair value 62,011 91,078 2,383 27,793 6,232 10,534 87 200,118 Total loans $ 592,321 $ 1,309,103 $ 5,711 $ 99,451 $ 70,257 $ 21,414 $ 4,291 2,102,548 Unamortized yield adjustments 316 Loans receivable, net of yield adjustments $ 2,102,864 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Allowance for Loan Losses and Loans Receivable at June 30, 2014 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Balance of allowance for loan losses: Originated and purchased loans: Loans individually evaluated for impairment $ 528 $ 404 $ - $ - $ 75 $ - $ - $ 1,007 Loans collectively evaluated for impairment 2,172 6,760 29 352 272 35 21 9,641 Allowance for loan losses on originated and purchased loans 2,700 7,164 29 352 347 35 21 10,648 Loans acquired at fair value: Loans acquired with deteriorated credit quality - - - 98 - - - 98 Other acquired loans individually evaluated for impairment - 165 - 346 57 - - 568 Acquired loans collectively evaluated for impairment 29 408 38 488 56 53 1 1,073 Allowance for loan losses on loans acquired at fair value 29 573 38 932 113 53 1 1,739 Total allowance for loan losses $ 2,729 $ 7,737 $ 67 $ 1,284 $ 460 $ 88 $ 22 $ 12,387 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Allowance for Loan Losses and Loans Receivable Year Ended June 30, 2014 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Changes in the allowance for loan losses for the year ended June 30, 2014: At June 30, 2013: Allocated $ 3,660 $ 5,359 $ 81 $ 1,218 $ 490 $ 76 $ 12 $ 10,896 Unallocated - - - - - - - - Total allowance for loan losses 3,660 5,359 81 1,218 490 76 12 10,896 Total charge offs (1,202 ) (44 ) - (1,170 ) (47 ) - (30 ) (2,493 ) Total recoveries 67 525 - 9 2 - - 603 Total allocated provisions 204 1,897 (14 ) 1,227 15 12 40 3,381 Total unallocated provisions - - - - - - - - At June 30, 2014: Allocated 2,729 7,737 67 1,284 460 88 22 12,387 Unallocated - - - - - - - - Total allowance for loan losses $ 2,729 $ 7,737 $ 67 $ 1,284 $ 460 $ 88 $ 22 $ 12,387 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Allowance for Loan Losses and Loans Receivable at June 30, 2014 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Balance of loans receivable: Originated and purchased loans: Loans individually evaluated for impairment $ 11,923 $ 5,403 $ - $ 1,263 $ 1,010 $ 17 $ - $ 19,616 Loans collectively evaluated for impairment 494,522 873,340 3,619 31,326 66,163 10,529 4,248 1,483,747 Total originated and purchased loans 506,445 878,743 3,619 32,589 67,173 10,546 4,248 1,503,363 Loans acquired at fair value: Loans acquired with deteriorated credit quality 742 1,071 - 8,325 - - - 10,138 Other acquired loans individually evaluated for impairment - 1,895 1,448 2,456 692 964 - 7,455 Acquired loans collectively evaluated for impairment 73,425 102,046 2,214 23,891 7,746 12,500 90 221,912 Total loans acquired at fair value 74,167 105,012 3,662 34,672 8,438 13,464 90 239,505 Total loans $ 580,612 $ 983,755 $ 7,281 $ 67,261 $ 75,611 $ 24,010 $ 4,338 1,742,868 Unamortized yield adjustments (1,397 ) Loans receivable, net of yield adjustments $ 1,741,471 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Allowance for Loan Losses Year Ended June 30, 2013 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Changes in the allowance for loan losses for the year ended June 30, 2013: At June 30, 2012: Allocated $ 4,572 $ 3,443 $ 277 $ 1,310 $ 447 $ 54 $ 14 $ 10,117 Unallocated - - - - - - - - Total allowance for loan losses 4,572 3,443 277 1,310 447 54 14 10,117 Total charge offs (2,272 ) (1,042 ) (9 ) (182 ) (221 ) - (2 ) (3,728 ) Total recoveries 15 - - 18 10 - - 43 Total allocated provisions 1,345 2,958 (187 ) 72 254 22 - 4,464 Total unallocated provisions - - - - - - - - At June 30, 2013: Allocated 3,660 5,359 81 1,218 490 76 12 10,896 Unallocated - - - - - - - - Total allowance for loan losses $ 3,660 $ 5,359 $ 81 $ 1,218 $ 490 $ 76 $ 12 $ 10,896 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) The following tables present key indicators of credit quality regarding the Company’s loan portfolio based upon loan classification and contractual payment status at June 30, 2015 and 2014. Credit-Rating Classification of Loans Receivable at June 30, 2015 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Originated and purchased loans: Non-classified $ 518,592 $ 1,213,307 $ 3,328 $ 69,662 $ 62,902 $ 10,780 $ 4,201 $ 1,882,772 Classified: Special Mention 955 256 - 58 56 74 - 1,399 Substandard 10,763 4,195 - 1,938 1,067 26 3 17,992 Doubtful - 267 - - - - - 267 Loss - - - - - - - - Total classified loans 11,718 4,718 - 1,996 1,123 100 3 19,658 Total originated and purchased loans 530,310 1,218,025 3,328 71,658 64,025 10,880 4,204 1,902,430 Loans acquired at fair value: Non-classified 60,593 82,068 - 13,749 5,588 9,196 60 171,254 Classified: Special Mention 372 3,425 346 7,617 76 242 24 12,102 Substandard 1,046 5,585 2,037 6,421 568 1,096 3 16,756 Doubtful - - - 6 - - - 6 Loss - - - - - - - - Total classified loans 1,418 9,010 2,383 14,044 644 1,338 27 28,864 Total loans acquired at fair value 62,011 91,078 2,383 27,793 6,232 10,534 87 200,118 Total loans $ 592,321 $ 1,309,103 $ 5,711 $ 99,451 $ 70,257 $ 21,414 $ 4,291 $ 2,102,548 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Credit-Rating Classification of Loans Receivable at June 30, 2014 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Originated and purchased loans: Non-classified $ 492,531 $ 872,063 $ 3,461 $ 31,301 $ 66,016 $ 10,352 $ 4,247 $ 1,479,971 Classified: Special Mention 1,626 357 158 25 146 84 1 2,397 Substandard 12,288 6,039 - 1,263 1,011 110 - 20,711 Doubtful - 284 - - - - - 284 Loss - - - - - - - - Total classified loans 13,914 6,680 158 1,288 1,157 194 1 23,392 Total originated and purchased loans 506,445 878,743 3,619 32,589 67,173 10,546 4,248 1,503,363 Loans acquired at fair value: Non-classified 73,425 96,758 - 18,946 7,582 12,003 71 208,785 Classified: Special Mention - 4,600 353 4,602 45 245 16 9,861 Substandard 742 3,654 3,309 11,118 811 1,216 3 20,853 Doubtful - - - 6 - - - 6 Loss - - - - - - - - Total classified loans 742 8,254 3,662 15,726 856 1,461 19 30,720 Total loans acquired at fair value 74,167 105,012 3,662 34,672 8,438 13,464 90 239,505 Total loans $ 580,612 $ 983,755 $ 7,281 $ 67,261 $ 75,611 $ 24,010 $ 4,338 $ 1,742,868 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Contractual Payment Status of Loans Receivable at June 30, 2015 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Originated and purchased loans: Current $ 524,780 $ 1,216,644 $ 3,328 $ 70,529 $ 63,457 $ 10,828 $ 4,199 $ 1,893,765 Past due: 30-59 days 420 256 - 23 114 - 4 817 60-89 days 685 - - - - 26 - 711 90+ days 4,425 1,125 - 1,106 454 26 1 7,137 Total past due 5,530 1,381 - 1,129 568 52 5 8,665 Total originated and purchased loans 530,310 1,218,025 3,328 71,658 64,025 10,880 4,204 1,902,430 Loans acquired at fair value: Current 61,895 89,796 1,610 25,721 5,993 9,577 85 194,677 Past due: 30-59 days 116 - - - 134 12 - 262 60-89 days - 468 - - - - 1 469 90+ days - 814 773 2,072 105 945 1 4,710 Total past due 116 1,282 773 2,072 239 957 2 5,441 Total loans acquired at fair value 62,011 91,078 2,383 27,793 6,232 10,534 87 200,118 Total loans $ 592,321 $ 1,309,103 $ 5,711 $ 99,451 $ 70,257 $ 21,414 $ 4,291 $ 2,102,548 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Contractual Payment Status of Loans Receivable at June 30, 2014 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Originated and purchased loans: Current $ 495,330 $ 875,887 $ 3,619 $ 31,081 $ 66,548 $ 10,499 $ 4,034 $ 1,486,998 Past due: 30-59 days 1,385 - - 245 183 - 60 1,873 60-89 days 1,163 - - - 3 30 28 1,224 90+ days 8,567 2,856 - 1,263 439 17 126 13,268 Total past due 11,115 2,856 - 1,508 625 47 214 16,365 Total originated and purchased loans 506,445 878,743 3,619 32,589 67,173 10,546 4,248 1,503,363 Loans acquired at fair value: Current 72,736 102,881 2,810 32,346 7,731 12,390 88 230,982 Past due: 30-59 days 689 561 - - 152 - - 1,402 60-89 days - 427 - - 95 110 1 633 90+ days 742 1,143 852 2,326 460 964 1 6,488 Total past due 1,431 2,131 852 2,326 707 1,074 2 8,523 Total loans acquired at fair value 74,167 105,012 3,662 34,672 8,438 13,464 90 239,505 Total loans $ 580,612 $ 983,755 $ 7,281 $ 67,261 $ 75,611 $ 24,010 $ 4,338 $ 1,742,868 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) The following tables present information relating to the Company’s nonperforming and impaired loans at June 30, 2015 and 2014. Loans reported as “90+ days past due and accruing” in the table immediately below are also reported in the preceding contractual payment status table under the heading “90+ days past due”. Performance Status of Loans Receivable at June 30, 2015 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Originated and purchased loans: Performing $ 522,474 $ 1,214,653 $ 3,328 $ 69,819 $ 63,563 $ 10,854 $ 4,203 $ 1,888,894 Nonperforming: 90+ days past due accruing - - - - - - - - Nonaccrual 7,836 3,372 - 1,839 462 26 1 13,536 Total nonperforming 7,836 3,372 - 1,839 462 26 1 13,536 Total originated and purchased loans 530,310 1,218,025 3,328 71,658 64,025 10,880 4,204 1,902,430 Loans acquired at fair value: Performing 61,895 87,273 346 25,688 5,882 9,589 86 190,759 Nonperforming: 90+ days past due accruing - - - - - - - - Nonaccrual 116 3,805 2,037 2,105 350 945 1 9,359 Total nonperforming 116 3,805 2,037 2,105 350 945 1 9,359 Total loans acquired at fair value 62,011 91,078 2,383 27,793 6,232 10,534 87 200,118 Total loans $ 592,321 $ 1,309,103 $ 5,711 $ 99,451 $ 70,257 $ 21,414 $ 4,291 $ 2,102,548 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Performance Status of Loans Receivable at June 30, 2014 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Originated and purchased loans: Performing $ 497,243 $ 873,421 $ 3,619 $ 31,326 $ 66,734 $ 10,529 $ 4,122 $ 1,486,994 Nonperforming: 90+ days past due accruing - - - - - - 125 125 Nonaccrual 9,202 5,322 - 1,263 439 17 1 16,244 Total nonperforming 9,202 5,322 - 1,263 439 17 126 16,369 Total originated and purchased loans 506,445 878,743 3,619 32,589 67,173 10,546 4,248 1,503,363 Loans acquired at fair value: Performing 73,425 103,399 2,214 31,016 7,928 12,500 89 230,571 Nonperforming: 90+ days past due accruing - - - - - - - - Nonaccrual 742 1,613 1,448 3,656 510 964 1 8,934 Total nonperforming 742 1,613 1,448 3,656 510 964 1 8,934 Total loans acquired at fair value 74,167 105,012 3,662 34,672 8,438 13,464 90 239,505 Total loans $ 580,612 $ 983,755 $ 7,281 $ 67,261 $ 75,611 $ 24,010 $ 4,338 $ 1,742,868 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Impairment Status of Loans Receivable at or Year Ended June 30, 2015 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Carrying value of impaired loans: Originated and purchased loans: Non-impaired loans $ 520,070 $ 1,214,586 $ 3,328 $ 69,797 $ 63,034 $ 10,854 $ 4,204 $ 1,885,873 Impaired loans: Impaired loans with no allowance for impairment 8,387 1,777 - 1,418 905 26 - 12,513 Impaired loans with allowance for impairment: Recorded investment 1,853 1,662 - 443 86 - - 4,044 Allowance for impairment (116 ) (415 ) - (30 ) (12 ) - - (573 ) Balance of impaired loans net of allowance for impairment 1,737 1,247 - 413 74 - - 3,471 Total impaired loans, excluding allowance for impairment: 10,240 3,439 - 1,861 991 26 - 16,557 Total originated and purchased loans 530,310 1,218,025 3,328 71,658 64,025 10,880 4,204 1,902,430 Loans acquired at fair value: Non-impaired loans 61,895 86,564 346 18,937 5,698 9,589 87 183,116 Impaired loans: Impaired loans with no allowance for impairment 116 4,072 2,037 8,214 534 488 - 15,461 Impaired loans with allowance for impairment: Recorded investment - 442 - 642 - 457 - 1,541 Allowance for impairment - (114 ) - (340 ) - (24 ) - (478 ) Balance of impaired loans net of allowance for impairment - 328 - 302 - 433 - 1,063 Total impaired loans, excluding allowance for impairment: 116 4,514 2,037 8,856 534 945 - 17,002 Total loans acquired at fair value 62,011 91,078 2,383 27,793 6,232 10,534 87 200,118 Total loans $ 592,321 $ 1,309,103 $ 5,711 $ 99,451 $ 70,257 $ 21,414 $ 4,291 $ 2,102,548 Unpaid principal balance of impaired loans: Originated and purchased loans $ 16,985 $ 4,103 $ - $ 2,036 $ 1,014 $ 26 $ - $ 24,164 Loans acquired at fair value 147 4,759 2,118 10,506 561 975 - 19,066 Total impaired loans $ 17,132 $ 8,862 $ 2,118 $ 12,542 $ 1,575 $ 1,001 $ - $ 43,230 For the year ended June 30, 2015: Average balance of impaired loans $ 12,433 $ 7,902 $ 1,912 $ 11,693 $ 1,618 $ 1,005 $ - $ 36,563 Interest earned on impaired loans $ 139 $ 63 $ 5 $ 886 $ 42 $ - $ - $ 1,135 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Impairment Status of Loans Receivable at or Year Ended June 30, 2014 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Carrying value of impaired loans: Originated and purchased loans: Non-impaired loans $ 494,522 $ 873,340 $ 3,619 $ 31,326 $ 66,163 $ 10,529 $ 4,248 $ 1,483,747 Impaired loans: Impaired loans with no allowance for impairment 9,800 5,037 - 1,263 911 17 - 17,028 Impaired loans with allowance for impairment: Recorded investment 2,123 366 - - 99 - - 2,588 Allowance for impairment (528 ) (404 ) - - (75 ) - - (1,007 ) Balance of impaired loans net of allowance for impairment 1,595 (38 ) - - 24 - - 1,581 Total impaired loans, excluding allowance for impairment: 11,923 5,403 - 1,263 1,010 17 - 19,616 Total originated and purchased loans 506,445 878,743 3,619 32,589 67,173 10,546 4,248 1,503,363 Loans acquired at fair value: Non-impaired loans 73,425 102,046 2,214 23,891 7,746 12,500 90 221,912 Impaired loans: Impaired loans with no allowance for impairment 742 1,690 1,448 10,141 617 964 - 15,602 Impaired loans with allowance for impairment: Recorded investment - 1,276 - 640 75 - - 1,991 Allowance for impairment - (165 ) - (444 ) (57 ) - - (666 ) Balance of impaired loans net of allowance for impairment - 1,111 - 196 18 - - 1,325 Total impaired loans, excluding allowance for impairment: 742 2,966 1,448 10,781 692 964 - 17,593 Total loans acquired at fair value 74,167 105,012 3,662 34,672 8,438 13,464 90 239,505 Total loans $ 580,612 $ 983,755 $ 7,281 $ 67,261 $ 75,611 $ 24,010 $ 4,338 $ 1,742,868 Unpaid principal balance of impaired loans: Originated and purchased loans $ 17,655 $ 5,919 $ - $ 1,407 $ 1,027 $ 17 $ - $ 26,025 Loans acquired at fair value 742 3,264 1,547 12,495 726 975 - 19,749 Total impaired loans $ 18,397 $ 9,183 $ 1,547 $ 13,902 $ 1,753 $ 992 $ - $ 45,774 For the year ended June 30, 2014: Average balance of impaired loans $ 13,754 $ 9,971 $ 2,514 $ 10,669 $ 1,526 $ 641 $ - $ 39,075 Interest earned on impaired loans $ 138 $ 186 $ - $ 732 $ 69 $ 7 $ - $ 1,132 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Impairment Status of Loans Receivable Year Ended June 30, 2013 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) For the year ended June 30, 2013: Average balance of impaired loans $ 15,890 $ 11,885 $ 2,120 $ 8,853 $ 1,767 $ 189 $ - $ 40,704 Interest earned on impaired loans $ 181 $ 108 $ 20 $ 478 $ 61 $ 2 $ - $ 850 Note 9 – Loan Quality and the Allowance for Loan Losses (continued) The following tables present information regarding the restructuring of the Company’s troubled debts during the year ended June 30, 2015 and June 30, 2013 and any defaults of TDRs during that year that were restructured within 12 months of the date of default. During the year ended June 30, 2014, the Company did not restructure any troubled debts and there were no defaults of TDRs that were restructured within 12 months of the date of default. Troubled Debt Restructurings of Loans Receivable Year Ended June 30, 2015 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Troubled debt restructuring activity for the year ended June 30, 2015 Originated and purchased loans Number of loans 5 1 - 2 - - - 8 Pre-modification outstanding recorded investment $ 1,955 $ 369 $ - $ 348 $ - $ - $ - $ 2,672 Post-modification outstanding recorded investment 1,823 376 - 322 - - - $ 2,521 Charge offs against the allowance for loan loss recognized at modification 261 14 - 27 - - - $ 302 Loans acquired at fair value Number of loans - 1 - 1 - - - 2 Pre-modification outstanding recorded investment $ - $ 479 $ - $ 32 $ - $ - $ - $ 511 Post-modification outstanding recorded investment - 537 - 32 - - - $ 569 Charge offs against the allowance for loan loss recognized at modification - 24 - 1 - - - $ 25 Troubled debt restructuring defaults for the year ended June 30, 2015 Originated and purchased loans Number of loans 1 - - - - - - 1 Outstanding recorded investment $ 416 $ - $ - $ - $ - $ - $ - $ 416 Loans acquired at fair value Number of loans - - - - - - - - Outstanding recorded investment $ - $ - $ - $ - $ - $ - $ - $ - Note 9 – Loan Quality and the Allowance for Loan Losses (continued) Troubled Debt Restructurings of Loans Receivable Year Ended June 30, 2013 Residential Mortgage Commercial Mortgage Construction Commercial Business Home Equity Loans Home Equity Lines of Credit Other Consumer Total (In Thousands) Troubled debt restructuring activity for the year ended June 30, 2013 Originated and purchased loans Number of loans 5 1 - - 2 - - 8 Pre-modification outstanding recorded investment $ 967 $ 265 $ - $ - $ 176 $ - $ - $ 1,408 Post-modification outstanding recorded investment 852 245 - - 164 - - $ 1,261 Charge offs against the allowance for loan loss for impairment recognized at modification 146 20 - - 14 - - $ 180 Loans acquired at fair value Number of loans - - - - - - - - Pre-modification outstanding recorded investment $ - $ - $ - $ - $ - $ - $ - $ - Post-modification outstanding recorded investment - - - - - - - $ - Charge offs against the allowance for loan loss for impairment recognized at modification - - - - - - - $ - Troubled debt restructuring defaults for the year ended June 30, 2013 Originated and purchased loans Number of loans - - - - - - - - Outstanding recorded investment $ - $ - $ - $ - $ - $ - $ - $ - Loans acquired at fair value Number of loans - - - - - - - - Outstanding recorded investment $ - $ - $ - $ - $ - $ - $ - $ - Note 9 – Loan Quality and the Allowance for Loan Losses (continued) The manner in which the terms of a loan are modified through a troubled debt restructuring generally includes one or more of the following changes to the loan’s repayment terms: · Interest Rate Reduction · Capitalization of Prior Past Dues · Extension of Maturity or Balloon Date · Deferral of Principal Payments · Payment Recalculation and Re-amortization At June 30, 2015, the remaining outstanding principal balance and carrying amount of acquired credit-impaired loans totaled approximately $9,900,000 and $8,363,000 respectively. By comparison, at June 30, 2014, the remaining outstanding principal balance and carrying amount of such loans totaled approximately $11,778,000 and $10,138,000, respectively. The carrying amount of acquired credit-impaired loans for which interest is not being recognized due to the uncertainty of the cash flows relating to such loans totaled $1,322,000 and $2,374,000 at June 30, 2015 and June 30, 2014, respectively. The balance of the allowance for loan losses at June 30, 2015 and June 30, 2014 included approximately $81,000 and $98,000 of valuation allowances, respectively, for a specifically identified impairment attributable to acquired credit-impaired loans. The valuation allowances were attributable to additional impairment recognized on the applicable loans subsequent to their acquisition, net of any charge offs recognized during that time. The following table presents the changes in the accretable yield relating to the acquired credit-impaired loans for the years ended June 30, 2015 and 2014. Year Ended June 30, 2015 2014 (In Thousands) Beginning balance $ 1,891 $ 741 Accretion to interest income (702 ) (326 ) Disposals - (38 ) Reclassifications from nonaccretable difference - 1,514 Ending balance $ 1,189 $ 1,891 |