Loans | Note 5 – Loans The following table sets forth the composition of our loan portfolio by segment and class, at the dates indicated. June 30, 2016 December 31, 2015 Amount Percent Amount Percent (Dollars in thousands) First mortgage loans: Secured by one- to four family $ 28,771 49.90 % $ 30,368 51.84 % Secured by multi-family 7,651 13.27 7,592 12.96 Secured by commercial real estate 14,688 25.47 13,941 23.80 Secured by land 181 0.31 192 0.33 Secured by construction 164 0.28 — — Total first mortgage loans 51,455 89.23 52,093 88.93 Commercial, consumer and other loans: Home equity lines-of-credit 4,421 7.67 4,574 7.81 Commercial business loans 1,214 2.11 1,112 1.90 Automobile loans 553 0.96 798 1.36 Other consumer loans 15 0.03 — — Total commercial, consumer and other loans 6,203 10.77 6,484 11.07 Gross loans 57,658 100.00 58,577 100.00 Premiums and net deferred loan costs (63 ) (50 ) Allowance for loan losses (981 ) (991 ) Total loans, net $ 56,614 $ 57,536 The following table presents the activity in the allowance for loan losses by portfolio segment and class for the three and six months ended June 30, 2016 and 2015. First Mortgages Commercial, Consumer and Other (Dollars in thousands) One-to-four Multi- Commercial Land Construction Home equity Commercial Automobile Other Total For the three months ended June 30, 2016 Allowance for loan losses Beginning balance $ 333 $ 146 $ 397 $ 5 $ 10 $ 75 $ 14 $ 32 $ — $ 1,012 Provision for loan losses (24 ) (12 ) 16 — (7 ) 1 (1 ) (6 ) — (33 ) Loans charged-off — — — — — — — — — — Recoveries — — — — 2 — — — — 2 Total ending allowance balance June 30, 2015 $ 309 $ 134 $ 413 $ 5 $ 5 $ 76 $ 13 $ 26 $ — $ 981 For the three months ended June 30, 2015 Allowance for loan losses Beginning balance $ 370 $ 340 $ 288 $ 6 $ 14 $ 92 $ 7 $ 62 $ — $ 1,179 Provision for loan losses 92 (155 ) 87 — (10 ) (6 ) — (8 ) — — Loans charged-off — — — — — — — — — — Recoveries — — — — 3 — — — — 3 Total ending allowance balance June 30, 2015 $ 462 $ 185 $ 375 $ 6 $ 7 $ 86 $ 7 $ 54 $ — $ 1,182 For the six months ended June 30, 2016 Allowance for loan losses Beginning balance $ 326 $ 157 $ 385 $ 5 $ — $ 70 $ 12 $ 36 $ — $ 991 Provision for loan losses (17 ) (23 ) 28 — (18 ) 6 1 (10 ) — (33 ) Loans charged-off — — — — — — — — — — Recoveries — — — — 23 — — — — 23 Total ending allowance balance June 30, 2016 $ 309 $ 134 $ 413 $ 5 $ 5 $ 76 $ 13 $ 26 $ — $ 981 For the six months ended June 30, 2015 Allowance for loan losses Beginning balance $ 392 $ 354 $ 277 $ 6 $ 7 $ 96 $ 8 $ 66 $ — $ 1,206 Provision for loan losses 70 (141 ) 98 — (4 ) (10 ) (1 ) (11 ) (1 ) — Loans charged-off — (28 ) — — — — — (1 ) — (29 ) Recoveries — — — — 4 — — — 1 5 Total ending allowance balance June 30, 2015 $ 462 $ 185 $ 375 $ 6 $ 7 $ 86 $ 7 $ 54 $ — $ 1,182 The following table represents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and class based on the impaired method at the dates indicated. The recorded investment in loans excludes accrued interest and loan origination fees due to immateriality. Loan Balance Allowance (Dollars in thousands) Individually Collectively Total Individually Collectively Total June 30, 2016 One-to-four-family $ 1,627 $ 27,144 $ 28,771 $ 65 $ 244 $ 309 Multi-family 1,337 6,314 7,651 21 113 134 Commercial real estate — 14,688 14,688 — 413 413 Land — 181 181 — 5 5 Construction — 164 164 — 5 5 Home equity lines of credit — 4,421 4,421 — 76 76 Commercial — 1,214 1,214 — 13 13 Automobile — 553 553 — 26 26 Other consumer — 15 15 — — — Total $ 2,964 $ 54,694 $ 57,658 $ 86 $ 895 $ 981 December 31, 2015 One-to-four-family $ 1,640 $ 28,728 $ 30,368 $ 67 $ 259 $ 326 Multi-family 1,354 6,238 7,592 52 105 157 Commercial real estate — 13,941 13,941 — 385 385 Land — 192 192 — 5 5 Construction — — — — — — Home equity lines of credit — 4,574 4,574 — 70 70 Commercial — 1,112 1,112 — 12 12 Automobile — 798 798 — 36 36 Other consumer — — — — — — Total $ 2,994 $ 55,583 $ 58,577 $ 119 $ 872 $ 991 The following tables present information related to loans individually evaluated for impairment by class of loans as of and for the six months ended June 30, 2016 and 2015 and as of and for the year ended December 31, 2015 Unpaid Recorded Allowance for Average Interest Cash Basis June 30, 2016 With no related allowance recorded One-to-four-family $ 1,513 $ 1,093 $ — $ 1,095 $ — $ — Multi-family 796 621 — 622 16 16 Commercial real estate — — — — — — Land — — — — — — Construction — — — — — — Home equity line of credit — — — — — — Commercial — — — — — — Automobile — — — — — — Other consumer — — — — — — Total with no related allowance recorded 2,309 1,714 — 1,717 16 16 With an allowance recorded One-to-four-family 534 534 65 537 13 13 Multi-family 716 716 21 722 18 18 Commercial real estate — — — — — — Land — — — — — — Construction — — — — — — Home equity line of credit — — — — — — Commercial — — — — — — Automobile — — — — — — Other consumer — — — — — — Total with a related allowance recorded 1,250 1,250 86 1,259 31 31 Total $ 3,559 $ 2,964 $ 86 $ 2,976 $ 47 $ 47 Unpaid Recorded Allowance for Average Interest Cash Basis (Dollars in thousands) June 30, 2015 With no related allowance recorded One-to-four-family $ 541 $ 405 $ — $ 754 $ — $ — Multi-family 798 623 — 1,683 40 40 Commercial real estate — — — — — — Land — — — — — — Construction — — — — — — Home equity line of credit — — — — — — Commercial 262 59 — 74 — — Automobile — — — — — — Other consumer — — — — — — Total with no related allowance recorded 1,601 1,087 — 2,511 40 40 With an allowance recorded One-to-four-family 1,558 1,558 134 720 13 13 Multi-family 742 742 64 747 19 19 Commercial real estate — — — — — — Land — — — — — — Construction — — — — — — Home equity line of credit — — — — — — Commercial — — — — — — Automobile — — — — — — Other consumer — — — — — — Total with a related allowance recorded 2,300 2,300 198 1,467 32 32 Total $ 3,901 $ 3,387 $ 198 $ 3,978 $ 72 $ 72 Unpaid Recorded Allowance for Average Interest Cash Basis December 31, 2015 With no related allowance recorded One-to-four-family $ 1,519 $ 1,099 $ — $ 1,040 $ 50 $ 50 Multi-family 800 625 — 1,154 — — Commercial real estate — — — — — — Land — — — — — — Construction — — — — — — Home equity line of credit — — — — — — Commercial — — — 49 — — Automobile — — — — — — Other consumer — — — — — Total with no related allowance recorded 2,319 1,724 — 2,243 50 50 With an allowance recorded One-to-four-family 541 541 67 548 26 26 Multi-family 729 729 52 740 38 38 Commercial real estate — — — — — — Land — — — — — — Construction — — — — — — Home equity line of credit — — — — — — Commercial — — — — — — Automobile — — — — — — Other consumer — — — — — — Total with a related allowance recorded 1,270 1,270 119 1,288 64 64 Total $ 3,589 $ 2,994 $ 119 $ 3,531 $ 114 $ 114 The following table presents the aging of the recorded investment in past due loans at the dates indicated by class of loans. 30 - 59 60 - 89 Greater than Nonaccrual Loans Not Total (Dollars in thousands) June 30, 2016 One-to-four-family $ — $ — $ — $ 1,093 $ 27,678 $ 28,771 Multi-family — — — 346 7,305 7,651 Commercial real estate — — — — 14,688 14,688 Land — — — — 181 181 Construction — — — — 164 164 Home equity line of credit — — — — 4,421 4,421 Commercial — — — — 1,214 1,214 Automobile — — — — 553 553 Other consumer — — — — 15 15 Total $ — $ — $ — $ 1,439 $ 56,219 $ 57,658 December 31, 2015 One-to-four-family $ — $ — $ — $ 1,099 $ 29,269 $ 30,368 Multi-family — — — 346 7,246 7,592 Commercial real estate — — — — 13,941 13,941 Land — — — — 192 192 Construction — — — — — — Home equity line of credit — — — — 4,574 4,574 Commercial — — — — 1,112 1,112 Automobile — — — — 798 798 Other consumer — — — — — — Total $ — $ — $ — $ 1,445 $ 57,132 $ 58,577 Nonperforming loans (non-accrual and loans past due 90 days and still on accrual) include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. Credit Quality Indicators The Bank categorizes loans into risk categories based on relevant information about the ability of a borrower to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Bank analyzes loans individually by classifying the loans as to credit risk. The analysis includes the non-homogeneous loans, such as multi- family, commercial real estate, construction, and commercial loans. The analysis is performed on a quarterly basis. Homogeneous loans are monitored based on past due status of the loan. The risk category of these loans is evaluated at origination, when a loan becomes delinquent or when a borrower requests a concession. Substandard Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, 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. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. The following table reflects the risk category by loans at the dates indicated based on the most recent analysis performed. Pass Substandard Doubtful Total (Dollars in thousands) June 30, 2016 One-to-four-family $ 27,678 $ 1,093 $ — $ 28,771 Multi-family 7,305 346 — 7,651 Commercial real estate 14,688 — — 14,688 Land 181 — — 181 Construction 164 — — 164 Home equity lines of credit 4,421 — — 4,421 Commercial 1,214 — — 1,214 Automobile 553 — — 553 Other consumer 15 — — 15 Total $ 56,219 $ 1,439 $ — $ 57,658 December 31, 2015 One-to-four-family $ 29,269 $ 1,099 $ — $ 30,368 Multi-family 7,246 346 — 7,592 Commercial real estate 13,941 — — 13,941 Land 192 — — 192 Construction — — — — Home equity lines of credit 4,574 — — 4,574 Commercial 1,112 — — 1,112 Automobile 798 — — 798 Other consumer — — — — Total $ 57,132 $ 1,445 $ — $ 58,577 Troubled Debt Restructurings Our troubled debt restructurings totaled $1,934 at June 30, 2016 and $1,964 at December 31, 2015. There were no loans modified as troubled debt restructurings during the six months ended June 30, 2016 or the year ended December 31, 2015. There were two loans modified as troubled debt restructurings with a balance of $409 as of June 30, 2016, which are being reported as nonaccrual, one of which totaling $63 is paying as agreed under the terms of the modification. There were two loans modified as troubled debt restructurings with a balance of $415 which are being reported as nonaccrual as of December 31, 2015, one of which totaling $69 is paying as agreed under the terms of the modification. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. During the six months ended June 30, 2016, one multi-family loan totaling $346 had payment defaults and was reported as non-accrual at June 30, 2016 and December 31, 2015. The Company has allocated $86 to specific reserves on $1,250 of loans to customers whose loan terms have been modified in troubled debt restructurings as of June 30, 2016. At December 31, 2015, the Company has allocated $119 to specific reserves on $1,271 of loans to customers whose loan terms have been modified in troubled debt restructurings. The Company has not committed to lend additional amounts as of June 30, 2016 and December 31, 2015 to customers with outstanding loans that are classified as troubled debt restructurings. |