Note 4 - Loans Receivable

3 Months Ended

Mar. 31, 2012

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

4.         LOANS RECEIVABLE

The following tables present age analyses of loans, including both accruing and nonaccrual loans, as of the dates indicated (in thousands):

March 31, 2012	30-89 Days Past Due		90 Days or More Past Due		Current		Total (1)
One- to four-family residential	$	5,409	$	6,332	$	163,125	$	174,866
Home equity and second mortgage		209		336		10,986		11,531
Speculative one- to four-family		--		--		1,150		1,150
Multifamily residential		28		--		24,742		24,770
Land		2,094		1,549		10,519		14,162
Commercial real estate		4,211		1,624		98,426		104,261
Commercial		3		380		10,840		11,223
Consumer		81		21		6,562		6,664
Total (1)	$	12,035	$	10,242	$	326,350	$	348,627

December 31, 2011	30-89 Days Past Due		90 Days or More Past Due		Current		Total (1)
One- to four-family residential	$	8,319	$	5,604	$	170,163	$	184,086
Home equity and second mortgage		126		437		11,939		12,502
Speculative one- to four-family		--		--		1,463		1,463
Multifamily residential		31		--		28,848		28,879
Land development		--		--		622		622
Land		191		1,344		12,883		14,418
Commercial real estate		1,371		4,752		89,797		95,920
Commercial		--		388		7,215		7,603
Consumer		23		5		7,987		8,015
Total (1)	$	10,061	$	12,530	$	330,917	$	353,508

(1) Gross of undisbursed loan funds, unearned discounts and net loan fees and the allowance for loan losses.

There was one loan over 90 days past due and still accruing at December 31, 2011 totaling $388,000 and no such loans at March 31, 2012.  Restructured loans totaled $11.3 million and $13.9 million as of March 31, 2012 and December 31, 2011, respectively, with $6.7 million and $8.7 million of such restructured loans on nonaccrual status at March 31, 2012 and December 31, 2011, respectively.

The following table presents age analyses of nonaccrual loans as of the dates indicated (in thousands):

March 31, 2012	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	1,403	$	6,332	$	2,110	$	9,845
Home equity and second mortgage		48		336		218		602
Multifamily residential		--		--		285		285
Land		2,094		1,549		590		4,233
Commercial real estate		995		1,624		7,933		10,552
Commercial		3		380		101		484
Consumer		2		21		17		40
Total	$	4,545	$	10,242	$	11,254	$	26,041

December 31, 2011	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	1,870	$	5,604	$	4,262	$	11,736
Home equity and second mortgage		57		437		270		764
Multifamily residential		--		--		4,645		4,645
Land development		--		--		622		622
Land		164		1,344		1,271		2,779
Commercial real estate		203		4,752		8,283		13,238
Commercial		--		--		72		72
Consumer		--		5		93		98
Total	$	2,294	$	12,142	$	19,518	$	33,954

The following tables summarize information pertaining to impaired loans as of March 31, 2012 and December 31, 2011 and for quarters ended March 31, 2012 and 2011 (in thousands):

	March 31, 2012						Three Months Ended March 31, 2012
	Unpaid Principal Balance		Recorded Investment		Valuation Allowance		Average Recorded Investment		Interest Income Recognized
Impaired loans with a valuation allowance:
One- to four-family residential	$	4,723	$	4,111	$	612	$	3,413	$	9
Home equity and second mortgage		113		20		93		24		--
Multifamily residential		--		--		--		1,128		--
Land		2,678		2,141		537		1,393		9
Commercial real estate		3,292		2,152		1,140		2,287		4
Consumer		1		--		1		13		--
		10,807		8,424		2,383		8,258		22
Impaired loans without a valuation allowance:
One- to four-family residential		6,028		6,028		--		8,047		27
Home equity and second mortgage		509		509		--		616		2
Multifamily residential		3,773		3,773		--		4,474		46
Land development		--		--		--		311		--
Land		1,722		1,722		--		1,929		5
Commercial real estate		7,260		7,260		--		8,099		50
Commercial		484		484		--		278		--
Consumer		54		54		--		52		1
		19,830		19,830		--		23,806		131
Total impaired loans	$	30,637	$	28,254	$	2,383	$	32,064	$	153
Interest based on original terms									$	477
Interest income recognized on a cash basis on impaired loans									$	69

	December 31, 2011						Three Months Ended March 31, 2011
	Unpaid Principal Balance		Recorded Investment		Valuation Allowance		Average Recorded Investment		Interest Income Recognized
Impaired loans with a valuation allowance:
One- to four-family residential	$	3,019	$	2,714	$	305	$	3,830	$	11
Home equity and second mortgage		108		27		81		260		--
Speculative one- to four-family		--		--		--		5		--
Multifamily residential		2,958		2,255		703		5,147		--
Land development		--		--		--		498		--
Land		925		645		280		3,564		12
Commercial real estate		4,301		2,422		1,879		2,541		3
Commercial		--		--		--		217		--
Consumer		70		25		45		24		--
		11,381		8,088		3,293		16,086		26
Impaired loans without a valuation allowance:
One- to four-family residential		10,066		10,066		--		20,476		87
Home equity and second mortgage		723		723		--		894		19
Multifamily residential		5,175		5,175		--		3,870		40
Land development		622		622		--		--		--
Land		2,136		2,136		--		3,568		14
Commercial real estate		8,937		8,937		--		9,975		81
Commercial		72		72		--		396		1
Consumer		49		49		--		95		2
		27,780		27,780		--		39,274		244
Total impaired loans	$	39,161	$	35,868	$	3,293	$	55,360	$	270
Interest based on original terms									$	852
Interest income recognized on a cash basis on impaired loans									$	163

Credit Quality Indicators. As part of the on-going monitoring of the credit quality of the Bank’s loan portfolio, the Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by assigning a credit risk rating to loans on at least an annual basis for non-homogeneous loans over $250,000. The Company uses the following definitions for risk ratings:

Pass (Grades 1 to 5). Loans classified as pass generally meet or exceed normal credit standards and are classified on a scale from 1 to 5, with 1 being the highest quality loan and 5 being a pass/watch loan.  Factors influencing the level of pass grade include repayment source and strength, collateral, borrower cash flows, existence of and strength of guarantors, industry/business sector, financial trends, performance history, etc.

Special Mention (Grade 6). Loans classified as special mention, while still adequately protected by the borrower’s repayment capability, exhibit distinct weakening trends. If left unchecked or uncorrected, these potential weaknesses may result in deteriorated prospects of repayment. These exposures require management’s close attention so as to avoid becoming adversely classified credits.

Substandard (Grade 7). Loans classified as substandard are inadequately protected by the current sound net worth and paying capacity of the borrower or the collateral pledged, if any. These assets must have a well-defined weakness based on objective evidence and be characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful (Grade 8). Loans classified as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

Loss (Grade 9). Loans classified as a loss are considered uncollectible and of such little value that continuance as an asset is not warranted. A loss classification does not mean that an asset has no recovery or salvage value, but that it is not practical or desirable to defer writing off or reserving all or a portion of the asset, even though partial recovery may be effected in the future.

Based on analyses performed at March 31, 2012 and December 31, 2011, the risk categories of loans are as follows:

	March 31, 2012
	Pass		Special Mention		Substandard		Not Rated		Total (1)
One- to four-family residential	$	14,774	$	14,362	$	19,241	$	126,489	$	174,866
Home equity and second mortgage		382		318		1,148		9,683		11,531
Speculative one- to four-family		--		--		1,150		--		1,150
Multifamily residential		14,457		4,512		5,699		102		24,770
Land		2,282		1,364		5,949		4,567		14,162
Commercial real estate		69,995		12,943		19,418		1,905		104,261
Commercial		9,695		837		547		144		11,223
Consumer		199		--		61		6,404		6,664
Total (1)	$	111,784	$	34,336	$	53,213	$	149,294	$	348,627

	December 31, 2011
	Pass		Special Mention		Substandard		Not Rated		Total (1)
One- to four-family residential	$	24,300	$	13,888	$	27,877	$	118,021	$	184,086
Home equity and second mortgage		558		487		1,569		9,888		12,502
Speculative one- to four-family		--		--		1,463		--		1,463
Multifamily residential		12,415		6,655		9,703		106		28,879
Land development		--		--		622		--		622
Land		2,168		2,908		4,575		4,767		14,418
Commercial real estate		55,657		9,174		29,018		2,071		95,920
Commercial		5,579		1,105		521		398		7,603
Consumer		627		13		192		7,183		8,015
Total (1)	$	101,304	$	34,230	$	75,540	$	142,434	$	353,508

(1) Gross of undisbursed loan funds, unearned discounts and net loan fees and the allowance for loan losses.

As of March 31, 2012 and December 31, 2011, the Bank did not have any loans categorized as subprime or classified as doubtful.

Troubled Debt Restructurings. Troubled debt restructurings (“TDRs”) are loans where the contractual terms on the loan have been modified and both of the following conditions exist: (i) the borrower is experiencing financial difficulty and (ii) the restructuring constitutes a concession that the Bank would not otherwise make. The Bank assesses all loan modifications to determine if the modifications constitute a TDR.  Restructurings resulting in an insignificant delay in payment are not considered to be TDRs.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

All TDRs are considered impaired loans. Impairment is measured on a loan by loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

The following table summarizes TDRs as of March 31, 2012 and December 31, 2011: (dollars in thousands)

March 31, 2012	Number of Accruing TDR Loans		Balance		Number of Nonaccrual TDR Loans		Balance		Total Number of TDR Loans		Total Balance
One- to four-family residential		10	$	907		7	$	668		17	$	1,575
Home equity and second mortgage		1		19		3		77		4		96
Multifamily residential		1		3,488		--		--		1		3,488
Land		2		167		5		1,262		7		1,429
Commercial real estate		--		--		6		4,691		6		4,691
Consumer		6		16		--		--		6		16
Total		20	$	4,597		21	$	6,698		41	$	11,295

December 31, 2011	Number of Accruing TDR Loans		Balance		Number of Nonaccrual TDR Loans		Balance		Total Number of TDR Loans		Total Balance
One- to four-family residential		15	$	1,349		11	$	1,134		26	$	2,483
Home equity and second mortgage		3		68		4		133		7		201
Multifamily residential		1		3,488		1		1,399		2		4,887
Land		5		282		4		1,242		9		1,524
Commercial real estate		--		--		6		4,759		6		4,759
Consumer		7		20		--		--		7		20
Total		31	$	5,207		26	$	8,667		57	$	13,874

During the three months ended March 31, 2012, the Bank did not restructure any loans receivable that were TDRs. The Bank had no loans receivable for which a payment default occurred during the three months ended March 31, 2012 and that had been modified as a TDR within 12 months or less of the payment default.  A payment default is defined as a payment received more than 90 days after its due date.