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Note 5 - Loans Receivable - 10Q

9 Months Ended

12 Months Ended

Sep. 30, 2013

Dec. 31, 2012

Note 5 - Loans Receivable - 10Q [Line Items]

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

5. LOANS RECEIVABLE

Loans receivable consisted of the following at September 30, 2013 and December 31, 2012 (in thousands):

	September 30, 2013			December 31, 2012
Real estate:
One- to four-family residential	$	134,341		$	157,936
Multifamily residential		25,641			20,790
Nonfarm nonresidential		161,434			138,014
Construction and land development		18,372			14,551
Commercial		17,414			16,083
Consumer		4,827			5,818
Total loans receivable		362,029			353,192
Unearned discounts and net deferred loan costs		(132	)		(188	)
Allowance for loan and lease losses		(13,078	)		(15,676	)

Loans receivable—net	$	348,819		$	337,328

Mortgage loans serviced for others are not included in the accompanying consolidated statements of financial condition. The unpaid principal balances of such loans at September 30, 2013 and December 31, 2012 were $12.3 million and $8.7 million, respectively. Servicing loans for others generally consists of collecting payments, maintaining escrow accounts, if applicable, disbursing payments to investors, and foreclosure processing. Servicing income for the three and nine months ended September 30, 2013 and 2012 was not material.

As of September 30, 2013 and December 31, 2012, qualifying loans collateralized by first lien one- to four-family mortgages with balances totaling approximately $53.9 million and $67.3 million, respectively, were held in custody by the Federal Home Loan Bank of Dallas (“FHLB”) and were pledged for outstanding advances or available for future advances.

The FHLB has custody and endorsement of the loans that collateralize the Bank’s outstanding borrowings with the FHLB. Qualifying loans (i) must not be 90 days or more past due; (ii) must not have been in default within the most recent twelve-month period, unless such default has been cured in a manner acceptable to the FHLB; (iii) must relate to real property that is covered by fire and hazard insurance in an amount at least sufficient to discharge the mortgage loan in case of loss and as to which all real estate taxes are current; (iv) must not have been classified as substandard, doubtful, or loss by the Bank or its regulatory authority; and (v) must not secure the indebtedness to any director, officer, employee, attorney, or agent of the Bank or of any FHLB. The FHLB currently allows an aggregate lendable value on the qualifying loans of approximately 90% of the collateral value of loans pledged to the FHLB.

As of September 30, 2013 and December 31, 2012, qualifying loans collateralized by commercial real estate with balances of $8.4 million and $9.4 million, respectively, were pledged at the FRB and available for future borrowings. The Bank uses qualifying commercial real estate loans as collateral for the discount window. No FRB borrowings were outstanding at September 30, 2013 or December 31, 2012.

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

September 30, 2013	30-89 Days Past Due		90 Days or More Past Due		Current		Total

One- to four-family residential	$	694	$	2,577	$	131,070	$	134,341
Multifamily residential		--		--		25,641		25,641
Nonfarm nonresidential		257		2,498		158,679		161,434
Construction and land development		300		2,524		15,548		18,372
Commercial		--		22		17,392		17,414
Consumer		18		4		4,805		4,827
Total	$	1,269	$	7,625	$	353,135	$	362,029

December 31, 2012	30-89 Days Past Due		90 Days or More Past Due		Current		Total

One- to four-family residential	$	7,411	$	3,982	$	146,543	$	157,936
Multifamily residential		3,459		--		17,331		20,790
Nonfarm nonresidential		--		4,523		133,491		138,014
Construction and land development		241		3,145		11,165		14,551
Commercial		341		402		15,340		16,083
Consumer		15		25		5,778		5,818
Total	$	11,467	$	12,077	$	329,648	$	353,192

There were no loans over 90 days past due and still accruing at September 30, 2013 or December 31, 2012. Restructured loans totaled $2.4 million and $9.2 million as of September 30, 2013 and December 31, 2012, respectively, with $2.2 million and $3.4 million of such restructured loans on nonaccrual status at September 30, 2013 and December 31, 2012, respectively.

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

September 30, 2013	30-89 Days Past Due		90 Days or More Past Due		Current		Total

One- to four-family residential	$	339	$	2,577	$	2,244	$	5,160
Multifamily residential		--		--		--		--
Nonfarm nonresidential		257		2,498		1,740		4,495
Construction and land development		299		2,524		555		3,378
Commercial		--		22		4		26
Consumer		--		4		5		9
Total	$	895	$	7,625	$	4,548	$	13,068

December 31, 2012	30-89 Days Past Due		90 Days or More Past Due		Current		Total

One- to four-family residential	$	1,070	$	3,982	$	1,975	$	7,027
Multifamily residential		--		--		--		--
Nonfarm nonresidential		--		4,523		2,713		7,236
Construction and land development		241		3,145		747		4,133
Commercial		--		402		--		402
Consumer		1		25		--		26
Total	$	1,312	$	12,077	$	5,435	$	18,824

The following tables summarize information pertaining to impaired loans as of September 30, 2013 and December 31, 2012 and for the three and nine months ended September 30, 2013 and 2012 (in thousands):

	September 30, 2013						December 31, 2012
	Unpaid Principal Balance		Recorded Investment		Valuation Allowance		Unpaid Principal Balance		Recorded Investment		Valuation Allowance
Impaired loans with a valuation allowance:
One- to four-family residential	$	1,688	$	1,499	$	265	$	1,517	$	1,424	$	275
Multifamily residential		--		--		--		--		--		--
Nonfarm nonresidential		2,998		2,833		1,051		3,718		3,596		779
Construction and land development		2,034		1,679		674		921		737		130
Commercial		1		1		1		380		380		380
Consumer		5		5		5		5		5		1
		6,726		6,017		1,996		6,541		6,142		1,565

Impaired loans without a valuation allowance:
One- to four-family residential		4,607		3,928		--		7,283		6,718		--
Multifamily residential		--		--		--		3,459		3,459		--
Nonfarm nonresidential		1,791		1,662		--		4,992		4,876		--
Construction and land development		2,440		1,699		--		4,377		3,396		--
Commercial		53		25		--		22		22		--
Consumer		7		4		--		29		27		--
		8,898		7,318		--		20,162		18,498		--
Total impaired loans	$	15,624	$	13,335	$	1,996	$	26,703	$	24,640	$	1,565

	Three and Nine Months Ended September 30, 2013
	Average Recorded Investment		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized
	(Three Months)		(Nine Months)		(Three Months)		(Nine Months)
Impaired loans with a valuation allowance:
One- to four-family residential	$	2,115	$	2,093	$	2	$	7
Multifamily residential		--		857		--		--
Nonfarm nonresidential		3,045		3,055		--		--
Construction and land development		1,977		1,592		--		--
Commercial		1		96		--		--
Consumer		5		5		--		--
		7,143		7,698		2		7

Impaired loans without a valuation allowance:
One- to four-family residential		3,659		4,693		--		--
Multifamily residential		--		865		--		--
Nonfarm nonresidential		1,382		2,714		--		--
Construction and land development		1,453		2,076		--		--
Commercial		26		24		--		--
Consumer		5		16		--		--
		6,525		10,388		--		--
Total impaired loans	$	13,668	$	18,086	$	2	$	7

Interest based on original terms					$	478	$	703

Interest income recognized on a cash basis on impaired loans					$	--	$	--

	Three and Nine Months Ended September 30, 2012
	Average Recorded Investment		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized
	(Three Months)		(Nine Months)		(Three Months)		(Nine Months)
Impaired loans with a valuation allowance:
One- to four-family residential	$	1,759	$	2,774	$	--	$	--
Multifamily residential		--		564		--		--
Nonfarm nonresidential		3,117		2,987		--		40
Construction and land development		1,366		1,514		--		9
Commercial		190		95		--		--
Consumer		--		7		--		--
		6,432		7,941		--		49

Impaired loans without a valuation allowance:
One- to four-family residential		7,137		7,900		18		75
Multifamily residential		1,873		3,173		42		49
Nonfarm nonresidential		5,570		6,834		18		102
Construction and land development		5,327		3,784		--		89
Commercial		212		245		--		--
Consumer		58		55		--		1
		20,177		21,991		78		316
Total impaired loans	$	26,609	$	29,932	$	78	$	365

Interest based on original terms					$	405	$	1,212

Interest income recognized on a cash basis on impaired loans					$	--	$	203

Credit Quality Indicators. As part of its on-going monitoring of the credit quality of the loan portfolio, the Bank assigns loans into risk categories based on the ability of borrowers to service their debt as determined by available and relevant information such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Bank assigns a credit risk rating to certain non-homogeneous loans over $250,000 on at least an annual basis. Homogeneous loans and non-homogeneous loans under $250,000 are generally not risk rated. The Bank uses the following definitions for risk ratings:

Pass (Grades 1 to 5). Loans rated as pass generally meet or exceed normal credit standards and are rated 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 value, borrower cash flows, existence of and strength of guarantors, industry/business sector, financial trends, performance history, etc.

Special Mention (Grade 6). Loans rated 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 rated as substandard are inadequately protected by the current sound net worth and repayment 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 rated 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 rated 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 all or a portion of the asset, even though partial recovery could occur in the future.

Based on analyses performed at September 30, 2013 and December 31, 2012, the risk categories of loans are as follows:

	September 30, 2013
	Pass		Special Mention		Substandard		Not Rated		Total
One- to four-family residential	$	31,913	$	2,571	$	7,848	$	92,009	$	134,341
Multifamily residential		25,634		--		--		7		25,641
Nonfarm nonresidential		151,123		5,032		4,510		769		161,434
Construction and land development		11,191		386		4,087		2,708		18,372
Commercial		16,907		--		362		145		17,414
Consumer		161		--		14		4,652		4,827
Total	$	236,929	$	7,989	$	16,821	$	100,290	$	362,029

	December 31, 2012
	Pass		Special Mention		Substandard		Not Rated		Total
One- to four-family residential	$	30,216	$	3,698	$	12,993	$	111,029	$	157,936
Multifamily residential		16,695		--		4,078		17		20,790
Nonfarm nonresidential		117,604		7,445		12,045		920		138,014
Construction and land development		5,298		867		4,934		3,452		14,551
Commercial		15,127		340		425		191		16,083
Consumer		159		--		45		5,614		5,818
Total	$	185,099	$	12,350	$	34,520	$	121,223	$	353,192

As of September 30, 2013 and December 31, 2012, the Bank did not have any loans classified as doubtful or loss.

Troubled Debt Restructurings. Troubled debt restructurings (“TDRs”) are loans where the contractual terms 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 September 30, 2013 and December 31, 2012: (dollars in thousands)

September 30, 2013	Number of Accruing TDR Loans		Balance		Number of Nonaccrual TDR Loans		Balance		Total Number of TDR Loans		Total Balance
One- to four-family residential		2	$	267		8	$	671		10	$	938
Multifamily residential		--		--		--		--		--		--
Nonfarm nonresidential		--		--		3		568		3		568
Construction and land development		--		--		5		934		5		934
Consumer		--		--		1		5		1		5

Total		2	$	267		17	$	2,178		19	$	2,445

December 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		12	$	1,115		9	$	1,461		21	$	2,576
Multifamily residential		1		3,459		--		--		1		3,459
Nonfarm nonresidential		1		1,235		3		606		4		1,841
Construction and land development		--		--		6		1,315		6		1,315
Consumer		3		7		--		--		3		7

Total		17	$	5,816		18	$	3,382		35	$	9,198

The Bank restructured one loan as a TDR during the three months ended September 30, 2013 in the amount of $111,000 and two loans in the nine months ended September 30, 2013 totaling $117,000. For the three and nine months ended September 30, 2012, there was one loan modified as a TDR with a balance after restructure of $172,000.

The Bank had no loans receivable for which a payment default occurred during the three or nine months ended September 30, 2013 or 2012 and that had been modified as a TDR within 12 months or less of the payment default.

6. LOANS RECEIVABLE

Loans receivable consisted of the following at December 31 (in thousands):

	2012			2011

Mortgage loans:
One- to four-family residential	$	149,484		$	183,158
Home equity and second mortgage		8,452			12,502
Multifamily		20,790			20,476
Commercial real estate		138,014			95,920
One- to four-family construction		803			1,724
Other construction and land		13,748			23,288
Total mortgage loans		331,291			337,068

Commercial loans		16,083			7,603
Consumer loans:
Automobile		1,757			2,536
Other		4,061			5,479
Total consumer loans		5,818			8,015
Total loans receivable		353,192			352,686

Unearned discounts and net deferred loan costs		(188	)		(415	)
Allowance for loan and lease losses		(15,676	)		(20,818	)

Loans receivable—net	$	337,328		$	331,453

Mortgage loans serviced for others are not included in the accompanying consolidated statements of financial condition. The unpaid principal balances of such loans at December 31, 2012 and 2011 were $8.7 million and $13.4 million, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors, and foreclosure processing. Servicing income for the years ended December 31, 2012 and 2011 was $7,000 and $24,000, respectively.

As of December 31, 2012 and 2011, qualifying loans collateralized by first lien one- to four-family mortgages with balances totaling approximately $67.3 million and $85.9 million, respectively, were held in custody by the Federal Home Loan Bank of Dallas (“FHLB”) and were pledged for outstanding advances or available for future advances.

The FHLB has custody and endorsement of the loans that collateralize our outstanding borrowings with the FHLB. Qualifying loans (i) must not be 90 days or more past due; (ii) must not have been in default within the most recent twelve-month period, unless such default has been cured in a manner acceptable to the FHLB; (iii) must relate to real property that is covered by fire and hazard insurance in an amount at least sufficient to discharge the mortgage loan in case of loss and as to which all real estate taxes are current; (iv) must not have been classified as substandard, doubtful, or loss by the Bank’s regulatory authority or the Bank; and (v) must not secure the indebtedness to any director, officer, employee, attorney, or agent of the Bank or of any FHLB. The FHLB currently allows an aggregate lendable value on the qualifying loans of approximately 90% of the collateral value of loans pledged to the FHLB.

As of December 31, 2012 and 2011, qualifying loans collateralized by commercial real estate with balances of $9.4 million and $12.3 million, respectively, were pledged at the FRB. The Bank uses qualifying investment securities and qualifying commercial real estate loans as collateral for the discount window and was, prior to October 9, 2012, required to pledge collateral to secure account transaction settlements. On October 9, 2012, the Bank was notified by the FRB that the Bank is no longer required to pledge collateral to secure account transaction settlements and that the Bank is eligible for primary credit from the Federal Reserve Discount Window as a result of improvement in the Bank’s financial condition.

Age analyses of loans as of December 31, 2012 and 2011, including both accruing and nonaccrual loans, are presented below (in thousands):

December 31, 2012	30-89 Days Past Due		90 Days or More Past Due		Current		Total (1)

One- to four-family residential	$	7,337	$	3,805	$	138,342	$	149,484
Home equity and second mortgage		74		177		8,201		8,452
Multifamily residential		3,459		--		17,331		20,790
Commercial real estate		--		4,523		133,491		138,014
One- to four-family construction		--		130		673		803
Other construction and land		241		3,015		10,492		13,748
Commercial		341		402		15,340		16,083
Consumer		15		25		5,778		5,818
Total (1)	$	11,467	$	12,077	$	329,648	$	353,192

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	$	169,235	$	183,158
Home equity and second mortgage		126		437		11,939		12,502
Multifamily residential		31		--		20,445		20,476
Commercial real estate		1,371		4,752		89,797		95,920
One- to four-family construction		--		--		1,724		1,724
Other construction and land		191		1,344		21,753		23,288
Commercial		--		388		7,215		7,603
Consumer		23		5		7,987		8,015
Total (1)	$	10,061	$	12,530	$	330,095	$	352,686

(1)

Gross of unearned discounts and net loan costs and the allowance for loan and lease 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 December 31, 2012. Restructured loans totaled $9.2 million and $13.9 million as of December 31, 2012 and 2011, respectively, with $3.4 million and $8.7 million of such restructured loans on nonaccrual status at December 31, 2012 and 2011, respectively.

The following table presents age analyses of nonaccrual loans as of December 31, 2012 and 2011 (in thousands):

December 31, 2012	30-89 Days Past Due		90 Days or More Past Due		Current		Total

One- to four-family residential	$	1,046	$	3,805	$	1,795	$	6,646
Home equity and second mortgage		24		177		180		381
Multifamily residential		--		--		--		--
Commercial real estate		--		4,523		2,713		7,236
One- to four-family construction		--		130		--		130
Other construction and land		241		3,015		747		4,003
Commercial		--		402		--		402
Consumer		1		25		--		26
Total	$	1,312	$	12,077	$	5,435	$	18,824

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
Commercial real estate		203		4,752		8,283		13,238
Other construction and land		164		1,344		1,893		3,401
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 December 31, 2012 and 2011 and for the years then ended (in thousands):

	December 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	$	1,343	$	1,136	$	207	$	2,142	$	37
Home equity and second mortgage		81		13		68		20		2
Multifamily residential		--		--		--		451		--
Commercial real estate		3,596		2,817		778		2,440		119
Other construction and land		737		607		130		1,127		--
Commercial		380		--		380		46		--
Consumer		5		4		2		6		--
		6,142		4,577		1,565		6,232		158

Impaired loans without a valuation allowance:
One- to four-family residential		6,399		6,399		--		7,175		69
Home equity and second mortgage		319		319		--		488		4
Multifamily residential		3,459		3,459		--		3,230		166
Commercial real estate		4,876		4,876		--		6,443		98
One- to four-family construction		130		130		--		76		--
Other construction and land		3,266		3,266		--		3,630		22
Commercial		22		22		--		200		--
Consumer		27		27		--		50		1
		18,498		18,498		--		21,292		360
Total impaired loans	$	24,640	$	23,075	$	1,565	$	27,524	$	518

Interest based on original terms									$	1,547

Interest income recognized on a cash basis on impaired loans									$	203

	December 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	$	3,734	$	52
Home equity and second mortgage		108		27		81		158		3
Multifamily residential		2,958		2,255		703		4,425		--
Commercial real estate		4,301		2,422		1,879		2,290		3
One- to four-family construction		--		--		--		2		--
Other construction and land		925		645		280		3,192		12
Commercial		--		--		--		129		--
Consumer		70		25		45		16		--
		11,381		8,088		3,293		13,946		70

Impaired loans without a valuation allowance:
One- to four-family residential		10,066		10,066		--		16,911		255
Home equity and second mortgage		723		723		--		801		33
Multifamily residential		5,175		5,175		--		4,171		18
Commercial real estate		8,937		8,937		--		10,710		282
One- to four-family construction		--		--		--		--		--
Other construction and land		2,758		2,758		--		3,156		50
Commercial		72		72		--		336		5
Consumer		49		49		--		83		2
		27,780		27,780		--		36,168		645
Total impaired loans	$	39,161	$	35,868	$	3,293	$	50,114	$	715

Interest based on original terms									$	2,272

Interest income recognized on a cash basis on impaired loans									$	320

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 available and 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 Bank 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 Bank uses the following definitions for risk ratings:

Pass (Grades 1 to 5). Loans rated as pass generally meet or exceed normal credit standards and are rated 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 rated 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 rated 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 rated 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 rated 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 December 31, 2012 and December 31, 2011, the risk categories of loans are as follows:

	December 31, 2012
	Pass		Special Mention		Substandard		Not Rated		Total (1)
One- to four-family residential	$	29,480	$	3,667	$	12,222	$	104,115	$	149,484
Home equity and second mortgage		736		31		771		6,914		8,452
Multifamily residential		16,695		--		4,078		17		20,790
Commercial real estate		117,604		7,445		12,045		920		138,014
One- to four-family construction		108		465		130		100		803
Other construction and land		5,190		402		4,804		3,352		13,748
Commercial		15,127		340		425		191		16,083
Consumer		159		--		45		5,614		5,818
Total (1)	$	185,099	$	12,350	$	34,520	$	121,223	$	353,192

	December 31, 2011
	Pass		Special Mention		Substandard		Not Rated		Total (1)
One- to four-family residential	$	24,300	$	13,888	$	27,877	$	117,093	$	183,158
Home equity and second mortgage		558		487		1,569		9,888		12,502
Multifamily residential		4,736		6,655		6,203		2,882		20,476
Commercial real estate		55,997		9,174		29,020		1,729		95,920
One- to four-family construction		--		--		905		819		1,724
Other construction and land		9,365		2,908		8,684		2,331		23,288
Commercial		5,579		1,105		521		398		7,603
Consumer		626		13		191		7,185		8,015
Total (1)	$	101,161	$	34,230	$	74,970	$	142,325	$	352,686

(1)

Gross of unearned discounts and net loan costs and the allowance for loan and lease losses.

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

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.

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

December 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		11	$	1,096		6	$	1,391		17	$	2,487
Home equity and second mortgage		1		19		3		70		4		89
Multifamily residential		1		3,459		--		--		1		3,459
Commercial real estate		1		1,235		3		606		4		1,841
Other construction and land		--		--		6		1,315		6		1,315
Consumer		3		7		--		--		3		7

Total		17	$	5,816		18	$	3,382		35	$	9,198

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
Commercial real estate		--		--		6		4,759		6		4,759
Other construction and land		5		282		4		1,242		9		1,524
Consumer		7		20		--		--		7		20

Total		31	$	5,207		26	$	8,667		57	$	13,874

Loans receivable that were restructured as TDRs during the years ended December 31, 2012 and 2011 were as follows: (dollars in thousands)


			Balance				Nature of Modification
	Number of Loans		Prior to TDR		Balance at Year End		Payment Term (1)		Other
Year Ended December 31, 2012
One- to four-family residential		1	$	880	$	875	$	880	$	--
Commercial real estate		1		164		166		164		--

Total		2	$	1,044	$	1,041	$	1,044	$	--

Year Ended December 31, 2011
One- to four-family residential		4	$	567	$	253	$	100	$	467	(3)
Home equity and second mortgage		2		78		76		19		59	(3)
Commercial real estate		2		1,471		1,495		200		1,271	(2)
Other construction and land		2		96		95		--		96	(3)
Commercial		1		54		--		--		54	(4)
Consumer		1		3		2		3		--

Total		12	$	2,269	$	1,921	$	322	$	1,947

(1)

Concessions represent skipped payments/maturity date extensions or amortization term extensions.

(2)

Concession represents payment of delinquent property taxes.

(3)

Modification to interest only payments for a period of time.

(4)

Debt consolidation.

The following tables present loans receivable for which a payment default occurred during the years ended December 31, 2012 and 2011, 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. (dollars in thousands)

	Year Ended December 31, 2012
	Number of Loans		Unpaid Principal Balance at December 31, 2012		Charge-offs		Transfers to REO

Home equity and second mortgage		1	$	53	$	--	$	--


Total		1	$	53	$	--	$	--

	Year Ended December 31, 2011
	Number of Loans		Unpaid Principal Balance at December 31, 2011		Charge-offs		Transfers to REO
One- to four-family residential		7	$	142	$	163	$	840
Home equity and second mortgage		3		51		137		--
Multifamily residential		1		--		962		718
Commercial real estate		1		409		--		--
Other construction and land		2		318		--		45
Commercial		1		--		98		--
Consumer		2		--		67		--

Total		17	$	920	$	1,427	$	1,603

Accrued Interest Receivable [Member]

Note 5 - Loans Receivable - 10Q [Line Items]

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

8. ACCRUED INTEREST RECEIVABLE

Accrued interest receivable consisted of the following at December 31 (in thousands):

	2012		2011

Loans	$	1,083	$	1,085
Investment securities		362		395
Deposits in banks		56		36

Total	$	1,501	$	1,516

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

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