Note 6 - Loans Receivable

12 Months Ended

Dec. 31, 2013

Note 6 - Loans Receivable [Line Items]

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

6.       LOANS RECEIVABLE

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

	2013			2012
Real estate:
One- to four-family residential	$	129,308		$	157,936
Multifamily residential		25,773			20,790
Nonfarm nonresidential		168,902			138,014
Construction and land development		26,554			14,551
Commercial		29,033			16,083
Consumer		4,368			5,818
Total loans receivable		383,938			353,192
Unearned discounts and net deferred loan costs		(78	)		(188	)
Allowance for loan and lease losses		(12,711	)		(15,676	)
Loans receivable—net	$	371,149		$	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 December 31, 2013 and 2012 were $12.9 million and $8.7 million, respectively. Servicing loans for others generally consists of collecting payments and disbursing payments to investors. Servicing income for the years ended December 31, 2013 and 2012 was not significant.

As of December 31, 2013 and 2012, qualifying loans collateralized by first lien one- to four-family mortgages with balances totaling approximately $50.6 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. On October 17, 2013, the Bank was notified by the FHLB that the Bank has been removed from custody status and upgraded to blanket lien status due to continued improvement in the financial ratios that the FHLB uses to measure a Bank’s status.

As of December 31, 2013 and 2012, qualifying loans collateralized by commercial real estate with balances of $8.2 million and $9.4 million, respectively, were pledged at the FRB.

Age analyses of loans as of December 31, 2013 and 2012, including both accruing and nonaccrual loans, are presented below (in thousands):

December 31, 2013	30-89 Days Past Due		90 Days or  More Past Due		Current		Total (1)
One- to four-family residential	$	3,511	$	1,664	$	124,133	$	129,308
Multifamily residential		--		--		25,773		25,773
Nonfarm nonresidential		176		2,340		166,386		168,902
Construction and land development		30		2,799		23,725		26,554
Commercial		--		348		28,685		29,033
Consumer		--		19		4,349		4,368
Total (1)	$	3,717	$	7,170	$	373,051	$	383,938

December 31, 2012	30-89 Days Past Due		90 Days or More Past Due		Current		Total (1)
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 (1)	$	11,467	$	12,077	$	329,648	$	353,192

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

There were no loans over 90 days past due and still accruing at December 31, 2013 or 2012. Restructured loans totaled $2.6 million and $9.2 million as of December 31, 2013 and 2012, respectively, with $2.1 million and $3.4 million of such restructured loans on nonaccrual status at December 31, 2013 and 2012, respectively.

The following table presents age analyses of nonaccrual loans as of December 31, 2013 and 2012 (in thousands):

December 31, 2013	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	637	$	1,664	$	1,957	$	4,258
Multifamily residential		--		--		--		--
Nonfarm nonresidential		--		2,340		1,717		4,057
Construction and land development		--		2,799		450		3,249
Commercial		--		348		2		350
Consumer		--		19		5		24
Total	$	637	$	7,170	$	4,131	$	11,938

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 December 31, 2013 and 2012 and for the years then ended (in thousands):

	As of or For the Year Ended December 31, 2013
	Unpaid Principal Balance		Recorded Investment		Valuation Allowance		Average Recorded Investment		Interest Income Recognized
Impaired loans with a valuation allowance:
One- to four-family residential	$	1,213	$	1,085	$	279	$	1,946	$	19
Multifamily residential		--		--		--		686		--
Nonfarm nonresidential		3,287		3,105		1,119		3,220		--
Construction and land development		2,488		2,000		764		1,700		--
Commercial		--		--		--		153		--
Consumer		--		--		--		4		--
		6,988		6,190		2,162		7,709		19
Impaired loans without a valuation allowance:
One- to four-family residential		4,430		3,668		--		4,488		2
Multifamily residential		--		--		--		692		--
Nonfarm nonresidential		1,077		952		--		2,362		--
Construction and land development		1,743		1,249		--		1,910		--
Commercial		388		350		--		89		--
Consumer		27		24		--		17		--
		7,665		6,243		--		9,558		2
Total impaired loans	$	14,653	$	12,433	$	2,162	$	17,267	$	21
Interest based on original terms									$	873
Interest income recognized on a cash
basis on impaired loans									$	--

	As of or For the Year Ended 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	$	1,517	$	1,424	$	275	$	2,162	$	39
Multifamily residential		--		--		--		451		--
Nonfarm nonresidential		3,718		3,596		778		2,440		119
Construction and land development		921		737		130		1,127		--
Commercial		380		380		380		46		--
Consumer		5		5		2		6		--
		6,541		6,142		1,565		6,232		158
Impaired loans without a valuation allowance:
One- to four-family residential		7,283		6,718		--		7,663		73
Multifamily residential		3,459		3,459		--		3,230		166
Nonfarm nonresidential		4,992		4,876		--		6,443		98
Construction and land development		4,377		3,396		--		3,706		22
Commercial		22		22		--		200		--
Consumer		29		27		--		50		1
		20,162		18,498		--		21,292		360
Total impaired loans	$	26,703	$	24,640	$	1,565	$	27,524	$	518
Interest based on original terms									$	1,547
Interest income recognized on a cash
basis on impaired loans									$	203

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, 2013 and December 31, 2012, the risk categories of loans are as follows (in thousands):

	December 31, 2013
	Pass		Special Mention		Substandard		Not Rated		Total (1)
One- to four-family residential	$	34,333	$	329	$	6,371	$	88,275	$	129,308
Multifamily residential		25,773		--		--		--		25,773
Nonfarm nonresidential		159,629		4,490		4,057		726		168,902
Construction and land development		19,732		295		3,942		2,585		26,554
Commercial		28,555		--		350		128		29,033
Consumer		151		--		45		4,172		4,368
Total (1)	$	268,173	$	5,114	$	14,765	$	95,886	$	383,938

	December 31, 2012
	Pass		Special Mention		Substandard		Not Rated		Total (1)
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 (1)	$	185,099	$	12,350	$	34,520	$	121,223	$	353,192

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

As of December 31, 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 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 December 31, 2013 and December 31, 2012: (dollars in thousands)

December 31, 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		4	$	495		8	$	658		12	$	1,153
Multifamily residential		--		--		--		--		--		--
Nonfarm nonresidential		--		--		3		556		3		556
Construction and land development		--		--		5		856		5		856
Consumer		--		--		1		5		1		5
Total		4	$	495		17	$	2,075		21	$	2,570

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

Loans receivable that were restructured as TDRs during the years ended December 31, 2013 and 2012 were as follows: (dollars in thousands)

	Year Ended December 31, 2013
			Balance		Balance at		Nature of Modification
		Number of Loans		Prior to  TDR		December 31, 2013	Payment Term (1)		Other
One- to four-family residential		4	$	348	$	333	$	348	$	--
Total		4	$	348	$	333	$	348	$	--

	Year Ended December 31, 2012
			Balance		Balance at		Nature of Modification
		Number of Loans		Prior to TDR		December 31, 2012	Payment Term (1)		Other
One- to four-family residential		1	$	880	$	875	$	880	$	--
Nonfarm nonresidential		1		164		166		164		--
Total		2	$	1,044	$	1,041	$	1,044	$	--

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

There were no loans receivable for which a payment default occurred during the year ended December 31, 2013 that had been modified as a TDR within 12 months or less of the payment default. During the year ended December 31, 2012, there was one loan with a balance of approximately $53,000 for which a payment default occurred that had been modified as a TDR within 12 months or less of the payment default. The Bank is not committed to lend additional funds to debtors whose loans have been modified in a TDR.

Accrued Interest Receivable [Member]

Note 6 - Loans Receivable [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):

	2013		2012
Loans	$	1,079	$	1,083
Investment securities		359		362
Deposits in banks		35		56
Total	$	1,473	$	1,501