Note 6: Loans Held For Investment: Loans and Leases Receivable, Troubled Debt Restructuring Policy (Policies)	12 Months Ended
Sep. 30, 2012
Policies
Loans and Leases Receivable, Troubled Debt Restructuring Policy	For the quarter ended September 30, 2012, there were no loans that were modified from their original terms, were re-underwritten and were identified as restructured loans. This compares to 12 loans for $4.8 million that were re-underwritten and were identified in the Corporation’s asset quality reports as restructured loans during the quarter ended September 30, 2011. During the quarter ended September 30, 2012, one restructured loan with a balance of $437,000 was in default within a 12-month period subsequent to their original restructuring and required an additional provision of $243,000. This compares to two restructured loans with a total balance of $771,000 during the quarter ended September 30, 2011 that were in default within a 12-month period subsequent to their original restructuring and required an additional provision of $200,000. Additionally, for the quarter ended September 30, 2012, there were no loans where their modification terms extended beyond the initial maturity of the modification. For the quarter ended September 30, 2011, one loan for $260,000 had their modification terms extended beyond the initial maturity of the modification. As of September 30, 2012, the net outstanding balance of the 49 restructured loans was $20.9 million: 6 were classified in accordance with the Bank’s risk rating system as pass and remain on accrual status ($2.3 million); four were classified as special mention and remain on accrual status ($1.9 million); and 39 were classified as substandard ($16.7 million total, with 38 of the 39 loans or $13.9 million on non-accrual status). Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Assets that do not currently expose the Bank to sufficient risk to warrant adverse classification but possess weaknesses are designated as special mention and are closely monitored by the Bank. As of September 30, 2012, $13.0 million, or 62 percent, of the restructured loans are current with respect to their payment status. The Corporation upgrades restructured single-family loans to the pass category if the borrower has demonstrated satisfactory contractual payments for at least six consecutive months; and if the borrower has demonstrated satisfactory contractual payments beyond 12 consecutive months, the loan is no longer categorized as a restructured loan for the United States Securities and Exchange Commissions (“SEC”) reporting purposes. In addition to the payment history described above, multi-family, commercial real estate, construction and commercial business loans (which are sometimes referred to in this report as “preferred loans”) must also demonstrate a combination of the following characteristics to be upgraded, such as: satisfactory cash flow, satisfactory guarantor support, and additional collateral support, among others. To qualify for restructuring, a borrower must provide evidence of their creditworthiness such as, current financial statements, their most recent income tax returns, current paystubs, current W-2s, and most recent bank statements, among other documents, which are then verified by the Bank. The Bank re-underwrites the loan with the borrower’s updated financial information, new credit report, current loan balance, new interest rate, remaining loan term, updated property value and modified payment schedule, among other considerations, to determine if the borrower qualifies.

Note 6: Loans Held For Investment: Loans and Leases Receivable, Troubled Debt Restructuring Policy (Policies)

12 Months Ended

Sep. 30, 2012

Loans and Leases Receivable, Troubled Debt Restructuring Policy

For the quarter ended September 30, 2012, there were no loans that were modified from their original terms, were re-underwritten and were identified as restructured loans. This compares to 12 loans for $4.8 million that were re-underwritten and were identified in the Corporation’s asset quality reports as restructured loans during the quarter ended September 30, 2011. During the quarter ended September 30, 2012, one restructured loan with a balance of $437,000 was in default within a 12-month period subsequent to their original restructuring and required an additional provision of $243,000. This compares to two restructured loans with a total balance of $771,000 during the quarter ended September 30, 2011 that were in default within a 12-month period subsequent to their original restructuring and required an additional provision of $200,000. Additionally, for the quarter ended September 30, 2012, there were no loans where their modification terms extended beyond the initial maturity of the modification. For the quarter ended September 30, 2011, one loan for $260,000 had their modification terms extended beyond the initial maturity of the modification.

As of September 30, 2012, the net outstanding balance of the 49 restructured loans was $20.9 million: 6 were classified in accordance with the Bank’s risk rating system as pass and remain on accrual status ($2.3 million); four were classified as special mention and remain on accrual status ($1.9 million); and 39 were classified as substandard ($16.7 million total, with 38 of the 39 loans or $13.9 million on non-accrual status). Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Assets that do not currently expose the Bank to sufficient risk to warrant adverse classification but possess weaknesses are designated as special mention and are closely monitored by the Bank. As of September 30, 2012, $13.0 million, or 62 percent, of the restructured loans are current with respect to their payment status.

The Corporation upgrades restructured single-family loans to the pass category if the borrower has demonstrated satisfactory contractual payments for at least six consecutive months; and if the borrower has demonstrated satisfactory contractual payments beyond 12 consecutive months, the loan is no longer categorized as a restructured loan for the United States Securities and Exchange Commissions (“SEC”) reporting purposes. In addition to the payment history described above, multi-family, commercial real estate, construction and commercial business loans (which are sometimes referred to in this report as “preferred loans”) must also demonstrate a combination of the following characteristics to be upgraded, such as: satisfactory cash flow, satisfactory guarantor support, and additional collateral support, among others.

To qualify for restructuring, a borrower must provide evidence of their creditworthiness such as, current financial statements, their most recent income tax returns, current paystubs, current W-2s, and most recent bank statements, among other documents, which are then verified by the Bank. The Bank re-underwrites the loan with the borrower’s updated financial information, new credit report, current loan balance, new interest rate, remaining loan term, updated property value and modified payment schedule, among other considerations, to determine if the borrower qualifies.