XML 66 R20.htm IDEA: XBRL DOCUMENT

Credit Quality of Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2013

Credit Quality Of Loans And Allowance For Loan Losses Tables

The following presents by portfolio segment, the activity in the allowance for loan losses for the three months ended March 31, 2013 and 2012:

Three months ended March 31, 2013	One-to-four family residential			All other mortgage loans			Commercial business loans			Consumer loans			Total
	(In thousands)
Beginning balance	$	1,122		$	1,925		$	275		$	6		$	3,328
Provision (credit) charged to expense		(61	)		(18	)		(63	)		1			(141	)
Losses charged off		(34	)		(176	)		—			(2	)		(212	)
Recoveries		—			—			1			1			2
Ending balance	$	1,027		$	1,731		$	213		$	6		$	2,977

Three months ended March 31, 2012	One-to-four family residential			All other mortgage loans			Commercial business loans		Consumer loans			Total
	(In thousands)
Beginning balance	$	1,128		$	2,547		$	169	$	10		$	3,854
Provision charged to expense		185			598			5		(1	)		787
Losses charged off		(65	)		(5	)		—		—			(70	)
Recoveries		3			—			—		—			3
Ending balance	$	1,251		$	3,140		$	174	$	9		$	4,574

The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on the portfolio segment and impairment method as of March 31, 2013 and December 31, 2012:

March 31, 2013	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans		Total
Allowance Balances:	(In thousands)
Ending balance:
Individually evaluated for impairment	$	232	$	950	$	87	$	—	$	1,269
Collectively evaluated for impairment		795		781		126		6		1,708
Total allowance for loan losses	$	1,027	$	1,731	$	213	$	6	$	2,977


Loan Balances:
Ending balance:
Individually evaluated for impairment	$	7,009	$	5,230	$	171	$	—	$	12,410
Collectively evaluated for impairment		154,697		73,796		10,536		1,409		240,438
Total balance	$	161,706	$	79,026	$	10,707	$	1,409	$	252,848

December 31, 2012	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans		Total
Allowance Balances:	(In thousands)
Ending balance:
Individually evaluated for impairment	$	248	$	1,074	$	100	$	—	$	1,422
Collectively evaluated for impairment		874		851		175		6		1,906
Total allowance for loan losses	$	1,122	$	1,925	$	275	$	6	$	3,328

Loan Balances:
Ending balance:
Individually evaluated for impairment	$	6,878	$	5,837	$	185	$	—	$	12,900
Collectively evaluated for impairment		154,032		71,884		14,060		1,517		241,493
Total balance	$	160,910	$	77,721	$	14,245	$	1,517	$	254,393

Schedule of Loans Receivable Quality Indicators

The following tables present the credit risk profile of the Bank’s loan portfolio based on rating category and payment activity as of March 31, 2013 and December 31, 2012:

March 31, 2013	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans
	(In thousands)
Rating *
Pass (Risk 1-4)	$	152,244	$	71,363	$	10,512	$	1,407
Special Mention (Risk 5)		700		2,433		24		—
Substandard (Risk 6)		8,762		5,230		171		2
Total	$	161,706	$	79,026	$	10,707	$	1,409

December 31, 2012	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans
	(In thousands)
Rating *
Pass (Risk 1-4)	$	151,749	$	68,949	$	14,034	$	1,513
Special Mention (Risk 5)		708		2,934		26		—
Substandard (Risk 6)		8,453		5,838		185		4
Total	$	160,910	$	77,721	$	14,245	$	1,517

* Ratings are generally assigned to consumer and residential mortgage loans on a “pass” or “fail” basis, where “fail” results in a substandard classification. Commercial loans, both secured by real estate or other assets or unsecured, are analyzed in accordance with an analytical matrix codified in the Bank’s loan policy that produces a risk rating as described below.

Risk 1 is unquestioned credit quality for any credit product. Loans are secured by cash and near cash collateral with immediate access to proceeds.

Risk 2 is very low risk with strong credit and repayment sources. Borrower is well capitalized in a stable industry, financial ratios exceed peers and financial trends are positive.

Risk 3 is very favorable risk with highly adequate credit strength and repayment sources. Borrower has good overall financial condition and adequate capitalization.

Risk 4 is acceptable, average risk with adequate credit strength and repayment sources. Collateral positions must be within Bank policies.

Risk 5 or “Special Mention,” also known as “watch,” has potential weakness that deserves Management’s close attention. This risk includes loans where the borrower has developed financial uncertainties or the borrower is resolving the financial uncertainties. Bank credits have been secured or negotiations will be ongoing to secure further collateral.

Risk 6 or “Substandard” loans are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged. This risk category contains loans that exhibit a weakening of the borrower’s credit strength with limited credit access and all non-performing loans.

Risk 7 or “Doubtful” loans are significantly under protected by the current net worth and paying capacity of the borrower or of the collateral pledged. This risk category contains loans that are likely to experience a loss of some magnitude, but where the amount of the expected loss is not known with enough certainty to allow for an accurate calculation of a loss amount for charge- off. This category is considered to be temporary until a charge-off amount can be reasonably determined.

Aging Analysis of Loans Receivable

The following tables present the Bank’s loan portfolio aging analysis for March 31, 2013 and December 31, 2012:

March 31, 2013	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In thousands)
One-to-four family residential loans	$	207	$	234	$	981	$	1,422	$	160,284	$	161,706	$	—
All other mortgage loans		—		—		1,129		1,129		77,897		79,026		—
Commercial business loans		—		—		—		—		10,707		10,707		—
Consumer loans		2		—		—		2		1,407		1,409		—
Total	$	209	$	234	$	2,110	$	2,553	$	250,295	$	252,848	$	—

December 31, 2012	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In thousands)
One-to-four family residential loans	$	1,049	$	339	$	1,190	$	2,578	$	158,332	$	160,910	$	—
All other mortgage loans		1,544		—		1,309		2,853		74,868		77,721		—
Commercial business loans		—		—		—		—		14,245		14,245		—
Consumer loans		1		2		2		5		1,512		1,517		—
Total	$	2,594	$	341	$	2,501	$	5,436	$	248,957	$	254,393	$	—

Schedule of Non-accrual Loans

Non-accrual loans were comprised of the following at:

Non-accrual loans	March 31, 2013		December 31, 2012
	(In thousands)
One-to-four family residential loans	$	2,377	$	2,097
Nonresidential real estate loans		2,903		3,123
All other mortgage loans		—		—
Commercial business loans		30		32
Consumer loans		2		4
Total	$	5,312	$	5,256

Schedule of Impaired Loans

Information with respect to the Company’s impaired loans at March 31, 2013 and December 31, 2012 in combination with activity for the three months ended March 31, 2013 and 2012 is presented below:

	As of March 31, 2013						Three months ended March 31, 2013
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)

Loans without a specific valuation allowance
One-to-four family residential loans	$	5,653	$	5,653	$	—	$	5,620	$	78
All other mortgage loans		2,375		2,375		—		2,578		29
Commercial business loans		84		87		—		85		1

Loans with a specific valuation allowance
One-to-four family residential loans		1,356		1,356		232		1,324		13
All other mortgage loans		2,855		3,627		950		2,956		9
Commercial business loans		87		87		87		94		1

Total:
One-to-four family residential loans	$	7,009	$	7,009	$	232	$	6,944	$	91
All other mortgage loans		5,230		6,002		950		5,534		38
Commercial business loans		171		174		87		178		2
	$	12,410	$	13,185	$	1,269	$	12,655	$	131

	As of December 31, 2012						Three months ended March 31, 2012
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation allowance
One-to-four family residential loans	$	5,587	$	5,587	$	—	$	3,232	$	39
All other mortgage loans		2,781		2,781		—		1,923		27
Commercial business loans		85		85		—		—		—

Loans with a specific valuation allowance
One-to-four family residential loans		1,291		1,291		248		821		25
All other mortgage loans		3,056		3,652		1,074		5,248		20
Commercial business loans		100		100		100		71		—

Total:
One-to-four family residential loans	$	6,878	$	6,878	$	248	$	4,053	$	64
All other mortgage loans		5,837		6,433		1,074		7,171		47
Commercial business loans		185		185		100		71		—
	$	12,900	$	13,496	$	1,422	$	11,295	$	111

Schedule of Troubled Debt Restructurings

Quarter-to-Date
Troubled Debt Restructurings	Number of loans	Pre-modification Unpaid Principal Balance		Post-modification Unpaid Principal Balance
	(dollars in thousands)
March 31, 2013
One-to-four family residential loans	1	$	113	$	113
All other mortgage loans	1		576		576

March 31, 2012
One-to-four family residential loans	2	$	538	$	538

- Definition

Tabular disclosure of troubled debt restructurings in the current period: (1) for each restructuring, the principal changes in terms, the major features of settlement, or both; (2) the aggregate gain (loss) on restructuring of payables; (3) the income tax effect on the gain or loss recognized on the restructuring of payables; (4) the gain (loss) recognized on the restructuring of payables, after the impact of income tax expense or benefit; and (5) the aggregate gain (loss) on transfer of assets recognized during the period, after the impact of income tax expense or benefit.

+ References+ Details