Loans Receivable And Allowance For Loan Losses

12 Months Ended

Sep. 30, 2013

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Loans Receivable And Allowance For Loan Losses

Loans Receivable and Allowance for Loan Losses

Loans receivable and loans held for sale by portfolio segment consisted of the following at September 30, 2013 and 2012 (dollars in thousands):

	2013		2012
Mortgage loans:
One- to four-family	$	102,387	$	105,552
Multi-family	51,108		47,521
Commercial	291,297		256,254
Construction – custom and owner/builder	40,811		33,345
Construction – speculative one- to four-family	1,428		1,880
Construction – commercial	2,239		20,247
Construction – multi-family	143		345
Construction – land development	515		589
Land	31,144		39,655
Total mortgage loans	521,072		505,388
Consumer loans:
Home equity and second mortgage	33,014		32,814
Other	5,981		6,183
Total consumer loans	38,995		38,997
Commercial business loans	17,499		22,588
Total loans receivable	577,566		566,973
Less:
Undisbursed portion of construction loans in process	18,527		16,325
Deferred loan origination fees	1,710		1,770
Allowance for loan losses	11,136		11,825
	31,373		29,920
Loans receivable, net	546,193		537,053
Loans held for sale (one- to four-family)	1,911		1,427
Total loans receivable and loans held for sale, net	$	548,104	$	538,480

Certain related parties of the Company, principally Bank directors and officers, are loan customers of the Bank in the ordinary course of business.  Their loans were performing according to their repayment terms at September 30, 2013 and 2012.  Activity in related party loans during the years ended September 30, 2013 and 2012 was as follows (dollars in thousands):

	2013			2012
Balance, beginning of year	$	1,113		$	2,498
New loans or advances	276			175
Repayments and reclassifications	(294		)	(1,560		)
Balance, end of year	$	1,095		$	1,113

Loan Segment Risk Characteristics

The Company believes that its loan classes are the same as its loan segments.

One- To Four-Family Residential Lending:  The Company originates both fixed rate and adjustable rate loans secured by one- to four-family residences.  A portion of the fixed-rate one- to four-family loans are sold in the secondary market for asset/liability management purposes and to generate non-interest income.  The Company’s lending policies generally limit the maximum loan-to-value on one- to four-family loans to 90% of the lesser of the appraised value or the purchase price.  However, the Company usually obtains private mortgage insurance on the portion of the principal amount that exceeds 80% of the appraised value of the property.

Multi-Family Lending: The Company originates loans secured by multi-family dwelling units (more than four units).  Multi-family lending generally affords the Company an opportunity to receive interest at rates higher than those generally available from one- to four-family residential lending.  However, loans secured by multi-family properties usually are greater in amount, more difficult to evaluate and monitor and, therefore, involve a greater degree of risk than one- to four-family residential mortgage loans.  Because payments on the loans secured by multi-family properties are often dependent on the successful operation and management of the properties, repayment of such loans may be affected by adverse conditions in the real estate market or economy.  The Company attempts to minimize these risks by scrutinizing the financial condition of the borrower, the quality of the collateral and the management of the property securing the loan.

Commercial Mortgage Lending: The Company originates commercial real estate loans secured by properties such as office buildings, retail/wholesale facilities, motels, restaurants, mini-storage facilities and other commercial properties.  Commercial real estate lending generally affords the Company an opportunity to receive interest at higher rates than those available from one- to four-family residential lending.  However, loans secured by such properties usually are greater in amount, more difficult to evaluate and monitor and, therefore, involve a greater degree of risk than one- to four-family residential mortgage loans.  Because payments on loans secured by commercial properties often depend upon the successful operation and management of the properties, repayment of these loans may be affected by adverse conditions in the real estate market or economy.  The Company attempts to mitigate these risks by generally limiting the maximum loan-to-value ratio to 80% and scrutinizing the financial condition of the borrower, the quality of the collateral and the management of the property securing the loan.

Construction Lending:  The Company currently originates the following types of construction loans: custom construction loans, owner/builder construction loans, speculative construction loans (on a very limited basis), commercial real estate construction loans, and multi-family construction loans.  The Company is not currently originating land development loans.

Construction lending affords the Company the opportunity to achieve higher interest rates and fees with shorter terms to maturity than does its single-family permanent mortgage lending.  Construction lending, however, is generally considered to involve a higher degree of risk than one-to four family residential lending because of the inherent difficulty in estimating both a property’s value at completion of the project and the estimated cost of the project.  The nature of these loans is such that they are generally more difficult to evaluate and monitor.  If the estimated cost of construction proves to be inaccurate, the Company may be required to advance funds beyond the amount originally committed to complete the project.  If the estimate of value upon completion proves to be inaccurate, the Company may be confronted with a project whose value is insufficient to assure full repayment, and it may incur a loss.  Projects may also be jeopardized by disagreements between borrowers and builders and by the failure of builders to pay subcontractors.  Loans to construct homes for which no purchaser has been identified carry more risk because the payoff for the loan depends on the builder’s ability to sell the property prior to the time that the

construction loan is due.  The Company attempts to mitigate these risks by adhering to its underwriting policies, disbursement procedures, and monitoring practices.

Construction Lending – Custom and Owner/Builder:  Custom construction loans are made to home builders who, at the time of construction, have a signed contract with a home buyer who has a commitment to purchase the finished home.  Owner/builder construction loans are originated to home owners rather than home builders and are typically refinanced into permanent loans at the completion of construction.

Construction Lending – Speculative One- To Four-Family: Speculative one-to four-family construction loans are made to home builders and are termed “speculative” because the home builder does not have, at the time of the loan origination, a signed contract with a home buyer who has a commitment for permanent financing with the Company or another lender for the finished home.  The home buyer may be identified either during or after the construction period.  The Company is currently originating speculative one-to four-family construction loans on a very limited basis.

Construction Lending – Commercial:  Commercial construction loans are originated to construct properties such as office buildings, hotels, retail rental space and mini-storage facilities.

Construction Lending – Multi-Family:  Multi-family construction loans are originated to construct apartment buildings and condominium projects.

Construction Lending – Land Development:  The Company historically originated loans to real estate developers for the purpose of developing residential subdivisions.  The Company is not currently originating any land development loans.

Land Lending: The Company has historically originated loans for the acquisition of land upon which the purchaser can then build or make improvements necessary to build or to sell as improved lots.  Currently, the Company is originating new land loans on a very limited basis.  Loans secured by undeveloped land or improved lots involve greater risks than one- to four-family residential mortgage loans because these loans are more difficult to evaluate.  If the estimate of value proves to be inaccurate, in the event of default or foreclosure, the Company may be confronted with a property value which is insufficient to assure full repayment.  The Company attempts to minimize this risk by generally limiting the maximum loan-to-value ratio on land loans to 75%.

Consumer Lending – Home Equity and Second Mortgages:   The Company originates home equity lines of credit and second mortgage loans.  Home equity lines of credit and second mortgage loans have a greater credit risk than one- to four-family residential mortgage loans because they are secured by mortgages subordinated to the existing first mortgage on the property, which may or may not be held by the Company.  The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the collateral and the credit-worthiness of the borrower.

Consumer Lending – Other: The Company originates other consumer loans, which include automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans and unsecured loans.  Other consumer loans generally have shorter terms to maturity than mortgage loans.  Other consumer loans generally entail greater risk than do residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by rapidly depreciating assets such as automobiles.  In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation.  The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the credit-worthiness of the borrower.

Commercial Business Lending:  The Company originates commercial business loans which are generally secured by business equipment, accounts receivable, inventory or other property.  The Company also generally obtains personal guarantees from the principals based on a review of personal financial statements.  Commercial business lending generally involves risks that are different from those associated with residential and commercial real estate lending.  Real estate lending is generally considered to be collateral based lending with loan amounts based on predetermined loan to collateral values, and liquidation of the underlying real estate collateral is viewed as the primary source of repayment in the event of borrower default.  Although commercial business loans are often collateralized by equipment, inventory, accounts receivable, or other business assets, the liquidation of collateral in the event of a borrower default is often an insufficient source of repayment, because accounts receivable may be uncollectible and inventories and equipment may be obsolete or of limited use.  Accordingly, the repayment of a commercial business loan depends primarily on the credit-worthiness of the borrower (and any guarantors), while the liquidation of collateral is a secondary and potentially insufficient source of repayment.  The Company attempts to mitigate

these risks by adhering to its underwriting policies in evaluating the management of the business and the credit-worthiness of the borrowers and the guarantors.

Allowance for Loan Losses

The following table sets forth information for the year ended September 30, 2013 regarding activity in the allowance for loan losses by portfolio segment (dollars in thousands):

	Beginning Allowance		Provision (Credit)			Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One-to four-family	$	1,558	$	565		$	769	$	95	$	1,449
Multi-family	1,156		(407		)	—		—		749
Commercial	4,247		1,640			667		55		5,275
Construction – custom and owner/builder	386		(124		)	26		26		262
Construction – speculative one- to four-family	128		(32		)	—		—		96
Construction – commercial	429		(373		)	—		—		56
Construction – multi-family	—		116			116		—		—
Construction – land development	—		(129		)	17		146		—
Land	2,392		1,801			2,307		54		1,940
Consumer loans:
Home equity and second mortgage	759		202			184		5		782
Other	254		(40		)	14		—		200
Commercial business loans	516		(294		)	—		105		327
Total	$	11,825	$	2,925		$	4,100	$	486	$	11,136

The following table sets forth information for the year ended September 30, 2012 regarding activity in the allowance for loan losses by portfolio segment (dollars in thousands):

	Beginning Allowance		Provision (Credit)			Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One-to four-family	$	760	$	1,000		$	276	$	74	$	1,558
Multi-family	1,076		80			14		14		1,156
Commercial	4,035		1,427			1,215		—		4,247
Construction – custom and owner/builder	222		164			—		—		386
Construction – speculative one- to four-family	169		(42		)	—		1		128
Construction – commercial	794		257			622		—		429
Construction – multi-family	354		(780		)	24		450		—
Construction – land development	79		106			239		54		—
Land	2,795		751			1,251		97		2,392
Consumer loans:
Home equity and second mortgage	460		517			232		14		759
Other	415		(137		)	24		—		254
Commercial business loans	787		157			430		2		516
Total	$	11,946	$	3,500		$	4,327	$	706	$	11,825

The following table sets forth information for the year ended September 30, 2011 regarding activity in the allowance for loan losses by portfolio segment (dollars in thousands):

	Beginning Allowance		Provision (Credit)			Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One-to four-family	$	530	$	622		$	543	$	151	$	760
Multi-family	393		642			—		41		1,076
Commercial	3,173		804			47		105		4,035
Construction – custom and owner/builder	481		(211		)	48		—		222
Construction – speculative one- to four-family	414		(142		)	103		—		169
Construction – commercial	245		1,993			1,444		—		794
Construction – multi-family	245		1,328			1,219		—		354
Construction – land development	240		993			1,158		4		79
Land	3,709		744			1,704		46		2,795
Consumer loans:
Home equity and second mortgage	922		(354		)	150		42		460
Other	451		(8		)	30		2		415
Commercial business loans	461		347			22		1		787
Total	$	11,264	$	6,758		$	6,468	$	392	$	11,946

The following table presents information on the loans evaluated individually and collectively for impairment in the allowance for loan losses by portfolio segment at September 30, 2013 (dollars in thousands):

	Allowance for Loan Losses						Recorded Investment in Loans
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Mortgage loans:
One- to four-family	$	600	$	849	$	1,449	$	8,984	$	95,314	$	104,298
Multi-family	334		415		749		5,184		45,924		51,108
Commercial	1,763		3,512		5,275		19,510		271,787		291,297
Construction – custom and owner/ builder	—		262		262		—		22,788		22,788
Construction – speculative one- to four family	88		8		96		687		236		923
Construction – commercial	—		56		56		—		2,239		2,239
Construction –  multi-family	—		—		—		143		1		144
Construction – land development	—		—		—		515		—		515
Land	234		1,706		1,940		2,391		28,753		31,144
Consumer loans:
Home equity and second mortgage	57		725		782		679		32,335		33,014
Other	—		200		200		6		5,975		5,981
Commercial business loans	—		327		327		—		17,499		17,499
Total	$	3,076	$	8,060	$	11,136	$	38,099	$	522,851	$	560,950

The following table presents information on the loans evaluated individually and collectively for impairment in the allowance for loan losses by portfolio segment at September 30, 2012 (dollars in thousands):

	Allowance for Loan Losses						Recorded Investment in Loans
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Mortgage loans:
One- to four-family	$	678	$	880	$	1,558	$	5,282	$	101,697	$	106,979
Multi-family	711		445		1,156		6,879		40,642		47,521
Commercial	667		3,580		4,247		17,192		239,062		256,254
Construction – custom and owner/ builder	15		371		386		309		20,159		20,468
Construction – speculative one- to four family	109		19		128		1,027		495		1,522
Construction – commercial	—		429		429		—		17,157		17,157
Construction –  multi-family	—		—		—		345		—		345
Construction – land development	—		—		—		589		—		589
Land	686		1,706		2,392		8,613		31,042		39,655
Consumer loans:
Home equity and second mortgage	36		723		759		562		32,252		32,814
Other	—		254		254		7		6,176		6,183
Commercial business loans	—		516		516		—		22,588		22,588
Total	$	2,902	$	8,923	$	11,825	$	40,805	$	511,270	$	552,075

The following table presents an age analysis of past due status of loans by portfolio segment at September 30, 2013 (dollars in thousands):

	30–59 Days Past Due		60-89 Days Past Due		Non- Accrual(1)		Past Due 90 Days or More and Still Accruing		Total Past Due		Current		Total Loans
Mortgage loans:
One- to four-family	$	14	$	1,218	$	6,985	$	—	$	8,217	$	96,081	$	104,298
Multi-family	—		—		—		—		—		51,108		51,108
Commercial	—		2,537		3,435		—		5,972		285,325		291,297
Construction – custom and owner/ builder	—		—		—		—		—		22,788		22,788
Construction – speculative one- to four family	—		—		—		—		—		923		923
Construction – commercial	—		—		—		—		—		2,239		2,239
Construction –  multi-family	—		—		144		—		144		—		144
Construction – land development	—		—		515		—		515		—		515
Land	—		—		2,146		284		2,430		28,714		31,144
Consumer loans:
Home equity and second mortgage	101		20		380		152		653		32,361		33,014
Other	1		39		5		—		45		5,936		5,981
Commercial business loans	83		15		—		—		98		17,401		17,499
Total	$	199	$	3,829	$	13,610	$	436	$	18,074	$	542,876	$	560,950

__________________

(1) Includes non-accrual loans past due 90 days or more and other loans classified as non-accrual.

The following table presents an age analysis of past due status of loans by portfolio segment at September 30, 2012 (dollars in thousands):

	30–59 Days Past Due		60-89 Days Past Due		Non- Accrual(1)		Past Due 90 Days or More and Still Accruing		Total Past Due		Current		Total Loans
Mortgage loans:
One- to four-family	$	1,987	$	—	$	3,382	$	142	$	5,511	$	101,468	$	106,979
Multi-family	3,402		—		1,449		—		4,851		42,670		47,521
Commercial	1,071		—		6,049		6		7,126		249,128		256,254
Construction – custom and owner/ builder	—		—		309		—		309		20,159		20,468
Construction – speculative one- to four family	—		—		327		700		1,027		495		1,522
Construction – commercial	—		—		—		—		—		17,157		17,157
Construction –  multi-family	—		—		345		—		345		—		345
Construction – land development	—		—		589		—		589		—		589
Land	943		—		8,613		200		9,756		29,899		39,655
Consumer loans:
Home equity and second mortgage	277		14		261		150		702		32,112		32,814
Other	4		—		7		—		11		6,172		6,183
Commercial business loans	—		15		—		—		15		22,573		22,588
Total	$	7,684	$	29	$	21,331	$	1,198	$	30,242	$	521,833	$	552,075

___________________

(1)     Includes non-accrual loans past due 90 days or more and other loans classified as non-accrual.

Credit Quality Indicators

The Company uses credit risk grades which reflect the Company’s assessment of a loan’s risk or loss potential.  The Company categorizes loans into risk grade 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 such as the estimated fair value of the collateral.  The Company uses the following definitions for credit risk ratings as part of the on-going monitoring of the credit quality of its loan portfolio:

Pass:  Pass loans are defined as those loans that meet acceptable quality underwriting standards.

Watch:  Watch loans are defined as those loans that still exhibit acceptable quality, but have some concerns that justify greater attention.  If these concerns are not corrected, a potential for further adverse categorization exists.  These concerns could relate to a specific condition peculiar to the borrower or its industry segment or the general economic environment.

Special Mention: Special mention loans are defined as those loans deemed by management to have some potential weaknesses that deserve management’s close attention.  If left uncorrected, these potential weaknesses may result in the deterioration of the payment prospects of the loan.  Assets in this category do not expose the Company to sufficient risk to warrant a substandard classification.

Substandard:  Substandard loans are defined as those loans that are inadequately protected by the current net worth and paying capacity of the obligor, or of the collateral pledged.  Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the repayment of the debt.  If the weakness or weaknesses are not corrected, there is the distinct possibility that some loss will be sustained.

Loss:  Loans in this classification are considered uncollectible and of such little value that continuance as an asset is not warranted.  This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not

practical or desirable to defer writing off this basically worthless loan even though partial recovery may be realized in the future.

The following table lists the loan credit risk grades by portfolio segment utilized by the Company that serve as credit quality indicators at September 30, 2013 (dollars in thousands):

	Loan Grades
	Pass		Watch		Special Mention		Substandard		Total
Mortgage loans:
One- to four-family	$	91,291	$	4,032	$	769	$	8,206	$	104,298
Multi-family	41,863		132		8,337		776		51,108
Commercial	262,502		3,309		12,522		12,964		291,297
Construction – custom and owner / builder	22,788		—		—		—		22,788
Construction – speculative one- to four-family	236		687		—		—		923
Construction – commercial	2,239		—		—		—		2,239
Construction – multi-family	—		—		—		144		144
Construction – land development	—		—		—		515		515
Land	20,627		5,101		1,129		4,287		31,144
Consumer loans:
Home equity and second mortgage	31,096		782		55		1,081		33,014
Other	5,937		39		—		5		5,981
Commercial business loans	17,029		366		104		—		17,499
Total	$	495,608	$	14,448	$	22,916	$	27,978	$	560,950

The following table lists the loan credit risk grades by portfolio segment utilized by the Company that serve as credit quality indicators at September 30, 2012 (dollars in thousands):

	Loan Grades
	Pass		Watch		Special Mention		Substandard		Total
Mortgage loans:
One- to four-family	$	93,668	$	4,000	$	4,343	$	4,968	$	106,979
Multi-family	35,703		107		10,220		1,491		47,521
Commercial	228,036		1,722		11,515		14,981		256,254
Construction – custom and owner / builder	17,621		—		2,538		309		20,468
Construction – speculative one- to four-family	304		191		700		327		1,522
Construction – commercial	17,157		—		—		—		17,157
Construction – multi-family	—		—		—		345		345
Construction – land development	—		—		—		589		589
Land	22,700		5,788		2,554		8,613		39,655
Consumer loans:
Home equity and second mortgage	29,777		1,488		788		761		32,814
Other	6,136		40		—		7		6,183
Commercial business loans	20,777		834		286		691		22,588
Total	$	471,879	$	14,170	$	32,944	$	33,082	$	552,075

Impaired Loans

A loan is considered impaired when it is probable that the Company will be unable to collect all contractual principal and interest payments due in accordance with the original or modified terms of the loan agreement.  Impaired loans are measured based on the estimated fair value of the collateral less estimated cost to sell (if applicable) if the loan is considered collateral dependent.  Impaired loans that are not considered to be collateral dependent are measured based on the present value of expected future cash flows.

The categories of non-accrual loans and impaired loans overlap, although they are not coextensive.  The Company considers all circumstances regarding the loan and borrower on an individual basis when determining whether an impaired loan should be placed on non-accrual status, such as the financial strength of the borrower, the estimated collateral value, reasons for the delay, payment record, the amount past due and the number of days past due.

The following table is a summary of information related to impaired loans by portfolio segment as of and for the year ended September 30, 2013 (dollars in thousands):

	September 30, 2013						For the Year Ended September 30, 2013
	Recorded Investment		Unpaid Principal Balance (Loan Balance Plus Charge Off)		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Mortgage loans:
One- to four-family	$	5,342	$	5,775	$	—	$	2,661	$	18	$	13
Multi-family	—		982		—		473		3		3
Commercial	4,879		8,005		—		8,781		322		267
Construction – custom and owner / builder	—		—		—		97		—		—
Construction – speculative one- to four-family	—		—		—		65		—		—
Construction – multi-family	143		608		—		293		—		—
Construction – land development	515		3,279		—		534		—		—
Land	1,188		2,133		—		3,519		9		8
Consumer loans:
Home equity and second mortgage	380		556		—		266		—		—
Other	6		6		—		8		—		—
Commercial business loans	—		33		—		—		—		—
Subtotal	12,453		21,377		—		16,697		352		291
With an allowance recorded:
Mortgage loans:
One- to four-family	3,642		3,726		600		4,397		91		68
Multi-family	5,184		5,184		334		5,960		301		230
Commercial	14,631		15,297		1,763		9,052		526		420
Construction – custom and owner / builder	—		—		—		60		—		—
Construction – speculative one- to four-family	687		687		88		695		29		16
Construction – multi-family	—		—		—		—		—		—
Construction - land development	—		—		—		—		—		—
Land	1,203		1,226		234		1,962		27		27
Consumer loans:
Home equity and second mortgage	299		299		57		352		16		12
Commercial business loans	—		—		—		—		—		—
Subtotal	25,646		26,419		3,076		22,478		990		773
Total
Mortgage loans:
One- to four-family	8,984		9,501		600		7,058		109		81
Multi-family	5,184		6,166		334		6,433		304		233
Commercial	19,510		23,302		1,763		17,833		848		687
Construction – custom and owner / builder	—		—		—		157		—		—
Construction – speculative one- to four-family	687		687		88		760		29		16
Construction – multi-family	143		608		—		293		—		—
Construction – land development	515		3,279		—		534		—		—
Land	2,391		3,359		234		5,481		36		35
Consumer loans:
Home equity and second mortgage	679		855		57		618		16		12
Other	6		6		—		8		—		—
Commercial business loans	—		33		—		—		—		—
Total	$	38,099	$	47,796	$	3,076	$	39,175	$	1,342	$	1,064

The following table is a summary of information related to impaired loans by portfolio segment as of and for the year ended September 30, 2012 (dollars in thousands):

	September 30, 2012						For the Year Ended September 30, 2012
	Recorded Investment		Unpaid Principal Balance (Loan Balance Plus Charge Off)		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Mortgage loans:
One- to four-family	$	1,510	$	1,605	$	—	$	1,838	$	20	$	16
Multi-family	—		982		—		—		1		1
Commercial	7,596		8,664		—		14,491		543		348
Construction – custom and owner / builder	208		208		—		209		—		—
Construction – speculative one- to four-family	327		327		—		65		—		—
Construction – commercial	—		2,066				—		14		14
Construction – multi-family	345		810		—		338		—		—
Construction – land development	589		3,497		—		1,089		14		14
Land	5,989		8,247		—		6,279		28		16
Consumer loans:					—
Home equity and second mortgage	261		383		—		482		—		—
Other	7		7		—		5		—		—
Commercial business loans	—		166		—		32		2		2
Subtotal	16,832		26,962		—		24,828		622		411
With an allowance recorded:
Mortgage loans:
One- to four-family	3,772		3,772		678		2,520		81		62
Multi-family	6,879		6,879		711		6,618		294		189
Commercial	9,596		9,596		667		5,043		60		39
Construction – custom and owner / builder	101		101		15		106		—		—
Construction – speculative one- to four-family	700		700		109		700		29		20
Construction – commercial	—		—		—		3,248		230		146
Construction – multi-family	—		—		—		74		—		—
Land	2,624		2,811		686		3,307		37		36
Consumer loans:
Home equity and second mortgage	301		301		36		515		31		23
Commercial business loans	—		—		—		55		—		—
Subtotal	23,973		24,160		2,902		22,186		762		515
Total
Mortgage loans:
One- to four-family	5,282		5,377		678		4,358		101		78
Multi-family	6,879		7,861		711		6,618		295		190
Commercial	17,192		18,260		667		19,534		603		387
Construction – custom and owner / builder	309		309		15		315		—		—
Construction – speculative one- to four-family	1,027		1,027		109		765		29		20
Construction – commercial	—		2,066		—		3,248		244		160
Construction – multi-family	345		810		—		412		—		—
Construction – land development	589		3,497		—		1,089		14		14
Land	8,613		11,058		686		9,586		65		52
Consumer loans:
Home equity and second mortgage	562		684		36		997		31		23
Other	7		7		—		5		—		—
Commercial business loans	—		166		—		87		2		2
Total	$	40,805	$	51,122	$	2,902	$	47,014	$	1,384	$	926

The following table is a summary of information related to impaired loans by portfolio segment as of and for the year ended September 30, 2011 (dollars in thousands):

	September 30, 2011						For the Year Ended September 30, 2011
	Recorded Investment		Unpaid Principal Balance (Loan Balance Plus Charge Off)		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Mortgage loans:
One- to four-family	$	2,092	$	2,387	$	—	$	2,908	$	30	$	22
Multi-family	—		982		—		681		—		—
Commercial	18,137		19,279		—		14,623		1,060		573
Construction – custom and owner / builder	209		209		—		303		7		1
Construction – speculative one- to four-family	—		—		—		502		7		7
Construction – multi-family	632		1,135		—		1,287		4		4
Construction – land development	1,882		7,179		—		2,920		5		—
Land	8,198		11,533		—		7,883		69		42
Consumer loans:
Home equity and second mortgage	669		719		—		430		26		16
Other	—		—		—		13		—		—
Commercial business loans	44		65		—		44		2		2
Subtotal	31,863		43,488		—		31,594		1,210		667
With an allowance recorded:
Mortgage loans:
One- to four-family	1,609		1,609		45		768		47		38
Multi-family	5,482		5,482		632		4,798		298		222
Commercial	1,185		1,185		255		1,409		50		118
Construction – custom and owner / builder	111		111		11		45		2		2
Construction – speculative one- to four-family	700		700		37		1,042		50		37
Construction - commercial	5,435		6,879		738		3,537		273		123
Construction – multi-family	—		—		—		65		—		—
Land	1,799		1,821		560		2,946		114		83
Consumer loans:
Home equity and second mortgage	345		345		10		425		10		9
Commercial business loans	1		1		1		1		—		—
Subtotal	16,667		18,133		2,289		15,036		844		632
Total
Mortgage loans:
One- to four-family	3,701		3,996		45		3,676		77		60
Multi-family	5,482		6,464		632		5,479		298		222
Commercial	19,322		20,464		255		16,032		1,110		691
Construction – custom and owner / builder	320		320		11		348		9		3
Construction – speculative one- to four-family	700		700		37		1,544		57		44
Construction - commercial	5,435		6,879		738		3,537		273		123
Construction – multi-family	632		1,135		—		1,352		4		4
Construction – land development	1,882		7,179		—		2,920		5		—
Land	9,997		13,354		560		10,829		183		125
Consumer loans:
Home equity and second mortgage	1,014		1,064		10		855		36		25
Other	1		1		—		14		—		—
Commercial business loans	44		65		1		44		2		2
Total	$	48,530	$	61,621	$	2,289	$	46,630	$	2,054	$	1,299

Troubled debt restructured loans are loans for which the Company, for economic or legal reasons related to the borrower’s financial condition, has granted a significant concession to the borrower that it would otherwise not consider.  The loan terms which have been modified or restructured due to a borrower’s financial difficulty, include but are not limited to: a reduction in the stated interest rate; an extension of the maturity at an interest rate below current market; a reduction in the face amount of the debt; a reduction in the accrued interest; or re-amortizing, extensions, deferrals and renewals.  Troubled debt restructured loans are considered impaired loans and are individually evaluated for impairment.  Troubled debt restructured loans can be classified as either accrual or non-accrual. The Company had $22.6 million in troubled debt restructured loans included in impaired loans at September 30, 2013 and had $1,000 in commitments to lend additional funds on these loans.  The Company had $23.5 million in troubled debt restructured loans included in impaired loans at September 30, 2012 and had $1,000 in commitments to lend additional funds on these loans. The allowance for loan losses allocated to troubled debt restructured loans at September 30, 2013 and 2012 was $2,371,000 and $1,894,000, respectively.

The following table sets forth information with respect to the Company’s troubled debt restructured loans by interest accrual status as of September 30, 2013 and 2012 (dollars in thousands):

	2013
	Accruing		Non- Accrual		Total
Mortgage loans:
One- to four-family	$	1,999	$	198	$	2,197
Multi-family	5,184		—		5,184
Commercial	10,160		1,574		11,734
Construction – speculative one- to four-family	687		—		687
Construction – land development	—		515		515
Land	244		1,564		1,808
Consumer loans:
Home equity and second mortgage	299		180		479
Total	$	18,573	$	4,031	$	22,604

	2012
	Accruing		Non- Accrual		Total
Mortgage loans:
One- to four-family	$	1,900	$	—	$	1,900
Multi-family	5,430		—		5,430
Commercial	5,079		4,862		9,941
Construction – speculative one- to four-family	700		—		700
Construction – land development	—		526		526
Land	—		4,445		4,445
Consumer loans:
Home equity and second mortgage	301		261		562
Total	$	13,410	$	10,094	$	23,504

The following table sets forth information with respect to the Company’s troubled debt restructured loans by portfolio segment that occurred during the years ended September 30, 2013, 2012 and 2011 (dollars in thousands):

2013	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		End of Period Balance
One-to four-family (1)	2	$	353	$	353	$	350
Commercial (2)	2	2,327		2,327		2,318
Total	4	$	2,680	$	2,680	$	2,668

___________________________

(1) Modifications were a result of a combination of changes (i.e. a reduction in the stated interest rate and an extension of the maturity at an interest rate below current market).

(2)     Modifications were a result of a reduction in the stated interest rate.

2012	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		End of Period Balance
One-to four-family (1)	1	$	373	$	373	$	372
Commercial (1)	1	2,718		2,718		2,657
Land (2)	1	249		249		233
Total	3	$	3,340	$	3,340	$	3,262

_______________________________

(1) Modifications were a result of a combination of changes (i.e. a reduction in the stated interest rate; an extension of the maturity at an interest rate below current market; a reduction in the face amount of the debt; a reduction in the accrued interest; or re-aging, extensions, deferrals and renewals).

(2)     Modification was a result of a reduction in the stated interest rate.

2011	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		End of Period Balance
One-to four-family (1)	4	$	1,543	$	1,543	$	1,543
Commercial (2)	2	3,394		3,717		3,145
Construction - commercial (3)	2	6,800		5,451		5,435
Land (4)	2	535		535		526
Home equity (3)	2	303		303		303
Total	12	$	12,575	$	11,549	$	10,952

(1) $1.01 million was a result of a reduction in stated interest rate and $538,000 was a result of a combination of changes (i.e., a reduction in the stated interest rate; an extension of the maturity at an interest rate below current market; a reduction in the face amount of the debt; a reduction in the accrued interest; or re-aging, extensions, deferrals and renewals).

(2) $925,000 was a result of a reduction in stated interest rate and $2.79 million was a result of a combination of changes (i.e., a reduction in the stated interest rate; an extension of the maturity at an interest rate below current market; a reduction in the face amount of the debt; a reduction in the accrued interest; or re-aging, extensions, deferrals and renewals).

(3) Modifications were a result of a combination of changes (i.e., a reduction in the stated interest rate; an extension of the maturity at an interest rate below current market; a reduction in the face amount of the debt; a reduction in the accrued interest; or re-aging, extensions, deferrals and renewals).

(4) $147,000 was a result of modifying the maturity date, timing of payments or frequency of payments and $388,000 was a result of a combination of changes (i.e., a reduction in the stated interest rate; an extension of the maturity at an interest rate below current market; a reduction in the face amount of the debt; a reduction in the accrued interest; or re-aging, extensions, deferrals and renewals).

One commercial real estate troubled debt restructured loan with a balance of $919,000 and one land troubled debt restructured loan with a balance of $147,000 were modified during the year ended September 30, 2011 and subsequently defaulted.  No troubled debt restructured loans were recorded that subsequently defaulted during the years ended September 30, 2013 and 2012.