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Loans and Allowance for Loan Losses
6 Months Ended
Dec. 31, 2016
Loans and Allowance for Loan Losses [Abstract]  
Loans and Allowance for Loan Losses
(5)
Loans and Allowance for Loan Losses

Loan segments and classes at December 31, 2016 and June 30, 2016 are summarized as follows:

(In thousands)
 
December 31, 2016
  
June 30, 2016
 
Residential real estate:
      
Residential real estate
 
$
238,431
  
$
234,992
 
Residential construction and land
  
4,980
   
5,575
 
Multi-family
  
3,904
   
3,918
 
Commercial real estate:
        
Commercial real estate
  
246,306
   
192,678
 
Commercial construction
  
25,651
   
20,159
 
Consumer loan:
        
Home equity
  
20,660
   
20,893
 
Consumer installment
  
4,714
   
4,350
 
Commercial loans
  
56,236
   
48,725
 
Total gross loans
  
600,882
   
531,290
 
Allowance for loan losses
  
(10,421
)
  
(9,485
)
Deferred fees and costs
  
866
   
959
 
Loans receivable, net
 
$
591,327
  
$
522,764
 

Management closely monitors the quality of the loan portfolio and has established a loan review process designed to help grade the quality and profitability of the Company’s loan portfolio.  The credit quality grade helps management make a consistent assessment of each loan relationship’s credit risk. Consistent with regulatory guidelines, The Bank of Greene County provides for the classification of loans considered being of lesser quality.  Such ratings coincide with the “Substandard,” “Doubtful” and “Loss” classifications used by federal regulators in their examination of financial institutions. Generally, an asset is considered Substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. Substandard assets include those characterized by the distinct possibility that the insured financial institution will sustain some loss if the deficiencies are not corrected. Assets classified as Doubtful have all the weaknesses inherent in assets classified Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. Assets classified as Loss are those considered uncollectible and of such little value that their continuance as assets without the establishment of a full loss reserve and/or charge-off is not warranted. Assets that do not currently expose the Company to sufficient risk to warrant classification in one of the aforementioned categories but otherwise possess weaknesses are designated “Special Mention.”   Management also maintains a listing of loans designated “Watch.” These loans represent borrowers with declining earnings, strained cash flow, increasing leverage and/or weakening market fundamentals that indicate above average risk.

When The Bank of Greene County classifies problem assets as either Substandard or Doubtful, it generally establishes a specific valuation allowance or “loss reserve” in an amount deemed prudent by management.  General allowances represent loss allowances that have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been allocated to particular loans.  When The Bank of Greene County identifies problem loans as being impaired, it is required to evaluate whether the Bank will be able to collect all amounts due either through repayments or the liquidation of the underlying collateral.  If it is determined that impairment exists, the Bank is required either to establish a specific allowance for losses equal to the amount of impairment of the assets, or to charge-off such amount.  The Bank of Greene County’s determination as to the classification of its loans and the amount of its valuation allowance is subject to review by its regulatory agencies, which can order the establishment of additional general or specific loss allowances.  The Bank of Greene County reviews its portfolio monthly to determine whether any assets require classification in accordance with applicable regulations.

The Bank primarily has four segments within its loan portfolio that it considers when measuring credit quality: residential real estate loans, commercial real estate loans, consumer loans and commercial loans.  The residential real estate portfolio consists of residential, construction, and multifamily loan classes. Commercial real estate loans consist of commercial real estate and commercial construction loan classes. Consumer loans consist of home equity loan and consumer installment loan classes. The inherent risk within the loan portfolio varies depending upon each of these loan types.

The Bank of Greene County’s primary lending activity is the origination of residential mortgage loans, including home equity loans, which are collateralized by residences.   Generally, residential mortgage loans are made in amounts up to 89.9% of the appraised value of the property.  However, The Bank of Greene County will originate residential mortgage loans with loan-to-value ratios of up to 95.0%, with private mortgage insurance.  In the event of default by the borrower, The Bank of Greene County will acquire and liquidate the underlying collateral. By originating the loan at a loan-to-value ratio of 89.9% or less or obtaining private mortgage insurance, The Bank of Greene County limits its risk of loss in the event of default.  However, the market values of the collateral may be adversely impacted by declines in the economy.  Home equity loans may have an additional inherent risk if The Bank of Greene County does not hold the first mortgage.  The Bank of Greene County may stand in a secondary position in the event of collateral liquidation resulting in a greater chance of insufficiency to meet all obligations.
 
Construction lending generally involves a greater degree of risk than other residential mortgage lending.  The repayment of the construction loan is, to a great degree, dependent upon the successful and timely completion of the construction of the subject property within specified cost limits.  The Bank of Greene County completes inspections during the construction phase prior to any disbursements.  The Bank of Greene County limits its risk during the construction as disbursements are not made until the required work for each advance has been completed.  Construction delays may further impair the borrower’s ability to repay the loan.

Loans collateralized by commercial real estate, and multi-family dwellings, such as apartment buildings generally are larger than residential loans and involve a greater degree of risk. Commercial real estate loans often involve large loan balances to single borrowers or groups of related borrowers. Payments on these loans depend to a large degree on the results of operations and management of the properties or underlying businesses, and may be affected to a greater extent by adverse conditions in the real estate market or the economy in general. Accordingly, the nature of commercial real estate loans makes them more difficult for management to monitor and evaluate.

Consumer loans generally have shorter terms and higher interest rates than residential mortgage loans. In addition, consumer loans expand the products and services offered by The Bank of Greene County to better meet the financial services needs of its customers.  Consumer loans generally involve greater credit risk than residential mortgage loans because of the difference in the nature of the underlying collateral.  Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance because of the greater likelihood of damage, loss or depreciation in the underlying collateral. The remaining deficiency often does not warrant further substantial collection efforts against the borrower beyond obtaining a deficiency judgment. In addition, consumer loan collections depend on the borrower’s personal financial stability.  Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

Commercial lending generally involves greater risk than residential mortgage lending and involves risks that are different from those associated with residential and commercial real estate mortgage lending. Real estate lending is generally considered to be collateral-based, with loan amounts based on fixed 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 loans may be collateralized by equipment or other business assets, the liquidation of collateral in the event of a borrower default is often an insufficient source of repayment because equipment and other business assets may be obsolete or of limited use, among other things. Accordingly, the repayment of a commercial loan depends primarily on the creditworthiness of the borrower (and any guarantors), while liquidation of collateral is a secondary and often insufficient source of repayment.

Loan balances by internal credit quality indicator as of December 31, 2016 are shown below.


(In thousands)
 
Performing
  
Watch
  
Special Mention
  
Substandard
  
Total
 
Residential real estate
 
$
235,628
  
$
755
  
$
93
  
$
1,955
  
$
238,431
 
Residential construction and land
  
4,980
   
-
   
-
   
-
   
4,980
 
Multi-family
  
3,810
   
-
   
-
   
94
   
3,904
 
Commercial real estate
  
243,664
   
100
   
178
   
2,364
   
246,306
 
Commercial construction
  
25,651
   
-
   
-
   
-
   
25,651
 
Home equity
  
20,469
   
-
   
-
   
191
   
20,660
 
Consumer installment
  
4,688
   
26
   
-
   
-
   
4,714
 
Commercial loans
  
54,845
   
72
   
347
   
972
   
56,236
 
Total gross loans
 
$
593,735
  
$
953
  
$
618
  
$
5,576
  
$
600,882
 
 
Loan balances by internal credit quality indicator as of June 30, 2016 are shown below.

(In thousands)
 
Performing
  
Watch
  
Special Mention
  
Substandard
  
Total
 
Residential real estate
 
$
232,321
  
$
757
  
$
94
  
$
1,820
  
$
234,992
 
Residential construction and land
  
5,575
   
-
   
-
   
-
   
5,575
 
Multi-family
  
3,820
   
-
   
-
   
98
   
3,918
 
Commercial real estate
  
190,293
   
52
   
531
   
1,802
   
192,678
 
Commercial construction
  
20,159
   
-
   
-
   
-
   
20,159
 
Home equity
  
20,555
   
321
   
12
   
5
   
20,893
 
Consumer installment
  
4,340
   
10
   
-
   
-
   
4,350
 
Commercial loans
  
47,598
   
26
   
8
   
1,093
   
48,725
 
Total gross loans
 
$
524,661
  
$
1,166
  
$
645
  
$
4,818
  
$
531,290
 

The Company had no loans classified Doubtful or Loss at December 31, 2016 or June 30, 2016.

Nonaccrual Loans

Management places loans on nonaccrual status once the loans have become 90 days or more delinquent.  A nonaccrual loan is defined as a loan in which collectability is questionable and therefore interest on the loan will no longer be recognized on an accrual basis.  A loan is not placed back on accrual status until the borrower has demonstrated the ability and willingness to make timely payments on the loan.  A loan does not have to be 90 days delinquent in order to be classified as nonaccrual.   Nonaccrual loans consisted primarily of loans secured by real estate at December 31, 2016 and June 30, 2016. Loans on nonaccrual status totaled $3.8 million at December 31, 2016, of which $1.5 million were in the process of foreclosure. At December 31, 2016, there were 12 residential loans in the process of foreclosure totaling $895,000. Included in nonaccrual loans were $1.9 million of loans which were less than 90 days past due at December 31, 2016, but have a recent history of delinquency greater than 90 days past due. These loans will be returned to accrual status once they have demonstrated a history of timely payments.  Included in total loans past due were $183,000 of loans which were making payments pursuant to forbearance agreements.  Under the forbearance agreements, the customers have made arrangements with the Bank to bring the loans current over a specified period of time (resulting in an insignificant delay in repayment).  During this term of the forbearance agreement, the Bank has agreed not to continue foreclosure proceedings.  Loans on nonaccrual status totaled $3.3 million at June 30, 2016 of which $1.5 million were in the process of foreclosure. At June 30, 2016, there were nine residential loans in the process of foreclosure totaling $867,000. Included in nonaccrual loans were $1.9 million of loans which were less than 90 days past due at June 30, 2016, but have a recent history of delinquency greater than 90 days past due.

The following table sets forth information regarding delinquent and/or nonaccrual loans as of December 31, 2016:
 
(In thousands)
 
30-59
days past
due
  
60-89 days
past due
  
90 days or
more past
due
  
Total past
due
  
Current
  
Total Loans
  
Loans on
Non-
accrual
 
Residential real estate
 
$
928
  
$
455
  
$
1,038
  
$
2,421
  
$
236,010
  
$
238,431
  
$
1,351
 
Residential construction and land
  
18
   
-
   
-
   
18
   
4,962
   
4,980
   
-
 
Multi-family
  
-
   
-
   
-
   
-
   
3,904
   
3,904
   
-
 
Commercial real estate
  
1,007
   
959
   
613
   
2,579
   
243,727
   
246,306
   
1,936
 
Commercial construction
  
-
   
-
   
-
   
-
   
25,651
   
25,651
   
-
 
Home equity
  
25
   
-
   
191
   
216
   
20,444
   
20,660
   
191
 
Consumer installment
  
51
   
26
   
-
   
77
   
4,637
   
4,714
   
-
 
Commercial loans
  
458
   
72
   
116
   
646
   
55,590
   
56,236
   
276
 
Total gross loans
 
$
2,487
  
$
1,512
  
$
1,958
  
$
5,957
  
$
594,925
  
$
600,882
  
$
3,754
 
 
The following table sets forth information regarding delinquent and/or nonaccrual loans as of June 30, 2016:

(In thousands)
 
30-59
days past
 due
  
60-89
days past
due
  
90 days or
more past
due
  
Total past
due
  
Current
  
Total Loans
  
Loans on
Non-
accrual
 
Residential real estate
 
$
1,533
  
$
637
  
$
938
  
$
3,108
  
$
231,884
  
$
234,992
  
$
1,207
 
Residential construction and land
  
-
   
-
   
-
   
-
   
5,575
   
5,575
   
-
 
Multi-family
  
47
   
-
   
-
   
47
   
3,871
   
3,918
   
-
 
Commercial real estate
  
324
   
793
   
590
   
1,707
   
190,971
   
192,678
   
1,899
 
Commercial construction
  
-
   
-
   
-
   
-
   
20,159
   
20,159
   
-
 
Home equity
  
17
   
321
   
17
   
355
   
20,538
   
20,893
   
18
 
Consumer installment
  
34
   
10
   
-
   
44
   
4,306
   
4,350
   
-
 
Commercial loans
  
392
   
112
   
-
   
504
   
48,221
   
48,725
   
202
 
Total gross loans
 
$
2,347
  
$
1,873
  
$
1,545
  
$
5,765
  
$
525,525
  
$
531,290
  
$
3,326
 

The Bank of Greene County had accruing loans delinquent more than 90 days totaling $73,000 and $77,000 as of December 31, 2016 and June 30, 2016, respectively.  The loans delinquent more than 90 days and accruing consist of loans that are well collateralized and the borrowers have demonstrated the ability and willingness to pay.  The borrower has made arrangements with the Bank to bring the loan current within a specified time period and has made a series of payments as agreed.

The table below details additional information related to nonaccrual loans for the three and six months ended December 31:

  
For the three months
ended December 31,
  
For the six months
ended December 31
 
(In thousands)
 
2016
  
2015
  
2016
  
2015
 
Interest income that would have been recorded if loans had been performing in accordance with original terms
 
$
56
  
$
58
  
$
136
  
$
159
 
Interest income that was recorded on nonaccrual loans
  
26
   
50
   
54
   
99
 

Impaired Loan Analysis

The Company identifies impaired loans and measures the impairment in accordance with FASB ASC subtopic “Receivables – Loan Impairment.”  Management may consider a loan impaired once it is classified as nonaccrual and when it is probable that the borrower will be unable to repay the loan according to the original contractual terms of the loan agreement or the loan is restructured in a troubled debt restructuring.  It should be noted that management does not evaluate all loans individually for impairment.  Generally, The Bank of Greene County considers residential mortgages, home equity loans and installment loans as small, homogeneous loans, which are evaluated for impairment collectively based on historical loan experience and other factors.  In contrast, large commercial mortgage, construction, multi-family, business loans and select larger balance residential mortgage loans are reviewed individually and considered impaired if it is probable that The Bank of Greene County will not be able to collect scheduled payments of principal and interest when due, according to the contractual terms of the loan agreement.  The measurement of impaired loans is generally based on the fair value of the underlying collateral.  The majority of The Bank of Greene County loans, including most nonaccrual loans, are small homogenous loan types adequately supported by collateral.  Management considers the payment status of loans in the process of evaluating the adequacy of the allowance for loan losses among other factors.  Based on this evaluation, a delinquent loan’s risk rating may be downgraded to either pass-watch, special mention, or substandard, and the allocation of the allowance for loan loss is based upon the risk associated with such designation.  Loans that have been modified as a troubled debt restructuring are included in impaired loans.  The measurement of impairment is generally based on the discounted cash flows based on the original rate of the loan before the restructuring, unless it is determined that the restructured loan is collateral dependent.  If the restructured loan is deemed to be collateral dependent, impairment is based on the fair value of the underlying collateral.
 
The tables below detail additional information on impaired loans at the date or periods indicated:

  
As of December 31, 2016
  
For the three months ended
December 31, 2016
  
For the six months ended
December 31, 2016
 
(In thousands)
 
Recorded
 Investment
  
Unpaid
Principal
  
Related
Allowance
  
Average
Recorded
 Investment
  
Interest Income
Recognized
  
Average
Recorded
 Investment
  
Interest
 Income
Recognized
 
With no related allowance recorded:
                       
Residential real estate
 
$
266
  
$
266
  
$
-
  
$
266
  
$
-
  
$
266
  
$
-
 
Commercial real estate
  
427
   
427
   
-
   
821
   
4
   
921
   
14
 
Home equity
  
-
   
-
   
-
   
2
   
-
   
4
   
-
 
Commercial loans
  
195
   
195
   
-
   
65
   
1
   
33
   
1
 
Impaired loans with no allowance
  
888
   
888
   
-
   
1,154
   
5
   
1,224
   
15
 
                             
With an allowance recorded:
                            
Residential real estate
  
1,235
   
1,235
   
244
   
1,238
   
12
   
1,241
   
24
 
Commercial real estate
  
1,450
   
1,656
   
221
   
749
   
7
   
576
   
11
 
Commercial loans
  
81
   
81
   
2
   
81
   
-
   
82
   
2
 
Impaired loans with allowance
  
2,766
   
2,972
   
467
   
2,068
   
19
   
1,899
   
37
 
                             
Total impaired:
                            
Residential real estate
  
1,501
   
1,501
   
244
   
1,504
   
12
   
1,507
   
24
 
Commercial real estate
  
1,877
   
2,083
   
221
   
1,570
   
11
   
1,497
   
25
 
Home equity
  
-
   
-
   
-
   
2
   
-
   
4
   
-
 
Commercial loans
  
276
   
276
   
2
   
146
   
1
   
115
   
3
 
Total impaired loans
 
$
3,654
  
$
3,860
  
$
467
  
$
3,222
  
$
24
  
$
3,123
  
$
52
 

  
As of June 30, 2016
  
For the three months ended
December 31, 2015
  
For the six months ended
December 31, 2015
 
(In thousands)
 
Recorded
Investment
  
Unpaid
Principal
  
Related
Allowance
  
Average
Recorded
Investment
  
Interest Income
 Recognized
  
Average
Recorded
Investment
  
Interest Income
Recognized
 
With no related allowance recorded:
                       
Residential real estate
 
$
266
  
$
266
  
$
-
  
$
185
  
$
-
  
$
267
  
$
2
 
Commercial real estate
  
1,024
   
1,231
   
-
   
1,086
   
11
   
1,143
   
17
 
Home equity
  
5
   
5
   
-
   
46
   
-
   
90
   
1
 
Impaired loans with no allowance
  
1,295
   
1,502
   
-
   
1,317
   
11
   
1,500
   
20
 
                             
With an allowance recorded:
                            
Residential real estate
  
1,457
   
1,457
   
267
   
1,382
   
14
   
1,393
   
28
 
Commercial real estate
  
405
   
405
   
61
   
461
   
6
   
566
   
12
 
Commercial loans
  
85
   
85
   
2
   
89
   
2
   
91
   
3
 
Impaired loans with allowance
  
1,947
   
1,947
   
330
   
1,932
   
22
   
2,050
   
43
 
                             
Total impaired:
                            
Residential mortgage
  
1,723
   
1,723
   
267
   
1,567
   
14
   
1,660
   
30
 
Nonresidential mortgage
  
1,429
   
1,636
   
61
   
1,547
   
17
   
1,709
   
29
 
Home equity
  
5
   
5
   
-
   
46
   
-
   
90
   
1
 
Commercial loans
  
85
   
85
   
2
   
89
   
2
   
91
   
3
 
Total impaired loans
 
$
3,242
  
$
3,449
  
$
330
  
$
3,249
  
$
33
  
$
3,550
  
$
63
 

There were no loans that have been modified as a troubled debt restructuring during the three and six months ended December 31, 2016 or 2015.

There were no loans that had been modified as a troubled debt restructuring during the twelve months prior to June 30, 2016 or 2015 which have subsequently defaulted during the three and six months ended December 31, 2016 or 2015, respectively.
 
Allowance for Loan Losses

The allowance for loan losses is established through a provision for loan losses based on management’s evaluation of the risk inherent in the loan portfolio, the composition of the loan portfolio, specific impaired loans and current economic conditions.  Such evaluation, which includes a review of certain identified loans on which full collectability may not be reasonably assured, considers among other matters, the estimated net realizable value or the fair value of the underlying collateral, economic conditions, payment status of the loan, historical loan loss experience and other factors that warrant recognition in providing for the loan loss allowance.  In addition, various regulatory agencies, as an integral part of their examination process, periodically review The Bank of Greene County’s allowance for loan losses.  Such agencies may require The Bank of Greene County to recognize additions to the allowance based on their judgment about information available to them at the time of their examination. The Bank of Greene County considers smaller balance residential mortgages, home equity loans, commercial loans and installment loans to customers as small, homogeneous loans, which are evaluated for impairment collectively based on historical loss experience.  Larger balance residential, commercial mortgage and business loans are viewed individually and considered impaired if it is probable that The Bank of Greene County will not be able to collect scheduled payments of principal and interest when due, according to the contractual terms of the loan agreements.  The measurement of impaired loans is generally based on the fair value of the underlying collateral.  The Bank of Greene County charges loans off against the allowance for credit losses when it becomes evident that a loan cannot be collected within a reasonable amount of time or that it will cost the Bank more than it will receive, and all possible avenues of repayment have been analyzed, including the potential of future cash flow, the value of the underlying collateral, and strength of any guarantors or co-borrowers.  Generally, consumer loans and smaller business loans (not secured by real estate) in excess of 90 days are charged-off against the allowance for loan losses, unless equitable arrangements are made.   For loans secured by real estate, a charge-off is recorded when it is determined that the collection of all or a portion of a loan may not be collected and the amount of that loss can be reasonably estimated.

The following tables set forth the activity and allocation of the allowance for loan losses by loan category during and at the periods indicated.  The allowance is allocated to each loan category based on historical loss experience and economic conditions.


  
Activity for the three months ended December 31, 2016
 
(In thousands)
 
Balance at
September 30, 2016
  
Charge-offs
  
Recoveries
  
Provision
  
Balance at
December 31, 2016
 
Residential real estate
 
$
2,242
  
$
90
  
$
-
  
$
82
  
$
2,234
 
Residential construction and land
  
63
   
-
   
-
   
-
   
63
 
Multi-family
  
18
   
-
   
-
   
-
   
18
 
Commercial real estate
  
4,981
   
-
   
-
   
384
   
5,365
 
Commercial construction
  
628
   
-
   
-
   
(25
)
  
603
 
Home equity
  
251
   
-
   
-
   
6
   
257
 
Consumer installment
  
168
   
69
   
18
   
107
   
224
 
Commercial loans
  
1,492
   
-
   
-
   
21
   
1,513
 
Unallocated
  
133
   
-
   
-
   
11
   
144
 
Total
 
$
9,976
  
$
159
  
$
18
  
$
586
  
$
10,421
 

  
Activity for the six months ended December 31, 2016
 
(In thousands)
 
Balance at
June 30, 2016
  
Charge-offs
  
Recoveries
  
Provision
  
Balance at
December 31, 2016
 
Residential real estate
 
$
2,396
  
$
90
  
$
-
  
$
(72
)
 
$
2,234
 
Residential construction and land
  
75
   
-
   
-
   
(12
)
  
63
 
Multi-family
  
22
   
-
   
-
   
(4
)
  
18
 
Commercial real estate
  
4,541
   
-
   
-
   
824
   
5,365
 
Commercial construction
  
502
   
-
   
-
   
101
   
603
 
Home equity
  
309
   
-
   
-
   
(52
)
  
257
 
Consumer installment
  
228
   
141
   
35
   
102
   
224
 
Commercial loans
  
1,412
   
-
   
3
   
98
   
1,513
 
Unallocated
  
-
   
-
   
-
   
144
   
144
 
Total
 
$
9,485
  
$
231
  
$
38
  
$
1,129
  
$
10,421
 
 
  
Allowance for Loan Losses
  
Loans Receivable
 
  
Ending Balance
December 31, 2016
Impairment Analysis
  
Ending Balance
December 31, 2016
Impairment Analysis
 
(In thousands)
 
Individually
Evaluated
  
Collectively
Evaluated
  
Individually
Evaluated
  
Collectively
Evaluated
 
Residential real estate
 
$
244
  
$
1,990
  
$
1,501
  
$
236,930
 
Residential construction and land
  
-
   
63
   
-
   
4,980
 
Multi-family
  
-
   
18
   
-
   
3,904
 
Commercial real estate
  
221
   
5,144
   
1,876
   
244,430
 
Commercial construction
  
-
   
603
   
-
   
25,651
 
Home equity
  
-
   
257
   
-
   
20,660
 
Consumer installment
  
-
   
224
   
-
   
4,714
 
Commercial loans
  
2
   
1,511
   
276
   
55,960
 
Unallocated
  
-
   
144
   
-
   
-
 
Total
 
$
467
  
$
9,954
  
$
3,653
  
$
597,229
 
 
  
Activity for the three months ended December 31, 2015
 
(In thousands)
 
Balance at
September 30, 2015
  
Charge-offs
  
Recoveries
  
Provision
  
Balance at
December 31, 2015
 
Residential real estate
 
$
2,386
  
$
-
  
$
-
  
$
6
  
$
2,392
 
Residential construction and land
  
62
   
-
   
-
   
8
   
70
 
Multi-family
  
25
   
-
   
-
   
-
   
25
 
Commercial real estate
  
3,814
   
148
   
-
   
354
   
4,020
 
Commercial construction
  
162
   
-
   
-
   
169
   
331
 
Home equity
  
319
   
-
   
-
   
(14
)
  
305
 
Consumer installment
  
240
   
65
   
15
   
(2
)
  
188
 
Commercial loans
  
1,252
   
-
   
-
   
20
   
1,272
 
Unallocated
  
206
   
-
   
-
   
(198
)
  
8
 
Total
 
$
8,466
  
$
213
  
$
15
  
$
343
  
$
8,611
 

  
Activity for the six months ended December 31, 2015
 
(In thousands)
 
Balance at
June 30, 2015
  
Charge-offs
  
Recoveries
  
Provision
  
Balance at
 December 31, 2015
 
Residential real estate
 
$
2,454
  
$
-
  
$
-
  
$
(62
)
 
$
2,392
 
Residential construction and land
  
50
   
-
   
-
   
20
   
70
 
Multi-family
  
40
   
-
   
-
   
(15
)
  
25
 
Commercial real estate
  
3,699
   
162
   
17
   
466
   
4,020
 
Commercial construction
  
233
   
-
   
-
   
98
   
331
 
Home equity
  
314
   
-
   
-
   
(9
)
  
305
 
Consumer installment
  
223
   
143
   
40
   
68
   
188
 
Commercial loans
  
1,129
   
-
   
-
   
143
   
1,272
 
Unallocated
  
-
   
-
   
-
   
8
   
8
 
Total
 
$
8,142
  
$
305
  
$
57
  
$
717
  
$
8,611
 
 
  
Allowance for Loan Losses
  
Loans Receivable
 
  
Ending Balance
June 30, 2016
Impairment Analysis
  
Ending Balance
June 30, 2016
Impairment Analysis
 
(In thousands)
 
Individually
Evaluated
  
Collectively
Evaluated
  
Individually
Evaluated
  
Collectively
Evaluated
 
Residential real estate
 
$
267
  
$
2,129
  
$
1,723
  
$
233,269
 
Residential construction and land
  
-
   
75
   
-
   
5,575
 
Multi-family
  
-
   
22
   
-
   
3,918
 
Commercial real estate
  
61
   
4,480
   
1,429
   
191,249
 
Commercial construction
  
-
   
502
   
-
   
20,159
 
Home equity
  
-
   
309
   
5
   
20,888
 
Consumer installment
  
-
   
228
   
-
   
4,350
 
Commercial loans
  
2
   
1,410
   
85
   
48,640
 
Unallocated
  
-
   
-
   
-
   
-
 
Total
 
$
330
  
$
9,155
  
$
3,242
  
$
528,048
 
 
Foreclosed real estate (FRE)

FRE consists of properties acquired through mortgage loan foreclosure proceedings or in full or partial satisfaction of loans. The following table sets forth information regarding FRE as of December 31, 2016 and June 30, 2016:

(in thousands)
 
December 31, 2016
  
June 30, 2016
 
Residential real estate
 
$
130
  
$
61
 
Land
  
-
   
65
 
Commercial real estate
  
208
   
244
 
Total foreclosed real estate
 
$
338
  
$
370