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Loans and Allowance for Loan Losses
 9 Months Ended
Jun. 30, 2015
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
Loans and Allowance for Loan Losses
3.
Loans and Allowance for Loan Losses
 
Loans at June 30, 2015 and September 30, 2014 consisted of the following:
 
 
 
June 30,
 
September 30,
 
 
 
2015
 
2014
 
 
 
(In thousands)
 
Real estate mortgage:
 
 
 
 
 
1-4 family residential
 
$
182,454
 
$
182,743
 
Commercial
 
 
160,706
 
 
153,896
 
Multifamily residential
 
 
23,026
 
 
21,286
 
Residential construction
 
 
16,114
 
 
14,528
 
Commercial construction
 
 
14,151
 
 
8,354
 
Land and land development
 
 
11,608
 
 
11,290
 
Commercial business loans
 
 
33,164
 
 
28,448
 
Consumer:
 
 
 
 
 
 
 
Home equity loans
 
 
18,572
 
 
17,903
 
Auto loans
 
 
5,579
 
 
5,619
 
Other consumer loans
 
 
2,135
 
 
2,320
 
Gross loans
 
 
467,509
 
 
446,387
 
Undisbursed portion of construction loans
 
 
(13,245)
 
 
(6,271)
 
Principal loan balance
 
 
454,264
 
 
440,116
 
 
 
 
 
 
 
 
 
Deferred loan origination fees and costs, net
 
 
(79)
 
 
10
 
Allowance for loan losses
 
 
(6,520)
 
 
(6,250)
 
 
 
 
 
 
 
 
 
Loans, net
 
$
447,665
 
$
433,876
 
 
During the nine-month period ended June 30, 2015, there was no significant change in the Company’s lending activities or methodology used to estimate the allowance for loan losses as disclosed in the Company’s Annual Report on Form 10-K for the year ended September 30, 2014.
 
The following table provides the components of the recorded investment in loans as of June 30, 2015:
 
 
 
Residential
 
Commercial
 
 
 
 
 
Land & Land
 
Commercial
 
 
 
 
 
 
 
Real Estate
 
Real Estate
 
Multifamily
 
Construction
 
Development
 
Business
 
Consumer
 
Total
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recorded Investment in Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal loan balance
 
$
182,454
 
$
160,706
 
$
23,026
 
$
17,020
 
$
11,608
 
$
33,164
 
$
26,286
 
$
454,264
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued interest receivable
 
 
563
 
 
421
 
 
63
 
 
30
 
 
33
 
 
95
 
 
58
 
 
1,263
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net deferred loan origination fees and costs
 
 
294
 
 
(275)
 
 
(28)
 
 
(60)
 
 
7
 
 
(15)
 
 
(2)
 
 
(79)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recorded investment in loans
 
$
183,311
 
$
160,852
 
$
23,061
 
$
16,990
 
$
11,648
 
$
33,244
 
$
26,342
 
$
455,448
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recorded Investment in Loans as Evaluated for Impairment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
4,916
 
$
7,153
 
$
-
 
$
-
 
$
-
 
$
321
 
$
318
 
$
12,708
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
 
 
178,004
 
 
153,699
 
 
23,061
 
 
16,990
 
 
11,648
 
 
32,923
 
 
25,993
 
 
442,318
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquired with deteriorated credit quality
 
 
391
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
31
 
 
422
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance
 
$
183,311
 
$
160,852
 
$
23,061
 
$
16,990
 
$
11,648
 
$
33,244
 
$
26,342
 
$
455,448
 
 
The following table provides the components of the recorded investment in loans as of September 30, 2014:
 
 
 
Residential
 
Commercial
 
 
 
 
 
Land & Land
 
Commercial
 
 
 
 
 
 
 
Real Estate
 
Real Estate
 
Multifamily
 
Construction
 
Development
 
Business
 
Consumer
 
Total
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recorded Investment in Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal loan balance
 
$
182,743
 
$
153,896
 
$
21,286
 
$
16,611
 
$
11,290
 
$
28,448
 
$
25,842
 
$
440,116
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued interest receivable
 
 
590
 
 
384
 
 
53
 
 
44
 
 
31
 
 
111
 
 
63
 
 
1,276
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net deferred loan origination fees and costs
 
 
337
 
 
(252)
 
 
(28)
 
 
(54)
 
 
4
 
 
(9)
 
 
12
 
 
10
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recorded investment in loans
 
$
183,670
 
$
154,028
 
$
21,311
 
$
16,601
 
$
11,325
 
$
28,550
 
$
25,917
 
$
441,402
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recorded Investment in Loans as Evaluated for Impairment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
4,866
 
$
5,705
 
$
-
 
$
-
 
$
-
 
$
145
 
$
350
 
$
11,066
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
 
 
178,298
 
 
148,323
 
 
21,311
 
 
16,601
 
 
11,325
 
 
28,405
 
 
25,535
 
 
429,798
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquired with deteriorated credit quality
 
 
506
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
32
 
 
538
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance
 
$
183,670
 
$
154,028
 
$
21,311
 
$
16,601
 
$
11,325
 
$
28,550
 
$
25,917
 
$
441,402
 
 
An analysis of the allowance for loan losses as of June 30, 2015 is as follows:
 
 
 
Residential
Real Estate
 
Commercial
Real Estate
 
Multifamily
 
Construction
 
Land & Land
Development
 
Commercial
Business
 
Consumer
 
Total
 
 
 
(In thousands)
 
Ending Allowance Balance Attributable to Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
11
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
8
 
$
19
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
 
 
604
 
 
3,855
 
 
170
 
 
549
 
 
375
 
 
841
 
 
107
 
 
6,501
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquired with deteriorated credit quality
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance
 
$
615
 
$
3,855
 
$
170
 
$
549
 
$
375
 
$
841
 
$
115
 
$
6,520
 
 
An analysis of the allowance for loan losses as of September 30, 2014 is as follows:
 
 
 
Residential
Real Estate
 
Commercial
Real Estate
 
Multifamily
 
Construction
 
Land & Land
Development
 
Commercial
Business
 
Consumer
 
Total
 
 
 
(In thousands)
 
Ending Allowance Balance Attributable to Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
13
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
8
 
$
21
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
 
 
564
 
 
3,808
 
 
146
 
 
443
 
 
302
 
 
795
 
 
171
 
 
6,229
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquired with deteriorated credit quality
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance
 
$
577
 
$
3,808
 
$
146
 
$
443
 
$
302
 
$
795
 
$
179
 
$
6,250
 
  
An analysis of the changes in the allowance for loan losses for the three months ended June 30, 2015 is as follows:
 
 
 
Residential
Real Estate
 
Commercial
Real Estate
 
Multifamily
 
Construction
 
Land & Land
Development
 
Commercial
Business
 
Consumer
 
Total
 
 
 
(In thousands)
 
Changes in Allowance for Loan Losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
457
 
$
4,109
 
$
163
 
$
455
 
$
316
 
$
886
 
$
128
 
$
6,514
 
Provisions
 
 
300
 
 
(254)
 
 
7
 
 
94
 
 
59
 
 
3
 
 
(1)
 
 
208
 
Charge-offs
 
 
(156)
 
 
-
 
 
-
 
 
-
 
 
-
 
 
(48)
 
 
(30)
 
 
(234)
 
Recoveries
 
 
14
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
18
 
 
32
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance
 
$
615
 
$
3,855
 
$
170
 
$
549
 
$
375
 
$
841
 
$
115
 
$
6,520
 
 
An analysis of the changes in the allowance for loan losses for the nine months ended June 30, 2015 is as follows:
 
 
 
Residential
Real Estate
 
Commercial
Real Estate
 
Multifamily
 
Construction
 
Land & Land
Development
 
Commercial
Business
 
Consumer
 
Total
 
 
 
(In thousands)
 
Changes in Allowance for Loan Losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
577
 
$
3,808
 
$
146
 
$
443
 
$
302
 
$
795
 
$
179
 
$
6,250
 
Provisions
 
 
298
 
 
47
 
 
24
 
 
106
 
 
73
 
 
93
 
 
(14)
 
 
627
 
Charge-offs
 
 
(299)
 
 
-
 
 
-
 
 
-
 
 
-
 
 
(48)
 
 
(103)
 
 
(450)
 
Recoveries
 
 
39
 
 
-
 
 
-
 
 
-
 
 
-
 
 
1
 
 
53
 
 
93
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance
 
$
615
 
$
3,855
 
$
170
 
$
549
 
$
375
 
$
841
 
$
115
 
$
6,520
 
 
An analysis of the changes in the allowance for loan losses for the three months ended June 30, 2014 is as follows:
 
 
 
Residential
Real Estate
 
Commercial
Real Estate
 
Multifamily
 
Construction
 
Land & Land
Development
 
Commercial
Business
 
Consumer
 
Total
 
 
 
(In thousands)
 
Changes in Allowance for Loan Losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
626
 
$
3,440
 
$
271
 
$
222
 
$
356
 
$
907
 
$
238
 
$
6,060
 
Provisions
 
 
291
 
 
(587)
 
 
(106)
 
 
29
 
 
35
 
 
622
 
 
16
 
 
300
 
Charge-offs
 
 
(291)
 
 
144
 
 
-
 
 
-
 
 
-
 
 
(234)
 
 
(14)
 
 
(395)
 
Recoveries
 
 
15
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
12
 
 
27
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance
 
$
641
 
$
2,997
 
$
165
 
$
251
 
$
391
 
$
1,295
 
$
252
 
$
5,992
 
  
An analysis of the changes in the allowance for loan losses for the nine months ended June 30, 2014 is as follows:
 
 
 
Residential
Real Estate
 
Commercial
Real Estate
 
Multifamily
 
Construction
 
Land & Land
Development
 
Commercial
Business
 
Consumer
 
Total
 
 
 
(In thousands)
 
Changes in Allowance for Loan Losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
780
 
$
2,826
 
$
249
 
$
229
 
$
299
 
$
907
 
$
248
 
$
5,538
 
Provisions
 
 
230
 
 
(48)
 
 
(84)
 
 
22
 
 
92
 
 
622
 
 
70
 
 
904
 
Charge-offs
 
 
(388)
 
 
-
 
 
-
 
 
-
 
 
-
 
 
(234)
 
 
(113)
 
 
(735)
 
Recoveries
 
 
19
 
 
219
 
 
-
 
 
-
 
 
-
 
 
-
 
 
47
 
 
285
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance
 
$
641
 
$
2,997
 
$
165
 
$
251
 
$
391
 
$
1,295
 
$
252
 
$
5,992
 
 
The following table presents impaired loans individually evaluated for impairment as of June 30, 2015 and for the three and nine months ended June 30, 2015 and 2014.
 
 
 
At June 30, 2015
 
Three Months Ended June 30,
 
Nine Months Ended June 30,
 
 
 
 
 
 
 
 
 
2015
 
2015
 
2014
 
2014
 
2015
 
2015
 
2014
 
2014
 
 
 
 
 
Unpaid
 
 
 
Average
 
Interest
 
Average
 
Interest
 
Average
 
Interest
 
Average
 
Interest
 
 
 
Recorded
 
Principal
 
Related
 
Recorded
 
Income
 
Recorded
 
Income
 
Recorded
 
Income
 
Recorded
 
Income
 
 
 
Investment
 
Balance
 
Allowance
 
Investment
 
Recognized
 
Investment
 
Recognized
 
Investment
 
Recognized
 
Investment
 
Recognized
 
 
 
(In thousands)
 
Loans with no related allowance recorded:
 
 
 
Residential real estate
 
$
5,083
 
$
5,568
 
$
-
 
$
5,643
 
$
36
 
$
5,614
 
$
33
 
$
5,663
 
$
109
 
$
5,976
 
$
98
 
Commercial real estate
 
 
7,130
 
 
7,165
 
 
-
 
 
6,047
 
 
55
 
 
5,816
 
 
65
 
 
5,842
 
 
168
 
 
5,896
 
 
176
 
Multifamily
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
2,214
 
 
27
 
 
-
 
 
-
 
 
2,227
 
 
83
 
Construction
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
Land and land development
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
Commercial business
 
 
321
 
 
304
 
 
-
 
 
305
 
 
-
 
 
164
 
 
-
 
 
242
 
 
1
 
 
333
 
 
1
 
Consumer
 
 
231
 
 
235
 
 
-
 
 
233
 
 
1
 
 
265
 
 
2
 
 
243
 
 
4
 
 
294
 
 
5
 
 
 
$
12,765
 
$
13,272
 
$
-
 
$
12,048
 
$
92
 
$
14,073
 
$
127
 
$
11,990
 
$
282
 
$
14,726
 
$
363
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans with an allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
75
 
$
73
 
$
11
 
$
73
 
$
-
 
$
55
 
$
-
 
$
129
 
$
-
 
$
55
 
$
-
 
Commercial real estate
 
 
23
 
 
22
 
 
-
 
 
22
 
 
-
 
 
-
 
 
-
 
 
9
 
 
-
 
 
-
 
 
-
 
Multifamily
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
Construction
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
Land and land development
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
Commercial business
 
 
-
 
 
-
 
 
-
 
 
12
 
 
-
 
 
-
 
 
-
 
 
5
 
 
-
 
 
-
 
 
-
 
Consumer
 
 
87
 
 
87
 
 
8
 
 
93
 
 
-
 
 
103
 
 
-
 
 
91
 
 
-
 
 
101
 
 
-
 
 
 
$
185
 
$
182
 
$
19
 
$
200
 
$
-
 
$
158
 
$
-
 
$
234
 
$
-
 
$
156
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
5,158
 
$
5,641
 
$
11
 
$
5,536
 
$
36
 
$
5,669
 
$
33
 
$
5,792
 
$
109
 
$
6,031
 
$
98
 
Commercial real estate
 
 
7,153
 
 
7,187
 
 
-
 
 
6,069
 
 
55
 
 
5,816
 
 
65
 
 
5,851
 
 
168
 
 
5,896
 
 
176
 
Multifamily
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
2,214
 
 
27
 
 
-
 
 
-
 
 
2,227
 
 
83
 
Construction
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
Land and land development
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
Commercial business
 
 
321
 
 
304
 
 
-
 
 
317
 
 
-
 
 
164
 
 
-
 
 
247
 
 
1
 
 
333
 
 
1
 
Consumer
 
 
318
 
 
322
 
 
8
 
 
326
 
 
1
 
 
368
 
 
2
 
 
334
 
 
4
 
 
395
 
 
5
 
 
 
$
12,950
 
$
13,454
 
$
19
 
$
12,248
 
$
92
 
$
14,231
 
$
127
 
$
12,224
 
$
282
 
$
14,882
 
$
363
 
 
The Company recognized $5,000 and $52,000 of interest income on impaired commercial real estate loans using the cash receipts method during the nine-month periods ended June 30, 2015 and 2014, respectively. The Company did not recognize any interest income using the cash receipts method during the three-month period ended June 30, 2015. The Company recognized $11,000 of interest income on impaired commercial real estate loans using the cash receipts method during the three-month period ended June 30, 2014.
 
The following table presents impaired loans individually evaluated for impairment as of September 30, 2014.
 
 
 
 
 
Unpaid
 
 
 
 
 
Recorded
 
Principal
 
Related
 
 
 
Investment
 
Balance
 
Allowance
 
 
 
(In thousands)
 
 
 
Loans with no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
4,974
 
$
5,426
 
$
-
 
Commercial real estate
 
 
5,705
 
 
5,739
 
 
-
 
Multifamily
 
 
-
 
 
-
 
 
-
 
Construction
 
 
-
 
 
-
 
 
-
 
Land and land development
 
 
-
 
 
-
 
 
-
 
Commercial business
 
 
145
 
 
133
 
 
-
 
Consumer
 
 
255
 
 
258
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
11,079
 
$
11,556
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
Loans with an allowance recorded:
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
167
 
$
166
 
$
13
 
Commercial real estate
 
 
-
 
 
-
 
 
-
 
Multifamily
 
 
-
 
 
-
 
 
-
 
Construction
 
 
-
 
 
-
 
 
-
 
Land and land development
 
 
-
 
 
-
 
 
-
 
Commercial business
 
 
-
 
 
-
 
 
-
 
Consumer
 
 
95
 
 
95
 
 
8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
262
 
$
261
 
$
21
 
 
 
 
 
 
 
 
 
 
 
 
Total:
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
5,141
 
$
5,592
 
$
13
 
Commercial real estate
 
 
5,705
 
 
5,739
 
 
-
 
Multifamily
 
 
-
 
 
-
 
 
-
 
Construction
 
 
-
 
 
-
 
 
-
 
Land and land development
 
 
-
 
 
-
 
 
-
 
Commercial business
 
 
145
 
 
133
 
 
-
 
Consumer
 
 
350
 
 
353
 
 
8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
11,341
 
$
11,817
 
$
21
 
 
Nonperforming loans consist of nonaccrual loans and loans over 90 days past due and still accruing interest. The following table presents the recorded investment in nonperforming loans at June 30, 2015:
 
 
 
 
 
Loans 90+
 
 
 
 
 
 
 
Days
 
Total
 
 
 
Nonaccrual
 
Past Due
 
Nonperforming
 
 
 
Loans
 
Still Accruing
 
Loans
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
2,352
 
$
178
 
$
2,530
 
Commercial real estate
 
 
1,919
 
 
-
 
 
1,919
 
Multifamily
 
 
-
 
 
-
 
 
-
 
Construction
 
 
-
 
 
-
 
 
-
 
Land and land development
 
 
-
 
 
-
 
 
-
 
Commercial business
 
 
304
 
 
100
 
 
404
 
Consumer
 
 
189
 
 
-
 
 
189
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
4,764
 
$
278
 
$
5,042
 
  
The following table presents the recorded investment in nonperforming loans at September 30, 2014:
 
 
 
 
 
Loans 90+
 
 
 
 
 
 
 
Days
 
Total
 
 
 
Nonaccrual
 
Past Due
 
Nonperforming
 
 
 
Loans
 
Still Accruing
 
Loans
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
2,431
 
$
458
 
$
2,889
 
Commercial real estate
 
 
1,034
 
 
-
 
 
1,034
 
Multifamily
 
 
-
 
 
-
 
 
-
 
Construction
 
 
-
 
 
-
 
 
-
 
Land and land development
 
 
-
 
 
-
 
 
-
 
Commercial business
 
 
123
 
 
-
 
 
123
 
Consumer
 
 
216
 
 
20
 
 
236
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
3,804
 
$
478
 
$
4,282
 
 
The following table presents the aging of the recorded investment in past due loans at June 30, 2015:
 
 
 
30-59
 
60-89
 
90 +
 
 
 
 
 
 
 
 
 
Days
 
Days
 
Days
 
Total
 
 
 
Total
 
 
 
Past Due
 
Past Due
 
Past Due
 
Past Due
 
Current
 
Loans
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
3,522
 
$
877
 
$
1,777
 
$
6,176
 
$
177,135
 
$
183,311
 
Commercial real estate
 
 
364
 
 
-
 
 
200
 
 
564
 
 
160,288
 
 
160,852
 
Multifamily
 
 
-
 
 
391
 
 
-
 
 
391
 
 
22,670
 
 
23,061
 
Construction
 
 
79
 
 
-
 
 
-
 
 
79
 
 
16,911
 
 
16,990
 
Land and land development
 
 
-
 
 
-
 
 
-
 
 
-
 
 
11,648
 
 
11,648
 
Commercial business
 
 
178
 
 
52
 
 
404
 
 
634
 
 
32,610
 
 
33,244
 
Consumer
 
 
41
 
 
31
 
 
20
 
 
92
 
 
26,250
 
 
26,342
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
4,184
 
$
1,351
 
$
2,401
 
$
7,936
 
$
447,512
 
$
455,448
 
 
The following table presents the aging of the recorded investment in past due loans at September 30, 2014:
 
 
 
30-59
 
60-89
 
90 +
 
 
 
 
 
 
 
 
 
Days
 
Days
 
Days
 
Total
 
 
 
Total
 
 
 
Past Due
 
Past Due
 
Past Due
 
Past Due
 
Current
 
Loans
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
4,493
 
$
1,639
 
$
1,823
 
$
7,955
 
$
175,715
 
$
183,670
 
Commercial real estate
 
 
115
 
 
54
 
 
59
 
 
228
 
 
153,800
 
 
154,028
 
Multifamily
 
 
297
 
 
-
 
 
-
 
 
297
 
 
21,014
 
 
21,311
 
Construction
 
 
-
 
 
-
 
 
-
 
 
-
 
 
16,601
 
 
16,601
 
Land and land development
 
 
6
 
 
205
 
 
-
 
 
211
 
 
11,114
 
 
11,325
 
Commercial business
 
 
259
 
 
-
 
 
123
 
 
382
 
 
28,168
 
 
28,550
 
Consumer
 
 
39
 
 
79
 
 
72
 
 
190
 
 
25,727
 
 
25,917
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
5,209
 
$
1,977
 
$
2,077
 
$
9,263
 
$
432,139
 
$
441,402
 
 
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, public information, historical payment experience, credit documentation, and current economic conditions and trends, among other factors. The Company classifies loans based on credit risk at least quarterly. The Company uses the following regulatory definitions for risk ratings:
 
Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date.
 
Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
 
Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
 
Loss: Loans classified as loss are considered uncollectible and of such little value that their continuance on the Company’s books as an asset is not warranted.
 
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass-rated loans. As of June 30, 2015, and based on the most recent analysis performed, the recorded investment in loans by risk category was as follows:
   
 
 
Residential
 
Commercial
 
 
 
 
 
Land and Land
 
Commercial
 
 
 
 
 
 
 
Real Estate
 
Real Estate
 
Multifamily
 
Construction
 
Development
 
Business
 
Consumer
 
Total
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
174,242
 
$
142,958
 
$
23,061
 
$
16,990
 
$
11,298
 
$
32,818
 
$
25,946
 
$
427,313
 
Special Mention
 
 
2,710
 
 
11,364
 
 
-
 
 
-
 
 
255
 
 
117
 
 
137
 
 
14,583
 
Substandard
 
 
5,992
 
 
6,530
 
 
-
 
 
-
 
 
95
 
 
309
 
 
251
 
 
13,177
 
Doubtful
 
 
367
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
8
 
 
375
 
Loss
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
183,311
 
$
160,852
 
$
23,061
 
$
16,990
 
$
11,648
 
$
33,244
 
$
26,342
 
$
455,448
 
 
As of September 30, 2014, the recorded investment in loans by risk category was as follows:
 
 
 
Residential
 
Commercial
 
 
 
 
 
Land and Land
 
Commercial
 
 
 
 
 
 
 
Real Estate
 
Real Estate
 
Multifamily
 
Construction
 
Development
 
Business
 
Consumer
 
Total
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
172,822
 
$
138,854
 
$
21,311
 
$
16,601
 
$
11,206
 
$
28,127
 
$
25,471
 
$
414,392
 
Special Mention
 
 
4,233
 
 
10,226
 
 
-
 
 
-
 
 
6
 
 
278
 
 
89
 
 
14,832
 
Substandard
 
 
6,398
 
 
4,948
 
 
-
 
 
-
 
 
113
 
 
145
 
 
350
 
 
11,954
 
Doubtful
 
 
217
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
7
 
 
224
 
Loss
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
183,670
 
$
154,028
 
$
21,311
 
$
16,601
 
$
11,325
 
$
28,550
 
$
25,917
 
$
441,402
 
 
Troubled Debt Restructurings
 
Modification of a loan is considered to be a troubled debt restructuring (“TDR”) if the debtor is experiencing financial difficulties and the Company grants a concession to the debtor that it would not otherwise consider. By granting the concession, the Company expects to obtain more cash or other value from the debtor, or to increase the probability of receipt, than would be expected by not granting the concession. The concession may include, but is not limited to, reduction of the stated interest rate of the loan, reduction of accrued interest, extension of the maturity date or reduction of the face amount or maturity amount of the debt. A concession will be granted when, as a result of the restructuring, the Company does not expect to collect all amounts due, including interest at the original stated rate. A concession may also be granted if the debtor is not able to access funds elsewhere at a market rate for debt with similar risk characteristics as the restructured debt. The Company’s determination of whether a loan modification is a TDR considers the individual facts and circumstances surrounding each modification.
 
Loans modified in a TDR may be retained on accrual status if the borrower has maintained a period of performance in which the borrower’s lending relationship was not greater than ninety days delinquent at the time of restructuring and the Company determines the future collection of principal and interest is reasonably assured. Loans modified in a TDR that are placed on nonaccrual status at the time of restructuring will continue on nonaccrual status until the Company determines the future collection of principal and interest is reasonably assured, which generally requires that the borrower demonstrate a period of performance according to the restructured terms of at least six consecutive months.
 
The following table summarizes the Company’s recorded investment in TDRs at June 30, 2015 and September 30, 2014. There was no specific reserve included in the allowance for loan losses related to TDRs at June 30, 2015 and September 30, 2014.
 
 
 
Accruing
 
Nonaccrual
 
Total
 
 
 
(In thousands)
 
June 30, 2015:
 
 
 
 
 
 
 
Residential real estate
 
$
2,806
 
$
214
 
$
3,020
 
Commercial real estate
 
 
5,234
 
 
-
 
 
5,234
 
Commercial business
 
 
17
 
 
-
 
 
17
 
Consumer
 
 
129
 
 
-
 
 
129
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
8,186
 
$
214
 
$
8,400
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2014:
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
2,710
 
$
214
 
$
2,924
 
Commercial real estate
 
 
4,671
 
 
696
 
 
5,367
 
Commercial business
 
 
22
 
 
-
 
 
22
 
Consumer
 
 
134
 
 
-
 
 
134
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
7,537
 
$
910
 
$
8,447
 
  
The following table summarizes information in regard to TDRs that were restructured during the three- and nine-month periods ended June 30, 2015 and 2014:
 
 
 
 
 
Pre-
 
Post-
 
 
 
 
 
Modification
 
Modification
 
 
 
Number of
 
Principal
 
Principal
 
 
 
Loans
 
Balance
 
Balance
 
 
 
(In thousands)
 
June 30, 2015:
 
 
 
Three Months Ended June 30, 2015:
 
 
 
 
 
 
 
Consumer
 
 
1
 
$
3
 
$
3
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
1
 
$
3
 
$
3
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended June 30, 2015:
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
 
2
 
$
165
 
$
172
 
Consumer
 
 
1
 
 
3
 
 
3
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
3
 
$
168
 
$
175
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2014:
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30, 2014:
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
 
2
 
$
76
 
$
76
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
2
 
$
76
 
$
76
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended June 30, 2014:
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
 
5
 
$
215
 
$
235
 
Commercial real estate
 
 
1
 
 
716
 
 
724
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
6
 
$
931
 
$
959
 
 
For the TDRs listed above, the terms of modification included reduction of the stated interest rate and extension of the maturity date where the debtor was unable to access funds elsewhere at a market interest rate for debt with similar risk characteristics.
 
The Company had not committed to lend any additional amounts as of June 30, 2015 and September 30, 2014 to customers with outstanding loans classified as TDRs at such dates.
 
There were no principal charge-offs recorded as a result of TDRs during the nine-month periods ended June 30, 2015 and 2014. There was no specific allowance for loan losses related to TDRs modified during the nine-month periods ended June 30, 2015 and 2014. In the event that a TDR subsequently defaults, the Company evaluates the restructuring for possible impairment. As a result, the related allowance for loan losses may be increased or charge-offs may be taken to reduce the carrying amount of the loan.
 
During the nine-month period ended June 30, 2015, the Company did not have any TDRs that were modified within the previous twelve months and for which there was a payment default (defined as more than 90 days past due or in the process of foreclosure). During the nine-month period ended June 30, 2014, the Company had two TDRs totaling $476,000 that were modified within the previous twelve months and for which there was a payment default. No charge-offs were recognized for TDRs with subsequent payment defaults for the nine-month periods ended June 30, 2015 and 2014.