10. DISCLOSURES ABOUT THE CREDIT QUALITY OF LOANS RECEIVABLE AND THE ALLOWANCE FOR LOAN LOSSES (IN THOUSANDS)

The following tables illustrate certain disclosures required by ASC 310-10-50-11B(c), (g) and (h), the changes to the allowance for loan losses, for the three months ended September 30, 2013 (in thousands):

Allowance for Credit Losses and Recorded Investment in Loans Receivable

	One- to				One- to		Multi-
	Four- Family				Four-family		family Non-
	Owner-				Non-owner		owner		Non-						Commercial
	Occupied				Occupied		Occupied		Residential						and
	Mortgage		Consumer		Mortgage		Mortgage		Real estate		Construction		Land		Agricultural		Total
Allowance for Credit Losses:
Balance, July 1, 2013:	$	942	$	553	$	215	$	1,286	$	2,386	$	10	$	17	$	34	$	5,443
Charge offs		(46)		(22)		-		-		-		-		-		-		(68)
Recoveries		126		14		1		391		1		-		12		-		545
Provision (credit)		(44)		37		3		(423)		8		(6)		(12)		(5)		(442)
Ending Balance:	$	978	$	582	$	219	$	1,254	$	2,395	$	4	$	17	$	29	$	5,478

Balance, Individually Evaluated	$	-	$	-	$	7	$	205	$	120	$	-	$	-	$	-	$	332

Balance, Collectively Evaluated	$	978	$	582	$	212	$	1,049	$	2,275	$	4	$	17	$	29	$	5,146

Financing receivables:
Ending balance	$	108,482	$	35,110	$	15,973	$	29,380	$	51,352	$	3,742	$	3,401	$	7,162	$	254,602

Ending Balance: individually evaluated for impairment	$	4,286	$	513	$	1,363	$	7,631	$	7,177	$	-	$	22	$	-	$	20,992

Ending Balance: collectively evaluated for impairment	$	94,284	$	30,045	$	13,967	$	21,749	$	40,844	$	3,742	$	3,273	$	5,898	$	213,802

Ending Balance: loans acquired with deteriorated credit quality	$	9,912	$	4,552	$	643	$	-	$	3,331	$	-	$	106	$	1,264	$	19,808

For the year ended June 30, 2013 (in thousands):

Allowance for Credit Losses and Recorded Investment in Loans Receivable

	One- to				One- to		Multi-
	Four- Family				Four-family		family Non-
	Owner-				Non-owner		owner		Non-						Commercial
	Occupied				Occupied		Occupied		Residential						and
	Mortgage		Consumer		Mortgage		Mortgage		Real estate		Construction		Land		Agricultural		Total
Allowance for Credit Losses:
Beginning balance:	$	666	$	477	$	236	$	1,915	$	2,282	$	3	$	11	$	24	$	5,614
Charge offs		(254)		(165)		(68)		-		(457)		-		-		-		(944)
Recoveries		34		75		63		660		4		-		-		3		839
Provision (credit)		496		166		(16)		(1,289)		557		7		6		7		(66)
Ending Balance:	$	942	$	553	$	215	$	1,286	$	2,386	$	10	$	17	$	34	$	5,443

Balance, Individually Evaluated	$	-	$	-	$	7	$	205	$	120	$	-	$	-	$	-	$	332

Balance, Collectively Evaluated	$	942	$	553	$	208	$	1,081	$	2,266	$	10	$	17	$	34	$	5,111

Financing receivables:
Ending balance	$	111,404	$	35,699	$	16,655	$	32,306	$	51,902	$	2,200	$	3,435	$	7,115	$	260,716

Ending Balance: individually evaluated for impairment	$	5,121	$	535	$	1,370	$	9,951	$	7,251	$	-	$	24	$	-	$	24,252

Ending Balance: collectively evaluated for impairment	$	95,779	$	30,406	$	14,628	$	22,355	$	41,265	$	2,200	$	3,304	$	5,816	$	215,753

Ending Balance: loans acquired with deteriorated credit quality	$	10,504	$	4,758	$	657	$	-	$	3,386	$	-	$	107	$	1,299	$	20,711

The following tables illustrate certain disclosures required by ASC 310-10-50-29(b).

Credit Risk Profile by Internally Assigned Grade

At September 30, 2013

(in thousands)

	One- to
	Four-				One- to
	Family				Four-family		Multi-family
	Owner-				Non-owner		Non-owner		Non-						Commercial
	Occupied				Occupied		Occupied		Residential						and
	Mortgage		Consumer		Mortgage		Mortgage		Real estate		Construction		Land		Agricultural		Total
Grade:
Pass	$	97,481	$	33,401	$	9,649	$	16,223	$	28,680	$	3,742	$	2,344	$	5,383	$	196,903
Watch		6,049		961		4,678		5,176		11,997		—		866		1,779		31,506
Special mention		666		235		283		350		3,396		—		168		—		5,098
Substandard		4,286		513		1,363		7,631		7,279		—		23		—		21,095
Total:	$	108,482	$	35,110	$	15,973	$	29,380	$	51,352	$	3,742	$	3,401	$	7,162	$	254,602

Credit Risk Profile by Internally Assigned Grade

At June 30, 2013

(in thousands)

	One- to
	Four-				One- to
	Family				Four-family		Multi-family
	Owner-				Non-owner		Non-owner		Non-						Commercial
	Occupied				Occupied		Occupied		Residential						and
	Mortgage		Consumer		Mortgage		Mortgage		Real estate		Construction		Land		Agricultural		Total
Grade:
Pass	$	99,494	$	34,506	$	10,909	$	16,900	$	26,340	$	2,200	$	2,364	$	5,691	$	198,404
Watch		6,033		641		3,988		5,102		14,866		—		861		1,414		32,905
Special mention		756		17		388		353		3,343		—		186		—		5,043
Substandard		5,121		535		1,370		9,951		7,353		—		24		10		24,364
Total:	$	111,404	$	35,699	$	16,655	$	32,306	$	51,902	$	2,200	$	3,435	$	7,115	$	260,716

The following tables illustrate certain disclosures required by ASC 310-10-50-7A for gross loans.

Age Analysis of Past Due Loans Receivable

At September 30, 2013

(in thousands)

							Total
	30-59 days		60-89 days		Greater than		past		Total		Total loans
	past due		past due		90 days		due		current		receivable
Mortgage One- to Four- Family - Owner-Occupied	$	1,971	$	721	$	931	$	3,623	$	104,859	$	108,482
Consumer		138		281		5		424		34,686		35,110
One- to Four- Family Non-Owner Occupied Mortgage		377		283		-		660		15,313		15,973
Multi-family Residential Real Estate Mortgage		109		-		-		109		29,271		29,380
Non-Residential Real Estate		894		114		719		1,727		49,625		51,352
Construction		-		-		-		-		3,742		3,742
Land		16		-		-		16		3,385		3,401
Commercial and Agricultural		10		-		-		10		7,152		7,162
Total	$	3,515	$	1,399	$	1,655	$	6,569	$	248,033	$	254,602

Age Analysis of Past Due Loans Receivable

At June 30, 2013

(in thousands)

							Total
	30-59 days		60-89 days		Greater than		past		Total		Total loans
	past due		past due		90 days		due		current		receivable
Mortgage One- to Four- Family - Owner-Occupied	$	1,748	$	706	$	889	$	3,343	$	108,061	$	111,404
Consumer		202		68		8		278		35,421		35,699
One- to Four- Family Non-Owner-Occupied Mortgage		54		388		—		442		16,213		16,655
Multi-family Residential Real Estate Mortgage		110		—		2,263		2,373		29,933		32,306
Nonresidential Real Estate		286		18		719		1,023		50,879		51,902
Construction		—		—		—		—		2,200		2,200
Land		—		—		—		—		3,435		3,435
Commercial and Agricultural		7		—		—		7		7,108		7,115
Total	$	2,407	$	1,180	$	3,879	$	7,466	$	253,250	$	260,716

The following table illustrates certain disclosures required by ASC 310-10-50-15.

Impaired Loans

(in thousands)

							For the three months
							ended September 30,
							2013
			Unpaid				Interest		Average
	Recorded		principal		Specific		income		Recorded
	investment		balance		allowance		recognized		investment
With a related allowance recorded:
Mortgage One- to Four- Family - Owner-Occupied	$	-	$	-	$	-	$	-	$	-
Consumer		-		-		-		-		-
One- to Four- Family Non-Owner Occupied Mortgage		332		339		(7)		5		333
Multifamily Residential Real Estate Mortgage		3,239		3,444		(205)		25		3,261
Non-Residential Real Estate		1,871		1,991		(120)		17		1,876
Construction		-		-		-		-		-
Land		-		-		-		-		-
Commercial and Agricultural		-		-		-		-		-
Total	$	5,442	$	5,774	$	(332)	$	47	$	5,470

Impaired Loans

(in thousands)

							For the three months
							ended September 30,
							2013
			Unpaid				Interest		Average
	Recorded		principal		Specific		income		Recorded
	investment		balance		allowance		recognized		investment
With no related allowance recorded:
Mortgage One- to Four- Family - Owner-Occupied	$	4,286	$	4,961	$	-	$	20	$	4,704
Consumer		513		1,093		-		6		524
One- to Four- Family Non-Owner Occupied Mortgage		1,025		1,110		-		8		1,027
Multifamily Residential Real Estate Mortgage		4,187		5,903		-		57		5,325
Non-Residential Real Estate		5,185		9,175		-		23		5,218
Construction		-		-		-		-		-
Land		23		30		-		-		24
Commercial and Agricultural		-		7		-		-		-
Total	$	15,219	$	22,279	$	-	$	114	$	16,822

Impaired Loans

(in thousands)

							For the three months
							ended September 30,
							2013
			Unpaid				Interest		Average
	Recorded		principal		Specific		income		Recorded
	investment		balance		allowance		recognized		investment
Total:
Mortgage One- to Four- Family - Owner-Occupied	$	4,286	$	4,961	$	-	$	20	$	4,704
Consumer		513		1,093		-		6		524
One- to Four- Family Non-Owner Occupied Mortgage		1,357		1,449		(7)		13		1,360
Multifamily Residential Real Estate Mortgage		7,426		9,347		(205)		82		8,586
Non-Residential Real Estate		7,056		11,166		(120)		40		7,094
Construction		-		-		-		-		-
Land		23		30		-		-		24
Commercial and Agricultural		-		7		-		-		-
Total	$	20,661	$	28,053	$	(332)	$	161	$	22,292

Impaired Loans

							For the year ended
							June 30, 2013
			Unpaid				Interest		Average
	Recorded		principal		Specific		income		recorded
	investment		balance		allowance		recognized		investment
	(in thousands)
With an allowance recorded:
One- to Four- Family - Owner-Occupied	$	—	$	—	$	—		—	$	20
Consumer		—		—		—		—		—
One- to Four- Family Non-Owner Occupied Mortgage		334		341		(7)		21		405
Multi-family Residential Real Estate Mortgage		3,283		3,488		(205)		103		3,775
Nonresidential Real Estate		1,880		2,000		(120)		71		3,397
Construction		—		—		—		—		—
Land		—		—		—		—		—
Commercial and Agricultural		—		—		—		—		—
Total	$	5,497	$	5,829	$	(332)	$	195	$	7,597

							For the year ended
							June 30, 2013
			Unpaid				Interest		Average
	Recorded		principal		Specific		income		recorded
	investment		balance		allowance		recognized		investment
	(in thousands)
Without an allowance recorded:
Mortgage One- to Four- Family - Owner-Occupied	$	5,121	$	5,876	$	—	$	65	$	5,799
Consumer		535		1,116		—		26		521
One- to Four- Family Non-Owner Occupied Mortgage		1,029		1,114		—		26		657
Multi-family Residential Real Estate Mortgage		6,463		8,570		—		219		7,855
Non-residential Real Estate		5,251		9,239		—		2,118		3,480
Construction		—		—		—		—		—
Land		24		45		—		27		26
Commercial and Agricultural		—		7		—		195		120
Total	$	18,423	$	25,967	$	—	$	2,676	$	18,458

							For the year ended
							June 30, 2013
			Unpaid				Interest		Average
	Recorded		principal		Specific		income		recorded
	investment		balance		allowance		recognized		investment
	(in thousands)
Total:
Mortgage One- to Four- Family - Owner-Occupied	$	5,121	$	5,876	$	—	$	65	$	5,819
Consumer		535		1,116		—		26		521
One- to Four- Family Non-Owner Occupied Mortgage		1,363		1,455		(7)		47		1,062
Multifamily Residential Real Estate Mortgage		9,746		12,058		(205)		322		11,630
Nonresidential Real Estate		7,131		11,239		(120)		2,189		6,877
Construction		—		—		—		—		—
Land		24		45		—		27		26
Commercial and Agricultural		—		7		—		195		120
Total	$	23,920	$	31,796	$	(332)	$	2,871	$	26,055

The Bank did not have any investments in subprime loans at September 30, 2013. Impaired loans at September 30, 2013 included troubled debt restructurings with an aggregate principal balance of $15.8 million and a recorded investment of $15.6 million. See Note 11 for a discussion on troubled debt restructurings.