12. TROUBLED DEBT RESTRUCTURINGS - From time to time, as part of our loss mitigation process, loans may be renegotiated in a TDR when we determine that greater economic value will ultimately be recovered under the new restructured terms than through foreclosure, liquidation, or bankruptcy. We may consider the borrower’s payment status and history, the borrower’s ability to pay upon a rate reset on an adjustable rate loan, size of the payment increase upon a rate reset, period of time remaining prior to the rate reset, and other relevant factors in determining whether a borrower is experiencing financial difficulty. TDRs are accounted for as set forth in ASC 310-40 Troubled Debt Restructurings by Creditors (“ASC 310-40”). A TDR may be on nonaccrual or it may accrue interest. A TDR is typically on nonaccrual until the borrower successfully performs under the new terms for at least six consecutive months. However, a TDR may be placed on accrual immediately following the restructuring in those instances where a borrower’s payments are current prior to the modification, the loan is restructured at a market rate and management determines that principal and interest under the new terms are fully collectible. All TDRs are considered to be impaired loans. A TDR will be removed from TDR classification if it is restructured at a market rate, is not impaired under those restructured terms and has been performing under those terms for at least twelve consecutive months.

Existing performing loan customers who request a loan (non-TDR) modification and who meet the Bank’s underwriting standards may, usually for a fee, modify their original loan terms to terms currently offered. The modified terms of these loans are similar to the terms offered to new customers with similar credit risk. The fee assessed for modifying the loan is deferred and amortized over the life of the modified loan using the level-yield method and is reflected as an adjustment to interest income. Each modification is examined on a loan-by-loan basis and if the modification of terms represents more than a minor change to the loan, then the unamortized balance of the pre-modification deferred fees or costs associated with the mortgage loan are recognized in interest income at the time of the modification. If the modification of terms does not represent more than a minor change to the loan, then the unamortized balance of the pre-modification deferred fees or costs continue to be deferred.

The following tables summarize TDRs by loan type and accrual status.

	At September 30, 2016
	Loan Status				Total Unpaid Principal		Related		Recorded		Number of		Average Recorded
(In thousands)	Accrual		Nonaccrual		Balance		Allowance		Investment		Loans		Investment
One- to Four-Family residential real estate	$	1,535	$	382	$	1,917	$	—	$	1,917		19	$	1,940
Multi-family residential real estate		—		—		—		—		—		—		180
Nonresidential real estate		718		647		1,365		—		1,365		3		2,116
Total	$	2,253	$	1,029	$	3,282	$	—	$	3,282		22	$	4,236

	At June 30, 2016
	Loan Status				Total Unpaid Principal		Related		Recorded		Number of		Average Recorded
(In thousands)	Accrual		Nonaccrual		Balance		Allowance		Investment		Loans		Investment
One- to Four-Family residential real estate	$	1,609	$	324	$	1,933	$	—	$	1,933		19	$	1,979
Multi-family residential real estate		—		—		—		—		—		—		361
Nonresidential real estate		721		1,066		1,787		—		1,787		3		3,009
Total	$	2,330	$	1,390	$	3,720	$	—	$	3,720		22	$	5,349

Interest income recognized on TDRs is as follows:

	For the three months ended
	September 30,
	2016		2015

One-to-Four Family residential real estate	$	17	$	11
Multi-family residential real estate		—		11
Nonresidential real estate		11		48
Construction		—		—
Commercial		—		—
Consumer		—		—
Total	$	28	$	70

At September 30, 2016, the Bank had 22 loans totaling $3.3 million that were reported as TDRs, and had established an allowance for losses on these loans of $0. With respect to the $3.3 million in TDRs, the Bank charged-off $1.4 million at the time the loans were restructured into the Note A/B split note format. At June 30, 2016, the Bank had 25 loans totaling $3.7 million that were reported as TDRs, and had an allowance for losses on these loans of $0. With respect to the $3.7 million in TDRs, the Bank charged-off $1.4 million with respect to those loans at the time the loans were restructured into the Note A/B split note format. At September 30, 2016, the Bank had no other commitments to lend on its TDRs. Management continues to monitor the performance of loans reported as TDRs on a monthly basis.

Loans that were included in TDRs at September 30, 2016 and June 30, 2016 were generally given concessions of interest rate reductions of between 25 and 300 basis points and/or structured as interest only payment loans for periods of one to three years. Some of these loans also have balloon payments due at the end of their lowered rate period, requiring the borrower to refinance at market rates at that time. At September 30, 2016 and June 30, 2016, all loans classified as TDRs required principal and interest payments.

The following table is a roll forward of activity in our TDRs:

	Three Months Ended
	September 30, 2016
	Recorded		Number
	Investment		of Loans
(Dollar amounts in thousands)
Beginning balance	$	3,720		22
Additions to TDR		—		—
Charge-offs		—		—
Removal of TDRs		—		—
Payments		(438)		—
Ending balance	$	3,282		22