Financing Receivables

3 Months Ended

Mar. 31, 2014

Receivables [Abstract]

Financing Receivables

12.     Financing Receivables

The recorded investment in loans was as follows as of March 31, 2014:

	One-to four
	Family			Multi-family
	Residential			Residential			Construction			Commercial			Consumer			Total
	(In thousands)
Purchased loans	$	75,997		$	6,115		$	-		$	26,783		$	1,692		$	110,587
Fair value discount		(1,055	)		(159	)		-			(520	)		(234	)		(1,968	)
Purchased loans book value		74,942			5,956			-			26,263			1,458			108,619
Originated loans (1)		157,045			14,054			7,040	(2)		49,064			786			227,989
Ending balance	$	231,987		$	20,010		$	7,040		$	75,327		$	2,244		$	336,608

(1) Includes loans held for sale

(2) Before consideration of undisbursed Loans-in-process

The carrying amount of purchased loans consisting of credit-impaired purchased loans and non-impaired purchased loans is shown in the following table as of March 31, 2014.

			Credit
	Non-impaired		Impaired
	Purchased Loans		Purchased Loans
	(In thousands)		(In thousands)
One-to-four family residential	$	72,037	$	2,905
Multi-family residential		4,901		1,055
Construction		-		-
Commercial		19,762		6,501
Consumer		1,458		-
Total	$	98,158	$	10,461

The following summarizes activity in the allowance for credit losses:

	March 31, 2014
	One-to four Family Residential			Multi-family Residential			Construction		Commercial			Consumer			Total
	(In thousands)
Allowance for loan losses:
Beginning balance	$	1,352		$	194		$	9	$	131		$	11		$	1,697
Provision		145			(1	)		1		55			-			200
Charge-offs		(128	)		-			-		(39	)		(3	)		(170	)
Recoveries		-			-			-		2			-			2
Ending balance	$	1,369		$	193		$	10	$	149		$	8		$	1,729
Originated loans:
Individually evaluated for impairment	$	-		$	-		$	-	$	-		$	-		$	-
Purchased loans:
Individually evaluated for impairment	$	-		$	-		$	-	$	-		$	-		$	-
Originated Loans:
Collectively evaluated for impairment	$	968		$	193		$	10	$	149		$	8		$	1,328
Purchased loans:
Loans acquired with deteriorated credit quality	$	401		$	-		$	-	$	-		$	-		$	401
Loans receivable:
Ending balance	$	231,987		$	20,010		$	7,040	$	75,327		$	2,244		$	336,608
Ending balance:
Individually evaluated for impairment (1)	$	73,434		$	4,996		$	-	$	20,401		$	1,458		$	100,289
Ending balance:
Collectively evaluated for impairment	$	155,648		$	13,959		$	7,040	$	48,425		$	786		$	225,858
Ending balance:
Loans acquired with deteriorated credit quality	$	2,905		$	1,055		$	-	$	6,501		$	-		$	10,461

(1)   Includes loans acquired from First Franklin with outstanding balances of $98,158 at March 31, 2014.

	December 31, 2013
	One-to four Family Residential			Multi-family Residential		Construction		Commercial			Consumer			Total
	(In thousands)
Allowance for loan losses:
Beginning balance	$	1,823		$	172	$	1	$	153		$	11		$	2,160
Provision		1,426			22		8		(14	)		1			1,443
Charge-offs		(1,928	)		-		-		(8	)		(1	)		(1,937	)
Recoveries		31			-		-		-			-			31
Ending balance	$	1,352		$	194	$	9	$	131		$	11		$	1,697
Originated loans:
Individually evaluated for impairment	$	-		$	-	$	-	$	-		$	-		$	-
Purchased loans:
Individually evaluated for impairment	$	-		$	-	$	-	$	-		$	-		$	-
Originated Loans:
Collectively evaluated for impairment	$	939		$	194	$	9	$	131		$	11		$	1,284
Purchased loans:
Loans acquired with deteriorated credit quality	$	413		$	-	$	-	$	-		$	-		$	413
Loans receivable:
Ending balance	$	236,236		$	22,805	$	7,141	$	72,755		$	2,278		$	341,215
Ending balance:
Individually evaluated for impairment (1)	$	77,380		$	6,535	$	-	$	21,055		$	1,508		$	106,478
Ending balance:
Collectively evaluated for impairment	$	155,676		$	15,214	$	7,141	$	45,109		$	770		$	223,910
Ending balance:
Loans acquired with deteriorated credit quality	$	3,180		$	1,056	$	-	$	6,591		$	-		$	10,827

(1) Includes loans acquired from First Franklin with outstanding balances of $103,497 at December 31, 2013.

The Corporation assigns credit risk grades to evaluated loans using grading standards employed by regulatory agencies. Loans judged to carry lower-risk attributes are assigned a “pass” grade, indicating a minimal likelihood of loss. Loans judged to carry a higher-risk attributes are referred to as “classified loans” and are further disaggregated, with increasing expectations for loss recognition, as “special mention”, “substandard”, “doubtful”, and “loss”. The Loan Classification of Assets committee assigns the credit risk grades to loans and reports to the board on a monthly basis the “classified asset” report.

The following table summarizes the credit risk profile by internally assigned grade:

	Originated Loans at March 31, 2014
	One-to four
	Family		Multi-family
	Residential		Residential		Construction		Commercial		Consumer		Total
	(In thousands)
Grade:
Pass	$	155,255	$	13,959	$	7,040	$	47,542	$	786	$	224,582
Special mention		-		-		-		-		-		-
Substandard		1,790		95		-		1,522		-		3,407
Doubtful		-		-		-		-		-		-
Loss		-		-		-		-		-		-
Total	$	157,045	$	14,054	$	7,040	$	49,064	$	786	$	227,989
	Originated Loans at December 31, 2013
	One-to four
	Family		Multi-family
	Residential		Residential		Construction		Commercial		Consumer		Total
					(In thousands)
Grade:
Pass	$	155,364	$	15,214	$	7,141	$	44,218	$	770	$	222,707
Special mention		-		-		-		-		-		-
Substandard		2,519		95		-		1,570		-		4,184
Doubtful		-		-		-		-		-		-
Loss		-		-		-		-		-		-
Total	$	157,883	$	15,309	$	7,141	$	45,788	$	770	$	226,891
	Purchased Loans at March 31, 2014
	One-to four
	Family		Multi-family
	Residential		Residential		Construction		Commercial		Consumer		Total
					(In thousands)
Grade:
Pass	$	71,505	$	5,956	$	-	$	21,877	$	1,434	$	100,772
Special mention		-		-		-		-		-		-
Substandard		3,437		-		-		4,386		24		7,847
Doubtful		-		-		-		-		-		-
Loss		-		-		-		-		-		-
Total	$	74,942	$	5,956	$	-	$	26,263	$	1,458	$	108,619

	Purchased Loans at December 31, 2013
	One-to four
	Family		Multi-family
	Residential		Residential		Construction		Commercial		Consumer		Total
	(In thousands)
Grade:
Pass	$	74,410	$	7,496	$	-	$	25,076	$	1,490	$	108,472
Special mention		-		-		-		-		-		-
Substandard		3,943		-		-		1,891		18		5,852
Doubtful		-		-		-		-		-		-
Loss		-		-		-		-		-		-
Total	$	78,353	$	7,496	$	-	$	26,967	$	1,508	$	114,324

The following tables summarizes loans by delinquency, nonaccrual status and impaired loans:

	Age Analysis of Past Due Originated Loans Receivable
	As of March 31, 2014
													Recorded
													Investment
	30-89 Days		Greater than		Total Past		Current &				Total		90 Days and
	Past Due		90 Days		Due		Accruing		Nonaccrual		Loans		Accruing
	(In thousands)
Real Estate:
1-4 family
Residential	$	1,893	$	1,397	$	3,290	$	153,755	$	1,397	$	157,045	$	-
Multi-family
Residential		-		95		95		13,959		95		14,054		-
Construction		-		-		-		7,040		-		7,040		-
Commercial		-		639		639		48,425		639		49,064		-
Consumer		-		-		-		786		-		786		-
Total	$	1,893	$	2,131	$	4,024	$	223,965	$	2,131	$	227,989	$	-

	Age Analysis of Past Due Originated Loans Receivable
	As of December 31, 2013
													Recorded
													Investment
	30-89 Days		Greater than		Total Past		Current &				Total Loan		90 Days and
	Past Due		90 Days		Due		Accruing		Nonaccrual		Receivables		Accruing
							(In thousands)
Real Estate:
1-4 family
Residential	$	1,915	$	2,207	$	4,122	$	153,761	$	2,207	$	157,883		-
Multi-family		-		95		95		15,214		95		15,309		-
Construction		-		-		-		7,141		-		7,141		-
Commercial		-		679		679		45,109		679		45,788		-
Consumer		-		-		-		770		-		770		-
Total	$	1,915	$	2,981	$	4,896	$	221,995	$	2,981	$	226,891		-

	Age Analysis of Past Due Purchased Loans Receivable
	As of March 31, 2014
													Recorded
													Investment
	30-89 Days		Greater than		Total Past		Current &				Total		90 Days and
	Past Due		90 Days		Due		Accruing		Nonaccrual		Loans		Accruing
							(In thousands)
Real Estate:
1-4 family
Residential	$	1,385	$	2,708	$	4,093	$	70,849	$	2,708	$	74,942	$	-
Multi-family
Residential		-		-		-		5,956		-		5,956		-
Construction		-		-		-		-		-		-		-
Commercial		1,007		693		1,700		24,563		693		26,263		-
Consumer		-		24		24		1,434		24		1,458		-
Total	$	2,392	$	3,425	$	5,817	$	102,802	$	3,425	$	108,619	$	-

		Age Analysis of Past Due Purchased Loans Receivable
		As of December 31, 2013
														Recorded
														Investment
	30-89 Days			Greater than		Total Past		Current &				Total Loan		90 Days and
	Past Due			90 Days		Due		Accruing		Nonaccrual		Receivables		Accruing
		(In thousands)
Real Estate:
1-4 family
Residential		$	2,221	$	3,287	$	5,508	$	72,845	$	3,287	$	78,353	$	-
Multi-family			56		-		56		7,440		-		7,496		-
Construction			-		-		-		-		-		-		-
Commercial			336		676		1,012		25,955		676		26,967		-
Consumer			10		18		28		1,480		18		1,508		-
Total		$	2,623	$	3,981	$	6,604	$	107,720	$	3,981	$	114,324	$	-

	Impaired Loans
	As of March 31, 2014
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
	(In thousands)
Purchased loans
with a fair value discount and no related allowance recorded:
Real Estate:
1-4 family
Residential	$	2,905	$	2,905	$	-	$	3,043	$	44
Multi-family		1,055		1,055		-		1,056		6
Construction		-		-		-		-		-
Commercial		6,501		6,501		-		6,546		111
Consumer		-		-		-		-		-
Total	$	10,461	$	10,461	$	-	$	10,645	$	161
Purchased loans
with no fair value discount and no related allowance recorded:
Real Estate:
1-4 family	$	2,314	$	2,314	$	-	$	2,480		9
Residential
Multi-family
Residential		-		-		-		-		-
Construction		-		-		-		-		-
Commercial		-		-		-		-		-
Consumer		23		23		-		12		-
Total	$	2,337	$	2,337	$	-	$	2,492	$	9
Originated loans with no related allowance recorded
Real Estate:
1-4 family	$	1,397	$	1,397	$	-	$	1,802	$	5
Residential
Multi-family
Residential		95		95		-		95		-
Construction		-		-		-		-		-
Commercial		639		639		-		659		7
Consumer		-		-		-		-		-
Total	$	2,131	$	2,131	$	-	$	2,556	$	12
Total:
Real Estate:
1-4 family	$	6,616	$	6,616	$	-	$	7,325	$	58
Residential
Multi-family
Residential		1,150		1,150		-		1,151		6
Construction		-		-		-		-		-
Commercial		7,140		7,140		-		7,205		118
Consumer		23		23		-		12		-
Total	$	14,929	$	14,929	$	-	$	15,693	$	182

	Impaired Loans
	As of December 31, 2013
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
	(In thousands)
Purchased loans
with a fair value discount and no related allowance recorded:
Real Estate:
1-4 family
Residential	$	3,180	$	3,180	$	-	$	3,556	$	192
Multi-family		1,056		1,056		-		1,059		22
Construction		-		-		-		-		-
Commercial		6,591		6,591		-		7,556		436
Consumer		-		-		-		41		-
Total	$	10,827	$	10,827	$	-	$	12,212	$	650
Purchased loans
with a fair value discount and an allowance recorded:
Real Estate:
1-4 family
Residential	$	-	$	-	$	-	$	7	$	-
Multi-family		-		-		-		-		-
Construction		-		-		-		-		-
Commercial		-		-		-		-		-
Consumer		-		-		-		-		-
Total	$	-	$	-	$	-	$	7	$	-
Purchased loans
with no fair value discount and no related allowance recorded:
Real Estate:
1-4 family	$	2,646	$	2,646	$	-	$	2,185	$	107
Residential
Multi-family
Residential		-		-		-		-		-
Construction		-		-		-		-		-
Commercial		-		-		-		-		-
Consumer		16		16		-		28		1
Total	$	2,662	$	2,662	$	-	$	2,213	$	108
Purchased loans with an allowance recorded:
Real Estate:
1-4 family	$	-	$	-	$	-	$	74	$	-
Residential
Multi-family
Residential		-		-		-		-		-
Construction		-		-		-		-		-
Commercial		-		-		-		-		-
Consumer		-		-		-		-		-
Total	$	-	$	-	$	-	$	74	$	-

			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
Originated loans with no related allowance recorded
Real Estate:
1-4 family
Residential	$	2,207	$	2,207	$	-	$	2,847	$	32
Multi-family		95		95		-		95		-
Construction		-		-		-		-		-
Commercial		679		679		-		537		35
Consumer		-		-		-		-		-
Total	$	2,981	$	2,981	$	-	$	3,479	$	67
Originated loans with an allowance recorded:
Real Estate:
1-4 family
Residential	$	-	$	-	$	-	$	473	$	-
Multi-family		-		-		-		-		-
Construction		-		-		-		-		-
Commercial		-		-		-		81		-
Consumer		-		-		-		-		-
Total	$	-	$	-	$	-	$	554	$	-
Total:
Real Estate:
1-4 family
Residential	$	8,033	$	8,033	$	-	$	9,142	$	331
Multi-family		1,151		1,151		-		1,154		22
Construction		-		-		-		-		-
Commercial		7,270		7,270		-		8,174		471
Consumer		16		16		-		69		1
Total	$	16,470	$	16,470	$	-	$	18,539	$	825

	Modifications As of March 31, 2014
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	Number of		Recorded		Recorded
	Contracts		Investment		Investment
			(In thousands)
Troubled Debt Restructurings
Real Estate:
1-4 Family Residential
Multi-family Residential		4	$	2,234	$	2,234
Construction		-		-		-
Commercial		1		100		100
Consumer		-		-		-

	Modifications For the three months ended March 31, 2014
	Number of		Recorded
	Contracts		Investment
			(In thousands)
Troubled Debt Restructurings
That Subsequently Defaulted
Real Estate:
1-4 Family Residential		-	$	-
Multi-family Residential		-		-
Construction		-		-
Commercial
Consumer		-		-

Modifications

	As of December 31, 2013
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	Number of		Recorded		Recorded
	Contracts		Investment		Investment
			(In thousands)
Troubled Debt Restructurings
Real Estate:
1-4 Family Residential		4	$	316	$	312
Multi-family Residential		-		-		-
Construction		-		-		-
Commercial		4		1,863		1,849
Consumer		-		-		-

	Number of		Recorded
	Contracts		Investment
			(In thousands)
Troubled Debt Restructurings
That Subsequently Defaulted
Real Estate:
1-4 Family Residential		-	$	-
Multi-family Residential		-		-
Construction		-		-
Commercial		1		754
Consumer		-		-

The modifications related to interest only payments ranging from a three to six month period. Due to the short term cash flow deficiency, no related allowance was recorded as a result of the restructurings. The collateral value was updated with recent appraisals which gave no indication of impairment.