Loans Receivable, Net

3 Months Ended

Jun. 30, 2015

Receivables [Abstract]

Financing Receivables [Text Block]

Note 3. Loans Receivable, Net

Loans receivable, net, are summarized as follows:

	June 30,		March 31,
	2015		2015
Real estate loans:
Single-family, owner occupied	$	60,794,526	$	61,255,147
Single-family, non-owner occupied		8,167,267		8,162,534
Multi-family, 5 or more units		705,612		721,130
Commercial		2,859,807		2,878,651
Land		1,059,891		1,212,874
Consumer loans		1,621,180		1,562,398
		75,208,283		75,792,734
Allowance for losses		(230,403)		(242,103)
Deferred loan fees, net		(83,754)		(86,885)
Total loans	$	74,894,126	$	75,463,746

The weighted-average rate on loans was 4.31% and 4.46% at June 30, 2015 and March 31, 2015, respectively.

The risk characteristics of each loan portfolio segment are as follows:

Single-family, owner occupied

Single-family, owner occupied loans are underwritten based on the applicant’s employment and credit history and the appraised value of the property. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas, such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

Single-family, non-owner occupied

Single-family, non-owner occupied loans carry greater inherent risks than single-family, owner occupied loans, since the repayment ability of the borrower is reliant on the success of the income generated from the property.

Multi-family, 5 or more units

Multi-family real estate loans are typically secured by apartment complexes. These loans typically have larger loan balances and involve a greater degree of risk than single-family residential mortgage loans. Payments on loans secured by income producing properties often depend on successful operation and management of the properties.

Commercial real estate

Commercial real estate loans are secured primarily by office buildings and various income-producing properties. Commercial real estate loans are underwritten based on the economic viability of the property and creditworthiness of the borrower, with emphasis given to projected cash flow as a percentage of debt service requirements. These loans carry significant credit risks as they involve larger balances concentrated with single borrowers or groups of related borrowers. Repayment of loans secured by income-producing properties generally depends on the successful operation of the real estate project and may be subject to a greater extent to adverse market conditions and the general economy.

Land

Land loans are secured by unimproved land with terms of fifteen years or less and loan amounts that do not exceed 85% of the lesser of the appraised value or the purchase price. Loans secured by unimproved land generally involve greater risks than residential mortgage lending because land loans are more difficult to evaluate and the marketability of the underlying property may also be adversely affected in a high interest rate environment or adverse conditions in the real estate market or economy.

Consumer

Consumer loans include automobile, signature and other consumer loans. Potential credit risks include rapidly depreciable assets, such as automobiles, which could adversely affect the value of the collateral.

The following presents by portfolio segment, the activity in the allowance for loan losses for the three months ended June 30, 2015 and 2014:

	Allowance for Loan Losses
	Beginning		Provision for						Ending
	Balance		Losses		Charge-offs		Recoveries		Balance
Three months ended June 30, 2015:
Real estate loans:
Single-family, owner occupied	$	162,403	$	(29,938)	$	-	$	-	$	132,465
Single-family, non-owner occupied		33,206		(4,949)		-		-		28,257
Multi-family, 5 or more units		1,500		37,185		-		-		38,685
Commercial		5,986		(1,628)		-		-		4,358
Land		2,521		(830)		-		-		1,691
Consumer loans		2,954		(763)		-		-		2,191
Unallocated		33,533		(10,777)		-		-		22,756
	$	242,103	$	(11,700)	$	-	$	-	$	230,403

	Allowance for Loan Losses
	Beginning		Provision for						Ending
	Balance		Losses		Charge-offs		Recoveries		Balance
Three months ended June 30, 2014:
Real estate loans:
Single-family, owner occupied	$	209,010	$	1,953	$	-	$	-	$	210,963
Single-family, non-owner occupied		52,576		(2,086)		-		-		50,490
Multi-family, 5 or more units		2,356		(44)		-		-		2,312
Commercial		8,971		(757)		-		-		8,214
Land		4,677		(223)		-		-		4,454
Consumer loans		4,420		(55)		-		-		4,365
Unallocated		22,093		(21,788)		-		-		305
	$	304,103	$	(23,000)	$	-	$	-	$	281,103

The following presents by portfolio segment, the recorded investment in loans and impairment method at June 30, 2015 and March 31, 2015:

	Allowance for Loan Losses						Loans
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated				Evaluated		Evaluated
	for Impairment		for Impairment		Total		for Impairment		for Impairment		Total
At June 30, 2015:
Real estate loans:
Single-family, owner occupied	$	37,000	$	95,465	$	132,465	$	1,204,587	$	59,589,939	$	60,794,526
Single-family, non-owner occupied		15,560		12,697		28,257		229,990		7,937,277		8,167,267
Multi-family, 5 or more units		37,560		1,125		38,685		127,623		577,989		705,612
Commercial		-		4,358		4,358		-		2,859,807		2,859,807
Land		-		1,691		1,691		-		1,059,891		1,059,891
Consumer loans		-		2,191		2,191		17,152		1,604,028		1,621,180
Unallocated		-		22,756		22,756		-		-		-
	$	90,120	$	140,283	$	230,403	$	1,579,352	$	73,628,931	$	75,208,283

	Allowance for Loan Losses						Loans
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated				Evaluated		Evaluated
	for Impairment		for Impairment		Total		for Impairment		for Impairment		Total
At March 31, 2015:
Real estate loans:
Single-family, owner occupied	$	37,000	$	125,403	$	162,403	$	1,209,527	$	60,045,620	$	61,255,147
Single-family, non-owner occupied		16,665		16,541		33,206		239,842		7,922,692		8,162,534
Multi-family, 5 or more units		-		1,500		1,500		127,623		593,507		721,130
Commercial		-		5,986		5,986		-		2,878,651		2,878,651
Land		-		2,521		2,521		-		1,212,874		1,212,874
Consumer loans		-		2,954		2,954		-		1,562,398		1,562,398
Unallocated		-		33,533		33,533		-		-		-
	$	53,665	$	188,438	$	242,103	$	1,576,992	$	74,215,742	$	75,792,734

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Bank will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.

The following presents impaired loans and allocated valuation allowances based upon class levels and average recorded investment:

	Impaired Loans
	With		With no				Unpaid		Allowance
	Allowance		Allowance				Principal		for
	for Losses		for Losses		Total		Balance		Losses
At June 30, 2015
Real estate loans:
Single-family, owner occupied	$	941,780	$	262,807	$	1,204,587	$	1,204,587	$	37,000
Single-family, non-owner occupied		206,531		23,459		229,990		229,990		15,560
Multi-family, 5 or more units		127,623		-		127,623		127,623		37,560
Commercial		-		-		-		-		-
Land		-		-		-		-		-
Consumer loans		-		17,152		17,152		17,152		-
	$	1,275,934	$	303,418	$	1,579,352	$	1,579,352	$	90,120

The average recorded investment on impaired loans for the three months ended June 30, 2015 included: single-family, owner occupied of $1.2 million, single-family, non-owner occupied of $223,990, multi-family of $85,082 and consumer loans of $8,532.

The average recorded investment on impaired loans for the three months ended June 30, 2014 included: single-family, owner occupied of $963,647, and single-family, non-owner occupied of $444,941.

	Impaired Loans
	With		With no				Unpaid		Allowance
	Allowance		Allowance				Principal		for
	for Losses		for Losses		Total		Balance		Losses
At March 31, 2015:
Real estate loans:
Single-family, owner occupied	$	946,720	$	262,807	$	1,209,527	$	1,209,527	$	37,000
Single-family, non-owner occupied		207,636		32,206		239,842		239,842		16,665
Multi-family, 5 or more units		-		127,623		127,623		127,623		-
Commercial		-		-		-		-		-
Land		-		-		-		-		-
Consumer loans		-		-		-		-		-
	$	1,154,356	$	422,636	$	1,576,992	$	1,576,992	$	53,665

The following presents nonperforming loans based upon class level:

	Nonperforming Loans
			Past Due 90		Accruing
			Days or More		Troubled Debt
	Nonaccrual		and Still Accruing		Restructurings		Total
At June 30, 2015:
Real estate loans:
Single-family, owner occupied	$	262,807	$	-	$	941,780	$	1,204,587
Single-family, non-owner occupied		23,459		-		206,531		229,990
Multi-family, 5 or more units		127,623		-		-		127,623
Commercial		-		-		-		-
Land		-		-		-		-
Consumer loans		17,152		-		-		17,152
	$	431,041	$	-	$	1,148,311	$	1,579,352

	Nonperforming Loans
			Past Due 90		Accruing
			Days or More		Troubled Debt
	Nonaccrual		and Still Accruing		Restructurings		Total
At March 31, 2015:
Real estate loans:
Single-family, owner occupied	$	262,807	$	-	$	946,720	$	1,209,527
Single-family, non-owner occupied		32,206		-		207,636		239,842
Multi-family, 5 or more units		127,623		-		-		127,623
Commercial		-		-		-		-
Land		-		-		-		-
Consumer loans		-		-		-		-
	$	422,636	$	-	$	1,154,356	$	1,576,992

For the three months ended June 30, 2015, gross interest income that would have been recorded had the non-accruing loans been current in accordance with their original terms was $5,997. There was no interest income recognized on such loans for the three months ended June 30, 2015.

There were no new additions for loans modified as troubled debt restructurings during the three months ended June 30, 2015 and 2014.

The following presents a summary of accruing troubled debt restructurings at June 30, 2015 and March 31, 2015:

	June 30,				March 31,
	2015				2015
	Number of		Recorded		Number of		Recorded
	Contracts		Investment		Contracts		Investment
Real estate loans:
Single-family, owner occupied		2	$	941,780		2	$	946,720
Single-family, non-owner occupied		2		206,531		2		207,636
		4	$	1,148,311		4	$	1,154,356

At June 30, 2015, the recorded investment in single-family, real estate loans that are in the process of foreclosure according to the local jurisdiction requirement was $199,548.

The following presents the Bank's loan portfolio aging analysis:

	Days Past Due
	30-59		60-89		90 or more		Current		Total
At June 30, 2015:
Real estate loans:
Single-family, owner occupied	$	183,080	$	501,501	$	262,807	$	59,847,138	$	60,794,526
Single-family, non-owner occupied		232,029		185,642		23,459		7,726,137		8,167,267
Multi-family, 5 or more units		-		-		127,623		577,989		705,612
Commercial		-		-		-		2,859,807		2,859,807
Land		-		-		-		1,059,891		1,059,891
Consumer loans		-		-		17,152		1,604,028		1,621,180
	$	415,109	$	687,143	$	431,041	$	73,674,990	$	75,208,283

	Days Past Due
	30-59		60-89		90 or more		Current		Total
At March 31, 2015:
Real estate loans:
Single-family, owner occupied	$	1,032,922	$	41,745	$	262,807	$	59,917,673	$	61,255,147
Single-family, non-owner occupied		-		186,457		32,206		7,943,871		8,162,534
Multi-family, 5 or more units		-		-		127,623		593,507		721,130
Commercial		-		-		-		2,878,651		2,878,651
Land		-		-		-		1,212,874		1,212,874
Consumer loans		26,221		3,944		-		1,532,233		1,562,398
	$	1,059,143	$	232,146	$	422,636	$	74,078,809	$	75,792,734

The Bank categorizes all classes of loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. Generally, smaller dollar consumer loans are excluded from this grading process and are reflected in the Pass category. The delinquency trends of these consumer loans are monitored on a homogeneous basis.

The Bank uses the following definitions for risk ratings:

The Pass asset quality rating encompasses assets that have performed as expected. With the exception of some smaller consumer and residential loans, these assets do not have delinquency. Loans assigned this rating include loans to borrowers possessing solid credit quality with acceptable risk.

The Special Mention asset quality rating encompasses assets that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. This grade is intended to include loans to borrowers whose credit quality has clearly deteriorated and where risk of further decline is possible unless active measures are taken to correct the situation. 

The Substandard asset quality rating encompasses assets that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any; assets having a well-defined weakness based upon objective evidence; assets characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected; or the possibility that liquidation will not be timely. Loans categorized in this grade possess a well-defined credit weakness and the likelihood of repayment from the primary source is uncertain.  Significant financial deterioration has occurred and very close attention is warranted to ensure the full repayment without loss.  Collateral coverage may be marginal.

Doubtful asset quality rating encompasses assets that have all of the weaknesses of those classified as substandard.  In addition, these weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

The Loss asset quality rating encompasses assets that are considered uncollectible and of such little value that their continuance as assets is not warranted. A loss classification does not mean that an asset has no recovery or salvage value; instead, it means that it is not practical or desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be realized in the future.

The following presents the credit risk profile for the Bank's loan portfolio based upon rating category:

	Credit Quality Indicator-Credit Risk Profile by Grade or Classification
	Special
	Mention		Substandard		Doubtful		Loss		Pass		Total
At June 30, 2015:
Real estate loans:
Single-family, owner occupied	$	-	$	1,204,587	$	-	$	-	$	59,589,939	$	60,794,526
Single-family, non-owner occupied		-		229,990		-		-		7,937,277		8,167,267
Multi-family, 5 or more units		-		127,623		-		-		577,989		705,612
Commercial		-		-		-		-		2,859,807		2,859,807
Land		-		-		-		-		1,059,891		1,059,891
Consumer loans		-		17,152		-		-		1,604,028		1,621,180
	$	-	$	1,579,352	$	-	$	-	$	73,628,931	$	75,208,283

	Credit Quality Indicator-Credit Risk Profile by Grade or Classification
	Special
	Mention		Substandard		Doubtful		Loss		Pass		Total
At March 31, 2015:
Real estate loans:
Single-family, owner occupied	$	-	$	1,209,527	$	-	$	-	$	60,045,620	$	61,255,147
Single-family, non-owner occupied		-		239,842		-		-		7,922,692		8,162,534
Multi-family, 5 or more units		-		127,623		-		-		593,507		721,130
Commercial		-		-		-		-		2,878,651		2,878,651
Land		-		-		-		-		1,212,874		1,212,874
Consumer loans		-		-		-		-		1,562,398		1,562,398
	$	-	$	1,576,992	$	-	$	-	$	74,215,742	$	75,792,734