6. LOANS

Portfolio loans consist of the following:


	September 30,			December 31,
	2011			2010
	(Dollars in thousands)
Real Estate:
One-to four-family residential	$	677,708		$	757,426
Multi-family residential		125,370			135,771
Nonresidential		303,165			331,390
Land		22,172			25,138
Construction:
One-to four-family residential and land development		66,761			108,583
Multi-family and nonresidential		4,528			15,077

Total real estate		1,199,704			1,373,385
Consumer
Home equity		195,131			220,582
Auto		9,918			11,525
Marine		5,983			7,285
Recreational vehicles		30,908			35,671
Other		3,427			4,390

Total consumer		245,367			279,453
Commercial
Secured		27,227			28,876
Unsecured		8,050			17,428

Total commercial		35,277			46,304

Total loans		1,480,348			1,699,142

Less:
Allowance for loan losses		44,162			50,883
Deferred loan costs, net		(1,389	)		(1,227	)

Total		42,773			49,656

Loans, net	$	1,437,575		$	1,649,486

Changes in the allowance for loan losses are as follows:


	Three Months ended			Three Months ended
	September 30, 2011			September 30, 2010
	(Dollars in thousands)
Balance, beginning of period	$	46,223		$	40,728
Provision for loan losses		11,836			17,116
Amounts charged off		(14,320	)		(17,307	)
Recoveries		423			347

Balance, end of period	$	44,162		$	40,884


	Nine Months			Nine Months
	Ended			Ended
	September 30, 2011			September 30, 2010
	(Dollars in thousands)
Balance, beginning of period	$	50,883		$	42,287
Provision for loan losses		22,272			39,876
Amounts charged off		(30,576	)		(42,005	)
Recoveries		1,583			726

Balance, end of period	$	44,162		$	40,884

The following tables present activity and the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of and for the three and nine months ended September 30, 2011 and the year ended December 31, 2010.

Allowance For Loan Losses
(Dollars in thousands)


	Permanent
	Real
	Estate			Construction			Consumer			Commercial
	Loans			Loans			Loans			Loans			Unallocated		Total
For the three months ended September 30, 2011
Beginning balance (6/30/11)	$	31,371		$	6,529		$	4,544		$	3,779		$	—	$	46,223
Provision		7,065			4,734			1,105			(1,068	)		—		11,836
Chargeoffs		(5,536	)		(6,832	)		(1,000	)		(952	)		—		(14,320	)
Recoveries		168			95			136			24			—		423

Net chargeoffs		(5,368	)		(6,737	)		(864	)		(928	)		—		(13,897	)

Ending balance (9/30/11)	$	33,068		$	4,526		$	4,785		$	1,783		$	—	$	44,162


For the nine months ended September 30, 2011
Beginning balance (12/31/10)	$	28,066		$	8,533		$	5,260		$	9,024		$	—	$	50,883
Provision		17,057			6,285			1,887			(2,957	)		—		22,272
Chargeoffs		(12,709	)		(10,589	)		(2,797	)		(4,481	)		—		(30,576	)
Recoveries		654			297			435			197			—		1,583

Net chargeoffs		(12,055	)		(10,292	)		(2,362	)		(4,284	)		—		(28,993	)

Ending balance (9/30/11)	$	33,068		$	4,526		$	4,785		$	1,783		$	—	$	44,162

(Dollars in thousands)


	Permanent
	Real
	Estate		Construction		Consumer		Commercial
	Loans		Loans		Loans		Loans		Unallocated		Total
Period-end amount allocated to:
Loans individually evaluated for impairment	$	9,265	$	2,861	$	—	$	111	$	—	$	12,237
Loans collectively evaluated for impairment		23,803		1,665		4,785		1,672		—		31,925

Ending balance	$	33,068	$	4,526	$	4,785	$	1,783	$	—	$	44,162


Period-end balances:
Loans individually evaluated for impairment	$	117,428	$	34,322	$	1,172	$	8,563	$	—	$	161,485
Loans collectively evaluated for impairment		1,010,987		36,967		244,195		26,714		—		1,318,863

Ending balance	$	1,128,415	$	71,289	$	245,367	$	35,277	$	—	$	1,480,348

Allowance For Loan Losses
(Dollars in thousands)


	Permanent
For the twelve months ended	Real Estate			Construction			Consumer			Commercial
December 31, 2010	Loans			Loans			Loans			Loans			Unallocated		Total

Beginning balance (12/31/09)	$	15,288		$	19,020		$	4,959		$	3,020		$	—	$	42,287
Provision		40,595			10,028			4,079			7,725			—		62,427
Chargeoffs		(28,153	)		(20,648	)		(4,316	)		(1,962	)		—		(55,079	)
Recoveries		336			133			538			241			—		1,248

Net chargeoffs		(27,817	)		(20,515	)		(3,778	)		(1,721	)		—		(53,831	)

Ending balance (12/31/10)	$	28,066		$	8,533		$	5,260		$	9,024		$	—	$	50,883


Period-end amount allocated to:
Loans individually evaluated for impairment	$	7,509		$	3,360		$	—		$	2,575		$	—	$	13,444
Loans collectively evaluated for impairment		20,557			5,173			5,260			6,449			—		37,439

Ending balance (12/31/10)	$	28,066		$	8,533		$	5,260		$	9,024		$	—	$	50,883


Period-end balances:
Loans individually evaluated for impairment**	$	101,410		$	47,054		$	1,547		$	6,444		$	—	$	156,455
Loans collectively evaluated for impairment		1,148,315			76,606			277,906			39,860			—		1,542,687

Ending balance (12/31/10)	$	1,249,725		$	123,660		$	279,453		$	46,304		$	—	$	1,699,142


**		Revised to include impaired loans without specific allocations.

Impaired loans are defined as loans, based on current information and events, it is probable that Home Savings will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement and the loan is non-homogeneous in nature. Impaired loans can be divided into two categories: those with a specific valuation and those without a specific valuation. In general, impaired loans without a specific valuation either has sufficient collateral to support the loan balance, or any collateral shortfall that did exist has been charged off such that the remaining loan balance is dully supported by collateral value (less costs to sell).

Impaired loans consisted of the following:


	As of or for		As of or for		As of or for
	the nine		the twelve		the nine
	months ended		months ended		months ended
	September 30,		December 31,		September 30,
	2011		2010		2010
	(Dollars in thousands)
Impaired loans on which no specific valuation allowance was provided	$	74,561	$	71,853	$	73,027
Impaired loans on which specific valuation allowance was provided		86,924		84,602		68,865

Total impaired loans at end of period	$	161,485	$	156,455	$	141,892

Specific valuation allowances on impaired loans at period-end		12,237		13,444		10,657
Average impaired loans during period		162,521		144,977		130,349
Interest income recognized on impaired loans during the period **		3,469		1,778		1,453
Interest income received on impaired loans during the period **		7,008		4,570		1,453


**		Interest income recognized may be less than interest income received on an impaired loan if, for example, payments received on nonaccrual impaired loans are applied to principal reduction.

The unpaid principal balance is the total amount of the loan that is due to Home Savings. The recorded investment includes the unpaid principal balance less any charge-offs or partial charge-offs applied to specific loans. The unpaid principal balance and the recorded investment exclude accrued interest receivable and deferred loan costs, both of which are immaterial.

The following table presents loans individually evaluated for impairment by class of loans as of and for the nine months ended September 30, 2011:

Impaired Loans
(Dollars in thousands)


					Allowance
	Unpaid				for Loan		Average		Interest		Cash Basis
	Principal		Recorded		Losses		Recorded		Income		Income
	Balance		Investment		Allocated		Investment		Recognized		Recognized

With no specific allowance recorded
Permanent real estate
One-to four-family residential	$	28,584	$	24,878	$	—	$	25,002	$	510	$	1,004
Multifamily residential		5,170		4,331		—		3,441		—		148
Nonresidential		27,445		26,780		—		22,847		524		1,247
Land		7,465		5,887		—		6,244		15		126

Total		68,664		61,876		—		57,534		1,049		2,525

Construction loans
One-to four-family residential		17,258		10,465		—		17,939		219		280
Multifamily and nonresidential		707		—		—		191		—		—

Total		17,965		10,465		—		18,130		219		280

Consumer loans
Home Equity		2,535		1,050		—		1,194		2		29
Auto		88		68		—		67		1		9
Marine		—		—		—		—		—		—
Recreational vehicle		113		47		—		47		—		2
Other		7		7		—		7		—		—

Total		2,743		1,172		—		1,315		3		40

Commercial loans
Secured		1,272		574		—		1,270		35		43
Unsecured		16,795		474		—		407		13		163

Total		18,067		1,048		—		1,677		48		206

Total	$	107,439	$	74,561	$	—	$	78,656	$	1,319	$	3,051

Impaired Loans
(Dollars in thousands)


					Allowance
	Unpaid				for Loan		Average		Interest		Cash Basis
	Principal		Recorded		Losses		Recorded		Income		Income
	Balance		Investment		Allocated		Investment		Recognized		Recognized

With a specific allowance recorded
Permanent real estate
One-to four-family residential	$	5,080	$	4,475	$	586	$	2,809	$	111	$	168
Multifamily residential		4,883		2,847		223		5,175		—		170
Nonresidential		47,710		42,246		6,452		40,139		1,527		1,888
Land		6,421		5,984		2,004		1,960		382		527

Total		64,094		55,552		9,265		50,083		2,020		2,753

Construction loans
One-to four-family residential		40,701		23,857		2,861		25,472		110		694
Multifamily and nonresidential		—		—		—		—		—		—

Total		40,701		23,857		2,861		25,472		110		694

Consumer loans
Home Equity		—		—		—		—		—		—
Auto		—		—		—		—		—		—
Marine		—		—		—		—		—		—
Recreational vehicle		—		—		—		—		—		—
Other		—		—		—		—		—		—

Total		—		—		—		—		—		—

Commercial loans
Secured		7,463		7,114		74		6,146		20		473
Unsecured		401		401		37		2,164		—		37

Total		7,864		7,515		111		8,310		20		510

Total		112,659		86,924		12,237		83,865		2,150		3,957

Total	$	220,098	$	161,485	$	12,237	$	162,521	$	3,469	$	7,008

The difference between the unpaid principal balance of $220,098 and the recorded investment of $161,485 (i.e., $58,613) represents amounts previously charged off by Home Savings. This amount, plus any existing reserves of $12,237, totals $70,850, or 32.2% of the unpaid principal balance of these loans.

The following table presents the average recorded investment and interest income associated with impaired loans for the three months ended September 30, 2011:

Impaired Loans
(Dollars in thousands)


	Average					Cash Basis
	Recorded		Interest Income			Income
	Investment		Recognized			Recognized

With no specific allowance recorded
Permanent real estate
One-to four-family residential	$	24,302	$	177		$	502
Multifamily residential		4,249		—			—
Nonresidential		25,770		206			544
Land		6,678		(30	)		24

Total		60,999		353			1,070

Construction loans
One-to four-family residential		14,976		89			13
Multifamily and nonresidential		—		—			—

Total		14,976		89			13

Consumer loans
Home Equity		1,045		(3	)		5
Auto		72		1			4
Marine		—		—			—
Recreational vehicle		47		—			—
Other		7		—			—

Total		1,171		(2	)		9

Commercial loans
Secured		957		15			21
Unsecured		429		8			126

Total		1,386		23			147

Total	$	78,532	$	463		$	1,239

Impaired Loans
(Dollars in thousands)


	Average					Cash Basis
	Recorded		Interest Income			Income
	Investment		Recognized			Recognized

With a specific allowance recorded
Permanent real estate
One-to four-family residential	$	4,589	$	72		$	101
Multifamily residential		2,853		—			133
Nonresidential		39,583		794			864
Land		3,494		370			504

Total		50,519		1,236			1,602

Construction loans
One-to four-family residential		24,858		(9	)		349
Multifamily and nonresidential		—		—			—

Total		24,858		(9	)		349

Consumer loans
Home Equity		—		—			—
Auto		—		—			—
Marine		—		—			—
Recreational vehicle		—		—			—
Other		—		—			—

Total		—		—			—

Commercial loans
Secured		7,242		(107	)		192
Unsecured		869		—			1

Total		8,111		(107	)		193

Total	$	83,488	$	1,120		$	2,144

Total	$	162,020	$	1,583		$	3,383

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2010:

Impaired Loans
(Dollars in thousands)


					Allowance
	Unpaid				for Loan
	Principal		Recorded		Losses
	Balance		Investment		Allocated

With no specific allowance recorded
Permanent real estate	$	60,516	$	44,666	$	—
Construction loans		31,715		23,465		—
Consumer loans		3,407		1,547		—
Commercial loans		16,148		2,175		—

Total		111,786		71,853		—

With a specific allowance recorded
Permanent real estate		65,869		56,744		7,509
Construction loans		35,777		23,589		3,360
Consumer loans		—		—		—
Commercial loans		5,419		4,269		2,575

Total		107,065		84,602		13,444

Total	$	218,851	$	156,455	$	13,444

The following tables present the recorded investment in nonaccrual loans and loans past due over 90 days and still on accrual by class of loans as of September 30, 2011:

Nonaccrual Loans and Loans Past Due Over 90 Days and Still Accruing
(Dollars in thousands)


			Loans past due
			over 90 days
			and still
	Nonaccrual		accruing

Real Estate Loans
Permanent
One-to four-family residential	$	27,250	$	—
Multifamily residential		6,517		—
Nonresidential		44,242		—
Land		11,655		—

Total		89,664		—


Construction Loans
One-to four-family residential		31,166		—
Multifamily and nonresidential		—		—

Total		31,166		—


Consumer Loans
Home Equity		3,273		—
Auto		146		—
Marine		—		—
Recreational vehicle		2,460		3
Other		7		—

Total		5,886		3


Commercial Loans
Secured		6,642		—
Unsecured		719		—

Total		7,361		—

Total	$	134,077	$	3

The following tables present the recorded investment in nonaccrual loans and loans past due over 90 days and still on accrual by class of loans as of December 31, 2010:

Nonaccrual Loans and Loans Past Due Over 90 Days and Still Accruing
(Dollars in thousands)


			Loans past due
			over 90 days
			and still
	Nonaccrual		accruing

Real Estate Loans
Permanent
One-to four-family residential	$	27,417	$	—
Multifamily residential		10,983		—
Nonresidential		39,838		—
Land		5,188		—

Total		83,426		—


Construction Loans
One-to four-family residential		40,077		3,944
Multifamily and nonresidential		382		2,032

Total		40,459		5,976


Consumer Loans
Home Equity		3,179		210
Auto		89		—
Marine		—		—
Recreational vehicle		93		144
Other		10		—

Total		3,371		354


Commercial Loans
Secured		1,822		—
Unsecured		4,123		—

Total		5,945		—

Total	$	133,201	$	6,330

The following tables present an age analysis of past-due loans, segregated by class of loans as of September 30, 2011:

Past Due Loans
(Dollars in thousands)


					Greater
	30-59		60-89		than 90
	Days Past		Days Past		Days Past		Total Past		Current		Total
	Due		Due		Due		Due		Loans		Loans
Real Estate Loans
Permanent
One-to four-family residential	$	2,495	$	3,768	$	20,825	$	27,088	$	650,620	$	677,708
Multifamily residential		—		—		5,455		5,455		119,915		125,370
Nonresidential		10,424		1,770		33,162		45,356		257,809		303,165
Land		—		417		10,108		10,525		11,647		22,172

Total		12,919		5,955		69,550		88,424		1,039,991		1,128,415


Construction Loans
One-to four-family residential		2,396		900		29,917		33,213		33,548		66,761
Multifamily and nonresidential		—		—		—		—		4,528		4,528

Total		2,396		900		29,917		33,213		38,076		71,289


Consumer Loans
Home Equity		1,788		924		2,263		4,975		190,156		195,131
Auto		60		15		68		143		9,775		9,918
Marine		142		523		—		665		5,318		5,983
Recreational vehicle		1,767		341		806		2,914		27,994		30,908
Other		17		5		7		29		3,398		3,427

Total		3,774		1,808		3,144		8,726		236,641		245,367


Commercial Loans
Secured		34		64		73		171		27,056		27,227
Unsecured		—		146		209		355		7,695		8,050

Total		34		210		282		526		34,751		35,277

Total	$	19,123	$	8,873	$	102,893	$	130,889	$	1,349,459	$	1,480,348

The following table presents an age analysis of past-due loans, segregated by class of loans as of December 31, 2010:

Past Due Loans
(Dollars in thousands)


					Greater
	30-59		60-89		than 90
	Days Past		Days Past		Days Past		Total Past		Current		Total
	Due		Due		Due		Due		Loans		Loans
Real Estate Loans
Permanent
One-to four-family residential	$	6,620	$	2,351	$	24,914	$	33,885	$	723,541	$	757,426
Multifamily residential		326		—		9,898		10,224		125,547		135,771
Nonresidential		1,888		13,146		30,382		45,416		285,974		331,390
Land		12		426		5,188		5,626		19,512		25,138

Total		8,846		15,923		70,382		95,151		1,154,574		1,249,725


Construction Loans
One-to four-family residential		3,688		7,579		42,855		54,122		54,461		108,583
Multifamily and nonresidential		—		—		2,414		2,414		12,663		15,077

Total		3,688		7,579		45,269		56,536		67,124		123,660


Consumer Loans
Home Equity		2,003		880		2,519		5,402		215,180		220,582
Auto		194		56		87		337		11,188		11,525
Marine		61		—		—		61		7,224		7,285
Recreational vehicle		1,693		618		188		2,499		33,172		35,671
Other		25		10		9		44		4,346		4,390

Total		3,976		1,564		2,803		8,343		271,110		279,453


Commercial Loans
Secured		163		—		1,822		1,985		26,891		28,876
Unsecured		43		—		3,554		3,597		13,831		17,428

Total		206		—		5,376		5,582		40,722		46,304

Total	$	16,716	$	25,066	$	123,830	$	165,612	$	1,533,530	$	1,699,142

Troubled Debt Restructurings:

Restructured loans were $47.7 million and $44.6 million at September 30, 2011 and December 31, 2010, respectively. The Company has allocated $2.0 million of specific reserves to customers whose loan terms were modified in troubled debt restructurings as of September 30, 2011. The Company had allocated $1.2 million of specific reserves to customers whose loan terms were modified in troubled debt restructurings as of December 31, 2010. Troubled debt restructurings are considered impaired and are included in the table above.

The Company has committed to lend additional amounts totaling up to $26.9 million as of September 30, 2011.

During the period ended September 30, 2011, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. Modifications involving a reduction of the stated interest rate of a loan were for periods ranging from six months to 28 years. Modifications involving an extension of the maturity date were for periods ranging from six months to three years.

The following table presents loans by class modified as troubled debt restructurings that occurred during the three months ended September 30, 2011:


			Pre-Modification		Post-
			Outstanding		Modification
			Recorded		Recorded
	Number of loans		Investment		Investment
	(Dollars in thousands)
Real Estate Loans
Permanent
One-to four-family		15	$	1,311	$	1,260
Multifamily residential		—		—		—
Nonresidential		—		—		—
Land		—		—		—

Total		15		1,311		1,260


Construction Loans
One-to four-family residential		—		—		—
Multifamily and nonresidential		—		—		—

Total		—		—		—


Consumer Loans
Home Equity		1		93		93
Auto		—		—		—
Marine		—		—		—
Recreational vehicle		—		—		—
Other		—		—		—

Total		—		93		93


Commercial Loans
Secured		—		—		—
Unsecured		—		—		—

Total		—		—		—

Total Restructured Loans		16	$	1,404	$	1,353

The troubled debt restructurings described above increased the allowance for loan losses by $9,000 and resulted in no charge offs during the three months ending September 30, 2011.

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine months ended September 30, 2011:


			Pre-
			Modification		Post-
			Outstanding		Modification
			Recorded		Recorded
	Number of loans		Investment		Investment
	(Dollars in thousands)
Real Estate Loans
Permanent
One-to four-family		38	$	4,521	$	4,491
Multifamily residential		2		2,246		2,246
Nonresidential		—		—		—
Land		1		2,027		1,476

Total		41		8,794		8,213


Construction Loans
One-to four-family residential		6		2,890		2,343
Multifamily and nonresidential		—		—		—

Total		6		2,890		2,343


Consumer Loans
Home Equity		1		93		93
Auto		1		21		21
Marine		—		—		—
Recreational vehicle		—		—		—
Other		—		—		—

Total		2		114		114


Commercial Loans
Secured		2		8,809		8,803
Unsecured		—		—		—

Total		2		8,809		8,803

Total Restructured Loans		51	$	20,607	$	19,473

The troubled debt restructurings described above increased the allowance for loan losses by $158,000 and resulted in charge offs of $439,000 during the nine months ended September 30, 2011.

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the period ended September 30, 2011:


	Number of		Recorded
	loans		Investment
	(Dollars in thousands)
Real Estate Loans
Permanent
One-to four-family		36	$	3,825
Multifamily residential		3		3,275
Nonresidential		4		2,343
Land		3		1,369

Total		46		10,812


Construction Loans
One-to four-family residential		6		1,696
Multifamily and nonresidential		—		—

Total		6		1,696


Consumer Loans
Home Equity		—		—
Auto		1		5
Marine		—		—
Recreational vehicle		—		—
Other		—		—

Total		1		5


Commercial Loans
Secured		1		6,569
Unsecured		1		—

Total		2		6,569

Total Restructured Loans		55	$	19,082

A troubled debt restructuring is considered to be in payment default once it is 30 days contractually past due under the modified terms.

The troubled debt restructurings that subsequently defaulted described above resulted in chargeoffs of $3.1 million during the period ended September 30, 2011, but had no effect on the allowance for loan losses.

The terms of certain other loans were modified during the period ended September 30, 2011 that did not meet the definition of a troubled debt restructuring. These loans have a total recorded investment as of September 30, 2011 of $15.4 million. The modification of these loans involved either a modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment that was considered to be insignificant.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed in accordance with the Company’s internal underwriting policy.

Certain loans which were modified during the nine months ended September 30, 2011 did not meet the definition of a troubled debt restructuring as the modification was a delay in a payment that was considered to be insignificant had delays in payment ranging from 180 days to 24 months.

Credit Quality Indicators:

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, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes homogenous loans past due 90 cumulative days, and all non-homogenous loans including commercial loans and commercial real estate loans.

Asset quality ratings are divided into two groups: Pass (unclassified) and Classified. Within the Pass group, loans that display potential weakness are risk rated as special mention. In addition, there are three Classified risk ratings: substandard, doubtful and loss. These specific credit risk categories are defined as follows:

Special Mention. Loans classified as special mention 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 or of the institution’s credit position at some future date. Loans may be housed in this category for no longer than 12 months during which time information is obtained to determine if the credit should be downgraded to the substandard category.

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 institution 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 continuance as assets is not warranted. Although there may be a chance of recovery on these assets, it is not practical or desirable to defer writing off the asset.

The Company monitors loans on a monthly basis to determine if they should be included in one of the categories listed above. All impaired non-homogeneous credits classified as Substandard, Doubtful or Loss are analyzed on an individual basis for a specific reserve requirement. This analysis is performed on each individual credit at least annually or more frequently if warranted.

As of September 30, 2011 and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

Loans
(Dollars in thousands)


	Unclassified				Classified
			Special								Total
	Unclassified		Mention		Substandard		Doubtful		Loss		Classified		Total Loans
Real Estate Loans
Permanent
One-to four-family residential	$	641,918	$	3,948	$	31,842	$	—	$	—	$	31,842	$	677,708
Multifamily residential		99,408		7,227		18,735		—		—		18,735		125,370
Nonresidential		172,853		18,890		111,422		—		—		111,422		303,165
Land		8,890		1,211		12,071		—		—		12,071		22,172

Total		923,069		31,276		174,070		—		—		174,070		1,128,415


Construction Loans
One-to four-family residential		29,243		3,214		31,117		3,187		—		34,304		66,761
Multifamily and nonresidential		4,528		—		—		—		—		—		4,528

Total		33,771		3,214		31,117		3,187		—		34,304		71,289


Consumer Loans
Home Equity		191,615		—		3,516		—		—		3,516		195,131
Auto		9,467		293		158		—		—		158		9,918
Marine		5,970		13		—		—		—		—		5,983
Recreational vehicle		28,397		—		2,511		—		—		2,511		30,908
Other		3,413		—		14		—		—		14		3,427

Total		238,862		306		6,199		—		—		6,199		245,367


Commercial Loans
Secured		17,632		258		9,337		—		—		9,337		27,227
Unsecured		5,393		171		2,486		—		—		2,486		8,050

Total		23,025		429		11,823		—		—		11,823		35,277

Total	$	1,218,727	$	35,225	$	223,209	$	3,187	$	—	$	226,396	$	1,480,348

As of December 31, 2010, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

Loans
(Dollars in thousands)


	Unclassified				Classified
			Special								Total
	Unclassified		Mention		Substandard		Doubtful		Loss		Classified		Total Loans
Real Estate Loans
Permanent
One-to four-family residential	$	723,814	$	2,404	$	31,208	$	—	$	—	$	31,208	$	757,426
Multifamily residential		106,839		6,900		22,032		—		—		22,032		135,771
Nonresidential		200,816		55,197		75,377		—		—		75,377		331,390
Land		9,677		1,100		14,361		—		—		14,361		25,138

Total		1,041,146		65,601		142,978		—		—		142,978		1,249,725


Construction Loans
One-to four-family residential		47,308		6,122		55,021		132		—		55,153		108,583
Multifamily and nonresidential		1,091		13,604		382		—		—		382		15,077

Total		48,399		19,726		55,403		132		—		55,535		123,660


Consumer Loans
Home Equity		216,994		—		3,588		—		—		3,588		220,582
Auto		11,420		—		105		—		—		105		11,525
Marine		7,285		—		0		—		—		—		7,285
Recreational vehicle		35,430		—		241		—		—		241		35,671
Other		4,375		—		15		—		—		15		4,390

Total		275,504		—		3,949		—		—		3,949		279,453


Commercial Loans
Secured		14,608		1,327		12,134		807		—		12,941		28,876
Unsecured		9,327		2,132		4,304		1,665		—		5,969		17,428

Total		23,935		3,459		16,438		2,472		—		18,910		46,304

Total	$	1,388,984	$	88,786	$	218,768	$	2,604	$	—	$	221,372	$	1,699,142