Credit Quality of Loans and the Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2014

Credit Quality Of Loans And Allowance For Loan Losses Tables

Schedule of allowance for loan losses

The following presents by portfolio segment, the activity in the allowance for loan losses for the three and six months ended June 30, 2014 and 2013:

Three months ended June 30, 2014	One-to-four family residential			All other mortgage loans			Commercial business loans			Consumer loans		Total
	(In thousands)
Beginning balance	$	889		$	1,393		$	288		$	4	$	2,574
Provision charged to expense		63			(255	)		271			—		79
Losses charged off		(11	)		—			(112	)		—		(123	)
Recoveries		—			17			2			—		19
Ending balance	$	941		$	1,155		$	449		$	4	$	2,549

Three months ended June 30, 2013	One-to-four family residential			All other mortgage loans			Commercial business loans			Consumer loans			Total
	(In thousands)
Beginning balance	$	1,027		$	1,731		$	213		$	6		$	2,977
Provision charged to expense		216			(174	)		(29	)		(3	)		10
Losses charged off		(4	)		—			—			—			(4	)
Recoveries		—			—			1			3			4
Ending balance	$	1,239		$	1,557		$	185		$	6		$	2,987

Six months ended June 30, 2014	One-to-four family residential			All other mortgage loans			Commercial business loans			Consumer loans			Total
	(In thousands)
Beginning balance	$	1,017		$	1,526		$	271		$	5		$	2,819
Provision charged to expense		(72	)		(128	)		288			(1	)		87
Losses charged off		(11	)		(260	)		(112	)		—			(383	)
Recoveries		7			17			2			—			26
Ending balance	$	941		$	1,155		$	449		$	4		$	2,549

Six months ended June 30, 2013	One-to-four family residential			All other mortgage loans			Commercial business loans			Consumer loans			Total
	(In thousands)
Beginning balance	$	1,122		$	1,925		$	275		$	6		$	3,328
Provision (credit) charged to expense		155			(192	)		(92	)		(2	)		(131	)
Losses charged off		(38	)		(176	)		—			(2	)		(216	)
Recoveries		—			—			2			4			6
Ending balance	$	1,239		$	1,557		$	185		$	6		$	2,987

The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on the portfolio segment and impairment method as of June 30, 2014 and December 31, 2013:

June 30, 2014	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans		Total
Allowance Balances:	(In thousands)
Ending balance:
Individually evaluated for impairment	$	96	$	209	$	241	$	—	$	546
Collectively evaluated for impairment		845		946		208		4		2,003
Total allowance for loan losses	$	941	$	1,155	$	449	$	4	$	2,549
Loan Balances:
Ending balance:
Individually evaluated for impairment	$	5,828	$	2,887	$	241	$	—	$	8,956
Collectively evaluated for impairment		160,422		81,467		14,116		1,932		257,937
Total balance	$	166,250	$	84,354	$	14,357	$	1,932	$	266,893

December 31, 2013	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans		Total
Allowance Balances:	(In thousands)
Ending balance:
Individually evaluated for impairment	$	226	$	618	$	65	$	—	$	909
Collectively evaluated for impairment		791		908		206		5		1,910
Total allowance for loan losses	$	1,017	$	1,526	$	271	$	5	$	2,819
Loan Balances:
Ending balance:
Individually evaluated for impairment	$	6,411	$	3,661	$	142	$	—	$	10,214
Collectively evaluated for impairment		160,317		82,434		14,773		1,110		258,634
Total balance	$	166,728	$	86,095	$	14,915	$	1,110	$	268,848

Schedule of loans receivable by credit risk profile

The following tables present the credit risk profile of the Bank’s loan portfolio based on rating category and payment activity as of June 30, 2014 and December 31, 2013:

June 30, 2014	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans
	(In thousands)
Rating *
Pass (Risk 1-4)	$	156,430	$	80,957	$	13,893	$	1,931
Special Mention (Risk 5)		2,867		1,017		223		—
Substandard (Risk 6)		6,953		2,380		241		1
Total	$	166,250	$	84,354	$	14,357	$	1,932

December 31, 2013	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans
	(In thousands)
Rating *
Pass (Risk 1-4)	$	158,518	$	81,362	$	14,328	$	1,108
Special Mention (Risk 5)		419		1,587		445		—
Substandard (Risk 6)		7,791		3,146		142		2
Total	$	166,728	$	86,095	$	14,915	$	1,110

* Ratings are generally assigned to consumer and residential mortgage loans on a “pass” or “fail” basis, where “fail” results in a substandard classification. Commercial loans, both secured by real estate or other assets or unsecured, are analyzed in accordance with an analytical matrix codified in the Bank’s loan policy that produces a risk rating as described below.

Aging analysis of loans receivable

The following tables present the Bank’s loan portfolio aging analysis for June 30, 2014 and December 31, 2013:

June 30, 2014	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In thousands)
One-to-four family residential loans	$	254	$	557	$	1,507	$	2,318	$	163,932	$	166,250	$	936
All other mortgage loans		—		—		152		152		84,202		84,354		—
Commercial business loans		—		37		110		147		14,210		14,357		—
Consumer loans		—		—		1		1		1,931		1,932		1
Total	$	254	$	594	$	1,770	$	2,618	$	264,275	$	266,893	$	937

December 31, 2013	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In thousands)
One-to-four family residential loans	$	679	$	228	$	624	$	1,531	$	165,197	$	166,728	$	—
All other mortgage loans		150		64		811		1,025		85,070		86,095		—
Commercial Business loans		—		—		—		—		14,915		14,915		—
Consumer loans		79		—		—		79		1,031		1,110		—
Total	$	908	$	292	$	1,435	$	2,635	$	266,213	$	268,848	$	—

Schedule of non-accrual loans

Nonaccrual loans were comprised of the following at:

Nonaccrual loans	June 30, 2014		December 31, 2013
	(In thousands)
One-to-four family residential loans	$	1,856	$	1,851
Nonresidential real estate loans		152		1,045
All other mortgage loans		—		—
Commercial business loans		183		2
Consumer loans		1		—
Total	$	2,192	$	2,898

Schedule of impaired loans

Information with respect to the Company’s impaired loans at June 30, 2014 and December 31, 2013 in combination with activity for the three and six months ended June 30, 2014 and 2013 is presented below:

	As of June 30, 2014						Three months ended June 30, 2014				Six months ended June 30, 2014
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation allowance
One-to-four family residential loans	$	4,897	$	4,897	$	—	$	5,247	$	41	$	5,354	$	105
All other mortgage loans		2,360		2,360		—		2,194		43		2,146		63
Commercial business loans		—		—		—		38		—		51		—
Loans with a specific valuation allowance
One-to-four family residential loans		931		931		96		826		18		831		27
All other mortgage loans		527		527		209		936		4		1,160		18
Commercial business loans		241		241		241		151		2		122		3
Total:
One-to-four family residential loans	$	5,828	$	5,828	$	96	$	6,073	$	59	$	6,185	$	132
All other mortgage loans		2,887		2,887		209		3,130		47		3,306		81
Commercial business loans		241		241		241		189		2		173		3
	$	8,956	$	8,956	$	546	$	9,392	$	108	$	9,664	$	216

	As of December 31, 2013						Three months ended June 30, 2013				Six months ended June 30, 2013
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation allowance
One-to-four family residential loans	$	5,569	$	5,569	$	—	$	5,810	$	60	$	5,736	$	138
All other mortgage loans		2,051		2,051		—		2,351		20		2,494		49
Commercial business loans		77		77		—		83		—		84		1
Loans with a specific valuation allowance
One-to-four family residential loans		842		842		226		1,230		2		1,250		15
All other mortgage loans		1,610		2,076		618		2,681		27		2,806		36
Commercial business loans		65		65		65		82		1		88		2
Total:
One-to-four family residential loans	$	6,411	$	6,411	$	226	$	7,040	$	62	$	6,986	$	153
All other mortgage loans		3,661		4,127		618		5,032		47		5,300		85
Commercial business loans		142		142		65		165		1		172		3
	$	10,214	$	10,680	$	909	$	12,237	$	110	$	12,458	$	241

Schedule of troubled debt restructurings

All the TDR classifications listed below occurred as concessions were granted to borrowers experiencing financial difficulties.

	Quarter-to-Date						Year-to-Date
Troubled Debt Restructurings	Number of loans		Pre- modification Unpaid Recorded   Balance		Post- modification Unpaid Recorded Balance		Number of loans		Pre- modification Unpaid Recorded Balance		Post- modification Unpaid Recorded Balance
	(dollars in thousands)
June 30, 2014
One-to-four family residential loans			$	—	$	—			$	—	$	—
All other mortgage loans		1		796		829		2		1,057		1,090
June 30, 2013
One-to-four family residential loans		1	$	303	$	303		2	$	416	$	416
All other mortgage loans				—		—		1		576		576