Loans Receivable, Net:

12 Months Ended

Dec. 31, 2011

Loans Receivable, Net [Abstract]

Loans Receivable, Net:

The components of loans receivable in the consolidated balance sheets as of December 31, 2011, and December 31, 2010, were as follows:

	12/31/2011		12/31/2011			12/31/2010		12/31/2010
	Amount		Percent			Amount		Percent
Real estate loans:
One-to-four family (closed end) first mortgages	$	171,192		30.2	%	$	182,671		30.0	%
Home equity lines of credit		38,694		6.8	%		40,191		6.6	%
Junior lien		6,209		1.1	%		6,196		1.0	%
Multi-family		33,739		5.9	%		29,416		4.8	%
Construction		11,931		2.1	%		23,361		3.8	%
Land		52,338		9.2	%		60,063		9.9	%
Non-residential real estate		183,485		32.3	%		195,285		32.0	%
Total mortgage loans		497,588		87.6	%		537,183		88.1	%
Consumer loans		15,110		2.7	%		18,060		3.0	%
Commercial loans		54,673		9.7	%		54,439		8.9	%
Total other loans		69,783		12.4	%		72,499		11.9	%
Total loans, gross		567,371		100.0	%		609,682		100.0	%
Deferred loan cost, net of income		251					363
Less allowance for loan losses		11,262					9,830
Total loans	$	556,360				$	600,215

The Company's loan portfolio balance has declined in each of the last two years. The decline is the result of a combination of factors, including a weak economy, both locally and nationally. In 2010 and 2011, unemployment in the Company's market area ranged from 9% to 13%. The Company's MOU with its former regulator, the OTS, restricted the Company's ability to grow its owner occupied commercial real estate loan portfolio.

The Company's loan portfolio includes a significant amount of loans secured by raw land and commercial real estate. These loans have come under increased regulatory scrutiny due to the potential for higher levels of losses. At December 31, 2011, the performance of the Company's land and commercial real estate loans has been satisfactory.

In 2010, the credit quality of the Company's multi-family loan portfolio began to experience an increase in delinquency and losses as compared to other segments of the loan portfolio due to the deployment of the more than 10,000 army personnel from the 101^st Airborne at Fort Campbell, Kentucky, to the Middle East, reducing the number of potential renters in the Company's largest market. In the first half of 2011, the deployed troops returned to Fort Campbell, thus creating a strong demand for multi-family real estate properties. This demand allowed the Company to sell a large portion of its other real estate owned.

Loans serviced for the benefit of others totaled approximately $59.2 million, $56.3 million and $42.1 million at December 31, 2011, 2010 and 2009, respectively. At December 31, 2011, approximately $22.3 million of the $59.2 million in loans serviced by the Company are serviced for the benefit of Freddie Mac. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow amounts, disbursing payments to investors and foreclosure processing. The servicing rights associated with these loans are not material to the Company's consolidated financial statements. Qualified one-to-four family first mortgage loans, non-residential real estate loans, multi-family loans and commercial real estate loans are pledged to the Federal Home Loan Bank of Cincinnati as discussed in note 7.

The Company originates most fixed rate loans for immediate sale to the Federal Home Loan Mortgage Corporation (FHLMC) or other investors. Generally, the sale of such loans is arranged shortly after the loan application is tentatively approved through commitments.

The Company conducts annual reviews on all loan relationships above $1.0 million to ascertain the borrowers continued ability to service their debt as agreed. In addition to the credit relationships mentioned above, management may classify any credit relationship once it becomes aware of adverse credit trends for that customer. Typically, the annual review consists of updated financial statements for borrowers and any guarantors, a review of the borrower's credit history with the Company and other creditors, and current income tax information. As a result of this review, management will classify loans based on their credit risk. Additionally, the Company provides a risk grade for all loans past due more than sixty days. The Company uses the following risk definitions for risk grades:

Satisfactory loans of average strength having some deficiency or vulnerability to changing economic or industry conditions. These customers should have reasonable amount of capital and operating ratios. Secured loans may lack in margin or liquidity. Loans to individuals, perhaps supported in dollars of net worth, but with supporting assets may be difficult to liquidate.

Watch loans are acceptable credits: (1) that need continual monitoring, such as out-of territory or asset-based loans (since the Company does not have an asset-based lending department), or (2) with a marginal risk level to business concerns and individuals that; (a) have exhibited favorable performance in the past, though currently experiencing negative trends; (b) are in an industry that is experiencing volatility or is declining, and their performance is less than industry norms; and (c) are experiencing unfavorable trends in their financial position, such as one-time net losses or declines in asset values. These marginal borrowers may have early warning signs of problems such as occasional overdrafts and minor delinquency.

If considered marginal, a loan would be a "watch" until financial data demonstrated improved performance or further deterioration to a "substandard" grade usually within a 12-month period. In the table on page 65, Watch loans are included with satisfactory loans and classified as Pass.

Other Loans Especially Mentioned are currently protected but are potentially weak. These loans constitute an undue and unwarranted credit risk but not to the point of justifying a substandard classification. The credit risk may be relatively minor yet constitutes an unwarranted risk in light of the circumstances surrounding a specific loan. These credit weaknesses, if not checked or corrected, will weaken the loan or inadequately protect the Bank's credit position at some future date.

A Substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. The loans are characterized by the higher degree of likelihood that the Company will sustain some loss if the deficiencies are not corrected. This does not imply ultimate loss of the principal, but may involve burdensome administrative expenses and the accompanying cost to carry the credit. Examples of substandard loans include those to borrowers with insufficient or negative cash flow, negative net worth coupled with inadequate guarantor support, inadequate working capital, and/or significantly past-due loans and overdrafts.

A loan classified Doubtful has all the weaknesses inherent in a substandard credit except that the weaknesses make collection or liquidation in full (on the basis of currently existing facts, conditions, and values) highly questionable and improbable. The possibility of loss is extremely high, but because of certain pending factors charge-off is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans. The doubtful classification is applied to that portion of the credit in which the full collection of principal and interest is questionable.

A loan is considered to be impaired when management determines that it is probable that the Company will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement. The value of individually impaired loans is measured based on the present value of expected payments using the fair value of the collateral if the loan is collateral dependent. Currently, it is management's practice to classify all substandard or doubtful loans as impaired.

Loans by classification type and the related valuation allowance amounts at December 31, 2011, were as follows:

	Pass		Special Mention		Impaired Loans				Total		Specific Allowance for  Impairment		Allowance for Performing  loans
					Substandard		Doubtful
					(Dollars in Thousands)
December 31, 2011
One-to-four family mortgages	$	153,375		9,434		8,153		230		171,192		728		1,912
Home equity lines of credit		36,528		1,694		233		239		38,694		131		277
Junior lien		4,778		622		809		—		6,209		180		97
Multi-family		20,715		7,073		5,951		—		33,739		26		1,175
Construction		9,943		213		1,775		—		11,931		14		125
Land		17,570		24,714		9,055		999		52,338		924		408
Non-residential real estate		142,190		25,077		16,101		117		183,485		1,374		2,297
Consumer loans		14,399		268		423		20		15,110		80		182
Commercial loans		45,509		4,009		5,034		121		54,673		623		709
Total	$	445,007		73,104		47,534		1,726		567,371		4,080		7,182

Loans by classification type and the related valuation allowance amounts at December 31, 2010, were as follows:

	Pass		Special Mention		Impaired Loans				Total		Specific Allowance for  Impairment		Allowance for Performing  loans
					Substandard		Doubtful
					(Dollars in Thousands)
December 31, 2010
One-to-four family mortgages	$	165,864		8,121		8,388		298		182,671		350		747
Home equity lines of credit		39,129		499		333		230		40,191		77		135
Junior lien		5,514		495		187		—		6,196		105		41
Multi-family		26,098		—		3,017		301		29,416		178		1,844
Construction		16,164		3,292		3,702		203		23,361		108		549
Land		29,858		16,930		13,275		—		60,063		588		277
Non-residential real estate		160,995		11,089		22,780		421		195,285		2,540		1,485
Consumer loans		17,488		205		367		—		18,060		85		23
Commercial loans		47,016		2,314		5,092		17		54,439		255		443
Total	$	508,126		42,945		57,141		1,470		609,682		4,286		5,544

Impaired loans by classification type and the related valuation allowance amounts at December 31, 2011, were as follows:

	At December 31, 2011						For the year ended December 31, 2011
Impaired loans with no recorded allowance	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
One-to-four family mortgages	$	5,144		5,300		—		5,814		220
Home equity line of credit		181		181		—		312		5
Junior lien		469		469		—		287		14
Multi-family		5,059		5,059		—		2,797		242
Construction		1,589		1,589		—		1,437		63
Land		7,513		7,513		—		10,777		446
Non-residential real estate		9,458		11,530		—		10,410		312
Consumer loans		75		75		—		92		4
Commercial loans		480		584		—		2,244		33
Total	$	29,968		32,300		—		34,170		1,339
	At December 31, 2011						For the year ended December 31, 2011
Impaired loans with recorded allowance:	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
One-to-four family mortgages	$	3,239		3,239		728		3,563		183
Home equity line of credit		291		291		131		399		13
Junior lien		340		340		180		703		16
Multi-family		892		892		26		1,962		15
Construction		186		186		14		1,222		11
Land		2,541		2,541		924		3,261		157
Non-residential real estate		6,760		6,760		1,374		10,833		360
Consumer loans		368		368		80		344		3
Commercial loans		4,675		4,675		623		2,671		27
Total	$	19,292		19,292		4,080		24,958		785
Total impaired loans	$	49,260		51,592		4,080		59,128		2,124

Impaired loans by classification type and the related valuation allowance amounts at December 31, 2010, were as follows:

	At December 31, 2010						For the year ended December 31, 2010
Impaired loans with no recorded allowance:	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
One-to-four family mortgages	$	7,097		7,097		—		3,863		352
Home equity line of credit		419		419		—		207		15
Junior lien		—		—		—		156		10
Multi-family		1,456		1,456		—		389		31
Construction		1,238		1,238		—		1,480		38
Land		11,175		11,175		—		10,282		328
Non-residential real estate		13,194		13,194		—		10,242		808
Consumer loans		51		51		—		459		1
Commercial loans		4,576		4,576		—		1,721		73
Total	$	39,206		39,206		—		28,799		1,656

	At December 31, 2010						For the year ended December 31, 2010
Impaired loans with recorded allowance:	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
One-to-four family mortgages	$	1,589		1,589		350		1,059		88
Home equity line of credit		144		144		77		156		6
Junior lien		187		187		105		75		5
Multi-family		1,862		1,862		178		6,828		18
Construction		2,667		2,667		108		1,202		176
Land		2,100		2,100		588		573		92
Non-residential real estate		10,007		10,007		2,540		3,537		720
Consumer loans		316		316		85		613		1
Commercial loans		533		533		255		353		34
Total	$	19,405		19,405		4,286		14,396		1,140
Total impaired loans	$	58,611		58,611		4,286		43,195		2,796

The average recorded investment in impaired loans for the years ended December 31, 2011, 2010 and 2009 was $59.1 million, $43.2 million and $27.7 million, respectively. Interest income recognized on impaired loans for the years ended December 31, 2011 and December 31, 2010 was $2.1 million and $2.8 million, respectively. The following table provides a detail of the Company's activity in the allowance for loan loss account by loan type for the year ended December 31, 2011:

Year ended December 31, 2011	Balance 12/31/2010		Charge off 2011			Recovery 2011		General Provision 2011			Specific Provision 2011			Ending Balance 12/31/2011
One-to-four family mortgages	$	1,097		(758	)		139		1,687			475			2,640
Home equity line of credit		212		(123	)		—		245			74			408
Junior liens		146		(27	)		1		79			78			277
Multi-family		2,022		(89	)		—		26			(758	)		1,201
Construction		657		(353	)		—		(91	)		(74	)		139
Land		865		(308	)		30		353			392			1,332
Non-residential real estate		4,025		(2,645	)		84		1,114			1,093			3,671
Consumer loans		108		(371	)		112		425			(12	)		262
Commercial loans		698		(201	)		20		305			510			1,332
	$	9,830		(4,875	)		386		4,143			1,778			11,262

The following table provides a detail of the Company's activity in the allowance for loan loss account allocated by loan type for the year ended December 30, 2010:

Year ended December 31, 2010	Balance 12/31/2009		Charge off 2010			Recovery 2010		General Provision 2010			Specific Provision 2010			Ending Balance 12/31/2010
One-to-four family mortgages	$	1,827		(403	)		10		(418	)		81			1,097
Home equity line of credit		245		(61	)		1		9			18			212
Junior liens		137		—			5		(20	)		24			146
Multi-family		1,344		(1,605	)		85		299			1,899			2,022
Construction		514		(751	)		—		392			502			657
Land		935		(265	)		3		61			131			865
Non-residential real estate		2,295		(1,252	)		—		1,695			1,287			4,025
Consumer loans		317		(472	)		184		66			13			108
Commercial loans		1,237		(481	)		11		(39	)		(30	)		698
	$	8,851		(5,290	)		299		2,045			3,925			9,830

Management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans and foreclosed real estate, future additions to the allowance for loan losses account by management may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Bank's allowances for losses on loans and foreclosed real estate. Such agencies may require the Bank to recognize additions to the allowances based on their judgments about information available to them at the time of their examination.

Non-accrual loans totaled $6.1 million and $5.0 million at December 31, 2011, and December 31, 2010, respectively. All non-accrual loans noted below are classified as either substandard or doubtful. Interest income foregone on such loans totaled $246,000 at December 31, 2011, $243,000 at December 31, 2010 and $679,000 at December 31, 2009, respectively. The Company is not committed to lend additional funds to borrowers whose loans have been placed on a non-accrual basis. There were no loans past due more than three months and still accruing interest as of December 31, 2011, December 31, 2010 and December 31, 2009. For the years ended December 31, 2011, and December 31, 2010, the components of the Company's balances of non-accrual loans are as follow:

	December 31,
	2011			2010
One-to-four family (closed end) first mortgages	$	2,074			1,559
Home equity lines of credit		134			103
Junior liens Multi-family		101 —			—   301
Construction		—			1,541
Land		1,330			363
Non-residential real estate		2,231			1,043
Consumer loans		9			23
Commercial loans		254			97
Total non-performing loans	$	6,133			5,030
Non-accrual loans to total loans ratio		1.08	%		0.82	%

The table below presents past due balances at December 31, 2011, by loan classification allocated between performing and non-performing:

	Currently Performing		30 - 89 Days Past  Due		Non-accrual Loans		Special Mention		Impaired Loans Currently Performing				Total
									Substandard		Doubtful
	(Dollars in Thousands)
One-to-four family mortgages	$	153,375		628		2,074		9,163		5,722		230		171,192
Home equity line of credit		36,528		5		134		1,664		134		229		38,694
Junior liens		4,778		312		101		521		497		—		6,209
Multi-family		20,715		—		—		7,073		5,951		—		33,739
Construction		9,943		107		—		213		1,668		—		11,931
Land		17,570		237		1,330		24,714		7,488		999		52,338
Non-residential real estate		142,190		487		2,231		24,782		13,678		117		183,485
Consumer loans		14,399		28		9		268		386		20		15,110
Commercial loans		45,509		506		254		4,003		4,385		16		54,673
Total	$	445,007		2,310		6,133		72,401		39,909		1,611		567,371

The table below presents past due balances at December 31, 2010, by loan classification allocated between performing and non-performing:

	Currently Performing		30 - 89 Days Past  Due		Non-accrual Loans		Special Mention		Impaired Loans Currently Performing				Total
									Substandard		Doubful
	(Dollars in Thousands)
One-to-four family mortgages	$	162,840		3,024		1,559		8,121		7,032		95		182,671
Home equity line of credit		39,087		42		103		499		260		200		40,191
Junior liens		5,514		—		—		495		187		—		6,196
Multi-family		25,852		246		301		—		2,716		301		29,416
Construction		15,351		813		1,541		3,292		2,364		—		23,361
Land		29,270		588		363		16,930		12,912		—		60,063
Non-residential real estate		156,997		3,998		1,043		11,089		21,737		421		195,285
Consumer loans		17,351		137		23		205		344		—		18,060
Commercial loans		46,676		340		97		2,314		4,995		17		54,439
Total	$	498,938		9,188		5,030		42,945		52,547		1,034		609,682

All loans listed as 30-89 days past due and non-accrual are not performing as agreed. Loans listed as special mention, substandard and doubtful are paying as agreed. However, the customer's financial statements may indicate weaknesses in their current cash flow, the customer's industry may be in decline due to current economic conditions, collateral values used to secure the loan may be declining, or the Company may be concerned about the customer's future business prospects.

On a periodic basis, the Company may modify the terms of certain loans. In evaluating whether a restructuring constitutes a troubled debt restructuring (TDR), Financial Accounting Standards Board has issued Accounting Standards Update 310 (ASU 310), A Creditor's Determination of Whether a Restructuring is a Troubled Debt Restructuring. In evaluating whether a restructuring constitutes a TDR, the Bank must separately conclude that both of the following exist:

• The restructuring constitutes a concession

• The debtor is experiencing financial difficulties

ASU 310 provides the following guidance for the Bank's evaluation of whether it has granted a concession as follows:

1. If a debtor does not otherwise have access to funds at a market interest rate for debt with similar risk characteristics as the restructured debt, the restructured debt would be considered a below market rate, which may indicate that the Company may have granted a concession. In that circumstance, the Company should consider all aspects of the restructuring in determining whether it has granted a concession, the creditor must make a separate assessment about whether the debtor is experiencing financial difficulties to determine whether the restructuring constitutes a TDR.

2. A temporary or permanent increase in the interest rate on a loan as a result of a restructuring does not eliminate the possibility of the restructuring from being considered a concession if the new interest rate on the loan is below the market interest rate for loans of similar risk characteristics.

3. A restructuring that results in a delay in payment that is insignificant is not a concession. However, the Company must consider a variety of factors in assessing whether a restructuring resulting in a delay in payment is insignificant.

A summary of the Company's loans classified as Troubled Debt Restructuring (TDR's) that are reported as performing and non-performing at December 31, 2011 and December 31, 2010 is below:

TDR by loan type:	2011			2010
One-to-four family mortgages	$	2,521			4,013
Home equity line of credit		—			33
Junior lien		857			—
Multi-family		—			246
Construction		—			1,541
Land		941			512
Non-residential real estate		3,367			3,915
Consumer loans		33			69
Commercial loans		125			700
Total TDR	$	7,844			11,029
Less:
TDR in non-accrual status:
One-to-four family mortgages		(1,410	)		(1,181	)
Home equity line of credit		—			—
Junior lien		(100	)		—
Multi-family		—			—
Construction		—			(1,338	)
Land		—			(512	)
Non-residential real estate		(1	)		—
Consumer loans		(1	)		—
Commercial loans		(105	)		—
Total performing TDR	$	6,227			7,998

The Company originates loans to officers and directors and their affiliates at terms substantially identical to those available to other borrowers. Loans to officers and directors at December 31, 2011 and December 31, 2010, were approximately $10,917,000 and $11,641,000, respectively. At December 31, 2011, funds committed that were undisbursed to officers and directors approximated $677,000.

The following summarizes activity of loans to officers and directors and their affiliates for the years ended December 31, 2011, and December 31, 2010:

	2011			2010
Balance at beginning of period	$	11,641			9,892
New loans		2,940			4,284
Principal repayments		(3,664	)		(2,535	)
Balance at end of period	$	10,917		$	11,641