Loans

12 Months Ended

Dec. 31, 2012

Loans [Abstract]

LOANS

5. LOANS

Portfolio loans consist of the following:

	December 31,			December 31,
	2012			2011
	(Dollars in thousands)
Real Estate:
One-to four-family residential	$	577,249		$	667,375
Multi-family residential		80,923			120,991
Nonresidential		138,188			276,198
Land		15,808			23,222
Construction:
One-to four-family residential and land development		28,318			59,339
Multi-family and nonresidential		4,534			4,528
Total real estate		845,020			1,151,653
Consumer
Home equity		177,230			191,827
Auto		7,648			8,933
Marine		4,942			5,900
Recreational vehicles		22,250			28,530
Other		2,523			3,207
Total consumer		214,593			238,397
Commercial
Secured		24,243			25,120
Unsecured		2,300			5,026
Total commercial		26,543			30,146
Total loans		1,086,156			1,420,196
Less:
Allowance for loan losses		21,130			42,271
Deferred loan costs, net		(1,214	)		(1,351	)
Total		19,916			40,920
Loans, net	$	1,066,240		$	1,379,276

On September 21, 2012, Home Savings sold assets in a bulk sale transaction, which was comprised primarily of loans. Loans included in the bulk sale had an unpaid principal balance of $147.3 million. These loans had a recorded investment as of the closing date of $117.4 million. Home Savings received proceeds of $77.4 million and recorded a total loss of $30.2 million on the sale of these loans. Of these loans, $91.6 million were classified, $63.3 million were nonperforming and $53.0 million were noncurrent (all amounts are book balance prior to the effect of any reserves).

Loan commitments are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments extend over various periods of time with the majority of such commitments disbursed within a sixty-day period. Commitments generally have fixed expiration dates or other termination clauses, may require payment of a fee and may expire unused. Commitments to extend credit at fixed rates expose Home Savings to some degree of interest rate risk. Home Savings evaluates each customer’s creditworthiness on a case-by-case basis. The type or amount of collateral obtained varies and is based on management’s credit evaluation of the potential borrower. Home Savings normally has a number of outstanding commitments to extend credit.

	December 31,
	2012				2011
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
	(Dollars in thousands)
Commitments to make loans	$	73,125	$	21,001	$	45,603	$	3,446
Undisbursed loans in process		731		23,502		875		22,463
Unused lines of credit		27,832		76,558		43,735		68,688

Terms of the commitments in both years extend up to six months, but are generally less than two months. The fixed rate loan commitments have interest rates ranging from 2.50% to 18.00%; and maturities ranging from three months to thirty years. Commitments to fund certain mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives. It is the Company’s practice to enter into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its commitments to fund the loans. These mortgage banking derivatives are not designated as hedge relationships.

At both December 31, 2012 and 2011, there were $702,000 and $1.1 million of outstanding standby letters of credit, respectively. These are issued to guarantee the performance of a customer to a third party. Standby letters of credit are generally contingent upon the failure of the customer to perform according to the terms of an underlying contract with the third party.

At December 31, 2012 and 2011, there was $42.3 million and $43.1 million in outstanding commitments to fund the OverdraftPrivlege™ Program at Home Savings. With OverdraftPrivlege™, Home Savings pays non-sufficient funds checks and fees on checking accounts up to a preapproved limit.

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2012 and December 31, 2011 and activity for the year ended December 31, 2012 and 2011. In accordance with GAAP, the net losses associated with loans sold as part of the bulk asset sale were recorded as net chargeoffs through the allowance for loan losses.

Allowance For Loan Losses

(Dollars in thousands)

	Permanent Real Estate Loans			Construction Loans			Consumer Loans			Commercial Loans			Total
2012
Beginning balance	$	31,323		$	4,493		$	4,576		$	1,879		$	42,271
Provision		34,260			2,310			2,721			34			39,325
Chargeoffs		(16,790	)		(3,480	)		(2,740	)		(1,258	)		(24,268	)
Recoveries		770			215			724			251			1,960
Net (chargeoffs) recovery from asset sale		(35,744	)		(2,134	)		(822	)		542			(38,158	)
Net chargeoffs		(51,764	)		(5,399	)		(2,838	)		(465	)		(60,466	)
Ending balance	$	13,819		$	1,404		$	4,459		$	1,448		$	21,130
Period-end amount allocated to:
Loans individually evaluated for impairment	$	2,380		$	478		$	—		$	166		$	3,024
Loans collectively evaluated for impairment		11,439			926			4,459			1,282			18,106
Ending balance	$	13,819		$	1,404		$	4,459		$	1,448		$	21,130
Period-end balances:
Loans individually evaluated for impairment	$	43,013		$	7,547		$	8,784		$	1,673		$	61,017
Loans collectively evaluated for impairment		769,155			25,305			205,809			24,870			1,025,139
Ending balance	$	812,168		$	32,852		$	214,593		$	26,543		$	1,086,156

Allowance For Loan Losses

(Dollars in thousands)

	Permanent Real Estate Loans			Construction Loans			Consumer Loans			Commercial Loans			Total
2011
Beginning balance	$	28,066		$	8,533		$	5,260		$	9,024		$	50,883
Provision		17,073			8,126			2,171			(2,712	)		24,658
Chargeoffs		(14,734	)		(12,504	)		(3,446	)		(5,055	)		(35,739	)
Recoveries		918			338			591			622			2,469
Net chargeoffs		(13,816	)		(12,166	)		(2,855	)		(4,433	)		(33,270	)
Ending balance	$	31,323		$	4,493		$	4,576		$	1,879		$	42,271
Period-end amount allocated to:
Loans individually evaluated for impairment	$	8,275		$	3,102		$	236		$	210		$	11,823
Loans collectively evaluated for impairment		23,048			1,391			4,340			1,669			30,448
Ending balance	$	31,323		$	4,493		$	4,576		$	1,879		$	42,271
Period-end balances:
Loans individually evaluated for impairment	$	115,290		$	30,587		$	3,734		$	3,956		$	153,567
Loans collectively evaluated for impairment		972,496			33,280			234,663			26,190			1,266,629
Ending balance	$	1,087,786		$	63,867		$	238,397		$	30,146		$	1,420,196

Activity in the allowance for loan losses was as follows:

	2010
Beginning balance	$	42,287
Provision for loan losses		62,427
Loans charged-off		(55,079	)
Recoveries		1,248
Ending Balance	$	50,883

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 chargeoffs or partial chargeoffs applied to specific loans. The unpaid principal balance and the recorded investment both 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 year ended December 31, 2012:

Impaired Loans

(Dollars in thousands)

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Income Recognized
With no specific allowance recorded
Permanent real estate
One-to four-family residential	$	18,672	$	16,947	$	—	$	22,526	$	613	$	715
Multifamily residential		1,173		1,078		—		2,581		36		63
Nonresidential		13,240		12,638		—		19,425		21		68
Land		4,577		3,804		—		4,918		—		—
Total		37,662		34,467		—		49,450		670		846
Construction loans
One-to four-family residential		17,912		3,580		—		6,051		—		14
Multifamily and nonresidential		571		—		—		—		—		—
Total		18,483		3,580		—		6,051		—		14
Consumer loans
Home Equity		8,867		7,958		—		5,571		265		326
Auto		68		44		—		52		1		6
Marine		190		190		—		268		—		13
Recreational vehicle		887		592		—		659		—		35
Other		—		—		—		5		—		—
Total		10,012		8,784		—		6,555		266		380
Commercial loans
Secured		2,122		1,212		—		1,480		—		124
Unsecured		2,861		38		—		261		2		11
Total		4,983		1,250		—		1,741		2		135
Total	$	71,140	$	48,081	$	—	$	63,797	$	938	$	1,375

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Income Recognized
With a specific allowance recorded
Permanent real estate
One-to four-family residential	$	735	$	735	$	260	$	1,242	$	—	$	—
Multifamily residential		996		981		57		2,390		—		17
Nonresidential		5,218		4,703		1,336		17,420		19		57
Land		3,913		2,127		727		2,603		—		—
Total		10,862		8,546		2,380		23,655		19		74
Construction loans
One-to four-family residential		6,455		3,967		478		9,511		—		2
Multifamily and nonresidential		—		—		—		—		—		—
Total		6,455		3,967		478		9,511		—		2
Consumer loans
Home Equity		—		—		—		—		—		—
Auto		—		—		—		—		—		—
Marine		—		—		—		—		—		—
Recreational vehicle		—		—		—		27		—		—
Other		—		—		—		—		—		—
Total		—		—		—		27		—		—
Commercial loans
Secured		798		423		166		487		—		3
Unsecured		—		—		—		—		—		—
Total		798		423		166		487		—		3
Total	$	18,115	$	12,936	$	3,024	$	33,680	$	19	$	79
Total	$	89,255	$	61,017	$	3,024	$	97,477	$	957	$	1,454

The following table presents loans individually evaluated for impairment by class of loans as of and for the year ended December 31, 2011:

Impaired Loans

(Dollars in thousands)

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Income Recognized
With no specific allowance recorded
Permanent real estate
One-to four-family residential	$	32,372	$	28,566	$	—	$	26,016	$	557	$	868
Multifamily residential		5,112		4,205		—		3,798		—		218
Nonresidential		29,120		28,327		—		26,911		391		1,006
Land		9,213		7,290		—		6,739		38		198
Total		75,817		68,388		—		63,464		986		2,290
Construction loans
One-to four-family residential		19,081		12,532		—		15,300		284		441
Multifamily and nonresidential		707		—		—		96		—		—
Total		19,788		12,532		—		15,396		284		441
Consumer loans
Home Equity		4,908		3,139		—		1,620		61		124
Auto		80		59		—		68		1		5
Marine		—		—		—		—		—		—
Recreational vehicle		26		11		—		38		—		2
Other		7		7		—		7		—		—
Total		5,021		3,216		—		1,733		62		131
Commercial loans
Secured		3,875		3,084		—		1,627		35		531
Unsecured		22,716		371		—		370		7		128
Total		26,591		3,455		—		1,997		42		659
Total	$	127,217	$	87,591	$	—	$	82,590	$	1,374	$	3,521

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Income Recognized
With a specific allowance recorded
Permanent real estate
One-to four-family residential	$	2,487	$	1,721	$	152	$	2,993	$	—	$	35
Multifamily residential		4,077		2,387		187		3,594		10		61
Nonresidential		42,201		38,176		6,127		37,986		919		1,569
Land		5,074		4,618		1,809		3,049		—		175
Total		53,839		46,902		8,275		47,622		929		1,840
Construction loans
One-to four-family residential		35,759		18,055		3,102		24,089		47		221
Multifamily and nonresidential		—		—		—		—		—		—
Total		35,759		18,055		3,102		24,089		47		221
Consumer loans
Home Equity		—		—		—		—		—		—
Auto		—		—		—		—		—		—
Marine		482		482		218		121		—		19
Recreational vehicle		88		36		18		9		—		—
Other		—		—		—		—		—		—
Total		570		518		236		130		—		19
Commercial loans
Secured		776		427		136		6,124		5		10
Unsecured		105		74		74		1,244		—		—
Total		881		501		210		7,368		5		10
Total		91,049		65,976		11,823		79,209		981		2,090
Total	$	218,266	$	153,567	$	11,823	$	161,799	$	2,355	$	5,611

The following table presents information for impaired loans as of December 31:

	2010
Average of individually impaired loans during the year	$	144,977
Interest income recognized during impairment		1,778
Cash-basis interest income recognized		4,570

The following tables present the recorded investment in nonaccrual and loans past due over 90 days and still on accrual by class of loans as of December 31, 2012:

Nonaccrual Loans and Loans Past Due Over 90 Days and Still Accruing

As of December 31, 2012

(Dollars in thousands)

	Nonaccrual		Loans past due over 90 days and still accruing
Real Estate Loans
Permanent
One-to four-family residential	$	5,437	$	—
Multifamily residential		2,027		—
Nonresidential		17,065		3,678
Land		6,047		—
Total		30,576		3,678
Construction Loans
One-to four-family residential		7,466		—
Multifamily and nonresidential		—		—
Total		7,466		—
Consumer Loans
Home Equity		3,298		—
Auto		105		—
Marine		176		—
Recreational vehicle		1,259		—
Other		4		—
Total		4,842		—
Commercial Loans
Secured		1,194		—
Unsecured		31		—
Total		1,225		—
Total	$	44,109	$	3,678

Nonaccrual Loans and Loans Past Due Over 90 Days and Still Accruing

As of December 31, 2011

(Dollars in thousands)

	Nonaccrual		Loans past due over 90 days and still accruing
Real Estate Loans
Permanent
One-to four-family residential	$	26,637	$	—
Multifamily residential		5,860		—
Nonresidential		42,902		—
Land		11,142		—
Total		86,541		—
Construction Loans
One-to four-family residential		27,104		—
Multifamily and nonresidential		—		—
Total		27,104		—
Consumer Loans
Home Equity		4,198		39
Auto		170		—
Marine		479		—
Recreational vehicle		1,725		—
Other		9		—
Total		6,581		39
Commercial Loans
Secured		2,483		—
Unsecured		347		—
Total		2,830		—
Total	$	123,056	$	39

The following tables present an age analysis of past-due loans, segregated by class of loans as of December 31, 2012:

Past Due Loans

(Dollars in thousands)

	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current Loans		Total Loans
Real Estate Loans
Permanent
One-to four-family residential	$	1,995	$	784	$	4,495	$	7,274	$	569,975	$	577,249
Multifamily residential		158		—		1,630		1,788		79,135		80,923
Nonresidential		—		176		19,942		20,118		118,070		138,188
Land		83		—		6,044		6,127		9,681		15,808
Total		2,236		960		32,111		35,307		776,861		812,168
Construction Loans
One-to four-family residential		54		—		7,398		7,452		20,866		28,318
Multifamily and nonresidential		—		—		—		—		4,534		4,534
Total		54		—		7,398		7,452		25,400		32,852
Consumer Loans
Home Equity		1,135		475		2,071		3,681		173,549		177,230
Auto		35		7		83		125		7,523		7,648
Marine		—		—		8		8		4,934		4,942
Recreational vehicle		447		32		353		832		21,418		22,250
Other		—		1		3		4		2,519		2,523
Total		1,617		515		2,518		4,650		209,943		214,593
Commercial Loans
Secured		16		—		23		39		24,204		24,243
Unsecured		—		728		6		734		1,566		2,300
Total		16		728		29		773		25,770		26,543
Total	$	3,923	$	2,203	$	42,056	$	48,182	$	1,037,974	$	1,086,156

The following table presents an age analysis of past-due loans, segregated by class of loans as of December 31, 2011:

Past Due Loans

(Dollars in thousands)

	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current Loans		Total Loans
Real Estate Loans
Permanent
One-to four-family residential	$	2,878	$	1,928	$	20,124	$	24,930	$	642,445	$	667,375
Multifamily residential		1,405		—		4,564		5,969		115,022		120,991
Nonresidential		6,820		971		41,151		48,942		227,256		276,198
Land		167		530		9,705		10,402		12,820		23,222
Total		11,270		3,429		75,544		90,243		997,543		1,087,786
Construction Loans
One-to four-family residential		979		1,718		24,608		27,305		32,034		59,339
Multifamily and nonresidential		—		—		—		—		4,528		4,528
Total		979		1,718		24,608		27,305		36,562		63,867
Consumer Loans
Home Equity		1,485		601		2,749		4,835		186,992		191,827
Auto		73		13		87		173		8,760		8,933
Marine		184		—		479		663		5,237		5,900
Recreational vehicle		867		754		1,044		2,665		25,865		28,530
Other		57		1		7		65		3,142		3,207
Total		2,666		1,369		4,366		8,401		229,996		238,397
Commercial Loans
Secured		554		—		96		650		24,470		25,120
Unsecured		69		—		237		306		4,720		5,026
Total		623		—		333		956		29,190		30,146
Total	$	15,538	$	6,516	$	104,851	$	126,905	$	1,293,291	$	1,420,196

The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended December 31, 2012:

	Number of loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Recorded Investment
			(Dollars in thousands)
Real Estate Loans
Permanent
One-to four-family		114	$	6,618	$	5,574
Multifamily residential		6		1,439		1,438
Nonresidential		1		424		424
Land		—		—		—
Total		121		8,481		7,436
Construction Loans
One-to four-family residential		3		853		830
Multifamily and nonresidential		—		—		—
Total		3		853		830
Consumer Loans
Home Equity		86		6,951		7,033
Auto		—		—		—
Marine		—		—		—
Recreational vehicle		—		—		—
Other		—		—		—
Total		86		6,951		7,033
Commercial Loans
Secured		—		—		—
Unsecured		1		446		446
Total		1		446		446
Total Restructured Loans		211	$	16,731	$	15,745

The troubled debt restructurings described above increased the allowance for loan losses by $584,000, and resulted in no chargeoffs during the twelve months ended December 31, 2012.

The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended December 31, 2011:

	Number of loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Recorded Investment
			(Dollars in thousands)
Real Estate Loans
Permanent
One-to four-family		55	$	7,344	$	7,485
Multifamily residential		2		2,246		2,246
Nonresidential		3		1,271		1,271
Land		4		4,292		3,524
Total		64		15,153		14,526
Construction Loans
One-to four-family residential		19		4,425		3,881
Multifamily and nonresidential		—		—		—
Total		19		4,425		3,881
Consumer Loans
Home Equity		54		1,847		1,841
Auto		1		21		21
Marine		—		—		—
Recreational vehicle		—		—		—
Other		—		—		—
Total		55		1,868		1,862
Commercial Loans
Secured		3		9,104		9,098
Unsecured		—		—		—
Total		3		9,104		9,098
Total Restructured Loans		141	$	30,550	$	29,367

The troubled debt restructurings described above increased the allowance for loan losses by $344,000, and resulted in chargeoffs of $796,000 during the twelve months ended December 31, 2011.

During the period ended December 31, 2012, 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.

Restructured loans were $25.4 million and $50.9 million at December 31, 2012 and December 31, 2011, respectively. The Company has allocated $1.0 million of specific reserves to customers whose loan terms were modified in troubled debt restructurings as of December 31, 2012. The Company had allocated $2.0 million of specific reserves to customers whose loan terms were modified in troubled debt restructurings as of December 31, 2011. Troubled debt restructurings are considered impaired.

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 December 31, 2012:

	Number of loans		Recorded Investment
			(Dollars in thousands)
Real Estate Loans
Permanent
One-to four-family		9	$	851
Multifamily residential		—		—
Nonresidential		—		—
Land		—		—
Total		9		851
Construction Loans
One-to four-family residential		—		—
Multifamily and nonresidential		—		—
Total		—		—
Consumer Loans
Home Equity		2		77
Auto		—		—
Marine		—		—
Recreational vehicle		—		—
Other		—		—
Total		2		77
Commercial Loans
Secured		—		—
Unsecured		—		—
Total		—		—
Total Restructured Loans		11	$	928

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 no chargeoffs during the twelve months ended December 31, 2012, and had no effect on the provision for loan losses.

The terms of certain other loans were modified during the period ended December 31, 2012, but they did not meet the definition of a troubled debt restructuring. These loans have a total recorded investment as of December 31, 2012 of $41.3 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 significant.

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.

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 December 31, 2011:

	Number of loans		Recorded Investment
			(Dollars in thousands)
Real Estate Loans
Permanent
One-to four-family		44	$	4,893
Multifamily residential		3		3,273
Nonresidential		5		7,278
Land		5		1,773
Total		57		17,217
Construction Loans
One-to four-family residential		7		799
Multifamily and nonresidential		—		—
Total		7		799
Consumer Loans
Home Equity		1		94
Auto		1		4
Marine		—		—
Recreational vehicle		—		—
Other		—		—
Total		2		98
Commercial Loans
Secured		2		2,682
Unsecured		—		—
Total		2		2,682
Total Restructured Loans		68	$	20,796

The troubled debt restructurings that subsequently defaulted described above resulted in $2.2 million during the year ended December 31, 2011, and had no effect on the provision for loan losses.

The terms of certain other loans were modified during the period ended December 31, 2011, but they did not meet the definition of a troubled debt restructuring. These loans have a total recorded investment as of December 31, 2011 of $16.4 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 significant.

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 homogeneous loans past due 90 cumulative days, and all non-homogeneous loans including commercial loans and commercial real estate loans. Smaller balance homogeneous loans are primarily monitored by payment status.

Asset quality ratings are divided into two groups: Pass (unclassified) and Classified. Within the unclassified 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 weakness that deserves 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 December 31, 2012 and December 31, 2011, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

Loans

December 31, 2012

(Dollars in thousands)

	Unclassified				Classified
	Unclassified		Special Mention		Substandard		Doubtful		Loss		Total Classified		Total Loans
Real Estate Loans
Permanent
One-to four-family residential	$	569,204	$	459	$	7,586	$	—	$	—	$	7,586	$	577,249
Multifamily Residential		69,060		8,409		3,454		—		—		3,454		80,923
Nonresidential		99,275		12,234		26,679		—		—		26,679		138,188
Land		9,596		280		5,932		—		—		5,932		15,808
Total		747,135		21,382		43,651		—		—		43,651		812,168
Construction Loans
One-to four-family Residential		20,577		196		7,545		—		—		7,545		28,318
Multifamily and Nonresidential		4,534		—		—		—		—		—		4,534
Total		25,111		196		7,545		—		—		7,545		32,852
Consumer Loans
Home Equity		173,696		82		3,534		—		—		3,534		177,230
Auto		7,453		7		113		—		—		113		7,648
Marine		4,745		—		190		—		—		190		4,942
Recreational vehicle		20,859		—		1,391		—		—		1,391		22,250
Other		2,507		—		16		—		—		16		2,523
Total		209,260		89		5,244		—		—		5,244		214,593
Commercial Loans
Secured		20,843		769		2,631		—		—		2,631		24,243
Unsecured		1,481		11		808		—		—		808		2,300
Total		22,324		780		3,439		—		—		3,439		26,543
Total	$	1,003,830	$	22,447	$	59,879	$	—	$	—	$	59,879	$	1,086,156

Loans

December 31, 2011

(Dollars in thousands)

	Unclassified				Classified
	Unclassified		Special Mention		Substandard		Doubtful		Loss		Total Classified		Total Loans
Real Estate Loans
Permanent
One-to four-family residential	$	626,072	$	4,094	$	37,209	$	—	$	—	$	37,209	$	667,375
Multifamily residential		90,820		8,392		21,779		—		—		21,779		120,991
Nonresidential		149,314		18,388		108,496		—		—		108,496		276,198
Land		10,475		1,200		11,547		—		—		11,547		23,222
Total		876,681		32,074		179,031		—		—		179,031		1,087,786
Construction Loans
One-to four-family residential		28,396		2,394		28,520		29		—		28,549		59,339
Multifamily and nonresidential		4,528		—		—		—		—		—		4,528
Total		32,924		2,394		28,520		29		—		28,549		63,867
Consumer Loans
Home Equity		187,153		269		4,405		—		—		4,405		191,827
Auto		8,738		12		183		—		—		183		8,933
Marine		5,418		—		482		—		—		482		5,900
Recreational vehicle		26,728		—		1,802		—		—		1,802		28,530
Other		3,192		—		15		—		—		15		3,207
Total		231,229		281		6,887		—		—		6,887		238,397
Commercial Loans
Secured		20,895		263		3,962		—		—		3,962		25,120
Unsecured		2,861		166		1,999		—		—		1,999		5,026
Total		23,756		429		5,961		—		—		5,961		30,146
Total	$	1,164,590	$	35,178	$	220,399	$	29	$	—	$	220,428	$	1,420,196

Directors and officers of United Community and Home Savings are customers of Home Savings in the ordinary course of business. The following describes loans to officers and/or directors of United Community and Home Savings:

	(Dollars in thousands)
Balance as of December 31, 2011	$	926
New loans to officers and/or directors		492
Loan payments during 2012		(31	)
Reductions due to changes in officers and/or directors		—
Balance as of December 31, 2012	$	1,387