LOANS

Portfolio loans consist of the following:

	June 30,			December 31,
	2015			2014
	(Dollars in thousands)
Commercial loans
Multifamily	$	69,485		$	60,546
Nonresidential		148,025			121,595
Land		10,231			9,484
Construction		16,265			16,064
Secured		68,813			45,088
Unsecured		456			134
Total commercial loans		313,275			252,911
Residential mortgage loans
One-to four-family		709,342			694,105
Construction		34,074			37,113
Total residential mortgage loans		743,416			731,218
Consumer loans
Home equity		157,909			154,776
Auto		8,169			5,902
Marine		3,054			3,917
Recreational vehicle		12,611			14,054
Other		1,953			2,105
Total consumer loans		183,696			180,754
Total loans		1,240,387			1,164,883
Less:
Allowance for loan losses		16,881			17,687
Deferred loan costs, net		(962	)		(897	)
Total		15,919			16,790
Loans, net	$	1,224,468		$	1,148,093

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and are based on impairment method as of June 30, 2015 and December 31, 2014 and activity for the three and six months ended June 30, 2015 and 2014.

Allowance For Loan Losses

	Commercial Loans			Residential Loans			Consumer Loans			Total
	(Dollars in thousands)
For the three months ended June 30, 2015
Beginning balance	$	5,945		$	7,666		$	3,610		$	17,221
Provision (recovery)		1,015			(278	)		16			753
Charge-offs		(779	)		(328	)		(357	)		(1,464	)
Recoveries		208			22			141			371
Ending balance	$	6,389		$	7,082		$	3,410		$	16,881
For the six months ended June 30, 2015
Beginning balance	$	5,690		$	8,517		$	3,480		$	17,687
Provision (recovery)		1,173			(1,149	)		545			569
Charge-offs		(794	)		(494	)		(888	)		(2,176	)
Recoveries		320			208			273			801
Ending balance	$	6,389		$	7,082		$	3,410		$	16,881
June 30, 2015
Period-end amount allocated to:
Loans individually evaluated for impairment	$	673		$	1,651		$	761		$	3,085
Loans collectively evaluated for impairment		5,716			5,431			2,649			13,796
Ending balance	$	6,389		$	7,082		$	3,410		$	16,881
Period-end balances:
Loans individually evaluated for impairment	$	13,592		$	19,239		$	11,023		$	43,854
Loans collectively evaluated for impairment		299,683			724,177			172,673			1,196,533
Ending balance	$	313,275		$	743,416		$	183,696		$	1,240,387

Allowance For Loan Losses

	Commercial Loans			Residential Loans			Consumer Loans			Total
	(Dollars in thousands)
For the three months ended June 30, 2014
Beginning balance	$	7,275		$	9,337		$	3,942		$	20,554
Provision (recovery)		(1,565	)		(201	)		152			(1,614	)
Charge-offs		(509	)		(236	)		(447	)		(1,192	)
Recoveries		318			55			143			516
Ending balance	$	5,519		$	8,955		$	3,790		$	18,264
For the six months ended June 30, 2014
Beginning balance	$	6,984		$	9,830		$	4,302		$	21,116
Provision (recovery)		(1,075	)		(531	)		25			(1,581	)
Charge-offs		(951	)		(551	)		(854	)		(2,356	)
Recoveries		561			207			317			1,085
Ending balance	$	5,519		$	8,955		$	3,790		$	18,264
December 31, 2014
Period-end amount allocated to:
Loans individually evaluated for impairment	$	717		$	1,751		$	842		$	3,310
Loans collectively evaluated for impairment		4,973			6,766			2,638			14,377
Ending balance	$	5,690		$	8,517		$	3,480		$	17,687
Period-end balances:
Loans individually evaluated for impairment	$	14,845		$	19,209		$	11,843		$	45,897
Loans collectively evaluated for impairment		238,066			712,009			168,911			1,118,986
Ending balance	$	252,911		$	731,218		$	180,754		$	1,164,883

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 allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required based on an analysis using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, general economic conditions in the market area and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

Other loans not reviewed specifically by management are evaluated as a homogenous group of loans (generally single-family residential mortgage loans and all consumer credits except marine loans) using a loss factor applied to the outstanding loan balance to determine the level of reserve required. This loss factor consists of two components, a quantitative and a qualitative component. The quantitative component is based on a historical analysis of all charged-off loans, net of recovery. In determining the qualitative factors, consideration is given to such attributes as lending policies, economic conditions, nature and volume of the portfolio, management, loan quality trend, loan review, collateral value, concentrations and other external factors. At December 31, 2014, the Company evaluated two years of net charge-off history and applied the information to the current period. This component was combined with the qualitative component to arrive at the loss factor, which is applied to the outstanding principal balance by type of credit and internal risk grade applied to specific risk pools, plus specific loss allocations and adjustments for current events and conditions. As of June 30, 2015, the Company evaluated 11 quarters of net charge-off history and applied this information to the current period. This component is combined with the qualitative component to arrive at the loss factor, which is applied to the average outstanding balance of homogenous loans and is no longer being applied by internal risk grade. This change in methodology, which was made in the first quarter of 2015, did not have a material effect on the calculation of the allowance for loan losses. The change in methodology was made in order to facilitate technological improvements in the calculation of the allowance for loan loss.

The following table presents loans individually evaluated for impairment by class of loans as of and for six months ended June 30, 2015:

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
Commercial loans
Multifamily	$	109	$	—	$	—	$	64	$	3	$	3
Nonresidential		4,175		2,431		—		3,567		3		80
Land		3,922		496		—		523		—		—
Construction		1,126		88		—		276		—		—
Secured		3,892		3,700		—		3,702		—		1
Unsecured		1,357		—		—		—		—		26
Total commercial loans		14,581		6,715		—		8,132		6		110
Residential mortgage loans
One-to four-family		5,925		4,411		—		4,939		27		62
Construction		—		—		—		—		—		—
Total residential mortgage loans		5,925		4,411		—		4,939		27		62
Consumer loans
Home equity		1,940		1,388		—		1,586		9		24
Auto		30		22		—		47		—		1
Marine		510		284		—		221		2		12
Recreational vehicle		95		66		—		117		1		2
Other		—		—		—		1		—		—
Total consumer loans		2,575		1,760		—		1,972		12		39
Total	$	23,081	$	12,886	$	—	$	15,043	$	45	$	211
With a specific allowance recorded
Commercial loans
Multifamily	$	153	$	85	$	17	$	31	$	—	$	—
Nonresidential		6,321		6,141		611		4,833		72		75
Land		—		—		—		—		—		—
Construction		2,815		327		42		967		—		—
Secured		324		324		3		324		—		—
Unsecured		—		—		—		—		—		—
Total commercial loans		9,613		6,877		673		6,155		72		75
Residential mortgage loans
One-to four-family		14,828		14,828		1,651		14,524		280		302
Construction		—		—		—		—		—		—
Total residential mortgage loans		14,828		14,828		1,651		14,524		280		302
Consumer loans
Home equity		8,554		8,554		646		9,260		211		224
Auto		4		4		—		6		—		—
Marine		—		—		—		—		—		—
Recreational vehicle		705		705		115		723		10		10
Other		—		—		—		—		—		—
Total consumer loans		9,263		9,263		761		9,989		221		234
Total		33,704		30,968		3,085		30,668		573		611
Total impaired loans	$	56,785	$	43,854	$	3,085	$	45,711	$	618	$	822

The following tables present loans individually evaluated for impairment by class of loans as of and for six months ended June 30, 2014:

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
Commercial loans
Multifamily	$	185	$	86	$	—	$	347	$	—	$	—
Nonresidential		5,304		3,684		—		4,536		—		20
Land		3,958		532		—		498		—		—
Construction		1,741		739		—		824		—		—
Secured		3,945		3,708		—		3,948		—		2
Unsecured		3,783		—		—		—		—		57
Total commercial loans		18,916		8,749		—		10,153		-		79
Residential mortgage loans
One-to four-family		7,571		6,020		—		8,558		29		148
Construction		—		—		—		—		—		—
Total residential mortgage loans		7,571		6,020		—		8,558		29		148
Consumer loans
Home equity		2,509		1,998		—		4,517		3		46
Auto		94		79		—		57		—		5
Marine		156		156		—		159		—		5
Recreational vehicle		544		323		—		255		3		12
Other		6		6		—		2		—		—
Total consumer loans		3,309		2,562		—		4,990		6		68
Total	$	29,796	$	17,331	$	—	$	23,701	$	35	$	295
With a specific allowance recorded
Commercial loans
Multifamily	$	73	$	48	$	6	$	326	$	—	$	—
Nonresidential		1,865		1,385		78		1,015		2		7
Land		—		—		—		—		—		—
Construction		3,436		1,811		202		2,140		—		—
Secured		324		324		3		162		—		—
Unsecured		—		—		—		—		—		—
Total commercial loans		5,698		3,568		289		3,643		2		7
Residential mortgage loans
One-to four-family		15,252		15,252		2,246		11,761		292		305
Construction		—		—		—		—		—		—
Total residential mortgage loans		15,252		15,252		2,246		11,761		292		305
Consumer loans
Home equity		10,348		10,160		949		7,568		246		260
Auto		8		8		—		4		—		—
Marine		—		—		—		—		—		—
Recreational vehicle		761		761		141		743		11		11
Other		—		—		—		—		—		—
Total consumer loans		11,117		10,929		1,090		8,315		257		271
Total		32,067		29,749		3,625		23,719		551		583
Total impaired loans	$	61,863	$	47,080	$	3,625	$	47,420	$	586	$	878

The following table present loans individually evaluated for impairment by class of loans as of December 31, 2014:

Impaired Loans

(Dollars in thousands)

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no specific allowance recorded
Commercial loans
Multifamily	$	185	$	85	$	—
Nonresidential		7,201		5,582		—
Land		3,958		532		—
Construction		1,126		188		—
Secured		3,903		3,702		—
Unsecured		3,258		—		—
Total commercial loans		19,631		10,089		—
Residential mortgage loans
One-to four-family		6,015		4,518		—
Construction		—		—		—
Total residential mortgage loans		6,015		4,518		—
Consumer loans
Home equity		1,901		1,262		—
Auto		47		37		—
Marine		151		151		—
Recreational vehicle		124		81		—
Other		—		—		—
Total consumer loans		2,223		1,531		—
Total	$	27,869	$	16,138	$	—
With a specific allowance recorded
Commercial loans
Multifamily	$	33	$	8	$	6
Nonresidential		3,944		3,561		615
Land		—		—		—
Construction		2,815		863		93
Secured		324		324		3
Unsecured		—		—		—
Total commercial loans		7,116		4,756		717
Residential mortgage loans
One-to four-family		14,691		14,691		1,751
Construction		—		—		—
Total residential mortgage loans		14,691		14,691		1,751
Consumer loans
Home equity		9,577		9,577		722
Auto		7		6		1
Marine		—		—		—
Recreational vehicle		729		729		119
Other		—		—		—
Total consumer loans		10,313		10,312		842
Total		32,120		29,759		3,310
Total impaired loans	$	59,989	$	45,897	$	3,310

The following table present loans individual evaluated for impairment by class of loans as of and for the three months ended June 30, 2015

Impaired Loans
(Dollars in thousands)
	Average Recorded Investment		Interest Income Recognized		Cash Basis Income Recognized
With no specific allowance recorded
Commercial loans
Multifamily	$	43	$	1	$	2
Nonresidential		2,441		2		41
Land		514		—		—
Construction		138		—		—
Secured		3,700		—		—
Unsecured		—		—		7
Total commercial loans		6,836		3		50
Residential mortgage loans
One-to four-family		4,530		17		30
Construction		—		—		—
Total residential mortgage loans		4,530		17		30
Consumer loans
Home equity		1,534		4		18
Auto		27		—		—
Marine		289		—		7
Recreational vehicle		68		1		1
Other		—		—		—
Total consumer loans		1,918		5		26
Total	$	13,284	$	25	$	106
With a specific allowance recorded
Commercial loans
Multifamily	$	43	$	—	$	—
Nonresidential		6,254		34		36
Land		—		—		—
Construction		595		—		—
Secured		324		—		—
Unsecured		—		—		—
Total commercial loans		7,216		34		36
Residential mortgage loans
One-to four-family		14,712		142		146
Construction		—		—		—
Total residential mortgage loans		14,712		142		146
Consumer loans
Home equity		8,905		108		114
Auto		5		—		—
Marine		—		—		—
Recreational vehicle		711		4		4
Other		—		—		—
Total consumer loans		9,621		112		118
Total		31,549		288		300
Total impaired loans	$	44,833	$	313	$	406

The following table present loans individual evaluated for impairment by class of loans as of and for the three months ended June 30, 2014

Impaired Loans
(Dollars in thousands)
	Average Recorded Investment		Interest Income Recognized		Cash Basis Income Recognized
With no specific allowance recorded
Commercial loans
Multifamily	$	88	$	—	$	1
Nonresidential		3,802		—		10
Land		510		—		—
Construction		690		—		—
Secured		3,710		—		1
Unsecured		—		9		23
Total commercial loans		8,800		9		35
Residential mortgage loans
One-to four-family		5,226		13		84
Construction		—		—		—
Total residential mortgage loans		5,226		13		84
Consumer loans
Home equity		1,875		2		21
Auto		65		—		2
Marine		157		—		2
Recreational vehicle		195		1		4
Other		4		—		—
Total consumer loans		2,296		3		29
Total	$	16,322	$	25	$	148
With a specific allowance recorded
Commercial loans
Multifamily	$	567	$	—	$	—
Nonresidential		1,404		1		3
Land		—		—		—
Construction		2,026		—		—
Secured		324		—		—
Unsecured		—		—		—
Total commercial loans		4,321		1		3
Residential mortgage loans
One-to four-family		15,742		145		148
Construction		—		—		—
Total residential mortgage loans		15,742		145		148
Consumer loans
Home equity		10,399		124		131
Auto		9		—		—
Marine		—		—		—
Recreational vehicle		794		7		7
Other		—		—		—
Total consumer loans		11,202		131		138
Total		31,265		277		289
Total impaired loans	$	47,587	$	302	$	437

Home Savings reclassifies a collateralized mortgage loan and consumer loans secured by real estate to real estate owned and other repossessed assets once it has either obtained legal title to the real estate collateral or the borrower voluntarily conveys all interest in the real property to the Bank to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. The table below presents loans that are in the process of foreclosure at June 30, 2015 and December 31, 2014 but legal title, deed in lieu of foreclosure or similar legal agreement to the property has not yet been obtained:

	June 30, 2015				December 31, 2014
	Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance		Recorded Investment
	(Dollars in thousands)				(Dollars in thousands)
Mortgage loans in process of foreclosure	$	2,176	$	2,105	$	1,714	$	1,661
Consumer loans in process of foreclosure		1,035		846		707		489

The following table presents the recorded investment in nonaccrual and loans past due over 90 days and still on accrual by class of loans as of June 30, 2015:

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

As of June 30, 2015

	Nonaccrual		Loans past due over 90 days and still accruing
	(Dollars in thousands)
Commercial loans
Multifamily	$	85	$	—
Nonresidential		5,637		—
Land		496		—
Construction		415		—
Secured		4,016		—
Unsecured		—		—
Total commercial loans		10,649		—
Residential mortgage loans
One-to four-family		6,475		—
Construction		—		—
Total residential mortgage loans		6,475		—
Consumer Loans
Home equity		1,490		—
Auto		39		—
Marine		242		—
Recreational vehicle		114		—
Other		2		—
Total consumer loans		1,887		—
Total nonaccrual loans and loans past due over 90 days and still accruing	$	19,011	$	—

The following table presents the recorded investment in nonaccrual and loans past due over 90 days and still on accrual by class of loans as of December 31, 2014:

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

As of December 31, 2014

	Nonaccrual		Loans past due over 90 days and still accruing
	(Dollars in thousands)
Commercial loans
Multifamily	$	93	$	—
Nonresidential		5,781		—
Land		531		—
Construction		1,051		—
Secured		4,016		—
Unsecured		—		—
Total commercial loans		11,472		—
Residential mortgage loans
One-to four-family		6,816		—
Construction		—		—
Total residential mortgage loans		6,816		—
Consumer Loans
Home equity		1,792		—
Auto		66		—
Marine		119		—
Recreational vehicle		184		—
Other		2		—
Total consumer loans		2,163		—
Total nonaccrual loans and loans past due over 90 days and still accruing	$	20,451	$	—

The following table presents an age analysis of past-due loans, segregated by class of loans as of June 30, 2015:

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
Commercial loans
Multifamily	$	—	$	—	$	85	$	85	$	69,400	$	69,485
Nonresidential		13		—		3,783		3,796		144,229		148,025
Land		—		—		496		496		9,735		10,231
Construction		—		—		415		415		15,850		16,265
Secured		—		—		4,016		4,016		64,797		68,813
Unsecured		—		—		—		—		456		456
Total commercial loans		13		—		8,795		8,808		304,467		313,275
Residential mortgage loans
One-to four-family		1,414		636		4,207		6,257		703,085		709,342
Construction		—		—		—		—		34,074		34,074
Total residential mortgage loans		1,414		636		4,207		6,257		737,159		743,416
Consumer Loans:
Home equity		472		136		1,122		1,730		156,179		157,909
Automobile		9		—		11		20		8,149		8,169
Marine		287		—		95		382		2,672		3,054
Recreational vehicle		33		557		16		606		12,005		12,611
Other		—		3		—		3		1,950		1,953
Total consumer loans		801		696		1,244		2,741		180,955		183,696
Total loans	$	2,228	$	1,332	$	14,246	$	17,806	$	1,222,581	$	1,240,387

The following table presents an age analysis of past-due loans, segregated by class of loans as of December 31, 2014:

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
Commercial loans
Multifamily	$	—	$	—	$	93	$	93	$	60,453	$	60,546
Nonresidential		—		—		3,891		3,891		117,704		121,595
Land		—		—		531		531		8,953		9,484
Construction		—		—		1,051		1,051		15,013		16,064
Secured		—		—		4,016		4,016		41,072		45,088
Unsecured		—		—		—		—		134		134
Total commercial loans		—		—		9,582		9,582		243,329		252,911
Residential mortgage loans
One-to four-family		2,279		605		4,856		7,740		686,365		694,105
Construction		—		—		—		—		37,113		37,113
Total residential mortgage loans		2,279		605		4,856		7,740		723,478		731,218
Consumer Loans:
Home equity		588		183		1,531		2,302		152,474		154,776
Automobile		21		—		30		51		5,851		5,902
Marine		—		686		—		686		3,231		3,917
Recreational vehicle		452		109		18		579		13,475		14,054
Other		3		4		1		8		2,097		2,105
Total consumer loans		1,064		982		1,580		3,626		177,128		180,754
Total loans	$	3,343	$	1,587	$	16,018	$	20,948	$	1,143,935	$	1,164,883

As of June 30, 2015 and December 31, 2014, the Company has a recorded investment in troubled debt restructurings of $29.5 million and $28.1 million, respectively. The Company has allocated $2.4 million and $2.6 million of specific allowance for those loans at June 30, 2015 and December 31, 2014, respectively. The Company has committed to lend additional amounts totaling up to$41,000 and $50,000 at June 30, 2015 and December 31, 2014, respectively.

The following table presents loans by class modified as troubled debt restructurings that occurred during the three months ended June 30, 2015:

	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Recorded Investment
			(In thousands)
Commercial loans
Multifamily		—	$	—	$	—
Nonresidential		—		—		—
Land		—		—		—
Construction		—		—		—
Secured		—		—		—
Unsecured		—		—		—
Total commercial loans		—		—		—
Residential mortgage loans
One-to four-family		5		469		476
Construction		—		—		—
Total residential mortgage loans		5		469		476
Consumer loans
Home equity		4		128		129
Auto		—		—		—
Marine		—		—		—
Recreational vehicle		—		—		—
Other		—		—		—
Total consumer loans		4		128		129
Total restructured loans		9	$	597	$	605

The troubled debt restructurings described above increased the allowance for loan losses by $24,000 and resulted in no charge-offs during the three months ended June 30, 2015.

The following table presents loans by class modified as troubled debt restructurings that occurred during the six months ended June 30, 2015:

	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Recorded Investment
			(In thousands)
Commercial loans
Multifamily		—	$	—	$	—
Nonresidential		—		—		—
Land		—		—		—
Construction		—		—		—
Secured		—		—		—
Unsecured		—		—		—
Total commercial loans		—		—		—
Residential mortgage loans
One-to four-family		10		910		930
Construction		—		—		—
Total residential mortgage loans		10		910		930
Consumer loans
Home equity		6		482		483
Auto		—		—		—
Marine		—		—		—
Recreational vehicle		—		—		—
Other		—		—		—
Total consumer loans		6		482		483
Total restructured loans		16	$	1,392	$	1,413

The troubled debt restructurings described above increased the allowance for loan losses by $82,000 and resulted in no charge-offs during the six months ended June 30, 2015.

The following table presents loans by class modified as troubled debt restructurings that occurred during the three months ended June 30, 2014:

	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Recorded Investment
			(Dollars in thousands)
Commercial loans
Multifamily		—	$	—	$	—
Nonresidential		—		—		—
Land		—		—		—
Construction		—		—		—
Secured		—		—		—
Unsecured		—		—		—
Total commercial loans		—		—		—
Residential mortgage loans
One-to four-family		11		922		969
Construction		—		—		—
Total residential mortgage loans		11		922		969
Consumer loans
Home equity		9		465		450
Auto		—		—		—
Marine		—		—		—
Recreational vehicle		—		—		—
Other		—		—		—
Total consumer loans		9		465		450
Total restructured loans		20	$	1,387	$	1,419

The troubled debt restructurings described above increased the allowance for loan losses by $59,000, and resulted in chargeoffs of $3,000 during the three months ended June 30, 2014.

The following table presents loans by class modified as troubled debt restructurings that occurred during the six months ended June 30, 2014:

	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Recorded Investment
			(Dollars in thousands)
Commercial loans
Multifamily		—	$	—	$	—
Nonresidential		1		120		120
Land		—		—		—
Construction		—		—		—
Secured		—		—		—
Unsecured		—		—		—
Total commercial loans		1		120		120
Residential mortgage loans
One-to four-family		20		1,491		1,545
Construction		—		—		—
Total residential mortgage loans		20		1,491		1,545
Consumer loans
Home equity		19		1,017		1,009
Auto		—		—		—
Marine		—		—		—
Recreational vehicle		—		—		—
Other		—		—		—
Total consumer loans		19		1,017		1,009
Total restructured loans		40	$	2,628	$	2,674

The troubled debt restructurings described above increased the allowance for loan losses by $116,000, and resulted in chargeoffs of $3,000 during the six months ended June 30, 2014.

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within a twelve month cycle following the modification during the six months ended June 30, 2015:

	Number of loans		Recorded Investment
			(Dollars in thousands)
Commercial loans
Multifamily		—	$	—
Nonresidential		—		—
Land		—		—
Construction		—		—
Secured		—		—
Unsecured		—		—
Total commercial loans		—		—
Residential mortgage loans
One-to four-family		1		76
Construction		—		—
Total residential mortgage loans		1		76
Consumer loans
Home equity		2		56
Auto		—		—
Marine		—		—
Recreational vehicle		—		—
Other		—		—
Total consumer loans		2		56
Total restructured loans		3	$	132

The troubled debt restructurings that subsequently defaulted described above resulted in no charge-offs during the three and six months ended June 30, 2015, and had no effect on the provision for loan losses.

	Number of loans		Recorded Investment
			(Dollars in thousands)
Commercial loans
Multifamily		—	$	—
Nonresidential		—		—
Land		—		—
Construction		—		—
Secured		—		—
Unsecured		—		—
Total commercial loans		—		—
Residential mortgage loans
One-to four-family		2		74
Construction		—		—
Total residential mortgage loans		2		74
Consumer loans
Home equity		4		172
Auto		—		—
Marine		—		—
Recreational vehicle		—		—
Other		—		—
Total consumer loans		4		172
Total restructured loans		6	$	246

The troubled debt restructurings that subsequently defaulted described above resulted in no charge-offs during the three months ended June 30, 2014, and had no effect on the provision for loan losses.

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

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.

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, certain 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.

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 June 30, 2015 and December 31, 2014, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

Loans

June 30, 2015

(Dollars in thousands)

	Unclassified				Classified
	Unclassified		Special Mention		Substandard		Doubtful		Loss		Total Classified		Total Loans
Commercial Loans
Multifamily	$	64,906	$	2,055	$	2,524	$	—	$	—	$	2,524	$	69,485
Nonresidential		123,491		11,592		12,942		—		—		12,942		148,025
Land		9,735		—		496		—		—		496		10,231
Construction		15,850		—		415		—		—		415		16,265
Secured		63,319		—		5,494		—		—		5,494		68,813
Unsecured		349		—		107		—		—		107		456
Total commercial loans		277,650		13,647		21,978		—		—		21,978		313,275
Residential mortgage loans
One-to four-family		701,570		125		7,647		—		—		7,647		709,342
Construction		34,074		—		—		—		—		—		34,074
Total residential mortgage loans		735,644		125		7,647		—		—		7,647		743,416
Consumer Loans
Home equity		156,152		—		1,757		—		—		1,757		157,909
Auto		8,121		3		45		—		—		45		8,169
Marine		2,770		—		284		—		—		284		3,054
Recreational vehicle		12,481		—		130		—		—		130		12,611
Other		1,948		—		5		—		—		5		1,953
Total consumer loans		181,472		3		2,221		—		—		2,221		183,696
Total loans	$	1,194,766	$	13,775	$	31,846	$	—	$	—	$	31,846	$	1,240,387

Loans

December 31, 2014

(Dollars in thousands)

	Unclassified				Classified
	Unclassified		Special Mention		Substandard		Doubtful		Loss		Total Classified		Total Loans
Commercial Loans
Multifamily	$	53,485	$	4,134	$	2,927	$	—	$	—	$	2,927	$	60,546
Nonresidential		92,074		12,290		17,231		—		—		17,231		121,595
Land		8,952		—		532		—		—		532		9,484
Construction		15,013		—		1,051		—		—		1,051		16,064
Secured		39,480		900		4,708		—		—		4,708		45,088
Unsecured		22		—		112		—		—		112		134
Total commercial loans		209,026		17,324		26,561		—		—		26,561		252,911
Residential mortgage loans
One-to four-family		684,779		939		8,387		—		—		8,387		694,105
Construction		37,113		—		—		—		—		—		37,113
Total residential mortgage loans		721,892		939		8,387		—		—		8,387		731,218
Consumer Loans
Home equity		152,599		—		2,177		—		—		2,177		154,776
Auto		5,829		10		63		—		—		63		5,902
Marine		3,766		—		151		—		—		151		3,917
Recreational vehicle		13,846		—		208		—		—		208		14,054
Other		2,099		—		6		—		—		6		2,105
Total consumer loans		178,139		10		2,605		—		—		2,605		180,754
Total loans	$	1,109,057	$	18,273	$	37,553	$	—	$	—	$	37,553	$	1,164,883