XML 67 R17.htm IDEA: XBRL DOCUMENT v3.3.0.814
Loans
 9 Months Ended
Sep. 30, 2015
Loans Receivable, Net [Abstract]  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]
8.
Loans 
 
Loans receivable consist of the following:
 
 
 
September 30,
2015
 
December 31,
2014
 
 
 
(In Thousands)
 
Real Estate:
 
 
 
 
 
 
 
Secured by 1-4 family residential
 
$
205,370
 
$
206,437
 
Secured by multi-family residential
 
 
163,255
 
 
156,530
 
Secured by commercial real estate
 
 
758,952
 
 
683,958
 
Construction
 
 
129,230
 
 
112,385
 
 
 
 
1,256,807
 
 
1,159,310
 
Other Loans:
 
 
 
 
 
 
 
Commercial
 
 
402,681
 
 
399,730
 
Home equity and improvement
 
 
113,781
 
 
111,813
 
Consumer Finance
 
 
15,774
 
 
15,466
 
 
 
 
532,236
 
 
527,009
 
Total loans
 
 
1,789,043
 
 
1,686,319
 
Deduct:
 
 
 
 
 
 
 
Undisbursed loan funds
 
 
(54,484)
 
 
(38,653)
 
Net deferred loan origination fees and costs
 
 
(1,021)
 
 
(880)
 
Allowance for loan loss
 
 
(25,209)
 
 
(24,766)
 
Totals
 
$
1,708,329
 
$
1,622,020
 
 
Loan segments have been identified by evaluating the portfolio based on collateral and credit risk characteristics.
 
The following table discloses allowance for loan loss activity for the quarter ended September 30, 2015 and 2014 by portfolio segment (In Thousands):
 
Quarter Ended September 30,
2015
 
1-4 Family
Residential
Real Estate
 
Multi- Family
Residential
Real Estate
 
Commercial
Real Estate
 
Construction
 
Commercial
 
Home Equity
and
Improvement
 
Consumer
Finance
 
Total
 
Beginning Allowance
 
$
2,877
 
$
2,269
 
$
12,096
 
$
308
 
$
5,567
 
$
2,107
 
$
160
 
$
25,384
 
Charge-Offs
 
 
(185)
 
 
0
 
 
(64)
 
 
0
 
 
(43)
 
 
(110)
 
 
(5)
 
 
(407)
 
Recoveries
 
 
105
 
 
0
 
 
25
 
 
0
 
 
42
 
 
76
 
 
11
 
 
259
 
Provisions
 
 
(18)
 
 
(25)
 
 
96
 
 
(69)
 
 
(155)
 
 
152
 
 
(8)
 
 
(27)
 
Ending Allowance
 
$
2,779
 
$
2,244
 
$
12,153
 
$
239
 
$
5,411
 
$
2,225
 
$
158
 
$
25,209
 
 
Quarter Ended September 30,
2014
 
1-4 Family
Residential
Real Estate
 
Multi- Family
Residential
Real Estate
 
Commercial
Real Estate
 
Construction
 
Commercial
 
Home Equity
and
Improvement
 
Consumer
Finance
 
Total
 
Beginning Allowance
 
$
2,345
 
$
2,480
 
$
11,476
 
$
199
 
$
6,199
 
$
1,780
 
$
148
 
$
24,627
 
Charge-Offs
 
 
(95)
 
 
-
 
 
(246)
 
 
-
 
 
(1,272)
 
 
(42)
 
 
(16)
 
 
(1,671)
 
Recoveries
 
 
13
 
 
2
 
 
978
 
 
-
 
 
109
 
 
87
 
 
16
 
 
1,205
 
Provisions
 
 
161
 
 
99
 
 
(1,121)
 
 
15
 
 
1,384
 
 
(134)
 
 
2
 
 
406
 
Ending Allowance
 
$
2,424
 
$
2,581
 
$
11,087
 
$
214
 
$
6,420
 
$
1,691
 
$
150
 
$
24,567
 
 
The following table discloses allowance for loan loss activity for the year-to-date periods ended September 30, 2015 and September 30, 2014 by portfolio segment and impairment method (In Thousands):
 
Year-to-date Period Ended
September 30, 2015
 
1-4 Family
Residential
Real Estate
 
Multi- Family
Residential
Real Estate
 
Commercial
Real Estate
 
Construction
 
Commercial
 
Home Equity
and
Improvement
 
Consumer
 
Total
 
Beginning Allowance
 
$
2,494
 
$
2,453
 
$
11,268
 
$
221
 
$
6,509
 
$
1,704
 
$
117
 
$
24,766
 
Charge-Offs
 
 
(275)
 
 
(114)
 
 
(250)
 
 
0
 
 
(68)
 
 
(340)
 
 
(21)
 
 
(1,068)
 
Recoveries
 
 
178
 
 
0
 
 
789
 
 
0
 
 
255
 
 
156
 
 
40
 
 
1,418
 
Provisions
 
 
382
 
 
(95)
 
 
346
 
 
18
 
 
(1,285)
 
 
705
 
 
22
 
 
93
 
Ending Allowance
 
$
2,779
 
$
2,244
 
$
12,153
 
$
239
 
$
5,411
 
$
2,225
 
$
158
 
$
25,209
 
 
Year-to-date Ended
September 30, 2014
 
1-4 Family
Residential
Real Estate
 
Multi- Family
Residential
Real Estate
 
Commercial
Real Estate
 
Construction
 
Commercial
 
Home Equity
and
Improvement
 
Consumer
 
Total
 
Beginning Allowance
 
$
2,847
 
$
2,508
 
$
12,000
 
$
134
 
$
5,678
 
$
1,635
 
$
148
 
$
24,950
 
Charge-Offs
 
 
(364)
 
 
-
 
 
(514)
 
 
-
 
 
(2,770)
 
 
(306)
 
 
(39)
 
 
(3,993)
 
Recoveries
 
 
167
 
 
7
 
 
1,901
 
 
-
 
 
358
 
 
172
 
 
50
 
 
2,655
 
Provisions
 
 
(226)
 
 
66
 
 
(2,300)
 
 
80
 
 
3,154
 
 
190
 
 
(9)
 
 
955
 
Ending Allowance
 
$
2,424
 
$
2,581
 
$
11,087
 
$
214
 
$
6,420
 
$
1,691
 
$
150
 
$
24,567
 
 
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2015 (In Thousands):
 
 
 
1-4 Family
 
Multi Family
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential
 
Residential
 
Commercial
 
 
 
 
 
Home Equity
 
Consumer
 
 
 
 
 
Real Estate
 
Real Estate
 
Real Estate
 
Construction
 
Commercial
 
& Improvement
 
Finance
 
Total
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending allowance balance attributable to loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
186
 
$
-
 
$
137
 
$
-
 
$
11
 
$
24
 
$
-
 
$
358
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
 
 
2,593
 
 
2,244
 
 
12,016
 
 
239
 
 
5,400
 
 
2,201
 
 
158
 
 
24,851
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquired with deteriorated credit quality
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total ending allowance balance
 
$
2,779
 
$
2,244
 
$
12,153
 
$
239
 
$
5,411
 
$
2,225
 
$
158
 
$
25,209
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans individually evaluated for impairment
 
$
9,417
 
$
3,139
 
$
12,914
 
$
-
 
$
3,979
 
$
2,168
 
$
54
 
$
31,671
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans collectively evaluated for impairment
 
 
196,331
 
 
160,191
 
 
748,367
 
 
74,677
 
 
400,087
 
 
112,108
 
 
15,706
 
 
1,707,467
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans acquired with deteriorated credit quality
 
 
-
 
 
-
 
 
156
 
 
-
 
 
18
 
 
-
 
 
-
 
 
174
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total ending loans balance
 
$
205,748
 
$
163,330
 
$
761,437
 
$
74,677
 
$
404,084
 
$
114,276
 
$
15,760
 
$
1,739,312
 
 
The following table presents 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, 2014 (In Thousands):
 
 
 
1-4 Family
 
Multi Family
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential
 
Residential
 
Commercial
 
 
 
 
 
Home Equity
 
Consumer
 
 
 
 
 
Real Estate
 
Real Estate
 
Real Estate
 
Construction
 
Commercial
 
& Improvement
 
Finance
 
Total
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending allowance balance attributable to loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
216
 
$
-
 
$
1,003
 
$
-
 
$
30
 
$
24
 
$
-
 
$
1,273
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
 
 
2,278
 
 
2,453
 
 
10,265
 
 
221
 
 
6,479
 
 
1,680
 
 
117
 
 
23,493
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquired with deteriorated credit quality
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total ending allowance balance
 
$
2,494
 
$
2,453
 
$
11,268
 
$
221
 
$
6,509
 
$
1,704
 
$
117
 
$
24,766
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans individually evaluated for impairment
 
$
10,281
 
$
2,482
 
$
28,117
 
$
150
 
$
5,739
 
$
2,242
 
$
34
 
$
49,045
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans collectively evaluated for impairment
 
 
196,582
 
 
154,178
 
 
657,677
 
 
73,572
 
 
395,270
 
 
110,040
 
 
15,417
 
 
1,602,736
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans acquired with deteriorated credit quality
 
 
1
 
 
-
 
 
163
 
 
-
 
 
22
 
 
-
 
 
-
 
 
186
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total ending loans balance
 
$
206,864
 
$
156,660
 
$
685,957
 
$
73,722
 
$
401,031
 
$
112,282
 
$
15,451
 
$
1,651,967
 
 
The following table presents the average balance, interest income recognized and cash basis income recognized on impaired loans by class of loans (In Thousands):
 
 
 
Three Months Ended September 30, 2015
 
Nine Months Ended September 30, 2015
 
 
 
Average
Balance
 
Interest
Income
Recognized
 
Cash Basis
Income
Recognized
 
Average
Balance
 
Interest
Income
Recognized
 
Cash Basis
Income
Recognized
 
Residential Owner Occupied
 
$
5,750
 
$
67
 
$
66
 
$
5,854
 
$
203
 
$
201
 
Residential Non Owner Occupied
 
 
3,762
 
 
38
 
 
38
 
 
4,045
 
 
117
 
 
117
 
Total Residential Real Estate
 
 
9,512
 
 
105
 
 
104
 
 
9,899
 
 
320
 
 
318
 
Construction
 
 
-
 
 
-
 
 
-
 
 
50
 
 
2
 
 
2
 
Multi-Family
 
 
3,168
 
 
12
 
 
11
 
 
2,680
 
 
25
 
 
25
 
CRE Owner Occupied
 
 
6,475
 
 
39
 
 
39
 
 
6,566
 
 
117
 
 
117
 
CRE Non Owner Occupied
 
 
2,696
 
 
29
 
 
29
 
 
7,445
 
 
273
 
 
273
 
Agriculture Land
 
 
2,236
 
 
21
 
 
2
 
 
1,741
 
 
53
 
 
30
 
Other CRE
 
 
1,509
 
 
5
 
 
5
 
 
2,023
 
 
31
 
 
30
 
Total Commercial Real Estate
 
 
12,916
 
 
94
 
 
75
 
 
17,775
 
 
474
 
 
450
 
Commercial Working Capital
 
 
1,030
 
 
11
 
 
11
 
 
1,478
 
 
38
 
 
36
 
Commercial Other
 
 
2,989
 
 
7
 
 
6
 
 
3,483
 
 
33
 
 
41
 
Total Commercial
 
 
4,019
 
 
18
 
 
17
 
 
4,961
 
 
71
 
 
77
 
Home Equity and Home Improvement
 
 
2,160
 
 
19
 
 
19
 
 
2,257
 
 
60
 
 
60
 
Consumer
 
 
58
 
 
1
 
 
2
 
 
55
 
 
2
 
 
3
 
Total Impaired Loans
 
$
31,833
 
$
249
 
$
228
 
$
37,677
 
$
954
 
$
935
 
 
The following table presents the average balance, interest income recognized and cash basis income recognized on impaired loans by class of loans (In Thousands):
 
 
 
Three Months Ended September 30, 2014
 
Nine Months Ended September 30, 2014
 
 
 
Average
Balance
 
Interest
Income
Recognized
 
Cash Basis
Income
Recognized
 
Average
Balance
 
Interest
Income
Recognized
 
Cash Basis
Income
Recognized
 
Residential Owner Occupied
 
$
6,242
 
$
84
 
$
84
 
$
6,235
 
$
250
 
$
245
 
Residential Non Owner Occupied
 
 
3,537
 
 
31
 
 
31
 
 
3,778
 
 
101
 
 
101
 
Total Residential Real Estate
 
 
9,779
 
 
115
 
 
115
 
 
10,013
 
 
351
 
 
346
 
Construction
 
 
261
 
 
4
 
 
4
 
 
261
 
 
10
 
 
13
 
Multi-Family
 
 
349
 
 
1
 
 
1
 
 
368
 
 
3
 
 
3
 
CRE Owner Occupied
 
 
8,238
 
 
35
 
 
29
 
 
9,014
 
 
108
 
 
97
 
CRE Non Owner Occupied
 
 
18,144
 
 
200
 
 
200
 
 
18,656
 
 
605
 
 
605
 
Agriculture Land
 
 
536
 
 
3
 
 
2
 
 
635
 
 
11
 
 
7
 
Other CRE
 
 
2,576
 
 
5
 
 
5
 
 
2,075
 
 
15
 
 
16
 
Total Commercial Real Estate
 
 
29,494
 
 
243
 
 
236
 
 
30,381
 
 
739
 
 
725
 
Commercial Working Capital
 
 
3,111
 
 
9
 
 
9
 
 
3,107
 
 
20
 
 
20
 
Commercial Other
 
 
4,325
 
 
4
 
 
3
 
 
4,612
 
 
8
 
 
6
 
Total Commercial
 
 
7,436
 
 
13
 
 
12
 
 
7,719
 
 
28
 
 
26
 
Home Equity and Home Improvement
 
 
2,185
 
 
25
 
 
24
 
 
2,240
 
 
75
 
 
74
 
Consumer
 
 
47
 
 
1
 
 
1
 
 
52
 
 
3
 
 
3
 
Total Impaired Loans
 
$
49,551
 
$
402
 
$
393
 
$
51,034
 
$
1,209
 
$
1,190
 
 
The following table presents loans individually evaluated for impairment by class of loans (In Thousands):
 
 
 
September 30, 2015
 
December 31, 2014
 
 
 
Unpaid
Principal
Balance*
 
Recorded
Investment
 
Allowance
for Loan
Losses
Allocated
 
Unpaid
Principal
Balance*
 
Recorded
Investment
 
Allowance
for Loan
Losses
Allocated
 
With no allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Owner Occupied
 
$
3,852
 
$
3,746
 
$
-
 
$
3,967
 
$
3,859
 
$
-
 
Residential Non Owner Occupied
 
 
3,527
 
 
3,535
 
 
-
 
 
3,763
 
 
3,670
 
 
-
 
Total 1-4 Family Residential Real Estate
 
 
7,379
 
 
7,281
 
 
-
 
 
7,730
 
 
7,529
 
 
-
 
Multi-Family Residential Real Estate
 
 
3,287
 
 
3,139
 
 
-
 
 
2,627
 
 
2,482
 
 
-
 
CRE Owner Occupied
 
 
4,163
 
 
3,821
 
 
-
 
 
7,109
 
 
6,481
 
 
-
 
CRE Non Owner Occupied
 
 
2,631
 
 
2,370
 
 
-
 
 
4,106
 
 
3,759
 
 
-
 
Agriculture Land
 
 
2,134
 
 
2,184
 
 
-
 
 
213
 
 
208
 
 
-
 
Other CRE
 
 
1,019
 
 
979
 
 
-
 
 
2,923
 
 
2,378
 
 
-
 
Total Commercial Real Estate
 
 
9,947
 
 
9,354
 
 
-
 
 
14,351
 
 
12,826
 
 
-
 
Construction
 
 
-
 
 
-
 
 
-
 
 
150
 
 
150
 
 
-
 
Commercial Working Capital
 
 
463
 
 
467
 
 
-
 
 
1,155
 
 
1,157
 
 
-
 
Commercial Other
 
 
2,610
 
 
2,611
 
 
-
 
 
3,966
 
 
3,663
 
 
-
 
Total Commercial
 
 
3,073
 
 
3,078
 
 
-
 
 
5,121
 
 
4,820
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home Equity and Home Improvement
 
 
2,135
 
 
2,084
 
 
-
 
 
2,192
 
 
2,140
 
 
-
 
Consumer Finance
 
 
54
 
 
54
 
 
-
 
 
35
 
 
34
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans with no allowance recorded
 
$
25,875
 
$
24,990
 
$
-
 
$
32,206
 
$
29,981
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Owner Occupied
 
$
1,970
 
$
1,972
 
$
182
 
$
2,112
 
$
2,114
 
$
204
 
Residential Non Owner Occupied
 
 
160
 
 
164
 
 
4
 
 
636
 
 
638
 
 
12
 
Total 1-4 Family Residential Real Estate
 
 
2,130
 
 
2,136
 
 
186
 
 
2,748
 
 
2,752
 
 
216
 
Multi-Family Residential Real Estate
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
CRE Owner Occupied
 
 
3,025
 
 
2,608
 
 
125
 
 
2,667
 
 
2,257
 
 
148
 
CRE Non Owner Occupied
 
 
386
 
 
310
 
 
4
 
 
13,020
 
 
12,606
 
 
842
 
Agriculture Land
 
 
121
 
 
111
 
 
1
 
 
333
 
 
320
 
 
10
 
Other CRE
 
 
955
 
 
531
 
 
7
 
 
137
 
 
108
 
 
3
 
Total Commercial Real Estate
 
 
4,487
 
 
3,560
 
 
137
 
 
16,157
 
 
15,291
 
 
1,003
 
Construction
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
Commercial Working Capital
 
 
622
 
 
624
 
 
8
 
 
649
 
 
650
 
 
21
 
Commercial Other
 
 
273
 
 
277
 
 
3
 
 
264
 
 
269
 
 
9
 
Total Commercial
 
 
895
 
 
901
 
 
11
 
 
913
 
 
919
 
 
30
 
Home Equity and Home Improvement
 
 
84
 
 
84
 
 
24
 
 
101
 
 
102
 
 
24
 
Consumer Finance
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
Total loans with an allowance recorded
 
$
7,596
 
$
6,681
 
$
358
 
$
19,919
 
$
19,064
 
$
1,273
 
 
* Presented gross of charge offs
 
The following table presents the current balance of the aggregate amounts of non-performing assets, comprised of non-performing loans and real estate owned on the dates indicated: 
 
 
 
September 30,
2015
 
December 31,
2014
 
 
 
(In Thousands)
 
Non-accrual loans
 
$
16,612
 
$
24,130
 
Loans over 90 days past due and still accruing
 
 
-
 
 
-
 
Total non-performing loans
 
 
16,612
 
 
24,130
 
Real estate and other assets held for sale
 
 
4,936
 
 
6,181
 
Total non-performing assets
 
$
21,548
 
$
30,311
 
Troubled debt restructuring, still accruing
 
$
13,786
 
$
24,686
 
 
The following table presents the aging of the recorded investment in past due and non accrual loans as of September 30, 2015 by class of loans (In Thousands):
 
 
 
Current
 
30-59 days
 
60-89 days
 
90+ days
 
Total
Past Due
 
Total Non
Accrual
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Owner Occupied
 
$
139,765
 
$
-
 
$
406
 
$
286
 
$
692
 
$
1,422
 
Residential Non Owner Occupied
 
 
63,898
 
 
642
 
 
128
 
 
623
 
 
1,393
 
 
1,323
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total 1-4 Family Residential Real Estate
 
 
203,663
 
 
642
 
 
534
 
 
909
 
 
2,085
 
 
2,745
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multi-Family Residential Real Estate
 
 
161,262
 
 
-
 
 
-
 
 
2,068
 
 
2,068
 
 
2,491
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CRE Owner Occupied
 
 
325,006
 
 
112
 
 
-
 
 
2,527
 
 
2,639
 
 
4,289
 
CRE Non Owner Occupied
 
 
291,214
 
 
121
 
 
-
 
 
357
 
 
478
 
 
1,055
 
Agriculture Land
 
 
96,007
 
 
190
 
 
104
 
 
-
 
 
294
 
 
838
 
Other Commercial Real Estate
 
 
45,484
 
 
-
 
 
-
 
 
315
 
 
315
 
 
1,414
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Commercial Real Estate
 
 
757,711
 
 
423
 
 
104
 
 
3,199
 
 
3,726
 
 
7,596
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction
 
 
74,604
 
 
-
 
 
73
 
 
-
 
 
73
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Working Capital
 
 
153,408
 
 
-
 
 
-
 
 
166
 
 
166
 
 
245
 
Commercial Other
 
 
248,227
 
 
2
 
 
207
 
 
2,074
 
 
2,283
 
 
2,878
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Commercial
 
 
401,635
 
 
2
 
 
207
 
 
2,240
 
 
2,449
 
 
3,123
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Finance
 
 
15,671
 
 
62
 
 
9
 
 
18
 
 
89
 
 
29
 
Home Equity/Home Improvement
 
 
113,698
 
 
459
 
 
76
 
 
43
 
 
578
 
 
632
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Loans
 
$
1,728,244
 
$
1,588
 
$
1,003
 
$
8,477
 
$
11,068
 
$
16,616
 
 
The following table presents the aging of the recorded investment in past due and non accrual loans as of December 31, 2014 by class of loans (In Thousands):
 
 
 
Current
 
30-59 days
 
60-89 days
 
90+ days
 
Total
Past Due
 
Total Non
Accrual
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Owner Occupied
 
$
141,597
 
$
39
 
$
1,079
 
$
365
 
$
1,483
 
$
1,702
 
Residential Non Owner Occupied
 
 
62,991
 
 
110
 
 
105
 
 
578
 
 
793
 
 
1,625
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total 1-4 Family Residential Real Estate
 
 
204,588
 
 
149
 
 
1,184
 
 
943
 
 
2,276
 
 
3,327
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multi-Family Residential Real Estate
 
 
156,413
 
 
247
 
 
-
 
 
-
 
 
247
 
 
2,546
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CRE Owner Occupied
 
 
299,500
 
 
163
 
 
1,566
 
 
1,753
 
 
3,482
 
 
7,004
 
CRE Non Owner Occupied
 
 
243,341
 
 
119
 
 
416
 
 
1,308
 
 
1,843
 
 
2,582
 
Agriculture Land
 
 
93,529
 
 
-
 
 
14
 
 
-
 
 
14
 
 
686
 
Other Commercial Real Estate
 
 
43,835
 
 
155
 
 
-
 
 
258
 
 
413
 
 
2,359
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Commercial Real Estate
 
 
680,205
 
 
437
 
 
1,996
 
 
3,319
 
 
5,752
 
 
12,631
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction
 
 
73,722
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Working Capital
 
 
135,009
 
 
-
 
 
-
 
 
951
 
 
951
 
 
1,103
 
Commercial Other
 
 
262,982
 
 
67
 
 
10
 
 
2,012
 
 
2,089
 
 
3,897
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Commercial
 
 
397,991
 
 
67
 
 
10
 
 
2,963
 
 
3,040
 
 
5,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Finance
 
 
15,326
 
 
68
 
 
57
 
 
-
 
 
125
 
 
12
 
Home Equity/Home Improvement
 
 
110,940
 
 
1,236
 
 
-
 
 
106
 
 
1,342
 
 
619
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Loans
 
$
1,639,185
 
$
2,204
 
$
3,247
 
$
7,331
 
$
12,782
 
$
24,135
 
 
Troubled Debt Restructurings
 
As of September 30, 2015 and December 31, 2014, the Company had a recorded investment in troubled debt restructurings (“TDRs”) of $20.5 million and $33.0 million, respectively. The Company allocated $256,000 and $1.1 million of specific reserves to those loans at September 30, 2015 and December 31, 2014, and has committed to lend additional amounts totaling up to $81,000 and $69,000 at September 30, 2015 and December 31, 2014, respectively.
 
The Company offers various types of concessions when modifying a loan, however, forgiveness of principal is rarely granted. Each TDR is uniquely designed to meet the specific needs of the borrower. Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral or an additional guarantor is often requested when granting a concession. Commercial mortgage loans modified in a TDR often involve temporary interest-only payments, re-amortization of remaining debt in order to lower payments, and sometimes reducing the interest rate lower than the current market rate. Residential mortgage loans modified in a TDR are comprised of loans where monthly payments are lowered, either through interest rate reductions or principal only payments for a period of time, to accommodate the borrowers’ financial needs, interest is capitalized into principal, or the term and amortization are extended. Home equity modifications are made infrequently and usually involve providing an interest rate that is lower than the borrower would be able to obtain due to credit issues. All retail loans where the borrower is in bankruptcy are classified as TDRs regardless of whether or not a concession is made.
 
Of the loans modified in a TDR, $6.8 million are on non-accrual status and partial charge-offs have in some cases been taken against the outstanding balance. Loans modified as a TDR may have the financial effect of increasing the allowance associated with the loan. If the loan is determined to be collateral dependent, the estimated fair value of the collateral, less any selling costs is used to determine if there is a need for a specific allowance or charge-off. If the loan is determined to be cash flow dependent, the allowance is measured based on the present value of expected future cash flows discounted at the loan’s pre-modification effective interest rate.
 
The following table presents loans by class modified as troubled debt restructurings that occurred during the three and nine month periods ending September 30, 2015 and September 30, 2014:
 
 
 
Loans Modified as a TDR for the Three
Months Ended September 30, 2015
($ in thousands)
 
Loans Modified as a TDR for the Nine
Months Ended September 30, 2015
($ in thousands)
 
Troubled Debt Restructurings
 
Number of
Loans
 
Recorded Investment
(as of period end)
 
Number of
Loans
 
Recorded Investment
(as of period end)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1-4 Family Owner Occupied
 
 
0
 
$
-
 
 
3
 
$
226
 
1-4 Family Non Owner Occupied
 
 
0
 
 
-
 
 
4
 
 
63
 
CRE Owner Occupied
 
 
1
 
 
72
 
 
2
 
 
632
 
CRE Non Owner Occupied
 
 
0
 
 
-
 
 
2
 
 
252
 
Agriculture Land
 
 
0
 
 
-
 
 
3
 
 
1,552
 
Other CRE
 
 
0
 
 
-
 
 
0
 
 
-
 
Commercial Working Capital
 
 
2
 
 
114
 
 
4
 
 
119
 
Commercial Other
 
 
1
 
 
19
 
 
2
 
 
73
 
Home Equity and Improvement
 
 
4
 
 
114
 
 
11
 
 
217
 
Consumer Finance
 
 
2
 
 
2
 
 
6
 
 
37
 
Total
 
 
10
 
$
321
 
 
37
 
$
3,171
 
 
The loans described above decreased the ALLL by $3,000 in the three month period ending September 30, 2015 and $23,000 in the nine month period ending September 30, 2015.
 
 
 
Loans Modified as a TDR for the Three
Months Ended September 30, 2014
($ In Thousands)
 
Loans Modified as a TDR for the Nine
Months Ended September 30, 2014
($ In Thousands)
 
Troubled Debt Restructurings
 
Number of
Loans
 
Recorded Investment
(as of period end)
 
Number of
Loans
 
Recorded Investment
(as of period end)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Owner Occupied
 
 
2
 
$
308
 
 
17
 
$
1,680
 
Residential Non Owner Occupied
 
 
2
 
 
361
 
 
2
 
 
361
 
CRE Owner Occupied
 
 
0
 
 
-
 
 
0
 
 
-
 
CRE Non Owner Occupied
 
 
1
 
 
135
 
 
2
 
 
493
 
Agriculture Land
 
 
0
 
 
-
 
 
0
 
 
-
 
Other CRE
 
 
0
 
 
-
 
 
0
 
 
-
 
Commercial working capital or other
 
 
2
 
 
24
 
 
13
 
 
1,700
 
Home Equity / Improvement
 
 
5
 
 
234
 
 
12
 
 
401
 
Consumer Finance
 
 
1
 
 
3
 
 
3
 
 
22
 
Total
 
 
13
 
$
1,065
 
 
49
 
$
4,657
 
  
The loans described above increased the allowance for loan loss by $60,000 in the three month period ending September 30, 2014 and increased the allowance for loan loss by $55,000 in the nine month period ending September 30, 2014.
 
Of the 2015 modifications, 13 were made TDRs due to the fact that the borrower has been in bankruptcy, 1 was made TDR due to extending the amortization, 1 was made a TDR due to an interest only period, 1 was made a TDR due to extending the maturity, 11 were made TDRs due to advancing funds to a watchlist credit, 3 was to term out a line of credit and 7 were made to refinance current debt for payment relief.
 
The following table presents loans by class modified as TDRs for which there was a payment default within twelve months following the modification during the three and nine month periods ended September 30, 2015 and September 30, 2014:
 
 
 
Three Months Ended September 30,
2015
($ in thousands)
 
Nine Months Ended September 30,
2015
($ in thousands)
 
Troubled Debt Restructurings
That Subsequently Defaulted
 
Number of
Loans
 
Recorded Investment
(as of period end)
 
Number of
Loans
 
Recorded Investment
(as of period end)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1-4 Family Owner Occupied
 
 
0
 
$
-
 
 
0
 
$
-
 
1-4 Family Non Owner Occupied
 
 
0
 
 
-
 
 
1
 
 
105
 
CRE Owner Occupied
 
 
0
 
 
-
 
 
0
 
 
-
 
CRE Non Owner Occupied
 
 
0
 
 
-
 
 
0
 
 
-
 
Agriculture Land
 
 
0
 
 
-
 
 
0
 
 
-
 
Other CRE
 
 
0
 
 
-
 
 
0
 
 
-
 
Commercial Working Capital or Other
 
 
1
 
 
120
 
 
1
 
 
120
 
Commercial Other
 
 
5
 
 
1,829
 
 
5
 
 
1,829
 
Home Equity and Improvement
 
 
0
 
 
-
 
 
1
 
 
22
 
Consumer Finance
 
 
0
 
 
-
 
 
0
 
 
-
 
Total
 
 
6
 
$
1,949
 
 
8
 
$
2,076
 
 
The TDRs that subsequently defaulted described above had no effect on the allowance for loan losses for the three and nine month periods ended September 30, 2015.
  
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
 
2014
 
2014
 
 
 
($ In Thousands)
 
($ In Thousands)
 
Troubled Debt Restructurings
 
 
Number of
 
Recorded Investment
 
Number of
 
Recorded Investment
 
That Subsequently Defaulted
 
 
Loans
 
(as of period end)
 
Loans
 
(as of period end)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Owner Occupied
 
 
1
 
$
80
 
 
1
 
$
80
 
Residential Non Owner Occupied
 
 
0
 
 
0
 
 
1
 
 
182
 
CRE Owner Occupied
 
 
4
 
 
146
 
 
4
 
 
146
 
CRE Non Owner Occupied
 
 
0
 
 
-
 
 
0
 
 
-
 
Agriculture Land
 
 
0
 
 
-
 
 
0
 
 
-
 
Other CRE
 
 
0
 
 
-
 
 
0
 
 
-
 
Commercial working capital or other
 
 
4
 
 
1,269
 
 
4
 
 
1,269
 
Home Equity / Improvement
 
 
0
 
 
-
 
 
0
 
 
-
 
Consumer Finance
 
 
0
 
 
-
 
 
0
 
 
-
 
Total
 
 
9
 
$
1,495
 
 
10
 
$
1,677
 
 
The TDRs that subsequently defaulted described above decreased the allowance for loan losses by $15,000 for the three and nine month periods ended September 30, 2014.
 
The terms of certain other loans were modified during the period ending September 30, 2015 that did not meet the definition of a TDR. The modification of these loans involved a modification of the terms of a loan to borrowers who were not experiencing financial difficulties. A total of 59 loans were modified under this definition during the three month period ended September 30, 2015 and a total of 212 loans were modified under this definition during the nine month period ended September 30, 2015.
 
In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed on the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification.
 
Credit Quality Indicators
 
Loans are categorized 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. Loans are analyzed individually by classifying the loans as to credit risk. This analysis includes all non-homogeneous loans, such as commercial and commercial real estate loans and certain homogenous mortgage, home equity and consumer loans. This analysis is performed on a quarterly basis. First Defiance uses the following definitions for risk ratings:
 
Special Mention. Loans classified as special mention have a 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.
 
Not Graded. Loans classified as not graded are generally smaller balance residential real estate, home equity and consumer installment loans which are originated primarily by using an automated underwriting system. These loans are monitored based on their delinquency status and are evaluated individually only if they are seriously delinquent.
 
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. As of September 30, 2015, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (In Thousands):
 
 
 
 
 
 
Special
 
 
 
 
 
 
 
Not
 
 
 
 
Class
 
Pass
 
Mention
 
Substandard
 
Doubtful
 
Graded
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1-4 Family Owner Occupied
 
$
5,516
 
$
150
 
$
1,970
 
$
-
 
$
132,820
 
$
140,456
 
1-4 Family Non Owner Occupied
 
 
54,283
 
 
2,088
 
 
4,394
 
 
-
 
 
4,527
 
 
65,292
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total 1-4 Family Real Estate
 
 
59,799
 
 
2,238
 
 
6,364
 
 
-
 
 
137,347
 
 
205,748
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multi-Family Residential Real Estate
 
 
159,206
 
 
208
 
 
3,798
 
 
-
 
 
118
 
 
163,330
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CRE Owner Occupied
 
 
299,619
 
 
20,719
 
 
6,489
 
 
-
 
 
819
 
 
327,646
 
CRE Non Owner Occupied
 
 
284,404
 
 
2,900
 
 
4,371
 
 
-
 
 
17
 
 
291,692
 
Agriculture Land
 
 
92,750
 
 
993
 
 
2,557
 
 
-
 
 
-
 
 
96,300
 
Other CRE
 
 
41,836
 
 
779
 
 
2,686
 
 
-
 
 
498
 
 
45,799
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Commercial Real Estate
 
 
718,609
 
 
25,391
 
 
16,103
 
 
-
 
 
1,334
 
 
761,437
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction
 
 
60,624
 
 
-
 
 
-
 
 
-
 
 
14,053
 
 
74,677
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Working Capital
 
 
149,408
 
 
3,350
 
 
817
 
 
-
 
 
-
 
 
153,575
 
Commercial Other
 
 
243,224
 
 
3,680
 
 
3,605
 
 
-
 
 
-
 
 
250,509
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Commercial
 
 
392,632
 
 
7,030
 
 
4,422
 
 
-
 
 
-
 
 
404,084
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home Equity and Home Improvement
 
 
-
 
 
-
 
 
559
 
 
-
 
 
113,717
 
 
114,276
 
Consumer Finance
 
 
-
 
 
-
 
 
8
 
 
-
 
 
15,752
 
 
15,760
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Loans
 
$
1,390,870
 
$
34,867
 
$
31,254
 
$
-
 
$
282,321
 
$
1,739,312
 
 
As of December 31, 2014, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (In Thousands):
 
 
 
 
 
 
Special
 
 
 
 
 
 
 
Not
 
 
 
 
Class
 
Pass
 
Mention
 
Substandard
 
Doubtful
 
Graded
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1-4 Family Owner Occupied
 
$
4,230
 
$
131
 
$
3,048
 
$
365
 
$
135,306
 
$
143,080
 
1-4 Family Non Owner Occupied
 
 
51,327
 
 
2,404
 
 
4,872
 
 
7
 
 
5,174
 
 
63,784
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total 1-4 Family Real Estate
 
 
55,557
 
 
2,535
 
 
7,920
 
 
372
 
 
140,480
 
 
206,864
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multi-Family Residential Real Estate
 
 
152,290
 
 
220
 
 
3,236
 
 
-
 
 
914
 
 
156,660
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CRE Owner Occupied
 
 
273,406
 
 
18,448
 
 
9,953
 
 
-
 
 
1,175
 
 
302,982
 
CRE Non Owner Occupied
 
 
224,073
 
 
7,898
 
 
13,186
 
 
-
 
 
27
 
 
245,184
 
Agriculture Land
 
 
90,875
 
 
1,849
 
 
819
 
 
-
 
 
-
 
 
93,543
 
Other CRE
 
 
40,147
 
 
63
 
 
3,466
 
 
-
 
 
572
 
 
44,248
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Commercial Real Estate
 
 
628,501
 
 
28,258
 
 
27,424
 
 
-
 
 
1,774
 
 
685,957
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction
 
 
62,355
 
 
-
 
 
150
 
 
-
 
 
11,217
 
 
73,722
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Working Capital
 
 
128,229
 
 
6,287
 
 
1,444
 
 
-
 
 
-
 
 
135,960
 
Commercial Other
 
 
253,576
 
 
6,504
 
 
4,991
 
 
-
 
 
-
 
 
265,071
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Commercial
 
 
381,805
 
 
12,791
 
 
6,435
 
 
-
 
 
-
 
 
401,031
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home Equity and Home Improvement
 
 
-
 
 
-
 
 
1,647
 
 
106
 
 
110,529
 
 
112,282
 
Consumer Finance
 
 
-
 
 
-
 
 
125
 
 
-
 
 
15,326
 
 
15,451
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Loans
 
$
1,280,508
 
$
43,804
 
$
46,937
 
$
478
 
$
280,240
 
$
1,651,967
 
 
Foreclosure Proceedings
 
Consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure totaled $140,000 as of September 30, 2015.