Loans Receivable And Allowance For Loan Losses	3 Months Ended
Dec. 31, 2011
Loans Receivable And Allowance For Loan Losses
Loans Receivable And Allowance For Loan Losses	(6) LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES Loans receivable and loans held for sale consisted of the following at December 31, 2011 and September 30, 2011 (dollars in thousands): December 31, September 30, 2011 2011 ------------------- ------------------ Amount Percent Amount Percent ------------------- ----------------------- Mortgage loans: One- to four-family (1) $110,502 19.7% $114,680 20.5% Multi-family 30,866 5.5 30,982 5.5 Commercial 245,874 43.9 246,037 43.9 Construction and land development 57,803 10.3 52,484 9.4 Land 46,198 8.3 49,236 8.8 -------- ----- -------- ----- Total mortgage loans 491,243 87.7 493,419 88.1 Consumer loans: Home equity and second mortgage 34,607 6.2 36,008 6.4 Other 6,695 1.2 8,240 1.5 -------- ----- -------- ----- Total consumer loans 41,302 7.4 44,248 7.9 Commercial business loans 27,426 4.9 22,510 4.0 -------- ----- -------- ----- Total loans receivable 559,971 100.0% 560,177 100.0% -------- ===== -------- ===== Less: Undisbursed portion of construction loans in process (17,073) (18,265) Deferred loan origination fees (1,884) (1,942) Allowance for loan losses (11,972) (11,946) -------- -------- Total loans receivable, net $529,042 $528,024 ======= ======= ------------- (1) Includes loans held for sale. Construction and Land Development Loan Portfolio Composition ------------------------------------------------------------ The following table sets forth the composition of the Company's construction and land development loan portfolio at December 31, 2011 and September 30, 2011 (dollars in thousands): December 31, September 30, 2011 2011 ---------------------- ---------------------- Amount Percent Amount Percent ---------------------- ----------------------- Custom and owner/builder $ 28,797 49.8% $ 26,205 49.9% Speculative one- to four-family 2,186 3.8 1,919 3.7 Commercial real estate 16,693 28.9 12,863 24.5 Multi-family (including condominiums) 8,320 14.4 9,322 17.8 Land development 1,807 3.1 2,175 4.1 -------- ----- -------- ----- Total construction and land development loans $ 57,803 100.0% $ 52,484 100.0% ====== ===== ====== ===== Allowance for Loan Losses ------------------------- The following tables set forth information for the three months ended December 31, 2011 and December 31, 2010 regarding activity in the allowance for loan losses (dollars in thousands): For the Three Months Ended December 31, 2011 ----------------------------------------------------------------- Beginning Ending Allowance Provision Charge-offs Recoveries Allowance --------- --------- ----------- ---------- --------- Mortgage loans: One-to four-family $ 760 $ 92 $ 68 $ 1 $ 785 Multi-family 1,076 233 - - - - 1,309 Commercial 4,035 (18) 508 - - 3,509 Construction - custom and owner / builder 222 38 - - - - 260 Construction - speculative one- to four-family 169 (6) - - 1 164 Construction - commercial 794 13 - - - - 807 Construction - multi-family 354 (414) - - 450 390 Construction - land development 79 247 230 - - 96 Land 2,795 76 285 71 2,657 Consumer loans: Home equity and second mortgage 460 (1) 50 - - 409 Other 415 (24) 1 - - 390 Commercial business loans 787 414 6 1 1,196 ------- ----- ------ ----- ------- Total $11,946 $ 650 $1,148 $ 524 $11,972 ======= ===== ===== ===== ===== Three Months Ended December 31, 2010 ------------------------ Balance at beginning of period $11,264 Provision for loan losses 900 Loans charged off (439) Recoveries of loans previously charged off 24 Net charge-offs (415) ------- Balance at end of period $11,749 ======= The following table presents information on the loans evaluated individually for impairment and collectively evaluated for impairment in the allowance for loan losses at December 31, 2011 and September 30, 2011 (dollars in thousands): Allowance for Loan Losses Recorded Investment in Loans ---------------------------------- ------------------------------------- Individually Collectively Individually Collectively Evaluated for Evaluated for Evaluated for Evaluated for Impairment Impairment Total Impairment Impairment Total ---------- ---------- ----- ---------- ---------- ----- December 31, 2011 ------------------------ Mortgage loans: One- to four-family $ 136 $ 649 $ 785 $ 4,335 $106,167 $110,502 Multi-family 976 333 1,309 6,921 23,945 30,866 Commercial 214 3,295 3,509 21,552 224,322 245,874 Construction - custom and owner / builder 9 251 260 318 19,890 20,208 Construction - speculative one- to four-family 24 140 164 700 972 1,672 Construction - commercial 687 120 807 5,413 4,817 10,230 Construction - multi-family - - 390 390 370 6,443 6,813 Construction - land development - - 96 96 1,597 210 1,807 Land 583 2,074 2,657 9,527 36,671 46,198 Consumer loans: Home equity and second mortgage 12 397 409 1,236 33,371 34,607 Other - - 390 390 - - 6,695 6,695 Commercial business loans 276 920 1,196 317 27,109 27,426 ------ ------ ------- ------- -------- -------- $2,917 $9,055 $11,972 $52,286 $490,612 $542,898 ===== ===== ====== ====== ====== ======= September 30, 2011 ------------------------ Mortgage loans: One- to four-family $ 45 $ 715 $ 760 $ 3,701 $110,979 $114,680 Multi-family 632 444 1,076 5,482 25,500 30,982 Commercial 255 3,780 4,035 19,322 226,715 246,037 Construction - custom and owner / builder 11 211 222 320 16,777 17,097 Construction - speculative one- to four-family 37 132 169 700 906 1,606 Construction - commercial 738 56 794 5,435 2,479 7,914 Construction - multi-family - - 354 354 632 4,867 5,499 Construction - land development - - 79 79 1,882 221 2,103 Land 560 2,235 2,795 9,997 39,239 49,236 Consumer loans: Home equity and second mortgage 10 450 460 1,014 34,994 36,008 Other 1 414 415 1 8,239 8,240 Commercial business loans - - 787 787 44 22,466 22,510 ------ ------ ------- ------- -------- -------- $2,289 $9,657 $11,946 $48,530 $493,382 $541,912 ====== ====== ======= ======= ====== ====== Credit Quality Indicators ------------------------------- The Company uses credit risk grades which reflect the Company's assessment of a loan's risk or loss potential. The Company categorizes loans into risk grade 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 such as the estimated fair value of the collateral. The Company uses the following definitions for credit risk ratings as part of the on-going monitoring of the credit quality of its loan portfolio: Pass: Pass loans are defined as those loans that meet acceptable quality underwriting standards. Watch: Watch loans are defined as those loans that still exhibit marginal acceptable quality, but have some concerns that justify greater attention. If these concerns are not corrected, a potential for further adverse categorization exists. These concerns could relate to a specific condition peculiar to the borrower, its industry segment or the general economic environment. Special Mention: Special mention loans are defined as those loans deemed by management to have some potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the payment prospects of the loan. Assets in this category do not expose the Company to sufficient risk to warrant a substandard classification. Substandard: Substandard loans are defined as those loans that are inadequately protected by the current net worth and paying capacity of the obligor, or of the collateral pledged. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. If the weakness or weaknesses are not corrected, there is the distinct possibility that some loss will be sustained. Loss: Loans in this classification are considered uncollectible and of such little value that continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this loan even though partial recovery may be realized in the future. The following table lists the loan credit risk grades utilized by the Company that serve as credit quality indicators. Each of the credit risk loan grades include high and low factors associated with their classification that are utilized to calculate the aggregate ranges of the allowance for loan losses at December 31, 2011 and September 30, 2011 (dollars in thousands): Credit Risk Profile by Internally Assigned Grades December 31, 2011 Loan Grades ------------------------ ------------------------------------------------------- Special Pass Watch Mention Substandard Total ------ ----- ------- ----------- ----- Mortgage loans: One- to four-family $ 96,715 $ 4,708 $ 3,291 $ 5,788 $110,502 Multi-family 18,995 68 4,696 7,107 30,866 Commercial 215,172 696 6,040 23,966 245,874 Construction - custom and owner / builder 19,629 261 - - 318 20,208 Construction - speculative one- to four-family 212 155 - - 1,305 1,672 Construction - commercial 4,817 - - - - 5,413 10,230 Construction - multi-family 6,443 - - - - 370 6,813 Construction - land development - - - - - - 1,807 1,807 Land 25,168 5,947 5,233 9,850 46,198 Consumer loans: Home equity and second mortgage 31,083 931 1,355 1,238 34,607 Other 6,638 48 - - 9 6,695 Commercial business loans 24,080 60 192 3,094 27,426 -------- ------- ------- -------- -------- Total $448,952 $12,874 $20,807 $60,265 $542,898 ====== ===== ===== ====== ====== September 30, 2011 ------------------------- Mortgage loans: One- to four-family $100,159 $ 6,131 $ 2,450 $ 5,940 $114,680 Multi-family 19,279 199 10,380 1,124 30,982 Commercial 212,898 1,042 6,320 25,777 246,037 Construction - custom and owner / builder 16,522 255 - - 320 17,097 Construction - speculative one- to four-family 323 - - 700 583 1,606 Construction – commercial 2,479 - - - - 5,435 7,914 Construction - multi-family 4,115 - - 752 632 5,499 Construction - land development 83 - - - - 2,020 2,103 Land 26,825 6,604 5,084 10,723 49,236 Consumer loans: Home equity and second mortgage 32,389 901 1,513 1,205 36,008 Other 8,179 50 - - 11 8,240 Commercial business loans 19,060 20 220 3,210 22,510 -------- ------- ------- ------- -------- Total $442,311 $15,202 $27,419 $56,980 $541,912 ====== ===== ===== ===== ====== The following tables present an age analysis of past due status of loans by category at December 31, 2011 and September 30, 2011 (dollars in thousands): Past Due 90 Days 30-59 Days 60-89 Days Non- or More and Total Total Past Due Past Due Accrual (1) Still Accruing Past due Current Loans -------- -------- ----------- ----------- -------- ------- --------- Mortgage loans: One- to four-family $2,889 $ - - $ 2,788 $ - - $ 5,677 $104,825 $110,502 Multi-family - - - - 1,449 - - 1,449 29,417 30,866 Commercial 8,902 - - 10,445 - - 19,347 226,527 245,874 Construction - custom and owner / builder - - - - 318 - - 318 19,890 20,208 Construction - speculative one- to four-family - - - - - - 201 201 1,471 1,672 Construction - commercial - - - - 666 - - 666 9,564 10,230 Construction - multi-family - - - - 370 - - 370 6,443 6,813 Construction - land development - - - - 1,597 - - 1,597 210 1,807 Land 5,727 82 9,264 1,586 16,659 29,539 46,198 Consumer loans: Home equity and second mortgage 816 39 589 890 2,334 32,273 34,607 Other 83 - - - - - - 83 6,612 6,695 Commercial business loans - - 132 317 - - 449 26,977 27,426 ------- ------ ------- ------ ------- -------- -------- Total $18,417 $ 253 $27,803 $2,677 $49,150 $493,748 $542,898 ====== ===== ====== ==== ===== ===== ===== September 30, 2011 ------------------ Mortgage loans: One- to four-family $ - - $1,822 $ 2,150 $ - - $ 3,972 $110,708 $114,680 Multi-family - - - - - - 1,449 1,449 29,533 30,982 Commercial - - 12,723 6,571 - - 19,294 226,743 246,037 Construction - custom and owner / builder - - - - 320 - - 320 16,777 17,097 Construction - speculative one- to four-family - - - - - - - - - - 1,606 1,606 Construction - commercial - - - - 688 - - 688 7,226 7,914 Construction - multi-family - - 752 632 - - 1,384 4,115 5,499 Construction - land development - - - - 1,882 - - 1,882 221 2,103 Land 1,100 2,558 8,935 29 12,622 36,614 49,236 Consumer loans: Home equity and second mortgage 643 441 366 - - 1,450 34,558 36,008 Other 9 7 1 - - 17 8,223 8,240 Commercial business loans - - 14 44 276 334 22,176 22,510 ------- ------ ------- ------ ------- -------- -------- Total $ 1,752 $18,317 $21,589 $1,754 $43,412 $498,500 $541,912 ===== ===== ===== ==== ===== ====== ====== ------------- (1) Includes non-accrual loans past due 90 days or more and manual non-accrual loans. Impaired Loans -------------- A loan is considered impaired when it is probable that the Company will be unable to collect all contractual principal and interest payments due in accordance with the original or modified terms of the loan agreement. Impaired loans are measured based on the estimated fair value of the collateral less estimated cost to sell if the loan is considered collateral dependent. Impaired loans that are not considered to be collateral dependent are measured based on the present value of expected future cash flows. The categories of non-accrual loans and impaired loans overlap, although they are not coextensive. The Company considers all circumstances regarding the loan and borrower on an individual basis when determining whether an impaired loan should be placed on non-accrual status, such as the financial strength of the borrower, the estimated collateral value, reasons for the delay, payment record, the amount past due and the number of days past due. At December 31, 2011 and September 30, 2011, the Company had impaired loans totaling $52.29 million and $48.53 million, respectively. At December 31, 2011, the Company had loans totaling $2.68 million that were 90 days or more past due and still accruing interest. At September 30, 2011, the Company had loans totaling $1.75 million that were 90 days or more past due and still accruing interest. Interest income recognized on impaired loans for the three months ended December 31, 2011 and 2010 was $419,000 and $322,000, respectively. Interest income recognized on a cash basis on impaired loans for the three months ended December 31, 2011 and 2010, was $294,000 and $246,000, respectively. The average investment in impaired loans for the three months ended December 31, 2011 and 2010 was $48.64 million and $41.44 million, respectively. The following table is a summary of information related to impaired loans as of and for the three months ended December 31, 2011 (dollars in thousands): Unpaid Principal Cash Basis Balance(Loan Average Interest Interest Recorded Balance Plus Related Recorded Income Income Investment Charge Off) Allowance Investment Recognized(1) Recognized(1) ---------- ------------ ------------- ------------- ------------ ------------ With no related allowance recorded: Mortgage loans: One- to four-family $ 2,266 $ 2,486 $ - - $ 2,623 $ 6 $ 6 Multi-family - - 982 - - - - - - - - Commercial 17,704 19,354 - - 15,514 190 135 Construction - custom and owner / builder 209 209 - - 345 - - - - Construction - speculative one- to four-family - - - - - - 243 - - - - Construction - multi-family 370 810 - - 1,071 - - - - Construction - land development 1,597 7,124 - - 2,482 5 5 Land 5,214 8,750 - - 7,034 8 4 Consumer loans: Home equity and second mortgage 592 658 - - 534 - - - - Other - - - - - - 8 - - - - Commercial business loans 41 61 - - 43 1 1 ------- ------- ------ ------- ----- ----- Subtotal 27,993 40,434 - - 29,897 210 151 With an allowance recorded: Mortgage loans: One- to four-family 2,069 2,069 136 1,181 22 17 Multi-family 6,921 6,921 976 5,768 73 55 Commercial 3,848 3,848 214 2,179 24 3 Construction - custom and owner / builder 109 109 9 67 - - - - Construction - speculative one- to four-family 700 700 24 1,030 8 6 Construction - commercial 5,413 6,857 687 4,620 63 47 Land 4,313 4,337 583 3,428 8 8 Consumer loans: Home equity and second mortgage 644 644 12 412 11 7 Other - - - - - - 1 - - - - Commercial business loans 276 276 276 55 - - - - ------- ------- ------ ------- ----- ----- Subtotal 24,293 25,761 2,917 18,741 209 143 Total Mortgage loans: One- to four-family 4,335 4,555 136 3,804 28 23 Multi-family 6,921 7,903 976 5,768 73 55 Commercial 21,552 23,202 214 17,693 214 138 Construction - custom and owner / builder 318 318 9 412 - - - - Construction - speculative one- to four-family 700 700 24 1,273 8 6 Construction – commercial 5,413 6,857 687 4,620 63 47 Construction - multi-family 370 810 - - 1,071 5 - - Construction - land development 1,597 7,124 - - 2,482 - - 5 Land 9,527 13,087 583 10,462 16 12 Consumer loans: Home equity and second mortgage 1,236 1,302 12 946 11 7 Other - - - - - - 9 - - - - Commercial business loans 317 337 276 98 1 1 ------- ------- ------ ------- ----- ----- Total $52,286 $66,195 $2,917 $48,638 $ 419 $ 294 ===== ===== ===== ====== ==== ==== ------------- (1) For the three months ended December 31, 2011 Following is a summary of information related to impaired loans as of and for the year ended September 30, 2011 (in thousands): Unpaid Principal Cash Basis Balance (Loan Average Interest Interest Recorded Balance Plus Related Recorded Income Income Investment Charge Off) Allowance Investment Recognized(1) Recognized(1) ---------- ------------ ------------ ------------- -------------- ------------- With no related allowance recorded: Mortgage loans: One- to four-family $ 2,092 $ 2,387 $ - - $ 2,908 $ 30 $ 22 Multi-family - - 982 - - 681 - - - - Commercial 18,137 19,279 - - 14,623 1,060 573 Construction - custom and owner / builder 209 209 - - 303 7 1 Construction speculative one- to four-family - - - - - - 502 7 7 Construction - multi-family 632 1,135 - - 1,287 4 4 Construction - land development 1,882 7,179 - - 2,920 5 - - Land 8,198 11,533 - - 7,883 69 42 Consumer loans: Home equity and second mortgage 669 719 - - 430 26 16 Other - - - - - - 13 - - - - Commercial business loans 44 65 - - 44 2 2 -------- -------- ------ ------- ------ ------ Subtotal 31,863 43,488 - - 31,594 1,210 667 With an allowance recorded: Mortgage loans: One- to four-family 1,609 1,609 45 768 47 38 Multi-family 5,482 5,482 632 4,798 298 222 Commercial 1,185 1,185 255 1,409 50 118 Construction - custom and owner / builder 111 111 11 45 2 2 Construction - speculative one- to four-family 700 700 37 1,042 50 37 Construction - commercial 5,435 6,879 738 3,537 273 123 Construction - multi-family - - - - - - 65 - - - - Land 1,799 1,821 560 2,946 114 83 Consumer loans: Home equity and second mortgage 345 345 10 425 10 9 Other 1 1 1 1 - - - - ------- ------- -------- ------- ------ ------ Subtotal 16,667 18,133 2,289 15,036 844 632 Total Mortgage loans: One- to four-family 3,701 3,996 45 3,676 77 60 Multi-family 5,482 6,464 632 5,479 298 222 Commercial 19,322 20,464 255 16,032 1,110 691 Construction - custom and owner / builder 320 320 11 348 9 3 Construction - speculative one- to four-family 700 700 37 1,544 57 44 Construction - commercial 5,435 6,879 738 3,537 273 123 Construction - multi-family 632 1,135 - - 1,352 4 4 Construction - land development 1,882 7,179 - - 2,920 5 - - Land 9,997 13,354 560 10,829 183 125 Consumer loans: Home equity and second mortgage 1,014 1,064 10 855 36 25 Other 1 1 1 14 - - - - Commercial business loans 44 65 - - 44 2 2 ------- ------- ------ ------- ------- ------ Total $48,530 $61,621 $2,289 $46,630 $2,054 $1,299 ===== ===== ==== ===== ===== ====== ------------- (1) For the year ended September 30, 2011 The following table sets forth information with respect to the Company's non-performing assets at December 31, 2011 and September 30, 2011 (dollars in thousands): Loans accounted for on a non-accrual basis: December 31, September 30, 2011 2011 -------- -------- Mortgage loans: One- to four-family $ 2,788 $ 2,150 Multi-family 1,449 - - Commercial 10,445 6,571 Construction custom and owner / builder 318 320 Construction speculative one- to four-family - - - - Construction commercial 666 688 Construction multi-family 370 632 Construction land development 1,597 1,882 Land 9,264 8,935 Consumer loans: Home equity and second mortgage 589 367 Commercial business 317 43 -------- -------- Total 27,803 21,589 Accruing loans which are contractually past due 90 days or more 2,677 1,754 -------- -------- Total of non-accrual and 90 days past due loans 30,480 23,343 Non-accrual investment securities 2,650 2,796 OREO and other repossessed assets 7,714 10,811 -------- -------- Total non-performing assets (1) $ 40,844 $ 36,950 ====== ====== Troubled debt restructured loans on accrual status (2) $ 18,297 $ 18,166 Non-accrual and 90 days or more past due loans as a percentage of loans receivable 5.64% 4.32% Non-accrual and 90 days or more past due loans as a percentage of total assets 4.15% 3.16% Non-performing assets as a percentage of total assets 5.55% 5.01% Loans receivable (3) $541,014 $539,970 ====== ======= Total assets $735,849 $738,224 ======= ====== (1) Does not include troubled debt restructured loans on accrual status. (2) Does not include troubled debt restructured loans totaling $7.33 million and $7.38 million reported as non-accrual loans at December 31, 2011 and September 30, 2011, respectively. (3) Includes loans held for sale and is before the allowance for loan losses. Troubled debt restructured loans are loans for which the Company, for economic or legal reasons related to the borrower's financial condition, has granted a significant concession to the borrower that it would otherwise not consider. The loan terms which have been modified or restructured due to a borrower's financial difficulty, include but are not limited to: a reduction in the stated interest rate; an extension of the maturity at an interest rate below current market; a reduction in the face amount of the debt; a reduction in the accrued interest; or re-aging, extensions, deferrals and renewals. Troubled debt restructured loans are considered impaired loans and are individually evaluated for impairment. Troubled debt restructured loans can be classified as either accrual or non-accrual. The Company had $25.63 million in troubled debt restructured loans included in impaired loans at December 31, 2011 and had no commitments to lend additional funds on these loans. At December 31, 2011, $7.33 million of the $25.63 million in troubled debt restructured loans were on non-accrual status and included in non-performing loans. The Company had $25.54 million in troubled debt restructured loans included in impaired loans at September 30, 2011 and had $144,000 in commitments to lend additional funds on these loans. At September 30, 2011, $7.38 million of the $25.54 million in troubled debt restructured loans were on non-accrual status and included in non-performing loans. The following table sets forth information with respect to the Company's troubled debt restructurings by portfolio segment at December 31, 2011 and September 30, 2011 (dollars in thousands): December 31, 2011 ------------------------ Pre- Post- Modification Modification Outstanding Outstanding End of Number of Recorded Recorded Period Contracts Investment Investment Balance --------- ---------- ---------- ------- One-to four-family 5 $ 1,619 $ 1,619 $1,547 Multi-family 4 6,534 5,482 5,472 Commercial 8 5,903 6,226 5,840 Construction - speculative one-to four-family 1 700 700 700 Construction – commercial 2 6,800 5,451 5,413 Construction - land development 4 5,433 5,433 756 Land 12 7,263 7,051 5,256 Home equity 3 654 654 647 -- ------- ------- ------- Total 39 $34,906 $32,616 $25,631 === ====== ====== ====== September 30, 2011 ------------------ Pre- Post- Modification Modification Outstanding Outstanding End of Number of Recorded Recorded Period Contracts Investment Investment Balance ------------ ----------- ---------- ------- One-to four-family 5 $ 1,619 $ 1,619 $1,618 Multi-family 4 6,534 5,482 5,482 Commercial 8 5,903 6,226 5,696 Construction - speculative one-to four-family 1 700 700 700 Construction - commercial 2 6,800 5,451 5,435 Construction - land development 4 5,433 5,433 756 Land 12 7,263 7,051 5,208 Home equity 3 654 654 647 -- -------- ------- -------- Total 39 $34,906 $32,616 $25,542 == ====== ====== ======= There were no new troubled debt restructured loans that were recorded during the three months ended December 31, 2011. There were no troubled debt restructured loans that were recorded in the twelve months prior to December 31, 2011 that subsequently defaulted in the three months ended December 31, 2011.

Loans Receivable And Allowance For Loan Losses

3 Months Ended

Dec. 31, 2011

Loans Receivable And Allowance For Loan Losses

Loans Receivable And Allowance For Loan Losses

(6) LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES

Loans receivable and loans held for sale consisted of the following at

December 31, 2011 and September 30, 2011 (dollars in thousands):

December 31, September 30,

2011 2011

------------------- ------------------

Amount Percent Amount Percent

------------------- -----------------------

Mortgage loans:

One- to four-family (1) $110,502 19.7% $114,680 20.5%

Multi-family 30,866 5.5 30,982 5.5

Commercial 245,874 43.9 246,037 43.9

Construction and land development 57,803 10.3 52,484 9.4

Land 46,198 8.3 49,236 8.8

-------- ----- -------- -----

Total mortgage loans 491,243 87.7 493,419 88.1

Consumer loans:

Home equity and second mortgage 34,607 6.2 36,008 6.4

Other 6,695 1.2 8,240 1.5

-------- ----- -------- -----

Total consumer loans 41,302 7.4 44,248 7.9

Commercial business loans 27,426 4.9 22,510 4.0

-------- ----- -------- -----

Total loans receivable 559,971 100.0% 560,177 100.0%

-------- ===== -------- =====

Less:

Undisbursed portion of

construction loans in process (17,073) (18,265)

Deferred loan origination fees (1,884) (1,942)

Allowance for loan losses (11,972) (11,946)

-------- --------

Total loans receivable, net $529,042 $528,024

======= =======

-------------

(1) Includes loans held for sale.

Construction and Land Development Loan Portfolio Composition

------------------------------------------------------------

The following table sets forth the composition of the Company's construction

and land development loan portfolio at December 31, 2011 and September 30,

2011 (dollars in thousands):

December 31, September 30,

2011 2011

---------------------- ----------------------

Amount Percent Amount Percent

---------------------- -----------------------

Custom and owner/builder $ 28,797 49.8% $ 26,205 49.9%

Speculative one- to four-family 2,186 3.8 1,919 3.7

Commercial real estate 16,693 28.9 12,863 24.5

Multi-family

(including condominiums) 8,320 14.4 9,322 17.8

Land development 1,807 3.1 2,175 4.1

-------- ----- -------- -----

Total construction and

land development loans $ 57,803 100.0% $ 52,484 100.0%

====== ===== ====== =====

Allowance for Loan Losses

-------------------------

The following tables set forth information for the three months ended December

31, 2011 and December 31, 2010 regarding activity in the allowance for loan

losses (dollars in thousands):

For the Three Months Ended December 31, 2011

-----------------------------------------------------------------

Beginning Ending

Allowance Provision Charge-offs Recoveries Allowance

--------- --------- ----------- ---------- ---------

Mortgage loans:

One-to four-family $ 760 $ 92 $ 68 $ 1 $ 785

Multi-family 1,076 233 - - - - 1,309

Commercial 4,035 (18) 508 - - 3,509

Construction -

custom and

owner / builder 222 38 - - - - 260

Construction -

speculative one-

to four-family 169 (6) - - 1 164

Construction -

commercial 794 13 - - - - 807

Construction -

multi-family 354 (414) - - 450 390

Construction -

land development 79 247 230 - - 96

Land 2,795 76 285 71 2,657

Consumer loans:

Home equity and

second mortgage 460 (1) 50 - - 409

Other 415 (24) 1 - - 390

Commercial business

loans 787 414 6 1 1,196

------- ----- ------ ----- -------

Total $11,946 $ 650 $1,148 $ 524 $11,972

======= ===== ===== ===== =====

Three Months Ended

December 31, 2010

------------------------

Balance at beginning of period $11,264

Provision for loan losses 900

Loans charged off (439)

Recoveries of loans previously charged off 24

Net charge-offs (415)

-------

Balance at end of period $11,749

=======

The following table presents information on the loans evaluated individually

for impairment and collectively evaluated for impairment in the allowance for

loan losses at December 31, 2011 and September 30, 2011 (dollars in

thousands):

Allowance for Loan Losses Recorded Investment in Loans

---------------------------------- -------------------------------------

Individually Collectively Individually Collectively

Evaluated for Evaluated for Evaluated for Evaluated for

Impairment Impairment Total Impairment Impairment Total

---------- ---------- ----- ---------- ---------- -----

December 31, 2011

------------------------

Mortgage loans:

One- to four-family $ 136 $ 649 $ 785 $ 4,335 $106,167 $110,502

Multi-family 976 333 1,309 6,921 23,945 30,866

Commercial 214 3,295 3,509 21,552 224,322 245,874

Construction - custom

and owner / builder 9 251 260 318 19,890 20,208

Construction -

speculative one- to

four-family 24 140 164 700 972 1,672

Construction -

commercial 687 120 807 5,413 4,817 10,230

Construction -

multi-family - - 390 390 370 6,443 6,813

Construction - land

development - - 96 96 1,597 210 1,807

Land 583 2,074 2,657 9,527 36,671 46,198

Consumer loans:

Home equity and

second mortgage 12 397 409 1,236 33,371 34,607

Other - - 390 390 - - 6,695 6,695

Commercial business

loans 276 920 1,196 317 27,109 27,426

------ ------ ------- ------- -------- --------

$2,917 $9,055 $11,972 $52,286 $490,612 $542,898

===== ===== ====== ====== ====== =======

September 30, 2011

------------------------

Mortgage loans:

One- to four-family $ 45 $ 715 $ 760 $ 3,701 $110,979 $114,680

Multi-family 632 444 1,076 5,482 25,500 30,982

Commercial 255 3,780 4,035 19,322 226,715 246,037

Construction - custom

and owner / builder 11 211 222 320 16,777 17,097

Construction -

speculative one- to

four-family 37 132 169 700 906 1,606

Construction -

commercial 738 56 794 5,435 2,479 7,914

Construction -

multi-family - - 354 354 632 4,867 5,499

Construction -

land development - - 79 79 1,882 221 2,103

Land 560 2,235 2,795 9,997 39,239 49,236

Consumer loans:

Home equity and second

mortgage 10 450 460 1,014 34,994 36,008

Other 1 414 415 1 8,239 8,240

Commercial business

loans - - 787 787 44 22,466 22,510

------ ------ ------- ------- -------- --------

$2,289 $9,657 $11,946 $48,530 $493,382 $541,912

====== ====== ======= ======= ====== ======

Credit Quality Indicators

-------------------------------

The Company uses credit risk grades which reflect the Company's assessment of

a loan's risk or loss potential. The Company categorizes loans into risk

grade 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 such as the estimated fair value of the

collateral. The Company uses the following definitions for credit risk

ratings as part of the on-going monitoring of the credit quality of its loan

portfolio:

Pass: Pass loans are defined as those loans that meet acceptable quality

underwriting standards.

Watch: Watch loans are defined as those loans that still exhibit marginal

acceptable quality, but have some concerns that justify greater attention. If

these concerns are not corrected, a potential for further adverse

categorization exists. These concerns could relate to a specific condition

peculiar to the borrower, its industry segment or the general economic

environment.

Special Mention: Special mention loans are defined as those loans deemed by

management to have some potential weaknesses that deserve management's close

attention. If left uncorrected, these potential weaknesses may result in the

deterioration of the payment prospects of the loan. Assets in this category

do not expose the Company to sufficient risk to warrant a substandard

classification.

Substandard: Substandard loans are defined as those loans that are

inadequately protected by the current net worth and paying capacity of the

obligor, or of the collateral pledged. Loans classified as substandard have a

well-defined weakness or weaknesses that jeopardize the repayment of the debt.

If the weakness or weaknesses are not corrected, there is the distinct

possibility that some loss will be sustained.

Loss: Loans in this classification are considered uncollectible and of such

little value that continuance as bankable assets is not warranted. This

classification does not mean that the loan has absolutely no recovery or

salvage value, but rather it is not practical or desirable to defer writing

off this loan even though partial recovery may be realized in the future.

The following table lists the loan credit risk grades utilized by the Company

that serve as credit quality indicators. Each of the credit risk loan grades

include high and low factors associated with their classification that are

utilized to calculate the aggregate ranges of the allowance for loan losses at

December 31, 2011 and September 30, 2011 (dollars in thousands):

Credit Risk Profile by Internally Assigned Grades

December 31, 2011 Loan Grades

------------------------ -------------------------------------------------------

Special

Pass Watch Mention Substandard Total

------ ----- ------- ----------- -----

Mortgage loans:

One- to four-family $ 96,715 $ 4,708 $ 3,291 $ 5,788 $110,502

Multi-family 18,995 68 4,696 7,107 30,866

Commercial 215,172 696 6,040 23,966 245,874

Construction - custom

and owner / builder 19,629 261 - - 318 20,208

Construction - speculative

one- to four-family 212 155 - - 1,305 1,672

Construction - commercial 4,817 - - - - 5,413 10,230

Construction - multi-family 6,443 - - - - 370 6,813

Construction - land

development - - - - - - 1,807 1,807

Land 25,168 5,947 5,233 9,850 46,198

Consumer loans:

Home equity and second

mortgage 31,083 931 1,355 1,238 34,607

Other 6,638 48 - - 9 6,695

Commercial business loans 24,080 60 192 3,094 27,426

-------- ------- ------- -------- --------

Total $448,952 $12,874 $20,807 $60,265 $542,898

====== ===== ===== ====== ======

September 30, 2011

-------------------------

Mortgage loans:

One- to four-family $100,159 $ 6,131 $ 2,450 $ 5,940 $114,680

Multi-family 19,279 199 10,380 1,124 30,982

Commercial 212,898 1,042 6,320 25,777 246,037

Construction - custom

and owner / builder 16,522 255 - - 320 17,097

Construction - speculative

one- to four-family 323 - - 700 583 1,606

Construction – commercial 2,479 - - - - 5,435 7,914

Construction - multi-family 4,115 - - 752 632 5,499

Construction - land

development 83 - - - - 2,020 2,103

Land 26,825 6,604 5,084 10,723 49,236

Consumer loans:

Home equity and second

mortgage 32,389 901 1,513 1,205 36,008

Other 8,179 50 - - 11 8,240

Commercial business loans 19,060 20 220 3,210 22,510

-------- ------- ------- ------- --------

Total $442,311 $15,202 $27,419 $56,980 $541,912

====== ===== ===== ===== ======

The following tables present an age analysis of past due status of loans by

category at December 31, 2011 and September 30, 2011 (dollars in thousands):

Past Due

90 Days

30-59 Days 60-89 Days Non- or More and Total Total

Past Due Past Due Accrual (1) Still Accruing Past due Current Loans

-------- -------- ----------- ----------- -------- ------- ---------

Mortgage loans:

One- to four-family $2,889 $ - - $ 2,788 $ - - $ 5,677 $104,825 $110,502

Multi-family - - - - 1,449 - - 1,449 29,417 30,866

Commercial 8,902 - - 10,445 - - 19,347 226,527 245,874

Construction - custom and

owner / builder - - - - 318 - - 318 19,890 20,208

Construction - speculative

one- to four-family - - - - - - 201 201 1,471 1,672

Construction - commercial - - - - 666 - - 666 9,564 10,230

Construction - multi-family - - - - 370 - - 370 6,443 6,813

Construction - land

development - - - - 1,597 - - 1,597 210 1,807

Land 5,727 82 9,264 1,586 16,659 29,539 46,198

Consumer loans:

Home equity and second

mortgage 816 39 589 890 2,334 32,273 34,607

Other 83 - - - - - - 83 6,612 6,695

Commercial business loans - - 132 317 - - 449 26,977 27,426

------- ------ ------- ------ ------- -------- --------

Total $18,417 $ 253 $27,803 $2,677 $49,150 $493,748 $542,898

====== ===== ====== ==== ===== ===== =====

September 30, 2011

------------------

Mortgage loans:

One- to four-family $ - - $1,822 $ 2,150 $ - - $ 3,972 $110,708 $114,680

Multi-family - - - - - - 1,449 1,449 29,533 30,982

Commercial - - 12,723 6,571 - - 19,294 226,743 246,037

Construction - custom and

owner / builder - - - - 320 - - 320 16,777 17,097

Construction - speculative

one- to four-family - - - - - - - - - - 1,606 1,606

Construction - commercial - - - - 688 - - 688 7,226 7,914

Construction - multi-family - - 752 632 - - 1,384 4,115 5,499

Construction - land

development - - - - 1,882 - - 1,882 221 2,103

Land 1,100 2,558 8,935 29 12,622 36,614 49,236

Consumer loans:

Home equity and second

mortgage 643 441 366 - - 1,450 34,558 36,008

Other 9 7 1 - - 17 8,223 8,240

Commercial business loans - - 14 44 276 334 22,176 22,510

------- ------ ------- ------ ------- -------- --------

Total $ 1,752 $18,317 $21,589 $1,754 $43,412 $498,500 $541,912

===== ===== ===== ==== ===== ====== ======

-------------

(1) Includes non-accrual loans past due 90 days or more and manual non-accrual loans.

Impaired Loans

--------------

A loan is considered impaired when it is probable that the Company will be

unable to collect all contractual principal and interest payments due in

accordance with the original or modified terms of the loan agreement.

Impaired loans are measured based on the estimated fair value of the

collateral less estimated cost to sell if the loan is considered collateral

dependent. Impaired loans that are not considered to be collateral dependent are

measured based on the present value of expected future cash flows.

The categories of non-accrual loans and impaired loans overlap, although they

are not coextensive. The Company considers all circumstances regarding the

loan and borrower on an individual basis when determining whether an impaired

loan should be placed on non-accrual status, such as the financial strength of

the borrower, the estimated collateral value, reasons for the delay, payment

record, the amount past due and the number of days past due.

At December 31, 2011 and September 30, 2011, the Company had impaired loans totaling

$52.29 million and $48.53 million, respectively. At December 31, 2011, the Company

had loans totaling $2.68 million that were 90 days or more past due and still accruing

interest. At September 30, 2011, the Company had loans totaling $1.75 million that

were 90 days or more past due and still accruing interest. Interest income recognized

on impaired loans for the three months ended December 31, 2011 and 2010 was $419,000

and $322,000, respectively. Interest income recognized on a cash basis on impaired

loans for the three months ended December 31, 2011 and 2010, was $294,000 and

$246,000, respectively. The average investment in impaired loans for the three months

ended December 31, 2011 and 2010 was $48.64 million and $41.44 million, respectively.

The following table is a summary of information related to impaired loans as of and for the three

months ended December 31, 2011 (dollars in thousands):

Unpaid Principal Cash Basis

Balance(Loan Average Interest Interest

Recorded Balance Plus Related Recorded Income Income

Investment Charge Off) Allowance Investment Recognized(1) Recognized(1)

---------- ------------ ------------- ------------- ------------ ------------

With no related allowance recorded:

Mortgage loans:

One- to four-family $ 2,266 $ 2,486 $ - - $ 2,623 $ 6 $ 6

Multi-family - - 982 - - - - - - - -

Commercial 17,704 19,354 - - 15,514 190 135

Construction - custom and

owner / builder 209 209 - - 345 - - - -

Construction - speculative

one- to four-family - - - - - - 243 - - - -

Construction - multi-family 370 810 - - 1,071 - - - -

Construction - land

development 1,597 7,124 - - 2,482 5 5

Land 5,214 8,750 - - 7,034 8 4

Consumer loans:

Home equity and second

mortgage 592 658 - - 534 - - - -

Other - - - - - - 8 - - - -

Commercial business loans 41 61 - - 43 1 1

------- ------- ------ ------- ----- -----

Subtotal 27,993 40,434 - - 29,897 210 151

With an allowance recorded:

Mortgage loans:

One- to four-family 2,069 2,069 136 1,181 22 17

Multi-family 6,921 6,921 976 5,768 73 55

Commercial 3,848 3,848 214 2,179 24 3

Construction - custom and

owner / builder 109 109 9 67 - - - -

Construction - speculative

one- to four-family 700 700 24 1,030 8 6

Construction - commercial 5,413 6,857 687 4,620 63 47

Land 4,313 4,337 583 3,428 8 8

Consumer loans:

Home equity and second

mortgage 644 644 12 412 11 7

Other - - - - - - 1 - - - -

Commercial business loans 276 276 276 55 - - - -

------- ------- ------ ------- ----- -----

Subtotal 24,293 25,761 2,917 18,741 209 143

Total

Mortgage loans:

One- to four-family 4,335 4,555 136 3,804 28 23

Multi-family 6,921 7,903 976 5,768 73 55

Commercial 21,552 23,202 214 17,693 214 138

Construction - custom and

owner / builder 318 318 9 412 - - - -

Construction - speculative

one- to four-family 700 700 24 1,273 8 6

Construction – commercial 5,413 6,857 687 4,620 63 47

Construction - multi-family 370 810 - - 1,071 5 - -

Construction - land

development 1,597 7,124 - - 2,482 - - 5

Land 9,527 13,087 583 10,462 16 12

Consumer loans:

Home equity and second

mortgage 1,236 1,302 12 946 11 7

Other - - - - - - 9 - - - -

Commercial business loans 317 337 276 98 1 1

------- ------- ------ ------- ----- -----

Total $52,286 $66,195 $2,917 $48,638 $ 419 $ 294

===== ===== ===== ====== ==== ====

-------------

(1) For the three months ended December 31, 2011

Following is a summary of information related to impaired loans as of and for the year ended September 30, 2011

(in thousands):

Unpaid Principal Cash Basis

Balance (Loan Average Interest Interest

Recorded Balance Plus Related Recorded Income Income

Investment Charge Off) Allowance Investment Recognized(1) Recognized(1)

---------- ------------ ------------ ------------- -------------- -------------

With no related allowance

recorded:

Mortgage loans:

One- to four-family $ 2,092 $ 2,387 $ - - $ 2,908 $ 30 $ 22

Multi-family - - 982 - - 681 - - - -

Commercial 18,137 19,279 - - 14,623 1,060 573

Construction - custom and

owner / builder 209 209 - - 303 7 1

Construction speculative

one- to four-family - - - - - - 502 7 7

Construction - multi-family 632 1,135 - - 1,287 4 4

Construction - land

development 1,882 7,179 - - 2,920 5 - -

Land 8,198 11,533 - - 7,883 69 42

Consumer loans:

Home equity and second

mortgage 669 719 - - 430 26 16

Other - - - - - - 13 - - - -

Commercial business loans 44 65 - - 44 2 2

-------- -------- ------ ------- ------ ------

Subtotal 31,863 43,488 - - 31,594 1,210 667

With an allowance recorded:

Mortgage loans:

One- to four-family 1,609 1,609 45 768 47 38

Multi-family 5,482 5,482 632 4,798 298 222

Commercial 1,185 1,185 255 1,409 50 118

Construction - custom and

owner / builder 111 111 11 45 2 2

Construction - speculative

one- to four-family 700 700 37 1,042 50 37

Construction - commercial 5,435 6,879 738 3,537 273 123

Construction - multi-family - - - - - - 65 - - - -

Land 1,799 1,821 560 2,946 114 83

Consumer loans:

Home equity and second

mortgage 345 345 10 425 10 9

Other 1 1 1 1 - - - -

------- ------- -------- ------- ------ ------

Subtotal 16,667 18,133 2,289 15,036 844 632

Total

Mortgage loans:

One- to four-family 3,701 3,996 45 3,676 77 60

Multi-family 5,482 6,464 632 5,479 298 222

Commercial 19,322 20,464 255 16,032 1,110 691

Construction - custom and

owner / builder 320 320 11 348 9 3

Construction - speculative

one- to four-family 700 700 37 1,544 57 44

Construction - commercial 5,435 6,879 738 3,537 273 123

Construction - multi-family 632 1,135 - - 1,352 4 4

Construction - land

development 1,882 7,179 - - 2,920 5 - -

Land 9,997 13,354 560 10,829 183 125

Consumer loans:

Home equity and second

mortgage 1,014 1,064 10 855 36 25

Other 1 1 1 14 - - - -

Commercial business loans 44 65 - - 44 2 2

------- ------- ------ ------- ------- ------

Total $48,530 $61,621 $2,289 $46,630 $2,054 $1,299

===== ===== ==== ===== ===== ======

-------------

(1) For the year ended September 30, 2011

The following table sets forth information with respect to the Company's

non-performing assets at December 31, 2011 and September 30, 2011 (dollars in

thousands):

Loans accounted for on a non-accrual basis:

December 31, September 30,

2011 2011

-------- --------

Mortgage loans:

One- to four-family $ 2,788 $ 2,150

Multi-family 1,449 - -

Commercial 10,445 6,571

Construction custom and owner / builder 318 320

Construction speculative one- to four-family - - - -

Construction commercial 666 688

Construction multi-family 370 632

Construction land development 1,597 1,882

Land 9,264 8,935

Consumer loans:

Home equity and second mortgage 589 367

Commercial business 317 43

-------- --------

Total 27,803 21,589

Accruing loans which are contractually

past due 90 days or more 2,677 1,754

-------- --------

Total of non-accrual and 90 days past due loans 30,480 23,343

Non-accrual investment securities 2,650 2,796

OREO and other repossessed assets 7,714 10,811

-------- --------

Total non-performing assets (1) $ 40,844 $ 36,950

====== ======

Troubled debt restructured loans on accrual

status (2) $ 18,297 $ 18,166

Non-accrual and 90 days or more past

due loans as a percentage of loans receivable 5.64% 4.32%

Non-accrual and 90 days or more past

due loans as a percentage of total assets 4.15% 3.16%

Non-performing assets as a percentage of total

assets 5.55% 5.01%

Loans receivable (3) $541,014 $539,970

====== =======

Total assets $735,849 $738,224

======= ======

(1) Does not include troubled debt restructured loans on accrual status.

(2) Does not include troubled debt restructured loans totaling $7.33 million

and $7.38 million reported as non-accrual loans at December 31, 2011 and

September 30, 2011, respectively.

(3) Includes loans held for sale and is before the allowance for loan losses.

Troubled debt restructured loans are loans for which the Company, for economic or

legal reasons related to the borrower's financial condition, has granted a significant

concession to the borrower that it would otherwise not consider. The loan terms which

have been modified or restructured due to a borrower's financial difficulty, include

but are not limited to: a reduction in the stated interest rate; an extension of the

maturity at an interest rate below current market; a reduction in the face amount of

the debt; a reduction in the accrued interest; or re-aging, extensions, deferrals and

renewals. Troubled debt restructured loans are considered impaired loans and are

individually evaluated for impairment. Troubled debt restructured loans can be

classified as either accrual or non-accrual. The Company had $25.63 million in

troubled debt restructured loans included in impaired loans at December 31, 2011 and

had no commitments to lend additional funds on these loans. At December 31, 2011,

$7.33 million of the $25.63 million in troubled debt restructured loans were on

non-accrual status and included in non-performing loans. The Company had $25.54

million in troubled debt restructured loans included in impaired loans at September

30, 2011 and had $144,000 in commitments to lend additional funds on these loans. At

September 30, 2011, $7.38 million of the $25.54 million in troubled debt restructured

loans were on non-accrual status and included in non-performing loans.

The following table sets forth information with respect to the Company's troubled debt

restructurings by portfolio segment at December 31, 2011 and September 30, 2011

(dollars in thousands):

December 31, 2011

------------------------

Pre- Post-

Modification Modification

Outstanding Outstanding End of

Number of Recorded Recorded Period

Contracts Investment Investment Balance

--------- ---------- ---------- -------

One-to four-family 5 $ 1,619 $ 1,619 $1,547

Multi-family 4 6,534 5,482 5,472

Commercial 8 5,903 6,226 5,840

Construction -

speculative one-to

four-family 1 700 700 700

Construction – commercial 2 6,800 5,451 5,413

Construction - land

development 4 5,433 5,433 756

Land 12 7,263 7,051 5,256

Home equity 3 654 654 647

-- ------- ------- -------

Total 39 $34,906 $32,616 $25,631

=== ====== ====== ======

September 30, 2011

------------------

Pre- Post-

Modification Modification

Outstanding Outstanding End of

Number of Recorded Recorded Period

Contracts Investment Investment Balance

------------ ----------- ---------- -------

One-to four-family 5 $ 1,619 $ 1,619 $1,618

Multi-family 4 6,534 5,482 5,482

Commercial 8 5,903 6,226 5,696

Construction -

speculative one-to

four-family 1 700 700 700

Construction - commercial 2 6,800 5,451 5,435

Construction - land

development 4 5,433 5,433 756

Land 12 7,263 7,051 5,208

Home equity 3 654 654 647

-- -------- ------- --------

Total 39 $34,906 $32,616 $25,542

== ====== ====== =======

There were no new troubled debt restructured loans that were recorded during the three

months ended December 31, 2011. There were no troubled debt restructured loans that

were recorded in the twelve months prior to December 31, 2011 that subsequently

defaulted in the three months ended December 31, 2011.