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Loans Receivable And Allowance For Loan Losses
 6 Months Ended
Mar. 31, 2014
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
Loans Receivable And Allowance For Loan Losses
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES

Loans receivable and loans held for sale consisted of the following at March 31, 2014 and September 30, 2013
(dollars in thousands):
 
March 31,
2014
 
September 30,
2013
 
Amount
 
Percent
 
Amount
 
Percent
Mortgage loans:
 
 
 
 
 
 
 
One- to four-family (1)
$
100,985

 
17.2
%
 
$
104,298

 
18.0
%
Multi-family
47,206

 
8.0

 
51,108

 
8.8

Commercial
299,791

 
51.0

 
291,297

 
50.3

Construction and land development
51,852

 
8.8

 
45,136

 
7.8

Land
29,593

 
5.0

 
31,144

 
5.4

Total mortgage loans
529,427

 
90.0

 
522,983

 
90.3

 
 
 
 
 
 
 
 
Consumer loans:
 

 
 

 
 

 
 

Home equity and second mortgage
32,120

 
5.5

 
33,014

 
5.7

Other
5,613

 
1.0

 
5,981

 
1.0

Total consumer loans
37,733

 
6.5

 
38,995

 
6.7

 
 
 
 
 
 
 
 
Commercial business loans
20,460

 
3.5

 
17,499

 
3.0

 
 
 
 
 
 
 
 
Total loans receivable
587,620

 
100.0
%
 
579,477

 
100.0
%
Less:
 

 
 

 
 

 
 

Undisbursed portion of construction 
loans in process
(20,472
)
 
 

 
(18,527
)
 
 

Deferred loan origination fees
(1,707
)
 
 

 
(1,710
)
 
 

Allowance for loan losses
(10,749
)
 
 

 
(11,136
)
 
 

 
 
 
 
 
 
 
 
Total loans receivable, net
$
554,692

 
 

 
$
548,104

 
 

________________________
(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 March 31, 2014 and September 30, 2013 (dollars in thousands):

 
March 31,
2014
 
September 30,
2013
 
Amount
 
Percent
 
Amount
 
Percent
Custom and owner/builder
$
47,365

 
91.3
%
 
$
40,811

 
90.4
%
Speculative one- to four-family
2,054

 
4.0

 
1,428

 
3.2

Commercial real estate
1,993

 
3.8

 
2,239

 
5.0

Multi-family
(including condominiums)
440

 
0.9

 
143

 
0.3

Land development
—

 
—

 
515

 
1.1

Total construction and
 land development loans
$
51,852

 
100.0
%
 
$
45,136

 
100.0
%




Allowance for Loan Losses
The following tables set forth information for the three and six months ended March 31, 2014 and 2013 regarding activity in the allowance for loan losses (dollars in thousands):

 
Three Months Ended March 31, 2014
 
Beginning
Allowance
 
Provision
/(Credit)
 
Charge-
offs
 
Recoveries
 
Ending
Allowance
Mortgage loans:
 
 
 
 
 
 
 
 
 
One-to four-family
$
1,321

 
$
560

 
$
273

 
$
143

 
$
1,751

Multi-family
551

 
(118
)
 
—

 
—

 
433

Commercial
5,113

 
222

 
168

 
1

 
5,168

Construction – custom and owner/builder
332

 
16

 
—

 
—

 
348

Construction – speculative one- to four-family
118

 
(72
)
 
—

 
—

 
46

Construction – commercial
80

 
(55
)
 
—

 
—

 
25

Construction – multi-family
—

 
(126
)
 
—

 
126

 
—

Construction – land development
—

 
(218
)
 
—

 
218

 
—

Land
1,865

 
(242
)
 
162

 
107

 
1,568

Consumer loans:
 

 
 

 
 

 
 

 
 

Home equity and second mortgage
809

 
52

 
—

 
7

 
868

Other
208

 
(12
)
 
2

 
—

 
194

Commercial business loans
348

 
(7
)
 
—

 
7

 
348

Total
$
10,745

 
$
—

 
$
605

 
$
609

 
$
10,749


 
Six Months Ended March 31, 2014
 
Beginning
Allowance
 
Provision
/(Credit)
 
Charge-
offs
 
Recoveries
 
Ending
Allowance
Mortgage loans:
 
 
 
 
 
 
 
 
 
One-to four-family
$
1,449

 
$
774

 
$
623

 
$
151

 
$
1,751

Multi-family
749

 
(316
)
 
—

 
—

 
433

Commercial
5,275

 
352

 
463

 
4

 
5,168

Construction – custom and owner/builder
262

 
86

 
—

 
—

 
348

Construction – speculative one- to four-family
96

 
(50
)
 
—

 
—

 
46

Construction – commercial
56

 
(31
)
 
—

 
—

 
25

Construction – multi-family
—

 
(126
)
 
—

 
126

 
—

Construction – land development
—

 
(287
)
 
—

 
287

 
—

Land
1,940

 
(524
)
 
255

 
407

 
1,568

Consumer loans:
 

 
 

 
 

 
 

 
 

Home equity and second mortgage
782

 
107

 
28

 
7

 
868

Other
200

 
(4
)
 
2

 
—

 
194

Commercial business loans
327

 
19

 
14

 
16

 
348

Total
$
11,136

 
$
—

 
$
1,385

 
$
998

 
$
10,749




 
Three Months Ended March 31, 2013
 
Beginning
Allowance
 
Provision
/(Credit)
 
Charge-
offs
 
Recoveries
 
Ending
Allowance
Mortgage loans:
 
 
 
 
 
 
 
 
 
  One-to four-family
$
1,829

 
$
258

 
$
261

 
$
20

 
$
1,846

  Multi-family
945

 
(14)

 
116

 
—

 
815
  Commercial
4,463

 
640

 
656

 
50

 
4,497
  Construction – custom and owner/builder
294

 
(10)

 
—

 
—

 
284
  Construction – speculative one- to four-family
132

 
9

 
—

 
—

 
141
  Construction – commercial
371

 
(286)

 
—

 
—

 
85
  Construction – land development
20

 
(8)

 
—

 
—

 
12

  Land
2,285

 
409

 
498

 
1

 
2,197
Consumer loans:
 
 
 
 
 
 
 
 
 
  Home equity and second mortgage
722

 
225

 
166

 
—

 
781
  Other
249

 
(4)

 
6

 
—

 
239
Commercial business loans
459

 
(44)

 
—

 
1

 
416
Total
$
11,769

 
$
1,175

 
$
1,703

 
$
72

 
$
11,313




 
Six Months Ended March 31, 2013
 
Beginning
Allowance
 
Provision
/(Credit)
 
Charge-
offs
 
Recoveries
 
Ending
Allowance
Mortgage loans:
 
 
 
 
 
 
 
 
 
  One-to four-family
$
1,558

 
$
791

 
$
524

 
$
21

 
$
1,846

  Multi-family
1,156

 
(226)

 
116

 
1

 
815
  Commercial
4,247

 
856

 
656

 
50

 
4,497
  Construction – custom and owner/builder
386

 
(102)

 
—

 
—

 
284
  Construction – speculative one- to four-family
128

 
13

 
—

 
—

 
141
  Construction – commercial
429

 
(344)

 
—

 
—

 
85
  Construction – land development
—

 
(128)

 
6

 
146

 
12

  Land
2,392

 
510

 
707

 
2

 
2,197
Consumer loans:
 
 
 
 
 
 
 
 
 
  Home equity and second mortgage
759

 
206

 
184

 
—

 
781
  Other
254

 
(9)

 
6

 
—

 
239
Commercial business loans
516

 
(192)

 
—

 
92

 
416
Total
$
11,825

 
$
1,375

 
$
2,199

 
$
312

 
$
11,313

The following table presents information on the loans evaluated individually for impairment and collectively evaluated for impairment in the allowance for loan losses at March 31, 2014 and September 30, 2013 (dollars in thousands):

 
Allowance for Loan Losses
 
Recorded Investment in Loans
 
Individually
Evaluated for
Impairment
 
Collectively
Evaluated for
Impairment
 
Total
 
Individually
Evaluated for
Impairment
 
Collectively
Evaluated for
Impairment
 
Total
March 31, 2014
 
 
 
 
 
 
 
 
 
 
 
Mortgage loans:
 
 
 
 
 
 
 
 
 
 
 
One- to four-family
$
824

 
$
927

 
$
1,751

 
$
7,827

 
$
93,158

 
$
100,985

Multi-family
77

 
356

 
433

 
4,024

 
43,182

 
47,206

Commercial
1,452

 
3,716

 
5,168

 
17,563

 
282,228

 
299,791

Construction – custom and owner/builder
—

 
348

 
348

 
—

 
29,055

 
29,055

Construction – speculative one- to four-family
—

 
46

 
46

 
—

 
1,324

 
1,324

Construction – commercial
—

 
25

 
25

 
—

 
996

 
996

Construction –  multi-family
—

 
—

 
—

 
—

 
5

 
5

Land
337

 
1,231

 
1,568

 
5,514

 
24,079

 
29,593

Consumer loans:
 

 
 
 
 

 
 

 
 

 
 

Home equity and second mortgage
199

 
669

 
868

 
725

 
31,395

 
32,120

Other
—

 
194

 
194

 
12

 
5,601

 
5,613

Commercial business loans
—

 
348

 
348

 
106

 
20,354

 
20,460

Total
$
2,889

 
$
7,860

 
$
10,749

 
$
35,771

 
$
531,377

 
$
567,148

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2013
 

 
 

 
 

 
 

 
 

 
 

Mortgage loans:
 

 
 

 
 

 
 

 
 

 
 

One- to four-family
$
600

 
$
849

 
$
1,449

 
$
8,984

 
$
95,314

 
$
104,298

Multi-family
334

 
415

 
749

 
5,184

 
45,924

 
51,108

Commercial
1,763

 
3,512

 
5,275

 
19,510

 
271,787

 
291,297

Construction – custom and owner/builder
—

 
262

 
262

 
—

 
22,788

 
22,788

Construction – speculative one- to four-family
88

 
8

 
96

 
687

 
236

 
923

Construction – commercial
—

 
56

 
56

 
—

 
2,239

 
2,239

Construction – multi-family
—

 
—

 
—

 
143

 
1

 
144

Construction – land development
—

 
—

 
—

 
515

 
—

 
515

Land
234

 
1,706

 
1,940

 
2,391

 
28,753

 
31,144

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

Home equity and second mortgage
57

 
725

 
782

 
679

 
32,335

 
33,014

Other
—

 
200

 
200

 
6

 
5,975

 
5,981

Commercial business loans
—

 
327

 
327

 
—

 
17,499

 
17,499

Total
$
3,076

 
$
8,060

 
$
11,136

 
$
38,099

 
$
522,851

 
$
560,950



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 ongoing 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 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 at March 31, 2014 and September 30, 2013 (dollars in thousands):

March 31, 2014
Loan Grades
 
 
 
Pass
 
Watch
 
Special
Mention
 
Substandard
 
Total
Mortgage loans:
 
 
 
 
 
 
 
 
 
One- to four-family
$
91,659

 
$
2,289

 
$
887

 
$
6,150

 
$
100,985

Multi-family
37,566

 
1,723

 
7,147

 
770

 
47,206

Commercial
273,149

 
2,368

 
17,898

 
6,376

 
299,791

Construction – custom and owner/builder
29,055

 
—

 
—

 
—

 
29,055

Construction – speculative one- to four-family
1,324

 
—

 
—

 
—

 
1,324

Construction – commercial
996

 
—

 
—

 
—

 
996

Construction – multi-family
5

 
—

 
—

 
—

 
5

 
 
 
 
 
 
 
 
 
 
Land
20,272

 
117

 
2,923

 
6,281

 
29,593

Consumer loans:
 

 
 

 
 

 
 

 
 

Home equity and second mortgage
30,297

 
749

 
178

 
896

 
32,120

Other
5,562

 
39

 
—

 
12

 
5,613

Commercial business loans
20,148

 
108

 
98

 
106

 
20,460

Total
$
510,033

 
$
7,393

 
$
29,131

 
$
20,591

 
$
567,148

September 30, 2013
 

 
 

 
 

 
 

 
 

Mortgage loans:
 
 
 

 
 

 
 

 
 

One- to four-family
$
91,291

 
$
4,032

 
$
769

 
$
8,206

 
$
104,298

Multi-family
41,863

 
132

 
8,337

 
776

 
51,108

Commercial
262,502

 
3,309

 
12,522

 
12,964

 
291,297

Construction – custom and owner/builder
22,788

 
—

 
—

 
—

 
22,788

Construction – speculative one- to four-family
236

 
687

 
—

 
—

 
923

Construction – commercial
2,239

 
—

 
—

 
—

 
2,239

Construction – multi-family
—

 
—

 
—

 
144

 
144

Construction – land development
—

 
—

 
—

 
515

 
515

Land
20,627

 
5,101

 
1,129

 
4,287

 
31,144

Consumer loans:
 

 
 

 
 

 
 

 
 

Home equity and second mortgage
31,096

 
782

 
55

 
1,081

 
33,014

Other
5,937

 
39

 
—

 
5

 
5,981

Commercial business loans
17,029

 
366

 
104

 
—

 
17,499

Total
$
495,608

 
$
14,448

 
$
22,916

 
$
27,978

 
$
560,950



The following tables present an age analysis of past due status of loans by category at March 31, 2014 and September 30, 2013 (dollars in thousands):

 
30–59
Days
Past Due
 
60-89
Days
Past Due
 
Non-
Accrual
 
Past Due
90 Days
or More
and Still
Accruing
 
Total
Past Due
 
Current
 
Total
Loans
March 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
One- to four-family
$
—

 
$
46

 
$
5,168

 
$
—

 
$
5,214

 
$
95,771

 
$
100,985

Multi-family
—

 
—

 
—

 
—

 
—

 
47,206

 
47,206

Commercial
1,846

 
—

 
1,666

 
—

 
3,512

 
296,279

 
299,791

Construction – custom and owner/builder
—

 
—

 
—

 
—

 
—

 
29,055

 
29,055

Construction – speculative one- to four- family
—

 
—

 
—

 
—

 
—

 
1,324

 
1,324

Construction – commercial
—

 
—

 
—

 
—

 
—

 
996

 
996

Construction – multi-family
—

 
—

 
—

 
—

 
—

 
5

 
5

Land
15

 
—

 
5,271

 
—

 
5,286

 
24,307

 
29,593

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 
 
 

Home equity and second mortgage
21

 
—

 
426

 
—

 
447

 
31,673

 
32,120

Other
—

 
39

 
12

 
—

 
51

 
5,562

 
5,613

Commercial business loans
48

 
—

 
106

 
—

 
154

 
20,306

 
20,460

Total
$
1,930

 
$
85

 
$
12,649

 
$
—

 
$
14,664

 
$
552,484

 
$
567,148

 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2013
 

 
 

 
 

 
 

 
 

 
 

 
 

Mortgage loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

One- to four-family
$
14

 
$
1,218

 
$
6,985

 
$
—

 
$
8,217

 
$
96,081

 
$
104,298

Multi-family
—

 
—

 
—

 
—

 
—

 
51,108

 
51,108

Commercial
—

 
2,537

 
3,435

 
—

 
5,972

 
285,325

 
291,297

   Construction – custom and owner/
       builder
—

 
—

 
—

 
—

 
—

 
22,788

 
22,788

Construction – speculative one- to four- family
—

 
—

 
—

 
—

 
—

 
923

 
923

Construction – commercial
—

 
—

 
—

 
—

 
—

 
2,239

 
2,239

Construction – multi-family
—

 
—

 
144

 
—

 
144

 
—

 
144

Construction – land development
—

 
—

 
515

 
—

 
515

 
—

 
515

Land
—

 
—

 
2,146

 
284

 
2,430

 
28,714

 
31,144

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

 


Home equity and second mortgage
101

 
20

 
380

 
152

 
653

 
32,361

 
33,014

Other
1

 
39

 
5

 
—

 
45

 
5,936

 
5,981

Commercial business loans
83

 
15

 
—

 
—

 
98

 
17,401

 
17,499

Total
$
199

 
$
3,829

 
$
13,610

 
$
436

 
$
18,074

 
$
542,876

 
$
560,950




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.
ollowing is a summary of information related to impaired loans as of March 31, 2014 and for the three and six months then ended (in thousands):
 
Recorded
Investment
 
Unpaid Principal Balance (Loan Balance Plus Charge Off)
 
Related
Allowance
 
QTD Average Recorded Investment (1)
 
YTD Average Recorded Investment (2)
 
QTD Interest Income Recognized (1)
 
YTD Interest Income Recognized (2)
 
QTD Cash Basis Interest Income Recognized (1)
 
YTD Cash Basis Interest Income Recognized (2)
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One- to four-family
$
2,863

 
$
3,236

 
$
—

 
$
4,095

 
$
3,622

 
$
—

 
$
—

 
$
—

 
$
—

Multi-family
—

 
982

 
—

 
—

 
315

 
—

 
—

 
—

 
—

Commercial
9,106

 
12,401

 
—

 
7,157

 
8,132

 
28

 
116

 
22

 
88

Construction – custom and owner/builder
—

 
—

 
—

 
—

 
15

 
—

 
—

 
—

 
—

Construction – speculative one- to four-family
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Construction – multi-family
—

 
339

 
—

 
—

 
184

 
—

 
—

 
—

 
—

Construction – land development
—

 
—

 
—

 
72

 
349

 
—

 
—

 
—

 
—

Land
967

 
1,732

 
—

 
95

 
1,635

 
3

 
6

 
2

 
5

Consumer loans:
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgage
236

 
440

 
—

 
231

 
253

 
—

 
—

 
—

 
—

Other
12

 
13

 
—

 
9

 
9

 
—

 
—

 
—

 
—

Commercial business loans
106

 
124

 
—

 
56

 
22

 
—

 
—

 
—

 
—

Subtotal
13,290

 
19,267

 
—

 
11,715

 
14,536

 
31

 
122

 
24

 
93

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
Mortgage loans:
 

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
One- to four-family
4,964

 
4,999

 
824

 
3,905

 
4,351

 
42

 
70

 
30

 
51

Multi-family
4,024

 
4,024

 
77

 
4,479

 
5,004

 
62

 
131

 
46

 
98

Commercial
8,457

 
8,457

 
1,452

 
10,631

 
10,038

 
159

 
323

 
122

 
257

Construction – custom and owner/builder
—

 
—

 
—

 
—

 
20

 
—

 
—

 
—

 
—

Construction – speculative one- to four-family
—

 
—

 
—

 
343

 
552

 
—

 
11

 
—

 
7

Construction – multi-family
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Construction - land development
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Land
4,547

 
4,559

 
337

 
4,607

 
2,780

 
—

 
6

 
—

 
6

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgage
489

 
489

 
199

 
394

 
389

 
3

 
8

 
4

 
6

Other 
—

 
—

 
—

 
 
 
—

 
—

 
—

 
—

 
—

Commercial business loans
—

 
—

 
—

 
 
 
—

 
—

 
—

 
—

 
—

Subtotal
22,481

 
22,528

 
2,889

 
24,359

 
23,134

 
266

 
549

 
202

 
425

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
Mortgage loans:
 

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
One- to four-family
$
7,827

 
$
8,235

 
$
824

 
$
8,000

 
$
7,973

 
$
42

 
$
70

 
$
30

 
$
51

Multi-family
4,024

 
5,006

 
77

 
4,479

 
5,319

 
62

 
131

 
46

 
98

Commercial
17,563

 
20,858

 
1,452

 
17,788

 
18,170

 
187

 
439

 
144

 
345

Construction – custom and owner/builder
—

 
—

 
—

 
—

 
35

 
—

 
—

 
—

 
—

Construction – speculative one- to four-family
—

 
—

 
—

 
343

 
552

 
—

 
11

 
—

 
7

Construction – multi-family
—

 
339

 
—

 
—

 
184

 
—

 
—

 
—

 
—

Construction – land development
—

 
—

 
—

 
72

 
349

 
—

 
—

 
—

 
—

Land
5,514

 
6,291

 
337

 
4,702

 
4,415

 
3

 
12

 
2

 
11

Consumer loans:


 


 


 


 


 


 
 
 


 


Home equity and second mortgage
725

 
929

 
199

 
625

 
642

 
3

 
8

 
4

 
6

Other
12

 
13

 
—

 
9

 
9

 
—

 
—

 
—

 
—

Commercial business loans
106

 
124

 
—

 
56

 
22

 
—

 
—

 
—

 
—

Total
$
35,771

 
$
41,795

 
$
2,889

 
$
36,074

 
$
37,670

 
$
297

 
$
671

 
$
226

 
$
518

________________________________________________
(1)
For the three months ended March 31, 2014
(2)
For the six months ended March 31, 2014
The following is a summary of information related to impaired loans as of and for the year ended September 30, 2013 (in thousands):
 
Recorded
Investment
 
Unpaid Principal Balance (Loan Balance Plus Charge Off)
 
Related
Allowance
 
YTD
Average
Recorded
Investment (1)
 
YTD Interest
Income
Recognized
(1)
 
YTD Cash Basis Interest Income Recognized (1)
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
Mortgage loans:
 
 
 
 
 
 
 
 
 
 
 
One- to four-family
$
5,342

 
$
5,775

 
$
—

 
$
2,661

 
$
18

 
$
13

Multi-family
—

 
982

 
—

 
473

 
3

 
3

Commercial
4,879

 
8,005

 
—

 
8,781

 
322

 
267

Construction – custom and owner/builder
—

 
—

 
—

 
97

 
—

 
—

Construction – speculative one- to four-family
—

 
—

 
—

 
65

 
—

 
—

Construction – multi-family
143

 
608

 
—

 
293

 
—

 
—

Construction – land development
515

 
3,279

 
—

 
534

 
—

 
—

Land
1,188

 
2,133

 
—

 
3,519

 
9

 
8

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

Home equity and second mortgage
380

 
556

 
—

 
266

 
—

 
—

Other
6

 
6

 
—

 
8

 
—

 
—

Commercial business loans
—

 
33

 
—

 
—

 
—

 
—

Subtotal
12,453

 
21,377

 
—

 
16,697

 
352

 
291

 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 

Mortgage loans:
 

 
 

 
 

 
 

 
 

 
 

One- to four-family
3,642

 
3,726

 
600

 
4,397

 
91

 
68

Multi-family
5,184

 
5,184

 
334

 
5,960

 
301

 
230

Commercial
14,631

 
15,297

 
1,763

 
9,052

 
526

 
420

Construction – custom and owner/builder
—

 
—

 
—

 
60

 
—

 
—

Construction – speculative one- to four-family
687

 
687

 
88

 
695

 
29

 
16

Construction – multi-family
—

 
—

 
—

 
—

 
—

 
—

Construction - land development
—

 
—

 
—

 
—

 
—

 
—

Land
1,203

 
1,226

 
234

 
1,962

 
27

 
27

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

Home equity and second mortgage
299

 
299

 
57

 
352

 
16

 
12

Other
—

 
—

 
—

 
—

 
—

 
—

Subtotal
25,646

 
26,419

 
3,076

 
22,478

 
990

 
773

Total
 

 
 

 
 

 
 

 
 

 
 

Mortgage loans:
 

 
 

 
 

 
 

 
 

 
 

One- to four-family
8,984

 
9,501

 
600

 
7,058

 
109

 
81

Multi-family
5,184

 
6,166

 
334

 
6,433

 
304

 
233

Commercial
19,510

 
23,302

 
1,763

 
17,833

 
848

 
687

Construction – custom and owner/builder
—

 
—

 
—

 
157

 
—

 
—

Construction – speculative one- to four-family
687

 
687

 
88

 
760

 
29

 
16

Construction – multi-family
143

 
608

 
—

 
293

 
—

 
—

Construction – land development
515

 
3,279

 
—

 
534

 
—

 
—

Land
2,391

 
3,359

 
234

 
5,481

 
36

 
35

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

Home equity and second mortgage
679

 
855

 
57

 
618

 
16

 
12

Other
6

 
6

 
—

 
8

 
—

 
—

Commercial business loans
—

 
33

 
—

 
—

 
—

 
—

Total
$
38,099

 
$
47,796

 
$
3,076

 
$
39,175

 
$
1,342

 
$
1,064

______________________________________________
(1) For the year ended September 30, 2013


The following table sets forth information with respect to the Company’s non-performing assets at March 31, 2014 and September 30, 2013 (dollars in thousands):

 
March 31,
2014

 
September 30,
2013

Loans accounted for on a non-accrual basis:
 
 
 
Mortgage loans:
 
 
 
    One- to four-family
$
5,168

 
$
6,985

    Commercial
1,666

 
3,435

    Construction – multi-family
—

 
144

    Construction – land development
—

 
515

    Land
5,271

 
2,146

Consumer loans:
 

 
 

    Home equity and second mortgage
426

 
380

Other
12

 
5

Commercial business loans
106

 
—

       Total loans accounted for on a non-accrual basis
12,649

 
13,610

 
 
 
 
Accruing loans which are contractually
past due 90 days or more
—

 
436

 
 
 
 
Total of non-accrual and 90 days past due loans
12,649

 
14,046

 
 
 
 
Non-accrual investment securities
1,204

 
2,187

 
 
 
 
OREO and other repossessed assets, net
13,208

 
11,720

       Total non-performing assets (1)
$
27,061

 
$
27,953

 
 
 
 
Troubled debt restructured loans on accrual status (2)
$
17,284

 
$
18,573

 
 
 
 
Non-accrual and 90 days or more past
due loans as a percentage of loans receivable
2.24
%
 
2.51
%
 
 
 
 
Non-accrual and 90 days or more past
due loans as a percentage of total assets
1.73
%
 
1.88
%
 
 
 
 
Non-performing assets as a percentage of total assets
3.69
%
 
3.75
%
 
 
 
 
Loans receivable (3)
$
565,441

 
$
559,240

 
 
 
 
Total assets
$
732,417

 
$
745,648

___________________________________
(1) Does not include troubled debt restructured loans on accrual status.
(2) Does not include troubled debt restructured loans totaling $2.8 million and $4.0 million reported as non-accrual loans at March 31, 2014 and September 30, 2013, respectively.
(3)  Includes loans held for sale and 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. Troubled debt restructured loans are classified as non-performing loans unless they have been performing in accordance with their modified terms for a period of at least six months. The Company had $20.10 million in troubled debt restructured loans included in impaired loans at March 31, 2014 and had no commitments to lend additional funds on these loans.  The Company had $22.60 million in troubled debt restructured loans included in impaired loans at September 30, 2013 and had $1,000 in commitments to lend additional funds on these loans. The allowance for loan losses allocated to troubled debt restructured loans at March 31, 2014 and September 30, 2013 was $1.80 million and $2.37 million, respectively.

The following table sets forth information with respect to the Company’s troubled debt restructured loans by interest accrual status as of March 31, 2014 and September 30, 2013 (dollars in thousands):

 
March 31, 2014
 
Accruing
 
Non-
Accrual
 
Total
Mortgage loans:
 
 
 
 
 
One- to four-family
$
2,659

 
$
194

 
$
2,853

Multi-family
4,024

 
—

 
4,024

Commercial
10,059

 
1,530

 
11,589

Land
243

 
936

 
1,179

Consumer loans:
 

 
 

 
 

Home equity and second mortgage
299

 
152

 
451

Total
$
17,284

 
$
2,812

 
$
20,096




 
September 30, 2013
 
Accruing
 
Non-
Accrual
 
Total
Mortgage loans:
 
 
 
 
 
One- to four-family
$
1,999

 
$
198

 
$
2,197

Multi-family
5,184

 
—

 
5,184

Commercial
10,160

 
1,574

 
11,734

Construction – speculative one- to four-family
687

 
—

 
687

Construction – land development
—

 
515

 
515

Land
244

 
1,564

 
1,808

Consumer loans:
 

 
 

 
 

Home equity and second mortgage
299

 
180

 
479

Total
$
18,573

 
$
4,031

 
$
22,604


There were no new troubled debt restructured loans during the six months ended March 31, 2014. The following table sets forth information with respect to the Company’s troubled debt restructured loans by portfolio segment that occurred during the year ended September 30, 2013 (dollars in thousands):

September 30, 2013 
Number of
Contracts
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post- Modification
Outstanding
Recorded
Investment
 
End of
Period
Balance
One-to four-family (1)
2

 
$
353

 
$
353

 
$
350

Commercial (2)
2

 
2,327

 
2,327

 
2,318

Total
4

 
$
2,680

 
$
2,680

 
$
2,668

___________________________
(1)
Modifications were a result of a combination of changes (i.e., a reduction in the stated interest rate and an extension of the maturity at an interest rate below current market).
(2)     Modifications were a result of a reduction in the stated interest rate.