XML 22 R12.htm IDEA: XBRL DOCUMENT v3.19.1
Loans Receivable (Notes)
 3 Months Ended
Mar. 31, 2019
Receivables [Abstract]  
Loans Receivable
Loans receivable are as follows:
 
March 31, 2019
 
December 31, 2018
One-to-four family residential real estate
$
66,833

 
$
70,371

Multi-family mortgage
634,328

 
619,870

Nonresidential real estate
148,601

 
152,442

Construction and land
145

 
172

Commercial loans
172,264

 
187,406

Commercial leases
289,750

 
299,394

Consumer
1,846

 
1,539

 
1,313,767

 
1,331,194

Net deferred loan origination costs
1,062

 
1,069

Allowance for loan losses
(8,354
)
 
(8,470
)
Loans, net
$
1,306,475

 
$
1,323,793


The following tables present the balance in the allowance for loan losses and the loans receivable by portfolio segment and based on impairment method:
 
Allowance for loan losses
 
Loan Balances
 
Individually
evaluated  for
impairment
 
Collectively
evaluated  for
impairment
 
Total
 
Individually
evaluated  for
impairment
 
Collectively
evaluated  for
impairment
 
Total
March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
$
—

 
$
649

 
$
649

 
$
2,365

 
$
64,468

 
$
66,833

Multi-family mortgage
—

 
4,079

 
4,079

 
646

 
633,682

 
634,328

Nonresidential real estate
—

 
1,487

 
1,487

 
242

 
148,359

 
148,601

Construction and land
—

 
3

 
3

 
—

 
145

 
145

Commercial loans
—

 
1,422

 
1,422

 
354

 
171,910

 
172,264

Commercial leases
—

 
690

 
690

 
—

 
289,750

 
289,750

Consumer
—

 
24

 
24

 
—

 
1,846

 
1,846

 
$
—

 
$
8,354

 
$
8,354

 
$
3,607

 
$
1,310,160

 
1,313,767

Net deferred loan origination costs
 
 
 
 
 
 
 
 
 
1,062

Allowance for loan losses
 
 
 
 
 
 
 
 
 
(8,354
)
Loans, net
 
 
 
 
 
 
 
 
 
 
$
1,306,475


 
Allowance for loan losses
 
Loan Balances
 
Individually
evaluated  for
impairment
 
Collectively
evaluated  for
impairment
 
Total
 
Individually
evaluated  for
impairment
 
Collectively
evaluated  for
impairment
 
Total
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
$
—

 
$
699

 
$
699

 
$
2,218

 
$
68,153

 
$
70,371

Multi-family mortgage
—

 
3,991

 
3,991

 
653

 
619,217

 
619,870

Nonresidential real estate
27

 
1,449

 
1,476

 
270

 
152,172

 
152,442

Construction and land
—

 
4

 
4

 
—

 
172

 
172

Commercial loans
—

 
1,517

 
1,517

 
—

 
187,406

 
187,406

Commercial leases
—

 
755

 
755

 
—

 
299,394

 
299,394

Consumer
—

 
28

 
28

 
—

 
1,539

 
1,539

 
$
27

 
$
8,443

 
$
8,470

 
$
3,141

 
$
1,328,053

 
1,331,194

Net deferred loan origination costs
 
 
 
 
 
 
 
 
 
1,069

Allowance for loan losses
 
 
 
 
 
 
 
 
 
(8,470
)
Loans, net
 
 
 
 
 
 
 
 
 
 
$
1,323,793


Activity in the allowance for loan losses is as follows:
 
Three Months Ended
March 31,
 
2019
 
2018
Beginning balance
$
8,470

 
$
8,366

Loans charged off:
 
 
 
One-to-four family residential real estate
(23
)
 
(97
)
Nonresidential real estate
(28
)
 
—

Consumer
(5
)
 
—

 
(56
)
 
(97
)
Recoveries:
 
 
 
One-to-four family residential real estate
17

 
99

Multi-family mortgage
8

 
8

Commercial loans
2

 
223

 
27

 
330

Net (charge-offs) recoveries
(29
)
 
233

Recovery of loan losses
(87
)
 
(258
)
Ending balance
$
8,354

 
$
8,341

Impaired loans
Several of the following disclosures are presented by “recorded investment,” which the FASB defines as “the amount of the investment in a loan, which is not net of a valuation allowance, but which does reflect any direct write-down of the investment.” The following represents the components of recorded investment:
Loan principal balance
Less unapplied payments
Plus negative unapplied balance
Less escrow balance
Plus negative escrow balance
Plus unamortized net deferred loan costs
Less unamortized net deferred loan fees
Plus unamortized premium
Less unamortized discount
Less previous charge-offs
Plus recorded accrued interest
Less reserve for uncollected interest
= Recorded investment
The following tables present loans individually evaluated for impairment by class of loans:
 
 
 
 
 
 
 
 
 
Three months ended
March 31, 2019
 
Loan
Balance
 
Recorded
Investment
 
Partial Charge-off
 
Allowance
for Loan
Losses
Allocated
 
Average
Investment
in Impaired
Loans
 
Interest
Income
Recognized
March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
$
2,896

 
$
2,303

 
$
561

 
$
—

 
$
2,230

 
$
15

One-to-four family residential real estate - non-owner occupied
86

 
32

 
56

 
—

 
43

 
—

Multi-family mortgage - Illinois
645

 
649

 
—

 
—

 
651

 
9

Nonresidential real estate
356

 
242

 
121

 
—

 
61

 
—

Commercial loans - health care
354

 
354

 
—

 
—

 
89

 
6

 
$
4,337

 
$
3,580

 
$
738

 
$
—

 
$
3,074

 
$
30

 
 
 
 
 
 
 
 
 
Year ended
December 31, 2018
 
Loan
Balance
 
Recorded
Investment
 
Partial Charge-off
 
Allowance
for Loan
Losses
Allocated
 
Average
Investment
in Impaired
Loans
 
Interest
Income
Recognized
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
$
2,751

 
$
2,155

 
$
575

 
$
—

 
$
3,274

 
$
41

One-to-four family residential real estate - non-owner occupied
86

 
46

 
43

 
—

 
95

 
—

Multi-family mortgage - Illinois
654

 
653

 
—

 
—

 
795

 
39

 
3,491

 
2,854

 
$
618

 
—

 
4,164

 
80

With an allowance recorded - Nonresidential real estate
356

 
270

 
93

 
27

 
21

 
—

 
$
3,847

 
$
3,124

 
$
711

 
$
27

 
$
4,185

 
$
80

Nonaccrual Loans
The following tables present the recorded investment in nonaccrual loans and loans past due over 90 days still on accrual by class of loans:
 
Loan Balance
 
Recorded
Investment
 
Loans Past
Due Over 90
Days, Still
Accruing
March 31, 2019
 
 
 
 
 
One-to-four family residential real estate
$
1,089

 
$
812

 
$
—

One-to-four family residential real estate – non-owner occupied
86

 
32

 
—

Nonresidential real estate
356

 
242

 
—

Commercial loans – health care
354

 
354

 
—

 
$
1,885

 
$
1,440

 
$
—

December 31, 2018
 
 
 
 
 
One-to-four family residential real estate
$
2,167

 
$
1,162

 
$
—

One-to-four family residential real estate – non-owner occupied
270

 
78

 
—

Nonresidential real estate
356

 
270

 
—

 
$
2,793

 
$
1,510

 
$
—


Nonaccrual loans and impaired loans are defined differently. Some loans may be included in both categories, and some loans may only be included in one category. Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.
The Company’s reserve for uncollected loan interest was $40,000 and $38,000 at March 31, 2019 and December 31, 2018, respectively. When a loan is on nonaccrual status and the ultimate collectability of the total principal of an impaired loan is in doubt, all payments are applied to principal under the cost recovery method. Alternatively, when a loan is on non-accrual status but there is doubt concerning only the ultimate collectability of interest, contractual interest is credited to interest income only when received, under the cash basis method pursuant to the provisions of FASB ASC 310–10, as applicable. In all cases, the average balances are calculated based on the month–end balances of the financing receivables within the period reported pursuant to the provisions of FASB ASC 310–10, as applicable.
Past Due Loans
The following tables present the aging of the recorded investment of loans at March 31, 2019 by class of loans:
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
90 Days or
Greater
Past Due
 
Total Past
Due
 
Loans Not
Past Due
 
Total
One-to-four family residential real estate loans
$
559

 
$
35

 
$
804

 
$
1,398

 
$
52,595

 
$
53,993

One-to-four family residential real estate loans – non-owner occupied
141

 
147

 
33

 
321

 
12,141

 
12,462

Multi-family mortgage - Illinois
—

 
—

 
—

 
—

 
273,114

 
273,114

Multi-family mortgage - Other
—

 
—

 
—

 
—

 
357,588

 
357,588

Nonresidential real estate
283

 
—

 
242

 
525

 
146,566

 
147,091

Land
—

 
—

 
—

 
—

 
142

 
142

Commercial loans:
 
 
 
 
 
 

 
 
 

Regional commercial banking
—

 
—

 
—

 
—

 
37,719

 
37,719

Health care
—

 
—

 
—

 
—

 
85,048

 
85,048

Direct commercial lessor
—

 
—

 
—

 
—

 
49,975

 
49,975

Commercial leases:
 
 
 
 
 
 


 
 
 


Investment rated commercial leases
336

 
—

 
—

 
336

 
158,095

 
158,431

Other commercial leases
37

 
—

 
—

 
37

 
133,324

 
133,361

Consumer
6

 
6

 
—

 
12

 
1,847

 
1,859

 
$
1,362

 
$
188

 
$
1,079

 
$
2,629

 
$
1,308,154

 
$
1,310,783


The following tables present the aging of the recorded investment of loans at December 31, 2018 by class of loans:
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
90 Days or
Greater
Past Due
 
Total Past
Due
 
Loans Not
Past Due
 
Total
One-to-four family residential real estate loans
$
1,380

 
$
637

 
$
1,162

 
$
3,179

 
$
53,820

 
$
56,999

One-to-four family residential real estate loans – non-owner occupied
387

 
10

 
78

 
475

 
12,460

 
12,935

Multi-family mortgage - Illinois
458

 
—

 
—

 
458

 
275,283

 
275,741

Multi-family mortgage - Other
—

 
—

 
—

 
—

 
340,470

 
340,470

Nonresidential real estate
—

 
270

 
—

 
270

 
149,271

 
149,541

Land
—

 
—

 
—

 
—

 
169

 
169

Commercial loans:
 
 
 
 
 
 

 
 
 

Regional commercial banking
—

 
—

 
—

 
—

 
39,712

 
39,712

Health care
—

 
—

 
—

 
—

 
85,418

 
85,418

Direct commercial lessor
—

 
—

 
—

 
—

 
62,719

 
62,719

Commercial leases:
 
 
 
 
 
 


 
 
 


Investment rated commercial leases
505

 
—

 
—

 
505

 
166,713

 
167,218

Other commercial leases
—

 
—

 
—

 
—

 
133,958

 
133,958

Consumer
40

 
4

 
—

 
44

 
1,508

 
1,552

 
$
2,770

 
$
921

 
$
1,240

 
$
4,931

 
$
1,321,501

 
$
1,326,432

Troubled Debt Restructurings
The Company evaluates loan extensions or modifications in accordance with FASB ASC 310–40 with respect to the classification of the loan as a Troubled Debt Restructuring ("TDR"). In general, if the Company grants a loan extension or modification to a borrower experiencing financial difficulties for other than an insignificant period of time that includes a below–market interest rate, principal forgiveness, payment forbearance or other concession intended to minimize the economic loss to the Company, the loan extension or loan modification is classified as a TDR. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal then due and payable, management measures any impairment on the restructured loan in the same manner as for impaired loans as noted above.
The Company had $17,000 of TDRs at March 31, 2019 and December 31, 2018. No specific valuation reserves were allocated to those loans at March 31, 2019 and December 31, 2018. The Company had no outstanding commitments to borrowers whose loans were classified as TDRs at either date.
The following table presents loans classified as TDRs:
 
March 31, 2019
 
December 31, 2018
One-to-four family residential real estate - nonaccrual
$
17

 
$
17


During the three months ended March 31, 2019 and 2018, there were no loans modified and classified as TDRs. During the three months ended March 31, 2019 and 2018, there were no TDR loans that subsequently defaulted within twelve months of their modification.
A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.
To determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.
Credit Quality Indicators
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans based on credit risk. This analysis includes non-homogeneous loans, such as commercial and commercial real estate loans. This analysis is performed on a monthly basis. The Company uses the following definitions for risk ratings:
Special Mention. A Special Mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.
Substandard. Loans categorized as Substandard continue to accrue interest, but exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt. The loans continue to accrue interest because they are well secured and collection of principal and interest is expected within a reasonable time. The risk rating guidance published by the Office of the Comptroller of the Currency clarifies that a loan with a well-defined weakness does not have to present a probability of default for the loan to be rated Substandard, and that an individual loan’s loss potential does not have to be distinct for the loan to be rated Substandard.
Nonaccrual. An asset classified Nonaccrual has all the weaknesses inherent in one classified 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.
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered “Pass” rated loans.
As of March 31, 2019, the risk categories of loans by class of loans are as follows:
 
Pass
 
Special
Mention
 
Substandard
 
Nonaccrual
 
Total
One-to-four family residential real estate loans
$
52,783

 
$
359

 
$
347

 
$
813

 
$
54,302

One-to-four family residential real estate loans – non-owner occupied
12,293

 
168

 
37

 
33

 
12,531

Multi-family mortgage - Illinois
274,368

 
—

 
214

 
—

 
274,582

Multi-family mortgage - Other
359,746

 
—

 
—

 
—

 
359,746

Nonresidential real estate
147,984

 
280

 
95

 
242

 
148,601

Land
145

 
—

 
—

 
—

 
145

Commercial loans:
 
 
 
 
 
 
 
 

Regional commercial banking
32,335

 
5,304

 
—

 
—

 
37,639

Health care
81,527

 
—

 
3,033

 
354

 
84,914

Direct commercial lessor
49,711

 
—

 
—

 
—

 
49,711

Commercial leases:
 
 
 
 
 
 
 
 


Investment rated commercial leases
156,569

 
646

 
—

 
—

 
157,215

Other commercial leases
132,535

 
—

 
—

 
—

 
132,535

Consumer
1,828

 
9

 
9

 
—

 
1,846


$
1,301,824

 
$
6,766

 
$
3,735

 
$
1,442

 
$
1,313,767

 
As of December 31, 2018, the risk categories of loans by class of loans are as follows:
 
Pass
 
Special
Mention
 
Substandard
 
Nonaccrual
 
Total
One-to-four family residential real estate loans
$
55,353

 
$
495

 
$
328

 
$
993

 
$
57,169

One-to-four family residential real estate loans – non-owner occupied
12,911

 
—

 
37

 
254

 
13,202

Multi-family mortgage - Illinois
279,021

 
—

 
216

 
—

 
279,237

Multi-family mortgage - Other
340,633

 
—

 
—

 
—

 
340,633

Nonresidential real estate
151,793

 
281

 
98

 
270

 
152,442

Land
172

 
—

 
—

 
—

 
172

Commercial loans:
 
 
 
 
 
 
 
 

Regional commercial banking
34,764

 
4,810

 
—

 
—

 
39,574

Health care
85,001

 
—

 
342

 
—

 
85,343

Direct commercial lessor
62,489

 
—

 
—

 
—

 
62,489

Commercial leases:
 
 
 
 
 
 
 
 


Investment rated commercial leases
165,508

 
701

 
—

 
—

 
166,209

Other commercial leases
133,185

 
—

 
—

 
—

 
133,185

Consumer
1,529

 
3

 
7

 
—

 
1,539

 
$
1,322,359

 
$
6,290

 
$
1,028

 
$
1,517

 
$
1,331,194