Company Quick10K Filing
Quick10K
Anchor Bancorp
10-Q 2018-09-30 Quarter: 2018-09-30
10-K 2018-06-30 Annual: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-Q 2017-12-31 Quarter: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-K 2017-06-30 Annual: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-Q 2016-12-31 Quarter: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-K 2016-06-30 Annual: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-Q 2015-12-31 Quarter: 2015-12-31
8-K 2018-11-13 Shareholder Vote
8-K 2018-11-01 Other Events
8-K 2018-10-29 Earnings, Exhibits
8-K 2018-07-27 Earnings, Exhibits
8-K 2018-07-17 Enter Agreement, Other Events, Exhibits
8-K 2018-04-30 Earnings, Exhibits
8-K 2018-04-02 Enter Agreement, Exhibits
8-K 2018-01-29 Earnings, Exhibits
8-K 2018-01-10 Earnings, Regulation FD, Exhibits
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ANCB 2018-09-30
Part I - Financial Information
Item 1. Financial Statements
Note 1 - Nature of Business
Note 2 - Basis of Presentation
Note 3 - Recently Issued Accounting Pronouncements
Note 4 - Earnings per Share ("Eps")
Note 5 - Investments
Note 6 - Loans Receivable, Net
Note 7 - Real Estate Owned, Net
Note 8 - Employee Benefit Plans
Note 9 - Fair Value Measurements
Note 10 - Stock-Based Compensation
Note 11 - Federal Income Taxes
Note 12 - Agreement and Plan of Merger
Note 13 - Revenue From Contracts with Customers
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 ancb10-q2018930exhibit311.htm
EX-31.2 ancb10-q2018930exhibit312.htm
EX-32 ancb10-q2018930exhibit32.htm

Anchor Bancorp Earnings 2018-09-30

ANCB 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 ancb10-q2018930.htm 10-Q Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q

[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2018
 or
[  ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
     
For the transition period from _____ to _____
 
Commission File Number: 001-34965
 
ANCHOR BANCORP
 
(Exact name of registrant as specified in its charter)
 
Washington  
  26-3356075
(State or other jurisdiction of incorporation 
(I.R.S. Employer
or organization) 
I.D. Number)
 
 
601 Woodland Square Loop SE, Lacey, Washington
98503
(Address of principal executive offices) 
(Zip Code)
 
 
Registrant’s telephone number, including area code:
  (360) 491-2250
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [   ]

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes [X] No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐    Non-accelerated filer ☐ Smaller reporting company ☒  Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [   ] No [X]




Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  As of November 5, 2018, there were 2,484,030 shares of common stock, $0.01 par value per share, outstanding.




ANCHOR BANCORP
FORM 10-Q
TABLE OF CONTENTS
 
                                                                                                                   
                                                                                                                        
As used in this report, the terms, “we,” “our,” and “us,” and “Company” refer to Anchor Bancorp and its consolidated subsidiary, unless the context indicates otherwise.  When we refer to “Anchor Bank” or the “Bank” in this report, we are referring to Anchor Bank, the wholly owned subsidiary of Anchor Bancorp.



PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ANCHOR BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in thousands, except share data) (Unaudited)
 
September 30, 2018
 
June 30, 2018
ASSETS
 
 
 
Cash and cash equivalents
$
50,546

 
$
17,568

Securities available-for-sale, at fair value, amortized cost of $17,586 and $18,407
16,817

 
17,725

Securities held-to-maturity, at amortized cost, fair value of $3,188 and $3,500
3,287

 
3,584

Loans held for sale
999

 
98

Loans receivable, net of allowance for loan losses of $4,420 and $4,370
369,291

 
392,044

Bank owned life insurance investment, net of surrender charges
20,675

 
20,546

Accrued interest receivable
1,424

 
1,423

Real estate owned ("REO"), net
742

 
737

Federal Home Loan Bank ("FHLB") stock, at cost
2,047

 
2,047

Property, premises, and equipment, at cost, less accumulated depreciation of $12,390 and $12,243
8,515

 
8,664

Deferred tax asset, net
3,187

 
3,585

Prepaid expenses and other assets
1,350

 
1,633

Total assets
$
478,880

 
$
469,654

LIABILITIES AND STOCKHOLDERS’ EQUITY 
 

 
 

LIABILITIES
 

 
 

Deposits:
 

 
 

Noninterest-bearing
$
59,725

 
$
55,381

Interest-bearing
305,932

 
303,640

Total deposits
365,657

 
359,021

 
 
 
 
FHLB advances
37,000

 
37,000

Advance payments by borrowers for taxes and insurance
1,975

 
1,077

Supplemental Executive Retirement Plan liability
1,746

 
1,738

Accounts payable and other liabilities
3,826

 
3,374

Total liabilities
410,204

 
402,210

STOCKHOLDERS’ EQUITY
 
 
 
Preferred stock, $0.01 par value per share authorized 5,000,000 shares; no shares issued or outstanding

 

Common stock, $0.01 par value per share, authorized 45,000,000 shares; 2,484,030 issued and outstanding at September 30, 2018 and 2,484,030 issued and outstanding at June 30, 2018, respectively
25

 
25

Additional paid-in capital
22,343

 
22,298

Retained earnings
48,063

 
46,776

Unearned Employee Stock Ownership Plan ("ESOP") shares
(523
)
 
(540
)
Accumulated other comprehensive loss, net of tax
(1,232
)
 
(1,115
)
Total stockholders’ equity
68,676

 
67,444

Total liabilities and stockholders’ equity
$
478,880

 
$
469,654

 
See accompanying notes to condensed consolidated financial statements (unaudited).

1



 
ANCHOR BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except share data) (Unaudited)
Three Months Ended September 30,
 
 
 
2018
 
2017
 
Interest income:
 
 
 
 
Loans receivable, including fees
$
5,528

 
$
5,133

 
Securities
173

 
34

 
Mortgage-backed securities
115

 
130

 
Total interest income
5,816

 
5,297

 
Interest expense:
 

 
 

 
Deposits
914

 
842

 
FHLB advances
179

 
109

 
Total interest expense
1,093

 
951

 
Net interest income before provision for loan losses
4,723

 
4,346

 
Provision for loan losses
50

 
75

 
Net interest income after provision for loan losses
4,673

 
4,271

 
Noninterest income:
 

 
 

 
Deposit service fees
261

 
313

 
Other deposit fees
194

 
199

 
  Other loan fees
226

 
228

 
(Loss) gain on sale of loans
(2
)
 
110

 
Bank owned life insurance investment
129

 
129

 
Other income
341

 
193

 
Total noninterest income
1,149

 
1,172

 
Noninterest expense:
 

 
 

 
Compensation and benefits
1,962

 
2,084

 
General and administrative expenses
580

 
574

 
Merger expenses
266

 
34

 
Real estate impairment
50

 

 
Real estate owned holding costs, net
20

 
30

 
Federal Deposit Insurance Corporation ("FDIC") insurance premiums
47

 
36

 
Information technology
498

 
537

 
Occupancy and equipment
398

 
433

 
Deposit services
96

 
104

 
Marketing
59

 
91

 
Loss on sale of property, premises and equipment

 
5

 
Total noninterest expense
3,976

 
3,928

 
Income before provision for income taxes
1,846

 
1,515

 
Provision for income taxes
559

 
471

 
Net income
$
1,287

 
$
1,044

 
Basic earnings per share
$
0.52

 
$
0.43

 
Diluted earnings per share
$
0.52

 
$
0.43

 
Weighted average number of basic shares outstanding
2,484,011

 
2,421,049

 
Weighted average number of diluted shares outstanding
2,489,475

 
2,432,960

See accompanying notes to condensed consolidated financial statements (unaudited).

2



 
ANCHOR BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands) (Unaudited)
Three Months Ended September 30,
 
 
 
2018
 
2017
 
NET INCOME
$
1,287

 
$
1,044

 
OTHER COMPREHENSIVE (LOSS) INCOME, net of income tax
 

 
 
 
Unrealized holding (losses) gains on available-for-sale securities during the period, net of income tax (benefit) expense of $(28) and $19, respectively
(117
)
 
36

 
Other comprehensive (loss) income, net of income tax
(117
)
 
36

 
COMPREHENSIVE INCOME
$
1,170

 
$
1,080


See accompanying notes to condensed consolidated financial statements (unaudited).


3


 
ANCHOR BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands, except share data) (Unaudited)
Three Months Ended September 30,
 
 
 
2018
 
2017
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
Net income
$
1,287

 
$
1,044

 
Adjustments to reconcile net income to net cash from operating activities:
 

 
 

 
Depreciation and amortization
149

 
158

 
Net amortization of premiums on securities
52

 
70

 
Provision for loan losses
50

 
75

 
ESOP expense
49

 
43

 
Real estate owned impairment
50

 

 
Deferred federal income taxes
368

 
326

 
Stock compensation expense
13

 
47

 
Increase in cash surrender value of life insurance investment
(129
)
 
(129
)
 
Loss (gain) on sale of loans
2

 
(110
)
 
Originations of loans held for sale
(1,001
)
 
(1,994
)
 
Proceeds from sale of loans held for sale
98

 
3,655

 
Loss on sale of property, premises, and equipment

 
5

 
Change in operating assets and liabilities:
 

 
 

 
Accrued interest receivable
(1
)
 
(12
)
 
Prepaid expenses and other assets
283

 
257

 
Supplemental Executive Retirement Plan ("SERP")
8

 
8

 
Accounts payable and other liabilities
452

 
832

 
Net cash provided by operating activities
1,730

 
4,275

 
CASH FLOWS FROM INVESTING ACTIVITIES
 

 
 

 
Principal repayments on mortgage-backed available-for-sale securities
783

 
937

 
Principal repayments on mortgage-backed held-to-maturity securities
283

 
374

 
Loan originations, net of undisbursed loan proceeds and principal repayments
22,650

 
(7,179
)
 
Capital improvements on real estate owned
(2
)
 

 
Proceeds from sale of property, premises, and equipment, net

 
160

 
Redemption of FHLB stock

 
312

 
Net cash provided by (used in) investing activities
23,714

 
(5,396
)
 
CASH FLOWS FROM FINANCING ACTIVITIES
 

 
 

 
Net change in deposits
6,636

 
3,189

 
Net change in advance payments by borrowers for taxes and insurance
898

 
708

 
Proceeds from FHLB advances

 
15,200

 
Repayment of FHLB advances

 
(23,000
)
 
Net share settlement of stock awards

 
(245
)
 
Net cash provided by (used in) financing activities
$
7,534

 
$
(4,148
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

4


 
ANCHOR BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Dollars in thousands, except share data) (Unaudited)
Three Months Ended September 30,
 
 
 
2018
 
2017
 
NET CHANGE IN CASH AND CASH EQUIVALENTS
$
32,978

 
$
(5,269
)
 
Beginning of period
17,568

 
14,194

 
End of period
$
50,546

 
$
8,925

 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 

 
 

 
Cash paid during the period for:
 
 
 
 
Interest
$
1,093

 
$
960

 
Income taxes
$

 
$
145

 
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES
 
 
 
 
Noncash investing activities:
 

 
 

 
Net loans transferred to real estate owned
$
53

 
$
1,791

 
Unrealized holding (loss) gain on available-for-sale securities, net of tax
$
(117
)
 
$
36


See accompanying notes to condensed consolidated financial statements (unaudited).

5


ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1 - Nature of Business

Anchor Bancorp (the “Company”), a Washington corporation, was formed in connection with the conversion of Anchor Mutual Savings Bank (the “Bank”) from the mutual to the stock form of organization. On January 25, 2011, the Bank completed its conversion from mutual to stock form, changed its name to “Anchor Bank” and became the wholly-owned subsidiary of the Company.

Anchor Bank is a community-based savings bank primarily serving Western Washington through its nine full-service bank offices within Grays Harbor, Thurston, Lewis, and Pierce counties, and one loan production office located in King County, Washington.  Anchor Bank’s business consists of attracting deposits from the public and utilizing those deposits to originate loans.
 
Note 2 - Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. It is recommended that these unaudited interim consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended June 30, 2018 (“2018 Form 10-K”). The results of operations for the three months ended September 30, 2018 are not necessarily indicative of results that may be expected for the entire fiscal year ending June 30, 2019. Certain prior year amounts have been reclassified to conform to current fiscal year presentation. The reclassifications had no impact on previously reported consolidated net income or equity. The Company has evaluated events and transactions subsequent to September 30, 2018 for potential recognition or disclosure.

Note 3 - Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842). The amendments in this ASU require lessees to recognize the following for all leases (with the exception of short-term) at the commencement date; a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The amendments in this ASU leave lessor accounting largely unchanged, although certain targeted improvements were made to align lessor accounting with the lessee accounting model. This ASU simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842), Targeted Improvements. This ASU amended the new leases standard to give entities another option for transition and to provide lessors with a practical expedient. The transition option allows entities to not apply the new leases standard in the comparative periods they present in their financial statements in the year of adoption. The practical expedient provides lessors with an option to not separate non-lease components from the associated lease components when certain criteria are met and requires them to account for the combined component in accordance with the new revenue standard if the associated non-lease components are the predominant components. The amendments have the same effective date as ASU 2016-02. The effect of the adoption will depend on leases at time of adoption. Once adopted, we expect to report higher assets and liabilities as a result of including right-of-use assets and lease liabilities related to certain banking offices and certain equipment under noncancelable operating lease agreements, however, based on current leases the adoption of these ASUs is not expected to have a material impact on the Company's consolidated financial statements.

6

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. The standard will take effect for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Once adopted, we expect our allowance for loan losses to increase, however, until our evaluation is complete the magnitude of the increase will not be known.

In March 2017, the FASB issued ASU No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The ASU shortens the amortization period for certain callable debt securities held at a premium. The standard will take effect for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of ASU No. 2017-08 is not expected to have a material impact on the Company's consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("AOCI"). ASU 2018-02 eliminates the stranded tax effects within AOCI resulting from the application of current U.S. GAAP in response to the change in the U.S. corporate income tax rate from 35 percent to 21 percent as part of the Tax Cuts and Jobs Act of 2017 enacted in December 2017 (the "Tax Act"). Stranded tax effects unrelated to the Tax Act are released from AOCI using the security-by-security approach. The Company elected to early adopt ASU 2018-02 effective during the year ended June 30, 2018 and applied the provisions retrospectively within our Consolidated Balance Sheets and Consolidated Statements of Shareholders' Equity. This adoption resulted in a one-time reclassification of the effect of remeasuring deferred tax liabilities related to items, primarily unrealized gains and losses on investments, within AOCI to retained earnings resulting from the change in the U.S. corporate income tax rate. This reclassification resulted in a decrease to AOCI and an increase to retained earnings in the amount of $39,496 for the year ended June 30, 2018, with no net impact to total stockholders' equity.

In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740). This ASU was issued to provide guidance on the income tax accounting implications of the Tax Act and allows for entities to report provisional amounts for specific income tax effects of the Act for which the accounting under ASC Topic 740 was not yet complete but a reasonable estimate could be determined. A measurement period of one-year is allowed to complete the accounting effects under ASC Topic 740 and revise any previous estimates reported. Any provisional amounts or subsequent adjustments included in an entity’s financial statements during the measurement period should be included in income from continuing operations as an adjustment to tax expense in the reporting period the amounts are determined. The Company adopted this ASU with the provisional adjustments as reported in the Consolidated Financial Statements in the Form 10-Q for the quarter ended December 31, 2017. As of September 30, 2018 the Company did not incur any adjustments to the provisional recognition.

In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This ASU amends the accounting for shared-based payments awards to nonemployees to align with the accounting for employee awards. Under the new guidance, the existing employee guidance will apply to nonemployee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards. Amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and early adoption is permitted. The adoption of ASU No. 2018-07 is not expected to have a material impact on the Company's consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). This ASU modifies the disclosure requirements on fair value measurements. The following disclosure requirements were removed from FASB Accounting Standards Codification (“ASC”) Topic 820 - Fair Value Measurement: (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (2) the policy for timing of transfers between levels; and (3) the valuation processes for Level 3 fair value measurements. This ASU clarifies that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. The ASU adds the following disclosure requirements for Level 3 measurements: (1) changes in unrealized gains and losses for the period included in other comprehensive income for the recurring Level 3 fair value measurements held at the end of the reporting period; and (2) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Amendments in this ASU are effective for

7

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for any removed or modified disclosures. The adoption of ASU 2018-13 is not expected to have a material impact on the Company's consolidated financial statements.

Application of New Accounting Guidance
On July 1, 2018, the Company adopted FASB issued ASU No. 2014‑09, Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively “ASC 606”)which created Topic 606 and supersedes Topic 605, Revenue Recognition. In August 2015, FASB issued ASU No. 2015‑14, Revenue from Contracts with Customers (Topic 606), which postponed the effective date of 2014‑09. The core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In general, the new guidance requires companies to use more judgment and make more estimates than under past guidance, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. For financial reporting purposes, the Company utilized the modified retrospective approach, meaning the ASU is applied only to the most current period presented in the financial statements with the cumulative effect of initially applying the standard recognized at the date of initial application. As a bank holding company, key revenue sources, such as interest income on loans, investment securities and deposits, as well as other sources of income including loan fees, security sales, and derivatives have been identified as out of the scope of this new guidance. Management conducted an assessment of the revenue streams that were affected by the new guidance and identified those considered material and in scope to ensure compliance with the new guidance concluding those related to credit and debit card fees, and service charges and fees on deposit accounts.  No additional changes to processes or procedures were identified for the recognition of revenues in scope. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. The additional disclosures required by this ASU have been included in “Note 13 - Revenue from Contracts with Customers”.
On July 1, 2018, the Company adopted FASB issued ASU No. 2016‑01, Financial Instruments - Overall (Subtopic 825‑10): Recognition and Measurement of Financial Assets and Financial Liabilities. The new guidance improves the recognition and measurement of financial instruments. This ASU requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. Exit price is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This ASU also eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. The adoption of ASU No. 2016-01 did not have a material impact on the Company’s consolidated financial statements. The disclosures to the Company’s consolidated financial statements have been updated appropriately using the exit price notion in “Note 9 - Fair Value of Financial Instruments”.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), a consensus of the FASB’s Emerging Issues Task Force. The ASU is intended to reduce diversity in practice in how certain transactions are presented and classified in the statement of cash flows. Management adopted the new guidance on July 1, 2018. The adoption of ASU No. 2016-15 did not have a material impact on the Company's consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash. The ASU amends the required statement of cash flow disclosures to include the change in amounts generally described as restricted cash. Management adopted the new guidance on July 1, 2018. The adoption of ASU No. 2016-18 did not have a material impact on the Company’s consolidated financial statements.

In May 2017, the FASB issued ASU No. 2017-09, Compensation Stock Compensation (Topic 718): Scope of Modification Accounting. This ASU provides clarity on the guidance related to stock compensation when there has been changes to the terms or conditions of a share-based payment award to which an entity would be required to apply modification accounting under ASC 718. The ASU provides the three following criteria must be met in order to not account for the effect of the modification of terms or conditions: the fair value, the vesting conditions and the classification as an equity or liability instrument of the modified award is the same as the original award immediately before the original award is modified. Management adopted the new guidance on July 1, 2018. The adoption of ASU No. 2017-09 did not have a material impact on the Company's consolidated financial statements.



8

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This ASU amends the hedge accounting recognition and presentation requirements in ASC 815 to (1) improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. The amendments in this ASU permit hedge accounting for hedging relationships involving nonfinancial risk and interest rate risk by removing certain limitations in cash flow and fair value hedging relationships. In addition, the ASU requires an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. Management adopted the new guidance on July 1, 2018. The adoption of ASU No. 2017-12 did not have a material impact on the Company's consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This ASU address how a customer should account for the costs of implementing a cloud computing service arrangement (also referred to as a “hosting arrangement”).  Entities should account for costs associated with implementing a cloud computing arrangement that is considered a service contract in the same way as accounting for implementation costs incurred to develop or obtain software for internal use using the guidance in ASC 350-40. The amendments also addresses when costs should be capitalized rather than expensed, the term to use when amortizing capitalized costs, and how to evaluate the unamortized portion of these capitalized implementation costs for impairment and includes guidance on how to present implementation costs in the financial statements and creates additional disclosure requirements. Amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2020. The adoption of ASU No. 2018-15 is not expected to have a material impact on the Company's consolidated financial statements.


9

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Note 4 - Earnings Per Share ("EPS")

Basic earnings per common share is the amount of earnings available to each share of common stock outstanding during the reporting period and is equal to net income divided by the weighted average number of shares outstanding during the period, without considering any dilutive items. Unvested share-based awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method described in ASC 260-10-45-60B. Diluted earnings per share is the amount of earnings available to each share of common stock outstanding during the period adjusted to include the effect of potentially dilutive common shares that may be issued upon the vesting of restricted stock awards. Therefore, under the two-class method, the difference in EPS is not significant since the Company did not pay dividends. The following table details the calculation of basic and diluted earnings per share:

 
For the Three Months Ended September 30,
 
2018
 
2017
 
(Dollars in thousands, except share data)
Net income
$
1,287

 
$
1,044

Earnings allocated to common shareholders
$
1,287

 
$
1,044

 
 
 
 
Basic weighted-average common shares outstanding
2,484,011

 
2,421,049

Potentially dilutive incremental shares
5,464

 
11,911

Diluted weighted-average common shares outstanding
2,489,475

 
2,432,960

 
 
 
 
Basic earnings per share
$
0.52

 
$
0.43

Diluted earnings per share
$
0.52

 
$
0.43


Shares owned by the Company's ESOP that have not been allocated are not considered to be outstanding for the purpose of computing basic and diluted EPS. As of September 30, 2018 and September 30, 2017 there were 46,766 and 53,649 shares, respectively, which had not been allocated under the Company's ESOP.

Potential dilutive shares are excluded from the computation of earnings per share if their effect is anti-dilutive. For both the three months ended September 30, 2018 and 2017, there were no anti-dilutive shares included in the computation of diluted earnings per share.


10

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Note 5 - Investments

The amortized cost and estimated fair market values of investment securities as of September 30, 2018 and June 30, 2018, were as follows:

September 30, 2018
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
(In thousands)
Securities available-for-sale
 
 
 
 
 
 
 
Municipal bonds
$
152

 
$

 
$

 
$
152

Mortgage-backed securities:
 
 
 
 
 
 
 
FHLMC (1)
10,037

 
10

 
(418
)
 
9,629

FNMA (2)
7,011

 

 
(340
)
 
6,671

GNMA (3)
386

 

 
(21
)
 
365

 
$
17,586

 
$
10

 
$
(779
)
 
$
16,817

Securities held-to-maturity
 

 
 

 
 

 
 

Mortgage-backed securities:
 
 
 
 
 
 
 
FHLMC
$
1,684

 
$
28

 
$
(88
)
 
$
1,624

FNMA
943

 
35

 
(30
)
 
948

GNMA
660

 

 
(44
)
 
616

 
$
3,287

 
$
63

 
$
(162
)
 
$
3,188

(1) Federal Home Loan Mortgage Corporation ("Freddie Mac")
(2) Federal National Mortgage Association ("Fannie Mae")
(3) Government National Mortgage Association ("Ginnie Mae")     

June 30, 2018
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
(In thousands)
Securities available-for-sale
 
 
 
 
 
 
 
Municipal bonds
$
155

 
$

 
$

 
$
155

Mortgage-backed securities:
 
 
 
 
 
 
 
FHLMC 
10,337

 
11

 
(350
)
 
9,998

FNMA
7,494

 

 
(323
)
 
7,171

GNMA 
421

 

 
(20
)
 
401

 
$
18,407

 
$
11

 
$
(693
)
 
$
17,725

Securities held-to-maturity
 

 
 

 
 

 
 

Mortgage-backed securities:
 
 
 
 
 
 
 
FHLMC
$
1,805

 
30

 
(84
)
 
$
1,751

FNMA
982

 
40

 
(26
)
 
996

GNMA
797

 

 
(44
)
 
753

 
$
3,584

 
$
70

 
$
(154
)
 
$
3,500


There were 56 and 55 securities in an unrealized loss position at September 30, 2018 and June 30, 2018, respectively. The unrealized losses on investments in mortgage-backed securities relate principally to the general change in interest rates and illiquidity, and not credit quality, that has occurred since the securities' purchase dates, and such unrecognized losses or gains will continue to vary with general interest rate level fluctuations in the future.  We do not intend to sell the temporarily impaired securities and it is not likely that we will be required to sell the securities prior to their maturity. We do expect to recover the entire amortized cost basis of the securities. The fair value of temporarily impaired securities, the amount of unrealized losses, and the length of time these unrealized losses existed as of the dates indicated, were as follows:

11

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



 
Less Than 12 Months
 
12 Months or Longer
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
September 30, 2018
(In thousands)
Securities available-for-sale
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
FHLMC
$
5,071

 
$
(154
)
 
$
4,320

 
$
(265
)
 
$
9,391

 
$
(419
)
FNMA

 

 
6,671

 
(340
)
 
6,671

 
(340
)
GNMA

 

 
365

 
(20
)
 
365

 
(20
)
 
$
5,071

 
$
(154
)
 
$
11,356

 
$
(625
)
 
$
16,427

 
$
(779
)

 
Less Than 12 Months
 
12 Months or Longer
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
September 30, 2018
(In thousands)
Securities held-to-maturity
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
FHLMC
$

 
$

 
$
1,141

 
$
(88
)
 
$
1,141

 
$
(88
)
FNMA

 

 
410

 
(30
)
 
410

 
(30
)
GNMA

 

 
616

 
(44
)
 
616

 
(44
)
 
$

 
$

 
$
2,167

 
$
(162
)
 
$
2,167

 
$
(162
)

 
Less Than 12 Months
 
12 Months or Longer
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
June 30, 2018
 (In thousands)
Securities available-for-sale
 

 
 

 
 

 
 

 
 

 
 

Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
FHLMC
$
5,696

 
$
(143
)
 
$
3,650

 
$
(207
)
 
$
9,346

 
$
(350
)
FNMA
781

 
(27
)
 
6,389

 
(296
)
 
7,170

 
(323
)
GNMA

 

 
402

 
(20
)
 
402

 
(20
)
 
$
6,477

 
$
(170
)
 
$
10,441

 
$
(523
)
 
$
16,918

 
$
(693
)

 
Less Than 12 Months
 
12 Months or Longer
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
June 30, 2018
 (In thousands)
Securities held-to-maturity
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
FHLMC
$

 
$

 
$
1,206

 
$
(84
)
 
$
1,206

 
$
(84
)
FNMA

 

 
434

 
(26
)
 
434

 
(26
)
GNMA

 

 
753

 
(44
)
 
753

 
(44
)
 
$

 
$

 
$
2,393

 
$
(154
)
 
$
2,393

 
$
(154
)



12

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Contractual maturities of securities at September 30, 2018 are listed below. Expected maturities of mortgage-backed securities may differ from contractual maturities because borrowers may have the right to call or prepay the obligations; therefore, these securities are classified separately with no specific maturity date.
September 30, 2018
Amortized
Cost
 
Fair Value
 
(In thousands)
Securities available-for-sale
 
Municipal bonds:
 
 
 
Due after five to ten years
$
152

 
$
152

Mortgage-backed securities:
 
 
 
FHLMC
10,037

 
9,629

FNMA
7,011

 
6,671

GNMA
386

 
365

 
$
17,586

 
$
16,817

Securities held-to-maturity
 
Mortgage-backed securities:
 
 
 
FHLMC
$
1,684

 
$
1,624

FNMA
943

 
948

GNMA
660

 
616

 
$
3,287

 
$
3,188


There were no sales of securities available-for-sale for the three months ended September 30, 2018 and 2017.

Pledged securities at the dates indicated are summarized as follows:

 
September 30, 2018
 
June 30, 2018
Pledged to secure:
Amortized Cost
 
Fair Value
 
Amortized Cost
 
Fair Value
 
(In thousands)
Public deposits
$
3,825

 
$
3,671

 
$
4,035

 
$
3,903

FHLB borrowings
727

 
730

 
766

 
770

Federal Reserve borrowing line
1,145

 
1,070

 
1,323

 
1,249



13

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Note 6 - Loans Receivable, net

Loans receivable consisted of the following at the dates indicated:
 
 
September 30, 2018
 
June 30,
2018
 
(In thousands)
Real estate:
 
 
 
One-to-four family
$
63,387

 
$
62,110

Multi-family
56,292

 
57,639

Commercial
156,452

 
150,050

Construction
64,106

 
85,866

Land
5,133

 
5,515

Total real estate
345,370

 
361,180

Consumer:
 

 
 

Home equity
12,522

 
12,291

Credit cards
2,198

 
2,284

Automobile
299

 
372

Other consumer
1,139

 
960

Total consumer
16,158

 
15,907

 
 
 
 
Business:
 
 
 
Commercial business
13,098

 
20,329

Total loans
374,626

 
397,416

Less:
 

 
 

Deferred loan fees and loan premiums, net
915

 
1,002

Allowance for loan losses
4,420

 
4,370

Loans receivable, net
$
369,291

 
$
392,044

 
Allowance for Loan Losses. The allowance for loan losses must be maintained at a level necessary to absorb specific losses on impaired loans and probable losses inherent in the loan portfolio. The assessment includes analysis of several different factors, including delinquency, charge-off rates and the changing risk profile of our loan portfolio, as well as local economic conditions such as unemployment rates, bankruptcies and vacancy rates of business and residential properties.
The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2018:

 
One-to- four family
 
Multi-
family
 
Commercial
real estate
 
Construction
 
Land
 
Consumer
(1)
 
Commercial
business
 
Unallocated
 
Three months ended 9/30/18
 
(In thousands)
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
339

 
$
585

 
$
1,478

 
$
1,280

 
$
83

 
$
353

 
$
252

 
$

 
$
4,370

Provision (benefit) for loan losses
41

 
73

 
239

 
(355
)
 
(21
)
 
40

 
33

 

 
50

Charge-offs

 

 

 

 

 
(20
)
 

 

 
(20
)
Recoveries
14

 

 

 
1

 

 
5

 

 

 
20

Ending balance
$
394

 
$
658

 
$
1,717

 
$
926

 
$
62

 
$
378

 
$
285

 
$

 
$
4,420

(1) 
Consumer loans include home equity, credit cards, automobile, and other consumer loans. The only consumer loans with impairment are home equity loans.

14

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)




The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2017:

 
One-to- four family
 
Multi-
family
 
Commercial
real estate
 
Construction
 
Land
 
Consumer
(1)
 
Commercial
business
 
Unallocated
 
Three months ended 9/30/17
 
(In thousands)
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
495

 
$
580

 
$
1,566

 
$
651

 
$
120

 
$
378

 
$
316

 
$

 
$
4,106

Provision (benefit) for loan losses
(207
)
 
10

 
168

 
169

 
(1
)
 
(40
)
 
(24
)
 

 
75

Charge-offs

 

 
(200
)
 

 

 
(1
)
 

 

 
(201
)
Recoveries
14

 

 

 
1

 

 
17

 
5

 

 
37

Ending balance
$
302

 
$
590

 
$
1,534

 
$
821

 
$
119

 
$
354

 
$
297

 
$

 
$
4,017

(1) 
Consumer loans include home equity, credit cards, automobile, and other consumer loans. The only consumer loans with impairment are home equity loans.


A loan is considered impaired when the Company has determined that it may be unable to collect payments of principal or interest when due under the terms of the loan. In the process of identifying loans as impaired, management takes into consideration factors which include payment history and status, collateral value, financial condition of the borrower, and the probability of collecting scheduled payments in the future. Minor payment delays and insignificant payment shortfalls typically do not result in a loan being classified as impaired. The significance of payment delays and shortfalls is considered by management on a case by case basis, after taking into consideration the totality of circumstances surrounding the loans and the borrowers, including payment history and amounts of any payment shortfall, length and reason for delay, and likelihood of return to stable performance. Impairment is measured on a loan by loan basis for all loans in the portfolio except for the smaller groups of homogeneous consumer loans in the portfolio.


15

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


The following table presents loans individually evaluated for impairment by class of loans as of September 30, 2018:

 
Recorded Investments
 
Unpaid Principal Balance
 
Related Allowance
 
(In thousands)
With no allowance recorded
 
 
 
 
 
One-to-four family
$
703

 
$
896

 
$

Home equity
316

 
330

 

Commercial business
63

 
125

 

With an allowance recorded
 

 
 

 
 

One-to-four family
$
2,295

 
$
2,305

 
$
95

Land
246

 
246

 
6

Home equity
252

 
252

 
65

Other consumer
12

 
12

 
12

Commercial business
141

 
162

 
17

Total
 

 
 

 
 

One-to-four family
$
2,998

 
$
3,201

 
$
95

Land
246

 
246

 
6

Home equity
568

 
582

 
65

Other consumer
12

 
12

 
12

Commercial business
204

 
287

 
17

Total
$
4,028

 
$
4,328

 
$
195


The following table presents loans individually evaluated for impairment by class of loans as of June 30, 2018:

 
Recorded Investments
 
Unpaid Principal Balance
 
Related Allowance
 
(In thousands)
With no allowance recorded
 
 
 
 
 
One-to-four family
$
608

 
$
794

 
$

Home equity
330

 
345

 

Commercial business
285

 
366

 

With an allowance recorded
 

 
 

 
 

One-to-four family
$
2,341

 
$
2,351

 
$
85

Land
300

 
300

 
13

Home equity
150

 
150

 
80

Other consumer
14

 
14

 
13

Total
 

 
 

 
 

One-to-four family
$
2,949

 
$
3,145

 
$
85

Land
300

 
300

 
13

Home equity
480

 
495

 
80

Other consumer
14

 
14

 
13

Commercial business
285

 
366

 

Total
$
4,028

 
$
4,320

 
$
191



16

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



The following table presents the average recorded investment in loans individually evaluated for impairment and the interest income recognized for the three months ended September 30, 2018 and 2017:

 
Three Months Ended September 30, 2018
 
Three Months Ended September 30, 2017
 
 
 
Average Recorded Investment
 
Interest Income
Recognized
 
Average Recorded Investment
 
Interest Income
Recognized
 
(In thousands)
With no allowance recorded
 
 
 
 
 
 
 
One-to-four family
$
656

 
$
1

 
$
1,716

 
$
3

Commercial real estate

 

 
996

 

Home equity
323

 
1

 
281

 
1

Commercial business
174

 
1

 
480

 
1

With an allowance recorded
 

 
 

 
 
 
 
One-to-four family
$
2,318

 
$
9

 
$
3,084

 
$
11

Land
273

 
7

 
310

 
7

Home equity
201

 
1

 
261

 
1

Other consumer
13

 

 

 

Commercial business
71

 

 
12

 

Total
 

 
 

 
 
 
 
One-to-four family
$
2,974

 
$
10

 
$
4,800

 
$
14

Commercial real estate

 

 
996

 

Land
273

 
7

 
310

 
7

Home equity
524

 
2

 
542

 
2

Other consumer
13

 

 

 

Commercial business
245

 
1

 
492

 

Total
$
4,029

 
$
20

 
$
7,140

 
$
23









17

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2018:

 
One-to-four
family
 
Multi-
family
 
Commercial
real estate
 
Construction
 
Land
 
Consumer(1)
 
Commercial
business
 
Unallocated
 
Total
 
(In thousands)
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance
$
394

 
$
658

 
$
1,717

 
$
926

 
$
62

 
$
378

 
$
285

 
$

 
$
4,420

Ending balance: individually evaluated for impairment
95

 

 

 

 
6

 
77

 
17

 

 
195

Ending balance: collectively evaluated for impairment
$
299

 
$
658

 
$
1,717

 
$
926

 
$
56

 
$
301

 
$
268

 
$

 
$
4,225

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans receivable:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 
 
 

Ending balance
$
63,387

 
$
56,292

 
$
156,452

 
$
64,106

 
$
5,133

 
$
16,158

 
$
13,098

 
$

 
$
374,626

Ending balance: individually evaluated for impairment
2,998

 

 

 

 
246

 
580

 
204

 

 
4,028

Ending balance: collectively evaluated for impairment
$
60,389

 
$
56,292

 
$
156,452

 
$
64,106

 
$
4,887

 
$
15,578

 
$
12,894

 
$

 
$
370,598

(1) 
 Consumer loans include home equity, credit cards, auto and other consumer loans.

18

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2018:
 
One-to-four
family
 
Multi-
family
 
Commercial
real estate
 
Construction
 
Land
 
Consumer(1)
 
Commercial
business
 
Unallocated
 
Total
 
(In thousands)
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance
$
339

 
$
585

 
$
1,478

 
$
1,280

 
$
83

 
$
353

 
$
252

 
$

 
$
4,370

Ending balance: individually evaluated for impairment
85

 

 

 

 
13

 
93

 

 

 
191

Ending balance: collectively evaluated for impairment
$
254

 
$
585

 
$
1,478

 
$
1,280

 
$
70

 
$
260

 
$
252

 
$

 
$
4,179

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans receivable:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 
 
 

Ending balance
$
62,110

 
$
57,639

 
$
150,050

 
$
85,866

 
$
5,515

 
$
15,907

 
$
20,329

 
$

 
$
397,416

Ending balance: individually evaluated for impairment
2,949

 

 

 

 
300

 
494

 
285

 

 
4,028

Ending balance: collectively evaluated for impairment
$
59,161

 
$
57,639

 
$
150,050

 
$
85,866

 
$
5,215

 
$
15,413

 
$
20,044

 
$

 
$
393,388

(1) 
 Consumer loans include home equity, credit cards, auto, and other consumer loans.

Nonaccrual and Past Due Loans. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual when, in management's opinion, the borrower may be unable to meet payment of obligations as they become due, as well as when required by regulatory provisions.

The following table presents the recorded investment in nonaccrual loans by type of loans as of the dates indicated:

 
September 30, 2018
 
June 30, 2018
 
(In thousands)
One-to-four family
$
450

 
$
507

Home equity
297

 
207

Commercial business
141

 
222

Total
$
888

 
$
936


There were no loans past due 90 days or more and still accruing interest at September 30, 2018 and June 30, 2018.
 

19

ANCHOR BANCORP AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


The following table presents past due loans, net of partial loan charge-offs, by class of loan, as of September 30, 2018:

 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
90 Days Or
More Past Due (1)
 
Total Past
Due
 
Current
 
Total Loans
 
(In thousands)
One-to-four family
$
330

 
$
179

 
$
450

 
$
959

 
$
62,428

 
$
63,387

Multi-family

 

 

 

 
56,292

 
56,292

Commercial real estate

 

 

 

 
156,452

 
156,452

Construction

 

 

 

 
64,106

 
64,106

Land

 

 

 

 
5,133

 
5,133

Home equity
57

 

 
297

 
354

 
12,168

 
12,522

Credit cards
6

 
4

 

 
10

 
2,188

 
2,198

Automobile

 

 

 

 
299

 
299

Other consumer
3

 
3

 

 
6

 
1,133

 
1,139

Commercial business

 

 
141

 
141

 
12,957

 
13,098

Total
$
396

 
$
186

 
$
888

 
$
1,470

 
$
373,156

 
$
374,626

(1) Includes loans on nonaccrual status.


The following table presents past due loans, net of partial loan charge-offs, by class of loan as of June 30, 2018:
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
90 Days Or
More Past Due (1)
 
Total Past
Due
 
Current
 
Total
Loans
 
(In thousands)
One-to-four family
$
683

 
$
122

 
$
507

 
$
1,312

 
$
60,798

 
$
62,110

Multi-family

 

 

 

 
57,639

 
57,639

Commercial real estate