Loans

9 Months Ended

Mar. 31, 2014

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 3 – Loans

Major classifications of loans were as follows:

	March 31, 2014		June 30, 2013
Commercial	$	31,898	$	26,678
Commercial real estate:
Construction		2,592		2,096
Other		126,781		125,630
1 – 4 Family residential real estate:
Owner occupied		30,407		32,755
Non-owner occupied		16,455		17,941
Construction		660		377
Consumer		9,529		11,866
Subtotal		218,322		217,343
Less: Net deferred loan fees		(389)		(303)
Allowance for loan losses		(2,337)		(2,496)
Net Loans	$	215,596	$	214,544

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ending March 31, 2014:

					1-4 Family
			Commercial		Residential
			Real		Real
	Commercial		Estate		Estate		Consumer		Total

Allowance for loan losses:
Beginning balance	$	159	$	1,501	$	451	$	376	$	2,487
Provision for loan losses		100		(26)		(85)		11		—
Loans charged-off		—		(48)		(118)		(38)		(204)
Recoveries		—		3		31		20		54
Total ending allowance balance	$	259	$	1,430	$	279	$	369	$	2,337

The following table presents the activity in the allowance for loan losses by portfolio segment for the nine months ending March 31, 2014:

					1-4 Family
			Commercial		Residential
			Real		Real
	Commercial		Estate		Estate		Consumer		Total

Allowance for loan losses:
Beginning balance	$	161	$	1,471	$	614	$	250	$	2,496
Provision for loan losses		115		5		(194)		242		168
Loans charged-off		(17)		(49)		(179)		(191)		(436)
Recoveries		—		3		38		68		109
Total ending allowance balance	$	259	$	1,430	$	279	$	369	$	2,337

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ending March 31, 2013:

					1-4 Family
			Commercial		Residential
			Real		Real
	Commercial		Estate		Estate		Consumer		Total

Allowance for loan losses:
Beginning balance	$	145	$	1,288	$	644	$	290	$	2,367
Provision for loan losses		(3)		78		(11)		26		90
Loans charged-off		(31)		—		(43)		(19)		(93)
Recoveries		—		—		—		13		13
Total ending allowance balance	$	111	$	1,366	$	590	$	310	$	2,377

The following table presents the activity in the allowance for loan losses by portfolio segment for the nine months ended March 31, 2013:

					1-4 Family
			Commercial		Residential
			Real		Real
	Commercial		Estate		Estate		Consumer		Total

Allowance for loan losses:
Beginning balance	$	143	$	1,283	$	712	$	197	$	2,335
Provision for loan losses		3		107		(64)		125		171
Loans charged-off		(35)		(24)		(58)		(59)		(176)
Recoveries		—		—		—		47		47
Total ending allowance balance	$	111	$	1,366	$	590	$	310	$	2,377

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 March 31, 2014. Included in the recorded investment in loans is $524 of accrued interest receivable net of deferred loan fees of $389.

					1-4 Family
			Commercial		Residential
			Real		Real
	Commercial		Estate		Estate		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	113	$	12	$	—	$	125
Collectively evaluated for impairment		259		1,317		267		369		2,212
Total ending allowance balance	$	259	$	1,430	$	279	$	369	$	2,337

Recorded investment in loans:
Loans individually evaluated for impairment	$	—	$	2,360	$	916	$	—	$	3,276
Loans collectively evaluated for impairment		31,984		126,986		46,686		9,525		215,181
Total ending loans balance	$	31,984	$	129,346	$	47,602	$	9,525	$	218,457

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, 2013. Included in the recorded investment in loans is $546 of accrued interest receivable net of deferred loan fees of $303.

					1-4 Family
			Commercial		Residential
			Real		Real
	Commercial		Estate		Estate		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	3	$	89	$	243	$	—	$	335
Collectively evaluated for impairment		158		1,382		371		250		2,161
Total ending allowance balance	$	161	$	1,471	$	614	$	250	$	2,496

Recorded investment in loans:
Loans individually evaluated for impairment	$	51	$	865	$	1,396	$	—	$	2,312
Loans collectively evaluated for impairment		26,683		126,881		49,780		11,930		215,274
Total ending loans balance	$	26,734	$	127,746	$	51,176	$	11,930	$	217,586

The following table presents information related to loans individually evaluated for impairment by class of loans as of and for the nine months ended March 31, 2014:

	Unpaid				Allowance for		Average		Interest		Cash Basis
	Principal		Recorded		Loan Losses		Recorded		Income		Interest
	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial	$	—	$	—	$	—	$	3	$	—	$	—
Commercial real estate:
Other		1,586		1,580		—		1,193		—		—
1-4 Family residential real estate:
Owner occupied		211		209		—		142		—		—
Non-owner occupied		27		27		—		94		2		2
With an allowance recorded:
Commercial		—		—		—		10		3		3
Commercial real estate:
Other		777		780		113		785		19		19
1-4 Family residential real estate:
Owner occupied		127		128		4		246		2		2
Non-owner occupied		553		552		8		652		12		12
Total	$	3,281	$	3,276	$	125	$	3,125	$	38	$	38

The following table presents information related to average recorded investment and interest income associated with loans individually evaluated for impairment by class of loans for the three months ended March 31, 2014:

	Average		Interest		Cash Basis
	Recorded		Income		Interest
	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial	$	1	$	—	$	—
Commercial real estate:
Other		1,562		—		—
1-4 Family residential real estate:
Owner occupied		180		—		—
Non-owner occupied		19		—		—
With an allowance recorded:
Commercial				—		—
Commercial real estate:
Other		780		9		9
1-4 Family residential real estate:
Owner occupied		178		2		2
Non-owner occupied		575		3		3
Total	$	3,295	$	14	$	14

The following table presents information related to loans individually evaluated for impairment by class of loans as of June 30, 2013 and for the nine months ended March 31, 2013:

	As of June 30, 2013						Nine Months ended March 31, 2013
	Unpaid				Allowance for		Average		Interest		Cash Basis
	Principal		Recorded		Loan Losses		Recorded		Income		Interest
	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial	$	—	$	—	$	—	$	4	$	—	$	—
Commercial real estate:
Other		65		65		—		63		—		—
1-4 Family residential real estate:
Owner occupied		125		125		—		96		—		—
Non-owner occupied		56		56		—		57		3		3
With an allowance recorded:
Commercial		51		51		3		96		8		8
Commercial real estate:
Other		793		800		89		809		66		66
1-4 Family residential real estate:
Owner occupied		283		281		56		305		—		—
Non-owner occupied		933		934		187		923		18		18
Total	$	2,306	$	2,312	$	335	$	2,353	$	95	$	95

	Average		Interest		Cash Basis
	Recorded		Income		Interest
	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial real estate:
Other	$	67	$	—	$	—
1-4 Family residential real estate:
Owner occupied		126		—		—
Non-owner occupied		57		1		1
With an allowance recorded:
Commercial		75		—		—
Commercial real estate:
Other		816		3		3
1-4 Family residential real estate:
Owner occupied		285		—		—
Non-owner occupied		884		6		6
Total	$	2,310	$	10	$	10

The following table presents the recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans as of March 31, 2014 and June 30, 2013:

	March 31, 2014				June 30, 2013
			Loans Past Due				Loans Past Due
			Over 90 Days				Over 90 Days
			Still				Still
	Non-accrual		Accruing		Non-accrual		Accruing
Commercial	$	—	$	—	$	46	$	—
Commercial real estate:
Other		1,628		—		86		—
1 – 4 Family residential:
Owner occupied		243		—		295		—
Non-owner occupied		25		—		663		—
Consumer		—		—		7		—
Total	$	1,896	$	—	$	1,097	$	—

Non-accrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The following table presents the aging of the recorded investment in past due loans as of March 31, 2014 by class of loans:

	Days Past Due
	30 - 59		60 - 89		90 Days or		Total		Loans Not
	Days		Days		Greater		Past Due		Past Due		Total
Commercial	$	5	$	—	$	—	$	5	$	31,979	$	31,984
Commercial real estate:
Construction		—		—		—		—		2,586		2,586
Other		—		108		1,519		1,627		125,133		126,760
1-4 Family residential:
Owner occupied		421		—		168		589		29,897		30,486
Non-owner occupied		39		—		25		64		16,393		16,457
Construction		—		—		—		—		659		659
Consumer		67		44		—		111		9,414		9,525
Total	$	532	$	152	$	1,712	$	2,396	$	216,061	$	218,457

The above table of past due loans includes the recorded investment in non-accrual loans of $41 in the 30-59 days category, $49 in the 60-89 days category, $1,712 in the 90 days or greater category and $94 in the loans not past due category.

The following table presents the aging of the recorded investment in past due loans as of June 30, 2013 by class of loans:

	Days Past Due
	30 – 59		60 - 89		90 Days or		Total		Loans Not
	Days		Days		Greater		Past Due		Past Due		Total
Commercial	$	—	$	—	$	46	$	46	$	26,688	$	26,674
Commercial real estate:
Construction		—		—		—		—		2,088		2,088
Other		1,158		—		—		1,158		124,500		125,658
1-4 Family residential:
Owner occupied		245		—		252		497		32,365		32,862
Non-owner occupied		—		—		84		84		17,854		17,938
Construction		—		—		—		—		376		376
Consumer		72		35		2		109		11,821		11,930
Total	$	1,475	$	8	$	384	$	1,894	$	215,692	$	217,586

The above table of past due loans includes the recorded investment in non-accrual loans of $7 in the 30 - 59 days past due category, $382 in the 90 days or greater and $708 in the loans not past due category.

Troubled Debt Restructurings:

As of March 31, 2014, the recorded investment of loans classified as troubled debt restructurings was $1,546 with $125 of specific reserves allocated to these loans. As of June 30, 2013, the recorded investment of loans classified as troubled debt restructurings was $1,946 with $245 of specific reserves allocated to these loans. As of March 31, 2014 and June 30, 2013, the Corporation had not committed to lend any additional amounts to customers with outstanding loans that are classified as troubled debt restructurings.

During the nine months ended March 31, 2014 there were no loan modifications completed that were classified as troubled debt restructurings. There was no increase to the allowance for loan losses or any charge offs from troubled debt restructurings during the three or nine month periods ended March 31, 2014.

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine months ended March 31, 2013:

			Pre-Modification		Post-Modification
	Number of		Outstanding Recorded		Outstanding Recorded
	Loans		Investment		Investment
Commercial real estate:
Other		1	$	285	$	282
1 – 4 Family residential:
Owner occupied		1		21		21
Total		2	$	306	$	303

Troubled debt restructurings increased the allowance for loan losses by $41 and $43 for the three and nine month periods ending March 31, 2013, respectively. There were no charge offs from troubled debt restructurings during the three or nine month periods ending March 31, 2013.

There were no loans classified as troubled debt restructurings for which there was a payment default during the three or nine month periods ending March 31, 2014 or 2013. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

Credit Quality Indicators:

The Corporation categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, current economic trends and other relevant information. The Corporation analyzes loans individually by classifying the loans as to credit risk. This analysis includes loans with a total outstanding loan relationship greater than $100 and non-homogeneous loans, such as commercial and commercial real estate loans. Management monitors the loans on an ongoing basis for any changes in the borrower’s ability to service their debt and affirm the risk ratings for the loans and leases in their respective portfolio on an annual basis. The Corporation uses the following definitions for risk ratings:

Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are either less than $100 or are included in groups of homogeneous loans. These loans are evaluated based on delinquency status, which are disclosed in the previous table within this footnote. Based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans was as follows:

	As of March 31, 2014
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	28,506	$	2,378	$	68	$	—	$	1,032
Commercial real estate:
Construction		2,522		64		—		—		—
Other		115,553		5,572		2,849		2,360		426
1-4 Family residential real estate:
Owner occupied		4,085		—		—		336		26,065
Non-owner occupied		14,559		840		344		580		134
Construction		659		—		—		—		—
Consumer		—		—		—		—		9,525
Total	$	165,884	$	8,854	$	3,261	$	3,276	$	37,182

	As of June 30, 2013
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	23,886	$	1,236	$	224	$	51	$	1,337
Commercial real estate:
Construction		2,003		85		—		—		—
Other		115,269		4,439		4,073		865		1,012
1-4 Family residential real estate:
Owner occupied		4,083		—		—		406		28,373
Non-owner occupied		14,443		1,104		995		990		406
Construction		243		—		—		—		133
Consumer		—		—		—		—		11,930
Total	$	159,927	$	6,864	$	5,292	$	2,312	$	43,191

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

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