LOANS

12 Months Ended

Jun. 30, 2014

Receivables [Abstract]

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

NOTE 3—LOANS

Major classifications of loans were as follows as of June 30:

	2014		2013
Commercial	$	33,809	$	26,678
Commercial real estate:
Construction		3,688		2,096
Other		131,518		125,630
1 – 4 Family residential real estate:
Owner occupied		31,044		32,755
Non-owner occupied		16,505		17,941
Construction		186		377
Consumer		8,604		11,866
Subtotal		225,354		217,343
Less: Deferred loan fees and costs		(388)		(303)
Allowance for loan losses		(2,405)		(2,496)
Net loans	$	222,561	$	214,544

The following table presents the activity in the allowance for loan losses by portfolio segment for the year ending June 30, 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		163		15		(177)		248		249
Loans charged-off		(17)		(49)		(214)		(241)		(521)
Recoveries		—		3		71		107		181
Total ending allowance balance	$	307	$	1,440	$	294	$	364	$	2,405

The following table presents the activity in the allowance for loan losses by portfolio segment for the year ending June 30, 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		53		212		(35)		107		337
Loans charged-off		(35)		(24)		(64)		(115)		(238)
Recoveries		—		—		1		61		62
Total ending allowance balance	$	161	$	1,471	$	614	$	250	$	2,496

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, 2014. Included in the recorded investment in loans is $491 of accrued interest receivable net of deferred loans fees of $388.

	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	$	—	$	110	$	8	$	—	$	118
Collectively evaluated for impairment		307		1,330		286		364		2,287
Total ending allowance balance	$	307	$	1,440	$	294	$	364	$	2,405
Recorded investment in loans:
Loans individually evaluated for impairment	$	—	$	2,404	$	798	$	—	$	3,202
Loans collectively evaluated for impairment		33,855		132,760		47,019		8,621		222,255
Total ending loans balance	$	33,855	$	135,164	$	47,817	$	8,621	$	225,457

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 loans 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 year ended June 30, 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 real estate:
Other	$	1,642	$	1,635	$	—	$	1,304	$	—	$	—
1-4 Family residential real estate:
Owner occupied		121		121		—		152		39		39
Non-owner occupied		472		472		—		71		2		2
With an allowance recorded:
Commercial		—		—		—		8		3		3
Commercial real estate:
Other		768		769		110		781		28		28
1-4 Family residential real estate:
Owner occupied		127		127		4		216		8		8
Non-owner occupied		78		78		4		626		13		13
Total	$	3,208	$	3,202	$	118	$	3,158	$	93	$	93

The following table presents information related to loans individually evaluated for impairment by class of loans as of and for the year ended June 30, 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 real estate:
Other	$	65	$	65	$	—	$	63	$	—	$	—
1-4 Family residential real estate:
Owner occupied		125		125		—		103		—		—
Non-owner occupied		56		56		—		57		5		5
With an allowance recorded:
Commercial		51		51		3		88		8		8
Commercial real estate:
Other		793		800		89		808		72		72
1-4 Family residential real estate:
Owner occupied		283		281		56		298		—		—
Non-owner occupied		933		934		187		927		24		24
Total	$	2,306	$	2,312	$	335	$	2,344	$	109	$	109

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 June 30, 2014 and 2013:

	June 30, 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		1,683		—		86		—
1 – 4 Family residential:
Owner occupied		276		—		295		—
Non-owner occupied		—		—		663		—
Consumer		—		—		7		2
Total	$	1,959	$	—	$	1,097	$	2

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 June 30, 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	$	66	$	—	$	—	$	66	$	33,789	$	33,855
Commercial real estate:
Construction		—		—		—		—		3,679		3,679
Other		—		—		1,625		1,625		129,860		131,485
1-4 Family residential:
Owner occupied		111		122		81		314		30,817		31,131
Non-owner occupied		—		39		—		39		16,462		16,501
Construction		—		—		—		—		185		185
Consumer		106		—		—		106		8,515		8,621
Total	$	283	$	161	$	1,706	$	2,150	$	223,307	$	225,457

The above table of past due loans includes the recorded investment in non-accrual loans of $40 in the 30-59 days past due category, $122 in the 60-89 days past due category, $1,706 in the 90 days or greater category and $91 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	$	26,734
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	$	35	$	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 category and $708 in the loans not past due category.

Troubled Debt Restructurings:

As of June 30, 2014, the recorded investment of loans classified as troubled debt restructurings was $1,528 with $118 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 June 30, 2014 and 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 year ended June 30, 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 twelve month period ended June 30, 2014.

During the year ended June 30, 2013, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included a reduction of the stated interest rate of the loan as well as an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. During the 2013 fiscal year, modifications completed involving a reduction of the stated interest rate of the loan for periods ranging from 6 months to 5 years and modifications involving the extension of the maturity date for a period of 5 years to 10 years.

The following table presents loans by class modified as troubled debt restructurings that occurred during the years ended June 30, 2013:

			Pre-Modification		Post-Modification
	Number of		Outstanding Recorded		Outstanding Recorded
	Loans		Investment		Investment
June 30, 2013
Commercial real estate:
Other		1	$	285	$	282
1 – 4 Family residential:
Owner occupied		1		21		21
Total		2	$	306	$	303

The troubled debt restructurings described above increased the allowance for loan losses by $42 and there were no charge offs from troubled debt restructurings during the fiscal year ending June 30, 2013.

There were no loans classified as troubled debt restructurings for which there was a payment default during the 2014 or the 2013 fiscal years. 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, and current economic trends, among other factors. 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. This analysis is performed on a monthly 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 was discussed previously.

As of June 30, 2014, and based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans is as follows:

			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	29,337	$	3,503	$	62	$	—	$	953
Commercial real estate:
Construction		3,619		—		60		—		—
Other		121,659		3,040		3,526		2,404		856
1-4 Family residential real estate:
Owner occupied		3,959		—		—		248		26,924
Non-owner occupied		14,632		565		599		550		155
Construction		—		—		—		—		185
Consumer		—		—		—		—		8,621
Total	$	173,206	$	7,108	$	4,247	$	3,202	$	37,694

As of June 30, 2013, and based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans is as follows:

	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

The Bank has granted loans to certain of its executive officers, directors and their affiliates. A summary of activity during the year ended June 30, 2014 of related party loans were as follows:

Principal balance, July 1	$	694
New loans		2,742
Repayments		(344)
Principal balance, June 30	$	3,092