Loans

3 Months Ended

Sep. 30, 2014

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

Note 3 – Loans

Major classifications of loans were as follows:

	September 30, 2014		June 30, 2014
Commercial	$	31,579	$	33,809
Commercial real estate:
Construction		3,285		3,688
Other		133,777		131,518
1 – 4 Family residential real estate:
Owner occupied		29,787		31,044
Non-owner occupied		15,817		16,505
Construction		817		186
Consumer		8,521		8,604
Subtotal		223,583		225,354
Less: Net deferred loan fees		(400)		(388)
Allowance for loan losses		(2,419)		(2,405)
Net Loans	$	220,764	$	222,561

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ending September 30, 2014:

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

Allowance for loan losses:
Beginning balance	$	307	$	1,440	$	294	$	364	$	2,405
Provision for loan losses		(7)		15		27		32		67
Loans charged-off		—		—		(33)		(33)		(66)
Recoveries		—		—		1		12		13
Total ending allowance balance	$	300	$	1,455	$	289	$	375	$	2,419

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ending September 30, 2013:

					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		(11)		28		(60)		176		133
Loans charged-off		—		—		(61)		(99)		(160)
Recoveries		—		—		7		10		17
Total ending allowance balance	$	150	$	1,499	$	500	$	337	$	2,486

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, 2014. Included in the recorded investment in loans is $485 of accrued interest receivable net of deferred loan fees of $400.

					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	$	22	$	—	$	135
Collectively evaluated for impairment		300		1,342		267		375		2,284
Total ending allowance balance	$	300	$	1,455	$	289	$	375	$	2,419

Recorded investment in loans:
Loans individually evaluated for impairment	$	—	$	1,530	$	788	$	—	$	2,318
Loans collectively evaluated for impairment		31,635		135,465		45,716		8,534		221,350
Total ending loans balance	$	31,635	$	136,995	$	46,504	$	8,534	$	223,668

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 loan 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 information related to average recorded investment and interest income associated with loans individually evaluated for impairment by class of loans as of September 30, 2014 and for the three months ended September 30, 2014:

	As of September 30, 2014							Three Months ended September 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	$	773	$	766	$	—	$	1,350	$	—	$	—
1-4 Family residential real estate:
Owner occupied		120		120		—		120		—		—
With an allowance recorded:
Commercial real estate:
Other		763		764		113		766		9		9
1-4 Family residential real estate:
Owner occupied		126		126		4		126		2		2
Non-owner occupied		543		542		18		545		5		5
Total	$	2,325	$	2,318	$	135	$	2,907	$	16	$	16

The following table presents information related to loans individually evaluated for impairment by class of loans as of June 30, 2014 and for the three months ended September 30, 2013:

	As of June 30, 2014						Three Months ended September 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	$	—	$	—	$	—	$	4	$	—	$	—
Commercial real estate:
Other		1,642		1,635		—		537		—		—
1-4 Family residential real estate:
Owner occupied		121		121		—		124		—		—
Non-owner occupied		472		472		—		142		1		1
With an allowance recorded:
Commercial		—		—		—		31		3		3
Commercial real estate:
Other		768		769		110		791		5		5
1-4 Family residential real estate:
Owner occupied		127		127		4		280		—		—
Non-owner occupied		78		78		4		839		6		6
Total	$	3,208	$	3,202	$	118	$	2,748	$	15	$	15

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 September 30, 2014 and June 30, 2014:

	September 30, 2014				June 30, 2014
			Loans Past Due				Loans Past Due
			Over 90 Days				Over 90 Days
			Still				Still
	Non-accrual		Accruing		Non-accrual		Accruing
Commercial	$	—	$	—	$	—	$	—
Commercial real estate:
Other		814		—		1,683		—
1 – 4 Family residential:
Owner occupied		304		—		276		—
Non-owner occupied		—		—		—		—
Consumer		—		—		—		—
Total	$	1,118	$	—	$	1,959	$	—

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 September 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	$	—	$	—	$	—	$	—	$	31,635	$	31,635
Commercial real estate:
Construction		—		—		—		—		3,264		3,264
Other		87		—		757		844		132,887		133,731
1-4 Family residential:
Owner occupied		216		—		223		439		29,432		29,871
Non-owner occupied		—		—		—		—		15,814		15,814
Construction		—		—		—		—		819		819
Consumer		79		9		—		88		8,446		8,534
Total	$	382	$	9	$	980	$	1,371	$	222,297	$	223,668

The above table of past due loans includes the recorded investment in non-accrual loans of $39 in the 30-59 days category, $980 in the 90 days or greater category and $99 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, 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 60-90 days past due category, $1,706 in the 90 days or greater and $91 in the loans not past due category.

Troubled Debt Restructurings:

As of September 30, 2014, the recorded investment of loans classified as troubled debt restructurings was $1,514 with $135 of specific reserves allocated to these loans. 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 September 30, 2014 and June 30, 2014, the Corporation had not committed to lend any additional amounts to customers with outstanding loans that are classified as troubled debt restructurings.

During the three months ended September 30, 2014 and 2013 there were no loan modifications completed that were classified as troubled debt restructurings. There were no charge offs from troubled debt restructurings during the three month periods ended September 30, 2014 and 2013.

There were no loans classified as troubled debt restructurings for which there was a payment default during the three month periods ending September 30, 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 September 30, 2014
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	26,967	$	3,669	$	133	$	—	$	866
Commercial real estate:
Construction		3,207		—		57		—		—
Other		125,364		2,686		3,450		1,530		701
1-4 Family residential real estate:
Owner occupied		3,960		—		—		246		25,665
Non-owner occupied		13,954		515		588		542		215
Construction		377		—		—		—		442
Consumer		—		—		—		—		8,534
Total	$	173,829	$	6,870	$	4,228	$	2,318	$	36,423

	As of June 30, 2014
			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

- 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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