Loans

6 Months Ended

Dec. 31, 2014

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

Note 3 – Loans

Major classifications of loans were as follows:

	December 31,		June 30,
	2014		2014
Commercial	$	32,079	$	33,809
Commercial real estate:
Construction		6,868		3,688
Other		135,176		131,518
1 – 4 Family residential real estate:
Owner occupied		29,779		31,044
Non-owner occupied		15,541		16,505
Construction		814		186
Consumer		8,224		8,604
Subtotal		228,481		225,354
Less: Net deferred loan fees		(407)		(388)
Allowance for loan losses		(2,452)		(2,405)
Net Loans	$	225,622	$	222,561

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

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

Allowance for loan losses:
Beginning balance	$	300	$	1,455	$	289	$	375	$	2,419
Provision for loan losses		11		38		(2)		10		57
Loans charged-off		—		—		—		(35)		(35)
Recoveries		—		—		1		10		11
Total ending allowance balance	$	311	$	1,493	$	288	$	360	$	2,452

The following table presents the activity in the allowance for loan losses by portfolio segment for the six months ending December 31, 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		4		53		25		42		124
Loans charged-off		—		—		(33)		(68)		(101)
Recoveries		—		—		2		22		24
Total ending allowance balance	$	311	$	1,493	$	288	$	360	$	2,452

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

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

Allowance for loan losses:
Beginning balance	$	150	$	1,499	$	500	$	337	$	2,486
Provision for loan losses		26		3		(49)		55		35
Loans charged-off		(17)		(1)		—		(54)		(72)
Recoveries		—		—		—		38		38
Total ending allowance balance	$	159	$	1,501	$	451	$	376	$	2,487

The following table presents the activity in the allowance for loan losses by portfolio segment for the six months ending December 31, 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		15		31		(109)		231		168
Loans charged-off		(17)		(1)		(61)		(153)		(232)
Recoveries		—		—		7		48		55
Total ending allowance balance	$	159	$	1,501	$	451	$	376	$	2,487

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 December 31, 2014. Included in the recorded investment in loans is $506 of accrued interest receivable net of deferred loan fees of $407.

					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	$	—	$	106	$	18	$	—	$	124
Collectively evaluated for impairment		311		1,387		270		360		2,328
Total ending allowance balance	$	311	$	1,493	$	288	$	360	$	2,452

Recorded investment in loans:
Loans individually evaluated for impairment	$	—	$	3,736	$	781	$	—	$	4,517
Loans collectively evaluated for impairment		32,134		138,245		45,442		8,242		224,063
Total ending loans balance	$	32,134	$	141,981	$	46,223	$	8,242	$	228,580

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 December 31, 2014 and for the six months ended December 31, 2014:

	As of December 31, 2014						Six Months ended December 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 real estate:
Other	$	2,973	$	2,973	$	—	$	1,426	$	—	$	—
1-4 Family residential real estate:
Owner occupied		119		119		—		120		—		—
Non-owner occupied		74		74		—		37		—		—
With an allowance recorded:
Commercial real estate:
Other		762		762		106		763		18		18
1-4 Family residential real estate:
Owner occupied		125		125		4		126		4		4
Non-owner occupied		464		463		14		505		10		10
Total	$	4,517	$	4,516	$	124	$	2,977	$	32	$	32

	Average		Interest		Cash Basis
	Recorded		Income		Interest
	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial real estate:
Other	$	1,502	$	—	$	—
1-4 Family residential real estate:
Owner occupied		120		—		—
Non-owner occupied		74		—		—
With an allowance recorded:
Commercial real estate:
Other		760		9		9
1-4 Family residential real estate:
Owner occupied		125		2		2
Non-owner occupied		465		5		5
Total	$	3,046	$	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 six months ended December 31, 2013:

	As of June 30, 2014						Six Months ended December 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	$	—	$	—	$	—	$	3	$	—	$	—
Commercial real estate:
Other		1,642		1,635		—		1,009		—		—
1-4 Family residential real estate:
Owner occupied		121		121		—		124		—		—
Non-owner occupied		472		472		—		132		2		2
With an allowance recorded:
Commercial		—		—		—		15		3		3
Commercial real estate:
Other		768		769		110		787		10		10
1-4 Family residential real estate:
Owner occupied		127		127		4		280		—		—
Non-owner occupied		78		78		4		690		9		9
Total	$	3,208	$	3,202	$	118	$	3,040	$	24	$	24

	Average		Interest		Cash Basis
	Recorded		Income		Interest
	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial	$	3	$	—	$	—
Commercial real estate:
Other		1,480		—		—
1-4 Family residential real estate:
Owner occupied		123		—		—
Non-owner occupied		121		1		1
With an allowance recorded:
Commercial		—		—
Commercial real estate:
Other		784		5		5
1-4 Family residential real estate:
Owner occupied		279		—		—
Non-owner occupied		541		3		3
Total	$	3,331	$	9	$	9

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 December 31, 2014 and June 30, 2014:

	December 31, 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		811		—		1,683		—
1 – 4 Family residential:
Owner occupied		289		—		276		—
Non-owner occupied		—		—		—		—
Consumer		—		—		—		—
Total	$	1,100	$	—	$	1,959	$	—

Non-accrual loans 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 December 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	$	—	$	—	$	—	$	—	$	32,134	$	32,134
Commercial real estate:
Construction		—		—		—		—		6,844		6,844
Other		—		—		756		756		134,381		135,137
1-4 Family residential:
Owner occupied		72		69		223		364		29,504		29,868
Non-owner occupied		—		—		—		—		15,535		15,535
Construction		—		—		—		—		820		820
Consumer		58		43		—		101		8,141		8,242
Total	$	130	$	112	$	979	$	1,221	$	227,359	$	228,580

The above table of past due loans includes the recorded investment in non-accrual loans of $56 in the 60-89 days category, $979 in the 90 days or greater category and $65 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 December 31, 2014, the recorded investment of loans classified as troubled debt restructurings was $1,507 with $124 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 December 31, 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 and six months ended December 31, 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 and six month periods ended December 31, 2014 and 2013.

There were no loans classified as troubled debt restructurings for which there was a payment default during the three or six month periods ending December 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 December 31, 2014
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	27,297	$	3,830	$	126	$	—	$	881
Commercial real estate:
Construction		6,791		—		53		—		—
Other		124,291		2,636		5,614		1,526		1,070
1-4 Family residential real estate:
Owner occupied		4,315		—		—		244		25,309
Non-owner occupied		13,682		500		582		537		234
Construction		716		—		—		—		104
Consumer		—		—		—		—		8,242
Total	$	177,092	$	6,966	$	6,375	$	2,307	$	35,840

	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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