Loans

6 Months Ended

Dec. 31, 2015

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

Note 3 – Loans

Major classifications of loans were as follows:

	December 31,		June 30,
	2015		2015
Commercial	$	41,106	$	32,155
Commercial real estate:
Construction		5,129		1,295
Other		142,392		143,680
1 – 4 Family residential real estate:
Owner occupied		31,346		30,027
Non-owner occupied		14,527		14,555
Construction		506		234
Consumer		6,332		6,965
Subtotal		241,338		228,911
Less: Net deferred loan fees		(369)		(392)
Allowance for loan losses		(2,555)		(2,432)
Net Loans	$	238,414	$	226,087

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ending December 31, 2015:

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

Allowance for loan losses:
Beginning balance	$	387	$	1,727	$	278	$	122	$	2,514
Provision for loan losses		10		3		149		30		192
Loans charged-off		—		(2)		(120)		(33)		(155)
Recoveries		—		—		—		4		4
Total ending allowance balance	$	397	$	1,728	$	307	$	123	$	2,555

The following table presents the activity in the allowance for loan losses by portfolio segment for the six months ending December 31, 2015:

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

Allowance for loan losses:
Beginning balance	$	316	$	1,660	$	289	$	167	$	2,432
Provision for loan losses		81		73		138		(8)		284
Loans charged-off		—		(5)		(120)		(51)		(176)
Recoveries		—		—		—		15		15
Total ending allowance balance	$	397	$	1,728	$	307	$	123	$	2,555

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 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, 2015. Included in the recorded investment in loans is $517 of accrued interest receivable net of deferred loan fees of $369.

					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	$	—	$	159	$	8	$	—	$	167
Collectively evaluated for impairment		397		1,569		299		123		2,388
Total ending allowance balance	$	397	$	1,728	$	307	$	123	$	2,555

Recorded investment in loans:
Loans individually evaluated for impairment	$	—	$	3,338	$	1,023	$	—	$	4,361
Loans collectively evaluated for impairment		41,162		144,129		45,499		6,335		237,125
Total ending loans balance	$	41,162	$	147,467	$	46,522	$	6,335	$	241,486

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 June 30, 2015. Included in the recorded investment in loans is $501 of accrued interest receivable net of deferred loan fees of $392.

					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	$	—	$	58	$	12	$	—	$	70
Collectively evaluated for impairment		316		1,602		277		167		2,362
Total ending allowance balance	$	316	$	1,660	$	289	$	167	$	2,432

Recorded investment in loans:
Loans individually evaluated for impairment	$	—	$	2,786	$	615	$	—	$	3,401
Loans collectively evaluated for impairment		32,210		142,139		44,304		6,966		225,619
Total ending loans balance	$	32,210	$	144,925	$	44,919	$	6,966	$	229,020

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, 2015 and for the six months ended December 31, 2015:

	As of December 31, 2015						Six Months ended December 31, 2015
	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:
Construction	$	22	$	22	$	—	$	17	$	—	$	—
Other		2,494		2,200		—		2,177		—		—
1-4 Family residential real estate:
Owner occupied		286		276		—		282		—		—
Non-owner occupied		736		560		—		341		—		—
With an allowance recorded:
Commercial real estate:
Other		1,139		1,116		159		984		18		18
1-4 Family residential real estate:
Owner occupied		187		187		8		188		4		4
Non-owner occupied		—		—		—		229		4		4
Total	$	4,864	$	4,361	$	167	$	4,218	$	26	$	26

	Average		Interest		Cash Basis
	Recorded		Income		Interest
	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial real estate:
Construction	$	22	$	—	$	—
Other		2,202		—		—
1-4 Family residential real estate:
Owner occupied		280		—		—
Non-owner occupied		604		—		—
With an allowance recorded:
Commercial real estate:
Other		1,122		9		9
1-4 Family residential real estate:
Owner occupied		187		2		2
Total	$	4,417	$	11	$	11

The following table presents information related to loans individually evaluated for impairment by class of loans as of June 30, 2015 and for the six months ended December 31, 2014:

	As of June 30, 2015						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	$	2,432	$	2,082	$	—	$	1,426	$	—		—
1-4 Family residential real estate:
Owner occupied		58		35		—		120		—		—
Non-owner occupied		—		—		—		37		—		—
With an allowance recorded:
Commercial real estate:
Other		740		704		58		763		18		18
1-4 Family residential real estate:
Owner occupied		122		123		4		126		4		4
Non-owner occupied		512		457		8		505		10		10
Total	$	3,864	$	3,401	$	70	$	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 the recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2015 and June 30, 2015:

	December 31, 2015				June 30, 2015
			Loans Past Due				Loans Past Due
			Over 90 Days				Over 90 Days
			Still				Still
	Non-accrual		Accruing		Non-accrual		Accruing
Commercial real estate:
Construction	$	22	$	—	$	—	$	—
Other		2,571		—		2,079		—
1 – 4 Family residential:
Owner occupied		343		—		190		—
Non-owner occupied		562		—		—		—
Total	$	3,498	$	—	$	2,269	$	—

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 December 31, 2015 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	$	—	$	—	$	—	$	—	$	41,162	$	41,162
Commercial real estate:
Construction		—		—		—		—		5,108		5,108
Other		46		—		2,063		2,109		140,250		142,359
1-4 Family residential:
Owner occupied		159		7		195		361		31,130		31,491
Non-owner occupied		41		—		336		377		14,147		14,524
Construction		—		—		—		—		507		507
Consumer		41		—		—		41		6,294		6,335
Total	$	287	$	7	$	2,594	$	2,888	$	238,598	$	241,486

The above table of past due loans includes the recorded investment in non-accrual loans $2,594 in the 90 days or greater category and $904 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, 2015 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	$	—	$	25	$	—	$	25	$	32,185	$	32,210
Commercial real estate:
Construction		—		—		—		—		1,270		1,270
Other		62		—		30		92		143,563		143,655
1-4 Family residential:
Owner occupied		268		68		139		475		29,654		30,129
Non-owner occupied		—		8		—		8		14,547		14,555
Construction		—		—		—		—		235		235
Consumer		17		—		—		17		6,949		6,966
Total	$	347	$	101	$	169	$	617	$	228,403	$	229,020

The above table of past due loans includes the recorded investment in non-accrual loans of $169 in the 90 days or greater and $2,100 in the loans not past due category.

Troubled Debt Restructurings:

As of December 31, 2015, the recorded investment of loans classified as troubled debt restructurings was $1,202 with $70 of specific reserves allocated to these loans. As of June 30, 2015, the recorded investment of loans classified as troubled debt restructurings was $1,335 with $70 of specific reserves allocated to these loans. As of December 31, 2015 and June 30, 2015, 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, 2015 and 2014 there were no loan modifications completed that were classified as troubled debt restructurings. There were no charge offs from troubled debt restructurings that were completed during the three or six month periods ended December 31, 2015 and 2014.

There were no loans classified as troubled debt restructurings for which there was a payment default within 12 months following the modification during the three and six month periods ending December 31, 2015 and 2014. 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, 2015
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	35,992	$	4,541	$	95	$	—	$	534
Commercial real estate:
Construction		5,086		—		22		—		—
Other		131,944		4,418		2,723		2,111		1,163
1-4 Family residential real estate:
Owner occupied		3,555		—		—		145		27,791
Non-owner occupied		12,986		444		883		—		211
Construction		263		—		—		—		244
Consumer		—		—		—		—		6,335
Total	$	189,826	$	9,403	$	3,723	$	2,256	$	36,278

	As of June 30, 2015
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	27,359	$	4,030	$	96	$	—	$	725
Commercial real estate:
Construction		1,224		—		46		—		—
Other		133,452		4,473		2,876		2,032		822
1-4 Family residential real estate:
Owner occupied		4,029		—		—		35		26,065
Non-owner occupied		12,602		475		1,025		—		453
Construction		235		—		—		—		—
Consumer		—		—		—		—		6,966
Total	$	178,901	$	8,978	$	4,043	$	2,067	$	35,031