Loans

9 Months Ended

Mar. 31, 2016

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

Note 3 – Loans

Major classifications of loans were as follows:

	March 31,		June 30,
	2016		2015
Commercial	$	43,115	$	32,127
Commercial real estate:
Construction		5,543		1,267
Other		145,062		143,375
1 – 4 Family residential real estate:
Owner occupied		30,932		30,050
Non-owner occupied		14,675		14,518
Construction		660		234
Consumer		6,207		6,948
Subtotal		246,194		228,519
Allowance for loan losses		(2,663)		(2,432)
Net Loans	$	243,531	$	226,087

Loans presented above are net of net deferred loan fees of $361 and $392 for March 31, 2016 and June 30, 2015, respectively.

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ending March 31, 2016:

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

Allowance for loan losses:
Beginning balance	$	397	$	1,728	$	307	$	123	$	2,555
Provision for loan losses		61		52		17		—		130
Loans charged-off		—		—		(18)		(7)		(25)
Recoveries		—		—		—		3		3
Total ending allowance balance	$	458	$	1,780	$	306	$	119	$	2,663

The following table presents the activity in the allowance for loan losses by portfolio segment for the nine months ending March 31, 2016:

					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		142		125		155		(8)		414
Loans charged-off		—		(5)		(138)		(58)		(201)
Recoveries		—		—		—		18		18
Total ending allowance balance	$	458	$	1,780	$	306	$	119	$	2,663

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

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

Allowance for loan losses:
Beginning balance	$	311	$	1,493	$	288	$	360	$	2,452
Provision for loan losses		50		125		(2)		(83)		90
Loans charged-off		—		(128)		—		(7)		(135)
Recoveries		—		1		—		17		18
Total ending allowance balance	$	361	$	1,491	$	286	$	287	$	2,425

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

					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		54		178		23		(41)		214
Loans charged-off		—		(128)		(33)		(75)		(236)
Recoveries		—		1		2		39		42
Total ending allowance balance	$	361	$	1,491	$	286	$	287	$	2,425

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, 2016. Included in the recorded investment in loans is $552 of accrued interest receivable.

					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	$	—	$	164	$	3	$	—	$	167
Collectively evaluated for impairment		458		1,616		303		119		2,496
Total ending allowance balance	$	458	$	1,780	$	306	$	119	$	2,663

Recorded investment in loans:
Loans individually evaluated for impairment	$	—	$	3,228	$	1,041	$	—	$	4,269
Loans collectively evaluated for impairment		43,225		147,674		45,356		6,222		242,477
Total ending loans balance	$	43,225	$	150,902	$	46,397	$	6,222	$	246,746

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.

					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 March 31, 2016 and for the nine months ended March 31, 2016:

	As of March 31, 2016						Nine Months ended March 31, 2016
	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	$	20	$	20	$	—	$	18	$	—	$	—
Other		2,294		2,105		—		2,164		—		—
1-4 Family residential real estate:
Owner occupied		409		382		—		280		1		1
Non-owner occupied		731		556		—		413		—		—
With an allowance recorded:
Commercial real estate:
Other		1,120		1,103		164		1,026		26		26
1-4 Family residential real estate:
Owner occupied		103		103		3		156		5		5
Non-owner occupied		—		—		—		153		4		4
Total	$	4,677	$	4,269	$	167	$	4,210	$	36	$	36

	Average		Interest		Cash Basis
	Recorded		Income		Interest
	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial real estate:
Construction	$	20	$	—	$	—
Other		2,183		—		—
1-4 Family residential real estate:
Owner occupied		294		1		1
Non-owner occupied		557		—		—
With an allowance recorded:
Commercial real estate:
Other		1,111		8		8
1-4 Family residential real estate:
Owner occupied		159		1		1
Total	$	4,324	$	10	$	10

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

	As of June 30, 2015						Nine Months ended March 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:
Other	$	2,432	$	2,082	$	—	$	1,735	$	25		25
1-4 Family residential real estate:
Owner occupied		58		35		—		190		—		—
Non-owner occupied		—		—		—		49		1		1
With an allowance recorded:
Commercial real estate:
Other		740		704		58		763		27		27
1-4 Family residential real estate:
Owner occupied		122		123		4		125		6		6
Non-owner occupied		512		457		8		490		14		14
Total	$	3,864	$	3,401	$	70	$	3,352	$	73	$	73

	Average		Interest		Cash Basis
	Recorded		Income		Interest
	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial real estate:
Other	$	2,355	$	25	$	25
1-4 Family residential real estate:
Owner occupied		330		—		—
Non-owner occupied		72		1		1
With an allowance recorded:
Commercial real estate:
Other		762		9		9
1-4 Family residential real estate:
Owner occupied		124		2		2
Non-owner occupied		462		4		4
Total	$	4,105	$	41	$	41

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, 2016 and June 30, 2015:

	March 31, 2016				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	$	20	$	—	$	—	$	—
Other		2,554		—		2,079		—
1 – 4 Family residential:
Owner occupied		213		—		190		—
Non-owner occupied		556		—		—		—
Consumer		—		6		—		—
Total	$	3,343	$	6	$	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 March 31, 2016 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	$	49	$	—	$	—	$	49	$	43,176	$	43,225
Commercial real estate:
Construction		—		—		—		—		5,555		5,555
Other		43		—		2,110		2,153		143,194		145,347
1-4 Family residential:
Owner occupied		131		—		196		327		30,697		31,024
Non-owner occupied		—		—		336		336		14,377		14,713
Construction		—		—		—		—		660		660
Consumer		—		—		6		6		6,216		6,222
Total	$	223	$	—	$	2,648	$	2,871	$	243,875	$	246,746

The above table of past due loans includes the recorded investment in non-accrual loans $43 in the 30-59 days category, $2,642 in the 90 days or greater category and $658 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 category and $2,100 in the loans not past due category.

Troubled Debt Restructurings:

As of March 31, 2016, the recorded investment of loans classified as troubled debt restructurings was $1,156 with $78 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 March 31, 2016 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 nine months ended March 31, 2016 and 2015 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 nine month periods ended March 31, 2016 and 2015.

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 nine month periods ending March 31, 2016 and 2015. 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, 2016
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	37,730	$	4,729	$	96	$	—	$	670
Commercial real estate:
Construction		5,535		—		20		—		—
Other		136,581		3,365		2,673		2,110		618
1-4 Family residential real estate:
Owner occupied		3,430		—		—		143		27,451
Non-owner occupied		13,397		422		498		336		60
Construction		350		—		—		—		310
Consumer		—		—		—		—		6,222
Total	$	197,023	$	8,516	$	3,287	$	2,589	$	35,331

	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