Note 3 - Loans

3 Months Ended

Sep. 30, 2017

Notes to Financial Statements

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

Note

3

– Loans

Major classifications of loans were as follows:

	September 30, 201 7			June 30, 20 17
Commercial	$	51,479		$	46,336
Commercial real estate:
Construction		7,437			5,588
Other		163,991			157,861
1 – 4 Family residential real estate:
Owner occupied		42,861			41,581
Non-owner occupied		14,072			14,377
Construction		2,725			1,993
Consumer		5,153			5,131
Subtotal		287,718			272,867
Allowance for loan losses		(3,194	)		(3,086	)
Net Loans	$	284,524		$	269,781

Loans presented above are net of

deferred loan fees and costs of

$299

and

$294

for

September 30, 2017

and

June 30, 2017,

respectively.

The following table presents the activity in the allowance for loan losses by portfolio segment for the

three

months end

ed

September 30, 2017:

					1-4 Family
			Commercial		Residential
			Real		Real
	Commercial		Estate		Estate		Consumer			Total
Allowance for loan losses:
Beginning balance	$	518	$	2,038	$	473	$	57		$	3,086
Provision for loan losses		52		25		—		13			90
Loans charged-off		—		—		—		(3	)		(3	)
Recoveries		2		18		—		1			21
Total ending allowance balance	$	572	$	2,081	$	473	$	68		$	3,194

The following table presents the activity in the allowance for loan losses by portfolio segment for the

three

months ended

September 30, 2016:

					1-4 Family
			Commercial		Residential
			Real		Real
	Commercial		Estate		Estate			Consumer			Total
Allowance for loan losses:
Beginning balance	$	505	$	2,518	$	402		$	141		$	3,566
Provision for loan losses		5		125		27			(21	)		136
Loans charged-off		—		—		(21	)		(4	)		(25	)
Recoveries		—		—		3			4			7
Total ending allowance balance	$	510	$	2,643	$	411		$	120		$	3,684

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 o

f

September 30, 2017.

Included in the recorded investment in loans is

$679

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	$	—	$	33	$	—	$	—	$	33
Collectively evaluated for impairment		572		2,048		473		68		3,161
Total ending allowance balance	$	572	$	2,081	$	473	$	68	$	3,194
Recorded investment in loans:
Loans individually evaluated for impairment	$	125	$	1,462	$	425	$	—	$	2,012
Loans collectively evaluated for impairment		51,463		170,356		59,400		5,166		286,385
Total ending loans balance	$	51,588	$	171,818	$	59,825	$	5,166	$	288,397

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impai

rment method as of

June 30, 2017.

Included in the recorded investment in loans is

$581

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	$	—	$	42	$	2	$	—	$	44
Collectively evaluated for impairment		518		1,996		471		57		3,042
Total ending allowance balance	$	518	$	2,038	$	473	$	57	$	3,086
Recorded investment in loans:
Loans individually evaluated for impairment	$	444	$	1,587	$	203	$	—	$	2,234
Loans collectively evaluated for impairment		45,993		162,176		57,901		5,144		271,214
Total ending loans balance	$	46,437	$	163,763	$	58,104	$	5,144	$	273,448

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, 2017

and for the

three

months ended

September 30, 2017:

	As of September 30, 2017						Three Months ended September 30, 2017
	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	$	124	$	125	$	—	$	114	$	2	$	2
Commercial real estate:
Other		1,121		1,123		—		1,053		10		10
1-4 Family residential real estate:
Owner occupied		102		101		—		102		—		—
Non-owner occupied		324		324		—		327		—		—
With an allowance recorded:
Commercial real estate:
Other		338		339		33		343		—		—
Total	$	2,009	$	2,012	$	33	$	1,939	$	12	$	12

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

June 30, 2017

and for the

three

months ended

September 30, 2016:

	As of June 30, 2017						Three Months ended September 30, 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	$	482	$	444	$	—	$	660	$	80	$	80
Commercial real estate:
Construction		—		—		—		329		6		6
Other		1,928		1,039		—		1,555		105		105
1-4 Family residential real estate:
Owner occupied		104		103		—		127		—		—
Non-owner occupied		—		—		—		208		—		—
With an allowance recorded:
Commercial real estate:
Other		548		548		42		2,449		8		8
1-4 Family residential real estate:
Owner occupied		99		100		2		177		2		2
Total	$	3,161	$	2,234	$	44	$	5,505	$	201	$	201

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, 2017

and

June 30, 2017:

	September 30, 2017				June 30, 2017
			Loans Past Due				Loans Past Due
			Over 90 Days				Over 90 Days
			Still				Still
	Non-accrual		Accruing		Non-accrual		Accruing
Commercial	$	—	$	—	$	368	$	—
Commercial real estate:
Other		565		—		729		—
1 – 4 Family residential:
Owner occupied		89		—		90		—
Non-owner occupied		324		—		—		—
Total	$	978	$	—	$	1,187	$	—

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, 2017

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	$	—	$	—	$	—	$	—	$	51,588	$	51,588
Commercial real estate:
Construction		—		—		—		—		7,452		7,452
Other		—		—		—		—		164,366		164,366
1-4 Family residential:
Owner occupied		23		—		74		97		42,885		42,982
Non-owner occupied		—		—		—		—		14,112		14,112
Construction		—		—		—		—		2,731		2,731
Consumer		18		—		—		18		5,148		5,166
Total	$	41	$	—	$	74	$	115	$	288,282	$	288,397

The above table of past due loans includes the recorded investment in non

-accrual loans of

$74

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 pa

st due loans as of

June 30, 2017

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	$	—	$	—	$	35	$	35	$	46,402	$	46,437
Commercial real estate:
Construction		—		—		—		—		5,596		5,596
Other		—		—		130		130		158,037		158,167
1-4 Family residential:
Owner occupied		13		—		74		87		41,605		41,692
Non-owner occupied		—		—		—		—		14,416		14,416
Construction		—		—		—		—		1,996		1,996
Consumer		22		—		—		22		5,122		5,144
Total	$	35	$	—	$	239	$	274	$	273,174	$	273,448

The above table of past due loans includes the recorded inves

tment in non-accrual loans of

$239

in the

90

days or greater category and

$948

in the loans

not

past due category.

Troubled Debt Restructurings:

As of

September 30, 2017,

the recorded investment of loans classified as troubled debt restructurings was

$1,732

with

$30

of specific reserves allocated to these loans. As of

September 30, 2017,

the Corporation had committed to lend an additional

$57

to customers with outstanding loans that were classified as troubled debt restructurings. As of

June 30, 2017,

the recorded investment of loans classified as troubled debt restructurings was

$1,740

with

$33

of specific reserves allocated to these loans. As of

June 30, 2017,

the Corporation had committed to lend an additional

$175

to customers with outstanding loans that were classified as troubled debt restructurings.

During the

three

months ended

September 30, 2017

and

2016

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

month periods ended

September 30, 2017

and

2016.

There w

ere

no

loans classified as troubled debt restructurings for which there was a payment default within

12

months following the modification during the

three

month periods ended

September 30, 2017

and

2016.

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, 2017
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	50,091	$	808	$	303	$	—	$	386
Commercial real estate:
Construction		6,221		1,186		4		—		41
Other		154,075		7,072		1,915		566		738
1-4 Family residential real estate:
Owner occupied		2,420		—		25		15		40,522
Non-owner occupied		12,958		206		440		324		184
Construction		1,154		—		—		—		1,577
Consumer		131		—		—		—		5,035
Total	$	227,050	$	9,272	$	2,687	$	905	$	48,483

	As of June 30, 2017
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	44,435	$	907	$	642	$	—	$	453
Commercial real estate:
Construction		4,514		1,035		—		4		43
Other		150,460		5,110		1,566		470		561
1-4 Family residential real estate:
Owner occupied		2,668		—		11		30		38,983
Non-owner occupied		13,633		210		261		187		125
Construction		1,223		—		—		—		773
Consumer		145		—		—		—		4,999
Total	$	217,078	$	7,262	$	2,480	$	691	$	45,937