Note

– Loans

Major classifications of loans were as follows:

	December 31 , 2017			June 30, 2017
Commercial	$	49,561		$	46,336
Commercial real estate:
Construction		5,936			5,588
Other		169,692			157,861
1 – 4 Family residential real estate:
Owner occupied		45,351			41,581
Non-owner occupied		16,163			14,377
Construction		1,931			1,993
Consumer		4,960			5,131
Subtotal		293,594			272,867
Allowance for loan losses		(3,225	)		(3,086	)
Net Loans	$	290,369		$	269,781

Loans presented above are net of deferred loan fees and costs of $

313

and

$294

for

December 31, 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 ended

December 31, 2017:

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

Allowance for loan losses:
Beginning balance	$	572		$	2,081	$	473		$	68		$	3,194
Provision for loan losses		(17	)		57		20			—			60
Loans charged-off		—			—		(33	)		(5	)		(38	)
Recoveries		—			6		1			2			9
Total ending allowance balance	$	555		$	2,144	$	461		$	65		$	3,225

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

six

months ended

December 31, 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		35		82		20			13			150
Loans charged-off		—		—		(33	)		(8	)		(41	)
Recoveries		2		24		1			3			30
Total ending allowance balance	$	555	$	2,144	$	461		$	65		$	3,225

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

three

months ended

December 31, 2016:

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

Allowance for loan losses:
Beginning balance	$	510		$	2,643		$	411		$	120		$	3,684
Provision for loan losses		(14	)		157			51			(54	)		140
Loans charged-off		—			(700	)		(23	)		(8	)		(731	)
Recoveries		1			—			26			3			30
Total ending allowance balance	$	497		$	2,100		$	465		$	61		$	3,123

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

six

months ended

December 31, 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		(9	)		282			78			(75	)		276
Loans charged-off		—			(700	)		(44	)		(12	)		(756	)
Recoveries		1			—			29			7			37
Total ending allowance balance	$	497		$	2,100		$	465		$	61		$	3,123

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, 2017.

Included in the recorded investment in loans is

$695

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	$	—	$	30	$	—	$	—	$	30
Collectively evaluated for impairment		555		2,114		461		65		3,195
Total ending allowance balance	$	555	$	2,144	$	461	$	65	$	3,225

Recorded investment in loans:
Loans individually evaluated for impairment	$	122	$	1,303	$	340	$	—	$	1,765
Loans collectively evaluated for impairment		49,553		174,707		63,293		4,971		292,524
Total ending loans balance	$	49,675	$	176,010	$	63,633	$	4,971	$	294,289

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, 2017.

Included in the recorded investment in loans is

$581

of accrued intere

st 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

unpaid principal balance, recorded investment and interest income associated with loans individually evaluated for impairment by class of loans as of

December 31, 2017

and for the

six

months ended

December 31, 2017:

	As of December 31, 2017						Six Months ended December 31, 2017
	Unpaid				Allowance for Loan		Average		Interest		Cash Basis
	Principal		Recorded		Losses		Recorded		Income		Interest
	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial	$	122	$	122	$	—	$	117	$	3	$	3
Commercial real estate:
Other		973		976		—		1,057		16		16
1-4 Family residential real estate:
Owner occupied		25		25		—		80		—		—
Non-owner occupied		315		315		—		322		—		—
With an allowance recorded:
Commercial real estate:
Other		327		327		30		337		5		5
Total	$	1,762	$	1,765	$	30	$	1,913	$	24	$	24

The following table presents information related to average recorded investment and interest income associated with loans individually evaluated for impairment by class of loans for the

three

months ended

December 31,

2017:

	Average		Interest		Cash Basis
	Recorded		Income		Interest
	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial	$	120	$	1	$	1
Commercial real estate:
Other		1,061		6		6
1-4 Family residential real estate:
Owner occupied		318		—		—
Non-owner occupied		58		—		—
With an allowance recorded:
Commercial real estate:
Other		330		5		5
Total	$	1,887	$	12	$	12

The following table presents information related to

unpaid principal balance, recorded investment and interest income associated with loans individually evaluated for impairment by class of loans as of

June 30, 2017

and for the

six

months ended

December 31, 2016:

	As of June 30, 2017						Six Months ended December 31, 2016
	Unpaid				Allowance for Loan		Average		Interest		Cash Basis
	Principal		Recorded		Losses		Recorded		Income		Interest
	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial	$	482	$	444	$	—	$	330	$	80	$	80
Commercial real estate:
Construction		—		—		—		170		6		6
Other		1,928		1,039		—		1,081		105		105
1-4 Family residential real estate:
Owner occupied		104		103		—		127		—		—
Non-owner occupied		—		—		—		205		—		—
With an allowance recorded:
Commercial		—		—		—		7		—		—
Commercial real estate:
Other		548		548		42		2,030		15		15
1-4 Family residential real estate:
Owner occupied		99		100		2		139		3		3
Total	$	3,161	$	2,234	$	44	$	4,089	$	209	$	209

The following table presents information related to average recorded investment and interest income associated with loans individually evaluated for impairment by class of loans for the

three

onths ended

December 31, 2016:

	Average		Interest		Cash Basis
	Recorded		Income		Interest
	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial real estate:
Construction	$	10	$	—	$	—
Other		607		—		—
1-4 Family residential real estate:
Owner occupied		127		—		—
Non-owner occupied		202		—		—
With an allowance recorded:
Commercial		14		—		—
Commercial real estate:
Other		1,612		7		7
1-4 Family residential real estate:
Owner occupied		101		1		1
Total	$	2,673	$	8	$	8

The foll

owing table presents the recorded investment in non-accrual and loans past due over

days still on accrual by class of loans as of

December 31, 2017

and

June 30, 2017:

	December 31, 2017				June 30, 2017
			Loans Past Due				Loans Past Due
			Over 90 Days				Over 90 Days
			Still				Still
	Non-accrual		Accruing		Non-accrual		Accruing
Commercia l	$	—	$	—	$	368	$	—
Commercial real estate:
Other		537		—		729		—
1 – 4 Family residential:
Owner occupied		13		—		90		—
Non-owner occupied		315		—		—		—
Total	$	865	$	—	$	1,187	$	—

Non-accrual loans and loans past due

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, 2017

by class of loans:

	Days Past Due
	30 - 59		60 - 89		90 Days or		Total		Loans Not
	Day s		Days		Greater		Past Due		Past Due		Total
Commercial	$	—	$	—	$	—	$	—	$	49,675	$	49,675
Commercial real estate:
Construction		—		—		—		—		5,943		5,943
Other		230		—		—		230		169,837		170,067
1-4 Family residential:
Owner occupied		12		—		—		12		45,477		45,489
Non-owner occupied		—		—		—		—		16,210		16,210
Construction		—		—		—		—		1,934		1,934
Consumer		4		2		—		6		4,965		4,971
Total	$	246	$	2	$	—	$	248	$	294,041	$	294,289

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

$865

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, 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 investment in non-accrual loans of

$239

in the

days or greater category and

$948

in the loans

not

past due category.

Troubled Debt Restructurings:

As of

December 31, 2017,

the recorded investment of loans classified as troubled debt restructurings was

$1,582

with

$30

of specific reserves allocated to these loans. As of

December 31, 2017,

the Corporation had committed to lend an additional

$192

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

and

six

months ended

December 31, 2017

and

2016

, there were

loan modifications completed that were classified as troubled debt restructurings. There were

charge offs from troubled debt restructurings that were completed during the

three

and

six

month periods ended

December 31, 2017

and

2016.

The

re were

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

months following the modification during the

three

and

six

month periods ended

December 31, 2017

and

2016.

A loan is considered to be in payment default once it is

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: curren

t 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 eit

her 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, 2017
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	48,091	$	883	$	339	$	—	$	362
Commercial real estate:
Construction		5,941		—		2		—		—
Other		156,415		10,365		1,772		537		978
1-4 Family residential real estate:
Owner occupied		2,661		58		14		13		42,743
Non-owner occupied		14,669		203		433		315		590
Construction		765		—		—		—		1,169
Consumer		119		—		—		—		4,852
Total	$	228,661	$	11,509	$	2,560	$	865	$	50,694

	As of June 30, 2017
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	44,435	$	907	$	642	$	—	$	453
Commercial real estate:
Constructio n		4,514		1,035		—		4		43
Other		150,460		5,110		1,566		470		561
1-4 Family residential real estate:
Owner occup ied		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