XML 24 R12.htm IDEA: XBRL DOCUMENT

Note 4 - Loans

12 Months Ended

Jun. 30, 2023

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

NOTE 4—LOANS

Major classifications of loans were as follows as of June 30:

	2023			2022
Commercial	$	112,558		$	87,008
Commercial real estate:
Construction		23,981			15,158
Other		318,636			291,847
1 – 4 Family residential real estate:
Owner occupied		156,989			142,244
Non-owner occupied		23,880			26,029
Construction		8,443			4,317
Consumer		65,617			44,964
Subtotal		710,104			611,567
Net deferred loan fees and costs		258			276
Allowance for loan losses		(7,724	)		(7,160	)
Net loans	$	702,638		$	604,683

The following table presents the activity in the allowance for loan losses by portfolio segment for the year ended June 30, 2023:

					1-4 Family
			Commercial		Residential
			Real		Real
	Commercial		Estate		Estate			Consumer			Total
Allowance for loan losses:
Beginning balance	$	960	$	3,927	$	1,645		$	628		$	7,160
Provision for loan losses		348		15		(72	)		564			855
Loans charged-off		—		—		(6	)		(441	)		(447	)
Recoveries		—		1		4			151			156
Total ending allowance balance	$	1,308	$	3,943	$	1,571		$	902		$	7,724

The following table presents the activity in the allowance for loan losses by portfolio segment for the year ended June 30, 2022:

						1-4 Family
			Commercial			Residential
			Real			Real
	Commercial		Estate			Estate			Consumer			Total
Allowance for loan losses:
Beginning balance	$	904	$	3,949		$	1,307		$	311		$	6,471
Provision for loan losses		33		(24	)		359			367			735
Loans charged-off		—		—			(41	)		(132	)		(173	)
Recoveries		23		2			20			82			127
Total ending allowance balance	$	960	$	3,927		$	1,645		$	628		$	7,160

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, 2023. Included in the recorded investment in loans is $1,598 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	$	—	$	—	$	—	$	—	$	—
Acquired loans collectively evaluated for impairment		—		40		74		—		114
Originated loans collectively evaluated for impairment		1,308		3,903		1,497		902		7,610
Total ending allowance balance	$	1,308	$	3,943	$	1,571	$	902	$	7,724

Recorded investment in loans:
Loans individually evaluated for impairment	$	314	$	88	$	3	$	—	$	405
Acquired loans collectively evaluated for impairment		622		6,953		23,038		1,230		31,843
Originated loans collectively evaluated for impairment		111,890		335,660		167,798		64,364		679,712
Total ending loans balance	$	112,826	$	342,701	$	190,839	$	65,594	$	711,960

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, 2022. Included in the recorded investment in loans is $1,214 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	$	—	$	—	$	—	$	—	$	—
Acquired loans collectively evaluated for impairment		1		62		85		—		148
Originated loans collectively evaluated for impairment		959		3,865		1,560		628		7,012
Total ending allowance balance	$	960	$	3,927	$	1,645	$	628	$	7,160

Recorded investment in loans:
Loans individually evaluated for impairment	$	276	$	42	$	155	$	—	$	473
Acquired loans collectively evaluated for impairment		665		10,095		27,731		3,051		41,542
Originated loans collectively evaluated for impairment		86,310		296,776		146,058		41,898		571,042
Total ending loans balance	$	87,251	$	306,913	$	173,944	$	44,949	$	613,057

The following table presents information related to loans individually evaluated for impairment by class of loans as of and for the year ended June 30, 2023:

	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	$	404	$	314	$	—	$	306	$	37	$	37
Commercial real estate:
Other		127		88		—		52		6		6
1-4 Family residential real estate:
Owner occupied		24		—		—		38		2		2
Non-owner occupied		3		3		—		29		—		—
Total	$	558	$	405	$	—	$	425	$	45	$	45

The following table presents information related to loans individually evaluated for impairment by class of loans as of and for the year ended June 30, 2022:

	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	$	414	$	276	$	—	$	291	$	—	$	—
Commercial real estate:
Other		83		42		—		518		193		193
1-4 Family residential real estate:
Owner occupied		48		22		—		187		8		8
Non-owner occupied		193		133		—		93		75		75
With an allowance recorded:
Commercial		—		—		—		113		6		6
Total	$	738	$	473	$	—	$	1,202	$	282	$	282

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 June 30, 2023 and 2022:

	June 30, 2023				June 30, 2022
			Loans Past Due				Loans Past Due
			Over 90 Days				Over 90 Days
			Still				Still
	Non-accrual		Accruing		Non-accrual		Accruing
Commercial	$	—	$	—	$	276	$	9
Commercial real estate:
Other		51		—		—		—
1 – 4 Family residential:
Owner occupied		—		—		22		—
Non-owner occupied		3		—		133		—
Consumer		—		50		—		—
Total	$	54	$	50	$	431	$	9

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 June 30, 2023 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	$	—	$	—	$	—	$	—	$	112,826	$	112,826
Commercial real estate:
Construction		—		—		—		—		23,996		23,996
Other		—		—		51		51		318,654		318,705
1-4 Family residential:
Owner occupied		17		124		—		141		158,296		158,437
Non-owner occupied		—		—		3		3		23,885		23,888
Construction		—		—		—		—		8,514		8,514
Consumer		438		120		50		608		64,986		65,594
Total	$	455	$	244	$	104	$	803	$	711,157	$	711,960

The above table of past due loans includes the recorded investment in non-accrual loans of $54 in the 90 days or greater category.

The following table presents the aging of the recorded investment in past due loans as of June 30, 2022 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	$	—	$	—	$	9	$	9	$	87,242	$	87,251
Commercial real estate:
Construction		—		—		—		—		15,138		15,138
Other		52		—		—		52		291,723		291,775
1-4 Family residential:
Owner occupied		125		—		—		125		143,381		143,506
Non-owner occupied		—		—		27		27		26,036		26,063
Construction		—		—		—		—		4,375		4,375
Consumer		381		79		—		460		44,489		44,949
Total	$	558	$	79	$	36	$	673	$	612,384	$	613,057

The above table of past due loans includes the recorded investment in non-accrual loans of $27 in the 90 days or greater category and $404 in the loans not past due category.

Troubled Debt Restructurings (TDR):

The Corporation has certain loans that have been modified in order to maximize collection of loan balances that are classified as TDRs. A modified loan is usually classified as a TDR if, for economic reasons, management grants a concession to the original terms and conditions of the loan to a borrower who is experiencing financial difficulties that it would not have otherwise considered.

The Corporation had $351 and $318 of loans classified as TDRs as of June 30, 2023 and 2022, respectively. There were no specific reserves allocated to these loans and TDRs are also included as impaired loans that are listed above. For the years ended June 30, 2023 and 2022, there were no loans modified that were classified as a troubled debt restructuring.

There were no loans classified as troubled debt restructurings for which there was a payment default within 12 months following the modification during the twelve-month periods ended June 30, 2023 and 2022. A loan is considered 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, and current economic trends, among other factors. 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. This analysis is performed monthly. 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, based on 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 was discussed previously.

As of June 30, 2023, and based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans is as follows:

			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	110,928	$	1,174	$	573	$	—	$	151
Commercial real estate:
Construction		23,996		—		—		—		—
Other		310,427		7,097		468		51		662
1-4 Family residential real estate:
Owner occupied		2,013		—		17		—		156,407
Non-owner occupied		23,474		50		105		3		256
Construction		3,227		—		—		—		5,287
Consumer		597		—		—		—		64,997
Total	$	474,662	$	8,321	$	1,163	$	54	$	227,760

As of June 30, 2022, and based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans is as follows:

			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	86,265	$	350	$	178	$	276	$	182
Commercial real estate:
Construction		15,138		—		—		—		—
Other		283,877		2,500		4,711		—		687
1-4 Family residential real estate:
Owner occupied		1,321		—		—		22		142,163
Non-owner occupied		25,606		59		—		133		265
Construction		1,234		—		—		—		3,141
Consumer		605		—		—		—		44,344
Total	$	414,046	$	2,909	$	4,889	$	431	$	190,782