Note 3 - Loans and Allowance for Credit Losses

6 Months Ended

Dec. 31, 2025

Notes to Financial Statements

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

Note 3 – Loans and Allowance for Credit Losses

The following table presents loans by major category.

	December 31, 2025			June 30, 2025
Commercial & Industrial	$	139,162		$	113,513
Commercial real estate:
Owner occupied		166,362			162,674
Non-owner occupied		176,397			163,768
Farmland		46,315			42,050
Land Development		16,017			17,535
1 – 4 family residential real estate		208,667			201,602
Consumer		119,472			112,316
Total loans		872,392			813,458
Allowance for credit losses		(8,777	)		(8,470	)
Net Loans	$	863,615		$	804,988

Total loans include net unamortized deferred loan costs of $2,794 as of December 31, 2025 and $2,674 as of June 30, 2025. Commercial & Industrial loans include a third-party residential mortgage warehouse line-of-credit with an outstanding balance of $19,360 as of December 31, 2025 and a zero balance as of June 30, 2025.

The following table presents the activity in the allowance for credit losses by portfolio segment for the three months ended December 31, 2025.

	Commercial			Commercial							1-4 Family
	&			Real				Land			Residential
	Industrial			Estate		Farmland		Development			Real Estate			Consumer			Total
ACL beginning balance	$	1,303		$	3,537	$	119	$	263		$	2,038		$	1,449		$	8,709
Provision for expected credit losses		3			113		10		(21	)		(25	)		95			175
Charge-offs		(7	)		—		—		—			—			(133	)		(140	)
Recoveries		—			—		—		—			—			33			33
ACL ending balance	$	1,299		$	3,650	$	129	$	242		$	2,013		$	1,444		$	8,777

The following table presents the activity in the allowance for credit losses by portfolio segment for the six months ended December 31, 2025.

	Commercial			Commercial							1-4 Family
	&			Real				Land			Residential
	Industrial			Estate		Farmland		Development			Real Estate		Consumer			Total
ACL beginning balance	$	1,249		$	3,446	$	118	$	266		$	2,010	$	1,381		$	8,470
Provision for expected credit losses		57			204		11		(24	)		3		244			495
Charge-offs		(7	)		—		—		—			—		(256	)		(263	)
Recoveries		—			—		—		—			—		75			75
ACL ending balance	$	1,299		$	3,650	$	129	$	242		$	2,013	$	1,444		$	8,777

The following table presents the activity in the allowance for credit losses by portfolio segment for the three months ended December 31, 2024.

												1-4 Family
	Commercial			Commercial								Residential
	&			Real					Land			Real
	Industrial			Estate			Farmland		Development			Estate		Consumer			Total
ACL beginning balance	$	1,088		$	3,678		$	87	$	183		$	2,018	$	894		$	7,948
Provision for expected credit losses		52			(200	)		6		(5	)		67		165			85
Charge-offs		(64	)		—			—		—			—		(156	)		(220	)
Recoveries		—			—			—		—			1		30			31
ACL ending balance	$	1,076		$	3,478		$	93	$	178		$	2,086	$	933		$	7,844

The following table presents the activity in the allowance for credit losses by portfolio segment for the six months ended December 31, 2024.

											1-4 Family
	Commercial			Commercial							Residential
	&			Real					Land		Real
	Industrial			Estate			Farmland		Development		Estate		Consumer			Total
ACL beginning balance	$	1,144		$	3,650		$	89	$	174	$	2,018	$	855		$	7,930
Provision for expected credit losses		(5	)		(172	)		4		4		66		265			162
Charge-offs		(64	)		—			—		—		—		(282	)		(346	)
Recoveries		1			—			—		—		2		95			98
ACL ending balance	$	1,076		$	3,478		$	93	$	178	$	2,086	$	933		$	7,844

The following table presents the amortized cost of non-accrual loans by class as of December 31, 2025 and the interest income recognized on non-accrual loans for the three- and six-month periods ended December 31, 2025:

	December 31, 2025
	Non-accrual		Total		Interest income recognized
	loans with		Non-accrual		During the periods presented
	no ACL		Loans		on non-accrual loans
					Three-month Period		Six-month Period
Commercial & Industrial	$	332	$	332	$	—	$	—
1 – 4 family residential real estate		563		563		—		2
Total	$	895	$	895	$	—	$	2

The following table presents the amortized cost of non-accrual loans by class as of June 30, 2025 and the interest income recognized on non-accrual loans for the three- and six-month periods ended December 31, 2024:

	June 30, 2025				December 31, 2024
	Non-accrual		Total		Interest Income Recognized
	loans with		Non-accrual		During the periods presented
	no ACL		loans		on non-accrual loans
					Three-month Period		Six-month Period
Commercial & Industrial	$	332	$	332	$	—	$	—
Commercial real estate:
Owner occupied		—		—		10		16
1 – 4 family residential real estate		440		598		—		—
Total	$	772	$	930	$	10	$	16

The following table presents the aging of the amortized cost of past due loans as of December 31, 2025 by class of loans:

													Loans 90
	Days Past Due												Days Past
	30 – 59		60 - 89		90 Days or		Total		Loans Not				Due and
	Days		Days		Greater		Past Due		Past Due		Total		Accruing
Commercial & Industrial	$	—	$	—	$	332	$	332	$	138,830	$	139,162	$	—
Commercial real estate:
Owner occupied		—		—		—		—		166,362		166,362		—
Non-owner occupied		—		—		—		—		176,397		176,397		—
Farmland		—		—		—		—		46,315		46,315		—
Land development		—		—		—		—		16,017		16,017		—
1 – 4 family residential real estate		917		329		496		1,742		206,925		208,667		—
Consumer		184		52		74		310		119,162		119,472		74
Total	$	1,101	$	381	$	902	$	2,384	$	870,008	$	872,392	$	74

The above table of past due loans includes the recorded investment in non-accrual loans of $62 in the 30-59 days past due category, $828 in the 90 days or greater category, and $5 in the loans not past due category.

The following table presents the aging of the amortized cost of past due loans as of June 30, 2025 by class of loans:

													Loans 90
	Days Past Due												Days Past
	30 – 59		60 - 89		90 Days or		Total		Loans Not				Due and
	Days		Days		Greater		Past Due		Past Due		Total		Accruing
Commercial & Industrial	$	77	$	48	$	332	$	457	$	113,056	$	113,513	$	—
Commercial real estate:
Owner occupied		—		—		—		—		162,674		162,674		—
Non-owner occupied		—		—		—		—		163,768		163,768		—
Farmland		—		—		—		—		42,050		42,050		—
Land development		—		—		—		—		17,535		17,535		—
1 – 4 family residential real estate		57		161		374		592		201,010		201,602		—
Consumer		245		33		101		379		111,937		112,316		101
Total	$	379	$	242	$	807	$	1,428	$	812,030	$	813,458	$	101

The above table includes the recorded investment in non-accrual loans of $73 in the loans not past due category, $151 in the 60 – 89 days past due category, and $706 in the 90 days or greater category.

Modifications to Borrowers Experiencing Financial Difficulty

Occasionally, the Company modifies loans to borrowers experiencing financial difficulty to maximize collection of loan balances by providing principal forgiveness, term extension, an other than insignificant payment delay, or an interest rate reduction. In some cases, the Company may provide multiple types of concessions on one loan. If principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. There were no modifications of loans to borrowers experiencing financial difficulty completed during the three- or six-month periods ending December 31, 2025 and 2024.

Collateral Dependent Loans

A loan is considered collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In such cases, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. As of December 31, 2025, there were no collateral dependent loans with an allowance for credit losses allocated. As of June 30, 2025, there was one 1-4 family residential real estate loan that was collateral dependent with an amortized cost of $158 and $52 of the allowance for credit losses allocated to it.

Credit Quality Indicators:

The Company 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. At the time of origination, the Company analyzes all commercial loans individually and classifies the loans by credit risk. Management regularly monitors commercial loans for any changes in the borrowers’ ability to service their debt and completes an annual review to confirm the risk rating for those loans with total outstanding loan relationships greater than $500. The Company uses the following definitions for risk ratings:

Pass. Loans classified as pass exhibit a wide array of characteristics but at a minimum represent minimal level of risk and are considered collectable. Borrowers in this rating may have leveraged but acceptable balance sheet positions, satisfactory asset quality, stable to favorable sales and earnings trends, acceptable liquidity, and adequate cash flow. While generally adhering to credit policy, these loans may exhibit occasional exceptions that do not result in undue risk. Borrowers are generally capable of absorbing setbacks, financial and otherwise.

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.

Not Rated. Loans listed as not rated are included in groups of homogeneous loans. Past due information is the primary credit indicator for groups of homogenous loans.

Based on the most recent analysis performed, the following tables present the amortized cost by internal risk category and class of loans as of December 31, 2025:

													Revolving		Revolving
													Loans		Loans
	Term Loans by Fiscal Year of Origination												Amortized		Converted
	2026		2025		2024		2023		2022		Prior		Cost Basis		To Term		Total
Commercial & Industrial
Pass	$	18,944	$	30,170	$	11,330	$	14,198	$	13,726	$	7,427	$	41,700	$	90	$	137,585
Special Mention		—		—		—		4		—		391		729		—		1,124
Substandard		—		—		—		—		—		—		200		—		200
Doubtful		—		—		43		—		129		81		—		—		253
Total Commercial & Industrial	$	18,944	$	30,170	$	11,373	$	14,202	$	13,855	$	7,899	$	42,629	$	90	$	139,162
Current year-to-date gross write-offs	$	—	$	7	$	—	$	—	$	—	$	—	$	—	$	—	$	7
Commercial real estate:
Owner occupied:
Pass	$	8,830	$	13,917	$	15,454	$	20,794	$	25,490	$	64,590	$	4,802	$	—	$	153,877
Special Mention		—		2,296		1,613		—		—		443		8		—		4,360
Substandard		—		—		5,880		—		—		2,010		235		—		8,125
Doubtful		—		—		—		—		—		—		—		—		—
Total owner occupied	$	8,830	$	16,213	$	22,947	$	20,794	$	25,490	$	67,043	$	5,045	$	—	$	166,362
Current year-to-date gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Non-owner occupied:
Pass	$	23,530	$	25,273	$	10,502	$	35,427	$	18,266	$	61,946	$	1,453	$	—	$	176,397
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total non-owner occupied	$	23,530	$	25,273	$	10,502	$	35,427	$	18,266	$	61,946	$	1,453	$	—	$	176,397
Current year-to-date gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Farmland:
Pass	$	2,534	$	9,473	$	1,751	$	5,616	$	5,099	$	20,235	$	1,489	$	118	$	46,315
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total Farmland	$	2,534	$	9,473	$	1,751	$	5,616	$	5,099	$	20,235	$	1,489	$	118	$	46,315
Current year-to-date gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving		Revolving
													Loans		Loans
	Term Loans by Fiscal Year of Origination												Amortized		Converted
	2026		2025		2024		2023		2022		Prior		Cost Basis		To Term		Total
Land Development:
Pass	$	643	$	5,482	$	6,380	$	1,921	$	310	$	727	$	554	$	—	$	16,017
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total Land Development	$	643	$	5,482	$	6,380	$	1,921	$	310	$	727	$	554	$	—	$	16,017
Current year-to-date gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total:
Pass	$	54,481	$	84,315	$	45,417	$	77,956	$	62,891	$	154,925	$	49,998	$	208	$	530,191
Special Mention		—		2,296		1,613		4		—		834		737		—		5,484
Substandard		—		—		5,880		—		—		2,010		435		—		8,325
Doubtful		—		—		43		—		129		81		—		—		253
Total	$	54,481	$	86,611	$	52,953	$	77,960	$	63,020	$	157,850	$	51,170	$	208	$	544,253

Management monitors the credit risk profile by payment activity for residential and consumer loan classes. Loans past due 90 days or more and loans on nonaccrual are considered nonperforming. The following table presents the amortized cost of residential real estate and consumer loans based on payment status as of December 31, 2025:

													Revolving		Revolving
													Loans		Loans
	Term Loans by Fiscal Year of Origination												Amortized		Converted
	2026		2025		2024		2023		2022		Prior		Cost Basis		To Term		Total
1 – 4 family residential real estate:
Performing	$	12,360	$	22,775	$	17,314	$	18,686	$	26,477	$	80,378	$	30,114	$	—	$	208,104
Nonperforming		—		—		—		183		175		205		—		—		563
Total 1-4 family residential real estate	$	12,360	$	22,775	$	17,314	$	18,869	$	26,652	$	80,583	$	30,114	$	—	$	208,667
Current year-to-date gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer:
Performing	$	28,246	$	56,687	$	16,386	$	12,074	$	4,797	$	1,199	$	7	$	—	$	119,396
Nonperforming		—		56		—		—		—		20		—		—		76
Total consumer	$	28,246	$	56,743	$	16,386	$	12,074	$	4,797	$	1,219	$	7	$	—	$	119,472
Current year-to-date gross write-offs	$	11	$	4	$	16	$	105	$	96	$	24	$	—	$	—	$	256
Total:
Performing	$	40,606	$	79,462	$	33,700	$	30,760	$	31,274	$	81,577	$	30,121	$	—	$	327,500
Nonperforming		—		56		—		183		175		225		—		—		639
Total	$	40,606	$	79,518	$	33,700	$	30,943	$	31,449	$	81,802	$	30,121	$	—	$	328,139

Based on the most recent analysis performed, the following tables present the amortized cost by internal risk category and class of commercial loans as of June 30, 2025:

													Revolving		Revolving
													Loans		Loans
	Term Loans by Fiscal Year of Origination												Amortized		Converted
	2025		2024		2023		2022		2021		Prior		Cost Basis		To Term		Total
Commercial & Industrial
Pass	$	31,506	$	13,318	$	17,215	$	16,821	$	4,604	$	4,677	$	23,164	$	91	$	111,396
Special Mention		—		411		80		183		375		145		923		—		2,117
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial & Industrial	$	31,506	$	13,729	$	17,295	$	17,004	$	4,979	$	4,822	$	24,087	$	91	$	113,513
Current year-to-date gross write-offs	$	49	$	40	$	—	$	—	$	64	$	—	$	—	$	100	$	253
Commercial real estate:
Owner occupied:
Pass	$	12,350	$	16,042	$	21,391	$	26,435	$	19,268	$	48,946	$	4,452	$	—	$	148,884
Special Mention		2,320		7,582		—		—		619		2,701		411		—		13,633
Substandard		—		—		—		—		—		157		—		—		157
Doubtful		—		—		—		—		—		—		—		—		—
Total owner occupied	$	14,670	$	23,624	$	21,391	$	26,435	$	19,887	$	51,804	$	4,863	$	—	$	162,674
Current year-to-date gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Non-owner occupied:
Pass	$	28,937	$	13,970	$	35,895	$	18,667	$	21,883	$	42,916	$	1,500	$	—	$	163,768
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total non-owner occupied	$	28,937	$	13,970	$	35,895	$	18,667	$	21,883	$	42,916	$	1,500	$	—	$	163,768
Current year-to-date gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Farmland:
Pass	$	6,063	$	1,759	$	5,696	$	5,648	$	5,084	$	16,448	$	1,225	$	127	$	42,050
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total Farmland	$	6,063	$	1,759	$	5,696	$	5,648	$	5,084	$	16,448	$	1,225	$	127	$	42,050
Current year-to-date gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Land Development:
Pass	$	4,922	$	7,912	$	1,950	$	324	$	332	$	494	$	1,601	$	—	$	17,535
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total Land Development	$	4,922	$	7,912	$	1,950	$	324	$	332	$	494	$	1,601	$	—	$	17,535
Current year-to-date gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total:
Pass	$	83,778	$	53,001	$	82,147	$	67,895	$	51,171	$	113,481	$	31,942	$	218	$	483,633
Special Mention		2,320		7,993		80		183		994		2,846		1,334		—		15,750
Substandard		—		—		—		—		—		157		—		—		157
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	86,098	$	60,994	$	82,227	$	68,078	$	52,165	$	116,484	$	33,276	$	218	$	499,540

Management monitors the credit risk profile by payment activity for residential and consumer loan classes. Loans past due 90 days or more and loans on nonaccrual are considered nonperforming. The following table presents the amortized cost of residential real estate and consumer loans based on payment status as of June 30, 2025:

													Revolving		Revolving
													Loans		Loans
	Term Loans by Fiscal Year of Origination												Amortized		Converted
	2025		2024		2023		2022		2021		Prior		Cost Basis		To Term		Total
1 – 4 family residential real estate:
Performing	$	20,297	$	18,547	$	19,403	$	27,391	$	45,186	$	41,453	$	28,663	$	63	$	201,003
Nonperforming		—		—		185		199		—		215		—		—		599
Total 1-4 family residential real estate	$	20,297	$	18,547	$	19,588	$	27,590	$	45,186	$	41,668	$	28,663	$	63	$	201,602
Current year-to-date gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer:
Performing	$	66,567	$	20,500	$	16,079	$	6,950	$	1,838	$	186	$	95	$	—	$	112,215
Nonperforming		—		—		72		29		—		—		—		—		101
Total consumer	$	66,567	$	20,500	$	16,151	$	6,979	$	1,838	$	186	$	95	$	—	$	112,316
Current year-to-date gross write-offs	$	49	$	26	$	199	$	251	$	19	$	2	$	—	$	—	$	546
Total:
Performing	$	86,864	$	39,047	$	35,482	$	34,341	$	47,024	$	41,639	$	28,758	$	63	$	313,218
Nonperforming		—		—		257		228		—		215		—		—		700
Total	$	86,864	$	39,047	$	35,739	$	34,569	$	47,024	$	41,854	$	28,758	$	63	$	313,918