Note

Loans Receivable and Allowance for Loan Losses

Loans receivable, excluding loans held for sale, consist of the following at

June 30, 2017

and

March 31, 2017:

	June 30, 2017												March 31, 2017
	Legacy (1)			Acquired			Total Loans			% of Total			Legacy (1)			Acquired			Total Loans			% of Total
Real estate loans:
One-to four-family:
Residential (2)	$	68,615,099		$	80,296,553		$	148,911,652			42	%	$	67,126,677		$	83,892,389		$	151,019,066			44	%
Residential construction		6,803,657			-			6,803,657			2	%		6,426,076			-			6,426,076			2	%
Investor (3)		7,811,461			18,433,397			26,244,858			7	%		6,742,469			18,779,644			25,522,113			8	%
Commercial		92,628,423			14,399,402			107,027,825			30	%		92,665,689			14,898,523			107,564,212			32	%
Commercial construction		2,326,457			1,191,507			3,517,964			1	%		1,881,541			1,308,652			3,190,193			1	%
Total real estate loans		178,185,097			114,320,859			292,505,956			83	%		174,842,452			118,879,208			293,721,660			87	%
Commercial business (4)		35,339,083			2,037,264			37,376,347			11	%		19,518,029			2,019,337			21,537,366			6	%
Home equity loans		14,116,647			6,668,685			20,785,332			6	%		13,278,229			7,266,141			20,544,370			6	%
Consumer		2,135,569			928,700			3,064,269			1	%		2,258,836			937,600			3,196,436			1	%
Total Loans		229,776,396			123,955,508			353,731,904			100	%		209,897,546			129,102,286			338,999,832			100	%
Net deferred loan origination fees and costs		(140,537	)		-			(140,537	)					(143,070	)		-			(143,070	)
Loan premium (discount)		586,024			(509,138	)		76,886						619,846			(543,410	)		76,436
	$	230,221,883		$	123,446,370		$	353,668,253					$	210,374,322		$	128,558,876		$	338,933,198

( 1 )	As a result of the acquisition of Fraternity Community Bancorp, Inc., the parent company of Fraternity Federal Savings and Loan, in May 2016 and Fairmount Bancorp, Inc., the parent company of Fairmount Bank, in September 2015, we have segmented the portfolio into two components, loans originated by Hamilton Bank "Legacy" and loans acquired from Fraternity Community Bancorp, Inc. and Fairmount Bancorp, Inc. "Acquired".
( 2 )	"Legacy" one -to four -family residential real estate loans at March 31, 2017 includes $23.4 million of loans purchased in March 2017.
( 3 )	"Investor" loans are residential mortgage loans secured by non-owner occupied one -to four -family properties.
( 4 )	"Legacy" commercial business loans at June 30, 2017 includes $15.4 million of loans purchased in June 2017.

Residential lending is generally considered to involve less risk than other forms of lending, although payment experience on these loans is dependent on economic and market conditions in the Bank's lending area. Construction loan repayments are generally dependent on the related properties or the financial condition of its borrower or guarantor. Accordingly, repayment of such loans can be more susceptible to adverse conditions in the real estate market and the regional economy.

A substantial portion of the Bank's loan portfolio is real estate loans secured by residential and commercial real estate properties located in the Baltimore metropolitan area. Loans are extended only after evaluation of a customer's creditworthiness and other relevant factors on a case-by-case basis. The Bank generally does

not

lend more than

75%

95%

of the appraised value of a property, depending on the type of loan, and requires private mortgage insurance on residential mortgages with loan-to-value ratios in excess of

80%.

In addition, the Bank generally obtains personal guarantees of repayment from borrowers and/or others for construction loans and disburses the proceeds of those and similar loans only as work progresses on the related projects.

Commercial business loans are made to provide funds for equipment and general corporate needs. Repayment of a loan primarily uses the funds obtained from the operation of the borrower’s business. Commercial loans also include lines of credit that are utilized to finance a borrower’s short-term credit needs and/or to finance a percentage of eligible receivables and inventory. The Company’s loan portfolio also includes equipment leases, which consists of leases for essential commercial equipment used by small to medium sized businesses.

The home equity loans consist of both conforming loans and revolving lines of credit to consumers which are secured by residential real estate. These loans are typically secured with

second

mortgages on the homes. Consumer loans include share loans, installment loans and, to a lesser extent, personal lines of credit. Share loans represent loans that are collateralized by a certificate of deposit or other deposit product. Installment loans are used by customers to purchase primarily automobiles, but

may

be used to also purchase boats and recreational vehicles.

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

three

months ended

June 30, 2017

and

2016.

The allowance for loan losses allocated to each portfolio segment is

not

necessarily indicative of future losses in any particular portfolio segment and does

not

restrict the use of the allowance to absorb losses in other portfolio segments.

	June 30, 2017
	Residential Real Estate			Investor Real Estate			Commercial Real Estate			Commercial Construction		Commercial Business		Home Equity			Consumer			Total
Allowance for credit losses:
Beginning balance	$	553,539		$	35,275		$	1,375,894		$	9,031	$	149,461	$	70,071		$	1,544		$	2,194,815
Charge-offs		-			(4,078	)		-			-		-		-			-			(4,078	)
Recoveries		-			5,307			-			-		175		-			1,309			6,791
Provision for credit losses		(8,982	)		27,967			(63,736	)		17,956		193,458		(5,410	)		(1,253	)		160,000
Ending balance	$	544,557		$	64,471		$	1,312,158		$	26,987	$	343,094	$	64,661		$	1,600		$	2,357,528

Allowance allocated to:
Legacy Loans:
Individually evaluated for impairment	$	278,573		$	-		$	-		$	-	$	-	$	-		$	-		$	278,573
Collectively evaluated for impairment		265,984			64,471			1,312,158			26,987		343,094		64,661			1,600			2,078,955

Acquired Loans:
Individually evaluated for impairment	$	-		$	-		$	-		$	-	$	-	$	-		$	-		$	-
Collectively evaluated for impairment		-			-			-			-		-		-			-			-

Loans:
Legacy Loans:
Individually evaluated for impairment	$	1,762,599		$	7,772		$	1,546,811		$	-	$	723,753	$	10,980		$	-		$	4,051,915
Collectively evaluated for impairment		73,656,157			7,803,689			91,081,612			2,326,457		34,615,330		14,105,667			2,135,569			225,724,481
Ending balance	$	75,418,756		$	7,811,461		$	92,628,423		$	2,326,457	$	35,339,083	$	14,116,647		$	2,135,569		$	229,776,396

Acquired Loans:
Individually evaluated for impairment	$	1,177,729		$	183,728		$	203,215		$	-	$	-	$	-		$	68,772		$	1,633,444
Collectively evaluated for impairment		79,118,824			18,249,669			14,196,187			1,191,507		2,037,264		6,668,685			859,928			122,322,064
Ending balance	$	80,296,553		$	18,433,397		$	14,399,402		$	1,191,507	$	2,037,264	$	6,668,685		$	928,700		$	123,955,508

	June 30, 2016
	Residential Real Estate		Investor Real Estate			Commercial Real Estate		Commercial Construction			Commercial Business			Home Equity			Consumer			Total
Allowance for credit losses:
Beginning balance	$	259,895	$	168,132		$	901,768	$	42,377		$	228,199		$	82,012		$	19,982		$	1,702,365
Charge-offs		-		(28,700	)		-		-			(1,521	)		-			(1,280	)		(31,501	)
Recoveries		-		-			-		-			15,319			-			789			16,108
Provision for credit losses		223,997		64,784			8,992		(14,544	)		(54,562	)		(954	)		(17,713	)		210,000
Ending balance	$	483,892	$	204,216		$	910,760	$	27,833		$	187,435		$	81,058		$	1,778		$	1,896,972

Allowance allocated to:
Legacy Loans:
Individually evaluated for impairment	$	293,992	$	-		$	-	$	-		$	9,657		$	-		$	-		$	303,649
Collectively evaluated for impairment		189,900		204,216			910,760		27,833			177,778			81,058			1,778			1,593,323

Acquired Loans:
Individually evaluated for impairment	$	-	$	-		$	-	$	-		$	-		$	-		$	-		$	-
Collectively evaluated for impairment		-		-			-		-			-			-			-			-

Loans:
Legacy Loans:
Individually evaluated for impairment	$	2,153,753	$	321,215		$	2,673,131	$	-		$	1,000,250		$	56,977		$	-		$	6,205,326
Collectively evaluated for impairment		48,813,333		11,504,219			78,482,502		2,348,741			14,985,423			12,236,608			2,875,534			171,246,360
Ending balance	$	50,967,086	$	11,825,434		$	81,155,633	$	2,348,741		$	15,985,673		$	12,293,585		$	2,875,534		$	177,451,686

Acquired Loans:
Individually evaluated for impairment	$	1,155,227	$	1,469,259		$	369,422	$	-		$	-		$	10,663		$	73,835		$	3,078,406
Collectively evaluated for impairment		97,389,613		22,137,498			17,506,436		1,615,922			2,714,738			9,484,671			957,681			151,806,559
Ending balance	$	98,544,840	$	23,606,757		$	17,875,858	$	1,615,922		$	2,714,738		$	9,495,334		$	1,031,516		$	154,884,965

Past due loans, segregated by age and class of loans, as of and for the

three

months ended

June 30, 2017

and as of and for the year ended

March 31, 2017,

were as follows:

	June 30, 2017						March 31, 2017
	Legacy		Acquired		Total		Legacy		Acquired		Total
Current	$	224,251,862	$	123,098,395	$	347,350,257	$	207,328,184	$	128,769,860	$	336,098,044
Accruing past due loans:
30-59 days past due:
Real estate loans:
Residential		75,992		131,204		207,196		69,618		-		69,618
Investor		-		72,885		72,885		320,971		-		320,971
Commercial		3,160,843		-		3,160,843		-		-		-
Commercial construction		-		73,500		73,500		113,603		-		113,603
Commercial business		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-
Consumer		-		4,089		4,089		-		-		-
Total 30-59 days past due		3,236,835		281,678		3,518,513		504,192		-		504,192

60-89 days past due:
Real estate loans:
Residential		92,545		139,263		231,808		74,631		-		74,631
Investor		-		78,009		78,009		-		-		-
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total 60-89 days past due		92,545		217,272		309,817		74,631		-		74,631

90 or more days past due:
Real estate loans:
Residential		-		-		-		-		-		-
Investor		221,731		109,403		331,134		-		21,030		21,030
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total 90 or more days past due		221,731		109,403		331,134		-		21,030		21,030
Total accruing past due loans		3,551,111		608,353		4,159,464		578,823		21,030		599,853

Non-accruing loans:
Real estate loans:
Residential		416,194		221,721		637,915		426,354		248,663		675,017
Investor		7,772		27,039		34,811		13,976		57,131		71,107
Commercial		1,546,811		-		1,546,811		1,546,812		-		1,546,812
Commercial construction		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-
Home equity loans		2,646		-		2,646		3,397		-		3,397
Consumer		-		-		-		-		5,602		5,602
Non-accruing loans:		1,973,423		248,760		2,222,183		1,990,539		311,396		2,301,935
Total Loans	$	229,776,396	$	123,955,508	$	353,731,904	$	209,897,546	$	129,102,286	$	338,999,832


Nonaccrual interest not accrued:
Real estate loans:
Residential	$	6,039	$	31,864	$	37,903	$	6,460	$	35,177	$	41,637
Investor		6,256		8,301		14,557		6,982		23,293		30,275
Commercial		-		-		-		109,818		-		109,818
Commercial construction		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-
Home equity loans		63		-		63		66		-		66
Consumer		-		-		-		-		317		317
Total nonaccrual interest not accrued	$	12,358	$	40,165	$	52,523	$	123,326	$	58,787	$	182,113

Impaired Loans as of and for the

three

months ended

June 30, 2017

and as of and for the year ended

March 31, 2017,

was as follows:

	Impaired Loans at June 30, 2017
	Unpaid
	Contractual						Average		Interest
	Principal		Recorded		Related		Recorded		Income
Legacy:	Balance		Investment		Allowance		Investment		Recognized
With no related allowance recorded:
Real estate loans:
Residential	$	581,380	$	449,473	$	-	$	453,305	$	288
Investor		50,947		7,772				7,847		-
Commercial		3,433,621		1,546,811		-		1,546,812		-
Commercial construction		-		-		-		-		-
Commercial business		1,138,939		723,753		-		740,966		25,151
Home equity loans		36,734		10,980		-		11,510		93
Consumer		-		-		-		-		-
With an allowance recorded:
Real estate loans:
Residential		1,340,394		1,313,126		278,573		1,317,495		12,802
Investor		-		-		-		-		-
Commercial		-		-		-		-		-
Commercial construction		-		-		-		-		-
Commercial business		-		-		-		-		-
Home equity loans		-		-		-		-		-
Consumer		-		-		-		-		-
Total legacy impaired		6,582,015		4,051,915		278,573		4,077,935		38,334

Acquired (1):
With no related allowance recorded:
Real estate loans:
Residential		1,370,261		1,177,729		-		1,184,445		11,221
Investor		333,362		183,728		-		168,815		3,102
Commercial		253,215		203,215		-		203,870		1,912
Commercial construction		-		-		-		-		-
Commercial business		-		-		-		-		-
Home equity loans		44,852		-		-		-		288
Consumer		107,670		68,772		-		70,988		1,927
With an allowance recorded:
Real estate loans:
Residential		-		-		-		-		-
Investor		-		-		-		-		-
Commercial		-		-		-		-		-
Commercial construction		-		-		-		-		-
Commercial business		-		-		-		-		-
Home equity loans		-		-		-		-		-
Consumer		-		-		-		-		-
Total acquired impaired		2,109,360		1,633,444		-		1,628,118		18,450
Total impaired	$	8,691,375	$	5,685,359	$	278,573	$	5,706,053	$	56,784

(

)

Generally accepted accounting principles require that we record acquired loans at fair value at acquisition, which includes a discount for loans with credit impairment. These purchased credit impaired loans are

not

performing according to their contractual terms and meet the definition of an impaired loan. Although we do

not

accrue interest income at the contractual rate on these loans, we do recognize an accretable yield as interest income to the extent such yield is supported by cash flow analysis of the underlying loans.

	Impaired Loans at March 31, 2017
	Unpaid
	Contractual						Average		Interest
	Principal		Recorded		Related		Recorded		Income
Legacy:	Balance		Investment		Allowance		Investment		Recognized
With no related allowance recorded:
Real estate loans:
Residential	$	491,249	$	360,590	$	-	$	373,618	$	11,901
Investor		107,710		16,919				16,306		-
Commercial		3,433,621		1,546,812		-		2,485,299		987
Commercial construction		-		-		-		-		-
Commercial business		1,177,632		753,375		-		832,437		107,063
Home equity loans		37,365		12,040		-		14,102		257
Consumer		-		-		-		-		-
With an allowance recorded:
Real estate loans:
Residential		1,432,212		1,401,827		284,177		1,428,128		54,121
Investor		-		-		-		-		-
Commercial		-		-		-		-		-
Commercial construction		-		-		-		-		-
Commercial business		-		-		-		-		-
Home equity loans		-		-		-		-		-
Consumer		-		-		-		-		-
Total legacy impaired		6,679,789		4,091,563		284,177		5,149,890		174,329

Acquired (1):
With no related allowance recorded:
Real estate loans:
Residential		1,320,985		1,133,646		-		1,017,399		51,442
Investor		503,920		148,506		-		230,757		12,229
Commercial		254,844		204,844		-		208,057		7,770
Commercial construction		-		-		-		-		-
Commercial business		-		-		-		-		-
Home equity loans		-		-		-		-		-
Consumer		88,276		40,107		-		44,079		6,049
With an allowance recorded:
Real estate loans:
Residential		-		-		-		-		-
Investor		66,446		38,382		1,182		34,448		-
Commercial		-		-		-		-		-
Commercial construction		-		-		-		-		-
Commercial business		-		-		-		-		-
Home equity loans		-		-		-		-		-
Consumer		-		-		-		-		-
Total acquired impaired		2,234,471		1,565,485		1,182		1,534,740		77,490
Total impaired	$	8,914,260	$	5,657,048	$	285,359	$	6,684,630	$	251,819

(

)

not

performing according to their contractual terms and meet the definition of an impaired loan. Although we do

not

The following table documents changes in the carrying amount of acquired impaired loans (Purchased Credit Impaired or “PCI”) for the

three

months ended

June 30, 2017

and

2016,

along with the outstanding balance at the end of the period:

	June 30, 2017			June 30, 2016

Recorded investment at beginning of period	$	1,341,935		$	919,729
Fair value of loans acquired during the year		-			1,027,518
Accretion		(360	)		6,527
Reductions of payments		(46,664	)		(11,670	)
Recorded investment at end of period	$	1,294,911		$	1,942,104
Outstanding principal balance at end of period	$	1,630,658		$	2,643,930

A summary of changes in the accretable yield for PCI loans for the

three

months ended

June 30, 2017

and

2016

is as follows:

	June 30, 2017		June 30, 2016

Accretable yield at beginning of period	$	59,639	$	32,629
Addition from acquisition		-		55,046
Accretion		360		(6,527	)
Reclassification from nonaccretable difference		-		-
Accretable yield at end of period	$	59,999	$	81,148

Impaired loans also include certain loans that have been modified in troubled debt restructurings (TDRs) where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Bank's loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Generally, nonaccrual loans that are modified and considered TDRs are classified as nonperforming at the time of restructure and

may

only be returned to performing status after considering the borrower's sustained repayment performance for a reasonable period, generally

six

months.

A summary of TDRs at

June 30, 2017

and

March 31, 2017

follows:

	Number of
June 30, 2017	contracts		Performing		Nonperforming		Total
Real estate loans:
Residential		14	$	1,253,861	$	289,565	$	1,543,426
Investor		-		-		-		-
Commercial		2		-		1,546,812		1,546,812
Commercial construction		-		-		-		-
Commercial business		-		-		-		-
Home equity loans		-		-		-		-
Consumer		1		610,003		-		610,003
		17	$	1,863,864	$	1,836,377	$	3,700,241

	Number of
March 31, 2017	contracts		Performing		Nonperforming		Total
Real estate loans:
Residential		13	$	1,261,603	$	294,968	$	1,556,571
Investor		-		-		-		-
Commercial		2		-		1,546,812		1,546,812
Commercial construction		-		-		-		-
Commercial business		1		643,999		-		643,999
Home equity loans		-		-		-		-
Consumer		-		-		-		-
		16	$	1,905,602	$	1,841,780	$	3,747,382

The following table presents the number of contracts and the dollar amount of TDRs that were added during the

three

-month period ended

June

30,

2017

and

2016.

The amount shown reflects the outstanding loan balance at the time of the modification.

There are

commitments to extend credit under existing TDRs as of

March 31, 2017.

Loans Modified as a TDR for the three months ended

June 30, 2017

June 30, 2016

Number of

Outstanding recorded

Number of

Outstanding recorded

Troubled Debt Restructurings

contracts

investment

contracts

investment

Real estate loans:

One-to four-family

1,931

712,786

The following table represents loans that were modified as TDRs within the previous

months and have subsequently defaulted in the

three

months ended

June 30, 2017

and

2016.

Payment default under a TDR is defined as any TDR that is

days or more past due since the loan was modified or the inability of the TDR to make the required payment subsequent to the modification.

Defaulted During the Three

Months Ended June 30, 2017

Defaulted During the Three Months

Ended June 30, 2016

Number of

Recorded

Number of

Recorded

TDR Loan Type

Contracts

Investment

Contracts

Investment

One-to four-family

261,563

The

one

-to

four

-family TDR loans that defaulted as of

June

30,

2016

represent several loans to

one

borrower for non-owner occupied residential real estate properties. The recorded investment reflects a write-down of the recorded investment amounts of

$451,223

during the quarter ended

June

30,

2016.

This write-down was recorded through an adjustment to goodwill based upon information that we were unaware of at time of acquisition. Had we been aware of the information at acquisition, we would have identified these loans as impaired at the time of acquisition.

In calculating the allowance for loan losses, individual TDRs are evaluated for impairment. TDRs are evaluated for impairment based upon either the present value of cash flows or, if collateral dependent, the lower of cost or fair value of the underlying collateral. If it is determined that the cash flows or underlying collateral is less than the carrying amount of the loan, the difference in value will be charged-off through earnings, unless the TDR is performing, in which case a specific reserve

may

be set-up for that TDR.

Credit quality indicators

As part of the ongoing monitoring of the credit quality of the Bank's loan portfolio, management tracks certain credit quality indicators including trends related to the risk grade of loans, the level of classified loans, net charge offs, nonperforming loans, and the general economic conditions in the Bank's market.

The Bank utilizes a risk grading matrix to assign a risk grade to each of its loans. A description of the general characteristics of loans characterized as watch list or classified is as follows:

Pass

A pass loan is considered of sufficient quality to preclude a special mention or an adverse rating. Pass assets generally are well protected by the current net worth and paying capacity of the obligor or by the value of the asset or underlying collateral.

Special Mention

A special mention loan has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses

may

result in deterioration of the repayment prospects for the loan or in the Bank's credit position at some future date. Special mention loans are

not

adversely classified and do

not

expose the Bank to sufficient risk to warrant adverse classification.

Loans that would primarily fall into this notational category could have been previously classified adversely, but the deficiencies have since been corrected. Management should closely monitor recent payment history of the loan and value of the collateral.

Borrowers

may

exhibit poor liquidity and leverage positions resulting from generally negative cash flow or negative trends in earnings. Access to alternative financing

may

be limited to finance companies for business borrowers and

may

be unavailable for commercial real estate borrowers.

Substandard

A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well defined weakness, or weaknesses, that jeopardize the collection or liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are

not

corrected. This will be the measurement for determining if a loan is impaired.

Borrowers

may

exhibit recent or unexpected unprofitable operations, an inadequate debt service coverage ratio, or marginal liquidity and capitalization. These loans require more intense supervision by Bank management.

Doubtful

A doubtful loan has all the weaknesses inherent as a substandard loan 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. A loan classified as doubtful exhibits loss potential. However, there is still sufficient reason to permit the loan to remain on the books. A doubtful classification could reflect the deterioration of the primary source of repayment and serious doubt exists as to the quality of the secondary source of repayment.

Doubtful classifications should be used only when a distinct and known possibility of loss exists. When identified, adequate loss should be recorded for the specific assets. The entire asset should

not

be classified as doubtful if a partial recovery is expected, such as liquidation of the collateral or the probability of a private mortgage insurance payment is likely.

Loss

Loans classified as loss are considered uncollectable and of such little value that their continuance as loans is unjustified. A loss classification does

not

mean a loan has absolutely

value; partial recoveries

may

be received in the future. When loans or portions of a loan are considered a loss, it will be the policy of the Bank to write-off the amount designated as a loss. Recoveries will be treated as additions to the allowance for loan losses.

The following tables present the

June 30, 2017

and

March 31, 2017,

balances of classified loans based on the risk grade. Classified loans include Special Mention, Substandard, Doubtful, and Loss loans. The Bank had

loans classified as Doubtful or Loss as of

June 30, 2017

March 31, 2017.

	June 30, 2017						March 31, 2017
	LEGACY		ACQUIRED		TOTAL		LEGACY		ACQUIRED		TOTAL
Risk Rating:
Rating - Pass:
Real estate loans:
Residential	$	73,580,895	$	78,192,680	$	151,773,575	$	71,721,341	$	81,228,457	$	152,949,798
Investor		7,803,689		17,924,246		25,727,935		6,728,493		18,151,533		24,880,026
Commercial		84,786,588		12,900,861		97,687,449		84,789,748		13,387,987		98,177,735
Commercial construction		2,326,457		1,191,507		3,517,964		1,881,541		1,308,652		3,190,193
Commercial Business		35,226,272		2,037,264		37,263,536		19,376,763		2,019,337		21,396,100
Home Equity		14,105,667		6,539,178		20,644,845		13,269,478		7,133,164		20,402,642
Consumer		2,135,569		889,891		3,025,460		2,258,836		896,022		3,154,858
Total Pass		219,965,137		119,675,627		339,640,764		200,026,200		124,125,152		324,151,352

Rating - Special Mention:
Real estate loans:
Residential		1,486,142		1,119,496		2,605,638		1,499,436		1,724,987		3,224,423
Investor		-		325,422		325,422		-		408,803		408,803
Commercial		6,295,024		1,295,327		7,590,351		6,329,129		1,305,692		7,634,821
Commercial construction		-		-		-		-		-		-
Commercial Business		-		-		-		-		-		-
Home Equity		-		129,507		129,507		-		132,977		132,977
Consumer		-		-		-		-		788		788
Total Special Mention		7,781,166		2,869,752		10,650,918		7,828,565		3,573,247		11,401,812

Rating - Substandard:
Real estate loans:
Residential		351,718		984,377		1,336,095		331,976		938,945		1,270,921
Investor		7,772		183,728		191,500		13,976		219,308		233,284
Commercial		1,546,812		203,215		1,750,027		1,546,812		204,844		1,751,656
Commercial construction		-		-		-		-		-		-
Commercial Business		112,811		-		112,811		141,266		-		141,266
Home Equity		10,980		-		10,980		8,751		-		8,751
Consumer		-		38,809		38,809		-		40,790		40,790
Total - Substandard		2,030,093		1,410,129		3,440,222		2,042,781		1,403,887		3,446,668

Rating - Doubtful		-		-		-		-		-		-
Rating - Loss		-		-		-		-		-		-
TOTAL LOANS	$	229,776,396	$	123,955,508	$	353,731,904	$	209,897,546	$	129,102,286	$	338,999,832

In the normal course of business, the Bank has various outstanding commitments and contingent liabilities that are

not

reflected in the accompanying financial statements. Loan commitments and lines of credit are agreements to lend to a customer as long as there is

violation of any condition to the contract. Mortgage loan commitments generally have fixed interest rates, fixed expiration dates, and

may

require payment of a fee. Other loan commitments generally have fixed interest rates. Lines of credit generally have variable interest rates. Such lines do

not

represent future cash requirements because it is unlikely that all customers will draw upon their lines in full at any time.

The Bank’s maximum exposure to credit loss in the event of nonperformance by the customer is the contractual amount of the credit commitment. Loan commitments, lines of credit, and letters of credit are made on the same terms, including collateral, as outstanding loans. The Bank has established an off-balance sheet reserve for potential losses associated with any outstanding commitment or unused line of credit. The off balance sheet reserve is a percentage of the outstanding commitment or unused line of credit that is based upon a discounted charge-off history associated with each respective loan segment. The reserve at

June 30, 2017

and

March 31, 2017

totaled

$63,000

and

$55,000,

respectively. At

June 30, 2017,

management is

not

aware of any accounting loss to be incurred by funding these loan commitments at this time.

The Bank had the following outstanding commitments and unused lines of credit as of

June 30, 2017

and

March 31, 2017:

	June 30,		March 31,
	2017		2017

Unused commercial lines of credit	$	13,942,528	$	10,733,345
Unused home equity lines of credit		22,566,463		22,993,289
Unused consumer lines of credit		30,760		1,110,155
Residential mortgage loan commitments		-		-
Residential construction loan commitments		8,435,236		8,047,156
Commercial construction loan commitments		6,812,988		7,091,564
Home equity loan commitments		-		84,000
Commercial loan commitments		360,000		1,089,218
Standby letters of credit		206,367		472,354