Note

Loans Receivable and Allowance for Loan Losses

Loans receivable at

March 31, 2018

and

March 31, 2017,

consisted of the following:

	March 31, 2018												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)	$	85,248,184		$	72,749,066		$	157,997,250			40	%	$	67,126,677		$	83,892,389		$	151,019,066			44	%
Residential construction		5,450,827			-			5,450,827			1	%		6,426,076			-			6,426,076			2	%
Investor (3)		9,275,031			17,460,809			26,735,840			7	%		6,742,469			18,779,644			25,522,113			8	%
Commercial		100,403,769			11,762,485			112,166,254			29	%		92,665,689			14,898,523			107,564,212			32	%
Commercial construction		5,763,784			1,352,019			7,115,803			2	%		1,881,541			1,308,652			3,190,193			1	%
Total real estate loans		206,141,595			103,324,379			309,465,974			80	%		174,842,452			118,879,208			293,721,660			87	%
Commercial business (4)		38,302,739			1,841,226			40,143,965			10	%		19,518,029			2,019,337			21,537,366			6	%
Home equity loans		13,956,327			6,039,462			19,995,789			5	%		13,278,229			7,266,141			20,544,370			6	%
Consumer (5)		18,849,448			766,063			19,615,511			5	%		2,258,836			937,600			3,196,436			1	%
Total Loans		277,250,109			111,971,130			389,221,239			100	%		209,897,546			129,102,286			338,999,832			100	%
Net deferred loan origination fees and costs		(212,746	)		-			(212,746	)					(143,070	)		-			(143,070	)
Loan premium (discount)		1,922,428			(510,036	)		1,412,392						619,846			(543,410	)		76,436
	$	278,959,791		$	111,461,094		$	390,420,885					$	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, 2018 and 2017 includes $19.2 million and $23.4 million of purchased loan pools, respectively.
( 3 )	"Investor" loans are residential mortgage loans secured by non-owner occupied one -to four -family properties.
( 4 )	"Legacy" commercial business loans at March 31, 2018 includes a $15.5 million pool of commercial lease loans purchased in June 2017 and $3.2 million in guaranteed SBA loans purchased in last half of fiscal 2018.
( 5 )	"Legacy" consumer loans at March 31, 2018 includes $19.9 million of purchased loan pools consisting of recreational vehicles that were purchased in August and December 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 tables detail activity in the allowance for loan losses by portfolio segment for the fiscal years ended

March 31, 2018

and

2017.

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.

	March 31, 2018
	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		(19,868	)		(315,663	)		(244,014	)		-		(378,694	)		-			(17,013	)		(975,252	)
Recoveries		3,937			18,129			-			-		770			-			4,504			27,340
Provision for credit losses		71,115			313,949			121,503			24,399		902,445			(612	)		142,201			1,575,000
Ending balance	$	608,723		$	51,690		$	1,253,383		$	33,430	$	673,982		$	69,459		$	131,236		$	2,821,903

Allowance allocated to:
Legacy Loans:
Individually evaluated for impairment	$	266,256		$	-		$	-		$	-	$	-		$	-		$	-		$	266,256
Collectively evaluated for impairment		342,467			51,690			1,253,383			33,430		673,982			69,459			131,236			2,555,647

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

	March 31, 2017
	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		(34,578	)		(1,801,438	)		(1,111,320	)		-			(1,521	)		-			(4,073	)		(2,952,930	)
Recoveries		-			11,599			-			-			29,257			-			9,518			50,374
Provision for credit losses		328,222			1,656,982			1,585,446			(33,346	)		(106,474	)		(11,941	)		(23,883	)		3,395,006
Ending balance	$	553,539		$	35,275		$	1,375,894		$	9,031		$	149,461		$	70,071		$	1,544		$	2,194,815

Allowance allocated to:
Legacy Loans:
Individually evaluated for impairment	$	284,177		$	-		$	-		$	-		$	-		$	-		$	-		$	284,177
Collectively evaluated for impairment		269,362			34,093			1,375,894			9,031			149,461			70,071			1,544			1,909,456

Acquired Loans:
Individually evaluated for impairment	$	-		$	1,182		$	-		$	-		$	-		$	-		$	-		$	1,182
Collectively evaluated for impairment		-			-			-			-			-			-			-			-

Our recorded investment in loans at

March 31, 2018

and

2017

related to each balance in the allowance for probable loan losses by portfolio segment and disaggregated on the basis of our impairment methodology was as follows:

	March 31, 2018
	Residential Real Estate		Investor Real Estate		Commercial Real Estate		Commercial Construction		Commercial Business		Home Equity		Consumer		Total
Loans:
Legacy Loans:
Individually evaluated for impairment	$	1,827,040	$	60,949	$	4,356,264	$	-	$	795,410	$	20,595	$	34,266	$	7,094,524
Collectively evaluated for impairment		88,871,971		9,214,082		96,047,505		5,763,784		37,507,329		13,935,732		18,815,182		270,155,585
Ending balance	$	90,699,011	$	9,275,031	$	100,403,769	$	5,763,784	$	38,302,739	$	13,956,327	$	18,849,448	$	277,250,109

Acquired Loans:
individually evaluated for impairment	$	922,252	$	444,254	$	198,938	$	-	$	-	$	-	$	60,011	$	1,625,455
collectively evaluated for impairment		71,826,814		17,016,555		11,563,547		1,352,019		1,841,226		6,039,462		706,052		110,345,675
Ending balance	$	72,749,066	$	17,460,809	$	11,762,485	$	1,352,019	$	1,841,226	$	6,039,462	$	766,063	$	111,971,130

	March 31, 2017
	Residential Real Estate		Investor Real Estate		Commercial Real Estate		Commercial Construction		Commercial Business		Home Equity		Consumer		Total
Loans:
Legacy Loans:
Individually evaluated for impairment	$	1,762,417	$	16,919	$	1,546,812	$	-	$	753,375	$	12,040	$	-	$	4,091,563
Collectively evaluated for impairment		71,790,336		6,725,550		91,118,877		1,881,541		18,764,654		13,266,189		2,258,836		205,805,983
Ending balance	$	73,552,753	$	6,742,469	$	92,665,689	$	1,881,541	$	19,518,029	$	13,278,229	$	2,258,836	$	209,897,546

Acquired Loans:
individually evaluated for impairment	$	1,133,646	$	186,888	$	204,844	$	-	$	-	$	-	$	40,107	$	1,565,485
collectively evaluated for impairment		82,758,743		18,592,756		14,693,679		1,308,652		2,019,337		7,266,141		897,493		127,536,801
Ending balance	$	83,892,389	$	18,779,644	$	14,898,523	$	1,308,652	$	2,019,337	$	7,266,141	$	937,600	$	129,102,286

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

March 31, 2018

and

2017,

were as follows:

	March 31, 2018						March 31, 2017
	Legacy		Acquired		Total		Legacy		Acquired		Total
Current	$	270,807,643	$	109,972,473	$	380,780,116	$	207,328,184	$	128,769,860	$	336,098,044
Accruing past due loans:
30-59 days past due:
Real estate loans:
Residential		63,618		689,364		752,982		69,618		-		69,618
Investor		-		-		-		320,971		-		320,971
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		113,603		-		113,603
Commercial business		135,502		-		135,502		-		-		-
Home equity loans		-		-		-		-		-		-
Consumer		148,876		-		148,876		-		-		-
Total 30-59 days past due		347,996		689,364		1,037,360		504,192		-		504,192

60-89 days past due:
Real estate loans:
Residential		70,291		-		70,291		74,631		-		74,631
Investor		-		-		-		-		-		-
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		134,524		-		134,524		-		-		-
Home equity loans		-		-		-		-		-		-
Consumer		28,300		-		28,300		-		-		-
Total 60-89 days past due		233,115		-		233,115		74,631		-		74,631

90 or more days past due:
Real estate loans:
Residential		-		-		-		-		-		-
Investor		734,818		471,423		1,206,241		-		21,030		21,030
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total 90 or more days past due		734,818		471,423		1,206,241		-		21,030		21,030
Total accruing past due loans		1,315,929		1,160,787		2,476,716		578,823		21,030		599,853

Non-accruing loans:
Real estate loans:
Residential		526,584		338,060		864,644		426,354		248,663		675,017
Investor		60,949		300,872		361,821		13,976		57,131		71,107
Commercial		4,356,264		198,938		4,555,202		1,546,812		-		1,546,812
Commercial construction		-		-		-		-		-		-
Commercial business		165,285		-		165,285		-		-		-
Home equity loans		12,605		-		12,605		3,397		-		3,397
Consumer		4,850		-		4,850		-		5,602		5,602
Non-accruing loans:		5,126,537		837,870		5,964,407		1,990,539		311,396		2,301,935
Total Loans	$	277,250,109	$	111,971,130	$	389,221,239	$	209,897,546	$	129,102,286	$	338,999,832


Nonaccrual interest not accrued:
Real estate loans:
Residential	$	8,250	$	53,120	$	61,370	$	6,460	$	35,177	$	41,637
Investor		8,513		15,604		24,117		6,982		23,293		30,275
Commercial		294,619		-		294,619		109,818		-		109,818
Commercial construction		-		-		-		-		-		-
Commercial business		12,891		-		12,891		-		-		-
Home equity loans		436		-		436		66		-		66
Consumer		385		-		385		-		317		317
Total nonaccrual interest not accrued	$	325,094	$	68,724	$	393,818	$	123,326	$	58,787	$	182,113

Impaired Loans as of

March 31, 2018

and

2017

were as follows:

	Impaired Loans at March 31, 2018
	Unpaid
	Contractual						Average		Interest
	Principal		Recorded		Related		Recorded		Income
Legacy:	Balance		Investment		Allowance		Investment		Recognized
With no related allowance recorded:
Real estate loans:
Residential	$	665,051	$	517,600	$	-	$	548,636	$	9,257
Investor		126,389		60,949		-		118,175		3,772
Commercial		6,487,088		4,356,264		-		4,634,504		1,077
Commercial construction		-		-		-		-		-
Commercial business		1,562,756		795,410		-		1,082,773		103,474
Home equity loans		47,650		20,595		-		22,604		392
Consumer		48,115		34,266		-		38,514		1,576
With an allowance recorded:
Real estate loans:
Residential		1,336,078		1,309,440		266,256		1,328,919		51,928
Investor		-		-		-		-
Commercial		-		-		-		-		-
Commercial construction		-		-		-		-		-
Commercial business		-		-		-		-		-
Home equity loans		-		-		-		-		-
Consumer		-		-		-		-		-
Total legacy impaired		10,273,127		7,094,524		266,256		7,774,125		171,476

Acquired (1):
With no related allowance recorded:
Real estate loans:
Residential		1,082,484		922,252		-		945,602		26,437
Investor		682,045		444,254		-		659,246		37,368
Commercial		248,938		198,938		-		201,519		7,336
Commercial construction		-		-		-		-		-
Commercial business		-		-		-		-		-
Home equity loans		40,473		-		-		-		1,329
Consumer		95,986		60,371		-		64,013		6,062
With an allowance recorded:
Real estate loans:
Residential		-		-		-		-		-
Investor		-		-		-		-		-
Commercial		-		-		-		-		-
Commercial construction		-		-		-		-		-
Commercial business		-		-		-		-		-
Home equity loans		-		-		-		-		-
Consumer		-		-		-		-		-
Total acquired impaired		2,149,926		1,625,815		-		1,870,380		78,532
Total impaired	$	12,423,053	$	8,720,339	$	266,256	$	9,644,505	$	250,008

(

)

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 (Purchase Credit Impaired of “PCI”) for the years ended

March 31,

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

	2018			2017

Recorded investment at beginning of period	$	1,341,935		$	919,729
Fair value of loans acquired during the year		-			1,027,518
Accretion		27,744			28,036
Reductions for payments		(348,255	)		(633,348	)
Recorded investment at end of period	$	1,021,424		$	1,341,935
Oustanding principal balance at end of period	$	1,274,022		$	1,691,004

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

March 31,

is as follows:

	2018			2017

Accretable yield, beginning of period	$	59,639		$	32,629
Addition from acquisition		-			55,046
Accretion		(27,744	)		(28,036	)
Reclassification from nonaccretable difference		-			-
Other changes, net		-			-
Accretable yield, end of period	$	31,895		$	59,639

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

March 31, 2018

and

2017

follows:

	Number of
March 31, 2018	contracts		Performing		Nonperforming		Total
Real estate loans:
Residential		15	$	1,230,166	$	312,964	$	1,543,130
Investor		-		-		-		-
Commercial		2		-		1,195,421		1,195,421
Commercial construction		-		-		-		-
Commercial business		1		605,488		-		605,488
Home equity loans		-		-		-		-
Consumer		-		-		-		-
		18	$	1,835,654	$	1,508,385	$	3,344,039

	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 years ended

March 31, 2018

and

2017.

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

Loans Modified as a TDR for the fiscal year ended

March 31, 2018

March 31, 2017

Number of

Outstanding recorded

Number of

Outstanding recorded

Troubled Debt Restructurings

contracts

investment

contracts

investment

Real estate loans:

Residential

52,363

97,401

There are

TDRs outstanding that defaulted over the

twelve

-month period ended

March 31, 2018

and

2017.

Earlier in fiscal

2017,

there were

newly added TDR loans to

one

borrower for non-owner occupied residential real estate properties that had subsequently defaulted within

twelve

months. However, these loans were sold as part of a larger pool of loans in

October 2016

and are

longer being reflected in these financial statements. Payment default under a TDR is defined as any TDR that is

days or more past due following the time that the loan was modified or the inability of the TDR to make the required payment subsequent to the modification. There are

commitments to extend credit under existing TDRs as of

March 31, 2018.

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

March 31, 2018

and

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

March 31, 2018

2017.

	March 31, 2018						March 31, 2017
	LEGACY		ACQUIRED		TOTAL		LEGACY		ACQUIRED		TOTAL
Risk Rating:
Rating - Pass:
Real estate loans:
Residential	$	87,863,805	$	70,901,293	$	158,765,098	$	71,721,341	$	81,228,457	$	152,949,798
Investor		9,214,082		16,719,346		25,933,428		6,728,493		18,151,533		24,880,026
Commercial		92,955,370		11,563,547		104,518,917		84,789,748		13,387,987		98,177,735
Commercial construction		5,763,784		1,352,019		7,115,803		1,881,541		1,308,652		3,190,193
Commercial Business		37,978,293		1,841,226		39,819,519		19,376,763		2,019,337		21,396,100
Home Equity		13,935,732		5,928,787		19,864,519		13,269,478		7,133,164		20,402,642
Consumer		18,733,489		733,669		19,467,158		2,258,836		896,022		3,154,858
Total Pass		266,444,555		109,039,887		375,484,442		200,026,200		124,125,152		324,151,352

Rating - Special Mention:
Real estate loans:
Residential		2,365,652		925,521		3,291,173		1,499,436		1,724,987		3,224,423
Investor		-		297,209		297,209		-		408,803		408,803
Commercial		3,092,135		-		3,092,135		6,329,129		1,305,692		7,634,821
Commercial construction		-		-		-		-		-		-
Commercial Business		134,524		-		134,524		-		-		-
Home Equity		-		110,675		110,675		-		132,977		132,977
Consumer		96,474		-		96,474		-		788		788
Total Special Mention		5,688,785		1,333,405		7,022,190		7,828,565		3,573,247		11,401,812

Rating - Substandard:
Real estate loans:
Residential		469,554		922,252		1,391,806		331,976		938,945		1,270,921
Investor		60,949		444,254		505,203		13,976		219,308		233,284
Commercial		4,356,264		198,938		4,555,202		1,546,812		204,844		1,751,656
Commercial construction		-		-		-		-		-		-
Commercial Business		189,922		-		189,922		141,266		-		141,266
Home Equity		20,595		-		20,595		8,751		-		8,751
Consumer		19,485		32,394		51,879		-		40,790		40,790
Total - Substandard		5,116,769		1,597,838		6,714,607		2,042,781		1,403,887		3,446,668

Rating - Doubtful		-		-		-		-		-		-
Rating - Loss		-		-		-		-		-		-
TOTAL LOANS	$	277,250,109	$	111,971,130	$	389,221,239	$	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

March 31, 2018

and

2017

totaled

$50,200

and

$55,200,

respectively. At

March 31, 2018,

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

March 31, 2018

and

2017:

	March 31,		March 31,
	2018		2017

Unused commercial lines of credit	$	9,187,810	$	10,733,345
Unused home equity lines of credit		22,560,376		22,993,289
Unused consumer lines of credit		29,331		1,110,155
Residential construction loan commitments		4,234,076		8,047,156
Commercial construction loan commitments		8,968,416		7,091,564
Home equity loan commitments		389,600		84,000
Commercial loan commitments		5,125,000		1,089,218
Standby letter of credit		250,224		472,354