Note

Loans Receivable and Allowance for Loan Losses

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

September 30, 2018

and

March 31, 2018:

	September 30, 2018												March 31, 2018
	Legacy (1)			Acquired			Total Loans			% of Total			Legacy (1)			Acquired			Total Loans			% of Total
Real estate loans:
One-to four-family:
Residential (2)	$	83,090,271		$	68,932,853		$	152,023,124			40	%	$	85,248,184		$	72,749,066		$	157,997,250			41	%
Residential construction		3,639,139			-			3,639,139			1	%		5,450,827			-			5,450,827			1	%
Investor (3)		7,880,161			17,002,668			24,882,829			7	%		9,275,031			17,460,809			26,735,840			7	%
Commercial		105,679,013			10,017,465			115,696,478			31	%		100,403,769			11,762,485			112,166,254			29	%
Commercial construction		2,529,160			928,008			3,457,168			1	%		5,763,784			1,352,019			7,115,803			2	%
Total real estate loans		202,817,744			96,880,994			299,698,738			80	%		206,141,595			103,324,379			309,465,974			80	%
Commercial business (4)		36,134,376			1,755,200			37,889,576			10	%		38,302,739			1,841,226			40,143,965			10	%
Home equity loans		14,183,532			5,184,176			19,367,708			5	%		13,956,327			6,039,462			19,995,789			5	%
Consumer (5)		16,973,316			719,527			17,692,843			5	%		18,849,448			766,063			19,615,511			5	%
Total Loans		270,108,968			104,539,897			374,648,865			100	%		277,250,109			111,971,130			389,221,239			100	%
Net deferred loan origination fees and costs		(194,146	)		-			(194,146	)					(212,746	)		-			(212,746	)
Loan premium (discount)		1,773,078			(288,093	)		1,484,985						1,922,428			(510,036	)		1,412,392
	$	271,687,900		$	104,251,804		$	375,939,704					$	278,959,791		$	111,461,094		$	390,420,885

_________________________________________________

(

)

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".

(

)

"Legacy"

one

-to

four

-family residential real estate loans at

March 31, 2018

includes

$19.2

million of various loan pools purchased in the

second

half of fiscal

2018.

(

)

"Investor" loans are residential mortgage loans secured by non-owner occupied

one

-to

four

-family properties.

(

)

"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

second

half of fiscal

2018.

(

)

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

three

and

six

-month periods ended

September 30, 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.

Three Months Ended September 30, 2018	Residential Real Estate			Investor Real Estate			Commercial Real Estate			Commercial Construction			Commercial Business			Home Equity		Consumer			Unallocated		Total
Allowance for credit losses:
Beginning balance	$	601,211		$	63,506		$	1,355,886		$	14,793		$	609,372		$	68,267	$	123,952		$	-	$	2,836,987
Charge-offs		(5,722	)		(2,531	)		-			-			(75,000	)		-		-			-		(83,253	)
Recoveries		1,475			-			31,320			-			-			-		1,904			-		34,699
Provision for credit losses		68,712			253,596			(74,765	)		(2,403	)		(1,761	)		4,564		(27,180	)		21,733		242,496
Ending balance	$	665,676		$	314,571		$	1,312,441		$	12,390		$	532,611		$	72,831	$	98,676		$	21,733	$	3,030,929

Six Months Ended September 30, 2018	Residential Real Estate			Investor Real Estate			Commercial Real Estate			Commercial Construction			Commercial Business			Home Equity		Consumer			Unallocated		Total
Allowance for credit losses:
Beginning balance	$	608,723		$	51,690		$	1,253,383		$	33,430		$	673,982		$	69,459	$	131,236		$	-	$	2,821,903
Charge-offs		(13,769	)		(8,111	)		(31,320	)		-			(75,000	)		-		(2,465	)		-		(130,665	)
Recoveries		2,242			64			31,320			-			-			-		3,569			-		37,195
Provision for credit losses		68,480			270,928			59,058			(21,040	)		(66,371	)		3,372		(33,664	)		21,733		302,496
Ending balance	$	665,676		$	314,571		$	1,312,441		$	12,390		$	532,611		$	72,831	$	98,676		$	21,733	$	3,030,929

Allowance allocated to:
Legacy Loans:
Individually evaluated for impairment	$	257,866		$	1,857		$	-		$	-		$	-		$	-	$	-		$	-	$	259,723
Collectively evaluated for impairment		260,437			50,278			1,272,762			11,381			528,363			57,845		98,491			21,733		2,301,290

Acquired Loans:
Individually evaluated for impairment	$	-		$	-		$	-		$	-		$	-		$	-	$	-		$	-	$	-
Collectively evaluated for impairment		147,373			262,436			39,679			1,009			4,248			14,986		185			-		469,916

Three Months Ended September 30, 2017	Residential Real Estate			Investor Real Estate			Commercial Real Estate		Commercial Construction			Commercial Business			Home Equity			Consumer			Unallocated		Total
Allowance for credit losses:
Beginning balance	$	544,557		$	64,471		$	1,312,158	$	26,987		$	343,094		$	64,661		$	1,600		$	-	$	2,357,528
Charge-offs		(8,907	)		(11,044	)		-		-			-			-			(486	)		-		(20,437	)
Recoveries		-			12,822			-		-			206			-			872			-		13,900
Provision for credit losses		(7,362	)		(13,994	)		48,275		(14,913	)		(16,170	)		(2,091	)		126,255			-		120,000
Ending balance	$	528,288		$	52,255		$	1,360,433	$	12,074		$	327,130		$	62,570		$	128,241		$	-	$	2,470,991

Six Months Ended September 30, 2017	Residential Real Estate			Investor Real Estate			Commercial Real Estate			Commercial Construction		Commercial Business		Home Equity			Consumer			Unallocated		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		(8,907	)		(15,122	)		-			-		-		-			(486	)		-		(24,515	)
Recoveries		-			18,129			-			-		381		-			2,181			-		20,691
Provision for credit losses		(16,344	)		13,973			(15,461	)		3,043		177,288		(7,501	)		125,002			-		280,000
Ending balance	$	528,288		$	52,255		$	1,360,433		$	12,074	$	327,130	$	62,570		$	128,241		$	-	$	2,470,991

Allowance allocated to:
Legacy Loans:
Individually evaluated for impairment	$	270,329		$	-		$	-		$	-	$	-	$	-		$	-		$	-	$	270,329
Collectively evaluated for impairment		257,959			52,255			1,360,433			12,074		327,130		62,570			128,241			-		2,200,662

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

Our recorded investment in loans at

September 30, 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:

September 30, 2018	Residential Real Estate		Investor Real Estate		Commercial Real Estate		Commercial Construction		Commercial Business		Home Equity		Consumer		Total
Legacy Loans:
Individually evaluated for impairment	$	1,710,906	$	59,426	$	4,251,209	$	-	$	769,307	$	7,254	$	7,208	$	6,805,310
Collectively evaluated for impairment		85,018,504		7,820,735		101,427,804		2,529,160		35,365,069		14,176,278		16,966,108		263,303,658
Ending balance	$	86,729,410	$	7,880,161	$	105,679,013	$	2,529,160	$	36,134,376	$	14,183,532	$	16,973,316	$	270,108,968

Acquired Loans:
Individually evaluated for impairment	$	1,002,307	$	499,838	$	196,697	$	-	$	-	$	-	$	57,772	$	1,756,614
Collectively evaluated for impairment		67,930,546		16,502,829		9,820,768		928,008		1,755,200		5,184,176		661,756		102,783,283
Ending balance	$	68,932,853	$	17,002,667	$	10,017,465	$	928,008	$	1,755,200	$	5,184,176	$	719,528	$	104,539,897

September 30, 2017	Residential Real Estate		Investor Real Estate		Commercial Real Estate		Commercial Construction		Commercial Business		Home Equity		Consumer		Total
Legacy Loans:
Individually evaluated for impairment	$	1,684,871	$	5,294	$	4,707,655	$	-	$	702,352	$	22,564	$	-	$	7,122,736
Collectively evaluated for impairment		73,121,605		9,622,035		90,250,315		2,081,647		33,340,191		13,641,850		20,178,064		242,235,707
Ending balance	$	74,806,476	$	9,627,329	$	94,957,970	$	2,081,647	$	34,042,543	$	13,664,414	$	20,178,064	$	249,358,443

Acquired Loans:
Individually evaluated for impairment	$	1,260,264	$	210,988	$	201,573	$	-	$	-	$	-	$	64,237	$	1,737,062
Collectively evaluated for impairment		76,403,162		18,212,904		11,912,984		1,058,534		1,668,783		6,459,424		838,003		116,553,794
Ending balance	$	77,663,426	$	18,423,892	$	12,114,557	$	1,058,534	$	1,668,783	$	6,459,424	$	902,240	$	118,290,856

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

six

months ended

September 30, 2018

and as of and for the year ended

March 31, 2018,

were as follows:

	September 30, 2018						March 31, 2018
	Legacy		Acquired		Total		Legacy		Acquired		Total
Current	$	264,810,304	$	102,404,079	$	367,214,383	$	270,807,643	$	109,972,473	$	380,780,116
Accruing past due loans:
30-59 days past due:
Real estate loans:
Residential		85,928		234,284		320,212		63,618		689,364		752,982
Investor		-		-		-		-		-		-
Commercial		-		-		-		-		-		-
Commercial construction		-		160,000		160,000		-		-		-
Commercial business		-		-		-		135,502		-		135,502
Home equity loans		-		33,031		33,031		-		-		-
Consumer		67,955		54,050		122,005		148,876		-		148,876
Total 30-59 days past due		153,883		481,365		635,248		347,996		689,364		1,037,360

60-89 days past due:
Real estate loans:
Residential		9,330		678,017		687,347		70,291		-		70,291
Investor		-		-		-		-		-		-
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		-		-		-		134,524		-		134,524
Home equity loans		-		-		-		-		-		-
Consumer		28,773		-		28,773		28,300		-		28,300
Total 60-89 days past due		38,103		678,017		716,120		233,115		-		233,115

90 or more days past due:
Real estate loans:
Residential		-		-		-		-		-		-
Investor		224,296		113,449		337,745		734,818		471,423		1,206,241
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total 90 or more days past due		224,296		113,449		337,745		734,818		471,423		1,206,241
Total accruing past due loans		416,282		1,272,831		1,689,113		1,315,929		1,160,787		2,476,716

Non-accruing loans:
Real estate loans:
Residential		397,300		305,198		702,498		526,584		338,060		864,644
Investor		59,426		361,092		420,518		60,949		300,872		361,821
Commercial		4,251,209		196,697		4,447,906		4,356,264		198,938		4,555,202
Commercial construction		-		-		-		-		-		-
Commercial business		167,239		-		167,239		165,285		-		165,285
Home equity loans		-		-		-		12,605		-		12,605
Consumer		7,208		-		7,208		4,850		-		4,850
Non-accruing loans:		4,882,382		862,987		5,745,369		5,126,537		837,870		5,964,407
Total Loans	$	270,108,968	$	104,539,897	$	374,648,865	$	277,250,109	$	111,971,130	$	389,221,239

Nonaccrual interest not accrued:
Real estate loans:
Residential	$	2,068	$	5,797	$	7,865	$	8,250	$	53,120	$	61,370
Investor		1,475		8,256		9,731		8,513		15,604		24,117
Commercial		245,071		959		246,030		294,619		-		294,619
Commercial construction		-		-		-		-		-		-
Commercial business		13,166		-		13,166		12,891		-		12,891
Home equity loans		-		-		-		436		-		436
Consumer		147		-		147		385		-		385
Total nonaccrual interest not accrued	$	261,927	$	15,012	$	276,939	$	325,094	$	68,724	$	393,818

Impaired loans as of and for the

three

and

six

months ended

September 30, 2018

and

2017,

and the year ended

March 31, 2018,

was as follows:

	Impaired Loans at September 30, 2018						Three months ended September 30, 2018				Six months ended September 30, 2018
	Unpaid
	Contractual						Average		Interest		Average		Interest
	Principal		Recorded		Related		Recorded		Income		Recorded		Income
Legacy:	Balance		Investment		Allowance		Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Real estate loans:
Residential	$	631,126	$	467,785	$	-	$	470,171	$	3,309	$	477,820	$	4,100
Investor		69,151		27,869		-		29,105		-		29,690		-
Commercial		6,399,358		4,251,209		-		4,251,209		-		4,265,903		53,278
Commercial construction		-		-		-		-		-		-		-
Commercial business		1,595,928		769,307		-		821,814		23,022		850,675		44,937
Home equity loans		7,254		7,254		-		7,279		54		12,148		133
Consumer		7,208		7,208		-		7,234		75		7,392		159
With an allowance recorded:
Real estate loans:
Residential	$	1,257,297	$	1,243,121	$	257,866	$	1,245,847	$	12,419	$	1,250,755	$	24,918
Investor		53,596		31,557		1,857		31,257		-		30,479		-
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total legacy impaired		10,020,918		6,805,310		259,723		6,863,916		38,879		6,924,862		127,525

Acquired (1):
With no related allowance recorded:
Real estate loans:
Residential		1,096,210		1,002,307		-		1,005,999		5,856		1,008,837		16,979
Investor		769,766		499,838		-		501,079		4,944		500,429		9,137
Commercial		246,697		196,697		-		196,697		618		197,398		2,481
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		38,310		-		-		-		329		-		650
Consumer		91,462		57,772		-		58,052		1,134		58,812		2,581
With an allowance recorded:
Real estate loans:
Residential		-		-		-		-		-		-		-
Investor		-		-		-		-		-		-		-
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total acquired impaired		2,242,445		1,756,614		-		1,761,827		12,881		1,765,476		31,828
Total impaired	$	12,263,363	$	8,561,924	$	259,723	$	8,625,743	$	51,760	$	8,690,338	$	159,353

(

)

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 September 30, 2017						Three months ended September 30, 2017				Six months ended September 30, 2017
	Unpaid
	Contractual						Average		Interest		Average		Interest
	Principal		Recorded		Related		Recorded		Income		Recorded		Income
Legacy:	Balance		Investment		Allowance		Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Real estate loans:
Residential	$	515,922	$	379,988	$	-	$	384,968	$	321	$	387,950	$	967
Investor		9,909		5,294				5,344		-		5,451		-
Commercial		6,594,464		4,707,655		-		4,707,655		-		4,712,233		1,077
Commercial construction		-		-		-		-		-		-		-
Commercial business		1,109,333		702,352		-		710,139		24,086		725,401		49,238
Home equity loans		48,781		22,564		-		22,997		77		23,611		240
Consumer						-		-		-		-		-
With an allowance recorded:
Real estate loans:
Residential		1,332,333		1,304,883		270,329		1,316,635		12,748		1,317,648		25,550
Investor		-		-		-		-		-		-		-
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total legacy impaired		9,610,742		7,122,736		270,329		7,147,738		37,232		7,172,294		77,072

Acquired (1):
With no related allowance recorded:
Real estate loans:
Residential		1,447,903		1,260,264		-		1,271,653		14,444		1,277,955		27,264
Investor		210,983		210,988		-		213,788		2,999		206,636		6,810
Commercial		251,573		201,573		-		202,395		1,900		203,121		3,813
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		42,927		-		-		-		313		-		600
Consumer		101,550		64,237		-		64,832		1,356		65,271		3,126
With an allowance recorded:
Real estate loans:
Residential		-		-		-		-		-		-		-
Investor		-		-		-		-		-		-		-
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total acquired impaired		2,054,936		1,737,062		-		1,752,668		21,012		1,752,983		41,613
Total impaired	$	11,665,678	$	8,859,798	$	270,329	$	8,900,406	$	58,244	$	8,925,277	$	118,685

(

)

not

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

not

	Impaired Loans at March 31, 2018						For the Year Ended 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

(

)

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

six

months ended

September 30, 2018

and

2017,

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

	September 30, 2018			September 30, 2017

Recorded investment at beginning of period	$	1,021,424		$	1,341,935
Accretion		2,089			725
Reductions for payments		(101,846	)		(113,688	)
Recorded investment at end of period	$	921,667		$	1,228,972
Oustanding principal balance at end of period	$	1,122,792		$	1,549,586

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

six

months ended

September 30, 2018

and

2017

is as follows:

	September 30, 2018			September 30, 2017

Accretable yield, beginning of period	$	31,895		$	59,639
Accretion		(2,089	)		(725	)
Reclassification from nonaccretable difference		-			-
Accretable yield, end of period	$	29,806		$	58,914

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

September 30, 2018

and

March 31, 2018

follows:

	Number of
September 30, 2018	contracts		Performing		Nonperforming		Total
Real estate loans:
Residential		16	$	1,304,276	$	230,953	$	1,535,229
Investor		-		-		-		-
Commercial		2		-		1,195,421		1,195,421
Commercial construction		-		-		-		-
Commercial business		1		602,067		-		602,067
Home equity loans		-		-		-		-
Consumer		-		-		-		-
		19	$	1,906,343	$	1,426,374	$	3,332,717

	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

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

six

-month period ended

September

30,

2018

and

2017.

There were

TDRs added during the

three

-month period ended

September 30, 2018

and

2017.

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

September 30, 2018.

Loans Modified as a TDR for the six months ended

September 30, 2018

September 30, 2017

Number of

Outstanding recorded

Number of

Outstanding recorded

Troubled Debt Restructurings

contracts

investment

contracts

investment

Real estate loans:

One-to four-family

20,866

1,931

There were

TDRs that defaulted in the

three

six

months ended

September 30, 2018

and

2017.

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.

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

September 30, 2018

and

March 31, 2018,

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

September 30, 2018

March 31, 2018.

	September 30, 2018						March 31, 2018
	LEGACY		ACQUIRED		TOTAL		LEGACY		ACQUIRED		TOTAL
Risk Rating:
Rating - Pass:
Real estate loans:
Residential	$	83,998,596	$	66,964,649	$	150,963,245	$	87,863,805	$	70,901,293	$	158,765,098
Investor		7,820,735		16,224,450		24,045,185		9,214,082		16,719,346		25,933,428
Commercial		101,427,804		9,820,768		111,248,572		92,955,370		11,563,547		104,518,917
Commercial construction		2,529,160		928,008		3,457,168		5,763,784		1,352,019		7,115,803
Commercial Business		35,967,137		1,755,200		37,722,337		37,978,293		1,841,226		39,819,519
Home Equity		14,176,278		5,046,158		19,222,436		13,935,732		5,928,787		19,864,519
Consumer		16,962,733		688,356		17,651,089		18,733,489		733,669		19,467,158
Total Pass		262,882,443		101,427,589		364,310,032		266,444,555		109,039,887		375,484,442

Rating - Special Mention:
Real estate loans:
Residential		2,324,604		965,897		3,290,501		2,365,652		925,521		3,291,173
Investor		-		279,685		279,685		-		297,209		297,209
Commercial		-		-		-		3,092,135		-		3,092,135
Commercial construction		-		-		-		-		-		-
Commercial Business		-		-		-		134,524		-		134,524
Home Equity		-		138,018		138,018		-		110,675		110,675
Consumer		10,583		-		10,583		96,474		-		96,474
Total Special Mention		2,335,187		1,383,600		3,718,787		5,688,785		1,333,405		7,022,190

Rating - Substandard:
Real estate loans:
Residential		406,210		1,002,307		1,408,517		469,554		922,252		1,391,806
Investor		59,426		498,533		557,959		60,949		444,254		505,203
Commercial		4,251,209		196,697		4,447,906		4,356,264		198,938		4,555,202
Commercial construction		-		-		-		-		-		-
Commercial Business		167,239		-		167,239		189,922		-		189,922
Home Equity		7,254		-		7,254		20,595		-		20,595
Consumer		-		31,171		31,171		19,485		32,394		51,879
Total - Substandard		4,891,338		1,728,708		6,620,046		5,116,769		1,597,838		6,714,607

Rating - Doubtful		-		-		-		-		-		-
Rating - Loss		-		-		-		-		-		-
TOTAL LOANS	$	270,108,968	$	104,539,897	$	374,648,865	$	277,250,109	$	111,971,130	$	389,221,239

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

September 30, 2018

and

March 31, 2018

totaled

$52,000

and

$50,000,

respectively. At

September 30, 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

September 30, 2018

and

March 31, 2018:

	September 30,		March 31,
Outstanding Commitment and Used Lines of Credit	2018		2018
Unused commercial lines of credit	$	11,536,470	$	9,187,810
Unused home equity lines of credit		23,299,018		22,560,376
Unused consumer lines of credit		26,845		29,331
Residential construction loan commitments		7,814,167		4,234,076
Commercial construction loan commitments		2,535,935		8,968,416
Home equity loan commitments		353,000		389,600
Commercial loan commitments		3,359,375		5,125,000
Standby letter of credit		416,449		250,224