10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended December 31, 2018

OR

[   ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______________ to _______________

Commission File No. 001-35693

Hamilton Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Maryland	46-0543309
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
501 Fairmount Avenue, Suite 200, Towson, Maryland	21286
(Address of Principal Executive Offices)	Zip Code

(410) 823-4510

(Registrant’s telephone number)

N/A

(Former name or former address, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days. YES [  X  ]     NO [   ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES [ X ]     NO [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer [   ]	Accelerated filer [   ]
Non-accelerated filer [ X ]	Smaller reporting company [ X ]
Emerging growth company [   ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES [   ]     NO [X]

The Registrant’s common stock, par value $0.01 per share, consisted of 3,416,414 shares issued and outstanding as of February 13, 2019.

Hamilton Bancorp, Inc. and Subsidiary

Form 10-Q

Index 

		Page
Part I. Financial Information
Item 1.	Financial Statements
	Consolidated Statements of Financial Condition as of December 31, 2018 (unaudited) and March 31, 2018	1
	Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 2018 and 2017 (unaudited)	2
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended December 31, 2018 and 2017 (unaudited)	3
	Consolidated Statements of Changes in Shareholders’ Equity for the Nine Months Ended December 31, 2018 and 2017 (unaudited)	4
	Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2018 and 2017 (unaudited)	5 - 6
	Notes to Consolidated Financial Statements (unaudited)	7 – 41
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42 – 68
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	68
Item 4.	Controls and Procedures	69
Part II. Other Information
Item 1.	Legal Proceedings	70
Item 1A.	Risk Factors	70
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	71
Item 3.	Defaults upon Senior Securities	71
Item 4.	Mine Safety Disclosures	71
Item 5.	Other Information	71
Item 6.	Exhibits	72
	Signatures	72

Part I. – Financial Information

Item 1. Financial Statements

HAMILTON BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Financial Condition

December 31, 2018 and March 31, 2018

	December 31,			March 31,
	2018			2018
	(Unaudited)			(Audited)
Assets
Assets
Cash and due from banks	$	15,175,250		$	15,488,396
Federal funds sold		11,372,590			7,880,019
Cash and cash equivalents		26,547,840			23,368,415
Certificates of deposit held as investment		499,121			499,189
Securities available for sale, at fair value		65,577,855			75,404,136
Federal Home Loan Bank stock, at cost		2,676,200			3,122,400
Loans		369,456,616			390,420,885
Allowance for loan losses		(3,031,106	)		(2,821,903	)
Net loans and leases		366,425,510			387,598,982
Premises and equipment, net		3,759,246			3,945,825
Foreclosed real estate		457,778			457,778
Accrued interest receivable		1,448,581			1,468,382
Bank-owned life insurance		17,799,920			17,455,850
Income taxes refundable		40,000			40,000
Goodwill and other intangible assets		9,082,215			9,176,764
Other assets		1,940,161			2,995,741
Total Assets	$	496,254,427		$	525,533,462
Liabilities and Shareholders' Equity
Liabilities
Noninterest-bearing deposits	$	27,545,786		$	29,557,943
Interest-bearing deposits		356,625,156			375,585,032
Total deposits		384,170,942			405,142,975
Borrowings		51,050,000			60,672,140
Advances by borrowers for taxes and insurance		1,059,677			1,962,665
Other liabilities		3,483,868			3,679,550
Total liabilities		439,764,487			471,457,330
Commitments and contingencies		-			-
Shareholders' Equity
Common stock, $.01 par value, 100,000,000 shares authorized. Issued and outstanding: 3,416,414 shares at December 31, 2018 and 3,407,613 shares at March 31, 2018		34,164			34,076
Additional paid in capital		32,548,023			32,113,534
Retained earnings		27,339,778			25,920,490
Unearned ESOP shares		(1,925,560	)		(2,073,680	)
Accumulated other comprehensive loss		(1,506,465	)		(1,918,288	)
Total shareholders' equity		56,489,940			54,076,132
Total Liabilities and Shareholders' Equity	$	496,254,427		$	525,533,462

The accompanying notes are an integral part of these consolidated financial statements.

1

HAMILTON BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Operations (Unaudited)

Three and Nine Months Ended December 31, 2018 and 2017

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2018			2017			2018		2017
Interest revenue
Loans, including fees	$	4,259,628		$	4,104,127		$	13,071,517	$	11,890,765
U.S. treasuries, government agencies and FHLB stock		48,499			37,836			165,402		117,034
Municipal and corporate bonds		94,773			102,847			283,838		329,386
Mortgage-backed securities		271,072			297,851			811,475		951,330
Federal funds sold and other bank deposits		113,357			18,998			337,608		100,145
Total interest revenue		4,787,329			4,561,659			14,669,840		13,388,660
Interest expense
Deposits		1,020,221			714,350			2,815,303		2,044,413
Borrowed funds		328,819			209,926			859,847		502,830
Total interest expense		1,349,040			924,276			3,675,150		2,547,243
Net interest income		3,438,289			3,637,383			10,994,690		10,841,417
Provision for loan losses		80,000			345,000			382,496		625,000
Net interest income after provision for loan losses		3,358,289			3,292,383			10,612,194		10,216,417
Noninterest revenue
Service charges		123,885			109,151			365,434		347,201
Loss on sale of investment securities		-			(12,736	)		-		(2,356	)
Gain on sale of loans held for sale		8,609			-			34,482		-
Gain on sale of property and equipment		-			212,743			-		212,743
Earnings on bank-owned life insurance		115,419			123,597			344,070		369,991
Other		33,260			29,860			124,177		95,972
Total noninterest revenue		281,173			462,615			868,163		1,023,551
Noninterest expenses
Salaries		1,675,976			1,445,336			4,671,013		4,415,848
Employee benefits		351,670			373,699			1,097,813		1,115,185
Occupancy		253,488			259,595			768,502		759,848
Advertising		21,524			22,487			53,506		63,685
Furniture and equipment		103,400			92,894			272,671		262,632
Data processing		202,915			176,114			604,456		522,469
Legal services		70,115			153,615			138,314		374,610
Other professional services		96,510			218,879			298,045		611,699
Merger related expenses		502,835			-			558,598		-
Deposit insurance premiums		56,760			91,470			270,690		222,359
Foreclosed real estate expense and losses		4,447			43,706			13,749		45,005
Other operating		424,505			452,423			1,313,712		1,306,791
Total noninterest expense		3,764,145			3,330,218			10,061,069		9,700,131
Income before income taxes		(124,683	)		424,780			1,419,288		1,539,837
Income tax expense		-			2,351,970			-		2,663,897
Net (loss) income	$	(124,683	)	$	(1,927,190	)	$	1,419,288	$	(1,124,060	)
Net (loss) income per common share:
Basic	$	(0.04	)	$	(0.60	)	$	0.44	$	(0.35	)
Diluted	$	(0.04	)	$	(0.60	)	$	0.44	$	(0.35	)

The accompanying notes are an integral part of these consolidated financial statements.

2

HAMILTON BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Comprehensive Income (Unaudited)

Three and Nine Months Ended December 31, 2018 and 2017

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2018			2017			2018			2017
Net (loss) income	$	(124,683	)	$	(1,927,190	)	$	1,419,288		$	(1,124,060	)
Other comprehensive income (loss):
Unrealized gain (loss) on investment securities available for sale		1,110,739			(393,475	)		505,094			243,772
Reclassification adjustment for realized loss on investment securities available for sale included in net income		-			12,736			-			2,356
Total unrealized gain (loss) on investment securities available for sale		1,110,739			(380,739	)		505,094			246,128
Unrealized (loss) gain on derivative transactions		(287,116	)		122,388			(93,271	)		22,784
Income tax (benefit) expense relating to investment securities available for sale and derivative transactions		-			(101,906	)		-			73,083
Other comprehensive income (loss)		823,623			(156,445	)		411,823			195,829
Total comprehensive income (loss)	$	698,940		$	(2,083,635	)	$	1,831,111		$	(928,231	)

The accompanying notes are an integral part of these consolidated financial statements.

3

HAMILTON BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

Nine Months Ended December 31, 2018 and 2017

											Accumulated
			Additional					Unearned			other			Total
	Common		paid-in		Retained			ESOP			comprehensive			shareholders'
	stock		capital		earnings			shares			loss			equity
Balances at April 1, 2017	$	34,111	$	31,656,235	$	31,730,673		$	(2,221,800	)	$	(1,407,989	)	$	59,791,230
Net income		-		-		(1,124,060	)		-			-			(1,124,060	)
Unrealized gain on available for sale securities, net of tax effect of $ 97,085		-		-		-			-			149,043			149,043
Unrealized gain on derivative transactions securities, net of tax effect of $(24,002)		-		-		-			-			46,786			46,786
Stock based compensation - options		-		172,177		-			-			-			172,177
Restricted stock - compensation and activity		-		173,457		.			.			.			173,457
ESOP shares allocated for release		-		48,434		-			148,120			-			196,554
Balances at December 31, 2017	$	34,111	$	32,050,303	$	30,606,613		$	(2,073,680	)	$	(1,212,160	)	$	59,405,187
Balances at April 1, 2018	$	34,076	$	32,113,534	$	25,920,490		$	(2,073,680	)	$	(1,918,288	)	$	54,076,132
Net income		-		-		1,419,288			-			-			1,419,288
Unrealized gain on available for sale securities, net of tax effect of $ -0-		-		-		-			-			505,094			505,094
Unrealized loss on derivative transactions, net of tax effect of $ -0-		-		-		-			-			(93,271	)		(93,271	)
Stock based compensation - options		-		184,542		-			-			-			184,542
Restricted stock - compensation and activity		88		192,180		-			-			-			192,268
ESOP shares allocated for release		-		57,767		-			148,120			-			205,887
Balances at December 31, 2018	$	34,164	$	32,548,023	$	27,339,778		$	(1,925,560	)	$	(1,506,465	)	$	56,489,940

The accompanying notes are an integral part of these consolidated financial statements.

4

HAMILTON BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended December 31, 2018 and 2017

	Nine Months Ended
	December 31,
	2018			2017
Cash flows from operating activities
Interest received	$	15,083,585		$	13,864,923
Fees and commissions received		493,843			444,472
Interest paid		(4,033,791	)		(3,236,631	)
Cash paid to suppliers and employees		(8,247,761	)		(8,418,190	)
Origination of loans held for sale		(1,733,400	)		-
Proceeds from sale of loans held for sale		1,767,882			-
Income taxes payable (refundable)		-			31,549
Net cash provided by operating activities		3,330,358			2,686,123
Cash flows from investing activities
Proceeds from maturing and called securities available for sale, including principal pay downs		11,891,251			12,219,990
Proceeds from sale of investment securities available for sale		-			11,608,699
Purchase of investment securities available for sale		(1,985,000	)		(1,208,990	)
Purchase (redemption) of Federal Home Loan Bank stock		446,200			(1,083,700	)
Loans made, net of principal repayments		20,672,174			778,762
Purchase of loan portfolios		-			(51,049,819	)
Purchase of premises and equipment		(63,665	)		(443,450	)
Proceeds from sale of premises and equipment		-			769,914
Proceeds from sale of foreclosed real estate		145,820			35,896
Net cash provided (used) by investing activities		31,106,780			(28,372,698	)
Cash flows from financing activities
Net decrease in:
Deposits		(20,761,542	)		(19,836,138	)
Advances by borrowers for taxes and insurance		(902,988	)		(760,104	)
Proceeds from borrowings		24,000,000			40,000,000
Payments of borrowings		(33,500,000	)		(13,007,050	)
Interest rate swap on FHLB borrowings		(93,271	)		22,784
Issuance of restricted stock		88			-
Net cash (used) provided by financing activities		(31,257,713	)		6,419,492
Net increase (decrease) in cash and cash equivalents		3,179,425			(19,267,083	)
Cash and cash equivalents at beginning of period		23,368,415			29,353,921
Cash and cash equivalents at end of period	$	26,547,840		$	10,086,838

The accompanying notes are an integral part of these consolidated financial statements.

5

HAMILTON BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows (Unaudited)

(Continued)

	Nine Months Ended
	December 31,
	2018			2017
Reconciliation of net income (loss) to net cash provided by operating activities
Net income (loss)	$	1,419,288		$	(1,124,060	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Amortization of premiums on certificates of deposit		68			68
Amortization of premiums on securities		425,126			668,133
Loss on sale of investment securities		-			2,356
Loss on sale of foreclosed real estate		4,232			1,299
Gain on loans held for sale		(34,482	)		-
Loan discount accretion		3,440			46,841
Deposit premium amortization		(210,491	)		(328,646	)
Borrowing premium amortization		(122,140	)		(352,463	)
Core deposit intangible asset amortization		94,548			94,548
Premises and equipment depreciation and amortization		250,243			243,348
Gain on sale of premises and equipment		-			(212,743	)
Stock based compensation		376,722			345,634
Provision for loan losses		382,496			625,000
ESOP shares allocated for release		205,887			196,555
Decrease (increase) in:
Accrued interest receivable		19,801			(203,068	)
Loans held for sale		34,482			-
Cash surrender value of life insurance		(344,070	)		(369,991	)
Income taxes refundable and deferred income taxes		-			2,695,446
Other assets		1,055,583			301,007
Increase (decrease) in:
Accrued interest payable		(26,010	)		(8,279	)
Deferred loan origination fees		(34,690	)		(35,711	)
Other liabilities		(169,675	)		100,849
Net cash provided by operating activities	$	3,330,358		$	2,686,123
Noncash investing activity
Real estate acquired through foreclosure	$	145,820		$	17,305

The accompanying notes are an integral part of these consolidated financial statements.

6

HAMILTON BANCORP, INC AND SUBSIDIARY

Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

December 31, 2018

Note 1:        Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Hamilton Bancorp, Inc. (the “Company”) was incorporated on June 7, 2012 to serve as the stock holding company for Hamilton Bank (the “Bank”), a federally chartered savings bank. On October 10, 2012, the Bank converted from a mutual savings bank to a stock savings bank and became the wholly owned subsidiary of the Company. In connection with the conversion, the Company sold 3,703,000 shares of common stock at a price of $10.00 per share, through which the Company received proceeds of approximately $35,580,000, net of offering expenses of approximately $1,450,000. The Bank’s employee stock ownership plan (the “ESOP”) purchased 8.0% of the shares sold in the offering, or 296,240 common shares. The purchase of shares by the ESOP was funded by a loan from the Company. The company’s common stock began trading on the NASDAQ Capital Market under the trading symbol “HBK” on October 12, 2012.

On December 21, 2017, the Bank converted its charter from a federal savings bank to a Maryland state-chartered commercial bank and now operates under the laws of the State of Maryland and applicable Federal law. In conjunction with the Bank’s charter conversion, Hamilton Bancorp converted from a savings and loan holding company to a bank holding company. The charter conversion was part of the Bank’s strategic plan to allow it to continue to focus on growth opportunities in commercial, consumer and mortgage lending as well as small business and retail banking. The Maryland Office of the Commissioner of Financial Regulation serves as the Bank's primary regulator with federal oversight provided by the Federal Deposit Insurance Corporation.  Hamilton Bancorp will continue to be regulated by the Federal Reserve Board.

On October 23, 2018, the Company and Orrstown Financial Services, Inc. (“Orrstown”), the parent company of Orrstown Bank located in Shippensburg, Pennsylvania, signed a definitive agreement and plan of merger under which the Company will merge with and into Orrstown, with Orrstown as the surviving company. Immediately thereafter, Hamilton Bank will merge with and into Orrstown Bank, with Orrstown Bank as the surviving institution. At the effective time of the merger, each share of Hamilton Bancorp’s common stock will be converted into the right to receive (1) $4.10 in cash, subject to adjustment downward as set forth in the Merger Agreement and (2) 0.54 shares of Orrstown common stock. The Merger Agreement provides each party with specified termination rights. If the Merger is not consummated under specified circumstances, Hamilton Bancorp has agreed to pay Orrstown a termination fee of $2.2 million. The transaction is expected to close in the second quarter of calendar 2019.

On May 13, 2016, the Company completed its acquisition of Fraternity Community Bancorp, Inc. (“Fraternity”) through the merger of Fraternity, the parent company of Fraternity Federal Savings and Loan, with and into the Company pursuant to the Agreement and Plan of Merger dated as of October 12, 2015, by and between the Company and Fraternity. As a result of the merger, each shareholder of Fraternity received a cash payment equal to nineteen dollars and twenty-five cents ($19.25) for each share of Fraternity common stock, or an aggregate of approximately $25.7 million. Immediately following the merger of Fraternity into the Company, Fraternity Federal Savings and Loan was merged with and into the Bank, with the Bank as the surviving entity.

On September 11, 2015, the Company completed its acquisition of Fairmount Bancorp, Inc. (“Fairmount Bancorp”) through the merger of Fairmount Bancorp, the parent company of Fairmount Bank, with and into the Company pursuant to the Agreement and Plan of Merger dated as of April 15, 2015, by and between the Company and Fairmount Bancorp. As a result of the merger, each shareholder of Fairmount Bancorp received a cash payment equal to thirty dollars ($30.00) for each share of Fairmount Bancorp common stock, or an aggregate of approximately $15.4 million. Immediately following the merger of Fairmount Bancorp into the Company, Fairmount Bank was merged with and into the Bank, with the Bank as the surviving entity.

7

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Hamilton Bancorp is a holding company that operates a community bank with seven branches in the Baltimore-metropolitan area. Its primary deposit products are certificates of deposit and demand, savings, checking, and money market accounts. Its primary lending products consist of real estate mortgages, along with commercial and consumer loans. Hamilton Bancorp’s primary source of revenue is derived from loans to customers, who are predominately small and middle-market businesses and middle-income individuals.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and with instructions for Form 10–Q and Regulation S–X as promulgated by the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the preceding unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. We derived the balances as of March 31, 2018 from audited financial statements. Operating results for the three and nine months ended December 31, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2019, or any other period. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2018.

Summary of Significant Accounting Policies

The accounting and reporting policies of Hamilton Bancorp, Inc. and Subsidiary (“Hamilton”) conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) and to general practices in the banking industry. The more significant policies follow:

Principles of Consolidation. The accompanying consolidated financial statements include the accounts of the parent company and its wholly owned subsidiary, Hamilton Bank. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, deferred income tax valuation allowances, the fair value of investment securities and other than temporary impairment of investment securities.

Investment Securities. Management determines the appropriate classification of investment securities at the time of purchase. Securities that may be sold before maturity are classified as available for sale and carried at fair value. Investment securities that management has the intent and ability to hold to maturity are classified as held to maturity and carried at amortized cost. All investment securities held by Hamilton at December 31, 2018 and March 31, 2018 were classified as available for sale.

Investment securities designated as available for sale are stated at estimated fair value based on quoted market prices. They represent those securities which management may sell as part of its asset/liability strategy or that may be sold in response to changing interest rates or liquidity needs. Changes in unrealized gains and losses, net of related deferred taxes, for available-for-sale securities are recorded in other comprehensive income. Realized gains (losses) on available-for-sale securities are included in noninterest revenue and, when applicable, are reported as a reclassification adjustment in other comprehensive income. Realized gains and losses on the sale of available-for-sale securities are recorded on the trade date and are determined by the specific identification method. The amortization of premiums and the accretion of discounts are recognized in interest revenue using methods approximating the interest method over the term of the security.

8

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

In estimating other-than-temporary impairment losses, management considers the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Bank to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Loans Held For Sale. Mortgage loans originated and intended for sale are carried at the lower of aggregate cost or estimated fair value. Fair value is determined based on outstanding investor commitments, or in the absence of such commitments, based on current investor yield requirements. Gains and losses on loan sales are determined by the specific-identification method.

Loans Receivable. The Bank makes mortgage, commercial, and consumer loans to customers. A substantial portion of the loan portfolio is represented by mortgage loans throughout the Baltimore metropolitan area. The ability of the Bank’s debtors to repay their loans is dependent upon the real estate and general economic conditions in this area.

Loans are reported at their outstanding unpaid principal balance adjusted for the allowance for loan loss, premiums on loans acquired, and/or any deferred fees or costs on originated loans. Interest revenue is accrued on the unpaid principal balance. Loan origination fees and the direct costs of underwriting and closing loans are recognized over the life of the related loan as an adjustment to yield using a method that approximates the interest method. Any differences that arise from prepayment will result in a recalculation of the effective yield.

Loans are generally placed on nonaccrual status when they are 90 days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual status at an earlier date if the collection of principal or interest is considered doubtful. All interest accrued but not collected for loans that are placed on nonaccrual status are reversed against interest revenue. The interest on nonaccrual loans is accounted for on the cash basis method, until the loans qualify for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and, in management’s judgment, future payments are reasonably assured.

Loans are considered impaired when, based on current information, management considers it unlikely that collection of principal and interest payments will be made according to contractual terms. If collection of principal is evaluated as doubtful, all payments are applied to principal. Impaired loans are measured: (i) at the present value of expected cash flows discounted at the loan’s effective interest rate; (ii) at the observable market price; or (iii) at the fair value of the collateral if the loan is collateral dependent. If the measure of the impaired loan is less than the recorded investment in the loan, an impairment is recognized through an allocation of the allowance for loan losses and corresponding provision for loan losses. Generally, identified impairments are charged-off against the allowance for loan losses.

Troubled debt restructurings are loans for which Hamilton, for legal or economic reasons related to a debtor’s financial difficulties, has granted a concession to the debtor that it otherwise would not have considered. Concessions that result in the categorization of a loan as a troubled debt restructuring include:

● Reduction of the stated interest rate;

● Extension of the maturity date or dates at a stated interest rate lower than the current market rate for new debt with similar risk;

● Reduction of the face amount or maturity amount of the debt as stated in the instrument or other agreement; or

● Reduction of accrued interest.

Allowance for Loan Losses. The allowance for loan losses represents an amount which, in management’s judgment, will be adequate to absorb probable future losses on existing loans. The allowance for loan losses is established, as loan losses are estimated to have occurred, through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Recoveries on previously charged-off loans are credited to the allowance for loan losses.

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HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

The allowance for loan losses is increased by provisions charged to income and reduced by charge-offs, net of recoveries. Management’s periodic evaluation of the adequacy of the allowance is based on the Bank’s past loan loss experience, known and inherent risks in the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and current economic conditions. The look back period for historical losses consists of reviewing a 48 month look back period for net charge-offs. Prior to September 30, 2018, we reviewed both a 36 and 48 month look back period individually for net charge-offs to develop a range in which the allowance for loan losses should be within. The range has grown smaller over the past year to a point where the difference in the two calculations of the allowance for loan loss is deemed immaterial. As a result, and for efficiency purposes, we began to only utilize a historical charge-off period of 48 months in determining the necessary allowance for loan losses. We believe, although similar in amount, that a 48-month period is more representative of our charge-off history. This period may change in the future depending on the performance of the loan portfolio. In addition, we also adjusted the environmental factors of the legacy and acquired loan portfolios so that they are not the same for each loan portfolio going forward. The environmental factors for each acquired loan portfolio and the legacy loan portfolio will be evaluated on their own merits so as to stand on their own characteristics. These changes at September 30, 2018 resulted in additional provisions of $294,000 and were primarily related to the acquired loan portfolios and the adjustment of their environmental factors.

Management considers a number of factors in estimating the required level of the allowance. These factors include: historical loss experience in the loan portfolios; the levels and trends in past-due and nonaccrual loans; the status of nonaccrual loans and other loans identified as having the potential for further deterioration; credit risk and industry concentrations; trends in loan volume; the effects of any changes in lending policies and procedures or underwriting standards; and a continuing evaluation of the economic environment. As part of the estimation process, management keeps the net charge-off history as a percentage of loans, as it pertains to each loan segment, constant across all risk ratings and alters the qualitative factors either up or down based upon the respective risk rating for each loan segment.

Foreclosed Real Estate. Real estate acquired through foreclosure or other means is recorded at the lower of its carrying value or the fair value of the related real estate collateral less estimated selling costs. Losses in estimated fair value incurred at the time of acquisition of the property are charged to the allowance for loan losses. Subsequent reductions in the estimated fair value of the property are included in noninterest expense. Costs to maintain foreclosed real estate are expensed as incurred.

Goodwill and Other Intangible Assets. Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Intangible assets, consisting of core deposit intangibles, represent purchased assets that also lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset may be sold or exchanged on its own or in combination with a related contract, asset, or liability. Core deposit intangibles are amortized on an accelerated basis over an eight-year period. Goodwill is not amortized but is evaluated on an annual basis to determine impairment, if any. Any impairment of goodwill would be recognized against income in the period of impairment.

Derivative Financial Instruments and Hedging Activities. Derivatives are initially recognized at fair value on the date the derivative contract is entered into and subsequently re-measured at their fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. The Company documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions.

For derivatives qualifying as cash flow hedges, the Company also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The effective portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges is recognized in the consolidated statement of comprehensive income (loss). The gain or loss relating to the ineffective portion is recognized immediately in the consolidated statement of operations as a gain or loss. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the consolidated statement of operations. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the consolidated statement of operations as a gain or loss to income.

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HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

For derivative instruments designated as fair-value hedges, the change in fair value of the derivative is recognized in the consolidated statement of operations under the same heading as the change in fair value of the hedged item for the portion attributable to the hedged risk. For accounting purposes, if the derivative is highly effective, the change in fair values relating to the asset or liability and the hedged item will offset one another and result in no impact to overall income.

Gains (losses) on derivatives representing either hedge components excluded from the assessment of effectiveness or hedge ineffectiveness are recognized in earnings.

Revenue from Contracts with Customers. We record revenue from contracts with customers in accordance with Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“Topic 606”). Under Topic 606, we must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) we satisfy a performance obligation. Significant revenue has not been recognized in the current reporting period that results from performance obligations satisfied in previous periods. Our primary sources of revenue are derived from interest and dividends earned on loans, investment securities, and other financial instruments that are not within the scope of Topic 606. We have evaluated the nature of our contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Consolidated Statements of Operation was not necessary. Contracts with customers are generally fully satisfied in regard to performance obligations as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers.

Stock Based Compensation. Compensation cost is recognized for stock options and restricted stock awards issued to employees and directors, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

Income Taxes. The Bank recognizes income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that all or some portion of the deferred tax assets will not be realized.

Earnings Per Common Share. Basic earnings per share represents income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Weighted average shares exclude unallocated ESOP shares. Diluted earnings per share includes additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares relate to outstanding stock options, restricted stock, and warrants and are determined using the treasury stock method.

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HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Note 2:        New Accounting Pronouncements

Recent Accounting Pronouncements

ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities. This ASU’s objectives are to: (1) improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities; and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. The ASU is effective for interim and annual reporting periods beginning after December 15, 2018; early adoption is permitted. The Company does not expect the adoption of ASU 2017-12 to have a material impact on the Company’s consolidated financial statements.

ASU No. 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company will evaluate the guidance in this update but does not expect it to have a significant impact on the Company’s consolidated financial statements.

ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. This update removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, under the ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The ASU is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements.

ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This guidance clarifies the definition of a business and assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under this guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset (or group of similar assets), the assets acquired would not represent a business. In addition, in order to be considered a business, an acquisition would have to include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The amended guidance also narrows the definition of outputs by more closely aligning it with how outputs are described in FASB guidance for revenue recognition. This guidance was effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this guidance effective April 1, 2018 and it did not have a material impact on our consolidated financial statements.

ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update addresses diversity on how certain cash receipts and payments are reflected in the statement of cash flows. The update made the following changes that may affect the Company: (1) Debt Prepayment or Debt Extinguishment Costs: Cash payments for debt prepayment or debt extinguishment costs should be classified as cash flows for financing activities. (2) Proceeds from the settlement of Bank-Owned Life Insurance Policies: Cash proceeds received from the settlement of bank-owned life insurance policies should be classified as cash flows from investing activities. The cash payments for premiums on bank-owned policies may be classified as cash flows from investing activities, operating activities, or a combination of investing and operating activities. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and is required to be applied retrospectively to all periods presented. The company adopted this guidance April 1, 2018, which did not result in a change in the classification in the statement of cash flows and did not have a material impact on our consolidated financial statements.

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HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

ASU 2016-13, Financial Instruments – Credit Losses. The main objective of this update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the guidance in this update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to estimate credit losses. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. The guidance in this update for public business entities is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating this guidance to determine the impact adoption will have on its consolidated financial statements. Hamilton Bancorp is in the process of implementing a committee and has begun to gather loan information and consider acceptable methodologies to comply with this ASU. The implementation team will meet periodically to discuss the latest developments and updates via webcasts, publications, and conferences. Due to the pending merger with Orrstown, we will not be entering into a contract with an outside vendor as originally planned to assist with implementing CECL due to the timing of required adoption and the pending merger. If the merger agreement is terminated for any reason, the Company will engage an outside vendor at that time to assist with the implementation of this pronouncement utilizing information we have continued to gather.

ASU 2016-02, Leases (Topic 842). From the lessee’s perspective, the new ASU standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for lessees. The guidance also eliminates the current real estate-specific provision and changes the guidance on sale-leaseback transactions, initial direct costs and lease executory costs. With respect to lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. All entities will classify leases to determine how to recognize lease-related revenue and expense. In applying this guidance entities will also need to determine whether an arrangement contains a lease or service agreement. Disclosures are required by lessees and lessors to meet the objective of enabling users of financials statements to assess the amount, timing, and uncertainty of cash flows arising from leases. For public entities, this guidance is effective for the first interim or annual period beginning after December 15, 2018. Early adoption is permitted. Entities are required to use a modified retrospective transition method for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements.

In July 2018, as a follow-up to ASU 2016-02 (Topic 842), the Board issued ASU No. 2018-10 – Codification Improvements to Topic 842, Leases to clarify the codification associated with ASU 2016-02 or to correct unintended application of guidance. The amendments in this Update are of a similar nature to the items typically addressed in the Codification improvements project and affect narrow aspects of the guidance issued in the amendments in Update 2016-02. The Update addresses sixteen separate issues under the guidance that provide a clearer understanding as to intent and application of the guidance. The Company is assessing the guidance under ASU 2016-02 and 2018-10 to determine its impact on the Company’s consolidated financial statements.

ASU No. 2018-11, Leases (Topic 842) – Targeted Improvements. The purpose of this ASU is to update ASU 2016-02 to address stakeholders concerns regarding comparative reporting and separating components of a lease contract for lessors. For comparative reporting, entities are required under ASU 2016-02 to use a modified retrospective transition method. Due to issues in implementing, the Board decided to provide another transition method that allows companies to initially apply the new leases standard at the adoption date versus retrospectively and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The amendments in this update also provides lessors a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component, similar to the expedient provided by lessees. However, the lessor practical expedient is limited to circumstances in which the nonlease component or components otherwise would be accounted for under the new revenue guidance and both (1) the timing and pattern of transfer are the same for the nonlease component(s) and associated lease component and (2) the lease component, if accounted for separately, would be classified as an operating lease. The Company is assessing this guidance in conjunction with ASU 2016-02 to determine its impact on the Company’s consolidated financial statements.

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HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

ASU No. 2016-01, Financial Instruments – Recognition and Measurement of Financial Assets and Liabilities. This ASU requires equity investments to be measured at fair value with changes in fair value recognized in net income, excluding equity investments that are consolidated or accounted for under the equity method of accounting. The amendment allows equity investments without readily determinable fair values to be measured at cost minus impairment, with a qualitative assessment required to identify impairment. The amendment also requires public companies to use exit prices to measure the fair value of financial instruments purposes; requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statement; it eliminates the disclosure requirements related to measurement assumptions for the fair value of instruments measured at amortized cost. In addition, for liabilities measured at fair value under the fair value option, to present in other comprehensive income changes in fair value due to changes in instrument specific credit risk. The Company’s management engaged a third-party expert in the field of valuation and reporting to assist management and ensure adequate documentation of financial controls and analysis performed in its review of “exit pricing” of the fair values of loans, deposits, and other financial instruments. This ASU is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We adopted this ASU effective April 1, 2018. With the adoption of this ASU, equity securities can no longer be classified as available for sale, and as such marketable equity securities are disclosed as a separate line item on the Consolidated Statement of Financial Condition with changes in the fair value of equity securities reflected in net income. At December 31, 2018 the Company did not have any equity securities. During the first quarter of fiscal 2019, we began using an exit price notion when measuring the fair value of our loan portfolio, excluding loans held for sale, for disclosure purposes. The adoption of this ASU did not have a significant impact on our consolidated financial statements.

ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

The guidance in this ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. This ASU does not apply to revenue associated with financial instruments including loans and securities that are accounted for under U.S. GAAP. Consequently, adoption of the ASU did not have a significant impact on the Company’s consolidated financial statements and related disclosures since the primary source of revenue for the Company is derived from interest and dividends earned on loans, investment securities and other financial instruments that are outside the scope of the ASU. The Company has assessed its revenue streams and reviewed its contracts with customers that are affected by the new guidance. This includes fees on deposits, gains and losses on the sale of foreclosed real estate, credit and debit card interchange fees, merchant card services, and administrative services for customer deposit account such as ATM and wire transfer transactions. The Company’s revenue recognition pattern for revenue streams within the scope of the ASU has not changed significantly from current practice and is immaterial to our financial statements. This guidance was effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted this guidance effective April 1, 2018 and it did not have a material impact on our consolidated financial statements.

Note 3:          Earnings per Share

Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Weighted average shares exclude unallocated ESOP shares. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

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HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Both the basic and diluted earnings per share for the three and nine months ended December 31, 2018 and 2017 are summarized below:

	Three Months Ended			Three Months Ended			Nine Months Ended		Nine Months Ended
	December 31, 2018			December 31, 2017			December 31, 2018		December 31, 2017
Net income	$	(124,683	)	$	(1,927,190	)	$	1,419,288	$	(1,124,060	)
Weighted average common shares outstanding - basic		3,209,207			3,189,056			3,209,100		3,188,949
Weighted average common shares outstanding - diluted		3,209,207			3,189,056			3,209,895		3,188,949
Income per common share - basic and diluted	$	(0.04	)	$	(0.60	)	$	0.44	$	(0.35	)
Anti-dilutive shares		184,060			118,525			183,265		118,525

Note 4:         Investment Securities Available for Sale

The amortized cost and fair value of securities at December 31, 2018 and March 31, 2018, are summarized as follows:

			Gross		Gross
	Amortized		unrealized		unrealized		Fair
December 31, 2018	cost		gains		losses		value
U.S. government agencies	$	744,186	$	-	$	16,850	$	727,336
Municipal bonds		12,347,163		-		705,934		11,641,229
Corporate bonds		2,000,000		-		99,496		1,900,504
Mortgage-backed securities		52,844,355		11,438		1,547,007		51,308,786
	$	67,935,704	$	11,438	$	2,369,287	$	65,577,855

			Gross		Gross
	Amortized		unrealized		unrealized		Fair
March 31, 2018	cost		gains		losses		value
U.S. government agencies	$	2,753,346	$	-	$	34,697	$	2,718,649
Municipal bonds		12,435,068		-		729,077		11,705,991
Corporate bonds		2,000,000		-		45,924		1,954,076
Mortgage-backed securities		61,078,665		12,993		2,066,238		59,025,420
	$	78,267,079	$	12,993	$	2,875,936	$	75,404,136

There were no sales of investment securities during the three and nine months ended December 31, 2018. Proceeds from the sale of investment securities were $7,364,939 and $11,608,699 during the three and nine months ended December 31, 2017, with gains of $33,747 and $57,099 and losses of $46,483 and $59,455, respectively.

As of December 31, 2018, and March 31, 2018, all mortgage-backed securities are backed by U.S. Government-Sponsored Enterprises (GSE’s), except one private label mortgage-backed security that was acquired in the Fraternity acquisition in May 2016 with a book value of $37,687 and fair value of $38,032 as of December 31, 2018.

As of December 31, 2018, and March 31, 2018, the Company had one security pledged to the Federal Reserve Bank with a book value of $744,186 at both dates and a fair value of $727,336 and $723,023, respectively.

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HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

The amortized cost and estimated fair value of debt securities by contractual maturity at December 31, 2018 and March 31, 2018 follow. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations.

	Available for Sale
	December 31, 2018				March 31, 2018
	Amortized		Fair		Amortized		Fair
	cost		value		cost		value
Maturing
Within one year	$	-	$	-	$	2,009,160	$	1,995,625
Over one to five years		1,227,258		1,197,309		1,231,928		1,196,368
Over five to ten years		4,665,976		4,447,904		3,578,827		3,500,641
Over ten years		9,198,115		8,623,856		10,368,499		9,686,082
Mortgage-backed securities, in monthly installments		52,844,355		51,308,786		61,078,665		59,025,420
	$	67,935,704	$	65,577,855	$	78,267,079	$	75,404,136

The following table presents the Company's investments' gross unrealized losses and the corresponding fair values by investment category and length of time that the securities have been in a continuous unrealized loss position at December 31, 2018 and March 31, 2018.

	Less than 12 months				12 months or longer				Total
	Gross unrealized		Fair		Gross unrealized		Fair		Gross unrealized		Fair
December 31, 2018	losses		value		losses		value		losses		value
U.S. government agencies	$	-	$	-	$	16,850	$	727,336	$	16,850	$	727,336
Municipal bonds		-		-		705,934		11,641,229		705,934		11,641,229
Corporate bonds		-		-		99,496		1,900,504		99,496		1,900,504
Mortgage-backed securities		56,462		1,801,231		1,490,545		46,787,724		1,547,007		48,588,955
	$	56,462	$	1,801,231	$	2,312,825	$	61,056,793	$	2,369,287	$	62,858,024

	Less than 12 months				12 months or longer				Total
	Gross unrealized		Fair		Gross unrealized		Fair		Gross unrealized		Fair
March 31, 2018	losses		value		losses		value		losses		value
U.S. government agencies	$	21,163	$	723,023	$	13,534	$	1,995,625	$	34,697	$	2,718,648
Municipal bonds		-		-		729,077		11,705,991		729,077		11,705,991
Corporate bonds		-		-		45,924		1,954,076		45,924		1,954,076
Mortgage-backed securities		383,987		15,880,948		1,682,251		40,684,836		2,066,238		56,565,784
	$	405,150	$	16,603,971	$	2,470,786	$	56,340,528	$	2,875,936	$	72,944,499

The unrealized losses that exist are a result of market changes in interest rates since the original purchase. Management systematically evaluates investment securities for other-than-temporary declines in fair value on an annual basis from the date of purchase if the respective security is in a loss position. This analysis requires management to consider various factors, which include (1) duration and magnitude of the decline in value, (2) the financial condition of the issuer or issuers and (3) structure of the security.

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HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

An impairment loss is recognized in earnings if any of the following are true: (1) the Company intends to sell the debt security; (2) it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis; or (3) the Company does not expect to recover the entire amortized cost basis of the security. In situations where the Company intends to sell or when it is more likely than not that the Company will be required to sell the security, the entire impairment loss must be recognized in earnings. In all other situations, only the portion of the impairment loss representing the credit loss is recognized in earnings, with the remaining portion being recognized in shareholders’ equity as a component of other comprehensive income, net of deferred tax.

Note 5:         Loans Receivable and Allowance for Loan Losses

Loans receivable, excluding loans held for sale, consist of the following at December 31, 2018 and March 31, 2018:

	December 31, 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)	$	83,117,881		$	66,255,260			149,373,141			40	%	$	85,248,184		$	72,749,066		$	157,997,250			41	%
Residential construction		3,430,203			-			3,430,203			1	%		5,450,827			-			5,450,827			1	%
Investor (3)		7,337,281			16,407,266			23,744,547			6	%		9,275,031			17,460,809			26,735,840			7	%
Commercial		105,755,786			9,289,784			115,045,570			31	%		100,403,769			11,762,485			112,166,254			29	%
Commercial construction		1,543,313			1,059,217			2,602,530			1	%		5,763,784			1,352,019			7,115,803			2	%
Total real estate loans		201,184,464			93,011,527			294,195,991			80	%		206,141,595			103,324,379			309,465,974			80	%
Commercial business (4)		35,276,493			1,706,509			36,983,002			10	%		38,302,739			1,841,226			40,143,965			10	%
Home equity loans		15,077,068			4,941,051			20,018,119			5	%		13,956,327			6,039,462			19,995,789			5	%
Consumer (5)		16,329,237			699,371			17,028,608			5	%		18,849,448			766,063			19,615,511			5	%
Total Loans		267,867,262			100,358,458			368,225,720			100	%		277,250,109			111,971,130			389,221,239			100	%
Net deferred loan origination fees and costs		(178,056	)		-			(178,056	)					(212,746	)		-			(212,746	)
Loan premium (discount)		1,708,908			(299,956	)		1,408,952						1,922,428			(510,036	)		1,412,392
	$	269,398,114		$	100,058,502		$	369,456,616					$	278,959,791		$	111,461,094		$	390,420,885

(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 includes $19.2 million of various loan pools purchased in the second half of fiscal 2018.
(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 second 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.

17

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

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 nine-month periods ended December 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.

Three Months Ended December 31, 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	$	665,676		$	314,571		$	1,312,441		$	12,390		$	532,611		$	72,831	$	98,676		$	21,733	$	3,030,929
Charge-offs		-			(32,909	)		-			-			(133,729	)		-		-			-		(166,638	)
Recoveries		41,059			33,609			-			-			10,880			-		1,267			-		86,815
Provision for credit losses		(24,321	)		(36,632	)		(31,557	)		(4,090	)		160,895			1,555		(4,214	)		18,364		80,000
Ending balance	$	682,414		$	278,639		$	1,280,884		$	8,300		$	570,657		$	74,386	$	95,729		$	40,097	$	3,031,106

Nine Months Ended December 31, 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	)		(41,022	)		(31,320	)		-			(208,729	)		-		(2,465	)		-		(297,305	)
Recoveries		43,301			33,675			31,320			-			10,880			-		4,836			-		124,012
Provision for credit losses		44,159			234,296			27,501			(25,130	)		94,524			4,927		(37,878	)		40,097		382,496
Ending balance	$	682,414		$	278,639		$	1,280,884		$	8,300		$	570,657		$	74,386	$	95,729		$	40,097	$	3,031,106
Allowance allocated to:
Legacy Loans:
Individually evaluated for impairment	$	253,811		$	-		$	-		$	-		$	-		$	-	$	-		$	-	$	253,811
Collectively evaluated for impairment		276,937			50,593			1,241,051			7,254			566,217			59,952		95,516			40,097		2,337,617
Acquired Loans:
Individually evaluated for impairment	$	-		$	-		$	-		$	-		$	-		$	-	$	-		$	-	$	-
Collectively evaluated for impairment		151,666			228,046			39,833			1,046			4,440			14,434		213			-		439,678

18

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Three Months Ended December 31, 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	$	528,288	$	52,255		$	1,360,433		$	12,074	$	327,130	$	62,570	$	128,241		$	-	$	2,470,991
Charge-offs		-		(111,360	)		(100,236	)		-		-		-		-			-		(211,596	)
Recoveries		3,937		-			-			-		171		-		1,034			-		5,142
Provision for credit losses		35,875		103,790			148,707			11,100		45,987		619		(1,078	)		-		345,000
Ending balance	$	568,100	$	44,685		$	1,408,904		$	23,174	$	373,288	$	63,189	$	128,197		$	-	$	2,609,537

Nine Months Ended December 31, 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	)		(126,482	)		(100,236	)		-		-		-			(486	)		-		(236,111	)
Recoveries		3,937			18,129			-			-		551		-			3,216			-		25,833
Provision for credit losses		19,531			117,763			133,246			14,143		223,276		(6,882	)		123,923			-		625,000
Ending balance	$	568,100		$	44,685		$	1,408,904		$	23,174	$	373,288	$	63,189		$	128,197		$	-	$	2,609,537
Allowance allocated to:
Legacy Loans:
Individually evaluated for impairment	$	272,707		$	-		$	-		$	-	$	-	$	-		$	-		$	-	$	272,707
Collectively evaluated for impairment		295,393			44,685			1,408,904			23,174		373,288		63,189			128,197			-		2,336,830
Acquired Loans:
Individually evaluated for impairment	$	-		$	-		$	-		$	-	$	-	$	-		$	-		$	-	$	-
Collectively evaluated for impairment		-			-			-			-		-		-			-			-		-

19

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Our recorded investment in loans at December 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:

December 31, 2018	Residential Real Estate		Investor Real Estate		Commercial Real Estate		Commercial Construction		Commercial Business		Home Equity		Consumer		Total
Legacy Loans:
Individually evaluated for impairment	$	1,773,176	$	31,752	$	4,139,177	$	-	$	743,160	$	6,785	$	91,662	$	6,785,712
Collectively evaluated for impairment		84,774,908		7,305,529		101,616,609		1,543,313		34,533,333		15,070,283		16,237,575		261,081,550
Ending balance	$	86,548,084	$	7,337,281	$	105,755,786	$	1,543,313	$	35,276,493	$	15,077,068	$	16,329,237	$	267,867,262
Acquired Loans:
Individually evaluated for impairment	$	440,242	$	261,659	$	-	$	-	$	-	$	164	$	55,492	$	757,557
Collectively evaluated for impairment		65,815,018		16,145,606		9,289,784		1,059,217		1,706,509		4,940,887		643,880		99,600,901
Ending balance	$	66,255,260	$	16,407,265	$	9,289,784	$	1,059,217	$	1,706,509	$	4,941,051	$	699,372	$	100,358,458

December 31, 2017	Residential Real Estate		Investor Real Estate		Commercial Real Estate		Commercial Construction		Commercial Business		Home Equity		Consumer		Total
Legacy Loans:
Individually evaluated for impairment	$	1,697,585	$	121,514	$	4,500,043	$	-	$	905,178	$	21,579	$	-	$	7,245,899
Collectively evaluated for impairment		85,532,435		7,254,483		96,357,409		3,995,441		38,083,051		13,780,512		20,075,548		265,078,879
Ending balance	$	87,230,020	$	7,375,997	$	100,857,452	$	3,995,441	$	38,988,229	$	13,802,091	$	20,075,548	$	272,324,778
Acquired Loans:
Individually evaluated for impairment	$	1,061,049	$	579,172	$	199,920	$	-	$	-	$	-	$	56,708	$	1,896,849
Collectively evaluated for impairment		73,640,662		17,629,734		11,960,924		856,970		1,928,232		6,874,136		728,392		113,619,050
Ending balance	$	74,701,711	$	18,208,906	$	12,160,844	$	856,970	$	1,928,232	$	6,874,136	$	785,100	$	115,515,899

20

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Past due loans, segregated by age and class of loans, as of and for the nine months ended December 31, 2018 and as of and for the year ended March 31, 2018, were as follows:

	December 31, 2018						March 31, 2018
	Legacy		Acquired		Total		Legacy		Acquired		Total
Current	$	262,125,497	$	99,620,976	$	361,746,473	$	270,807,643	$	109,972,473	$	380,780,116
Accruing past due loans:
30-59 days past due:
Real estate loans:
Residential		71,020		18,488		89,508		63,618		689,364		752,982
Investor		-		29,357		29,357		-		-		-
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		120,418		-		120,418		135,502		-		135,502
Home equity loans		-		68		68		-		-		-
Consumer		23,357		25,753		49,110		148,876		-		148,876
Total 30-59 days past due		214,795		73,666		288,461		347,996		689,364		1,037,360
60-89 days past due:
Real estate loans:
Residential		72,377		121,223		193,600		70,291		-		70,291
Investor		-		-		-		-		-		-
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		460,762		-		460,762		134,524		-		134,524
Home equity loans		-		-		-		-		-		-
Consumer		5,233		-		5,233		28,300		-		28,300
Total 60-89 days past due		538,372		121,223		659,595		233,115		-		233,115
90 or more days past due:
Real estate loans:
Residential		-		-		-		-		-		-
Investor		222,485		113,029		335,514		734,818		471,423		1,206,241
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total 90 or more days past due		222,485		113,029		335,514		734,818		471,423		1,206,241
Total accruing past due loans		975,652		307,918		1,283,570		1,315,929		1,160,787		2,476,716
Non-accruing loans:
Real estate loans:
Residential		365,610		300,530		666,140		526,584		338,060		864,644
Investor		31,752		128,937		160,689		60,949		300,872		361,821
Commercial		4,139,177		-		4,139,177		4,356,264		198,938		4,555,202
Commercial construction		-		-		-		-		-		-
Commercial business		143,145		-		143,145		165,285		-		165,285
Home equity loans		-		97		97		12,605		-		12,605
Consumer		86,429		-		86,429		4,850		-		4,850
Non-accruing loans:		4,766,113		429,564		5,195,677		5,126,537		837,870		5,964,407
Total Loans	$	267,867,262	$	100,358,458	$	368,225,720	$	277,250,109	$	111,971,130	$	389,221,239
Nonaccrual interest not accrued:
Real estate loans:
Residential	$	2,289	$	7,237	$	9,526	$	8,250	$	53,120	$	61,370
Investor		2,066		6,490		8,556		8,513		15,604		24,117
Commercial		252,381		-		252,381		294,619		-		294,619
Commercial construction		-		-		-		-		-		-
Commercial business		8,796		-		8,796		12,891		-		12,891
Home equity loans		-		-		-		436		-		436
Consumer		1,459		-		1,459		385		-		385
Total nonaccrual interest not accrued	$	266,991	$	13,727	$	280,718	$	325,094	$	68,724	$	393,818

21

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Impaired loans as of and for the three and nine months ended December 31, 2018 and 2017, and the year ended March 31, 2018, was as follows:

	Impaired Loans at December 31, 2018						Three months ended December 31, 2018				Nine months ended December 31, 2018
	Unpaid
	Contractual						Average		Interest		Average		Interest
	Principal		Recorded		Related		Recorded		Income		Recorded		Income
	Balance		Investment		Allowance		Investment		Recognized		Investment		Recognized
Legacy:
With no related allowance recorded:
Real estate loans:
Residential	$	706,098	$	538,723	$	-	$	558,414	$	3,719	$	538,965	$	7,666
Investor		-		-		-		-		-		-		-
Commercial		6,375,413		4,139,177		-		4,309,168		-		4,280,325		53,278
Commercial construction
Commercial business		1,369,695		743,160		-		863,260		25,781		925,694		70,558
Home equity loans		33,287		6,785		-		7,036		1,910		7,293		2,043
Consumer		91,745		91,662		-		92,474		2,542		92,822		2,542
With an allowance recorded:
Real estate loans:
Residential	$	1,248,874	$	1,234,453	$	253,811	$	1,237,197	$	12,337	$	1,246,235	$	37,255
Investor		57,831		31,752		-		32,427		1,108		32,291		1,108
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total legacy impaired		9,882,943		6,785,712		253,811		7,099,976		47,397		7,123,625		174,450
Acquired (1):
With no related allowance recorded:
Real estate loans:
Residential		456,272		440,242		-		439,495		5,457		425,256		7,179
Investor		405,538		261,659		-		263,562		4,722		246,751		13,859
Commercial
Commercial construction
Commercial business
Home equity loans		37,858		164		-		238		1,851		79		2,501
Consumer		88,545		55,492		-		56,249		1,401		57,957		3,949
With an allowance recorded:
Real estate loans:
Residential		-		-		-		-		-		-		-
Investor		-		-		-		-		-		-		-
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total acquired impaired		988,213		757,557		-		759,544		13,431		730,043		27,488
Total impaired	$	10,871,156	$	7,543,269	$	253,811	$	7,859,520	$	60,828	$	7,853,668	$	201,938

(1) 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.

22

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

	Impaired Loans at December 31, 2017						Three months ended December 31, 2017				Nine months ended December 31, 2017
	Unpaid
	Contractual						Average		Interest		Average		Interest
	Principal		Recorded		Related		Recorded		Income		Recorded		Income
	Balance		Investment		Allowance		Investment		Recognized		Investment		Recognized
Legacy:
With no related allowance recorded:
Real estate loans:
Residential	$	513,736	$	371,312	$	-	$	376,225	$	280	$	387,772	$	1,451
Investor		127,420		121,514				122,576		-		123,362		3,772
Commercial		6,487,088		4,500,043		-		4,689,502		-		4,703,598		1,077
Commercial construction		-		-		-		-		-		-		-
Commercial business		1,303,000		905,178		-		937,594		24,038		894,330		75,926
Home equity loans		48,218		21,579		-		22,072		76		23,100		316
Consumer		-		-		-		-		-		-		-
With an allowance recorded:
Real estate loans:
Residential		1,354,169		1,326,273		272,707		1,330,015		13,248		1,341,584		39,333
Investor		-		-		-		-		-		-		-
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total legacy impaired		9,833,631		7,245,899		272,707		7,477,984		37,642		7,473,746		121,875
Acquired (1):
With no related allowance recorded:
Real estate loans:
Residential		1,211,254		1,061,049		-		1,063,445		4,247		1,077,738		26,087
Investor		687,849		579,172		-		663,538		2,893		697,174		34,582
Commercial		249,920		199,920		-		200,589		1,888		202,263		5,700
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		42,583		-		-		-		-		-		600
Consumer		99,349		56,708		-		58,084		1,338		62,234		4,464
With an allowance recorded:
Real estate loans:
Residential		-		-		-		-		-		-		-
Investor		-		-		-		-		-		-		-
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total acquired impaired		2,290,955		1,896,849		-		1,985,656		10,366		2,039,409		71,433
Total impaired	$	12,124,586	$	9,142,748	$	272,707	$	9,463,640	$	48,008	$	9,513,155	$	193,308

(1) 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.

23

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

	Impaired Loans at March 31, 2018						For the Year Ended March 31, 2018
	Unpaid
	Contractual						Average		Interest
	Principal		Recorded		Related		Recorded		Income
	Balance		Investment		Allowance		Investment		Recognized
Legacy:
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

(1) 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.

24

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

The following table documents changes in the carrying amount of acquired impaired loans (Purchased Credit Impaired or “PCI”) for the nine months ended December 31, 2018 and 2017, along with the outstanding balance at the end of the period:

	December 31, 2018			December 31, 2017
Recorded investment at beginning of period	$	1,021,424		$	1,341,935
Accretion		2,505			25,964
Reductions for payments		(649,168	)		(324,806	)
Recorded investment at end of period	$	374,761		$	1,043,093
Oustanding principal balance at end of period	$	470,368		$	1,297,471

A summary of changes in the accretable yield for PCI loans for the nine months ended December 31, 2018 and 2017 is as follows:

	December 31, 2018			December 31, 2017
Accretable yield, beginning of period	$	31,895		$	59,639
Accretion		(2,505	)		(25,964	)
Reclassification from nonaccretable difference		-			-
Accretable yield, end of period	$	29,390		$	33,675

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 December 31, 2018 and March 31, 2018 follows:

	Number of
December 31, 2018	contracts		Performing		Nonperforming		Total
Real estate loans:
Residential		16	$	1,295,469	$	226,119	$	1,521,588
Investor		-		-		-		-
Commercial		2		-		1,195,421		1,195,421
Commercial construction		-		-		-		-
Commercial business		1		600,016		-		600,016
Home equity loans		-		-		-		-
Consumer		-		-		-		-
		19	$	1,895,485	$	1,421,540	$	3,317,025

25

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

	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 three and nine-month periods ended December 31, 2018 and 2017. There were no TDRs added during the three-month period ended December 31, 2018. The amount shown reflects the outstanding loan balance at the time of the modification. There are no commitments to extend credit under existing TDRs as of December 31, 2018.

	Loans Modified as a TDR for the Three Months Ended
	December 31, 2018				December 31, 2017
	Number of		Outstanding recorded		Number of		Outstanding recorded
Troubled Debt Restructurings	contracts		investment		contracts		investment
Real estate loans:
Residential		-	$	-		2	$	50,432

	Loans Modified as a TDR for the nine months ended
	December 31, 2018				December 31, 2017
	Number of		Outstanding recorded		Number of		Outstanding recorded
Troubled Debt Restructurings	contracts		investment		contracts		investment
Real estate loans:
One-to four-family		1	$	20,565		3	$	52,363

There were no TDRs that defaulted in the three or nine months ended December 31, 2018 and 2017. Payment default under a TDR is defined as any TDR that is 90 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.

26

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

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 no 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.

27

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

The following tables present the December 31, 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 no loans classified as Doubtful or Loss as of December 31, 2018 or March 31, 2018.

	December 31, 2018						March 31, 2018
	LEGACY		ACQUIRED		TOTAL		LEGACY		ACQUIRED		TOTAL
Risk Rating:
Rating - Pass:
Real estate loans:
Residential	$	83,743,323	$	64,856,380	$	148,599,703	$	87,863,805	$	70,901,293	$	158,765,098
Investor		7,305,529		15,873,106		23,178,635		9,214,082		16,719,346		25,933,428
Commercial		101,616,609		9,289,784		110,906,393		92,955,370		11,563,547		104,518,917
Commercial construction		1,543,313		1,059,217		2,602,530		5,763,784		1,352,019		7,115,803
Commercial Business		34,835,870		1,706,509		36,542,379		37,978,293		1,841,226		39,819,519
Home Equity		15,070,123		4,805,766		19,875,889		13,935,732		5,928,787		19,864,519
Consumer		16,227,625		669,618		16,897,243		18,733,489		733,669		19,467,158
Total Pass		260,342,392		98,260,380		358,602,772		266,444,555		109,039,887		375,484,442
Rating - Special Mention:
Real estate loans:
Residential		2,327,412		958,638		3,286,050		2,365,652		925,521		3,291,173
Investor		-		273,806		273,806		-		297,209		297,209
Commercial		-		-		-		3,092,135		-		3,092,135
Commercial construction		-		-		-		-		-		-
Commercial Business		297,478		-		297,478		134,524		-		134,524
Home Equity		-		135,121		135,121		-		110,675		110,675
Consumer		9,950		-		9,950		96,474		-		96,474
Total Special Mention		2,634,840		1,367,565		4,002,405		5,688,785		1,333,405		7,022,190
Rating - Substandard:
Real estate loans:
Residential		477,349		440,242		917,591		469,554		922,252		1,391,806
Investor		31,752		260,354		292,106		60,949		444,254		505,203
Commercial		4,139,177		-		4,139,177		4,356,264		198,938		4,555,202
Commercial construction		-		-		-		-		-		-
Commercial Business		143,145		-		143,145		189,922		-		189,922
Home Equity		6,945		164		7,109		20,595		-		20,595
Consumer		91,662		29,753		121,415		19,485		32,394		51,879
Total - Substandard		4,890,030		730,513		5,620,543		5,116,769		1,597,838		6,714,607
Rating - Doubtful		-		-		-		-		-		-
Rating - Loss		-		-		-		-		-		-
TOTAL LOANS	$	267,867,262	$	100,358,458	$	368,225,720	$	277,250,109	$	111,971,130	$	389,221,239

28

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

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 no 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 December 31, 2018 and March 31, 2018 totaled $57,000 and $50,000, respectively. At December 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 December 31, 2018 and March 31, 2018:

	December 31,		March 31,
Outstanding Commitment and Used Lines of Credit	2018		2018
Unused commercial lines of credit	$	13,004,510	$	9,187,810
Unused home equity lines of credit		23,263,860		22,560,376
Unused consumer lines of credit		26,770		29,331
Residential construction loan commitments		6,934,369		4,234,076
Commercial construction loan commitments		2,678,900		8,968,416
Home equity loan commitments		200,000		389,600
Commercial loan commitments		3,671,000		5,125,000
Standby letter of credit		766,783		250,224

Note 6:       Goodwill and Other Intangible Asset

The Company’s intangible assets (goodwill and core deposit intangible) at December 31, 2018 consisted of assets recorded in December 2009 associated with the acquisition of a branch office in Pasadena, Maryland and the acquisitions of Fairmount and Fraternity in September 2015 and May 2016, respectively. Only the goodwill related to the branch office acquisition in the amount of $2.7 million is deductible for tax purposes. We conducted our annual impairment test of goodwill in the fourth quarter of fiscal 2018 utilizing Company information as of December 31, 2017. Subsequently, due to the significant increase in tax expense resulting from the recording of a valuation allowance on our net deferred tax assets at the end of the fourth quarter of fiscal 2018, we concluded that a triggering event had occurred. Therefore, we performed an additional goodwill impairment analysis utilizing Company information as of March 31, 2018. Based upon the impairment tests performed, the fair values as determined exceeded the carrying values of our only reporting unit. As a result, no impairment to goodwill was recorded for the 2018 fiscal year. The core deposit intangible assets are being amortized straight-line over a life of eight years.

29

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

The following table presents the changes in the net book value of intangible assets for the nine months ended December 31, 2018 and 2017:

			Core deposit
	Goodwill		intangible
Balance April 1, 2017	$	8,563,530	$	739,298
Amortization		-		(94,548	)
Balance December 31, 2017		8,563,530		644,750

			Core deposit
	Goodwill		intangible
Balance April 1, 2018	$	8,563,530	$	613,234
Amortization		-		(94,549	)
Balance December 31, 2018	$	8,563,530	$	518,685

      At December 31, 2018, future expected annual amortization associated with the core deposit intangible is as follows:

Year ending March 31,	Amount
2019		31,519
2020		123,737
2021		98,070
2022		98,070
2023		98,070
2024		64,177
2025		5,042
	$	518,685

Note 7:     Derivative – Interest Rate Swap Agreement

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. The Company posted $762,000 and $751,000 under collateral arrangements as of December 31, 2018 and March 31, 2018, respectively, to satisfy collateral requirements associated with the risk exposure associated with all interest rate swap agreements.

Interest Rate SWAPS Designated as Cash Flow Hedges

During fiscal 2017, the Company entered into several interest rate swaps that were designated as cash flow hedges. The interest rate swaps have notional amounts totaling $11.6 million as of December 31, 2018 and were designated as cash flow hedges of certain Federal Home Loan Bank advances. The purpose of the cash flow hedges is to match-fund longer-term assets with longer-term borrowings to reduce potential interest rate risk and cost by swapping a variable rate borrowing for a fixed rate borrowing. The aggregate fair value of the swaps is recorded in other assets (liabilities) with changes in fair value associated with the effective portion recorded in other comprehensive income (loss) and the ineffective portion recorded in other non-interest income (expense). The cash flow hedges were determined to be ineffective beginning with the quarter ended September 30, 2017. As such, a loss of $1,996 and $1,075 of ineffectiveness has been reported in noninterest revenue for the three and nine-month periods ended December 31, 2018, respectively, compared to a loss of $5,445 and $9,124 reported as an offset to noninterest revenue for the three and nine-month period ended December 31, 2017.

30

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Summary information about the interest rate swaps designated as cash flow hedges is as follows:

	Notional		Effective		Pay Fixed			Receive
Interest Rate Swap	Amount		Start Date	Maturity Date	Rate			Floating Rate
FHLB Advance Swap 1	$	1,850,000	March 9, 2017	March 9, 2022		2.24	%	3-Month LIBOR
FHLB Advance Swap 2		1,850,000	March 9, 2017	March 9, 2024		2.41	%	3-Month LIBOR
FHLB Advance Swap 3		1,850,000	March 9, 2017	March 9, 2027		2.57	%	3-Month LIBOR
FHLB Advance Swap 4		2,000,000	March 29, 2017	March 29, 2022		2.08	%	3-Month LIBOR
FHLB Advance Swap 5		2,000,000	March 29, 2017	March 29, 2024		2.24	%	3-Month LIBOR
FHLB Advance Swap 6		2,000,000	March 29, 2017	March 29, 2027		2.40	%	3-Month LIBOR
Total Notional Amount	$	11,550,000

Interest revenue/(expense) recorded on the swap transactions totaled $(60) and ($1,892) for the three and nine months ended December 31, 2018 and is reported as a component of interest expense on FHLB Advances.

The following table reflects cash flow hedges included in the Consolidated Statements of Financial Condition as of December 31, 2018 and March 31, 2018:

	December 31, 2018				March 31, 2018
	Notional				Notional
	Amount		Fair Value		Amount		Fair Value
Included in assets:
Interest rate swaps related  to FHLB Advances	$	11,550,000	$	123,118	$	11,550,000	$	217,464

The following tables present the net gain (loss) recorded in accumulated other comprehensive income (loss) and the Consolidated Statements of Operations relating to the cash flow derivative instruments for the three and nine-month periods ended December 31, 2018 and 2017:

	Three Month and Period Ended December 31, 2018								Three Month and Period Ended December 31, 2017
	Amount of Gain (Loss) Recognized in OCI (Effective Portion)			Amount of Gain (Loss) Reclassified from OCI to Interest Income		Amount of Gain (Loss) Recognized in Other Noninterest Revenue (Ineffective Portion)			Amount of Gain (Loss) Recognized in OCI (Effective Portion)		Amount of Gain (Loss) Reclassified from OCI to Interest Income		Amount of Gain (Loss) Recognized in Other Noninterest Revenue (Ineffective Portion)
Interest Rate
Contract	$	(287,116	)	$	-	$	(1,996	)	$	122,388	$	-	$	(5,445	)

	Nine Month and Period Ended December 31, 2018								Nine Month and Period Ended December 31, 2017
	Amount of Gain (Loss) Recognized in OCI (Effective Portion)			Amount of Gain (Loss) Reclassified from OCI to Interest Income		Amount of Gain (Loss) Recognized in Other Noninterest Revenue (Ineffective Portion)			Amount of Gain (Loss) Recognized in OCI (Effective Portion)		Amount of Gain (Loss) Reclassified from OCI to Interest Income		Amount of Gain (Loss) Recognized in Other Noninterest Revenue (Ineffective Portion)
Interest Rate
Contract	$	(93,271	)	$	-	$	(1,075	)	$	22,784	$	-	$	(9,124	)

31

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

 Interest Rate SWAPS Designated as Fair Value Hedges

The derivative position relates to a transaction in which the Bank entered into an interest rate swap with another financial institution using a fixed rate commercial real estate loan as an offset. The Bank agrees to pay the other financial institution a fixed interest rate on a notional amount based upon the commercial real estate loan and in return receive a variable interest rate on the same notional amount. This transaction allows the Bank to effectively convert a fixed rate loan to a variable rate. Because the terms of the swap with the other financial institution and the commercial real estate loan offset each other, with the only difference being credit risk associated with the loan, changes in the fair value of the underlying derivative contract and the commercial real estate loan are not materially different and do not significantly impact the Bank’s results of operations.

During the second quarter of fiscal 2016, the Company entered into the interest rate swap agreement with a $3.3 million notional amount to convert a fixed rate commercial real estate loan at 3.99% into a variable rate for a term of approximately 10 years. The notional amount of the interest rate swap and the offsetting commercial real estate loan were $3.0 million at December 31, 2018. The derivative is designated as a fair value hedge.

Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. The Bank’s exposure is limited to the replacement value of the contract rather than the notional amount, principal, or contract amount. There are provisions in the agreement with the counterparty that allow for certain unsecured credit exposure up to an agreed threshold. Exposures in excess of the agreed threshold are collateralized. In addition, the Bank minimizes credit risk through credit approvals, limits, and monitoring procedures.

The fair value hedge is summarized below:

	December 31, 2018						March 31, 2018
	Notional Amount		Principal Amount		Fair Value		Notional Amount		Principal Amount		Fair Value
Included in Loans and Leases:
Commercial real estate loan	$	-	$	3,027,702	$	2,984,595	$	-	$	3,091,892	$	3,022,744
Included in Other Assets:
Interest Rate Swap	$	3,027,702	$	-	$	43,107	$	3,091,892		-	$	69,148

No gain or loss was recognized in earnings with respect to the interest rate swap for the three or nine months ended December 31, 2018 and 2017 due to the fact the gain or increase in the fair value of the commercial real estate loan was offset by the loss or decrease in the fair value of the interest rate swap.

Note 8:     Deposits

The following table details the composition of deposits and the related percentage mix of total deposits, respectively:

	December 31, 2018					March 31, 2018
	Amount		% of Total			Amount		% of Total
Savings	$	41,548,268		10.8	%	$	42,499,381		10.6	%
Noninterest-bearing checking		27,365,942		7.1	%		29,557,943		7.3	%
Interest-bearing checking		28,478,231		7.4	%		27,219,286		6.7	%
Money market accounts		48,128,831		12.5	%		58,466,228		14.4	%
Time deposits		238,448,636		62.1	%		246,988,613		61.0	%
	$	383,969,908		100.0	%	$	404,731,451		100.0	%
Premium on deposits asssumed		201,034					411,524
Total deposits	$	384,170,942				$	405,142,975

32

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Note 9:     Lines of Credit and Federal Home Loan Bank Advances

The Bank may borrow up to $5.0 million from a correspondent bank under a secured federal funds line of credit and $1.0 million under an unsecured federal funds line of credit. The Bank would be required to pledge investment securities to draw upon the secured line of credit. There were no borrowings under these lines of credit at December 31, 2018 and March 31, 2018.

Borrowings consist of advances from the Federal Home Loan Bank (FHLB). The Bank may borrow up to 25 percent of its assets under a line of credit agreement with the FHLB. Advances under the line of credit are secured by certain loans owned by the Bank. As of December 31, 2018, and March 31, 2018, the Bank had $73.6 million and $68.3 million, respectively, of available credit from the FHLB. Advances are limited by the balance of loans available for pledge. The amount of loans that were deemed eligible to pledge as collateral totaled $114.8 million at December 31, 2018 and $127.1 million at March 31, 2018. As a condition of obtaining the line of credit from the FHLB, the FHLB also requires the Bank purchase shares of capital stock in the FHLB. Information relating to borrowings at December 31, 2018 and March 31, 2018 is presented below.

	December 31, 2018							March 31, 2018
	Amount		Rate			Maturity Date		Amount		Rate			Maturity Date
FHLB advance (1)	$	5,550,000		2.57	%	3/11/2019		$	5,550,000		1.84	%	6/11/2018
FHLB advance (2)		6,000,000		2.58	%	3/29/2019			6,000,000		1.90	%	6/29/2018
FHLB advance		3,000,000		2.71	%	8/26/2019			1,000,000		2.60	%	7/2/2018
FHLB advance		3,000,000		1.59	%	8/26/2019			1,000,000		3.05	%	7/3/2018
FHLB advance		1,500,000		1.95	%	11/25/2019			5,000,000		3.94	%	7/23/2018
FHLB advance		3,000,000		2.31	%	2/3/2020			1,000,000		1.74	%	7/31/2018
FHLB advance		1,000,000		2.86	%	8/4/2020			1,000,000		1.40	%	8/21/2018
FHLB advance		2,000,000		2.56	%	8/27/2020			4,000,000		1.94	%	8/27/2018
FHLB advance		1,000,000		2.15	%	11/30/2020			3,000,000		1.41	%	8/27/2018
FHLB advance		2,000,000		2.28	%	12/28/2020			5,000,000		3.38	%	9/19/2018
FHLB advance		2,000,000		2.49	%	2/1/2021			1,000,000		2.60	%	10/2/2018
FHLB advance		3,000,000		2.93	%	7/26/2021			1,000,000		1.95	%	12/31/2018
FHLB advance		2,000,000		3.01	%	8/4/2021			3,000,000		1.38	%	7/31/2019
FHLB advance		1,000,000		2.88	%	8/23/2021			3,000,000		1.96	%	8/26/2019
FHLB advance		3,000,000		1.48	%	8/25/2021			3,000,000		1.59	%	8/26/2019
FHLB advance		2,000,000		2.68	%	8/27/2021			3,000,000		1.42	%	8/26/2019
FHLB advance		3,000,000		2.79	%	8/29/2022			1,500,000		1.95	%	11/25/2019
FHLB advance		2,000,000		3.14	%	9/19/2022			1,500,000		1.78	%	11/27/2019
FHLB advance		3,000,000		2.70	%	8/28/2023			3,000,000		2.31	%	2/3/2020
FHLB advance		2,000,000		3.20	%	9/19/2023			1,000,000		2.15	%	11/30/2020
FHLB advance		-		-			-		2,000,000		2.28	%	12/28/2020
FHLB advance		-		-			-		2,000,000		2.49	%	2/1/2021
FHLB advance		-		-			-		3,000,000		1.48	%	8/25/2021
		51,050,000							60,550,000
Premium on FHLB advances assumed		-							122,140
Total borrowings	$	51,050,000						$	60,672,140

(1) -

FHLB Advance is tied to three derivative cash flow hedges in increments of $1.85 million each. The three individual cash flow hedges are for a term of five, seven and ten years, respectively and are tied to the 3-month LIBOR rate. In order for the cash flow hedges to remain effective, the corresponding FHLB Advance will have to be renewed every three months until the respective cash flow hedge matures. The maturity date for the three cash flow hedges are March 9, 2022, 2024, and 2027.

(2) -

FHLB Advance is tied to three derivative cash flow hedges in increments of $2.0 million each. The three individual cash flow hedges are for a term of five, seven and ten years, respectively and are tied to the 3-month LIBOR rate. In order for the cash flow hedges to remain effective, the corresponding FHLB Advance will have to be renewed every three months until the respective cash flow hedge matures. The maturity for the three cash flow hedges are March 29, 2022, 2024, and 2027.

33

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Note 10:     Regulatory Capital Ratios

Banks and bank holding companies are subject to various regulatory capital requirements administered by state and federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors.

The Basel III Capital Rules became effective for Hamilton Bank on January 1, 2015 (subject to a phase-in period for certain provisions). Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the table below) of Common Equity Tier 1 capital, Tier 1 capital and Total capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to adjusted quarterly average assets (as defined).

In connection with the adoption of the Basel III Capital Rules, we elected to opt-out of the requirement to include accumulated other comprehensive income in Common Equity Tier 1. Common Equity Tier 1 for Hamilton Bank is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities and subject to transition provisions.

Under the revised prompt corrective action requirements, as of January 1, 2015, insured depository institutions are required to meet the following in order to qualify as “well capitalized:” (1) a common equity Tier 1 risk-based capital ratio of 6.5%; (2) a Tier 1 risk-based capital ratio of 8%; (3) a total risk-based capital ratio of 10% and (4) a Tier 1 leverage ratio of 5%. As of December 31, 2018, the Bank met all capital adequacy requirements under the Basel III Capital Rules to be considered “well capitalized” under prompt corrective action rules.

The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and was phased in over a four-year period until it reached 2.5% on January 1, 2019. The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to Hamilton Bank.

As a result of the recently enacted Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Act”), banking regulatory agencies must adopt a revised definition of “well capitalized” for financial institutions and holding companies with assets of less than $10 billion and that are not determined to be ineligible by their primary federal regulator due to their risk profile (a “qualifying community bank”). The new definition will expand the ways that a qualifying community bank may meet its capital requirements and be deemed “well qualified.” The new rule will establish a “community bank leverage ratio” equal to the tangible equity capital divided by the average total consolidated assets. A qualifying community bank that exceeds a to-be-determined threshold for this new leverage ratio, which regulators must set at between 8% and 10%, will be considered to be well capitalized and to have met generally applicable leverage capital requirements, generally applicable risk-based capital requirements, and any other capital or leverage requirements to which such financial institution or holding company is subject.

In addition, as a result of the Act, the Federal Reserve Board amended its small bank holding company and savings and loan holding company policy statement to provide that holding companies with consolidated assets of less than $3 billion that are (i) not engaged in significant nonbanking activities, (ii) do not conduct significant off-balance sheet activities, and (iii) do not have a material amount of SEC-registered debt or equity securities, other than trust preferred securities, that contribute to an organization’s complexity, are no longer subject to regulatory capital requirements.

The following table presents actual and required capital ratios as of December 31, 2018 and March 31, 2018 for Hamilton Bank and the Company under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of January 1, 2015 based on the phase-in provisions of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules became fully phased-in. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

34

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

						Minimum Capital					Minimum Capital					To be well
	Actual					Required - Basel III					Required - Basel III					capitalized (1)
						Phase-In Schedule					Fully Phased-In
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2018
Common equity tier 1 capital (to risk-weighted assets)
Hamilton Bank	$	43,688		12.55	%	$	22,186		6.375	%	$	24,361		7.00	%	$	22,621		6.50	%
Hamilton Bancorp		49,329		14.12	%		22,277		6.375	%		24,461		7.00	%		22,714		6.50	%
Total risk-based capital (to risk-weighted assets)
Hamilton Bank		46,776		13.44	%		34,366		9.875	%		36,541		10.50	%		34,801		10.00	%
Hamilton Bancorp		52,417		15.00	%		34,508		9.875	%		36,692		10.50	%		34,945		10.00	%
Tier 1 capital (to risk-weighted assets)
Hamilton Bank		43,688		12.55	%		27,406		7.875	%		29,581		8.50	%		27,841		8.00	%
Hamilton Bancorp		49,329		14.12	%		27,519		7.875	%		27,703		8.50	%		27,956		8.00	%
Tier 1 capital (to adjusted total assets)
Hamilton Bank		43,688		8.91	%		19,619		4.000	%		19,619		4.00	%		24,523		5.00	%
Hamilton Bancorp		49,329		10.00	%		19,732		4.000	%		19,732		4.00	%		24,665		5.00	%
March 31, 2018
Common equity tier 1 capital (to risk-weighted assets)
Hamilton Bank	$	39,126		10.61	%	$	23,498		6.375	%	$	25,802		7.00	%	$	23,959		6.50	%
Hamilton Bancorp		47,308		12.79	%		23,582		6.375	%		25,894		7.00	%		24,044		6.50	%
Total risk-based capital (to risk-weighted assets)
Hamilton Bank		41,998		11.39	%		36,399		9.875	%		38,703		10.50	%		36,860		10.00	%
Hamilton Bancorp		50,180		13.57	%		36,529		9.875	%		38,841		10.50	%		36,992		10.00	%
Tier 1 capital (to risk-weighted assets)
Hamilton Bank		39,126		10.61	%		29,027		7.875	%		31,331		8.50	%		29,488		8.00	%
Hamilton Bancorp		47,308		12.79	%		29,131		7.875	%		31,443		8.50	%		29,593		8.00	%
Tier 1 capital (to adjusted total assets)
Hamilton Bank		39,126		7.64	%		20,497		4.000	%		20,497		4.00	%		25,621		5.00	%
Hamilton Bancorp		47,308		9.15	%		20,674		4.000	%		20,674		4.00	%		25,843		5.00	%
(1) - Under prompt corrective action

Tier 1 capital consists of total shareholders’ equity less goodwill, intangible assets, and deferred tax net operating loss carryforwards. Total capital includes a limited amount of the allowance for loan losses and a portion of any unrealized gain on equity securities. In calculating risk-weighted assets, specified risk percentages are applied to each category of asset and off-balance-sheet items.

In its regulatory report filed as of December 31, 2018, the Bank exceeded all regulatory capital requirements and was considered “well capitalized” under regulatory guidelines. Management is not aware of any events that would have caused this classification to change. Failure to meet the capital requirements could affect, among other things, the Bank's ability to accept brokered deposits and may significantly affect the operations of the Bank. Management has no plans that should change the classification of the capital adequacy.

35

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Note 11:     Stock Based Compensation

In November 2013, the Company’s shareholders approved a new Equity Incentive Plan (the “2013 Equity Incentive Plan’’). The 2013 Equity Incentive Plan allows for up to 148,120 shares to be issued to employees, executive officers or Directors in the form of restricted stock, and up to 370,300 shares to be issued to employees, executive officers or Directors in the form of stock options. At December 31, 2018, there were 92,701 restricted stock awards issued and outstanding and 268,204 stock option awards granted under the 2013 Equity Incentive Plan.

Stock Options:

Under the above plan, the exercise price for stock options is the market price at date of grant. The maximum option term is ten years and the options granted shall vest in five equal annual installments of 20% with the first installment becoming exercisable on the first anniversary of the date of grant and succeeding installments on each anniversary thereafter. The Company plans to issue new shares to satisfy share option exercises. The total cost that has been incurred for the stock option plan was $61,514 and $184,542 for the three and nine months ended December 31, 2018 and $57,392 and $172,177 for the three and nine months ended December 31, 2017, respectively.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical data. The Company uses historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury rate equal to the expected term of the option in effect at the time of the grant.

The fair value of options granted to date was determined using the following weighted-average assumptions as of grant date.

Grant Date	Number of Options Granted		Risk Free Interest Rate			Expected Term (in years)		Expected Stock Price Volatility			Dividend Yield			Fair Value of Options Granted
February 3, 2014		225,150		2.07	%		7.0		27.30	%		0.00	%	$	4.65
November 1, 2016		19,000		1.61	%		7.0		27.17	%		0.00	%	$	4.35
February 3, 2017		3,700		2.27	%		7.0		27.26	%		0.00	%	$	5.18
April 1, 2018		20,354		2.67	%		7.0		19.61	%		0.00	%	$	4.05

The following tables summarize the Company’s stock option activity and related information for the periods ended:

December 31, 2018:	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Outstanding at April 1, 2018		242,350	$	13.84		6.1
Granted		20,354		14.25		9.3
Exercised		-		-		-
Forfeited, exchanged or expired		-		-		-
Outstanding at December 31, 2018		262,704	$	13.87		5.6
Vested at December 31, 2018		184,060	$	13.84		5.2

36

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

March 31, 2018:	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Outstanding at April 1, 2017		242,350	$	13.84		7.1
Granted		-		-		-
Exercised		-		-		-
Forfeited, exchanged or expired		-		-		-
Outstanding at March 31, 2018		242,350	$	13.84		6.1
Vested at March 31, 2018		180,260	$	13.84		5.8

As of December 31, 2018, there was $146,164 of total unrecognized compensation cost related to nonvested stock options granted under the Plan. The cost is expected to be recognized over a weighted-average period of 1.7 years. The intrinsic value of a stock option is the amount that the market value of the underlying stock exceeds the exercise price of the option. Based upon a fair market value of $13.90 at December 31, 2018, the options outstanding had an intrinsic value of $18,583.

Restricted Stock:

The specific terms of each restricted stock award are determined by the Compensation Committee at the date of the grant. Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at the grant date. Restricted stock awards granted shall vest in five equal annual installments of 20% with the first installment becoming vested on the first anniversary of the date of grant and succeeding installments on each anniversary thereafter.

The following table presents a summary of the activity in the Company’s restricted stock for the periods ended:

				Weighted-Average
December 31, 2018:	Shares			Fair Value
Nonvested shares at April 1, 2018		19,440		$	13.74
Granted		8,801			14.25
Vested		(380	)		13.61
Forfeited		-			-
Nonvested shares at December 31, 2018		27,861		$	13.90
Fair Value of shares vested at December 31, 2018	$	901,276

				Weighted-Average
March 31, 2018:	Shares			Fair Value
Nonvested shares at April 1, 2017		36,220		$	13.76
Granted		-			-
Vested		(16,780	)		13.78
Forfeited		-			-
Nonvested shares at March 31, 2018		19,440		$	13.74
Fair Value of shares vested at March 31, 2018	$	918,555

The Company recorded restricted stock awards expense of $64,089 and $192,268 during the three and nine months ended December 31, 2018 and $57,819 and $173,457 during the three and nine months ended December 31, 2017, respectively. As of December 31, 2018, there was $158,591 of total unrecognized compensation cost related to nonvested shares granted under the 2013 stock incentive plan. The cost is expected to be recognized over a weighted-average period of 1.6 years.

37

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Note 12:     Fair Value Measurements

Generally accepted accounting principles define fair value, establish a framework for measuring fair value, and establish a hierarchy for determining fair value measurement. The hierarchy includes three levels and is based upon the valuation techniques used to measure assets and liabilities. The three levels are as follows:

Level 1: Valuation is based on quoted prices (unadjusted) for identical assets or liabilities in active markets;

Level 2: Valuation is determined from quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market; and

Level 3: Valuation is derived from model-based techniques in which at least one significant input is unobservable and based on the Company’s own estimates about the assumptions that market participants would use to value the asset or liability.

The following is a description of the valuation methods used for instruments measured at fair value as well as the general classification of such instruments pursuant to the applicable valuation method.

Fair value measurements on a recurring basis

Securities available for sale – If quoted prices are available in an active market for identical assets, securities are classified within Level 1 of the hierarchy. If quoted market prices are not available, then fair values are estimated using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. As of December 31, 2018, and March 31, 2018, the Bank has categorized its investment securities available for sale as follows:

	Level 1		Level 2		Level 3
December 31, 2018	inputs		inputs		inputs		Total
U.S. government agencies	$	-	$	727,336	$	-	$	727,336
Municipal bonds		-		11,641,229		-		11,641,229
Corporate bonds				-		1,900,504		1,900,504
Mortgage-backed securities		-		51,308,786		-		51,308,786
Total investment securities available for sale	$	-	$	63,677,351	$	1,900,504	$	65,577,855

	Level 1		Level 2		Level 3
March 31, 2018	inputs		inputs		inputs		Total
U.S. government agencies	$	-	$	2,718,649	$	-	$	2,718,649
Municipal bonds		-		11,705,991		-		11,705,991
Corporate bonds				-		1,954,076		1,954,076
Mortgage-backed securities		-		59,025,404		16		59,025,420
Total investment securities available for sale	$	-	$	73,450,044	$	1,954,092	$	75,404,136

38

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Derivative – Interest rate swap agreements – The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). The quantitative models that are used utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. As of December 31, 2018, and March 31, 2018, the bank has categorized its interest rate swaps and related loan as follows:

	Level 1		Level 2		Level 3
December 31, 2018	inputs		inputs		inputs		Total
Loans - Commercial real estate loan	$	-	$	2,984,595	$	-	$	2,984,595
Derivative - Interest rate swap designated as fair value hedge		-		43,107		-		43,107
Derivatives - Interest rate swaps designated as cash flow hedge		-		123,118		-		123,118

	Level 1		Level 2		Level 3
March 31, 2018	inputs		inputs		inputs		Total
Loans - Commercial real estate loan	$	-	$	3,022,744	$	-	$	3,022,744
Derivative - Interest rate swap designated as fair value hedge		-		69,148		-		69,148
Derivatives - Interest rate swaps designated as cash flow hedge		-		217,464		-		217,464

The following table presents the valuation and unobservable inputs for Level 3 assets measured at fair value on a recurring basis at December 31, 2018:

			Valuation	Unobservable	Range of
Description	Fair Value		Methodology	Inputs	Inputs
Investment securities	$	1,900,504	3rd party valuation	Discount to reflect current market conditions	0.00%	-	10.00%

The following table presents a reconciliation of the investments which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods presented:

	Nine Months			Fiscal Year
	Ended			Ended
	December 31, 2018			March 31, 2018
Balance, beginning of year	$	1,954,092		$	1,930,786
Transfers in:
Corporate bonds		-			1,954,076
Mortgage-backed securities		-			16
Municipal bonds		-			-
Transfers out:
Corporate bonds		-			-
Mortgage-backed securities		16			2,473
Municipal bonds		-			1,928,313
Change in valuation		(53,572	)		-
Balance, end of year	$	1,900,504		$	1,954,092

Fair value measurements on a nonrecurring basis

Impaired Loans - The Bank has measured impairment generally based on the fair value of the loan's collateral. Fair value is generally determined based upon independent appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values. As of December 31, 2018, and March 31, 2018, the fair values consist of loan balances of $7,543,269 and $8,720,339 that have been written down by $255,863 and $266,256, respectively, as a result of specific loan loss allowances.

39

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

Foreclosed real estate – The Bank's foreclosed real estate is measured at the lower of carrying value or fair value less estimated cost to sell. At December 31, 2018 and March 31, 2018, the fair value of foreclosed real estate was estimated to be $457,778 for both periods. Fair value was determined based on offers and/or appraisals. Cost to sell the assets was based on standard market factors. The Company has categorized its foreclosed assets as Level 3.

	Level 1		Level 2		Level 3
December 31, 2018	inputs		inputs		inputs		Total
Impaired loans	$	-	$	-	$	7,289,458	$	7,289,458
Foreclosed real estate		-		-		457,778		457,778

	Level 1		Level 2		Level 3
March 31, 2018	inputs		inputs		inputs		Total
Impaired loans	$	-	$	-	$	8,454,083	$	8,454,083
Foreclosed real estate		-		-		457,778		457,778

The following table presents the valuation and unobservable inputs for Level 3 assets measured at fair value on a nonrecurring basis at December 31, 2018:

			Valuation	Unobservable	Range of
Description	Fair Value		Methodology	Inputs	Inputs
Impaired loans, net of allowance	$	7,289,458	Appraised value	Discount to reflect current market conditions	0.00%	-	25.00%
			Discounted cash flows	Discount rates	2.63%	-	7.25%
Foreclosed real estate	$	457,778	Appraised value	Discount to reflect current market conditions	0.00%	-	25.00%

The following table summarizes changes in foreclosed real estate for the periods shown, which is measured on a nonrecurring basis using significant unobservable, level 3, inputs.

	Nine Months			Fiscal Year
	Ended			Ended
	December 31, 2018			March 31, 2018
Balance at beginning of period	$	457,778		$	503,094
Transfer to foreclosed real estate		150,052			23,834
Write-down of foreclosed real estate		-			(31,955	)
Proceeds from sale of foreclosed real estate		(145,820	)		(35,896	)
Loss on sale of foreclosed real estate		(4,232	)		(1,299	)
Balance at end of period	$	457,778		$	457,778

The remaining financial assets and liabilities are not reported on the balance sheets at fair value on a recurring basis. The calculation of estimated fair values is based on market conditions at a specific point in time and may not reflect current or future fair values.

40

HAMILTON BANCORP, INC., AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

	December 31, 2018				March 31, 2018
	Carrying		Fair		Carrying		Fair
	amount		value		amount		value
Financial assets
Level 1 inputs
Cash and cash equivalents	$	26,547,840	$	26,547,840	$	23,368,415	$	23,368,415
Level 2 inputs
Federal Home Loan Bank stock		2,676,200		2,676,200		3,122,400		3,122,400
Bank-owned life insurance		17,799,920		17,799,920		17,455,850		17,455,850
Level 3 inputs
Certificates of deposit held as investment		499,121		485,928		499,189		492,751
Loans receivable, net of unearned income		366,428,914		352,433,858		387,328,993		385,818,260
Financial liabilities
Level 2 inputs
Deposits		384,170,942		385,031,487		405,142,975		405,026,957
Advance payments by borrowers for  taxes and insurance		1,059,677		1,059,677		1,962,665		1,962,665
Borrowings		51,050,000		50,394,636		60,672,140		60,494,922

The fair values of cash and cash equivalents and advances by borrowers for taxes and insurance are estimated to equal the carrying amount.

The fair values of Federal Home Loan Bank stock and bank-owned life insurance are estimated to equal carrying amounts, which are based on repurchase prices of the FHLB stock and the insurance company.

Beginning in the first quarter 2018, the fair value of loans is determined using an exit price methodology as prescribed by ASU 2016-01, which became effective for the Company during in the first quarter ended June 30, 2018. The exit price estimation of fair value is based on the present value of the expected cash flows. The projected cash flows are based on the contractual terms of the loans, adjusted for prepayments and use of a discount rate based on the relative risk of the cash flows, taking into account the loan type, maturity of the loan, liquidity risk, servicing costs, and a required return on debt and capital (Level 3). In addition, an incremental liquidity discount is applied to certain loans, using historical sales of loans during periods of similar economic conditions as a benchmark. In comparison, loan fair values as of March 31, 2018 were estimated based on an entrance price methodology.  As a result, the fair value adjustments as of December 31, 2018 and March 31, 2018 are not comparable.

The fair value of certificates of deposit held as investments is estimated based on interest rates currently offered for certificates of deposit with similar remaining maturities.

The fair value of interest-bearing checking, savings, and money market deposit accounts is equal to the carrying amount due to these products having no stated maturity. The fair value of fixed-maturity time deposits is estimated based on interest rates currently offered for deposits of similar remaining maturities.

The fair value of borrowings is estimated based on interest rates currently offered for borrowings of similar remaining maturities.

The fair value of outstanding loan commitments and unused lines of credit are considered to be the same as the contractual amount and are not included in the table above. These commitments generate fees that approximate those currently charged to originate similar commitments.

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ITEM 2.      MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

In addition to the results of operations and financial condition presented in accordance with GAAP, this management's discussion and analysis includes non-GAAP financial measures and should be read along with the accompanying tables which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. The Company's management uses these non-GAAP financial measures, including tangible common equity, in its analysis of the Company's performance. The tangible common equity non-GAAP reconciliation, which includes tangible book value per share, is presented within the “Summary of Recent Performance and Other Activities” section below.

Management believes that non-GAAP financial measures provide additional useful information that allows readers to evaluate the ongoing performance of the Company without regard to transactional activities. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP. 

Safe Harbor Statement for Forward-Looking Statements

This report may contain forward-looking statements within the meaning of the federal securities laws. These statements are not historical facts; rather they are statements based on the Company’s current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms such as “expects”, “believes”, “anticipates”, “intends”, and similar expressions.

Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company’s actual results, performance, and achievements being materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government, legislative and regulatory changes, the quality and composition of the loan and investment securities portfolio, loan demand, deposit flows, competition, changes in accounting principles and guidelines, and change or other circumstances related to the Company’s recently announced merger with Orrstown Financial Services, Inc. (“Orrstown”) that negatively affects the Company’s financial condition or results of operations, including delays in closing the merger, the diversion of management's time from existing business operations due to time spent related to the merger or integration efforts, potential litigation in connection with the merger, higher than expected transaction or other costs and expenses, or higher than expected attrition of the customers or key employees of the Company. Additional factors that may affect our results are discussed in Part II, Item 1A of this form 10-Q and Item 1A of Hamilton Bancorp, Inc.’s Annual Report on Form 10-K filed June 29, 2018 with the Securities and Exchange Commission under the sections titled “Risk Factors”. These factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, the Company assumes no obligation and disclaims any obligation to update any forward-looking statements.

General

Hamilton Bancorp, Inc. (the “Company”) is a Maryland corporation incorporated on June 7, 2012 by Hamilton Bank (the “Bank”) to be its holding company following the Bank’s conversion from the mutual to the stock form of organization (the “Conversion”). The Conversion was completed on October 10, 2012. On that same date, the Company completed its public stock offering and issued 3,703,000 shares of its common stock for aggregate proceeds of $37,030,000, and net proceeds of $35,580,000. The Company’s business is the ownership of the outstanding capital stock of the Bank. On December 21, 2017, the Bank converted its charter from a federal savings bank to a Maryland state-chartered commercial bank and now operates under the laws of the State of Maryland and applicable Federal laws. In conjunction with the Bank’s charter conversion, Hamilton Bancorp converted from a savings and loan holding company to a bank holding company. The charter conversion was part of the bank’s strategic plan to allow it to continue to focus on growth opportunities in commercial, consumer and mortgage lending as well as small business and retail banking. The Maryland Office of the Commissioner of Financial Regulation serves as the Bank's primary regulator with federal oversight provided by the Federal Deposit Insurance Corporation.  Hamilton Bancorp will continue to be regulated by the Federal Reserve Board.

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Founded in 1915 and celebrating over 103 years of service, the Bank is a community-oriented financial institution, dedicated to serving the financial service needs of consumers and businesses within its market area, which is considered greater Maryland, southern Pennsylvania, Washington D.C., and northern Virginia. We offer a variety of deposit products and provide loans secured by real estate located in our market area. Our real estate loans consist primarily of one-to four-family mortgage loans, as well as commercial real estate loans, and home equity loans and lines of credit. We also offer commercial term and line of credit loans and, to a limited extent, consumer loans. We currently operate out of our corporate headquarters in Towson, Maryland and our seven full-service branch offices located in Baltimore City, Cockeysville, Towson, Rosedale, Ellicott City and Pasadena, Maryland. The Company does not own or lease any property but instead uses the premises, equipment and other property of the Bank.

On May 13, 2016, the Company acquired Fraternity Community Bancorp, Inc. (“Fraternity”), the parent company of Fraternity Federal Savings and Loan in an all cash transaction for $25.7 million. In addition, the Company acquired Fairmount Bancorp, Inc. (“Fairmount”), the parent company of Fairmount Bank on September 11, 2015 in an all cash transaction for $14.2 million. Both acquisitions combined added three branches to our branch structure in the Baltimore area.

On October 23, 2018, the Company and Orrstown, the parent company of Orrstown Bank, signed a definitive agreement and plan of merger under which the Company will merge with and into Orrstown, with Orrstown as the surviving company. Immediately, thereafter, Hamilton Bank will merge with and into Orrstown Bank, with Orrstown Bank as the surviving institution. Hamilton shareholders will receive a combination of cash and stock. Upon completion of the transaction, the combined company is expected to have approximately $2.5 billion in assets, $1.7 billion in loans, and $2.1 billion in deposits. The transaction is expected to close in the second quarter of calendar 2019.

The Company and the Bank maintain an Internet website at http://www.hamilton-bank.com. Information on our website should not be considered a part of this Quarterly Report on Form 10-Q.

Summary of Recent Performance and Other Activities

The Company and its wholly owned subsidiary, Hamilton Bank, continued to show improvement in overall earnings, as well as revenue and lower loan loss provisions during the three months ended December 31, 2018 compared to the same period a year ago. Earnings improved from a net loss of $1.9 million to a net loss of $125,000 for the comparable periods, an improvement of $1.8 million. The net loss for the current quarter resulted from $503,000 in merger related expenses pertaining to the pending merger with Orrstown, while the net loss in the prior year quarter was impacted by the recording of a one-time adjustment equal to $2.2 million to our deferred tax asset through tax expense. The adjustment was due to the reduction in the corporate income tax rate that was enacted through the passage of the Tax Cuts and Jobs Act (the “Jobs Act”). Over these same comparable periods, interest revenue grew from $4.6 million to $4.8 million, an increase of $196,000. This increase is reflective of the overall growth of the loan portfolio during the prior year due to both organic and purchased loans. The increase in interest revenue is offset by a $425,000 increase in interest expense over this same period resulting from the rise in interest rates on deposits and borrowings.

Non-interest revenue of $281,000 for the three months ended December 31, 2018 represented a $182,000 decrease compared to $463,000 for the three months ended December 31, 2017. Noninterest revenue is lower compared to a year ago due to $213,000 in revenue generated during the prior year period relating to the sale and re-location of our Pigtown branch within the same community of Baltimore City. We went from owning our old location to leasing our new smaller, space. Excluding the prior year period gain on sale of the branch, noninterest revenue increased $31,000 quarter-over-quarter. On a comparative basis, there were increases relating to gain on sale of loans, service charges, and other noninterest revenue, partially offset by a reduction in earnings on bank-owned life insurance (BOLI). In the prior fiscal year, the Company made a decision to hold in portfolio the majority of our residential loan originations versus selling them in the secondary market to partially offset the increased run-off associated with this loan type. Beginning in fiscal 2019, however, we again started to sell qualified residential loan originations into the secondary market as a means to generate noninterest revenue and diversify our income stream. For the three and nine months ended December 31, 2018 we recorded gains of $9,000 and $34,000 on the sale of these loans, respectively.

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Non-interest expense for the quarter ended December 31, 2018 increased $434,000 to $3.8 million compared to the quarter ended December 31, 2017. The increase is attributable to $503,000 in merger related expenses that have been incurred relating to the pending merger with Orrstown. Excluding the merger expenses, our non-interest expenses have actually decreased compared to the prior year period, indicating we have been able to manage a larger loan portfolio from an operational cost basis and increase our interest revenue as noted earlier. However, the recent rise in interest rates and the impact to our cost of funds has resulted in a higher efficiency ratio of 87.7%, excluding merger expenses, for the three months ended December 31, 2018 compared to 81.2% for the three months ended December 31, 2017. We have experienced significant declines in both legal and other professional services expense quarter-over-quarter related to costs incurred in the prior year, including costs associated with our charter conversion and payments under non-compete agreements that were a part of the Fraternity Community Bancorp, Inc. acquisition. Both these declines were more than offset by increases in salaries and data processing expense. Salaries increased due to respective annual salary increases, along with bonus accruals that were not present in the prior year period due to our net loss position, while data processing increased because of new technology we incorporated to create a better banking experience for our customers. Management remains committed to managing our operational expenses.

For the three and nine months ended December 31, 2018, the Company did not report any income tax expense due to the release of a portion of the valuation allowance on our net deferred tax assets established in the prior fiscal year. Management concluded, based upon analysis and substantive evidence, particularly negative evidence associated with being in a three-year cumulative loss position, that it is more likely than not that the Company will be unable to generate sufficient taxable income in the foreseeable future to fully utilize the net deferred tax assets. If, in the future, the Company generates taxable income on a sustained basis sufficient to support the deferred tax assets, the need for a deferred tax valuation allowance could change, resulting in the reversal of all or a portion of the deferred tax asset valuation at that time. The establishment of a valuation allowance on our net deferred tax assets for financial reporting purposes does not affect how the net operating loss carryforwards may be utilized on our subsequent income tax returns. Income tax expense for the periods reported is based upon year-to-date results and may not be reflective of annual earnings.

The following highlights contain additional financial data and events relating to the three and nine months ended December 31, 2018 compared to the same periods ended December 31, 2017:

● The Company reported a net loss of $125,000, or $0.04 per common share, and net income of $1.9 million, or $0.60 per common share for the three and nine months ended December 31, 2018, respectively, compared to a net loss of $1.9 million, or $0.60 per common share, and a net loss of $1.1 million, or $0.35 per common share for the comparable periods ended December 31, 2017. This represents an increase of $3.0 million in earnings for the nine-month comparable periods.

● Net interest income for the three months ended December 31, 2018 was $3.4 million, or $199,000 lower than the same period a year ago. For the nine months ended December 31, 2018, net interest income increased $153,000, or 1.4%, to $11.0 million compared to $10.8 million for the same nine-month period a year ago.

● The net interest margin decreased 13 basis points from 3.07% to 2.94% for the three months ended December 31, 2017 and 2018, respectively, due to the decrease in net interest income. The net interest margin for the nine months ended December 31, 2018 declined slightly from 3.07% to 3.06% due to an increase in average interest-earning assets.

● Return on average assets and equity for the first nine months of fiscal 2019 improved to 0.37% and 3.41%, compared to negative return of 0.29% and 2.45% for the first nine months of fiscal 2018.

● Efficiency ratio was higher for the nine months ended December 31, 2018 at 84.8% compared to 81.8% for the nine months ended December 31, 2017 primarily as a result of the merger costs related to Orrstown. Excluding the merger costs, the efficiency ratio improved to 80.1% for the comparable periods from 81.8%, respectively; an improvement of 2.1%. The improvement is attributable to increased interest revenue and the reduction of non-interest expenses (exclusive of merger expenses), including legal and other professional services.

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● Total assets declined $29.3 million from $525.5 million at March 31, 2018 to $496.3 million at December 31, 2018. The decline in overall assets is attributable to declines in investments and gross loans.

● Cash and cash equivalents increased $3.2 million, or 13.6%, to $26.5 million at December 31, 2018, compared to $23.4 million at March 31, 2018, while investments declined $9.8 million from $75.4 million to $65.6 million over the same period. The decline in the investment portfolio is related to normal principal paydowns on mortgage-backed securities.

● Gross loans decreased $21.0 million, or 5.4%, from $389.2 million at March 31, 2018 to $368.2 million at December 31, 2018. The decrease is due to principal paydowns and pay-offs within the loan portfolio, including $9.6 million in pay-offs composed of one commercial relationship that totaled $6.3 million and a $3.3 million commercial real estate loan that was on nonaccrual.

● The allowance for loan losses to nonperforming loans improved to 54.8% at December 31, 2018 from 39.4% at March 31, 2018. This improvement resulted from the pay-off on a $3.3 million nonaccrual loan during the second quarter and a $209,000 increase in the allowance for loan losses over that period.

● Annualized net charge-offs to average loans improved to 0.06% for the nine-month period ended December 31, 2018 compared to 0.26% for the fiscal year ended March 31, 2018, while the allowance for loan losses as a percentage of gross loans increased from 0.73% to 0.82% over this same period.

● Total deposits decreased $21.0 million to $384.2 million at December 31, 2018, while borrowings decreased $9.6 million to $51.1 million. The decline in deposits was related to higher costing time deposits which declined by $8.5 million; while lower costing core deposits declined by $12.2 million. Core deposits at December 31, 2018 made up 37.9% of total deposits compared to 38.9% and 37.5% at March 31, 2018 and December 31, 2017, respectively.

● At December 31, 2018 the Company had a book value of $16.53 per common share and a tangible book value of $13.88 per common share compared to $15.87 and $13.18, respectively, at March 31, 2018. Book value and tangible book value increased as a result of the net income reported for the fiscal year. Tangible book value, a non-GAAP measure, was determined as follows:

	December 31,			March 31,
	2018			2018
Tangible book value per common share:
Total shareholders' equity	$	56,489,940		$	54,076,132
Less: Goodwill and other intangible assets		(9,082,215	)		(9,176,764	)
Tangible common equity (Non-GAAP)	$	47,407,725		$	44,899,368
Outstanding common shares		3,416,414			3,407,613
Book value per common share (GAAP)	$	16.53		$	15.87
Tangible book value per common share (Non-GAAP)	$	13.88		$	13.18

● The Company maintained strong liquidity based upon cash equivalents held and the amount and make-up of its investment portfolio. At December 31, 2018 the Bank was deemed “well capitalized” under federal regulations.

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Strategic Plan

We have based our 2019-2021 strategic plan on the objective of improving shareholder value and growth through creating sustainable and profitable growth given the current and expected economic and competitive environment in the financial services industry. Our short-term goals include continuing the growth of operating revenue, changing the mix of our deposits base to be more concentrated in lower costing core deposits, collecting payments on non-accrual and past due loans, enhancing and improving credit quality, expanding fee income, maintaining a branch network that is economical and efficient, and using technology to improve efficiencies and enhance the customer experience.

We identified several strategic priorities in our three-year Strategic Plan that focused on the following core areas:

● Efficient Operating Revenue Growth – Generating sustainable, profitable operating revenue through smart growth of earning assets that are funded by low-cost core deposits and growth of noninterest income. In addition, we will focus on efficient utilization of the Bank’s assets and other resources. This strategic priority includes prudent loan growth, sales strategies to attract and grow small business deposit and other fee income services, strategic marketing campaigns, studying and benchmarking efficiency and productivity, and focusing on ways to utilize technology to drive earnings.

● Low-Cost Funding Strategies – Focusing on utilizing and growing low-cost core deposits as the primary funding source for loans. Given the current environment for higher-returns on investments, the retention of deposit customers along with targeted sales strategies will be important to growing deposits. Comprehensive marketing plans for increasing brand awareness in our market and promotion of products and services will be required, along with a seamless, fully integrated delivery experience for our customers that leverages technology and optimizes efficiencies. These strategies will apply to not just consumers, but to all commercial and small business customers.

● Capital to Support Growth – Increasing the capital and value of the holding company’s stock through sustainable, consistent earnings, prudent capital management and enhancement of overall “franchise value”. We will continually evaluate the Bank’s capital needs and, if additional capital is needed, evaluate the most suitable type of capital, whether it be subordinated-debt or common or preferred stock.

Although the current economic climate continues to present significant challenges for the financial industry, management feels that based on our strategic initiatives we have positioned the Company to capitalize on the opportunities that may become available in the current economy, as well as a healthier economy going forward.     

Critical Accounting Policies

The discussion and analysis of the financial condition and results of operations are based on our consolidated financial statements, which are prepared in conformity with generally accepted accounting principles used in the United States of America. The preparation of these consolidated financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of income and expenses. We consider the accounting policies discussed below to be critical accounting policies. The estimates and assumptions that we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations.

For a discussion of significant accounting policies, see Note 1—Nature of Operations and Summary of Significant Accounting Policies in the Notes to our Consolidated Financial Statements. The following are the accounting policies that we believe require the most subjective or complex judgments, and as such could be most subject to revision as new information becomes available:

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Allowance for Loan Losses. The allowance for loan losses is the estimated amount considered necessary to cover inherent credit losses in the loan portfolio at the balance sheet date. The allowance is established through the provision for losses on loans which is charged against income. In determining the allowance for loan losses, management makes significant estimates and has identified this policy as one of our most critical accounting policies.

Management, at a minimum, performs a quarterly evaluation of the allowance for loan losses. Consideration is given to historical losses in conjunction with a variety of other factors including, but not limited to, current economic conditions, delinquency statistics, geographic and industry concentrations, the adequacy of the underlying collateral, the financial strength of the borrower, results of internal loan reviews and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change.

The analysis has two components, specific and general allocations. Specific allocations can be made for estimated losses related to loans that are determined to be impaired. Impairment is measured by determining the present value of expected future cash flows or, for collateral-dependent loans, the fair value of the collateral adjusted for market conditions and selling expenses. If the fair value of the loan is less than the loan’s carrying value, a charge is recorded for the difference. The general allocation is determined by segregating the remaining loans by type of loan, risk weighting (if applicable) and payment history. We also analyze historical loss experience, delinquency trends, general economic conditions and geographic and industry concentrations. This analysis establishes factors that are applied to the loan groups to determine the amount of the general reserve.

We cannot predict with certainty the amount of loan charge-offs that we will incur. Our regulatory agencies, as an integral part of their examination processes, periodically review our allowance for credit losses. Such agencies may require that we recognize additions to the allowance for credit losses based on their judgments about information available to them at the time of their examination. To the extent that actual outcomes differ from management’s estimates, additional provisions to the allowance for credit losses may be required that would adversely impact earnings in future periods.

Securities Valuation and Impairment. We classify our investments in debt and equity securities as either held to maturity or available for sale. Securities classified as held to maturity are recorded at cost or amortized cost. Available-for-sale securities are carried at fair value. We obtain our fair values from a third-party service. This service’s fair value calculations are based on quoted market prices when such prices are available. If quoted market prices are not available, estimates of fair value are computed using a variety of techniques, including extrapolation from the quoted prices of similar instruments or recent trades for thinly traded securities, fundamental analysis, or through obtaining purchase quotes. Due to the subjective nature of the valuation process, it is possible that the actual fair values of these investments could differ from the estimated amounts, thereby affecting our financial position, results of operations and cash flows.

If the estimated value of investments is less than the cost or amortized cost, we evaluate whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment. If such an event or change has occurred and we determine that the impairment is other-than-temporary, we record the impairment of the investment in the period in which the event or change occurred. We also consider how long a security has been in a loss position in determining if it is other than temporarily impaired. Management also assesses the nature of the unrealized losses taking into consideration factors such as changes in risk-free interest rates, general credit spread widening, market supply and demand, creditworthiness of the issuer, and quality of the underlying collateral. At December 31, 2018, all of our securities were either issued by U.S. government agencies, U.S. government-sponsored enterprises, municipalities, or corporations.     

Goodwill Impairment. Goodwill represents the excess purchase price paid over the fair value of the net assets acquired. Goodwill is not amortized but is tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company is considered the Reporting Unit for purposes of impairment testing. Impairment testing requires that the fair value of the Company be compared to the carrying amount of the Company’s net assets, including goodwill. If the fair value of the Company exceeds the book value, no write-down of recorded goodwill is required. If the fair value of the Company is less than book value, an expense may be required to write-down the related goodwill to the proper carrying value. We perform the goodwill impairment analysis during the fourth quarter of each fiscal year utilizing December financial information and current projections. We estimate the fair value of the Company utilizing four valuation methods including the Comparable Transactions Approach, the Control Premium Approach, the Public Market Peers Approach, and the Discounted Cash Flow Approach.

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Based on our annual analysis of impairment testing performed in the fourth quarter of fiscal 2018, there was no evidence of impairment with respect to the Company’s goodwill or intangible assets. Subsequent to this testing, there was a triggering event at March 31, 2018 associated with the establishment of a valuation allowance on our deferred tax asset. Due to this event, we re-evaluated the impairment testing on our goodwill and intangible assets and concluded that there was still no impairment.

Business Combinations. Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method of accounting, acquired assets and assumed liabilities are included with the acquirer's accounts as of the date of acquisition at estimated fair value, with any excess of purchase price over the fair value of the net assets acquired (including identifiable core deposit intangibles) capitalized as goodwill. In the event that the fair value of the net assets acquired exceeds the purchase price, an acquisition gain is recorded for the difference in the consolidated statements of operations for the period in which the acquisition occurred. The core deposit intangible asset is recognized as an asset apart from goodwill when it arises from contractual or other legal rights or if it is capable of being separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged. In addition, acquisition-related costs and restructuring costs are recognized as period expenses as incurred.

Income Taxes. Income taxes are accounted for under the asset/liability method. Deferred tax assets are recognized for the future consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as operating loss and tax credit carry-forwards. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period indicated by the enactment date. We establish a valuation allowance for deferred tax assets when, in the judgment of management, it is more likely than not that such deferred tax assets will not become realizable. The judgment about the level of future taxable income is dependent to a great extent on matters that may, at least in part, be beyond our control.

Analysis of Financial Condition at December 31, 2018 and March 31, 2018

Assets. Total assets decreased $29.3 million to $496.3 million at December 31, 2018 from $525.5 million at March 31, 2018. The decrease is primarily attributable to a $21.0 million reduction in gross loans and a $9.8 million decrease in the investment portfolio, partially offset by a $3.2 million increase in cash and cash equivalents.

Cash and Cash Equivalents. Cash and cash equivalents at December 31, 2018 totaled $26.5 million compared to $22.0 million and $23.4 million at September 30, 2018 and March 31, 2018, respectively. The 20.5% increase since September 30, 2018 was due to principal paydowns and/or pay-offs within the loan portfolio and a declining investment portfolio from normal principal payments associated with the mortgage-backed security portfolio. Excluding funds needed for liquidity and operational needs, management intends to utilize any excess cash for future loan growth and/or purchase of investment securities.

Investment Securities. Our investment portfolio consists primarily of investment grade securities including U.S. government agency and government-sponsored entity (“GSEs”) securities, securities issued by states, counties and municipalities, corporate bonds, and mortgage-backed securities. At December 31, 2018, all securities are classified as available for sale. While we usually intend to hold investment securities until maturity, this classification provides us the opportunity to divest of securities that may no longer meet our liquidity objectives. During the nine months ended December 31, 2018, we did not sell any securities.

Investment securities decreased $9.8 million, or 13.0%, to $65.6 million at December 31, 2018, from $75.4 million at March 31, 2018. The decrease is attributable to $9.1 million in cash flows resulting from normal principal payments associated with our collateralized mortgage obligation and mortgage-backed security portfolios, partially offset by the purchase of one security during the first quarter of fiscal 2019 with a book value of $2.0 million. The fair value of the investment portfolio increased $505,000 from an unrealized net loss position of $2.9 million at March 31, 2018 to an unrealized net loss position of $2.4 million at December 31, 2018. The improvement in fair value of the investment portfolio is a result of the decrease in longer-term interest rates over the past nine months.

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We have evaluated securities with unrealized losses for an extended period of time and determined that these losses are temporary because, at this point in time, we have the ability to hold them until maturity. Currently, we have no intent to sell these securities; however, if market conditions or funding needs change, we may sell securities if needed. As the maturity date moves closer and/or interest rates decline, we expect that any unrealized losses for individual securities in the portfolio will decline or dissipate. In addition, we perform an annual impairment analysis with respect to securities issued by states, counties, municipalities, and corporations that are in a loss position for an extended period of time, typically twelve months. As a result, we have not identified any portion of the unrecorded loss as being attributed to credit deterioration in the issuer of the security.

Loans. Excluding loan premiums and loan origination fees and costs, gross loans decreased by $21.0 million, or 5.4%, to $368.2 million at December 31, 2018 from $389.2 million at March 31, 2018. The decrease is primarily attributable to normal principal pay-downs and pay-offs within the loan portfolio. Pay-offs over this period included $6.3 million in loans associated with one commercial relationship and a $3.3 million nonaccrual loan in which we collected all of our principal and past due interest, plus all legal and other expenses incurred. Included in gross loans at December 31, 2018 are acquired loans with a book balance of $100.4 million associated with the prior acquisitions of Fraternity and Fairmount institutions (these loans are reflected in the “acquired” loan column of the table below). At December 31 and March 31, 2018 gross loans receivable represented 74.1% of total assets. The following table details the composition of loans and the related percentage mix and growth of total loans:

	December 31, 2018									March 31, 2018									Year-To-Date Growth
							Percent									Percent						Growth
	Legacy		Acquired		Total		of Total			Legacy		Acquired		Total		of Total			Amount			Percent
Real estate loans:
One-to four-family:
Residential	$	83,117,881	$	66,255,260	$	149,373,141		40.6	%	$	85,248,184	$	72,749,066	$	157,997,250		40.6	%	$	(8,624,109	)		-5.5	%
Residential construction		3,430,203		-		3,430,203		0.9	%		5,450,827		-		5,450,827		1.4	%		(2,020,624	)		-37.1	%
Investor		7,337,281		16,407,266		23,744,547		6.5	%		9,275,031		17,460,809		26,735,840		6.9	%		(2,991,293	)		-11.2	%
Commercial		105,755,786		9,289,784		115,045,570		31.2	%		100,403,769		11,762,485		112,166,254		28.8	%		2,879,316			2.6	%
Commercial construction		1,543,313		1,059,217		2,602,530		0.7	%		5,763,784		1,352,019		7,115,803		1.8	%		(4,513,273	)		-63.4	%
Total real estate loans		201,184,464		93,011,527		294,195,991		79.9	%		206,141,595		103,324,379		309,465,974		79.5	%		(15,269,983	)		-4.9	%
Commercial business		35,276,493		1,706,509		36,983,002		10.0	%		38,302,739		1,841,226		40,143,965		10.4	%		(3,160,963	)		-7.9	%
Home equity loans		15,077,068		4,941,051		20,018,119		5.5	%		13,956,327		6,039,462		19,995,789		5.1	%		22,330			0.1	%
Consumer		16,329,237		699,371		17,028,608		4.6	%		18,849,448		766,063		19,615,511		5.0	%		(2,586,903	)		-13.2	%
Gross loans	$	267,867,262	$	100,358,458	$	368,225,720		100.0	%	$	277,250,109	$	111,971,130	$	389,221,239		100.0	%	$	(20,995,519	)		-5.4	%

The Company’s largest category of loans continues to be residential one-to four-family loans as a result of the loans acquired in the Fraternity and Fairmount acquisitions. This segment of our loan portfolio comprises 40.6% of the entire loan portfolio at December 31, 2018, the same percentage as of March 31, 2018 despite a decrease of $8.6 million. During the last half of fiscal 2017 and into fiscal 2018 we retained in portfolio many of the traditional residential mortgage loans we originated, versus selling them in the secondary market, due to the increase in normal attrition within this loan segment resulting from our acquisitions. Prior to that time, we generally sold these loans in the secondary market at a premium to assist with managing interest rate risk and to enhance non-interest revenue. At the beginning of this year, we began to once again sell most newly originated residential loans that qualify into the secondary market versus putting them in portfolio for those same reasons. To date we have originated and sold $1.7 million in loans into the secondary market. Because of this, we expect the one-to four-family residential loan portfolio to continue to decline as we focus more on the growth within the commercial portfolio to replace the residential run-off and assist with managing interest rate risk.

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As a means to supplement our residential loan portfolio, the Company began to promote its one-to-four family residential construction lending program several years ago. Over the first three quarters of fiscal 2019, the Bank has originated $8.9 million of commitments in residential construction loans. At December 31, 2018 there were $8.7 million in residential construction commitments, of which $3.4 million in funds have been advanced; compared to $8.7 million in residential construction commitments at March 31, 2018, of which $5.4 million in funds had been advanced. The construction period on residential homes is typically nine to twelve months.

Real estate investor loans represent funds advanced to borrowers for the purchase or refinance of non-owner occupied one-to-four family properties. These loans made up $23.7 million, or 6.5%, of gross loans at December 31, 2018, including a remaining balance of $16.4 million of such loans acquired from Fraternity and Fairmount. This type of lending typically involves more risk than originating owner-occupied one-to-four family residential mortgages. The Bank typically refrains from originating this type of loan.

The Bank continues to focus on growth through origination and/or purchase of both commercial real estate and commercial business loans as these loans offer higher rates of return and shorter maturity periods than typical retail lending. Over the nine months ended December 31, 2018, we saw strong organic growth within our commercial real estate loan portfolio. We organically originated $14.8 million in commercial real estate loans and transferred or reclassed nearly $2.0 million more from commercial construction loans over this period. This resulted in an overall increase, after several loan pay-offs and normal principal payments, of nearly $2.9 million within this loan segment. Commercial business loans declined from $40.1 million to $37.0 million, a decrease of 7.9% or $3.2 million. Commercial business loans, although relatively stable, can fluctuate based upon demands or pay-downs on respective lines of credit. Overall commercial loans, including commercial construction loans, have declined since March 31, 2018 due to $6.3 million in pay-offs associated with one commercial relationship that had several commercial loans with the Bank, the pay-off of a nonaccrual commercial real estate loan with a book balance of $3.3 million, and a $1.2 million take out of an SBA 504 commercial construction loan that occurred during the quarter ended December 31, 2018.

Bank-Owned Life Insurance. We invest in bank-owned life insurance (“BOLI”) to provide us with a funding source for our benefit plan obligations. BOLI also provides us noninterest income that is tax-exempt. Our investment in BOLI increased by $344,000 to $17.8 million at December 31, 2018. The increase is attributable to the increase in cash surrender value of the underlying insurance policies. Federal regulations generally limit our investment in BOLI to 25% of our Tier 1 capital plus our allowance for loan losses. Our amount of BOLI at December 31, 2018 exceeded these limits because of the BOLI we acquired in the Fraternity acquisition in May 2016 and the increase in cash surrender value of the policies over the years. Due to the amount of BOLI currently held, the Company has no plans to purchase additional BOLI at this time.

Deposits. Total deposits (excluding premiums on acquired deposits) decreased $20.8 million, or 5.1%, to $384.0 million at December 31, 2018 from $404.7 million at March 31, 2018. The Company continues to focus on generating lower cost, core deposits (which includes all deposits other than certificates of deposit) to support continued loan growth. Core deposits accounted for 37.9% of total deposits at December 31, 2018, compared to 39.0% at March 31, 2018.

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The following table details the composition of deposits and the related percentage mix and growth of total deposits.

	December 31, 2018					March 31, 2018					Year-To-Date Growth
			Percent					Percent						Growth
	Total		of Total			Total		of Total			Amount			Percent
Savings	$	41,548,268		10.8	%	$	42,499,381		10.6	%	$	(951,113	)		-2.2	%
Noninterest-bearing checking		27,365,942		7.1	%		29,557,943		7.3	%		(2,192,001	)		-7.4	%
Interest-bearing checking		28,478,231		7.4	%		27,219,286		6.7	%		1,258,945			4.6	%
Money market accounts		48,128,831		12.6	%		58,466,228		14.4	%		(10,337,397	)		-17.7	%
Time deposits		238,448,636		62.1	%		246,988,613		61.0	%		(8,539,977	)		-3.5	%
	$	383,969,908		100.0	%	$	404,731,451		100.0	%	$	(20,761,543	)		-5.1	%
Premium on deposits asssumed		201,034					411,524					(210,490	)
Total deposits	$	384,170,942				$	405,142,975				$	(20,972,033	)

Our strategy with respect to deposits has been to maintain our current certificate of deposit base as needed to support loan demand by pricing more competitively in the marketplace or through short-term certificate of deposit promotions, as we focus on growing our core deposits at a faster pace to reduce our overall cost of funds. During the first nine months of fiscal 2019, however, we have not been as aggressive in maintaining our certificates of deposits based upon funding and liquidity needs. Over this period, time deposits have decreased $8.5 million, or 3.5%, to $238.4 million at December 31, 2018. As interest rates have risen in the past nine months, the market for time deposits has become more competitive with respect to pricing. We have strategically decided not to price at the top of the market, unless through a promotional deposit product, or to match competitor pricing in certain circumstances as a means to manage interest expense. Over this period core deposits have also declined by $12.2 million, or 7.7%, from $157.7 million at March 31, 2018 to $145.5 million at September 30, 2018. The largest decline in core deposits has been in our money market accounts, which declined $10.1 million over this period. The decline in money market accounts is due to a prior promotional campaign offered by the Bank that included a money market account with a six-month introductory rate. During the quarter ended December 31, 2018, many of these introductory rates expired and the Bank was unable to retain many of these depositors. Because of the decrease in deposits, the Company began utilizing a certificate of deposit subscription service in the third quarter of fiscal 2018. The cost of these deposits is more expensive than traditional certificates of deposit because of the ability to provide the funding needed in a timely manner; but can be less costly than borrowing from the Federal Home Loan Bank or other sources. During the first nine months of fiscal 2019 we did not need to utilize this service to originate deposits to support any additional funding requirements.

Borrowings. Borrowings consist of both short and long-term advances from the Federal Home Loan Bank (FHLB). At December 31, 2018, outstanding advances from the FHLB decreased $9.6 million, or 15.9%, to $51.5 million compared to $60.7 million at March 31, 2018. Approximately $6.0 million of this decline occurred during the quarter ended September 30, 2018. During the first nine months of fiscal 2019 there were $30.5 million in borrowings that have either matured or been called. We elected to rollover $21.0 million of those borrowings and pay-off $9.6 million to date. The next date a borrowing is expected to mature or be called is not until August 2019.

At December 31, 2018, $7.5 million of the total advances are considered short-term and mature in less than one year, while the remaining $43.6 million in advances are considered long-term and mature in more than one year (See Note 9 of the Notes to Consolidated Financial Statements). Included in long-term advances is $11.6 million in advances that mature on a quarterly basis; however, they are associated with several cash flow hedge transactions and will be continuously renewed over the expected life of the hedged transactions. The hedge transactions currently have an average life of 5.3 years. Excluding the advances associated with the hedge transactions, the longest outstanding borrowing is for $2.0 million and matures in September 2023.

The FHLB borrowings provide an alternative means to support the cash outflow needed to fund new loan originations in coordination with deposit growth. FHLB borrowings can provide a less expensive means to support cash outflow when compared to selling higher yielding investment securities. These obligations are secured by our residential and home equity loan portfolios. At December 31, 2018, we had the ability to borrow approximately $73.6 million in additional funds from the FHLB, subject to our pledging sufficient assets. These obligations will be repaid as our cash position strengthens.

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Equity. Total equity increased $2.4 million or 4.5%, to $56.5 million at December 31, 2018 from $54.1 million at March 31, 2018. The change in equity is primarily attributable to net income of $1.4 million reported for the first nine months of fiscal 2019, along with a $434,000 increase in additional paid in capital resulting from equity awards granted in prior periods and a $412,000 increase in the accumulated other comprehensive loss associated with the fair value of the investment portfolio and cash flow hedges on FHLB borrowings. The fair value of the investment portfolio increased while the fair value of our cash flow hedge decreased due to rising interest rates that occurred over that same period. The Company’s book value per common share was $16.53 at December 31, 2018 compared to $15.87 at March 31, 2018. At December 31, 2018, the Bank remains “well capitalized” as defined under federal regulations.

Analysis of Asset Quality at December 31, 2018, March 31, 2018, and December 31, 2017

The Bank’s asset quality remains a primary focus of management and the Board of Directors. Nonperforming assets at December 31, 2018, were $6.0 million, a decrease of $1.6 million from March 31, 2018 and a $1.1 million decrease from December 31, 2017. Nonperforming assets to total assets decreased from 1.45% at March 31, 2018 to 1.21% at December 31, 2018. Nonperforming assets for the respective periods were as follows:

	At or For The Three			At or For The Year			At or For The Three
	Months Ended			Ended			Months Ended
	December 31, 2018			March 31, 2018			December 31, 2017
	(dollars in thousands)
Nonaccruing loans	$	5,196		$	5,964		$	6,195
Accruing loans delinquent more than 90 days		335			1,206			441
Foreclosed real estate		458			458			451
Total nonperforming assets	$	5,989		$	7,628		$	7,087
Asset Quality Ratios:
Nonperforming loans to gross loans		1.50	%		1.84	%		1.71	%
Nonperforming assets to total assets		1.21	%		1.45	%		1.36	%
Net charge-offs (annualized) to average loans		0.06	%		0.26	%		0.08	%

Nonaccrual loans decreased to $5.2 million at December 31, 2018 compared to $6.0 million at March 31, 2018. At the end of the first quarter of fiscal 2019, nonaccrual loans reached a high of $8.9 million due to the addition of a commercial real estate relationship with a recorded value of $3.1 million. The borrower on this loan continues to make timely payments to date under the original terms of that loan and has never been delinquent; however, review of their financial information indicates they do not have sufficient cash flow to service the debt, thus we have placed it on nonaccrual status. To date there is no impairment associated with this relationship based upon the most recently obtained appraised value. In July 2018, another commercial real estate loan that was already on nonaccrual, with a recorded value of $3.3 million, was resolved and paid-off with no loss to the Bank. Proceeds from the pay-off included payment of principal, past due interest and all legal and other expenses incurred. In addition, several other nonaccrual commercial loans paid-off during the quarter ended December 31, 2018 with minimal additional charge-offs, including a $197,000 commercial real estate loan, $254,000 in investor loans to one borrower, and two commercial lease loans equaling $66,000. The aggregate of the loans just described is primarily responsible for the $768,000 decrease in nonaccrual loans from March 31, 2018 to December 31, 2018.

As of December 31, 2018, there are two commercial real estate relationships totaling $4.1 million that are a part of the $5.2 million in nonaccrual loans, including the one relationship that was added in the first quarter of fiscal 2019 that was previously discussed. Both relationships have been reviewed for impairment and recorded at their fair value based upon recent appraisals, one of which has incurred $1.9 million in write-downs through charge-offs over the past two years. Management continues to actively explore options and work with the borrowers to obtain the best outcome for the Bank, which may or may not result in new or additional write-downs.

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There were $143,000 in nonaccrual commercial business loans at December 31, 2018 compared to $165,000 at March 31, 2018. The recorded book balance of $143,000 in loans is primarily comprised of three commercial lease loans to different borrowers with a combined contractual balance of $399,000 and charge-offs totaling $261,000. The purpose of the loans was to provide funding to purchase medical equipment related to cosmetic surgery. Based upon the inability to generate sufficient revenue, the borrowers stopped making payments on the leases or asked for the equipment to be repossessed. All three loans are fully guaranteed by the respective borrowers.

The remaining balance of nonaccrual loans at December 31, 2018 30, 2018 consisted of $797,000 in one-to four-family residential mortgage loans, including two loans with a book balance of $271,000 that were acquired loans, and $96,000 in residential investor loans. The majority of the residential investor loans were acquired in the Fairmount acquisition.

Included in nonperforming assets are accruing loans delinquent more than 90 days. These loans represent loans that are on accrual status and making payments, however, such loans are 90 days past their contractual maturity date, and therefore reported as nonperforming. At March 31, 2018, these loan balances were elevated as they related to several borrowing relationships that are comprised of many smaller investor (residential non-owner occupied) loans that matured at the same time. The decline over fiscal 2019 is a result of the Bank’s credit department working diligently to obtain the necessary financial information from these borrowers so that these loans can either be renewed or extended accordingly.

Loans 30-89 days past due decreased $322,000 to $948,000 at December 31, 2018 from $1.3 million at March 31, 2018. This decrease is attributable to a $540,000 and $123,000 decrease in delinquencies associated with one-to four-family residential mortgage loans and consumer loans, respectively, partially offset by a $311,000 increase in commercial business loans. Delinquencies related to one-to four-family residential loans decreased $540,000 from $823,000 at March 31, 2018 to $283,000 at December 31, 2018 due to the pay-off of one delinquent loan with a book balance of $555,000; while consumer loans decreased $123,000 over this same nine-month period due to a $127,000 decline in delinquent recreational vehicles. These decreases were partially offset by an increase in delinquent commercial business loans from $270,000 at March 31, 2018 to $581,000 at December 31, 2018. At September 30, 2018 there were no delinquent commercial business loans. The increase of $581,000 from September 30, 2018 to December 31, 2018 is related to four commercial medical lease loans. The Bank is monitoring the delinquent loans closely and working with the borrowers to develop a payment plan. If the borrowers are unable to bring these loans current or re-pay or re-finance the respective loans, there could be future charge-offs associated with these loans based upon collateral values.

Foreclosed real estate at December 30, 2018 was $458,000; unchanged from March 31, 2018. At December 31, 2018 there were five properties that comprised the foreclosed real estate balance. One of the five properties consists of semi-developed land with a fair value of $411,000. The property is listed for sale and is participated with another financial institution, with Hamilton being the lead lender. The remaining four properties totaling $70,000 are all participations and comprised of one-to- four family residential mortgage loans in which Hamilton owns less than 15% of and is not the lead lender. During the quarter ended December 31, 2018, one property that was booked to foreclosed real estate earlier in the year for $130,000 was sold at a loss of $4,200.

The Bank recorded a $382,000 provision for loan loss during the first nine months of fiscal 2019 compared to a $625,000 provision for loan loss for the same period a year ago. The provision for loan loss for the nine months ended December 31, 2018 was a result of $173,000 in net charge-offs and roughly $294,000 in additional reserves associated with the revaluation of our environmental factors in the prior quarter (see Note 1 of the Financial Statements under Summary of Significant Accounting Policies for further discussion), partially offset by a decline in loan balances; compared to prior year provisions which were primarily related to growth within the loan portfolio due to organic loan originations and loan purchases. The allowance for loan losses at December 31, 2018 totaled $3.0 million, or 0.82% of gross loans, compared to the same $2.8 million, or 0.73% of gross loans, at March 31, 2018. The change in percentage was due to in part to both the decrease in overall loan balances and the increase in the allowance for loan losses itself. This overall percentage remains relatively low compared to peers as a result of our acquired loan portfolios. Loans acquired in an acquisition are recorded at estimated fair value on their purchase date with no carryover of the related allowance for loan and lease losses. We continue to monitor and manage the acquired loan portfolio to determine if additional provisions are necessary in relation to the estimated fair value placed on those loans at acquisition date as determined by management.

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The activity in the allowance for loan losses for the nine-month period ended December 31, 2018 includes $297,000 in charge-offs, offset by $124,000 in recoveries and a $382,000 provision for loan losses. We currently review the adequacy of the allowance for loan losses on a quarterly basis and are proactively managing problem assets. Based upon our analysis, we believe this allowance appropriately reflects the inherent risk of loss in our loan portfolio at December 31, 2018. We estimate the allowance for loan losses based upon a four-year charge-off history and certain environmental factors.

Results of Operations for the Three Months Ended December 31, 2018 and 2017 (unaudited)

General. Net loss for the quarter ended December 31, 2018 was $125,000, or $0.04 per common share, compared to net loss of $1.9 million, or $0.60 per common share for the quarter ended December 31, 2017; an improvement of $1.8 million quarter-over-quarter. The improvement was largely due to a $2.2 million tax adjustment in the prior year period to the Company’s net deferred tax asset resulting from the reduction in the corporate tax rate associated with the federal government’s passage of the Jobs Act; whereas there was no tax expense or benefit for the three month period ended December 31, 2018 because of the valuation allowance established at March 31, 2018 on the deferred tax asset. Also contributing to a lower net loss were the lower provision for loan losses, partially offset by a decrease in net interest income associated with rising rates on deposits and borrowings, a decline in noninterest revenue, and an increase in noninterest expenses related to $503,000 thousand in merger related expenses associated with the pending acquisition by Orrstown. Excluding the merger costs, net income would have been $378,000, or $0.12 per common share, for the three months ended December 31, 2018 compared to a net loss of $1.9 million, or $0.60 per common share for the quarter ended December 31, 2017.

Net Interest Income. Net interest income decreased $199,000, or 5.5%, to $3.4 million for the three-months ended December 31, 2018 compared to $3.6 million for the three-months ended December 31, 2017. The decrease in net interest income was due to a $425,000 increase in interest expense, partially offset by a $226,000 increase in interest revenue. The net interest margin decreased 13 basis point from 3.07% for the three months ended December 31, 2017 to 2.94% for the three months ended December 31, 2018.

The increase in interest revenue quarter-over-quarter was due to an increase in the average yield on interest-earning assets, partially offset by a decrease in the average balance of those same assets. The average yield on interest-earning assets increased 26 basis points to 4.10% from 3.84%, while the average balance decreased $7.1 million, or 1.5%, for the quarter ended December 31, 2018 compared to the same period in fiscal 2018. The decrease in average balances was primarily due to a declining investment portfolio.

The increase in interest expense for the quarter ended December 31, 2018 compared to the same quarter last year was the result of a 43 basis points increase in the average cost of interest-bearing liabilities. The average cost of interest-bearing liabilities increased from 0.88% for the three months ended December 31, 2017 to 1.31% for the three months ended December 31, 2018. Partially offsetting the rise in the average cost was a decrease of $8.7 million in the average balance of interest-bearing liabilities from $420.4 million to $411.7 million. The decrease resulted from the decline in average interest-bearing deposits.

Interest Revenue. Interest revenue increased $226,000, or 4.9% to $4.8 million during the three months ended December 31, 2018 compared to $4.6 million for the three months ended December 31, 2017. The increase resulted from increases in interest and fees on loans and interest on federal funds sold and other bank deposits, partially offset by a decrease in interest revenue from investment securities.

Interest and fees on loans increased $156,000, or 3.8%, to $4.3 million for the three months ended December 31, 2018, compared to $4.1 million for the three months ended December 31, 2017. The increase in interest and fees on loans is due to a 19-basis point increase in the average yield earned on loans from 4.42% to 4.61% for the comparable periods. The increase in average yield is a result of higher interest rates on new loan originations, as well as interest revenue realized through the pay-off of certain purchased credit impaired loans (PCI) associated with our prior acquisitions. Partially offsetting the increase in interest revenue associated with the average yield is a $2.1 million decrease in the average balance of net loans from $371.5 million to $369.3 million quarter-over-quarter. The decrease in average loans was attributable to normal attrition associated with a larger loan portfolio resulting from loan purchases in the prior year, along with several large commercial relationships and loans that paid-off during the year.

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Interest revenue on total investment securities decreased $25,000 to $414,000 for the three months ended December 31, 2018 from $439,000 for the three months ended December 31, 2017. The decrease is due to the average balance of investment securities decreasing $19.0 million, or 21.1%, to $71.2 million for the three months ended December 31, 2018 from $90.2 million for the same period last year, while the average yield increased 38 basis points to 2.33% from 1.95%. The largest decrease in investment securities was in mortgage-backed securities, which decreased $16.2 million to $51.7 million for the three months ended December 31, 2018 from $67.9 million for the same period last year. The average balance of investment securities other than mortgage-backed securities also decreased quarter-over-quarter by $2.8 million. The overall decrease in average investments is attributable to normal principal paydowns related to mortgage-backed securities over the past twelve months as no securities were sold during this period. One investment security, with a book value of $2.0 million, was purchased during the first quarter of fiscal 2019.

Interest Expense. Interest expense increased $425,000, or 45.6%, to $1.3 million for the three months ended December 31, 2018 compared to $924,000 for the same period in fiscal 2018, due to the increase in the average cost of both interest-bearing deposits and borrowings. The average cost of interest-bearing deposits increased 36 basis points from 0.78% for the three months ended December 31, 2017 to 1.14% for the three months ended December 31, 2018. The increase in average cost was partially offset by a decrease in the average balance of interest-bearing deposits. The average balance of interest-bearing deposits decreased $8.1 million, or 2.2%, to $358.7 million for the three months ended December 31, 2018 from $366.8 million for the three months ended December 31, 2017. Due to the increase in costs, the interest expense associated with interest-bearing deposits increased $306,000, or 42.8%, period-over-period.

For the three-month period ended December 31, 2018, average interest-bearing deposit balances decreased for all types of deposits other than checking accounts which increased $4.6 million, when compared to the same period a year ago. As interest rates have risen over the past year, the market competition for deposits, in particular time deposits and money market accounts, has become more competitive with respect to pricing. We have strategically decided not to price our deposits at the top of the market, unless through a promotional deposit product, or to match competitor pricing in certain circumstances as a means to manage interest expense. The Company continues to focus on generating lower cost, core deposits (which includes all deposits other than certificates of deposit) to support continued loan growth. The average balance of core interest-bearing deposits decreased $3.1 million, or 2.6%, to $123.7 million for the three-month period ended December 31, 2018 compared to $126.8 million for the three months ended December 31, 2017. The average balance of time deposits also decreased $5.0 million, or 2.1%, to $235.0 million for the quarter ended December 31, 2018 compared to $239.9 million for the quarter ended December 31, 2017.

Noninterest-bearing deposits allow us to fund growth in interest-earning assets at minimal cost. Average noninterest-bearing deposits decreased $159,000, or less than 1.0%, to $29.5 million for the three months ended December 31, 2018, compared to $29.7 million for the three months ended December 31, 2017. Our cash management personnel and commercial loan officers remain focused in working with commercial clients to move their core deposit relationships to Hamilton Bank and provide lower cost of funds.

For the three-month period ended December 31, 2018, average borrowings were $53.0 million compared to an average balance of $53.6 million for the same period a year ago. The decrease in borrowings is associated with maturing FHLB advances that were paid-off versus rolled over at higher interest rates, partially offset with new advances entered into at the end of December 2017 that coincided with specific loan purchases and a seasonal decline in deposits. The borrowings at December 31, 2018 consist of only advances from the FHLB and totaled $51.1 million; a decrease of $8.5 million since June 30, 2018. Due to rising interest rates, we have paid-off maturing advances based upon available liquidity at that time versus rolling the advance over at the higher rate. Borrowings carry an average rate of 2.48% for the three months ended December 31, 2018; a 91 basis points increase from 1.57% for the same period a year ago. Borrowing from the FHLB in today’s low interest rate environment can be a more cost-effective means to obtain funds if deposits are not growing compared to selling investment securities that are earning a higher yield.

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Average Balances, Interest and Yields. The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest revenue from average interest-earning assets, the dollar amounts of interest expense on average interest-bearing liabilities, and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing interest revenue or interest expense by the average balances of assets or liabilities, respectively, for the periods presented and have been annualized. Average balances have been calculated using average daily balances. No tax-equivalent adjustments were made. Nonaccrual loans have been included in the table as loans carrying a zero yield.

	Three Months Ended December 31,
	(dollars in thousands)
	2018								2017
	Average					Yield/			Average					Yield/
	Balance			Interest		Cost			Balance			Interest		Cost
Interest-earning assets:
Interest bearing deposits with banks	$	26,950		$	113		1.68	%	$	12,850		$	19		0.59	%
Investment securities (1)		19,478			143		2.94	%		22,310			141		2.53	%
Mortgage-backed securities		51,739			271		2.10	%		67,919			298		1.76	%
Loans receivable, net (2)		369,337			4,260		4.61	%		371,486			4,103		4.42	%
Total interest-earning assets		467,504			4,787		4.10	%		474,565			4,561		3.84	%
Noninterest-earning assets		34,465								43,173
Total assets	$	501,969							$	517,738
Interest-bearing liabilities:
Statement savings	$	39,648		$	25		0.25	%	$	43,080		$	13		0.12	%
Checking accounts		29,601			3		0.04	%		24,996			2		0.03	%
Money market		54,468			90		0.66	%		58,761			74		0.50	%
Certificates of deposit		234,957			902		1.54	%		239,920			625		1.04	%
Total interest-bearing deposits		358,674			1,020		1.14	%		366,757			714		0.78	%
Borrowings		53,011			329		2.48	%		53,645			210		1.57	%
Total interest-bearing liabilities		411,685			1,349		1.31	%		420,402			924		0.88	%
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits		29,549								29,708
Other noninterest-bearing liabilities		5,233								6,026
Total liabilities		446,467								456,136
Total shareholders’ equity		55,502								61,602
Total liabilities and shareholders’ equity	$	501,969							$	517,738
Net interest income				$	3,438							$	3,637
Net interest rate spread (3)							2.79	%							2.98	%
Net interest-earning assets (4)	$	55,819							$	54,163
Net interest margin (5)							2.94	%							3.07	%
Average interest-earning assets to average interest-bearing liabilities		113.56	%							112.88	%

(1) Includes U.S agency and treasury securities, municipal and corporate bonds and to a much lesser extent, Federal Home Loan Bank equity securities.

(2) Loans on non-accrual status are included in average loans carrying a zero yield.

(3) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing libilities.

(4) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(5) Net interest margin represents net interest income divided by average total interest-earning assets.

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Provision for Loan Losses. We establish provisions for loan losses that are charged to operations in order to maintain the allowance for loan losses at a level believed, to the best of management’s knowledge, to cover all known and inherent losses in the portfolio both probable and reasonable to estimate at each reporting date. There was $80,000 charged to the provision for loan losses for the three months ended December 31, 2018 compared to a provision for loan loss of $345,000 for the three months ended December 31, 2017. In the current quarter, the $80,000 provision for loan loss recorded is primarily attributable to $80,000 in net charge-offs experienced during the quarter; compared to the provision for the prior year quarter, which was related to net charge-offs of $206,000 and growth within the loan portfolio, as reflected in the table below.

The allowance for loan losses was $3.0 million, or 54.8% of non-performing loans at December 31, 2018 compared to $2.6 million, or 39.3% of non-performing loans at December 31, 2017. The increase in the percentage is a result of the $1.1 million decrease in nonperforming loans over this period, partially offset by a $421,000 increase in the allowance for loan losses. The $5.5 million in non-performing loans at December 31, 2018 primarily consisted of two commercial real estate relationships totaling $4.1 million. The first relationship has a recorded value of $2.9 million and was placed on nonaccrual in June 2018, while the second relationship has a book value of $1.2 million and has had $1.9 million in charge-offs over the past two years. Both relationships have been recorded at their net realizable fair value based upon recent appraisals. No additional charge-offs are anticipated with these relationships at this time; however, changes in property values and other circumstances may result in additional charge-offs at a later date.

During the three months ended December 31, 2018, loan charge-offs totaled $167,000 with recoveries of $87,000, compared to $211,000 in charge-offs and $5,000 in recoveries during the three months ended December 31, 2017. During fiscal year 2019, we expect that we will continue our emphasis in growing commercial real estate and commercial business loans, which have higher interest rates than one-to four-family mortgage loans, thus are generally considered to bear higher risk than one-to four-family mortgage loans and could contribute to higher loan loss provisions going forward.

Summary of Allowance for Loan Losses Activity. The following table sets forth an analysis of the allowance for loan losses for the periods indicated.

	Three Months Ended
	December 31,
	2018			2017
	(dollars in thousands)
Allowance for loan losses at beginning of period	$	3,031		$	2,471
Charge-offs:
Real estate loans:
Residential		-			-
Investor		33			111
Commercial		-			100
Commercial construction		-			-
Commercial business		134			-
Home equity		-			-
Consumer		-			-
Total charge-offs		167			211
Recoveries		87			5
Net charge-offs		80			206
Provision for loan losses		80			345
Allowance for loan losses at end of period	$	3,031		$	2,610
Allowance for loan losses to non-performing loans		54.80	%		39.33	%
Allowance for loan losses to total loans outstanding at the end of the period		0.82	%		0.67	%
Net charge-offs to average loans outstanding during the period (annualized)		0.09	%		0.22	%

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Noninterest Revenue. Noninterest revenue decreased $181,000 to $281,000 for the three months ended December 31, 2018, compared to $463,000 for the three months ended December 31, 2017. The following table outlines the changes in noninterest revenue for the three-month periods.

	Three months ended
	December 31,
	2018		2017			$ Change			% Change
Service charges	$	123,885	$	109,151		$	14,734			13.5
Loss on sale of investment securities		-		(12,736	)		12,736			100.0
Gain on sale of loans held for sale		8,609		-			8,609			N/A
Gain on sale of property and equipment		-		212,743			(212,743	)		(100.0	)
Earnings on bank-owned life insurance		115,419		123,597			(8,178	)		(6.6	)
Other fees and commissions		33,260		29,860			3,400			11.4
Total noninterest revenue	$	281,173	$	462,615		$	(181,442	)		(39.2	)

Service charges associated with retail and commercial deposit products increased during the three-months ending December 31, 2018 compared to the same period a year ago. Management remains focused on growing core deposits, particularly checking accounts, which typically generate more service fee income. The average balance relating to overall checking accounts for the three months ended December 31, 2018 was $59.2 million compared to an average balance of $54.7 million at December 31, 2017, an increase of 8.1%, or $4.4 million. We continue to review and evaluate our fee structure to be more aligned with our market. Customers, however, have become more cost conscious of fees and better manage their deposit relationship with the Bank.     

During the three months ended December 31, 2018, the Company was able to enhance noninterest revenue by $9,000 relating to gains on loans sold to the secondary market. In the last quarter of fiscal 2017 and into fiscal 2018, the Company purposely held in portfolio the majority of our residential loan originations to partially offset the increased run-off associated with this loan segment. The increased run-off was due to higher balances resulting from our two prior acquisitions. Beginning in fiscal 2019, however, we again started to sell qualified residential loan originations into the secondary market as a means to generate noninterest revenue and diversify our income stream. In the prior year three-month period we also realized losses on the sale of investment securities of $13,000 compared to none for the three months ended December 31, 2018.

The $213,000 gain on sale of property and equipment for the prior year quarter ended December 31, 2017 is related specifically to the sale of our Pigtown branch in Baltimore City, along with various furniture and equipment that was associated with the property. This branch was relocated within the same community, but to a smaller, more efficient space that provided operational cost savings.

The other components that make up noninterest revenue for the three months ended December 31, 2018 include a $3,000 increase in other fees and commissions, along with an $8,000 decline in earnings associated with BOLI due to a reduction in the cash surrender value of the Company’s outstanding BOLI related to the pay-out of death benefits in the fourth quarter of fiscal 2018. Other fees and commissions include the collection of certain loan fees, merchant card services and other miscellaneous items.

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Noninterest Expense. Noninterest expense increased $434,000 to $3.8 million for the three months ended December 31, 2018 compared to $3.3 million for the three months ended December 31, 2017. The increase is attributable to $503,000 in merger expenses related to the pending merger with Orrstown. These expenses include legal fees and services provided by the Company’s investment bankers. The following table outlines the changes within noninterest expense for those periods.

	Three months ended
	December 31,
	2018		2017		$ Change			% Change
Salaries and benefits	$	2,027,646	$	1,819,035	$	208,611			11.5
Occupancy		253,488		259,595		(6,107	)		(2.4	)
Advertising		21,524		22,487		(963	)		(4.3	)
Furniture and equipment		103,400		92,894		10,506			11.3
Data processing		202,915		176,114		26,801			15.2
Legal services		70,115		153,615		(83,500	)		(54.4	)
Other professional services		96,510		218,879		(122,369	)		(55.9	)
Merger related expenses		502,835		-		502,835			N/A
Deposit insurance premiums		56,760		91,470		(34,710	)		(37.9	)
Foreclosed real estate expense and losses		4,447		43,706		(39,259	)		89.8
Other operating		424,505		452,423		(27,918	)		(6.2	)
Total noninterest expense	$	3,764,145	$	3,330,218	$	433,927			13.0

Excluding merger costs, overall our operating expenses have remained relatively unchanged, despite decreases in certain operating expenses related to specific expenses incurred in the prior year, offset by increases in other operating expenses, particularly salaries and benefits. We have been able to manage a larger loan portfolio from an operational cost basis and continue to increase our interest revenue. However, the recent rise in interest rates and the impact to our cost of funds has resulted in a higher efficiency ratio of 87.7% for the three months ended December 31, 2018 compared to 81.2% for the three months ended December 31, 2017. The efficiency ratio presented excludes the $503,000 in merger related expenses. Management remains committed to reducing operational expenses.

Salaries and benefit expense remain our highest operational cost and increased by $209,000, or 11.5%, quarter-over-quarter. This increase is due to annual evaluations and respective salary increases, along with bonus accruals that were not present in the prior year period due to our net loss position, partially offset by unfilled positions and a decrease in employee benefits related to lower costs associated with our employee stock ownership plan (ESOP). The decrease in the ESOP is related to the decrease in the Company’s average stock price quarter-over-quarter. Also included in salaries and benefits for the three months ended December 31, 2018 and 2017, is $91,000 and $80,000 in expense, respectively, relating to prior equity awards granted to officers under the Company’s Equity Incentive Plan. The equity awards provide for management to have a vested interest in the performance of the company and share in the benefit of an increase in shareholder value. Similarly, other operating expenses for the same periods include $35,000 in expense associated with equity awards granted to Directors.

The Company realized an increase in operating expenses relating to furniture and equipment and data processing for the three-month periods ended December 31, 2018 compared to the 2017 period. Data processing costs increased $27,000 for the comparable quarters due to annual cost increases, along with the introduction of new technology that has made banking easier for our customers, including products such as mobile banking and our on-line consumer loan application.

The Company has been able to offset the increase in certain noninterest expenses through reduced operating expenses in other operational areas, including legal and other professional services. Legal fees are lower by $84,000 due to fewer problem assets and the exclusion of certain costs incurred in the prior year period, including our charter conversion and branch sale and re-location. Other professional services also declined by $122,000 due to the exclusion of certain costs incurred in the prior year period, including the use of a financial consultant to assist with strategy and non-compete payments made to executives associated with the Fraternity Community Bancorp, Inc. acquisition. The terms and the payments under the consulting and non-compete agreements were fully satisfied in March and April 2018, respectively. FDIC insurance premiums decreased $35,000 to $57,000 for the three months ended December 31, 2018 compared to $91,000 for the three months ended December 31, 2017. The decrease in the premiums is attributable to a reduction in nonaccrual loans quarter-over-quarter and an increase in the Bank’s capital position due to the $2 million of new capital brought down from the Holding Company to the Bank in August 2018. Foreclosed real estate expense also decreased $39,000 due to a write-down of one property in the prior year quarter to its net realizable value determined through a newly obtained appraisal.

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Income Tax Expense. For the three months ended December 31, 2018, the Company did not report any income tax benefit on pre-tax loss of $125,000 compared to tax expense of $2.4 million for the three months ended December 31, 2017 after pre-tax income of $425,000. There was no tax expense during the current quarter due to the release of a portion of the valuation allowance on our net deferred tax assets established in the prior fiscal year. In accordance with Accounting Standards Codification (ASC) 740, Accounting for Income Taxes, at December 31, 2018, the Company has assessed whether the deferred tax assets are more likely than not to be realized based on an evaluative process that considers all available positive and negative evidence. As part of this evaluative process, management considered the following sources of taxable income: 1.) taxable income in prior carryback years; 2.) the future reversals of taxable temporary differences; 3.) tax planning strategies; and 4.) future taxable income exclusive of reversing temporary differences and carryforwards. In making a conclusion, management evaluated all the available positive and negative evidence impacting these sources of taxable income. The first three options are more quantifiable and verifiable; however, management has concluded they are not viable sources of taxable income. As such, the positive evidence that has been most heavily relied upon, but the most subjective, is future taxable income exclusive of reversing temporary differences and carryforwards. Based upon the Company being in a three-year cumulative loss position, which creates negative evidence, and because this evidence is considered significant, management has concluded that there is more negative evidence than positive evidence and therefore, it is more likely than not that the Company will be unable to generate sufficient taxable income in the foreseeable future to fully utilize the net deferred tax assets.

If, in the future, the Company generates taxable income on a sustained basis sufficient to support the deferred tax assets, the need for a deferred tax valuation allowance could change, resulting in the reversal of all or a portion of the deferred tax asset valuation at that time. The establishment of a valuation allowance on our deferred tax assets for financial reporting purposes does not affect how the net operating loss carryforwards may be utilized on our subsequent income tax returns. The valuation allowance on the Company’s net deferred tax assets decreased $94,000 to $5.3 million at December 31, 2018, from $5.4 million at September 30, 2018 due to $503,000 in non-deductible merger expenses, partially offset by the net loss of $125,000 and adjustments for permanent and temporary differences between book and tax expenses. Income tax expense for the periods reported is based upon year-to-date results and may not be reflective of annual earnings.

The large tax expense for the prior year quarter ended December 31, 2017 is directly related to the passage of the Jobs Act that was signed into law on December 22, 2017. The Act amended the Internal Revenue Code to reduce income tax rates and modify policies, credits, and deductions for individuals and businesses. For businesses, the Act reduces the federal corporate income tax rate from a maximum 35 percent to a flat 21 percent tax rate. As a result, our net deferred tax assets at that time, which were based upon a 34 percent corporate tax rate, had to be re-evaluated to reflect the new tax rate of 21 percent. This one-time non-cash adjustment was estimated to be $2.2 million and was recorded through income tax expense.     

Results of Operations for the Nine Months Ended December 31, 2018 and 2017 (unaudited)

General. Net income was $1.4 million, or $0.44 per common share for the nine-month period ended December 31, 2018 compared to a net loss of $1.1 million, or $0.35 per common share for the same period in fiscal 2018, a period-over-period increase of $2.5 million. The increase in net income is largely due to a $2.2 million tax adjustment in the prior year period to the Company’s net deferred tax asset resulting from the reduction in the corporate tax rate associated with the federal government’s passage of the Jobs Act; whereas there was no tax expense or benefit for the nine month period ended December 31, 2018 because of the valuation allowance established at March 31, 2018 on our deferred tax asset. Also contributing to a higher net income was an increase in net interest income associated with higher average loan balances and a lower provision for loan losses, partially offset by a decline in noninterest revenue and an increase in operating expenses realized in the nine-month period ended December 31, 2018. The increase in operating expenses is related to $559,000 in merger related expenses associated with the pending merger with Orrstown. Excluding the merger expenses, net income would have been $2.0 million, or $0.62 per common share, for the nine months ended December 31, 2018.

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Net Interest Income. Net interest income increased $153,000, or 1.4%, to $11.0 million for the nine months ended December 31, 2018 compared to $10.8 million for the nine months ended December 31, 2017. The increase in net interest income was due to a $1.3 million increase in interest revenue, partially offset by a $1.1 million increase in interest expense. The increase in interest revenue was due to an increase in the average balance of interest-earning assets, particularly higher yielding loans, as well as an increase in average yield on interest-earning assets. The average balance in interest-earning assets increased $7.8 million, or 1.6%, over the first three quarters of fiscal year 2019 compared to the same period in fiscal 2018, while the average yield increased 30 basis points to 4.09% from 3.79%, respectively. The average balances increased period-over-period due to organic loan growth and the purchase of several pools of loans in the second half of fiscal 2018, including residential mortgage loan pools totaling $19.2 million and several guaranteed SBA loans equal to $3.2 million.

The increase in interest expense for the nine-month period ended December 31, 2018 compared to the same period last year was the result of a 35 basis points increase in the average cost of interest-bearing liabilities. The average cost of interest-bearing liabilities increased from 0.81% for the nine months ended December 31, 2017 to 1.16% for the nine months ended December 31, 2018. In addition, the average balance of interest-bearing liabilities also increased $6.0 million from $417.2 million to $423.3 million. The increase resulted from the growth in average borrowings, partially offset by a decrease in average interest-bearing deposits. The net interest margin decreased 1 basis point from 3.07% for the nine months ended December 31, 2017 to 3.06% for the nine months ended December 31, 2018.

Interest Revenue. Interest revenue increased $1.3 million, or 9.6% to $14.7 million during the nine months ended December 31, 2018 compared to $13.4 million for the nine months ended December 31, 2017. The increase resulted from increases in interest and fees on loans and interest on federal funds sold and other bank deposits, partially offset by a decrease in interest on investment securities.

Interest and fees on loans increased $1.2 million, or 9.9%, to $13.1 million for the nine months ended December 31, 2018, compared to $11.9 million for the nine months ended December 31, 2017. The increase in interest and fees on loans is due to a $20.5 million increase in the average balance of net loans from $354.1 million to $374.6 million period-over-period. The increase in average loans is attributable to organic growth generated by our commercial lending area and strategic loan purchases that occurred in the second half of fiscal 2018. In addition, the average yield earned on loans increased 17 basis points from 4.48% for the nine months ended December 31, 2017 to 4.65% for the nine months ended December 31, 2018. The increase in yield is a result of interest revenue recognized over the first nine months of the fiscal year relating to early pay-offs on acquired loans and the associated purchase accounting marks, pay-off on a $3.3 million nonaccrual commercial loan in which all past due interest was collected, as well as overall higher rates on new loan originations due to rising interest rates.

Interest revenue on total investment securities decreased $137,000 to $1.3 million for the nine months ended December 31, 2018 from $1.4 million for the nine months ended December 31, 2017. The decrease is due to the average balance of investment securities decreasing $22.5 million, or 23.1%, to $74.8 million for the nine months ended December 31, 2018 from $97.3 million for the same period last year, while the average yield increased 33 basis points to 2.25% from 1.92%. The largest decrease in investment securities was in mortgage-backed securities, which decreased $18.8 million to $54.9 million for the nine months ended December 31, 2018 from $73.6 million for the same period last year. The average balance of investment securities other than mortgage-backed securities also decreased period-over-period by $3.7 million. The decrease in average investments is attributable to both normal principal paydowns related to mortgage-backed securities over the past twelve months, along with $11.6 million in securities that were sold between August and December 2017. There were no securities sold and only one investment security, with a book value of $2.0 million, purchased during the first quarter of fiscal 2019.

Interest Expense. Interest expense increased $1.1 million, or 44.3%, to $3.7 million for the nine months ended December 31, 2018 compared to $2.5 million for the same period in fiscal 2018, due to the increase in the average cost of both interest-bearing deposits and borrowings. The average cost of interest-bearing deposits increased 29 basis points from 0.73% for the nine months ended December 31, 2017 to 1.02% for the nine months ended December 31, 2018. The increase in the average cost of interest-bearing deposits was partially offset by a decrease in the average balance of interest-bearing deposits. The average balance of interest-bearing deposits decreased $5.9 million, or 1.6%, to $367.3 million for the nine months ended December 31, 2018 from $373.2 million for the nine months ended December 31, 2017. Due to the increase in average costs, the interest expense associated with interest-bearing deposits increased $771,000, or 37.7%, period-over-period.

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For the nine-month period ended December 31, 2018, average interest-bearing deposit balances decreased for all types of deposits other than checking accounts which increased $4.1 million, when compared to the same period a year ago. As interest rates have risen over the past year, the market for deposits, in particular time deposits and money market accounts, has become more competitive with respect to pricing. We have strategically decided not to price our deposits at the top of the market, unless through a promotional deposit product, or match competitor pricing in certain circumstances as a means to manage interest expense. The Company continues to focus on generating lower cost, core deposits (which includes all deposits other than certificates of deposit) to support continued loan growth. The average balance of core interest-bearing deposits decreased $3.0 million, or 2.3%, to $129.1 million for the nine-month period ended December 31, 2018 compared to $132.0 million for the nine months ended December 31, 2017. The average balance of time deposits also decreased $2.9 million, or 1.2%, to $238.3 million compared to $241.2 for the same periods, respectively.

Noninterest-bearing deposits allow us to fund growth in interest-earning assets at minimal cost. Average noninterest-bearing deposits decreased $428,000, or 1.4%, to $29.2 million for the nine months ended December 31, 2018, compared to $29.6 million for the nine months ended December 31, 2017. Our cash management personnel and commercial loan officers remain focused in working with commercial clients to move their core deposit relationships to Hamilton Bank and provide lower cost of funds.

For the nine-month period ended December 31, 2018, average borrowings were $56.0 million compared to an average balance of $44.0 million for the same period a year ago. The increase in average borrowings is associated with funds needed to purchase several loan portfolios over the last half of fiscal 2018 and a declining deposit base. The borrowings at December 31, 2018 consist of only advances from the FHLB and totaled $51.1 million; a decrease of $8.5 million since June 30, 2018. Due to rising interest rates, we have paid-off maturing advances based upon available liquidity at that time versus rolling the advance over at the higher rate. The borrowings carry an average rate of 2.48% for the nine months ended December 31, 2018; a 91 basis points increase from 1.57% for the same period a year ago. Borrowing from the FHLB in today’s low interest rate environment can be a more cost-effective means to obtain funds if deposits are not growing compared to selling investment securities that are earning a higher yield.

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Average Balances, Interest and Yields. The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest revenue from average interest-earning assets, the dollar amounts of interest expense on average interest-bearing liabilities, and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing interest revenue or interest expense by the average balances of assets or liabilities, respectively, for the periods presented and have been annualized. Average balances have been calculated using average daily balances. No tax-equivalent adjustments were made. Nonaccrual loans have been included in the table as loans carrying a zero yield.

	Nine Months Ended December 31,
	(dollars in thousands)
	2018								2017
	Average					Yield/			Average					Yield/
	Balance			Interest		Cost			Balance			Interest		Cost
Interest-earning assets:
Cash and cash equivalents	$	29,413		$	338		1.53	%	$	19,636		$	100		0.68	%
Investment securities (1)		19,915			449		3.01	%		23,635			446		2.52	%
Mortgage-backed securities		54,890			811		1.97	%		73,637			951		1.72	%
Loans receivable, net (2)		374,593			13,072		4.65	%		354,132			11,891		4.48	%
Total interest-earning assets		478,811			14,670		4.09	%		471,040			13,388		3.79	%
Noninterest-earning assets		34,546								43,526
Total assets	$	513,357							$	514,566
Interest-bearing liabilities:
Statement savings	$	40,449		$	50		0.16	%	$	43,771		$	41		0.12	%
Checking accounts		30,018			8		0.04	%		25,966			7		0.04	%
Money market		58,583			292		0.66	%		62,308			243		0.52	%
Certificates of deposit		238,262			2,465		1.38	%		241,176			1,753		0.97	%
Total interest-bearing deposits		367,312			2,815		1.02	%		373,221			2,044		0.73	%
Borrowings		55,952			860		2.05	%		44,022			503		1.52	%
Total interest-bearing liabilities		423,264			3,675		1.16	%		417,243			2,547		0.81	%
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits		29,157								29,585
Other noninterest-bearing liabilities		5,475								6,604
Total liabilities		457,896								453,432
Total shareholders’ equity		55,461								61,134
Total liabilities and shareholders’ equity	$	513,357							$	514,566
Net interest income				$	10,995							$	10,841
Net interest rate spread (3)							2.93	%							2.98	%
Net interest-earning assets (4)	$	55,547							$	53,797
Net interest margin (5)							3.06	%							3.07	%
Average interest-earning assets to average interest-bearing liabilities		113.12	%							112.89	%

(1) Includes U.S agency and treasury securities, municipal and corporate bonds and to a much lesser extent, Federal Home Loan Bank equity securities.

(2) Loans on non-accrual status are included in average loans carrying a zero yield.

(3) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing libilities.

(4) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(5) Net interest margin represents net interest income divided by average total interest-earning assets.

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Provision for Loan Losses. We establish provisions for loan losses that are charged to operations in order to maintain the allowance for loan losses at a level believed, to the best of management’s knowledge, to cover all known and inherent losses in the portfolio both probable and reasonable to estimate at each reporting date. There was $382,000 charged to the provision for loan losses for the nine months ended December 31, 2018 compared to a provision for loan loss of $625,000 for the nine months ended December 31, 2017. In the first three quarters of fiscal 2019, the $382,000 provision for loan loss recorded is primarily attributable to $173,000 in net charge-offs experienced over this period and roughly $294,000 in additional reserves associated with the revaluation of our environmental factors (see Note 1 of the Financial Statements under Summary of Significant Accounting Policies for further discussion), partially offset by a decline in loan balances; compared to the provision for the prior year comparable period, which was related to net charge-offs of $210,000 and growth within the loan portfolio, as reflected in the table below.

The allowance for loan losses was $3.0 million, or 54.8% of non-performing loans at December 31, 2018 compared to $2.6 million, or 39.3% of non-performing loans at December 31, 2017. The increase in the percentage is a result of the $1.1 million decrease in nonperforming loans over this period, partially offset by a $421,000 increase in the allowance for loan losses. The $5.5 million in non-performing loans at December 31, 2018 primarily consisted of two commercial real estate relationships totaling $4.1 million. The first relationship has a recorded value of $2.9 million and was placed on nonaccrual in June 2018, while the second relationship has a book value of $1.2 million and has had $1.9 million in charge-offs over the past two years. Both relationships have been recorded at their net realizable fair value based upon appraisals performed within the last year. No additional charge-offs are anticipated with these relationships at this time; however, changes in property values and other circumstances may result in additional charge-offs at a later date.

During the nine months ended December 31, 2018, loan charge-offs totaled $297,000 with recoveries of $124,000, compared to $236,000 in charge-offs and $26,000 in recoveries during the nine months ended December 31, 2017. During fiscal year 2019, we expect that we will continue our emphasis in growing commercial real estate and commercial business loans, which have higher interest rates than one-to four-family mortgage loans, thus are generally considered to bear higher risk than one-to four-family mortgage loans and could contribute to higher loan loss provisions going forward.

Summary of Allowance for Loan Losses Activity. The following table sets forth an analysis of the allowance for loan losses for the periods indicated.

	Nine Months Ended
	December 31,
	2018			2017
	(dollars in thousands)
Allowance for loan losses at beginning of period	$	2,822		$	2,195
Charge-offs:
Real estate loans:
Residential		14			9
Investor		41			126
Commercial		31			100
Construction		-			-
Commercial business		209			-
Home equity		-			-
Consumer		2			1
Total charge-offs		297			236
Recoveries		124			26
Net charge-offs		173			210
Provision for loan losses		382			625
Allowance for loan losses at end of period	$	3,031		$	2,610
Allowance for loan losses to non-performing loans		54.80	%		39.33	%
Allowance for loan losses to total loans outstanding at the end of the period		0.82	%		0.67	%
Net charge-offs to average loans outstanding during the period (annualized)		0.06	%		0.08	%

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Noninterest Revenue. Noninterest revenue decreased $155,000, or 15.2%, to $868,000 for the nine months ended December 31, 2018, compared to $1.0 million for the nine months ended December 31, 2017. The following table outlines the changes in noninterest revenue for the nine-month periods.

	Nine months ended
	December 31,
	2018		2017			$ Change			% Change
Service charges	$	365,434	$	347,201		$	18,233			5.3
Loss on sale of investment securities		-		(2,356	)		2,356			100.0
Gain on sale of loans held for sale		34,482		-			34,482			N/A
Gain on sale of property and equipment		-		212,743			(212,743	)		(100.0	)
Earnings on bank-owned life insurance		344,070		369,991			(25,921	)		(7.0	)
Other fees and commissions		124,177		95,972			28,205			29.4
Total noninterest revenue	$	868,163	$	1,023,551		$	(155,388	)		(15.2	)

Service charges associated with retail and commercial deposit products increased during the nine months ended December 31, 2018 compared to the same period a year ago. Management remains focused on growing core deposits, particularly checking accounts, which typically generate more service fee income. The average balance relating to overall checking accounts for the nine months ended December 31, 2018 was $59.2 million compared to an average balance of $55.6 million at December 31, 2017, an increase of 6.5%, or $3.6 million. We continue to review and evaluate our fee structure to be more aligned with our market. Customers, however, have become more cost conscious of fees and better manage their deposit relationship with the Bank.     

During the nine months ended December 31, 2018, the Company was able to enhance noninterest revenue by $34,000 relating to gains on loans sold to the secondary market. In the last quarter of fiscal 2017 and into fiscal 2018, the Company purposely held in portfolio the majority of our residential loan originations to partially offset the increased run-off associated with this loan segment due to higher balances resulting from our two prior acquisitions. Beginning in fiscal 2019, however, we again started to sell qualified residential loan originations into the secondary market as a means to generate noninterest revenue and diversify our income stream. In the prior year nine-month period we also realized losses on the sale of investment securities of $2,000 compared to none for the nine months ended December 31, 2018.

The $213,000 gain on sale of property and equipment for the prior year period ended December 31, 2017 is related specifically to the sale of our Pigtown branch in Baltimore City, along with various furniture and equipment that was associated with the property. This branch was relocated within the same community, but to a smaller, more efficient space that provided operational cost savings.

In addition to these noninterest revenue items, the Company also experienced a $28,000 increase in other fees and commissions, offset by a $26,000 decline in earnings associated with BOLI. The decline in BOLI is due to a reduction in the cash surrender value of the company’s outstanding BOLI related to the pay-out of death benefits in the fourth quarter of fiscal 2018. Other fees and commissions include the collection of certain loan fees, merchant card services and other miscellaneous items. Merchant card services increased $6,000 period-over-period.    

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Noninterest Expense. Noninterest expense increased $361,000 to $10.1 million for the nine months ended December 31, 2018 compared to $9.7 million the same period a year ago. The increase is attributable to $559,000 in merger related expenses incurred pertaining to the pending merger with Orrstown.  The merger expenses to date include legal fees and services provided by the Company’s investment bankers. The following table outlines the changes within noninterest expense for those periods.

	Nine months ended
	December 31,
	2018		2017		$ Change			% Change
Salaries and benefits	$	5,768,826	$	5,531,033	$	237,793			4.3
Occupancy		768,502		759,848		8,654			1.1
Advertising		53,506		63,685		(10,179	)		(16.0	)
Furniture and equipment		272,671		262,632		10,039			3.8
Data processing		604,456		522,469		81,987			15.7
Legal services		138,314		374,610		(236,296	)		(63.1	)
Other professional services		298,045		611,699		(313,654	)		(51.3	)
Merger related expenses		558,598		-		558,598			N/A
Deposit insurance premiums		270,690		222,359		48,331			21.7
Foreclosed real estate expense and losses		13,749		45,005		(31,256	)		(69.5	)
Other operating		1,313,712		1,306,791		6,921			0.5
Total noninterest expense	$	10,061,069	$	9,700,131	$	360,938			3.7

Excluding merger related expenses, overall operating expenses have remained relatively unchanged, despite decreases in certain operating expenses related to specific expenses incurred in the prior year period, offset by increases in other operating expenses, particularly salaries and benefits and data processing. We have been able to manage a larger loan portfolio from an operational cost basis and continue to increase our interest revenue; however, this has been partially offset by the recent rise in interest rates and the impact to our cost of funds. This is reflected in the modest improvement of the Company’s efficiency ratio which has decreased from 81.8% for the nine months ended December 31, 2017 to 80.1% for the nine months ended December 31, 2018. The efficiency ratio presented excludes the $559,000 in merger related expenses. Management remains committed to reducing operational expenses.

Salaries and benefit expense remain our highest operational cost and increased by $238,000, or 4.3%, period-over-period. This increase is due to annual evaluations and respective salary increases, along with bonus accruals that were not present in the prior year period due to our net loss position, partially offset by unfilled positions. Included in salaries and benefits for the nine months ended December 31, 2018 and 2017, is $273,000 and $241,000 in expense, respectively, relating to prior equity awards granted to officers under the Company’s Equity Incentive Plan. The equity awards provide for management to have a vested interest in the performance of the company and share in the benefit of an increase in shareholder value. Similarly, other operating expenses for the same periods include $104,000 associated with equity awards granted to Directors.

The Company realized an increase in operating expenses relating to data processing and deposit insurance premiums for the nine-month periods ended December 31, 2018 and 2017. Data processing costs increased $82,000 for the comparable periods due to annual cost increases, along with the introduction of new technology that has made banking easier for our customers, including products such as mobile banking and our on-line consumer loan application. FDIC insurance premiums have also increased $48,000 to $271,000 for the nine months ended December 31, 2018 compared to $222,000 for the nine months ended December 31, 2017. This increase is attributable to the Company’s lower capital position that resulted from the establishment of a valuation allowance on our deferred tax asset at the end of March 2018. A financial institution’s FDIC insurance base is determined based upon an institution’s average consolidated assets less tangible equity.

The Company has been able to offset the increase in certain noninterest expenses through reduced operating expenses in other operational areas, including legal and other professional services. Legal fees are lower by $181,000 due to fewer problem assets and the exclusion of certain costs incurred in the prior year period, including our charter conversion and consultation with counsel to advise on agreements associated with loan purchases and certain branch issues and transactions. Other professional services also declined by $314,000 because of certain costs incurred in the prior year period, including the use of a financial consultant to assist with strategy and non-compete payments made to executives associated with the Fraternity Community Bancorp, Inc. acquisition. The terms and the payments under the consulting and non-compete agreements were fully satisfied in March and April 2018, respectively. Foreclosed real estate expense also decreased $31,000 due to a write-down of one property in the prior year period to its net realizable value determined through a newly obtained appraisal.

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Income Tax Expense. For the nine months ended December 31, 2018, the Company did not report any income tax expense on pre-tax income of $1.4 million compared to tax expense of $2.7 for the nine months ended December 31, 2017 on pre-tax income of $1.5 million. There was no tax expense during the first nine months of fiscal 2019 due to the release of a portion of the valuation allowance on our net deferred tax assets established in the prior fiscal year. In accordance with Accounting Standards Codification (ASC) 740, Accounting for Income Taxes, at December 31, 2018, the Company has assessed whether the deferred tax assets are more likely than not to be realized based on an evaluative process that considers all available positive and negative evidence. As part of this evaluative process, management considered the following sources of taxable income: 1.) taxable income in prior carryback years; 2.) the future reversals of taxable temporary differences; 3.) tax planning strategies; and 4.) future taxable income exclusive of reversing temporary differences and carryforwards. In making a conclusion, management evaluated all the available positive and negative evidence impacting these sources of taxable income. The first three options are more quantifiable and verifiable; however, management has concluded they are not viable sources of taxable income. As such, the positive evidence that has been most heavily relied upon, but the most subjective, is future taxable income exclusive of reversing temporary differences and carryforwards. Based upon the Company being in a three-year cumulative loss position, which creates negative evidence, and because this evidence is considered significant, management has concluded that there is more negative evidence than positive evidence and therefore, it is more likely than not that the Company will be unable to generate sufficient taxable income in the foreseeable future to fully utilize the net deferred tax assets.

If, in the future, the Company generates taxable income on a sustained basis sufficient to support the deferred tax assets, the need for a deferred tax valuation allowance could change, resulting in the reversal of all or a portion of the deferred tax asset valuation at that time. The establishment of a valuation allowance on our deferred tax assets for financial reporting purposes does not affect how the net operating loss carryforwards may be utilized on our subsequent income tax returns. The valuation allowance on the Company’s net deferred tax assets decreased $455,000 to $5.3 million at December 31, 2018, from $5.8 million at March 30, 2018 due to $559,000 in non-deductible merger expenses, book income of $1.4 million and adjustments for permanent and temporary differences between book and tax expenses. Income tax expense for the periods reported is based upon year-to-date results and is not reflective of annual earnings.

The large tax expense for the prior year period ended December 31, 2017 is directly related to the passage of the Jobs Act. The Act amended the Internal Revenue Code to reduce income tax rates and modify policies, credits, and deductions for individuals and businesses. For businesses, the Act reduces the federal corporate income tax rate from a maximum 35 percent to a flat 21 percent tax rate. As a result, our net deferred tax assets at that time, which were based upon a 34 percent corporate tax rate, had to be re-evaluated to reflect the new tax rate of 21 percent. This one-time non-cash adjustment was estimated to be $2.2 million and was recorded through income tax expense.

Liquidity and Capital Resources

Liquidity describes our ability to meet current and future financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, scheduled amortization and prepayments of loan principal and mortgage-backed securities, maturities and calls of investment securities and funds provided by our operations. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions, and competition. We regularly adjust our investments in liquid assets available to meet short-term liquidity needs based upon our assessment of (i) expected loan demand, (ii) expected deposit flows, (iii) yields available on interest-earning deposits and securities, and (iv) the objectives of our asset/liability management policy.

We also have the ability to borrow from the FHLB to meet our funding and liquidity needs. At December 31, 2018, we had $51.1 million in borrowings from the FHLB and the capacity to borrow approximately $73.6 million more, subject to our pledging sufficient assets.

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Hamilton Bank may also borrow up to $5.0 million from a correspondent bank under a secured federal funds line of credit, and $1.0 million under an unsecured line of credit. We would be required to pledge investment securities to draw upon the secured line of credit.

We normally carry balances with correspondent banks that exceed the federally insured limit. We currently conduct a quarterly review of each correspondent bank’s financial information, including the banks’ capital ratios, balance sheet, income statement, allowance for loans losses, and other performance ratios, to determine if the bank is financially stable.

Our most liquid assets are cash and cash equivalents and interest-earning deposits. The level of these assets depends on our operating, financing, lending, and investing activities during any given period. At December 31, 2018, cash and cash equivalents totaled $26.5 million and securities classified as available-for-sale amounted to $65.6 million.

Total deposits decreased $21.0 million over the nine months ended December 31, 2018, while total deposits decreased $20.2 million over the same period a year ago; however, then increasing $12.5 million from December 31, 2017 to March 31, 2018. Deposit flows are affected by the level of interest rates, the interest rates and products offered by competitors and other factors. In the first three quarters of fiscal 2019, we continued our focus in growing our lower costing core deposits (considered to be all deposits other than certificates of deposit) to assist in funding organic loan growth. However, as interest rates have risen over this same period, the market competition for deposits, in particular time deposits and money market accounts, has become more competitive with respect to pricing. We have strategically decided not to price at the top of the market, unless through a promotional deposit product, or match competitor pricing in certain circumstances as a means to manage interest expense. Certificates of deposit due allow us to lock in those funds for an extended period of time based upon current interest rates. At December 31, 2018, certificates of deposit scheduled to mature within one year totaled $118.3 million, or 49.6% of certificates of deposit. We believe the large percentage of certificates of deposit that mature within one year reflects customers’ hesitancy to invest their funds for longer periods due to the current rising interest rate environment and local competitive pressures. Whether we retain these deposits will be determined in part by the interest rates we are willing to pay on such deposits. If these maturing deposits do not remain with us, we will be required to seek other sources of funds, including other certificates of deposit and borrowings. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on certificates of deposit due on or before December 31, 2019.

In the normal course of operations, we engage in a variety of financial transactions that, in accordance with generally accepted accounting principles, are not recorded in our financial statements. These transactions involve, to varying degrees, elements of credit, interest rate and liquidity risk. Such transactions are used primarily to manage customers’ requests for funding and take the form of loan commitments, unused lines of credit and letters of credit. At December 31, 2018, we had $50.5 million in unused lines of credit and commitments to extend credit outstanding.

We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained. However, our retention experience could be impacted by the merger with Orrstown and our depositor’s decision to place their funds elsewhere (see Part II – Other Information; Item 1A. Risk Factors for further discussion).

At December 31, 2018, we exceeded all of the applicable regulatory capital requirements for the Bank (See capital tables in Note 10 of the Notes to Consolidated Financial Statements). Our regulatory risk weighted capital ratios increased during the first three quarters of fiscal 2019 as a result of an increase in our capital levels due to the net income recorded over this period.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For a discussion of our market risk, please refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2018 filed on June 29, 2018. The Company’s market risk has not changed materially from that disclosed in the annual report.

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Item 4. Controls and Procedures

As of the end of the period covered by this report, management of the Company carried out an evaluation, under the supervision and with the participation of the Company’s principal executive officer and principal financial officer, of the effectiveness of the Company’s disclosure controls and procedures as that term is defined in Rule 13a-15(e). Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

It should be noted that the design of the Company’s disclosure controls and procedures is based in part upon certain reasonable assumptions about the likelihood of future events, and there can be no reasonable assurance that any design of disclosure controls and procedures will succeed in achieving its stated goals under all potential future conditions, regardless of how remote, but the Company’s principal executive and financial officers have concluded that the Company’s disclosure controls and procedures are, in fact, effective at a reasonable assurance level.

During the period covered by this report, there have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities and Exchange Commission Rule 13a-15 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II – Other Information

Item 1. Legal Proceedings

The Bank and Company are subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the Bank’s or the Company’s financial condition or results of operations.

Item 1A.     Risk Factors

For information regarding the Company’s risk factors, see Part I, Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended March 31, 2018, filed with the Securities and Exchange Commission on June 29, 2018. As of December 31, 2018, additional risk factors of the Company related to the Merger with Orrstown are noted below:

The termination fee and the restrictions on third party proposals set forth in the Merger Agreement may discourage others from trying to acquire us.

Until the completion of the Merger, with some exceptions, we are prohibited from soliciting, initiating, encouraging or participating in any discussion of any inquiries or proposals that may lead to an acquisition proposal, such as a merger or other business combination transaction, with any person other than Orrstown. In addition, we have agreed to pay to Orrstown in certain circumstances, including if we terminate the Merger Agreement to enter into a transaction with another party, a termination fee equal to $ 2,212,500. These provisions could discourage other companies from trying to acquire us even though those other companies might be willing to offer greater value to our stockholders than Orrstown has offered in the Merger. Similarly, such a competing company might propose a price lower than it might otherwise have been willing to offer because of the potential added expense of the termination fee that may become payable to Orrstown in certain circumstances under the Merger Agreement.

If the Merger is not completed, we will have incurred significant expenses without realizing the expected benefits of the Merger and could be subject to additional risks.

Prior to completion of the Merger, we will incur or have incurred substantial expenses in connection with the completion of the transactions contemplated by the Merger Agreement. If the Merger is not completed, we would have to recognize these expenses without receiving the Merger consideration. In addition, if the Merger is not completed, we may experience negative reactions from the financial markets and from our customers and employees. The market price of our common stock may decline significantly, particularly to the extent that the current market price reflects a market assumption that the Merger will be consummated. We also could be subject to litigation related to any failure to complete the Merger or to proceedings commenced by Orrstown against us seeking damages or to compel us to perform our obligations under the Merger Agreement. These factors and similar risks could have an adverse effect on the results of operations, business and stock prices of the Company.

We will be subject to business uncertainties and contractual restrictions while the Merger is pending.

Uncertainty about the effect of the Merger on employees, customers, suppliers and vendors may have an adverse effect on our business, financial condition and results of operations. These uncertainties may impair our ability to retain and motivate key personnel pending the consummation of the Merger, as such, personnel may experience uncertainty about their future roles following the consummation of the Merger. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with Orrstown our business could be harmed. Additionally, these uncertainties could cause customers (including depositors and borrowers), suppliers, vendors and others who deal with us to seek to change existing business relationships with us or fail to extend an existing relationship with us. In addition, competitors may target our existing customers by highlighting potential uncertainties and integration difficulties that may result from the Merger.

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The pursuit of the Merger and the preparation for the integration may place a burden on our management and internal resources. Any significant diversion of management attention away from ongoing business concerns and any difficulties encountered in the transition and integration process could have a material adverse effect on our business, financial condition and results of operations.

In addition, in the Merger Agreement we have agreed to operate our business in the ordinary course prior to closing and are restricted from taking certain actions without Orrstown’s consent while the Merger is pending. These restrictions may, among other matters, prevent us from pursuing otherwise attractive business opportunities, selling assets, incurring indebtedness, engaging in significant capital expenditures in excess of certain limits set forth in the Merger Agreement, entering into other transactions or making other changes to our business prior to consummation of the Merger or termination of the Merger Agreement. These restrictions could have a material adverse effect on our business, financial condition and results of operations.

Our stockholders will not be entitled to dissenters’ or appraisal rights in the Merger.

Dissenters’ or appraisal rights are statutory rights that, if applicable under law, enable stockholders to dissent from an extraordinary transaction, such as a Merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction. Under Maryland law, holders of our common stock do not have the right to dissent from the Merger Agreement and seek an appraisal in connection with the Merger.

Litigation may be filed against the board of directors of the Company and/or Orrstown that could prevent or delay the completion of the Merger or result in the payment of damages following completion of the Merger.

In connection with the Merger, it is possible that our stockholders may file putative class action lawsuits against the boards of directors of the Company and/or Orrstown. Among other remedies, these stockholders could seek to enjoin the Merger. The outcome of any such litigation would be uncertain. If a dismissal is not granted or a settlement is not reached, such potential lawsuits could prevent or delay completion of the Merger and result in substantial costs to Orrstown and the Company, including any costs associated with indemnification obligations of the Company and/or Orrstown.

Item 2.          Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.          Defaults Upon Senior Securities

None.

Item 4.          Mine Safety Disclosures

None.

Item 5.          Other Information

None.

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Item 6.          Exhibits

Exhibit 2.1	Agreement and Plan of Merger dated as of October 23, 2018 by and between Orrstown Financial Services, Inc. (“Orrstown”) and Hamilton Bancorp, Inc. (incorporated by reference to Exhibit 2.1 of Orrstown’s Current Report on form 8-K (File No. 001-34292) filed with the SEC on October 24, 2018).*
Insert 10.1	Form of Voting Agreement (incorporated by reference to Exhibit 10.1 to Orrstown’s Current Report on Form 8-K (File No. 001-34292) filed with the SEC on October 24, 2018).

31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101 Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Statements of Financial Condition as of December 31, 2018 (unaudited) and March 31, 2018; (ii) the Consolidated Statements of Operations for the three and nine months ended December 31, 2018 and 2017 (unaudited); (iii) the Consolidated Statements of Comprehensive Income for the three and nine months ended December 31, 2018 and 2017 (unaudited); (iv) the Consolidated Statements of Equity for the nine months ended December 31, 2018 and 2017 (unaudited); (v) the Consolidated Statement of Cash Flows for the nine months ended December 31, 2018 and 2017 (unaudited); and (vi) Notes to Consolidated Financial Statements (unaudited).

____________________

* Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	HAMILTON BANCORP, INC.
Date:  February 13, 2019	/s/ Robert A. DeAlmeida
	Robert A. DeAlmeida
	President and Chief Executive Officer
Date:  February 13, 2019	/s/ John P. Marzullo
	John P. Marzullo
	Senior Vice President, Chief Financial Officer and Treasurer

72

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Robert A. DeAlmeida, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Hamilton Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a.) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  February 13, 2019	/s/ Robert A. DeAlmeida
	Robert A. DeAlmeida
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, John P. Marzullo, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Hamilton Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a.) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  February 13, 2019	/s/ John P. Marzullo
	John P. Marzullo
	Senior Vice President, Chief Financial Officer and Treasurer

EX-32

Exhibit 32

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Robert A. DeAlmeida, President and Chief Executive Officer of Hamilton Bancorp, Inc., (the “Company”) and John P. Marzullo, Senior Vice President, Chief Financial Officer and Treasurer of the Company, each certify in their capacity as an officer of the Company that they have reviewed the quarterly report on Form 10-Q for the quarter ended December 31, 2018 (the “Report”) and that to the best of their knowledge:

1. the Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  February 13, 2019	/s/ Robert A. DeAlmeida
	Robert A. DeAlmeida
	President and Chief Executive Officer
Date:  February 13, 2019	/s/ John P. Marzullo
	John P. Marzullo
	Senior Vice President, Chief Financial Officer      And Treasurer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	9 Months Ended
	Dec. 31, 2018	Feb. 13, 2019
Document Information [Line Items]
Entity Registrant Name	HAMILTON BANCORP, INC.
Entity Central Index Key	0001551739
Trading Symbol	hbk
Current Fiscal Year End Date	--03-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		3,416,414
Document Type	10-Q
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Consolidated Statements of Financial Condition (Current Period Unaudited) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Assets
Cash and due from banks	$ 15,175,250	$ 15,488,396
Federal funds sold	11,372,590	7,880,019
Cash and cash equivalents	26,547,840	23,368,415
Certificates of deposit held as investment	499,121	499,189
Securities available for sale, at fair value	65,577,855	75,404,136
Federal Home Loan Bank stock, at cost	2,676,200	3,122,400
Loans	369,456,616	390,420,885
Allowance for loan losses	(3,031,106)	(2,821,903)
Net loans and leases	366,425,510	387,598,982
Premises and equipment, net	3,759,246	3,945,825
Foreclosed real estate	457,778	457,778
Accrued interest receivable	1,448,581	1,468,382
Bank-owned life insurance	17,799,920	17,455,850
Income taxes refundable	40,000	40,000
Goodwill and other intangible assets	9,082,215	9,176,764
Other assets	1,940,161	2,995,741
Total Assets	496,254,427	525,533,462
Liabilities
Noninterest-bearing deposits	27,545,786	29,557,943
Interest-bearing deposits	356,625,156	375,585,032
Total deposits	384,170,942	405,142,975
Borrowings	51,050,000	60,672,140
Advances by borrowers for taxes and insurance	1,059,677	1,962,665
Other liabilities	3,483,868	3,679,550
Total liabilities	439,764,487	471,457,330
Commitments and contingencies
Shareholders' Equity
Common stock, $.01 par value, 100,000,000 shares authorized. Issued and outstanding: 3,416,414 shares at December 31, 2018 and 3,407,613 shares at March 31, 2018	34,164	34,076
Additional paid in capital	32,548,023	32,113,534
Retained earnings	27,339,778	25,920,490
Unearned ESOP shares	(1,925,560)	(2,073,680)
Accumulated other comprehensive loss	(1,506,465)	(1,918,288)
Total shareholders' equity	56,489,940	54,076,132
Total Liabilities and Shareholders' Equity	$ 496,254,427	$ 525,533,462

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Consolidated Statements of Financial Condition (Current Period Unaudited) (Parentheticals) - $ / shares	Dec. 31, 2018	Mar. 31, 2018
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	3,416,414	3,407,613
Common stock, outstanding (in shares)	3,416,414	3,407,613

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Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Interest revenue
Loans, including fees	$ 4,259,628	$ 4,104,127	$ 13,071,517	$ 11,890,765
U.S. treasuries, government agencies and FHLB stock	48,499	37,836	165,402	117,034
Municipal and corporate bonds	94,773	102,847	283,838	329,386
Mortgage-backed securities	271,072	297,851	811,475	951,330
Federal funds sold and other bank deposits	113,357	18,998	337,608	100,145
Total interest revenue	4,787,329	4,561,659	14,669,840	13,388,660
Interest expense
Deposits	1,020,221	714,350	2,815,303	2,044,413
Borrowed funds	328,819	209,926	859,847	502,830
Total interest expense	1,349,040	924,276	3,675,150	2,547,243
Net interest income	3,438,289	3,637,383	10,994,690	10,841,417
Provision for loan losses	80,000	345,000	382,496	625,000
Net interest income after provision for loan losses	3,358,289	3,292,383	10,612,194	10,216,417
Noninterest revenue
Service charges	123,885	109,151	365,434	347,201
Loss on sale of investment securities		(12,736)		(2,356)
Gain on sale of loans held for sale	8,609		34,482
Gain on sale of property and equipment		212,743		212,743
Earnings on bank-owned life insurance	115,419	123,597	344,070	369,991
Other	33,260	29,860	124,177	95,972
Total noninterest revenue	281,173	462,615	868,163	1,023,551
Noninterest expenses
Salaries	1,675,976	1,445,336	4,671,013	4,415,848
Employee benefits	351,670	373,699	1,097,813	1,115,185
Occupancy	253,488	259,595	768,502	759,848
Advertising	21,524	22,487	53,506	63,685
Furniture and equipment	103,400	92,894	272,671	262,632
Data processing	202,915	176,114	604,456	522,469
Legal services	70,115	153,615	138,314	374,610
Other professional services	96,510	218,879	298,045	611,699
Merger related expenses	502,835		558,598
Deposit insurance premiums	56,760	91,470	270,690	222,359
Foreclosed real estate expense and losses	4,447	43,706	13,749	45,005
Other operating	424,505	452,423	1,313,712	1,306,791
Total noninterest expense	3,764,145	3,330,218	10,061,069	9,700,131
Income before income taxes	(124,683)	424,780	1,419,288	1,539,837
Income tax expense		2,351,970		2,663,897
Net (loss) income	$ (124,683)	$ (1,927,190)	$ 1,419,288	$ (1,124,060)
Net (loss) income per common share:
Basic (in dollars per share)	$ (0.04)	$ (0.60)	$ 0.44	$ (0.35)
Diluted (in dollars per share)	$ (0.04)	$ (0.60)	$ 0.44	$ (0.35)

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Net income (loss)	$ (124,683)	$ (1,927,190)	$ 1,419,288	$ (1,124,060)
Other comprehensive income (loss):
Unrealized gain (loss) on investment securities available for sale	1,110,739	(393,475)	505,094	243,772
Reclassification adjustment for realized loss on investment securities available for sale included in net income		12,736		2,356
Total unrealized gain (loss) on investment securities available for sale	1,110,739	(380,739)	505,094	246,128
Unrealized (loss) gain on derivative transactions	(287,116)	122,388	(93,271)	22,784
Income tax (benefit) expense relating to investment securities available for sale and derivative transactions		(101,906)		73,083
Other comprehensive income (loss)	823,623	(156,445)	411,823	195,829
Total comprehensive income (loss)	$ 698,940	$ (2,083,635)	$ 1,831,111	$ (928,231)

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Consolidated Statements of Changes In Shareholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Unearned ESOP Shares [Member]	AOCI Attributable to Parent [Member]	Total
Balances at Mar. 31, 2017	$ 34,111	$ 31,656,235	$ 31,730,673	$ (2,221,800)	$ (1,407,989)	$ 59,791,230
Net income (loss)			(1,124,060)			(1,124,060)
Unrealized gain on available for sale securities, net of tax effect					149,043	149,043
Unrealized gain on derivative transactions securities, net of tax effect					46,786	46,786
Stock based compensation - options		172,177				172,177
Restricted stock - compensation and activity		173,457				173,457
ESOP shares allocated for release		48,434		148,120		196,554
Balances at Dec. 31, 2017	34,111	32,050,303	30,606,613	(2,073,680)	(1,212,160)	59,405,187
Balances at Mar. 31, 2018	34,076	32,113,534	25,920,490	(2,073,680)	(1,918,288)	54,076,132
Net income (loss)			1,419,288			1,419,288
Unrealized gain on available for sale securities, net of tax effect					505,094	505,094
Unrealized gain on derivative transactions securities, net of tax effect					(93,271)	(93,271)
Stock based compensation - options		184,542				184,542
Restricted stock - compensation and activity	88	192,180				192,268
ESOP shares allocated for release		57,767		148,120		205,887
Balances at Dec. 31, 2018	$ 34,164	$ 32,548,023	$ 27,339,778	$ (1,925,560)	$ (1,506,465)	$ 56,489,940

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Consolidated Statements of Changes In Shareholders' Equity (Unaudited) (Parentheticals) - USD ($)	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Unrealized loss on available for sale securities, tax effect	$ 0	$ 97,085
Unrealized gain on derivative transactions, tax effect	$ 0	$ (24,002)

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities
Interest received	$ 15,083,585	$ 13,864,923
Fees and commissions received	493,843	444,472
Interest paid	(4,033,791)	(3,236,631)
Cash paid to suppliers and employees	(8,247,761)	(8,418,190)
Origination of loans held for sale	(1,733,400)
Proceeds from sale of loans held for sale	1,767,882
Income taxes payable (refundable)		31,549
Net cash provided by operating activities	3,330,358	2,686,123
Cash flows from investing activities
Proceeds from maturing and called securities available for sale, including principal pay downs	11,891,251	12,219,990
Proceeds from sale of investment securities available for sale		11,608,699
Purchase of investment securities available for sale	(1,985,000)	(1,208,990)
Purchase (redemption) of Federal Home Loan Bank stock	446,200	(1,083,700)
Loans made, net of principal repayments	20,672,174	778,762
Purchase of loan portfolios		(51,049,819)
Purchase of premises and equipment	(63,665)	(443,450)
Proceeds from sale of premises and equipment		769,914
Proceeds from sale of foreclosed real estate	145,820	35,896
Net cash provided (used) by investing activities	31,106,780	(28,372,698)
Cash flows from financing activities
Net increase (decrease) in Deposits	(20,761,542)	(19,836,138)
Advances by borrowers for taxes and insurance	(902,988)	(760,104)
Proceeds from borrowings	24,000,000	40,000,000
Payments of borrowings	(33,500,000)	(13,007,050)
Interest rate swap on FHLB borrowings	(93,271)	22,784
Issuance of restricted stock	88
Net cash (used) provided by financing activities	(31,257,713)	6,419,492
Net increase (decrease) in cash and cash equivalents	3,179,425	(19,267,083)
Cash and cash equivalents at beginning of period	23,368,415	29,353,921
Cash and cash equivalents at end of period	26,547,840	10,086,838
Reconciliation of net income (loss) to net cash provided by operating activities
Net income (loss)	1,419,288	(1,124,060)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Amortization of premiums on certificates of deposit	68	68
Amortization of premiums on securities	425,126	668,133
Loss on sale of investment securities		2,356
Loss on sale of foreclosed real estate	4,232	1,299
Gain on loans held for sale	(34,482)
Loan discount accretion	3,440	46,841
Deposit premium amortization	(210,491)	(328,646)
Borrowing premium amortization	(122,140)	(352,463)
Core deposit intangible asset amortization	94,548	94,548
Premises and equipment depreciation and amortization	250,243	243,348
Gain on sale of premises and equipment		(212,743)
Stock based compensation	376,722	345,634
Provision for credit losses	382,496	625,000
ESOP shares allocated for release	205,887	196,555
Decrease (increase) in:
Accrued interest receivable	19,801	(203,068)
Loans held for sale	34,482
Cash surrender value of life insurance	(344,070)	(369,991)
Income taxes refundable and deferred income taxes		2,695,446
Other assets	1,055,583	301,007
Increase (decrease) in:
Accrued interest payable	(26,010)	(8,279)
Deferred loan origination fees	(34,690)	(35,711)
Other liabilities	(169,675)	100,849
Net cash provided by operating activities	3,330,358	2,686,123
Noncash investing activity
Real estate acquired through foreclosure	$ 145,820	$ 17,305

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Note 1 - Nature of Operations and Summary of Significant Accounting Policies

9 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

Note

1:

        

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Hamilton Bancorp, Inc. (the “Company”) was incorporated on

June 7, 2012

to serve as the stock holding company for Hamilton Bank (the “Bank”), a federally chartered savings bank. On

October 10, 2012,

the Bank converted from a mutual savings bank to a stock savings bank and became the wholly owned subsidiary of the Company. In connection with the conversion, the Company sold

3,703,000

shares of common stock at a price of

$10.00

per share, through which the Company received proceeds of approximately

$35,580,000,

net of offering expenses of approximately

$1,450,000.

The Bank’s employee stock ownership plan (the “ESOP”) purchased

8.0%

of the shares sold in the offering, or

296,240

common shares. The purchase of shares by the ESOP was funded by a loan from the Company. The company’s common stock began trading on the NASDAQ Capital Market under the trading symbol “HBK” on

October 12, 2012.

On

December 21, 2017,

the Bank converted its charter from a federal savings bank to a Maryland state-chartered commercial bank and now operates under the laws of the State of Maryland and applicable Federal law. In conjunction with the Bank’s charter conversion, Hamilton Bancorp converted from a savings and loan holding company to a bank holding company. The charter conversion was part of the Bank’s strategic plan to allow it to continue to focus on growth opportunities in commercial, consumer and mortgage lending as well as small business and retail banking. The Maryland Office of the Commissioner of Financial Regulation serves as the Bank's primary regulator with federal oversight provided by the Federal Deposit Insurance Corporation.  Hamilton Bancorp will continue to be regulated by the Federal Reserve Board.

On

October 23, 2018,

the Company and Orrstown Financial Services, Inc. (“Orrstown”), the parent company of Orrstown Bank located in Shippensburg, Pennsylvania, signed a definitive agreement and plan of merger under which the Company will merge with and into Orrstown, with Orrstown as the surviving company. Immediately thereafter, Hamilton Bank will merge with and into Orrstown Bank, with Orrstown Bank as the surviving institution. At the effective time of the merger, each share of Hamilton Bancorp’s common stock will be converted into the right to receive (

1

)

$4.10

in cash, subject to adjustment downward as set forth in the Merger Agreement and (

2

)

0.54

shares of Orrstown common stock. The Merger Agreement provides each party with specified termination rights. If the Merger is

not

consummated under specified circumstances, Hamilton Bancorp has agreed to pay Orrstown a termination fee of

$2.2

million. The transaction is expected to close in the

second

quarter of calendar

2019.

On

May 13, 2016,

the Company completed its acquisition of Fraternity Community Bancorp, Inc. (“Fraternity”) through the merger of Fraternity, the parent company of Fraternity Federal Savings and Loan, with and into the Company pursuant to the Agreement and Plan of Merger dated as of

October 12, 2015,

by and between the Company and Fraternity. As a result of the merger, each shareholder of Fraternity received a cash payment equal to

nineteen

dollars and

twenty-five

cents (

$19.25

) for each share of Fraternity common stock, or an aggregate of approximately

$25.7

million. Immediately following the merger of Fraternity into the Company, Fraternity Federal Savings and Loan was merged with and into the Bank, with the Bank as the surviving entity.

On

September 11, 2015,

the Company completed its acquisition of Fairmount Bancorp, Inc. (“Fairmount Bancorp”) through the merger of Fairmount Bancorp, the parent company of Fairmount Bank, with and into the Company pursuant to the Agreement and Plan of Merger dated as of

April 15, 2015,

by and between the Company and Fairmount Bancorp. As a result of the merger, each shareholder of Fairmount Bancorp received a cash payment equal to

thirty

dollars (

$30.00

) for each share of Fairmount Bancorp common stock, or an aggregate of approximately

$15.4

million. Immediately following the merger of Fairmount Bancorp into the Company, Fairmount Bank was merged with and into the Bank, with the Bank as the surviving entity.

Hamilton Bancorp is a holding company that operates a community bank with

seven

branches in the Baltimore-metropolitan area. Its primary deposit products are certificates of deposit and demand, savings, checking, and money market accounts. Its primary lending products consist of real estate mortgages, along with commercial and consumer loans. Hamilton Bancorp’s primary source of revenue is derived from loans to customers, who are predominately small and middle-market businesses and middle-income individuals.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and with instructions for Form

10–Q

and Regulation S–X as promulgated by the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the preceding unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. We derived the balances as of

March 31, 2018

from audited financial statements. Operating results for the

three

and

nine

months ended

December 

31,

2018

are

not

necessarily indicative of the results that

may

be expected for the fiscal year ending

March 

31,

2019,

or any other period. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form

10

-K for the year ended

March 

31,

2018.

Summary of Significant Accounting Policies

The accounting and reporting policies of Hamilton Bancorp, Inc. and Subsidiary (“Hamilton”) conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) and to general practices in the banking industry. The more significant policies follow:

Principles of Consolidation

. The accompanying consolidated financial statements include the accounts of the parent company and its wholly owned subsidiary, Hamilton Bank. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, deferred income tax valuation allowances, the fair value of investment securities and other than temporary impairment of investment securities.

Investment Securities.

Management determines the appropriate classification of investment securities at the time of purchase. Securities that

may

be sold before maturity are classified as available for sale and carried at fair value. Investment securities that management has the intent and ability to hold to maturity are classified as held to maturity and carried at amortized cost. All investment securities held by Hamilton at

December 31, 2018

and

March 31, 2018

were classified as available for sale.

Investment securities designated as available for sale are stated at estimated fair value based on quoted market prices. They represent those securities which management

may

sell as part of its asset/liability strategy or that

may

be sold in response to changing interest rates or liquidity needs. Changes in unrealized gains and losses, net of related deferred taxes, for available-for-sale securities are recorded in other comprehensive income. Realized gains (losses) on available-for-sale securities are included in noninterest revenue and, when applicable, are reported as a reclassification adjustment in other comprehensive income. Realized gains and losses on the sale of available-for-sale securities are recorded on the trade date and are determined by the specific identification method. The amortization of premiums and the accretion of discounts are recognized in interest revenue using methods approximating the interest method over the term of the security.

In estimating other-than-temporary impairment losses, management considers the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Bank to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Loans Held For Sale

.

Mortgage loans originated and intended for sale are carried at the lower of aggregate cost or estimated fair value. Fair value is determined based on outstanding investor commitments, or in the absence of such commitments, based on current investor yield requirements. Gains and losses on loan sales are determined by the specific-identification method.

Loans Receivable.

The Bank makes mortgage, commercial, and consumer loans to customers. A substantial portion of the loan portfolio is represented by mortgage loans throughout the Baltimore metropolitan area. The ability of the Bank’s debtors to repay their loans is dependent upon the real estate and general economic conditions in this area.

Loans are reported at their outstanding unpaid principal balance adjusted for the allowance for loan loss, premiums on loans acquired, and/or any deferred fees or costs on originated loans. Interest revenue is accrued on the unpaid principal balance. Loan origination fees and the direct costs of underwriting and closing loans are recognized over the life of the related loan as an adjustment to yield using a method that approximates the interest method. Any differences that arise from prepayment will result in a recalculation of the effective yield.

Loans are generally placed on nonaccrual status when they are

90

days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual status at an earlier date if the collection of principal or interest is considered doubtful. All interest accrued but

not

collected for loans that are placed on nonaccrual status are reversed against interest revenue. The interest on nonaccrual loans is accounted for on the cash basis method, until the loans qualify for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and, in management’s judgment, future payments are reasonably assured.

Loans are considered impaired when, based on current information, management considers it unlikely that collection of principal and interest payments will be made according to contractual terms. If collection of principal is evaluated as doubtful, all payments are applied to principal. Impaired loans are measured: (i) at the present value of expected cash flows discounted at the loan’s effective interest rate; (ii) at the observable market price; or (iii) at the fair value of the collateral if the loan is collateral dependent. If the measure of the impaired loan is less than the recorded investment in the loan, an impairment is recognized through an allocation of the allowance for loan losses and corresponding provision for loan losses. Generally, identified impairments are charged-off against the allowance for loan losses.

Troubled debt restructurings are loans for which Hamilton, for legal or economic reasons related to a debtor’s financial difficulties, has granted a concession to the debtor that it otherwise would

not

have considered. Concessions that result in the categorization of a loan as a troubled debt restructuring include:

● Reduction of the stated interest rate;

● Extension of the maturity date or dates at a stated interest rate lower than the current market rate for new debt with similar risk;

● Reduction of the face amount or maturity amount of the debt as stated in the instrument or other agreement; or

● Reduction of accrued interest.

Allowance for Loan Losses.

The allowance for loan losses represents an amount which, in management’s judgment, will be adequate to absorb probable future losses on existing loans. The allowance for loan losses is established, as loan losses are estimated to have occurred, through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Recoveries on previously charged-off loans are credited to the allowance for loan losses.

The allowance for loan losses is increased by provisions charged to income and reduced by charge-offs, net of recoveries. Management’s periodic evaluation of the adequacy of the allowance is based on the Bank’s past loan loss experience, known and inherent risks in the loan portfolio, adverse situations that

may

affect the borrower’s ability to repay, estimated value of any underlying collateral and current economic conditions. The look back period for historical losses consists of reviewing a

48

month look back period for net charge-offs. Prior to

September 30, 2018,

we reviewed both a

36

and

48

month look back period individually for net charge-offs to develop a range in which the allowance for loan losses should be within. The range has grown smaller over the past year to a point where the difference in the

two

calculations of the allowance for loan loss is deemed immaterial. As a result, and for efficiency purposes, we began to only utilize a historical charge-off period of

48

months in determining the necessary allowance for loan losses. We believe, although similar in amount, that a

48

-month period is more representative of our charge-off history. This period

may

change in the future depending on the performance of the loan portfolio. In addition, we also adjusted the environmental factors of the legacy and acquired loan portfolios so that they are

not

the same for each loan portfolio going forward. The environmental factors for each acquired loan portfolio and the legacy loan portfolio will be evaluated on their own merits so as to stand on their own characteristics. These changes at

September 30, 2018

resulted in additional provisions of

$294,000

and were primarily related to the acquired loan portfolios and the adjustment of their environmental factors.

Management considers a number of factors in estimating the required level of the allowance. These factors include: historical loss experience in the loan portfolios; the levels and trends in past-due and nonaccrual loans; the status of nonaccrual loans and other loans identified as having the potential for further deterioration; credit risk and industry concentrations; trends in loan volume; the effects of any changes in lending policies and procedures or underwriting standards; and a continuing evaluation of the economic environment. As part of the estimation process, management keeps the net charge-off history as a percentage of loans, as it pertains to each loan segment, constant across all risk ratings and alters the qualitative factors either up or down based upon the respective risk rating for each loan segment.

Foreclosed Real Estate.

Real estate acquired through foreclosure or other means is recorded at the lower of its carrying value or the fair value of the related real estate collateral less estimated selling costs. Losses in estimated fair value incurred at the time of acquisition of the property are charged to the allowance for loan losses. Subsequent reductions in the estimated fair value of the property are included in noninterest expense. Costs to maintain foreclosed real estate are expensed as incurred.

Goodwill and Other Intangible Assets.

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Intangible assets, consisting of core deposit intangibles, represent purchased assets that also lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset

may

be sold or exchanged on its own or in combination with a related contract, asset, or liability. Core deposit intangibles are amortized on an accelerated basis over an

eight

-year period. Goodwill is

not

amortized but is evaluated on an annual basis to determine impairment, if any. Any impairment of goodwill would be recognized against income in the period of impairment.

Derivative

Financial Instruments

and Hedging Activities

.

Derivatives are initially recognized at fair value on the date the derivative contract is entered into and subsequently re-measured at their fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. The Company documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions.

For derivatives qualifying as cash flow hedges, the Company also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The effective portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges is recognized in the consolidated statement of comprehensive income (loss). The gain or loss relating to the ineffective portion is recognized immediately in the consolidated statement of operations as a gain or loss. When a hedging instrument expires or is sold, or when a hedge

no

longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the consolidated statement of operations. When a forecast transaction is

no

longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the consolidated statement of operations as a gain or loss to income.

For derivative instruments designated as fair-value hedges, the change in fair value of the derivative is recognized in the consolidated statement of operations under the same heading as the change in fair value of the hedged item for the portion attributable to the hedged risk. For accounting purposes, if the derivative is highly effective, the change in fair values relating to the asset or liability and the hedged item will offset

one

another and result in

no

impact to overall income.

Gains (losses) on derivatives representing either hedge components excluded from the assessment of effectiveness or hedge ineffectiveness are recognized in earnings.

Revenue from Contracts with Customers

.

We record revenue from contracts with customers in accordance with Accounting Standards Codification Topic

606,

“Revenue from Contracts with Customers” (“Topic

606”

). Under Topic

606,

we must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) we satisfy a performance obligation. Significant revenue has

not

been recognized in the current reporting period that results from performance obligations satisfied in previous periods. Our primary sources of revenue are derived from interest and dividends earned on loans, investment securities, and other financial instruments that are

not

within the scope of Topic

606.

We have evaluated the nature of our contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Consolidated Statements of Operation was

not

necessary. Contracts with customers are generally fully satisfied in regard to performance obligations as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Topic

606

that significantly affects the determination of the amount and timing of revenue from contracts with customers.

Stock Based Compensation.

Compensation cost is recognized for stock options and restricted stock awards issued to employees and directors, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

Income Taxes.

The Bank recognizes income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-

not

that all or some portion of the deferred tax assets will

not

be realized.

Earnings Per Common Share.

Basic earnings per share represents income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Weighted average shares exclude unallocated ESOP shares. Diluted earnings per share includes additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares relate to outstanding stock options, restricted stock, and warrants and are determined using the treasury stock method.

XML

Note 2 - New Accounting Pronouncements

9 Months Ended

Dec. 31, 2018

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

Note

2:

        

New Accounting Pronouncements

Recent Accounting Pronouncements

ASU

No.

2017

-

12,

Targeted Improvements to Accounting for Hedging Activities.

This ASU’s objectives are to: (

1

) improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities; and (

2

) reduce the complexity of and simplify the application of hedge accounting by preparers. The ASU is effective for interim and annual reporting periods beginning after

December 15, 2018;

early adoption is permitted. The Company does

not

expect the adoption of ASU

2017

-

12

to have a material impact on the Company’s consolidated financial statements.

ASU

No.

2017

-

08,

Receivables—Nonrefundable Fees and Other Costs (Subtopic

310

-

20

): Premium Amortization on Purchased Callable Debt Securities.

The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do

not

require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2018.

The Company will evaluate the guidance in this update but does

not

expect it to have a significant impact on the Company’s consolidated financial statements.

ASU

No.

2017

-

04,

Simplifying the Test for Goodwill Impairment.

This update removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step

2

of the goodwill impairment test. As a result, under the ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should

not

exceed the total amount of goodwill allocated to that reporting unit. The ASU is effective for annual and interim goodwill impairment tests in fiscal years beginning after

December 15, 2019.

Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after

January 1, 2017.

The Company does

not

expect the adoption of ASU

2017

-

04

to have a material impact on its consolidated financial statements.

ASU

No.

2017

-

01,

Business Combinations (Topic

805

): Clarifying the Definition of a Business.

This guidance clarifies the definition of a business and assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under this guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset (or group of similar assets), the assets acquired would

not

represent a business. In addition, in order to be considered a business, an acquisition would have to include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The amended guidance also narrows the definition of outputs by more closely aligning it with how outputs are described in FASB guidance for revenue recognition. This guidance was effective for annual periods beginning after

December 15, 2017,

including interim periods within those fiscal years, with early adoption permitted. The Company adopted this guidance effective

April 1, 2018

and it did

not

have a material impact on our consolidated financial statements.

ASU

No.

2016

-

15,

Statement of Cash Flows (Topic

230

): Classification of Certain Cash Receipts and Cash Payments.

This update addresses diversity on how certain cash receipts and payments are reflected in the statement of cash flows. The update made the following changes that

may

affect the Company: (

1

) Debt Prepayment or Debt Extinguishment Costs: Cash payments for debt prepayment or debt extinguishment costs should be classified as cash flows for financing activities. (

2

) Proceeds from the settlement of Bank-Owned Life Insurance Policies: Cash proceeds received from the settlement of bank-owned life insurance policies should be classified as cash flows from investing activities. The cash payments for premiums on bank-owned policies

may

be classified as cash flows from investing activities, operating activities, or a combination of investing and operating activities. The amendments in this update are effective for public business entities for fiscal years beginning after

December 15, 2017,

and interim periods within those fiscal years and is required to be applied retrospectively to all periods presented. The company adopted this guidance

April 1, 2018,

which did

not

result in a change in the classification in the statement of cash flows and did

not

have a material impact on our consolidated financial statements.

ASU

2016

-

13,

Financial Instruments – Credit Losses.

The main objective of this update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the guidance in this update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to estimate credit losses. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. The guidance in this update for public business entities is effective for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. The Company is currently evaluating this guidance to determine the impact adoption will have on its consolidated financial statements. Hamilton Bancorp is in the process of implementing a committee and has begun to gather loan information and consider acceptable methodologies to comply with this ASU. The implementation team will meet periodically to discuss the latest developments and updates via webcasts, publications, and conferences. Due to the pending merger with Orrstown, we will

not

be entering into a contract with an outside vendor as originally planned to assist with implementing CECL due to the timing of required adoption and the pending merger. If the merger agreement is terminated for any reason, the Company will engage an outside vendor at that time to assist with the implementation of this pronouncement utilizing information we have continued to gather.

ASU

2016

-

02,

Leases (Topic

842

).

From the lessee’s perspective, the new ASU standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than

12

months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for lessees. The guidance also eliminates the current real estate-specific provision and changes the guidance on sale-leaseback transactions, initial direct costs and lease executory costs. With respect to lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. All entities will classify leases to determine how to recognize lease-related revenue and expense. In applying this guidance entities will also need to determine whether an arrangement contains a lease or service agreement. Disclosures are required by lessees and lessors to meet the objective of enabling users of financials statements to assess the amount, timing, and uncertainty of cash flows arising from leases. For public entities, this guidance is effective for the

first

interim or annual period beginning after

December 15, 2018.

Early adoption is permitted. Entities are required to use a modified retrospective transition method for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements.

In

July 2018,

as a follow-up to ASU

2016

-

02

(Topic

842

), the Board issued

ASU

No.

2018

-

10

– Codification Improvements to Topic

842,

Leases

to clarify the codification associated with ASU

2016

-

02

or to correct unintended application of guidance. The amendments in this Update are of a similar nature to the items typically addressed in the Codification improvements project and affect narrow aspects of the guidance issued in the amendments in Update

2016

-

02.

The Update addresses

sixteen

separate issues under the guidance that provide a clearer understanding as to intent and application of the guidance. The Company is assessing the guidance under ASU

2016

-

02

and

2018

-

10

to determine its impact on the Company’s consolidated financial statements.

ASU

No.

2018

-

11,

Leases

(Topic

842

)

– Targeted Improvement

s

.

The purpose of this ASU is to update ASU

2016

-

02

to address stakeholders concerns regarding comparative reporting and separating components of a lease contract for lessors. For comparative reporting, entities are required under ASU

2016

-

02

to use a modified retrospective transition method. Due to issues in implementing, the Board decided to provide another transition method that allows companies to initially apply the new leases standard at the adoption date versus retrospectively and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The amendments in this update also provides lessors a practical expedient, by class of underlying asset, to

not

separate nonlease components from the associated lease component, similar to the expedient provided by lessees. However, the lessor practical expedient is limited to circumstances in which the nonlease component or components otherwise would be accounted for under the new revenue guidance and both (

1

) the timing and pattern of transfer are the same for the nonlease component(s) and associated lease component and (

2

) the lease component, if accounted for separately, would be classified as an operating lease. The Company is assessing this guidance in conjunction with ASU

2016

-

02

to determine its impact on the Company’s consolidated financial statements.

ASU

No.

2016

-

01,

Financial Instruments – Recognition and Measurement of Financial Assets and Liabilities

.

This ASU requires equity investments to be measured at fair value with changes in fair value recognized in net income, excluding equity investments that are consolidated or accounted for under the equity method of accounting. The amendment allows equity investments without readily determinable fair values to be measured at cost minus impairment, with a qualitative assessment required to identify impairment. The amendment also requires public companies to use exit prices to measure the fair value of financial instruments purposes; requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statement; it eliminates the disclosure requirements related to measurement assumptions for the fair value of instruments measured at amortized cost. In addition, for liabilities measured at fair value under the fair value option, to present in other comprehensive income changes in fair value due to changes in instrument specific credit risk. The Company’s management engaged a

third

-party expert in the field of valuation and reporting to assist management and ensure adequate documentation of financial controls and analysis performed in its review of “exit pricing” of the fair values of loans, deposits, and other financial instruments. This ASU is effective for public companies for fiscal years beginning after

December 15, 2017,

including interim periods within those fiscal years. We adopted this ASU effective

April 1, 2018.

With the adoption of this ASU, equity securities can

no

longer be classified as available for sale, and as such marketable equity securities are disclosed as a separate line item on the Consolidated Statement of Financial Condition with changes in the fair value of equity securities reflected in net income. At

December 31, 2018

the Company did

not

have any equity securities. During the

first

quarter of fiscal

2019,

we began using an exit price notion when measuring the fair value of our loan portfolio, excluding loans held for sale, for disclosure purposes. The adoption of this ASU did

not

have a significant impact on our consolidated financial statements.

ASU 

2014

-

09,

Revenue from Contracts with Customers (Topic

606

).

ASU

2014

-

09

implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 

2014

-

09

is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

The guidance in this ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. This ASU does

not

apply to revenue associated with financial instruments including loans and securities that are accounted for under U.S. GAAP. Consequently, adoption of the ASU did

not

have a significant impact on the Company’s consolidated financial statements and related disclosures since the primary source of revenue for the Company is derived from interest and dividends earned on loans, investment securities and other financial instruments that are outside the scope of the ASU. The Company has assessed its revenue streams and reviewed its contracts with customers that are affected by the new guidance. This includes fees on deposits, gains and losses on the sale of foreclosed real estate, credit and debit card interchange fees, merchant card services, and administrative services for customer deposit account such as ATM and wire transfer transactions. The Company’s revenue recognition pattern for revenue streams within the scope of the ASU has

not

changed significantly from current practice and is immaterial to our financial statements. This guidance was effective for annual periods beginning after

December 15, 2017,

including interim periods within those fiscal years. The Company adopted this guidance effective

April 1, 2018

and it did

not

have a material impact on our consolidated financial statements.

XML

Note 3 - Earnings Per Share

9 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Earnings Per Share [Text Block]

Note

3

:          Earnings per Share

Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Weighted average shares exclude unallocated ESOP shares. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

Both the basic and diluted earnings per share for the

three

and

nine

months ended

December 31, 2018

and

2017

are summarized below:

	Three Months Ended			Three Months Ended			Nine Months Ended		Nine Months Ended
	December 31, 2018			December 31, 2017			December 31, 2018		December 31, 2017
Net income	$	(124,683	)	$	(1,927,190	)	$	1,419,288	$	(1,124,060	)
Weighted average common shares outstanding - basic		3,209,207			3,189,056			3,209,100		3,188,949
Weighted average common shares outstanding - diluted		3,209,207			3,189,056			3,209,895		3,188,949
Income per common share - basic and diluted	$	(0.04	)	$	(0.60	)	$	0.44	$	(0.35	)
Anti-dilutive shares		184,060			118,525			183,265		118,525

XML

Note 4 - Investment Securities Available for Sale

9 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note

4:

         Investment Securities Available for Sale

The amortized cost and fair value of securities at

December 31, 2018

and

March 31, 2018,

are summarized as follows:

			Gross		Gross
	Amortized		unrealized		unrealized		Fair
December 31, 2018	cost		gains		losses		value
U.S. government agencies	$	744,186	$	-	$	16,850	$	727,336
Municipal bonds		12,347,163		-		705,934		11,641,229
Corporate bonds		2,000,000		-		99,496		1,900,504
Mortgage-backed securities		52,844,355		11,438		1,547,007		51,308,786
	$	67,935,704	$	11,438	$	2,369,287	$	65,577,855

			Gross		Gross
	Amortized		unrealized		unrealized		Fair
March 31, 2018	cost		gains		losses		value
U.S. government agencies	$	2,753,346	$	-	$	34,697	$	2,718,649
Municipal bonds		12,435,068		-		729,077		11,705,991
Corporate bonds		2,000,000		-		45,924		1,954,076
Mortgage-backed securities		61,078,665		12,993		2,066,238		59,025,420
	$	78,267,079	$	12,993	$	2,875,936	$	75,404,136

There were

no

sales of investment securities during the

three

and

nine

months ended

December 31, 2018.

Proceeds from the sale of investment securities were

$7,364,939

and

$11,608,699

during the

three

and

nine

months ended

December 31, 2017,

with gains of

$33,747

and

$57,099

and losses of

$46,483

and

$59,455,

respectively.

As of

December 31, 2018,

and

March 31, 2018,

all mortgage-backed securities are backed by U.S. Government-Sponsored Enterprises (GSE’s), except

one

private label mortgage-backed security that was acquired in the Fraternity acquisition in

May 2016

with a book value of

$37,687

and fair value of

$38,032

as of

December 31, 2018.

As of

December 31, 2018,

and

March 31, 2018,

the Company had

one

security pledged to the Federal Reserve Bank with a book value of

$744,186

at both dates and a fair value of

$727,336

and

$723,023,

respectively.

The amortized cost and estimated fair value of debt securities by contractual maturity at

December 31, 2018

and

March 31, 2018

follow. Actual maturities

may

differ from contractual maturities because borrowers

may

have the right to call or prepay obligations.

	Available for Sale
	December 31, 2018				March 31, 2018
	Amortized		Fair		Amortized		Fair
	cost		value		cost		value
Maturing
Within one year	$	-	$	-	$	2,009,160	$	1,995,625
Over one to five years		1,227,258		1,197,309		1,231,928		1,196,368
Over five to ten years		4,665,976		4,447,904		3,578,827		3,500,641
Over ten years		9,198,115		8,623,856		10,368,499		9,686,082
Mortgage-backed securities, in monthly installments		52,844,355		51,308,786		61,078,665		59,025,420
	$	67,935,704	$	65,577,855	$	78,267,079	$	75,404,136

The following table presents the Company's investments' gross unrealized losses and the corresponding fair values by investment category and length of time that the securities have been in a continuous unrealized loss position at

December 31, 2018

and

March 31, 2018.

	Less than 12 months				12 months or longer				Total
	Gross unrealized		Fair		Gross unrealized		Fair		Gross unrealized		Fair
December 31, 2018	losses		value		losses		value		losses		value
U.S. government agencies	$	-	$	-	$	16,850	$	727,336	$	16,850	$	727,336
Municipal bonds		-		-		705,934		11,641,229		705,934		11,641,229
Corporate bonds		-		-		99,496		1,900,504		99,496		1,900,504
Mortgage-backed securities		56,462		1,801,231		1,490,545		46,787,724		1,547,007		48,588,955
	$	56,462	$	1,801,231	$	2,312,825	$	61,056,793	$	2,369,287	$	62,858,024

	Less than 12 months				12 months or longer				Total
	Gross unrealized		Fair		Gross unrealized		Fair		Gross unrealized		Fair
March 31, 2018	losses		value		losses		value		losses		value
U.S. government agencies	$	21,163	$	723,023	$	13,534	$	1,995,625	$	34,697	$	2,718,648
Municipal bonds		-		-		729,077		11,705,991		729,077		11,705,991
Corporate bonds		-		-		45,924		1,954,076		45,924		1,954,076
Mortgage-backed securities		383,987		15,880,948		1,682,251		40,684,836		2,066,238		56,565,784
	$	405,150	$	16,603,971	$	2,470,786	$	56,340,528	$	2,875,936	$	72,944,499

The unrealized losses that exist are a result of market changes in interest rates since the original purchase. Management systematically evaluates investment securities for other-than-temporary declines in fair value on an annual basis from the date of purchase if the respective security is in a loss position. This analysis requires management to consider various factors, which include (

1

) duration and magnitude of the decline in value, (

2

) the financial condition of the issuer or issuers and (

3

) structure of the security.

An impairment loss is recognized in earnings if any of the following are true: (

1

) the Company intends to sell the debt security; (

2

) it is more likely than

not

that the Company will be required to sell the security before recovery of its amortized cost basis; or (

3

) the Company does

not

expect to recover the entire amortized cost basis of the security. In situations where the Company intends to sell or when it is more likely than

not

that the Company will be required to sell the security, the entire impairment loss must be recognized in earnings. In all other situations, only the portion of the impairment loss representing the credit loss is recognized in earnings, with the remaining portion being recognized in shareholders’ equity as a component of other comprehensive income, net of deferred tax.

XML

Note 5 - Loans Receivable and Allowance for Loan Losses

9 Months Ended

Dec. 31, 2018

Notes to Financial Statements

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

Note

5:

     

    

Loans Receivable and Allowance for Loan Losses

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

December 31, 2018

and

March 31, 2018:

	December 31, 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)	$	83,117,881		$	66,255,260			149,373,141			40	%	$	85,248,184		$	72,749,066		$	157,997,250			41	%
Residential construction		3,430,203			-			3,430,203			1	%		5,450,827			-			5,450,827			1	%
Investor (3)		7,337,281			16,407,266			23,744,547			6	%		9,275,031			17,460,809			26,735,840			7	%
Commercial		105,755,786			9,289,784			115,045,570			31	%		100,403,769			11,762,485			112,166,254			29	%
Commercial construction		1,543,313			1,059,217			2,602,530			1	%		5,763,784			1,352,019			7,115,803			2	%
Total real estate loans		201,184,464			93,011,527			294,195,991			80	%		206,141,595			103,324,379			309,465,974			80	%
Commercial business (4)		35,276,493			1,706,509			36,983,002			10	%		38,302,739			1,841,226			40,143,965			10	%
Home equity loans		15,077,068			4,941,051			20,018,119			5	%		13,956,327			6,039,462			19,995,789			5	%
Consumer (5)		16,329,237			699,371			17,028,608			5	%		18,849,448			766,063			19,615,511			5	%
Total Loans		267,867,262			100,358,458			368,225,720			100	%		277,250,109			111,971,130			389,221,239			100	%
Net deferred loan origination fees and costs		(178,056	)		-			(178,056	)					(212,746	)		-			(212,746	)
Loan premium (discount)		1,708,908			(299,956	)		1,408,952						1,922,428			(510,036	)		1,412,392
	$	269,398,114		$	100,058,502		$	369,456,616					$	278,959,791		$	111,461,094		$	390,420,885

( 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 includes $19.2 million of various loan pools purchased in the second half of fiscal 2018.
( 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 second 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 table details activity in the allowance for loan losses by portfolio segment for the

three

and

nine

-month periods ended

December 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.

Three Months Ended December 31, 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	$	665,676		$	314,571		$	1,312,441		$	12,390		$	532,611		$	72,831	$	98,676		$	21,733	$	3,030,929
Charge-offs		-			(32,909	)		-			-			(133,729	)		-		-			-		(166,638	)
Recoveries		41,059			33,609			-			-			10,880			-		1,267			-		86,815
Provision for credit losses		(24,321	)		(36,632	)		(31,557	)		(4,090	)		160,895			1,555		(4,214	)		18,364		80,000
Ending balance	$	682,414		$	278,639		$	1,280,884		$	8,300		$	570,657		$	74,386	$	95,729		$	40,097	$	3,031,106

Nine Months Ended December 31, 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	)		(41,022	)		(31,320	)		-			(208,729	)		-		(2,465	)		-		(297,305	)
Recoveries		43,301			33,675			31,320			-			10,880			-		4,836			-		124,012
Provision for credit losses		44,159			234,296			27,501			(25,130	)		94,524			4,927		(37,878	)		40,097		382,496
Ending balance	$	682,414		$	278,639		$	1,280,884		$	8,300		$	570,657		$	74,386	$	95,729		$	40,097	$	3,031,106
Allowance allocated to:
Legacy Loans:
Individually evaluated for impairment	$	253,811		$	-		$	-		$	-		$	-		$	-	$	-		$	-	$	253,811
Collectively evaluated for impairment		276,937			50,593			1,241,051			7,254			566,217			59,952		95,516			40,097		2,337,617
Acquired Loans:
Individually evaluated for impairment	$	-		$	-		$	-		$	-		$	-		$	-	$	-		$	-	$	-
Collectively evaluated for impairment		151,666			228,046			39,833			1,046			4,440			14,434		213			-		439,678

Three Months Ended December 31, 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	$	528,288	$	52,255		$	1,360,433		$	12,074	$	327,130	$	62,570	$	128,241		$	-	$	2,470,991
Charge-offs		-		(111,360	)		(100,236	)		-		-		-		-			-		(211,596	)
Recoveries		3,937		-			-			-		171		-		1,034			-		5,142
Provision for credit losses		35,875		103,790			148,707			11,100		45,987		619		(1,078	)		-		345,000
Ending balance	$	568,100	$	44,685		$	1,408,904		$	23,174	$	373,288	$	63,189	$	128,197		$	-	$	2,609,537

Nine Months Ended December 31, 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	)		(126,482	)		(100,236	)		-		-		-			(486	)		-		(236,111	)
Recoveries		3,937			18,129			-			-		551		-			3,216			-		25,833
Provision for credit losses		19,531			117,763			133,246			14,143		223,276		(6,882	)		123,923			-		625,000
Ending balance	$	568,100		$	44,685		$	1,408,904		$	23,174	$	373,288	$	63,189		$	128,197		$	-	$	2,609,537
Allowance allocated to:
Legacy Loans:
Individually evaluated for impairment	$	272,707		$	-		$	-		$	-	$	-	$	-		$	-		$	-	$	272,707
Collectively evaluated for impairment		295,393			44,685			1,408,904			23,174		373,288		63,189			128,197			-		2,336,830
Acquired Loans:
Individually evaluated for impairment	$	-		$	-		$	-		$	-	$	-	$	-		$	-		$	-	$	-
Collectively evaluated for impairment		-			-			-			-		-		-			-			-		-

Our recorded investment in loans at

December 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:

December 31, 2018	Residential Real Estate		Investor Real Estate		Commercial Real Estate		Commercial Construction		Commercial Business		Home Equity		Consumer		Total
Legacy Loans:
Individually evaluated for impairment	$	1,773,176	$	31,752	$	4,139,177	$	-	$	743,160	$	6,785	$	91,662	$	6,785,712
Collectively evaluated for impairment		84,774,908		7,305,529		101,616,609		1,543,313		34,533,333		15,070,283		16,237,575		261,081,550
Ending balance	$	86,548,084	$	7,337,281	$	105,755,786	$	1,543,313	$	35,276,493	$	15,077,068	$	16,329,237	$	267,867,262
Acquired Loans:
Individually evaluated for impairment	$	440,242	$	261,659	$	-	$	-	$	-	$	164	$	55,492	$	757,557
Collectively evaluated for impairment		65,815,018		16,145,606		9,289,784		1,059,217		1,706,509		4,940,887		643,880		99,600,901
Ending balance	$	66,255,260	$	16,407,265	$	9,289,784	$	1,059,217	$	1,706,509	$	4,941,051	$	699,372	$	100,358,458

December 31, 2017	Residential Real Estate		Investor Real Estate		Commercial Real Estate		Commercial Construction		Commercial Business		Home Equity		Consumer		Total
Legacy Loans:
Individually evaluated for impairment	$	1,697,585	$	121,514	$	4,500,043	$	-	$	905,178	$	21,579	$	-	$	7,245,899
Collectively evaluated for impairment		85,532,435		7,254,483		96,357,409		3,995,441		38,083,051		13,780,512		20,075,548		265,078,879
Ending balance	$	87,230,020	$	7,375,997	$	100,857,452	$	3,995,441	$	38,988,229	$	13,802,091	$	20,075,548	$	272,324,778
Acquired Loans:
Individually evaluated for impairment	$	1,061,049	$	579,172	$	199,920	$	-	$	-	$	-	$	56,708	$	1,896,849
Collectively evaluated for impairment		73,640,662		17,629,734		11,960,924		856,970		1,928,232		6,874,136		728,392		113,619,050
Ending balance	$	74,701,711	$	18,208,906	$	12,160,844	$	856,970	$	1,928,232	$	6,874,136	$	785,100	$	115,515,899

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

nine

months ended

December 31, 2018

and as of and for the year ended

March 31, 2018,

were as follows:

	December 31, 2018						March 31, 2018
	Legacy		Acquired		Total		Legacy		Acquired		Total
Current	$	262,125,497	$	99,620,976	$	361,746,473	$	270,807,643	$	109,972,473	$	380,780,116
Accruing past due loans:
30-59 days past due:
Real estate loans:
Residential		71,020		18,488		89,508		63,618		689,364		752,982
Investor		-		29,357		29,357		-		-		-
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		120,418		-		120,418		135,502		-		135,502
Home equity loans		-		68		68		-		-		-
Consumer		23,357		25,753		49,110		148,876		-		148,876
Total 30-59 days past due		214,795		73,666		288,461		347,996		689,364		1,037,360
60-89 days past due:
Real estate loans:
Residential		72,377		121,223		193,600		70,291		-		70,291
Investor		-		-		-		-		-		-
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		460,762		-		460,762		134,524		-		134,524
Home equity loans		-		-		-		-		-		-
Consumer		5,233		-		5,233		28,300		-		28,300
Total 60-89 days past due		538,372		121,223		659,595		233,115		-		233,115
90 or more days past due:
Real estate loans:
Residential		-		-		-		-		-		-
Investor		222,485		113,029		335,514		734,818		471,423		1,206,241
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total 90 or more days past due		222,485		113,029		335,514		734,818		471,423		1,206,241
Total accruing past due loans		975,652		307,918		1,283,570		1,315,929		1,160,787		2,476,716
Non-accruing loans:
Real estate loans:
Residential		365,610		300,530		666,140		526,584		338,060		864,644
Investor		31,752		128,937		160,689		60,949		300,872		361,821
Commercial		4,139,177		-		4,139,177		4,356,264		198,938		4,555,202
Commercial construction		-		-		-		-		-		-
Commercial business		143,145		-		143,145		165,285		-		165,285
Home equity loans		-		97		97		12,605		-		12,605
Consumer		86,429		-		86,429		4,850		-		4,850
Non-accruing loans:		4,766,113		429,564		5,195,677		5,126,537		837,870		5,964,407
Total Loans	$	267,867,262	$	100,358,458	$	368,225,720	$	277,250,109	$	111,971,130	$	389,221,239
Nonaccrual interest not accrued:
Real estate loans:
Residential	$	2,289	$	7,237	$	9,526	$	8,250	$	53,120	$	61,370
Investor		2,066		6,490		8,556		8,513		15,604		24,117
Commercial		252,381		-		252,381		294,619		-		294,619
Commercial construction		-		-		-		-		-		-
Commercial business		8,796		-		8,796		12,891		-		12,891
Home equity loans		-		-		-		436		-		436
Consumer		1,459		-		1,459		385		-		385
Total nonaccrual interest not accrued	$	266,991	$	13,727	$	280,718	$	325,094	$	68,724	$	393,818

Impaired loans as of and for the

three

and

nine

months ended

December 31, 2018

and

2017,

and the year ended

March 31, 2018,

was as follows:

	Impaired Loans at December 31, 2018						Three months ended December 31, 2018				Nine months ended December 31, 2018
	Unpaid
	Contractual						Average		Interest		Average		Interest
	Principal		Recorded		Related		Recorded		Income		Recorded		Income
	Balance		Investment		Allowance		Investment		Recognized		Investment		Recognized
Legacy:
With no related allowance recorded:
Real estate loans:
Residential	$	706,098	$	538,723	$	-	$	558,414	$	3,719	$	538,965	$	7,666
Investor		-		-		-		-		-		-		-
Commercial		6,375,413		4,139,177		-		4,309,168		-		4,280,325		53,278
Commercial construction
Commercial business		1,369,695		743,160		-		863,260		25,781		925,694		70,558
Home equity loans		33,287		6,785		-		7,036		1,910		7,293		2,043
Consumer		91,745		91,662		-		92,474		2,542		92,822		2,542
With an allowance recorded:
Real estate loans:
Residential	$	1,248,874	$	1,234,453	$	253,811	$	1,237,197	$	12,337	$	1,246,235	$	37,255
Investor		57,831		31,752		-		32,427		1,108		32,291		1,108
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total legacy impaired		9,882,943		6,785,712		253,811		7,099,976		47,397		7,123,625		174,450
Acquired (1):
With no related allowance recorded:
Real estate loans:
Residential		456,272		440,242		-		439,495		5,457		425,256		7,179
Investor		405,538		261,659		-		263,562		4,722		246,751		13,859
Commercial
Commercial construction
Commercial business
Home equity loans		37,858		164		-		238		1,851		79		2,501
Consumer		88,545		55,492		-		56,249		1,401		57,957		3,949
With an allowance recorded:
Real estate loans:
Residential		-		-		-		-		-		-		-
Investor		-		-		-		-		-		-		-
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total acquired impaired		988,213		757,557		-		759,544		13,431		730,043		27,488
Total impaired	$	10,871,156	$	7,543,269	$	253,811	$	7,859,520	$	60,828	$	7,853,668	$	201,938

( 1 ) 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 December 31, 2017						Three months ended December 31, 2017				Nine months ended December 31, 2017
	Unpaid
	Contractual						Average		Interest		Average		Interest
	Principal		Recorded		Related		Recorded		Income		Recorded		Income
	Balance		Investment		Allowance		Investment		Recognized		Investment		Recognized
Legacy:
With no related allowance recorded:
Real estate loans:
Residential	$	513,736	$	371,312	$	-	$	376,225	$	280	$	387,772	$	1,451
Investor		127,420		121,514				122,576		-		123,362		3,772
Commercial		6,487,088		4,500,043		-		4,689,502		-		4,703,598		1,077
Commercial construction		-		-		-		-		-		-		-
Commercial business		1,303,000		905,178		-		937,594		24,038		894,330		75,926
Home equity loans		48,218		21,579		-		22,072		76		23,100		316
Consumer		-		-		-		-		-		-		-
With an allowance recorded:
Real estate loans:
Residential		1,354,169		1,326,273		272,707		1,330,015		13,248		1,341,584		39,333
Investor		-		-		-		-		-		-		-
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total legacy impaired		9,833,631		7,245,899		272,707		7,477,984		37,642		7,473,746		121,875
Acquired (1):
With no related allowance recorded:
Real estate loans:
Residential		1,211,254		1,061,049		-		1,063,445		4,247		1,077,738		26,087
Investor		687,849		579,172		-		663,538		2,893		697,174		34,582
Commercial		249,920		199,920		-		200,589		1,888		202,263		5,700
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		42,583		-		-		-		-		-		600
Consumer		99,349		56,708		-		58,084		1,338		62,234		4,464
With an allowance recorded:
Real estate loans:
Residential		-		-		-		-		-		-		-
Investor		-		-		-		-		-		-		-
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total acquired impaired		2,290,955		1,896,849		-		1,985,656		10,366		2,039,409		71,433
Total impaired	$	12,124,586	$	9,142,748	$	272,707	$	9,463,640	$	48,008	$	9,513,155	$	193,308

( 1 ) 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, 2018						For the Year Ended March 31, 2018
	Unpaid
	Contractual						Average		Interest
	Principal		Recorded		Related		Recorded		Income
	Balance		Investment		Allowance		Investment		Recognized
Legacy:
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

( 1 ) 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.

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

nine

months ended

December 31, 2018

and

2017,

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

	December 31, 2018			December 31, 2017
Recorded investment at beginning of period	$	1,021,424		$	1,341,935
Accretion		2,505			25,964
Reductions for payments		(649,168	)		(324,806	)
Recorded investment at end of period	$	374,761		$	1,043,093
Oustanding principal balance at end of period	$	470,368		$	1,297,471

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

nine

months ended

December 31, 2018

and

2017

is as follows:

	December 31, 2018			December 31, 2017
Accretable yield, beginning of period	$	31,895		$	59,639
Accretion		(2,505	)		(25,964	)
Reclassification from nonaccretable difference		-			-
Accretable yield, end of period	$	29,390		$	33,675

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

December 31, 2018

and

March 31, 2018

follows:

	Number of
December 31, 2018	contracts		Performing		Nonperforming		Total
Real estate loans:
Residential		16	$	1,295,469	$	226,119	$	1,521,588
Investor		-		-		-		-
Commercial		2		-		1,195,421		1,195,421
Commercial construction		-		-		-		-
Commercial business		1		600,016		-		600,016
Home equity loans		-		-		-		-
Consumer		-		-		-		-
		19	$	1,895,485	$	1,421,540	$	3,317,025

	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

three

and

nine

-month periods ended

December 

31,

2018

and

2017.

There were

no

TDRs added during the

three

-month period ended

December 31, 2018.

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

no

commitments to extend credit under existing TDRs as of

December 31, 2018.

	Loans Modified as a TDR for the Three Months Ended
	December 31, 2018				December 31, 2017
	Number of		Outstanding recorded		Number of		Outstanding recorded
Troubled Debt Restructurings	contracts		investment		contracts		investment
Real estate loans:
Residential		-	$	-		2	$	50,432

	Loans Modified as a TDR for the nine months ended
	December 31, 2018				December 31, 2017
	Number of		Outstanding recorded		Number of		Outstanding recorded
Troubled Debt Restructurings	contracts		investment		contracts		investment
Real estate loans:
One-to four-family		1	$	20,565		3	$	52,363

There were

no

TDRs that defaulted in the

three

or

nine

months ended

December 31, 2018

and

2017.

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

90

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

no

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

December 31, 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

no

loans classified as Doubtful or Loss as of

December 31, 2018

or

March 31, 2018.

	December 31, 2018						March 31, 2018
	LEGACY		ACQUIRED		TOTAL		LEGACY		ACQUIRED		TOTAL
Risk Rating:
Rating - Pass:
Real estate loans:
Residential	$	83,743,323	$	64,856,380	$	148,599,703	$	87,863,805	$	70,901,293	$	158,765,098
Investor		7,305,529		15,873,106		23,178,635		9,214,082		16,719,346		25,933,428
Commercial		101,616,609		9,289,784		110,906,393		92,955,370		11,563,547		104,518,917
Commercial construction		1,543,313		1,059,217		2,602,530		5,763,784		1,352,019		7,115,803
Commercial Business		34,835,870		1,706,509		36,542,379		37,978,293		1,841,226		39,819,519
Home Equity		15,070,123		4,805,766		19,875,889		13,935,732		5,928,787		19,864,519
Consumer		16,227,625		669,618		16,897,243		18,733,489		733,669		19,467,158
Total Pass		260,342,392		98,260,380		358,602,772		266,444,555		109,039,887		375,484,442
Rating - Special Mention:
Real estate loans:
Residential		2,327,412		958,638		3,286,050		2,365,652		925,521		3,291,173
Investor		-		273,806		273,806		-		297,209		297,209
Commercial		-		-		-		3,092,135		-		3,092,135
Commercial construction		-		-		-		-		-		-
Commercial Business		297,478		-		297,478		134,524		-		134,524
Home Equity		-		135,121		135,121		-		110,675		110,675
Consumer		9,950		-		9,950		96,474		-		96,474
Total Special Mention		2,634,840		1,367,565		4,002,405		5,688,785		1,333,405		7,022,190
Rating - Substandard:
Real estate loans:
Residential		477,349		440,242		917,591		469,554		922,252		1,391,806
Investor		31,752		260,354		292,106		60,949		444,254		505,203
Commercial		4,139,177		-		4,139,177		4,356,264		198,938		4,555,202
Commercial construction		-		-		-		-		-		-
Commercial Business		143,145		-		143,145		189,922		-		189,922
Home Equity		6,945		164		7,109		20,595		-		20,595
Consumer		91,662		29,753		121,415		19,485		32,394		51,879
Total - Substandard		4,890,030		730,513		5,620,543		5,116,769		1,597,838		6,714,607
Rating - Doubtful		-		-		-		-		-		-
Rating - Loss		-		-		-		-		-		-
TOTAL LOANS	$	267,867,262	$	100,358,458	$	368,225,720	$	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

no

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

December 31, 2018

and

March 31, 2018

totaled

$57,000

and

$50,000,

respectively. At

December 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

December 31, 2018

and

March 31, 2018:

	December 31,		March 31,
Outstanding Commitment and Used Lines of Credit	2018		2018
Unused commercial lines of credit	$	13,004,510	$	9,187,810
Unused home equity lines of credit		23,263,860		22,560,376
Unused consumer lines of credit		26,770		29,331
Residential construction loan commitments		6,934,369		4,234,076
Commercial construction loan commitments		2,678,900		8,968,416
Home equity loan commitments		200,000		389,600
Commercial loan commitments		3,671,000		5,125,000
Standby letter of credit		766,783		250,224

XML

Note 6 - Goodwill and Other Intangible Asset

9 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note

6:

       

Goodwill and Other Intangible Asset

The Company’s intangible assets (goodwill and core deposit intangible) at

December 31, 2018

consisted of assets recorded in

December 2009

associated with the acquisition of a branch office in Pasadena, Maryland and the acquisitions of Fairmount and Fraternity in

September 2015

and

May 2016,

respectively. Only the goodwill related to the branch office acquisition in the amount of

$2.7

million is deductible for tax purposes. We conducted our annual impairment test of goodwill in the

fourth

quarter of fiscal

2018

utilizing Company information as of

December 31, 2017.

Subsequently, due to the significant increase in tax expense resulting from the recording of a valuation allowance on our net deferred tax assets at the end of the

fourth

quarter of fiscal

2018,

we concluded that a triggering event had occurred. Therefore, we performed an additional goodwill impairment analysis utilizing Company information as of

March 31, 2018.

Based upon the impairment tests performed, the fair values as determined exceeded the carrying values of our only reporting unit. As a result,

no

impairment to goodwill was recorded for the

2018

fiscal year. The core deposit intangible assets are being amortized straight-line over a life of

eight

years.

The following table presents the changes in the net book value of intangible assets for the

nine

months ended

December 31, 2018

and

2017:

			Core deposit
	Goodwill		intangible
Balance April 1, 2017	$	8,563,530	$	739,298
Amortization		-		(94,548	)
Balance December 31, 2017		8,563,530		644,750

			Core deposit
	Goodwill		intangible
Balance April 1, 2018	$	8,563,530	$	613,234
Amortization		-		(94,549	)
Balance December 31, 2018	$	8,563,530	$	518,685

      At

December 31, 2018,

future expected annual amortization associated with the core deposit intangible is as follows:

Year ending March 31,	Amount
2019		31,519
2020		123,737
2021		98,070
2022		98,070
2023		98,070
2024		64,177
2025		5,042
	$	518,685

XML

Note 7 - Derivative - Interest Rate Swap Agreement

9 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Note

7:

     

Derivative – Interest Rate Swap Agreement

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does

not

represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. The Company posted

$762,000

and

$751,000

under collateral arrangements as of

December 31, 2018

and

March 31, 2018,

respectively, to satisfy collateral requirements associated with the risk exposure associated with all interest rate swap agreements.

Interest Rate SWAPS Designated as Cash Flow Hedges

During fiscal

2017,

the Company entered into several interest rate swaps that were designated as cash flow hedges. The interest rate swaps have notional amounts totaling

$11.6

million as of

December 31, 2018

and were designated as cash flow hedges of certain Federal Home Loan Bank advances. The purpose of the cash flow hedges is to match-fund longer-term assets with longer-term borrowings to reduce potential interest rate risk and cost by swapping a variable rate borrowing for a fixed rate borrowing. The aggregate fair value of the swaps is recorded in other assets (liabilities) with changes in fair value associated with the effective portion recorded in other comprehensive income (loss) and the ineffective portion recorded in other non-interest income (expense). The cash flow hedges were determined to be ineffective beginning with the quarter ended

September 30, 2017.

As such, a loss of

$1,996

and

$1,075

of ineffectiveness has been reported in noninterest revenue for the

three

and

nine

-month periods ended

December 31, 2018,

respectively, compared to a loss of

$5,445

and

$9,124

reported as an offset to noninterest revenue for the

three

and

nine

-month period ended

December 31, 2017.

Summary information about the interest rate swaps designated as cash flow hedges is as follows:

	Notional		Effective		Pay Fixed			Receive
Interest Rate Swap	Amount		Start Date	Maturity Date	Rate			Floating Rate
FHLB Advance Swap 1	$	1,850,000	March 9, 2017	March 9, 2022		2.24	%	3-Month LIBOR
FHLB Advance Swap 2		1,850,000	March 9, 2017	March 9, 2024		2.41	%	3-Month LIBOR
FHLB Advance Swap 3		1,850,000	March 9, 2017	March 9, 2027		2.57	%	3-Month LIBOR
FHLB Advance Swap 4		2,000,000	March 29, 2017	March 29, 2022		2.08	%	3-Month LIBOR
FHLB Advance Swap 5		2,000,000	March 29, 2017	March 29, 2024		2.24	%	3-Month LIBOR
FHLB Advance Swap 6		2,000,000	March 29, 2017	March 29, 2027		2.40	%	3-Month LIBOR
Total Notional Amount	$	11,550,000

Interest revenue/(expense) recorded on the swap transactions totaled $(

60

) and (

$1,892

) for the

three

and

nine

months ended

December 31, 2018

and is reported as a component of interest expense on FHLB Advances.

The following table reflects cash flow hedges included in the Consolidated Statements of Financial Condition as of

December 31, 2018

and

March 31, 2018:

	December 31, 2018				March 31, 2018
	Notional				Notional
	Amount		Fair Value		Amount		Fair Value
Included in assets:
Interest rate swaps related  to FHLB Advances	$	11,550,000	$	123,118	$	11,550,000	$	217,464

The following tables present the net gain (loss) recorded in accumulated other comprehensive income (loss) and the Consolidated Statements of Operations relating to the cash flow derivative instruments for the

three

and

nine

-month periods ended

December 31, 2018

and

2017:

	Three Month and Period Ended December 31, 2018								Three Month and Period Ended December 31, 2017
	Amount of Gain (Loss) Recognized in OCI (Effective Portion)			Amount of Gain (Loss) Reclassified from OCI to Interest Income		Amount of Gain (Loss) Recognized in Other Noninterest Revenue (Ineffective Portion)			Amount of Gain (Loss) Recognized in OCI (Effective Portion)		Amount of Gain (Loss) Reclassified from OCI to Interest Income		Amount of Gain (Loss) Recognized in Other Noninterest Revenue (Ineffective Portion)
Interest Rate
Contract	$	(287,116	)	$	-	$	(1,996	)	$	122,388	$	-	$	(5,445	)

	Nine Month and Period Ended December 31, 2018								Nine Month and Period Ended December 31, 2017
	Amount of Gain (Loss) Recognized in OCI (Effective Portion)			Amount of Gain (Loss) Reclassified from OCI to Interest Income		Amount of Gain (Loss) Recognized in Other Noninterest Revenue (Ineffective Portion)			Amount of Gain (Loss) Recognized in OCI (Effective Portion)		Amount of Gain (Loss) Reclassified from OCI to Interest Income		Amount of Gain (Loss) Recognized in Other Noninterest Revenue (Ineffective Portion)
Interest Rate
Contract	$	(93,271	)	$	-	$	(1,075	)	$	22,784	$	-	$	(9,124	)

Interest Rate SWAPS Designated as Fair Value Hedges

The derivative position relates to a transaction in which the Bank entered into an interest rate swap with another financial institution using a fixed rate commercial real estate loan as an offset. The Bank agrees to pay the other financial institution a fixed interest rate on a notional amount based upon the commercial real estate loan and in return receive a variable interest rate on the same notional amount. This transaction allows the Bank to effectively convert a fixed rate loan to a variable rate. Because the terms of the swap with the other financial institution and the commercial real estate loan offset each other, with the only difference being credit risk associated with the loan, changes in the fair value of the underlying derivative contract and the commercial real estate loan are

not

materially different and do

not

significantly impact the Bank’s results of operations.

During the

second

quarter of fiscal

2016,

the Company entered into the interest rate swap agreement with a

$3.3

million notional amount to convert a fixed rate commercial real estate loan at

3.99%

into a variable rate for a term of approximately

10

years. The notional amount of the interest rate swap and the offsetting commercial real estate loan were

$3.0

million at

December 31, 2018.

The derivative is designated as a fair value hedge.

Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. The Bank’s exposure is limited to the replacement value of the contract rather than the notional amount, principal, or contract amount. There are provisions in the agreement with the counterparty that allow for certain unsecured credit exposure up to an agreed threshold. Exposures in excess of the agreed threshold are collateralized. In addition, the Bank minimizes credit risk through credit approvals, limits, and monitoring procedures.

The fair value hedge is summarized below:

	December 31, 2018						March 31, 2018
	Notional Amount		Principal Amount		Fair Value		Notional Amount		Principal Amount		Fair Value
Included in Loans and Leases:
Commercial real estate loan	$	-	$	3,027,702	$	2,984,595	$	-	$	3,091,892	$	3,022,744
Included in Other Assets:
Interest Rate Swap	$	3,027,702	$	-	$	43,107	$	3,091,892		-	$	69,148

No

gain or loss was recognized in earnings with respect to the interest rate swap for the

three

or

nine

months ended

December 31, 2018

and

2017

due to the fact the gain or increase in the fair value of the commercial real estate loan was offset by the loss or decrease in the fair value of the interest rate swap.

XML

Note 8 - Deposits

9 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Deposit Liabilities Disclosures [Text Block]

Note

8:

     

Deposits

The following table details the composition of deposits and the related percentage mix of total deposits, respectively:

	December 31, 2018					March 31, 2018
	Amount		% of Total			Amount		% of Total
Savings	$	41,548,268		10.8	%	$	42,499,381		10.6	%
Noninterest-bearing checking		27,365,942		7.1	%		29,557,943		7.3	%
Interest-bearing checking		28,478,231		7.4	%		27,219,286		6.7	%
Money market accounts		48,128,831		12.5	%		58,466,228		14.4	%
Time deposits		238,448,636		62.1	%		246,988,613		61.0	%
	$	383,969,908		100.0	%	$	404,731,451		100.0	%
Premium on deposits asssumed		201,034					411,524
Total deposits	$	384,170,942				$	405,142,975

XML

Note 9 - Lines of Credit and Federal Home Loan Bank Advances

9 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Federal Home Loan Bank Advances, Disclosure [Text Block]

Note

9:

     Lines of Credit and Federal Home Loan Bank Advances

The Bank

may

borrow up to

$5.0

million from a correspondent bank under a secured federal funds line of credit and

$1.0

million under an unsecured federal funds line of credit. The Bank would be required to pledge investment securities to draw upon the secured line of credit. There were

no

borrowings under these lines of credit at

December 31, 2018

and

March 31, 2018.

Borrowings consist of advances from the Federal Home Loan Bank (FHLB). The Bank

may

borrow up to

25

percent of its assets under a line of credit agreement with the FHLB. Advances under the line of credit are secured by certain loans owned by the Bank. As of

December 31, 2018,

and

March 31, 2018,

the Bank had

$73.6

million and

$68.3

million, respectively, of available credit from the FHLB. Advances are limited by the balance of loans available for pledge. The amount of loans that were deemed eligible to pledge as collateral totaled

$114.8

million at

December 31, 2018

and

$127.1

million at

March 31, 2018.

As a condition of obtaining the line of credit from the FHLB, the FHLB also requires the Bank purchase shares of capital stock in the FHLB. Information relating to borrowings at

December 31, 2018

and

March 31, 2018

is presented below.

	December 31, 2018							March 31, 2018
	Amount		Rate			Maturity Date		Amount		Rate			Maturity Date
FHLB advance (1)	$	5,550,000		2.57	%	3/11/2019		$	5,550,000		1.84	%	6/11/2018
FHLB advance (2)		6,000,000		2.58	%	3/29/2019			6,000,000		1.90	%	6/29/2018
FHLB advance		3,000,000		2.71	%	8/26/2019			1,000,000		2.60	%	7/2/2018
FHLB advance		3,000,000		1.59	%	8/26/2019			1,000,000		3.05	%	7/3/2018
FHLB advance		1,500,000		1.95	%	11/25/2019			5,000,000		3.94	%	7/23/2018
FHLB advance		3,000,000		2.31	%	2/3/2020			1,000,000		1.74	%	7/31/2018
FHLB advance		1,000,000		2.86	%	8/4/2020			1,000,000		1.40	%	8/21/2018
FHLB advance		2,000,000		2.56	%	8/27/2020			4,000,000		1.94	%	8/27/2018
FHLB advance		1,000,000		2.15	%	11/30/2020			3,000,000		1.41	%	8/27/2018
FHLB advance		2,000,000		2.28	%	12/28/2020			5,000,000		3.38	%	9/19/2018
FHLB advance		2,000,000		2.49	%	2/1/2021			1,000,000		2.60	%	10/2/2018
FHLB advance		3,000,000		2.93	%	7/26/2021			1,000,000		1.95	%	12/31/2018
FHLB advance		2,000,000		3.01	%	8/4/2021			3,000,000		1.38	%	7/31/2019
FHLB advance		1,000,000		2.88	%	8/23/2021			3,000,000		1.96	%	8/26/2019
FHLB advance		3,000,000		1.48	%	8/25/2021			3,000,000		1.59	%	8/26/2019
FHLB advance		2,000,000		2.68	%	8/27/2021			3,000,000		1.42	%	8/26/2019
FHLB advance		3,000,000		2.79	%	8/29/2022			1,500,000		1.95	%	11/25/2019
FHLB advance		2,000,000		3.14	%	9/19/2022			1,500,000		1.78	%	11/27/2019
FHLB advance		3,000,000		2.70	%	8/28/2023			3,000,000		2.31	%	2/3/2020
FHLB advance		2,000,000		3.20	%	9/19/2023			1,000,000		2.15	%	11/30/2020
FHLB advance		-		-			-		2,000,000		2.28	%	12/28/2020
FHLB advance		-		-			-		2,000,000		2.49	%	2/1/2021
FHLB advance		-		-			-		3,000,000		1.48	%	8/25/2021
		51,050,000							60,550,000
Premium on FHLB advances assumed		-							122,140
Total borrowings	$	51,050,000						$	60,672,140

( 1 ) -

FHLB Advance is tied to three derivative cash flow hedges in increments of $1.85 million each. The three individual cash flow hedges are for a term of five , seven and ten years, respectively and are tied to the 3 -month LIBOR rate. In order for the cash flow hedges to remain effective, the corresponding FHLB Advance will have to be renewed every three months until the respective cash flow hedge matures. The maturity date for the three cash flow hedges are March 9, 2022, 2024, and 2027.

( 2 ) -

FHLB Advance is tied to three derivative cash flow hedges in increments of $2.0 million each. The three individual cash flow hedges are for a term of five , seven and ten years, respectively and are tied to the 3 -month LIBOR rate. In order for the cash flow hedges to remain effective, the corresponding FHLB Advance will have to be renewed every three months until the respective cash flow hedge matures. The maturity for the three cash flow hedges are March 29, 2022, 2024, and 2027.

XML

Note 10 - Regulatory Capital Ratios

9 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note

10:

     Regulatory Capital Ratios

Banks and bank holding companies are subject to various regulatory capital requirements administered by state and federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors.

The Basel III Capital Rules became effective for Hamilton Bank on

January 1, 2015 (

subject to a phase-in period for certain provisions). Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the table below) of Common Equity Tier

1

capital, Tier

1

capital and Total capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier

1

capital to adjusted quarterly average assets (as defined).

In connection with the adoption of the Basel III Capital Rules, we elected to opt-out of the requirement to include accumulated other comprehensive income in Common Equity Tier

1.

Common Equity Tier

1

for Hamilton Bank is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities and subject to transition provisions.

Under the revised prompt corrective action requirements, as of

January 1, 2015,

insured depository institutions are required to meet the following in order to qualify as “well capitalized:” (

1

) a common equity Tier

1

risk-based capital ratio of

6.5%;

(

2

) a Tier

1

risk-based capital ratio of

8%;

(

3

) a total risk-based capital ratio of

10%

and (

4

) a Tier

1

leverage ratio of

5%.

As of

December 31, 2018,

the Bank met all capital adequacy requirements under the Basel III Capital Rules to be considered “well capitalized” under prompt corrective action rules.

The implementation of the capital conservation buffer began on

January 1, 2016

at the

0.625%

level and was phased in over a

four

-year period until it reached

2.5%

on

January 1, 2019.

The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does

not

have any current applicability to Hamilton Bank.

As a result of the recently enacted Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Act”), banking regulatory agencies must adopt a revised definition of “well capitalized” for financial institutions and holding companies with assets of less than

$10

billion and that are

not

determined to be ineligible by their primary federal regulator due to their risk profile (a “qualifying community bank”). The new definition will expand the ways that a qualifying community bank

may

meet its capital requirements and be deemed “well qualified.” The new rule will establish a “community bank leverage ratio” equal to the tangible equity capital divided by the average total consolidated assets. A qualifying community bank that exceeds a to-be-determined threshold for this new leverage ratio, which regulators must set at between

8%

and

10%,

will be considered to be well capitalized and to have met generally applicable leverage capital requirements, generally applicable risk-based capital requirements, and any other capital or leverage requirements to which such financial institution or holding company is subject.

In addition, as a result of the Act, the Federal Reserve Board amended its small bank holding company and savings and loan holding company policy statement to provide that holding companies with consolidated assets of less than

$3

billion that are (i)

not

engaged in significant nonbanking activities, (ii) do

not

conduct significant off-balance sheet activities, and (iii) do

not

have a material amount of SEC-registered debt or equity securities, other than trust preferred securities, that contribute to an organization’s complexity, are

no

longer subject to regulatory capital requirements.

The following table presents actual and required capital ratios as of

December 31, 2018

and

March 31, 2018

for Hamilton Bank and the Company under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of

January 1, 2015

based on the phase-in provisions of the Basel III Capital Rules and the minimum required capital levels as of

January 1, 2019

when the Basel III Capital Rules became fully phased-in. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

						Minimum Capital					Minimum Capital					To be well
	Actual					Required - Basel III					Required - Basel III					capitalized (1)
						Phase-In Schedule					Fully Phased-In
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2018
Common equity tier 1 capital (to risk-weighted assets)
Hamilton Bank	$	43,688		12.55	%	$	22,186		6.375	%	$	24,361		7.00	%	$	22,621		6.50	%
Hamilton Bancorp		49,329		14.12	%		22,277		6.375	%		24,461		7.00	%		22,714		6.50	%
Total risk-based capital (to risk-weighted assets)
Hamilton Bank		46,776		13.44	%		34,366		9.875	%		36,541		10.50	%		34,801		10.00	%
Hamilton Bancorp		52,417		15.00	%		34,508		9.875	%		36,692		10.50	%		34,945		10.00	%
Tier 1 capital (to risk-weighted assets)
Hamilton Bank		43,688		12.55	%		27,406		7.875	%		29,581		8.50	%		27,841		8.00	%
Hamilton Bancorp		49,329		14.12	%		27,519		7.875	%		27,703		8.50	%		27,956		8.00	%
Tier 1 capital (to adjusted total assets)
Hamilton Bank		43,688		8.91	%		19,619		4.000	%		19,619		4.00	%		24,523		5.00	%
Hamilton Bancorp		49,329		10.00	%		19,732		4.000	%		19,732		4.00	%		24,665		5.00	%
March 31, 2018
Common equity tier 1 capital (to risk-weighted assets)
Hamilton Bank	$	39,126		10.61	%	$	23,498		6.375	%	$	25,802		7.00	%	$	23,959		6.50	%
Hamilton Bancorp		47,308		12.79	%		23,582		6.375	%		25,894		7.00	%		24,044		6.50	%
Total risk-based capital (to risk-weighted assets)
Hamilton Bank		41,998		11.39	%		36,399		9.875	%		38,703		10.50	%		36,860		10.00	%
Hamilton Bancorp		50,180		13.57	%		36,529		9.875	%		38,841		10.50	%		36,992		10.00	%
Tier 1 capital (to risk-weighted assets)
Hamilton Bank		39,126		10.61	%		29,027		7.875	%		31,331		8.50	%		29,488		8.00	%
Hamilton Bancorp		47,308		12.79	%		29,131		7.875	%		31,443		8.50	%		29,593		8.00	%
Tier 1 capital (to adjusted total assets)
Hamilton Bank		39,126		7.64	%		20,497		4.000	%		20,497		4.00	%		25,621		5.00	%
Hamilton Bancorp		47,308		9.15	%		20,674		4.000	%		20,674		4.00	%		25,843		5.00	%
(1) - Under prompt corrective action

Tier

1

capital consists of total shareholders’ equity less goodwill, intangible assets, and deferred tax net operating loss carryforwards. Total capital includes a limited amount of the allowance for loan losses and a portion of any unrealized gain on equity securities. In calculating risk-weighted assets, specified risk percentages are applied to each category of asset and off-balance-sheet items.

In its regulatory report filed as of

December 31, 2018,

the Bank exceeded all regulatory capital requirements and was considered “well capitalized” under regulatory guidelines. Management is

not

aware of any events that would have caused this classification to change. Failure to meet the capital requirements could affect, among other things, the Bank's ability to accept brokered deposits and

may

significantly affect the operations of the Bank. Management has

no

plans that should change the classification of the capital adequacy.

XML

Note 11 - Stock Based Compensation

9 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note

11:

     

Stock Based Compensation

In

November 2013,

the Company’s shareholders approved a new Equity Incentive Plan (the

“2013

Equity Incentive Plan’’). The

2013

Equity Incentive Plan allows for up to

148,120

shares to be issued to employees, executive officers or Directors in the form of restricted stock, and up to

370,300

shares to be issued to employees, executive officers or Directors in the form of stock options. At

December 31, 2018,

there were

92,701

restricted stock awards issued and outstanding and

268,204

stock option awards granted under the

2013

Equity Incentive Plan.

Stock Options:

Under the above plan, the exercise price for stock options is the market price at date of grant. The maximum option term is

ten

years and the options granted shall vest in

five

equal annual installments of

20%

with the

first

installment becoming exercisable on the

first

anniversary of the date of grant and succeeding installments on each anniversary thereafter. The Company plans to issue new shares to satisfy share option exercises. The total cost that has been incurred for the stock option plan was

$61,514

and

$184,542

for the

three

and

nine

months ended

December 31, 2018

and

$57,392

and

$172,177

for the

three

and

nine

months ended

December 31, 2017,

respectively.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical data. The Company uses historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted represents the period of time that options granted are expected to be outstanding, which takes into account that the options are

not

transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury rate equal to the expected term of the option in effect at the time of the grant.

The fair value of options granted to date was determined using the following weighted-average assumptions as of grant date.

Grant Date	Number of Options Granted		Risk Free Interest Rate			Expected Term (in years)		Expected Stock Price Volatility			Dividend Yield			Fair Value of Options Granted
February 3, 2014		225,150		2.07	%		7.0		27.30	%		0.00	%	$	4.65
November 1, 2016		19,000		1.61	%		7.0		27.17	%		0.00	%	$	4.35
February 3, 2017		3,700		2.27	%		7.0		27.26	%		0.00	%	$	5.18
April 1, 2018		20,354		2.67	%		7.0		19.61	%		0.00	%	$	4.05

The following tables summarize the Company’s stock option activity and related information for the periods ended:

December 31, 2018:	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Outstanding at April 1, 2018		242,350	$	13.84		6.1
Granted		20,354		14.25		9.3
Exercised		-		-		-
Forfeited, exchanged or expired		-		-		-
Outstanding at December 31, 2018		262,704	$	13.87		5.6
Vested at December 31, 2018		184,060	$	13.84		5.2

March 31, 2018:	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Outstanding at April 1, 2017		242,350	$	13.84		7.1
Granted		-		-		-
Exercised		-		-		-
Forfeited, exchanged or expired		-		-		-
Outstanding at March 31, 2018		242,350	$	13.84		6.1
Vested at March 31, 2018		180,260	$	13.84		5.8

As of

December 31, 2018,

there was

$146,164

of total unrecognized compensation cost related to nonvested stock options granted under the Plan. The cost is expected to be recognized over a weighted-average period of

1.7

years. The intrinsic value of a stock option is the amount that the market value of the underlying stock exceeds the exercise price of the option. Based upon a fair market value of

$13.90

at

December 31, 2018,

the options outstanding had an intrinsic value of

$18,583.

Restricted Stock:

The specific terms of each restricted stock award are determined by the Compensation Committee at the date of the grant. Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at the grant date. Restricted stock awards granted shall vest in

five

equal annual installments of

20%

with the

first

installment becoming vested on the

first

anniversary of the date of grant and succeeding installments on each anniversary thereafter.

The following table presents a summary of the activity in the Company’s restricted stock for the periods ended:

				Weighted-Average
December 31, 2018:	Shares			Fair Value
Nonvested shares at April 1, 2018		19,440		$	13.74
Granted		8,801			14.25
Vested		(380	)		13.61
Forfeited		-			-
Nonvested shares at December 31, 2018		27,861		$	13.90
Fair Value of shares vested at December 31, 2018	$	901,276

				Weighted-Average
March 31, 2018:	Shares			Fair Value
Nonvested shares at April 1, 2017		36,220		$	13.76
Granted		-			-
Vested		(16,780	)		13.78
Forfeited		-			-
Nonvested shares at March 31, 2018		19,440		$	13.74
Fair Value of shares vested at March 31, 2018	$	918,555

The Company recorded restricted stock awards expense of

$64,089

and

$192,268

during the

three

and

nine

months ended

December 31, 2018

and

$57,819

and

$173,457

during the

three

and

nine

months ended

December 31, 2017,

respectively. As of

December 31, 2018,

there was

$158,591

of total unrecognized compensation cost related to nonvested shares granted under the

2013

stock incentive plan. The cost is expected to be recognized over a weighted-average period of

1.6

years.

XML

Note 12 - Fair Value Measurements

9 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]

Note

12:

     

Fair Value Measurements

Generally accepted accounting principles define fair value, establish a framework for measuring fair value, and establish a hierarchy for determining fair value measurement.The hierarchy includes

three

levels and is based upon the valuation techniques used to measure assets and liabilities. The

three

levels are as follows:

Level

1

: Valuation is based on quoted prices (unadjusted) for identical assets or liabilities in active markets;

Level

2

: Valuation is determined from quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar instruments in markets that are

not

active or by model-based techniques in which all significant inputs are observable in the market; and

Level

3

: Valuation is derived from model-based techniques in which at least

one

significant input is unobservable and based on the Company’s own estimates about the assumptions that market participants would use to value the asset or liability.

The following is a description of the valuation methods used for instruments measured at fair value as well as the general classification of such instruments pursuant to the applicable valuation method.

Fair value measurements on a recurring basis

Securities available for sale – If quoted prices are available in an active market for identical assets, securities are classified within Level

1

of the hierarchy. If quoted market prices are

not

available, then fair values are estimated using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. As of

December 31, 2018,

and

March 31, 2018,

the Bank has categorized its investment securities available for sale as follows:

	Level 1		Level 2		Level 3
December 31, 2018	inputs		inputs		inputs		Total
U.S. government agencies	$	-	$	727,336	$	-	$	727,336
Municipal bonds		-		11,641,229		-		11,641,229
Corporate bonds				-		1,900,504		1,900,504
Mortgage-backed securities		-		51,308,786		-		51,308,786
Total investment securities available for sale	$	-	$	63,677,351	$	1,900,504	$	65,577,855

	Level 1		Level 2		Level 3
March 31, 2018	inputs		inputs		inputs		Total
U.S. government agencies	$	-	$	2,718,649	$	-	$	2,718,649
Municipal bonds		-		11,705,991		-		11,705,991
Corporate bonds				-		1,954,076		1,954,076
Mortgage-backed securities		-		59,025,404		16		59,025,420
Total investment securities available for sale	$	-	$	73,450,044	$	1,954,092	$	75,404,136

Derivative – Interest rate swap agreements – The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level

2

). The quantitative models that are used utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and

third

-party pricing services. As of

December 31, 2018,

and

March 31, 2018,

the bank has categorized its interest rate swaps and related loan as follows:

	Level 1		Level 2		Level 3
December 31, 2018	inputs		inputs		inputs		Total
Loans - Commercial real estate loan	$	-	$	2,984,595	$	-	$	2,984,595
Derivative - Interest rate swap designated as fair value hedge		-		43,107		-		43,107
Derivatives - Interest rate swaps designated as cash flow hedge		-		123,118		-		123,118

	Level 1		Level 2		Level 3
March 31, 2018	inputs		inputs		inputs		Total
Loans - Commercial real estate loan	$	-	$	3,022,744	$	-	$	3,022,744
Derivative - Interest rate swap designated as fair value hedge		-		69,148		-		69,148
Derivatives - Interest rate swaps designated as cash flow hedge		-		217,464		-		217,464

The following table presents the valuation and unobservable inputs for Level

3

assets measured at fair value on a recurring basis at

December 31, 2018:

			Valuation	Unobservable	Range of
Description	Fair Value		Methodology	Inputs	Inputs
Investment securities	$	1,900,504	3rd party valuation	Discount to reflect current market conditions	0.00%	-	10.00%

The following table presents a reconciliation of the investments which are measured at fair value on a recurring basis using significant unobservable inputs (Level

3

) for the periods presented:

	Nine Months			Fiscal Year
	Ended			Ended
	December 31, 2018			March 31, 2018
Balance, beginning of year	$	1,954,092		$	1,930,786
Transfers in:
Corporate bonds		-			1,954,076
Mortgage-backed securities		-			16
Municipal bonds		-			-
Transfers out:
Corporate bonds		-			-
Mortgage-backed securities		16			2,473
Municipal bonds		-			1,928,313
Change in valuation		(53,572	)		-
Balance, end of year	$	1,900,504		$	1,954,092

Fair value measurements on a nonrecurring basis

Impaired Loans - The Bank has measured impairment generally based on the fair value of the loan's collateral. Fair value is generally determined based upon independent appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level

3

fair values. As of

December 31, 2018,

and

March 31, 2018,

the fair values consist of loan balances of

$7,543,269

and

$8,720,339

that have been written down by

$255,863

and

$266,256,

respectively, as a result of specific loan loss allowances.

Foreclosed real estate – The Bank's foreclosed real estate is measured at the lower of carrying value or fair value less estimated cost to sell. At

December 31, 2018

and

March 31, 2018,

the fair value of foreclosed real estate was estimated to be

$457,778

for both periods. Fair value was determined based on offers and/or appraisals. Cost to sell the assets was based on standard market factors. The Company has categorized its foreclosed assets as Level

3.

	Level 1		Level 2		Level 3
December 31, 2018	inputs		inputs		inputs		Total
Impaired loans	$	-	$	-	$	7,289,458	$	7,289,458
Foreclosed real estate		-		-		457,778		457,778

	Level 1		Level 2		Level 3
March 31, 2018	inputs		inputs		inputs		Total
Impaired loans	$	-	$	-	$	8,454,083	$	8,454,083
Foreclosed real estate		-		-		457,778		457,778

The following table presents the valuation and unobservable inputs for Level

3

assets measured at fair value on a nonrecurring basis at

December 31, 2018:

			Valuation	Unobservable	Range of
Description	Fair Value		Methodology	Inputs	Inputs
Impaired loans, net of allowance	$	7,289,458	Appraised value	Discount to reflect current market conditions	0.00%	-	25.00%
			Discounted cash flows	Discount rates	2.63%	-	7.25%
Foreclosed real estate	$	457,778	Appraised value	Discount to reflect current market conditions	0.00%	-	25.00%

The following table summarizes changes in foreclosed real estate for the periods shown, which is measured on a nonrecurring basis using significant unobservable, level

3,

inputs.

	Nine Months			Fiscal Year
	Ended			Ended
	December 31, 2018			March 31, 2018
Balance at beginning of period	$	457,778		$	503,094
Transfer to foreclosed real estate		150,052			23,834
Write-down of foreclosed real estate		-			(31,955	)
Proceeds from sale of foreclosed real estate		(145,820	)		(35,896	)
Loss on sale of foreclosed real estate		(4,232	)		(1,299	)
Balance at end of period	$	457,778		$	457,778

The remaining financial assets and liabilities are

not

reported on the balance sheets at fair value on a recurring basis. The calculation of estimated fair values is based on market conditions at a specific point in time and

may

not

reflect current or future fair values.

	December 31, 2018				March 31, 2018
	Carrying		Fair		Carrying		Fair
	amount		value		amount		value
Financial assets
Level 1 inputs
Cash and cash equivalents	$	26,547,840	$	26,547,840	$	23,368,415	$	23,368,415
Level 2 inputs
Federal Home Loan Bank stock		2,676,200		2,676,200		3,122,400		3,122,400
Bank-owned life insurance		17,799,920		17,799,920		17,455,850		17,455,850
Level 3 inputs
Certificates of deposit held as investment		499,121		485,928		499,189		492,751
Loans receivable, net of unearned income		366,428,914		352,433,858		387,328,993		385,818,260
Financial liabilities
Level 2 inputs
Deposits		384,170,942		385,031,487		405,142,975		405,026,957
Advance payments by borrowers for  taxes and insurance		1,059,677		1,059,677		1,962,665		1,962,665
Borrowings		51,050,000		50,394,636		60,672,140		60,494,922

The fair values of cash and cash equivalents and advances by borrowers for taxes and insurance are estimated to equal the carrying amount.

The fair values of Federal Home Loan Bank stock and bank-owned life insurance are estimated to equal carrying amounts, which are based on repurchase prices of the FHLB stock and the insurance company.

Beginning in the

first

quarter

2018,

the fair value of loans is determined using an exit price methodology as prescribed by ASU

2016

-

01,

which became effective for the Company during in the

first

quarter ended

June 30, 2018.

The exit price estimation of fair value is based on the present value of the expected cash flows. The projected cash flows are based on the contractual terms of the loans, adjusted for prepayments and use of a discount rate based on the relative risk of the cash flows, taking into account the loan type, maturity of the loan, liquidity risk, servicing costs, and a required return on debt and capital (Level

3

). In addition, an incremental liquidity discount is applied to certain loans, using historical sales of loans during periods of similar economic conditions as a benchmark. In comparison, loan fair values as of

March 31, 2018

were estimated based on an entrance price methodology.  As a result, the fair value adjustments as of

December 31, 2018

and

March 31, 2018

are

not

comparable.

The fair value of certificates of deposit held as investments is estimated based on interest rates currently offered for certificates of deposit with similar remaining maturities.

The fair value of interest-bearing checking, savings, and money market deposit accounts is equal to the carrying amount due to these products having

no

stated maturity. The fair value of fixed-maturity time deposits is estimated based on interest rates currently offered for deposits of similar remaining maturities.

The fair value of borrowings is estimated based on interest rates currently offered for borrowings of similar remaining maturities.

The fair value of outstanding loan commitments and unused lines of credit are considered to be the same as the contractual amount and are

not

included in the table above. These commitments generate fees that approximate those currently charged to originate similar commitments.

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Significant Accounting Policies (Policies)

9 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

. The accompanying consolidated financial statements include the accounts of the parent company and its wholly owned subsidiary, Hamilton Bank. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, deferred income tax valuation allowances, the fair value of investment securities and other than temporary impairment of investment securities.

Marketable Securities, Policy [Policy Text Block]

Investment Securities.

Management determines the appropriate classification of investment securities at the time of purchase. Securities that

may

be sold before maturity are classified as available for sale and carried at fair value. Investment securities that management has the intent and ability to hold to maturity are classified as held to maturity and carried at amortized cost. All investment securities held by Hamilton at

December 31, 2018

and

March 31, 2018

were classified as available for sale.

Investment securities designated as available for sale are stated at estimated fair value based on quoted market prices. They represent those securities which management

may

sell as part of its asset/liability strategy or that

may

be sold in response to changing interest rates or liquidity needs. Changes in unrealized gains and losses, net of related deferred taxes, for available-for-sale securities are recorded in other comprehensive income. Realized gains (losses) on available-for-sale securities are included in noninterest revenue and, when applicable, are reported as a reclassification adjustment in other comprehensive income. Realized gains and losses on the sale of available-for-sale securities are recorded on the trade date and are determined by the specific identification method. The amortization of premiums and the accretion of discounts are recognized in interest revenue using methods approximating the interest method over the term of the security.

In estimating other-than-temporary impairment losses, management considers the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Bank to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Finance, Loan and Lease Receivables, Held-for-sale, Policy [Policy Text Block]

Loans Held For Sale

.

Mortgage loans originated and intended for sale are carried at the lower of aggregate cost or estimated fair value. Fair value is determined based on outstanding investor commitments, or in the absence of such commitments, based on current investor yield requirements. Gains and losses on loan sales are determined by the specific-identification method.

Finance, Loans and Leases Receivable, Policy [Policy Text Block]

Loans Receivable.

The Bank makes mortgage, commercial, and consumer loans to customers. A substantial portion of the loan portfolio is represented by mortgage loans throughout the Baltimore metropolitan area. The ability of the Bank’s debtors to repay their loans is dependent upon the real estate and general economic conditions in this area.

Loans are reported at their outstanding unpaid principal balance adjusted for the allowance for loan loss, premiums on loans acquired, and/or any deferred fees or costs on originated loans. Interest revenue is accrued on the unpaid principal balance. Loan origination fees and the direct costs of underwriting and closing loans are recognized over the life of the related loan as an adjustment to yield using a method that approximates the interest method. Any differences that arise from prepayment will result in a recalculation of the effective yield.

Loans are generally placed on nonaccrual status when they are

90

days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual status at an earlier date if the collection of principal or interest is considered doubtful. All interest accrued but

not

collected for loans that are placed on nonaccrual status are reversed against interest revenue. The interest on nonaccrual loans is accounted for on the cash basis method, until the loans qualify for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and, in management’s judgment, future payments are reasonably assured.

Loans are considered impaired when, based on current information, management considers it unlikely that collection of principal and interest payments will be made according to contractual terms. If collection of principal is evaluated as doubtful, all payments are applied to principal. Impaired loans are measured: (i) at the present value of expected cash flows discounted at the loan’s effective interest rate; (ii) at the observable market price; or (iii) at the fair value of the collateral if the loan is collateral dependent. If the measure of the impaired loan is less than the recorded investment in the loan, an impairment is recognized through an allocation of the allowance for loan losses and corresponding provision for loan losses. Generally, identified impairments are charged-off against the allowance for loan losses.

Troubled debt restructurings are loans for which Hamilton, for legal or economic reasons related to a debtor’s financial difficulties, has granted a concession to the debtor that it otherwise would

not

have considered. Concessions that result in the categorization of a loan as a troubled debt restructuring include:

● Reduction of the stated interest rate;

● Extension of the maturity date or dates at a stated interest rate lower than the current market rate for new debt with similar risk;

● Reduction of the face amount or maturity amount of the debt as stated in the instrument or other agreement; or

● Reduction of accrued interest.

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

Allowance for Loan Losses.

The allowance for loan losses represents an amount which, in management’s judgment, will be adequate to absorb probable future losses on existing loans. The allowance for loan losses is established, as loan losses are estimated to have occurred, through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Recoveries on previously charged-off loans are credited to the allowance for loan losses.

The allowance for loan losses is increased by provisions charged to income and reduced by charge-offs, net of recoveries. Management’s periodic evaluation of the adequacy of the allowance is based on the Bank’s past loan loss experience, known and inherent risks in the loan portfolio, adverse situations that

may

affect the borrower’s ability to repay, estimated value of any underlying collateral and current economic conditions. The look back period for historical losses consists of reviewing a

48

month look back period for net charge-offs. Prior to

September 30, 2018,

we reviewed both a

36

and

48

month look back period individually for net charge-offs to develop a range in which the allowance for loan losses should be within. The range has grown smaller over the past year to a point where the difference in the

two

calculations of the allowance for loan loss is deemed immaterial. As a result, and for efficiency purposes, we began to only utilize a historical charge-off period of

48

months in determining the necessary allowance for loan losses. We believe, although similar in amount, that a

48

-month period is more representative of our charge-off history. This period

may

change in the future depending on the performance of the loan portfolio. In addition, we also adjusted the environmental factors of the legacy and acquired loan portfolios so that they are

not

the same for each loan portfolio going forward. The environmental factors for each acquired loan portfolio and the legacy loan portfolio will be evaluated on their own merits so as to stand on their own characteristics. These changes at

September 30, 2018

resulted in additional provisions of

$294,000

and were primarily related to the acquired loan portfolios and the adjustment of their environmental factors.

Management considers a number of factors in estimating the required level of the allowance. These factors include: historical loss experience in the loan portfolios; the levels and trends in past-due and nonaccrual loans; the status of nonaccrual loans and other loans identified as having the potential for further deterioration; credit risk and industry concentrations; trends in loan volume; the effects of any changes in lending policies and procedures or underwriting standards; and a continuing evaluation of the economic environment. As part of the estimation process, management keeps the net charge-off history as a percentage of loans, as it pertains to each loan segment, constant across all risk ratings and alters the qualitative factors either up or down based upon the respective risk rating for each loan segment.

Finance, Loan and Lease Receivables, Held for Investments, Foreclosed Assets Policy [Policy Text Block]

Foreclosed Real Estate.

Real estate acquired through foreclosure or other means is recorded at the lower of its carrying value or the fair value of the related real estate collateral less estimated selling costs. Losses in estimated fair value incurred at the time of acquisition of the property are charged to the allowance for loan losses. Subsequent reductions in the estimated fair value of the property are included in noninterest expense. Costs to maintain foreclosed real estate are expensed as incurred.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and Other Intangible Assets.

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Intangible assets, consisting of core deposit intangibles, represent purchased assets that also lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset

may

be sold or exchanged on its own or in combination with a related contract, asset, or liability. Core deposit intangibles are amortized on an accelerated basis over an

eight

-year period. Goodwill is

not

amortized but is evaluated on an annual basis to determine impairment, if any. Any impairment of goodwill would be recognized against income in the period of impairment.

Derivatives, Policy [Policy Text Block]

Derivative

Financial Instruments

and Hedging Activities

.

Derivatives are initially recognized at fair value on the date the derivative contract is entered into and subsequently re-measured at their fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. The Company documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions.

For derivatives qualifying as cash flow hedges, the Company also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The effective portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges is recognized in the consolidated statement of comprehensive income (loss). The gain or loss relating to the ineffective portion is recognized immediately in the consolidated statement of operations as a gain or loss. When a hedging instrument expires or is sold, or when a hedge

no

longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the consolidated statement of operations. When a forecast transaction is

no

longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the consolidated statement of operations as a gain or loss to income.

For derivative instruments designated as fair-value hedges, the change in fair value of the derivative is recognized in the consolidated statement of operations under the same heading as the change in fair value of the hedged item for the portion attributable to the hedged risk. For accounting purposes, if the derivative is highly effective, the change in fair values relating to the asset or liability and the hedged item will offset

one

another and result in

no

impact to overall income.

Gains (losses) on derivatives representing either hedge components excluded from the assessment of effectiveness or hedge ineffectiveness are recognized in earnings.

Revenue from Contract with Customer [Policy Text Block]

Revenue from Contracts with Customers

.

We record revenue from contracts with customers in accordance with Accounting Standards Codification Topic

606,

“Revenue from Contracts with Customers” (“Topic

606”

). Under Topic

606,

we must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) we satisfy a performance obligation. Significant revenue has

not

been recognized in the current reporting period that results from performance obligations satisfied in previous periods. Our primary sources of revenue are derived from interest and dividends earned on loans, investment securities, and other financial instruments that are

not

within the scope of Topic

606.

We have evaluated the nature of our contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Consolidated Statements of Operation was

not

necessary. Contracts with customers are generally fully satisfied in regard to performance obligations as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Topic

606

that significantly affects the determination of the amount and timing of revenue from contracts with customers.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock Based Compensation.

Compensation cost is recognized for stock options and restricted stock awards issued to employees and directors, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

Income Tax, Policy [Policy Text Block]

Income Taxes.

The Bank recognizes income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-

not

that all or some portion of the deferred tax assets will

not

be realized.

Earnings Per Share, Policy [Policy Text Block]

Earnings Per Common Share.

Basic earnings per share represents income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Weighted average shares exclude unallocated ESOP shares. Diluted earnings per share includes additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares relate to outstanding stock options, restricted stock, and warrants and are determined using the treasury stock method.

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Note 3 - Earnings Per Share (Tables)

9 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended			Three Months Ended			Nine Months Ended		Nine Months Ended
	December 31, 2018			December 31, 2017			December 31, 2018		December 31, 2017
Net income	$	(124,683	)	$	(1,927,190	)	$	1,419,288	$	(1,124,060	)
Weighted average common shares outstanding - basic		3,209,207			3,189,056			3,209,100		3,188,949
Weighted average common shares outstanding - diluted		3,209,207			3,189,056			3,209,895		3,188,949
Income per common share - basic and diluted	$	(0.04	)	$	(0.60	)	$	0.44	$	(0.35	)
Anti-dilutive shares		184,060			118,525			183,265		118,525

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Note 4 - Investment Securities Available for Sale (Tables)

9 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

			Gross		Gross
	Amortized		unrealized		unrealized		Fair
December 31, 2018	cost		gains		losses		value
U.S. government agencies	$	744,186	$	-	$	16,850	$	727,336
Municipal bonds		12,347,163		-		705,934		11,641,229
Corporate bonds		2,000,000		-		99,496		1,900,504
Mortgage-backed securities		52,844,355		11,438		1,547,007		51,308,786
	$	67,935,704	$	11,438	$	2,369,287	$	65,577,855

			Gross		Gross
	Amortized		unrealized		unrealized		Fair
March 31, 2018	cost		gains		losses		value
U.S. government agencies	$	2,753,346	$	-	$	34,697	$	2,718,649
Municipal bonds		12,435,068		-		729,077		11,705,991
Corporate bonds		2,000,000		-		45,924		1,954,076
Mortgage-backed securities		61,078,665		12,993		2,066,238		59,025,420
	$	78,267,079	$	12,993	$	2,875,936	$	75,404,136

Investments Classified by Contractual Maturity Date [Table Text Block]

	Available for Sale
	December 31, 2018				March 31, 2018
	Amortized		Fair		Amortized		Fair
	cost		value		cost		value
Maturing
Within one year	$	-	$	-	$	2,009,160	$	1,995,625
Over one to five years		1,227,258		1,197,309		1,231,928		1,196,368
Over five to ten years		4,665,976		4,447,904		3,578,827		3,500,641
Over ten years		9,198,115		8,623,856		10,368,499		9,686,082
Mortgage-backed securities, in monthly installments		52,844,355		51,308,786		61,078,665		59,025,420
	$	67,935,704	$	65,577,855	$	78,267,079	$	75,404,136

Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value [Table Text Block]

	Less than 12 months				12 months or longer				Total
	Gross unrealized		Fair		Gross unrealized		Fair		Gross unrealized		Fair
December 31, 2018	losses		value		losses		value		losses		value
U.S. government agencies	$	-	$	-	$	16,850	$	727,336	$	16,850	$	727,336
Municipal bonds		-		-		705,934		11,641,229		705,934		11,641,229
Corporate bonds		-		-		99,496		1,900,504		99,496		1,900,504
Mortgage-backed securities		56,462		1,801,231		1,490,545		46,787,724		1,547,007		48,588,955
	$	56,462	$	1,801,231	$	2,312,825	$	61,056,793	$	2,369,287	$	62,858,024

	Less than 12 months				12 months or longer				Total
	Gross unrealized		Fair		Gross unrealized		Fair		Gross unrealized		Fair
March 31, 2018	losses		value		losses		value		losses		value
U.S. government agencies	$	21,163	$	723,023	$	13,534	$	1,995,625	$	34,697	$	2,718,648
Municipal bonds		-		-		729,077		11,705,991		729,077		11,705,991
Corporate bonds		-		-		45,924		1,954,076		45,924		1,954,076
Mortgage-backed securities		383,987		15,880,948		1,682,251		40,684,836		2,066,238		56,565,784
	$	405,150	$	16,603,971	$	2,470,786	$	56,340,528	$	2,875,936	$	72,944,499

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Note 5 - Loans Receivable and Allowance for Loan Losses (Tables)

9 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	December 31, 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)	$	83,117,881		$	66,255,260			149,373,141			40	%	$	85,248,184		$	72,749,066		$	157,997,250			41	%
Residential construction		3,430,203			-			3,430,203			1	%		5,450,827			-			5,450,827			1	%
Investor (3)		7,337,281			16,407,266			23,744,547			6	%		9,275,031			17,460,809			26,735,840			7	%
Commercial		105,755,786			9,289,784			115,045,570			31	%		100,403,769			11,762,485			112,166,254			29	%
Commercial construction		1,543,313			1,059,217			2,602,530			1	%		5,763,784			1,352,019			7,115,803			2	%
Total real estate loans		201,184,464			93,011,527			294,195,991			80	%		206,141,595			103,324,379			309,465,974			80	%
Commercial business (4)		35,276,493			1,706,509			36,983,002			10	%		38,302,739			1,841,226			40,143,965			10	%
Home equity loans		15,077,068			4,941,051			20,018,119			5	%		13,956,327			6,039,462			19,995,789			5	%
Consumer (5)		16,329,237			699,371			17,028,608			5	%		18,849,448			766,063			19,615,511			5	%
Total Loans		267,867,262			100,358,458			368,225,720			100	%		277,250,109			111,971,130			389,221,239			100	%
Net deferred loan origination fees and costs		(178,056	)		-			(178,056	)					(212,746	)		-			(212,746	)
Loan premium (discount)		1,708,908			(299,956	)		1,408,952						1,922,428			(510,036	)		1,412,392
	$	269,398,114		$	100,058,502		$	369,456,616					$	278,959,791		$	111,461,094		$	390,420,885

Allowance for Credit Losses on Financing Receivables [Table Text Block]

Three Months Ended December 31, 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	$	665,676		$	314,571		$	1,312,441		$	12,390		$	532,611		$	72,831	$	98,676		$	21,733	$	3,030,929
Charge-offs		-			(32,909	)		-			-			(133,729	)		-		-			-		(166,638	)
Recoveries		41,059			33,609			-			-			10,880			-		1,267			-		86,815
Provision for credit losses		(24,321	)		(36,632	)		(31,557	)		(4,090	)		160,895			1,555		(4,214	)		18,364		80,000
Ending balance	$	682,414		$	278,639		$	1,280,884		$	8,300		$	570,657		$	74,386	$	95,729		$	40,097	$	3,031,106

Nine Months Ended December 31, 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	)		(41,022	)		(31,320	)		-			(208,729	)		-		(2,465	)		-		(297,305	)
Recoveries		43,301			33,675			31,320			-			10,880			-		4,836			-		124,012
Provision for credit losses		44,159			234,296			27,501			(25,130	)		94,524			4,927		(37,878	)		40,097		382,496
Ending balance	$	682,414		$	278,639		$	1,280,884		$	8,300		$	570,657		$	74,386	$	95,729		$	40,097	$	3,031,106
Allowance allocated to:
Legacy Loans:
Individually evaluated for impairment	$	253,811		$	-		$	-		$	-		$	-		$	-	$	-		$	-	$	253,811
Collectively evaluated for impairment		276,937			50,593			1,241,051			7,254			566,217			59,952		95,516			40,097		2,337,617
Acquired Loans:
Individually evaluated for impairment	$	-		$	-		$	-		$	-		$	-		$	-	$	-		$	-	$	-
Collectively evaluated for impairment		151,666			228,046			39,833			1,046			4,440			14,434		213			-		439,678

Three Months Ended December 31, 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	$	528,288	$	52,255		$	1,360,433		$	12,074	$	327,130	$	62,570	$	128,241		$	-	$	2,470,991
Charge-offs		-		(111,360	)		(100,236	)		-		-		-		-			-		(211,596	)
Recoveries		3,937		-			-			-		171		-		1,034			-		5,142
Provision for credit losses		35,875		103,790			148,707			11,100		45,987		619		(1,078	)		-		345,000
Ending balance	$	568,100	$	44,685		$	1,408,904		$	23,174	$	373,288	$	63,189	$	128,197		$	-	$	2,609,537

Nine Months Ended December 31, 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	)		(126,482	)		(100,236	)		-		-		-			(486	)		-		(236,111	)
Recoveries		3,937			18,129			-			-		551		-			3,216			-		25,833
Provision for credit losses		19,531			117,763			133,246			14,143		223,276		(6,882	)		123,923			-		625,000
Ending balance	$	568,100		$	44,685		$	1,408,904		$	23,174	$	373,288	$	63,189		$	128,197		$	-	$	2,609,537
Allowance allocated to:
Legacy Loans:
Individually evaluated for impairment	$	272,707		$	-		$	-		$	-	$	-	$	-		$	-		$	-	$	272,707
Collectively evaluated for impairment		295,393			44,685			1,408,904			23,174		373,288		63,189			128,197			-		2,336,830
Acquired Loans:
Individually evaluated for impairment	$	-		$	-		$	-		$	-	$	-	$	-		$	-		$	-	$	-
Collectively evaluated for impairment		-			-			-			-		-		-			-			-		-

December 31, 2018	Residential Real Estate		Investor Real Estate		Commercial Real Estate		Commercial Construction		Commercial Business		Home Equity		Consumer		Total
Legacy Loans:
Individually evaluated for impairment	$	1,773,176	$	31,752	$	4,139,177	$	-	$	743,160	$	6,785	$	91,662	$	6,785,712
Collectively evaluated for impairment		84,774,908		7,305,529		101,616,609		1,543,313		34,533,333		15,070,283		16,237,575		261,081,550
Ending balance	$	86,548,084	$	7,337,281	$	105,755,786	$	1,543,313	$	35,276,493	$	15,077,068	$	16,329,237	$	267,867,262
Acquired Loans:
Individually evaluated for impairment	$	440,242	$	261,659	$	-	$	-	$	-	$	164	$	55,492	$	757,557
Collectively evaluated for impairment		65,815,018		16,145,606		9,289,784		1,059,217		1,706,509		4,940,887		643,880		99,600,901
Ending balance	$	66,255,260	$	16,407,265	$	9,289,784	$	1,059,217	$	1,706,509	$	4,941,051	$	699,372	$	100,358,458

December 31, 2017	Residential Real Estate		Investor Real Estate		Commercial Real Estate		Commercial Construction		Commercial Business		Home Equity		Consumer		Total
Legacy Loans:
Individually evaluated for impairment	$	1,697,585	$	121,514	$	4,500,043	$	-	$	905,178	$	21,579	$	-	$	7,245,899
Collectively evaluated for impairment		85,532,435		7,254,483		96,357,409		3,995,441		38,083,051		13,780,512		20,075,548		265,078,879
Ending balance	$	87,230,020	$	7,375,997	$	100,857,452	$	3,995,441	$	38,988,229	$	13,802,091	$	20,075,548	$	272,324,778
Acquired Loans:
Individually evaluated for impairment	$	1,061,049	$	579,172	$	199,920	$	-	$	-	$	-	$	56,708	$	1,896,849
Collectively evaluated for impairment		73,640,662		17,629,734		11,960,924		856,970		1,928,232		6,874,136		728,392		113,619,050
Ending balance	$	74,701,711	$	18,208,906	$	12,160,844	$	856,970	$	1,928,232	$	6,874,136	$	785,100	$	115,515,899

Past Due Financing Receivables [Table Text Block]

	December 31, 2018						March 31, 2018
	Legacy		Acquired		Total		Legacy		Acquired		Total
Current	$	262,125,497	$	99,620,976	$	361,746,473	$	270,807,643	$	109,972,473	$	380,780,116
Accruing past due loans:
30-59 days past due:
Real estate loans:
Residential		71,020		18,488		89,508		63,618		689,364		752,982
Investor		-		29,357		29,357		-		-		-
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		120,418		-		120,418		135,502		-		135,502
Home equity loans		-		68		68		-		-		-
Consumer		23,357		25,753		49,110		148,876		-		148,876
Total 30-59 days past due		214,795		73,666		288,461		347,996		689,364		1,037,360
60-89 days past due:
Real estate loans:
Residential		72,377		121,223		193,600		70,291		-		70,291
Investor		-		-		-		-		-		-
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		460,762		-		460,762		134,524		-		134,524
Home equity loans		-		-		-		-		-		-
Consumer		5,233		-		5,233		28,300		-		28,300
Total 60-89 days past due		538,372		121,223		659,595		233,115		-		233,115
90 or more days past due:
Real estate loans:
Residential		-		-		-		-		-		-
Investor		222,485		113,029		335,514		734,818		471,423		1,206,241
Commercial		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total 90 or more days past due		222,485		113,029		335,514		734,818		471,423		1,206,241
Total accruing past due loans		975,652		307,918		1,283,570		1,315,929		1,160,787		2,476,716
Non-accruing loans:
Real estate loans:
Residential		365,610		300,530		666,140		526,584		338,060		864,644
Investor		31,752		128,937		160,689		60,949		300,872		361,821
Commercial		4,139,177		-		4,139,177		4,356,264		198,938		4,555,202
Commercial construction		-		-		-		-		-		-
Commercial business		143,145		-		143,145		165,285		-		165,285
Home equity loans		-		97		97		12,605		-		12,605
Consumer		86,429		-		86,429		4,850		-		4,850
Non-accruing loans:		4,766,113		429,564		5,195,677		5,126,537		837,870		5,964,407
Total Loans	$	267,867,262	$	100,358,458	$	368,225,720	$	277,250,109	$	111,971,130	$	389,221,239
Nonaccrual interest not accrued:
Real estate loans:
Residential	$	2,289	$	7,237	$	9,526	$	8,250	$	53,120	$	61,370
Investor		2,066		6,490		8,556		8,513		15,604		24,117
Commercial		252,381		-		252,381		294,619		-		294,619
Commercial construction		-		-		-		-		-		-
Commercial business		8,796		-		8,796		12,891		-		12,891
Home equity loans		-		-		-		436		-		436
Consumer		1,459		-		1,459		385		-		385
Total nonaccrual interest not accrued	$	266,991	$	13,727	$	280,718	$	325,094	$	68,724	$	393,818

Impaired Financing Receivables [Table Text Block]

	Impaired Loans at December 31, 2018						Three months ended December 31, 2018				Nine months ended December 31, 2018
	Unpaid
	Contractual						Average		Interest		Average		Interest
	Principal		Recorded		Related		Recorded		Income		Recorded		Income
	Balance		Investment		Allowance		Investment		Recognized		Investment		Recognized
Legacy:
With no related allowance recorded:
Real estate loans:
Residential	$	706,098	$	538,723	$	-	$	558,414	$	3,719	$	538,965	$	7,666
Investor		-		-		-		-		-		-		-
Commercial		6,375,413		4,139,177		-		4,309,168		-		4,280,325		53,278
Commercial construction
Commercial business		1,369,695		743,160		-		863,260		25,781		925,694		70,558
Home equity loans		33,287		6,785		-		7,036		1,910		7,293		2,043
Consumer		91,745		91,662		-		92,474		2,542		92,822		2,542
With an allowance recorded:
Real estate loans:
Residential	$	1,248,874	$	1,234,453	$	253,811	$	1,237,197	$	12,337	$	1,246,235	$	37,255
Investor		57,831		31,752		-		32,427		1,108		32,291		1,108
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total legacy impaired		9,882,943		6,785,712		253,811		7,099,976		47,397		7,123,625		174,450
Acquired (1):
With no related allowance recorded:
Real estate loans:
Residential		456,272		440,242		-		439,495		5,457		425,256		7,179
Investor		405,538		261,659		-		263,562		4,722		246,751		13,859
Commercial
Commercial construction
Commercial business
Home equity loans		37,858		164		-		238		1,851		79		2,501
Consumer		88,545		55,492		-		56,249		1,401		57,957		3,949
With an allowance recorded:
Real estate loans:
Residential		-		-		-		-		-		-		-
Investor		-		-		-		-		-		-		-
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total acquired impaired		988,213		757,557		-		759,544		13,431		730,043		27,488
Total impaired	$	10,871,156	$	7,543,269	$	253,811	$	7,859,520	$	60,828	$	7,853,668	$	201,938

	Impaired Loans at December 31, 2017						Three months ended December 31, 2017				Nine months ended December 31, 2017
	Unpaid
	Contractual						Average		Interest		Average		Interest
	Principal		Recorded		Related		Recorded		Income		Recorded		Income
	Balance		Investment		Allowance		Investment		Recognized		Investment		Recognized
Legacy:
With no related allowance recorded:
Real estate loans:
Residential	$	513,736	$	371,312	$	-	$	376,225	$	280	$	387,772	$	1,451
Investor		127,420		121,514				122,576		-		123,362		3,772
Commercial		6,487,088		4,500,043		-		4,689,502		-		4,703,598		1,077
Commercial construction		-		-		-		-		-		-		-
Commercial business		1,303,000		905,178		-		937,594		24,038		894,330		75,926
Home equity loans		48,218		21,579		-		22,072		76		23,100		316
Consumer		-		-		-		-		-		-		-
With an allowance recorded:
Real estate loans:
Residential		1,354,169		1,326,273		272,707		1,330,015		13,248		1,341,584		39,333
Investor		-		-		-		-		-		-		-
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total legacy impaired		9,833,631		7,245,899		272,707		7,477,984		37,642		7,473,746		121,875
Acquired (1):
With no related allowance recorded:
Real estate loans:
Residential		1,211,254		1,061,049		-		1,063,445		4,247		1,077,738		26,087
Investor		687,849		579,172		-		663,538		2,893		697,174		34,582
Commercial		249,920		199,920		-		200,589		1,888		202,263		5,700
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		42,583		-		-		-		-		-		600
Consumer		99,349		56,708		-		58,084		1,338		62,234		4,464
With an allowance recorded:
Real estate loans:
Residential		-		-		-		-		-		-		-
Investor		-		-		-		-		-		-		-
Commercial		-		-		-		-		-		-		-
Commercial construction		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Home equity loans		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total acquired impaired		2,290,955		1,896,849		-		1,985,656		10,366		2,039,409		71,433
Total impaired	$	12,124,586	$	9,142,748	$	272,707	$	9,463,640	$	48,008	$	9,513,155	$	193,308

	Impaired Loans at March 31, 2018						For the Year Ended March 31, 2018
	Unpaid
	Contractual						Average		Interest
	Principal		Recorded		Related		Recorded		Income
	Balance		Investment		Allowance		Investment		Recognized
Legacy:
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

Certain Loans Acquired In Transfer not Accounted for as Debt Securities Changes in Recorded Investment Schedule [Table Text Block]

	December 31, 2018			December 31, 2017
Recorded investment at beginning of period	$	1,021,424		$	1,341,935
Accretion		2,505			25,964
Reductions for payments		(649,168	)		(324,806	)
Recorded investment at end of period	$	374,761		$	1,043,093
Oustanding principal balance at end of period	$	470,368		$	1,297,471

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Table Text Block]

	December 31, 2018			December 31, 2017
Accretable yield, beginning of period	$	31,895		$	59,639
Accretion		(2,505	)		(25,964	)
Reclassification from nonaccretable difference		-			-
Accretable yield, end of period	$	29,390		$	33,675

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	Number of
December 31, 2018	contracts		Performing		Nonperforming		Total
Real estate loans:
Residential		16	$	1,295,469	$	226,119	$	1,521,588
Investor		-		-		-		-
Commercial		2		-		1,195,421		1,195,421
Commercial construction		-		-		-		-
Commercial business		1		600,016		-		600,016
Home equity loans		-		-		-		-
Consumer		-		-		-		-
		19	$	1,895,485	$	1,421,540	$	3,317,025

	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

Schedule Of Modified Troubled Debt Restructurings On Financing Receivables [Table Text Block]

	Loans Modified as a TDR for the Three Months Ended
	December 31, 2018				December 31, 2017
	Number of		Outstanding recorded		Number of		Outstanding recorded
Troubled Debt Restructurings	contracts		investment		contracts		investment
Real estate loans:
Residential		-	$	-		2	$	50,432

	Loans Modified as a TDR for the nine months ended
	December 31, 2018				December 31, 2017
	Number of		Outstanding recorded		Number of		Outstanding recorded
Troubled Debt Restructurings	contracts		investment		contracts		investment
Real estate loans:
One-to four-family		1	$	20,565		3	$	52,363

Financing Receivable Credit Quality Indicators [Table Text Block]

	December 31, 2018						March 31, 2018
	LEGACY		ACQUIRED		TOTAL		LEGACY		ACQUIRED		TOTAL
Risk Rating:
Rating - Pass:
Real estate loans:
Residential	$	83,743,323	$	64,856,380	$	148,599,703	$	87,863,805	$	70,901,293	$	158,765,098
Investor		7,305,529		15,873,106		23,178,635		9,214,082		16,719,346		25,933,428
Commercial		101,616,609		9,289,784		110,906,393		92,955,370		11,563,547		104,518,917
Commercial construction		1,543,313		1,059,217		2,602,530		5,763,784		1,352,019		7,115,803
Commercial Business		34,835,870		1,706,509		36,542,379		37,978,293		1,841,226		39,819,519
Home Equity		15,070,123		4,805,766		19,875,889		13,935,732		5,928,787		19,864,519
Consumer		16,227,625		669,618		16,897,243		18,733,489		733,669		19,467,158
Total Pass		260,342,392		98,260,380		358,602,772		266,444,555		109,039,887		375,484,442
Rating - Special Mention:
Real estate loans:
Residential		2,327,412		958,638		3,286,050		2,365,652		925,521		3,291,173
Investor		-		273,806		273,806		-		297,209		297,209
Commercial		-		-		-		3,092,135		-		3,092,135
Commercial construction		-		-		-		-		-		-
Commercial Business		297,478		-		297,478		134,524		-		134,524
Home Equity		-		135,121		135,121		-		110,675		110,675
Consumer		9,950		-		9,950		96,474		-		96,474
Total Special Mention		2,634,840		1,367,565		4,002,405		5,688,785		1,333,405		7,022,190
Rating - Substandard:
Real estate loans:
Residential		477,349		440,242		917,591		469,554		922,252		1,391,806
Investor		31,752		260,354		292,106		60,949		444,254		505,203
Commercial		4,139,177		-		4,139,177		4,356,264		198,938		4,555,202
Commercial construction		-		-		-		-		-		-
Commercial Business		143,145		-		143,145		189,922		-		189,922
Home Equity		6,945		164		7,109		20,595		-		20,595
Consumer		91,662		29,753		121,415		19,485		32,394		51,879
Total - Substandard		4,890,030		730,513		5,620,543		5,116,769		1,597,838		6,714,607
Rating - Doubtful		-		-		-		-		-		-
Rating - Loss		-		-		-		-		-		-
TOTAL LOANS	$	267,867,262	$	100,358,458	$	368,225,720	$	277,250,109	$	111,971,130	$	389,221,239

Outstanding Commitments And Unused Lines Of Credit [Table Text Block]

	December 31,		March 31,
Outstanding Commitment and Used Lines of Credit	2018		2018
Unused commercial lines of credit	$	13,004,510	$	9,187,810
Unused home equity lines of credit		23,263,860		22,560,376
Unused consumer lines of credit		26,770		29,331
Residential construction loan commitments		6,934,369		4,234,076
Commercial construction loan commitments		2,678,900		8,968,416
Home equity loan commitments		200,000		389,600
Commercial loan commitments		3,671,000		5,125,000
Standby letter of credit		766,783		250,224

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Note 6 - Goodwill and Other Intangible Asset (Tables)

9 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Intangible Assets and Goodwill [Table Text Block]

			Core deposit
	Goodwill		intangible
Balance April 1, 2017	$	8,563,530	$	739,298
Amortization		-		(94,548	)
Balance December 31, 2017		8,563,530		644,750

			Core deposit
	Goodwill		intangible
Balance April 1, 2018	$	8,563,530	$	613,234
Amortization		-		(94,549	)
Balance December 31, 2018	$	8,563,530	$	518,685

Finite-lived Intangible Assets Amortization Expense [Table Text Block]

Year ending March 31,	Amount
2019		31,519
2020		123,737
2021		98,070
2022		98,070
2023		98,070
2024		64,177
2025		5,042
	$	518,685

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Note 7 - Derivative - Interest Rate Swap Agreement (Tables)

9 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block]

	December 31, 2018				March 31, 2018
	Notional				Notional
	Amount		Fair Value		Amount		Fair Value
Included in assets:
Interest rate swaps related  to FHLB Advances	$	11,550,000	$	123,118	$	11,550,000	$	217,464

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Three Month and Period Ended December 31, 2018								Three Month and Period Ended December 31, 2017
	Amount of Gain (Loss) Recognized in OCI (Effective Portion)			Amount of Gain (Loss) Reclassified from OCI to Interest Income		Amount of Gain (Loss) Recognized in Other Noninterest Revenue (Ineffective Portion)			Amount of Gain (Loss) Recognized in OCI (Effective Portion)		Amount of Gain (Loss) Reclassified from OCI to Interest Income		Amount of Gain (Loss) Recognized in Other Noninterest Revenue (Ineffective Portion)
Interest Rate
Contract	$	(287,116	)	$	-	$	(1,996	)	$	122,388	$	-	$	(5,445	)

	Nine Month and Period Ended December 31, 2018								Nine Month and Period Ended December 31, 2017
	Amount of Gain (Loss) Recognized in OCI (Effective Portion)			Amount of Gain (Loss) Reclassified from OCI to Interest Income		Amount of Gain (Loss) Recognized in Other Noninterest Revenue (Ineffective Portion)			Amount of Gain (Loss) Recognized in OCI (Effective Portion)		Amount of Gain (Loss) Reclassified from OCI to Interest Income		Amount of Gain (Loss) Recognized in Other Noninterest Revenue (Ineffective Portion)
Interest Rate
Contract	$	(93,271	)	$	-	$	(1,075	)	$	22,784	$	-	$	(9,124	)

Fair Value Hedging [Member]

Notes Tables

Schedule of Derivative Instruments [Table Text Block]

	December 31, 2018						March 31, 2018
	Notional Amount		Principal Amount		Fair Value		Notional Amount		Principal Amount		Fair Value
Included in Loans and Leases:
Commercial real estate loan	$	-	$	3,027,702	$	2,984,595	$	-	$	3,091,892	$	3,022,744
Included in Other Assets:
Interest Rate Swap	$	3,027,702	$	-	$	43,107	$	3,091,892		-	$	69,148

Cash Flow Hedging [Member]

Notes Tables

Schedule of Derivative Instruments [Table Text Block]

	Notional		Effective		Pay Fixed			Receive
Interest Rate Swap	Amount		Start Date	Maturity Date	Rate			Floating Rate
FHLB Advance Swap 1	$	1,850,000	March 9, 2017	March 9, 2022		2.24	%	3-Month LIBOR
FHLB Advance Swap 2		1,850,000	March 9, 2017	March 9, 2024		2.41	%	3-Month LIBOR
FHLB Advance Swap 3		1,850,000	March 9, 2017	March 9, 2027		2.57	%	3-Month LIBOR
FHLB Advance Swap 4		2,000,000	March 29, 2017	March 29, 2022		2.08	%	3-Month LIBOR
FHLB Advance Swap 5		2,000,000	March 29, 2017	March 29, 2024		2.24	%	3-Month LIBOR
FHLB Advance Swap 6		2,000,000	March 29, 2017	March 29, 2027		2.40	%	3-Month LIBOR
Total Notional Amount	$	11,550,000

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Note 8 - Deposits (Tables)

9 Months Ended

Dec. 31, 2018

Notes Tables

Summary of Deposits [Table Text Block]

	December 31, 2018					March 31, 2018
	Amount		% of Total			Amount		% of Total
Savings	$	41,548,268		10.8	%	$	42,499,381		10.6	%
Noninterest-bearing checking		27,365,942		7.1	%		29,557,943		7.3	%
Interest-bearing checking		28,478,231		7.4	%		27,219,286		6.7	%
Money market accounts		48,128,831		12.5	%		58,466,228		14.4	%
Time deposits		238,448,636		62.1	%		246,988,613		61.0	%
	$	383,969,908		100.0	%	$	404,731,451		100.0	%
Premium on deposits asssumed		201,034					411,524
Total deposits	$	384,170,942				$	405,142,975

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Note 9 - Lines of Credit and Federal Home Loan Bank Advances (Tables)

9 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	December 31, 2018							March 31, 2018
	Amount		Rate			Maturity Date		Amount		Rate			Maturity Date
FHLB advance (1)	$	5,550,000		2.57	%	3/11/2019		$	5,550,000		1.84	%	6/11/2018
FHLB advance (2)		6,000,000		2.58	%	3/29/2019			6,000,000		1.90	%	6/29/2018
FHLB advance		3,000,000		2.71	%	8/26/2019			1,000,000		2.60	%	7/2/2018
FHLB advance		3,000,000		1.59	%	8/26/2019			1,000,000		3.05	%	7/3/2018
FHLB advance		1,500,000		1.95	%	11/25/2019			5,000,000		3.94	%	7/23/2018
FHLB advance		3,000,000		2.31	%	2/3/2020			1,000,000		1.74	%	7/31/2018
FHLB advance		1,000,000		2.86	%	8/4/2020			1,000,000		1.40	%	8/21/2018
FHLB advance		2,000,000		2.56	%	8/27/2020			4,000,000		1.94	%	8/27/2018
FHLB advance		1,000,000		2.15	%	11/30/2020			3,000,000		1.41	%	8/27/2018
FHLB advance		2,000,000		2.28	%	12/28/2020			5,000,000		3.38	%	9/19/2018
FHLB advance		2,000,000		2.49	%	2/1/2021			1,000,000		2.60	%	10/2/2018
FHLB advance		3,000,000		2.93	%	7/26/2021			1,000,000		1.95	%	12/31/2018
FHLB advance		2,000,000		3.01	%	8/4/2021			3,000,000		1.38	%	7/31/2019
FHLB advance		1,000,000		2.88	%	8/23/2021			3,000,000		1.96	%	8/26/2019
FHLB advance		3,000,000		1.48	%	8/25/2021			3,000,000		1.59	%	8/26/2019
FHLB advance		2,000,000		2.68	%	8/27/2021			3,000,000		1.42	%	8/26/2019
FHLB advance		3,000,000		2.79	%	8/29/2022			1,500,000		1.95	%	11/25/2019
FHLB advance		2,000,000		3.14	%	9/19/2022			1,500,000		1.78	%	11/27/2019
FHLB advance		3,000,000		2.70	%	8/28/2023			3,000,000		2.31	%	2/3/2020
FHLB advance		2,000,000		3.20	%	9/19/2023			1,000,000		2.15	%	11/30/2020
FHLB advance		-		-			-		2,000,000		2.28	%	12/28/2020
FHLB advance		-		-			-		2,000,000		2.49	%	2/1/2021
FHLB advance		-		-			-		3,000,000		1.48	%	8/25/2021
		51,050,000							60,550,000
Premium on FHLB advances assumed		-							122,140
Total borrowings	$	51,050,000						$	60,672,140

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Note 10 - Regulatory Capital Ratios (Tables)

9 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

						Minimum Capital					Minimum Capital					To be well
	Actual					Required - Basel III					Required - Basel III					capitalized (1)
						Phase-In Schedule					Fully Phased-In
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2018
Common equity tier 1 capital (to risk-weighted assets)
Hamilton Bank	$	43,688		12.55	%	$	22,186		6.375	%	$	24,361		7.00	%	$	22,621		6.50	%
Hamilton Bancorp		49,329		14.12	%		22,277		6.375	%		24,461		7.00	%		22,714		6.50	%
Total risk-based capital (to risk-weighted assets)
Hamilton Bank		46,776		13.44	%		34,366		9.875	%		36,541		10.50	%		34,801		10.00	%
Hamilton Bancorp		52,417		15.00	%		34,508		9.875	%		36,692		10.50	%		34,945		10.00	%
Tier 1 capital (to risk-weighted assets)
Hamilton Bank		43,688		12.55	%		27,406		7.875	%		29,581		8.50	%		27,841		8.00	%
Hamilton Bancorp		49,329		14.12	%		27,519		7.875	%		27,703		8.50	%		27,956		8.00	%
Tier 1 capital (to adjusted total assets)
Hamilton Bank		43,688		8.91	%		19,619		4.000	%		19,619		4.00	%		24,523		5.00	%
Hamilton Bancorp		49,329		10.00	%		19,732		4.000	%		19,732		4.00	%		24,665		5.00	%
March 31, 2018
Common equity tier 1 capital (to risk-weighted assets)
Hamilton Bank	$	39,126		10.61	%	$	23,498		6.375	%	$	25,802		7.00	%	$	23,959		6.50	%
Hamilton Bancorp		47,308		12.79	%		23,582		6.375	%		25,894		7.00	%		24,044		6.50	%
Total risk-based capital (to risk-weighted assets)
Hamilton Bank		41,998		11.39	%		36,399		9.875	%		38,703		10.50	%		36,860		10.00	%
Hamilton Bancorp		50,180		13.57	%		36,529		9.875	%		38,841		10.50	%		36,992		10.00	%
Tier 1 capital (to risk-weighted assets)
Hamilton Bank		39,126		10.61	%		29,027		7.875	%		31,331		8.50	%		29,488		8.00	%
Hamilton Bancorp		47,308		12.79	%		29,131		7.875	%		31,443		8.50	%		29,593		8.00	%
Tier 1 capital (to adjusted total assets)
Hamilton Bank		39,126		7.64	%		20,497		4.000	%		20,497		4.00	%		25,621		5.00	%
Hamilton Bancorp		47,308		9.15	%		20,674		4.000	%		20,674		4.00	%		25,843		5.00	%
(1) - Under prompt corrective action

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Note 11 - Stock Based Compensation (Tables)

9 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

Grant Date	Number of Options Granted		Risk Free Interest Rate			Expected Term (in years)		Expected Stock Price Volatility			Dividend Yield			Fair Value of Options Granted
February 3, 2014		225,150		2.07	%		7.0		27.30	%		0.00	%	$	4.65
November 1, 2016		19,000		1.61	%		7.0		27.17	%		0.00	%	$	4.35
February 3, 2017		3,700		2.27	%		7.0		27.26	%		0.00	%	$	5.18
April 1, 2018		20,354		2.67	%		7.0		19.61	%		0.00	%	$	4.05

Share-based Compensation, Stock Options, Activity [Table Text Block]

December 31, 2018:	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Outstanding at April 1, 2018		242,350	$	13.84		6.1
Granted		20,354		14.25		9.3
Exercised		-		-		-
Forfeited, exchanged or expired		-		-		-
Outstanding at December 31, 2018		262,704	$	13.87		5.6
Vested at December 31, 2018		184,060	$	13.84		5.2

March 31, 2018:	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Outstanding at April 1, 2017		242,350	$	13.84		7.1
Granted		-		-		-
Exercised		-		-		-
Forfeited, exchanged or expired		-		-		-
Outstanding at March 31, 2018		242,350	$	13.84		6.1
Vested at March 31, 2018		180,260	$	13.84		5.8

Schedule of Nonvested Share Activity [Table Text Block]

				Weighted-Average
December 31, 2018:	Shares			Fair Value
Nonvested shares at April 1, 2018		19,440		$	13.74
Granted		8,801			14.25
Vested		(380	)		13.61
Forfeited		-			-
Nonvested shares at December 31, 2018		27,861		$	13.90
Fair Value of shares vested at December 31, 2018	$	901,276

				Weighted-Average
March 31, 2018:	Shares			Fair Value
Nonvested shares at April 1, 2017		36,220		$	13.76
Granted		-			-
Vested		(16,780	)		13.78
Forfeited		-			-
Nonvested shares at March 31, 2018		19,440		$	13.74
Fair Value of shares vested at March 31, 2018	$	918,555

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Note 12 - Fair Value Measurements (Tables)

9 Months Ended

Dec. 31, 2018

Notes Tables

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	Level 1		Level 2		Level 3
December 31, 2018	inputs		inputs		inputs		Total
U.S. government agencies	$	-	$	727,336	$	-	$	727,336
Municipal bonds		-		11,641,229		-		11,641,229
Corporate bonds				-		1,900,504		1,900,504
Mortgage-backed securities		-		51,308,786		-		51,308,786
Total investment securities available for sale	$	-	$	63,677,351	$	1,900,504	$	65,577,855

	Level 1		Level 2		Level 3
March 31, 2018	inputs		inputs		inputs		Total
U.S. government agencies	$	-	$	2,718,649	$	-	$	2,718,649
Municipal bonds		-		11,705,991		-		11,705,991
Corporate bonds				-		1,954,076		1,954,076
Mortgage-backed securities		-		59,025,404		16		59,025,420
Total investment securities available for sale	$	-	$	73,450,044	$	1,954,092	$	75,404,136

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

	Level 1		Level 2		Level 3
December 31, 2018	inputs		inputs		inputs		Total
Loans - Commercial real estate loan	$	-	$	2,984,595	$	-	$	2,984,595
Derivative - Interest rate swap designated as fair value hedge		-		43,107		-		43,107
Derivatives - Interest rate swaps designated as cash flow hedge		-		123,118		-		123,118

	Level 1		Level 2		Level 3
March 31, 2018	inputs		inputs		inputs		Total
Loans - Commercial real estate loan	$	-	$	3,022,744	$	-	$	3,022,744
Derivative - Interest rate swap designated as fair value hedge		-		69,148		-		69,148
Derivatives - Interest rate swaps designated as cash flow hedge		-		217,464		-		217,464

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

			Valuation	Unobservable	Range of
Description	Fair Value		Methodology	Inputs	Inputs
Investment securities	$	1,900,504	3rd party valuation	Discount to reflect current market conditions	0.00%	-	10.00%

			Valuation	Unobservable	Range of
Description	Fair Value		Methodology	Inputs	Inputs
Impaired loans, net of allowance	$	7,289,458	Appraised value	Discount to reflect current market conditions	0.00%	-	25.00%
			Discounted cash flows	Discount rates	2.63%	-	7.25%
Foreclosed real estate	$	457,778	Appraised value	Discount to reflect current market conditions	0.00%	-	25.00%

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Nine Months			Fiscal Year
	Ended			Ended
	December 31, 2018			March 31, 2018
Balance, beginning of year	$	1,954,092		$	1,930,786
Transfers in:
Corporate bonds		-			1,954,076
Mortgage-backed securities		-			16
Municipal bonds		-			-
Transfers out:
Corporate bonds		-			-
Mortgage-backed securities		16			2,473
Municipal bonds		-			1,928,313
Change in valuation		(53,572	)		-
Balance, end of year	$	1,900,504		$	1,954,092

Fair Value Measurements, Nonrecurring [Table Text Block]

	Level 1		Level 2		Level 3
December 31, 2018	inputs		inputs		inputs		Total
Impaired loans	$	-	$	-	$	7,289,458	$	7,289,458
Foreclosed real estate		-		-		457,778		457,778

	Level 1		Level 2		Level 3
March 31, 2018	inputs		inputs		inputs		Total
Impaired loans	$	-	$	-	$	8,454,083	$	8,454,083
Foreclosed real estate		-		-		457,778		457,778

Summar yOf Beginning And Ending Balance Of Foreclosed Real Estate [Table Text Block]

	Nine Months			Fiscal Year
	Ended			Ended
	December 31, 2018			March 31, 2018
Balance at beginning of period	$	457,778		$	503,094
Transfer to foreclosed real estate		150,052			23,834
Write-down of foreclosed real estate		-			(31,955	)
Proceeds from sale of foreclosed real estate		(145,820	)		(35,896	)
Loss on sale of foreclosed real estate		(4,232	)		(1,299	)
Balance at end of period	$	457,778		$	457,778

Fair Value, by Balance Sheet Grouping [Table Text Block]

	December 31, 2018				March 31, 2018
	Carrying		Fair		Carrying		Fair
	amount		value		amount		value
Financial assets
Level 1 inputs
Cash and cash equivalents	$	26,547,840	$	26,547,840	$	23,368,415	$	23,368,415
Level 2 inputs
Federal Home Loan Bank stock		2,676,200		2,676,200		3,122,400		3,122,400
Bank-owned life insurance		17,799,920		17,799,920		17,455,850		17,455,850
Level 3 inputs
Certificates of deposit held as investment		499,121		485,928		499,189		492,751
Loans receivable, net of unearned income		366,428,914		352,433,858		387,328,993		385,818,260
Financial liabilities
Level 2 inputs
Deposits		384,170,942		385,031,487		405,142,975		405,026,957
Advance payments by borrowers for  taxes and insurance		1,059,677		1,059,677		1,962,665		1,962,665
Borrowings		51,050,000		50,394,636		60,672,140		60,494,922

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Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details Textual)				9 Months Ended
	May 13, 2016 USD ($) $ / shares	Sep. 11, 2015 USD ($)	Oct. 10, 2012 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) shares	Jun. 30, 2019 USD ($) $ / shares shares	Mar. 31, 2018 shares	Apr. 15, 2015 $ / shares
Common Stock, Shares, Issued, Total | shares			3,703,000	3,416,414		3,407,613
Share Price | $ / shares			$ 10
Proceeds from Issuance of Common Stock			$ 35,580,000
Noninterest Expense Offering Cost			$ 1,450,000
Employee Stock Option Plan, Subscribed Percentage			8.00%
Employee Stock Ownership Plan (ESOP), Number of Allocated Shares | shares			296,240
Number of Branches				7
Allowance for Loan and Lease Losses, Loans Acquired				$ 294,000
Core Deposits [Member]
Finite-Lived Intangible Asset, Useful Life				8 years
Merger With Orrstown Financial Services [Member] | Scenario, Forecast [Member]
Merger Termination Fee Amount					$ 2,200,000
Merger With Orrstown Financial Services [Member] | Orrstown Financial Services, Inc. [Member] | Scenario, Forecast [Member]
Business Acquisition, Share Price | $ / shares					$ 4.10
Business Acquisition, Equity Interest Issued or Issuable, Shares Available for Issuance Upon Conversion of Acquiree Stock | shares					0.54
Fraternity Community Bancorp, Inc. [Member]
Business Acquisition, Share Price | $ / shares	$ 19.25
Payments to Acquire Businesses, Gross	$ 25,700,000
Fairmount Bancorp, Inc. [Member]
Business Acquisition, Share Price | $ / shares							$ 30
Business Combination, Consideration Transferred, Total		$ 15,400,000

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Note 3 - Earnings Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Net income	$ (124,683)	$ (1,927,190)	$ 1,419,288	$ (1,124,060)
Weighted average common shares outstanding - basic (in shares)	3,209,207	3,189,056	3,209,100	3,188,949
Weighted average common shares outstanding - diluted (in shares)	3,209,207	3,189,056	3,209,895	3,188,949
Income per common share - basic and diluted (in dollars per share)	$ (0.04)	$ (0.60)	$ 0.44	$ (0.35)
Anti-dilutive shares (in shares)	184,060	118,525	183,265	118,525

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Note 4 - Investment Securities Available for Sale (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Proceeds from Sale of Debt Securities, Available-for-sale	$ 0	$ 7,364,939	$ 0	$ 11,608,699
Gain on Sale of Investments		33,747		57,099
Loss on Sale of Investments		$ 46,483		$ 59,455
Debt Securities, Available-for-sale, Amortized Cost, Total	67,935,704		67,935,704		$ 78,267,079
Debt Securities, Available-for-sale, Total	65,577,855		65,577,855		75,404,136
Pledged Financial Instruments, Not Separately Reported, Securities, Total	744,186		744,186		744,186
Collateral Pledged [Member]
Debt Securities, Available-for-sale, Restricted	727,336		727,336		$ 723,023
Fraternity Community Bancorp, Inc. [Member] | Mortgage-backed Securities, Issued by Private Enterprises [Member]
Debt Securities, Available-for-sale, Amortized Cost, Total	37,687		37,687
Debt Securities, Available-for-sale, Total	$ 38,032		$ 38,032

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Note 4 - Investment Securities Available for Sale - Amortized Cost and Fair Value of Securities (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Securities available for sale, amortized cost	$ 67,935,704	$ 78,267,079
Securities available for sale, gross unrealized gains	11,438	12,993
Securities available for sale, gross unrealized losses	2,369,287	2,875,936
Investment securities available for sale, at fair value	65,577,855	75,404,136
US Government Agencies Debt Securities [Member]
Securities available for sale, amortized cost	744,186	2,753,346
Securities available for sale, gross unrealized gains
Securities available for sale, gross unrealized losses	16,850	34,697
Investment securities available for sale, at fair value	727,336	2,718,649
US States and Political Subdivisions Debt Securities [Member]
Securities available for sale, amortized cost	12,347,163	12,435,068
Securities available for sale, gross unrealized gains
Securities available for sale, gross unrealized losses	705,934	729,077
Investment securities available for sale, at fair value	11,641,229	11,705,991
Corporate Debt Securities [Member]
Securities available for sale, amortized cost	2,000,000	2,000,000
Securities available for sale, gross unrealized gains
Securities available for sale, gross unrealized losses	99,496	45,924
Investment securities available for sale, at fair value	1,900,504	1,954,076
Collateralized Mortgage Backed Securities [Member]
Securities available for sale, amortized cost	52,844,355	61,078,665
Securities available for sale, gross unrealized gains	11,438	12,993
Securities available for sale, gross unrealized losses	1,547,007	2,066,238
Investment securities available for sale, at fair value	$ 51,308,786	$ 59,025,420

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Note 4 - Investment Securities Available for Sale - Debt Securities By Contractual Maturity (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Amortized cost, securities available for sale, maturing within one year		$ 2,009,160
Fair value, securities available for sale, maturing within one year		1,995,625
Amortized cost, securities available for sale, maturing over one to five years	1,227,258	1,231,928
Fair value, securities available for sale, maturing over one to five years	1,197,309	1,196,368
Amortized cost, securities available for sale maturing over five to ten years	4,665,976	3,578,827
Fair value, securities available for sale, maturing over five to ten years	4,447,904	3,500,641
Amortized cost, securities available for sale, maturing over ten years	9,198,115	10,368,499
Fair value, securities available for sale, maturing over ten years	8,623,856	9,686,082
Amortized cost of mortgage-backed securities, in monthly installments	52,844,355	61,078,665
Fair value of mortgage-backed securities, in monthly installments	51,308,786	59,025,420
Amortized cost of securities available for sale	67,935,704	78,267,079
Fair value of securities available for sale	$ 65,577,855	$ 75,404,136

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Note 4 - Investment Securities Available for Sale - Securities In a Continuous Unrealized Loss Position (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Securities available for sale, less than 12 months, gross unrealized losses	$ 56,462	$ 405,150
Securities available for sale, less than 12 months, fair value	1,801,231	16,603,971
Securities available for sale, 12 months or longer, gross unrealized losses	2,312,825	2,470,786
Securities available for sale, 12 months or longer, fair value	61,056,793	56,340,528
Securities available for sale, total gross unrealized losses	2,369,287	2,875,936
Securities available for sale, total fair value	62,858,024	72,944,499
US Government Agencies Debt Securities [Member]
Securities available for sale, less than 12 months, gross unrealized losses		21,163
Securities available for sale, less than 12 months, fair value		723,023
Securities available for sale, 12 months or longer, gross unrealized losses	16,850	13,534
Securities available for sale, 12 months or longer, fair value	727,336	1,995,625
Securities available for sale, total gross unrealized losses	16,850	34,697
Securities available for sale, total fair value	727,336	2,718,648
US States and Political Subdivisions Debt Securities [Member]
Securities available for sale, less than 12 months, gross unrealized losses
Securities available for sale, less than 12 months, fair value
Securities available for sale, 12 months or longer, gross unrealized losses	705,934	729,077
Securities available for sale, 12 months or longer, fair value	11,641,229	11,705,991
Securities available for sale, total gross unrealized losses	705,934	729,077
Securities available for sale, total fair value	11,641,229	11,705,991
Corporate Debt Securities [Member]
Securities available for sale, less than 12 months, gross unrealized losses
Securities available for sale, less than 12 months, fair value
Securities available for sale, 12 months or longer, gross unrealized losses	99,496	45,924
Securities available for sale, 12 months or longer, fair value	1,900,504	1,954,076
Securities available for sale, total gross unrealized losses	99,496	45,924
Securities available for sale, total fair value	1,900,504	1,954,076
Collateralized Mortgage Backed Securities [Member]
Securities available for sale, less than 12 months, gross unrealized losses	56,462	383,987
Securities available for sale, less than 12 months, fair value	1,801,231	15,880,948
Securities available for sale, 12 months or longer, gross unrealized losses	1,490,545	1,682,251
Securities available for sale, 12 months or longer, fair value	46,787,724	40,684,836
Securities available for sale, total gross unrealized losses	1,547,007	2,066,238
Securities available for sale, total fair value	$ 48,588,955	$ 56,565,784

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Note 5 - Loans Receivable and Allowance for Loan Losses (Details Textual)	3 Months Ended		9 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	$ 374,761	$ 1,043,093	$ 374,761	$ 1,043,093	$ 1,021,424	$ 1,341,935
Limit Over Which Private Mortgage Insurance is Required	80.00%		80.00%
Financing Receivable, Modifications, Number of Contracts	0
Loans and Leases Receivable, Impaired, Commitment to Lend	$ 0		$ 0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
SEC Schedule, 12-09, Reserve, Off-balance Sheet Activity [Member]
SEC Schedule, 12-09, Valuation Allowances and Reserves, Amount, Ending Balance	$ 57,000		$ 57,000		50,000
Doubtful [Member]
Loans Receivable, Net, Total	$ 0		$ 0		0
Minimum [Member]
Maximum Percentage of Value of Property Against Lending	75.00%		75.00%
Maximum [Member]
Maximum Percentage of Value of Property Against Lending	95.00%		95.00%
Real Estate Loans [Member] | One to four family, Residential [Member]
Financing Receivable, Modifications, Number of Contracts			1	3
Real Estate Loans [Member] | One to four family, Residential [Member] | Legacy Loans [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net					19,200,000
Commercial Portfolio Segment [Member] | Commercial Lease Loans Purchased [Member] | Legacy Loans [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net					15,500,000
Commercial Portfolio Segment [Member] | Guaranteed SBA Purchased Loans [Member] | Legacy Loans [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net					3,200,000
Commercial Portfolio Segment [Member] | Recreational Vehicle Loans [Member] | Legacy Loans [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net					$ 19,900,000

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Note 5 - Loans Receivable and Allowance for Loan Losses - Loans Receivable Excluding Loans Held for Sale (Details) - USD ($)		Dec. 31, 2018		Mar. 31, 2018		Dec. 31, 2017
Loans		$ 368,225,720		$ 389,221,239
Percentage of loans		100.00%		100.00%
Net deferred loan origination fees and costs		$ (178,056)		$ (212,746)
Loan premium (discount)		1,408,952		1,412,392
Net loans		369,456,616		390,420,885
Financial Asset Originated [Member]
Loans		267,867,262	[1]	277,250,109	[1]	$ 272,324,778
Net deferred loan origination fees and costs	[1]	(178,056)		(212,746)
Loan premium (discount)	[1]	1,708,908		1,922,428
Net loans	[1]	269,398,114		278,959,791
Financial Asset Acquired [Member]
Loans		100,358,458		111,971,130		115,515,899
Net deferred loan origination fees and costs
Loan premium (discount)		(299,956)		(510,036)
Net loans		100,058,502		111,461,094
Real Estate Loans [Member]
Loans		$ 294,195,991		$ 309,465,974
Percentage of loans		80.00%		80.00%
Real Estate Loans [Member] | Financial Asset Originated [Member]
Loans	[1]	$ 201,184,464		$ 206,141,595
Real Estate Loans [Member] | Financial Asset Acquired [Member]
Loans		93,011,527		103,324,379
Real Estate Loans [Member] | One to four family, Residential [Member]
Loans	[2]	$ 149,373,141		$ 157,997,250
Percentage of loans	[2]	40.00%		41.00%
Real Estate Loans [Member] | One to four family, Residential [Member] | Financial Asset Originated [Member]
Loans	[1],[2]	$ 83,117,881		$ 85,248,184
Real Estate Loans [Member] | One to four family, Residential [Member] | Financial Asset Acquired [Member]
Loans	[2]	66,255,260		72,749,066
Real Estate Loans [Member] | One to four family, Residential construction [Member]
Loans		$ 3,430,203		$ 5,450,827
Percentage of loans		1.00%		1.00%
Real Estate Loans [Member] | One to four family, Residential construction [Member] | Financial Asset Originated [Member]
Loans	[1]	$ 3,430,203		$ 5,450,827
Real Estate Loans [Member] | One to four family, Residential construction [Member] | Financial Asset Acquired [Member]
Loans
Real Estate Loans [Member] | One to four family, Investor [Member]
Loans	[3]	$ 23,744,547		$ 26,735,840
Percentage of loans	[3]	6.00%		7.00%
Real Estate Loans [Member] | One to four family, Investor [Member] | Financial Asset Originated [Member]
Loans	[1],[3]	$ 7,337,281		$ 9,275,031
Real Estate Loans [Member] | One to four family, Investor [Member] | Financial Asset Acquired [Member]
Loans	[3]	16,407,266		17,460,809
Real Estate Loans [Member] | Commercial [Member]
Loans		$ 115,045,570		$ 112,166,254
Percentage of loans		31.00%		29.00%
Real Estate Loans [Member] | Commercial [Member] | Financial Asset Originated [Member]
Loans		$ 105,755,786	[1]	$ 100,403,769	[1]	100,857,452
Real Estate Loans [Member] | Commercial [Member] | Financial Asset Acquired [Member]
Loans		9,289,784		11,762,485		12,160,844
Real Estate Loans [Member] | Commercial Construction [Member]
Loans		$ 2,602,530		$ 7,115,803
Percentage of loans		1.00%		2.00%
Real Estate Loans [Member] | Commercial Construction [Member] | Financial Asset Originated [Member]
Loans		$ 1,543,313	[1]	$ 5,763,784	[1]	3,995,441
Real Estate Loans [Member] | Commercial Construction [Member] | Financial Asset Acquired [Member]
Loans		1,059,217		1,352,019		856,970
Commercial Portfolio Segment [Member]
Loans	[4]	$ 36,983,002		$ 40,143,965
Percentage of loans	[4]	10.00%		10.00%
Commercial Portfolio Segment [Member] | Financial Asset Originated [Member]
Loans		$ 35,276,493	[1],[4]	$ 38,302,739	[1],[4]	38,988,229
Commercial Portfolio Segment [Member] | Financial Asset Acquired [Member]
Loans		1,706,509	[4]	1,841,226	[4]	1,928,232
Home Equity Loans [Member]
Loans		$ 20,018,119		$ 19,995,789
Percentage of loans		5.00%		5.00%
Home Equity Loans [Member] | Financial Asset Originated [Member]
Loans		$ 15,077,068	[1]	$ 13,956,327	[1]	13,802,091
Home Equity Loans [Member] | Financial Asset Acquired [Member]
Loans		4,941,051		6,039,462		6,874,136
Consumer Portfolio Segment [Member]
Loans	[5]	$ 17,028,608		$ 19,615,511
Percentage of loans	[5]	5.00%		5.00%
Consumer Portfolio Segment [Member] | Financial Asset Originated [Member]
Loans		$ 16,329,237	[1],[5]	$ 18,849,448	[1],[5]	20,075,548
Consumer Portfolio Segment [Member] | Financial Asset Acquired [Member]
Loans		$ 699,372		$ 766,063	[5]	$ 785,100

[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 includes $19.2 million of various loan pools purchased in the second half of fiscal 2018.

[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 second 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.

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Note 5 - Loans Receivable and Allowance for Loan Losses - Activity in Allowance for Loan Losses (Details) - USD ($)		3 Months Ended			9 Months Ended
		Dec. 31, 2018		Dec. 31, 2017	Dec. 31, 2018		Dec. 31, 2017	Mar. 31, 2018
Beginning balance		$ 3,030,929		$ 2,470,991	$ 2,821,903		$ 2,194,815
Charge-offs		(166,638)		(211,596)	(297,305)		(236,111)
Recoveries		86,815		5,142	124,012		25,833
Provision for credit losses		80,000		345,000	382,496		625,000
Ending balance		3,031,106		2,609,537	3,031,106		2,609,537
Loans		368,225,720			368,225,720			$ 389,221,239
Financial Asset Originated [Member]
Individually evaluated for impairment, allowance		253,811		272,707	253,811		272,707
Collectively evaluated for impairment, allowance		2,337,617		2,336,830	2,337,617		2,336,830
Individually evaluated for impairment		6,785,712		7,245,899	6,785,712		7,245,899
Collectively evaluated for impairment		261,081,550		265,078,879	261,081,550		265,078,879
Loans		267,867,262	[1]	272,324,778	267,867,262	[1]	272,324,778	277,250,109	[1]
Financial Asset Acquired [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		439,678			439,678
Individually evaluated for impairment		757,557		1,896,849	757,557		1,896,849
Collectively evaluated for impairment		99,600,901		113,619,050	99,600,901		113,619,050
Loans		100,358,458		115,515,899	100,358,458		115,515,899	111,971,130
Real Estate Loans [Member]
Loans		294,195,991			294,195,991			309,465,974
Real Estate Loans [Member] | Financial Asset Originated [Member]
Loans	[1]	201,184,464			201,184,464			206,141,595
Real Estate Loans [Member] | Financial Asset Acquired [Member]
Loans		93,011,527			93,011,527			103,324,379
Real Estate Loans [Member] | Residential [Member]
Beginning balance		665,676		528,288	608,723		553,539
Charge-offs					(13,769)		(8,907)
Recoveries		41,059		3,937	43,301		3,937
Provision for credit losses		(24,321)		35,875	44,159		19,531
Ending balance		682,414		568,100	682,414		568,100
Real Estate Loans [Member] | Residential [Member] | Financial Asset Originated [Member]
Individually evaluated for impairment, allowance		253,811		272,707	253,811		272,707
Collectively evaluated for impairment, allowance		276,937		295,393	276,937		295,393
Individually evaluated for impairment		1,773,176		1,697,585	1,773,176		1,697,585
Collectively evaluated for impairment		84,774,908		85,532,435	84,774,908		85,532,435
Loans		86,548,084		87,230,020	86,548,084		87,230,020
Real Estate Loans [Member] | Residential [Member] | Financial Asset Acquired [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		151,666			151,666
Individually evaluated for impairment		440,242		1,061,049	440,242		1,061,049
Collectively evaluated for impairment		65,815,018		73,640,662	65,815,018		73,640,662
Loans		66,255,260		74,701,711	66,255,260		74,701,711
Real Estate Loans [Member] | Investor Loans [Member]
Beginning balance		314,571		52,255	51,690		35,275
Charge-offs		(32,909)		(111,360)	(41,022)		(126,482)
Recoveries		33,609			33,675		18,129
Provision for credit losses		(36,632)		103,790	234,296		117,763
Ending balance		278,639		44,685	278,639		44,685
Real Estate Loans [Member] | Investor Loans [Member] | Financial Asset Originated [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		50,593		44,685	50,593		44,685
Individually evaluated for impairment		31,752		121,514	31,752		121,514
Collectively evaluated for impairment		7,305,529		7,254,483	7,305,529		7,254,483
Loans		7,337,281		7,375,997	7,337,281		7,375,997
Real Estate Loans [Member] | Investor Loans [Member] | Financial Asset Acquired [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		228,046			228,046
Individually evaluated for impairment		261,659		579,172	261,659		579,172
Collectively evaluated for impairment		16,145,606		17,629,734	16,145,606		17,629,734
Loans		16,407,265		18,208,906	16,407,265		18,208,906
Real Estate Loans [Member] | Commercial [Member]
Beginning balance		1,312,441		1,360,433	1,253,383		1,375,894
Charge-offs				(100,236)	(31,320)		(100,236)
Recoveries					31,320
Provision for credit losses		(31,557)		148,707	27,501		133,246
Ending balance		1,280,884		1,408,904	1,280,884		1,408,904
Loans		115,045,570			115,045,570			112,166,254
Real Estate Loans [Member] | Commercial [Member] | Financial Asset Originated [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		1,241,051		1,408,904	1,241,051		1,408,904
Individually evaluated for impairment		4,139,177		4,500,043	4,139,177		4,500,043
Collectively evaluated for impairment		101,616,609		96,357,409	101,616,609		96,357,409
Loans		105,755,786	[1]	100,857,452	105,755,786	[1]	100,857,452	100,403,769	[1]
Real Estate Loans [Member] | Commercial [Member] | Financial Asset Acquired [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		39,833			39,833
Individually evaluated for impairment				199,920			199,920
Collectively evaluated for impairment		9,289,784		11,960,924	9,289,784		11,960,924
Loans		9,289,784		12,160,844	9,289,784		12,160,844	11,762,485
Real Estate Loans [Member] | Commercial Construction [Member]
Beginning balance		12,390		12,074	33,430		9,031
Charge-offs
Recoveries
Provision for credit losses		(4,090)		11,100	(25,130)		14,143
Ending balance		8,300		23,174	8,300		23,174
Loans		2,602,530			2,602,530			7,115,803
Real Estate Loans [Member] | Commercial Construction [Member] | Financial Asset Originated [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		7,254		23,174	7,254		23,174
Individually evaluated for impairment
Collectively evaluated for impairment		1,543,313		3,995,441	1,543,313		3,995,441
Loans		1,543,313	[1]	3,995,441	1,543,313	[1]	3,995,441	5,763,784	[1]
Real Estate Loans [Member] | Commercial Construction [Member] | Financial Asset Acquired [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		1,046			1,046
Individually evaluated for impairment
Collectively evaluated for impairment		1,059,217		856,970	1,059,217		856,970
Loans		1,059,217		856,970	1,059,217		856,970	1,352,019
Commercial Portfolio Segment [Member]
Beginning balance		532,611		327,130	673,982		149,461
Charge-offs		(133,729)			(208,729)
Recoveries		10,880		171	10,880		551
Provision for credit losses		160,895		45,987	94,524		223,276
Ending balance		570,657		373,288	570,657		373,288
Loans	[2]	36,983,002			36,983,002			40,143,965
Commercial Portfolio Segment [Member] | Financial Asset Originated [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		566,217		373,288	566,217		373,288
Individually evaluated for impairment		743,160		905,178	743,160		905,178
Collectively evaluated for impairment		34,533,333		38,083,051	34,533,333		38,083,051
Loans		35,276,493	[1],[2]	38,988,229	35,276,493	[1],[2]	38,988,229	38,302,739	[1],[2]
Commercial Portfolio Segment [Member] | Financial Asset Acquired [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		4,440			4,440
Individually evaluated for impairment
Collectively evaluated for impairment		1,706,509		1,928,232	1,706,509		1,928,232
Loans		1,706,509	[2]	1,928,232	1,706,509	[2]	1,928,232	1,841,226	[2]
Home Equity Loans [Member]
Beginning balance		72,831		62,570	69,459		70,071
Charge-offs
Recoveries
Provision for credit losses		1,555		619	4,927		(6,882)
Ending balance		74,386		63,189	74,386		63,189
Loans		20,018,119			20,018,119			19,995,789
Home Equity Loans [Member] | Financial Asset Originated [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		59,952		63,189	59,952		63,189
Individually evaluated for impairment		6,785		21,579	6,785		21,579
Collectively evaluated for impairment		15,070,283		13,780,512	15,070,283		13,780,512
Loans		15,077,068	[1]	13,802,091	15,077,068	[1]	13,802,091	13,956,327	[1]
Home Equity Loans [Member] | Financial Asset Acquired [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		14,434			14,434
Individually evaluated for impairment		164			164
Collectively evaluated for impairment		4,940,887		6,874,136	4,940,887		6,874,136
Loans		4,941,051		6,874,136	4,941,051		6,874,136	6,039,462
Consumer Portfolio Segment [Member]
Beginning balance		98,676		128,241	131,236		1,544
Charge-offs					(2,465)		(486)
Recoveries		1,267		1,034	4,836		3,216
Provision for credit losses		(4,214)		(1,078)	(37,878)		123,923
Ending balance		95,729		128,197	95,729		128,197
Loans	[3]	17,028,608			17,028,608			19,615,511
Consumer Portfolio Segment [Member] | Financial Asset Originated [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		95,516		128,197	95,516		128,197
Individually evaluated for impairment		91,662			91,662
Collectively evaluated for impairment		16,237,575		20,075,548	16,237,575		20,075,548
Loans		16,329,237	[1],[3]	20,075,548	16,329,237	[1],[3]	20,075,548	18,849,448	[1],[3]
Consumer Portfolio Segment [Member] | Financial Asset Acquired [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		213			213
Individually evaluated for impairment		55,492		56,708	55,492		56,708
Collectively evaluated for impairment		643,880		728,392	643,880		728,392
Loans		699,372		785,100	699,372		785,100	$ 766,063	[3]
Unallocated Financing Receivables [Member]
Beginning balance		21,733
Charge-offs
Recoveries
Provision for credit losses		18,364			40,097
Ending balance		40,097			40,097
Unallocated Financing Receivables [Member] | Financial Asset Originated [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance		40,097			40,097
Unallocated Financing Receivables [Member] | Financial Asset Acquired [Member]
Individually evaluated for impairment, allowance
Collectively evaluated for impairment, allowance

[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" 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.

[3] "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.

XML

Note 5 - Loans Receivable and Allowance for Loan Losses - Past Due Loans (Details) - USD ($)		Dec. 31, 2018		Mar. 31, 2018		Dec. 31, 2017
Current		$ 361,746,473		$ 380,780,116
Past due		1,283,570		2,476,716
Nonaccrual loans		5,195,677		5,964,407
Loans		368,225,720		389,221,239
Nonaccrual interest not accrued		280,718		393,818
Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		288,461		1,037,360
Financing Receivables, 60 to 89 Days Past Due [Member]
Past due		659,595		233,115
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due		335,514		1,206,241
Real Estate Loans [Member]
Loans		294,195,991		309,465,974
Real Estate Loans [Member] | Residential [Member]
Nonaccrual loans		666,140		864,644
Nonaccrual interest not accrued		9,526		61,370
Real Estate Loans [Member] | Residential [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		89,508		752,982
Real Estate Loans [Member] | Residential [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due		193,600		70,291
Real Estate Loans [Member] | Residential [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Real Estate Loans [Member] | Investor Loans [Member]
Nonaccrual loans		160,689		361,821
Nonaccrual interest not accrued		8,556		24,117
Real Estate Loans [Member] | Investor Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		29,357
Real Estate Loans [Member] | Investor Loans [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Real Estate Loans [Member] | Investor Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due		335,514		1,206,241
Real Estate Loans [Member] | Commercial [Member]
Nonaccrual loans		4,139,177		4,555,202
Loans		115,045,570		112,166,254
Nonaccrual interest not accrued		252,381		294,619
Real Estate Loans [Member] | Commercial [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due
Real Estate Loans [Member] | Commercial [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Real Estate Loans [Member] | Commercial [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Real Estate Loans [Member] | Commercial Construction [Member]
Nonaccrual loans
Loans		2,602,530		7,115,803
Nonaccrual interest not accrued
Real Estate Loans [Member] | Commercial Construction [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due
Real Estate Loans [Member] | Commercial Construction [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Real Estate Loans [Member] | Commercial Construction [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Commercial Portfolio Segment [Member]
Nonaccrual loans		143,145		165,285
Loans	[1]	36,983,002		40,143,965
Nonaccrual interest not accrued		8,796		12,891
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		120,418		135,502
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due		460,762		134,524
Commercial Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Home Equity Loans [Member]
Nonaccrual loans		97		12,605
Loans		20,018,119		19,995,789
Nonaccrual interest not accrued				436
Home Equity Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		68
Home Equity Loans [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Home Equity Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Consumer Portfolio Segment [Member]
Nonaccrual loans		86,429		4,850
Loans	[2]	17,028,608		19,615,511
Nonaccrual interest not accrued		1,459		385
Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		49,110		148,876
Consumer Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due		5,233		28,300
Consumer Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Financial Asset Originated [Member]
Current		262,125,497		270,807,643
Past due		975,652		1,315,929
Nonaccrual loans		4,766,113		5,126,537
Loans		267,867,262	[3]	277,250,109	[3]	$ 272,324,778
Nonaccrual interest not accrued		266,991		325,094
Financial Asset Originated [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		214,795		347,996
Financial Asset Originated [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due		538,372		233,115
Financial Asset Originated [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due		222,485		734,818
Financial Asset Originated [Member] | Real Estate Loans [Member]
Loans	[3]	201,184,464		206,141,595
Financial Asset Originated [Member] | Real Estate Loans [Member] | Residential [Member]
Nonaccrual loans		365,610		526,584
Loans		86,548,084				87,230,020
Nonaccrual interest not accrued		2,289		8,250
Financial Asset Originated [Member] | Real Estate Loans [Member] | Residential [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		71,020		63,618
Financial Asset Originated [Member] | Real Estate Loans [Member] | Residential [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due		72,377		70,291
Financial Asset Originated [Member] | Real Estate Loans [Member] | Residential [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Financial Asset Originated [Member] | Real Estate Loans [Member] | Investor Loans [Member]
Nonaccrual loans		31,752		60,949
Loans		7,337,281				7,375,997
Nonaccrual interest not accrued		2,066		8,513
Financial Asset Originated [Member] | Real Estate Loans [Member] | Investor Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due
Financial Asset Originated [Member] | Real Estate Loans [Member] | Investor Loans [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Financial Asset Originated [Member] | Real Estate Loans [Member] | Investor Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due		222,485		734,818
Financial Asset Originated [Member] | Real Estate Loans [Member] | Commercial [Member]
Nonaccrual loans		4,139,177		4,356,264
Loans		105,755,786	[3]	100,403,769	[3]	100,857,452
Nonaccrual interest not accrued		252,381		294,619
Financial Asset Originated [Member] | Real Estate Loans [Member] | Commercial [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due
Financial Asset Originated [Member] | Real Estate Loans [Member] | Commercial [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Financial Asset Originated [Member] | Real Estate Loans [Member] | Commercial [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Financial Asset Originated [Member] | Real Estate Loans [Member] | Commercial Construction [Member]
Nonaccrual loans
Loans		1,543,313	[3]	5,763,784	[3]	3,995,441
Nonaccrual interest not accrued
Financial Asset Originated [Member] | Real Estate Loans [Member] | Commercial Construction [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due
Financial Asset Originated [Member] | Real Estate Loans [Member] | Commercial Construction [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Financial Asset Originated [Member] | Real Estate Loans [Member] | Commercial Construction [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Financial Asset Originated [Member] | Commercial Portfolio Segment [Member]
Nonaccrual loans		143,145		165,285
Loans		35,276,493	[1],[3]	38,302,739	[1],[3]	38,988,229
Nonaccrual interest not accrued		8,796		12,891
Financial Asset Originated [Member] | Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		120,418		135,502
Financial Asset Originated [Member] | Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due		460,762		134,524
Financial Asset Originated [Member] | Commercial Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Financial Asset Originated [Member] | Home Equity Loans [Member]
Nonaccrual loans				12,605
Loans		15,077,068	[3]	13,956,327	[3]	13,802,091
Nonaccrual interest not accrued				436
Financial Asset Originated [Member] | Home Equity Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due
Financial Asset Originated [Member] | Home Equity Loans [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Financial Asset Originated [Member] | Home Equity Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Financial Asset Originated [Member] | Consumer Portfolio Segment [Member]
Nonaccrual loans		86,429		4,850
Loans		16,329,237	[2],[3]	18,849,448	[2],[3]	20,075,548
Nonaccrual interest not accrued		1,459		385
Financial Asset Originated [Member] | Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		23,357		148,876
Financial Asset Originated [Member] | Consumer Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due		5,233		28,300
Financial Asset Originated [Member] | Consumer Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Financial Asset Acquired [Member]
Current		99,620,976		109,972,473
Past due		307,918		1,160,787
Nonaccrual loans		429,564		837,870
Loans		100,358,458		111,971,130		115,515,899
Nonaccrual interest not accrued		13,727		68,724
Financial Asset Acquired [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		73,666		689,364
Financial Asset Acquired [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due		121,223
Financial Asset Acquired [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due		113,029		471,423
Financial Asset Acquired [Member] | Real Estate Loans [Member]
Loans		93,011,527		103,324,379
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Residential [Member]
Nonaccrual loans		300,530		338,060
Loans		66,255,260				74,701,711
Nonaccrual interest not accrued		7,237		53,120
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Residential [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		18,488		689,364
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Residential [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due		121,223
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Residential [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Investor Loans [Member]
Nonaccrual loans		128,937		300,872
Loans		16,407,265				18,208,906
Nonaccrual interest not accrued		6,490		15,604
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Investor Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		29,357
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Investor Loans [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Investor Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due		113,029		471,423
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Commercial [Member]
Nonaccrual loans				198,938
Loans		9,289,784		11,762,485		12,160,844
Nonaccrual interest not accrued
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Commercial [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Commercial [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Commercial [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Commercial Construction [Member]
Nonaccrual loans
Loans		1,059,217		1,352,019		856,970
Nonaccrual interest not accrued
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Commercial Construction [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Commercial Construction [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Real Estate Loans [Member] | Commercial Construction [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Commercial Portfolio Segment [Member]
Nonaccrual loans
Loans		1,706,509	[1]	1,841,226	[1]	1,928,232
Nonaccrual interest not accrued
Financial Asset Acquired [Member] | Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Commercial Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Home Equity Loans [Member]
Nonaccrual loans		97
Loans		4,941,051		6,039,462		6,874,136
Nonaccrual interest not accrued
Financial Asset Acquired [Member] | Home Equity Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		68
Financial Asset Acquired [Member] | Home Equity Loans [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Home Equity Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Consumer Portfolio Segment [Member]
Nonaccrual loans
Loans		699,372		766,063	[2]	$ 785,100
Nonaccrual interest not accrued
Financial Asset Acquired [Member] | Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due		25,753
Financial Asset Acquired [Member] | Consumer Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due
Financial Asset Acquired [Member] | Consumer Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due

[1] "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.

[2] "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.

[3] 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".

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Note 5 - Loans Receivable and Allowance for Loan Losses - Impaired Loans (Details) - USD ($)		3 Months Ended				9 Months Ended				12 Months Ended
		Dec. 31, 2018		Dec. 31, 2017		Dec. 31, 2018		Dec. 31, 2017		Mar. 31, 2018
Related allowance		$ 253,811		$ 272,707		$ 253,811		$ 272,707		$ 266,256	[1]
Unpaid contractual principal balance		10,871,156		12,124,586		10,871,156		12,124,586		12,423,053
Recorded investment		7,543,269		9,142,748		7,543,269		9,142,748		8,720,339
Average recorded investment		7,859,520		9,463,640		7,853,668		9,513,155		9,644,505
Interest income recognized		60,828		48,008		201,938		193,308		250,008
Financial Asset Originated [Member]
Related allowance		253,811		272,707		253,811		272,707		266,256
Unpaid contractual principal balance		9,882,943		9,833,631		9,882,943		9,833,631		10,273,127
Recorded investment		6,785,712		7,245,899		6,785,712		7,245,899		7,094,524
Average recorded investment		7,099,976		7,477,984		7,123,625		7,473,746		7,774,125
Interest income recognized		47,397		37,642		174,450		121,875		171,476
Financial Asset Acquired [Member]
Related allowance			[1]		[1]		[1]		[1]
Unpaid contractual principal balance	[1]	988,213		2,290,955		988,213		2,290,955		2,149,926
Recorded investment	[1]	757,557		1,896,849		757,557		1,896,849		1,625,815
Average recorded investment	[1]	759,544		1,985,656		730,043		2,039,409		1,870,380
Interest income recognized	[1]	13,431		10,366		27,488		71,433		78,532
Real Estate Loans [Member] | Residential [Member] | Financial Asset Originated [Member]
Unpaid contractual principal balance, with no related allowance recorded		706,098		513,736		706,098		513,736		665,051
Recorded investment, with no related allowance recorded		538,723		371,312		538,723		371,312		517,600
Average recorded investment, with no related allowance recorded		558,414		376,225		538,965		387,772		548,636
Interest income recognized, with no related allowance recorded		3,719		280		7,666		1,451		9,257
Unpaid contractual principal balance, with an allowance recorded		1,248,874		1,354,169		1,248,874		1,354,169		1,336,078
Recorded investment, with an allowance recorded		1,234,453		1,326,273		1,234,453		1,326,273		1,309,440
Related allowance		253,811		272,707		253,811		272,707		266,256
Average recorded investment, with an allowance recorded		1,237,197		1,330,015		1,246,235		1,341,584		1,328,919
Interest income recognized, with an allowance recorded		12,337		13,248		37,255		39,333		51,928
Real Estate Loans [Member] | Residential [Member] | Financial Asset Acquired [Member]
Unpaid contractual principal balance, with no related allowance recorded	[1]	456,272		1,211,254		456,272		1,211,254		1,082,484
Recorded investment, with no related allowance recorded	[1]	440,242		1,061,049		440,242		1,061,049		922,252
Average recorded investment, with no related allowance recorded	[1]	439,495		1,063,445		425,256		1,077,738		945,602
Interest income recognized, with no related allowance recorded	[1]	5,457		4,247		7,179		26,087		26,437
Unpaid contractual principal balance, with an allowance recorded	[1]
Recorded investment, with an allowance recorded	[1]
Related allowance	[1]
Average recorded investment, with an allowance recorded	[1]
Interest income recognized, with an allowance recorded	[1]
Real Estate Loans [Member] | Investor Loans [Member] | Financial Asset Originated [Member]
Unpaid contractual principal balance, with no related allowance recorded				127,420				127,420		126,389
Recorded investment, with no related allowance recorded				121,514				121,514		60,949
Average recorded investment, with no related allowance recorded				122,576				123,362		118,175
Interest income recognized, with no related allowance recorded								3,772		3,772
Unpaid contractual principal balance, with an allowance recorded		57,831				57,831
Recorded investment, with an allowance recorded		31,752				31,752
Related allowance
Average recorded investment, with an allowance recorded		32,427				32,291
Interest income recognized, with an allowance recorded		1,108				1,108
Real Estate Loans [Member] | Investor Loans [Member] | Financial Asset Acquired [Member]
Unpaid contractual principal balance, with no related allowance recorded	[1]	405,538		687,849		405,538		687,849		682,045
Recorded investment, with no related allowance recorded	[1]	261,659		579,172		261,659		579,172		444,254
Average recorded investment, with no related allowance recorded	[1]	263,562		663,538		246,751		697,174		659,246
Interest income recognized, with no related allowance recorded	[1]	4,722		2,893		13,859		34,582		37,368
Unpaid contractual principal balance, with an allowance recorded	[1]
Recorded investment, with an allowance recorded	[1]
Related allowance	[1]
Average recorded investment, with an allowance recorded	[1]
Interest income recognized, with an allowance recorded	[1]
Real Estate Loans [Member] | Commercial [Member] | Financial Asset Originated [Member]
Unpaid contractual principal balance, with no related allowance recorded		6,375,413		6,487,088		6,375,413		6,487,088		6,487,088
Recorded investment, with no related allowance recorded		4,139,177		4,500,043		4,139,177		4,500,043		4,356,264
Average recorded investment, with no related allowance recorded		4,309,168		4,689,502		4,280,325		4,703,598		4,634,504
Interest income recognized, with no related allowance recorded						53,278		1,077		1,077
Unpaid contractual principal balance, with an allowance recorded
Recorded investment, with an allowance recorded
Related allowance
Average recorded investment, with an allowance recorded
Interest income recognized, with an allowance recorded
Real Estate Loans [Member] | Commercial [Member] | Financial Asset Acquired [Member]
Unpaid contractual principal balance, with no related allowance recorded	[1]			249,920				249,920		248,938
Recorded investment, with no related allowance recorded	[1]			199,920				199,920		198,938
Average recorded investment, with no related allowance recorded	[1]			200,589				202,263		201,519
Interest income recognized, with no related allowance recorded	[1]			1,888				5,700		7,336
Unpaid contractual principal balance, with an allowance recorded	[1]
Recorded investment, with an allowance recorded	[1]
Related allowance	[1]
Average recorded investment, with an allowance recorded	[1]
Interest income recognized, with an allowance recorded	[1]
Real Estate Loans [Member] | Commercial Construction [Member] | Financial Asset Originated [Member]
Unpaid contractual principal balance, with no related allowance recorded
Recorded investment, with no related allowance recorded
Average recorded investment, with no related allowance recorded
Interest income recognized, with no related allowance recorded
Unpaid contractual principal balance, with an allowance recorded
Recorded investment, with an allowance recorded
Related allowance
Average recorded investment, with an allowance recorded
Interest income recognized, with an allowance recorded
Real Estate Loans [Member] | Commercial Construction [Member] | Financial Asset Acquired [Member]
Unpaid contractual principal balance, with no related allowance recorded	[1]
Recorded investment, with no related allowance recorded	[1]
Average recorded investment, with no related allowance recorded	[1]
Interest income recognized, with no related allowance recorded	[1]
Unpaid contractual principal balance, with an allowance recorded	[1]
Recorded investment, with an allowance recorded	[1]
Related allowance	[1]
Average recorded investment, with an allowance recorded	[1]
Interest income recognized, with an allowance recorded	[1]
Commercial Portfolio Segment [Member]
Interest income recognized, with no related allowance recorded										103,474
Commercial Portfolio Segment [Member] | Financial Asset Originated [Member]
Unpaid contractual principal balance, with no related allowance recorded		1,369,695		1,303,000		1,369,695		1,303,000		1,562,756
Recorded investment, with no related allowance recorded		743,160		905,178		743,160		905,178		795,410
Average recorded investment, with no related allowance recorded		863,260		937,594		925,694		894,330		1,082,773
Interest income recognized, with no related allowance recorded		25,781		24,038		70,558		75,926
Unpaid contractual principal balance, with an allowance recorded
Recorded investment, with an allowance recorded
Related allowance
Average recorded investment, with an allowance recorded
Interest income recognized, with an allowance recorded
Commercial Portfolio Segment [Member] | Financial Asset Acquired [Member]
Unpaid contractual principal balance, with no related allowance recorded	[1]
Recorded investment, with no related allowance recorded	[1]
Average recorded investment, with no related allowance recorded	[1]
Interest income recognized, with no related allowance recorded	[1]
Unpaid contractual principal balance, with an allowance recorded	[1]
Recorded investment, with an allowance recorded	[1]
Related allowance	[1]
Average recorded investment, with an allowance recorded	[1]
Interest income recognized, with an allowance recorded	[1]
Home Equity Loans [Member] | Financial Asset Originated [Member]
Unpaid contractual principal balance, with no related allowance recorded		33,287		48,218		33,287		48,218		47,650
Recorded investment, with no related allowance recorded		6,785		21,579		6,785		21,579		20,595
Average recorded investment, with no related allowance recorded		7,036		22,072		7,293		23,100		22,604
Interest income recognized, with no related allowance recorded		1,910		76		2,043		316		392
Unpaid contractual principal balance, with an allowance recorded
Recorded investment, with an allowance recorded
Related allowance
Average recorded investment, with an allowance recorded
Interest income recognized, with an allowance recorded
Home Equity Loans [Member] | Financial Asset Acquired [Member]
Unpaid contractual principal balance, with no related allowance recorded	[1]	37,858		42,583		37,858		42,583		40,473
Recorded investment, with no related allowance recorded	[1]	164				164
Average recorded investment, with no related allowance recorded	[1]	238				79
Interest income recognized, with no related allowance recorded	[1]	1,851				2,501		600		1,329
Unpaid contractual principal balance, with an allowance recorded	[1]
Recorded investment, with an allowance recorded	[1]
Related allowance	[1]
Average recorded investment, with an allowance recorded	[1]
Interest income recognized, with an allowance recorded	[1]
Consumer Portfolio Segment [Member] | Financial Asset Originated [Member]
Unpaid contractual principal balance, with no related allowance recorded		91,745				91,745				48,115
Recorded investment, with no related allowance recorded		91,662				91,662				34,266
Average recorded investment, with no related allowance recorded		92,474				92,822				38,514
Interest income recognized, with no related allowance recorded		2,542				2,542				1,576
Unpaid contractual principal balance, with an allowance recorded
Recorded investment, with an allowance recorded
Related allowance
Average recorded investment, with an allowance recorded
Interest income recognized, with an allowance recorded
Consumer Portfolio Segment [Member] | Financial Asset Acquired [Member]
Unpaid contractual principal balance, with no related allowance recorded	[1]	88,545		99,349		88,545		99,349		95,986
Recorded investment, with no related allowance recorded	[1]	55,492		56,708		55,492		56,708		60,371
Average recorded investment, with no related allowance recorded	[1]	56,249		58,084		57,957		62,234		64,013
Interest income recognized, with no related allowance recorded	[1]	1,401		1,338		3,949		4,464		6,062
Unpaid contractual principal balance, with an allowance recorded	[1]
Recorded investment, with an allowance recorded	[1]
Related allowance	[1]
Average recorded investment, with an allowance recorded	[1]
Interest income recognized, with an allowance recorded	[1]

[1] 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.

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Note 5 - Loans Receivable and Allowance for Loan Losses - Purchased Credit Impaired (PCI) Loans (Details) - USD ($)	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Recorded investment at beginning of period	$ 1,021,424	$ 1,341,935
Accretion	2,505	25,964
Reductions for payments	(649,168)	(324,806)
Recorded investment at end of period	374,761	1,043,093
Oustanding principal balance at end of period	$ 470,368	$ 1,297,471

XML

Note 5 - Loans Receivable and Allowance for Loan Losses - Changes In the Accretable Yield for PCI Loans (Details) - USD ($)	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Accretable yield, beginning of period	$ 31,895	$ 59,639
Accretion	(2,505)	(25,964)
Reclassification from nonaccretable difference
Accretable yield, end of period	$ 29,390	$ 33,675

XML

Note 5 - Loans Receivable and Allowance for Loan Losses - Summary of Troubled Debt Restructurings (Details)	Dec. 31, 2018 USD ($)	Mar. 31, 2018 USD ($)
Number of contracts	19	18
Troubled debt restructurings	$ 3,317,025	$ 3,344,039
Performing Financial Instruments [Member]
Troubled debt restructurings	1,895,485	1,835,654
Nonperforming Financial Instruments [Member]
Troubled debt restructurings	$ 1,421,540	$ 1,508,385
Real Estate Loans [Member] | Residential [Member]
Number of contracts	16	15
Troubled debt restructurings	$ 1,521,588	$ 1,543,130
Real Estate Loans [Member] | Residential [Member] | Performing Financial Instruments [Member]
Troubled debt restructurings	1,295,469	1,230,166
Real Estate Loans [Member] | Residential [Member] | Nonperforming Financial Instruments [Member]
Troubled debt restructurings	$ 226,119	$ 312,964
Real Estate Loans [Member] | Investor Loans [Member]
Number of contracts	0	0
Troubled debt restructurings	$ 0	$ 0
Real Estate Loans [Member] | Investor Loans [Member] | Performing Financial Instruments [Member]
Troubled debt restructurings	0	0
Real Estate Loans [Member] | Investor Loans [Member] | Nonperforming Financial Instruments [Member]
Troubled debt restructurings	$ 0	$ 0
Real Estate Loans [Member] | Commercial [Member]
Number of contracts	2	2
Troubled debt restructurings	$ 1,195,421	$ 1,195,421
Real Estate Loans [Member] | Commercial [Member] | Performing Financial Instruments [Member]
Troubled debt restructurings	0	0
Real Estate Loans [Member] | Commercial [Member] | Nonperforming Financial Instruments [Member]
Troubled debt restructurings	$ 1,195,421	$ 1,195,421
Real Estate Loans [Member] | Commercial Construction [Member]
Number of contracts	0	0
Troubled debt restructurings	$ 0	$ 0
Real Estate Loans [Member] | Commercial Construction [Member] | Performing Financial Instruments [Member]
Troubled debt restructurings	0	0
Real Estate Loans [Member] | Commercial Construction [Member] | Nonperforming Financial Instruments [Member]
Troubled debt restructurings	$ 0	$ 0
Commercial Portfolio Segment [Member]
Number of contracts	1	1
Troubled debt restructurings	$ 600,016	$ 605,488
Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Troubled debt restructurings	600,016	605,488
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Troubled debt restructurings	$ 0	$ 0
Home Equity Loans [Member]
Number of contracts	0	0
Troubled debt restructurings	$ 0	$ 0
Home Equity Loans [Member] | Performing Financial Instruments [Member]
Troubled debt restructurings	0	0
Home Equity Loans [Member] | Nonperforming Financial Instruments [Member]
Troubled debt restructurings	$ 0	$ 0
Consumer Portfolio Segment [Member]
Number of contracts	0	0
Troubled debt restructurings	$ 0	$ 0
Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member]
Troubled debt restructurings	0	0
Consumer Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Troubled debt restructurings	$ 0	$ 0

XML

Note 5 - Loans Receivable and Allowance for Loan Losses - Number of Contracts and Outstanding Loan Balance at Time of Modification (Details)	3 Months Ended		9 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Financing Receivable, Modifications, Number of Contracts	0
Real Estate Loans [Member] | Residential [Member]
Financing Receivable, Modifications, Number of Contracts		2
Outstanding recorded investment		$ 50,432
Real Estate Loans [Member] | One to four family, Residential [Member]
Financing Receivable, Modifications, Number of Contracts			1	3
Outstanding recorded investment			$ 20,565	$ 52,363

XML

Note 5 - Loans Receivable and Allowance for Loan Losses - Loans by Risk Grade (Details) - USD ($)		Dec. 31, 2018		Mar. 31, 2018		Dec. 31, 2017
Loans		$ 368,225,720		$ 389,221,239
Financial Asset Originated [Member]
Loans		267,867,262	[1]	277,250,109	[1]	$ 272,324,778
Financial Asset Acquired [Member]
Loans		100,358,458		111,971,130		115,515,899
Pass [Member]
Loans		358,602,772		375,484,442
Pass [Member] | Financial Asset Originated [Member]
Loans		260,342,392		266,444,555
Pass [Member] | Financial Asset Acquired [Member]
Loans		98,260,380		109,039,887
Special Mention [Member]
Loans		4,002,405		7,022,190
Special Mention [Member] | Financial Asset Originated [Member]
Loans		2,634,840		5,688,785
Special Mention [Member] | Financial Asset Acquired [Member]
Loans		1,367,565		1,333,405
Substandard [Member]
Loans		5,620,543		6,714,607
Substandard [Member] | Financial Asset Originated [Member]
Loans		4,890,030		5,116,769
Substandard [Member] | Financial Asset Acquired [Member]
Loans		730,513		1,597,838
Doubtful [Member]
Loans
Doubtful [Member] | Financial Asset Originated [Member]
Loans
Doubtful [Member] | Financial Asset Acquired [Member]
Loans
Unlikely to be Collected Financing Receivable [Member]
Loans
Unlikely to be Collected Financing Receivable [Member] | Financial Asset Originated [Member]
Loans
Unlikely to be Collected Financing Receivable [Member] | Financial Asset Acquired [Member]
Loans
Real Estate Loans [Member]
Loans		294,195,991		309,465,974
Real Estate Loans [Member] | Financial Asset Originated [Member]
Loans	[1]	201,184,464		206,141,595
Real Estate Loans [Member] | Financial Asset Acquired [Member]
Loans		93,011,527		103,324,379
Real Estate Loans [Member] | Residential [Member] | Financial Asset Originated [Member]
Loans		86,548,084				87,230,020
Real Estate Loans [Member] | Residential [Member] | Financial Asset Acquired [Member]
Loans		66,255,260				74,701,711
Real Estate Loans [Member] | Residential [Member] | Pass [Member]
Loans		148,599,703		158,765,098
Real Estate Loans [Member] | Residential [Member] | Pass [Member] | Financial Asset Originated [Member]
Loans		83,743,323		87,863,805
Real Estate Loans [Member] | Residential [Member] | Pass [Member] | Financial Asset Acquired [Member]
Loans		64,856,380		70,901,293
Real Estate Loans [Member] | Residential [Member] | Special Mention [Member]
Loans		3,286,050		3,291,173
Real Estate Loans [Member] | Residential [Member] | Special Mention [Member] | Financial Asset Originated [Member]
Loans		2,327,412		2,365,652
Real Estate Loans [Member] | Residential [Member] | Special Mention [Member] | Financial Asset Acquired [Member]
Loans		958,638		925,521
Real Estate Loans [Member] | Residential [Member] | Substandard [Member]
Loans		917,591		1,391,806
Real Estate Loans [Member] | Residential [Member] | Substandard [Member] | Financial Asset Originated [Member]
Loans		477,349		469,554
Real Estate Loans [Member] | Residential [Member] | Substandard [Member] | Financial Asset Acquired [Member]
Loans		440,242		922,252
Real Estate Loans [Member] | Investor Loans [Member] | Financial Asset Originated [Member]
Loans		7,337,281				7,375,997
Real Estate Loans [Member] | Investor Loans [Member] | Financial Asset Acquired [Member]
Loans		16,407,265				18,208,906
Real Estate Loans [Member] | Investor Loans [Member] | Pass [Member]
Loans		23,178,635		25,933,428
Real Estate Loans [Member] | Investor Loans [Member] | Pass [Member] | Financial Asset Originated [Member]
Loans		7,305,529		9,214,082
Real Estate Loans [Member] | Investor Loans [Member] | Pass [Member] | Financial Asset Acquired [Member]
Loans		15,873,106		16,719,346
Real Estate Loans [Member] | Investor Loans [Member] | Special Mention [Member]
Loans		273,806		297,209
Real Estate Loans [Member] | Investor Loans [Member] | Special Mention [Member] | Financial Asset Originated [Member]
Loans
Real Estate Loans [Member] | Investor Loans [Member] | Special Mention [Member] | Financial Asset Acquired [Member]
Loans		273,806		297,209
Real Estate Loans [Member] | Investor Loans [Member] | Substandard [Member]
Loans		292,106		505,203
Real Estate Loans [Member] | Investor Loans [Member] | Substandard [Member] | Financial Asset Originated [Member]
Loans		31,752		60,949
Real Estate Loans [Member] | Investor Loans [Member] | Substandard [Member] | Financial Asset Acquired [Member]
Loans		260,354		444,254
Real Estate Loans [Member] | Commercial [Member]
Loans		115,045,570		112,166,254
Real Estate Loans [Member] | Commercial [Member] | Financial Asset Originated [Member]
Loans		105,755,786	[1]	100,403,769	[1]	100,857,452
Real Estate Loans [Member] | Commercial [Member] | Financial Asset Acquired [Member]
Loans		9,289,784		11,762,485		12,160,844
Real Estate Loans [Member] | Commercial [Member] | Pass [Member]
Loans		110,906,393		104,518,917
Real Estate Loans [Member] | Commercial [Member] | Pass [Member] | Financial Asset Originated [Member]
Loans		101,616,609		92,955,370
Real Estate Loans [Member] | Commercial [Member] | Pass [Member] | Financial Asset Acquired [Member]
Loans		9,289,784		11,563,547
Real Estate Loans [Member] | Commercial [Member] | Special Mention [Member]
Loans				3,092,135
Real Estate Loans [Member] | Commercial [Member] | Special Mention [Member] | Financial Asset Originated [Member]
Loans				3,092,135
Real Estate Loans [Member] | Commercial [Member] | Special Mention [Member] | Financial Asset Acquired [Member]
Loans
Real Estate Loans [Member] | Commercial [Member] | Substandard [Member]
Loans		4,139,177		4,555,202
Real Estate Loans [Member] | Commercial [Member] | Substandard [Member] | Financial Asset Originated [Member]
Loans		4,139,177		4,356,264
Real Estate Loans [Member] | Commercial [Member] | Substandard [Member] | Financial Asset Acquired [Member]
Loans				198,938
Real Estate Loans [Member] | Commercial Construction [Member]
Loans		2,602,530		7,115,803
Real Estate Loans [Member] | Commercial Construction [Member] | Financial Asset Originated [Member]
Loans		1,543,313	[1]	5,763,784	[1]	3,995,441
Real Estate Loans [Member] | Commercial Construction [Member] | Financial Asset Acquired [Member]
Loans		1,059,217		1,352,019		856,970
Real Estate Loans [Member] | Commercial Construction [Member] | Pass [Member]
Loans		2,602,530		7,115,803
Real Estate Loans [Member] | Commercial Construction [Member] | Pass [Member] | Financial Asset Originated [Member]
Loans		1,543,313		5,763,784
Real Estate Loans [Member] | Commercial Construction [Member] | Pass [Member] | Financial Asset Acquired [Member]
Loans		1,059,217		1,352,019
Real Estate Loans [Member] | Commercial Construction [Member] | Special Mention [Member]
Loans
Real Estate Loans [Member] | Commercial Construction [Member] | Special Mention [Member] | Financial Asset Originated [Member]
Loans
Real Estate Loans [Member] | Commercial Construction [Member] | Special Mention [Member] | Financial Asset Acquired [Member]
Loans
Real Estate Loans [Member] | Commercial Construction [Member] | Substandard [Member]
Loans
Real Estate Loans [Member] | Commercial Construction [Member] | Substandard [Member] | Financial Asset Originated [Member]
Loans
Real Estate Loans [Member] | Commercial Construction [Member] | Substandard [Member] | Financial Asset Acquired [Member]
Loans
Commercial Portfolio Segment [Member]
Loans	[2]	36,983,002		40,143,965
Commercial Portfolio Segment [Member] | Financial Asset Originated [Member]
Loans		35,276,493	[1],[2]	38,302,739	[1],[2]	38,988,229
Commercial Portfolio Segment [Member] | Financial Asset Acquired [Member]
Loans		1,706,509	[2]	1,841,226	[2]	1,928,232
Commercial Portfolio Segment [Member] | Pass [Member]
Loans		36,542,379		39,819,519
Commercial Portfolio Segment [Member] | Pass [Member] | Financial Asset Originated [Member]
Loans		34,835,870		37,978,293
Commercial Portfolio Segment [Member] | Pass [Member] | Financial Asset Acquired [Member]
Loans		1,706,509		1,841,226
Commercial Portfolio Segment [Member] | Special Mention [Member]
Loans		297,478		134,524
Commercial Portfolio Segment [Member] | Special Mention [Member] | Financial Asset Originated [Member]
Loans		297,478		134,524
Commercial Portfolio Segment [Member] | Special Mention [Member] | Financial Asset Acquired [Member]
Loans
Commercial Portfolio Segment [Member] | Substandard [Member]
Loans		143,145		189,922
Commercial Portfolio Segment [Member] | Substandard [Member] | Financial Asset Originated [Member]
Loans		143,145		189,922
Commercial Portfolio Segment [Member] | Substandard [Member] | Financial Asset Acquired [Member]
Loans
Home Equity Loans [Member]
Loans		20,018,119		19,995,789
Home Equity Loans [Member] | Financial Asset Originated [Member]
Loans		15,077,068	[1]	13,956,327	[1]	13,802,091
Home Equity Loans [Member] | Financial Asset Acquired [Member]
Loans		4,941,051		6,039,462		6,874,136
Home Equity Loans [Member] | Pass [Member]
Loans		19,875,889		19,864,519
Home Equity Loans [Member] | Pass [Member] | Financial Asset Originated [Member]
Loans		15,070,123		13,935,732
Home Equity Loans [Member] | Pass [Member] | Financial Asset Acquired [Member]
Loans		4,805,766		5,928,787
Home Equity Loans [Member] | Special Mention [Member]
Loans		135,121		110,675
Home Equity Loans [Member] | Special Mention [Member] | Financial Asset Originated [Member]
Loans
Home Equity Loans [Member] | Special Mention [Member] | Financial Asset Acquired [Member]
Loans		135,121		110,675
Home Equity Loans [Member] | Substandard [Member]
Loans		7,109		20,595
Home Equity Loans [Member] | Substandard [Member] | Financial Asset Originated [Member]
Loans		6,945		20,595
Home Equity Loans [Member] | Substandard [Member] | Financial Asset Acquired [Member]
Loans		164
Consumer Portfolio Segment [Member]
Loans	[3]	17,028,608		19,615,511
Consumer Portfolio Segment [Member] | Financial Asset Originated [Member]
Loans		16,329,237	[1],[3]	18,849,448	[1],[3]	20,075,548
Consumer Portfolio Segment [Member] | Financial Asset Acquired [Member]
Loans		699,372		766,063	[3]	$ 785,100
Consumer Portfolio Segment [Member] | Pass [Member]
Loans		16,897,243		19,467,158
Consumer Portfolio Segment [Member] | Pass [Member] | Financial Asset Originated [Member]
Loans		16,227,625		18,733,489
Consumer Portfolio Segment [Member] | Pass [Member] | Financial Asset Acquired [Member]
Loans		669,618		733,669
Consumer Portfolio Segment [Member] | Special Mention [Member]
Loans		9,950		96,474
Consumer Portfolio Segment [Member] | Special Mention [Member] | Financial Asset Originated [Member]
Loans		9,950		96,474
Consumer Portfolio Segment [Member] | Special Mention [Member] | Financial Asset Acquired [Member]
Loans
Consumer Portfolio Segment [Member] | Substandard [Member]
Loans		121,415		51,879
Consumer Portfolio Segment [Member] | Substandard [Member] | Financial Asset Originated [Member]
Loans		91,662		19,485
Consumer Portfolio Segment [Member] | Substandard [Member] | Financial Asset Acquired [Member]
Loans		$ 29,753		$ 32,394

[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" 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.

[3] "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.

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Note 5 - Loans Receivable and Allowance for Loan Losses - Outstanding Commitments and Unused Lines of Credit (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Unused Commercial Lines of Credit [Member]
Outstanding commitments and unused lines of credit	$ 13,004,510	$ 9,187,810
Unused Home Equity Lines of Credit [Member]
Outstanding commitments and unused lines of credit	23,263,860	22,560,376
Unused Consumer Lines of Credit [Member]
Outstanding commitments and unused lines of credit	26,770	29,331
Residential Construction Loan Commitments [Member]
Outstanding commitments and unused lines of credit	6,934,369	4,234,076
Commercial Construction Loan Commitments [Member]
Outstanding commitments and unused lines of credit	2,678,900	8,968,416
Home Equity Loan Commitments [Member]
Outstanding commitments and unused lines of credit	200,000	389,600
Commercial loan commitments [Member]
Outstanding commitments and unused lines of credit	3,671,000	5,125,000
Standby Letters of Credit [Member]
Outstanding commitments and unused lines of credit	$ 766,783	$ 250,224

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Note 6 - Goodwill and Other Intangible Asset (Details Textual) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Business Acquisition, Goodwill, Expected Tax Deductible Amount	$ 2,700
Goodwill, Impairment Loss			$ 0
Core Deposits [Member]
Finite-Lived Intangible Asset, Useful Life	8 years

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Note 6 - Goodwill and Other Intangible Assets - Activity in Goodwill and Intangible Assets (Details) - USD ($)	9 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Goodwill, balance	$ 8,563,530	$ 8,563,530	$ 8,563,530
Goodwill, Amortization			0
Core deposit intangible, Amortization	(94,548)	(94,548)
Goodwill, balance	8,563,530	8,563,530	8,563,530
Core deposit intangible, balance	518,685
Core Deposits [Member]
Core deposit intangible, balance	613,234	739,298	739,298
Core deposit intangible, Amortization	(94,549)	(94,548)
Core deposit intangible, balance	$ 518,685	$ 644,750	$ 613,234

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Note 6 - Goodwill and Other Intangible Assets - Future Expected Annual Amortization Associated With Core Deposit Intangible (Details)	Dec. 31, 2018 USD ($)
2019	$ 31,519
2020	123,737
2021	98,070
2022	98,070
2023	98,070
2024	64,177
2025	5,042
Total core deposit intangible	$ 518,685

XML

Note 7 - Derivative - Interest Rate Swap Agreement (Details Textual) - USD ($)	3 Months Ended			9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2015	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Derivative, Notional Amount	$ 11,550,000			$ 11,550,000
Interest Income (Expense), Net, Total	3,438,289	$ 3,637,383		10,994,690	$ 10,841,417
Interest Rate Swap [Member]
Unrealized Gain (Loss) on Cash Flow Hedging Instruments	0	0		0	0
Interest Rate Swap [Member] | Cash Flow Hedging [Member]
Derivative Liability, Fair Value of Collateral	762,000			762,000		$ 751,000
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net, Total	(1,996)	(5,445)		(1,075)	(9,124)
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | Federal Home Loan Bank Advances [Member]
Derivative, Notional Amount	11,600,000			11,600,000
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net, Total	(1,996)	$ (5,445)		(1,075)	$ (9,124)
Interest Income (Expense), Net, Total	(60)			(1,892)
Interest Rate Swap [Member] | Fair Value Hedging [Member]
Derivative, Notional Amount	$ 3,000,000		$ 3,300,000	$ 3,000,000
Derivative, Fixed Interest Rate			3.99%
Derivative, Term of Contract			10 years

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Note 7 - Derivative - Interest Rate Swap Agreement - Information on Interest Rate Swaps (Details)	9 Months Ended
	Dec. 31, 2018 USD ($)
Notional amounts	$ 11,550,000
FHLB Advance Swap 1 [Member]
Notional amounts	$ 1,850,000
Effective Start Date	Mar. 09, 2017
Maturity Date	Mar. 09, 2022
Pay Fixed Rate	2.24%
Receive Floating Rate	3-Month LIBOR
FHLB Advance Swap 2 [Member]
Notional amounts	$ 1,850,000
Effective Start Date	Mar. 09, 2017
Maturity Date	Mar. 09, 2024
Pay Fixed Rate	2.41%
Receive Floating Rate	3-Month LIBOR
FHLB Advance Swap 3 [Member]
Notional amounts	$ 1,850,000
Effective Start Date	Mar. 09, 2017
Maturity Date	Mar. 09, 2027
Pay Fixed Rate	2.57%
Receive Floating Rate	3-Month LIBOR
FHLB Advance Swap 4 [Member]
Notional amounts	$ 2,000,000
Effective Start Date	Mar. 29, 2017
Maturity Date	Mar. 29, 2022
Pay Fixed Rate	2.08%
Receive Floating Rate	3-Month LIBOR
FHLB Advance Swap 5 [Member]
Notional amounts	$ 2,000,000
Effective Start Date	Mar. 29, 2017
Maturity Date	Mar. 29, 2024
Pay Fixed Rate	2.24%
Receive Floating Rate	3-Month LIBOR
FHLB Advance Swap 6 [Member]
Notional amounts	$ 2,000,000
Effective Start Date	Mar. 29, 2017
Maturity Date	Mar. 29, 2027
Pay Fixed Rate	2.40%
Receive Floating Rate	3-Month LIBOR

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Note 7 - Derivative - Interest Rate Swap Agreement - Cash Flow Hedges (Details) - Interest Rate Swap [Member] - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Derivative notional amount	$ 11,550,000	$ 11,550,000
Loans - Commercial real estate loan	$ 123,118	$ 217,464

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Note 7 - Derivative - Interest Rate Swap Agreement - Cash Flow Derivative Gains (Loss) Recorded In AOCI and the Statement of Income (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Unrealized gain on derivative transactions securities, net of tax effect			$ (93,271)	$ 46,786
Cash Flow Hedging [Member] | Interest Rate Swap [Member]
Unrealized gain on derivative transactions securities, net of tax effect	$ (287,116)	$ 122,388	(93,271)	22,784
Interest Rate ContraAmount of gain (loss) reclassified from OCI to Interest Incomet
Amount of gain (loss) recognized in Other Noninterest Income (ineffective portion)	$ (1,996)	$ (5,445)	$ (1,075)	$ (9,124)

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Note 7 - Derivative - Interest Rate Swap Agreement - Fair Value Hedge (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Commercial real estate loan, principal amount	$ 366,425,510	$ 387,598,982
Interest Rate Swap [Member]
Derivative notional amount	11,550,000	11,550,000
Loans and Leases [Member] | Offsetting Commercial Real Estate Loan by Interest Rate Swap [Member]
Derivative notional amount
Commercial real estate loan, principal amount	3,027,702	3,091,892
Commercial real estate loan, fair value	2,984,595	3,022,744
Other Assets [Member] | Interest Rate Swap [Member]
Derivative notional amount	3,027,702	3,091,892
Commercial real estate loan, fair value	$ 43,107	$ 69,148

XML

Note 8 - Deposits - Composition of Deposits and Related Percentage Mix (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Savings, amount	$ 41,548,268	$ 42,499,381
Savings, percentage	10.80%	10.60%
Noninterest-bearing checking, amount	$ 27,365,942	$ 29,557,943
Noninterest-bearing checking, percentage	7.10%	7.30%
Interest-bearing checking, amount	$ 28,478,231	$ 27,219,286
Interest-bearing checking, percentage	7.40%	6.70%
Money market accounts, amount	$ 48,128,831	$ 58,466,228
Money market accounts, percentage	12.50%	14.40%
Time deposits, amount	$ 238,448,636	$ 246,988,613
Time deposits, percentage	62.10%	61.00%
Gross deposits, amount	$ 383,969,908	$ 404,731,451
Gross deposits, percentage	100.00%	100.00%
Premium on deposits asssumed	$ 201,034	$ 411,524
Total deposits	$ 384,170,942	$ 405,142,975

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Note 9 - Lines of Credit and Federal Home Loan Bank Advances (Details Textual) - USD ($)	9 Months Ended
	Dec. 31, 2018	Mar. 31, 2018
Federal Home Loan Bank Advances Total Funding Available As A Percent Of Total Assets	25.00%
Federal Home Loan Bank, Advances, General Debt Obligations, Maximum Amount Available	$ 73,600,000	$ 68,300,000
Loans Pledged as Collateral	114,800,000	127,100,000
Derivative, Notional Amount	11,550,000
Secured Debt [Member]
Line of Credit Facility, Maximum Borrowing Capacity	5,000,000
Unsecured Debt [Member]
Line of Credit Facility, Maximum Borrowing Capacity	1,000,000
Long-term Line of Credit, Total	0	$ 0
Federal Home Loan Bank Advances [Member] | Individual Cash Flow Hedge Tied to FHLB, 3 [Member] | Borrowing One [Member]
Derivative, Notional Amount	$ 1,850,000
Derivative, Term of Contract	10 years
Federal Home Loan Bank Advances [Member] | Individual Cash Flow Hedge Tied to FHLB, 3 [Member] | Borrowing Two [Member]
Derivative, Term of Contract	10 years
Federal Home Loan Bank Advances [Member] | Individual Cash Flow Hedge Tied to FHLB, 2 [Member] | Borrowing One [Member]
Derivative, Term of Contract	7 years
Federal Home Loan Bank Advances [Member] | Individual Cash Flow Hedge Tied to FHLB, 2 [Member] | Borrowing Two [Member]
Derivative, Term of Contract	7 years
Federal Home Loan Bank Advances [Member] | Individual Cash Flow Hedge Tied to FHLB, 1 [Member] | Borrowing One [Member]
Derivative, Term of Contract	5 years
Federal Home Loan Bank Advances [Member] | Individual Cash Flow Hedge Tied to FHLB, 1 [Member] | Borrowing Two [Member]
Derivative, Notional Amount	$ 2,000,000
Derivative, Term of Contract	5 years

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Note 9 - Lines of Credit and Federal Home Loan Bank Advances - Federal Home Loan Bank Advances (Details) - USD ($)		9 Months Ended	12 Months Ended
		Dec. 31, 2018	Mar. 31, 2018
Amount		$ 51,050,000	$ 60,550,000
Premium on FHLB advances assumed			122,140
Total borrowings		51,050,000	60,672,140
Borrowing One [Member] | Federal Home Loan Bank Advances [Member]
Amount	[1]	$ 5,550,000	$ 5,550,000
Rate	[1]	2.57%	1.84%
Maturity Date	[1]	Mar. 11, 2019	Jun. 11, 2018
Borrowing Two [Member] | Federal Home Loan Bank Advances [Member]
Amount	[2]	$ 6,000,000	$ 6,000,000
Rate	[2]	2.58%	1.90%
Maturity Date	[2]	Mar. 29, 2019	Jun. 29, 2018
Borrowing Three [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 3,000,000	$ 1,000,000
Rate		2.71%	2.60%
Maturity Date		Aug. 26, 2019	Jul. 02, 2018
Borrowing Four [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 3,000,000	$ 1,000,000
Rate		1.59%	3.05%
Maturity Date		Aug. 26, 2019	Jul. 03, 2018
Borrowing Five [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 1,500,000	$ 5,000,000
Rate		1.95%	3.94%
Maturity Date		Nov. 25, 2019	Jul. 23, 2018
Borrowing Six [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 3,000,000	$ 1,000,000
Rate		2.31%	1.74%
Maturity Date		Feb. 03, 2020	Jul. 31, 2018
Borrowing Seven [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 1,000,000	$ 1,000,000
Rate		2.86%	1.40%
Maturity Date		Aug. 04, 2020	Aug. 21, 2018
Borrowing Eight [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 2,000,000	$ 4,000,000
Rate		2.56%	1.94%
Maturity Date		Aug. 27, 2020	Aug. 27, 2018
Borrowing Nine [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 1,000,000	$ 3,000,000
Rate		2.15%	1.41%
Maturity Date		Nov. 30, 2020	Aug. 27, 2018
Borrowing Ten [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 2,000,000	$ 5,000,000
Rate		2.28%	3.38%
Maturity Date		Dec. 28, 2020	Sep. 19, 2018
Borrowing Eleven [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 2,000,000	$ 1,000,000
Rate		2.49%	2.60%
Maturity Date		Feb. 01, 2021	Oct. 02, 2018
Borrowing Twelve [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 3,000,000	$ 1,000,000
Rate		2.93%	1.95%
Maturity Date		Jul. 26, 2021	Dec. 31, 2018
Borrowing Thirteen [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 2,000,000	$ 3,000,000
Rate		3.01%	1.38%
Maturity Date		Aug. 04, 2021	Jul. 31, 2019
Borrowing Fourteen [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 1,000,000	$ 3,000,000
Rate		2.88%	1.96%
Maturity Date		Aug. 23, 2021	Aug. 26, 2019
Borrowing Fifteen [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 3,000,000	$ 3,000,000
Rate		1.48%	1.59%
Maturity Date		Aug. 25, 2021	Aug. 26, 2019
Borrowing Sixteen [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 2,000,000	$ 3,000,000
Rate		2.68%	1.42%
Maturity Date		Aug. 27, 2021	Aug. 26, 2019
Borrowing Seventeen [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 3,000,000	$ 1,500,000
Rate		2.79%	1.95%
Maturity Date		Aug. 29, 2022	Nov. 25, 2019
Borrowing Eighteen [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 2,000,000	$ 1,500,000
Rate		3.14%	1.78%
Maturity Date		Sep. 19, 2022	Nov. 27, 2019
Borrowing Nineteen [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 3,000,000	$ 3,000,000
Rate		2.70%	2.31%
Maturity Date		Aug. 28, 2023	Feb. 03, 2020
Borrowing Twenty [Member] | Federal Home Loan Bank Advances [Member]
Amount		$ 2,000,000	$ 1,000,000
Rate		3.20%	2.15%
Maturity Date		Sep. 19, 2023	Nov. 30, 2020
Borrowing Twenty One [Member] | Federal Home Loan Bank Advances [Member]
Amount			$ 2,000,000
Rate			2.28%
Maturity Date			Dec. 28, 2020
Borrowing Twenty Two [Member] | Federal Home Loan Bank Advances [Member]
Amount			$ 2,000,000
Rate			2.49%
Maturity Date			Feb. 01, 2021
Borrowing Twenty Three [Member] | Federal Home Loan Bank Advances [Member]
Amount			$ 3,000,000
Rate			1.48%
Maturity Date			Aug. 25, 2021

[1] FHLB Advance is tied to three derivative cash flow hedges in increments of $1.85 million each. The three individual cash flow hedges are for a term of five, seven and ten years, respectively and are tied to the 3-month LIBOR rate. In order for the cash flow hedges to remain effective, the corresponding FHLB Advance will have to be renewed every three months until the respective cash flow hedge matures. The maturity date for the three cash flow hedges are March 9, 2022, 2024, and 2027.

[2] FHLB Advance is tied to three derivative cash flow hedges in increments of $2.0 million each. The three individual cash flow hedges are for a term of five, seven and ten years, respectively and are tied to the 3-month LIBOR rate. In order for the cash flow hedges to remain effective, the corresponding FHLB Advance will have to be renewed every three months until the respective cash flow hedge matures. The maturity for the three cash flow hedges are March 29, 2022, 2024, and 2027.

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Note 10 - Regulatory Capital Ratios (Details Textual)		9 Months Ended
		Dec. 31, 2018	Jan. 01, 2019	Mar. 31, 2018
Common Equity Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	[1]	6.50%		6.50%
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	[1]	8.00%		8.00%
Capital Required to be Well Capitalized to Risk Weighted Assets	[1]	10.00%		10.00%
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	[1]	5.00%		5.00%
Capital Conservation Buffer Level R Ratio		0.625%
Capital Conservation Buffer Phase In Period		4 years
Subsequent Event [Member]
Capital Conservation Buffer Level R Ratio			2.50%

[1] Under prompt corrective action

XML

Note 10 - Regulatory Capital Ratios - Capital Ratios and Minimum Capital Requirements of Bank (Details) - USD ($) $ in Thousands		Dec. 31, 2018	Mar. 31, 2018
Common equity tier 1 capital (to risk-weighted assets)		$ 49,329	$ 47,308
Common equity tier 1 capital (to risk-weighted assets)		14.12%	12.79%
Common equity tier 1 capital (to risk-weighted assets)	[1]	$ 22,714	$ 24,044
Common Equity Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	[1]	6.50%	6.50%
Total risk-based capital (to risk-weighted assets)		$ 52,417	$ 50,180
Total risk-based capital (to risk-weighted assets)		15.00%	13.57%
Total risk-based capital (to risk-weighted assets)	[1]	$ 34,945	$ 36,992
Capital Required to be Well Capitalized to Risk Weighted Assets	[1]	10.00%	10.00%
Tier 1 capital (to risk-weighted assets)		$ 49,329	$ 47,308
Tier 1 capital (to risk-weighted assets)		14.12%	12.79%
Tier 1 capital (to risk-weighted assets)	[1]	$ 27,956	$ 29,593
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	[1]	8.00%	8.00%
Tier 1 capital (to adjusted total assets)		$ 49,329	$ 47,308
Tier 1 capital (to adjusted total assets)		10.00%	9.15%
Tier 1 capital (to adjusted total assets)	[1]	$ 24,665	$ 25,843
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	[1]	5.00%	5.00%
Minimum Capital Required - Basel III Phase-In Schedule [Member]
Common equity tier 1 capital (to risk-weighted assets)		$ 22,277	$ 23,582
Common equity tier 1 capital (to risk-weighted assets)		6.375%	6.375%
Total risk-based capital (to risk-weighted assets)		$ 34,508	$ 36,529
Total risk-based capital (to risk-weighted assets)		9.875%	9.875%
Tier 1 capital (to risk-weighted assets)		$ 27,519	$ 29,131
Tier 1 capital (to risk-weighted assets)		7.875%	7.875%
Tier 1 capital (to adjusted total assets)		$ 19,732	$ 20,674
Tier 1 capital (to adjusted total assets)		4.00%	4.00%
Minimum Capital Required - Basel III Fully Phased-In [Member]
Common equity tier 1 capital (to risk-weighted assets)		$ 24,461	$ 25,894
Common equity tier 1 capital (to risk-weighted assets)		7.00%	7.00%
Total risk-based capital (to risk-weighted assets)		$ 36,692	$ 38,841
Total risk-based capital (to risk-weighted assets)		10.50%	10.50%
Tier 1 capital (to risk-weighted assets)		$ 27,703	$ 31,443
Tier 1 capital (to risk-weighted assets)		8.50%	8.50%
Tier 1 capital (to adjusted total assets)		$ 19,732	$ 20,674
Tier 1 capital (to adjusted total assets)		4.00%	4.00%
Hamilton Bank [Member]
Common equity tier 1 capital (to risk-weighted assets)		$ 43,688	$ 39,126
Common equity tier 1 capital (to risk-weighted assets)		12.55%	10.61%
Common equity tier 1 capital (to risk-weighted assets)	[1]	$ 22,621	$ 23,959
Common Equity Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	[1]	6.50%	6.50%
Total risk-based capital (to risk-weighted assets)		$ 46,776	$ 41,998
Total risk-based capital (to risk-weighted assets)		13.44%	11.39%
Total risk-based capital (to risk-weighted assets)	[1]	$ 34,801	$ 36,860
Capital Required to be Well Capitalized to Risk Weighted Assets	[1]	10.00%	10.00%
Tier 1 capital (to risk-weighted assets)		$ 43,688	$ 39,126
Tier 1 capital (to risk-weighted assets)		12.55%	10.61%
Tier 1 capital (to risk-weighted assets)	[1]	$ 27,841	$ 29,488
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	[1]	8.00%	8.00%
Tier 1 capital (to adjusted total assets)		$ 43,688	$ 39,126
Tier 1 capital (to adjusted total assets)		8.91%	7.64%
Tier 1 capital (to adjusted total assets)	[1]	$ 24,523	$ 25,621
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	[1]	5.00%	5.00%
Hamilton Bank [Member] | Minimum Capital Required - Basel III Phase-In Schedule [Member]
Common equity tier 1 capital (to risk-weighted assets)		$ 22,186	$ 23,498
Common equity tier 1 capital (to risk-weighted assets)		6.375%	6.375%
Total risk-based capital (to risk-weighted assets)		$ 34,366	$ 36,399
Total risk-based capital (to risk-weighted assets)		9.875%	9.875%
Tier 1 capital (to risk-weighted assets)		$ 27,406	$ 29,027
Tier 1 capital (to risk-weighted assets)		7.875%	7.875%
Tier 1 capital (to adjusted total assets)		$ 19,619	$ 20,497
Tier 1 capital (to adjusted total assets)		4.00%	4.00%
Hamilton Bank [Member] | Minimum Capital Required - Basel III Fully Phased-In [Member]
Common equity tier 1 capital (to risk-weighted assets)		$ 24,361	$ 25,802
Common equity tier 1 capital (to risk-weighted assets)		7.00%	7.00%
Total risk-based capital (to risk-weighted assets)		$ 36,541	$ 38,703
Total risk-based capital (to risk-weighted assets)		10.50%	10.50%
Tier 1 capital (to risk-weighted assets)		$ 29,581	$ 31,331
Tier 1 capital (to risk-weighted assets)		8.50%	8.50%
Tier 1 capital (to adjusted total assets)		$ 19,619	$ 20,497
Tier 1 capital (to adjusted total assets)		4.00%	4.00%

[1] Under prompt corrective action

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Note 11 - Stock Based Compensation (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018	Mar. 31, 2017	Nov. 30, 2013	Oct. 10, 2012
Share Price								$ 10
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance	27,861		27,861		19,440	36,220
2013 Equity Incentive Plan [Member]
Stock or Unit Option Plan Expense	$ 61,514	$ 57,392	$ 184,542	$ 172,177
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total	$ 146,164		$ 146,164
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 255 days
Share Price	$ 13.90		$ 13.90
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value	$ 18,583		$ 18,583
Restricted Stock or Unit Expense	$ 64,089	$ 57,819	$ 192,268	$ 173,457
2013 Equity Incentive Plan [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized							148,120
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance	92,701		92,701
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures, Total			268,204
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			5 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total	$ 158,591		$ 158,591
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 219 days
2013 Equity Incentive Plan [Member] | Restricted Stock [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
2013 Equity Incentive Plan [Member] | Restricted Stock [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
2013 Equity Incentive Plan [Member] | Restricted Stock [Member] | Share-based Compensation Award, Tranche Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
2013 Equity Incentive Plan [Member] | Restricted Stock [Member] | Share-based Compensation Award, Tranche Four [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
2013 Equity Incentive Plan [Member] | Restricted Stock [Member] | Share-based Compensation Award, Tranche Five[Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
2013 Equity Incentive Plan [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized							370,300
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			5 years
2013 Equity Incentive Plan [Member] | Employee Stock Option [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
2013 Equity Incentive Plan [Member] | Employee Stock Option [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
2013 Equity Incentive Plan [Member] | Employee Stock Option [Member] | Share-based Compensation Award, Tranche Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
2013 Equity Incentive Plan [Member] | Employee Stock Option [Member] | Share-based Compensation Award, Tranche Four [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
2013 Equity Incentive Plan [Member] | Employee Stock Option [Member] | Share-based Compensation Award, Tranche Five[Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			20.00%
2013 Equity Incentive Plan [Member] | Employee Stock Option [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			10 years

XML

Note 11 - Stock Based Compensation - Fair Value Assumptions (Details) - $ / shares					9 Months Ended	12 Months Ended
	Apr. 01, 2018	Feb. 03, 2017	Nov. 01, 2016	Feb. 03, 2014	Dec. 31, 2018	Mar. 31, 2018
Number of options granted (in shares)	20,354	3,700	19,000	225,150	20,354
Risk free interest rate	2.67%	2.27%	1.61%	2.07%
Expected term (Year)	7 years	7 years	7 years	7 years
Expected stock price volatility	19.61%	27.26%	27.17%	27.30%
Dividend yield	0.00%	0.00%	0.00%	0.00%
Fair value of options granted (in dollars per share)	$ 4.05	$ 5.18	$ 4.35	$ 4.65

XML

Note 11 - Stock Based Compensation - Stock Option Activity (Details) - $ / shares					9 Months Ended	12 Months Ended
	Apr. 01, 2018	Feb. 03, 2017	Nov. 01, 2016	Feb. 03, 2014	Dec. 31, 2018	Mar. 31, 2018	Mar. 31, 2017
Outstanding, beginning of period (in shares)	242,350				242,350	242,350
Outstanding, beginning of period (in dollars per share)					$ 13.87	$ 13.84	$ 13.84
Outstanding, beginning of period (Year)					5 years 219 days	6 years 36 days	7 years 36 days
Granted (in shares)	20,354	3,700	19,000	225,150	20,354
Granted (in dollars per share)					$ 14.25
Granted (Year)					9 years 109 days
Exercised (in shares)
Exercised (in dollars per share)
Exercised (Year)
Forfeited, exchanged or expired (in shares)
Forfeited, exchanged or expired (in dollars per share)
Forfeited, exchanged or expired (Year)
Outstanding, end of period (in shares)					262,704	242,350	242,350
Vested at end of year (in shares)					184,060	180,260
Vested at end of year (in dollars per share)					$ 13.84	$ 13.84
Vested at end of year (Year)					5 years 73 days	5 years 292 days

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Note 11 - Stock Based Compensation - Restricted Stock Activity (Details) - Restricted Stock [Member] - USD ($)	9 Months Ended	12 Months Ended
	Dec. 31, 2018	Mar. 31, 2018	Mar. 31, 2017
Nonvested (in shares)	19,440	36,220
Nonvested shares (in dollars per share)	$ 13.90	$ 13.74	$ 13.76
Granted (in shares)	8,801
Granted (in dollars per share)	$ 14.25
Vested (in shares)	(380)	(16,780)
Vested (in dollars per share)	$ 13.61	$ 13.78
Forfeited (in shares)
Forfeited (in dollars per share)
Nonvested (in shares)	27,861	19,440
Fair Value of shares vested	$ 901,276	$ 918,555

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Note 12 - Fair Value Measurements (Details Textual) - USD ($)	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Impaired Financing Receivable, Recorded Investment, Total	$ 7,543,269	$ 8,720,339	$ 9,142,748
Real Estate Acquired Through Foreclosure	457,778	457,778
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired Financing Receivable, Recorded Investment, Total	7,543,269	8,720,339
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	255,863	266,256
Real Estate Acquired Through Foreclosure	$ 457,778	$ 457,778

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Note 12 - Fair Value Measurements - Securities Available for Sale Measured On a Recurring Basis (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Investment securities available for sale, at fair value	$ 65,577,855	$ 75,404,136
Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value	65,577,855	75,404,136
US Government Agencies Debt Securities [Member]
Investment securities available for sale, at fair value	727,336	2,718,649
US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value	727,336	2,718,649
US States and Political Subdivisions Debt Securities [Member]
Investment securities available for sale, at fair value	11,641,229	11,705,991
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value	11,641,229	11,705,991
Corporate Debt Securities [Member]
Investment securities available for sale, at fair value	1,900,504	1,954,076
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value	1,900,504	1,954,076
Collateralized Mortgage Backed Securities [Member]
Investment securities available for sale, at fair value	51,308,786	59,025,420
Collateralized Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value	51,308,786	59,025,420
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value
Fair Value, Inputs, Level 1 [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value
Fair Value, Inputs, Level 1 [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value
Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value
Fair Value, Inputs, Level 1 [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value	63,677,351	73,450,044
Fair Value, Inputs, Level 2 [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value	727,336	2,718,649
Fair Value, Inputs, Level 2 [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value	11,641,229	11,705,991
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value
Fair Value, Inputs, Level 2 [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value	51,308,786	59,025,404
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value	1,900,504	1,954,092
Fair Value, Inputs, Level 3 [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value
Fair Value, Inputs, Level 3 [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value
Fair Value, Inputs, Level 3 [Member] | Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value	1,900,504	1,954,076
Fair Value, Inputs, Level 3 [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value		$ 16

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Note 12 - Fair Value Measurements - Derivatives Measured On a Recurring Basis (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Offsetting Commercial Real Estate Loan by Interest Rate Swap [Member] | Loans and Leases [Member]
Commercial real estate loan, fair value	$ 2,984,595	$ 3,022,744
Offsetting Commercial Real Estate Loan by Interest Rate Swap [Member] | Loans and Leases [Member] | Fair Value, Measurements, Recurring [Member]
Loans - Commercial real estate loan	2,984,595	3,022,744
Interest Rate Swap [Member]
Loans - Commercial real estate loan	123,118	217,464
Interest Rate Swap [Member] | Other Liabilities [Member] | Fair Value, Measurements, Recurring [Member]
Commercial real estate loan, fair value	43,107	69,148
Derivatives - Interest rate swaps designated as cash flow hedge	123,118	217,464
Fair Value, Inputs, Level 1 [Member] | Offsetting Commercial Real Estate Loan by Interest Rate Swap [Member] | Loans and Leases [Member] | Fair Value, Measurements, Recurring [Member]
Loans - Commercial real estate loan
Fair Value, Inputs, Level 1 [Member] | Interest Rate Swap [Member] | Other Liabilities [Member] | Fair Value, Measurements, Recurring [Member]
Commercial real estate loan, fair value
Derivatives - Interest rate swaps designated as cash flow hedge
Fair Value, Inputs, Level 2 [Member] | Offsetting Commercial Real Estate Loan by Interest Rate Swap [Member] | Loans and Leases [Member] | Fair Value, Measurements, Recurring [Member]
Loans - Commercial real estate loan	2,984,595	3,022,744
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | Other Liabilities [Member] | Fair Value, Measurements, Recurring [Member]
Commercial real estate loan, fair value	43,107	69,148
Derivatives - Interest rate swaps designated as cash flow hedge	123,118	217,464
Fair Value, Inputs, Level 3 [Member] | Offsetting Commercial Real Estate Loan by Interest Rate Swap [Member] | Loans and Leases [Member] | Fair Value, Measurements, Recurring [Member]
Loans - Commercial real estate loan
Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member] | Other Liabilities [Member] | Fair Value, Measurements, Recurring [Member]
Commercial real estate loan, fair value
Derivatives - Interest rate swaps designated as cash flow hedge

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Note 12 - Fair Value Measurements - Valuation and Unobservable Inputs for Level 3 Assets (Details)	Dec. 31, 2018 USD ($)	Mar. 31, 2018 USD ($)
Fair Value, Measurements, Nonrecurring [Member]
Impaired Loans, Net of Allowance, Fair Value Disclosure, Nonrecurring	$ 7,289,458	$ 8,454,083
Foreclosed Real Estate, Fair Value Disclosure, Nonrecurring	457,778	457,778
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Impaired Loans, Net of Allowance, Fair Value Disclosure, Nonrecurring	7,289,458	8,454,083
Foreclosed Real Estate, Fair Value Disclosure, Nonrecurring	457,778	$ 457,778
Fair Value, Inputs, Level 3 [Member] | Valuation, Market Approach [Member] | Fair Value, Measurements, Recurring [Member]
Investment securities, fair value	$ 1,900,504
Fair Value, Inputs, Level 3 [Member] | Valuation, Market Approach [Member] | Fair Value, Measurements, Recurring [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member]
Investment securities, discount rate	0
Impaired loans, net of allowance, discount rate	0
Fair Value, Inputs, Level 3 [Member] | Valuation, Market Approach [Member] | Fair Value, Measurements, Recurring [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member]
Investment securities, discount rate	0.1
Impaired loans, net of allowance, discount rate	0.25
Fair Value, Inputs, Level 3 [Member] | Valuation, Market Approach [Member] | Fair Value, Measurements, Nonrecurring [Member]
Impaired Loans, Net of Allowance, Fair Value Disclosure, Nonrecurring	$ 7,289,458
Foreclosed Real Estate, Fair Value Disclosure, Nonrecurring	$ 457,778
Fair Value, Inputs, Level 3 [Member] | Valuation, Market Approach [Member] | Fair Value, Measurements, Nonrecurring [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member]
Foreclosed real estate, discount rate	0
Fair Value, Inputs, Level 3 [Member] | Valuation, Market Approach [Member] | Fair Value, Measurements, Nonrecurring [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member]
Foreclosed real estate, discount rate	0.25
Fair Value, Inputs, Level 3 [Member] | Valuation Technique, Discounted Cash Flow [Member] | Fair Value, Measurements, Nonrecurring [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member]
Impaired loans, net of allowance, discount rate	0.0263
Fair Value, Inputs, Level 3 [Member] | Valuation Technique, Discounted Cash Flow [Member] | Fair Value, Measurements, Nonrecurring [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member]
Impaired loans, net of allowance, discount rate	0.0725

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Note 12 - Fair Value Measurements - Reconciliation of Investments at Fair Value on Recurring Basis (Details) - USD ($)	9 Months Ended	12 Months Ended
	Dec. 31, 2018	Mar. 31, 2018
Balance, beginning of year	$ 1,954,092	$ 1,930,786
Change in valuation	(53,572)
Balance, end of year	1,900,504	1,954,092
Corporate Bond Securities [Member]
Transfers in		1,954,076
Transfers out
Collateralized Mortgage Backed Securities [Member]
Transfers in		16
Transfers out	16	2,473
Municipal Bonds [Member]
Transfers in
Transfers out		$ 1,928,313

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Note 12 - Fair Value Measurements - Measurements On Nonrecurring Basis (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Impaired loans	$ 7,289,458	$ 8,454,083
Foreclosed real estate	457,778	457,778
Fair Value, Inputs, Level 1 [Member]
Impaired loans
Foreclosed real estate
Fair Value, Inputs, Level 2 [Member]
Impaired loans
Foreclosed real estate
Fair Value, Inputs, Level 3 [Member]
Impaired loans	7,289,458	8,454,083
Foreclosed real estate	$ 457,778	$ 457,778

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Note 12 - Fair Value Measurements - Reconciliation of Foreclosed Real Estate, Measured On Nonrecurring Basis Using Significant Unobservable Inputs (Details) - USD ($)	9 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Transfer to foreclosed real estate	$ 145,820	$ 17,305
Fair Value, Inputs, Level 3 [Member]
Balance at beginning of period	457,778	$ 503,094	$ 503,094
Transfer to foreclosed real estate	150,052		23,834
Write-down of foreclosed real estate			(31,955)
Proceeds from sale of foreclosed real estate	(145,820)		(35,896)
Loss on sale of foreclosed real estate	(4,232)		(1,299)
Balance at end of period	$ 457,778		$ 457,778

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Note 12 - Fair Value Measurements - Financial Assets and Liabilities Measured On a Recurring Basis (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Financial assets
Loans receivable, net of unearned income	$ 369,456,616	$ 390,420,885
Fair Value, Inputs, Level 1 [Member] | Reported Value Measurement [Member]
Financial assets
Cash and cash equivalents	26,547,840	23,368,415
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value Measurement [Member]
Financial assets
Cash and cash equivalents	26,547,840	23,368,415
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member]
Financial assets
Federal Home Loan Bank stock	2,676,200	3,122,400
Bank-owned life insurance	17,799,920	17,455,850
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member]
Financial assets
Federal Home Loan Bank stock	2,676,200	3,122,400
Bank-owned life insurance	17,799,920	17,455,850
Fair Value, Inputs, Level 3 [Member] | Reported Value Measurement [Member]
Financial assets
Certificates of deposit held as investment	499,121	499,189
Loans receivable, net of unearned income	366,428,914	387,328,993
Deposits	384,170,942	405,142,975
Advance payments by borrowers for taxes and insurance	1,059,677	1,962,665
Borrowings, fair value	51,050,000	60,672,140
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member]
Financial assets
Certificates of deposit held as investment	485,928	492,751
Loans receivable, net of unearned income	352,433,858	385,818,260
Deposits	385,031,487	405,026,957
Advance payments by borrowers for taxes and insurance	1,059,677	1,962,665
Borrowings, fair value	$ 50,394,636	$ 60,494,922