10-Q

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 June 30, 2019

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. 001-38239

FFBW, Inc.

(Exact name of registrant as specified in its charter)

Federal	82-3027075
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
1360 South Moorland Road  Brookfield, Wisconsin	53005
(Address of Principal Executive Offices)	(Zip Code)

(262) 542-4448

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of class	Trading Symbol	Name of exchange on which registered
Common Stock; $0.01 par value	FFBW	The Nasdaq Stock Market

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, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

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

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 Act). YES [  ] NO [X]

6,580,988 shares of the Registrant’s common stock, par value $0.01 per share, were issued and outstanding as of July 31, 2019.

FFBW, Inc.

Form 10-Q

Index 

		Page
Part I. Financial Information
Item 1.	Financial Statements
	Balance Sheets as of June 30, 2019 (unaudited) and December 31, 2018	2
	Statements of Income for the Three and Six Months Ended June 30, 2019 and 2018 (unaudited)	3
	Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2019 and 2018 (unaudited)	4
	Statements of Changes in Equity for the Six Months Ended June 30, 2019 and 2018 (unaudited)	5
	Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018 (unaudited)	6
	Notes to Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	41
Item 4.	Controls and Procedures	41
Part II. Other Information
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	42
	Signature Page	43

1

Part I. – Financial Information

Item 1. Financial Statements

FFBW, Inc.

Balance Sheets

June 30, 2019 (Unaudited) and December 31, 2018

(In thousands, except share data)

	June 30,			December 31,
	2019			2018
Assets
Cash and due from banks	$	4,351		$	1,746
Fed funds sold		1,046			2,742
Cash and cash equivalents		5,397			4,488
Available for sale securities, stated at fair value		43,478			43,751
Loans held for sale		1,951			679
Loans, net of allowance for loan and lease losses of $2,252 and $2,118, respectively		193,001			198,694
Premises and equipment, net		4,888			5,057
Foreclosed assets		84			69
FHLB stock, at cost		609			739
Accrued interest receivable		777			768
Cash value of life insurance		7,105			7,007
Other assets		1,034			1,474
TOTAL ASSETS	$	258,324		$	262,726
Liabilities and Equity
Deposits	$	177,553		$	183,205
Advance payments by borrowers for taxes and insurance		771			55
FHLB advances		15,750			17,750
Accrued interest payable		648			70
Other liabilities		2,418			1,284
Total liabilities	$	197,140		$	202,364
Preferred stock ($0.01 par value, 1,000,000 authorized, no shares issued or outstanding as of June 30, 2019 and December 31, 2018, respectively)	$	-		$	-
Common stock ($0.01 par value, 19,000,000 authorized, 6,706,742 and 6,696,742 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively)		67			67
Additional paid in capital		28,489			28,326
Unallocated common stock of Employee Stock Ownership Plan ("ESOP") (236,823 and 243,303 shares at June 30, 2019 and December 31, 2018, respectively)		(2,368	)		(2,433	)
Retained earnings		35,632			34,995
Accumulated other comprehensive income (loss), net of income taxes		235			(593	)
Less treasury stock, 82,055 and 0 shares at cost, at June 30, 2019 and December 31, 2018, respectively		(871	)		-
Total equity	$	61,184		$	60,362
TOTAL LIABILITIES AND EQUITY	$	258,324		$	262,726

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

2

FFBW, Inc.

Statements of Income

Three and Six Months Ended June 30, 2019 and 2018 (Unaudited)

(In thousands, except per share data)

	Three months ended June 30,					Six months ended June 30,
	2019		2018			2019			2018
Interest and dividend income:
Loans, including fees	$	2,497	$	2,326		$	4,945		$	4,294
Securities
Taxable		282		339			557			679
Tax-exempt		4		14			6			37
Other		21		15			46			31
Total interest and dividend income		2,804		2,694			5,554			5,041
Interest Expense:
Interest-bearing deposits		633		342			1,232			688
Borrowed funds		91		116			179			169
Total interest expense		724		458			1,411			857
Net interest income		2,080		2,236			4,143			4,184
Provision for loan losses		85		189			155			304
Net interest income after provision for loan losses		1,995		2,047			3,988			3,880
Noninterest income:
Service charges and other fees		64		51			99			111
Net gain on sale of loans		127		36			168			75
Net gain (loss) on sale of securities		5		1			(3	)		9
Increase in cash surrender value of insurance		51		49			98			95
Other noninterest income		24		24			49			47
Total noninterest income		271		161			411			337
Noninterest expense:
Salaries and employee benefits		1,031		1,139			2,128			2,196
Occupancy and equipment		242		226			484			459
Data processing		169		158			344			310
Technology		79		49			157			104
Foreclosed assets, net		1		(9	)		2			37
Professional fees		104		57			216			175
Other noninterest expense		126		151			229			323
Total noninterest expense		1,752		1,771			3,560			3,604
Income before income taxes		514		437			839			613
Provision for income taxes		126		84			202			137
Net income	$	388	$	353		$	637		$	476
Earnings per share
Basic	$	0.06	$	0.06		$	0.10		$	0.07
Diluted	$	0.06	$	0.06		$	0.10		$	0.07

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

3

FFBW, Inc.

Statement of Comprehensive Income (Loss)

Three and Six Months Ended June 30, 2019 and 2018, (Unaudited)

(In thousands)

	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Net income	$	388		$	353		$	637		$	476
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the period		540			(262	)		1,132			(956	)
Reclassification adjustment for losses (gains) realized in net income		(5	)		(1	)		3			(9	)
Other comprehensive income (loss) before tax effect		535			(263	)		1,135			(965	)
Tax effect of other comprehensive income (loss) items		(144	)		136			(307	)		230
Other comprehensive income (loss), net of tax		391			(127	)		828			(735	)
Comprehensive income (loss)	$	779		$	226		$	1,465		$	(259	)

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

4

FFBW, Inc.

Statement of Changes in Equity

For the Six Months Ended June, 2019 and 2018, (Unaudited)

(In thousands, except share data)

	Common Stock		Additional Paid-In Capital		Unallocated Common Stock of ESOP			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total
Balance at December 31, 2017	$	66	$	28,296	$	(2,563	)	$	33,937	$	(247	)	$	-		$	59,489
Net income		-		-		-			476		-			-			476
ESOP shares committed to be released (6,480 shares)		-		6		65			-		-			-			71
Other comprehensive loss		-		-		-			-		(735	)					(735	)
Balance at June 30, 2018	$	66	$	28,302	$	(2,498	)	$	34,413	$	(982	)	$	-		$	59,301
Balance at December 31, 2018	$	67	$	28,326	$	(2,433	)	$	34,995	$	(593	)	$	-			60,362
Net income		-		-		-			637		-						637
ESOP shares committed to be released (6,480 shares)		-		4		65			-		-			-			69
Stock based compensation expense		-		159		-			-		-			-			159
Other comprehensive income		-		-		-			-		828			-			828
Repurchase of common stock		-		-		-			-		-			(871	)		(871	)
Balance at June 30, 2019	$	67	$	28,489	$	(2,368	)	$	35,632	$	235		$	(871	)	$	61,184

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

5

FFBW, Inc.

Statements of Cash Flows

For the Six Months Ended June 30, 2019 and 2018 (Unaudited)

(In thousands)

	For the six months ended June 30,
	2019			2018
Increase (decrease) in cash and cash equivalents:
Cash flows from operating activities:
Net income	$	637		$	476
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		155			304
Depreciation		181			167
Accretion of loan portfolio discount and deposit premium		(59	)		(46	)
Net amortization on securities available for sale		199			272
(Gain) loss on sales and impairments of foreclosed assets		(7	)		17
(Gain) loss on sale of available for sale securities		3			(9	)
Increase in cash surrender value of life insurance		(98	)		(95	)
ESOP compensation		69			71
Stock based compensation		159			-
Changes in operating assets and liabilities:
Accrued interest receivable		(9	)		(39	)
Loans held for sale		(1,272	)		109
Other assets		133			66
Accrued interest payable		550			323
Other liabilities		1,162			(152	)
Net cash provided by operating activities	$	1,803		$	1,464
Cash flows from investing activities:
Proceeds from sales of available for sale securities	$	4,837		$	6,437
Maturities, calls, paydowns on available for sale securities		2,316			3,079
Purchases of available for sale securities		(5,947	)		(7,867	)
Net (increase) decrease in loans		5,521			(22,259	)
Purchases of premises and equipment		(12	)		(38	)
Proceeds from redemption of FHLB stock		130			-
Purchase of FHLB stock		-			(584	)
Proceeds from sale of foreclosed assets		76			823
Net cash provided by (used in) investing activities	$	6,921		$	(20,409	)
Cash flows from financing activities:
Net decrease in deposits	$	(5,660	)	$	(16,501	)
Net increase in advance payments by borrowers for taxes and insurance		716			776
Repayments of FHLB advances		(2,000	)		-
Proceeds from FHLB advances		-			25,250
Repurchase of common stock		(871	)		-
Net cash provided by (used in) financing activities	$	(7,815	)	$	9,525
Net increase (decrease) in cash and cash equivalents	$	909		$	(9,420	)
Cash and cash equivalents at beginning		4,488			11,813
Cash and cash equivalents at end	$	5,397		$	2,393
Supplemental Cash Flow Disclosures:
Cash paid for interest	$	833		$	534
Cash paid for income taxes		160			40
Loans transferred to foreclosed assets		84			221
Financed sales of foreclosed assets		-			21

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

6

FFBW, Inc.

Form 10-Q

Notes to Financial Statements (Unaudited – In thousands, except share data)

Note 1 – Basis of Presentation

The accompanying unaudited consolidated financial statements of FFBW, Inc. and its wholly-owned subsidiary, First Federal Bank of Wisconsin, (collectively the “Company”) were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America.

In the opinion of management, all adjustments necessary for a fair presentation of the financial statements have been included. The results of operations for the six month period ended June 30, 2019 are not necessarily indicative of the results which may be expected for the entire year. These statements should be read in conjunction with the Financial Statements and notes thereto for the year ended December 31, 2018 filed with the U.S. Securities and Exchange Commission (“SEC”) as part of FFBW, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2018.

In preparing the financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s financial condition, results of operations, comprehensive income, changes in shareholders’ equity and cash flows for the interim periods presented. These adjustments are of a normal recurring nature and include appropriate estimated provisions.

Note 2 – Nature of Business and Summary of Significant Accounting Policies

Organization

On October 10, 2017, First Federal Bank of Wisconsin (“the Bank”) converted to a stock savings bank and was reorganized into the mutual holding company structure.  The Bank issued all of its outstanding stock to a new holding company, FFBW, Inc., (the “Company”) which sold 2,950,625 shares of common stock to the public at $10.00 per share, and contributed an additional 25,000 shares to FFBW Community Foundation, representing 45% of its outstanding shares of common stock.  This amount included shares purchased by the Bank’s employee stock ownership plan (“ESOP”), which purchased 3.92% of the Company’s outstanding common upon the completion of the reorganization and stock issuance.  FFBW, Inc. is organized as a corporation under the laws of the United States.  FFBW, MHC has been organized as a mutual holding company under the laws of the United States and owns 55% of the outstanding common stock of FFBW, Inc.    

The cost of the reorganization and the issuing of the common stock were deferred and deducted from the sales proceeds of the offering.  Reorganization costs of $1,394 were recognized.  

At June 30, 2019, the significant assets of the Company were the capital stock of the Bank, and a loan to the First Federal Bank of Wisconsin Employee Stock Ownership Plan (“ESOP”). The liabilities of the Company were insignificant. The Company is subject to the financial reporting requirements of the Securities Exchange Act of 1934, as amended. The Company is subject to regulation and examination by the Board of Governors of the Federal Reserve System (“the Federal Reserve Board”).

First Federal Bank of Wisconsin is a community bank headquartered in Waukesha, Wisconsin that provides financial services to individuals and businesses from our offices in Waukesha, Brookfield, and the Bay View neighborhood.   

7

Use of Estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ 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, the fair values of securities, fair value of financial instruments, the valuation of other real estate owned and the valuation of deferred income tax assets.

Revenue Recognition

Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

The majority of the Company's revenue-generating transactions are not subject to ASC 606, including revenue all interest and dividend income generated from financial instruments. Certain noninterest income items, including loan servicing income, gain on sales of loans, gain on sales of securities, and other noninterest income have been evaluated to not fall with the scope of ASC 606. Elements of noninterest income that is within the scope of ASC 606, are as follows:

Service fees - The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Management reviewed the deposit account agreements, and determined that the agreements can be terminated at any time by either the Company or the account holder. Transaction fees, such as balance transfers, wires and overdraft charges are settled the day the performance obligation is satisfied. The Company's monthly service charges and maintenance fees are for services provided to the customer on a monthly basis and are considered a series of services that have the same pattern of transfer each month. The review of service charges assessed on deposit accounts included the amount of variable consideration that is a part of the monthly charges. It was found that the waiver of service charges due to insufficient funds and dormant account fees is immaterial and would not require a change in the accounting treatment for these fees under the new revenue standards. Recognition of revenue under ASC 606 did not materially change the timing or magnitude of revenue recognition.

Interchange fees - Customers use a Bank-issued debit card to purchase goods and services, and the Company earns interchange fees on those transactions, typically a percentage of the sale amount of the transaction. The Company records the amount due when it receives the settlement from the payment network. Payments from the payment network are received and recorded into income on a daily basis. There are no contingent debit card interchange fees recorded by the Company that could be subject to a clawback in future periods. Recognition of revenue under ASC 606 did not materially change the timing or magnitude of revenue recognition.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash and balances due from banks and non-maturity deposits in the Federal Home Loan Bank of Chicago (FHLB). The Company may at times maintain balances at financial institutions that exceed federally insured limits. The Company has not experienced any losses in such accounts.

Available for Sale Securities

Securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity.  Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company's assets and liabilities, liquidity needs, regulatory capital requirements, and other similar factors.  Securities classified as available for sale are carried at fair value.  Unrealized gains or losses are reported as increases or decreases in other comprehensive income, net of the related deferred tax effect.  Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Gains and losses on the sale of securities are recorded on the trade date and determined using the specific-identification method.

8

Declines in fair value of securities that are deemed to be other than temporary, if applicable, are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers the length of time and the extent to which fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient enough to allow for any anticipated recovery in fair value.

Loans Acquired in a Transfer 

The Company acquires loans (including debt securities) individually and in groups or portfolios. These loans are initially measured at fair value with no allowance for loan losses. The Company's allowance for loan losses on all acquired loans reflect only those losses incurred subsequent to acquisition.

Certain acquired loans may have experienced deterioration of credit quality between origination and the Company's acquisition of the loans. At acquisition, the Company reviews each loan to determine whether there is evidence of deterioration of credit quality since origination and if it is probable that the Company will be unable to collect all amounts due according to the loan's contractual terms. If both conditions exist, the Company determines whether each such loan is to be accounted for individually or whether such loans will be assembled into pools of loans based on common risk characteristics (for example, credit score, loan type, and date of origination). The Company considers expected prepayments and estimates the amount and timing of undiscounted principal, interest, and other cash flows expected at acquisition for each loan and aggregated pool of loans. The excess of the loan's or pool's scheduled contractual principal and interest payments over all cash flows expected at acquisition is calculated as the nonaccretable difference. The excess of cash flows expected to be collected over the fair value of each loan or pool (accretable yield) is accreted into interest income over the remaining life of the loan or pool.

At each reporting date, the Company continues to estimate cash flows expected to be collected for each loan or pool. If expected cash flows have decreased from the acquisition date estimate, the Company recognizes an allowance for loan losses. If expected cash flows have increased from the acquisition date estimate, the Company increases the amount of accretable yield to be recognized as interest income over the remaining life of the loan or pool.

Loans  

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff generally are reported at their outstanding unpaid principal balances adjusted for deferred loan fees and costs, charge-offs, and an allowance for loan losses. Interest on loans is accrued and credited to income based on the unpaid principal balance. Loan-origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method.

The accrual of interest on loans is discontinued when, in the opinion of management, there is an indication that the borrower may be unable to make payments as they become due. When loans are placed on nonaccrual status or charged off, all unpaid accrued interest is reversed against interest income. The interest on these loans is subsequently accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Allowance for Loan Losses

The allowance for loan losses is maintained at the level considered adequate by management to provide for losses that are probable as of the balance sheet date. The allowance for loan losses is established through a provision for loan losses charged to expense as losses are estimated to have occurred. Loan losses are charged against the allowance when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance. In determining the adequacy of the allowance balance, the Company makes evaluations of the loan portfolio and related off-balance sheet commitments, considers current economic conditions and historical loss experience, and reviews specific problem loans and other factors.

9

When establishing the allowance for loan losses, management categorizes loans into risk categories generally based on the nature of the collateral and the basis of repayment. These risk categories and their relevant risk characteristics are as follows:

Commercial development: These loans are secured by vacant land and/or property that are in the process of improvement. Repayment of these loans can be dependent on the sale of the property to third parties or the successful completion of the improvements by the builder for the end user. Construction loans include not only construction of new structures, but loans originated to finance additions to or alterations of existing structures. Until a permanent loan originates, or payoff occurs, all commercial construction loans secured by real estate are reported in this loan pool. Development loans also have the risk that improvements will not be completed on time, or in accordance with specifications and projected costs.

Commercial real estate: These loans are primarily secured by office and industrial buildings, warehouses, small retail shopping facilities, and various special purpose properties, including restaurants. These loans are subject to underwriting standards and processes similar to commercial and industrial loans. Loans to closely held businesses are generally guaranteed in full by the owners of the business. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property. The cash flows of the borrowers, however, may not behave as forecasted and collateral securing loans may fluctuate in value due to the general economic factors or conditions specific to the real estate market, such as geographic location and/or purpose type.

Commercial and industrial: Commercial and industrial loans are extended primarily to small and middle market customers. Such credits typically comprise working capital loans, asset acquisition loans, and loans for other business purposes. Loans to closely held businesses are generally guaranteed in full by the owners of the business. Commercial and industrial loans are made based primarily on the historical and projected cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of the borrowers, however, may not behave as forecasted and collateral securing loans may fluctuate in value due to economic or individual performance factors. Minimum standards and underwriting guidelines have been established for commercial and industrial loans.

1-4 family owner-occupied: These loans are generally to individuals and are underwritten by evaluating the credit history of the borrower, the ability of the borrower to meet the debt service requirements of the loan and total debt obligations, the underlying collateral, and the loan to collateral value. Also included in this category are junior liens on 1-4 family residential properties. Underwriting standards for single family loans are heavily influenced by statutory requirements, which include, but are not limited to, loan-to-value and affordability ratios, risk-based pricing strategies, and documentation requirements.

1-4 family investor-owned: These loans may be to individuals or businesses and are subject to underwriting standards and processes similar to commercial and industrial loans. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property(ies). The cash flows of the borrowers, however, may not behave as forecasted and collateral securing loans may fluctuate in value due to the general economic factors or conditions specific to the real estate market, such as geographic location and/or purpose type.

Multifamily real estate: These loans include loans to finance non-farm properties with five or more units in structures primarily to accommodate households. Such credits are typically originated to finance the acquisition or refinancing of an apartment building. These loans are subject to underwriting standards and processes similar to commercial and industrial loans. Loans to closely held businesses are generally guaranteed in full by the owners of the business. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the subject multifamily property, with assumptions made for vacancy rates. Cash flows of the borrowers rely on the receipt of rental income from the tenants of the property who are themselves subject to fluctuations in national and local economic conditions and unemployment trends.

Consumer: These loans may take the form of installment loans, demand loans, or single payment loans, and are extended to individuals for household, family, and other personal expenditures. These loans generally include direct consumer automobile loans and credit card loans. These loans are generally smaller in size and are underwritten by evaluating the credit history of the borrower, the ability of the borrower to meet the debt service requirements of the loan and total debt obligations.

10

Management regularly evaluates the allowance for loan losses using the Company’s past loan loss experience, known and inherent risks in the loan portfolio, composition of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, current economic conditions, and other relevant factors. This evaluation is inherently subjective since it requires material estimates that may be susceptible to significant change.

A loan is impaired when, based on current information, it is probable that the Company will not collect all amounts due in accordance with the contractual terms of the loan agreement. Management determines whether a loan is impaired on a case-by-case basis, taking into consideration the payment status, collateral value, length and reason of any payment delays, the borrower’s prior payment record, and any other relevant factors. Large groups of smaller-balance homogeneous loans, such as residential mortgage and consumer loans, are collectively evaluated in the allowance for loan losses analysis and are not subject to impairment analysis unless such loans have been subject to a restructuring agreement. Specific allowances for impaired loans are based on discounted cash flows of expected future payments using the loan’s initial effective interest rate or the fair value of the collateral if the loan is collateral dependent.

In addition, various regulatory agencies periodically review the allowance for loan losses. These agencies may require the Company to make additions to the allowance for loan losses based on their judgments of collectability based on information available to them at the time of their examination.

Troubled Debt Restructurings 

Loans are accounted for as troubled debt restructurings when a borrower is experiencing financial difficulties that lead to a restructuring of the loan, and the Company grants a “concession” to the borrower that they would not otherwise consider. These concessions include a modification of terms such as a reduction of the stated interest rate or loan balance, a reduction of accrued interest, an extension of the maturity date at an interest rate lower than a current market rate for a new loan with similar risk, or some combination thereof to facilitate repayment. Troubled debt restructurings are considered impaired loans.

Foreclosed Assets

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value, less costs to sell, at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management, and the assets are carried at the lower of carrying amount or fair value less costs to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed assets.

Premises and Equipment

Depreciable assets are stated at cost less accumulated depreciation. Provisions for depreciation are computed on straight-line and accelerated methods over the estimated useful lives of the assets.

Federal Home Loan Bank Stock

The Company's investment in Federal Home Loan Bank ("FHLB") stock is carried at cost, which approximates fair value. The Company is required to hold the stock as a member of the FHLB, and transfer of the stock is substantially restricted. The stock is evaluated for impairment on an annual basis.

Income Taxes

Amounts provided for income tax expense are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable under tax laws. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and income tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

11

As changes in tax laws or rates are enacted, deferred income tax assets and liabilities are adjusted through the provision for income taxes. The differences relate principally to the allowances for loan losses, deferred compensation, depreciation, FHLB stock dividends and non-accrual interest. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Based on its evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements.

The Company's policy is to recognize interest and penalties related to income tax issues as components of income tax expense. During the periods shown, the Company did not recognize any interest or penalties related to income tax expense in its statement of income.

Transfers of Financial Assets 

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Advertising 

Advertising costs are expensed as incurred.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) is shown on the statements of comprehensive income (loss). The Company’s accumulated other comprehensive income (loss) is composed of the unrealized gain (loss) on securities available for sale, net of tax and is shown on the statements of changes in equity. Reclassification adjustments out of other comprehensive income (loss) for gains (losses) realized on sales of securities available for sale comprise the entire balance of “net gain (loss) on sale of securities” on the statements of income.

Off-Balance Sheet Financial Instruments

In the ordinary course of business, the Company has entered into off-balance-sheet financial instruments consisting of commitments to extend credit, unfunded commitments under lines of credit, and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable.

Life Insurance

The Company has purchased life insurance policies on certain key executives. Life insurance is measured at the amount that could be realized under the insurance contract as of the balance sheet date, which is generally the cash surrender value of the policy.

Subsequent Events 

Management has reviewed the Company’s operations for potential disclosure or financial statement impacts related to events occurring after June 30, 2019, but prior to the release of these financial statements. Based on the results of this review, no subsequent event disclosure or financial statement impacts to these financial statements are required as of July 31, 2019.

12

Recent Accounting Pronouncements

The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as the Company is an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to other public companies. An emerging growth company may elect to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the Company is first required to file a registration statement. The Company has elected to use the extended transition period described above and intends to maintain its emerging growth company status as allowed under the JOBS Act.

The Company recently adopted the following Accounting Standards Updates (ASU) issued by the Financial Accounting Standards Board (FASB).

ASU No. 2014-09, "Revenue from Contracts with Customers."

The objective of this new standard is to provide a common revenue standard for all entities that enter into contracts with customers to transfer goods, services, or nonfinancial assets. The Company adopted this new accounting standard for the effective January 1, 2019. The Company did not identify any changes in the timing of revenue recognition when considering the amended accounting guidance, however, the Company has included additional disclosures as required by the guidance.

ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities”

ASU No. 2018-03, “Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic 825-10)”

ASU No. 2016-01 is a wide-ranging standard with several elements that will impact most financial institutions. The standard introduces new guidance that applies to most equity investments. Under the standard, equity securities can no longer be classified as available-for-sale securities. Instead, market value fluctuations on equity securities will have to be recognized directly through net income. An entity may elect to value equity investments without a readily determinable fair value at its cost minus impairment (if any) plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer, with any changes recognized through net income. The standard also eliminates certain disclosure requirements related to financial instruments. Non-PBEs will no longer have to disclose the fair value of financial instruments measured at amortized cost in the financial statements. PBEs will still need to make this disclosure but will no longer be required to disclose the methods and significant assumptions used to determine the fair value of financial instruments measured at amortized cost. ASU 2016-01 is effective for non-PBEs for years beginning after Dec.15, 2018, and was effective for PBEs with fiscal years beginning after December 15, 2017.  ASU2016-01 will require the Company to adjust its reported value of Bankers' Bank stock, which is considered an equity security without a readily determinable market value, if a comparable transaction is observed.

The following Accounting Standards Updates (ASUs) have been issued by the Financial Accounting Standards Board (FASB) and may impact the Company's financial statements in future reporting periods:

ASU No. 2016-13, “Credit Losses (Topic 326).”

ASU No. 2019-04, "Codification Improvements to Topic 326."

ASU No. 2019-05, "Financial Instruments-Credit Losses."

ASU 2016-13 requires organizations to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early adoption will be permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently assessing the impact of adopting ASU 2016-13 on its financial statements.

ASU No. 2016-02 “Leases (Topic 842): Amendments to the Leases Analysis.”

ASU No. 2018-10 "Codification Improvements to Topic 842."

ASU No. 2018-11 "Targeted Improvements"

For lessees, Topic 842 requires leases to be recognized on the balance sheet, along with disclosure of key information about leasing arrangements. Topic 842 was subsequently amended by ASU 2018-01, 2018-10 and 2018-11. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification expense recognition in the income statement.

For lessors, Topic 842 requires lessors to classify leases as sales-type, direct financing or operating leases. A lease is a sales-type lease if any one of five criteria are met, each of which indicate that the lease, in effect, transfers control of the underlying asset to the lessee. If none of those five criteria are met, but two additional criteria are both met, indicating the lessor has transferred substantially all the risks and benefits of the underlying asset to the lessee and a third party, the lease is a direct financing lease. All leases that are not sales-type or direct financing leases are operating leases.

The new standard is effective for the Company for periods beginning after December 15, 2019, with early adoption permitted. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) the new standard's effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company expects to adopt the new standard on January 1, 2020 using the effective date as its date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods beginning before December 15, 2019.

13

ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement”

This ASU modifies the disclosure requirements on fair value measurements in Topic 820, including the removal, modification to, and addition of certain disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2019 with early adoption permitted. The majority of the disclosure changes are to be applied on a prospective basis. The Company is currently in the process of reviewing this ASU to determine whether the modifications within will be adopted prior to the effective date. Although this ASU has a significant impact to the Company’s fair value disclosures, no additional impact to the financial statements is expected.

Note 3 Earnings Per Share

Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding, adjusted for weighted average unallocated ESOP shares, during the applicable period, excluding outstanding participating securities. Participating securities include non-vested restricted stock awards and restricted stock units, though no actual shares of common stock related to restricted stock units are issued until the settlement of such units, to the extent holders of these securities receive non-forfeitable dividends or dividend equivalents at the same rate as holders of the Company’s common stock. Diluted earnings per share is computed using the weighted-average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method. Antidilutive options are disregarded in earnings per share calculations.

14

The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share (in thousands, except share and per share data).

	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Net income	$	388		$	353		$	637		$	476
Basic potential common shares
Weighted average shares outstanding		6,644,529			6,612,500			6,668,358			6,612,500
Weighted average unallocated Employee Stock Ownership Plan Shares		(238,947	)		(250,863	)		(240,558	)		(252,483	)
Basic weighted average shares outstanding		6,405,582			6,361,637			6,427,800			6,360,017
Dilutive potential common shares		-			-			-			-
Dilutive weighted average shares outstanding		6,405,582			6,361,637			6,427,800			6,360,017
Basic earnings per share	$	0.06		$	0.06		$	0.10		$	0.07
Diluted earnings per share	$	0.06		$	0.06		$	0.10		$	0.07

Note 4 Available for Sale Securities

Amortized costs and fair values of available for sale securities are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
June 30, 2019
Obligations of the US government and US government sponsored agencies	$	1,102	$	22	$	-		$	1,124
Obligations of states and political subdivisions		7,612		46		(20	)		7,638
Mortgage-backed securities		30,863		360		(113	)		31,110
Certificates of deposit		1,500		1		(3	)		1,498
Corporate debt securities		2,079		29		-			2,108
Total available for sale securities	$	43,156	$	458	$	(136	)	$	43,478
December 31, 2018
Obligations of the US government and US government sponsored agencies	$	1,299	$	8	$	-		$	1,307
Obligations of states and political subdivisions		8,381		17		(103	)		8,295
Mortgage-backed securities		29,164		24		(652	)		28,536
Certificates of deposit		1,500		1		(55	)		1,446
Corporate debt securities		4,220		2		(55	)		4,167
Total available for sale securities	$	44,564	$	52	$	(865	)	$	43,751

Fair values of securities are estimated based on financial models or prices paid for similar securities. It is possible interest rates could change considerably, resulting in a material change in estimated fair value.

15

The following table presents the portion of the Company's portfolio which has gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position:

	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
June 30, 2019
Obligations of the US government and US government sponsored agencies	$	-	$	-		$	-	$	-		$	-	$	-
Obligations of states and political subdivisions		-		-			2,084		(20	)		2,084		(20	)
Mortgage-backed securities		9		-			6,898		(113	)		6,907		(113	)
Certificates of deposit		-		-			1,247		(3	)		1,247		(3	)
Corporate debt securities		-		-			-		-			-		-
Total	$	9	$	-		$	10,229	$	(136	)	$	10,238	$	(136	)
December 31, 2018
Obligations of the US government and US government sponsored agencies	$	175	$	-		$	113	$	-		$	288	$	-
Obligations of states and political subdivisions		-		-			6,142		(103	)		6,142		(103	)
Mortgage-backed securities		1,171		(24	)		24,725		(628	)		25,896		(652	)
Certificates of deposit		-		-			1,195		(55	)		1,195		(55	)
Corporate debt securities		384		(2	)		3,128		(53	)		3,512		(55	)
Total	$	1,730	$	(26	)	$	35,303	$	(839	)	$	37,033	$	(865	)

At June 30, 2019, the investment portfolio included 27 securities available for sale, which had been in an unrealized loss position for greater than twelve months, and one security available for sale, which had been in an unrealized loss position for less than twelve months. At December 31, 2018, the investment portfolio included 79 securities available for sale, which had been in an unrealized loss position for greater than twelve months, and 6 securities available for sale, which had been in an unrealized loss position for less than twelve months. Because these securities have a fixed interest rate, their fair value is sensitive to movements in market interest rates. These unrealized losses are considered temporary because the Company does not intend to sell them prior to maturity; therefore the Company expect to collect all contractually due amounts from these securities. Accordingly, these investments were reduced to their fair values through accumulated other comprehensive income, not through earnings.

The Company regularly assesses the securities portfolio for other-than-temporary impairment (OTTI). The assessments are based on the nature of the securities, the underlying collateral, the financial condition of the issuer, the extent and duration of the loss, our intent related to the individual securities, and the likelihood that the Company will have to sell securities prior to expected recovery. The Company did not have any impairment losses recognized in earnings for the six months ended June 30, 2019 and June 30, 2018.

16

The amortized cost and fair value of available for sale securities by contractual maturity are shown below. Expected maturities will differ from contractual maturities in mortgage-backed securities since the anticipated maturities are not readily determinable. Therefore, these securities are not included in the maturity categories in the following maturity summary listed below:

	June 30, 2019
	Amortized Cost		Fair Value
Due in one year or less	$	641	$	648
Due after one year through 5 years		4,053		4,079
Due after 5 years through 10 years		3,578		3,610
Due after 10 years		4,021		4,031
Subtotal	$	12,293	$	12,368
Mortgage-backed securities		30,863		31,110
Total	$	43,156	$	43,478

Proceeds from sales of available for sale securities during the three months ended June 30, 2019 and June 30, 2018 were $2,704 and $3,002, respectively. Proceeds from sales of available for sale securities during the six months ended June 30, 2019 and June 30, 2018 were $4,837 and $6,437, respectively. Gross realized gains during the three months ended June 30, 2019 and June 30, 2018 on these sales amounted to $22 and $1, respectively, while gross realized losses on these sales were $17 and $0 during the same periods. Gross realized gains during the six months ended June 30, 2019 and June 30, 2018 on these sales amounted to $22 and $24, respectively. Gross realized losses on these sales were $25 and $15, during the six months ended June 30, 2019 and June 30, 2018, respectively.

Available for sale securities with a fair value of $1,001 and $960 were pledged securities at June 30, 2019 and December 31, 2018, respectively.

Note 5 Loans 

Major classifications of loans are as follows:

	June 30,			December 31,
	2019			2018
Commercial
Development	$	12,886		$	7,801
Real estate		70,993			69,425
Commercial and industrial		12,526			13,142
Residential real estate and consumer
1-4 family owner-occupied		33,629			41,018
1-4 family investor-owned		31,339			32,312
Multifamily		31,148			34,467
Consumer		2,884			2,733
Subtotal	$	195,405		$	200,898
Deferred loan fees		(152	)		(86	)
Allowance for loan losses		(2,252	)		(2,118	)
Net loans	$	193,001		$	198,694

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Analysis of the allowance for loan losses for the three and six months ended June 30, 2019 and 2018 follows:

Three Months Ended	Commercial			Residential real estate and consumer			Total
Balance at March 31, 2019	$	984		$	1,204		$	2,188
Provision for loan losses		69			16			85
Loans charged off		-			(21	)		(21	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2019	$	1,053		$	1,199		$	2,252
Balance at March 31, 2018	$	738		$	1,071		$	1,809
Provision for loan losses		92			97			189
Loans charged off		(24	)		(66	)		(90	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2018	$	806		$	1,102		$	1,908

Six Months Ended	Commercial			Residential real estate and consumer			Total
Balance at December 31, 2018	$	940		$	1,178		$	2,118
Provision for loan losses		113			42			155
Loans charged off		-			(21	)		(21	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2019	$	1,053		$	1,199		$	2,252
Balance at December 31, 2017	$	660		$	1,140		$	1,800
Provision for loan losses		170			134			304
Loans charged off		(24	)		(172	)		(196	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2018	$	806		$	1,102		$	1,908

Allowance for loan losses at June 30, 2019:	Commercial		Residential real estate and consumer		Total
Individually evaluated for impairment	$	-	$	-	$	-
Collectively evaluated for impairment		1,053		1,199		2,252
Total allowance for loan losses	$	1,053	$	1,199	$	2,252
Allowance for loan losses at December 31, 2018:
Individually evaluated for impairment	$	-	$	-	$	-
Collectively evaluated for impairment		940		1,178		2,118
Total allowance for loan losses	$	940	$	1,178	$	2,118

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June 30, 2019	Commercial		Residential real estate and consumer
Loans:
Individually evaluated for impairment	$	78	$	1,861	$	1,939
Collectively evaluated for impairment		96,327		97,139		193,466
Total loans	$	96,405	$	99,000	$	195,405
December 31, 2018
Loans:
Individually evaluated for impairment	$	87	$	1,469	$	1,556
Collectively evaluated for impairment		90,281		109,061		199,342
Total loans	$	90,368	$	110,530	$	200,898

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Analysis for loans evaluated for impairment as of June 30, 2019 and December 31, 2018, follows:

As of June 30, 2019	Principal Balance		Recorded Investment		Related Allowance		Average Investment		Interest Recognized
Loans with no related allowance for loan losses:
Commercial
Commercial and industrial	$	81	$	78	$	-	$	82	$	2
Residential real estate and consumer
1-4 family owner-occupied		1,136		1,109		-		1,114		17
1-4 family investor-owned		669		653		-		657		-
Consumer		108		99		-		103		-
Total impaired loans	$	1,994	$	1,939	$	-	$	1,956	$	19

As of December 31, 2018	Principal Balance		Recorded Investment		Related Allowance		Average Investment		Interest Recognized
Loans with no related allowance for loan losses:
Commercial
Commercial and industrial	$	89	$	87	$	-	$	93	$	5
Residential real estate and consumer
1-4 family owner-occupied		1,142		1,120		-		1,137		26
1-4 family investor-owned		248		241		-		246		-
Consumer		114		108		-		114		-
Total impaired loans	$	1,593	$	1,556	$	-	$	1,590	$	31

As of June 30, 2019 and December 31, 2018, no additional funds are committed to be advanced in connection with impaired loans.

The Company regularly evaluates various attributes of loans to determine the appropriateness of the allowance for loan losses. The credit quality indicators monitored differ depending on the class of loan. 

Commercial loans are generally evaluated using the following internally prepared ratings:

“Pass” ratings are assigned to loans with adequate collateral and debt service ability such that collectability of the contractual loan payments is highly probable.

“Special mention” ratings are assigned to loans where management has some concern that the collateral or debt service ability may not be adequate, though the collectability of the contractual loan payments is still probable.

“Substandard” ratings are assigned to loans that do not have adequate collateral and/or debt service ability such that collectability of the contractual loan payments is no longer probable.

“Doubtful” ratings are assigned to loans that do not have adequate collateral and/or debt service ability, and collectability of the contractual loan payments is unlikely.

20

Residential real estate and consumer loans are generally evaluated based on whether or not the loan is performing according to the contractual terms of the loan.

Information regarding the credit quality indicators most closely monitored for commercial loans by class as of June 30, 2019 and December 31, 2018, follows:

	Pass		Special Mention		Substandard		Doubtful		Totals
June 30, 2019
Development	$	12,886	$	-	$	-	$	-	$	12,886
Real estate		70,993		-		-		-		70,993
Commercial and industrial		9,886		2,623		17		-		12,526
1-4 family investor-owned		29,616		912		811		-		31,339
Multifamily		31,148		-		-		-		31,148
Totals	$	154,529	$	3,535	$	828	$	-	$	158,892
December 31, 2018
Development	$	7,801	$	-	$	-	$	-	$	7,801
Real estate		69,425		-		-		-		69,425
Commercial and industrial		13,122		-		20		-		13,142
1-4 family investor-owned		30,558		1,353		401		-		32,312
Multifamily		34,467		-		-		-		34,467
Totals	$	155,373	$	1,353	$	421	$	-	$	157,147

Information regarding the credit quality indicators most closely monitored for residential real estate and consumer loans by class as of June 30, 2019 and December 31, 2018, follows:

	Performing		Non-performing		Totals
June 30, 2019
1-4 family owner-occupied	$	32,967	$	662	$	33,629
Consumer		2,794		90		2,884
	$	35,761	$	752	$	36,513
December 31, 2018
1-4 family owner-occupied	$	39,919	$	1,099	$	41,018
Consumer		2,625		108		2,733
	$	42,544	$	1,207	$	43,751

21

Loan aging information as of June 30, 2019, follows:

			Loans Past Due		Loans Past Due				Nonaccrual
June 30, 2019	Current Loans		30-89 Days		90+ Days		Total Loans		Loans
Commercial
Development	$	12,886	$	-	$	-	$	12,886	$	-
Real estate		70,993		-		-		70,993		-
Commercial and industrial		12,526		-		-		12,526		17
Residential real estate and consumer
1-4 family owner-occupied		32,880		749		-		33,629		357
1-4 family investor-owned		31,339		-		-		31,339		653
Multifamily		31,148		-		-		31,148		-
Consumer		2,826		58		-		2,884		90
Total	$	194,598	$	807	$	-	$	195,405	$	1,117

Loan aging information as of December 31, 2018, follows:

			Loans Past Due		Loans Past Due				Nonaccrual
December 31, 2018	Current Loans		30-89 Days		90+ Days		Total Loans		Loans
Commercial
Development	$	7,801	$	-	$	-	$	7,801	$	-
Real estate		69,425		-		-		69,425		-
Commercial and industrial		13,076		66		-		13,142		20
Residential real estate and consumer
1-4 family owner-occupied		41,013		5		-		41,018		365
1-4 family investor-owned		32,069		243		-		32,312		241
Multifamily		34,467		-		-		34,467		-
Consumer		2,733		-		-		2,733		94
Total	$	200,584	$	314	$	-	$	200,898	$	720

There were no loans past due ninety days or more and still accruing interest as of June 30, 2019 and December 31, 2018.

When, for economic or legal reasons related to the borrower’s financial difficulties, the Company grants a concession to the borrower that the Company would not otherwise consider, the modified loan is classified as a troubled debt restructuring. Loan modifications may consist of forgiveness of interest and/or principal, a reduction of the interest rate, interest-only payments for a period of time, and/or extending amortization terms. During the six months ended and as of June 30, 2019, there was a 1-4 family owner-occupied property totaling $83 and a 1-4 family investor –owned property totaling $421 that were new troubled debt restructurings. $0 was charged to the allowance for losses related to these loans. No troubled debt restructurings defaulted within 12 months of their modification date during the six months ended June 30, 2019. During the year ended and as of December 31, 2018, there were two 1-4 family owner-occupied properties totaling $302, a 1-4 family investor-owned property totaling $250, and a consumer loan totaling $20 that were new troubled debt restructurings. $0 was charged to the allowance for losses related to these loans. No troubled debt restructurings defaulted within 12 months of their modification date during the year ended December 31, 2018.

22

Management regularly monitors impaired loan relationships. In the event facts and circumstances change, an additional provision for loan losses may be necessary.

Note 6 Deposits

The composition of deposits are as follows:

	June 30,		December 31,
	2019		2018
Non-interest bearing checking	$	20,658	$	22,763
Interest bearing checking		8,467		5,424
Money market		40,803		41,910
Statement savings accounts		13,129		13,773
Health savings accounts		10,914		11,197
Certificates of deposit		83,582		88,138
Total	$	177,553	$	183,205

Certificates of deposit that meet or exceed the FDIC insurance limit two hundred fifty thousand dollars totaled $28,013 and $30,590 as of June 30, 2019 and December 31, 2018, respectively.

The scheduled maturities of certificates of deposit are as follows as of June 30, 2019:

2019	$	43,338
2020		25,108
2021		10,522
2022		2,258
2023		1,981
2024		375
Total	$	83,582

Note 7 FHLB Advances

FHLB advances consist of the following:

	June 30, 2019					December 31, 2018
	Rates			Amount		Rates			Amount
Fixed rate, fixed term advances	1.42%	-	2.70%	$	9,750	1.42%	-	2.70%	$	11,750
Fixed term advances with floating spread	1.73%	-	2.06%		6,000	1.54%	-	2.05%		6,000
				$	15,750				$	17,750

23

The following is a summary of scheduled maturities of fixed term FHLB advances as of June 30, 2019:

	Fixed Rate Advances					Adjustable Rate Advances
	Weighted Average Rate			Amount		Weighted Average Rate			Amount		Total Amount
2019		2.36	%	$	3,750		1.73	%	$	2,000	$	5,750
2020		2.34	%		6,000		1.88	%		2,000		8,000
2021		0.00	%		-		2.06	%		2,000		2,000
Total		2.35	%	$	9,750		1.89	%	$	6,000	$	15,750

Actual maturities may differ from the scheduled principal maturities due to call options on the various advances. The Company has a master contract agreement with the FHLB that provides for a borrowing up to the lesser of a determined multiple of FHLB stock owned or a determined percentage of the book value of the Company’s qualifying 1-4 family, multifamily, and commercial real estate loans. The Company pledged approximately $156,985 and $158,923 of 1-4 family, multifamily, and commercial real estate loans to secure FHLB advances at June 30, 2019 and December 31, 2018, respectively. FHLB provides both fixed and floating rate advances. Floating rates are tied to short-term market rates of interest, such as LIBOR, Federal funds or Treasury Bill rates. Fixed rate advances are priced in reference to market rates of interest at the time of the advance, namely the rates that FHLB pays to borrowers at various maturities. FHLB advances are subject to a prepayment penalty if they are repaid prior to maturity. FHLB advances are also secured by $609 and $739 of FHLB stock owned by the Company at June 30, 2019 and December 31, 2018, respectively.

At June 30, 2019 and December 31, 2018, the Company’s available and unused portion of this borrowing agreement was $0 and $889, respectively. Additionally, the Company has a fluctuating $5,000 letter of credit under this agreement, which collateralizes certain public deposits. In addition, the Company has a $7,000 federal funds line of credit through Bankers’ Bank of Wisconsin, which was not drawn on as of June 30, 2019 or December 31, 2018. The Company also has the authority to borrow through the Federal Reserve’s Discount Window.

Note 8 Employee Stock Ownership Plan

The Company maintains a leveraged employee stock ownership plan (“ESOP”) that covers substantially all employees. The ESOP was established in conjunction with the Company’s stock offering completed in October 2017 and operates on a plan year ending December 31. The loan to fund the acquisition of stock by the ESOP was made by the Company. The Bank makes annual contributions to the ESOP equal to the ESOP’s debt service. The ESOP shares initially were pledged as collateral for this debt. As the debt is repaid, shares are released from collateral and allocated to active participants, based on the proportion of debt service paid in the year. Because the debt is intercompany, it is eliminated in consolidation for presentation in these financial statements. The shares pledged as collateral are reported as unearned ESOP shares in the balance sheet. As shares are committed to be released from collateral and allocated to active participants, the Company reports compensation expense equal to the current market price of the shares and the shares will become outstanding for earnings-per-shares (EPS) computations. During the six month periods ended June 30, 2019 and 2018, 6,480 shares were committed to be released. During the period ended June 30, 2019, the average fair value per share of stock was $10.57 resulting in total ESOP compensation expense of $69 for the six months ended June 30, 2019. During the period ended June 30, 2018, the average fair value per share of stock was $10.95 resulting in total ESOP compensation expense of $71 for the six months ended June 30, 2018. The ESOP shares as of June 30, 2019 and December 31, 2018 were as follows:

	June 30, 2019		December 31, 2018
Shares allocated to active partipicants		15,907		2,947
Shares committed to be released and allocated to participants		6,480		12,960
Total unallocated shares		236,823		243,303
Total ESOP shares		259,210		259,210
Fair value of unallocated shares (based on $10.45 and $10.03 share price at June 30, 2019 and December 31, 2018, respectively)	$	2,475	$	2,440

24

Note 9 Share-based Compensation Plans

ASC Topic 718 requires that the grant date fair value of equity awards to employees be recognized as compensation expense over the period during which an employee is required to provide service in exchange for such awards.

The following table summarizes the impact of the Company’s share-based payment plans in the financial statements for the period shown:

	Six Months Ended June 30, 2019
Total cost of stock grant plan during the year	$	93
Total cost of stock option plan during the year		66
Total cost of share-based payment plans during the year	$	159
Amount of related income tax benefit recognized in income	$	44

The Company adopted the FFBW, Inc. 2018 Equity Incentive Plan (the “2018 Equity Incentive Plan”) in 2018. In November 2018, the Company’s stockholders approved the 2018 Equity Incentive Plan which authorized the issuance of up to 129,605 restricted stock awards and up to 324,012 stock options. As of June 30, 2019, there were 35,363 restricted stock awards and 101,923 options available for future grants. Shares granted under the 2018 Equity Incentive Plan may be authorized but unissued, currently held or, to the extent permitted by applicable law, subsequently acquired by the Company as treasury shares, including shares purchased in the open market or in private transactions. Forfeited or canceled shares shall not be deemed to have been delivered for purposes of determining the maximum number of shares of stock available for delivery under the Plan.

Options are granted with an exercise price equal to no less than the market price of the Company’s shares at the date of grant: those option awards generally vest pro-rata over five years of service and have 10-year contractual terms. Restricted shares typically vest pro-rata over a five-year period, 20% per year beginning one year from the issuance date.

25

The following table summarizes stock options activity for the six months ended June 30, 2019:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Options outstanding as of December 31, 2018		192,089	$	10.81
Granted		30,000		10.64
Exercised		-		-
Expired or canceled		-		-
Forfeited		-		-
Options outstanding as of June 30, 2019		222,089	$	10.79		9.51	$	-
Options exercisable as of June 30, 2019		-	$	-		-	$	-

The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model based on certain assumptions. Since the Company does not have sufficient historical fair value estimates of its stock, the Company calculates expected volatility using the historical volatility of the Dow Jones U.S. Financial Services Index. The risk free interest rate for periods within the contractual term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life of options is estimated based on the assumption that options will be exercised evenly throughout their life after vesting and represents the period of time that options granted are expected to remain outstanding.

The following assumptions were used for options granted during the six months ended June 30, 2019:

	For the Six Months Ended June 30,
	2019
Risk-free interest rate		2.30	%
Expected volatility		18.38	%
Expected dividend yield		0	%
Expected life of options (years)		7.5
Weighted average fair value per option of options granted during the year	$	2.90

The total intrinsic value of options exercised during the six months ended June 30, 2019 was $0.

The following is a summary of changes in restricted shares for the six months ended June 30, 2019:

	Number of Shares		Weighted Average Grant Date Fair Value
Shares outstanding as of December 31, 2018		84,242	$	10.82
Granted		10,000		10.64
Exercised		-		-
Forfeited		-		-
Shares outstanding as of June 30, 2019		94,242	$	10.80

The total intrinsic value of restricted shares that vested during the six months ended June 30, 2019 was $0.

26

As of June 30, 2019, there was $1.6 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements (including share option and non-vested share awards) granted under the 2018 Equity Incentive Plan. At June 30, 2019, the weighted-average period over which the unrecognized compensation expense is expected to be recognized was approximately 2.72 years.

Note 10 Regulatory Capital Ratios

The Bank is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of Common Equity Tier 1, Tier 1, and Total capital to risk-weighted assets and of Tier 1 capital to average assets. It is management's opinion, as of December 31, 2018 and as of June 30, 2019, that the Bank meets all applicable capital adequacy requirements.

As of June 30, 2019, and December 31, 2018, the Bank is categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum regulatory capital ratios as set forth in the table. There are no conditions or events since June 30, 2019 that management believes have changed the Bank's category.

The Bank's actual capital amounts and ratios are presented in the following tables:

Actual

For Capital Adequacy Purposes

To Be Well Capitalized Under Prompt Corrective Action

Amount

Ratio

Amount

Ratio

Amount

Ratio

June 30, 2019

Common Equity Tier 1 capital (to risk‑weighted assets)

$

49,268

24.5

%

$

>   9,055

> 4.5

%

$

> 13,079

>   6.5

%

Tier 1 capital (to risk‑weighted assets)

49,268

24.5

> 12,073

> 6.0

> 16,097

>   8.0

Total capital (to risk‑weighted assets)

51,520

25.6

> 16,097

> 8.0

> 20,122

> 10.0

Tier 1 capital (to average assets)

49,268

19.0

> 10,346

> 4.0

> 12,932

>   5.0

December 31, 2018

Common Equity Tier 1 capital (to risk‑weighted assets)

$

48,502

23.7

%

$

> 9,209

> 4.5

%

$

> 13,302

>   6.5

%

Tier 1 capital (to risk‑weighted assets)

48,502

23.7

> 12,279

> 6.0

> 16,372

>   8.0

Total capital (to risk‑weighted assets)

50,620

24.7

> 16,372

> 8.0

> 20,465

> 10.0

Tier 1 capital (to average assets)

48,502

18.4

> 10,542

> 4.0

> 13,178

>   5.0

Note 11 Fair Value Measurements

Accounting standards describe three levels of inputs that may be used to measure fair value (the fair value hierarchy). The level of an asset or liability within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement of that asset or liability.

Following is a brief description of each level of the fair value hierarchy:

Level 1 - Fair value measurement is based on quoted prices for identical assets or liabilities in active markets.

27

Level 2 - Fair value measurement is based on: (1) quoted prices for similar assets or liabilities in active markets; (2) quoted prices for identical or similar assets or liabilities in markets that are not active; or (3) valuation models and methodologies for which all significant assumptions are or can be corroborated by observable market data.

Level 3 - Fair value measurement is based on valuation models and methodologies that incorporate at least one significant assumption that cannot be corroborated by observable market data. Level 3 measurements reflect the Company’s estimates about assumptions market participants would use in measuring fair value of the asset or liability.

Some assets and liabilities, such as available for sale securities, are measured at fair value on a recurring basis under accounting principles generally accepted in the United States. Other assets and liabilities, such as impaired loans, may be measured at fair value on a nonrecurring basis.

Following is a description of the valuation methodology used for each asset measured at fair value on a recurring or nonrecurring basis, as well as the classification of the asset within the fair value hierarchy. 

Available for sale securities – Available for sale securities may be classified as Level 1 or Level 2 measurements within the fair value hierarchy. Level 1 securities include equity securities traded on a national exchange. The fair value measurement of a Level 1 security is based on the quoted price of the security. Level 2 securities include U.S. government and agency securities, obligations of states and political subdivisions, corporate debt securities, and mortgage-related securities. The fair value measurement of a Level 2 security is obtained from an independent pricing service and is based on recent sales of similar securities and other observable market data.

Information regarding the fair value of assets measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 follows:      

			Recurring Fair Value Measurements Using
	Assets Measured at		Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
June 30, 2019
Assets - Available for sale securities		43,478		-		43,478		-
December 31, 2018
Assets - Available for sale securities		43,751		-		43,751		-

Loans - Loans are not measured at fair value on a recurring basis. However, loans considered to be impaired may be measured at fair value on a nonrecurring basis. The fair value measurement of an impaired loan that is collateral dependent is based on the fair value of the underlying collateral. All other impaired loan measurements are based on the present value of expected future cash flows discounted at the applicable effective interest rate and, thus, are not fair value measurements. Fair value measurements of underlying collateral that utilize observable market data, such as independent appraisals reflecting recent comparable sales are considered Level 2 measurements. Other fair value measurements that incorporate estimated assumptions market participants would use to measure fair value are considered Level 3 measurements.

Foreclosed Assets – Real estate acquired through or in lieu of loan foreclosure are not measured at fair value on a recurring basis. However, foreclosed assets are initially measured at fair value (less estimated costs to sell) when they are acquired and may also be measured at fair value (less estimated costs to sell) if they become subsequently impaired. The fair value measurement for each asset may be obtained from an independent appraiser or prepared internally. Fair value measurements obtained from independent appraisers generally utilize a market approach based on sales of comparable assets and/or an income approach. Such measurements are usually considered Level 2 measurements. However, management routinely evaluates fair value measurements of independent appraisers by comparing actual selling prices to the most recent appraisals. If management determines significant adjustments should be made to the independent appraisals based on these evaluations, these measurements are considered Level 3 measurements. Fair value measurements prepared internally are based on management’s comparisons to sales of comparable assets, but include significant unobservable data and are therefore considered Level 3 measurements.

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Information regarding the fair value of assets measured at fair value on a nonrecurring basis as of June 30, 2019 and December 31, 2018 follows:

			Nonrecurring Fair Value Measurements Using
	Assets Measured at		Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
As of June 30, 2019
Assets:
Loans	$	-	$	-	$	-	$	-
Foreclosed assets		84		-		-		84
As of December 31, 2018
Assets :
Loans	$	-	$	-	$	-	$	-
Foreclosed assets		69		-		-		69

29

 The carrying value and estimated fair value of financial instruments at June 30, 2019 and December 31, 2018 follow:

	June 30, 2019
	Carrying Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	5,397	$	5,397	$	-	$	-
Available for sale securities		43,478		-		43,478		-
Loans held for sale		1,951		-		1,951		-
Loans		193,001		-		-		194,770
Accrued interest receivable		777		777		-		-
Cash value of life insurance		7,105		-		-		7,105
FHLB stock		609		-		-		609
Financial liabilities:
Deposits		177,553		93,971		-		83,719
Advance payments by borrowers for taxes and insurance		771		771		-		-
FHLB advances		15,750		-		-		15,685
Accrued interest payable		620		620		-		-

	December 31, 2018
	Carrying Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	4,488	$	4,488	$	-	$	-
Available for sale securities		43,751		-		43,751		-
Loans held for sale		679		-		679		-
Loans		198,694		-		-		199,048
Accrued interest receivable		768		768		-		-
Cash value of life insurance		7,007		-		-		7,007
FHLB stock		739		-		-		739
Financial liabilities:
Deposits		183,205		95,067		-		87,531
Advance payments by borrowers for taxes and insurance		55		55		-		-
FHLB advances		17,750		-		-		17,505
Accrued interest payable		70		70		-		-

Limitations – The fair value of a financial instrument is the current amount that would be exchanged between market participants, other than in a forced liquidation. Fair value is best determined based on quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value of other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Consequently, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

30

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General 

Management’s discussion and analysis of the financial condition and results of operations at and for the three and six months ended June 30, 2019 and 2018 is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto, appearing on Part I, Item 1 of this quarterly report on Form 10-Q.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and words of similar meaning. These forward-looking statements include, but are not limited to:

● statements of our goals, intentions and expectations;

● statements regarding our business plans, prospects, growth and operating strategies;

● statements regarding the quality of our loan and investment portfolios; and

● estimates of our risks and future costs and benefits.

These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

● general economic conditions, either nationally or in our market areas, that are worse than expected;

● changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses;

● our ability to access cost-effective funding;

● fluctuations in real estate values and both residential and commercial real estate market conditions;

● demand for loans and deposits in our market area;

● our ability to implement and change our business strategies;

● competition among depository and other financial institutions;

● inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans the Company have made and make;

● adverse changes in the securities or secondary mortgage markets;

31

● changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements, including as a result of Basel III;

● the impact of the Dodd-Frank Act and the implementing regulations;

● changes in the quality or composition of our loan or investment portfolios;

● technological changes that may be more difficult or expensive than expected;

● the inability of third-party providers to perform as expected;

● our ability to manage market risk, credit risk and operational risk in the current economic environment;

● our ability to enter new markets successfully and capitalize on growth opportunities;

● our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel the Company may acquire and our ability to realize related revenue synergies and cost savings within expected time frames, and any goodwill charges related thereto;

● changes in consumer spending, borrowing and savings habits;

● changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;

● our ability to retain key employees;

● our compensation expense associated with equity allocated or awarded to our employees; and

● changes in the financial condition, results of operations or future prospects of issuers of securities that the Company own.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

Critical Accounting Policies

There are no material changes to the critical accounting policies disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Comparison of Financial Condition at June 30, 2019 and December 31, 2018

Total Assets. Total assets decreased $4.4 million, or 1.7%, to $258.3 million at June 30, 2019 from $262.7 million at December 31, 2018. This decrease was primarily due to the decrease in net loans of $5.7 million offset by the increases in cash and cash equivalents of $909,000 and loans held for sale of $1.3 million.

Cash and cash equivalents. Cash and due from banks increased $2.6 million, or 149.2%, to $4.4 million at June 30, 2019 from $1.7 million at December 31, 2018. Fed funds sold decreased $1.7 million, or 61.9%, to $1.0 million at June 30, 2019 from $2.7 million at December 31, 2018. The change in change in cash and cash equivalents is due to normal fluctuations.

Net Loans.  Net loans decreased $5.7 million, or 2.9%, to $193.0 million at June 30, 2019 from $198.7 million at December 31, 2018. The decrease resulted primarily from decreases in 1-4 family owner-occupied loans of $7.4 million, or 18.0%, and multifamily loans of $3.3 million, or 9.6%, offset by increases in commercial development loans of $5.1 million, or 65.2%, and commercial real estate loans of $1.6 million, or 2.3%.

32

During the six months ended June 30, 2019, the Company sold $6.5 million of one- to four family, owner-occupied residential real estate loans, on a servicing-released basis. Subject to market and economic conditions, management intends to continue this sales activity in future periods to generate gain on sale of loans income and manage interest rate risk.

Available for sale securities. Available for sale securities decreased $273,000, or 0.6%, to $43.5 million at June 30, 2019 from $43.8 million at December 31, 2018. This was a result of purchases of $5.9 million and a change in unrealized gain (loss) of $1.1 million offset by sales of $4.8 million and maturities, normal paydowns and amortization of $2.3 million.

FHLB stock. FHLB stock decreased $130,000, or 17.6%, to $609,000 at June 30, 2019 from $739,000 at December 31, 2018.

Deposits.  Deposits decreased $5.6 million, or 3.1%, to $177.6 million at June 30, 2019 from $183.2 million at December 31, 2018. Noninterest-bearing checking accounts decreased $2.1 million, or 9.2%, to $20.7 million as of June 30, 2019 compared to $22.8 million as of December 31, 2018. Interest-bearing checking accounts increased $3.0 million, or 56.1%, to $8.5 million at June 30, 2019 from $5.4 million at December 31, 2018. Additionally, money market accounts decreased $1.1 million to $40.8 million at June 30, 2019, compared to $41.9 million at December 31, 2018, and savings accounts decreased $644,000 to $13.1 million at June 30, 2019, compared to $13.8 million at December 31, 2018. Certificates of deposit decreased $4.6 million, or 5.2% to $83.6 million as of June 30, 2019 from $88.1 million as of December 31, 2018. Health savings accounts decreased $283,000 to $10.9 million at June 30, 2019 from $11.2 million as of December 31, 2018.

Borrowings. Borrowings, consisting entirely of FHLB advances, decreased $2.0 million, or 11.3%, to $15.8 million at June 30, 2019 from $17.8 million December 31, 2018. The aggregate cost of outstanding FHLB advances was 2.16% at June 30, 2019, compared to the cost of deposits of 1.51% at that date.

Other liabilities. Other liabilities increased $1.2 million, or 90.5%, to $2.4 million at June 30, 2019 from $1.3 million at December 31, 2018.

Total Equity.  Total equity increased $822,000, or 1.4%, to $61.2 million at June 30, 2019 from $60.4 million at December 31, 2018. The increase resulted from net income of $637,000 for the six months ended June 30, 2019 and the change in net unrealized gain (loss) in available for sale securities offset by the repurchases of common stock of $871,000.

Nonperforming Loans, Potential Problem Loans and Foreclosed Properties. The Company practice early identification of non-accrual and problem loans in order to minimize the Company’s risk of loss. Non-performing loans are defined as non-accrual loans and restructured loans that were 90 days or more past due at the time of their restructure, or when management determines that such classification is warranted. The accrual of interest income is generally discontinued when contractual payments have become 90 days past due or when management has serious doubts about further collectability of principal or interest. Cash receipts on non-accrual loans are used to reduce principal rather than being recorded as interest income. A troubled debt restructuring typically involves the granting of some concession to the borrower involving a loan modification, such as modifying the payment schedule or making interest changes. TDR loans may involve loans that have had a charge-off taken against the loan to reduce the carrying amount of the loan to fair market value as determined pursuant to ASC 310-10.

33

The following table identifies the various components of non-performing assets and other balance sheet information as of the dates indicated below and changes in the ALLL for the periods then ended:

	June 30, 2019 and Six Months Then Ended			December 31, 2018 and Twelve Months Then Ended			December 31, 2017 and Twelve Months Then Ended
	(in thousands)
Nonperforming assets:
Nonaccrual loans	$	1,117		$	720		$	1,243
Accruing loans past due 90 days or more		-			-			-
Total nonperforming loans ("NPLs")	$	1,117		$	720		$	1,243
Foreclosed assets		84			69			619
Total nonperforming assets ("NPAs")	$	1,201		$	789		$	1,862
Troubled Debt Restructurings ("TDRs")		1,400			1,201			1,630
Nonaccrual TDRs		1,100			700			969
Average outstanding loan balance		200,246			189,233			170,577
Loans, end of period		195,405			200,898			179,229
ALLL, at beginning of period		2,118			1,800			1,478
Loans charged off:
Commercial		-			(24	)		-
Residential real estate and consumer		(21	)		(172	)		(133	)
Total loans charged off	$	(21	)	$	(196	)	$	(133	)
Recoveries of loans previously charged off:
Residential real estate and consumer		-			1			36
Total recoveries of loans previous charged off		-			1			36
Net loans charged off ("NCOs'")	$	(21	)	$	(195	)	$	(97	)
Additions to ALLL via provision for loan losses charged to operations		155			513			419
ALLL, at end of period	$	2,252		$	2,118		$	1,800
Ratios:
ALLL to NCOs (annualized)		5440.34	%		1086.15	%		1855.67	%
NCOs (annualized) to average loans		0.02	%		0.10	%		0.06	%
ALLL to total loans		1.15	%		1.05	%		1.00	%
NPL to total loans		0.57	%		0.36	%		0.69	%
NPAs to total assets		0.46	%		0.30	%		0.73	%
Total Assets	$	258,324		$	262,726		$	256,481

Loans 30 to 89 days past due increased $493,000 during the six month period ended June 30, 2019 to $807,000 compared to $314,000 at December 31, 2018. The Company believes the credit and underwriting policies continue to support more effective lending decisions by the Company, which increases the likelihood of maintain loan quality going forward. The Company believe our current ALLL is adequate to cover probable losses in our current loan portfolio.

Non-performing loans of $1.1 million at June 30, 2019, which included $1.1 million of non-accrual troubled debt restructured loans, reflected an increase of $397,000 from the non-performing loans balance of $720,000 at December 31, 2018.

Our non-performing assets were $1.2 million at June 30, 2019, or 0.46% of total assets, compared to $789,000, or 0.30% of total assets, at December 31, 2018.

34

Foreclosed assets were $84,000 at June 30, 2019 compared to $69,000 at December 31, 2018. The Company strives to aggressively liquidate foreclosed assets as part of our overall credit risk management strategy.

Net charge offs for the six month period ended June 30, 2019 were $21,000 compared to $196,000 for the six month period ended June 30, 2018. The ratio of annualized net charge-offs to average loans receivable was 0.02% for the six month period ended June 30, 2019, compared to 0.10% for the twelve months ended December 31, 2018. Net charge-offs decreased during the current year to date period primarily as a result of selling nonperforming assets during 2018.

Comparison of Operating Results for the Three Months Ended June 30, 2019 and June 30, 2018

General.  The Company had net income of $388,000 for the three months ended June 30, 2019, compared to net income of $353,000 for the three months ended June 30, 2018, an increase of $35,000, or 9.9%. The increase in net income was the net effect of an increase in noninterest income of $110,000, or 68.3%, a decrease in the provision of loan losses of $104,000, or 55.0%, and a decrease in noninterest expenses of $19,000, or 1.1%, partially offset by a decrease in net interest income of $156,000, or 7.0%.

Interest and dividend income. Interest and dividend income increased $110,000, or 4.1%, to $2.8 million for the three months ended June 30, 2019 from $2.7 million for the three months ended June 30, 2018. The increase was primarily attributable to a $171,000 increase in interest on loans resulting from an increase of $13.6 million in the average balance of loans quarter to quarter. Excluding second quarter 2018 one-time adjustments of $136,000 in nonaccrual interest recognized from the payoff of nonperforming loans, the yield on loans increased by 29 basis points. This was partially offset by a $67,000 decrease in interest on available for sale securities, a result of the decrease in the average balance of available for sale securities of $14.0 million quarter to quarter while the yield increased by 17 basis points quarter to quarter.

 Interest Expense. Interest expense increased $266,000, or 58.1%, to $724,000 for the three months ended June 30, 2019, from $458,000 for the three months ended June 30, 2018. Interest expense on interest-bearing deposits increased $291,000 quarter to quarter. The average cost of our interest-bearing deposits increased 68 basis points to 1.57% from 0.89%, and the average balance of interest-bearing deposits increased by $7.2 million, or 4.7%, during the same period. Interest expense on borrowings, consisting entirely of FHLB advances, decreased $25,000, or 21.6%, to $91,000 during the three months ended June 30, 2019 from $116,000 during the three months ended June 30, 2018, as the average balance of borrowings decreased $8.7 million to $16.5 million for the three months ended June 30, 2019 from $25.2 million for the three months ended June 30, 2018. Additionally, the cost of those borrowings increased 37 basis points to 2.21% for the three months ended June 30, 2019 from 1.84% for the three months ended June 30, 2018.

Net Interest Income.  Net interest income decreased $156,000, or 7.0%, to $2.1 million for the three months ended June 30, 2019 from $2.2 million for the three months ended June 30, 2018. Average net interest-earning assets increased $1.3 million to $68.3 million for the 2019 quarter from $67.0 million for the 2018 quarter. The increase was due primarily to the decrease in borrowings to offset the outflow in interest-bearing deposit accounts. Our net interest rate spread decreased to 2.93% for the three months ended June 30, 2019 from 3.36% for the three months ended June 30, 2018, while our net interest margin decreased to 3.38% for the 2019 quarter from 3.63% for the 2018 quarter.

Provision for Loan Losses.  The Company recorded a provision for loan losses of $85,000 for the three months ended June 30, 2019, compared to a $189,000 provision for the three months ended June 30, 2018, a decrease of $104,000, or 55.0%. The decrease in the provision for loan losses in the 2019 quarter compared to the 2018 quarter was a result of charge-offs in the prior year quarter. The allowance for loan losses was $2.3 million, or 1.15% of total loans, at June 30, 2019, compared to $1.9 million, or 0.95% of total loans, at June 30, 2018. Classified (substandard, doubtful and loss) commercial loans increased to $828,000 at June 30, 2019 from $250,000 at June 30, 2018. Total nonperforming loans increased to $1.1 million at June 30, 2019 from $968,000 at June 30, 2018. Net charge-offs for the three months ended June 30, 2019 were $21,000, compared to $90,000 for the three months ended June 30, 2018. At June 30, 2019, all of the nonperforming loans were contractually current.

35

Noninterest Income. Noninterest income increased $110,000, or 68.3%, to $271,000 for the three months ended June 30, 2019 from $161,000 for the three months ended June 30, 2018. The increase resulted primarily from the increase in service charges and fees of $13,000 and an increase in net gain on sale of securities of $91,000.

Noninterest Expense.  Noninterest expense decreased $19,000, or 1.1%, to $1.8 million for the three months ended June 30, 2019 from $1.8 million for the three months ended June 30, 2018. The decrease was due to a decrease in salaries and employee benefits expense, due to staffing efficiencies and vacancies, of $108,000 and other noninterest expense of $25,000, which primarily is a reduction in marketing and business development. The decrease in noninterest expense was partially offset by increases in professional fees of $47,000, net foreclosed assets of $10,000, occupancy and equipment of $16,000, data processing of $11,000, and technology of $30,000.

Income Tax Expense.  The Company recorded an income tax expense of $126,000 for the three months ended June 30, 2019 compared to an income tax expense of $84,000 for the three months ended June 30, 2018, an increase of $42,000, or 50.0%. The increase was due to an increase of $77,000 in income before income taxes to $514,000 for the 2019 quarter compared to $437,000 for the 2018 quarter.

Comparison of Operating Results for the Six Months Ended June 30, 2019 and June 30, 2018

General.  The Company had net income of $637,000 for the six months ended June 30, 2019, compared to net income of $476,000 for the six months ended June 30, 2018, an increase of $161,000, or 33.8%. The increase in net income was the net effect of an increase in noninterest income of $74,000, or 22.0%, a decrease in the provision of loan losses of $149,000, or 49.0%, and an decrease in noninterest expenses of $44,000, or 1.2%, offset by a decrease in net interest income of $41,000, or 1.0%.

Interest and dividend income. Interest and dividend income increased $513,000, or 10.2%, to $5.6 million for the six months ended June 30, 2019 from $5.0 million for the six months ended June 30, 2018. The increase was primarily attributable to a $651,000 increase in interest on loans resulting from an increase of $19.9 million in the average balance of loans quarter to quarter with an 18 basis point increase in yield period to period. Excluding second quarter 2018 one-time adjustments of $136,000 in nonaccrual interest recognized from the payoff of nonperforming loans, the yield on loans increased by 33 basis points. This was partially offset by a $153,000 decrease in interest on available for sale securities, a result of the decrease in the average balance of available for sale securities of $14.9 million quarter to quarter while the yield increased by 13 basis points quarter to quarter.

 Interest Expense. Interest expense increased $554,000, or 64.6%, to $1.4 million for the six months ended June 30, 2019, from $857,000 for the six months ended June 30, 2018. Interest expense on interest-bearing deposits increased $544,000 period to periods. The average cost of our interest-bearing deposits increased 63 basis points to 1.51% from 0.88%, and the average balance of interest-bearing deposits increased $6.5 million, or 4.1%, during the same period. Interest expense on borrowings, consisting entirely of FHLB advances, increased $10,000, or 5.9%, to $179,000 during the six months ended June 30, 2019 from $169,000 during the six months ended June 30, 2018, as the average balance of borrowings decreased $3.3 million to $16.5 million for the six months ended June 30, 2019 from $19.9 million for the six months ended June 30, 2018. Additionally, the cost of those borrowings increased 46 basis points to 2.16% for the six months ended June 30, 2019 from 1.70% for the six months ended June 30, 2018.

Net Interest Income.  Net interest income decreased $41,000, or 1.0%, to $4.1 million for the six months ended June 30, 2019 from $4.2 million for the six months ended June 30, 2018. Average net interest-earning assets increased $1.0 million to $67.3 million for the 2019 period from $66.3 million for the 2018 period. The increase was due primarily to the increase in loans and the decrease in borrowings offset by an increase in noninterest-bearing deposit accounts and a decrease in available for sale securities. Our net interest rate spread decreased to 2.93% for the six months ended June 30, 2019 from 3.18% for the six months ended June 30, 2018, while our net interest margin decreased to 3.35% for the 2019 quarter from 3.45% for the 2018 quarter.

36

Provision for Loan Losses.  The Company recorded a provision for loan losses of $155,000 for the six months ended June 30, 2019, compared to a $304,000 provision for the six months ended June 30, 2018, a decrease of $149,000, or 49.0%. The decrease in the provision for loan losses in the 2019 period compared to the 2018 period was a result of charge-offs in the prior year period. The allowance for loan losses was $2.3 million, or 1.15% of total loans, at June 30, 2019, compared to $1.9 million, or 0.95% of total loans, at June 30, 2018. Classified (substandard, doubtful and loss) commercial loans increased to $828,000 at June 30, 2019 from $250,000 at June 30, 2018. Total nonperforming loans increased to $1.1 million at June 30, 2019 from $968,000 at June 30, 2018. Net charge-offs for the six months ended June 30, 2019 were $21,000, compared to $196,000 for the prior year period. At June 30, 2019, all of the nonperforming loans were contractually current.

Noninterest Income. Noninterest income increased $74,000, or 22.0%, to $411,000 for the six months ended June 30, 2019 from $337,000 for the six months ended June 30, 2018. The increase resulted primarily from the increase in net gain on sale of loans of $93,000 offset by a decrease in service charges and fees of $12,000 and a decrease in net gain on sale of securities of $12,000.

Noninterest Expense.  Noninterest expense decreased $44,000, or 1.2%, to $3.6 million for the six months ended June 30, 2019 from $3.6 million for the six months ended June 30, 2018. The decrease was due to a decrease in salaries and employee benefits of $68,000, due to staffing efficiencies and vacancies, as well as foreclosed assets expense of $35,000 and other noninterest expense of $94,000, which primarily is a reduction in marketing, business development, FDIC insurance, and supervisory expenses. The decrease in noninterest expense was partially offset by increases in professional fees of $41,000, data processing of $34,000, and technology of $53,000.

Income Tax Expense.  The Company recorded an income tax expense of $202,000 for the six months ended June 30, 2019 compared to an income tax expense of $137,000 for the six months ended June 30, 2018, an increase of $65,000, or 47.4%. The increase was due to an increase of $226,000 in income before income taxes to $839,000 for the 2019 period compared to $613,000 for the 2018 period.

Analysis of Net Interest Income

Net interest income represents the difference between the income the Company earns on interest-earning assets and the interest expense the Company pays on interest-bearing liabilities. Net interest income also depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them. The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. Average balances are derived from daily average balances for all periods presented in the table. Non-accrual loans were included in the computation of average balances but have been reflected in the tables as loans carrying a zero yield. No tax-equivalent yield adjustments were made, as the effect thereof was not material. The yields set forth below include the effect of loans fees, discounts and premiums that are amortized or accreted to interest income.

	For the Three Months Ended June 30,
	2019								2018
	Average Outstanding Balance			Interest		Yield/ Rate			Average Outstanding Balance			Interest		Yield/ Rate
	(in thousands)								(in thousands)
Interest-earning assets:
Loans	$	199,235		$	2,497		5.01	%	$	185,665		$	2,326		5.01	%
Available for sale securities		43,501			286		2.63	%		57,490			353		2.46	%
Interest-bearing deposits		2,486			13		2.09	%		2,071			3		0.58	%
FHLB stock		638			8		5.02	%		841			12		5.71	%
Total interest-earning assets		245,860			2,804		4.56	%		246,067			2,694		4.38	%
Noninterest-earning assets		15,891								15,901
Allowance for loan losses		(2,219	)							(1,855	)
Total assets	$	259,532							$	260,113
Interest-bearing liabilities:
Demand accounts	$	8,662			26		1.20	%	$	4,817			4		0.33	%
Money market accounts		40,373			132		1.31	%		52,327			103		0.79	%
Savings accounts		13,755			4		0.12	%		15,196			7		0.18	%
Health savings accounts		11,199			8		0.29	%		11,642			6		0.21	%
Certificates of deposit		87,112			463		2.13	%		69,890			222		1.27	%
Total interest-bearing deposits		161,101			633		1.57	%		153,872			342		0.89	%
Borrowings		16,492			91		2.21	%		25,197			116		1.84	%
Total interest-bearing liabilities		177,593			724		1.63	%		179,069			458		1.02	%
Noninterest-bearing deposits		18,790								20,783
Other non-interest bearing liabilities		2,188								1,123
Total liabilities		198,571								200,975
Equity		60,961								59,138
Total liabilities and equity	$	259,532							$	260,113
Net interest income					2,080								2,236
Net interest rate spread							2.93	%							3.36	%
Net interest-earning assets		68,267								66,998
Net interest margin							3.38	%							3.63	%
Average of interest-earning assets to interest-bearing liabilities		138	%							137	%

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	For the Six Months Ended June 30,
	2019								2018
	Average Outstanding Balance			Interest		Yield/ Rate			Average Outstanding Balance			Interest		Yield/ Rate
	(in thousands)								(in thousands)
Interest-earning assets:
Loans	$	200,246		$	4,945		4.94	%	$	180,390		$	4,294		4.76	%
Available for sale securities		43,579			563		2.58	%		58,451			716		2.45	%
Interest-bearing deposits		2,540			29		2.28	%		3,293			15		0.91	%
FHLB stock		642			17		5.30	%		700			16		4.57	%
Total interest-earning assets		247,007			5,554		4.50	%		242,834			5,041		4.15	%
Noninterest-earning assets		16,683								16,414
Allowance for loan losses		(2,182	)							(1,835	)
Total assets	$	260,885							$	257,413
Interest-bearing liabilities:
Demand accounts	$	9,168			57		1.24	%	$	4,502			7		0.31	%
Money market accounts		40,785			243		1.19	%		52,764			185		0.70	%
Savings accounts		14,245			9		0.13	%		15,329			15		0.20	%
Health savings accounts		11,284			17		0.30	%		11,596			13		0.22	%
Certificates of deposit		87,689			906		2.07	%		72,493			468		1.29	%
Total interest-bearing deposits		163,171			1,232		1.51	%		156,684			688		0.88	%
Borrowings		16,544			179		2.16	%		19,862			169		1.70	%
Total interest-bearing liabilities		179,715			1,411		1.57	%		176,546			857		0.97	%
Noninterest-bearing deposits		18,256								20,538
Other non-interest bearing liabilities		1,406								1,199
Total liabilities		200,050								198,283
Equity		60,835								59,130
Total liabilities and equity	$	260,885							$	257,413
Net interest income					4,143								4,184
Net interest rate spread							2.93	%							3.18	%
Net interest-earning assets		67,292								66,288
Net interest margin							3.35	%							3.45	%
Average of interest-earning assets to interest-bearing liabilities		137	%							138	%

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Rate/Volume Analysis. The following table presents the dollar amount of changes in interest income and interest expense for the components of interest earning assets and interest-bearing liabilities that are presented in the preceding table. For each category of interest earning assets and interest-bearing liabilities, information is provided on changes attributable to: (1) changes in volume, which are changes in the average outstanding balances multiplied by the prior period rate (i.e. holding the initial rate constant); and (2) changes in rate, which are changes in average interest rates multiplied by the prior period volume (i.e. holding the initial balance constant). Changes due to both rate and volume which cannot be segregated have been allocated in proportion to the relationship of the dollar amounts of the change in each category.

For Three Months Ended June 30, 2019 vs. 2018
	Increase (Decrease) Due to						Total Increase (Decrease)
	Volume			Rate
	(In thousands)
Interest-earning assets:
Loans	$	170		$	1		$	171
Available for sale securities		(86	)		19			(67	)
Interest-bearing deposits		1			9			10
FHLB Stock		(3	)		(1	)		(4	)
Total interest-earning assets	$	82		$	28		$	110
Interest-bearing liabilities:
Demand accounts	$	3		$	19		$	22
Money market accounts		(24	)		53			29
Savings accounts		(1	)		(2	)		(3	)
Health savings accounts		-			2			2
Certificates of deposit		55			186			241
Total deposits	$	33		$	258		$	291
Borrowings		(40	)		15			(25	)
Total interest-bearing liabilities		(7	)		273			266
Change in net interest income	$	89		$	(245	)	$	(156	)

39

For Six Months Ended June 30,
	2019 vs. 2018
	Increase (Decrease) Due to						Total Increase (Decrease)
	Volume			Rate
	(In thousands)
Interest-earning assets:
Loans	$	473		$	178		$	651
Available for sale securities		(182	)		29			(153	)
Interest-bearing deposits		(3	)		17			14
FHLB Stock		(1	)		2			1
Total interest-earning assets	$	287		$	226		$	513
Interest-bearing liabilities:
Demand accounts	$	7		$	43		$	50
Money market accounts		(42	)		100			58
Savings accounts		(1	)		(5	)		(6	)
Health savings accounts		-			4			4
Certificates of deposit		98			340			438
Total deposits	$	62		$	482		$	544
Borrowings		(28	)		38			10
Total interest-bearing liabilities		34			520			554
Change in net interest income	$	253		$	(294	)	$	(41	)

Liquidity and Capital Resources. Liquidity describes our ability to meet the 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, principal and interest payments on loans and securities, proceeds from the sale of loans, and proceeds from maturities of securities. The Company also has the ability to borrow from the FHLB-Chicago. At June 30, 2019, the Company had $15.8 million outstanding in advances from the FHLB-Chicago. At June 30, 2019, due to the FHLB-Chicago’s repurchase of its stock, the Company had no available capacity for additional FHLB-Chicago advances.

Additionally, at June 30, 2019 the Company had a $7.0 million federal funds rate line of credit with the Bankers’ Bank of Wisconsin, of which zero was drawn at June 30, 2019.

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and cash equivalents and available for sale investment securities. The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period. 

40

The Company is committed to maintaining a strong liquidity position. The Company monitors our liquidity position on a daily basis. The Company anticipates that the Company will have sufficient funds to meet our current funding commitments. Based on our current strategy to change our mix of deposits to become less reliant on certificates of deposit, the Company anticipates that the Company will continue to allow a significant portion of higher-costing certificates of deposit to run off at maturity. The Company also anticipates continued use of FHLB-Chicago advances as well as continuing to utilize non-core funding sources, such as the Certificate of Depository Registry Service (CDARS), as needed, to fund future loan growth and our operations. 

At June 30, 2019, the Company exceeded all of our regulatory capital requirements with a Tier 1 leverage capital of $49.3 million, or 19.0% of adjusted total assets, which is above the well-capitalized required level of $12.9 million, or 5.0%; and total risk-based capital of $51.5 million, or 25.6% of risk-weighted assets, which is above the well-capitalized required level of $20.1 million, or 10.0%. Management is not aware of any conditions or events since the most recent notification that would change our category.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable, as the Registrant is a smaller reporting company.

Item 4. Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of June 30, 2019. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Registrant’s disclosure controls and procedures were effective.

During the quarter ended June 30, 2019, there have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II – Other Information

Item 1. Legal Proceedings

The Company is 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 our financial condition or results of operations.

Item 1A. Risk Factors

Not applicable, as the Registrant is a smaller reporting company.

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

(a) There were no sales of unregistered securities during the period covered by this Report.

(b) Not applicable.

(c) Repurchase of Equity Securities.

41

On January 25, 2019, the Company announced that its Board of Directors had authorized the repurchase of up to 334,837 shares of the Company’s common stock, representing approximately 5.00% of the Company’s then outstanding shares. The shares may be purchased under the current repurchase program in the open market or in privately negotiated transactions from time to time depending on market conditions and other factors. As of June 30, 2019, 82,055 shares had been purchased under the current plan.

The table below sets forth FFBW, Inc.’s common stock repurchases during the three months ended June 30, 2019.

Period	(a) Total number of shares purchased		(b) Average price paid per share		(c) Total number of shares purchased as part of publicly announced plans or programs		(d) Maximum number of shares that may yet be purchased under the plans or programs
April 1 - April 30, 2019		22,094	$	10.79		22,094		283,304
May 1 - May 31, 2019		11,604	$	10.37		11,604		271,700
June 1 - June 30, 2019		18,921	$	10.22		18,921		252,779
Total		52,619				52,619

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

3.1 Charter of FFBW, Inc. (1)

3.2 Bylaws of FFBW, Inc. (2)

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

101.0 The following materials for the quarter ended June 30, 2019, formatted in XBRL (Extensible Business Reporting Language): (i) Balance Sheets, (ii) Statements of Income, (iii) Statements of Comprehensive Income, (iv) Statements of Cash Flows, and (v) Notes to Financial Statements

(1) Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, as amended (Commission File No. 333-218736).

(2) Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1, as amended (Commission File No. 333-218736).

42

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.

	FFBW, INC.
Date:  July 31, 2019	/s/ Edward H. Schaefer
	Edward H. Schaefer
	President and Chief Executive Officer
Date:  July 31, 2019	/s/ Nikola B. Schaumberg
	Nikola B. Schaumberg
	Chief Financial Officer

43

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

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

I, Edward H. Schaefer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of FFBW, 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 general 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:  July 31, 2019	/s/ Edward H. Schaefer
	Edward H. Schaefer
	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, Nikola B. Schaumberg, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of FFBW, 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 general 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:  July 31, 2019	/s/ Nikola B. Schaumberg
	Nikola B. Schaumberg
	Chief Financial Officer

EX-32

Exhibit 32

Certification of Chief Executive Officer and Chief Financial Officer

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

Edward H. Schaefer, President and Chief Executive Officer of FFBW, Inc., (the “Company”) and Nikola B. Schaumberg, Chief Financial Officer 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 June 30, 2019 (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:  July 31, 2019	/s/ Edward H. Schaefer
	Edward H. Schaefer
	President and Chief Executive Officer

Date:  July 31, 2019	/s/ Nikola B. Schaumberg
	Nikola B. Schaumberg
	Chief Financial Officer

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.

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Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Jul. 31, 2019
Document Information [Line Items]
Entity Registrant Name	FFBW, Inc.
Entity Central Index Key	0001709017
Trading Symbol	ffbw
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		6,580,988
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false
Title of 12(b) Security	Common Stock

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Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Assets
Cash and due from banks	$ 4,351	$ 1,746
Fed funds sold	1,046	2,742
Cash and cash equivalents	5,397	4,488
Available for sale securities, stated at fair value	43,478	43,751
Loans held for sale	1,951	679
Loans, net of allowance for loan and lease losses of $2,252 and $2,118, respectively	193,001	198,694
Premises and equipment, net	4,888	5,057
Foreclosed assets	84	69
FHLB stock, at cost	609	739
Accrued interest receivable	777	768
Cash value of life insurance	7,105	7,007
Other assets	1,034	1,474
TOTAL ASSETS	258,324	262,726
Liabilities and Equity
Deposits	177,553	183,205
Advance payments by borrowers for taxes and insurance	771	55
FHLB advances	15,750	17,750
Accrued interest payable	648	70
Other liabilities	2,418	1,284
Total liabilities	197,140	202,364
Preferred stock ($0.01 par value, 1,000,000 authorized, no shares issued or outstanding as of June 30, 2019 and December 31, 2018, respectively)
Common stock ($0.01 par value, 19,000,000 authorized, 6,706,742 and 6,696,742 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively)	67	67
Additional paid in capital	28,489	28,326
Unallocated common stock of Employee Stock Ownership Plan ("ESOP") (236,823 and 243,303 shares at June 30, 2019 and December 31, 2018, respectively)	(2,368)	(2,433)
Retained earnings	35,632	34,995
Accumulated other comprehensive income (loss), net of income taxes	235	(593)
Less treasury stock, 82,055 and 0 shares at cost, at June 30, 2019 and December 31, 2018, respectively	(871)
Total equity	61,184	60,362
TOTAL LIABILITIES AND EQUITY	$ 258,324	$ 262,726

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Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Allowance for loan and lease losses	$ 2,252	$ 2,118
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	1,000,000	1,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	19,000,000	19,000,000
Common stock, issued (in shares)	6,706,742	6,696,742
Common stock, outstanding (in shares)	6,706,742	6,696,742
Unallocated common stock of Employee Stock Ownership Plan, shares (in shares)	236,823	243,303
Treasury stock, shares (in shares)	82,055	0

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Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Interest and dividend income:
Loans, including fees	$ 2,497	$ 2,326	$ 4,945	$ 4,294
Securities
Taxable	282	339	557	679
Tax-exempt	4	14	6	37
Other	21	15	46	31
Total interest and dividend income	2,804	2,694	5,554	5,041
Interest Expense:
Interest-bearing deposits	633	342	1,232	688
Borrowed funds	91	116	179	169
Total interest expense	724	458	1,411	857
Net interest income	2,080	2,236	4,143	4,184
Provision for loan losses	85	189	155	304
Net interest income after provision for loan losses	1,995	2,047	3,988	3,880
Noninterest income:
Service charges and other fees	64	51	99	111
Net gain on sale of loans	127	36	168	75
Net gain (loss) on sale of securities	5	1	(3)	9
Increase in cash surrender value of insurance	51	49	98	95
Other noninterest income	24	24	49	47
Total noninterest income	271	161	411	337
Noninterest expense:
Salaries and employee benefits	1,031	1,139	2,128	2,196
Occupancy and equipment	242	226	484	459
Data processing	169	158	344	310
Technology	79	49	157	104
Foreclosed assets, net	1	(9)	2	37
Professional fees	104	57	216	175
Other noninterest expense	126	151	229	323
Total noninterest expense	1,752	1,771	3,560	3,604
Income before income taxes	514	437	839	613
Provision for income taxes	126	84	202	137
Net income	$ 388	$ 353	$ 637	$ 476
Earnings per share
Basic (in dollars per share)	$ 0.06	$ 0.06	$ 0.10	$ 0.07
Diluted (in dollars per share)	$ 0.06	$ 0.06	$ 0.10	$ 0.07

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Statement of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Net income	$ 388	$ 353	$ 637	$ 476
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the period	540	(262)	1,132	(956)
Reclassification adjustment for losses (gains) realized in net income	(5)	(1)	3	(9)
Other comprehensive income (loss) before tax effect	535	(263)	1,135	(965)
Tax effect of other comprehensive income (loss) items	(144)	136	(307)	230
Other comprehensive income (loss), net of tax	391	(127)	828	(735)
Comprehensive income (loss)	$ 779	$ 226	$ 1,465	$ (259)

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Statement of Changes in Equity (Unaudited) - USD ($) $ in Thousands	Common Stock Outstanding [Member]	Additional Paid-in Capital [Member]	Unallocated Common Stock of ESOP [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2017	$ 66	$ 28,296	$ (2,563)	$ 33,937	$ (247)		$ 59,489
Net income				476			476
ESOP shares committed to be released (6,480 shares)		6	65				71
Other comprehensive loss					(735)		(735)
Balance at Jun. 30, 2018	66	28,302	(2,498)	34,413	(982)		59,301
Balance at Dec. 31, 2018	67	28,326	(2,433)	34,995	(593)		60,362
Net income				637			637
ESOP shares committed to be released (6,480 shares)		4	65				69
Other comprehensive loss					828		828
Stock based compensation expense		159					159
Repurchase of common stock						(871)	(871)
Balance at Jun. 30, 2019	$ 67	$ 28,489	$ (2,368)	$ 35,632	$ 235	$ (871)	$ 61,184

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Statement of Changes in Equity (Unaudited) (Parentheticals) - shares	Jun. 30, 2019	Jun. 30, 2018
ESOP shares committed to be released (in shares)	6,480	6,480

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Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net income	$ 637,000	$ 476,000
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	155,000	304,000
Depreciation	181,000	167,000
Accretion of loan portfolio discount and deposit premium	(59,000)	(46,000)
Net amortization on securities available for sale	199,000	272,000
(Gain) loss on sales and impairments of foreclosed assets	(7,000)	17,000
(Gain) loss on sale of available for sale securities	3,000	(9,000)
Increase in cash surrender value of life insurance	(98,000)	(95,000)
ESOP compensation	69,000	71,000
Stock based compensation	159,000
Changes in operating assets and liabilities:
Accrued interest receivable	(9,000)	(39,000)
Loans held for sale	(1,272,000)	109,000
Other assets	134,000	66,000
Accrued interest payable	550,000	323,000
Other liabilities	1,162,000	(152,000)
Net cash provided by operating activities	1,803,000	1,464,000
Cash flows from investing activities:
Proceeds from sales of available for sale securities	4,837,000	6,437,000
Maturities, calls, paydowns on available for sale securities	2,316,000	3,079,000
Purchases of available for sale securities	(5,947,000)	(7,867,000)
Net (increase) decrease in loans	5,521,000	(22,259,000)
Purchases of premises and equipment	(12,000)	(38,000)
Proceeds from redemption of FHLB stock	130,000
Purchase of FHLB stock		(584,000)
Proceeds from sale of foreclosed assets	76,000	823,000
Net cash provided by (used in) investing activities	6,921,000	(20,409,000)
Cash flows from financing activities:
Net decrease in deposits	(5,660,000)	(16,501,000)
Net increase in advance payments by borrowers for taxes and insurance	716,000	776,000
Repayments of FHLB advances	(2,000,000)
Proceeds from FHLB advances		25,250,000
Repurchase of common stock	(871,000)
Net cash provided by (used in) financing activities	(7,815,000)	9,525,000
Net increase (decrease) in cash and cash equivalents	909,000	(9,420,000)
Cash and cash equivalents at beginning	4,488,000	11,813,000
Cash and cash equivalents at end	5,397,000	2,393,000
Supplemental Cash Flow Disclosures:
Cash paid for interest	833,000	534,000
Cash paid for income taxes	160,000	40,000
Loans transferred to foreclosed assets	84,000	221,000
Financed sales of foreclosed assets		$ 21,000

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Note 1 - Basis of Presentation

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Business Description and Basis of Presentation [Text Block]

Note

1

– Basis of Presentation

The accompanying unaudited consolidated financial statements of FFBW, Inc. and its wholly-owned subsidiary, First Federal Bank of Wisconsin, (collectively the “Company”) were prepared in accordance with instructions for Form

10

-Q and Regulation S-

X

and do

not

include information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America.

In the opinion of management, all adjustments necessary for a fair presentation of the financial statements have been included. The results of operations for the

six

month period ended

June 30, 2019

are

not

necessarily indicative of the results which

may

be expected for the entire year. These statements should be read in conjunction with the Financial Statements and notes thereto for the year ended

December 31, 2018

filed with the U.S. Securities and Exchange Commission (“SEC”) as part of FFBW, Inc.’s Annual Report on Form

10

-K for the year ended

December 31, 2018.

In preparing the financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s financial condition, results of operations, comprehensive income, changes in shareholders’ equity and cash flows for the interim periods presented. These adjustments are of a normal recurring nature and include appropriate estimated provisions.

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Note 2 - Nature of Business and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Business Description and Accounting Policies [Text Block]

Note

2

–

Nature of Business and Summary of Significant Accounting Policies

Organization

On

October 10, 2017,

First Federal Bank of Wisconsin (“the Bank”) converted to a stock savings bank and was reorganized into the mutual holding company structure.  The Bank issued all of its outstanding stock to a new holding company, FFBW, Inc., (the “Company”) which sold

2,950,625

shares of common stock to the public at

$10.00

per share, and contributed an additional

25,000

shares to FFBW Community Foundation, representing

45%

of its outstanding shares of common stock.  This amount included shares purchased by the Bank’s employee stock ownership plan (“ESOP”), which purchased

3.92%

of the Company’s outstanding common upon the completion of the reorganization and stock issuance.  FFBW, Inc. is organized as a corporation under the laws of the United States.  FFBW, MHC has been organized as a mutual holding company under the laws of the United States and owns

55%

of the outstanding common stock of FFBW, Inc.    

The cost of the reorganization and the issuing of the common stock were deferred and deducted from the sales proceeds of the offering.  Reorganization costs of

$1,394

were recognized.  

At

June 30, 2019,

the significant assets of the Company were the capital stock of the Bank, and a loan to the First Federal Bank of Wisconsin Employee Stock Ownership Plan (“ESOP”). The liabilities of the Company were insignificant. The Company is subject to the financial reporting requirements of the Securities Exchange Act of

1934,

as amended. The Company is subject to regulation and examination by the Board of Governors of the Federal Reserve System (“the Federal Reserve Board”).

First Federal Bank of Wisconsin is a community bank headquartered in Waukesha, Wisconsin that provides financial services to individuals and businesses from our offices in Waukesha, Brookfield, and the Bay View neighborhood.

Use of Estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ 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, the fair values of securities, fair value of financial instruments, the valuation of other real estate owned and the valuation of deferred income tax assets.

Revenue Recognition

Accounting Standards Codification ("ASC")

606,

Revenue from Contracts with Customers ("ASC

606"

), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

The majority of the Company's revenue-generating transactions are

not

subject to ASC

606,

including revenue all interest and dividend income generated from financial instruments. Certain noninterest income items, including loan servicing income, gain on sales of loans, gain on sales of securities, and other noninterest income have been evaluated to

not

fall with the scope of ASC

606.

Elements of noninterest income that is within the scope of ASC

606,

are as follows:

Service fees - The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Management reviewed the deposit account agreements, and determined that the agreements can be terminated at any time by either the Company or the account holder. Transaction fees, such as balance transfers, wires and overdraft charges are settled the day the performance obligation is satisfied. The Company's monthly service charges and maintenance fees are for services provided to the customer on a monthly basis and are considered a series of services that have the same pattern of transfer each month. The review of service charges assessed on deposit accounts included the amount of variable consideration that is a part of the monthly charges. It was found that the waiver of service charges due to insufficient funds and dormant account fees is immaterial and would

not

require a change in the accounting treatment for these fees under the new revenue standards. Recognition of revenue under ASC

606

did

not

materially change the timing or magnitude of revenue recognition.

Interchange fees - Customers use a Bank-issued debit card to purchase goods and services, and the Company earns interchange fees on those transactions, typically a percentage of the sale amount of the transaction. The Company records the amount due when it receives the settlement from the payment network. Payments from the payment network are received and recorded into income on a daily basis. There are

no

contingent debit card interchange fees recorded by the Company that could be subject to a clawback in future periods. Recognition of revenue under ASC

606

did

not

materially change the timing or magnitude of revenue recognition.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash and balances due from banks and non-maturity deposits in the Federal Home Loan Bank of Chicago (FHLB). The Company

may

at times maintain balances at financial institutions that exceed federally insured limits. The Company has

not

experienced any losses in such accounts.

Available for Sale Securities

Securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time, but

not

necessarily to maturity.  Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company's assets and liabilities, liquidity needs, regulatory capital requirements, and other similar factors.  Securities classified as available for sale are carried at fair value.  Unrealized gains or losses are reported as increases or decreases in other comprehensive income, net of the related deferred tax effect.  Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Gains and losses on the sale of securities are recorded on the trade date and determined using the specific-identification method.

Declines in fair value of securities that are deemed to be other than temporary, if applicable, are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers the length of time and the extent to which fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient enough to allow for any anticipated recovery in fair value.

Loans Acquired in a Transfer

The Company acquires loans (including debt securities) individually and in groups or portfolios. These loans are initially measured at fair value with

no

allowance for loan losses. The Company's allowance for loan losses on all acquired loans reflect only those losses incurred subsequent to acquisition.

Certain acquired loans

may

have experienced deterioration of credit quality between origination and the Company's acquisition of the loans. At acquisition, the Company reviews each loan to determine whether there is evidence of deterioration of credit quality since origination and if it is probable that the Company will be unable to collect all amounts due according to the loan's contractual terms. If both conditions exist, the Company determines whether each such loan is to be accounted for individually or whether such loans will be assembled into pools of loans based on common risk characteristics (for example, credit score, loan type, and date of origination). The Company considers expected prepayments and estimates the amount and timing of undiscounted principal, interest, and other cash flows expected at acquisition for each loan and aggregated pool of loans. The excess of the loan's or pool's scheduled contractual principal and interest payments over all cash flows expected at acquisition is calculated as the nonaccretable difference. The excess of cash flows expected to be collected over the fair value of each loan or pool (accretable yield) is accreted into interest income over the remaining life of the loan or pool.

At each reporting date, the Company continues to estimate cash flows expected to be collected for each loan or pool. If expected cash flows have decreased from the acquisition date estimate, the Company recognizes an allowance for loan losses. If expected cash flows have increased from the acquisition date estimate, the Company increases the amount of accretable yield to be recognized as interest income over the remaining life of the loan or pool.

Loans

  

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff generally are reported at their outstanding unpaid principal balances adjusted for deferred loan fees and costs, charge-offs, and an allowance for loan losses. Interest on loans is accrued and credited to income based on the unpaid principal balance. Loan-origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method.

The accrual of interest on loans is discontinued when, in the opinion of management, there is an indication that the borrower

may

be unable to make payments as they become due. When loans are placed on nonaccrual status or charged off, all unpaid accrued interest is reversed against interest income. The interest on these loans is subsequently accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Allowance for Loan Losses

The allowance for loan losses is maintained at the level considered adequate by management to provide for losses that are probable as of the balance sheet date. The allowance for loan losses is established through a provision for loan losses charged to expense as losses are estimated to have occurred. Loan losses are charged against the allowance when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance. In determining the adequacy of the allowance balance, the Company makes evaluations of the loan portfolio and related off-balance sheet commitments, considers current economic conditions and historical loss experience, and reviews specific problem loans and other factors.

When establishing the allowance for loan losses, management categorizes loans into risk categories generally based on the nature of the collateral and the basis of repayment. These risk categories and their relevant risk characteristics are as follows:

Commercial development

:

These loans are secured by vacant land and/or property that are in the process of improvement. Repayment of these loans can be dependent on the sale of the property to

third

parties or the successful completion of the improvements by the builder for the end user. Construction loans include

not

only construction of new structures, but loans originated to finance additions to or alterations of existing structures. Until a permanent loan originates, or payoff occurs, all commercial construction loans secured by real estate are reported in this loan pool. Development loans also have the risk that improvements will

not

be completed on time, or in accordance with specifications and projected costs.

Commercial real estate

:

These loans are primarily secured by office and industrial buildings, warehouses, small retail shopping facilities, and various special purpose properties, including restaurants. These loans are subject to underwriting standards and processes similar to commercial and industrial loans. Loans to closely held businesses are generally guaranteed in full by the owners of the business. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property. The cash flows of the borrowers, however,

may

not

behave as forecasted and collateral securing loans

may

fluctuate in value due to the general economic factors or conditions specific to the real estate market, such as geographic location and/or purpose type.

Commercial and industrial

:

Commercial and industrial loans are extended primarily to small and middle market customers. Such credits typically comprise working capital loans, asset acquisition loans, and loans for other business purposes. Loans to closely held businesses are generally guaranteed in full by the owners of the business. Commercial and industrial loans are made based primarily on the historical and projected cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of the borrowers, however,

may

not

behave as forecasted and collateral securing loans

may

fluctuate in value due to economic or individual performance factors. Minimum standards and underwriting guidelines have been established for commercial and industrial loans.

1

-

4

family owner-occupied:These loans are generally to individuals and are underwritten by evaluating the credit history of the borrower, the ability of the borrower to meet the debt service requirements of the loan and total debt obligations, the underlying collateral, and the loan to collateral value. Also included in this category are junior liens on

1

-

4

family residential properties. Underwriting standards for single family loans are heavily influenced by statutory requirements, which include, but are

not

limited to, loan-to-value and affordability ratios, risk-based pricing strategies, and documentation requirements.

1

-

4

family investor-owned:These loans

may

be to individuals or businesses and are subject to underwriting standards and processes similar to commercial and industrial loans. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property(ies). The cash flows of the borrowers, however,

may

not

behave as forecasted and collateral securing loans

may

fluctuate in value due to the general economic factors or conditions specific to the real estate market, such as geographic location and/or purpose type.

Multifamily real estate:These loans include loans to finance non-farm properties with

five

or more units in structures primarily to accommodate households. Such credits are typically originated to finance the acquisition or refinancing of an apartment building. These loans are subject to underwriting standards and processes similar to commercial and industrial loans. Loans to closely held businesses are generally guaranteed in full by the owners of the business. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the subject multifamily property, with assumptions made for vacancy rates. Cash flows of the borrowers rely on the receipt of rental income from the tenants of the property who are themselves subject to fluctuations in national and local economic conditions and unemployment trends.

Consumer:These loans

may

take the form of installment loans, demand loans, or single payment loans, and are extended to individuals for household, family, and other personal expenditures. These loans generally include direct consumer automobile loans and credit card loans. These loans are generally smaller in size and are underwritten by evaluating the credit history of the borrower, the ability of the borrower to meet the debt service requirements of the loan and total debt obligations.

Management regularly evaluates the allowance for loan losses using the Company’s past loan loss experience, known and inherent risks in the loan portfolio, composition of the loan portfolio, adverse situations that

may

affect the borrower’s ability to repay, estimated value of any underlying collateral, current economic conditions, and other relevant factors. This evaluation is inherently subjective since it requires material estimates that

may

be susceptible to significant change.

A loan is impaired when, based on current information, it is probable that the Company will

not

collect all amounts due in accordance with the contractual terms of the loan agreement. Management determines whether a loan is impaired on a case-by-case basis, taking into consideration the payment status, collateral value, length and reason of any payment delays, the borrower’s prior payment record, and any other relevant factors. Large groups of smaller-balance homogeneous loans, such as residential mortgage and consumer loans, are collectively evaluated in the allowance for loan losses analysis and are

not

subject to impairment analysis unless such loans have been subject to a restructuring agreement. Specific allowances for impaired loans are based on discounted cash flows of expected future payments using the loan’s initial effective interest rate or the fair value of the collateral if the loan is collateral dependent.

In addition, various regulatory agencies periodically review the allowance for loan losses. These agencies

may

require the Company to make additions to the allowance for loan losses based on their judgments of collectability based on information available to them at the time of their examination.

Troubled Debt Restructurings

Loans are accounted for as troubled debt restructurings when a borrower is experiencing financial difficulties that lead to a restructuring of the loan, and the Company grants a “concession” to the borrower that they would

not

otherwise consider. These concessions include a modification of terms such as a reduction of the stated interest rate or loan balance, a reduction of accrued interest, an extension of the maturity date at an interest rate lower than a current market rate for a new loan with similar risk, or some combination thereof to facilitate repayment. Troubled debt restructurings are considered impaired loans.

Foreclosed Assets

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value, less costs to sell, at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management, and the assets are carried at the lower of carrying amount or fair value less costs to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed assets.

Premises and Equipment

Depreciable assets are stated at cost less accumulated depreciation. Provisions for depreciation are computed on straight-line and accelerated methods over the estimated useful lives of the assets.

Federal Home Loan Bank Stock

The Company's investment in Federal Home Loan Bank ("FHLB") stock is carried at cost, which approximates fair value. The Company is required to hold the stock as a member of the FHLB, and transfer of the stock is substantially restricted. The stock is evaluated for impairment on an annual basis.

Income Taxes

Amounts provided for income tax expense are based on income reported for financial statement purposes and do

not

necessarily represent amounts currently payable under tax laws. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and income tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

As changes in tax laws or rates are enacted, deferred income tax assets and liabilities are adjusted through the provision for income taxes. The differences relate principally to the allowances for loan losses, deferred compensation, depreciation, FHLB stock dividends and non-accrual interest. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than

not

to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than

not

sustain the position following an audit. For tax positions meeting the more likely than

not

threshold, the amount recognized in the financial statements is the largest benefit that has a greater than

50

percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Based on its evaluation, the Company has concluded that there are

no

significant uncertain tax positions requiring recognition in its financial statements.

The Company's policy is to recognize interest and penalties related to income tax issues as components of income tax expense. During the periods shown, the Company did

not

recognize any interest or penalties related to income tax expense in its statement of income.

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (

1

) the assets have been isolated from the Company, (

2

) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (

3

) the Company does

not

maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Advertising

Advertising costs are expensed as incurred.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) is shown on the statements of comprehensive income (loss). The Company’s accumulated other comprehensive income (loss) is composed of the unrealized gain (loss) on securities available for sale, net of tax and is shown on the statements of changes in equity. Reclassification adjustments out of other comprehensive income (loss) for gains (losses) realized on sales of securities available for sale comprise the entire balance of “net gain (loss) on sale of securities” on the statements of income.

Off-Balance Sheet Financial Instruments

In the ordinary course of business, the Company has entered into off-balance-sheet financial instruments consisting of commitments to extend credit, unfunded commitments under lines of credit, and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable.

Life Insurance

The Company has purchased life insurance policies on certain key executives. Life insurance is measured at the amount that could be realized under the insurance contract as of the balance sheet date, which is generally the cash surrender value of the policy.

Subsequent Events

Management has reviewed the Company’s operations for potential disclosure or financial statement impacts related to events occurring after

June 30, 2019,

but prior to the release of these financial statements. Based on the results of this review,

no

subsequent event disclosure or financial statement impacts to these financial statements are required as of

July 31, 2019.

Recent Accounting Pronouncements

The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of

2012

(the “JOBS Act”). For as long as the Company is an emerging growth company, it

may

choose to take advantage of exemptions from various reporting requirements applicable to other public companies. An emerging growth company

may

elect to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the Company is

first

required to file a registration statement. The Company has elected to use the extended transition period described above and intends to maintain its emerging growth company status as allowed under the JOBS Act.

The Company recently adopted the following Accounting Standards Updates (ASU) issued by the Financial Accounting Standards Board (FASB).

ASU

No.

2014

-

09,

"Revenue from Contracts with Customers."

The objective of this new standard is to provide a common revenue standard for all entities that enter into contracts with customers to transfer goods, services, or nonfinancial assets. The Company adopted this new accounting standard for the effective

January 1, 2019.

The Company did

not

identify any changes in the timing of revenue recognition when considering the amended accounting guidance, however, the Company has included additional disclosures as required by the guidance.

ASU

No.

2016

-

01,

“Recognition and Measurement of Financial Assets and Financial Liabilities”

ASU

No.

2018

-

03,

“Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic

825

-

10

)”

These standards make a number of changes to the recognition and measurement standards of financial instruments, including the following changes:

1

) equity securities with a readily determinable fair value will have to be measured at fair value with changes in fair value recognized in net income;

2

) entities that are public business entities will

no

longer be required to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost; and

3

) entities that are public business entities will be required to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The Company adopted this new accounting standard for the effective

January 1, 2019.

The adoption of these standard did

not

have a material impact on the Company's financial condition or results of operations, except that the Company will

no

longer disclose the method(s) and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost.

The following Accounting Standards Updates (ASUs) have been issued by the Financial Accounting Standards Board (FASB) and

may

impact the Company's financial statements in future reporting periods:

ASU

No.

2016

-

13,

“Credit Losses (Topic

326

).”

ASU

No.

2019

-

04,

"Codification Improvements to Topic

326."

ASU

No.

2019

-

05,

"Financial Instruments-Credit Losses."

ASU

2016

-

13

requires organizations to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2021.

Early adoption will be permitted for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2018.

The Company is currently assessing the impact of adopting ASU

2016

-

13

on its financial statements.

ASU

No.

2016

-

02

“Leases (Topic

842

): Amendments to the Leases Analysis.”

ASU

No.

2018

-

10

"Codification Improvements to Topic

842."

ASU

No.

2018

-

11

"Targeted Improvements"

For lessees, Topic

842

requires leases to be recognized on the balance sheet, along with disclosure of key information about leasing arrangements. Topic

842

was subsequently amended by ASU

2018

-

01,

2018

-

10

and

2018

-

11.

The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than

12

months. Leases will be classified as finance or operating, with classification affecting the pattern and classification expense recognition in the income statement.

For lessors, Topic

842

requires lessors to classify leases as sales-type, direct financing or operating leases. A lease is a sales-type lease if any

one

of

five

criteria are met, each of which indicate that the lease, in effect, transfers control of the underlying asset to the lessee. If

none

of those

five

criteria are met, but

two

additional criteria are both met, indicating the lessor has transferred substantially all the risks and benefits of the underlying asset to the lessee and a

third

party, the lease is a direct financing lease. All leases that are

not

sales-type or direct financing leases are operating leases.

The new standard is effective for the Company on

January 1, 2020,

with early adoption permitted. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity

may

choose to use either (

1

) the new standard's effective date or (

2

) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company expects to adopt the new standard on

January 1, 2020

using the effective date as its date of initial application. Consequently, financial information will

not

be updated and the disclosures required under the new standard will

not

be provided for dates and periods before

January 1, 2020.

ASU

No.

2016

-

01,

“Recognition and Measurement of Financial Assets and Financial Liabilities”

ASU

No.

2018

-

03,

“Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic

825

-

10

)”

ASU

No.

2016

-

01

is a wide-ranging standard with several elements that will impact most financial institutions. The standard introduces new guidance that applies to most equity investments. Under the standard, equity securities can

no

longer be classified as available-for-sale securities. Instead, market value fluctuations on equity securities will have to be recognized directly through net income. An entity

may

elect to value equity investments without a readily determinable fair value at its cost minus impairment (if any) plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer, with any changes recognized through net income. The standard also eliminates certain disclosure requirements related to financial instruments. Non-PBEs will

no

longer have to disclose the fair value of financial instruments measured at amortized cost in the financial statements. PBEs will still need to make this disclosure but will

no

longer be required to disclose the methods and significant assumptions used to determine the fair value of financial instruments measured at amortized cost. ASU

2016

-

01

is effective for non-PBEs for years beginning after

Dec.15,

2018,

and was effective for PBEs with fiscal years beginning after

December 15, 2017. 

ASU2016

-

01

will require the Company to adjust its reported value of Bankers' Bank stock, which is considered an equity security without a readily determinable market value, if a comparable transaction is observed.

ASU

No.

2018

-

13,

“Fair Value Measurement (Topic

820

): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement”

This ASU modifies the disclosure requirements on fair value measurements in Topic

820,

including the removal, modification to, and addition of certain disclosure requirements. This ASU will be effective for fiscal years beginning after

December 15, 2019

with early adoption permitted. The majority of the disclosure changes are to be applied on a prospective basis. The Company is currently in the process of reviewing this ASU to determine whether the modifications within will be adopted prior to the effective date. Although this ASU has a significant impact to the Company’s fair value disclosures,

no

additional impact to the financial statements is expected.

XML

Note 3 - Earnings Per Share

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

Note

3

Earnings Per Share

Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding, adjusted for weighted average unallocated ESOP shares, during the applicable period, excluding outstanding participating securities. Participating securities include non-vested restricted stock awards and restricted stock units, though

no

actual shares of common stock related to restricted stock units are issued until the settlement of such units, to the extent holders of these securities receive non-forfeitable dividends or dividend equivalents at the same rate as holders of the Company’s common stock. Diluted earnings per share is computed using the weighted-average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method. Antidilutive options are disregarded in earnings per share calculations.

The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share (in thousands, except share and per share data).

	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Net income	$	388		$	353		$	637		$	476
Basic potential common shares
Weighted average shares outstanding		6,644,529			6,612,500			6,668,358			6,612,500
Weighted average unallocated Employee Stock Ownership Plan Shares		(238,947	)		(250,863	)		(240,558	)		(252,483	)
Basic weighted average shares outstanding		6,405,582			6,361,637			6,427,800			6,360,017
Dilutive potential common shares		-			-			-			-
Dilutive weighted average shares outstanding		6,405,582			6,361,637			6,427,800			6,360,017
Basic earnings per share	$	0.06		$	0.06		$	0.10		$	0.07
Diluted earnings per share	$	0.06		$	0.06		$	0.10		$	0.07

XML

Note 4 - Available for Sale Securities

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

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

Note

4

Available for Sale Securities

Amortized costs and fair values of available for sale securities are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
June 30, 2019
Obligations of the US government and US government sponsored agencies	$	1,102	$	22	$	-		$	1,124
Obligations of states and political subdivisions		7,612		46		(20	)		7,638
Mortgage-backed securities		30,863		360		(113	)		31,110
Certificates of deposit		1,500		1		(3	)		1,498
Corporate debt securities		2,079		29		-			2,108
Total available for sale securities	$	43,156	$	458	$	(136	)	$	43,478
December 31, 2018
Obligations of the US government and US government sponsored agencies	$	1,299	$	8	$	-		$	1,307
Obligations of states and political subdivisions		8,381		17		(103	)		8,295
Mortgage-backed securities		29,164		24		(652	)		28,536
Certificates of deposit		1,500		1		(55	)		1,446
Corporate debt securities		4,220		2		(55	)		4,167
Total available for sale securities	$	44,564	$	52	$	(865	)	$	43,751

Fair values of securities are estimated based on financial models or prices paid for similar securities. It is possible interest rates could change considerably, resulting in a material change in estimated fair value.

The following table presents the portion of the Company's portfolio which has gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position:

	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
June 30, 2019
Obligations of the US government and US government sponsored agencies	$	-	$	-		$	-	$	-		$	-	$	-
Obligations of states and political subdivisions		-		-			2,084		(20	)		2,084		(20	)
Mortgage-backed securities		9		-			6,898		(113	)		6,907		(113	)
Certificates of deposit		-		-			1,247		(3	)		1,247		(3	)
Corporate debt securities		-		-			-		-			-		-
Total	$	9	$	-		$	10,229	$	(136	)	$	10,238	$	(136	)
December 31, 2018
Obligations of the US government and US government sponsored agencies	$	175	$	-		$	113	$	-		$	288	$	-
Obligations of states and political subdivisions		-		-			6,142		(103	)		6,142		(103	)
Mortgage-backed securities		1,171		(24	)		24,725		(628	)		25,896		(652	)
Certificates of deposit		-		-			1,195		(55	)		1,195		(55	)
Corporate debt securities		384		(2	)		3,128		(53	)		3,512		(55	)
Total	$	1,730	$	(26	)	$	35,303	$	(839	)	$	37,033	$	(865	)

At

June 30, 2019,

the investment portfolio included

27

securities available for sale, which had been in an unrealized loss position for greater than

twelve

months, and

one

security available for sale, which had been in an unrealized loss position for less than

twelve

months. At

December 31, 2018,

the investment portfolio included

79

securities available for sale, which had been in an unrealized loss position for greater than

twelve

months, and

6

securities available for sale, which had been in an unrealized loss position for less than

twelve

months. Because these securities have a fixed interest rate, their fair value is sensitive to movements in market interest rates. These unrealized losses are considered temporary because the Company does

not

intend to sell them prior to maturity; therefore the Company expect to collect all contractually due amounts from these securities. Accordingly, these investments were reduced to their fair values through accumulated other comprehensive income,

not

through earnings.

The Company regularly assesses the securities portfolio for other-than-temporary impairment (OTTI). The assessments are based on the nature of the securities, the underlying collateral, the financial condition of the issuer, the extent and duration of the loss, our intent related to the individual securities, and the likelihood that the Company will have to sell securities prior to expected recovery. The Company did

not

have any impairment losses recognized in earnings for the

six

months ended

June 30, 2019

and

June 30, 2018.

The amortized cost and fair value of available for sale securities by contractual maturity are shown below. Expected maturities will differ from contractual maturities in mortgage-backed securities since the anticipated maturities are

not

readily determinable. Therefore, these securities are

not

included in the maturity categories in the following maturity summary listed below:

	June 30, 2019
	Amortized Cost		Fair Value
Due in one year or less	$	641	$	648
Due after one year through 5 years		4,053		4,079
Due after 5 years through 10 years		3,578		3,610
Due after 10 years		4,021		4,031
Subtotal	$	12,293	$	12,368
Mortgage-backed securities		30,863		31,110
Total	$	43,156	$	43,478

Proceeds from sales of available for sale securities during the

three

months ended

June 30, 2019

and

June 30, 2018

were

$2,704

and

$3,002,

respectively. Proceeds from sales of available for sale securities during the

six

months ended

June 30, 2019

and

June 30, 2018

were

$4,837

and

$6,437,

respectively. Gross realized gains during the

three

months ended

June 30, 2019

and

June 30, 2018

on these sales amounted to

$22

and

$1,

respectively, while gross realized losses on these sales were

$17

and

$0

during the same periods. Gross realized gains during the

six

months ended

June 30, 2019

and

June 30, 2018

on these sales amounted to

$22

and

$24,

respectively. Gross realized losses on these sales were

$25

and

$15,

during the

six

months ended

June 30, 2019

and

June 30, 2018,

respectively.

Available for sale securities with a fair value of

$1,001

and

$960

were pledged securities at

June 30, 2019

and

December 31, 2018,

respectively.

XML

Note 5 - Loans

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

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

Note

5

Loans

 

Major classifications of loans are as follows:

	June 30,			December 31,
	2019			2018
Commercial
Development	$	12,886		$	7,801
Real estate		70,993			69,425
Commercial and industrial		12,526			13,142
Residential real estate and consumer
1-4 family owner-occupied		33,629			41,018
1-4 family investor-owned		31,339			32,312
Multifamily		31,148			34,467
Consumer		2,884			2,733
Subtotal	$	195,405		$	200,898
Deferred loan fees		(152	)		(86	)
Allowance for loan losses		(2,252	)		(2,118	)
Net loans	$	193,001		$	198,694

Analysis of the allowance for loan losses for the

three

and

six

months ended

June 30, 2019

and

2018

follows:

Three Months Ended	Commercial			Residential real estate and consumer			Total
Balance at March 31, 2019	$	984		$	1,204		$	2,188
Provision for loan losses		69			16			85
Loans charged off		-			(21	)		(21	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2019	$	1,053		$	1,199		$	2,252
Balance at March 31, 2018	$	738		$	1,071		$	1,809
Provision for loan losses		92			97			189
Loans charged off		(24	)		(66	)		(90	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2018	$	806		$	1,102		$	1,908

Six Months Ended	Commercial			Residential real estate and consumer			Total
Balance at December 31, 2018	$	940		$	1,178		$	2,118
Provision for loan losses		113			42			155
Loans charged off		-			(21	)		(21	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2019	$	1,053		$	1,199		$	2,252
Balance at December 31, 2017	$	660		$	1,140		$	1,800
Provision for loan losses		170			134			304
Loans charged off		(24	)		(172	)		(196	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2018	$	806		$	1,102		$	1,908

Allowance for loan losses at June 30, 2019:	Commercial		Residential real estate and consumer		Total
Individually evaluated for impairment	$	-	$	-	$	-
Collectively evaluated for impairment		1,053		1,199		2,252
Total allowance for loan losses	$	1,053	$	1,199	$	2,252
Allowance for loan losses at December 31, 2018:
Individually evaluated for impairment	$	-	$	-	$	-
Collectively evaluated for impairment		940		1,178		2,118
Total allowance for loan losses	$	940	$	1,178	$	2,118

June 30, 2019	Commercial		Residential real estate and consumer
Loans:
Individually evaluated for impairment	$	78	$	1,861	$	1,939
Collectively evaluated for impairment		96,327		97,139		193,466
Total loans	$	96,405	$	99,000	$	195,405
December 31, 2018
Loans:
Individually evaluated for impairment	$	87	$	1,469	$	1,556
Collectively evaluated for impairment		90,281		109,061		199,342
Total loans	$	90,368	$	110,530	$	200,898

Analysis for loans evaluated for impairment as of

June 30, 2019

and

December 31, 2018,

follows:

As of June 30, 2019	Principal Balance		Recorded Investment		Related Allowance		Average Investment		Interest Recognized
Loans with no related allowance for loan losses:
Commercial
Commercial and industrial	$	81	$	78	$	-	$	82	$	2
Residential real estate and consumer
1-4 family owner-occupied		1,136		1,109		-		1,114		17
1-4 family investor-owned		669		653		-		657		-
Consumer		108		99		-		103		-
Total impaired loans	$	1,994	$	1,939	$	-	$	1,956	$	19

As of December 31, 2018	Principal Balance		Recorded Investment		Related Allowance		Average Investment		Interest Recognized
Loans with no related allowance for loan losses:
Commercial
Commercial and industrial	$	89	$	87	$	-	$	93	$	5
Residential real estate and consumer
1-4 family owner-occupied		1,142		1,120		-		1,137		26
1-4 family investor-owned		248		241		-		246		-
Consumer		114		108		-		114		-
Total impaired loans	$	1,593	$	1,556	$	-	$	1,590	$	31

As of

June 30, 2019

and

December 31, 2018,

no

additional funds are committed to be advanced in connection with impaired loans.

The Company regularly evaluates various attributes of loans to determine the appropriateness of the allowance for loan losses. The credit quality indicators monitored differ depending on the class of loan. 

Commercial loans are generally evaluated using the following internally prepared ratings:

“Pass” ratings are assigned to loans with adequate collateral and debt service ability such that collectability of the contractual loan payments is highly probable.

“Special mention” ratings are assigned to loans where management has some concern that the collateral or debt service ability

may

not

be adequate, though the collectability of the contractual loan payments is still probable.

“Substandard” ratings are assigned to loans that do

not

have adequate collateral and/or debt service ability such that collectability of the contractual loan payments is

no

longer probable.

“Doubtful” ratings are assigned to loans that do

not

have adequate collateral and/or debt service ability, and collectability of the contractual loan payments is unlikely.

Residential real estate and consumer loans are generally evaluated based on whether or

not

the loan is performing according to the contractual terms of the loan.

Information regarding the credit quality indicators most closely monitored for commercial loans by class as of

June 30, 2019

and

December 31, 2018,

follows:

	Pass		Special Mention		Substandard		Doubtful		Totals
June 30, 2019
Development	$	12,886	$	-	$	-	$	-	$	12,886
Real estate		70,993		-		-		-		70,993
Commercial and industrial		9,886		2,623		17		-		12,526
1-4 family investor-owned		29,616		912		811		-		31,339
Multifamily		31,148		-		-		-		31,148
Totals	$	154,529	$	3,535	$	828	$	-	$	158,892
December 31, 2018
Development	$	7,801	$	-	$	-	$	-	$	7,801
Real estate		69,425		-		-		-		69,425
Commercial and industrial		13,122		-		20		-		13,142
1-4 family investor-owned		30,558		1,353		401		-		32,312
Multifamily		34,467		-		-		-		34,467
Totals	$	155,373	$	1,353	$	421	$	-	$	157,147

Information regarding the credit quality indicators most closely monitored for residential real estate and consumer loans by class as of

June 30, 2019

and

December 31, 2018,

follows:

	Performing		Non-performing		Totals
June 30, 2019
1-4 family owner-occupied	$	32,967	$	662	$	33,629
Consumer		2,794		90		2,884
	$	35,761	$	752	$	36,513
December 31, 2018
1-4 family owner-occupied	$	39,919	$	1,099	$	41,018
Consumer		2,625		108		2,733
	$	42,544	$	1,207	$	43,751

Loan aging information as of

June 30, 2019,

follows:

			Loans Past Due		Loans Past Due				Nonaccrual
June 30, 2019	Current Loans		30-89 Days		90+ Days		Total Loans		Loans
Commercial
Development	$	12,886	$	-	$	-	$	12,886	$	-
Real estate		70,993		-		-		70,993		-
Commercial and industrial		12,526		-		-		12,526		17
Residential real estate and consumer
1-4 family owner-occupied		32,880		749		-		33,629		357
1-4 family investor-owned		31,339		-		-		31,339		653
Multifamily		31,148		-		-		31,148		-
Consumer		2,826		58		-		2,884		90
Total	$	194,598	$	807	$	-	$	195,405	$	1,117

Loan aging information as of

December 31, 2018,

follows:

			Loans Past Due		Loans Past Due				Nonaccrual
December 31, 2018	Current Loans		30-89 Days		90+ Days		Total Loans		Loans
Commercial
Development	$	7,801	$	-	$	-	$	7,801	$	-
Real estate		69,425		-		-		69,425		-
Commercial and industrial		13,076		66		-		13,142		20
Residential real estate and consumer
1-4 family owner-occupied		41,013		5		-		41,018		365
1-4 family investor-owned		32,069		243		-		32,312		241
Multifamily		34,467		-		-		34,467		-
Consumer		2,733		-		-		2,733		94
Total	$	200,584	$	314	$	-	$	200,898	$	720

There were

no

loans past due

ninety

days or more and still accruing interest as of

June 30, 2019

and

December 31, 2018.

When, for economic or legal reasons related to the borrower’s financial difficulties, the Company grants a concession to the borrower that the Company would

not

otherwise consider, the modified loan is classified as a troubled debt restructuring. Loan modifications

may

consist of forgiveness of interest and/or principal, a reduction of the interest rate, interest-only payments for a period of time, and/or extending amortization terms. During the

six

months ended and as of

June 30, 2019,

there was a

1

-

4

family owner-occupied property totaling

$83

and a

1

-

4

family investor –owned property totaling

$421

that were new troubled debt restructurings.

$0

was charged to the allowance for losses related to these loans.

No

troubled debt restructurings defaulted within

12

months of their modification date during the

six

months ended

June 30, 2019.

During the year ended and as of

December 31, 2018,

there were

two

1

-

4

family owner-occupied properties totaling

$302,

a

1

-

4

family investor-owned property totaling

$250,

and a consumer loan totaling

$20

that were new troubled debt restructurings.

$0

was charged to the allowance for losses related to these loans.

No

troubled debt restructurings defaulted within

12

months of their modification date during the year ended

December 31, 2018.

Management regularly monitors impaired loan relationships. In the event facts and circumstances change, an additional provision for loan losses

may

be necessary.

XML

Note 6 - Deposits

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Deposit Liabilities Disclosures [Text Block]

Note

6

Deposits

The composition of deposits are as follows:

	June 30,		December 31,
	2019		2018
Non-interest bearing checking	$	20,658	$	22,763
Interest bearing checking		8,467		5,424
Money market		40,803		41,910
Statement savings accounts		13,129		13,773
Health savings accounts		10,914		11,197
Certificates of deposit		83,582		88,138
Total	$	177,553	$	183,205

Certificates of deposit that meet or exceed the FDIC insurance limit

two hundred fifty thousand

dollars totaled

$28,013

and

$30,590

as of

June 30, 2019

and

December 31, 2018,

respectively.

The scheduled maturities of certificates of deposit are as follows as of

June 30, 2019:

2019	$	43,338
2020		25,108
2021		10,522
2022		2,258
2023		1,981
2024		375
Total	$	83,582

XML

Note 7 - FHLB Advances

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Federal Home Loan Bank Advances, Disclosure [Text Block]

Note

7

FHLB Advances

FHLB advances consist of the following:

	June 30, 2019					December 31, 2018
	Rates			Amount		Rates			Amount
Fixed rate, fixed term advances	1.42%	-	2.70%	$	9,750	1.42%	-	2.70%	$	11,750
Fixed term advances with floating spread	1.73%	-	2.06%		6,000	1.54%	-	2.05%		6,000
				$	15,750				$	17,750

The following is a summary of scheduled maturities of fixed term FHLB advances as of

June 30, 2019:

	Fixed Rate Advances					Adjustable Rate Advances
	Weighted Average Rate			Amount		Weighted Average Rate			Amount		Total Amount
2019		2.36	%	$	3,750		1.73	%	$	2,000	$	5,750
2020		2.34	%		6,000		1.88	%		2,000		8,000
2021		0.00	%		-		2.06	%		2,000		2,000
Total		2.35	%	$	9,750		1.89	%	$	6,000	$	15,750

Actual maturities

may

differ from the scheduled principal maturities due to call options on the various advances. The Company has a master contract agreement with the FHLB that provides for a borrowing up to the lesser of a determined multiple of FHLB stock owned or a determined percentage of the book value of the Company’s qualifying

1

-

4

family, multifamily, and commercial real estate loans. The Company pledged approximately

$156,985

and

$158,923

of

1

-

4

family, multifamily, and commercial real estate loans to secure FHLB advances at

June 30, 2019

and

December 31, 2018,

respectively. FHLB provides both fixed and floating rate advances. Floating rates are tied to short-term market rates of interest, such as LIBOR, Federal funds or Treasury Bill rates. Fixed rate advances are priced in reference to market rates of interest at the time of the advance, namely the rates that FHLB pays to borrowers at various maturities. FHLB advances are subject to a prepayment penalty if they are repaid prior to maturity. FHLB advances are also secured by

$609

and

$739

of FHLB stock owned by the Company at

June 30, 2019

and

December 31, 2018,

respectively.

At

June 30, 2019

and

December 31, 2018,

the Company’s available and unused portion of this borrowing agreement was

$0

and

$889,

respectively. Additionally, the Company has a fluctuating

$5,000

letter of credit under this agreement, which collateralizes certain public deposits. In addition, the Company has a

$7,000

federal funds line of credit through Bankers’ Bank of Wisconsin, which was

not

drawn on as of

June 30, 2019

or

December 31, 2018.

The Company also has the authority to borrow through the Federal Reserve’s Discount Window.

XML

Note 8 - Employee Stock Ownership Plan

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Employee Stock Ownership Plan [Text Block]

Note

8

Employee Stock Ownership Plan

The Company maintains a leveraged employee stock ownership plan (“ESOP”) that covers substantially all employees. The ESOP was established in conjunction with the Company’s stock offering completed in

October 2017

and operates on a plan year ending

December 31.

The loan to fund the acquisition of stock by the ESOP was made by the Company. The Bank makes annual contributions to the ESOP equal to the ESOP’s debt service. The ESOP shares initially were pledged as collateral for this debt. As the debt is repaid, shares are released from collateral and allocated to active participants, based on the proportion of debt service paid in the year. Because the debt is intercompany, it is eliminated in consolidation for presentation in these financial statements. The shares pledged as collateral are reported as unearned ESOP shares in the balance sheet. As shares are committed to be released from collateral and allocated to active participants, the Company reports compensation expense equal to the current market price of the shares and the shares will become outstanding for earnings-per-shares (EPS) computations. During the

six

month periods ended

June 30, 2019

and

2018,

6,480

shares were committed to be released. During the period ended

June 30, 2019,

the average fair value per share of stock was

$10.57

resulting in total ESOP compensation expense of

$69

for the

six

months ended

June 30, 2019.

During the period ended

June 30, 2018,

the average fair value per share of stock was

$10.95

resulting in total ESOP compensation expense of

$71

for the

six

months ended

June 30, 2018.

The ESOP shares as of

June 30, 2019

and

December 31, 2018

were as follows:

	June 30, 2019		December 31, 2018
Shares allocated to active partipicants		15,907		2,947
Shares committed to be released and allocated to participants		6,480		12,960
Total unallocated shares		236,823		243,303
Total ESOP shares		259,210		259,210
Fair value of unallocated shares (based on $10.45 and $10.03 share price at June 30, 2019 and December 31, 2018, respectively)	$	2,475	$	2,440

XML

Note 9 - Share-based Compensation Plans

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

Note

9

Share-based Compensation Plans

ASC Topic

718

requires that the grant date fair value of equity awards to employees be recognized as compensation expense over the period during which an employee is required to provide service in exchange for such awards.

The following table summarizes the impact of the Company’s share-based payment plans in the financial statements for the period shown:

	Six Months Ended June 30, 2019
Total cost of stock grant plan during the year	$	93
Total cost of stock option plan during the year		66
Total cost of share-based payment plans during the year	$	159
Amount of related income tax benefit recognized in income	$	44

The Company adopted the FFBW, Inc.

2018

Equity Incentive Plan (the

“2018

Equity Incentive Plan”) in

2018.

In

November 2018,

the Company’s stockholders approved the

2018

Equity Incentive Plan which authorized the issuance of up to

129,605

restricted stock awards and up to

324,012

stock options. As of

June 30, 2019,

there were

35,363

restricted stock awards and

101,923

options available for future grants. Shares granted under the

2018

Equity Incentive Plan

may

be authorized but unissued, currently held or, to the extent permitted by applicable law, subsequently acquired by the Company as treasury shares, including shares purchased in the open market or in private transactions. Forfeited or canceled shares shall

not

be deemed to have been delivered for purposes of determining the maximum number of shares of stock available for delivery under the Plan.

Options are granted with an exercise price equal to

no

less than the market price of the Company’s shares at the date of grant: those option awards generally vest pro-rata over

five

years of service and have

10

-year contractual terms. Restricted shares typically vest pro-rata over a

five

-year period,

20%

per year beginning

one

year from the issuance date.

The following table summarizes stock options activity for the

six

months ended

June 30, 2019:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Options outstanding as of December 31, 2018		192,089	$	10.81
Granted		30,000		10.64
Exercised		-		-
Expired or canceled		-		-
Forfeited		-		-
Options outstanding as of June 30, 2019		222,089	$	10.79		9.51	$	-
Options exercisable as of June 30, 2019		-	$	-		-	$	-

The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model based on certain assumptions. Since the Company does

not

have sufficient historical fair value estimates of its stock, the Company calculates expected volatility using the historical volatility of the Dow Jones U.S. Financial Services Index. The risk free interest rate for periods within the contractual term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life of options is estimated based on the assumption that options will be exercised evenly throughout their life after vesting and represents the period of time that options granted are expected to remain outstanding.

The following assumptions were used for options granted during the

six

months ended

June 30, 2019:

	For the Six Months Ended June 30,
	2019
Risk-free interest rate		2.30	%
Expected volatility		18.38	%
Expected dividend yield		0	%
Expected life of options (years)		7.5
Weighted average fair value per option of options granted during the year	$	2.90

The total intrinsic value of options exercised during the

six

months ended

June 30, 2019

was

$0.

The following is a summary of changes in restricted shares for the

six

months ended

June 30, 2019:

	Number of Shares		Weighted Average Grant Date Fair Value
Shares outstanding as of December 31, 2018		84,242	$	10.82
Granted		10,000		10.64
Exercised		-		-
Forfeited		-		-
Shares outstanding as of June 30, 2019		94,242	$	10.80

The total intrinsic value of restricted shares that vested during the

six

months ended

June 30, 2019

was

$0.

As of

June 30, 2019,

there was

$1.6

million of total unrecognized compensation cost related to non-vested share-based compensation arrangements (including share option and non-vested share awards) granted under the

2018

Equity Incentive Plan. At

June 30, 2019,

the weighted-average period over which the unrecognized compensation expense is expected to be recognized was approximately

2.72

years.

XML

Note 10 - Regulatory Capital Ratios

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note

10

Regulatory Capital Ratios

The Bank is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of Common Equity Tier

1,

Tier

1,

and Total capital to risk-weighted assets and of Tier

1

capital to average assets. It is management's opinion, as of

December 31, 2018

and as of

June 30, 2019,

that the Bank meets all applicable capital adequacy requirements.

As of

June 30, 2019,

and

December 31, 2018,

the Bank is categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum regulatory capital ratios as set forth in the table. There are

no

conditions or events since

June 30, 2019

that management believes have changed the Bank's category.

The Bank's actual capital amounts and ratios are presented in the following tables:

Actual

For Capital Adequacy Purposes

To Be Well Capitalized Under Prompt Corrective Action

Amount

Ratio

Amount

Ratio

Amount

Ratio

June 30, 2019

Common Equity Tier 1 capital (to risk‑weighted assets)

$

49,268

24.5

%

$

>   9,055

> 4.5

%

$

> 13,079

>    6.5

%

Tier 1 capital (to risk‑weighted assets)

49,268

24.5

> 12,073

> 6.0

> 16,097

>    8.0

Total capital (to risk‑weighted assets)

51,520

25.6

> 16,097

> 8.0

> 20,122

> 10.0

Tier 1 capital (to average assets)

49,268

19.0

> 10,346

> 4.0

> 12,932

>    5.0

December 31, 2018

Common Equity Tier 1 capital (to risk‑weighted assets)

$

48,502

23.7

%

$

> 9,209

> 4.5

%

$

> 13,302

>    6.5

%

Tier 1 capital (to risk‑weighted assets)

48,502

23.7

> 12,279

> 6.0

> 16,372

>    8.0

Total capital (to risk‑weighted assets)

50,620

24.7

> 16,372

> 8.0

> 20,465

> 10.0

Tier 1 capital (to average assets)

48,502

18.4

> 10,542

> 4.0

> 13,178

>    5.0

XML

Note 11 - Fair Value Measurements

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note

1

1

Fair Value Measurements

Accounting standards describe

three

levels of inputs that

may

be used to measure fair value (the fair value hierarchy). The level of an asset or liability within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement of that asset or liability.

Following is a brief description of each level of the fair value hierarchy:

Level

1

- Fair value measurement is based on quoted prices for identical assets or liabilities in active markets.

Level

2

- Fair value measurement is based on: (

1

) quoted prices for similar assets or liabilities in active markets; (

2

) quoted prices for identical or similar assets or liabilities in markets that are

not

active; or (

3

) valuation models and methodologies for which all significant assumptions are or can be corroborated by observable market data.

Level

3

- Fair value measurement is based on valuation models and methodologies that incorporate at least

one

significant assumption that cannot be corroborated by observable market data. Level

3

measurements reflect the Company’s estimates about assumptions market participants would use in measuring fair value of the asset or liability.

Some assets and liabilities, such as available for sale securities, are measured at fair value on a recurring basis under accounting principles generally accepted in the United States. Other assets and liabilities, such as impaired loans,

may

be measured at fair value on a nonrecurring basis.

Following is a description of the valuation methodology used for each asset measured at fair value on a recurring or nonrecurring basis, as well as the classification of the asset within the fair value hierarchy. 

Available for sale securities –

Available for sale securities

may

be classified as Level

1

or Level

2

measurements within the fair value hierarchy. Level

1

securities include equity securities traded on a national exchange. The fair value measurement of a Level

1

security is based on the quoted price of the security. Level

2

securities include U.S. government and agency securities, obligations of states and political subdivisions, corporate debt securities, and mortgage-related securities. The fair value measurement of a Level

2

security is obtained from an independent pricing service and is based on recent sales of similar securities and other observable market data.

Information regarding the fair value of assets measured at fair value on a recurring basis as of

June 30, 2019

and

December 31, 2018

follows:

			Recurring Fair Value Measurements Using
	Assets Measured at		Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
June 30, 2019
Assets - Available for sale securities		43,478		-		43,478		-
December 31, 2018
Assets - Available for sale securities		43,751		-		43,751		-

Loans -

Loans are

not

measured at fair value on a recurring basis. However, loans considered to be impaired

may

be measured at fair value on a nonrecurring basis. The fair value measurement of an impaired loan that is collateral dependent is based on the fair value of the underlying collateral. All other impaired loan measurements are based on the present value of expected future cash flows discounted at the applicable effective interest rate and, thus, are

not

fair value measurements. Fair value measurements of underlying collateral that utilize observable market data, such as independent appraisals reflecting recent comparable sales are considered Level

2

measurements. Other fair value measurements that incorporate estimated assumptions market participants would use to measure fair value are considered Level

3

measurements.

Foreclosed Assets –

Real estate acquired through or in lieu of loan foreclosure are

not

measured at fair value on a recurring basis. However, foreclosed assets are initially measured at fair value (less estimated costs to sell) when they are acquired and

may

also be measured at fair value (less estimated costs to sell) if they become subsequently impaired. The fair value measurement for each asset

may

be obtained from an independent appraiser or prepared internally. Fair value measurements obtained from independent appraisers generally utilize a market approach based on sales of comparable assets and/or an income approach. Such measurements are usually considered Level

2

measurements. However, management routinely evaluates fair value measurements of independent appraisers by comparing actual selling prices to the most recent appraisals. If management determines significant adjustments should be made to the independent appraisals based on these evaluations, these measurements are considered Level

3

measurements. Fair value measurements prepared internally are based on management’s comparisons to sales of comparable assets, but include significant unobservable data and are therefore considered Level

3

measurements.

Information regarding the fair value of assets measured at fair value on a nonrecurring basis as of

June 30, 2019

and

December 31, 2018

follows:

			Nonrecurring Fair Value Measurements Using
	Assets Measured at		Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
As of June 30, 2019
Assets:
Loans	$	-	$	-	$	-	$	-
Foreclosed assets		84		-		-		84
As of December 31, 2018
Assets :
Loans	$	-	$	-	$	-	$	-
Foreclosed assets		69		-		-		69

 The carrying value and estimated fair value of financial instruments at

June 30, 2019

and

December 31, 2018

follow:

	June 30, 2019
	Carrying Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	5,397	$	5,397	$	-	$	-
Available for sale securities		43,478		-		43,478		-
Loans held for sale		1,951		-		1,951		-
Loans		193,001		-		-		194,770
Accrued interest receivable		777		777		-		-
Cash value of life insurance		7,105		-		-		7,105
FHLB stock		609		-		-		609
Financial liabilities:
Deposits		177,553		93,971		-		83,719
Advance payments by borrowers for taxes and insurance		771		771		-		-
FHLB advances		15,750		-		-		15,685
Accrued interest payable		620		620		-		-

	December 31, 2018
	Carrying Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	4,488	$	4,488	$	-	$	-
Available for sale securities		43,751		-		43,751		-
Loans held for sale		679		-		679		-
Loans		198,694		-		-		199,048
Accrued interest receivable		768		768		-		-
Cash value of life insurance		7,007		-		-		7,007
FHLB stock		739		-		-		739
Financial liabilities:
Deposits		183,205		95,067		-		87,531
Advance payments by borrowers for taxes and insurance		55		55		-		-
FHLB advances		17,750		-		-		17,505
Accrued interest payable		70		70		-		-

Limitations –

The fair value of a financial instrument is the current amount that would be exchanged between market participants, other than in a forced liquidation. Fair value is best determined based on quoted market prices. However, in many instances, there are

no

quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are

not

available, fair values are based on estimates using present value of other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates

may

not

be realized in an immediate settlement of the instrument. Consequently, the aggregate fair value amounts presented

may

not

necessarily represent the underlying fair value of the Company.

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ 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, the fair values of securities, fair value of financial instruments, the valuation of other real estate owned and the valuation of deferred income tax assets.

Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition

Accounting Standards Codification ("ASC")

606,

Revenue from Contracts with Customers ("ASC

606"

), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

The majority of the Company's revenue-generating transactions are

not

subject to ASC

606,

including revenue all interest and dividend income generated from financial instruments. Certain noninterest income items, including loan servicing income, gain on sales of loans, gain on sales of securities, and other noninterest income have been evaluated to

not

fall with the scope of ASC

606.

Elements of noninterest income that is within the scope of ASC

606,

are as follows:

Service fees - The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Management reviewed the deposit account agreements, and determined that the agreements can be terminated at any time by either the Company or the account holder. Transaction fees, such as balance transfers, wires and overdraft charges are settled the day the performance obligation is satisfied. The Company's monthly service charges and maintenance fees are for services provided to the customer on a monthly basis and are considered a series of services that have the same pattern of transfer each month. The review of service charges assessed on deposit accounts included the amount of variable consideration that is a part of the monthly charges. It was found that the waiver of service charges due to insufficient funds and dormant account fees is immaterial and would

not

require a change in the accounting treatment for these fees under the new revenue standards. Recognition of revenue under ASC

606

did

not

materially change the timing or magnitude of revenue recognition.

Interchange fees - Customers use a Bank-issued debit card to purchase goods and services, and the Company earns interchange fees on those transactions, typically a percentage of the sale amount of the transaction. The Company records the amount due when it receives the settlement from the payment network. Payments from the payment network are received and recorded into income on a daily basis. There are

no

contingent debit card interchange fees recorded by the Company that could be subject to a clawback in future periods. Recognition of revenue under ASC

606

did

not

materially change the timing or magnitude of revenue recognition.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash and balances due from banks and non-maturity deposits in the Federal Home Loan Bank of Chicago (FHLB). The Company

may

at times maintain balances at financial institutions that exceed federally insured limits. The Company has

not

experienced any losses in such accounts.

Marketable Securities, Policy [Policy Text Block]

Available for Sale Securities

Securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time, but

not

necessarily to maturity.  Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company's assets and liabilities, liquidity needs, regulatory capital requirements, and other similar factors.  Securities classified as available for sale are carried at fair value.  Unrealized gains or losses are reported as increases or decreases in other comprehensive income, net of the related deferred tax effect.  Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Gains and losses on the sale of securities are recorded on the trade date and determined using the specific-identification method.

Declines in fair value of securities that are deemed to be other than temporary, if applicable, are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers the length of time and the extent to which fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient enough to allow for any anticipated recovery in fair value.

Certain Loans and Debt Securities Acquired in Transfer, Recognizing Interest Income on Impaired Loans, Policy [Policy Text Block]

Loans Acquired in a Transfer

The Company acquires loans (including debt securities) individually and in groups or portfolios. These loans are initially measured at fair value with

no

allowance for loan losses. The Company's allowance for loan losses on all acquired loans reflect only those losses incurred subsequent to acquisition.

Certain acquired loans

may

have experienced deterioration of credit quality between origination and the Company's acquisition of the loans. At acquisition, the Company reviews each loan to determine whether there is evidence of deterioration of credit quality since origination and if it is probable that the Company will be unable to collect all amounts due according to the loan's contractual terms. If both conditions exist, the Company determines whether each such loan is to be accounted for individually or whether such loans will be assembled into pools of loans based on common risk characteristics (for example, credit score, loan type, and date of origination). The Company considers expected prepayments and estimates the amount and timing of undiscounted principal, interest, and other cash flows expected at acquisition for each loan and aggregated pool of loans. The excess of the loan's or pool's scheduled contractual principal and interest payments over all cash flows expected at acquisition is calculated as the nonaccretable difference. The excess of cash flows expected to be collected over the fair value of each loan or pool (accretable yield) is accreted into interest income over the remaining life of the loan or pool.

At each reporting date, the Company continues to estimate cash flows expected to be collected for each loan or pool. If expected cash flows have decreased from the acquisition date estimate, the Company recognizes an allowance for loan losses. If expected cash flows have increased from the acquisition date estimate, the Company increases the amount of accretable yield to be recognized as interest income over the remaining life of the loan or pool.

Financing Receivable, Held-for-investment [Policy Text Block]

Loans

  

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff generally are reported at their outstanding unpaid principal balances adjusted for deferred loan fees and costs, charge-offs, and an allowance for loan losses. Interest on loans is accrued and credited to income based on the unpaid principal balance. Loan-origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method.

The accrual of interest on loans is discontinued when, in the opinion of management, there is an indication that the borrower

may

be unable to make payments as they become due. When loans are placed on nonaccrual status or charged off, all unpaid accrued interest is reversed against interest income. The interest on these loans is subsequently accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

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

Allowance for Loan Losses

The allowance for loan losses is maintained at the level considered adequate by management to provide for losses that are probable as of the balance sheet date. The allowance for loan losses is established through a provision for loan losses charged to expense as losses are estimated to have occurred. Loan losses are charged against the allowance when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance. In determining the adequacy of the allowance balance, the Company makes evaluations of the loan portfolio and related off-balance sheet commitments, considers current economic conditions and historical loss experience, and reviews specific problem loans and other factors.

When establishing the allowance for loan losses, management categorizes loans into risk categories generally based on the nature of the collateral and the basis of repayment. These risk categories and their relevant risk characteristics are as follows:

Commercial development

:

These loans are secured by vacant land and/or property that are in the process of improvement. Repayment of these loans can be dependent on the sale of the property to

third

parties or the successful completion of the improvements by the builder for the end user. Construction loans include

not

only construction of new structures, but loans originated to finance additions to or alterations of existing structures. Until a permanent loan originates, or payoff occurs, all commercial construction loans secured by real estate are reported in this loan pool. Development loans also have the risk that improvements will

not

be completed on time, or in accordance with specifications and projected costs.

Commercial real estate

:

These loans are primarily secured by office and industrial buildings, warehouses, small retail shopping facilities, and various special purpose properties, including restaurants. These loans are subject to underwriting standards and processes similar to commercial and industrial loans. Loans to closely held businesses are generally guaranteed in full by the owners of the business. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property. The cash flows of the borrowers, however,

may

not

behave as forecasted and collateral securing loans

may

fluctuate in value due to the general economic factors or conditions specific to the real estate market, such as geographic location and/or purpose type.

Commercial and industrial

:

Commercial and industrial loans are extended primarily to small and middle market customers. Such credits typically comprise working capital loans, asset acquisition loans, and loans for other business purposes. Loans to closely held businesses are generally guaranteed in full by the owners of the business. Commercial and industrial loans are made based primarily on the historical and projected cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of the borrowers, however,

may

not

behave as forecasted and collateral securing loans

may

fluctuate in value due to economic or individual performance factors. Minimum standards and underwriting guidelines have been established for commercial and industrial loans.

1

-

4

family owner-occupied:These loans are generally to individuals and are underwritten by evaluating the credit history of the borrower, the ability of the borrower to meet the debt service requirements of the loan and total debt obligations, the underlying collateral, and the loan to collateral value. Also included in this category are junior liens on

1

-

4

family residential properties. Underwriting standards for single family loans are heavily influenced by statutory requirements, which include, but are

not

limited to, loan-to-value and affordability ratios, risk-based pricing strategies, and documentation requirements.

1

-

4

family investor-owned:These loans

may

be to individuals or businesses and are subject to underwriting standards and processes similar to commercial and industrial loans. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property(ies). The cash flows of the borrowers, however,

may

not

behave as forecasted and collateral securing loans

may

fluctuate in value due to the general economic factors or conditions specific to the real estate market, such as geographic location and/or purpose type.

Multifamily real estate:These loans include loans to finance non-farm properties with

five

or more units in structures primarily to accommodate households. Such credits are typically originated to finance the acquisition or refinancing of an apartment building. These loans are subject to underwriting standards and processes similar to commercial and industrial loans. Loans to closely held businesses are generally guaranteed in full by the owners of the business. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the subject multifamily property, with assumptions made for vacancy rates. Cash flows of the borrowers rely on the receipt of rental income from the tenants of the property who are themselves subject to fluctuations in national and local economic conditions and unemployment trends.

Consumer:These loans

may

take the form of installment loans, demand loans, or single payment loans, and are extended to individuals for household, family, and other personal expenditures. These loans generally include direct consumer automobile loans and credit card loans. These loans are generally smaller in size and are underwritten by evaluating the credit history of the borrower, the ability of the borrower to meet the debt service requirements of the loan and total debt obligations.

Management regularly evaluates the allowance for loan losses using the Company’s past loan loss experience, known and inherent risks in the loan portfolio, composition of the loan portfolio, adverse situations that

may

affect the borrower’s ability to repay, estimated value of any underlying collateral, current economic conditions, and other relevant factors. This evaluation is inherently subjective since it requires material estimates that

may

be susceptible to significant change.

A loan is impaired when, based on current information, it is probable that the Company will

not

collect all amounts due in accordance with the contractual terms of the loan agreement. Management determines whether a loan is impaired on a case-by-case basis, taking into consideration the payment status, collateral value, length and reason of any payment delays, the borrower’s prior payment record, and any other relevant factors. Large groups of smaller-balance homogeneous loans, such as residential mortgage and consumer loans, are collectively evaluated in the allowance for loan losses analysis and are

not

subject to impairment analysis unless such loans have been subject to a restructuring agreement. Specific allowances for impaired loans are based on discounted cash flows of expected future payments using the loan’s initial effective interest rate or the fair value of the collateral if the loan is collateral dependent.

In addition, various regulatory agencies periodically review the allowance for loan losses. These agencies

may

require the Company to make additions to the allowance for loan losses based on their judgments of collectability based on information available to them at the time of their examination.

Troubled Debt Restructuring [Policy Text Block]

Troubled Debt Restructurings

Loans are accounted for as troubled debt restructurings when a borrower is experiencing financial difficulties that lead to a restructuring of the loan, and the Company grants a “concession” to the borrower that they would

not

otherwise consider. These concessions include a modification of terms such as a reduction of the stated interest rate or loan balance, a reduction of accrued interest, an extension of the maturity date at an interest rate lower than a current market rate for a new loan with similar risk, or some combination thereof to facilitate repayment. Troubled debt restructurings are considered impaired loans.

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

Foreclosed Assets

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value, less costs to sell, at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management, and the assets are carried at the lower of carrying amount or fair value less costs to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed assets.

Property, Plant and Equipment, Policy [Policy Text Block]

Premises and Equipment

Depreciable assets are stated at cost less accumulated depreciation. Provisions for depreciation are computed on straight-line and accelerated methods over the estimated useful lives of the assets.

Federal Home Loan Bank Stock [Policy Text Block]

Federal Home Loan Bank Stock

The Company's investment in Federal Home Loan Bank ("FHLB") stock is carried at cost, which approximates fair value. The Company is required to hold the stock as a member of the FHLB, and transfer of the stock is substantially restricted. The stock is evaluated for impairment on an annual basis.

Income Tax, Policy [Policy Text Block]

Income Taxes

Amounts provided for income tax expense are based on income reported for financial statement purposes and do

not

necessarily represent amounts currently payable under tax laws. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and income tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

As changes in tax laws or rates are enacted, deferred income tax assets and liabilities are adjusted through the provision for income taxes. The differences relate principally to the allowances for loan losses, deferred compensation, depreciation, FHLB stock dividends and non-accrual interest. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than

not

to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than

not

sustain the position following an audit. For tax positions meeting the more likely than

not

threshold, the amount recognized in the financial statements is the largest benefit that has a greater than

50

percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Based on its evaluation, the Company has concluded that there are

no

significant uncertain tax positions requiring recognition in its financial statements.

The Company's policy is to recognize interest and penalties related to income tax issues as components of income tax expense. During the periods shown, the Company did

not

recognize any interest or penalties related to income tax expense in its statement of income.

Transfers and Servicing of Financial Assets, Transfers of Financial Assets, Sales, Policy [Policy Text Block]

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (

1

) the assets have been isolated from the Company, (

2

) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (

3

) the Company does

not

maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Advertising Cost [Policy Text Block]

Advertising

Advertising costs are expensed as incurred.

Comprehensive Income, Policy [Policy Text Block]

Other Comprehensive Income (Loss)

Other comprehensive income (loss) is shown on the statements of comprehensive income (loss). The Company’s accumulated other comprehensive income (loss) is composed of the unrealized gain (loss) on securities available for sale, net of tax and is shown on the statements of changes in equity. Reclassification adjustments out of other comprehensive income (loss) for gains (losses) realized on sales of securities available for sale comprise the entire balance of “net gain (loss) on sale of securities” on the statements of income.

Off-Balance-Sheet Credit Exposure, Policy [Policy Text Block]

Off-Balance Sheet Financial Instruments

In the ordinary course of business, the Company has entered into off-balance-sheet financial instruments consisting of commitments to extend credit, unfunded commitments under lines of credit, and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable.

Life Insurance [Policy Text Block]

Life Insurance

The Company has purchased life insurance policies on certain key executives. Life insurance is measured at the amount that could be realized under the insurance contract as of the balance sheet date, which is generally the cash surrender value of the policy.

Subsequent Events, Policy [Policy Text Block]

Subsequent Events

Management has reviewed the Company’s operations for potential disclosure or financial statement impacts related to events occurring after

June 30, 2019,

but prior to the release of these financial statements. Based on the results of this review,

no

subsequent event disclosure or financial statement impacts to these financial statements are required as of

July 31, 2019.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of

2012

(the “JOBS Act”). For as long as the Company is an emerging growth company, it

may

choose to take advantage of exemptions from various reporting requirements applicable to other public companies. An emerging growth company

may

elect to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the Company is

first

required to file a registration statement. The Company has elected to use the extended transition period described above and intends to maintain its emerging growth company status as allowed under the JOBS Act.

The Company recently adopted the following Accounting Standards Updates (ASU) issued by the Financial Accounting Standards Board (FASB).

ASU

No.

2014

-

09,

"Revenue from Contracts with Customers."

The objective of this new standard is to provide a common revenue standard for all entities that enter into contracts with customers to transfer goods, services, or nonfinancial assets. The Company adopted this new accounting standard for the effective

January 1, 2019.

The Company did

not

identify any changes in the timing of revenue recognition when considering the amended accounting guidance, however, the Company has included additional disclosures as required by the guidance.

ASU

No.

2016

-

01,

“Recognition and Measurement of Financial Assets and Financial Liabilities”

ASU

No.

2018

-

03,

“Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic

825

-

10

)”

These standards make a number of changes to the recognition and measurement standards of financial instruments, including the following changes:

1

) equity securities with a readily determinable fair value will have to be measured at fair value with changes in fair value recognized in net income;

2

) entities that are public business entities will

no

longer be required to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost; and

3

) entities that are public business entities will be required to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The Company adopted this new accounting standard for the effective

January 1, 2019.

The adoption of these standard did

not

have a material impact on the Company's financial condition or results of operations, except that the Company will

no

longer disclose the method(s) and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost.

The following Accounting Standards Updates (ASUs) have been issued by the Financial Accounting Standards Board (FASB) and

may

impact the Company's financial statements in future reporting periods:

ASU

No.

2016

-

13,

“Credit Losses (Topic

326

).”

ASU

No.

2019

-

04,

"Codification Improvements to Topic

326."

ASU

No.

2019

-

05,

"Financial Instruments-Credit Losses."

ASU

2016

-

13

requires organizations to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2021.

Early adoption will be permitted for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2018.

The Company is currently assessing the impact of adopting ASU

2016

-

13

on its financial statements.

ASU

No.

2016

-

02

“Leases (Topic

842

): Amendments to the Leases Analysis.”

ASU

No.

2018

-

10

"Codification Improvements to Topic

842."

ASU

No.

2018

-

11

"Targeted Improvements"

For lessees, Topic

842

requires leases to be recognized on the balance sheet, along with disclosure of key information about leasing arrangements. Topic

842

was subsequently amended by ASU

2018

-

01,

2018

-

10

and

2018

-

11.

The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than

12

months. Leases will be classified as finance or operating, with classification affecting the pattern and classification expense recognition in the income statement.

For lessors, Topic

842

requires lessors to classify leases as sales-type, direct financing or operating leases. A lease is a sales-type lease if any

one

of

five

criteria are met, each of which indicate that the lease, in effect, transfers control of the underlying asset to the lessee. If

none

of those

five

criteria are met, but

two

additional criteria are both met, indicating the lessor has transferred substantially all the risks and benefits of the underlying asset to the lessee and a

third

party, the lease is a direct financing lease. All leases that are

not

sales-type or direct financing leases are operating leases.

The new standard is effective for the Company on

January 1, 2020,

with early adoption permitted. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity

may

choose to use either (

1

) the new standard's effective date or (

2

) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company expects to adopt the new standard on

January 1, 2020

using the effective date as its date of initial application. Consequently, financial information will

not

be updated and the disclosures required under the new standard will

not

be provided for dates and periods before

January 1, 2020.

ASU

No.

2016

-

01,

“Recognition and Measurement of Financial Assets and Financial Liabilities”

ASU

No.

2018

-

03,

“Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic

825

-

10

)”

ASU

No.

2016

-

01

is a wide-ranging standard with several elements that will impact most financial institutions. The standard introduces new guidance that applies to most equity investments. Under the standard, equity securities can

no

longer be classified as available-for-sale securities. Instead, market value fluctuations on equity securities will have to be recognized directly through net income. An entity

may

elect to value equity investments without a readily determinable fair value at its cost minus impairment (if any) plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer, with any changes recognized through net income. The standard also eliminates certain disclosure requirements related to financial instruments. Non-PBEs will

no

longer have to disclose the fair value of financial instruments measured at amortized cost in the financial statements. PBEs will still need to make this disclosure but will

no

longer be required to disclose the methods and significant assumptions used to determine the fair value of financial instruments measured at amortized cost. ASU

2016

-

01

is effective for non-PBEs for years beginning after

Dec.15,

2018,

and was effective for PBEs with fiscal years beginning after

December 15, 2017. 

ASU2016

-

01

will require the Company to adjust its reported value of Bankers' Bank stock, which is considered an equity security without a readily determinable market value, if a comparable transaction is observed.

ASU

No.

2018

-

13,

“Fair Value Measurement (Topic

820

): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement”

This ASU modifies the disclosure requirements on fair value measurements in Topic

820,

including the removal, modification to, and addition of certain disclosure requirements. This ASU will be effective for fiscal years beginning after

December 15, 2019

with early adoption permitted. The majority of the disclosure changes are to be applied on a prospective basis. The Company is currently in the process of reviewing this ASU to determine whether the modifications within will be adopted prior to the effective date. Although this ASU has a significant impact to the Company’s fair value disclosures,

no

additional impact to the financial statements is expected.

XML

Note 3 - Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

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

	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Net income	$	388		$	353		$	637		$	476
Basic potential common shares
Weighted average shares outstanding		6,644,529			6,612,500			6,668,358			6,612,500
Weighted average unallocated Employee Stock Ownership Plan Shares		(238,947	)		(250,863	)		(240,558	)		(252,483	)
Basic weighted average shares outstanding		6,405,582			6,361,637			6,427,800			6,360,017
Dilutive potential common shares		-			-			-			-
Dilutive weighted average shares outstanding		6,405,582			6,361,637			6,427,800			6,360,017
Basic earnings per share	$	0.06		$	0.06		$	0.10		$	0.07
Diluted earnings per share	$	0.06		$	0.06		$	0.10		$	0.07

XML

Note 4 - Available for Sale Securities (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

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

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
June 30, 2019
Obligations of the US government and US government sponsored agencies	$	1,102	$	22	$	-		$	1,124
Obligations of states and political subdivisions		7,612		46		(20	)		7,638
Mortgage-backed securities		30,863		360		(113	)		31,110
Certificates of deposit		1,500		1		(3	)		1,498
Corporate debt securities		2,079		29		-			2,108
Total available for sale securities	$	43,156	$	458	$	(136	)	$	43,478
December 31, 2018
Obligations of the US government and US government sponsored agencies	$	1,299	$	8	$	-		$	1,307
Obligations of states and political subdivisions		8,381		17		(103	)		8,295
Mortgage-backed securities		29,164		24		(652	)		28,536
Certificates of deposit		1,500		1		(55	)		1,446
Corporate debt securities		4,220		2		(55	)		4,167
Total available for sale securities	$	44,564	$	52	$	(865	)	$	43,751

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

	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
June 30, 2019
Obligations of the US government and US government sponsored agencies	$	-	$	-		$	-	$	-		$	-	$	-
Obligations of states and political subdivisions		-		-			2,084		(20	)		2,084		(20	)
Mortgage-backed securities		9		-			6,898		(113	)		6,907		(113	)
Certificates of deposit		-		-			1,247		(3	)		1,247		(3	)
Corporate debt securities		-		-			-		-			-		-
Total	$	9	$	-		$	10,229	$	(136	)	$	10,238	$	(136	)
December 31, 2018
Obligations of the US government and US government sponsored agencies	$	175	$	-		$	113	$	-		$	288	$	-
Obligations of states and political subdivisions		-		-			6,142		(103	)		6,142		(103	)
Mortgage-backed securities		1,171		(24	)		24,725		(628	)		25,896		(652	)
Certificates of deposit		-		-			1,195		(55	)		1,195		(55	)
Corporate debt securities		384		(2	)		3,128		(53	)		3,512		(55	)
Total	$	1,730	$	(26	)	$	35,303	$	(839	)	$	37,033	$	(865	)

Investments Classified by Contractual Maturity Date [Table Text Block]

	June 30, 2019
	Amortized Cost		Fair Value
Due in one year or less	$	641	$	648
Due after one year through 5 years		4,053		4,079
Due after 5 years through 10 years		3,578		3,610
Due after 10 years		4,021		4,031
Subtotal	$	12,293	$	12,368
Mortgage-backed securities		30,863		31,110
Total	$	43,156	$	43,478

XML

Note 5 - Loans (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

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

	June 30,			December 31,
	2019			2018
Commercial
Development	$	12,886		$	7,801
Real estate		70,993			69,425
Commercial and industrial		12,526			13,142
Residential real estate and consumer
1-4 family owner-occupied		33,629			41,018
1-4 family investor-owned		31,339			32,312
Multifamily		31,148			34,467
Consumer		2,884			2,733
Subtotal	$	195,405		$	200,898
Deferred loan fees		(152	)		(86	)
Allowance for loan losses		(2,252	)		(2,118	)
Net loans	$	193,001		$	198,694

Financing Receivable, Allowance for Credit Loss [Table Text Block]

Three Months Ended	Commercial			Residential real estate and consumer			Total
Balance at March 31, 2019	$	984		$	1,204		$	2,188
Provision for loan losses		69			16			85
Loans charged off		-			(21	)		(21	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2019	$	1,053		$	1,199		$	2,252
Balance at March 31, 2018	$	738		$	1,071		$	1,809
Provision for loan losses		92			97			189
Loans charged off		(24	)		(66	)		(90	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2018	$	806		$	1,102		$	1,908

Six Months Ended	Commercial			Residential real estate and consumer			Total
Balance at December 31, 2018	$	940		$	1,178		$	2,118
Provision for loan losses		113			42			155
Loans charged off		-			(21	)		(21	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2019	$	1,053		$	1,199		$	2,252
Balance at December 31, 2017	$	660		$	1,140		$	1,800
Provision for loan losses		170			134			304
Loans charged off		(24	)		(172	)		(196	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2018	$	806		$	1,102		$	1,908

Allowance for loan losses at June 30, 2019:	Commercial		Residential real estate and consumer		Total
Individually evaluated for impairment	$	-	$	-	$	-
Collectively evaluated for impairment		1,053		1,199		2,252
Total allowance for loan losses	$	1,053	$	1,199	$	2,252
Allowance for loan losses at December 31, 2018:
Individually evaluated for impairment	$	-	$	-	$	-
Collectively evaluated for impairment		940		1,178		2,118
Total allowance for loan losses	$	940	$	1,178	$	2,118

June 30, 2019	Commercial		Residential real estate and consumer
Loans:
Individually evaluated for impairment	$	78	$	1,861	$	1,939
Collectively evaluated for impairment		96,327		97,139		193,466
Total loans	$	96,405	$	99,000	$	195,405
December 31, 2018
Loans:
Individually evaluated for impairment	$	87	$	1,469	$	1,556
Collectively evaluated for impairment		90,281		109,061		199,342
Total loans	$	90,368	$	110,530	$	200,898

Impaired Financing Receivables [Table Text Block]

As of June 30, 2019	Principal Balance		Recorded Investment		Related Allowance		Average Investment		Interest Recognized
Loans with no related allowance for loan losses:
Commercial
Commercial and industrial	$	81	$	78	$	-	$	82	$	2
Residential real estate and consumer
1-4 family owner-occupied		1,136		1,109		-		1,114		17
1-4 family investor-owned		669		653		-		657		-
Consumer		108		99		-		103		-
Total impaired loans	$	1,994	$	1,939	$	-	$	1,956	$	19

As of December 31, 2018	Principal Balance		Recorded Investment		Related Allowance		Average Investment		Interest Recognized
Loans with no related allowance for loan losses:
Commercial
Commercial and industrial	$	89	$	87	$	-	$	93	$	5
Residential real estate and consumer
1-4 family owner-occupied		1,142		1,120		-		1,137		26
1-4 family investor-owned		248		241		-		246		-
Consumer		114		108		-		114		-
Total impaired loans	$	1,593	$	1,556	$	-	$	1,590	$	31

Financing Receivable Credit Quality Indicators [Table Text Block]

	Pass		Special Mention		Substandard		Doubtful		Totals
June 30, 2019
Development	$	12,886	$	-	$	-	$	-	$	12,886
Real estate		70,993		-		-		-		70,993
Commercial and industrial		9,886		2,623		17		-		12,526
1-4 family investor-owned		29,616		912		811		-		31,339
Multifamily		31,148		-		-		-		31,148
Totals	$	154,529	$	3,535	$	828	$	-	$	158,892
December 31, 2018
Development	$	7,801	$	-	$	-	$	-	$	7,801
Real estate		69,425		-		-		-		69,425
Commercial and industrial		13,122		-		20		-		13,142
1-4 family investor-owned		30,558		1,353		401		-		32,312
Multifamily		34,467		-		-		-		34,467
Totals	$	155,373	$	1,353	$	421	$	-	$	157,147

	Performing		Non-performing		Totals
June 30, 2019
1-4 family owner-occupied	$	32,967	$	662	$	33,629
Consumer		2,794		90		2,884
	$	35,761	$	752	$	36,513
December 31, 2018
1-4 family owner-occupied	$	39,919	$	1,099	$	41,018
Consumer		2,625		108		2,733
	$	42,544	$	1,207	$	43,751

Financing Receivable, Past Due [Table Text Block]

			Loans Past Due		Loans Past Due				Nonaccrual
June 30, 2019	Current Loans		30-89 Days		90+ Days		Total Loans		Loans
Commercial
Development	$	12,886	$	-	$	-	$	12,886	$	-
Real estate		70,993		-		-		70,993		-
Commercial and industrial		12,526		-		-		12,526		17
Residential real estate and consumer
1-4 family owner-occupied		32,880		749		-		33,629		357
1-4 family investor-owned		31,339		-		-		31,339		653
Multifamily		31,148		-		-		31,148		-
Consumer		2,826		58		-		2,884		90
Total	$	194,598	$	807	$	-	$	195,405	$	1,117

			Loans Past Due		Loans Past Due				Nonaccrual
December 31, 2018	Current Loans		30-89 Days		90+ Days		Total Loans		Loans
Commercial
Development	$	7,801	$	-	$	-	$	7,801	$	-
Real estate		69,425		-		-		69,425		-
Commercial and industrial		13,076		66		-		13,142		20
Residential real estate and consumer
1-4 family owner-occupied		41,013		5		-		41,018		365
1-4 family investor-owned		32,069		243		-		32,312		241
Multifamily		34,467		-		-		34,467		-
Consumer		2,733		-		-		2,733		94
Total	$	200,584	$	314	$	-	$	200,898	$	720

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Note 6 - Deposits (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Deposit Liabilities, Type [Table Text Block]

	June 30,		December 31,
	2019		2018
Non-interest bearing checking	$	20,658	$	22,763
Interest bearing checking		8,467		5,424
Money market		40,803		41,910
Statement savings accounts		13,129		13,773
Health savings accounts		10,914		11,197
Certificates of deposit		83,582		88,138
Total	$	177,553	$	183,205

Time Deposit Maturities [Table Text Block]

2019	$	43,338
2020		25,108
2021		10,522
2022		2,258
2023		1,981
2024		375
Total	$	83,582

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Note 7 - FHLB Advances (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Schedule of Federal Home Loan Bank, Advances, by Branch of FHLB Bank [Table Text Block]

	June 30, 2019					December 31, 2018
	Rates			Amount		Rates			Amount
Fixed rate, fixed term advances	1.42%	-	2.70%	$	9,750	1.42%	-	2.70%	$	11,750
Fixed term advances with floating spread	1.73%	-	2.06%		6,000	1.54%	-	2.05%		6,000
				$	15,750				$	17,750

Schedule of Federal Home Loan Bank Advances, Maturities Summary [Table Text Block]

	Fixed Rate Advances					Adjustable Rate Advances
	Weighted Average Rate			Amount		Weighted Average Rate			Amount		Total Amount
2019		2.36	%	$	3,750		1.73	%	$	2,000	$	5,750
2020		2.34	%		6,000		1.88	%		2,000		8,000
2021		0.00	%		-		2.06	%		2,000		2,000
Total		2.35	%	$	9,750		1.89	%	$	6,000	$	15,750

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Note 8 - Employee Stock Ownership Plan (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Employee Stock Ownership Plan (ESOP) Disclosures [Table Text Block]

	June 30, 2019		December 31, 2018
Shares allocated to active partipicants		15,907		2,947
Shares committed to be released and allocated to participants		6,480		12,960
Total unallocated shares		236,823		243,303
Total ESOP shares		259,210		259,210
Fair value of unallocated shares (based on $10.45 and $10.03 share price at June 30, 2019 and December 31, 2018, respectively)	$	2,475	$	2,440

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Note 9 - Share-based Compensation Plans (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	Six Months Ended June 30, 2019
Total cost of stock grant plan during the year	$	93
Total cost of stock option plan during the year		66
Total cost of share-based payment plans during the year	$	159
Amount of related income tax benefit recognized in income	$	44

Share-based Payment Arrangement, Option, Activity [Table Text Block]

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Options outstanding as of December 31, 2018		192,089	$	10.81
Granted		30,000		10.64
Exercised		-		-
Expired or canceled		-		-
Forfeited		-		-
Options outstanding as of June 30, 2019		222,089	$	10.79		9.51	$	-
Options exercisable as of June 30, 2019		-	$	-		-	$	-

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	For the Six Months Ended June 30,
	2019
Risk-free interest rate		2.30	%
Expected volatility		18.38	%
Expected dividend yield		0	%
Expected life of options (years)		7.5
Weighted average fair value per option of options granted during the year	$	2.90

Nonvested Restricted Stock Shares Activity [Table Text Block]

	Number of Shares		Weighted Average Grant Date Fair Value
Shares outstanding as of December 31, 2018		84,242	$	10.82
Granted		10,000		10.64
Exercised		-		-
Forfeited		-		-
Shares outstanding as of June 30, 2019		94,242	$	10.80

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Note 10 - Regulatory Capital Ratios (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

Actual

For Capital Adequacy Purposes

To Be Well Capitalized Under Prompt Corrective Action

Amount

Ratio

Amount

Ratio

Amount

Ratio

June 30, 2019

Common Equity Tier 1 capital (to risk‑weighted assets)

$

49,268

24.5

%

$

>   9,055

> 4.5

%

$

> 13,079

>    6.5

%

Tier 1 capital (to risk‑weighted assets)

49,268

24.5

> 12,073

> 6.0

> 16,097

>    8.0

Total capital (to risk‑weighted assets)

51,520

25.6

> 16,097

> 8.0

> 20,122

> 10.0

Tier 1 capital (to average assets)

49,268

19.0

> 10,346

> 4.0

> 12,932

>    5.0

December 31, 2018

Common Equity Tier 1 capital (to risk‑weighted assets)

$

48,502

23.7

%

$

> 9,209

> 4.5

%

$

> 13,302

>    6.5

%

Tier 1 capital (to risk‑weighted assets)

48,502

23.7

> 12,279

> 6.0

> 16,372

>    8.0

Total capital (to risk‑weighted assets)

50,620

24.7

> 16,372

> 8.0

> 20,465

> 10.0

Tier 1 capital (to average assets)

48,502

18.4

> 10,542

> 4.0

> 13,178

>    5.0

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Note 11 - Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

			Recurring Fair Value Measurements Using
	Assets Measured at		Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
June 30, 2019
Assets - Available for sale securities		43,478		-		43,478		-
December 31, 2018
Assets - Available for sale securities		43,751		-		43,751		-

Fair Value Measurements, Nonrecurring [Table Text Block]

			Nonrecurring Fair Value Measurements Using
	Assets Measured at		Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
As of June 30, 2019
Assets:
Loans	$	-	$	-	$	-	$	-
Foreclosed assets		84		-		-		84
As of December 31, 2018
Assets :
Loans	$	-	$	-	$	-	$	-
Foreclosed assets		69		-		-		69

Fair Value, by Balance Sheet Grouping [Table Text Block]

	June 30, 2019
	Carrying Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	5,397	$	5,397	$	-	$	-
Available for sale securities		43,478		-		43,478		-
Loans held for sale		1,951		-		1,951		-
Loans		193,001		-		-		194,770
Accrued interest receivable		777		777		-		-
Cash value of life insurance		7,105		-		-		7,105
FHLB stock		609		-		-		609
Financial liabilities:
Deposits		177,553		93,971		-		83,719
Advance payments by borrowers for taxes and insurance		771		771		-		-
FHLB advances		15,750		-		-		15,685
Accrued interest payable		620		620		-		-

	December 31, 2018
	Carrying Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	4,488	$	4,488	$	-	$	-
Available for sale securities		43,751		-		43,751		-
Loans held for sale		679		-		679		-
Loans		198,694		-		-		199,048
Accrued interest receivable		768		768		-		-
Cash value of life insurance		7,007		-		-		7,007
FHLB stock		739		-		-		739
Financial liabilities:
Deposits		183,205		95,067		-		87,531
Advance payments by borrowers for taxes and insurance		55		55		-		-
FHLB advances		17,750		-		-		17,505
Accrued interest payable		70		70		-		-

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Note 2 - Nature of Business and Summary of Significant Accounting Policies (Details Textual) - USD ($) $ / shares in Units, $ in Thousands		6 Months Ended
	Oct. 10, 2017	Jun. 30, 2019
Stock Issued During Period, Shares, New Issues	2,950,625
Sale of Stock, Price Per Share	$ 10
Payments of Stock Issuance Costs	$ 1,394
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense, Total		$ 0
FFBW Community Foundation [Member]
Stock Issued During Period, Shares, New Issues	25,000
Percentage of Common Stock Outstanding to Bank Eligible Members	45.00%
Percentage of Common Stock Subscribe to Adopt Employee Stock Ownership Plan	3.92%
FFBW, MHC [Member]
Percentage of Common Stock Outstanding Upon Completion of Reorganization and Stock Issuance	55.00%

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Note 3 - Earnings Per Share - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Net income	$ 388	$ 353	$ 637	$ 476
Weighted average shares outstanding (in shares)	6,644,529	6,612,500	6,668,358	6,612,500
Weighted average unallocated Employee Stock Ownership Plan Shares (in shares)	(238,947)	(250,863)	(240,558)	(252,483)
Basic weighted average shares outstanding (in shares)	6,405,582	6,361,637	6,427,800	6,360,017
Dilutive potential common shares (in shares)
Dilutive weighted average shares outstanding (in shares)	6,405,582	6,361,637	6,427,800	6,360,017
Basic earnings per share (in dollars per share)	$ 0.06	$ 0.06	$ 0.10	$ 0.07
Diluted earnings per share (in dollars per share)	$ 0.06	$ 0.06	$ 0.10	$ 0.07

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Note 4 - Available for Sale Securities (Details Textual)	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	27		27		79
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	1		1		6
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities, Total			$ 0	$ 0
Proceeds from Sale of Available-for-sale Securities, Total	$ 2,704,000	$ 3,002,000	4,837,000	6,437,000
Available-for-sale Securities, Gross Realized Gains	22,000	1,000	22,000	24,000
Available-for-sale Securities, Gross Realized Losses	17,000	$ 0	25,000	$ 15,000
Security Owned and Pledged as Collateral, Fair Value, Total	$ 1,001,000		$ 1,001,000		$ 960,000

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Note 4 - Available for Sale Securities - Amortized Cost and Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Amortized cost	$ 43,156	$ 44,564
Gross unrealized gains	458	52
Gross unrealized losses	(136)	(865)
Estimated fair value	43,478	43,751
US Government Corporations and Agencies Securities [Member]
Amortized cost	1,102	1,299
Gross unrealized gains	22	8
Gross unrealized losses
Estimated fair value	1,124	1,307
US States and Political Subdivisions Debt Securities [Member]
Amortized cost	7,612	8,381
Gross unrealized gains	46	17
Gross unrealized losses	(20)	(103)
Estimated fair value	7,638	8,295
Collateralized Mortgage Backed Securities [Member]
Amortized cost	30,863	29,164
Gross unrealized gains	360	24
Gross unrealized losses	(113)	(652)
Estimated fair value	31,110	28,536
Certificates of Deposit [Member]
Amortized cost	1,500	1,500
Gross unrealized gains	1	1
Gross unrealized losses	(3)	(55)
Estimated fair value	1,498	1,446
Corporate Debt Securities [Member]
Amortized cost	2,079	4,220
Gross unrealized gains	29	2
Gross unrealized losses		(55)
Estimated fair value	$ 2,108	$ 4,167

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Note 4 - Available for Sale Securities - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Less Than 12 Months Fair Value	$ 9	$ 1,730
Less Than 12 Months Unrealized Losses		(26)
12 Months or More Fair Value	10,229	35,303
12 Months or More Unrealized Losses	(136)	(839)
Total Fair Value	10,238	37,033
Total Unrealized Losses	(136)	(865)
US Government Corporations and Agencies Securities [Member]
Less Than 12 Months Fair Value		175
Less Than 12 Months Unrealized Losses
12 Months or More Fair Value		113
12 Months or More Unrealized Losses
Total Fair Value		288
Total Unrealized Losses
US States and Political Subdivisions Debt Securities [Member]
Less Than 12 Months Fair Value
Less Than 12 Months Unrealized Losses
12 Months or More Fair Value	2,084	6,142
12 Months or More Unrealized Losses	(20)	(103)
Total Fair Value	2,084	6,142
Total Unrealized Losses	(20)	(103)
Collateralized Mortgage Backed Securities [Member]
Less Than 12 Months Fair Value	9	1,171
Less Than 12 Months Unrealized Losses		(24)
12 Months or More Fair Value	6,898	24,725
12 Months or More Unrealized Losses	(113)	(628)
Total Fair Value	6,907	25,896
Total Unrealized Losses	(113)	(652)
Certificates of Deposit [Member]
Less Than 12 Months Fair Value
Less Than 12 Months Unrealized Losses
12 Months or More Fair Value	1,247	1,195
12 Months or More Unrealized Losses	(3)	(55)
Total Fair Value	1,247	1,195
Total Unrealized Losses	(3)	(55)
Corporate Debt Securities [Member]
Less Than 12 Months Fair Value		384
Less Than 12 Months Unrealized Losses		(2)
12 Months or More Fair Value		3,128
12 Months or More Unrealized Losses		(53)
Total Fair Value		3,512
Total Unrealized Losses		$ (55)

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Note 4 - Available for Sale Securities - Contractual Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Due in one year or less, amortized cost	$ 641
Due in one year or less, fair value	648
Due after one year through 5 years, amortized cost	4,053
Due after one year through 5 years, fair value	4,079
Due after 5 years through 10 years, amortized cost	3,578
Due after 5 years through 10 years, fair value	3,610
Due after 10 years, amortized cost	4,021
Due after 10 years, fair value	4,031
Subtotal, amortized cost	12,293
Subtotal, fair value	12,368
Amortized cost	43,156	$ 44,564
Estimated fair value	43,478	43,751
Collateralized Mortgage Backed Securities [Member]
Amortized cost	30,863	29,164
Estimated fair value	$ 31,110	$ 28,536

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Note 5 - Loans (Details Textual)	6 Months Ended	12 Months Ended
	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Loans and Leases Receivable, Commitments to Purchase or Sell	$ 0	$ 0
Financing Receivable, 90 Days or More Past Due, Still Accruing	$ 0	0
Financing Receivable Modifications Specific Reserves		$ 0
Financing Receivable, Troubled Debt Restructuring, Subsequent Default, Number of Contracts	0	0
Residential Real Estate and Consumer [Member] | One to Four Family Owner-occupied [Member]
Financing Receivable, Troubled Debt Restructuring	$ 83,000	$ 302,000
Financing Receivable, Modifications, Number of Contracts		2
Residential Real Estate and Consumer [Member] | One to Four Family Investor-owned [Member]
Financing Receivable, Troubled Debt Restructuring	421,000	$ 250,000
Financing Receivable Modifications Specific Reserves	$ 0
Residential Real Estate and Consumer [Member] | Consumer [Member]
Financing Receivable, Troubled Debt Restructuring		$ 20,000

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Note 5 - Loans - Major Classifications of Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Subtotal	$ 195,405		$ 200,898
Deferred loan fees	(152)		(86)
Allowance for loan losses	(2,252)	$ (2,188)	(2,118)	$ (1,908)	$ (1,809)	$ (1,800)
Net loans	193,001		198,694
Commercial Portfolio Segment [Member]
Subtotal	96,405		90,368
Allowance for loan losses	(1,053)	(984)	(940)	(806)	(738)	(660)
Commercial Portfolio Segment [Member] | Development [Member]
Subtotal	12,886		7,801
Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Subtotal	70,993		69,425
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Subtotal	12,526		13,142
Residential Real Estate and Consumer [Member]
Subtotal	99,000		110,530
Allowance for loan losses	(1,199)	$ (1,204)	(1,178)	$ (1,102)	$ (1,071)	$ (1,140)
Residential Real Estate and Consumer [Member] | One to Four Family Owner-occupied [Member]
Subtotal	33,629		41,018
Residential Real Estate and Consumer [Member] | One to Four Family Investor-owned [Member]
Subtotal	31,339		32,312
Residential Real Estate and Consumer [Member] | Multifamily Loan [Member]
Subtotal	31,148		34,467
Residential Real Estate and Consumer [Member] | Consumer [Member]
Subtotal	$ 2,884		$ 2,733

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Note 5 - Loans - Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Balance	$ 2,188	$ 1,809	$ 2,118	$ 1,800
Provision for loan losses	85	189	155	304
Loans charged off	(21)	(90)	(21)	(196)
Recoveries of loans previously charged off
Balance	2,252	1,908	2,252	1,908
Allowance for loan losses, individually evaluated for impairment
Allowance for loan losses, collectively evaluated for impairment					2,252	2,118
Total allowance for loan losses	2,252	1,809	2,252	1,908	2,252	2,118
Loans, individually evaluated for impairment					1,939	1,556
Loans, collectively evaluated for impairment					193,466	199,342
Total loans					195,405	200,898
Commercial Portfolio Segment [Member]
Balance	984	738	940	660
Provision for loan losses	69	92	113	170
Loans charged off		(24)		(24)
Recoveries of loans previously charged off
Balance	1,053	806	1,053	806
Allowance for loan losses, individually evaluated for impairment
Allowance for loan losses, collectively evaluated for impairment					1,053	940
Total allowance for loan losses	984	738	1,053	806	1,053	940
Loans, individually evaluated for impairment					78	87
Loans, collectively evaluated for impairment					96,327	90,281
Total loans					96,405	90,368
Residential Real Estate and Consumer [Member]
Balance	1,204	1,071	1,178	1,140
Provision for loan losses	16	97	42	134
Loans charged off	(21)	(66)	(21)	(172)
Recoveries of loans previously charged off
Balance	1,199	1,102	1,199	1,102
Allowance for loan losses, individually evaluated for impairment
Allowance for loan losses, collectively evaluated for impairment					1,199	1,178
Total allowance for loan losses	$ 1,204	$ 1,071	$ 1,199	$ 1,102	1,199	1,178
Loans, individually evaluated for impairment					1,861	1,469
Loans, collectively evaluated for impairment					97,139	109,061
Total loans					$ 99,000	$ 110,530

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Note 5 - Loans - Impaired Financing Receivable (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Principal balance	$ 1,994	$ 1,593
Recorded investment	1,939	1,556
Average investment	1,956	1,590
Interest recognized	19	31
Related allowance
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Principal balance with no related allowance	81	89
Recorded investment with no related allowance	78	87
Average investment with no related allowance	82	93
Interest recognized with no related allowance	2	5
Residential Real Estate and Consumer [Member] | One to Four Family Owner-occupied [Member]
Principal balance with no related allowance	1,136	1,142
Recorded investment with no related allowance	1,109	1,120
Average investment with no related allowance	1,114	1,137
Interest recognized with no related allowance	17	26
Residential Real Estate and Consumer [Member] | One to Four Family Investor-owned [Member]
Principal balance with no related allowance	669	248
Recorded investment with no related allowance	653	241
Average investment with no related allowance	657	246
Interest recognized with no related allowance
Related allowance
Residential Real Estate and Consumer [Member] | Consumer [Member]
Principal balance with no related allowance	108	114
Recorded investment with no related allowance	99	108
Average investment with no related allowance	103	114
Interest recognized with no related allowance

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Note 5 - Loans - Credit Quality Indicators (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Total loans for credit quality indicators	$ 158,892	$ 157,147
Pass [Member]
Total loans for credit quality indicators	154,529	155,373
Special Mention [Member]
Total loans for credit quality indicators	3,535	1,353
Substandard [Member]
Total loans for credit quality indicators	828	421
Doubtful [Member]
Total loans for credit quality indicators
Commercial Portfolio Segment [Member] | Development [Member]
Total loans for credit quality indicators	12,886	7,801
Commercial Portfolio Segment [Member] | Development [Member] | Pass [Member]
Total loans for credit quality indicators	12,886	7,801
Commercial Portfolio Segment [Member] | Development [Member] | Special Mention [Member]
Total loans for credit quality indicators
Commercial Portfolio Segment [Member] | Development [Member] | Substandard [Member]
Total loans for credit quality indicators
Commercial Portfolio Segment [Member] | Development [Member] | Doubtful [Member]
Total loans for credit quality indicators
Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Total loans for credit quality indicators	70,993	69,425
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | Pass [Member]
Total loans for credit quality indicators	70,993	69,425
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | Special Mention [Member]
Total loans for credit quality indicators
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | Substandard [Member]
Total loans for credit quality indicators
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | Doubtful [Member]
Total loans for credit quality indicators
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Total loans for credit quality indicators	12,526	13,142
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Pass [Member]
Total loans for credit quality indicators	9,886	13,122
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Special Mention [Member]
Total loans for credit quality indicators	2,623
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Substandard [Member]
Total loans for credit quality indicators	17	20
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Doubtful [Member]
Total loans for credit quality indicators
Residential Real Estate and Consumer [Member]
Total loans for credit quality indicators	36,513	43,751
Residential Real Estate and Consumer [Member] | Performing Financial Instruments [Member]
Total loans for credit quality indicators	35,761	42,544
Residential Real Estate and Consumer [Member] | Nonperforming Financial Instruments [Member]
Total loans for credit quality indicators	752	1,207
Residential Real Estate and Consumer [Member] | One to Four Family Owner-occupied [Member]
Total loans for credit quality indicators	33,629	41,018
Residential Real Estate and Consumer [Member] | One to Four Family Owner-occupied [Member] | Performing Financial Instruments [Member]
Total loans for credit quality indicators	32,967	39,919
Residential Real Estate and Consumer [Member] | One to Four Family Owner-occupied [Member] | Nonperforming Financial Instruments [Member]
Total loans for credit quality indicators	662	1,099
Residential Real Estate and Consumer [Member] | Consumer [Member]
Total loans for credit quality indicators	2,884	2,733
Residential Real Estate and Consumer [Member] | Consumer [Member] | Performing Financial Instruments [Member]
Total loans for credit quality indicators	2,794	2,625
Residential Real Estate and Consumer [Member] | Consumer [Member] | Nonperforming Financial Instruments [Member]
Total loans for credit quality indicators	90	108
Residential Real Estate and Consumer [Member] | One to Four Family Investor-owned [Member]
Total loans for credit quality indicators	31,339	32,312
Residential Real Estate and Consumer [Member] | One to Four Family Investor-owned [Member] | Pass [Member]
Total loans for credit quality indicators	29,616	30,558
Residential Real Estate and Consumer [Member] | One to Four Family Investor-owned [Member] | Special Mention [Member]
Total loans for credit quality indicators	912	1,353
Residential Real Estate and Consumer [Member] | One to Four Family Investor-owned [Member] | Substandard [Member]
Total loans for credit quality indicators	811	401
Residential Real Estate and Consumer [Member] | One to Four Family Investor-owned [Member] | Doubtful [Member]
Total loans for credit quality indicators
Residential Real Estate and Consumer [Member] | Multifamily Loan [Member]
Total loans for credit quality indicators	31,148	34,467
Residential Real Estate and Consumer [Member] | Multifamily Loan [Member] | Pass [Member]
Total loans for credit quality indicators	31,148	34,467
Residential Real Estate and Consumer [Member] | Multifamily Loan [Member] | Special Mention [Member]
Total loans for credit quality indicators
Residential Real Estate and Consumer [Member] | Multifamily Loan [Member] | Substandard [Member]
Total loans for credit quality indicators
Residential Real Estate and Consumer [Member] | Multifamily Loan [Member] | Doubtful [Member]
Total loans for credit quality indicators

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Note 5 - Loans - Loans Aging Information (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current loans	$ 194,598	$ 200,584
Loans past due	195,405	200,898
Nonaccrual loans	1,117	720
Financing Receivables, 30 to 89 Days Past Due [Member]
Loans past due	807	314
Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Loans past due
Commercial Portfolio Segment [Member] | Development [Member]
Current loans	12,886	7,801
Loans past due	12,886	7,801
Nonaccrual loans
Commercial Portfolio Segment [Member] | Development [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Loans past due
Commercial Portfolio Segment [Member] | Development [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Loans past due
Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Current loans	70,993	69,425
Loans past due	70,993	69,425
Nonaccrual loans
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Loans past due
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Loans past due
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Current loans	12,526	13,076
Loans past due	12,526	13,142
Nonaccrual loans	17	20
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Loans past due		66
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Loans past due
Residential Real Estate and Consumer [Member] | One to Four Family Owner-occupied [Member]
Current loans	32,880	41,013
Loans past due	33,629	41,018
Nonaccrual loans	357	365
Residential Real Estate and Consumer [Member] | One to Four Family Owner-occupied [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Loans past due	749	5
Residential Real Estate and Consumer [Member] | One to Four Family Owner-occupied [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Loans past due
Residential Real Estate and Consumer [Member] | One to Four Family Investor-owned [Member]
Current loans	31,339	32,069
Loans past due	31,339	32,312
Nonaccrual loans	653	241
Residential Real Estate and Consumer [Member] | One to Four Family Investor-owned [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Loans past due		243
Residential Real Estate and Consumer [Member] | One to Four Family Investor-owned [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Loans past due
Residential Real Estate and Consumer [Member] | Multifamily Loan [Member]
Current loans	31,148	34,467
Loans past due	31,148	34,467
Nonaccrual loans
Residential Real Estate and Consumer [Member] | Multifamily Loan [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Loans past due
Residential Real Estate and Consumer [Member] | Multifamily Loan [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Loans past due
Residential Real Estate and Consumer [Member] | Consumer [Member]
Current loans	2,826	2,733
Loans past due	2,884	2,733
Nonaccrual loans	90	94
Residential Real Estate and Consumer [Member] | Consumer [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Loans past due	58
Residential Real Estate and Consumer [Member] | Consumer [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Loans past due

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Note 6 - Deposits (Details Textual) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Time Deposits, at or Above FDIC Insurance Limit	$ 28,013	$ 30,590

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Note 6 - Deposits - Composition of Deposits (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Non-interest bearing checking	$ 20,658	$ 22,763
Interest bearing checking	8,467	5,424
Money market	40,803	41,910
Statement savings accounts	13,129	13,773
Health savings accounts	10,914	11,197
Certificates of deposit	83,582	88,138
Total	$ 177,553	$ 183,205

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Note 6 - Deposits - Maturities of Certificates of Deposit (Details) $ in Thousands	Jun. 30, 2019 USD ($)
2019	$ 43,338
2020	25,108
2021	10,522
2022	2,258
2023	1,981
2024	375
Total	$ 83,582

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Note 7 - FHLB Advances (Details Textual) - USD ($)	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	$ 156,985,000		$ 158,923,000
Federal Home Loan Bank Advances, Total	609,000		739,000
Federal Home Loan Bank, Advances, General Debt Obligations, Amount of Available, Unused Funds	0		889,000
Federal Home Loan Bank Advances, Federal Funds Line of Credit not Withdrawn	7,000,000		7,000,000
Bankers' Bank of Wisconsin [Member]
Federal Home Loan Bank Advances, Total	0	$ 0
Letter of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 5,000,000		$ 5,000,000

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Note 7 - FHLB Advances - FHLB Advances (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Fixed rate, fixed term advances, amount	$ 9,750	$ 11,750
Fixed term advances with floating spread, amount	6,000	6,000
FHLB advances	$ 15,750	$ 17,750
Minimum [Member]
Fixed rate, fixed term advances rate	1.42%	1.42%
Fixed term advances with floating spread	1.73%	1.54%
Maximum [Member]
Fixed rate, fixed term advances rate	2.70%	2.70%
Fixed term advances with floating spread	2.06%	2.05%

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Note 7 - FHLB Advances - Summary of Scheduled Maturities of Fixed Term FHLB Advances (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Fixed rate advances, amount, 2019	$ 3,750
Adjustable rate advances, amount, 2019	2,000
2019	5,750
Fixed rate advances, amount, 2020	6,000
Adjustable rate advances, amount, 2020	2,000
2020	8,000
Fixed rate advances, amount, 2021
Adjustable rate advances, amount, 2021	2,000
2021	2,000
Fixed rate advances, amount, Total	9,750
Adjustable rate advances, amount, Total	6,000
Total	$ 15,750	$ 17,750
Weighted Average [Member]
Fixed rate advances, weighted average rate, 2019	2.36%
Adjustable rate advances, weighted average rate, 2019	1.73%
Fixed rate advances, weighted average rate, 2020	2.34%
Adjustable rate advances, weighted average rate, 2020	1.88%
Fixed rate advances, weighted average rate, 2021	0.00%
Adjustable rate advances, weighted average rate, 2021	2.06%
Fixed rate, fixed term advances rate	2.35%
Adjustable rate advances, weighted average rate, Total	1.89%

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Note 8 - Employee Stock Ownership Plan (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Employee Stock Ownership Plan (ESOP), Number of Committed-to-be-Released Shares	6,480	6,480
Average Fair Value of Per Share	$ 10.57	$ 10.95
Employee Stock Ownership Plan (ESOP), Compensation Expense	$ 69	$ 71

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Note 8 - Employee Stock Ownership Plan - ESOP Shares (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Shares allocated to active partipicants (in shares)	15,907	2,947
Shares committed to be released and allocated to participants (in shares)	6,480	12,960
Total unallocated shares (in shares)	236,823	243,303
Total ESOP shares (in shares)	259,210	259,210
Fair value of unallocated shares (based on $10.45 and $10.03 share price at June 30, 2019 and December 31, 2018, respectively)	$ 2,475	$ 2,440

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Note 8 - Employee Stock Ownership Plan - ESOP Shares (Details) (Parentheticals) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Share price (in dollars per share)	$ 10.45	$ 10.03

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Note 9 - Share-based Compensation Plans (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2019	Nov. 30, 2018
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 1,600,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	2 years 262 days
The 2018 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$ 0
The 2018 Equity Incentive Plan [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized		129,605
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	35,363
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested	$ 0
The 2018 Equity Incentive Plan [Member] | Restricted Stock [Member] | Share-based Payment Arrangement, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	20.00%
The 2018 Equity Incentive Plan [Member] | Share-based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized		324,012
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	101,923
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years

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Note 9 - Share-based Compensation Plans - Impact of Share-based Payment Plans in Financial Statements (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Cost of share-based payment plans	$ 159
Amount of related income tax benefit recognized in income	44
Restricted Stock [Member]
Cost of share-based payment plans	93
Share-based Payment Arrangement, Option [Member]
Cost of share-based payment plans	$ 66

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Note 9 - Share-based Compensation Plans - Stock Options Activity (Details)	6 Months Ended
	Jun. 30, 2019 $ / shares shares
Options outstanding, number of options (in shares) | shares	192,089
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 10.81
Granted, number of options (in shares) | shares	30,000
Granted, weighted average exercise price (in dollars per share) | $ / shares	$ 10.64
Exercised, number of options (in shares) | shares
Exercised, weighted average exercise price (in dollars per share) | $ / shares
Expired or canceled, number of options (in shares) | shares
Expired or canceled, weighted average exercise price (in dollars per share) | $ / shares
Forfeited, number of options (in shares) | shares
Forfeited, weighted average exercise price (in dollars per share) | $ / shares
Options outstanding, number of options (in shares) | shares	222,089
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 10.79
Options outstanding, weighted average remaining contractual term (Year)	9 years 186 days
Options exercisable, number of options (in shares) | shares
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares

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Note 9 - Share-based Compensation Plans - Assumptions (Details)	6 Months Ended
	Jun. 30, 2019 $ / shares
Risk-free interest rate	2.30%
Expected volatility	18.38%
Expected dividend yield	0.00%
Expected life of options (years) (Year)	7 years 182 days
Weighted average fair value per option of options granted during the year (in dollars per share)	$ 2.90

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Note 9 - Share-based Compensation Plans - Summary of Changes in Restricted Shares (Details) - Restricted Stock [Member]	6 Months Ended
	Jun. 30, 2019 $ / shares shares
Shares outstanding, number of shares (in shares) | shares	84,242
Shares outstanding, weighted average grant date fair value (in dollars per share) | $ / shares	$ 10.82
Granted, number of shares (in shares) | shares	10,000
Granted, weighted average grant date fair value (in dollars per share) | $ / shares	$ 10.64
Forfeited, number of shares (in shares) | shares
Forfeited, weighted average grant date fair value (in dollars per share) | $ / shares
Shares outstanding, number of shares (in shares) | shares	94,242
Shares outstanding, weighted average grant date fair value (in dollars per share) | $ / shares	$ 10.80

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Note 10 - Regulatory Capital Ratios - Capital Amounts and Ratios (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Common Equity Tier 1 capital (to risk-weighted assets)	$ 49,268	$ 48,502
Common Equity Tier 1 capital (to risk-weighted assets), ratio	24.50%	23.70%
Common Equity Tier 1 capital (to risk-weighted assets), for capital adequacy	$ 9,055	$ 9,209
Common Equity Tier 1 capital (to risk-weighted assets), for capital adequacy, ratio	4.50%	4.50%
Common Equity Tier 1 capital (to risk-weighted assets), to be capitalized	$ 13,079	$ 13,302
Common Equity Tier 1 capital (to risk-weighted assets), to be capitalized, ratio	6.50%	6.50%
Tier 1 capital (to risk-weighted assets)	$ 49,268	$ 48,502
Tier 1 capital (to risk-weighted assets), ratio	24.50%	23.70%
Tier 1 capital (to risk-weighted assets), for capital adequacy	$ 12,073	$ 12,279
Tier 1 capital (to risk-weighted assets), for capital adequacy, ratio	6.00%	6.00%
Tier 1 capital (to risk-weighted assets), to be capitalized	$ 16,097	$ 16,372
Tier 1 capital (to risk-weighted assets), to be capitalized, ratio	8.00%	8.00%
Total capital (to risk-weighted assets)	$ 51,520	$ 50,620
Total capital (to risk-weighted assets), ratio	25.60%	24.70%
Total capital (to risk-weighted assets), for capital adequacy	$ 16,097	$ 16,372
Total capital (to risk-weighted assets), for capital adequacy, ratio	8.00%	8.00%
Total capital (to risk-weighted assets), to be capitalized	$ 20,122	$ 20,465
Total capital (to risk-weighted assets), to be capitalized, ratio	10.00%	10.00%
Tier 1 capital (to average assets)	$ 49,268	$ 48,502
Tier 1 capital (to average assets), ratio	19.00%	18.40%
Tier 1 capital (to average assets), for capital adequacy	$ 10,346	$ 10,542
Tier 1 capital (to average assets), for capital adequacy, ratio	4.00%	4.00%
Tier 1 capital (to average assets), to be capitalized	$ 12,932	$ 13,178
Tier 1 capital (to average assets), to be capitalized, ratio	5.00%	5.00%

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Note 11 - Fair Value Measurements - Fair Value of Assets on Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Assets - Available for sale securities	$ 43,478	$ 43,751
Fair Value, Recurring [Member]
Assets - Available for sale securities	43,478	43,751
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Assets - Available for sale securities
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Assets - Available for sale securities	43,478	43,751
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Assets - Available for sale securities

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Note 11 - Fair Value Measurements - Fair Value of Assets on Nonrecurring Basis (Details) - Fair Value, Nonrecurring [Member] - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Loans
Foreclosed assets	84	69
Fair Value, Inputs, Level 1 [Member]
Loans
Foreclosed assets
Fair Value, Inputs, Level 2 [Member]
Loans
Foreclosed assets
Fair Value, Inputs, Level 3 [Member]
Loans
Foreclosed assets	$ 84	$ 69

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Note 11 - Fair Value Measurements - Carrying Value and Estimated Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Estimated fair value	$ 43,478	$ 43,751
Reported Value Measurement [Member]
Cash and cash equivalents	5,397	4,488
Estimated fair value	43,478	43,751
Loans held for sale	1,951	679
Loans	193,001	198,694
Accrued interest receivable	777	768
Cash value of life insurance	7,105	7,007
FHLB stock	609	739
Deposits	177,553	183,205
Advance payments by borrowers for taxes and insurance	771	55
FHLB advances	15,750	17,750
Accrued interest payable	620	70
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents	5,397	4,488
Estimated fair value
Loans held for sale
Loans
Accrued interest receivable	777	768
Cash value of life insurance
FHLB stock
Deposits	93,971	95,067
Advance payments by borrowers for taxes and insurance	771	55
FHLB advances
Accrued interest payable	620	70
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Cash and cash equivalents
Estimated fair value	43,478	43,751
Loans held for sale	1,951	679
Loans
Accrued interest receivable
Cash value of life insurance
FHLB stock
Deposits
Advance payments by borrowers for taxes and insurance
FHLB advances
Accrued interest payable
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Cash and cash equivalents
Estimated fair value
Loans held for sale
Loans	194,770	199,048
Accrued interest receivable
Cash value of life insurance	7,105	7,007
FHLB stock	609	739
Deposits	83,719	87,531
Advance payments by borrowers for taxes and insurance
FHLB advances	15,685	17,505
Accrued interest payable