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LOANS
 12 Months Ended
Jun. 30, 2022
Receivables [Abstract]  
LOANS

4. Loans

A summary of the balances of loans follows:

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

June 30, 2022

 

 

June 30, 2021

 

Mortgage loans on real estate:

 

 

 

 

 

 

Residential:

 

 

 

 

 

 

1-4 family

 

$

141,073

 

 

$

139,687

 

Multi-family

 

 

14,310

 

 

 

15,868

 

Second mortgages and home equity lines of credit

 

 

1,970

 

 

 

2,454

 

Construction

 

 

375

 

 

 

-

 

Commercial

 

 

14,761

 

 

 

16,366

 

Total mortgage loans on real estate

 

 

172,489

 

 

 

174,375

 

Consumer loans:

 

 

 

 

 

 

Consumer

 

 

84

 

 

 

139

 

Home improvement

 

 

2,116

 

 

 

1,972

 

Total other loans

 

 

2,200

 

 

 

2,111

 

Total loans

 

 

174,689

 

 

 

176,486

 

 

 

 

 

 

 

 

Less: Allowance for loan losses

 

 

(1,747

)

 

 

(1,722

)

    Net deferred loan fees

 

 

(349

)

 

 

(331

)

Loans, net

 

$

172,593

 

 

$

174,433

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of mortgage loans serviced for others were $0 and $499,000 at June 30, 2022 and 2021, respectively.

Residential loans are subject to a blanket lien securing FHLB advances. See Note 7.

Included in total loans are loans due from directors and other related parties of $3.0 million and $2.5 million at June 30, 2022 and 2021, respectively. All loans made to directors have substantially the same terms and interest rates as other bank borrowers at their origination date. The Board of Directors confirms that collateral requirements, terms and rates are comparable to other borrowers and are in compliance with underwriting policies prior to approving loans to individual directors. The following presents the activity in amount due from directors and other related parties for the years ended June 30, 2022 and 2021:

 

(Dollars in thousands)

 

June 30, 2022

 

 

June 30, 2021

 

Outstanding related party loans at July 1,

 

$

2,544

 

 

$

2,177

 

New Loans

 

 

1,211

 

 

 

1,385

 

Repayments

 

 

(708

)

 

 

(1,018

)

Outstanding related party loans at June 30,

 

$

3,047

 

 

$

2,544

 

 

 

 

 

 

Activity in the allowance for loan losses and allocation of the allowance to loan segments follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

Residential Real Estate

 

 

Residential Real Estate Construction

 

 

Commercial Real Estate

 

 

 

Consumer

 

 

Unallocated

 

 

Total

 

Provision (credit) for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2021

 

$

1,262

 

 

$

-

 

 

$

279

 

 

 

$

58

 

 

$

123

 

 

$

1,722

 

Provision (credit) for loan losses

 

 

(39

)

 

 

3

 

 

 

(27

)

 

 

 

4

 

 

 

85

 

 

 

26

 

Loans charged-off

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

(1

)

 

 

-

 

 

 

(1

)

Recoveries

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

Balance at June 30, 2022

 

$

1,223

 

 

$

3

 

 

$

252

 

 

 

$

61

 

 

$

208

 

 

$

1,747

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2020

 

$

1,228

 

 

$

-

 

 

$

301

 

 

 

$

48

 

 

$

85

 

 

$

1,662

 

Provision (credit) for loan losses

 

 

34

 

 

 

-

 

 

 

(22

)

 

 

 

10

 

 

 

38

 

 

 

60

 

Loans charged-off

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

Recoveries

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

Balance at June 30, 2021

 

$

1,262

 

 

$

-

 

 

$

279

 

 

 

$

58

 

 

$

123

 

 

$

1,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for impaired loans

 

$

-

 

 

$

-

 

 

$

-

 

 

 

$

-

 

 

$

-

 

 

$

-

 

Allowance for non-impaired loans

 

 

1,223

 

 

 

3

 

 

 

252

 

 

 

 

61

 

 

 

208

 

 

 

1,747

 

Total allowance for loan losses

 

$

1,223

 

 

$

3

 

 

$

252

 

 

 

$

61

 

 

$

208

 

 

$

1,747

 

Impaired loans

 

$

-

 

 

$

-

 

 

$

-

 

 

 

$

-

 

 

$

-

 

 

$

-

 

Non-impaired loans

 

 

157,353

 

 

 

375

 

 

 

14,761

 

 

 

 

2,200

 

 

 

-

 

 

 

174,689

 

Total loans

 

$

157,353

 

 

$

375

 

 

$

14,761

 

 

 

$

2,200

 

 

$

-

 

 

$

174,689

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for impaired loans

 

$

-

 

 

$

-

 

 

$

-

 

 

 

$

-

 

 

$

-

 

 

$

-

 

Allowance for non-impaired loans

 

 

1,262

 

 

 

-

 

 

 

279

 

 

 

 

58

 

 

 

123

 

 

 

1,722

 

Total allowance for loan losses

 

$

1,262

 

 

$

-

 

 

$

279

 

 

 

$

58

 

 

$

123

 

 

$

1,722

 

Impaired loans

 

$

-

 

 

$

-

 

 

$

-

 

 

 

$

-

 

 

$

-

 

 

$

-

 

Non-impaired loans

 

 

158,009

 

 

 

-

 

 

 

16,366

 

 

 

 

2,111

 

 

 

-

 

 

 

176,486

 

Total loans

 

$

158,009

 

 

$

-

 

 

$

16,366

 

 

 

$

2,111

 

 

$

-

 

 

$

176,486

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2022 and 2021 there were no past due loans or loans on non-accrual. At June 30, 2022 and 2021 there were no loans past due ninety days or more and still accruing.

There were no impaired loans at June 30, 2022 or 2021.

During the years ended June 30, 2022 and 2021, there were no troubled debt restructurings or troubled debt restructurings that defaulted in the first twelve months after restructuring. Management performs a discounted cash flow calculation to determine the amount of impairment reserve required on each of the troubled debt restructurings. Any reserve required is recorded through the provision for loan losses.

 

 

Credit Quality Information

The Bank utilizes an internal loan rating system for residential real estate, commercial real estate, and construction loans as follows:

Pass: Loans in this category are considered to pose low to average risk. Passed assets are generally protected by the current net worth and paying capacity of the obligor or by the value of collateral pledged.

Special Mention: Loans in this category possess credit deficiencies or potential weaknesses deserving management’s close attention. If uncorrected, such deficiencies or weaknesses may expose the Bank to an increased risk of loss.

Substandard: Loans in this category are considered to be inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. These assets have a well-defined weakness and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans in this category have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.

Loss: Loans in this category are considered uncollectible and continuance as a bankable asset is not warranted. Loans in this category are generally charged-off.

On an annual basis, or more often if needed, the Bank formally reviews the ratings on all commercial real estate and construction loans. On a monthly basis, the Bank reviews the residential and other loan portfolios for credit quality primarily through the use of delinquency reports.

The following table presents information on the Bank’s loans by risk ratings at June 30, 2022 and 2021:

 

 

 

June 30, 2022

 

 

June 30, 2021

 

(Dollars in thousands)

 

Residential Real Estate

 

 

Commercial Real Estate

 

 

Residential Real Estate

 

 

Commercial Real Estate

 

Pass

 

$

157,728

 

 

$

14,761

 

 

$

158,009

 

 

$

14,342

 

Special mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,024

 

 

 

$

157,728

 

 

$

14,761

 

 

$

158,009

 

 

$

16,366

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate included $375,000 of pass rated residential construction loans. At June 30, 2022 and 2021, there were no loans rated substandard, doubtful or loss.