Note 5 - Transfers and Servicing of Financial Assets

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Transfers and Servicing of Financial Assets [Text Block]

5.

Transfers and Servicing of Financial Assets

The Company sells loans in the secondary market and for certain loans, retains the servicing responsibility. Consideration for the sale includes the cash received as well as the related servicing rights asset. The Company receives fees for the services provided.

Capitalized servicing rights as of

December 31, 2018

and

June 30, 2018

totaled

$2.9

million and

$3.0

million, respectively, and are classified as servicing rights, net, on the consolidated balance sheets.

Mortgage loans sold during the

three

months ended

December 31, 2018

totaled

$7.7

 million, compared to

$17.6

 million during the

three

months ended

December 31, 2017.

Mortgage loans sold during the

six

months ended

December 31, 2018

totaled

$20.9

 million, compared to

$36.7

 million during the

six

months ended

December 31, 2017.

Mortgage loans serviced for others totaled

$7.7

million at

December 31, 2018

and

$8.7

 million at

June 

30,

2018.

Additionally, the Company was servicing commercial loans participated out to various other institutions amounting to

$23.7

million and

$32.2

million at

December 31, 2018

and

June 30, 2018,

respectively.

SBA loans sold during the

three

months ended

December 31, 2018

totaled

$12.8

 million, compared to

$3.4

million during the

three

months ended

December 31, 2017.

SBA loans sold during the

six

months ended

December 31, 2018

totaled

$25.2

 million, compared to

$12.5

million during the

six

months ended

December 31, 2017.

SBA loans serviced for others totaled

$174.7

million at

December 31, 2018

and

$162.0

 million at

June 

30,

2018.

Mortgage and SBA loans serviced for others are accounted for as sales and therefore are

not

included on the accompanying consolidated balance sheets. The risks inherent in mortgage servicing assets and SBA servicing assets relate primarily to changes in prepayments that result from shifts in interest rates.

Contractually specified servicing fees were

$101

thousand and

$234

 thousand for the

three

months ended

December 31, 2018

and

2017,

respectively, and were included as a component of loan-related fees within noninterest income. Contractually specified servicing fees were

$349

thousand and

$497

 thousand for the

six

months ended

December 31, 2018

and

2017,

respectively.

The significant assumptions used in the valuation of the servicing rights included a range of discount rates from

8.8%

to

17.7%

and a weighted average prepayment speed assumption of

12.4%.