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FAIR VALUE OF FINANCIAL INSTRUMENTS
 6 Months Ended
Dec. 31, 2016
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]  
FAIR VALUE OF FINANCIAL INSTRUMENTS
13. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values are as follows:

 

                   December 31, 2016                                             
         Carrying
Amount		            Fair
Value		                Level I                    Level II                    Level III      
         (Dollars in Thousands)  

FINANCIAL ASSETS

                         

Cash and cash equivalents

   $      2,386      $           2386      $           2,386      $           -      $           -   

Certificates of deposit

        10,385           10,385           10,385           -           -   

Trading Securities

        920           920           920           -           -   

Investment securities – available for sale

        106,754           106,754           -           106,754           -   

Investment securities – held to maturity

        8,684           8,861           -           8,861           -   

Mortgage-backed securities – held to maturity:

                         

Agency

        122,005           122,922           -           122,922           -   

Private-label

        1,268           1,541           -           -           1,541   

Net loans receivable

        74,146           73,144           -           -           73,144   

Accrued interest receivable

        1,314           1,314           1,314           -           -   

FHLB stock

        6,778           6,778           6,778           -           -   

Bank owned life insurance

        4,476           4,476           4,476           -           -   

FINANCIAL LIABILITIES

                         

Deposits:

                         

Non-interest bearing deposits

   $      20,190      $           20,190      $           20,190      $           -      $           -   

NOW accounts

        23,688           23,688           23,688           -           -   

Savings accounts

        45,696           45,696           45,696           -           -   

Money market accounts

        22,716           22,716           22,716           -           -   

Certificates of deposit

        29,934           29,782           -           -           29,782   

Advance payments by borrowers for taxes and insurance

        1,230           1,230           1,230           -           -   

FHLB long-term advances – fixed rate

        10,000           10,346           -           -           10,346   

FHLB long-term advances – variable rate

        6,109           6,109           6,109           -           -   

FHLB short-term advances

        146,074           146,074           146,074           -           -   

Accrued interest payable

        166           166           166           -           -   

 

                     June 30, 2016                                             
           Carrying
Amount		            Fair
Value		                Level I                    Level II                    Level III      
           (Dollars in Thousands)  

FINANCIAL ASSETS

                         

Cash and cash equivalents

   $           2,343      $           2,343      $           2,343      $           -      $           -   

Certificates of deposit

        350           350           350           -           -   

Investment securities – available for sale

        107,676           107,676           -           107,676           -   

Investment securities – held to maturity

        9,523           9,990           -           9,990           -   

Mortgage-backed securities – held to maturity:

                         

Agency

        135,957           135,976           -           135,976           -   

Private-label

        1,459           1,703           -           -           1,703   

Net loans receivable

        64,673           67,335           -           -           67,335   

Accrued interest receivable

        1,508           1,508           1,508           -           -   

FHLB stock

        6,599           6,599           6,599           -           -   

Bank owned life insurance

        4,410           4,410           4,410           -           -   

FINANCIAL LIABILITIES

                         

Deposits:

                         

Non-interest bearing deposits

   $           17,284      $           17,284      $           17,284      $           -      $           -   

NOW accounts

        22,201           22,201           22,201           -           -   

Savings accounts

        47,232           47,232           47,232           -           -   

Money market accounts

        23,050           23,050           23,050           -           -   

Certificates of deposit

        30,250           30,241           -           -           30,241   

Advance payments by borrowers for taxes and insurance

        1,261           1,261           1,261           -           -   

FHLB long-term advances – fixed rate

        10,000           10,498           -           -           10,498   

FHLB long-term advances- variable rate

        6,109           6,109           6,109           -           -   

FHLB short-term advances

        144,027           144,027           144,027           -           -   

Accrued interest payable

        189           189           189           -           -   

Financial instruments are defined as cash, evidence of an ownership interest in an entity, or a contract which creates an obligation or right to receive or deliver cash or another financial instrument from or to a second entity on potentially favorable or unfavorable terms.

Fair value is defined as the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. If a quoted market price is available for a financial instrument, the estimated fair value would be calculated based upon the market price per trading unit of the instrument.

If no readily available market exists, the fair value estimates for financial instruments should be based upon management’s judgment regarding current economic conditions, interest rate risk, expected cash flows, future estimated losses, and other factors, as determined through various option pricing formulas or simulation modeling. As many of these assumptions result from judgments made by management based upon estimates, which are inherently uncertain, the resulting estimated values may not be indicative of the amount realizable in the sale of a particular financial instrument. In addition, changes in the assumptions on which the estimated values are based may have a significant impact on the resulting estimated values.

As certain assets and liabilities, such as deferred tax assets, premises and equipment, and many other operational elements of the Company, are not considered financial instruments, but have value, this estimated fair value of financial instruments would not represent the full market value of the Company.

 

Estimated fair values have been determined by the Company using the best available data, as generally provided in internal Savings Bank regulatory, or third party valuation reports, using an estimation methodology suitable for each category of financial instruments. The estimation methodologies used are as follows:

Cash and Cash Equivalents, Certificates of Deposit, Accrued Interest Receivable and Payable, and FHLB Short-term Advances

The fair value approximates the current carrying value.

Trading Securities, Investment Securities, Mortgage-Backed Securities, and FHLB Stock

The fair value of investment and mortgage-backed securities is equal to the available quoted market price. If no quoted market price is available, fair value is estimated using the quoted market price for similar securities. For discussion of valuation of private-label CMOs, see Note 8 “Unrealized Losses on Securities”. Since the FHLB stock is not actively traded on a secondary market and held exclusively by member financial institutions, the estimated fair market value approximates the carrying amount.

Net Loans Receivable, Deposits, and Advance Payments by Borrowers for Taxes and Insurance

Fair value for consumer mortgage loans is estimated using market quotes or discounting contractual cash flows for prepayment estimates. Discount rates were obtained from secondary market sources, adjusted to reflect differences in servicing, credit, and other characteristics.

The estimated fair values for consumer, fixed-rate commercial, and multi-family real estate loans are estimated by discounting contractual cash flows for prepayment estimates. Discount rates are based upon rates generally charged for such loans with similar credit characteristics.

The estimated fair value for nonperforming loans is the appraised value of the underlying collateral adjusted for estimated credit risk.

Demand, savings, money market deposit accounts, and advance payments by borrowers for taxes and insurance are reported at book value. The fair value of certificates of deposit is based upon the discounted value of the contractual cash flows. The discount rate is estimated using average market rates for deposits with similar average terms.

Bank Owned Life Insurance (“BOLI”)

The fair value of BOLI approximates the cash surrender value of the policies at these dates.

FHLB Long-term Advances

The fair values of fixed-rate advances are estimated using discounted cash flows, based on current incremental borrowing rates for similar types of borrowing arrangements. The carrying amount on variable rate advances approximates their fair value.

Commitments to Extend Credit

These financial instruments are generally not subject to sale, and estimated fair values are not readily available. The carrying value, represented by the net deferred fee arising from the unrecognized commitment, and the fair value, determined by discounting the remaining contractual fee over the term of the commitment using fees currently charged to enter into similar agreements with similar credit risk, is not considered material for disclosure.