10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2018

or

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                to               

Commission File Number: 0-22444

WVS Financial Corp.
(Exact name of registrant as specified in its charter)
Pennsylvania	25-1710500
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
9001 Perry Highway Pittsburgh, Pennsylvania	15237
(Address of principal executive offices)	(Zip Code)
(412) 364-1911
(Registrant’s telephone number, including area code)

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 filing requirement 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).      YES  X   NO     

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

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12 b-2 of the Exchange Act).      YES        NO X 

Shares outstanding as of February 8, 2019: 1,943,796 shares Common Stock, $.01 par value.

WVS FINANCIAL CORP. AND SUBSIDIARY

INDEX

PART I.	Financial Information	Page
Item 1.	Financial Statements
	Consolidated Balance Sheet as of December 31, 2018 and June 30, 2018 (Unaudited)	3
	Consolidated Statement of Income for the Three and Six Months Ended December 31, 2018 and 2017 (Unaudited)	4
	Consolidated Statement of Comprehensive Income (Loss) for the Three and Six Months Ended December 31, 2018 and 2017 (Unaudited)	5
	Consolidated Statement of Changes in Stockholders’ Equity for the Three and Six Months Ended December 31, 2018 (Unaudited)	6
	Consolidated Statement of Cash Flows for the Six Months Ended December 31, 2018 and 2017 (Unaudited)	7
	Notes to Unaudited Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three and Six Months Ended December 31, 2018	40
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	47
Item 4.	Controls and Procedures	51
PART II.	Other Information	Page
Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3.	Defaults Upon Senior Securities	53
Item 4.	Mine Safety Disclosures	53
Item 5.	Other Information	53
Item 6.	Exhibits	53
	Signatures	54

2

WVS FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

(In thousands, except share and per share data)

	December 31, 2018			June 30, 2018
Assets
Cash and due from banks		$       2,738			$       2,099
Interest-earning demand deposits		890			342
Total cash and cash equivalents		3,628			2,441
Certificates of deposit		1,346			350
Investment securities available-for-sale (amortized cost of $129,395 and $128,824)		127,514			128,811
Investment securities held-to-maturity (fair value of $3,998 and $6,125)		3,995			6,181
Mortgage-backed securities held-to-maturity (fair value of $110,924 and $116,844)		109,922			115,857
Net loans receivable (allowance for loan losses of $501 and $468)		88,405			84,675
Accrued interest receivable		1,186			1,225
Federal Home Loan Bank (FHLB) stock, at cost		6,987			7,161
Premises and equipment, net		363			392
Bank owned life insurance		4,729			4,668
Deferred tax assets (net)		785			359
Other assets		122			168
TOTAL ASSETS		$  348,982			$  352,288
Liabilities and Stockholders’ Equity
Liabilities:
Deposits
Non-interest-bearing accounts		$    22,356			$    18,436
Interest-earning checking accounts		23,692			24,459
Savings accounts		43,982			44,727
Money market accounts		19,040			21,087
Certificates of deposit		32,625			34,376
Advance payments by borrowers for taxes and insurance		1,550			1,938
Total deposits		143,245			145,023
Federal Home Loan Bank advances: short-term		70,067			171,403
Federal Home Loan Bank advances: long-term – fixed rate		15,000			-
Federal Home Loan Bank advances: long-term – variable rate		85,000			-
Accrued interest payable		786			380
Other liabilities		1,497			1,465
TOTAL LIABILITIES		315,595			318,271
Stockholders’ equity:
Preferred stock:
5,000,000 shares, no par value per share, authorized; none issued		-			-
Common stock:
10,000,000 shares, $.01 par value per share, authorized; 3,805,636 shares issued, shares outstanding		38			38
Additional paid-in capital		21,530			21,516
Treasury stock: 1,943,796 and 1,969,513 shares at cost, respectively		(28,258	)		(27,886	)
Retained earnings, substantially restricted		43,941			42,795
Accumulated other comprehensive loss		(1,685	)		(188	)
Unallocated Employee Stock Ownership Plan (“ESOP”) shares		(2,179	)		(2,258	)
TOTAL STOCKHOLDERS’ EQUITY		33,387			34,017
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$  348,982			$  352,288

See accompanying notes to unaudited consolidated financial statements.

3

WVS FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

(In thousands, except share and per share data)

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2018		2017		2018			2017
INTEREST AND DIVIDEND INCOME:
Loans, including fees		$                825		$                754		$                1,628			$                1,493
Investment securities		1,066		680		2,088			1,318
Mortgage-backed securities		927		722		1,816			1,450
Certificates of deposit		3		21		5			54
Interest-earning demand deposits		6		2		9			4
FHLB Stock		116		88		228			173
Total interest and dividend income		2,943		2,267		5,774			4,492
INTEREST EXPENSE:
Deposits		129		86		252			167
Federal Home Loan Bank advances – long-term – fixed rate		235		-		235			32
Federal Home Loan Bank advances – long-term – variable rate		407		-		407			11
Federal Home Loan Bank advances – short-term		437		591		1,345			1,111
Total interest expense		1,208		677		2,239			1,321
NET INTEREST INCOME		1,735		1,590		3,535			3,171
PROVISION FOR LOAN LOSSES		14		6		33			12
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		1,721		1,584		3,502			3,159
NON-INTEREST INCOME:
Service charges on deposits		26		32		55			64
Earnings on Bank Owned Life Insurance		30		32		61			64
Investment securities losses		-		-		(2	)		-
Other than temporary impairment (“OTTI”) losses		-		-		-			41
Portion of gain recognized in other comprehensive Income (before taxes)		-		-		-			(49	)
Net impairment loss recognized in earnings		-		-		-			(8	)
ATM fee income		43		47		85			94
Other		11		13		21			25
Total non-interest income		110		124		220			239
NON-INTEREST EXPENSE:
Salaries and employee benefits		565		549		1,121			1,103
Occupancy and equipment		58		75		126			148
Data processing		58		54		116			103
Correspondent bank service charges		7		10		15			20
Federal deposit insurance premium		22		28		50			56
ATM network expense		25		25		62			49
Other		219		216		365			370
Total non-interest expense		954		957		1,855			1,849
INCOME BEFORE INCOME TAXES		877		751		1,867			1,549
INCOME TAX EXPENSE		192		355		435			651
NET INCOME		$              685		$              396		$            1,432			$              898
EARNINGS PER SHARE:
Basic		$              0.38		$              0.22		$              0.80			$              0.49
Diluted		$              0.38		$              0.22		$              0.80			$              0.49
AVERAGE SHARES OUTSTANDING:
Basic		1,782,091		1,826,580		1,787,573			1,825,729
Diluted		1,782,091		1,826,580		1,787,682			1,825,729

See accompanying notes to unaudited consolidated financial statements.

4

WVS FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(In thousands)

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2018			2017			2018			2017
NET INCOME	$	685		$	396		$	1,432		$	898
OTHER COMPREHENSIVE INCOME (LOSS)
Investment securities available for sale not other-than-temporarily impaired:
Gains (losses) arising during the year		(1,992	)		50			(1,870	)		73
Less: Income tax effect		418			(17	)		392			(25	)
		(1,574	)		33			(1,478	)		48
Losses recognized in earnings		-			-			2			-
Less: Income tax effect		-			-			-			-
		-			-			2			-
Unrealized holdings gains (losses) on securities available for sale not other-than-temporarily impaired, net of tax		(1,574	)		33			(1,476	)		48
Investment securities held to maturity other-than-temporarily impaired:
Total losses		-			-			-			41
Losses recognized in earnings		-			-			-			(8	)
Gains (losses) recognized in comprehensive income		-			-			-			49
Income tax effect		-			-			-			(17	)
		-			-			-			32
Accretion of other comprehensive loss on other-than-temporarily impaired securities held to maturity		12			(24	)		(27	)		45
Less: Income tax effect		(2	)		8			6			(15	)
Unrealized holding (losses) gains on other-than-temporarily impaired securities held to maturity, net of tax		10			(16	)		(21	)		30
Unrealized holdings gains (losses) on securities, net		10			(16	)		(21	)		62
Other comprehensive income (loss)		(1,564	)		17			(1,497	)		110
COMPREHENSIVE INCOME (LOSS)	$	(879	)	$	413		$	(65	)	$	1,008

See accompanying notes to unaudited consolidated financial statements.

5

WVS FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

(In thousands)

	Common     Stock		Additional Paid-in     Capital		Treasury     Stock			Retained Earnings –     Substantially     Restricted			Accumulated Other     Comprehensive     Loss			Unallocated     ESOP Shares			Total
Balance September 30, 2018		$    38		$ 21,525		$ (27,918	)		$ 43,400			$  (121	)		$    (2,219	)		$ 34,705
Net income									685									685
Other comprehensive loss												(1,564	)					(1,564	)
Purchase of treasury stock (23,717 shares)						(340	)											(340	)
Amortization of unallocated ESOP Shares				5											40			45
Cash dividends declared ($0.08 per share)									(144	)								(144	)
Balance December 31, 2018		$    38		$ 21,530		$ (28,258	)		$ 43,941			$   (1,685	)		$ (2,179	)		$ 33,387

	Common     Stock		Additional Paid-in     Capital		Treasury     Stock			Retained Earnings –     Substantially     Restricted			Accumulated Other     Comprehensive     Loss			Unallocated     ESOP Shares			Total
Balance June 30, 2018		$    38		$ 21,516		$ (27,886	)		$ 42,795			$ (188	)		$    (2,258	)		$ 34,017
Net income									1,432									1,432
Other comprehensive loss												(1,497	)					(1,497	)
Purchase of treasury stock (25,717 shares)						(372	)											(372	)
Amortization of unallocated ESOP Shares				14											79			93
Cash dividends declared ($0.16 per share)									(286	)								(286	)
Balance December 31, 2018		$    38		$ 21,530		$ (28,258	)		$ 43,941			$   (1,685	)		$ (2,179	)		$ 33,387

See accompanying notes to unaudited consolidated financial statements.

6

WVS FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

(In thousands)

	Six Months Ended
	December 31,
	2018			2017
OPERATING ACTIVITIES
Net income	$	1,432		$	898
Adjustments to reconcile net income to cash provided by operating activities:
Provision for loan losses		33			12
Depreciation		29			41
Loss on sale of investment security		2			-
Amortization of discounts, premiums and deferred loan costs		111			362
Amortization of unallocated ESOP shares		93			71
Deferred income taxes		(27	)		97
Increase in prepaid/accrued income taxes		33			11
Earnings on bank owned life insurance		(61	)		(64	)
Decrease in accrued interest receivable		39			69
Increase (decrease) in accrued interest payable		406			(1	)
Increase in deferred director compensation payable		22			19
Other, net		22			31
Net cash provided by operating activities		2,134			2,776
INVESTING ACTIVITIES
Available-for-sale:
Purchase of investment securities		(24,782	)		(28,825	)
Proceeds from sale of investments		1,364			-
Proceeds from repayments of investments		22,705			17,451
Held-to-maturity:
Proceeds from repayments of investments		2,180			2,033
Proceeds from repayments of mortgage-backed securities		5,918			7,818
Purchase of certificates of deposit		(1,096	)		(348	)
Maturities/redemptions of certificates of deposit		100			7,100
Purchase of loans		(5,102	)		(6,347	)
Net decrease in net loans receivable		1,364			1,974
Purchase of FHLB stock		(3,043	)		(3,503	)
Redemption of FHLB stock		3,217			3,331
Acquisition of premises and equipment		-			(11	)
Net cash provided by investing activities		2,825			673

7

WVS FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

(In thousands)

	Six Months Ended
	December 31,
	2018			2017
FINANCING ACTIVITIES
Net increase (decrease) in transaction and savings accounts	$	361		$	(2,401	)
Net increase (decrease) in certificates of deposit		(1,751	)		1,376
Net decrease in advance payments by borrowers for taxes and insurance		(388	)		(415	)
Proceeds from FHLB long-term advances - fixed rate		15,000			(10,000	)
Proceeds from FHLB long-term advances - variable rate		85,000			(6,109	)
Net increase (decrease) FHLB short-term advances		(101,336	)		20,606
Purchase of treasury stock		(372	)		-
Cash dividends paid		(286	)		(257	)
Net cash (used for) provided by financing activities		(3,772	)		2,800
Increase in cash and cash equivalents		1,187			6,249
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD		2,441			2,272
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD	$	3,628		$	8,521
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest on deposits and borrowings	$	1,833		$	1,322
Income taxes	$	430		$	537
Non-cash items:
Educational Improvement Tax Credit	$	45		$	50

See accompanying notes to unaudited consolidated financial statements.

8

WVS FINANCIAL CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and therefore do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles (GAAP). However, all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary for a fair presentation have been included. The results of operations for the three and six months ended December 31, 2018, are not necessarily indicative of the results which may be expected for the entire fiscal year.

2. RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). This Update requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU replaces most existing revenue recognition guidance in GAAP. The new standard was effective for the Company on July 1, 2018. Adoption of ASU 2014-09 did not have a material impact on the Company’s consolidated financial statements other than additional disclosures in Note 3 as the Company’s primary sources of revenues are derived from interest and dividends earned on loans, investment securities, and other financial instruments that are not within the scope of ASU 2014-09.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This accounting standard (a) requires separate presentation of equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) on the balance sheet and measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities 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 on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (g) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets.

The Company adopted ASU 2016-01 during the reporting period. On a prospective basis, the Company implemented changes to the measurement of the fair value of financial instruments using an exit price notion for disclosure purposes in Note 13 to the financial statements. The June 30, 2018, fair value of each class of financial instruments disclosure did not utilize the exit price notion when measuring fair value and, therefore, would not be comparable to the December 31, 2018 disclosure. The Company estimated the fair value based on guidance from ASC 820-10, Fair Value Measurements, which defines fair value as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is no active observable market for sale information on community bank loans and, thus, Level 3 fair value procedures were utilized, primarily in the use of present value techniques incorporating assumptions that market participants would use in estimating fair values. The fair value of loans held for investment, excluding impaired loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses. The discount rates used to determine fair value use interest rate spreads that reflect factors such as liquidity, credit and nonperformance risk of the loans. Loans are considered a Level 3 classification.

9

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. A short-term lease is defined as one in which (a) the lease term is 12 months or less and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently assessing the practical expedients it may elect at adoption, but does not anticipate the amendments will have a significant impact on the financial statements. Based on the Company’s preliminary analysis of its current portfolio, the impact to the Company’s balance sheet is estimated to result in less than a 1 percent increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which changes the impairment model for most financial assets. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the ASU is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be effected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements.

In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842), which provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current lease guidance in Topic 840. An entity that elects this practical expedient should evaluate new or modified land easements under Topic 842 beginning at the date the entity adopts Topic 842; otherwise, an entity should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in ASU 2016-02. This Update is not expected to have a significant impact on the Company’s financial statements.

In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718), which simplified the accounting for nonemployee share-based payment transactions. The amendments in this update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this Update improve the following areas of nonemployee share-based payment accounting; (a) the overall measurement objective, (b) the measurement date, (c) awards with performance conditions, (d) classification reassessment of certain

10

equity-classified awards, (e) calculated value (nonpublic entities only), and (f) intrinsic value (nonpublic entities only). The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. This Update is not expected to have a significant impact on the Company’s financial statements.

In July 2018, the FASB issued ASU 2018-09, Codification Improvements, represents changes to clarify, correct errors in, or make minor improvements to the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments do not require transition guidance and will be effective upon issuance of this ASU. However, many of the amendments in this ASU do have transition guidance with effective dates for annual periods beginning after December 15, 2018, for public business entities. This Update is not expected to have a significant impact on the Company’s financial statements.

In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, represents changes to clarify, correct errors in, or make minor improvements to the Codification. The amendments in this ASU affect the amendments in ASU 2016-02, which are not yet effective, but for which early adoption upon issuance is permitted. For entities that early adopted Topic 842, the amendments are effective upon issuance of this ASU, and the transition requirements are the same as those in Topic 842. For entities that have not adopted Topic 842, the effective date and transition requirements will be the same as the effective date and transition requirements in Topic 842. This Update is not expected to have a significant impact on the Company’s financial statements.

In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements. This Update provides another transition method which allows entities to initially apply ASC 842 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Entities that elect this approach should report comparative periods in accordance with ASC 840, Leases. In addition, this Update provides a practical expedient under which lessors may elect, by class of underlying assets, to not separate nonlease components from the associated lease component, similar to the expedient provided for lessees. However, the lessor practical expedient is limited to circumstances in which the nonlease component or components otherwise would be accounted for under the new revenue guidance and both (a) the timing and pattern of transfer are the same for the nonlease component(s) and associated lease component and (b) the lease component, if accounted for separately, would be classified as an operating lease. If the nonlease component or components associated with the lease component are the predominant component of the combined component, an entity should account for the combined component in accordance with ASC 606, Revenue from Contracts with Customers. Otherwise, the entity should account for the combined component as an operating lease in accordance with ASC 842. If a lessor elects the practical expedient, certain disclosures are required. This Update is effective for public business entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. This Update is not expected to have a significant impact on the Company’s financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes the Disclosure Requirements for Fair Value Measurements. The Update removes the requirement to disclose the amount of and reasons for transfers between Level I and Level II of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level III fair value measurements. The Update requires disclosure of changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level III fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level III fair value measurements. This Update is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

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In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits (Topic 715-20). This Update amends ASC 715 to add, remove and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The Update eliminates the requirement to disclose the amounts in accumulated other comprehensive income expected to be recognized as part of net periodic benefit cost over the next year. The Update also removes the disclosure requirements for the effects of a one-percentage-point change on the assumed health care costs and the effect of this change in rates on service cost, interest cost and the benefit obligation for postretirement health care benefits. This Update is effective for public business entities for fiscal years ending after December 15, 2020, and must be applied on a retrospective basis. For all other entities, this Update is effective for fiscal years ending after December 15, 2021. This standard is not expected to have a significant impact on the Company’s financial position or results of operations.

In November, 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, which amended the effective date of ASU 2016-13 for entities other than public business entities (PBEs), by requiring non-PBEs to adopt the standard for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Therefore, the revised effective dates of ASU 2016-13 for PBEs that are SEC filers will be fiscal years beginning after December 15, 2019, including interim periods within those years, PBEs other than SEC filers will be for fiscal years beginning after December 15, 2020, including interim periods within those years, and all other entities (non-PBEs) will be for fiscal years beginning after December 15, 2021, including interim periods within those years. The ASU also clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Rather, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. The effective date and transition requirements for ASU 2018-19 are the same as those in ASU 2016-13, as amended by ASU 2018-19. This Update is not expected to have a significant impact on the Company’s financial statements.

In December 2018, the FASB issued ASU 2018-20, Leases (Topic 842), which addressed implementation questions arising from stakeholders in regard to ASU 2016-02, Leases. Specifically addressed in this Update were issues related to 1) sales taxes and other similar taxes collected from lessees, 2) certain lessor costs, and 3) recognition of variable payments for contracts with lease and nonlease components. The amendments in this Update affect the amendments in Update 2016-02, which are not yet effective but can be early adopted. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Update 2016-02 (for example, January 1, 2019, for calendar-year-end public business entities). This Update is not expected to have a significant impact on the Company’s financial statements.

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3. REVENUE RECOGNITION

Effective July 1, 2018, the Company adopted Accounting Standards Update ASU 2014-09, Revenue from contracts with Customers – Topic 606, and all subsequent ASUs that modified ASC 606. The Company has elected to apply the standard to all prior periods presented utilizing the full retrospective approach. The implementation of the new standard had no material impact to the measurement or recognition of revenue of prior periods. Management determined that the primary sources of revenue emanating from interest and dividend income on loans and investments along with noninterest revenue resulting from investment security gains, and earnings on bank owned life insurances are not within the scope of ASC 606. As a result, no changes were made during the period related to these sources of revenue. The main types of noninterest income within the scope of the standard are as follows: Service Charges on deposit accounts—the Company has contracts with its deposit customers where fees are charged if certain parameters are not met. These agreements can be cancelled at any time by either the Company or the deposit customer. Revenue from these transactions is recognized on a monthly basis as the Company has an unconditional right to the fee consideration. The Company also has transaction fees related to specific transactions or activities resulting from a customer request or activity that include overdraft fees, online banking fees, interchange fees, ATM fees and other transaction fees. All of these fees are attributable to specific performance obligations of the Company where the revenue is recognized at a defined point in time upon the completion of the requested service/transaction.

4. EARNINGS PER SHARE

The following table sets forth the computation of the weighted-average common shares used to calculate basic and diluted earnings per share.

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2018			2017			2018			2017
Weighted average common shares issued		3,805,636			3,805,636			3,805,636			3,805,636
Average treasury stock shares		(1,849,437	)		(1,797,492	)		(1,843,161	)		(1,797,492	)
Average unallocated ESOP shares		(174,108	)		(181,564	)		(174,902	)		(182,415	)
Weighted average common shares and common stock equivalents used to calculate basic earnings per share		1,782,091			1,826,580			1,787,573			1,825,729
Additional common stock equivalents (stock options) used to calculate diluted earnings per share		-			-			109			-
Weighted average common shares and common stock equivalents used to calculate diluted earnings per share		1,782,091			1,826,580			1,787,682			1,825,729

There are no convertible securities that would affect the numerator in calculating basic and diluted earnings per share; therefore, net income as presented on the Consolidated Statement of Income is used.

At December 31, 2018, there were 27,019 options outstanding with an exercise price of $16.20 which were anti-dilutive for the three month period, and dilutive for the six month period. At December 31, 2017, there were 114,519 options outstanding with an exercise price of $16.20 which were anti-dilutive for the three and six month periods.

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5. STOCK BASED COMPENSATION DISCLOSURE

The Company’s 2008 Stock Incentive Plan (the “Plan”), which was approved by shareholders in October 2008, permits the grant of stock options or restricted shares to its directors and employees for up to 152,000 shares (up to 38,000 restricted shares may be issued). Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest over five years of continuous service and have ten-year contractual terms.

During the six month periods ended December 31, 2018 and 2017, the Company recorded no compensation expense related to our share-based compensation awards. As of December 31, 2018, there was no unrecognized compensation cost related to unvested share-based compensation awards granted in fiscal 2009.

All of the Company’s outstanding stock options were vested at December 31, 2018 and 2017. There were no stock options exercised or issued during the six months ended December 31, 2018 and 2017.

6. INVESTMENT SECURITIES

The amortized cost and fair values of investments are as follows:

					Gross			Gross
		Amortized			Unrealized			Unrealized				Fair
		Cost			Gains			Losses				Value
		(Dollars in Thousands)
December 31, 2018
AVAILABLE FOR SALE
Corporate debt securities	$		102,207	$		3	$		(1,510	)	$		100,700
Foreign debt securities 1			25,558			-			(367	)			25,191
Obligations of states and political subdivisions			1,630			-			(7	)			1,623
Total	$		129,395	$		3	$		(1,884	)	$		127,514
					Gross			Gross
		Amortized			Unrealized			Unrealized				Fair
		Cost			Gains			Losses				Value
		(Dollars in Thousands)
December 31, 2018
HELD TO MATURITY
U.S. government agency securities	$		-	$		-	$		-		$		-
Corporate debt securities			-			-			-				-
Obligations of states and political subdivisions			3,995			4			(1	)			3,998
Total	$		3,995	$		4	$		(1	)	$		3,998

¹ U.S. dollar denominated investment-grade corporate bonds of large foreign corporate issuers.

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					Gross			Gross
		Amortized			Unrealized			Unrealized				Fair
		Cost			Gains			Losses				Value
		(Dollars in Thousands)
June 30, 2018
AVAILABLE FOR SALE
Corporate debt securities	$		104,316	$		204	$		(181	)	$		104,339
Foreign debt securities 1			22,878			11			(38	)			22,851
Obligations of states and political subdivisions			1,630			-			(9	)			1,621
Total	$		128,824	$		215	$		(228	)	$		128,811
					Gross			Gross
		Amortized			Unrealized			Unrealized				Fair
		Cost			Gains			Losses				Value
		(Dollars in Thousands)
June 30, 2018
HELD TO MATURITY
U.S. government agency securities	$		625	$		-	$		(1	)	$		624
Corporate debt securities			1,061			13			-				1,074
Obligations of states and political subdivisions 2			4,495			-			(68	)			4,427
Total	$		6,181	$		13	$		(69	)	$		6,125

Proceeds from sales of investments during the six month period ended December 31, 2018 were $1.4 million and the Company recorded gross realized investment losses of $2 thousand during this same period. There were no sales of investment securities during the quarter ended December 31, 2018 or for the three and six month periods ended December 31, 2017.

² U.S. dollar denominated investment-grade corporate bonds of large foreign corporate issuers.

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The amortized cost and fair values of debt securities at December 31, 2018, by contractual maturity, are shown below. Expected maturities may differ from the contractual maturities because issuers may have the right to call securities prior to their final maturities.

		Due in one year or less			Due after one through five years			Due after five through ten years			Due after ten years			Total
		(Dollars in Thousands)
AVAILABLE FOR SALE
Amortized cost	$		13,378	$		110,310	$		5,707	$		-	$		129,395
Fair value			13,364			108,607			5,543			-			127,514
HELD TO MATURITY
Amortized cost	$		500	$		3,495	$		-	$		-	$		3,995
Fair value			499			3,499			-			-			3,998

At December 31, 2018, investment securities with amortized cost, and fair value of $3.5 million were pledged to secure borrowings with the Federal Home Loan Bank (“FHLB”).

As of December 31, 2018, investment securities with amortized cost $13.4 million and fair values of $13.1 million were pledged to secure future borrowings with the Federal Reserve Bank of Cleveland (“FRBC”). Since the Company had no FRBC borrowings outstanding on December 31, 2018, all FRBC collateral pledges may be withdrawn by the Company at any time.

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7. MORTGAGE-BACKED SECURITIES

Mortgage-backed securities (“MBS”) include mortgage pass-through certificates (“PCs”) and collateralized mortgage obligations (“CMOs”). With a pass-through security, investors own an undivided interest in the pool of mortgages that collateralize the PCs. Principal and interest is passed through to the investor as it is generated by the mortgages underlying the pool. PCs and CMOs may be insured or guaranteed by Freddie Mac (“FHLMC”), Fannie Mae (“FNMA”) and the Government National Mortgage Association (“GNMA”). CMOs may also be privately issued with varying degrees of credit enhancements. A CMO reallocates mortgage pool cash flow to a series of bonds (called traunches) with varying stated maturities, estimated average lives, coupon rates and prepayment characteristics.

The Company’s CMO portfolio is comprised of two segments: CMOs backed by U.S. Government Agencies (“Agency CMOs”) and CMOs backed by single-family whole loans not guaranteed by a U.S. Government Agency (“private-label CMOs”).

At December 31, 2018, the Company’s Agency CMOs totaled $109.1 million as compared to $114.9 million at June 30, 2018. The Company’s private-label CMOs totaled $845 thousand at December 31, 2018 as compared to $958 thousand at June 30, 2018. The $5.9 million decrease in the CMO portfolio was primarily due to repayments on our Agency and private-label CMOs which totaled $5.8 million and $86 thousand, respectively. At December 31, 2018 and June 30, 2018, all of the Company’s MBS portfolio, including CMOs, were comprised of adjustable or floating rate investments. Substantially all of the Company’s floating rate MBS adjust monthly based upon changes in the one month LIBOR. The Company has no investment in multi-family or commercial real estate based MBS.

Due to prepayments of the underlying loans, and the prepayment characteristics of the CMO traunches, the actual maturities of the Company’s MBS are expected to be substantially less than the scheduled maturities.

The Company retains an independent third party to assist it in the determination of a fair value for its three private-label CMOs. This valuation is meant to be a “Level Three” valuation as defined by ASC Topic 820, Fair Value Measurements and Disclosures. The valuation does not represent the actual terms or prices at which any party could purchase the securities. There is currently no active secondary market for private-label CMOs and there can be no assurance that any secondary market for private-label CMOs will develop. The private-label CMO portfolio had four previously recorded other-than-temporary impairments at December 31, 2018. During the six months ending December 31, 2018, the Company reversed $(27) thousand of non-credit unrealized holding losses on its three private-label CMOs with OTTI due to principal repayments. During the six months ended December 31, 2018, the Company recorded no additional credit impairment charge on its private-label CMO portfolio.

The Company believes that the data and assumptions used to determine the fair values are reasonable. The fair value calculations reflect relevant facts and market conditions. Events and conditions occurring after the valuation date could have a material effect on the private-label CMO segment’s fair value.

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The following table sets forth information with respect to the Company’s private-label CMO portfolio as of December 31, 2018. At the time of purchase, all of our private-label CMOs were rated in the highest investment category by at least two ratings agencies.

			At December 31, 2018
			Rating						Amortized Cost		Fair   Value3		Life to Date Impairment   Recorded in   Earnings
Cusip #	Security Description		S&P		Moody’s		Fitch		(in thousands)
126694CP1		CWHL SER 21 A11		N/A		Caa2		D	$	459	$	572	$	201
126694KF4		CWHL SER 24 A15		NR		N/A		D		192		221		44
126694KF4		CWHL SER 24 A15		NR		N/A		D		96		111		89
126694MP0		CWHL SER 26 1A5		NR		N/A		D		98		107		36
									$	845	$	1,011	$	370

The amortized cost and fair values of the Company’s mortgage-backed securities are as follows:

		Amortized     Cost			Gross     Unrealized     Gains			Gross     Unrealized     Losses				Fair     Value
		(Dollars in Thousands)
December 31, 2018
HELD TO MATURITY
Collateralized mortgage obligations:
Agency	$		109,077	$		1,297	$		(461	)	$		109,913
Private-label			845			166			-				1,011
Total	$		109,922	$		1,463	$		(461	)	$		110,924
		Amortized     Cost			Gross     Unrealized     Gains			Gross     Unrealized     Losses				Fair     Value
		(Dollars in Thousands)
June 30, 2018
HELD TO MATURITY
Collateralized mortgage obligations:
Agency	$		114,899	$		1,260	$		(426	)	$		115,733
Private-label			958			153			-				1,111
Total	$		115,857	$		1,413	$		(426	)	$		116,844

³ Fair value estimate provided by the Company’s independent third party valuation consultant.

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The amortized cost and fair value of the Company’s mortgage-backed securities at December 31, 2018, by contractual maturity, are shown below. Expected maturities may differ from the contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

		Due in      one year      or less			Due after  one through  five years			Due after   five through   ten years			Due after     ten years			Total
		(Dollars in Thousands)
HELD TO MATURITY
Amortized cost	$		-	$		-	$		165	$		109,757	$		109,922
Fair value			-			-			168			110,756			110,924

At December 31, 2018, mortgage-backed securities with amortized costs of $109.1 million and fair values of $109.9 million were pledged to secure public deposits and borrowings with the FHLB. Of the securities pledged, $8.3 million of fair value was excess collateral. At June 30, 2018, mortgage-backed securities with an amortized cost of $114.9 million and fair values of $115.7 million, were pledged to secure public deposits and borrowings with the FHLB. Of the securities pledged, $2.5 million of fair value was excess collateral. Excess collateral is maintained to support future borrowings and may be withdrawn by the Company at any time.

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8. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following tables present the changes in accumulated other comprehensive loss by component, for the three and six months ended December 31, 2018 and 2017.

	Three Months Ended December 31, 2018
	(Dollars in Thousands – net of tax)
	Unrealized Gains         and Losses on         Available-for-Sale         Securities			Unrealized Gains         and Losses on         Held-to-Maturity         Securities			Total
Beginning Balance – September 30, 2018	$	88		$	(209	)	$	(121	)
Other comprehensive income (loss) before reclassifications		(1,574	)		10			(1,564	)
Amounts reclassified from accumulated other comprehensive income (loss)		-			-			-
Net current-period other comprehensive income (loss)		(1,574	)		10			(1,564	)
Ending Balance – December 31, 2018	$	(1,486	)	$	(199	)	$	(1,685	)
	Six Months Ended December 31, 2018
	(Dollars in Thousands – net of tax)
	Unrealized Gains         and Losses on         Available-for-Sale         Securities			Unrealized Gains         and Losses on         Held-to-Maturity         Securities			Total
Beginning Balance – June 30, 2018	$	(10	)	$	(178	)	$	(188	)
Other comprehensive income (loss) before reclassifications		(1,478	)		(21	)		(1,499	)
Amounts reclassified from accumulated other comprehensive income (loss)		2			-			2
Net current-period other comprehensive income (loss)		(1,476	)		(21	)		(1,497	)
Ending Balance – December 31, 2018	$	(1,486	)	$	(199	)	$	(1,685	)

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	Three Months Ended December 31, 2017
	(Dollars in Thousands – net of tax)
	Unrealized Gains         and Losses on         Available-for-Sale         Securities		Unrealized Gains         and Losses on         Held-to-Maturity         Securities			Total
Beginning Balance – September 30, 2017	$	91	$	(186	)	$	(95	)
Other comprehensive income (loss) before reclassifications		33		(16	)		17
Amounts reclassified from accumulated other comprehensive income (loss)		24		(39	)		(15	)
Net current-period other comprehensive income (loss)		57		(55	)		2
Ending Balance – December 31, 2017	$	148	$	(241	)	$	(93	)
	Six Months Ended December 31, 2017
	(Dollars in Thousands – net of tax)
	Unrealized Gains         and Losses on         Available-for-Sale         Securities		Unrealized Gains         and Losses on         Held-to-Maturity         Securities			Total
Beginning Balance – June 30, 2017	$	44	$	(232	)	$	(188	)
Other comprehensive income (loss) before reclassifications		80		30			110
Amounts reclassified from accumulated other comprehensive income (loss)		24		(39	)		(15	)
Net current-period other comprehensive income (loss)		104		(9	)		95
Ending Balance – December 31, 2017	$	148	$	(241	)	$	(93	)

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9. UNREALIZED LOSSES ON SECURITIES

The following tables show the Company’s gross unrealized losses and fair value, aggregated by category and length of time that the individual securities have been in a continuous unrealized loss position, at December 31, 2018 and June 30, 2018.

			December 31, 2018
			Less Than Twelve Months						Twelve Months or Greater						Total
	Fair Value				Gross Unrealized Losses			Fair Value			Gross Unrealized Losses			Fair Value			Gross Unrealized Losses
				(Dollars in Thousands)
Corporate debt securities		$		88,190	$	(1,452	)	$		4,973	$	(58	)	$		93,163	$	(1,510	)
Foreign debt securities 4				20,775		(367	)			-		-				20,775		(367	)
Obligations of state and political subdivision				500		(1	)			1,623		(7	)			2,123		(8	)
Collateralized mortgage obligations:
Agency				7,047		(75	)			21,440		(386	)			28,487		(461	)
Total		$		116,512	$	(1,895	)	$		28,036	$	(451	)	$		144,548	$	(2,346	)
			June 30, 2018
			Less Than Twelve Months						Twelve Months or Greater						Total
	Fair Value				Gross Unrealized Losses			Fair Value			Gross Unrealized Losses			Fair Value			Gross Unrealized Losses
				(Dollars in Thousands)
U.S. government agency securities		$		624	$	(1	)	$		-	$	-		$		624	$	(1	)
Corporate debt securities				56,714		(169	)			3,028		(12	)			59,742		(181	)
Foreign debt securities³				13,761		(38	)			-		-				13,761		(38	)
Obligations of states and political subdivisions				5,048		(77	)			-		-				5,048		(77	)
Collateralized mortgage obligations:
Agency				7,600		(12	)			21,424		(414	)			29,024		(426	)
Total		$		83,747	$	(297	)	$		24,452	$	(426	)	$		108,199	$	(723	)

For debt securities, impairment is considered to be other than temporary if an entity (1) intends to sell the security, (2) more likely than not will be required to sell the security before recovering its amortized cost basis, or (3) does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell the security). In addition, impairment is considered to be other than temporary if the present value of cash flows expected to be collected from the debt security is less than the amortized cost basis of the security (any such shortfall is referred to as a credit loss).

The Company evaluates outstanding available-for-sale and held-to-maturity securities in an unrealized loss position (i.e., impaired securities) for other-than-temporary impairment (“OTTI”) on a quarterly basis. In doing so, the Company considers many factors including, but not limited to: the credit ratings assigned to the securities by the Nationally Recognized Statistical Rating Organizations

⁴ U.S. dollar denominated investment-grade corporate bonds of large foreign corporate issuers.

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(“NRSROs”); other indicators of the credit quality of the issuer; the strength of the provider of any guarantees; the length of time and extent that fair value has been less than amortized cost; and whether the Company has the intent to sell the security or more likely than not will be required to sell the security before its anticipated recovery. In the case of its private label residential MBSs, the Company also considers prepayment speeds, the historical and projected performance of the underlying loans and the credit support provided by the subordinate securities. These evaluations are inherently subjective and consider a number of quantitative and qualitative factors.

The following table presents a roll-forward of the credit loss component of the amortized cost of mortgage-backed securities that we have written down for OTTI and the credit component of the loss that is recognized in earnings. OTTI recognized in earnings for credit impaired mortgage-backed securities is presented as additions in two components based upon whether the current period is the first time the mortgage-backed security was credit-impaired (initial credit impairment) or is not the first time the mortgage-backed security was credit impaired (subsequent credit impairments). The credit loss component is reduced if we sell, intend to sell or believe that we will be required to sell previously credit-impaired mortgage-backed securities. Additionally, the credit loss component is reduced if we receive cash flows in excess of what we expected to receive over the remaining life of the credit impaired mortgage-backed securities, the security matures or is fully written down.

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2018			2017			2018			2017
	(Dollars in Thousands)
Beginning balance	$	236		$	258		$	239		$	259
Initial credit impairment		-			-			-			-
Subsequent credit impairment		-			-			-			8
Reductions for amounts recognized in earnings due to intent or requirement to sell		-			-			-			-
Reductions for securities sold		-			-			-			-
Reduction for actual realized losses		(7	)		(13	)		(10	)		(19	)
Reduction for increase in cash flows expected to be collected		-			-			-			-
Ending balance	$	229		$	248		$	229		$	248

During the three months ended December 31, 2018, the Company recorded no additional credit impairment charge and no non-credit unrealized holding losses to accumulated other comprehensive income. During the three and six months ended December 31, 2018, the Company accreted back out of/into other comprehensive income $10 thousand and $(21) thousand, respectively (net of income tax effect of $2 thousand and $(6) thousand, respectively), based on principal repayments on private-label CMOs previously identified with OTTI.

In the case of its private-label residential CMOs that exhibit adverse risk characteristics, the Company employs models to determine the cash flows that it is likely to collect from the securities. These models consider borrower characteristics and the particular attributes of the loans underlying the securities, in conjunction with assumptions about future changes in home prices and interest rates, to predict the likelihood a loan will default and the impact on default frequency, loss severity and remaining credit enhancement. A significant input to these models is the forecast of future housing price changes for the relevant states and metropolitan statistical areas, which are based upon an assessment of the various housing markets. In general, since the ultimate receipt of contractual payments on these securities will depend upon the credit and prepayment performance of the underlying loans and, if needed, the credit enhancements for the senior securities owned by the Company, the Company uses these models to assess whether the credit enhancement associated with each security is sufficient to protect against likely losses of principal and interest on the underlying mortgage loans. The development of the modeling assumptions requires significant judgment.

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In conjunction with our adoption of ASC Topic 820, the Company retained an independent third party to assist it with assessing its investments within the private-label CMO portfolio. The independent third party utilized certain assumptions for producing the cash flow analyses used in the OTTI assessment. Key assumptions would include interest rates, expected market participant spreads and discount rates, housing prices, projected future delinquency levels and assumed loss rates on any liquidated collateral.

The Company reviewed the independent third party’s assumptions used in the December 31, 2018 OTTI process. Based on the results of this review, the Company deemed the independent third party’s assumptions to be reasonable and adopted them. However, different assumptions could produce materially different results, which could impact the Company’s conclusions as to whether an impairment is considered other-than-temporary and the magnitude of the credit loss. The Company had three private-label CMOs with OTTI at December 31, 2018.

If the Company intends to sell an impaired debt security, or more likely than not will be required to sell the security before recovery of its amortized cost basis, the impairment is other-than-temporary and is recognized currently in earnings in an amount equal to the entire difference between fair value and amortized cost. The Company does not anticipate selling its private-label CMO portfolio, nor does Management believe that the Company will be required to sell these securities before recovery of this amortized cost basis.

In instances in which the Company determines that a credit loss exists but the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before the anticipated recovery of its remaining amortized cost basis, the OTTI is separated into (1) the amount of the total impairment related to the credit loss and (2) the amount of the total impairment related to all other factors (i.e., the noncredit portion). The amount of the total OTTI related to the credit loss is recognized in earnings and the amount of the total OTTI related to all other factors is recognized in accumulated other comprehensive loss. The total OTTI is presented in the Consolidated Statement of Income with an offset for the amount of the total OTTI that is recognized in accumulated other comprehensive loss. Absent the intent or requirement to sell a security, if a credit loss does not exist, any impairment is considered to be temporary.

Regardless of whether an OTTI is recognized in its entirety in earnings or if the credit portion is recognized in earnings and the noncredit portion is recognized in other comprehensive income (loss), the estimation of fair values has a significant impact on the amount(s) of any impairment that is recorded.

The noncredit portion of any OTTI losses on securities classified as available-for-sale is adjusted to fair value with an offsetting adjustment to the carrying value of the security. The fair value adjustment could increase or decrease the carrying value of the security. All of the Company’s private-label CMOs were originally, and continue to be classified, as held to maturity.

In periods subsequent to the recognition of an OTTI loss, the other-than-temporarily impaired debt security is accounted for as if it had been purchased on the measurement date of the OTTI at an amount equal to the previous amortized cost basis less the credit-related OTTI recognized in earnings. For debt securities for which credit-related OTTI is recognized in earnings, the difference between the new cost basis and the cash flows expected to be collected is accreted into interest income over the remaining life of the security in a prospective manner based on the amount and timing of future estimated cash flows.

The Company had investments in 80 positions that were impaired at December 31, 2018. Based on its analysis, management has concluded that three private-label CMOs are other-than-temporarily impaired, while the remaining securities portfolio has experienced unrealized losses and a decrease in fair value due to interest rate volatility, illiquidity in the marketplace, or credit deterioration in the U.S. mortgage markets.

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10. LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES

The following table summarizes the primary segments of the loan portfolio as of December 31, 2018 and June 30, 2018.

		December 31, 2018							June 30, 2018
		Total         Loans			Individually evaluated for impairment		Collectively evaluated for impairment		Total Loans			Individually evaluated for impairment		Collectively evaluated for impairment
		(Dollars in Thousands)
First mortgage loans:
1 – 4 family dwellings	$		76,011		$	-	$	76,011	$	72,237		$	-	$	72,237
Construction			1,102			-		1,102		1,769			-		1,769
Land acquisition & development			292			-		292		-			-		-
Multi-family dwellings			3,258			-		3,258		3,390			-		3,390
Commercial			3,953			-		3,953		3,482			-		3,482
Consumer Loans
Home equity			982			-		982		861			-		861
Home equity lines of credit			2,174			-		2,174		2,177			-		2,177
Other			131			-		131		125			-		125
Commercial Loans			525			-		525		633			-		633
	$		88,428		$	-	$	88,428	$	84,674		$	-	$	84,674
Plus: Deferred loan costs			478							469
Allowance for loan losses			(501	)						(468	)
Total	$		88,405						$	84,675

Impaired loans are loans for which it is probable the Company will not be able to collect all amounts due according to the contractual terms of the loan agreement. The Company collectively evaluates for impairment 1-4 family first mortgage loans and all consumer loans. The following loan categories are individually evaluated for impairment: first mortgage loans - construction, land acquisition and development, multi-family dwellings, and commercial. The Company evaluates commercial loans not secured by real property individually for impairment.

The definition of “impaired loans” is not the same as the definition of “nonaccrual loans,” although the two categories overlap. The Company may choose to place a loan on nonaccrual status due to payment delinquency or uncertain collectability, while not classifying the loan as impaired if the loan is not a commercial or commercial real estate loan. Factors considered by management in determining impairment include payment status and collateral value. The amount of impairment for these types of impaired loans is determined by the difference between the present value of the expected cash flows related to the loan, using the original interest rate, and its recorded value, or as a practical expedient in the case of collateralized loans, the difference between the fair value of the collateral and the recorded amount of the loans. When foreclosure is probable, impairment is measured based on the fair value of the collateral.

Loans that experience insignificant payment delays, which are defined as 90 days or less, generally are not classified as impaired. Management determines the significance of payment delays on a case-by-case basis taking into consideration all circumstances surrounding the loan and the borrower, including the length of the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed.

As of December 31, 2018 and June 30, 2018 there were no loans considered to be impaired.

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Total nonaccrual loans as of December 31, 2018 and June 30, 2018 and the related interest income recognized for the three and six months ended December 31, 2018 and December 31, 2017 are as follows:

		December 31,         2018			June 30,         2018
		(Dollars in Thousands)
Principal outstanding
1 – 4 family dwellings	$		233	$		235
Construction			-			-
Land acquisition & development			-			-
Commercial real estate			-			-
Home equity lines of credit			-			-
Total	$		233	$		235

		Three Months Ended						Six Months Ended
		December 31,			December 31,			December 31,			December 31,
		2018			2017			2018			2017
		(Dollars in Thousands)
Average nonaccrual loans
1 – 4 family dwellings	$		233	$		243	$		234	$		244
Construction			-			-			-			-
Land acquisition & development			-			-			-			-
Commercial real estate			-			-			-			-
Home equity lines of credit			-			-			-			-
Total	$		233	$		243	$		234	$		244
Income that would have been recognized	$		4	$		4	$		9	$		9
Interest income recognized	$		3	$		5	$		6	$		11

The Company’s loan portfolio may also include troubled debt restructurings (“TDRs”), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months.

During the three and six months ended December 31, 2018, and December 31, 2017, there were no TDRs.

When the Company modifies a loan, management evaluates any possible impairment based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, except when the sole (remaining) source of repayment for the loan is the operation or liquidation of the collateral. In these cases, management uses the current fair value of the collateral, less selling costs, instead of discounted cash flows. If management determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized by segment or class of loan, as applicable, through an allowance estimate or a charge-off to the allowance. Segment and class status is determined by the loan’s classification at origination.

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The allowance for loan losses is established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the allowance account. Subsequent recoveries, if any, are credited to the allowance. The allowance is maintained at a level believed adequate by management to absorb estimated potential loan losses. Management’s determination of the adequacy of the allowance is based on periodic evaluations of the loan portfolio considering past experience, current economic conditions, composition of the loan portfolio and other relevant factors. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant change.

Federal regulations require that each insured savings institution classify its assets on a regular basis. In addition, in connection with examinations of insured institutions, federal examiners have authority to identify problem assets and, if appropriate, classify them. There are three classifications for problem assets: “substandard”, “doubtful” and “loss”. Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. Doubtful assets have the weaknesses of those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss. An asset classified as loss is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. Another category designated “asset watch” is also utilized by the Bank for assets which do not currently expose an insured institution to a sufficient degree of risk to warrant classification as substandard, doubtful or loss. Assets classified as substandard or doubtful require the institution to establish general allowances for loan losses. If an asset or portion thereof is classified as loss, the insured institution must either establish specific allowances for loan losses in the amount of 100% of the portion of the asset classified loss, or charge-off such amount. General loss allowances established to cover possible losses related to assets classified substandard or doubtful may be included in determining an institution’s regulatory capital, while specific valuation allowances for loan losses do not qualify as regulatory capital.

The Company’s general policy is to internally classify its assets on a regular basis and establish prudent general valuation allowances that are adequate to absorb losses that have not been identified but that are inherent in the loan portfolio. The Company maintains general valuation allowances that it believes are adequate to absorb losses in its loan portfolio that are not clearly attributable to specific loans. The Company’s general valuation allowances are within the following general ranges: (1) 0% to 5% of assets subject to special mention; (2) 1.00% to 100% of assets classified substandard; and (3) 50% to 100% of assets classified doubtful. Any loan classified as loss is charged-off. To further monitor and assess the risk characteristics of the loan portfolio, loan delinquencies are reviewed to consider any developing problem loans. Based upon the procedures in place, considering the Company’s past charge-offs and recoveries and assessing the current risk elements in the portfolio, management believes the allowance for loan losses at December 31, 2018, is adequate.

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The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of December 31, 2018 and June 30, 2018:

		Current			30 – 59   Days Past   Due			60 – 89   Days Past   Due			90 Days +   Past Due Accruing			90 Days +   Past Due Non-accrual			Total   Past   Due			Total Loans
		(Dollars in Thousands)
December 31, 2018
First mortgage loans:
1 – 4 family dwellings	$		75,778	$		-	$		-	$		-	$		233	$		233	$		76,011
Construction			1,102			-			-			-			-			-			1,102
Land acquisition & development			292			-			-			-			-			-			292
Multi-family dwellings			3,258			-			-			-			-			-			3,258
Commercial			3,953			-			-			-			-			-			3,953
Consumer Loans:
Home equity			982			-			-			-			-			-			982
Home equity lines of credit			2,174			-			-			-			-			-			2,174
Other			131			-			-			-			-			-			131
Commercial Loans			525			-			-			-			-			-			525
	$		88,195	$		-	$		-	$		-	$		233	$		233			88,428
Plus: Deferred loan fees																					478
Allowance for loan losses																					(501	)
Net Loans Receivable																			$		88,405
		Current			30 – 59   Days Past   Due			60 – 89   Days Past Due			90 Days +   Past Due Accruing			90 Days +   Past Due Non-accrual			Total   Past   Due			Total Loans
		(Dollars in Thousands)
June 30, 2018
First mortgage loans:
1 – 4 family dwellings	$		72,002	$		-	$		-	$		-	$		235	$		235	$		72,237
Construction			1,769			-			-			-			-			-			1,769
Land acquisition & development			-			-			-			-			-			-			-
Multi-family dwellings			3,390			-			-			-			-			-			3,390
Commercial			3,482			-			-			-			-			-			3,482
Consumer Loans:
Home equity			861			-			-			-			-			-			861
Home equity lines of credit			2,177			-			-			-			-			-			2,177
Other			125			-			-			-			-			-			125
Commercial Loans			633			-			-			-			-			-			633
	$		84,439	$		-	$		-	$		-	$		235	$		235			84,674
Plus: Deferred loan fees																					469
Allowance for loan losses																					(468	)
Net Loans Receivable																			$		84,675

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Credit quality information

The following tables represent credit exposure by internally assigned grades for the period ended December 31, 2018 and June 30, 2018. The grading system analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or not at all. The Company’s internal credit risk grading system is based on experiences with similarly graded loans.

The Company’s internally assigned grades are as follows:

Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.

Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

Substandard – loans that have a well-defined weakness based on objective evidence and can be characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – loans classified as doubtful have all the weaknesses inherent in a substandard loan. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

Loss – loans classified as loss are considered uncollectible, or of such value that continuance as a loan is not warranted.

The primary credit quality indicator used by management in the 1 – 4 family and consumer loan portfolios is the performance status of the loans. Payment activity is reviewed by Management on a monthly basis to determine how loans are performing. Loans are considered to be non-performing when they become 90 days delinquent, have a history of delinquency, or have other inherent characteristics which Management deems to be weaknesses.

The following tables present the Company’s internally classified construction, land acquisition and development, multi-family residential, commercial real estate and commercial (not secured by real estate) loans at December 31, 2018 and June 30, 2018.

		December 31, 2018
		(Dollars in Thousands)
		Construction			Land Acquisition & Development Loans			Multi- family Residential			Commercial Real Estate			Commercial
Pass	$		1,102	$		292	$		3,258	$		3.953	$		525
Special Mention		-			-			-			-			-
Substandard			-			-			-			-			-
Doubtful			-			-			-			-			-
Ending Balance	$		1,102	$		292	$		3,258	$		3,953	$		525

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		June 30, 2018
		(Dollars in Thousands)
	Construction				Land Acquisition &   Development   Loans			Multi-family   Residential			Commercial   Real Estate			Commercial
Pass	$		1,769	$		-	$		3,390	$		3,482	$		633
Special Mention			-			-			-			-			-
Substandard			-			-			-			-			-
Doubtful			-			-			-			-			-
Ending Balance	$		1,769	$		-	$		3,390	$		3,482	$		633

The following table presents performing and non-performing 1 – 4 family residential and consumer loans based on payment activity for the periods ended December 31, 2018 and June 30, 2018.

		December 31, 2018
		1 – 4 Family			Consumer
		(Dollars in Thousands)
Performing	$		75,778	$		3,287
Non-performing			233			-
Total	$		76,011	$		3,287
		June 30, 2018
		1 – 4 Family			Consumer
		(Dollars in Thousands)
Performing	$		72,002	$		3,163
Non-performing			235			-
Total	$		72,237	$		3,163

The Company determines its allowance for loan losses in accordance with generally accepted accounting principles. The Company uses a systematic methodology as required by Financial Reporting Release No. 28 and the various Federal Financial Institutions Examination Council guidelines. The Company also endeavors to adhere to SEC Staff Accounting Bulletin No. 102 in connection with loan loss allowance methodology and documentation issues.

Our methodology used to determine the allocated portion of the allowance is as follows. For groups of homogenous loans, we apply a loss rate to the groups’ aggregate balance. Our group loss rate reflects our historical loss experience. We may adjust these group rates to compensate for changes in environmental factors; but our adjustments have not been frequent due to a relatively stable charge-off experience. The Company also monitors industry loss experience on similar loan portfolio segments. We then identify loans for individual evaluation under ASC Topic 310. If the individually identified loans are performing, we apply a segment specific loss rate adjusted for relevant environmental factors, if necessary, for those loans reviewed individually and considered individually impaired, we use one of the three methods for measuring impairment mandated by ASC Topic 310. Generally the fair value of collateral is used since our impaired loans are generally real estate based. In connection with the fair value of collateral measurement, the Company generally uses an independent appraisal and determines costs to sell. The Company’s appraisals for commercial income based loans, such as multi-family and commercial real estate loans, assess value based

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upon the operating cash flows of the business as opposed to merely “as built” values. The Company then validates the reasonableness of our calculated allowances by: (1) reviewing trends in loan volume, delinquencies, restructurings and concentrations; (2) reviewing prior period (historical) charge-offs and recoveries; and (3) presenting the results of this process, quarterly, to the Asset Classification Committee and the Savings Bank’s Board of Directors. We then tabulate, format and summarize the current loan loss allowance balance for financial and regulatory reporting purposes.

The Company had no unallocated loss allowance balance at December 31, 2018.

The allowance for loan losses represents the amount which management estimates is adequate to provide for probable losses inherent in its loan portfolio. The allowance method is used in providing for loan losses. Accordingly, all loan losses are charged to the allowance, and all recoveries are credited to it. The allowance for loan losses is established through a provision for loan losses charged to operations. The provision for loan losses is based on management’s periodic evaluation of individual loans, economic factors, past loan loss experience, changes in the composition and volume of the portfolio, and other relevant factors. The estimates used in determining the adequacy of the allowance for loan losses, including the amounts and timing of future cash flows expected on impaired loans, are particularly susceptible to changes in the near term.

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The following tables summarize the primary segments of the allowance for loan losses (“ALLL”), segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of December 31, 2018 and 2017. Activity in the allowance is presented for the three and six months ended December 31, 2018 and 2017.

		As of December 31, 2018
		First Mortgage Loans
		1 – 4     Family			Construction				Land   Acquisition &   Development			Multi-   family			Commercial			Consumer   Loans			Commercial   Loans			Total
		(Dollars in Thousands)
Beginning ALLL Balance at September 30, 2018	$		363	$		29		$		10	$		18	$		32	$		32	$		3	$		487
Charge-offs			-			-				-			-			-			-			-			-
Recoveries			-			-				-			-			-			-			-			-
Provisions			10			(4	)			-			-			7			1			-			14
Ending ALLL Balance at December 31, 2018	$		373	$		25		$		10	$		18	$		39	$		33	$		3	$		501
Individually evaluated for impairment	$		-	$		-		$		-	$		-	$		-	$		-	$		-	$		-
Collectively evaluated for impairment			373			25				10			18			39			33			3			501
	$		373	$		25		$		10	$		18	$		39	$		33	$		3	$		501

		As of December 31, 2018
		First Mortgage Loans
		1 – 4   Family			Construction			Land   Acquisition &   Development			Multi-   family			Commercial			Consumer   Loans			Commercial   Loans				Total
					(Dollars in Thousands)
Beginning ALLL Balance at June 30, 2018	$		356	$		24	$		-	$		18	$		35	$		31	$		4		$		468
Charge-offs			-			-			-			-			-			-			-				-
Recoveries			-			-			-			-			-			-			-				-
Provisions			17			1			10			-			4			2			(1	)			33
Ending ALLL Balance at December 31, 2018	$		373	$		25	$		10	$		18	$		39	$		33	$		3		$		501
Individually evaluated for impairment	$		-	$		-	$		-	$		-	$		-	$		-	$		-		$		-
Collectively evaluated for impairment			373			25			10			18			39			33			3				501
	$		373	$		25	$		10	$		18	$		39	$		33	$		3		$		501

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		As of December 31, 2017
		First Mortgage Loans
		1 – 4     Family			Construction				Land   Acquisition &   Development				Multi-   family				Commercial				Consumer   Loans			Commercial   Loans			Total
		(Dollars in Thousands)
Beginning ALLL Balance at September 30, 2017	$		311	$		32		$		2		$		20		$		21		$		34	$		3	$		423
Charge-offs			-			-				-				-				-				-			-			-
Recoveries			-			-				-				-				-				-			-			-
Provisions			15			(6	)			(2	)			(1	)			(1	)			-			1			6
Ending ALLL Balance at December 31, 2017	$		326	$		26		$		-		$		19		$		20		$		34	$		4	$		429
Individually evaluated for impairment	$		-	$		-		$		-		$		-		$		-		$		-	$		-	$		-
Collectively evaluated for impairment			326			26				-				19				20				34			4			429
	$		326	$		26		$		-		$		19		$		20		$		34	$		4	$		429

		As of December 31, 2017
		First Mortgage Loans
		1 – 4     Family			Construction				Land   Acquisition &   Development				Multi-   family				Commercial			Consumer   Loans			Commercial   Loans			Total
		(Dollars in Thousands)
Beginning ALLL Balance at June 30, 2017	$		305	$		30		$		5		$		20		$		20	$		34	$		4	$		468
Charge-offs			-			-				-				-				-			-			-			-
Recoveries			-			-				-				-				-			-			-			-
Provisions			22			(4	)			(5	)			(1	)			-			-			-			12
Ending ALLL Balance at December 31, 2017	$		327	$		26		$		-		$		19		$		20	$		34	$		4	$		430
Individually evaluated for impairment	$		-	$		-		$		-		$		-		$		-	$		-	$		-	$		-
Collectively evaluated for impairment			327			26				-				19				20			34			4			430
	$		327	$		26		$		-		$		19		$		20	$		34	$		4	$		430

During the three and six months ending December 31, 2018, the ALLL increased $14 thousand and $33 thousand, respectively. For the three months ended December 31, 2018, the ALLL associated with 1 - 4 family real estate loans increased $10 thousand and the ALLL associated with commercial loans increased $7 thousand. These increases were partially offset by a decrease of $4 thousand in the ALLL associated with the construction loan segment. During the six months ended December 31, 2018, the ALLL associated with 1 - 4 family real estate loans, land acquisition and development loans and commercial loans increased by $17 thousand, $10 thousand and $4 thousand, respectively. The primary reason for the changes in the ALLL balances, both in total, and within the identified segments, is changes in applicable loan balances.

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During the three months and six months ended December 31, 2017, the ALLL increased $6 thousand and $12 thousand, respectively. These increases were associated with the 1-4 family real estate loan portfolio and were partially offset by decreases in the ALLL associated with construction and land acquisition and development loans. The primary reason for the changes in the ALLL associated with these segments were the changes in associated loan balances.

11. FEDERAL HOME LOAN BANK (FHLB) ADVANCES

The following table presents contractual maturities of FHLB long-term advances as of December 31, 2018 and June 30, 2018.

					Weighted-		Stated interest
	Maturity range				average		rate range					December 31,			June 30,
Description	from		to		interest rate 5		from		to			2018			2018
												(Dollars in Thousands)
Fixed		10/01/20		10/03/22		3.03%		2.95%		3.09%	$		15,000	$		-
Adjustable		10/01/20		10/01/21		2.47%		2.43%		2.52%			85,000			-
Total											$		100,000	$		-

Maturities of FHLB long-term advances at December 31, 2018, are summarized as follows:

Maturing During                 Fiscal Year Ended                                         June 30:			Amount		Weighted-       Average       Interest Rate
		(Dollars in Thousands)
2019	$			-		-
2020				-		-
2021				65,000		2.51%
2022				30,000		2.55%
2023				5,000		3.09%
2024 and thereafter				-		-
Total	$			100,000		2.55%

⁵  As of December 31, 2018.

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The adjustable rate advances are not convertible or callable. The FHLB advances are secured by the Company’s FHLB stock, mortgage-backed and investment securities, and loans, and are subject to substantial prepayment penalties.

The Company also utilized revolving and short-term FHLB advances. Short-term FHLB advances generally mature within 90 days, while revolving FHLB advances may be repaid by the Company without penalty. The following table presents information regarding such advances as of December 31, 2018 and June 30, 2018:

		December 31,         2018				June 30,         2018
		(Dollars in Thousands)
FHLB revolving and short-term advances:
Ending balance	$		70,067		$		171,403
Average balance			113,789				167,306
Maximum month-end balance			160,484				179,791
Average interest rate			2.36	%			1.60	%
Weighted-average rate			2.62	%			2.12	%

At December 31, 2018, the Company had remaining borrowing capacity with the FHLB of approximately $2.6 million.

The FHLB advances are secured by the Company’s FHLB stock, loans, and mortgage-backed and investment securities held in safekeeping at the FHLB. FHLB advances are subject to substantial prepayment penalties.

12. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. GAAP established a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels:

Level I:	Quoted prices are available in active markets for identical assets or liabilities as of the reported date.
Level II:	Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed.
Level III:	Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

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Assets Measured at Fair Value on a Recurring Basis

Investment Securities Available-for-Sale

Fair values for securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities. The Company has no Level I or Level III investment securities. Level II investment securities were primarily comprised of investment-grade corporate bonds and U.S. dollar-denominated investment-grade corporate bonds of large foreign issuers.

The following tables present the assets reported on a recurring basis on the Consolidated Balance Sheet at their fair value as of December 31, 2018 and June 30, 2018, by level within the fair value hierarchy. As required by GAAP, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

		December 31, 2018
		Level I				Level II			Level III			Total
		(Dollars in Thousands)
Assets measured on a recurring basis:
Investment securities – available for sale:
Obligations of states and political subdivisions	$		-		$		1,623	$		-	$		1,623
Corporate securities			-				100,700			-			100,700
Foreign debt securities 6			-				25,191			-			25,191
	$		-	$			127,514	$		-	$		127,514

		June 30, 2018
		Level I			Level II			Level III			Total
		(Dollars in Thousands)
Assets measured on a recurring basis:
Investment securities – available for sale:
Obligations of states and political subdivisions	$		-	$		1,621	$		-	$		1,621
Corporate securities			-			104,339			-			104,339
Foreign debt securities 6			-			22,851			-			22,851
	$		-		$	128,811	$		-	$		128,811

Assets Measured at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis in accordance with U.S. generally accepted accounting principles. These include assets that are measured at the lower of cost or fair value that were recognized at fair value below cost at the end of the period.

⁶  U.S. dollar-denominated investment-grade corporate bonds of large foreign corporate issuers.

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Impaired Loans

Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment in accordance with ASC Topic 310. The fair value of impaired loans is estimated using one of several methods, including collateral value, liquidation value and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. Collateral values are estimated using Level II inputs based on observable market data or Level III inputs based on customized discounting criteria. For a majority of impaired real estate related loans, the Company obtains a current external appraisal. Other valuation techniques are used as well, including internal valuations, comparable property analysis and contractual sales information. The Company has no Level I, Level II or Level III impaired loans at December 31, 2018 and June 30, 2018.

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values are as follows:

		December 31, 2018
		Carrying Amount			Fair Value			Level I			Level II			Level III
		(Dollars in Thousands)
FINANCIAL ASSETS
Cash and cash equivalents	$		3,628	$		3,628	$		3,628	$		-	$		-
Certificates of deposit			1,346			1,346			1,346			-			-
Investment securities – available for sale			127,514			127,514			-			127,514			-
Investment securities – held to maturity			3,995			3,998			-			3,998			-
Mortgage-backed securities – held to maturity:
Agency			109,077			109,913			-			109,913			-
Private-label			845			1,011			-			-			1,011
Net loans receivable			88,405			88,404			-			-			88,404
Accrued interest receivable			1,186			1,186			1,186			-			-
FHLB stock			6,987			6,987			6,987			-			-
Bank owned life insurance			4,729			4,729			4,729			-			-
FINANCIAL LIABILITIES
Deposits:
Non-interest bearing deposits	$		22,356	$		22,356	$		22,356	$		-	$		-
NOW accounts			23,692			23,692			23,692			-			-
Savings accounts			43,982			43,982			43,982			-			-
Money market accounts			19,040			19,040			19,040			-			-
Certificates of deposit			32,625			32,460			-			-			32,460
Advance payments by borrowers for taxes and insurance			1,550			1,550			1,550			-			-
FHLB advances – fixed rate			15,000			14,090			-			-			14,090
FHLB advances – variable rate			85,000			85,000			85,000			-			-
FHLB short-term advances			70,067			70,067			70,067			-			-
Accrued interest payable			786			786			786			-			-

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		June 30, 2018
		Carrying Amount			Fair Value			Level I			Level II			Level III
		(Dollars in Thousands)
FINANCIAL ASSETS
Cash and cash equivalents	$		2,441	$		2,441	$		2,441	$		-	$		-
Certificates of deposit			350			350			350			-			-
Investment securities – available for sale			128,811			128,811			-			128,811			-
Investment securities – held to maturity			6,181			6,125			-			6,125			-
Mortgage-backed securities – held to maturity:
Agency			114,899			115,733			-			115,733			-
Private-label			958			1,111			-			-			1,111
Net loans receivable			84,675			84,319			-			-			84,319
Accrued interest receivable			1,225			1,225			1,225			-			-
FHLB stock			7,161			7,161			7,161			-			-
Bank owned life insurance			4,668			4,668			4,668			-			-
FINANCIAL LIABILITIES
Deposits:
Non-interest bearing deposits	$		18,436	$		18,436	$		18,436	$		-	$		-
Interest-earning checking			24,459			24,459			24,459			-			-
Savings accounts			44,727			44,727			44,727			-			-
Money market accounts			21,087			21,087			21,087			-			-
Certificates of deposit			34,376			34,053			-			-			34,053
Advance payments by borrowers for taxes and insurance			1,938			1,938			1,938			-			-
FHLB short-term advances			171,403			171,403			171,403			-			-
Accrued interest payable			380			380			380			-			-

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.

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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.

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.

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2018

FORWARD LOOKING STATEMENTS

In the normal course of business, we, in an effort to help keep our shareholders and the public informed about our operations, may from time to time issue or make certain statements, either in writing or orally, that are or contain forward-looking statements, as that term is defined in the U.S. federal securities laws. Generally, these statements relate to business plans or strategies, projected or anticipated benefits from acquisitions made by or to be made by us, projections involving anticipated revenues, earnings, profitability or other aspects of operating results or other future developments in our affairs or the industry in which we conduct business. Forward-looking statements may be identified by reference to a future period or periods or by the use of forward-looking terminology such as “anticipated,” “believe,” ”expect,” ”intend,” “plan,” “estimate” or similar expressions.

Although we believe that the anticipated results or other expectations reflected in our forward-looking statements are based on reasonable assumptions, we can give no assurance that those results or expectations will be attained. Forward-looking statements involve risks, uncertainties and assumptions (some of which are beyond our control), and as a result actual results may differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from forward-looking statements include, but are not limited to, the following, as well as those discussed elsewhere herein:

• our investments in our businesses and in related technology could require additional incremental spending, and might not produce expected deposit and loan growth and anticipated contributions to our earnings;

• general economic or industry conditions could be less favorable than expected, resulting in a deterioration in credit quality, a change in the allowance for loan losses or a reduced demand for credit or fee-based products and services;

• changes in the interest rate environment could reduce net interest income and could increase credit losses;

• the conditions of the securities markets could change, which could adversely affect, among other things, the value or credit quality of our assets, the availability and terms of funding necessary to meet our liquidity needs and our ability to originate loans and leases;

• changes in the extensive laws, regulations and policies governing financial holding companies and their subsidiaries could alter our business environment or affect our operations;

• the potential need to adapt to industry changes in information technology systems, on which we are highly dependent, could present operational issues or require significant capital spending;

• competitive pressures could intensify and affect our profitability, including as a result of continued industry consolidation, the increased availability of financial services from non-banks, technological developments such as the internet or bank regulatory reform; and

• acts or threats of terrorism and actions taken by the United States or other governments as a result of such acts or threats, including possible military action, could further adversely affect business and economic conditions in the United States generally and in our principal markets, which could have an adverse effect on our financial performance and that of our borrowers and on the financial markets and the price of our common stock.

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You should not put undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new or future events except to the extent required by federal securities laws.

GENERAL

WVS Financial Corp. (the “Company”) is the parent holding company of West View Savings Bank (“West View” or the “Savings Bank”). The Company was organized in July 1993 as a Pennsylvania-chartered unitary bank holding company and acquired 100% of the common stock of the Savings Bank in November 1993.

West View Savings Bank is a Pennsylvania-chartered, FDIC-insured stock savings bank conducting business from six offices in the North Hills suburbs of Pittsburgh. The Savings Bank converted from the mutual to the stock form of ownership in November 1993. The Savings Bank had no subsidiaries at December 31, 2018.

The operating results of the Company depend primarily upon its net interest income, which is determined by the difference between income on interest-earning assets, principally loans, mortgage-backed securities and investment securities, and interest expense on interest-bearing liabilities, which consist primarily of deposits and borrowings. The Company’s net income is also affected by its provision for loan losses, as well as the level of its non-interest income, including loan fees and service charges, and its non-interest expenses, such as compensation and employee benefits, income taxes, deposit insurance and occupancy costs.

FINANCIAL CONDITION

The Company’s assets totaled $349.0 million at December 31, 2018, as compared to $352.3 million at June 30, 2018. The $3.3 million or 1.0% decrease in total assets was primarily comprised of a $5.9 million decrease in mortgage-backed securities, a $2.2 million decrease in investment securities held-to-maturity and a $1.3 million decrease in investment securities available-for-sale, which were partially offset by a $3.7 million increase in net loans receivable, a $1.2 million increase in cash and cash equivalents and a $996 thousand increase in certificates of deposits. The increase in net loans receivable was primarily attributable to an increase in the single-family owner occupied segment of the loan portfolio. The decrease in mortgage-backed securities was principally due to repayments of principal totaling $5.9 million and the decreases in both investment securities available-for-sale and held-to-maturity were the result of maturities and calls.

The Company’s total liabilities decreased $2.7 million or 1.0% to $315.6 million as of December 31, 2018 from $318.3 million as of June 30, 2018. The $2.7 million decrease in total liabilities was primarily comprised of a $1.8 million or 1.2% decrease in total deposits and a $1.3 million or 0.8% net decrease in FHLB advances, which were partially offset by a $406 thousand or 106.8% increase in accrued interest payable. Money market accounts and certificates of deposit declined $2.0 million and $1.8 million, respectively, as of December 31, 2018 from June 30, 2018. Partially offsetting the decreases in money market and certificates of deposit was a $3.9 million or 21.3% increase in non-interest bearing transaction accounts. The overall decrease in FHLB advances was the result of $15 million in long-term fixed rate and $85 million long-term variable rate FHLB advances partially offsetting a $101.3 million decrease in FHLB short-term advances. See also Quantitative and Qualitative Disclosures About Market Risk “Asset and Liability Management”.

Total stockholders’ equity decreased $630 thousand or 1.9% to $33.4 million as of December 31, 2018, from $34.0 million as of June 30, 2018. The decrease in stockholders’ equity was primarily attributable to Treasury share purchases of $372 thousand, cash dividends paid totaling $286 thousand and an increase of $1.5 million in accumulated other comprehensive loss due primarily to the decline in market value of the available-for-sale securities portfolio as of December 31, 2018 compared to June 30, 2018, which was partially offset by net income of $1.4 million. The Company believes that the decline in the market value of the available-for-sale securities portfolio is temporary and was caused by transient disruptions in corporate credit spreads. These transient disruptions were associated with distressed conditions in the equity and bond markets experienced during the quarter ended December 31, 2018 which subsequently disipated.

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RESULTS OF OPERATIONS

General. WVS reported net income of $685 million or $0.38 per share (diluted and basic) for the three months ended December 31, 2018 as compared to $396 thousand or $0.22 per share for the same period in 2017.    The $289 thousand or 73% increase in net income during the three months ended December 31, 2018 was primarily attributable to a $145 thousand increase in net interest income and a $163 decrease in income tax expense, which were partially offset by an $8 thousand increase in provision for loan losses, a $14 thousand decrease in non-interest income, and a $3 thousand decline in non-interest expense. The increase in net interest income during the three months ended December 31, 2018 was attributable to a $676 thousand increase in interest income, which was partially offset by a $531 thousand increase in interest expense. The decrease in the income tax expense was primarily due to the absence of the additional $133 thousand charge for a write-down of the Company’s net deferred tax assets recorded in December 2017 pursuant to the enactment of the Tax Cuts and Jobs Act of 2017 (“TCJA”) and the reduced federal income tax rate in 2018.

Net income for the six months ended December 31, 2018 totaled $1.4 million or $0.80 per diluted share, as compared to $898 thousand or $0.49 per diluted share for the same period in 2017. The $534 thousand or 59% increase in net income during the six months ended December 31, 2018 was primarily attributable to a $364 thousand increase in net interest income and a $216 thousand decrease in income tax expense, which were partially offset by a $21 thousand increase in the provision for loan losses, a $19 thousand decrease in non-interest income and an increase in non-interest expense of $6 thousand, when compared to the same period of 2017. The increase in net interest income during the six month period was attributable to a $1.3 million increase in interest income, which was partially offset by a $918 thousand increase in interest expense. The decrease in income tax expense for the six months ended December 31, 2018 was primarily the result of the absence of the additional $133 thousand federal income tax expense recorded during December 31, 2017 due to the write down of the Company’s net deferred tax assets associated with the enactment of the TCJA and the reduced federal corporate tax rate in 2018 partially offset by the higher levels of taxable income in 2018.

Net Interest Income. The Company’s net interest income increased by $145 thousand or 9.1% for the three months ended December 31, 2018, when compared to the same period in 2017. The increase in net interest income during the three months ended December 31, 2018 was attributable to a $676 thousand increase in interest income primarily due to higher average yields on investment and mortgage-backed securities, and higher average balances and yields on the loan portfolio when compared to the same period in 2017. The increase in net interest income was partially offset by a $531 thousand increase in interest expense which was primarily attributable to higher average market rates paid on FHLB short-term borrowings, when compared to the same period in 2017.

For the six months ended December 31, 2018, net interest income increased $364 thousand or 11.5% when compared to the same period in 2017. The increase in net interest income was primarily attributable to a $1.3 million increase in interest income, which was partially offset by a $918 thousand increase in interest expense. The increase in interest income was the result of higher average yields on investment and mortgage-backed securities, FHLB stock and loans and higher average balances of loans outstanding, when compared to the same period in 2017. The increase in interest expense was primarily attributable to higher average market rates paid on FHLB borrowings and time deposits, which were partially offset by lower average balances of FHLB short-term advances outstanding during the six months ended December 31, 2018, when compared to the same period in 2017.

Interest Income. Interest income on net loans receivable increased $71 thousand or 9.4% and $135 thousand or 9.0% for the three and six months ended December 31, 2018, respectively, when compared to the same periods in 2017. The increase for the quarter ended December 31, 2018 was primarily attributable to a $5.5 million increase in the average balance of net loans receivable and an increase of 9 basis points in the weighted average yield earned on net loans receivable for the three months ended

42

December 31, 2018, when compared to the same period in 2017. The increase for the six months ended December 31, 2018 was primarily attributable to a $6.0 million increase in the average balance of net loans receivable and an increase of 5 basis points in the weighted average yield earned on net loans receivable for the six months ended December 31, 2018, when compared to the same period in 2017. For the three and six months ended December 31, 2018, the increase in the average balance of loans outstanding was primarily attributable to loan originations in excess of repayments, while the increase in the average yield earned on net loans receivable was primarily attributable to higher market rates on new loans originated. During fiscal 2017, 2018 and into fiscal 2019, the Company enjoyed higher demand for single-family home purchase loans. Substantially all of our loan originations and purchases were fixed-rate loans with a mix of 15, 20, and 30 year terms.

The increase in the average balance of investments outstanding during both periods is attributable to the redeployment of mortgage-backed securities cash flows into floating rate corporate bonds. The increase in weighted average yields in 2018 was principally attributable to higher one-month dollar London Interbank Offered Rates (“LIBOR”) when compared to the same periods in 2017.

Interest income on investment securities increased $386 thousand or 56.8% and $770 thousand or 58.4% for the three and six months ended December 31, 2018, respectively, when compared to the same periods in 2017. The increase for the three months ended December 31, 2018 was primarily attributable to a $7.9 million increase in the average balance of investment securities outstanding and a 104 basis point increase in the weighted average yield on investment securities, when compared to the same period in 2017. The increase for the six months ended December 31, 2018 was primarily attributable to a $9.5 million increase in the average balance of investment securities outstanding and an increase in the weighted average yield on investment securities of 100 basis points, when compared to the same period in 2017.

Interest income on mortgage-backed securities increased $205 thousand or 28.4% and $366 thousand or 25.2% for the three and six months ended December 31, 2018, respectively, when compared to the same periods in 2017. The increase for the three months ended December 31, 2018 was primarily attributable to a 103 basis point increase in the weighted average yield earned on U.S. Government agency mortgage-backed securities, which more than offset a $13.4 million decrease in the average balance of U.S. Government agency mortgage-backed securities, when compared to the same period in 2017. The increase for the six months ended December 31, 2018 was also primarily attributable to a 94 basis point increase in the weighted average yield earned on U.S. Government agency mortgage-backed securities, which more than offset a $13.8 million decline in the average balance of U.S. Government agency mortgage-backed securities, when compared to the same period in 2017. The decrease in the average balances of U.S. Government and agency private-label mortgage-backed securities during the three and six months ended December 31, 2018 was attributable to principal paydowns during the periods. The mortgage-backed securities proceeds during both periods were primarily used to fund loan originations and purchases of floating rate corporate bonds in the investment portfolio. The increase in weighted average yields in 2018 was primarily attributable to higher three-month LIBOR when compared to the same periods in 2017.

Dividend income on FHLB stock increased $28 thousand or 31.8% and $55 thousand or 31.8% for the three and six months ended December 31, 2018, respectively, when compared to the same periods in 2017. The change in dividends on FHLB stock for both the three and six months ended December 31, 2018 was primarily attributable by a 175 basis point increase in the average yield on FHLB stock held during the three and six months December 31, 2018, when compared to the same periods in 2017.

Interest income on bank certificates of deposit decreased $18 thousand or 85.7% for the three months ended December 31, 2018 when compared to the same period in 2017. The decrease for the quarter ended December 31, 2018 was primarily attributable to a decrease in the average portfolio balance of certificates of deposit of $4.1 million, which was partially offset by an increase in the weighted average yield of 77 basis points. For the six months ended December 31, 2018, interest income on certificates of deposits decreased by $49 thousand or 90.7% primarily as a result of a decrease in the average portfolio balance of certificates of deposit of $5.5 million, which was partially offset by a 75 basis point increase in the weighted average yield compared to the same period in 2017. During the three and six months ended December 31, 2017, the Company redeployed maturing large dollar floating rate certificates of deposit to fund loan originations and purchases of floating rate corporate bonds in the investment portfolio.

43

Interest Expense. Interest paid on FHLB fixed-rate and variable-rate long term advances increased by $642 thousand and $599 thousand, respectively, for the three and six months ended December 31, 2018 when compared to the same periods in 2017, due to increases in the average balances of these long-term obligations during the three and six months ended December 31, 2018. The decrease in interest expense on short-term FHLB advances for the three months ended December 31, 2018 was primarily attributable to a $102.1 million decrease in the average balance of FHLB short-term advances outstanding when compared to the same period in the prior year. Interest expense on short-term borrowings during the six months ended December 31, 2018 increased by $234 thousand or 21.0% due to higher market interest rates compared to the same period of 2017. The Company reduced this funding source during the quarter ended December 31, 2018 periods by increasing FHLB long-term fixed and variable advances to better match expected cash flows from the Company’s investment, MBS and loan portfolios.

Interest expense on deposits increased $43 thousand or 50.0% and $85 thousand or 50.9% for the three and six months ended December 31, 2018, respectively, when compared to the same periods in 2017. The increase in interest expense on deposits for the three months ended December 31, 2018 was primarily attributable to a 57 basis point increase in the weighted average rate paid on time deposits partially offset by a $2.0 million decline in the average balance of time deposits for the quarter ended December 31, 2018, when compared to the same period in 2017. For the six months ended December 31, 2018, the $85 thousand increase in interest expense was primarily due to a 58 basis point increase in the weighted average rate paid on the time deposits, partially offset by a $2.9 million decrease in the average balance of time deposits for the six months ended December 31, 2018. The decrease in the average balances of time deposits during both the three and six months ended December 31, 2018 was primarily attributable to reduced levels of short-term brokered deposits when compared to the same periods of 2017. From time to time the Company uses brokered deposits to fund investment purchases or as an alternative to FHLB borrowings if the cost of such deposits is less than other wholesale funding options.

Provision for Loan Losses. A provision for loan losses is charged or accreted to earnings to bring the total allowance to a level considered adequate by management to absorb potential losses in the portfolio. Management’s determination of the adequacy of the allowance is based on an evaluation of the portfolio considering past experience, current economic conditions, volume, growth and composition of the loan portfolio, and other relevant factors.

During the three and six months ending December 31, 2018, the ALLL increased $14 thousand and $33 thousand, respectively. For the three months ended December 31, 2018, the ALLL associated with 1—4 family real estate loans increased $10 thousand and the ALLL associated with commercial loans increased $7 thousand, which were partially offset by a decrease of $4 thousand in the ALLL associated with the construction loan segment. During the six months ended December 31, 2018, the ALLL associated with 1 - 4 family real estate loans, land acquisition and development loans and commercial loans increased by $17 thousand, $10 thousand and $4 thousand, respectively. The primary reason for the changes in the ALLL balances, both in total, and within the identified segments, are changes in applicable loan balances.

At December 31, 2018, the Company’s total allowance for loan losses amounted to $501 thousand or 0.57% of the Company’s total loan portfolio, as compared to $468 thousand or 0.55% at June 30, 2018. At December 31, 2018, the Company’s non-performing loans totaled $233 thousand as compared to $235 thousand at June 30, 2018.

Non-Interest Income. The decreases in the non-interest income for the three and six months ended December 31, 2018 were primarily attributable to lower service charges on deposits and lower ATM fee income, when compared to the same period of 2017.

Non-Interest Expense. Non-interest expense decreased $3 thousand or 0.3% for the three months ended December 31, 2018, when compared to the same period in 2017. This decrease was principally attributable to lower correspondent bank service charges when compared to the same period in 2017. Non-interest expense increased $6 thousand or 0.3% for the six months ended December 31, 2018 when compared to the same period in 2017. This increase was due to higher employee related costs, data processing, and ATM network expenses which were partially offset by lower occupancy and equipment, federal deposit insurance premiums, correspondent bank service charges, and other operating expenses when compared to the six months ended December 31, 2017.

44

Income Tax Expense. Income tax expense decreased $163 thousand and $216 thousand for the three and six months ended December 31, 2018, respectively, when compared to the same periods in 2017. The decreases for both periods ended December 31, 2018 when compared to the same periods of 2017, were primarily due to the absence of the additional $133 thousand federal income tax expense recorded in December 31, 2017 as a result of the write down of the Company’s net deferred tax assets associated with the enactment of the TCJA and the reduced federal income tax rate which was effective for 2018. Partially offsetting these decreases were higher levels of taxable income for both the three and six month periods ended December 31, 2018 when compared to the same periods of 2017.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities totaled $2.1 million during the six months ended December 31, 2018. Net cash provided by operating activities was primarily comprised of net income of $1.4 million, a $406 thousand increase in accrued interest payable and $111 thousand of amortization of discounts, premiums and deferred loan costs.

Funds provided by investing activities totaled $2.8 million during the six months ended December 31, 2018. Primary sources of funds during the six months ended December 31, 2018 included proceeds from repayments of investment securities and mortgage-backed securities in the held-to-maturity portfolio totaling $2.2 million and $5.9 million, respectively, proceeds from repayments of investment securities in the available-for-sale portfolio totaling $22.7 million, and $1.4 million of proceeds on sales of investment securities available for sale and repayments of loans in excess of originations of $1.4 million. Primary uses of funds during this period were purchases of investment securities available for sale totaling $24.8 million, purchases of loans totaling $5.1 million and purchases of certificates of deposit totaling $1.1 million.    

Funds used for financing activities totaled $3.8 million for the six months ended December 31, 2018. The primary uses were a $101.3 million decrease in FHLB short-term advances and a $1.8 million decrease in certificates of deposits which were partially offset by increases of FHLB long-term advances totaling $100.0 million. Management believes that a significant portion of our local maturing deposits will remain with the Company. Management has determined that it currently is maintaining adequate liquidity and continues to match funding sources with lending and investment opportunities.

The Company’s primary sources of funds are deposits, amortization, repayments and maturities of existing loans, mortgage-backed securities and investment securities, funds from operations, and funds obtained through FHLB advances and other borrowings. Certificates of deposit scheduled to mature in one year or less at December 31, 2018 totaled $26.9 million.

Historically, the Company used its sources of funds primarily to meet its ongoing commitments to pay maturing savings certificates and savings withdrawals, fund loan commitments and maintain a substantial portfolio of investment securities. At December 31, 2018, total approved loan commitments outstanding were $1.9 million. At the same date, commitments under unused lines of credit amounted to $5.8 million and the unadvanced portion of construction loans approximated $3.0 million. The Company has been able to generate sufficient cash through the retail deposit market, its traditional funding source, and through FHLB advances, and other borrowings, to provide the cash utilized in investing activities. The Company’s available for sale segment of the investment portfolio totaled $127.5 million at December 31, 2018. In addition the Company had $1.3 million of certificates of deposit at December 31, 2018. Management believes that the Company currently has adequate liquidity available to respond to liquidity demands.

On January 28, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.10 per share, payable on February 21, 2019, to shareholders of record at the close of business on February 11, 2019, an increase from the previous quarterly cash dividend of $0.08 per share. Dividends are subject to determination and declaration by the Board of Directors, which take into account the Company’s financial condition, statutory and regulatory restrictions, general economic conditions and other factors. There can be no assurance that dividends will in fact be paid on the Common Stock in future periods or that, if paid, such dividends will not be reduced or eliminated.

45

As of December 31, 2018, WVS Financial Corp. exceeded all regulatory capital requirements and maintained Common Equity Tier I Capital, Tier I, and total risk-based capital equal to $35.1 million or 17.9%, $35.1 million or 17.9%, and $35.6 million or 18.2%, respectively, of total risk-weighted assets, and Tier I leverage capital of $35.1 million or 10.1% of average quarterly assets.

Nonperforming assets consist of nonaccrual loans and real estate owned. A loan is placed on nonaccrual status when, in the judgment of management, the probability of collection of interest is deemed insufficient to warrant further accrual. When a loan is placed on nonaccrual status, previously accrued but uncollected interest is deducted from interest income. The Company normally does not accrue interest on loans past due 90 days or more, however, interest may be accrued if management believes that it will collect on the loan.

The Company’s nonperforming assets at December 31, 2018 totaled $233 thousand or 0.07% of total assets as compared to $235 million or 0.07% of total assets at June 30, 2018. Nonperforming assets at December 31, 2018 consisted of one single-family real estate loan totaling $233 thousand. The loan is currently under a bankruptcy order and making payments as agreed.    

The $2 thousand decrease in nonperforming assets during the six months ended December 31, 2018 was primarily attributable to principal repayments on one non-accrual single-family real estate loan.

During the three and six months ended December 31, 2018, the Company collected $5 thousand and $11 thousand, respectively, of interest income on non-accrual loans. Approximately $4 thousand and $9 thousand, respectively, of interest income would have been recorded during the three and six months ended December 31, 2018, on non-accrual loans if such loans had been current according to the original loan agreements for the entire periods. The Company continues to work with the borrowers in an attempt to cure the defaults and is also pursuing various legal avenues in order to collect on these loans.

46

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ASSET AND LIABILITY MANAGEMENT

The Company’s primary market risk exposure is interest rate risk and, to a lesser extent, liquidity risk. All of the Company’s transactions are denominated in US dollars with no specific foreign exchange exposure. The Savings Bank has no agricultural loan assets and therefore would not have a specific exposure to changes in commodity prices. Any impacts that changes in foreign exchange rates and commodity prices would have on interest rates are assumed to be exogenous and will be analyzed on an ex post basis.

Interest rate risk (“IRR”) is the exposure of a banking organization’s financial condition to adverse movements in interest rates. Accepting this risk can be an important source of profitability and shareholder value, however excessive levels of IRR can pose a significant threat to the Company’s earnings and capital base. Accordingly, effective risk management that maintains IRR at prudent levels is essential to the Company’s safety and soundness.

Evaluating a financial institution’s exposure to changes in interest rates includes assessing both the adequacy of the management process used to control IRR and the organization’s quantitative level of exposure. When assessing the IRR management process, the Company seeks to ensure that appropriate policies, procedures, management information systems and internal controls are in place to maintain IRR at prudent levels with consistency and continuity. Evaluating the quantitative level of IRR exposure requires the Company to assess the existing and potential future effects of changes in interest rates on its consolidated financial condition, including capital adequacy, earnings, liquidity, and, where appropriate, asset quality.

Financial institutions derive their income primarily from the excess of interest collected over interest paid. The rates of interest an institution earns on its assets and owes on its liabilities generally are established contractually for a period of time. Since market interest rates change over time, an institution is exposed to lower profit margins (or losses) if it cannot adapt to interest-rate changes. For example, assume that an institution’s assets carry intermediate- or long-term fixed rates and that those assets were funded with short-term liabilities. If market interest rates rise by the time the short-term liabilities must be refinanced, the increase in the institution’s interest expense on its liabilities may not be sufficiently offset if assets continue to earn at the long-term fixed rates. Accordingly, an institution’s profits could decrease on existing assets because the institution will either have lower net interest income or, possibly, net interest expense. Similar risks exist when assets are subject to contractual interest-rate ceilings, or rate sensitive assets are funded by longer-term, fixed-rate liabilities in a decreasing-rate environment.

During the fiscal years 2013 - 2018 and into fiscal year 2019, intermediate and long-term market interest rates fluctuated considerably. Many central banks, including the Federal Reserve, continued above normal levels of monetary accommodation including quantitative easing and targeted asset purchase programs. The desired outcomes of these programs are to stimulate aggregate demand, reduce high levels of unemployment and to further lower market interest rates.

The effect of interest rate changes on a financial institution’s assets and liabilities may be analyzed by examining the “interest rate sensitivity” of the assets and liabilities and by monitoring an institution’s interest rate sensitivity “gap”. An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within a given time period. A gap is considered positive (negative) when the amount of rate sensitive assets (liabilities) exceeds the amount of rate sensitive liabilities (assets). During a period of falling interest rates, a negative gap would tend to result in an increase in net interest income. During a period of rising interest rates, a positive gap would tend to result in an increase in net interest income.

47

As part of its asset/liability management strategy, the Company maintained an asset sensitive financial position due to unusually low market interest rates. An asset sensitive financial position may benefit earnings during a period of rising interest rates and reduce earnings during a period of declining interest rates.

The following table sets forth certain information at the dates indicated relating to the Company’s interest-earning assets and interest-bearing liabilities which are estimated to mature or are scheduled to reprice within one year.

	December 31,			June 30,
	2018			2018			2017
	(Dollars in Thousands)
Interest-earning assets maturing or repricing within one year		$267,002			$270,356			$257,808
Interest-bearing liabilities maturing or repricing within one year		209,162			229,231			228,616
Interest sensitivity gap		$  57,840			$  41,125			$  29,192
Interest sensitivity gap as a percentage of total assets		16.57	%		11.67	%		8.30	%
Ratio of assets to liabilities maturing or repricing within one year		127.65	%		117.94	%		112.77	%

48

The following table illustrates the Company’s estimated stressed cumulative repricing gap – the difference between the amount of interest-earning assets and interest-bearing liabilities expected to reprice at a given point in time – at December 31, 2018. The table estimates the impact of an upward or downward change in market interest rates of 100 and 200 basis points.

Cumulative Stressed Repricing Gap

	Month 3			Month 6			Month 12			Month 24			Month 36			Month 60			Long Term
	(Dollars in Thousands)
Base Case Up 200 bp
Cumulative Gap ($’s)	$	61,101		$	52,630		$	55,771		$	48,604		$	43,150		$	39,464		$	30,353
% of Total Assets		17.5	%		15.1	%		16.0	%		13.9	%		12.4	%		11.3	%		8.7	%
Base Case Up 100 bp
Cumulative Gap ($’s)	$	61,319		$	53,058		$	56,555		$	49,996		$	45,006		$	41,701		$	30,353
% of Total Assets		17.6	%		15.2	%		16.2	%		14.3	%		12.9	%		11.9	%		8.7	%
Base Case No Change
Cumulative Gap ($’s)	$	61,674		$	53,753		$	57,840		$	52,155		$	47,801		$	44,866		$	30,353
% of Total Assets		17.7	%		15.4	%		16.6	%		14.9	%		13.7	%		12.9	%		8.7	%
Base Case Down 100 bp
Cumulative Gap ($’s)	$	62,999		$	56,304		$	62,510		$	59,918		$	57,070		$	54,173		$	30,353
% of Total Assets		18.1	%		16.1	%		17.9	%		17.2	%		16.4	%		15.5	%		8.7	%
Base Case Down 200 bp
Cumulative Gap ($’s)	$	64,210		$	58,598		$	66,577		$	66,160		$	64,432		$	62,278		$	30,353
% of Total Assets		18.4	%		16.8	%		19.1	%		19.0	%		18.5	%		17.8	%		8.7	%

The Company utilizes an income simulation model to measure interest rate risk and to manage interest rate sensitivity. The Company believes that income simulation modeling may enable the Company to better estimate the possible effects on net interest income due to changing market interest rates. Other key model parameters include: estimated prepayment rates on the Company’s loan, mortgage-backed securities and investment portfolios; savings decay rate assumptions; and the repayment terms and embedded options of the Company’s borrowings.

49

The following table presents the simulated impact of a 100 and 200 basis point upward or downward (parallel) shift in market interest rates on net interest income, return on average equity, return on average assets and the market value of portfolio equity at December 31, 2018. This analysis was done assuming that the interest-earning assets will average approximately $343.971 million and $346.021 million over a projected twelve and twenty-four month period, respectively, for the estimated impact on change in net interest income, return on average equity and return on average assets. The estimated changes in market value of equity were calculated using balance sheet levels at December 31, 2018. Actual future results could differ materially from our estimates primarily due to unknown future interest rate changes and the level of prepayments on our investment and loan portfolios.

Analysis of Sensitivity to Changes in Market Interest Rates

	Twelve Month Forward Modeled Change in Market Interest Rates
	December 31, 2019															December 31, 2020
Estimated impact on:	-200			-100			0			+100			+200			-200			-100			0			+100			+200
Change in net interest income		-20.9	%		-10.1	%		-			6.3	%		13.3	%		-27.3	%		-12.9	%		-			8.7	%		18.2	%
Return on average equity		5.09	%		6.80	%		8.36	%		9.33	%		10.40	%		4.11	%		6.25	%		8.06	%		9.25	%		10.48	%
Return on average assets		0.50	%		0.67	%		0.82	%		0.92	%		1.03	%		0.41	%		0.64	%		0.84	%		0.98	%		1.12	%
Market value of equity (in thousands)	$	39,829		$	43,283		$	45,547		$	45,902		$	46,198

The table below provides information about the Company’s anticipated transactions comprised of firm loan commitments and other commitments, including undisbursed letters and lines of credit, at December 31, 2018. The Company used no derivative financial instruments to hedge such anticipated transactions as of December 31, 2018.

Anticipated Transactions
	(Dollars in Thousands)
Undisbursed construction and land development loans	$	2,980
Undisbursed lines of credit	$	5,836
Loan origination commitments	$	1,932
Letters of credit	$	-
	$	10,748

50

In the ordinary course of its construction lending business, the Savings Bank enters into performance standby letters of credit. Typically, the standby letters of credit are issued on behalf of a builder to a third party to ensure the timely completion of a certain aspect of a construction project or land development. At December 31, 2018, the Savings Bank had no performance standby letters of credit outstanding. In the event that an obligor is unable to perform its obligations as specified in the applicable letter of credit agreement, the Savings Bank would be obligated to disburse funds up to the amount specified in the letter of credit agreement. The Savings Bank maintains adequate collateral that could be liquidated to fund these contingent obligations.

ITEM 4. CONTROLS AND PROCEDURES

As of December 31, 2018, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Accounting Officer, on the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, the Company’s management, including the Chief Executive Officer and Chief Accounting Officer, concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2018.

Disclosure controls and procedures are the controls and other procedures that are designed to ensure that the information required to be disclosed by the Company in its reports filed and submitted under the Securities Exchange Act of 1934, as amended (“Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in its reports filed under the Exchange Act is accumulated and communicated to the Company’s management, including the principal executive officer and principal accounting officer, as appropriate to allow timely decisions regarding required disclosure.

During the quarter ended December 31, 2018, no change in the Company’s internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) has occurred that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.

51

PART II—OTHER INFORMATION

ITEM 1. Legal Proceedings

(a)The Company is involved with various legal actions arising in the ordinary course of business. Management believes the outcome of these matters will have no material effect on the consolidated operations or consolidated financial condition of WVS Financial Corp.

(b)Not applicable.

ITEM 1A. Risk Factors

There are no material changes to the risk factors included in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018.

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

(a) Not applicable.

(b) Not applicable.

(c) The following table sets forth information with respect to purchases of common stock of the Company made by WVS Financial Corp. during the three months ended December 31, 2018.

COMPANY PURCHASES OF EQUITY SECURITIES
Period	Total Number of Shares   Purchased(1)		Average   Price Paid per Share ($)		Total Number of Shares Purchased as part of Publicly   Announced Plans   or Programs(1)		Maximum Number of Shares that May Yet Be Repurchased   Under the Plans or   Programs (2)
10/01/18 – 10/31/18		1,997		13.21		1,997		50,131
11/01/18 – 11/30/18		17,912		14.36		17,912		32,219
12/01/18 – 12/31/18		3,808		14.80		3,808		28,411
Total		23,717		14.34		23,717		28,411

(1) All shares indicated were purchased under the Company’s reopened Eleventh Stock Repurchase Program.

(2) Eleventh Stock Repurchase Program

(a) Announced October 27, 2015.

(b) 100,800 common shares approved for repurchase.

(c) No fixed date of expiration.

(d) This program has not expired and has 28,411 of shares remaining to be purchased at December 31, 2018.

(e) Not applicable.

52

ITEM 3. Defaults Upon Senior Securities

Not applicable.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

(a) Not applicable.

(b) Not applicable.

ITEM 6. Exhibits

The following exhibits are filed as part of this Form 10-Q, and this list includes the Exhibit Index.

Number	Description
31.1	Rule 13a-14(a) / 15d-14(a) Certification of the Chief Executive Officer
31.2	Rule 13a-14(a) / 15d-14(a) Certification of the Chief Accounting Officer
32.1	Section 1350 Certification of the Chief Executive Officer
32.2	Section 1350 Certification of the Chief Accounting Officer
99	Report of Independent Registered Public Accounting Firm
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definitions Linkbase Document

53

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.

	WVS FINANCIAL CORP.
February 14, 2019	BY:	/s/ David J. Bursic
Date		David J. Bursic
		President and Chief Executive Officer   (Principal Executive Officer)
February 14, 2019	BY:	/s/ Linda K. Butia
Date		Linda K. Butia
		Vice-President, Treasurer and Chief Accounting Officer   (Principal Accounting Officer)

54

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934

and Section 302 of the Sarbanes-Oxley Act of 2002

I, David J. Bursic, certify that:

1. I have reviewed this quarterly report on Form 10-Q of WVS Financial Corp. (the “registrant”);

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 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 officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

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

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

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) 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 officers 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 registrant’s board of directors (or persons performing the equivalent functions):

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

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

Date: February 14, 2019	/s/ David J. Bursic
	David J. Bursic
	President and Chief Executive Officer

E-1

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934

and Section 302 of the Sarbanes-Oxley Act of 2002

I, Linda K. Butia, certify that:

1. I have reviewed this quarterly report on Form 10-Q of WVS Financial Corp. (the “registrant”);

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 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 officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

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

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

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) 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 officers 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 registrant’s board of directors (or persons performing the equivalent functions):

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

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

Date: February 14, 2019	/s/ Linda K. Butia
	Linda K. Butia
	Vice-President and Chief Accounting Officer

E-2

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

The undersigned executive officer of WVS Financial Corp. (the “Registrant”) hereby certifies that the Registrant’s Quarterly Report on Form 10-Q for the three months ended December 31, 2018 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained therein fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ David J. Bursic

David J. Bursic

President and

Chief Executive Officer

Date:  February 14, 2019

Note:      A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act has been provided to WVS Financial Corp. and will be retained by WVS Financial Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

E-3

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF ACCOUNTING OFFICER

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

The undersigned executive officer of WVS Financial Corp. (the “Registrant”) hereby certifies that the Registrant’s Quarterly Report on Form 10-Q for the three months ended December 31, 2018 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained therein fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ Linda K. Butia

Linda K. Butia

Vice-President and

Chief Accounting Officer

Date:  February 14, 2019

Note:      A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act has been provided to WVS Financial Corp. and will be retained by WVS Financial Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

E-4

EX-99

Exhibit 99

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors

WVS Financial Corp.

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of WVS Financial Corp. and subsidiary (the “Company”) as of December 31, 2018; the related consolidated statements of income and comprehensive income (loss) for the three-month and six-month periods ended December 31, 2018 and 2017; changes in stockholders’ equity for the three-month and six-month periods ended December 31, 2018; and the related consolidated statements of cash flows for the six-month periods ended December 31, 2018 and 2017; and the related notes to the consolidated financial statements (collectively, the interim financial statements). Based on our reviews, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of June 30, 2018, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for the year then ended (not presented herein), and in our report dated September 13, 2018, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of June 30, 2018, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

Basis for Review Results

These interim financial statements are the responsibility of the Company’s management. We conducted our reviews in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company, in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

/s/ S.R. Snodgrass, P.C.

Cranberry Township, Pennsylvania

February 14, 2019

E-5

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Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2018	Feb. 08, 2019
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Entity Registrant Name	WVS FINANCIAL CORP
Entity Central Index Key	0000910679
Current Fiscal Year End Date	--06-30
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		1,943,796

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CONSOLIDATED BALANCE SHEET (UNAUDITED) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Assets
Cash and due from banks	$ 2,738	$ 2,099
Interest-earning demand deposits	890	342
Total cash and cash equivalents	3,628	2,441
Certificates of deposit	1,346	350
Investment securities available-for-sale (amortized cost of $129,395 and $128,824)	127,514	128,811
Investment securities held-to-maturity (fair value of $3,998 and $6,125)	3,995	6,181
Mortgage-backed securities held-to-maturity (fair value of $110,924 and $116,844)	109,922	115,857
Net loans receivable (allowance for loan losses of $501 and $468)	88,405	84,675
Accrued interest receivable	1,186	1,225
Federal Home Loan Bank (FHLB) stock, at cost	6,987	7,161
Premises and equipment, net	363	392
Bank owned life insurance	4,729	4,668
Deferred tax assets (net)	785	359
Other assets	122	168
TOTAL ASSETS	348,982	352,288
Deposits
Non-interest-bearing accounts	22,356	18,436
Interest-earning checking accounts	23,692	24,459
Savings accounts	43,982	44,727
Money market accounts	19,040	21,087
Certificates of deposit	32,625	34,376
Advance payments by borrowers for taxes and insurance	1,550	1,938
Total deposits	143,245	145,023
Federal Home Loan Bank advances: short-term	70,067	171,403
Federal Home Loan Bank advances: long-term - fixed rate	15,000
Federal Home Loan Bank advances: long-term - variable rate	85,000
Accrued interest payable	786	380
Other liabilities	1,497	1,465
TOTAL LIABILITIES	315,595	318,271
Stockholders' equity:
Preferred stock: 5,000,000 shares, no par value per share, authorized; none issued
Common stock: 10,000,000 shares, $.01 par value per share, authorized; 3,805,636 shares issued	38	38
Additional paid-in capital	21,530	21,516
Treasury stock: 1,943,796 and 1,969,513 shares at cost, respectively	(28,258)	(27,886)
Retained earnings, substantially restricted	43,941	42,795
Accumulated other comprehensive loss	(1,685)	(188)
Unallocated Employee Stock Ownership Plan ("ESOP") shares	(2,179)	(2,258)
TOTAL STOCKHOLDERS' EQUITY	33,387	34,017
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 348,982	$ 352,288

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CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Assets
Investment securities available-for-sale, amortized cost	$ 129,395	$ 128,824
Investment securities held-to-maturity, fair value	3,998	6,125
Mortgage-backed securities held-to-maturity, fair value	110,924	116,844
Net loans receivable, allowance for loan losses	$ 501	$ 468
Stockholders' equity:
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, no par value per share	$ 0.00	$ 0.00
Preferred stock, shares issued	0	0
Common stock, shares authorized	10,000,000	10,000,000
Common stock, par value per share	$ 0.01	$ 0.01
Common stock, shares issued	3,805,636	3,805,636
Common stock, shares outstanding	3,805,636	3,805,636
Treasury stock, shares at cost	1,943,796	1,969,513

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CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
INTEREST AND DIVIDEND INCOME:
Loans, including fees	$ 825	$ 754	$ 1,628	$ 1,493
Investment securities	1,066	680	2,088	1,318
Mortgage-backed securities	927	722	1,816	1,450
Certificates of deposit	3	21	5	54
Interest-earning demand deposits	6	2	9	4
FHLB Stock	116	88	228	173
Total interest and dividend income	2,943	2,267	5,774	4,492
INTEREST EXPENSE:
Deposits	129	86	252	167
Federal Home Loan Bank advances - long-term - fixed rate	235		235	32
Federal Home Loan Bank advances - long-term - variable rate	407		407	11
Federal Home Loan Bank advances - short-term	437	591	1,345	1,111
Total interest expense	1,208	677	2,239	1,321
NET INTEREST INCOME	1,735	1,590	3,535	3,171
PROVISION FOR LOAN LOSSES	14	6	33	12
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	1,721	1,584	3,502	3,159
NON-INTEREST INCOME:
Service charges on deposits	26	32	55	64
Earnings on Bank Owned Life Insurance	30	32	61	64
Investment securities losses			(2)
Other than temporary impairment ("OTTI") losses				41
Portion of gain recognized in other comprehensive Income (before taxes)				(49)
Net impairment loss recognized in earnings				(8)
ATM fee income	43	47	85	94
Other	11	13	21	25
Total non-interest income	110	124	220	239
NON-INTEREST EXPENSE:
Salaries and employee benefits	565	549	1,121	1,103
Occupancy and equipment	58	75	126	148
Data processing	58	54	116	103
Correspondent bank service charges	7	10	15	20
Federal deposit insurance premium	22	28	50	56
ATM network expense	25	25	62	49
Other	219	216	365	370
Total non-interest expense	954	957	1,855	1,849
INCOME BEFORE INCOME TAXES	877	751	1,867	1,549
INCOME TAX EXPENSE	192	355	435	651
NET INCOME	$ 685	$ 396	$ 1,432	$ 898
EARNINGS PER SHARE:
Basic	$ 0.38	$ 0.22	$ 0.80	$ 0.49
Diluted	$ 0.38	$ 0.22	$ 0.80	$ 0.49
AVERAGE SHARES OUTSTANDING:
Basic	1,782,091	1,826,580	1,787,573	1,825,729
Diluted	1,782,091	1,826,580	1,787,682	1,825,729

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Statement of Comprehensive Income [Abstract]
NET INCOME	$ 685	$ 396	$ 1,432	$ 898
Investment securities available for sale not other-than-temporarily impaired:
Gains (losses) arising during the year	(1,992)	50	(1,870)	73
Less: Income tax effect	418	(17)	392	(25)
Net gains (losses)	(1,574)	33	(1,478)	48
Losses recognized in earnings			2
Less: Income tax effect
Investment securities gains, net of tax			2
Unrealized holdings gains (losses) on securities available for sale not other-than-temporarily impaired, net of tax	(1,574)	33	(1,476)	48
Investment securities held to maturity other-than-temporarily impaired:
Total losses				41
Losses recognized in earnings				(8)
Gains (losses) recognized in comprehensive income				49
Income tax effect				(17)
Total gains (losses) recognized in comprehensive income after income tax effect				32
Accretion of other comprehensive loss on other-than-temporarily impaired securities held to maturity	12	(24)	(27)	45
Less: Income tax effect	(2)	8	6	(15)
Unrealized holding (losses) gains on other-than-temporarily impaired securities held to maturity, net of tax	10	(16)	(21)	30
Unrealized holdings gains (losses) on securities, net	10	(16)	(21)	62
Other comprehensive income (loss)	(1,564)	17	(1,497)	110
COMPREHENSIVE INCOME (LOSS)	$ (879)	$ 413	$ (65)	$ 1,008

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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings - Substantially Restricted [Member]	Accumulated Other Comprehensive Loss [Member]	Unallocated ESOP Shares [Member]	Total
Balance at Jun. 30, 2018	$ 38	$ 21,516	$ (27,886)	$ 42,795	$ (188)	$ (2,258)	$ 34,017
Net income				1,432			1,432
Other comprehensive loss					(1,497)		(1,497)
Purchase of treasury stock			(372)				(372)
Amortization of unallocated ESOP Shares		14				79	93
Cash dividends declared				(286)			(286)
Balance at Dec. 31, 2018	38	21,530	(28,258)	43,941	(1,685)	(2,179)	33,387
Balance at Sep. 30, 2018	38	21,525	(27,918)	43,400	(121)	(2,219)	34,705
Net income				685			685
Other comprehensive loss					(1,564)		(1,564)
Purchase of treasury stock			(340)				(340)
Amortization of unallocated ESOP Shares		5				40	45
Cash dividends declared				(144)			(144)
Balance at Dec. 31, 2018	$ 38	$ 21,530	$ (28,258)	$ 43,941	$ (1,685)	$ (2,179)	$ 33,387

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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares	3 Months Ended	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2018
Statement of Stockholders' Equity [Abstract]
Cash dividends declared, per share	$ 0.08	$ 0.16
Purchase of treasury stock, shares	23,717	25,717

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CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
OPERATING ACTIVITIES
Net income	$ 1,432	$ 898
Adjustments to reconcile net income to cash provided by operating activities:
Provision for loan losses	33	12
Depreciation	29	41
Loss on sale of investment security	2
Amortization of discounts, premiums and deferred loan costs	111	362
Amortization of unallocated ESOP shares	93	71
Deferred income taxes	(27)	97
Increase in prepaid/accrued income taxes	33	11
Earnings on bank owned life insurance	(61)	(64)
Decrease in accrued interest receivable	39	69
Increase (decrease) in accrued interest payable	406	(1)
Increase in deferred director compensation payable	22	19
Other, net	22	31
Net cash provided by operating activities	2,134	2,776
Available-for-sale:
Purchase of investment securities	(24,782)	(28,825)
Proceeds from sale of investments	1,364
Proceeds from repayments of investments	22,705	17,451
Held-to-maturity:
Proceeds from repayments of investments	2,180	2,033
Proceeds from repayments of mortgage-backed securities	5,918	7,818
Purchase of certificates of deposit	(1,096)	(348)
Maturities/redemptions of certificates of deposit	100	7,100
Purchase of loans	(5,102)	(6,347)
Net decrease in net loans receivable	1,364	1,974
Purchase of FHLB stock	(3,043)	(3,503)
Redemption of FHLB stock	3,217	3,331
Acquisition of premises and equipment		(11)
Net cash provided by investing activities	2,825	673
FINANCING ACTIVITIES
Net increase (decrease) in transaction and savings accounts	361	(2,401)
Net increase (decrease) in certificates of deposit	(1,751)	1,376
Net decrease in advance payments by borrowers for taxes and insurance	(388)	(415)
Proceeds from FHLB long-term advances - fixed rate	15,000	(10,000)
Proceeds from FHLB long-term advances - variable rate	85,000	(6,109)
Net increase (decrease) FHLB short-term advances	(101,336)	20,606
Purchase of treasury stock	(372)
Cash dividends paid	(286)	(257)
Net cash (used for) provided by financing activities	(3,772)	2,800
Increase in cash and cash equivalents	1,187	6,249
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD	2,441	2,272
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD	3,628	8,521
Cash paid during the period for:
Interest on deposits and borrowings	1,833	1,322
Income taxes	430	537
Non-cash items:
Educational Improvement Tax Credit	$ 45	$ 50

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BASIS OF PRESENTATION

6 Months Ended

Dec. 31, 2018

BASIS OF PRESENTATION [Abstract]

BASIS OF PRESENTATION

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and therefore do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles (GAAP). However, all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary for a fair presentation have been included. The results of operations for the three and six months ended December 31, 2018, are not necessarily indicative of the results which may be expected for the entire fiscal year.

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RECENT ACCOUNTING PRONOUNCEMENTS

6 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

2. RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). This Update requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU replaces most existing revenue recognition guidance in GAAP. The new standard was effective for the Company on July 1, 2018. Adoption of ASU 2014-09 did not have a material impact on the Company’s consolidated financial statements other than additional disclosures in Note 3 as the Company’s primary sources of revenues are derived from interest and dividends earned on loans, investment securities, and other financial instruments that are not within the scope of ASU 2014-09.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This accounting standard (a) requires separate presentation of equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) on the balance sheet and measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities 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 on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (g) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets.

The Company adopted ASU 2016-01 during the reporting period. On a prospective basis, the Company implemented changes to the measurement of the fair value of financial instruments using an exit price notion for disclosure purposes in Note 13 to the financial statements. The June 30, 2018, fair value of each class of financial instruments disclosure did not utilize the exit price notion when measuring fair value and, therefore, would not be comparable to the December 31, 2018 disclosure. The Company estimated the fair value based on guidance from ASC 820-10, Fair Value Measurements, which defines fair value as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is no active observable market for sale information on community bank loans and, thus, Level 3 fair value procedures were utilized, primarily in the use of present value techniques incorporating assumptions that market participants would use in estimating fair values. The fair value of loans held for investment, excluding impaired loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses. The discount rates used to determine fair value use interest rate spreads that reflect factors such as liquidity, credit and nonperformance risk of the loans. Loans are considered a Level 3 classification.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. A short-term lease is defined as one in which (a) the lease term is 12 months or less and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently assessing the practical expedients it may elect at adoption, but does not anticipate the amendments will have a significant impact on the financial statements. Based on the Company’s preliminary analysis of its current portfolio, the impact to the Company’s balance sheet is estimated to result in less than a 1 percent increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which changes the impairment model for most financial assets. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the ASU is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be effected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements.

In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842), which provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current lease guidance in Topic 840. An entity that elects this practical expedient should evaluate new or modified land easements under Topic 842 beginning at the date the entity adopts Topic 842; otherwise, an entity should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in ASU 2016-02. This Update is not expected to have a significant impact on the Company’s financial statements.

In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718), which simplified the accounting for nonemployee share-based payment transactions. The amendments in this update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this Update improve the following areas of nonemployee share-based payment accounting; (a) the overall measurement objective, (b) the measurement date, (c) awards with performance conditions, (d) classification reassessment of certain equity-classified awards, (e) calculated value (nonpublic entities only), and (f) intrinsic value (nonpublic entities only). The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. This Update is not expected to have a significant impact on the Company’s financial statements.

In July 2018, the FASB issued ASU 2018-09, Codification Improvements, represents changes to clarify, correct errors in, or make minor improvements to the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments do not require transition guidance and will be effective upon issuance of this ASU. However, many of the amendments in this ASU do have transition guidance with effective dates for annual periods beginning after December 15, 2018, for public business entities. This Update is not expected to have a significant impact on the Company’s financial statements.

In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, represents changes to clarify, correct errors in, or make minor improvements to the Codification. The amendments in this ASU affect the amendments in ASU 2016-02, which are not yet effective, but for which early adoption upon issuance is permitted. For entities that early adopted Topic 842, the amendments are effective upon issuance of this ASU, and the transition requirements are the same as those in Topic 842. For entities that have not adopted Topic 842, the effective date and transition requirements will be the same as the effective date and transition requirements in Topic 842. This Update is not expected to have a significant impact on the Company’s financial statements.

In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements. This Update provides another transition method which allows entities to initially apply ASC 842 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Entities that elect this approach should report comparative periods in accordance with ASC 840, Leases. In addition, this Update provides a practical expedient under which lessors may elect, by class of underlying assets, to not separate nonlease components from the associated lease component, similar to the expedient provided for lessees. However, the lessor practical expedient is limited to circumstances in which the nonlease component or components otherwise would be accounted for under the new revenue guidance and both (a) the timing and pattern of transfer are the same for the nonlease component(s) and associated lease component and (b) the lease component, if accounted for separately, would be classified as an operating lease. If the nonlease component or components associated with the lease component are the predominant component of the combined component, an entity should account for the combined component in accordance with ASC 606, Revenue from Contracts with Customers. Otherwise, the entity should account for the combined component as an operating lease in accordance with ASC 842. If a lessor elects the practical expedient, certain disclosures are required. This Update is effective for public business entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. This Update is not expected to have a significant impact on the Company’s financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes the Disclosure Requirements for Fair Value Measurements. The Update removes the requirement to disclose the amount of and reasons for transfers between Level I and Level II of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level III fair value measurements. The Update requires disclosure of changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level III fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level III fair value measurements. This Update is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits (Topic 715-20). This Update amends ASC 715 to add, remove and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The Update eliminates the requirement to disclose the amounts in accumulated other comprehensive income expected to be recognized as part of net periodic benefit cost over the next year. The Update also removes the disclosure requirements for the effects of a one-percentage-point change on the assumed health care costs and the effect of this change in rates on service cost, interest cost and the benefit obligation for postretirement health care benefits. This Update is effective for public business entities for fiscal years ending after December 15, 2020, and must be applied on a retrospective basis. For all other entities, this Update is effective for fiscal years ending after December 15, 2021. This standard is not expected to have a significant impact on the Company’s financial position or results of operations.

In November, 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, which amended the effective date of ASU 2016-13 for entities other than public business entities (PBEs), by requiring non-PBEs to adopt the standard for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Therefore, the revised effective dates of ASU 2016-13 for PBEs that are SEC filers will be fiscal years beginning after December 15, 2019, including interim periods within those years, PBEs other than SEC filers will be for fiscal years beginning after December 15, 2020, including interim periods within those years, and all other entities (non-PBEs) will be for fiscal years beginning after December 15, 2021, including interim periods within those years. The ASU also clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Rather, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. The effective date and transition requirements for ASU 2018-19 are the same as those in ASU 2016-13, as amended by ASU 2018-19. This Update is not expected to have a significant impact on the Company’s financial statements.

In December 2018, the FASB issued ASU 2018-20, Leases (Topic 842), which addressed implementation questions arising from stakeholders in regard to ASU 2016-02, Leases. Specifically addressed in this Update were issues related to 1) sales taxes and other similar taxes collected from lessees, 2) certain lessor costs, and 3) recognition of variable payments for contracts with lease and nonlease components. The amendments in this Update affect the amendments in Update 2016-02, which are not yet effective but can be early adopted. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Update 2016-02 (for example, January 1, 2019, for calendar-year-end public business entities). This Update is not expected to have a significant impact on the Company’s financial statements.

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REVENUE RECOGNITION

6 Months Ended

Dec. 31, 2018

Revenue Recognition [Abstract]

REVENUE RECOGNITION

3. REVENUE RECOGNITION

Effective July 1, 2018, the Company adopted Accounting Standards Update ASU 2014-09, Revenue from contracts with Customers – Topic 606, and all subsequent ASUs that modified ASC 606. The Company has elected to apply the standard to all prior periods presented utilizing the full retrospective approach. The implementation of the new standard had no material impact to the measurement or recognition of revenue of prior periods. Management determined that the primary sources of revenue emanating from interest and dividend income on loans and investments along with noninterest revenue resulting from investment security gains, and earnings on bank owned life insurances are not within the scope of ASC 606. As a result, no changes were made during the period related to these sources of revenue. The main types of noninterest income within the scope of the standard are as follows: Service Charges on deposit accounts—the Company has contracts with its deposit customers where fees are charged if certain parameters are not met. These agreements can be cancelled at any time by either the Company or the deposit customer. Revenue from these transactions is recognized on a monthly basis as the Company has an unconditional right to the fee consideration. The Company also has transaction fees related to specific transactions or activities resulting from a customer request or activity that include overdraft fees, online banking fees, interchange fees, ATM fees and other transaction fees. All of these fees are attributable to specific performance obligations of the Company where the revenue is recognized at a defined point in time upon the completion of the requested service/transaction.

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EARNINGS PER SHARE

6 Months Ended

Dec. 31, 2018

EARNINGS PER SHARE:

EARNINGS PER SHARE

4. EARNINGS PER SHARE

The following table sets forth the computation of the weighted-average common shares used to calculate basic and diluted earnings per share.

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2018			2017			2018			2017
Weighted average common shares issued		3,805,636			3,805,636			3,805,636			3,805,636
Average treasury stock shares		(1,849,437	)		(1,797,492	)		(1,843,161	)		(1,797,492	)
Average unallocated ESOP shares		(174,108	)		(181,564	)		(174,902	)		(182,415	)
Weighted average common shares and common stock equivalents used to calculate basic earnings per share		1,782,091			1,826,580			1,787,573			1,825,729
Additional common stock equivalents (stock options) used to calculate diluted earnings per share		-			-			109			-
Weighted average common shares and common stock equivalents used to calculate diluted earnings per share		1,782,091			1,826,580			1,787,682			1,825,729

There are no convertible securities that would affect the numerator in calculating basic and diluted earnings per share; therefore, net income as presented on the Consolidated Statement of Income is used.

At December 31, 2018, there were 27,019 options outstanding with an exercise price of $16.20 which were anti-dilutive for the three month period, and dilutive for the six month period. At December 31, 2017, there were 114,519 options outstanding with an exercise price of $16.20 which were anti-dilutive for the three and six month periods.

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STOCK BASED COMPENSATION DISCLOSURE

6 Months Ended

Dec. 31, 2018

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

STOCK BASED COMPENSATION DISCLOSURE

5. STOCK BASED COMPENSATION DISCLOSURE

The Company’s 2008 Stock Incentive Plan (the “Plan”), which was approved by shareholders in October 2008, permits the grant of stock options or restricted shares to its directors and employees for up to 152,000 shares (up to 38,000 restricted shares may be issued). Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest over five years of continuous service and have ten-year contractual terms.

During the six month periods ended December 31, 2018 and 2017, the Company recorded no compensation expense related to our share-based compensation awards. As of December 31, 2018, there was no unrecognized compensation cost related to unvested share-based compensation awards granted in fiscal 2009.

All of the Company’s outstanding stock options were vested at December 31, 2018 and 2017. There were no stock options exercised or issued during the six months ended December 31, 2018 and 2017.

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INVESTMENT SECURITIES

6 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

6. INVESTMENT SECURITIES

The amortized cost and fair values of investments are as follows:

					Gross			Gross
		Amortized			Unrealized			Unrealized				Fair
		Cost			Gains			Losses				Value
		(Dollars in Thousands)
December 31, 2018
AVAILABLE FOR SALE
Corporate debt securities	$		102,207	$		3	$		(1,510	)	$		100,700
Foreign debt securities 1			25,558			-			(367	)			25,191
Obligations of states and political subdivisions			1,630			-			(7	)			1,623
Total	$		129,395	$		3	$		(1,884	)	$		127,514
					Gross			Gross
		Amortized			Unrealized			Unrealized				Fair
		Cost			Gains			Losses				Value
		(Dollars in Thousands)
December 31, 2018
HELD TO MATURITY
U.S. government agency securities	$		-	$		-	$		-		$		-
Corporate debt securities			-			-			-				-
Obligations of states and political subdivisions			3,995			4			(1	)			3,998
Total	$		3,995	$		4	$		(1	)	$		3,998

¹ U.S. dollar denominated investment-grade corporate bonds of large foreign corporate issuers.

					Gross			Gross
		Amortized			Unrealized			Unrealized				Fair
		Cost			Gains			Losses				Value
		(Dollars in Thousands)
June 30, 2018
AVAILABLE FOR SALE
Corporate debt securities	$		104,316	$		204	$		(181	)	$		104,339
Foreign debt securities 1			22,878			11			(38	)			22,851
Obligations of states and political subdivisions			1,630			-			(9	)			1,621
Total	$		128,824	$		215	$		(228	)	$		128,811
					Gross			Gross
		Amortized			Unrealized			Unrealized				Fair
		Cost			Gains			Losses				Value
		(Dollars in Thousands)
June 30, 2018
HELD TO MATURITY
U.S. government agency securities	$		625	$		-	$		(1	)	$		624
Corporate debt securities			1,061			13			-				1,074
Obligations of states and political subdivisions 2			4,495			-			(68	)			4,427
Total	$		6,181	$		13	$		(69	)	$		6,125

Proceeds from sales of investments during the six month period ended December 31, 2018 were $1.4 million and the Company recorded gross realized investment losses of $2 thousand during this same period. There were no sales of investment securities during the quarter ended December 31, 2018 or for the three and six month periods ended December 31, 2017.

² U.S. dollar denominated investment-grade corporate bonds of large foreign corporate issuers.

The amortized cost and fair values of debt securities at December 31, 2018, by contractual maturity, are shown below. Expected maturities may differ from the contractual maturities because issuers may have the right to call securities prior to their final maturities.

		Due in one year or less			Due after one through five years			Due after five through ten years			Due after ten years			Total
		(Dollars in Thousands)
AVAILABLE FOR SALE
Amortized cost	$		13,378	$		110,310	$		5,707	$		-	$		129,395
Fair value			13,364			108,607			5,543			-			127,514
HELD TO MATURITY
Amortized cost	$		500	$		3,495	$		-	$		-	$		3,995
Fair value			499			3,499			-			-			3,998

At December 31, 2018, investment securities with amortized cost, and fair value of $3.5 million were pledged to secure borrowings with the Federal Home Loan Bank (“FHLB”).

As of December 31, 2018, investment securities with amortized cost $13.4 million and fair values of $13.1 million were pledged to secure future borrowings with the Federal Reserve Bank of Cleveland (“FRBC”). Since the Company had no FRBC borrowings outstanding on December 31, 2018, all FRBC collateral pledges may be withdrawn by the Company at any time.

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MORTGAGE-BACKED SECURITIES

6 Months Ended

Dec. 31, 2018

MORTGAGE-BACKED SECURITIES [Abstract]

MORTGAGE-BACKED SECURITIES

7. MORTGAGE-BACKED SECURITIES

Mortgage-backed securities (“MBS”) include mortgage pass-through certificates (“PCs”) and collateralized mortgage obligations (“CMOs”). With a pass-through security, investors own an undivided interest in the pool of mortgages that collateralize the PCs. Principal and interest is passed through to the investor as it is generated by the mortgages underlying the pool. PCs and CMOs may be insured or guaranteed by Freddie Mac (“FHLMC”), Fannie Mae (“FNMA”) and the Government National Mortgage Association (“GNMA”). CMOs may also be privately issued with varying degrees of credit enhancements. A CMO reallocates mortgage pool cash flow to a series of bonds (called traunches) with varying stated maturities, estimated average lives, coupon rates and prepayment characteristics.

The Company’s CMO portfolio is comprised of two segments: CMOs backed by U.S. Government Agencies (“Agency CMOs”) and CMOs backed by single-family whole loans not guaranteed by a U.S. Government Agency (“private-label CMOs”).

At December 31, 2018, the Company’s Agency CMOs totaled $109.1 million as compared to $114.9 million at June 30, 2018. The Company’s private-label CMOs totaled $845 thousand at December 31, 2018 as compared to $958 thousand at June 30, 2018. The $5.9 million decrease in the CMO portfolio was primarily due to repayments on our Agency and private-label CMOs which totaled $5.8 million and $86 thousand, respectively. At December 31, 2018 and June 30, 2018, all of the Company’s MBS portfolio, including CMOs, were comprised of adjustable or floating rate investments. Substantially all of the Company’s floating rate MBS adjust monthly based upon changes in the one month LIBOR. The Company has no investment in multi-family or commercial real estate based MBS.

Due to prepayments of the underlying loans, and the prepayment characteristics of the CMO traunches, the actual maturities of the Company’s MBS are expected to be substantially less than the scheduled maturities.

The Company retains an independent third party to assist it in the determination of a fair value for its three private-label CMOs. This valuation is meant to be a “Level Three” valuation as defined by ASC Topic 820, Fair Value Measurements and Disclosures. The valuation does not represent the actual terms or prices at which any party could purchase the securities. There is currently no active secondary market for private-label CMOs and there can be no assurance that any secondary market for private-label CMOs will develop. The private-label CMO portfolio had four previously recorded other-than-temporary impairments at December 31, 2018. During the six months ending December 31, 2018, the Company reversed $(27) thousand of non-credit unrealized holding losses on its three private-label CMOs with OTTI due to principal repayments. During the six months ended December 31, 2018, the Company recorded no additional credit impairment charge on its private-label CMO portfolio.

The Company believes that the data and assumptions used to determine the fair values are reasonable. The fair value calculations reflect relevant facts and market conditions. Events and conditions occurring after the valuation date could have a material effect on the private-label CMO segment’s fair value.

The following table sets forth information with respect to the Company’s private-label CMO portfolio as of December 31, 2018. At the time of purchase, all of our private-label CMOs were rated in the highest investment category by at least two ratings agencies.

			At December 31, 2018
			Rating						Amortized Cost		Fair   Value3		Life to Date Impairment   Recorded in   Earnings
Cusip #	Security Description		S&P		Moody’s		Fitch		(in thousands)
126694CP1		CWHL SER 21 A11		N/A		Caa2		D	$	459	$	572	$	201
126694KF4		CWHL SER 24 A15		NR		N/A		D		192		221		44
126694KF4		CWHL SER 24 A15		NR		N/A		D		96		111		89
126694MP0		CWHL SER 26 1A5		NR		N/A		D		98		107		36
									$	845	$	1,011	$	370

The amortized cost and fair values of the Company’s mortgage-backed securities are as follows:

		Amortized     Cost			Gross     Unrealized     Gains			Gross     Unrealized     Losses				Fair     Value
		(Dollars in Thousands)
December 31, 2018
HELD TO MATURITY
Collateralized mortgage obligations:
Agency	$		109,077	$		1,297	$		(461	)	$		109,913
Private-label			845			166			-				1,011
Total	$		109,922	$		1,463	$		(461	)	$		110,924
		Amortized     Cost			Gross     Unrealized     Gains			Gross     Unrealized     Losses				Fair     Value
		(Dollars in Thousands)
June 30, 2018
HELD TO MATURITY
Collateralized mortgage obligations:
Agency	$		114,899	$		1,260	$		(426	)	$		115,733
Private-label			958			153			-				1,111
Total	$		115,857	$		1,413	$		(426	)	$		116,844

³ Fair value estimate provided by the Company’s independent third party valuation consultant.

The amortized cost and fair value of the Company’s mortgage-backed securities at December 31, 2018, by contractual maturity, are shown below. Expected maturities may differ from the contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

		Due in      one year      or less			Due after  one through  five years			Due after   five through   ten years			Due after     ten years			Total
		(Dollars in Thousands)
HELD TO MATURITY
Amortized cost	$		-	$		-	$		165	$		109,757	$		109,922
Fair value			-			-			168			110,756			110,924

At December 31, 2018, mortgage-backed securities with amortized costs of $109.1 million and fair values of $109.9 million were pledged to secure public deposits and borrowings with the FHLB. Of the securities pledged, $8.3 million of fair value was excess collateral. At June 30, 2018, mortgage-backed securities with an amortized cost of $114.9 million and fair values of $115.7 million, were pledged to secure public deposits and borrowings with the FHLB. Of the securities pledged, $2.5 million of fair value was excess collateral. Excess collateral is maintained to support future borrowings and may be withdrawn by the Company at any time.

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ACCUMULATED OTHER COMPREHENSIVE LOSS

6 Months Ended

Dec. 31, 2018

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

ACCUMULATED OTHER COMPREHENSIVE LOSS

8. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following tables present the changes in accumulated other comprehensive loss by component, for the three and six months ended December 31, 2018 and 2017.

	Three Months Ended December 31, 2018
	(Dollars in Thousands – net of tax)
	Unrealized Gains         and Losses on         Available-for-Sale         Securities			Unrealized Gains         and Losses on         Held-to-Maturity         Securities			Total
Beginning Balance – September 30, 2018	$	88		$	(209	)	$	(121	)
Other comprehensive income (loss) before reclassifications		(1,574	)		10			(1,564	)
Amounts reclassified from accumulated other comprehensive income (loss)		-			-			-
Net current-period other comprehensive income (loss)		(1,574	)		10			(1,564	)
Ending Balance – December 31, 2018	$	(1,486	)	$	(199	)	$	(1,685	)
	Six Months Ended December 31, 2018
	(Dollars in Thousands – net of tax)
	Unrealized Gains         and Losses on         Available-for-Sale         Securities			Unrealized Gains         and Losses on         Held-to-Maturity         Securities			Total
Beginning Balance – June 30, 2018	$	(10	)	$	(178	)	$	(188	)
Other comprehensive income (loss) before reclassifications		(1,478	)		(21	)		(1,499	)
Amounts reclassified from accumulated other comprehensive income (loss)		2			-			2
Net current-period other comprehensive income (loss)		(1,476	)		(21	)		(1,497	)
Ending Balance – December 31, 2018	$	(1,486	)	$	(199	)	$	(1,685	)

	Three Months Ended December 31, 2017
	(Dollars in Thousands – net of tax)
	Unrealized Gains         and Losses on         Available-for-Sale         Securities		Unrealized Gains         and Losses on         Held-to-Maturity         Securities			Total
Beginning Balance – September 30, 2017	$	91	$	(186	)	$	(95	)
Other comprehensive income (loss) before reclassifications		33		(16	)		17
Amounts reclassified from accumulated other comprehensive income (loss)		24		(39	)		(15	)
Net current-period other comprehensive income (loss)		57		(55	)		2
Ending Balance – December 31, 2017	$	148	$	(241	)	$	(93	)
	Six Months Ended December 31, 2017
	(Dollars in Thousands – net of tax)
	Unrealized Gains         and Losses on         Available-for-Sale         Securities		Unrealized Gains         and Losses on         Held-to-Maturity         Securities			Total
Beginning Balance – June 30, 2017	$	44	$	(232	)	$	(188	)
Other comprehensive income (loss) before reclassifications		80		30			110
Amounts reclassified from accumulated other comprehensive income (loss)		24		(39	)		(15	)
Net current-period other comprehensive income (loss)		104		(9	)		95
Ending Balance – December 31, 2017	$	148	$	(241	)	$	(93	)

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UNREALIZED LOSSES ON SECURITIES

6 Months Ended

Dec. 31, 2018

Debt and Equity Securities, Gain (Loss) [Abstract]

UNREALIZED LOSSES ON SECURITIES

9. UNREALIZED LOSSES ON SECURITIES

The following tables show the Company’s gross unrealized losses and fair value, aggregated by category and length of time that the individual securities have been in a continuous unrealized loss position, at December 31, 2018 and June 30, 2018.

			December 31, 2018
			Less Than Twelve Months						Twelve Months or Greater						Total
	Fair Value				Gross Unrealized Losses			Fair Value			Gross Unrealized Losses			Fair Value			Gross Unrealized Losses
				(Dollars in Thousands)
Corporate debt securities		$		88,190	$	(1,452	)	$		4,973	$	(58	)	$		93,163	$	(1,510	)
Foreign debt securities 4				20,775		(367	)			-		-				20,775		(367	)
Obligations of state and political subdivision				500		(1	)			1,623		(7	)			2,123		(8	)
Collateralized mortgage obligations:
Agency				7,047		(75	)			21,440		(386	)			28,487		(461	)
Total		$		116,512	$	(1,895	)	$		28,036	$	(451	)	$		144,548	$	(2,346	)
			June 30, 2018
			Less Than Twelve Months						Twelve Months or Greater						Total
	Fair Value				Gross Unrealized Losses			Fair Value			Gross Unrealized Losses			Fair Value			Gross Unrealized Losses
				(Dollars in Thousands)
U.S. government agency securities		$		624	$	(1	)	$		-	$	-		$		624	$	(1	)
Corporate debt securities				56,714		(169	)			3,028		(12	)			59,742		(181	)
Foreign debt securities³				13,761		(38	)			-		-				13,761		(38	)
Obligations of states and political subdivisions				5,048		(77	)			-		-				5,048		(77	)
Collateralized mortgage obligations:
Agency				7,600		(12	)			21,424		(414	)			29,024		(426	)
Total		$		83,747	$	(297	)	$		24,452	$	(426	)	$		108,199	$	(723	)

For debt securities, impairment is considered to be other than temporary if an entity (1) intends to sell the security, (2) more likely than not will be required to sell the security before recovering its amortized cost basis, or (3) does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell the security). In addition, impairment is considered to be other than temporary if the present value of cash flows expected to be collected from the debt security is less than the amortized cost basis of the security (any such shortfall is referred to as a credit loss).

The Company evaluates outstanding available-for-sale and held-to-maturity securities in an unrealized loss position (i.e., impaired securities) for other-than-temporary impairment (“OTTI”) on a quarterly basis. In doing so, the Company considers many factors including, but not limited to: the credit ratings assigned to the securities by the Nationally Recognized Statistical Rating Organizations

⁴ U.S. dollar denominated investment-grade corporate bonds of large foreign corporate issuers.

(“NRSROs”); other indicators of the credit quality of the issuer; the strength of the provider of any guarantees; the length of time and extent that fair value has been less than amortized cost; and whether the Company has the intent to sell the security or more likely than not will be required to sell the security before its anticipated recovery. In the case of its private label residential MBSs, the Company also considers prepayment speeds, the historical and projected performance of the underlying loans and the credit support provided by the subordinate securities. These evaluations are inherently subjective and consider a number of quantitative and qualitative factors.

The following table presents a roll-forward of the credit loss component of the amortized cost of mortgage-backed securities that we have written down for OTTI and the credit component of the loss that is recognized in earnings. OTTI recognized in earnings for credit impaired mortgage-backed securities is presented as additions in two components based upon whether the current period is the first time the mortgage-backed security was credit-impaired (initial credit impairment) or is not the first time the mortgage-backed security was credit impaired (subsequent credit impairments). The credit loss component is reduced if we sell, intend to sell or believe that we will be required to sell previously credit-impaired mortgage-backed securities. Additionally, the credit loss component is reduced if we receive cash flows in excess of what we expected to receive over the remaining life of the credit impaired mortgage-backed securities, the security matures or is fully written down.

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2018			2017			2018			2017
	(Dollars in Thousands)
Beginning balance	$	236		$	258		$	239		$	259
Initial credit impairment		-			-			-			-
Subsequent credit impairment		-			-			-			8
Reductions for amounts recognized in earnings due to intent or requirement to sell		-			-			-			-
Reductions for securities sold		-			-			-			-
Reduction for actual realized losses		(7	)		(13	)		(10	)		(19	)
Reduction for increase in cash flows expected to be collected		-			-			-			-
Ending balance	$	229		$	248		$	229		$	248

During the three months ended December 31, 2018, the Company recorded no additional credit impairment charge and no non-credit unrealized holding losses to accumulated other comprehensive income. During the three and six months ended December 31, 2018, the Company accreted back out of/into other comprehensive income $10 thousand and $(21) thousand, respectively (net of income tax effect of $2 thousand and $(6) thousand, respectively), based on principal repayments on private-label CMOs previously identified with OTTI.

In the case of its private-label residential CMOs that exhibit adverse risk characteristics, the Company employs models to determine the cash flows that it is likely to collect from the securities. These models consider borrower characteristics and the particular attributes of the loans underlying the securities, in conjunction with assumptions about future changes in home prices and interest rates, to predict the likelihood a loan will default and the impact on default frequency, loss severity and remaining credit enhancement. A significant input to these models is the forecast of future housing price changes for the relevant states and metropolitan statistical areas, which are based upon an assessment of the various housing markets. In general, since the ultimate receipt of contractual payments on these securities will depend upon the credit and prepayment performance of the underlying loans and, if needed, the credit enhancements for the senior securities owned by the Company, the Company uses these models to assess whether the credit enhancement associated with each security is sufficient to protect against likely losses of principal and interest on the underlying mortgage loans. The development of the modeling assumptions requires significant judgment.

In conjunction with our adoption of ASC Topic 820, the Company retained an independent third party to assist it with assessing its investments within the private-label CMO portfolio. The independent third party utilized certain assumptions for producing the cash flow analyses used in the OTTI assessment. Key assumptions would include interest rates, expected market participant spreads and discount rates, housing prices, projected future delinquency levels and assumed loss rates on any liquidated collateral.

The Company reviewed the independent third party’s assumptions used in the December 31, 2018 OTTI process. Based on the results of this review, the Company deemed the independent third party’s assumptions to be reasonable and adopted them. However, different assumptions could produce materially different results, which could impact the Company’s conclusions as to whether an impairment is considered other-than-temporary and the magnitude of the credit loss. The Company had three private-label CMOs with OTTI at December 31, 2018.

If the Company intends to sell an impaired debt security, or more likely than not will be required to sell the security before recovery of its amortized cost basis, the impairment is other-than-temporary and is recognized currently in earnings in an amount equal to the entire difference between fair value and amortized cost. The Company does not anticipate selling its private-label CMO portfolio, nor does Management believe that the Company will be required to sell these securities before recovery of this amortized cost basis.

In instances in which the Company determines that a credit loss exists but the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before the anticipated recovery of its remaining amortized cost basis, the OTTI is separated into (1) the amount of the total impairment related to the credit loss and (2) the amount of the total impairment related to all other factors (i.e., the noncredit portion). The amount of the total OTTI related to the credit loss is recognized in earnings and the amount of the total OTTI related to all other factors is recognized in accumulated other comprehensive loss. The total OTTI is presented in the Consolidated Statement of Income with an offset for the amount of the total OTTI that is recognized in accumulated other comprehensive loss. Absent the intent or requirement to sell a security, if a credit loss does not exist, any impairment is considered to be temporary.

Regardless of whether an OTTI is recognized in its entirety in earnings or if the credit portion is recognized in earnings and the noncredit portion is recognized in other comprehensive income (loss), the estimation of fair values has a significant impact on the amount(s) of any impairment that is recorded.

The noncredit portion of any OTTI losses on securities classified as available-for-sale is adjusted to fair value with an offsetting adjustment to the carrying value of the security. The fair value adjustment could increase or decrease the carrying value of the security. All of the Company’s private-label CMOs were originally, and continue to be classified, as held to maturity.

In periods subsequent to the recognition of an OTTI loss, the other-than-temporarily impaired debt security is accounted for as if it had been purchased on the measurement date of the OTTI at an amount equal to the previous amortized cost basis less the credit-related OTTI recognized in earnings. For debt securities for which credit-related OTTI is recognized in earnings, the difference between the new cost basis and the cash flows expected to be collected is accreted into interest income over the remaining life of the security in a prospective manner based on the amount and timing of future estimated cash flows.

The Company had investments in 80 positions that were impaired at December 31, 2018. Based on its analysis, management has concluded that three private-label CMOs are other-than-temporarily impaired, while the remaining securities portfolio has experienced unrealized losses and a decrease in fair value due to interest rate volatility, illiquidity in the marketplace, or credit deterioration in the U.S. mortgage markets.

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LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES

6 Months Ended

Dec. 31, 2018

Receivables [Abstract]

LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES

10. LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES

The following table summarizes the primary segments of the loan portfolio as of December 31, 2018 and June 30, 2018.

		December 31, 2018							June 30, 2018
		Total         Loans			Individually evaluated for impairment		Collectively evaluated for impairment		Total Loans			Individually evaluated for impairment		Collectively evaluated for impairment
		(Dollars in Thousands)
First mortgage loans:
1 – 4 family dwellings	$		76,011		$	-	$	76,011	$	72,237		$	-	$	72,237
Construction			1,102			-		1,102		1,769			-		1,769
Land acquisition & development			292			-		292		-			-		-
Multi-family dwellings			3,258			-		3,258		3,390			-		3,390
Commercial			3,953			-		3,953		3,482			-		3,482
Consumer Loans
Home equity			982			-		982		861			-		861
Home equity lines of credit			2,174			-		2,174		2,177			-		2,177
Other			131			-		131		125			-		125
Commercial Loans			525			-		525		633			-		633
	$		88,428		$	-	$	88,428	$	84,674		$	-	$	84,674
Plus: Deferred loan costs			478							469
Allowance for loan losses			(501	)						(468	)
Total	$		88,405						$	84,675

Impaired loans are loans for which it is probable the Company will not be able to collect all amounts due according to the contractual terms of the loan agreement. The Company collectively evaluates for impairment 1-4 family first mortgage loans and all consumer loans. The following loan categories are individually evaluated for impairment: first mortgage loans - construction, land acquisition and development, multi-family dwellings, and commercial. The Company evaluates commercial loans not secured by real property individually for impairment.

The definition of “impaired loans” is not the same as the definition of “nonaccrual loans,” although the two categories overlap. The Company may choose to place a loan on nonaccrual status due to payment delinquency or uncertain collectability, while not classifying the loan as impaired if the loan is not a commercial or commercial real estate loan. Factors considered by management in determining impairment include payment status and collateral value. The amount of impairment for these types of impaired loans is determined by the difference between the present value of the expected cash flows related to the loan, using the original interest rate, and its recorded value, or as a practical expedient in the case of collateralized loans, the difference between the fair value of the collateral and the recorded amount of the loans. When foreclosure is probable, impairment is measured based on the fair value of the collateral.

Loans that experience insignificant payment delays, which are defined as 90 days or less, generally are not classified as impaired. Management determines the significance of payment delays on a case-by-case basis taking into consideration all circumstances surrounding the loan and the borrower, including the length of the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed.

As of December 31, 2018 and June 30, 2018 there were no loans considered to be impaired.

Total nonaccrual loans as of December 31, 2018 and June 30, 2018 and the related interest income recognized for the three and six months ended December 31, 2018 and December 31, 2017 are as follows:

		December 31,         2018			June 30,         2018
		(Dollars in Thousands)
Principal outstanding
1 – 4 family dwellings	$		233	$		235
Construction			-			-
Land acquisition & development			-			-
Commercial real estate			-			-
Home equity lines of credit			-			-
Total	$		233	$		235

		Three Months Ended						Six Months Ended
		December 31,			December 31,			December 31,			December 31,
		2018			2017			2018			2017
		(Dollars in Thousands)
Average nonaccrual loans
1 – 4 family dwellings	$		233	$		243	$		234	$		244
Construction			-			-			-			-
Land acquisition & development			-			-			-			-
Commercial real estate			-			-			-			-
Home equity lines of credit			-			-			-			-
Total	$		233	$		243	$		234	$		244
Income that would have been recognized	$		4	$		4	$		9	$		9
Interest income recognized	$		3	$		5	$		6	$		11

The Company’s loan portfolio may also include troubled debt restructurings (“TDRs”), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months.

During the three and six months ended December 31, 2018, and December 31, 2017, there were no TDRs.

When the Company modifies a loan, management evaluates any possible impairment based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, except when the sole (remaining) source of repayment for the loan is the operation or liquidation of the collateral. In these cases, management uses the current fair value of the collateral, less selling costs, instead of discounted cash flows. If management determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized by segment or class of loan, as applicable, through an allowance estimate or a charge-off to the allowance. Segment and class status is determined by the loan’s classification at origination.

The allowance for loan losses is established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the allowance account. Subsequent recoveries, if any, are credited to the allowance. The allowance is maintained at a level believed adequate by management to absorb estimated potential loan losses. Management’s determination of the adequacy of the allowance is based on periodic evaluations of the loan portfolio considering past experience, current economic conditions, composition of the loan portfolio and other relevant factors. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant change.

Federal regulations require that each insured savings institution classify its assets on a regular basis. In addition, in connection with examinations of insured institutions, federal examiners have authority to identify problem assets and, if appropriate, classify them. There are three classifications for problem assets: “substandard”, “doubtful” and “loss”. Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. Doubtful assets have the weaknesses of those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss. An asset classified as loss is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. Another category designated “asset watch” is also utilized by the Bank for assets which do not currently expose an insured institution to a sufficient degree of risk to warrant classification as substandard, doubtful or loss. Assets classified as substandard or doubtful require the institution to establish general allowances for loan losses. If an asset or portion thereof is classified as loss, the insured institution must either establish specific allowances for loan losses in the amount of 100% of the portion of the asset classified loss, or charge-off such amount. General loss allowances established to cover possible losses related to assets classified substandard or doubtful may be included in determining an institution’s regulatory capital, while specific valuation allowances for loan losses do not qualify as regulatory capital.

The Company’s general policy is to internally classify its assets on a regular basis and establish prudent general valuation allowances that are adequate to absorb losses that have not been identified but that are inherent in the loan portfolio. The Company maintains general valuation allowances that it believes are adequate to absorb losses in its loan portfolio that are not clearly attributable to specific loans. The Company’s general valuation allowances are within the following general ranges: (1) 0% to 5% of assets subject to special mention; (2) 1.00% to 100% of assets classified substandard; and (3) 50% to 100% of assets classified doubtful. Any loan classified as loss is charged-off. To further monitor and assess the risk characteristics of the loan portfolio, loan delinquencies are reviewed to consider any developing problem loans. Based upon the procedures in place, considering the Company’s past charge-offs and recoveries and assessing the current risk elements in the portfolio, management believes the allowance for loan losses at December 31, 2018, is adequate.

The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of December 31, 2018 and June 30, 2018:

		Current			30 – 59   Days Past   Due			60 – 89   Days Past   Due			90 Days +   Past Due Accruing			90 Days +   Past Due Non-accrual			Total   Past   Due			Total Loans
		(Dollars in Thousands)
December 31, 2018
First mortgage loans:
1 – 4 family dwellings	$		75,778	$		-	$		-	$		-	$		233	$		233	$		76,011
Construction			1,102			-			-			-			-			-			1,102
Land acquisition & development			292			-			-			-			-			-			292
Multi-family dwellings			3,258			-			-			-			-			-			3,258
Commercial			3,953			-			-			-			-			-			3,953
Consumer Loans:
Home equity			982			-			-			-			-			-			982
Home equity lines of credit			2,174			-			-			-			-			-			2,174
Other			131			-			-			-			-			-			131
Commercial Loans			525			-			-			-			-			-			525
	$		88,195	$		-	$		-	$		-	$		233	$		233			88,428
Plus: Deferred loan fees																					478
Allowance for loan losses																					(501	)
Net Loans Receivable																			$		88,405
		Current			30 – 59   Days Past   Due			60 – 89   Days Past Due			90 Days +   Past Due Accruing			90 Days +   Past Due Non-accrual			Total   Past   Due			Total Loans
		(Dollars in Thousands)
June 30, 2018
First mortgage loans:
1 – 4 family dwellings	$		72,002	$		-	$		-	$		-	$		235	$		235	$		72,237
Construction			1,769			-			-			-			-			-			1,769
Land acquisition & development			-			-			-			-			-			-			-
Multi-family dwellings			3,390			-			-			-			-			-			3,390
Commercial			3,482			-			-			-			-			-			3,482
Consumer Loans:
Home equity			861			-			-			-			-			-			861
Home equity lines of credit			2,177			-			-			-			-			-			2,177
Other			125			-			-			-			-			-			125
Commercial Loans			633			-			-			-			-			-			633
	$		84,439	$		-	$		-	$		-	$		235	$		235			84,674
Plus: Deferred loan fees																					469
Allowance for loan losses																					(468	)
Net Loans Receivable																			$		84,675

Credit quality information

The following tables represent credit exposure by internally assigned grades for the period ended December 31, 2018 and June 30, 2018. The grading system analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or not at all. The Company’s internal credit risk grading system is based on experiences with similarly graded loans.

The Company’s internally assigned grades are as follows:

Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.

Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

Substandard – loans that have a well-defined weakness based on objective evidence and can be characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – loans classified as doubtful have all the weaknesses inherent in a substandard loan. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

Loss – loans classified as loss are considered uncollectible, or of such value that continuance as a loan is not warranted.

The primary credit quality indicator used by management in the 1 – 4 family and consumer loan portfolios is the performance status of the loans. Payment activity is reviewed by Management on a monthly basis to determine how loans are performing. Loans are considered to be non-performing when they become 90 days delinquent, have a history of delinquency, or have other inherent characteristics which Management deems to be weaknesses.

The following tables present the Company’s internally classified construction, land acquisition and development, multi-family residential, commercial real estate and commercial (not secured by real estate) loans at December 31, 2018 and June 30, 2018.

		December 31, 2018
		(Dollars in Thousands)
		Construction			Land Acquisition & Development Loans			Multi- family Residential			Commercial Real Estate			Commercial
Pass	$		1,102	$		292	$		3,258	$		3.953	$		525
Special Mention		-			-			-			-			-
Substandard			-			-			-			-			-
Doubtful			-			-			-			-			-
Ending Balance	$		1,102	$		292	$		3,258	$		3,953	$		525

		June 30, 2018
		(Dollars in Thousands)
	Construction				Land Acquisition &   Development   Loans			Multi-family   Residential			Commercial   Real Estate			Commercial
Pass	$		1,769	$		-	$		3,390	$		3,482	$		633
Special Mention			-			-			-			-			-
Substandard			-			-			-			-			-
Doubtful			-			-			-			-			-
Ending Balance	$		1,769	$		-	$		3,390	$		3,482	$		633

The following table presents performing and non-performing 1 – 4 family residential and consumer loans based on payment activity for the periods ended December 31, 2018 and June 30, 2018.

		December 31, 2018
		1 – 4 Family			Consumer
		(Dollars in Thousands)
Performing	$		75,778	$		3,287
Non-performing			233			-
Total	$		76,011	$		3,287
		June 30, 2018
		1 – 4 Family			Consumer
		(Dollars in Thousands)
Performing	$		72,002	$		3,163
Non-performing			235			-
Total	$		72,237	$		3,163

The Company determines its allowance for loan losses in accordance with generally accepted accounting principles. The Company uses a systematic methodology as required by Financial Reporting Release No. 28 and the various Federal Financial Institutions Examination Council guidelines. The Company also endeavors to adhere to SEC Staff Accounting Bulletin No. 102 in connection with loan loss allowance methodology and documentation issues.

Our methodology used to determine the allocated portion of the allowance is as follows. For groups of homogenous loans, we apply a loss rate to the groups’ aggregate balance. Our group loss rate reflects our historical loss experience. We may adjust these group rates to compensate for changes in environmental factors; but our adjustments have not been frequent due to a relatively stable charge-off experience. The Company also monitors industry loss experience on similar loan portfolio segments. We then identify loans for individual evaluation under ASC Topic 310. If the individually identified loans are performing, we apply a segment specific loss rate adjusted for relevant environmental factors, if necessary, for those loans reviewed individually and considered individually impaired, we use one of the three methods for measuring impairment mandated by ASC Topic 310. Generally the fair value of collateral is used since our impaired loans are generally real estate based. In connection with the fair value of collateral measurement, the Company generally uses an independent appraisal and determines costs to sell. The Company’s appraisals for commercial income based loans, such as multi-family and commercial real estate loans, assess value based upon the operating cash flows of the business as opposed to merely “as built” values. The Company then validates the reasonableness of our calculated allowances by: (1) reviewing trends in loan volume, delinquencies, restructurings and concentrations; (2) reviewing prior period (historical) charge-offs and recoveries; and (3) presenting the results of this process, quarterly, to the Asset Classification Committee and the Savings Bank’s Board of Directors. We then tabulate, format and summarize the current loan loss allowance balance for financial and regulatory reporting purposes.

The Company had no unallocated loss allowance balance at December 31, 2018.

The allowance for loan losses represents the amount which management estimates is adequate to provide for probable losses inherent in its loan portfolio. The allowance method is used in providing for loan losses. Accordingly, all loan losses are charged to the allowance, and all recoveries are credited to it. The allowance for loan losses is established through a provision for loan losses charged to operations. The provision for loan losses is based on management’s periodic evaluation of individual loans, economic factors, past loan loss experience, changes in the composition and volume of the portfolio, and other relevant factors. The estimates used in determining the adequacy of the allowance for loan losses, including the amounts and timing of future cash flows expected on impaired loans, are particularly susceptible to changes in the near term.

The following tables summarize the primary segments of the allowance for loan losses (“ALLL”), segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of December 31, 2018 and 2017. Activity in the allowance is presented for the three and six months ended December 31, 2018 and 2017.

		As of December 31, 2018
		First Mortgage Loans
		1 – 4     Family			Construction				Land   Acquisition &   Development			Multi-   family			Commercial			Consumer   Loans			Commercial   Loans			Total
		(Dollars in Thousands)
Beginning ALLL Balance at September 30, 2018	$		363	$		29		$		10	$		18	$		32	$		32	$		3	$		487
Charge-offs			-			-				-			-			-			-			-			-
Recoveries			-			-				-			-			-			-			-			-
Provisions			10			(4	)			-			-			7			1			-			14
Ending ALLL Balance at December 31, 2018	$		373	$		25		$		10	$		18	$		39	$		33	$		3	$		501
Individually evaluated for impairment	$		-	$		-		$		-	$		-	$		-	$		-	$		-	$		-
Collectively evaluated for impairment			373			25				10			18			39			33			3			501
	$		373	$		25		$		10	$		18	$		39	$		33	$		3	$		501

		As of December 31, 2018
		First Mortgage Loans
		1 – 4   Family			Construction			Land   Acquisition &   Development			Multi-   family			Commercial			Consumer   Loans			Commercial   Loans				Total
					(Dollars in Thousands)
Beginning ALLL Balance at June 30, 2018	$		356	$		24	$		-	$		18	$		35	$		31	$		4		$		468
Charge-offs			-			-			-			-			-			-			-				-
Recoveries			-			-			-			-			-			-			-				-
Provisions			17			1			10			-			4			2			(1	)			33
Ending ALLL Balance at December 31, 2018	$		373	$		25	$		10	$		18	$		39	$		33	$		3		$		501
Individually evaluated for impairment	$		-	$		-	$		-	$		-	$		-	$		-	$		-		$		-
Collectively evaluated for impairment			373			25			10			18			39			33			3				501
	$		373	$		25	$		10	$		18	$		39	$		33	$		3		$		501

		As of December 31, 2017
		First Mortgage Loans
		1 – 4     Family			Construction				Land   Acquisition &   Development				Multi-   family				Commercial				Consumer   Loans			Commercial   Loans			Total
		(Dollars in Thousands)
Beginning ALLL Balance at September 30, 2017	$		311	$		32		$		2		$		20		$		21		$		34	$		3	$		423
Charge-offs			-			-				-				-				-				-			-			-
Recoveries			-			-				-				-				-				-			-			-
Provisions			15			(6	)			(2	)			(1	)			(1	)			-			1			6
Ending ALLL Balance at December 31, 2017	$		326	$		26		$		-		$		19		$		20		$		34	$		4	$		429
Individually evaluated for impairment	$		-	$		-		$		-		$		-		$		-		$		-	$		-	$		-
Collectively evaluated for impairment			326			26				-				19				20				34			4			429
	$		326	$		26		$		-		$		19		$		20		$		34	$		4	$		429

		As of December 31, 2017
		First Mortgage Loans
		1 – 4     Family			Construction				Land   Acquisition &   Development				Multi-   family				Commercial			Consumer   Loans			Commercial   Loans			Total
		(Dollars in Thousands)
Beginning ALLL Balance at June 30, 2017	$		305	$		30		$		5		$		20		$		20	$		34	$		4	$		468
Charge-offs			-			-				-				-				-			-			-			-
Recoveries			-			-				-				-				-			-			-			-
Provisions			22			(4	)			(5	)			(1	)			-			-			-			12
Ending ALLL Balance at December 31, 2017	$		327	$		26		$		-		$		19		$		20	$		34	$		4	$		430
Individually evaluated for impairment	$		-	$		-		$		-		$		-		$		-	$		-	$		-	$		-
Collectively evaluated for impairment			327			26				-				19				20			34			4			430
	$		327	$		26		$		-		$		19		$		20	$		34	$		4	$		430

During the three and six months ending December 31, 2018, the ALLL increased $14 thousand and $33 thousand, respectively. For the three months ended December 31, 2018, the ALLL associated with 1 - 4 family real estate loans increased $10 thousand and the ALLL associated with commercial loans increased $7 thousand. These increases were partially offset by a decrease of $4 thousand in the ALLL associated with the construction loan segment. During the six months ended December 31, 2018, the ALLL associated with 1 - 4 family real estate loans, land acquisition and development loans and commercial loans increased by $17 thousand, $10 thousand and $4 thousand, respectively. The primary reason for the changes in the ALLL balances, both in total, and within the identified segments, is changes in applicable loan balances.

During the three months and six months ended December 31, 2017, the ALLL increased $6 thousand and $12 thousand, respectively. These increases were associated with the 1-4 family real estate loan portfolio and were partially offset by decreases in the ALLL associated with construction and land acquisition and development loans. The primary reason for the changes in the ALLL associated with these segments were the changes in associated loan balances.

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FEDERAL HOME LOAN BANK (FHLB) ADVANCES

6 Months Ended

Dec. 31, 2018

Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures [Abstract]

FEDERAL HOME LOAN BANK (FHLB) ADVANCES

11. FEDERAL HOME LOAN BANK (FHLB) ADVANCES

The following table presents contractual maturities of FHLB long-term advances as of December 31, 2018 and June 30, 2018.

					Weighted-		Stated interest
	Maturity range				average		rate range					December 31,			June 30,
Description	from		to		interest rate 5		from		to			2018			2018
												(Dollars in Thousands)
Fixed		10/01/20		10/03/22		3.03%		2.95%		3.09%	$		15,000	$		-
Adjustable		10/01/20		10/01/21		2.47%		2.43%		2.52%			85,000			-
Total											$		100,000	$		-

Maturities of FHLB long-term advances at December 31, 2018, are summarized as follows:

Maturing During                 Fiscal Year Ended                                         June 30:			Amount		Weighted-       Average       Interest Rate
		(Dollars in Thousands)
2019	$			-		-
2020				-		-
2021				65,000		2.51%
2022				30,000		2.55%
2023				5,000		3.09%
2024 and thereafter				-		-
Total	$			100,000		2.55%

⁵  As of December 31, 2018.

The adjustable rate advances are not convertible or callable. The FHLB advances are secured by the Company’s FHLB stock, mortgage-backed and investment securities, and loans, and are subject to substantial prepayment penalties.

The Company also utilized revolving and short-term FHLB advances. Short-term FHLB advances generally mature within 90 days, while revolving FHLB advances may be repaid by the Company without penalty. The following table presents information regarding such advances as of December 31, 2018 and June 30, 2018:

		December 31,         2018				June 30,         2018
		(Dollars in Thousands)
FHLB revolving and short-term advances:
Ending balance	$		70,067		$		171,403
Average balance			113,789				167,306
Maximum month-end balance			160,484				179,791
Average interest rate			2.36	%			1.60	%
Weighted-average rate			2.62	%			2.12	%

At December 31, 2018, the Company had remaining borrowing capacity with the FHLB of approximately $2.6 million.

The FHLB advances are secured by the Company’s FHLB stock, loans, and mortgage-backed and investment securities held in safekeeping at the FHLB. FHLB advances are subject to substantial prepayment penalties.

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FAIR VALUE MEASUREMENTS

6 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

12. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. GAAP established a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels:

Level I:	Quoted prices are available in active markets for identical assets or liabilities as of the reported date.
Level II:	Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed.
Level III:	Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

Assets Measured at Fair Value on a Recurring Basis

Investment Securities Available-for-Sale

Fair values for securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities. The Company has no Level I or Level III investment securities. Level II investment securities were primarily comprised of investment-grade corporate bonds and U.S. dollar-denominated investment-grade corporate bonds of large foreign issuers.

The following tables present the assets reported on a recurring basis on the Consolidated Balance Sheet at their fair value as of December 31, 2018 and June 30, 2018, by level within the fair value hierarchy. As required by GAAP, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

		December 31, 2018
		Level I				Level II			Level III			Total
		(Dollars in Thousands)
Assets measured on a recurring basis:
Investment securities – available for sale:
Obligations of states and political subdivisions	$		-		$		1,623	$		-	$		1,623
Corporate securities			-				100,700			-			100,700
Foreign debt securities 6			-				25,191			-			25,191
	$		-	$			127,514	$		-	$		127,514

		June 30, 2018
		Level I			Level II			Level III			Total
		(Dollars in Thousands)
Assets measured on a recurring basis:
Investment securities – available for sale:
Obligations of states and political subdivisions	$		-	$		1,621	$		-	$		1,621
Corporate securities			-			104,339			-			104,339
Foreign debt securities 6			-			22,851			-			22,851
	$		-		$	128,811	$		-	$		128,811

Assets Measured at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis in accordance with U.S. generally accepted accounting principles. These include assets that are measured at the lower of cost or fair value that were recognized at fair value below cost at the end of the period.

⁶  U.S. dollar-denominated investment-grade corporate bonds of large foreign corporate issuers.

Impaired Loans

Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment in accordance with ASC Topic 310. The fair value of impaired loans is estimated using one of several methods, including collateral value, liquidation value and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. Collateral values are estimated using Level II inputs based on observable market data or Level III inputs based on customized discounting criteria. For a majority of impaired real estate related loans, the Company obtains a current external appraisal. Other valuation techniques are used as well, including internal valuations, comparable property analysis and contractual sales information. The Company has no Level I, Level II or Level III impaired loans at December 31, 2018 and June 30, 2018.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Dec. 31, 2018

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, 2018
		Carrying Amount			Fair Value			Level I			Level II			Level III
		(Dollars in Thousands)
FINANCIAL ASSETS
Cash and cash equivalents	$		3,628	$		3,628	$		3,628	$		-	$		-
Certificates of deposit			1,346			1,346			1,346			-			-
Investment securities – available for sale			127,514			127,514			-			127,514			-
Investment securities – held to maturity			3,995			3,998			-			3,998			-
Mortgage-backed securities – held to maturity:
Agency			109,077			109,913			-			109,913			-
Private-label			845			1,011			-			-			1,011
Net loans receivable			88,405			88,404			-			-			88,404
Accrued interest receivable			1,186			1,186			1,186			-			-
FHLB stock			6,987			6,987			6,987			-			-
Bank owned life insurance			4,729			4,729			4,729			-			-
FINANCIAL LIABILITIES
Deposits:
Non-interest bearing deposits	$		22,356	$		22,356	$		22,356	$		-	$		-
NOW accounts			23,692			23,692			23,692			-			-
Savings accounts			43,982			43,982			43,982			-			-
Money market accounts			19,040			19,040			19,040			-			-
Certificates of deposit			32,625			32,460			-			-			32,460
Advance payments by borrowers for taxes and insurance			1,550			1,550			1,550			-			-
FHLB advances – fixed rate			15,000			14,090			-			-			14,090
FHLB advances – variable rate			85,000			85,000			85,000			-			-
FHLB short-term advances			70,067			70,067			70,067			-			-
Accrued interest payable			786			786			786			-			-

		June 30, 2018
		Carrying Amount			Fair Value			Level I			Level II			Level III
		(Dollars in Thousands)
FINANCIAL ASSETS
Cash and cash equivalents	$		2,441	$		2,441	$		2,441	$		-	$		-
Certificates of deposit			350			350			350			-			-
Investment securities – available for sale			128,811			128,811			-			128,811			-
Investment securities – held to maturity			6,181			6,125			-			6,125			-
Mortgage-backed securities – held to maturity:
Agency			114,899			115,733			-			115,733			-
Private-label			958			1,111			-			-			1,111
Net loans receivable			84,675			84,319			-			-			84,319
Accrued interest receivable			1,225			1,225			1,225			-			-
FHLB stock			7,161			7,161			7,161			-			-
Bank owned life insurance			4,668			4,668			4,668			-			-
FINANCIAL LIABILITIES
Deposits:
Non-interest bearing deposits	$		18,436	$		18,436	$		18,436	$		-	$		-
Interest-earning checking			24,459			24,459			24,459			-			-
Savings accounts			44,727			44,727			44,727			-			-
Money market accounts			21,087			21,087			21,087			-			-
Certificates of deposit			34,376			34,053			-			-			34,053
Advance payments by borrowers for taxes and insurance			1,938			1,938			1,938			-			-
FHLB short-term advances			171,403			171,403			171,403			-			-
Accrued interest payable			380			380			380			-			-

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.

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.

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EARNINGS PER SHARE (Tables)

6 Months Ended

Dec. 31, 2018

EARNINGS PER SHARE:

Schedule of Basic and Diluted Earnings Per Share

The following table sets forth the computation of the weighted-average common shares used to calculate basic and diluted earnings per share.

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2018			2017			2018			2017
Weighted average common shares issued		3,805,636			3,805,636			3,805,636			3,805,636
Average treasury stock shares		(1,849,437	)		(1,797,492	)		(1,843,161	)		(1,797,492	)
Average unallocated ESOP shares		(174,108	)		(181,564	)		(174,902	)		(182,415	)
Weighted average common shares and common stock equivalents used to calculate basic earnings per share		1,782,091			1,826,580			1,787,573			1,825,729
Additional common stock equivalents (stock options) used to calculate diluted earnings per share		-			-			109			-
Weighted average common shares and common stock equivalents used to calculate diluted earnings per share		1,782,091			1,826,580			1,787,682			1,825,729

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INVESTMENT SECURITIES (Tables)

6 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Schedule of Amortized Cost and Fair Values of Investments

The amortized cost and fair values of investments are as follows:

					Gross			Gross
		Amortized			Unrealized			Unrealized				Fair
		Cost			Gains			Losses				Value
		(Dollars in Thousands)
December 31, 2018
AVAILABLE FOR SALE
Corporate debt securities	$		102,207	$		3	$		(1,510	)	$		100,700
Foreign debt securities 1			25,558			-			(367	)			25,191
Obligations of states and political subdivisions			1,630			-			(7	)			1,623
Total	$		129,395	$		3	$		(1,884	)	$		127,514
					Gross			Gross
		Amortized			Unrealized			Unrealized				Fair
		Cost			Gains			Losses				Value
		(Dollars in Thousands)
December 31, 2018
HELD TO MATURITY
U.S. government agency securities	$		-	$		-	$		-		$		-
Corporate debt securities			-			-			-				-
Obligations of states and political subdivisions			3,995			4			(1	)			3,998
Total	$		3,995	$		4	$		(1	)	$		3,998

¹ U.S. dollar denominated investment-grade corporate bonds of large foreign corporate issuers.

					Gross			Gross
		Amortized			Unrealized			Unrealized				Fair
		Cost			Gains			Losses				Value
		(Dollars in Thousands)
June 30, 2018
AVAILABLE FOR SALE
Corporate debt securities	$		104,316	$		204	$		(181	)	$		104,339
Foreign debt securities 1			22,878			11			(38	)			22,851
Obligations of states and political subdivisions			1,630			-			(9	)			1,621
Total	$		128,824	$		215	$		(228	)	$		128,811
					Gross			Gross
		Amortized			Unrealized			Unrealized				Fair
		Cost			Gains			Losses				Value
		(Dollars in Thousands)
June 30, 2018
HELD TO MATURITY
U.S. government agency securities	$		625	$		-	$		(1	)	$		624
Corporate debt securities			1,061			13			-				1,074
Obligations of states and political subdivisions 2			4,495			-			(68	)			4,427
Total	$		6,181	$		13	$		(69	)	$		6,125

² U.S. dollar denominated investment-grade corporate bonds of large foreign corporate issuers.

Schedule of Investments by Contractual Maturity

The amortized cost and fair values of debt securities at December 31, 2018, by contractual maturity, are shown below. Expected maturities may differ from the contractual maturities because issuers may have the right to call securities prior to their final maturities.

		Due in one year or less			Due after one through five years			Due after five through ten years			Due after ten years			Total
		(Dollars in Thousands)
AVAILABLE FOR SALE
Amortized cost	$		13,378	$		110,310	$		5,707	$		-	$		129,395
Fair value			13,364			108,607			5,543			-			127,514
HELD TO MATURITY
Amortized cost	$		500	$		3,495	$		-	$		-	$		3,995
Fair value			499			3,499			-			-			3,998

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MORTGAGE-BACKED SECURITIES (Tables)

6 Months Ended

Dec. 31, 2018

MORTGAGE-BACKED SECURITIES [Abstract]

Schedule of Information Relating To Private Label CMO Portfolio

The following table sets forth information with respect to the Company’s private-label CMO portfolio as of December 31, 2018. At the time of purchase, all of our private-label CMOs were rated in the highest investment category by at least two ratings agencies.

			At December 31, 2018
			Rating						Amortized Cost		Fair   Value3		Life to Date Impairment   Recorded in   Earnings
Cusip #	Security Description		S&P		Moody’s		Fitch		(in thousands)
126694CP1		CWHL SER 21 A11		N/A		Caa2		D	$	459	$	572	$	201
126694KF4		CWHL SER 24 A15		NR		N/A		D		192		221		44
126694KF4		CWHL SER 24 A15		NR		N/A		D		96		111		89
126694MP0		CWHL SER 26 1A5		NR		N/A		D		98		107		36
									$	845	$	1,011	$	370

Schedule of Amortized Cost and Fair Values of Mortgage-Backed Securities

The amortized cost and fair values of the Company’s mortgage-backed securities are as follows:

		Amortized     Cost			Gross     Unrealized     Gains			Gross     Unrealized     Losses				Fair     Value
		(Dollars in Thousands)
December 31, 2018
HELD TO MATURITY
Collateralized mortgage obligations:
Agency	$		109,077	$		1,297	$		(461	)	$		109,913
Private-label			845			166			-				1,011
Total	$		109,922	$		1,463	$		(461	)	$		110,924
		Amortized     Cost			Gross     Unrealized     Gains			Gross     Unrealized     Losses				Fair     Value
		(Dollars in Thousands)
June 30, 2018
HELD TO MATURITY
Collateralized mortgage obligations:
Agency	$		114,899	$		1,260	$		(426	)	$		115,733
Private-label			958			153			-				1,111
Total	$		115,857	$		1,413	$		(426	)	$		116,844

Schedule of Mortgage-Backed Securities by Contractual Maturity

		Due in      one year      or less			Due after  one through  five years			Due after   five through   ten years			Due after     ten years			Total
		(Dollars in Thousands)
HELD TO MATURITY
Amortized cost	$		-	$		-	$		165	$		109,757	$		109,922
Fair value			-			-			168			110,756			110,924

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

6 Months Ended

Dec. 31, 2018

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of Changes in Accumulated Other Comprehensive loss

The following tables present the changes in accumulated other comprehensive loss by component, for the three and six months ended December 31, 2018 and 2017.

	Three Months Ended December 31, 2018
	(Dollars in Thousands – net of tax)
	Unrealized Gains         and Losses on         Available-for-Sale         Securities			Unrealized Gains         and Losses on         Held-to-Maturity         Securities			Total
Beginning Balance – September 30, 2018	$	88		$	(209	)	$	(121	)
Other comprehensive income (loss) before reclassifications		(1,574	)		10			(1,564	)
Amounts reclassified from accumulated other comprehensive income (loss)		-			-			-
Net current-period other comprehensive income (loss)		(1,574	)		10			(1,564	)
Ending Balance – December 31, 2018	$	(1,486	)	$	(199	)	$	(1,685	)
	Six Months Ended December 31, 2018
	(Dollars in Thousands – net of tax)
	Unrealized Gains         and Losses on         Available-for-Sale         Securities			Unrealized Gains         and Losses on         Held-to-Maturity         Securities			Total
Beginning Balance – June 30, 2018	$	(10	)	$	(178	)	$	(188	)
Other comprehensive income (loss) before reclassifications		(1,478	)		(21	)		(1,499	)
Amounts reclassified from accumulated other comprehensive income (loss)		2			-			2
Net current-period other comprehensive income (loss)		(1,476	)		(21	)		(1,497	)
Ending Balance – December 31, 2018	$	(1,486	)	$	(199	)	$	(1,685	)

	Three Months Ended December 31, 2017
	(Dollars in Thousands – net of tax)
	Unrealized Gains         and Losses on         Available-for-Sale         Securities		Unrealized Gains         and Losses on         Held-to-Maturity         Securities			Total
Beginning Balance – September 30, 2017	$	91	$	(186	)	$	(95	)
Other comprehensive income (loss) before reclassifications		33		(16	)		17
Amounts reclassified from accumulated other comprehensive income (loss)		24		(39	)		(15	)
Net current-period other comprehensive income (loss)		57		(55	)		2
Ending Balance – December 31, 2017	$	148	$	(241	)	$	(93	)
	Six Months Ended December 31, 2017
	(Dollars in Thousands – net of tax)
	Unrealized Gains         and Losses on         Available-for-Sale         Securities		Unrealized Gains         and Losses on         Held-to-Maturity         Securities			Total
Beginning Balance – June 30, 2017	$	44	$	(232	)	$	(188	)
Other comprehensive income (loss) before reclassifications		80		30			110
Amounts reclassified from accumulated other comprehensive income (loss)		24		(39	)		(15	)
Net current-period other comprehensive income (loss)		104		(9	)		95
Ending Balance – December 31, 2017	$	148	$	(241	)	$	(93	)

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UNREALIZED LOSSES ON SECURITIES (Tables)

6 Months Ended

Dec. 31, 2018

Debt and Equity Securities, Gain (Loss) [Abstract]

Schedule of Gross Unrealized Losses and Fair Value

The following tables show the Company’s gross unrealized losses and fair value, aggregated by category and length of time that the individual securities have been in a continuous unrealized loss position, at December 31, 2018 and June 30, 2018.

			December 31, 2018
			Less Than Twelve Months						Twelve Months or Greater						Total
	Fair Value				Gross Unrealized Losses			Fair Value			Gross Unrealized Losses			Fair Value			Gross Unrealized Losses
				(Dollars in Thousands)
Corporate debt securities		$		88,190	$	(1,452	)	$		4,973	$	(58	)	$		93,163	$	(1,510	)
Foreign debt securities 4				20,775		(367	)			-		-				20,775		(367	)
Obligations of state and political subdivision				500		(1	)			1,623		(7	)			2,123		(8	)
Collateralized mortgage obligations:
Agency				7,047		(75	)			21,440		(386	)			28,487		(461	)
Total		$		116,512	$	(1,895	)	$		28,036	$	(451	)	$		144,548	$	(2,346	)
			June 30, 2018
			Less Than Twelve Months						Twelve Months or Greater						Total
	Fair Value				Gross Unrealized Losses			Fair Value			Gross Unrealized Losses			Fair Value			Gross Unrealized Losses
				(Dollars in Thousands)
U.S. government agency securities		$		624	$	(1	)	$		-	$	-		$		624	$	(1	)
Corporate debt securities				56,714		(169	)			3,028		(12	)			59,742		(181	)
Foreign debt securities³				13,761		(38	)			-		-				13,761		(38	)
Obligations of states and political subdivisions				5,048		(77	)			-		-				5,048		(77	)
Collateralized mortgage obligations:
Agency				7,600		(12	)			21,424		(414	)			29,024		(426	)
Total		$		83,747	$	(297	)	$		24,452	$	(426	)	$		108,199	$	(723	)

Schedule of Changes in the Credit Loss

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2018			2017			2018			2017
	(Dollars in Thousands)
Beginning balance	$	236		$	258		$	239		$	259
Initial credit impairment		-			-			-			-
Subsequent credit impairment		-			-			-			8
Reductions for amounts recognized in earnings due to intent or requirement to sell		-			-			-			-
Reductions for securities sold		-			-			-			-
Reduction for actual realized losses		(7	)		(13	)		(10	)		(19	)
Reduction for increase in cash flows expected to be collected		-			-			-			-
Ending balance	$	229		$	248		$	229		$	248

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LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES (Tables)

6 Months Ended

Dec. 31, 2018

Receivables [Abstract]

Schedule of Primary Segments of Loan Portfolio

The following table summarizes the primary segments of the loan portfolio as of December 31, 2018 and June 30, 2018.

		December 31, 2018							June 30, 2018
		Total         Loans			Individually evaluated for impairment		Collectively evaluated for impairment		Total Loans			Individually evaluated for impairment		Collectively evaluated for impairment
		(Dollars in Thousands)
First mortgage loans:
1 – 4 family dwellings	$		76,011		$	-	$	76,011	$	72,237		$	-	$	72,237
Construction			1,102			-		1,102		1,769			-		1,769
Land acquisition & development			292			-		292		-			-		-
Multi-family dwellings			3,258			-		3,258		3,390			-		3,390
Commercial			3,953			-		3,953		3,482			-		3,482
Consumer Loans
Home equity			982			-		982		861			-		861
Home equity lines of credit			2,174			-		2,174		2,177			-		2,177
Other			131			-		131		125			-		125
Commercial Loans			525			-		525		633			-		633
	$		88,428		$	-	$	88,428	$	84,674		$	-	$	84,674
Plus: Deferred loan costs			478							469
Allowance for loan losses			(501	)						(468	)
Total	$		88,405						$	84,675

Schedule of Nonaccrual Loans

Total nonaccrual loans as of December 31, 2018 and June 30, 2018 and the related interest income recognized for the three and six months ended December 31, 2018 and December 31, 2017 are as follows:

		December 31,         2018			June 30,         2018
		(Dollars in Thousands)
Principal outstanding
1 – 4 family dwellings	$		233	$		235
Construction			-			-
Land acquisition & development			-			-
Commercial real estate			-			-
Home equity lines of credit			-			-
Total	$		233	$		235

		Three Months Ended						Six Months Ended
		December 31,			December 31,			December 31,			December 31,
		2018			2017			2018			2017
		(Dollars in Thousands)
Average nonaccrual loans
1 – 4 family dwellings	$		233	$		243	$		234	$		244
Construction			-			-			-			-
Land acquisition & development			-			-			-			-
Commercial real estate			-			-			-			-
Home equity lines of credit			-			-			-			-
Total	$		233	$		243	$		234	$		244
Income that would have been recognized	$		4	$		4	$		9	$		9
Interest income recognized	$		3	$		5	$		6	$		11

Schedule of Loan Portfolio by Aging Categories

The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of December 31, 2018 and June 30, 2018:

		Current			30 – 59   Days Past   Due			60 – 89   Days Past   Due			90 Days +   Past Due Accruing			90 Days +   Past Due Non-accrual			Total   Past   Due			Total Loans
		(Dollars in Thousands)
December 31, 2018
First mortgage loans:
1 – 4 family dwellings	$		75,778	$		-	$		-	$		-	$		233	$		233	$		76,011
Construction			1,102			-			-			-			-			-			1,102
Land acquisition & development			292			-			-			-			-			-			292
Multi-family dwellings			3,258			-			-			-			-			-			3,258
Commercial			3,953			-			-			-			-			-			3,953
Consumer Loans:
Home equity			982			-			-			-			-			-			982
Home equity lines of credit			2,174			-			-			-			-			-			2,174
Other			131			-			-			-			-			-			131
Commercial Loans			525			-			-			-			-			-			525
	$		88,195	$		-	$		-	$		-	$		233	$		233			88,428
Plus: Deferred loan fees																					478
Allowance for loan losses																					(501	)
Net Loans Receivable																			$		88,405
		Current			30 – 59   Days Past   Due			60 – 89   Days Past Due			90 Days +   Past Due Accruing			90 Days +   Past Due Non-accrual			Total   Past   Due			Total Loans
		(Dollars in Thousands)
June 30, 2018
First mortgage loans:
1 – 4 family dwellings	$		72,002	$		-	$		-	$		-	$		235	$		235	$		72,237
Construction			1,769			-			-			-			-			-			1,769
Land acquisition & development			-			-			-			-			-			-			-
Multi-family dwellings			3,390			-			-			-			-			-			3,390
Commercial			3,482			-			-			-			-			-			3,482
Consumer Loans:
Home equity			861			-			-			-			-			-			861
Home equity lines of credit			2,177			-			-			-			-			-			2,177
Other			125			-			-			-			-			-			125
Commercial Loans			633			-			-			-			-			-			633
	$		84,439	$		-	$		-	$		-	$		235	$		235			84,674
Plus: Deferred loan fees																					469
Allowance for loan losses																					(468	)
Net Loans Receivable																			$		84,675

Schedule of Loans by Internal Classification

The following tables present the Company’s internally classified construction, land acquisition and development, multi-family residential, commercial real estate and commercial (not secured by real estate) loans at December 31, 2018 and June 30, 2018.

		December 31, 2018
		(Dollars in Thousands)
		Construction			Land Acquisition & Development Loans			Multi- family Residential			Commercial Real Estate			Commercial
Pass	$		1,102	$		292	$		3,258	$		3.953	$		525
Special Mention		-			-			-			-			-
Substandard			-			-			-			-			-
Doubtful			-			-			-			-			-
Ending Balance	$		1,102	$		292	$		3,258	$		3,953	$		525

		June 30, 2018
		(Dollars in Thousands)
	Construction				Land Acquisition &   Development   Loans			Multi-family   Residential			Commercial   Real Estate			Commercial
Pass	$		1,769	$		-	$		3,390	$		3,482	$		633
Special Mention			-			-			-			-			-
Substandard			-			-			-			-			-
Doubtful			-			-			-			-			-
Ending Balance	$		1,769	$		-	$		3,390	$		3,482	$		633

Schedule of Performing and Non-Performing Loans

The following table presents performing and non-performing 1 – 4 family residential and consumer loans based on payment activity for the periods ended December 31, 2018 and June 30, 2018.

		December 31, 2018
		1 – 4 Family			Consumer
		(Dollars in Thousands)
Performing	$		75,778	$		3,287
Non-performing			233			-
Total	$		76,011	$		3,287
		June 30, 2018
		1 – 4 Family			Consumer
		(Dollars in Thousands)
Performing	$		72,002	$		3,163
Non-performing			235			-
Total	$		72,237	$		3,163

Schedule of Primary Segments of Allowance for Loan Losses

The following tables summarize the primary segments of the allowance for loan losses (“ALLL”), segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of December 31, 2018 and 2017. Activity in the allowance is presented for the three and six months ended December 31, 2018 and 2017.

		As of December 31, 2018
		First Mortgage Loans
		1 – 4     Family			Construction				Land   Acquisition &   Development			Multi-   family			Commercial			Consumer   Loans			Commercial   Loans			Total
		(Dollars in Thousands)
Beginning ALLL Balance at September 30, 2018	$		363	$		29		$		10	$		18	$		32	$		32	$		3	$		487
Charge-offs			-			-				-			-			-			-			-			-
Recoveries			-			-				-			-			-			-			-			-
Provisions			10			(4	)			-			-			7			1			-			14
Ending ALLL Balance at December 31, 2018	$		373	$		25		$		10	$		18	$		39	$		33	$		3	$		501
Individually evaluated for impairment	$		-	$		-		$		-	$		-	$		-	$		-	$		-	$		-
Collectively evaluated for impairment			373			25				10			18			39			33			3			501
	$		373	$		25		$		10	$		18	$		39	$		33	$		3	$		501

		As of December 31, 2018
		First Mortgage Loans
		1 – 4   Family			Construction			Land   Acquisition &   Development			Multi-   family			Commercial			Consumer   Loans			Commercial   Loans				Total
					(Dollars in Thousands)
Beginning ALLL Balance at June 30, 2018	$		356	$		24	$		-	$		18	$		35	$		31	$		4		$		468
Charge-offs			-			-			-			-			-			-			-				-
Recoveries			-			-			-			-			-			-			-				-
Provisions			17			1			10			-			4			2			(1	)			33
Ending ALLL Balance at December 31, 2018	$		373	$		25	$		10	$		18	$		39	$		33	$		3		$		501
Individually evaluated for impairment	$		-	$		-	$		-	$		-	$		-	$		-	$		-		$		-
Collectively evaluated for impairment			373			25			10			18			39			33			3				501
	$		373	$		25	$		10	$		18	$		39	$		33	$		3		$		501

		As of December 31, 2017
		First Mortgage Loans
		1 – 4     Family			Construction				Land   Acquisition &   Development				Multi-   family				Commercial				Consumer   Loans			Commercial   Loans			Total
		(Dollars in Thousands)
Beginning ALLL Balance at September 30, 2017	$		311	$		32		$		2		$		20		$		21		$		34	$		3	$		423
Charge-offs			-			-				-				-				-				-			-			-
Recoveries			-			-				-				-				-				-			-			-
Provisions			15			(6	)			(2	)			(1	)			(1	)			-			1			6
Ending ALLL Balance at December 31, 2017	$		326	$		26		$		-		$		19		$		20		$		34	$		4	$		429
Individually evaluated for impairment	$		-	$		-		$		-		$		-		$		-		$		-	$		-	$		-
Collectively evaluated for impairment			326			26				-				19				20				34			4			429
	$		326	$		26		$		-		$		19		$		20		$		34	$		4	$		429

		As of December 31, 2017
		First Mortgage Loans
		1 – 4     Family			Construction				Land   Acquisition &   Development				Multi-   family				Commercial			Consumer   Loans			Commercial   Loans			Total
		(Dollars in Thousands)
Beginning ALLL Balance at June 30, 2017	$		305	$		30		$		5		$		20		$		20	$		34	$		4	$		468
Charge-offs			-			-				-				-				-			-			-			-
Recoveries			-			-				-				-				-			-			-			-
Provisions			22			(4	)			(5	)			(1	)			-			-			-			12
Ending ALLL Balance at December 31, 2017	$		327	$		26		$		-		$		19		$		20	$		34	$		4	$		430
Individually evaluated for impairment	$		-	$		-		$		-		$		-		$		-	$		-	$		-	$		-
Collectively evaluated for impairment			327			26				-				19				20			34			4			430
	$		327	$		26		$		-		$		19		$		20	$		34	$		4	$		430

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FEDERAL HOME LOAN BANK (FHLB) ADVANCES (Tables)

6 Months Ended

Dec. 31, 2018

Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures [Abstract]

Schedule of Contractual Maturities of Federal Home Loan Bank Long-Term Advances

The following table presents contractual maturities of FHLB long-term advances as of December 31, 2018 and June 30, 2018.

					Weighted-		Stated interest
	Maturity range				average		rate range					December 31,			June 30,
Description	from		to		interest rate 5		from		to			2018			2018
												(Dollars in Thousands)
Fixed		10/01/20		10/03/22		3.03%		2.95%		3.09%	$		15,000	$		-
Adjustable		10/01/20		10/01/21		2.47%		2.43%		2.52%			85,000			-
Total											$		100,000	$		-

Maturities of Federal Home Loan Bank Long-Term Advances

Maturities of FHLB long-term advances at December 31, 2018, are summarized as follows:

Maturing During                 Fiscal Year Ended                                         June 30:			Amount		Weighted-       Average       Interest Rate
		(Dollars in Thousands)
2019	$			-		-
2020				-		-
2021				65,000		2.51%
2022				30,000		2.55%
2023				5,000		3.09%
2024 and thereafter				-		-
Total	$			100,000		2.55%

Schedule of Federal Home Loan Bank Short-Term Advances

The following table presents information regarding such advances as of December 31, 2018 and June 30, 2018:

		December 31,         2018				June 30,         2018
		(Dollars in Thousands)
FHLB revolving and short-term advances:
Ending balance	$		70,067		$		171,403
Average balance			113,789				167,306
Maximum month-end balance			160,484				179,791
Average interest rate			2.36	%			1.60	%
Weighted-average rate			2.62	%			2.12	%

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on a Recurring Basis

The following tables present the assets reported on a recurring basis on the Consolidated Balance Sheet at their fair value as of December 31, 2018 and June 30, 2018, by level within the fair value hierarchy. As required by GAAP, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

		December 31, 2018
		Level I				Level II			Level III			Total
		(Dollars in Thousands)
Assets measured on a recurring basis:
Investment securities – available for sale:
Obligations of states and political subdivisions	$		-		$		1,623	$		-	$		1,623
Corporate securities			-				100,700			-			100,700
Foreign debt securities 6			-				25,191			-			25,191
	$		-	$			127,514	$		-	$		127,514

		June 30, 2018
		Level I			Level II			Level III			Total
		(Dollars in Thousands)
Assets measured on a recurring basis:
Investment securities – available for sale:
Obligations of states and political subdivisions	$		-	$		1,621	$		-	$		1,621
Corporate securities			-			104,339			-			104,339
Foreign debt securities 6			-			22,851			-			22,851
	$		-		$	128,811	$		-	$		128,811

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Dec. 31, 2018

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and estimated fair values are as follows:

		December 31, 2018
		Carrying Amount			Fair Value			Level I			Level II			Level III
		(Dollars in Thousands)
FINANCIAL ASSETS
Cash and cash equivalents	$		3,628	$		3,628	$		3,628	$		-	$		-
Certificates of deposit			1,346			1,346			1,346			-			-
Investment securities – available for sale			127,514			127,514			-			127,514			-
Investment securities – held to maturity			3,995			3,998			-			3,998			-
Mortgage-backed securities – held to maturity:
Agency			109,077			109,913			-			109,913			-
Private-label			845			1,011			-			-			1,011
Net loans receivable			88,405			88,404			-			-			88,404
Accrued interest receivable			1,186			1,186			1,186			-			-
FHLB stock			6,987			6,987			6,987			-			-
Bank owned life insurance			4,729			4,729			4,729			-			-
FINANCIAL LIABILITIES
Deposits:
Non-interest bearing deposits	$		22,356	$		22,356	$		22,356	$		-	$		-
NOW accounts			23,692			23,692			23,692			-			-
Savings accounts			43,982			43,982			43,982			-			-
Money market accounts			19,040			19,040			19,040			-			-
Certificates of deposit			32,625			32,460			-			-			32,460
Advance payments by borrowers for taxes and insurance			1,550			1,550			1,550			-			-
FHLB advances – fixed rate			15,000			14,090			-			-			14,090
FHLB advances – variable rate			85,000			85,000			85,000			-			-
FHLB short-term advances			70,067			70,067			70,067			-			-
Accrued interest payable			786			786			786			-			-

		June 30, 2018
		Carrying Amount			Fair Value			Level I			Level II			Level III
		(Dollars in Thousands)
FINANCIAL ASSETS
Cash and cash equivalents	$		2,441	$		2,441	$		2,441	$		-	$		-
Certificates of deposit			350			350			350			-			-
Investment securities – available for sale			128,811			128,811			-			128,811			-
Investment securities – held to maturity			6,181			6,125			-			6,125			-
Mortgage-backed securities – held to maturity:
Agency			114,899			115,733			-			115,733			-
Private-label			958			1,111			-			-			1,111
Net loans receivable			84,675			84,319			-			-			84,319
Accrued interest receivable			1,225			1,225			1,225			-			-
FHLB stock			7,161			7,161			7,161			-			-
Bank owned life insurance			4,668			4,668			4,668			-			-
FINANCIAL LIABILITIES
Deposits:
Non-interest bearing deposits	$		18,436	$		18,436	$		18,436	$		-	$		-
Interest-earning checking			24,459			24,459			24,459			-			-
Savings accounts			44,727			44,727			44,727			-			-
Money market accounts			21,087			21,087			21,087			-			-
Certificates of deposit			34,376			34,053			-			-			34,053
Advance payments by borrowers for taxes and insurance			1,938			1,938			1,938			-			-
FHLB short-term advances			171,403			171,403			171,403			-			-
Accrued interest payable			380			380			380			-			-

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RECENT ACCOUNTING PRONOUNCEMENTS (Details) $ in Thousands	6 Months Ended
	Dec. 31, 2018 USD ($)
Accounting Policies [Abstract]
Cumulative effect adjustment from accumulated other comprehensive income to retained earnings	$ 0

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EARNINGS PER SHARE (Schedule of Basic and Diluted Earnings per Share) (Details) - shares	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
EARNINGS PER SHARE:
Weighted average common shares issued	3,805,636	3,805,636	3,805,636	3,805,636
Average treasury stock shares	(1,849,437)	(1,797,492)	(1,843,161)	(1,797,492)
Average unallocated ESOP shares	(174,108)	(181,564)	(174,902)	(182,415)
Weighted average common shares and common stock equivalents used to calculate basic earnings per share	1,782,091	1,826,580	1,787,573	1,825,729
Additional common stock equivalents (stock options) used to calculate diluted earnings per share			109
Weighted average common shares and common stock equivalents used to calculate diluted earnings per share	1,782,091	1,826,580	1,787,682	1,825,729

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EARNINGS PER SHARE (Narrative) (Details) - Employee Stock Option [Member] - $ / shares	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	27,019	114,519	27,019	114,519
Exercise price	$ 16.20	$ 16.20	$ 16.20	$ 16.20

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STOCK BASED COMPENSATION DISCLOSURE (Details) $ in Thousands	6 Months Ended
	Dec. 31, 2018 USD ($) shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Number of options and restricted shares authorized for issuance under the 2008 Stock Incentive Plan	152,000
Number of restricted shares authorized for issuance under the 2008 Incentive Plan	38,000
Vesting period for plan	5 years
Contractual term	10 years
Share-based compensation | $	$ 0

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INVESTMENT SECURITIES (Schedule of Amortized Cost and Fair Values of Investments) (Details) - USD ($) $ in Thousands		Dec. 31, 2018	Jun. 30, 2018
AVAILABLE FOR SALE
Amortized Cost		$ 129,395	$ 128,824
Gross Unrealized Gains		3	215
Gross Unrealized Losses		(1,884)	(228)
Fair Value		127,514	128,811
HELD TO MATURITY
Amortized Cost		3,995	6,181
Gross Unrealized Gains		4	13
Gross Unrealized Losses		(1)	(69)
Fair Value		3,998	6,125
U.S. Government Agency Securities [Member]
HELD TO MATURITY
Amortized Cost			625
Gross Unrealized Gains
Gross Unrealized Losses			(1)
Fair Value			624
Corporate Debt Securities [Member]
AVAILABLE FOR SALE
Amortized Cost		102,207	104,316
Gross Unrealized Gains		3	204
Gross Unrealized Losses		(1,510)	(181)
Fair Value		100,700	104,339
HELD TO MATURITY
Amortized Cost			1,061
Gross Unrealized Gains			13
Gross Unrealized Losses
Fair Value			1,074
Foreign Debt Securities [Member]
AVAILABLE FOR SALE
Amortized Cost	[1]	25,558	22,878
Gross Unrealized Gains	[1]		11
Gross Unrealized Losses	[1]	(367)	(38)
Fair Value	[1]	25,191	22,851
Obligations of States and Political Subdivisions [Member]
AVAILABLE FOR SALE
Amortized Cost		1,630	1,630
Gross Unrealized Gains
Gross Unrealized Losses		(7)	(9)
Fair Value		1,623	1,621
HELD TO MATURITY
Amortized Cost		3,995	4,495	[1]
Gross Unrealized Gains		4		[1]
Gross Unrealized Losses		(1)	(68)	[1]
Fair Value		$ 3,998	$ 4,427	[1]

[1] U.S. dollar denominated investment-grade corporate bonds of large foreign corporate issuers.

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INVESTMENT SECURITIES (Schedule of Investments by Contractual Maturity) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
AVAILABLE FOR SALE, Amortized cost
Due in one year or less	$ 13,378
Due after one through five years	110,310
Due after five through ten years	5,707
Due after ten years
Total	129,395
AVAILABLE FOR SALE, Fair value
Due in one year or less	13,364
Due after one through five years	108,607
Due after five through ten years	5,543
Due after ten years
Total	127,514
HELD TO MATURITY, Amortized cost
Due in one year or less	500
Due after one through five years	3,495
Due after five through ten years
Due after ten years
Total	3,995	$ 6,181
HELD TO MATURITY, Fair value
Due in one year or less	499
Due after one through five years	3,499
Due after five through ten years
Due after ten years
Total	$ 3,998	$ 6,125

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INVESTMENT SECURITIES (Narrative) (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Investment securities gains	$ 2
Sale of investment securities	1,364
Pledged for FHLB [Member]
Investment securities pledged as collateral	3,500
Investment securities pledged as collateral, fair value	3,500
Pledged for Federal Reserve Bank [Member]
Investment securities pledged as collateral	13,400
Investment securities pledged as collateral, fair value	$ 13,100

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MORTGAGE-BACKED SECURITIES (Narrative) (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2018	Jun. 30, 2018
Schedule of Held-to-maturity Securities [Line Items]
Investment securities - held to maturity	$ 3,995	$ 6,181
Collateralized Mortgage Obligations [Member]
Schedule of Held-to-maturity Securities [Line Items]
Investment securities - held to maturity	109,922	115,857
Decrease in mortgage-backed securities	5,900
MBS comprised of adjustable or floating rate investments	27
Mortgage-backed securities pledged as collateral	109,100	114,900
Mortgage-backed securities pledged as collateral, fair value	109,900	115,700
Mortgage-backed securities pledged as collateral, excess collateral	8,300	2,500
Additional credit impairment charge on its private-label CMO portfolio
Private-label [Member]
Schedule of Held-to-maturity Securities [Line Items]
Investment securities - held to maturity	845	$ 958
Decrease in mortgage-backed securities	5,800
Accretion of other comprehensive loss on other-than-temporarily impaired securities held to maturity	$ 86

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MORTGAGE-BACKED SECURITIES (Schedule of Information Relating To Private Label CMO Portfolio) (Details) - USD ($) $ in Thousands		6 Months Ended
		Dec. 31, 2018		Jun. 30, 2018
Schedule of Held-to-maturity Securities [Line Items]
Investment securities - held to maturity		$ 3,995		$ 6,181
Investment securities held-to-maturity, fair value		3,998		6,125
Private-label [Member]
Schedule of Held-to-maturity Securities [Line Items]
Investment securities - held to maturity		845		958
Investment securities held-to-maturity, fair value		1,011	[1]	$ 1,111
Life to date impairment recorded in earnings		$ 370
Private-label [Member] | Cusip No. 126694CP1 [Member]
Schedule of Held-to-maturity Securities [Line Items]
S&P Rating		N/A
Moody's Rating		Caa2
Fitch Rating		D
Investment securities - held to maturity		$ 459
Investment securities held-to-maturity, fair value	[1]	572
Life to date impairment recorded in earnings		$ 201
Private-label [Member] | Cusip No. 126694KF4 [Member]
Schedule of Held-to-maturity Securities [Line Items]
S&P Rating		NR
Moody's Rating		N/A
Fitch Rating		D
Investment securities - held to maturity		$ 192
Investment securities held-to-maturity, fair value	[1]	221
Life to date impairment recorded in earnings		$ 44
Private-label [Member] | Cusip No. 126694KF4 [Member]
Schedule of Held-to-maturity Securities [Line Items]
S&P Rating		NR
Moody's Rating		N/A
Fitch Rating		D
Investment securities - held to maturity		$ 96
Investment securities held-to-maturity, fair value	[1]	111
Life to date impairment recorded in earnings		$ 89
Private-label [Member] | Cusip No. 126694MP0 [Member]
Schedule of Held-to-maturity Securities [Line Items]
S&P Rating		NR
Moody's Rating		N/A
Fitch Rating		D
Investment securities - held to maturity		$ 98
Investment securities held-to-maturity, fair value	[1]	107
Life to date impairment recorded in earnings		$ 36

[1] Fair value estimate provided by the Company's independent third party valuation consultant.

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MORTGAGE-BACKED SECURITIES (Schedule of Amortized Cost and Fair Values of Mortgage-Backed Securities) (Details) - USD ($) $ in Thousands	Dec. 31, 2018		Jun. 30, 2018
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 3,995		$ 6,181
Gross Unrealized Gains	4		13
Gross Unrealized Losses	(1)		(69)
Fair Value	3,998		6,125
Agency [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	109,077		114,899
Gross Unrealized Gains	1,297		1,260
Gross Unrealized Losses	(461)		(426)
Fair Value	109,913		115,733
Private-label [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	845		958
Gross Unrealized Gains	166		153
Gross Unrealized Losses
Fair Value	1,011	[1]	1,111
Collateralized Mortgage Obligations [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	109,922		115,857
Gross Unrealized Gains	1,463		1,413
Gross Unrealized Losses	(461)		(426)
Fair Value	$ 110,924		$ 116,844

[1] Fair value estimate provided by the Company's independent third party valuation consultant.

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MORTGAGE-BACKED SECURITIES (Schedule of Mortgage-Backed Securities by Contractual Maturity) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Amortized cost
Due in one year or less	$ 500
Due after one through five years	3,495
Due after five through ten years
Due after ten years
Total	3,995	$ 6,181
Fair value
Due in one year or less	499
Due after one through five years	3,499
Due after five through ten years
Due after ten years
Total	3,998	6,125
Collateralized Mortgage Obligations [Member]
Amortized cost
Due in one year or less
Due after one through five years
Due after five through ten years	165
Due after ten years	109,757
Total	109,922	115,857
Fair value
Due in one year or less
Due after one through five years
Due after five through ten years	168
Due after ten years	110,756
Total	$ 110,924	$ 116,844

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ (121)	$ (95)	$ (188)	$ (188)
Other comprehensive income (loss) before reclassifications	(1,564)	17	(1,499)	110
Amounts reclassified from accumulated other comprehensive income (loss)		(15)	2	(15)
Net current-period other comprehensive income (loss)	(1,564)	2	(1,497)	95
Ending Balance	(1,685)	(93)	(1,685)	(93)
Unrealized Gains and Losses on Available-for-Sale Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	88	91	(10)	44
Other comprehensive income (loss) before reclassifications	(1,574)	33	(1,478)	80
Amounts reclassified from accumulated other comprehensive income (loss)		24	2	24
Net current-period other comprehensive income (loss)	(1,574)	57	(1,476)	104
Ending Balance	(1,486)	148	(1,486)	148
Unrealized Gains and Losses on Held-to-Maturity Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(209)	(186)	(178)	(232)
Other comprehensive income (loss) before reclassifications	10	(16)	(21)	30
Amounts reclassified from accumulated other comprehensive income (loss)		(39)		(39)
Net current-period other comprehensive income (loss)	10	(55)	(21)	(9)
Ending Balance	$ (199)	$ (241)	$ (199)	$ (241)

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UNREALIZED LOSSES ON SECURITIES (Schedule of Gross Unrealized Losses and Fair Value) (Details) - USD ($) $ in Thousands		Dec. 31, 2018	Jun. 30, 2018
Schedule of Investment Securities [Line Items]
Fair Value		$ 116,512	$ 83,747
Gross Unrealized Losses		(1,895)	(297)
Twelve Months or Greater
Fair Value		28,036	24,452
Gross Unrealized Losses		(451)	(426)
Total
Fair Value		144,548	108,199
Gross Unrealized Losses		(2,346)	(723)
Corporate Debt Securities [Member]
Schedule of Investment Securities [Line Items]
Fair Value		88,190	56,714
Gross Unrealized Losses		(1,452)	(169)
Twelve Months or Greater
Fair Value		4,973	3,028
Gross Unrealized Losses		(58)	(12)
Total
Fair Value		93,163	59,742
Gross Unrealized Losses		(1,510)	(181)
Foreign Debt Securities [Member]
Schedule of Investment Securities [Line Items]
Fair Value	[1]	20,775	13,761
Gross Unrealized Losses	[1]	(367)	(38)
Twelve Months or Greater
Fair Value	[1]
Gross Unrealized Losses	[1]
Total
Fair Value	[1]	20,775	13,761
Gross Unrealized Losses	[1]	(367)	(38)
Obligations of state and political subdivision [Member]
Schedule of Investment Securities [Line Items]
Fair Value		500
Gross Unrealized Losses		(1)
Twelve Months or Greater
Fair Value		1,623
Gross Unrealized Losses		(7)
Total
Fair Value		2,123
Gross Unrealized Losses		(8)
Agency [Member]
Schedule of Investment Securities [Line Items]
Fair Value		7,047	7,600
Gross Unrealized Losses		(75)	(12)
Twelve Months or Greater
Fair Value		21,440	21,424
Gross Unrealized Losses		(386)	(414)
Total
Fair Value		28,487	29,024
Gross Unrealized Losses		$ (461)	(426)
U.S. Government Agency Securities [Member]
Schedule of Investment Securities [Line Items]
Fair Value			624
Gross Unrealized Losses			(1)
Twelve Months or Greater
Fair Value
Gross Unrealized Losses
Total
Fair Value			624
Gross Unrealized Losses			$ (1)

[1] U.S. dollar denominated investment-grade corporate bonds of large foreign corporate issuers.

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UNREALIZED LOSSES ON SECURITIES (Schedule of Changes in the Credit Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Changes in the credit loss component of credit impaired mortgage-backed securities:
Beginning balance	$ 236	$ 258	$ 239	$ 259
Initial credit impairment
Subsequent credit impairment				8
Reductions for amounts recognized in earnings due to intent or requirement to sell
Reductions for securities sold
Reduction for actual realized losses	(7)	(13)	(10)	(19)
Reduction for increase in cash flows expected to be collected
Ending balance	$ 229	$ 248	$ 229	$ 248

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UNREALIZED LOSSES ON SECURITIES (Narrative) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Schedule of Investment Securities [Line Items]
Net accretion	$ 10		$ (21)
Less: Income tax effect	$ 2	$ (8)	$ (6)	$ 15
Private-label [Member]
Schedule of Investment Securities [Line Items]
Number of positions that are impaired	80		80

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LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES (Schedule of Primary Segments of Loan Portfolio) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 88,428	$ 84,674
Plus: Deferred loan costs	478	469
Allowance for loan losses	(501)	(468)
Net Loans Receivable	88,405	84,675
First Mortgage Loans One To Four Family Dwellings [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	76,011	72,237
Individually evaluated for impairment
Collectively evaluated for impairment	76,011	72,237
First Mortgage Loans Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,102	1,769
Individually evaluated for impairment
Collectively evaluated for impairment	1,102	1,769
First Mortgage Loans Land Acquisition And Development [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	292
Individually evaluated for impairment
Collectively evaluated for impairment	292
First Mortgage Loans Multifamily Dwellings [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	3,258	3,390
Individually evaluated for impairment
Collectively evaluated for impairment	3,258	3,390
First Mortgage Loans Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	3,953	3,482
Individually evaluated for impairment
Collectively evaluated for impairment	3,953	3,482
Consumer Loans Home Equity [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	982	861
Individually evaluated for impairment
Collectively evaluated for impairment	982	861
Consumer Loans Home Equity Lines Of Credit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	2,174	2,177
Individually evaluated for impairment
Collectively evaluated for impairment	2,174	2,177
Consumer Loans Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	131	125
Individually evaluated for impairment
Collectively evaluated for impairment	131	125
Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	525	633
Individually evaluated for impairment
Collectively evaluated for impairment	$ 525	$ 633

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LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES (Schedule of Nonaccrual Loans) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Financing Receivable, Impaired [Line Items]
Principal outstanding on nonaccrual loans	$ 233		$ 233		$ 235
Average nonaccrual loans	233	$ 243	234	$ 244
Income that would have been recognized	4	4	9	9
Interest income recognized	3	5	6	11
First Mortgage Loans One To Four Family Dwellings [Member]
Financing Receivable, Impaired [Line Items]
Principal outstanding on nonaccrual loans	233		233		235
Average nonaccrual loans	233	243	234	244
First Mortgage Loans Construction [Member]
Financing Receivable, Impaired [Line Items]
Principal outstanding on nonaccrual loans
Average nonaccrual loans
First Mortgage Loans Land Acquisition And Development [Member]
Financing Receivable, Impaired [Line Items]
Principal outstanding on nonaccrual loans
Average nonaccrual loans
Commercial Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Principal outstanding on nonaccrual loans
Average nonaccrual loans
Consumer Loans Home Equity Lines Of Credit [Member]
Financing Receivable, Impaired [Line Items]
Principal outstanding on nonaccrual loans
Average nonaccrual loans

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LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES (Schedule of Loan Portfolio by Aging Categories) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 88,195	$ 84,439
90 Days + Past Due Non-accrual	233	235
Total Past Due	233	235
Total Loans	88,428	84,674
Deferred loan fees	478	469
Allowance for loan losses	(501)	(468)
Net Loans Receivable	88,405	84,675
Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans One To Four Family Dwellings [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	75,778	72,002
90 Days + Past Due Non-accrual	233	235
Total Past Due	233	235
Total Loans	76,011	72,237
First Mortgage Loans One To Four Family Dwellings [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans One To Four Family Dwellings [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans One To Four Family Dwellings [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,102	1,769
90 Days + Past Due Non-accrual
Total Past Due
Total Loans	1,102	1,769
First Mortgage Loans Construction [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans Construction [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans Construction [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans Land Acquisition And Development [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	292
90 Days + Past Due Non-accrual
Total Past Due
Total Loans	292
First Mortgage Loans Land Acquisition And Development [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans Land Acquisition And Development [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans Land Acquisition And Development [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans Multifamily Dwellings [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	3,258	3,390
90 Days + Past Due Non-accrual
Total Past Due
Total Loans	3,258	3,390
First Mortgage Loans Multifamily Dwellings [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans Multifamily Dwellings [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans Multifamily Dwellings [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	3,953	3,482
90 Days + Past Due Non-accrual
Total Past Due
Total Loans	3,953	3,482
First Mortgage Loans Commercial [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans Commercial [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
First Mortgage Loans Commercial [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Consumer Loans Home Equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	982	861
90 Days + Past Due Non-accrual
Total Past Due
Total Loans	982	861
Consumer Loans Home Equity [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Consumer Loans Home Equity [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Consumer Loans Home Equity [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Consumer Loans Home Equity Lines Of Credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,174	2,177
90 Days + Past Due Non-accrual
Total Past Due
Total Loans	2,174	2,177
Consumer Loans Home Equity Lines Of Credit [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Consumer Loans Home Equity Lines Of Credit [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Consumer Loans Home Equity Lines Of Credit [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Consumer Loans Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	131	125
90 Days + Past Due Non-accrual
Total Past Due
Total Loans	131	125
Consumer Loans Other [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Consumer Loans Other [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Consumer Loans Other [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	525	633
90 Days + Past Due Non-accrual
Total Past Due
Total Loans	525	633
Commercial Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Commercial Loans [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Commercial Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due

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LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES (Schedule of Loans by Internal Classification) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
First Mortgage Loans Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	$ 1,102	$ 1,769
First Mortgage Loans Construction [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	1,102	1,769
First Mortgage Loans Construction [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
First Mortgage Loans Construction [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
First Mortgage Loans Construction [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
First Mortgage Loans Land Acquisition And Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	292
First Mortgage Loans Land Acquisition And Development [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	292
First Mortgage Loans Land Acquisition And Development [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
First Mortgage Loans Land Acquisition And Development [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
First Mortgage Loans Land Acquisition And Development [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
First Mortgage Loans Multifamily Dwellings [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	3,258	3,390
First Mortgage Loans Multifamily Dwellings [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	3,258	3,390
First Mortgage Loans Multifamily Dwellings [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
First Mortgage Loans Multifamily Dwellings [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
First Mortgage Loans Multifamily Dwellings [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
First Mortgage Loans Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	3,953	3,482
First Mortgage Loans Commercial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	3,953	3,482
First Mortgage Loans Commercial [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
First Mortgage Loans Commercial [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
First Mortgage Loans Commercial [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
Commercial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	525	633
Commercial Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	525	633
Commercial Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
Commercial Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
Commercial Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable

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LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES (Schedule of Performing and Non-Performing Loans) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
First Mortgage Loans One To Four Family Dwellings [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	$ 76,011	$ 72,237
First Mortgage Loans One To Four Family Dwellings [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	75,778	72,002
First Mortgage Loans One To Four Family Dwellings [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	233	235
Consumer Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	3,287	3,163
Consumer Loan [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	3,287	3,163
Consumer Loan [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable

XML

LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES (Schedule of Primary Segments of Allowance for Loan Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Summary of the changes in the allowance for loan losses:
ALLL Balance, Beginning	$ 487	$ 423	$ 468	$ 468
Charge-offs
Recoveries
Provisions	14	6	33	12
ALLL Balance, Ending	501	430	501	430
Individually evaluated for impairment
Collectively evaluated for impairment	501	430	501	430
First Mortgage Loans One To Four Family Dwellings [Member]
Summary of the changes in the allowance for loan losses:
ALLL Balance, Beginning	363	311	356	305
Charge-offs
Recoveries
Provisions	10	15	17	22
ALLL Balance, Ending	373	327	373	327
Individually evaluated for impairment
Collectively evaluated for impairment	373	327	373	327
First Mortgage Loans Construction [Member]
Summary of the changes in the allowance for loan losses:
ALLL Balance, Beginning	29	32	24	30
Charge-offs
Recoveries
Provisions	(4)	(6)	1	(4)
ALLL Balance, Ending	25	26	25	26
Individually evaluated for impairment
Collectively evaluated for impairment	25	26	25	26
First Mortgage Loans Land Acquisition And Development [Member]
Summary of the changes in the allowance for loan losses:
ALLL Balance, Beginning	10	2		5
Charge-offs
Recoveries
Provisions		(2)	10	(5)
ALLL Balance, Ending	10		10
Individually evaluated for impairment
Collectively evaluated for impairment	10		10
First Mortgage Loans Multifamily Dwellings [Member]
Summary of the changes in the allowance for loan losses:
ALLL Balance, Beginning	18	20	18	20
Charge-offs
Recoveries
Provisions		(1)		(1)
ALLL Balance, Ending	18	19	18	19
Individually evaluated for impairment
Collectively evaluated for impairment	18	19	18	19
First Mortgage Loans Commercial [Member]
Summary of the changes in the allowance for loan losses:
ALLL Balance, Beginning	32	21	35	20
Charge-offs
Recoveries
Provisions	7	(1)	4
ALLL Balance, Ending	39	20	39	20
Individually evaluated for impairment
Collectively evaluated for impairment	39	20	39	20
Consumer Loans [Member]
Summary of the changes in the allowance for loan losses:
ALLL Balance, Beginning	32	34	31	34
Charge-offs
Recoveries
Provisions	1		2
ALLL Balance, Ending	33	34	33	34
Individually evaluated for impairment
Collectively evaluated for impairment	33	34	33	34
Commercial Loans [Member]
Summary of the changes in the allowance for loan losses:
ALLL Balance, Beginning	3	3	4	4
Charge-offs
Recoveries
Provisions		1	(1)
ALLL Balance, Ending	3	4	3	4
Individually evaluated for impairment
Collectively evaluated for impairment	$ 3	$ 4	$ 3	$ 4

XML

LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES (Schedule of increased ALL reserve factors) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Financing Receivable, Allowance for Credit Losses [Line Items]
Increase (decrease) in allowance for credit losses	$ 14	$ 6	$ 33	$ 12
First Mortgage Loans One To Four Family Dwellings [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Increase (decrease) in allowance for credit losses	10		17
First Mortgage Loans Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Increase (decrease) in allowance for credit losses	7		4
First Mortgage Loans Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Increase (decrease) in allowance for credit losses	$ (4)
First Mortgage Loans Land Acquisition And Development [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Increase (decrease) in allowance for credit losses			$ 10

XML

FEDERAL HOME LOAN BANK (FHLB) ADVANCES (Schedule of Contractual Maturities of Federal Home Loan Bank Long-Term Advances) (Details) - USD ($) $ in Thousands		6 Months Ended
		Dec. 31, 2018	Jun. 30, 2018
Debt Instrument [Line Items]
Federal Home Loan Bank advances: long-term		$ 15,000
Fixed Debt [Member]
Debt Instrument [Line Items]
Maturity range, minimum		Oct. 01, 2020
Maturity range, maximum		Oct. 03, 2022
Federal Home Loan Bank advances: long-term		$ 15,000
Fixed Debt [Member] | Weighted Average [Member]
Debt Instrument [Line Items]
Interest rate	[1]	3.03%
Fixed Debt [Member] | Minimum [Member]
Debt Instrument [Line Items]
Interest rate		2.95%
Fixed Debt [Member] | Maximum [Member]
Debt Instrument [Line Items]
Interest rate		3.09%
Adjustable Debt [Member]
Debt Instrument [Line Items]
Maturity range, minimum		Oct. 01, 2020
Maturity range, maximum		Oct. 01, 2021
Federal Home Loan Bank advances: long-term		$ 85,000
Adjustable Debt [Member] | Weighted Average [Member]
Debt Instrument [Line Items]
Interest rate	[1]	2.47%
Adjustable Debt [Member] | Minimum [Member]
Debt Instrument [Line Items]
Interest rate		2.43%
Adjustable Debt [Member] | Maximum [Member]
Debt Instrument [Line Items]
Interest rate		2.52%

[1] As of December 31, 2018.

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FEDERAL HOME LOAN BANK (FHLB) ADVANCES (Maturities of Federal Home Loan Bank Long-Term Advances) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Amount
Total	$ 15,000
Federal Home Loan Bank Advances [Member]
Amount
2019
2020
2021	65,000
2022	30,000
2023	5,000
2024 and thereafter
Total	$ 100,000
Federal Home Loan Bank Advances [Member] | Weighted Average [Member]
Weighted-Average Interest Rate
2019
2020
2021	2.51%
2022	2.55%
2023	3.09%
2024 and thereafter
Interest rate	2.55%

XML

FEDERAL HOME LOAN BANK (FHLB) ADVANCES (Schedule of Federal Home Loan Bank Short-Term Advances) (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Dec. 31, 2018	Jun. 30, 2018
Federal Home Loan Bank, Advances [Line Items]
Remaining borrowing capacity	$ 2,600
FHLB revolving and short-term advances:
Ending balance	70,067	$ 171,403
Average balance	113,789	167,306
Maximum month-end balance	$ 160,484	$ 179,791
Average interest rate	2.36%	1.60%
Weighted-average rate	2.62%	2.12%

XML

FAIR VALUE MEASUREMENTS (Assets Measured at Fair Value on a Recurring and Nonrecurring Basis) (Details) - USD ($) $ in Thousands		Dec. 31, 2018	Jun. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis		$ 127,514	$ 128,811
Obligations (Other Than Securities and Leases) of States and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis		1,623	1,621
Corporate Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis		100,700	104,339
Foreign Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis	[1]	25,191	22,851
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis
Fair Value, Inputs, Level 1 [Member] | Obligations (Other Than Securities and Leases) of States and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis
Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis
Fair Value, Inputs, Level 1 [Member] | Foreign Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis	[1]
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis		127,514	128,811
Fair Value, Inputs, Level 2 [Member] | Obligations (Other Than Securities and Leases) of States and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis		1,623	1,621
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis		100,700	104,339
Fair Value, Inputs, Level 2 [Member] | Foreign Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis	[1]	25,191	22,851
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis
Fair Value, Inputs, Level 3 [Member] | Obligations (Other Than Securities and Leases) of States and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis
Fair Value, Inputs, Level 3 [Member] | Corporate Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis
Fair Value, Inputs, Level 3 [Member] | Foreign Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured on a recurring basis	[1]

[1] U.S. dollar-denominated investment-grade corporate bonds of large foreign corporate issuers.

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
FINANCIAL ASSETS
Cash and cash equivalents	$ 3,628	$ 2,441	$ 8,521	$ 2,272
Certificates of deposit	1,346	350
Investment securities - available for sale	127,514	128,811
Investment securities - held to maturity	3,995	6,181
Mortgage-backed securities - held to maturity	109,922	115,857
Net loans receivable	88,405	84,675
Accrued interest receivable	1,186	1,225
FHLB stock	6,987	7,161
Bank owned life insurance	4,729	4,668
Deposits
Non-interest bearing deposits	22,356	18,436
Savings accounts	43,982	44,727
Money market accounts	19,040	21,087
FHLB long-term advances - fixed rate	15,000
FHLB short-term advances	70,067	171,403
Accrued interest payable	786	380
Agency [Member]
FINANCIAL ASSETS
Investment securities - held to maturity	109,077	114,899
Private-label [Member]
FINANCIAL ASSETS
Investment securities - held to maturity	845	958
Fair Value, Inputs, Level 1 [Member]
FINANCIAL ASSETS
Cash and cash equivalents	3,628	2,441
Certificates of deposit	1,346	350
Investment securities - available for sale
Investment securities - held to maturity
Net loans receivable
Accrued interest receivable	1,186	1,225
FHLB stock	6,987	7,161
Bank owned life insurance	4,729	4,668
Deposits
Non-interest bearing deposits	22,356	18,436
NOW accounts	23,692	24,459
Savings accounts	43,982	44,727
Money market accounts	19,040	21,087
Certificates of deposit
Advance payments by borrowers for taxes and insurance	1,550	1,938
FHLB long-term advances - fixed rate
FHLB long-term advances - variable rate	85,000
FHLB short-term advances	70,067	171,403
Accrued interest payable	786	380
Fair Value, Inputs, Level 1 [Member] | Agency [Member]
FINANCIAL ASSETS
Mortgage-backed securities - held to maturity
Fair Value, Inputs, Level 1 [Member] | Private-label [Member]
FINANCIAL ASSETS
Mortgage-backed securities - held to maturity
Fair Value, Inputs, Level 2 [Member]
FINANCIAL ASSETS
Cash and cash equivalents
Certificates of deposit
Investment securities - available for sale	127,514	128,811
Investment securities - held to maturity	3,998	6,125
Net loans receivable
Accrued interest receivable
FHLB stock
Bank owned life insurance
Deposits
Non-interest bearing deposits
NOW accounts
Savings accounts
Money market accounts
Certificates of deposit
Advance payments by borrowers for taxes and insurance
FHLB long-term advances - fixed rate
FHLB long-term advances - variable rate
FHLB short-term advances
Accrued interest payable
Fair Value, Inputs, Level 2 [Member] | Agency [Member]
FINANCIAL ASSETS
Mortgage-backed securities - held to maturity	109,913	115,733
Fair Value, Inputs, Level 2 [Member] | Private-label [Member]
FINANCIAL ASSETS
Mortgage-backed securities - held to maturity
Fair Value, Inputs, Level 3 [Member]
FINANCIAL ASSETS
Cash and cash equivalents
Certificates of deposit
Investment securities - available for sale
Investment securities - held to maturity
Net loans receivable	88,404	84,319
Accrued interest receivable
FHLB stock
Bank owned life insurance
Deposits
Non-interest bearing deposits
NOW accounts
Savings accounts
Money market accounts
Certificates of deposit	32,460	34,053
Advance payments by borrowers for taxes and insurance
FHLB long-term advances - fixed rate	14,090
FHLB long-term advances - variable rate
FHLB short-term advances
Accrued interest payable
Fair Value, Inputs, Level 3 [Member] | Agency [Member]
FINANCIAL ASSETS
Mortgage-backed securities - held to maturity
Fair Value, Inputs, Level 3 [Member] | Private-label [Member]
FINANCIAL ASSETS
Mortgage-backed securities - held to maturity	1,011	1,111
Carrying (Reported) Amount, Fair Value Disclosure [Member]
FINANCIAL ASSETS
Cash and cash equivalents	3,628	2,441
Certificates of deposit	1,346	350
Investment securities - available for sale	127,514	128,811
Investment securities - held to maturity	3,995	6,181
Net loans receivable	88,405	84,675
Accrued interest receivable	1,186	1,225
FHLB stock	6,987	7,161
Bank owned life insurance	4,729	4,668
Deposits
Non-interest bearing deposits	22,356	18,436
NOW accounts	23,692	24,459
Savings accounts	43,982	44,727
Money market accounts	19,040	21,087
Certificates of deposit	32,625	34,376
Advance payments by borrowers for taxes and insurance	1,550	1,938
FHLB long-term advances - fixed rate	15,000
FHLB long-term advances - variable rate	85,000
FHLB short-term advances	70,067	171,403
Accrued interest payable	786	380
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Agency [Member]
FINANCIAL ASSETS
Mortgage-backed securities - held to maturity	109,077	114,899
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Private-label [Member]
FINANCIAL ASSETS
Mortgage-backed securities - held to maturity	845	958
Estimate of Fair Value Measurement [Member]
FINANCIAL ASSETS
Cash and cash equivalents	3,628	2,441
Certificates of deposit	1,346	350
Investment securities - available for sale	127,514	128,811
Investment securities - held to maturity	3,998	6,125
Net loans receivable	88,404	84,319
Accrued interest receivable	1,186	1,225
FHLB stock	6,987	7,161
Bank owned life insurance	4,729	4,668
Deposits
Non-interest bearing deposits	22,356	18,436
NOW accounts	23,692	24,459
Savings accounts	43,982	44,727
Money market accounts	19,040	21,087
Certificates of deposit	32,460	34,053
Advance payments by borrowers for taxes and insurance	1,550	1,938
FHLB long-term advances - fixed rate	14,090
FHLB long-term advances - variable rate	85,000
FHLB short-term advances	70,067	171,403
Accrued interest payable	786	380
Estimate of Fair Value Measurement [Member] | Agency [Member]
FINANCIAL ASSETS
Mortgage-backed securities - held to maturity	109,913	115,733
Estimate of Fair Value Measurement [Member] | Private-label [Member]
FINANCIAL ASSETS
Mortgage-backed securities - held to maturity	$ 1,011	$ 1,111