Note 3 - Loans
 12 Months Ended
Jun. 30, 2017
Notes to Financial Statements  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]
NOTE
3—LOANS
 
Major classifications of loans were as follows as of
June 
30:
 
 
 
2017
 
 
2016
 
Commercial
   $
46,380
     $
43,207
  
Commercial real estate:
                
Construction
    
5,604
      
7,783
  
Other
    
158,225
      
153,097
  
1 – 4 Family residential real estate:
                
Owner occupied
    
41,411
      
31,012
  
Non-owner occupied
    
14,415
      
14,471
  
Construction
    
1,988
      
1,256
  
Consumer
    
5,138
      
5,812
  
Subtotal
    
273,161
      
256,638
  
Less: Deferred loan fees and costs
    
(294
 )    
(360
 )
Allowance for loan losses
    
(3,086
 )    
(3,566
 )
Net loans
   $
269,781
     $
252,712
  
 
 
The following table presents the activity in the allowance for loan losses by portfolio segment for the year ending
June 30, 2017:
 
               
  1-4 Family                  
            Commercial     Residential                  
            Real     Real                  
   
Commercial
    
Estate
    
Estate
    
Consumer
     Total  
                                         
Allowance for loan losses:
                                        
Beginning balance
   $
505
     $
2,518
     $
402
     $
141
     $
3,566
  
Provision for loan losses
    
18
      
581
      
77
      
(80
 )    
596
  
Loans charged-off
    
(6
 )    
(1,061
 )    
(44
 )    
(37
 )    
(1,148
 )
Recoveries
    
1
      
—
      
38
      
33
      
72
  
Total ending allowance balance
   $
518
     $
2,038
     $
473
     $
57
     $
3,086
  
 
The following table presents the activity in the allowance for loan losses by portfolio segment for the year ending
June 30, 2016:
 
                    1-4 Family                  
            Commercial     Residential                  
            Real     Real                  
   
Commercial
    
Estate
    
Estate
    
Consumer
     Total  
                                         
Allowance for loan losses:
                                        
Beginning balance
   $
316
     $
1,660
     $
289
     $
167
     $
2,432
  
Provision for loan losses
    
189
      
862
      
414
      
33
      
1,498
  
Loans charged-off
    
—
      
(4
 )    
(311
 )    
(80
 )    
(395
 )
Recoveries
    
—
      
—
      
10
      
21
      
31
  
Total ending allowance balance
   $
505
     $
2,518
     $
402
     $
141
     $
3,566
  
 
 
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of
June 30, 2017.
Included in the recorded investment in loans is
$581
of accrued interest receivable.
 
                    1-4 Family                  
            Commercial     Residential                  
            Real     Real                  
   
Commercial
    
Estate
    
Estate
    
Consumer
     Total  
Allowance for loan losses:
                                        
Ending allowance balance attributable to loans:
                                        
Individually evaluated for impairment
   $
—
     $
42
     $
2
     $
—
     $
44
  
Collectively evaluated for impairment
    
518
      
1,996
      
471
      
57
      
3,042
  
                                         
Total ending allowance balance
   $
518
     $
2,038
     $
473
     $
57
     $
3,086
  
                                         
Recorded investment in loans:
                                        
Loans individually evaluated for impairment
   $
444
     $
1,587
     $
203
     $
—
     $
2,234
  
Loans collectively evaluated for impairment
    
45,993
      
162,176
      
57,901
      
5,144
      
271,214
  
                                         
Total ending loans balance
   $
46,437
     $
163,763
     $
58,104
     $
5,144
     $
273,448
  
 
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of
June 30, 2016.
Included in the recorded investment in loans is
$549
of accrued interest receivable.
 
                    1-4 Family                  
            Commercial     Residential                  
            Real     Real                  
   
Commercial
    
Estate
    
Estate
    
Consumer
     Total  
Allowance for loan losses:
                                        
Ending allowance balance attributable to loans:
                                        
Individually evaluated for impairment
   $
—
     $
868
     $
6
     $
—
     $
874
  
Collectively evaluated for impairment
    
505
      
1,650
      
396
      
141
      
2,692
  
                                         
Total ending allowance balance
   $
505
     $
2,518
     $
402
     $
141
     $
3,566
  
                                         
Recorded investment in loans:
                                        
Loans individually evaluated for impairment
   $
1,029
     $
5,105
     $
758
     $
—
     $
6,892
  
Loans collectively evaluated for impairment
    
42,219
      
155,734
      
46,166
      
5,816
      
249,935
  
                                         
Total ending loans balance
   $
43,248
     $
160,839
     $
46,924
     $
5,816
     $
256,827
  
 
The following table presents information related to loans individually evaluated for impairment by class of loans as of and for the year ended
June 30, 2017:
 
   
Unpaid
            
Allowance for
    
Average
    
Interest
     Cash Basis  
   
Principal
    
Recorded
    
Loan Losses
    
Recorded
    
Income
     Interest  
   
Balance
    
Investment
    
Allocated
    
Investment
    
Recognized
     Recognized  
                                                 
With no related allowance recorded:
                                                
Commercial
   $
482
     $
444
     $
—
     $
207
     $
80
     $
80
  
Commercial real estate:
                                                
Construction
    
—
      
—
      
—
      
87
      
6
      
6
  
Other
    
1,928
      
1,039
      
—
      
951
      
105
      
105
  
1-4 Family residential real estate:
                                                
Owner occupied
    
104
      
103
      
—
      
119
      
—
      
—
  
Non-owner occupied
    
—
      
—
      
—
      
183
      
—
      
—
  
With an allowance recorded:
                                                
Commercial real estate:
                                                
Other
    
548
      
548
      
42
      
1,884
      
21
      
21
  
1-4 Family residential real estate:
                                                
Owner occupied
    
99
      
100
      
2
      
120
      
6
      
6
  
Total
   $
3,161
     $
2,234
     $
44
     $
3,551
     $
218
     $
218
  
     
 
The following table presents information related to loans individually evaluated for impairment by class of loans as of and for the year ended
June 30, 2016:
 
   
Unpaid
            
Allowance for
    
Average
    
Interest
     Cash Basis  
   
Principal
    
Recorded
    
Loan Losses
    
Recorded
    
Income
     Interest  
   
Balance
    
Investment
    
Allocated
    
Investment
    
Recognized
     Recognized  
                                                 
With no related allowance recorded:
                                                
Commercial
   $
1,033
     $
1,029
     $
—
     $
95
     $
—
     $
—
  
Commercial real estate:
                                                
Construction
    
386
      
384
      
—
      
52
      
—
      
—
  
Other
    
2,121
      
2,106
      
—
      
2,344
      
—
      
—
  
1-4 Family residential real estate:
                                                
Owner occupied
    
175
      
174
      
—
      
357
      
2
      
2
  
Non-owner occupied
    
722
      
407
      
—
      
435
      
—
      
—
  
With an allowance recorded:
                                                
Commercial real estate:
                                                
Other
    
2,802
      
2,615
      
868
      
1,103
      
8
      
8
  
1-4 Family residential real estate:
                                                
Owner occupied
    
177
      
177
      
6
      
149
      
—
      
—
  
Non-owner occupied
    
—
      
—
      
—
      
115
      
—
      
—
  
Total
   $
7,416
     $
6,892
     $
874
     $
4,650
     $
10
     $
10
  
 
The following table presents the recorded investment in non-accrual and loans past due over
90
days still on accrual by class of loans as of
June 30, 2017
and
2016:
 
   
June 30, 2017
     June 30, 2016  
            Loans Past Due             Loans Past Due  
            Over 90 Days             Over 90 Days  
            Still             Still  
   
Non-accrual
    
Accruing
    
Non-accrual
     Accruing  
Commercial
   $
368
     $
—
     $
1,009
     $
—
  
Commercial real estate:
                                
Construction
    
—
      
—
      
384
      
—
  
Other
    
729
      
—
      
4,000
      
—
  
1 – 4 Family residential:
                                
Owner occupied
    
90
      
—
      
234
      
—
  
Non-owner occupied
    
—
      
—
      
407
      
—
  
Consumer
    
—
      
—
      
—
      
—
  
Total
   $
1,187
     $
—
     $
6,034
     $
—
  
 
Non-accrual loans and loans past due
90
days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.
 
The following table presents the aging of the recorded investment in past due loans as of
June 30, 2017
by class of loans:
 
   
Days Past Due
                          
    30 - 59     60 - 89    
90 Days or
    
Total
     Loans Not          
   
Days
    
Days
    
Greater
    
Past Due
    
Past Due
     Total  
Commercial
   $
—
     $
—
     $
35
     $
35
     $
46,402
     $
46,437
  
Commercial real estate:
                                                
Construction
    
—
      
—
      
—
      
—
      
5,596
      
5,596
  
Other
    
—
      
—
      
130
      
130
      
158,037
      
158,167
  
1-4 Family residential:
                                                
Owner occupied
    
13
      
—
      
74
      
87
      
41,605
      
41,692
  
Non-owner occupied
    
—
      
—
      
—
      
—
      
14,416
      
14,416
  
Construction
    
—
      
—
      
—
      
—
      
1,996
      
1,996
  
Consumer
    
22
      
—
      
—
      
22
      
5,122
      
5,144
  
Total
   $
35
     $
—
     $
239
     $
274
     $
273,174
     $
273,448
  
 
The above table of past due loans includes the recorded investment in non-accrual loans of
$239
in the
90
days or greater category and
$948
in the loans
not
past due category.
 
The following table presents the aging of the recorded investment in past due loans as of
June 30, 2016
by class of loans:
 
   
Days Past Due
                          
    30 - 59     60 - 89    
90 Days or
    
Total
     Loans Not          
   
Days
    
Days
    
Greater
    
Past Due
    
Past Due
     Total  
Commercial
   $
123
     $
—
     $
—
     $
123
     $
43,125
     $
43,248
  
Commercial real estate:
                                                
Construction
    
—
      
—
      
—
      
—
      
7,764
      
7,764
  
Other
    
59
      
—
      
2,110
      
2,169
      
150,906
      
153,075
  
1-4 Family residential:
                                                
Owner occupied
    
15
      
—
      
218
      
233
      
30,947
      
31,180
  
Non-owner occupied
    
—
      
—
      
196
      
196
      
14,278
      
14,474
  
Construction
    
—
      
—
      
—
      
—
      
1,270
      
1,270
  
Consumer
    
7
      
—
      
—
      
7
      
5,809
      
5,816
  
Total
   $
204
     $
—
     $
2,524
     $
2,728
     $
254,099
     $
256,827
  
 
The above table of past due loans includes the recorded investment in non-accrual loans of
$2,524
in the
90
days or greater category and
$3,510
in the loans
not
past due category.
 
Troubled Debt Restructurings:
As of
June 30, 2017,
the recorded investment of loans classified as troubled debt restructurings was
$1,740
with
$33
of specific reserves allocated to these loans. As of
June 30, 2016,
the recorded investment of loans classified as troubled debt restructurings was
$3,529
with
$43
of specific reserves allocated to these loans.
 
During the fiscal year ended
June 30, 2017,
the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included a combination of an extension of the maturity date and the extension of additional credit to provide operating funds. The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended
June 30, 2017:
 
            Pre-Modification     Post-Modification  
   
Number of
     Outstanding Recorded     Outstanding Recorded  
   
Loans
     Investment     Investment  
Commercial
    
2
     $
518
     $
518
  
Commercial real estate:
                        
Other    
1
      
512
      
512
  
Total
    
3
     $
1,030
     $
1,030
  
 
 
The troubled debt restructurings described above did
not
increase the allowance for loan losses or result in any charge-offs during the
twelve
months ended
June 30, 2017.
As of
June 30, 2017,
the Corporation had committed to lend an additional
$175
as part of the restructurings described above. There were
no
loans classified as troubled debt restructurings that were modified within the last
twelve
months for which there was a payment default.
 
During the fiscal year ended
June 30, 2016,
the terms of certain loans to
one
borrower were modified as troubled debt restructurings. The modification of the terms of such loans included a combination of a reduction in the monthly payment amounts, an extension of the maturity date on
one
loan, and the extension of additional credit to provide operating funds to the borrower. The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended
June 30, 2016:
 
           
Pre-Modification
     Post-Modification  
   
Number of
    
Outstanding Recorded
     Outstanding Recorded  
   
Loans
    
Investment
     Investment  
Commercial
    
3
     $
1,058
     $
1,029
  
Commercial real estate:
                        
Other
    
3
      
1,294
      
1,487
  
Total
    
6
     $
2,352
     $
2,516
  
 
The troubled debt restructurings described above did
not
increase the allowance for loan losses or result in any charge-offs during the
twelve
months ended
June 30, 2016.
As of
June 30, 2016,
the Corporation had committed to lend an additional
$207
as part of the restructuring described above. There were
no
loans classified as troubled debt restructurings that were modified within the last
twelve
months for which there was a payment default.
 
Credit Quality Indicators:
The Corporation categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans individually by classifying the loans as to credit risk. This analysis includes loans with a total outstanding loan relationship greater than
$100
and non-homogeneous loans, such as commercial and commercial real estate loans. This analysis is performed on a monthly basis. The Corporation uses the following definitions for risk ratings:
 
Special Mention.
Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses
may
result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.
 
Substandard.
Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are
not
corrected.
 
Doubtful.
Loans classified as doubtful have all the weaknesses inherent in 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, highly questionable and improbable.
 
Loans
not
meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as
not
rated are either less than
$100
or are included in groups of homogeneous loans. These loans are evaluated based on delinquency status, which was discussed previously.
 
As of
June 30, 2017,
and based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans is as follows:
 
           
Special
                     Not  
   
Pass
    
Mention
    
Substandard
    
Doubtful
     Rated  
Commercial
   $
44,435
     $
907
     $
642
     $
—
     $
453
  
Commercial real estate:
                                        
Construction
    
4,514
      
1,035
      
—
      
4
      
43
  
Other
    
150,460
      
5,110
      
1,566
      
470
      
561
  
1-4 Family residential real estate:
                                        
Owner occupied
    
2,668
      
—
      
11
      
30
      
38,983
  
Non-owner occupied
    
13,633
      
210
      
261
      
187
      
125
  
Construction
    
1,223
      
—
      
—
      
—
      
773
  
Consumer
    
145
      
—
      
—
      
—
      
4,999
  
Total
   $
217,078
     $
7,262
     $
2,480
     $
691
     $
45,937
  
  
 
As of
June 30, 2016,
and based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans is as follows:
 
            Special                     Not  
   
Pass
    
Mention
    
Substandard
    
Doubtful
     Rated  
Commercial
   $
35,243
     $
6,190
     $
1,162
     $
—
     $
653
  
Commercial real estate:
                                        
Construction
    
7,305
      
—
      
384
      
—
      
75
  
Other
    
144,101
      
2,482
      
4,026
      
2,150
      
316
  
1-4 Family residential real estate:
                                        
Owner occupied
    
3,506
      
72
      
349
      
47
      
27,206
  
Non-owner occupied
    
12,999
      
406
      
486
      
196
      
387
  
Construction
    
235
      
—
      
—
      
—
      
1,035
  
Consumer
    
210
      
—
      
6
      
—
      
5,600
  
Total
   $
203,599
     $
9,150
     $
6,413
     $
2,393
     $
35,272
  
 
The Bank has granted loans to certain of its executive officers, directors and their affiliates. A summary of activity during the year ended
June 
30,
2017
of related party loans were as follows:
 
Principal balance, July 1
   $
4,724
  
New loans
    
1,620
  
Effect of changes in composition of related parties
    
3,565
  
Repayments
    
(422
 )
Principal balance, June 30
   $
9,487