v2.4.0.6
Loans
9 Months Ended
Mar. 31, 2012
Receivables [Abstract]  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 3 – Loans

 

Major classifications of loans were as follows:

 

    March 31,
2012
    June 30,
2011
 
Commercial   $ 18,928     $ 19,297  
Commercial real estate:                
Construction     597       1,057  
Other     103,337       97,403  
1 – 4 Family residential real estate:                
Owner occupied     34,820       34,488  
Non-owner occupied     17,890       19,098  
Construction     330       597  
Consumer     8,396       5,874  
Subtotal     184,298       177,814  
Less:   Net deferred loan fees     (223 )     (263 )
Allowance for loan losses     (2,214 )     (2,101 )
Net Loans   $ 181,861     $ 175,450  

   

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ending March 31, 2012:

 

                1-4 Family              
          Commercial     Residential              
          Real     Real              
    Commercial     Estate     Estate     Consumer     Total  
                               
Allowance for loan losses:                                        
Beginning balance   $ 118     $ 965     $ 900     $ 143     $ 2,126  
Provision for loan losses     4       3       2       2       11  
Loans charged-off                       (27 )     (27 )
Recoveries           65             39       104  
Total ending allowance balance   $ 122     $ 1,033     $ 902     $ 157     $ 2,214  

  

The following table presents the activity in the allowance for loan losses by portfolio segment for the nine months ending March 31, 2012:

 

                1-4 Family              
          Commercial     Residential              
          Real     Real              
    Commercial     Estate     Estate     Consumer     Total  
                               
Allowance for loan losses:                                        
Beginning balance   $ 179     $ 882     $ 947     $ 93     $ 2,101  
Provision for loan losses     (57 )     86       19       122       170  
Loans charged-off                 (69 )     (127 )     (196 )
Recoveries           65       5       69       139  
Total ending allowance balance   $ 122     $ 1,033     $ 902     $ 157     $ 2,214  

  

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2011:

 

                1-4 Family              
          Commercial     Residential              
          Real     Real              
    Commercial     Estate     Estate     Consumer     Total  
                               
Allowance for loan losses:                                        
Beginning balance   $ 80     $ 1,110     $ 1,007     $ 69     $ 2,266  
Provision for loan losses     54       14       6       26       100  
Loans charged-off     (9 )     (238 )           (36 )     (283 )
Recoveries                       18       18  
Total ending allowance balance   $ 125     $ 886     $ 1,013     $ 77     $ 2,101  

  

A summary of activity in the allowance for loan losses for the nine months ended March 31, 2011, was as follows:

 

   

Nine Months Ended

March 31, 2011

 
Beginning of period   $ 2,276  
Provision     344  
Charge-offs     (568 )
Recoveries     49  
Balance at March 31,   $ 2,101  

  

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 March 31, 2012. Included in the recorded investment in loans is $(223) of net deferred loan fees and $463 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   $ 46     $ 99     $ 275     $     $ 420  
Collectively evaluated for impairment     76       934       627       157       1,794  
Total ending allowance balance   $ 122     $ 1,033     $ 902     $ 157     $ 2,214  
                                         
Recorded investment in loans:                                        
Loans individually evaluated for impairment   $ 152     $ 1,083     $ 1,443     $     $ 2,678  
Loans collectively evaluated for impairment     18,816       102,877       51,723       8,444       181,860  
Total ending loans balance   $ 18,968     $ 103,960     $ 53,166     $ 8,444     $ 184,538  

  

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, 2011. Included in the recorded investment in loans is $(263) of net deferred loan fees and $472 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   $ 13     $ 126     $ 293     $     $ 432  
Collectively evaluated for impairment     166       756       654       93       1,669  
Total ending allowance balance   $ 179     $ 882     $ 947     $ 93     $ 2,101  
                                         
Recorded investment in loans:                                        
Loans individually evaluated for impairment   $ 82     $ 1,405     $ 1,042     $     $ 2,529  
Loans collectively evaluated for impairment     19,254       97,093       53,279       5,868       175,494  
Total ending loans balance   $ 19,336     $ 98,498     $ 54,321     $ 5,868     $ 178,023  

  

The following table presents information related to loans individually evaluated for impairment by class of loans as of and for the nine months ended March 31, 2012:

    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   $ 13     $ 13     $     $ 25     $     $  
Commercial real estate:                                                
Other     207       207             491       67       67  
1-4 Family residential real estate:                                                
Owner occupied     90       90             94       2       2  
Non-owner occupied     64       65             57       3       3  
With an allowance recorded:                                                
Commercial     139       139       46       88       2       2  
Commercial real estate:                                                
Other     876       876       99       797       12       12  
1-4 Family residential real estate:                                                
Owner occupied     323       324       14       255       2       2  
Non-owner occupied     963       964       261       929       10       10  
Total   $ 2,675     $ 2,678     $ 420     $ 2,736     $ 98     $ 98  

 

The following table presents information related to average recorded investment and interest income associated with loans individually evaluated for impairment by class of loans for the three months ended March 31, 2012:

 

    Average     Interest     Cash Basis  
    Recorded     Income     Interest  
    Investment     Recognized     Recognized  
With no related allowance recorded:                        
Commercial   $ 13     $     $  
Commercial real estate:                        
Other     208       64       64  
1-4 Family residential real estate:                        
Owner occupied     90              
Non-owner occupied     65       1       1  
With an allowance recorded:                        
Commercial     141       2       2  
Commercial real estate:                        
Other     869       1       1  
1-4 Family residential real estate:                        
Owner occupied     328       2       2  
Non-owner occupied     968       4       4  
Total   $ 2,682     $ 74     $ 74  

  

The following table presents information related to loans individually evaluated for impairment by class of loans as of June 30, 2011 and for the nine months ended March 31, 2011:

    As of June 30, 2011     Nine Months ended March 31, 2011  
    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   $ 18     $ 18     $     $ 21     $     $  
Commercial real estate:                                                
Other     413       412             516              
With an allowance recorded:                                                
Commercial     64       64       13       59              
Commercial real estate:                                                
Other     997       993       126       1,274       32       32  
1-4 Family residential real estate:                                                
Owner occupied     320       319       3       296       5       5  
Non-owner occupied     724       723       290       743              
Total   $ 2,536     $ 2,529     $ 432     $ 2,909     $ 37     $ 37  

  

The following table presents information related to average recorded investment and interest income associated with loans individually evaluated for impairment by class of loans for the three months ended March 31, 2011:

 

    Average     Interest     Cash Basis  
    Recorded     Income     Interest  
    Investment     Recognized     Recognized  
With no related allowance recorded:                        
Commercial   $ 18     $     $  
Commercial real estate:                        
Other     550              
With an allowance recorded:                        
Commercial     70              
Commercial real estate:                        
Other     1,220       8       8  
1-4 Family residential real estate:                        
Owner occupied     324       2       2  
Non-owner occupied     727              
Total   $ 2,909     $ 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 March 31, 2012 and June 30, 2011:

    March 31, 2012     June 30, 2011  
          Loans Past Due           Loans Past Due  
          Over 90 Days           Over 90 Days  
          Still           Still  
    Non-accrual     Accruing     Non-accrual     Accruing  
Commercial   $ 54     $     $ 64     $  
Commercial real estate:                                
Other     947             754        
1 – 4 Family residential:                                
Owner occupied     321             219        
Non-owner occupied     673             723        
Consumer                        
Total   $ 1,995     $     $ 1,760     $  

  

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 March 31, 2012 by class of loans:

    Days Past Due                    
                90 Days or                    
    30 - 59     60 - 89     Greater &     Total     Loans Not        
    Days     Days     Non-accrual     Past Due     Past Due     Total  
Commercial   $     $     $ 35     $ 35     $ 18,933     $ 18,968  
Commercial real estate:                                                
Construction                             597       597  
Other           466       226       692       102,671       103,363  
1-4 Family residential:                                                
Owner occupied     141             183       324       34,620       34,944  
Non-owner occupied                             17,893       17,893  
Construction                             329       329  
Consumer           15             15       8,429       8,444  
Total   $ 141     $ 481     $ 444     $ 1,066     $ 183,472     $ 184,538  

 

The above table of past due loans includes the recorded investment in non-accrual loans of $440 in the 60-89 days past due category and $1,111 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, 2011 by class of loans:

    Days Past Due                    
                90 Days or                    
    30 - 59     60 - 89     Greater &     Total     Loans Not        
    Days     Days     Non-accrual     Past Due     Past Due     Total  
Commercial   $     $ 1     $     $ 1     $ 19,335     $ 19,336  
Commercial real estate:                                                
Construction                             1,053       1,053  
Other           242       412       654       96,791       97,445  
1-4 Family residential:                                                
Owner occupied           167       23       190       34,438       34,628  
Non-owner occupied           44       175       219       18,877       19,096  
Construction                             597       597  
Consumer     26                   26       5,842       5,868  
Total   $ 26     $ 454     $ 610     $ 1,090     $ 176,933     $ 178,023  

  

The above table of past due loans includes the recorded investment in non-accrual loans of $410 in the 60 – 89 days past due category and $740 in the loans not past due category.

 

Troubled Debt Restructurings:

As of March 31, 2012, the recorded investment of loans classified as troubled debt restructurings was $2,071 with $274 of specific reserves allocated to these loans. As of June 30, 2011, the recorded investment of loans classified as troubled debt restructurings was $1,341 with $229 of specific reserves allocated to these loans. As of March 31, 2012 and June 30, 2011, the Corporation had not committed to lend any additional amounts to customers with outstanding loans that are classified as troubled debt restructurings.

 

During the period ending December 31, 2011, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a permanent reduction of the recorded investment in the loan; or a temporary reduction in the payment amount to interest only.

 

Modifications involving a reduction of the stated interest rate of the loan were for periods ranging from 12 months to 25 years. Modifications involving an extension of the maturity date were for a period of 6.5 years to 25 years.

 

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine month period ending March 31, 2012:

 

          Pre-Modification     Post-Modification  
    Number of     Outstanding Recorded     Outstanding Recorded  
    Loans     Investment     Investment  
Troubled debt restructuring:                        
Commercial     1     $ 85     $ 85  
Commercial real estate:                        
Other     2       137       137  
1 – 4 Family residential:                        
Owner occupied     1       114       113  
Non-owner occupied     7       534       458  
Total     11     $ 619     $ 543  

  

The troubled debt restructurings described above increased the allowance for loan losses by $32 and resulted in charge offs of $63 during the period ending March 31, 2012.

 

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the period ending March 31, 2012:

 

    Number of     Recorded  
    Loans     Investment  
Troubled debt restructuring:                
Commercial real estate:                
Other     1     $ 440  

  

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

 

The troubled debt restructuring that subsequently defaulted described above did not increase the allowance for loan losses or have any charge-off during the period ending March 31, 2012.

 

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 thousand and non-homogeneous loans, such as commercial and commercial real estate loans. Management monitors the loans on an ongoing basis for any changes in the borrower’s ability to service their debt and affirm the risk ratings for the loans and leases in their respective portfolio on an annual 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 thousand or are included in groups of homogeneous loans. Based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans was as follows:

 

    As of March 31, 2012  
          Special                 Not  
    Pass     Mention     Substandard     Doubtful     Rated  
Commercial   $ 18,118     $ 173     $ 45     $ 152     $ 480  
Commercial real estate:                                        
Construction     428       169                    
Other     91,606       8,031       1,668       1,083       975  
1-4 Family residential real estate:                                        
Owner occupied     4,355             100       414       30,075  
Non-owner occupied     13,320       2,481       888       1,029       175  
Construction     188                         141  
Consumer                             8,444  
Total   $ 128,015     $ 10,854     $ 2,701     $ 2,678     $ 40,290  

 

    As of June 30, 2011  
          Special                 Not  
    Pass     Mention     Substandard     Doubtful     Rated  
Commercial   $ 17,469     $ 743     $ 884     $ 82     $ 158  
Commercial real estate:                                        
Construction     868       76       109              
Other     87,857       5,624       2,055       1,405       504  
1-4 Family residential real estate:                                        
Owner occupied     5,526       305       372       319       28,106  
Non-owner occupied     14,549       1,976       1,657       723       191  
Construction     28                         569  
Consumer                             5,868  
Total   $ 126,297     $ 8,724     $ 5,077     $ 2,529     $ 35,396