v2.4.0.6
Loans
3 Months Ended
Sep. 30, 2012
Receivables [Abstract]  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 3 – Loans

 

Major classifications of loans were as follows:

 

    September 30,
2012
    June 30,
2012
 
Commercial   $ 23,506     $ 23,041  
Commercial real estate:                
Construction     2,607       1,546  
Other     113,811       110,775  
1 – 4 Family residential real estate:                
Owner occupied     33,417       34,000  
Non-owner occupied     18,739       18,794  
Construction     248       187  
Consumer     10,121       9,407  
Subtotal     202,449       197,750  
Less: Net deferred loan fees     (331 )     (320 )
Allowance for loan losses     (2,338 )     (2,335 )
Net Loans   $ 199,780     $ 195,095  

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ending September 30, 2012:

 

                1-4 Family              
          Commercial     Residential              
          Real     Real              
    Commercial     Estate     Estate     Consumer     Total  
                               
Allowance for loan losses:                                        
Beginning balance   $ 143     $ 1,283     $ 712     $ 197     $ 2,335  
Provision for loan losses     6       (8 )     (20 )     47       25  
Loans charged-off     (4 )           (15 )     (19 )     (38 )
Recoveries                       16       16  
Total ending allowance balance   $ 145     $ 1,275     $ 677     $ 241     $ 2,338  

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2011:

 

                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     (82 )     172       (33 )     35       92  
Loans charged-off                 (69 )     (50 )     (119 )
Recoveries                       13       13  
Total ending allowance balance   $ 97     $ 1,054     $ 845     $ 91     $ 2,087  

 

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 September 30, 2012. Included in the recorded investment in loans is $534 of accrued interest receivable net of deferred loan fees of $331.

 

                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     $ 62     $ 257     $     $ 365  
Collectively evaluated for impairment     99       1,213       420       241       1,973  
Total ending allowance balance   $ 145     $ 1,275     $ 677     $ 241     $ 2,338  
                                         
Recorded investment in loans:                                        
Loans individually evaluated for impairment   $ 104     $ 949     $ 1,392     $     $ 2,445  
Loans collectively evaluated for impairment     23,458       115,513       51,134       10,102       200,207  
Total ending loans balance   $ 23,562     $ 116,462     $ 52,526     $ 10,102     $ 202,652  

 

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, 2012. Included in the recorded investment in loans is $494 of accrued interest receivable net of deferred loan fees of $320.

 

                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   $ 50     $ 82     $ 258     $     $ 390  
Collectively evaluated for impairment     93       1,201       454       197       1,945  
Total ending allowance balance   $ 143     $ 1,283     $ 712     $ 197     $ 2,335  
                                         
Recorded investment in loans:                                        
Loans individually evaluated for impairment   $ 148     $ 996     $ 1,417     $     $ 2,561  
Loans collectively evaluated for impairment     22,940       111,352       51,683       9,388       195,363  
Total ending loans balance   $ 23,088     $ 112,348     $ 53,100     $ 9,388     $ 197,924  

 

The following table presents information related to loans individually evaluated for impairment by class of loans as of and for the three months ended September 30, 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   $ 11     $ 11     $     $ 11     $     $  
Commercial real estate:                                                
Other     94       94             103              
1-4 Family residential real estate:                                                
Owner occupied     81       81             81              
Non-owner occupied     57       58             57       1       1  
With an allowance recorded:                                                
Commercial     93       93       46       122              
Commercial real estate:                                                
Other     854       855       62       863       2       2  
1-4 Family residential real estate:                                                
Owner occupied     310       310       42       314              
Non-owner occupied     942       943       215       946       6       6  
Total   $ 2,442     $ 2,445     $ 365     $ 2,497     $ 9     $ 9  

 

The following table presents information related to loans individually evaluated for impairment by class of loans as of June 30, 2012 and for the three months ended September 30, 2011:

    As of June 30, 2012     Three Months ended September 30, 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   $ 12     $ 12     $     $ 17     $     $  
Commercial real estate:                                                
Other     144       144             635       3       3  
1-4 Family residential real estate:                                                
Owner occupied     238       238             97       2       2  
Non-owner occupied     64       65             43              
With an allowance recorded:                                                
Commercial     136       136       50       63              
Commercial real estate:                                                
Other     851       852       82       763       5       5  
1-4 Family residential real estate:                                                
Owner occupied     160       160       13       218       2       2  
Non-owner occupied     952       954       245       871              
Total   $ 2,557     $ 2,561     $ 390     $ 2,707     $ 12     $ 12  

 

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 September 30, 2012 and June 30, 2012:

    September 30, 2012     June 30, 2012  
          Loans Past Due           Loans Past Due  
          Over 90 Days           Over 90 Days  
          Still           Still  
    Non-accrual     Accruing     Non-accrual     Accruing  
Commercial   $ 93     $     $ 51     $  
Commercial real estate:                                
Other     863             911        
1 – 4 Family residential:                                
Owner occupied     300             307        
Non-owner occupied     716             663        
Consumer                        
Total   $ 1,972     $     $ 1,932     $  

 

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 September 30, 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   $ 9     $     $ 78     $ 87     $ 23,475     $ 23,562  
Commercial real estate:                                                
Construction                             2,609       2,609  
Other     26             280       306       113,547       113,853  
1-4 Family residential:                                                
Owner occupied     159             254       413       33,126       33,539  
Non-owner occupied           87       43       130       18,610       18,740  
Construction                             247       247  
Consumer     7                   7       10,095       10,102  
Total   $ 201     $ 87     $ 655     $ 943     $ 201,709     $ 202,652  

 

The above table of past due loans includes the recorded investment in non-accrual loans of $63 in the 60-89 days past due category and $1,254 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, 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   $ 85     $     $ 33     $ 118     $ 22,970     $ 23,088  
Commercial real estate:                                                
Construction     202                   202       1,345       1,547  
Other     82             268       350       110,451       110,801  
1-4 Family residential:                                                
Owner occupied     174             178       352       33,766       34,118  
Non-owner occupied     43                   43       18,753       18,796  
Construction                             186       186  
Consumer           8             8       9,380       9,388  
Total   $ 586     $ 8     $ 479     $ 1,073     $ 196,851     $ 197,924  

 

The above table of past due loans includes the recorded investment in non-accrual loans of $43 in the 30 – 59 days past due category and $1,410 in the loans not past due category.

 

Troubled Debt Restructurings:

As of September 30, 2012, the recorded investment of loans classified as troubled debt restructurings was $1,806 with $193 of specific reserves allocated to these loans. As of June 30, 2012, the recorded investment of loans classified as troubled debt restructurings was $1,973 with $258 of specific reserves allocated to these loans. As of September 30, 2012 and June 30, 2012, the Corporation had not committed to lend any additional amounts to customers with outstanding loans that are classified as troubled debt restructurings.

 

During the three months ended September 30, 2012, there were no loan modifications completed that were classified as troubled debt restructurings. During the year ended June 30, 2012, 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 year ended June 30, 2012:

 

          Pre-Modification     Post-Modification  
    Number of     Outstanding Recorded     Outstanding Recorded  
    Loans     Investment     Investment  
Commercial 1   $ 85     $ 85          
Commercial real estate:                        
Other     2       137       137  
1 – 4 Family residential:                        
Owner occupied     1       114       114  
Non-owner occupied     7       534       466  
Total     11     $ 870     $ 802  

 

There were no troubled debt restructurings or impact on the provision for loan losses for the three months ended September 30, 2012. Troubled debt restructurings increased the allowance for loan losses by $20 and resulted in charge offs of $63 during the period ended September 30, 2011.

 

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within 12 months following the modification during the period ending September 30, 2012:

 

    Number of     Recorded  
    Loans     Investment  
Commercial real estate:                
Other     1     $ 428  

 

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. Subsequent to the payment default, the above referenced loan has been paid current under the modified terms of the loan. The troubled debt restructuring that subsequently defaulted did not increase the allowance for loan losses or have any charge-off during the periods ending September 30, 2012 or June 30, 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 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 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 September 30, 2012  
          Special                 Not  
    Pass     Mention     Substandard     Doubtful     Rated  
Commercial   $ 22,292     $ 38     $ 74     $ 104     $ 1,054  
Commercial real estate:                                        
Construction     2,421       158                   30  
Other     103,514       5,833       2,752       949       805  
1-4 Family residential real estate:                                        
Owner occupied     3,953             99       391       29,096  
Non-owner occupied     14,109       2,157       860       1,001       613  
Construction     200                         47  
Consumer                             10,102  
Total   $ 146,489     $ 8,186     $ 3,785     $ 2,445     $ 41,747  

 

    As of June 30, 2012  
          Special                 Not  
    Pass     Mention     Substandard     Doubtful     Rated  
Commercial   $ 21,642     $ 240     $ 14     $ 148     $ 1,044  
Commercial real estate:                                        
Construction     1,353       163                   31  
Other     98,942       7,332       2,657       996       874  
1-4 Family residential real estate:                                        
Owner occupied     4,256             99       398       29,365  
Non-owner occupied     14,205       2,197       875       1,019       500  
Construction     47                         139  
Consumer                             9,388  
Total   $ 140,445     $ 9,932     $ 3,645     $ 2,561     $ 41,341