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

Note 3 – Loans

 

Major classifications of loans were as follows:

 

    December 31,
2012		     June 30,
2012		  
Commercial   $ 24,288     $ 23,041  
Commercial real estate:                
Construction     2,385       1,546  
Other     116,307       110,775  
1 – 4 Family residential real estate:                
Owner occupied     32,794       34,000  
Non-owner occupied     18,686       18,794  
Construction     344       187  
Consumer     11,225       9,407  
Subtotal     206,029       197,750  
Less:    Net deferred loan fees     (343 )     (320 )
 Allowance for loan losses     (2,367 )     (2,335 )
Net Loans   $ 203,319     $ 195,095  

  

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

 

                1-4 Family              
          Commercial     Residential              
          Real     Real              
    Commercial     Estate     Estate     Consumer     Total  
                               
Allowance for loan losses:                                        
Beginning balance   $ 145     $ 1,275     $ 677     $ 241     $ 2,338  
Provision for loan losses     —       37       (33 )     52       56  
Loans charged-off     —       (24 )     —       (21 )     (45 )
Recoveries     —       —       —       18       18  
Total ending allowance balance   $ 145     $ 1,288     $ 644     $ 290     $ 2,367  

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended December 31, 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       29       (53 )     99       81  
Loans charged-off     (4 )     (24 )     (15 )     (40 )     (83 )
Recoveries     —       —       —       34       34  
Total ending allowance balance   $ 145     $ 1,288     $ 644     $ 290     $ 2,367  

  

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

 

                1-4 Family              
          Commercial     Residential              
          Real     Real              
    Commercial     Estate     Estate     Consumer     Total  
                               
Allowance for loan losses:                                        
Beginning balance   $ 97     $ 1,054     $ 845     $ 91     $ 2,087  
Provision for loan losses     21       (89 )     50       85       67  
Loans charged-off     —       —       —       (50 )     (50 )
Recoveries     —       —       5       17       22  
Total ending allowance balance   $ 118     $ 965     $ 900     $ 143     $ 2,126  

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the six months ending December 31, 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     (61 )     83       17       120       159  
Loans charged-off     —       —       (69 )     (100 )     (169 )
Recoveries     —       —       5       30       35  
Total ending allowance balance   $ 118     $ 965     $ 900     $ 143     $ 2,126  

 

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 December 31, 2012. Included in the recorded investment in loans is $528 of accrued interest receivable net of deferred loan fees of $343.

 

                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     $ 70     $ 269     $ —     $ 381  
Collectively evaluated for impairment     103       1,218       375       290       1,986  
Total ending allowance balance   $ 145     $ 1,288     $ 644     $ 290     $ 2,367  
                                         
Recorded investment in loans:                                        
Loans individually evaluated for impairment   $ 86     $ 608     $ 1,401     $ —     $ 2,095  
Loans collectively evaluated for impairment     24,264       118,112       50,535       11,208       204,119  
Total ending loans balance   $ 24,350     $ 118,720     $ 51,936     $ 11,208     $ 206,214  

 

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 six months ended December 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   $ —     $ —     $ —     $ 5     $ —     $ —  
Commercial real estate:                                                
Other     1       1       —       60       —       —  
1-4 Family residential real estate:                                                
Owner occupied     81       81       —       81       —       —  
Non-owner occupied     57       58       —       57       2       2  
With an allowance recorded:                                                
Commercial     86       86       42       107       8       8  
Commercial real estate:                                                
Other     607       607       70       806       63       63  
1-4 Family residential real estate:                                                
Owner occupied     330       328       45       315       —       —  
Non-owner occupied     933       934       224       942       12       12  
Total   $ 2,095     $ 2,095     $ 381     $ 2,373     $ 85     $ 85  

  

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 December 31, 2012:

 

    Average     Interest     Cash Basis  
    Recorded     Income     Interest  
    Investment     Recognized     Recognized  
With no related allowance recorded:                        
Commercial real estate:                        
Other   $ 18     $ —     $ —  
1-4 Family residential real estate:                        
Owner occupied     81       —       —  
Non-owner occupied     57       1       1  
With an allowance recorded:                        
Commercial     92       8       8  
Commercial real estate:                        
Other     750       61       61  
1-4 Family residential real estate:                        
Owner occupied     316       —       —  
Non-owner occupied     937       6       6  
Total   $ 2,251     $ 76     $ 76  

 

The following table presents information related to loans individually evaluated for impairment by class of loans as of June 30, 2012 and for the six months ended December 31, 2011:

 

    As of June 30, 2012     Six Months ended December 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   $ 12     $ 12     $ —     $ 44     $ —     $ —  
Commercial real estate:                                                
Other     144       144       —       633       3       3  
1-4 Family residential real estate:                                                
Owner occupied     238       238       —       96       2       2  
Non-owner occupied     64       65       —       54       2       2  
With an allowance recorded:                                                
Commercial     136       136       50       61       —       —  
Commercial real estate:                                                
Other     851       852       82       760       11       11  
1-4 Family residential real estate:                                                
Owner occupied     160       160       13       218       6       6  
Non-owner occupied     952       954       245       917       —       —  
Total   $ 2,557     $ 2,561     $ 390     $ 2,783     $ 24     $ 24  

 

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 December 31, 2011:

 

    Average     Interest     Cash Basis  
    Recorded     Income     Interest  
    Investment     Recognized     Recognized  
With no related allowance recorded:                        
Commercial   $ 43     $ —     $ —  
Commercial real estate:                        
Other     630       —       —  
1-4 Family residential real estate:                        
Owner occupied     95       —       —  
Non-owner occupied     65       2       2  
With an allowance recorded:                        
Commercial     60       —       —  
Commercial real estate:                        
Other     758       6       6  
1-4 Family residential real estate:                        
Owner occupied     218       4       4  
Non-owner occupied     949       —       —  
Total   $ 2,818     $ 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 December 31, 2012 and June 30, 2012:

    December 31, 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   $ 77     $  —     $ 51     $ —  
Commercial real estate:                                
Other     522       —       911       —  
1 – 4 Family residential:                                
Owner occupied     298       109       307       —  
Non-owner occupied     727       —       663       —  
Consumer     —       —       —       —  
Total   $ 1,624     $ 109     $ 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 December 31, 2012 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     $—     $ 8     $ 77     $ 85     $ 24,265     $ 24,350  
Commercial real estate:                                                
Construction     —       —       —       —       2,390       2,390  
Other     —       —       20       20       116,310       116,330  
1-4 Family residential:                                                
Owner occupied     —       —       361       361       32,547       32,908  
Non-owner occupied     —       —       126       126       18,559       18,685  
Construction     —       —       —       —       343       343  
Consumer     43       —       —       43       11,165       11,208  
Total   $ 43     $ 8     $ 584     $ 635     $ 205,579     $ 206,214  

 

The above table of past due loans includes the recorded investment in non-accrual loans of $475 in the 90 days or greater and $1,149 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                    
    30 - 59     60 - 89     90 Days or     Total     Loans Not        
    Days     Days     Greater     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, $479 in the 90 days or greater and $1,410 in the loans not past due category.

 

Troubled Debt Restructurings:

As of December 31, 2012, the recorded investment of loans classified as troubled debt restructurings was $1,712 with $250 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 December 31, 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 six months ended December 31, 2012 and 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 principal balance of 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 5 years to 25 years.

 

The following table presents loans by class modified as troubled debt restructurings that occurred during the six months ended December 31, 2012:

 

          Pre-Modification     Post-Modification  
    Number of     Outstanding Recorded     Outstanding Recorded  
    Loans     Investment     Investment  
1 – 4 Family residential:                        
Owner occupied     1     $ 21     $ 21  
Total     1     $ 21     $ 21  

 

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  

 

Troubled debt restructurings increased the allowance for loan losses by $2 for the three and six month periods ending December 31, 2012. There were no charge offs from troubled debt restructurings during the three or six month periods ending December 31, 2012. There was no increase to the allowance for loan losses or any charge offs from troubled debt restructurings during the three month period ended December 31, 2011. Troubled debt restructurings increased the allowance for loan losses by $20 and resulted in charge offs of $63 during the six month period ended December 31, 2011.

 

There were no loans classified as troubled debt restructurings for which there was a payment default during the three or six month periods ending December 31, 2012 or December 31, 2011. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

 

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. These loans are evaluated based on delinquency status, which are disclosed in the previous table within this footnote. Based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans was as follows:

 

    As of December 31, 2012  
        Special                 Not  
    Pass     Mention     Substandard     Doubtful     Rated  
Commercial   $ 23,044     $ 149     $ 28     $ 86     $ 1,043  
Commercial real estate:                                        
Construction     2,299       91       —       —       —  
Other     106,864       5,451       2,708       608       699  
1-4 Family residential real estate:                                        
Owner occupied     4,204       —       —       409       28,295  
Non-owner occupied     15,365       1,359       772       992       197  
Construction     166       —       —       —       177  
Consumer     —       —       —       —       11,208  
Total   $ 151,942     $ 7,050     $ 3,508     $ 2,095     $ 41,619  

 

    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