v2.4.0.6
Loans
9 Months Ended
Mar. 31, 2013
Receivables [Abstract]  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 3 – Loans

 

Major classifications of loans were as follows:

 

    March 31,
2013
    June 30,
2012
 
Commercial   $ 24,967     $ 23,041  
Commercial real estate:                
Construction     3,232       1,546  
Other     121,197       110,775  
1 – 4 Family residential real estate:                
Owner occupied     32,858       34,000  
Non-owner occupied     18,396       18,794  
Construction     474       187  
Consumer     11,775       9,407  
Subtotal     212,899       197,750  
Less: Net deferred loan fees     (285 )     (320 )
Allowance for loan losses     (2,377 )     (2,335 )
Net Loans   $ 210,237     $ 195,095  

  

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ending March 31, 2013:

 

              1-4 Family              
          Commercial     Residential              
          Real     Real              
    Commercial     Estate     Estate     Consumer     Total  
                               
Allowance for loan losses:                              
Beginning balance   $ 145     $ 1,288     $ 644     $ 290     $ 2,367  
Provision for loan losses     (3 )     78     (11)       26       90  
Loans charged-off     (31 )           (43 )     (19)     (93 )
Recoveries                       13       13  
Total ending allowance balance   $ 111     $ 1,366     $ 590     $ 310     $ 2,377  

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the nine months ended March 31, 2013:

 

                1-4 Family              
          Commercial     Residential              
          Real     Real     Real        
    Commercial     Estate     Estate     Consumer     Total  
                               
Allowance for loan losses:                              
Beginning balance   $ 143     $ 1,283     $ 712     $ 197     $ 2,335  
Provision for loan losses     3       107       (64 )     125       171  
Loans charged-off     (35 )     (24 )     (58 )     (59 )     (176 )
Recoveries                       47       47  
Total ending allowance balance   $ 111     $ 1,366     $ 590     $ 310     $ 2,377  

 

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 balance in the allowance for loan losses and t

he recorded investment in loans by portfolio segment and based on impairment method as of March 31, 2013. Included in the recorded investment in loans is $542 of accrued interest receivable net of deferred loan fees of $285.

 

                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   $ 11     $ 100     $ 201       $—     $ 312  
Collectively evaluated for impairment     100       1,266       389       310       2,065  
Total ending allowance balance   $ 111     $ 1,366     $ 590     $ 310     $ 2,377  
                                         
Recorded investment in loans:                                        
Loans individually evaluated for impairment   $ 53     $ 880     $ 1,345       $—     $ 2,278  
Loans collectively evaluated for impairment     24,972       123,575       50,493       11,838       210,878  
Total ending loans balance   $ 25,025     $ 124,455     $ 51,838     $ 11,838     $ 213,156  

 

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 nine months ended March 31, 2013:

 

          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     $—       $—       $—     $ 4       $—       $—  
Commercial real estate:                                                
Other     67       67             63              
1-4 Family residential real estate:                                                
Owner occupied     126       126             96              
Non-owner occupied     56       56             57       3       3  
With an allowance recorded:                                                
Commercial     53       53       11       96       8       8  
Commercial real estate:                                                
Other     812       813       100       809       66       66  
1-4 Family residential real estate:                                                
Owner occupied     283       282       39       305              
Non-owner occupied     881       881       162       923       18       18  
Total   $ 2,278     $ 2,278     $ 312     $ 2,353     $ 95     $ 95  

 

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, 2013:

 

    Average     Interest     Cash Basis  
    Recorded     Income     Interest  
    Investment     Recognized     Recognized  
With no related allowance recorded:                  
Commercial real estate:                  
Other   $ 67       $—       $—  
1-4 Family residential real estate:                        
Owner occupied     126              
Non-owner occupied     57       1       1  
With an allowance recorded:                        
Commercial     75              
Commercial real estate:                        
Other     816       3       3  
1-4 Family residential real estate:                        
Owner occupied     285              
Non-owner occupied     884       6       6  
Total   $ 2,310     $ 10     $ 10  

 

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

 

    As of June 30, 2012     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   $ 12     $ 12       $—     $ 25       $—       $—  
Commercial real estate:                                                
Other     144       144             491       67       67  
1-4 Family residential real estate:                                                
Owner occupied     238       238             94       2       2  
Non-owner occupied     64       65             57       3       3  
With an allowance recorded:                                                
Commercial     136       136       50       88       2       2  
Commercial real estate:                                                
Other     851       852       82       797       12       12  
1-4 Family residential real estate:                                                
Owner occupied     160       160       13       255       2       2  
Non-owner occupied     952       954       245       929       10       10  
Total   $ 2,557     $ 2,561     $ 390     $ 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 the recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans as of March 31, 2013 and June 30, 2012:

 

    March 31, 2013     June 30, 2012  
          Loans Past Due           Loans Past Due  
          Over 90 Days           Over 90 Days  
          Still           Still  
    Non-accrual     Accruing     Non-accrual     Accruing  
Commercial   $ 46       $—     $ 51       $—  
Commercial real estate:                                
Other     494             911        
1 – 4 Family residential:                                
Owner occupied     303             307        
Non-owner occupied     674             663        
Consumer                          
Total   $ 1,517       $—     $ 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 March 31, 2013 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   $ 22     $ 5     $ 46     $ 73     $ 24,952     $ 25,025  
Commercial real estate:                                                
Construction                             3,232       3,232  
Other           63             63       121,160       121,223  
1-4 Family residential:                                                
Owner occupied     180             258       438       32,528       32,966  
Non-owner occupied                 84       84       18,315       18,399  
Construction                             473       473  
Consumer     36       16             52       11,786       11,838  
Total   $ 238     $ 84     $ 388     $ 710     $ 212,446     $ 213,156  

 

The above table of past due loans includes the recorded investment in non-accrual loans of $388 in the 90 days or greater and $1,129 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 March 31, 2013, the recorded investment of loans classified as troubled debt restructurings was $1,972 with $270 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 March 31, 2013 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 nine months ended March 31, 2013 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 nine months ended March 31, 2013:

 

          Pre-Modification     Post-Modification  
    Number of     Outstanding Recorded     Outstanding Recorded  
    Loans     Investment     Investment  
Commercial real estate:                        
Other     1     $ 285     $ 282  
1 – 4 Family residential:                        
Owner occupied     1       21       21  
Total     2     $ 306     $ 303  

 

 

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  
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 $41 and $43 for the three and nine month periods ending March 31, 2013, respectively. There were no charge offs from troubled debt restructurings during the three or nine month periods ending March 31, 2013. Troubled debt restructurings increased the allowance for loan losses by $12 and $32 for the three and nine month periods ending March 31, 2012, respectively. There were no charge offs from troubled debt restructurings during the three month period ending March 31, 2012 and charge offs of $63 during the nine month period ending March 31, 2012.

 

There were no loans classified as troubled debt restructurings for which there was a payment default during the three or nine month periods ending March 31, 2013. 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 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.

 

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 March 31, 2013  
        Special               Not  
    Pass     Mention     Substandard     Doubtful     Rated  
Commercial   $ 23,826     $ 64     $ 24     $ 53     $ 1,058  
Commercial real estate:                                        
Construction     3,144       88                    
Other     111,936       5,222       2,729       880       456  
1-4 Family residential real estate:                                        
Owner occupied     4,302                   408       28,256  
Non-owner occupied     14,665       1,376       887       937       534  
Construction     168                         305  
Consumer                             11,838  
Total   $ 158,041     $ 6,750     $ 3,640     $ 2,278     $ 42,447  

 

    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