Note

– Loans

Major classifications of loans were as follows:

	September 30, 2019			June 30, 2019
Commercial	$	81,782		$	80,453
Commercial real estate:
Construction		14,583			16,120
Other		205,214			195,269
1 – 4 Family residential real estate:
Owner occupied		58,406			55,941
Non-owner occupied		14,936			14,517
Construction		3,115			1,931
Consumer		5,912			5,150
Subtotal		383,948			369,381
Net Deferred loan fees and costs		(128	)		(206	)
Allowance for loan losses		(3,909	)		(3,788	)
Net Loans	$	379,911		$	365,387

The following table presents the activity in the allowance for loan losses by portfolio segment for the

three

months ended

September 30, 2019:

						1-4 Family
				Commercial		Residential
				Real		Real
	Commercial			Estate		Estate		Consumer			Total

Allowance for loan losses:
Beginning balance	$	660		$	2,575	$	494	$	59		$	3,788
Provision for loan losses		(11	)		69		56		16			130
Loans charged-off		—			—		—		(16	)		(16	)
Recoveries		—			1		—		6			7
Total ending allowance balance	$	649		$	2,645	$	550	$	65		$	3,909

The following table presents the activity in the allowance for loan losses by portfolio segment for the

three

months ended

September 30, 2018:

					1-4 Family
			Commercial		Residential
			Real		Real
	Commercial		Estate		Estate		Consumer			Total

Allowance for loan losses:
Beginning balance	$	586	$	2,277	$	499	$	60		$	3,422
Provision for loan losses		16		100		5		(6	)		115
Loans charged-off		—		—		—		(7	)		(7	)
Recoveries		—		1		3		4			8
Total ending allowance balance	$	602	$	2,378	$	507	$	51		$	3,538

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

September 30, 2019.

Included in the recorded investment in loans is

$764

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	$	2	$	7	$	—	$	—	$	9
Collectively evaluated for impairment		647		2,638		550		65		3,900
Total ending allowance balance	$	649	$	2,645	$	550	$	65	$	3,909

Recorded investment in loans:
Loans individually evaluated for impairment	$	167	$	460	$	266	$	—	$	893
Loans collectively evaluated for impairment		81,639		219,298		76,822		5,932		383,691
Total ending loans balance	$	81,806	$	219,758	$	77,088	$	5,932	$	384,584

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, 2019.

Included in the recorded investment in loans is

$891

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	$	2	$	7	$	—	$	—	$	9
Collectively evaluated for impairment		658		2,568		494		59		3,779
Total ending allowance balance	$	660	$	2,575	$	494	$	59	$	3,788

Recorded investment in loans:
Loans individually evaluated for impairment	$	174	$	658	$	357	$	—	$	1,189
Loans collectively evaluated for impairment		80,413		210,709		72,591		5,164		368,877
Total ending loans balance	$	80,587	$	211,367	$	72,948	$	5,164	$	370,066

The following table presents information related to unpaid principal balance, recorded investment and interest income associated with loans individually evaluated for impairment by class of loans as of

September 30, 2019

and for the

three

months ended

September 30, 2019:

	As of September 30, 2019						Three Months ended September 30, 2019
	Unpaid				Allowance for Loan		Average		Interest		Cash Basis
	Principal		Recorded		Losses		Recorded		Income		Interest
	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial real estate:
Other	$	316		240	$	—	$	362	$	86	$	86
1-4 Family residential real estate:
Owner occupied		43		12		—		39		7		7
Non-owner occupied		292		255		—		257		—		—
With an allowance recorded:
Commercial real estate:
Other		218		220		7		220		3		3
Commercial		167		169		2		170		3		3
Total	$	1,036	$	896	$	9	$	1,048	$	99	$	99

June 30, 2019

and for the

three

months ended

September 30, 2018:

	As of June 30, 2019						Three Months ended September 30, 2018
	Unpaid				Allowance for Loan		Average		Interest		Cash Basis
	Principal		Recorded		Losses		Recorded		Income		Interest
	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial	$	—	$	—	$	—	$	71	$	1	$	1
Commercial real estate:
Other		580		436		—		1,369		11		11
1-4 Family residential real estate:
Owner occupied		124		93		—		99		—		—
Non-owner occupied		297		264		—		292		—		—
With an allowance recorded:
Commercial real estate:
Other		221		222		7		231		3		3
Commercial		173		174		2		—		—		—
Total	$	1,395	$	1,189	$	9	$	2,062	$	15	$	15

The following table presents the recorded investment in non-accrual and loans past due over

days still on accrual by class of loans as of

September 30, 2019

and

June 30, 2019:

	September 30, 2019				June 30, 2019
			Loans Past Due				Loans Past Due
			Over 90 Days				Over 90 Days
			Still				Still
	Non-accrual		Accruing		Non-accrual		Accruing
Commercial real estate:
Other	$	185	$	—	$	436	$	—
1 – 4 Family residential:
Owner occupied		5		—		85		—
Non-owner occupied		254		—		264		—
Total	$	444	$	—	$	785	$	—

Non-accrual loans and loans past due

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, 2019

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	$	—	$	—	$	—	$	—	$	81,806	$	81,806
Commercial real estate:
Construction		—		—		—		—		14,540		14,540
Other		—		8		—		8		205,210		205,218
1-4 Family residential:
Owner occupied		—		5		—		5		58,974		58,979
Non-owner occupied		—		—		—		—		14,936		14,936
Construction		—		—		—		—		3,173		3,173
Consumer		16		—		—		16		5,916		5,932
Total	$	16	$	13	$	—	$	29	$	384,555	$	384,584

The above table of past due loans includes the recorded investment in non-accrual loans of

$13

in the

days category and

$431

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, 2019

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	$	—	$	—	$	—	$	—	$	80,587	$	80,587
Commercial real estate:
Construction		—		—		—		—		16,075		16,075
Other		199		—		—		199		195,093		195,292
1-4 Family residential:
Owner occupied		40		—		80		120		56,347		56,467
Non-owner occupied		—		—		—		—		14,518		14,518
Construction		—		—		—		—		1,963		1,963
Consumer		1		—		—		1		5,163		5,164
Total	$	240	$	—	$	80	$	320	$	369,746	$	370,066

The above table of past due loans includes the recorded investment in non-accrual loans of

$198

in the

days,

$80

in the

days or greater category and

$507

in the loans

not

past due category.

Troubled Debt Restructurings

(TDR)

The Corporation has certain loans that have been modified in order to maximize collection of loan balances. A modified loan is classified as a TDR if, for economic reasons, management grants a concession to the original terms and conditions of the loan to a borrower who is experiencing financial difficulties that it would

not

have otherwise considered.

September 30, 2019

and

June 30, 2019,

the Corporation had

$706

and

$725,

respectively, of loans classified as TDRs which are included in impaired loans above. As of

September 30, 2019,

the Corporation had

not

committed to lend any additional funds to customers with outstanding loans that were classified as troubled debt restructurings. As of

June 30, 2019,

the Corporation had committed to lend an additional

to customers with outstanding loans that were classified as troubled debt restructurings. At

September 30, 2019

and

June 30, 2019,

the Corporation had

of specific reserves allocated to these loans.

During the

three

-month periods ended

September 30, 2019

and

2018,

there were

loan modifications completed that were classified as troubled debt restructurings. There were

charge offs from troubled debt restructurings that were completed during the

three

-month periods ended

September 30, 2019

and

2018.

There were

loans classified as troubled debt restructurings for which there was a payment default within

months following the modification during the

three

-month periods ended

September 30, 2019

and

2018.

A loan is considered in payment default once it is

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, current economic trends and other relevant information. 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 affirms 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 September 30, 2019
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	76,118	$	4,448	$	959	$	—	$	281
Commercial real estate:
Construction		14,540		—		—		—		—
Other		191,044		6,741		5,308		185		1,940
1-4 Family residential real estate:
Owner occupied		2,192		—		23		4		56,760
Non-owner occupied		13,823		200		311		255		347
Construction		105		—		—		—		3,068
Consumer		24		—		—		—		5,908
Total	$	297,846	$	11,389	$	6,601	$	444	$	68,304

As of

June 30, 2019,

and based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans is as follows:

	As of June 30, 2019
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	74,393	$	4,942	$	1,012	$	—	$	240
Commercial real estate:
Construction		16,075		—		—		—		—
Other		179,952		8,071		5,337		436		1,496
1-4 Family residential real estate:
Owner occupied		2,245		—		24		5		54,193
Non-owner occupied		13,413		205		318		263		319
Construction		—		—		—		—		1,963
Consumer		32		—		—		—		5,132
Total	$	286,110	$	13,218	$	6,691	$	704	$	63,343