10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _______________

Commission File No. 0-23433

WAYNE SAVINGS BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Delaware	31-1557791
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)
151 North Market Street
Wooster, Ohio	44691
(Address of principal	(Zip Code)
executive office)

Registrant’s telephone number, including area code: (330) 264-5767

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes   x     No o  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes      o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer”, “large accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o    Accelerated filer o    Non-accelerated filer  o  Smaller reporting company   x   Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.).

Yes o                No   x

As of April 30, 2017, the latest practicable date, 2,781,839 shares of the registrant’s common stock, $.10 par value, were issued and outstanding.

Wayne Savings Bancshares, Inc.

Index

			Page
PART I - FINANCIAL INFORMATION
	Item 1	Condensed Consolidated Balance Sheets	2
		Condensed Consolidated Statements of Income and Comprehensive Income.	3
		Condensed Consolidated Statements of Cash Flows	4
		Notes to Condensed Consolidated Financial Statements	6
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
	Item 3	Quantitative and Qualitative Disclosures About Market Risk	42
	Item 4	Controls and Procedures	42
PART II - OTHER INFORMATION
	Item 1	Legal Proceedings	43
	Item 1A	Risk Factors	43
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	43
	Item 3	Defaults Upon Senior Securities	43
	Item 4	Mine Safety Disclosures	43
	Item 5	Other Information	44
	Item 6	Exhibits	44
SIGNATURES			45

Wayne Savings Bancshares, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

	March 31, 2017			December 31, 2016
	(Unaudited)
Assets
Cash and due from banks	$	6,429		$	10,138
Interest-bearing deposits		4,845			6,618
Cash and cash equivalents		11,274			16,756
Available-for-sale securities		66,497			70,709
Held-to-maturity securities		11,343			9,559
Loans, net of allowance for loan losses of $3,044 and $3,040           at March 31, 2017 and December 31, 2016, respectively		334,076			332,283
Premises and equipment		6,269			6,420
Federal Home Loan Bank stock		4,226			4,226
Foreclosed assets held for sale, net		—			2
Accrued interest receivable		1,309			1,146
Bank-owned life insurance		9,893			9,827
Goodwill		1,719			1,719
Prepaid federal income taxes		163			264
Other assets		1,848			1,880
Total assets	$	448,617		$	454,791
Liabilities and Stockholders’ Equity
Liabilities
Deposits
Demand	$	108,171		$	111,213
Savings and money market		145,203			141,029
Time		124,884			131,491
Total deposits		378,258			383,733
Other short-term borrowings		7,259			7,246
Federal Home Loan Bank advances		18,000			18,000
Deferred federal income taxes		182			184
Interest payable and other liabilities		3,519			4,600
Total liabilities		407,218			413,763
Commitments and Contingencies		—			—
Stockholders’ Equity
Preferred stock, 500,000 shares of $.10 par value authorized;           no shares issued		—			—
Common stock, $.10 par value; authorized 9,000,000 shares;           3,978,731 shares issued		398			398
Additional paid-in capital		36,054			36,041
Retained earnings		22,640			22,317
Shares acquired by ESOP		(256	)		(273	)
Accumulated other comprehensive loss		(501	)		(519	)
Treasury stock, at cost: Common: 1,196,892 shares           at March 31, 2017 and December 31, 2016.		(16,936	)		(16,936	)
Total stockholders’ equity		41,399			41,028
Total liabilities and stockholders’ equity	$	448,617		$	454,791

See accompanying notes to condensed consolidated financial statements.

2 

Wayne Savings Bancshares, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

For the three months ended March 31, 2017 and 2016

(In thousands, except per share data)

(Unaudited)

	Three Months Ended March 31,
	2017			2016
Interest and Dividend Income
Loans	$	3,439		$	3,169
Securities		482			628
Dividends on Federal Home Loan Bank stock and other		56			44
Total interest and dividend income		3,977			3,841
Interest Expense
Deposits		445			421
Other short-term borrowings		3			2
Federal Home Loan Bank advances		60			70
Total interest expense		508			493
Net Interest Income		3,469			3,348
Provision (Credit) for Loan Losses		27			(67	)
Net Interest Income After Provision (Credit) for Loan Losses		3,442			3,415
Noninterest Income
Deposit service charges		152			137
Gain on loan sales		33			48
Earnings and amortization on bank-owned life insurance		73			73
Interchange fees		103			96
Other operating		126			98
Total noninterest income		487			452
Noninterest Expense
Salaries and employee benefits		1,724			1,686
Net occupancy and equipment expense		526			527
Federal deposit insurance premiums		46			71
Franchise taxes		91			88
Advertising and marketing		70			69
Legal		191			60
Audit and accounting		110			79
Stockholder expense		76			30
Other		325			298
Total noninterest expense		3,159			2,908
Income Before Federal Income Taxes		770			959
Provision for Federal Income Taxes		199			252
Net Income	$	571		$	707
Other comprehensive income:
Unrealized gains on available-for-sale securities		71			479
Unrecognized loss on split-dollar life insurance policy		(29	)		—
Tax expense		(24	)		(163	)
Other comprehensive income		18			316
Total comprehensive income	$	589		$	1,023
Basic and Diluted Earnings Per Share	$	0.21		$	0.26
Dividends Per Share	$	0.09		$	0.09

See accompanying notes to condensed consolidated financial statements.

3 

Wayne Savings Bancshares, Inc.

Condensed Consolidated Statements of Cash Flows

For the three months ended March 31, 2017 and 2016

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2017			2016
Operating Activities
Net income	$	571		$	707
Items not requiring (providing) cash
Depreciation and amortization		173			157
Provision (credit) for loan losses		27			(67	)
Amortization of premiums and discounts on securities		231			283
Amortization of mortgage servicing rights		11			7
Amortization of deferred loan origination fees		(23	)		(36	)
Increase in value of bank-owned life insurance		(66	)		(67	)
Amortization expense of stock benefit plan		30			22
Provision for impairment on foreclosed assets held for sale		2			3
Loss on sale of foreclosed assets held for sale		—			4
Net gain on sale of loans		(33	)		(48	)
Proceeds from sale of loans in the secondary market		1,689			1,114
Origination of loans for sale in the secondary market		(1,656	)		(1,066	)
Deferred income taxes		(26	)		14
Changes in
Accrued interest receivable		(163	)		(199	)
Other assets		122			174
Interest payable and other liabilities		(586	)		(310	)
Net cash provided by operating activities		303			692
Investing Activities
Purchase of  held-to-maturity securities		(1,813	)		—
Proceeds from maturities and paydowns of available-for-sale securities		4,066			6,291
Proceeds from maturities and paydowns of held-to-maturity securities		16			13
Net change in loans		(1,797	)		(13,003	)
Purchase of premises and equipment		(22	)		(133	)
Proceeds from the sale of foreclosed assets		—			70
Net cash provided by (used in)  investing activities	$	450		$	(6,762	)

See accompanying notes to condensed consolidated financial statements.

4 

Wayne Savings Bancshares, Inc.

Condensed Consolidated Statements of Cash Flows (continued)

For the three months ended March 31, 2017 and 2016

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2017			2016
Financing Activities
Net change in deposits	$	(5,475	)	$	3,147
Net change in other short-term borrowings		13			632
Proceeds from Federal Home Loan Bank advances		9,600			13,375
Repayments of Federal Home Loan Bank advances		(9,600	)		(13,375	)
Advances by borrowers for taxes and insurance		(525	)		(482	)
Dividends on common stock		(248	)		(247	)
Net cash (used in) provided by financing activities		(6,235	)		3,050
Change in Cash and Cash Equivalents		(5,482	)		(3,020	)
Cash and Cash Equivalents, Beginning of period		16,756			11,156
Cash and Cash Equivalents, End of period	$	11,274		$	8,136
Supplemental Cash Flows Information
Interest paid on deposits and borrowings	$	505		$	492
Federal income taxes paid	$	100		$	—
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Transfers from loans to foreclosed assets held for sale	$	—		$	106
Recognition of mortgage servicing rights	$	25		$	16
Dividends payable	$	250		$	250

See accompanying notes to condensed consolidated financial statements.

5 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Note 1: Basis of Presentation

The accompanying unaudited condensed consolidated financial statements as of March 31, 2017 and for the three months ended March 31, 2017 and 2016, were prepared in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto of Wayne Savings Bancshares, Inc. (the “Company”) included in the Annual Report on Form 10-K for the year ended December 31, 2016. Reference is made to the accounting policies of the Company described in the Notes to the Consolidated Financial Statements contained in its Annual Report on Form 10-K.

In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of the unaudited financial statements have been included. The results of operations for the three months ended March 31, 2017, are not necessarily indicative of the results which may be expected for the full year. The condensed consolidated balance sheet of the Company as of December 31, 2016 has been derived from the consolidated balance sheet of the Company as of that date.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

6 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Note 2: Principles of Consolidation

The accompanying condensed consolidated financial statements include Wayne Savings Bancshares, Inc. and the Company’s wholly-owned subsidiary, Wayne Savings Community Bank (“Wayne Savings” or the “Bank”).

Wayne Savings has eleven full-service offices in Wayne, Holmes, Ashland, Medina and Stark counties. All significant intercompany transactions and balances have been eliminated in the consolidation.

Note 3: Securities

The amortized cost and fair values, together with gross unrealized gains and losses, of securities are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Available-for-sale securities
March 31, 2017
U.S. government agencies	$	9	$	—	$	—	$	9
Mortgage-backed securities of           government sponsored entities		54,558		390		477		54,471
State and political subdivisions		11,697		374		54		12,017
Totals	$	66,264	$	764	$	531	$	66,497

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale securities	(In thousands)
December 31, 2016:
U.S. government agencies	$	11	$	—	$	—	$	11
Mortgage-backed securities of           government sponsored entities		58,797		399		582		58,614
Private-label collateralized mortgage           obligations		41		—		1		40
State and political subdivisions		11,698		402		56		12,044
Totals	$	70,547	$	801	$	639	$	70,709

7 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Held-to-maturity Securities:
March 31, 2017
U.S. government agencies	$	16	$	—	$	—	$	16
Mortgage-backed securities of           government sponsored entities		693		3		1		695
State and political subdivisions		10,634		15		243		10,406
Totals	$	11,343	$	18	$	244	$	11,117

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Held-to-maturity Securities:	(In thousands)
December 31, 2016:
U.S. government agencies	$	21	$	—	$	—	$	21
Mortgage-backed securities of           government sponsored entities		704		7		—		711
State and political subdivisions		8,834		12		239		8,607
Totals	$	9,559	$	19	$	239	$	9,339

8 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Amortized cost and fair value of available-for-sale securities and held-to-maturity securities at March 31, 2017 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
One to five years	$	5,213	$	5,437	$	2,057	$	2,051
Five to ten years		4,553		4,622		2,894		2,826
After ten years		1,940		1,967		5,699		5,545
		11,706		12,026		10,650		10,422
Mortgage-backed securities of      government sponsored entities		54,558		54,471		693		695
Totals	$	66,264	$	66,497	$	11,343	$	11,117

The carrying value of securities pledged as collateral to secure public deposits and for other purposes was $40.8 million at March 31, 2017, compared to $43.7 million at December 31, 2016.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. The total fair value of these investments at March 31, 2017 and December 31, 2016 was $47.6 million and $49.8 million, which represented approximately 61% and 62%, respectively, of the Company’s total aggregate fair value of the available-for-sale and held-to-maturity investment portfolios. These decreases resulted primarily from changes in market interest rates.

Based on an evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the decreases in fair value for these securities are temporary at March 31, 2017.

Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

The following table shows the gross unrealized losses and fair value of the Company’s temporarily impaired investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

9 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

	March 31, 2017
	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
Mortgage-backed securities of      government sponsored entities	$	30,327	$	351	$	7,570	$	127	$	37,897	$	478
State and political subdivisions		8,786		208		929		89		9,715		297
Total temporarily impaired securities	$	39,113	$	559	$	8,499	$	216	$	47,612	$	775

	December 31, 2016
	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
Mortgage-backed securities of      government sponsored entities	$	32,810	$	409	$	7,978	$	173	$	40,788	$	582
Private-label collateralized      mortgage obligations		—		—		40		1		40		1
State and political subdivisions		8,087		204		929		91		9,016		295
Total temporarily impaired securities	$	40,897	$	613	$	8,947	$	265	$	49,844	$	878

Note 4: Credit Quality of Loans and the Allowance for Loan Losses

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoffs are reported at their outstanding principal balances adjusted for unearned income, charge-offs, the allowance for loan losses, any unamortized deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans.

For loans amortized at cost, interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized as a level yield adjustment over the term of the loan.

10 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

The accrual of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well secured and in process of collection. Past due status is determined based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current for a period of six months and future payments are reasonably assured.

Allowance for Loan Losses

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to income. Loan losses are charged against the allowance when management believes the collectibility of a loan balance is in question. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical charge-off experience and expected loss given default derived from the Company’s internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by using the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogenous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment measurements, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower.

11 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

The risk characteristics of each portfolio segment are as follows:

Residential Real Estate Loans

For residential mortgage loans that are secured by one-to-four family residences and are generally owner occupied, the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in one-to-four family residences. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

All Other Mortgage Loans

All other mortgage loans consist of residential construction loans, nonresidential real estate loans, land loans and multi-family real estate loans.

Residential construction loan proceeds are disbursed in increments as construction progresses and as inspections warrant. Construction loans are typically structured as permanent one-to-four family loans originated by the Company with a 12-month construction phase. Accordingly, upon completion of the construction phase, there is no change in interest rate or term to maturity of the original construction loan, nor is a new permanent loan originated. These loans are generally owner occupied and the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded.

Nonresidential real estate loans are negotiated on a case-by-case basis. Loans secured by nonresidential real estate generally involve a greater degree of risk than one-to-four family residential mortgage loans and carry larger loan balances. This increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the effects of general economic conditions on income-producing properties, and the increased difficulty of evaluating and monitoring these types of loans. Furthermore, the repayment of loans secured by nonresidential real estate is typically dependent upon the successful operation of the related real estate project. If the cash flow from the project is reduced, the borrower’s ability to repay the loan may be impaired.

The Company also originates a limited number of land loans secured by individual improved and unimproved lots for future residential construction. In addition, the Company originates loans to commercial customers with land held as the collateral.

Multi-family real estate loans generally involve a greater degree of credit risk than one-to-four family residential mortgage loans and carry larger loan balances. This increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the effects of general economic conditions on income-producing properties, and the increased difficulty of evaluating and monitoring these types of loans. Furthermore, the repayment of loans secured by multi-family real estate is typically dependent upon the successful operation of the related real estate property. If the cash flow from the project is reduced, the borrower’s ability to repay the loan may be impaired.

12 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Commercial Business Loans

Commercial business loans carry a higher degree of risk than one-to-four family residential loans. Such lending typically involves large loan balances concentrated in a single borrower or groups of related borrowers for rental or business properties. In addition, the payment experience on loans secured by income-producing properties is typically dependent on the success of the operation of the related project and thus is typically affected by adverse conditions in the real estate market and in the economy. The Company originates commercial loans generally in the $50,000 to $1,000,000 range with the majority of these loans being under $500,000. Commercial loans are generally underwritten based on the borrower’s ability to pay and assets such as buildings, land and equipment are taken as additional loan collateral. Each loan is evaluated for a level of risk and assigned a rating from “1” (the highest quality rating) to “7” (the lowest quality rating).

Consumer Loans

Consumer loans entail greater credit risk than residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly, such as automobiles, mobile homes, boats, and recreational vehicles. In such cases, repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and the remaining deficiency often does not warrant further substantial collection efforts against the borrower. In particular, amounts realizable on the sale of repossessed automobiles may be significantly reduced based upon the condition of the automobiles and the lack of demand for used automobiles.

The following presents by portfolio segment the activity in the allowance for loan losses for the three months ended March 31, 2017 and 2016:

Three months ended March 31, 2017	One-to-four family residential			All other mortgage loans		Commercial business loans		Consumer loans		Total
	(In thousands)
Beginning balance	$	1,479		$	1,108	$	447	$	6	$	3,040
Provision charged to           expense		(12	)		21		18		—		27
Losses charged off		(23	)		—		—		—		(23	)
Recoveries		—			—		—		—		—
Ending balance	$	1,444		$	1,129	$	465	$	6	$	3,044

Three months ended March 31, 2016	One-to-four family residential			All other mortgage loans			Commercial business loans		Consumer loans		Total
	(In thousands)
Beginning balance	$	1,346		$	1,210		$	279	$	2	$	2,837
Provision (Credit)           charged to expense		(68	)		(3	)		2		2		(67	)
Losses charged off		—			—			—		—		—
Recoveries		1			—			—		—		1
Ending balance	$	1,279		$	1,207		$	281	$	4	$	2,771

13 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on the portfolio segment and impairment method as of March 31, 2017 and December 31, 2016:

March 31, 2017	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans		Total
Allowance Balances:	(In thousands)
Ending balance:
Individually evaluated for           impairment	$	263	$	145	$	180	$	—	$	588
Collectively evaluated for           impairment		1,181		984		285		6		2,456
Total allowance for loan losses	$	1,444	$	1,129	$	465	$	6	$	3,044
Loan Balances:
Ending balance:
Individually evaluated for           impairment	$	1,583	$	1,059	$	573	$	—	$	3,215
Collectively evaluated for           impairment		190,169		124,876		23,990		1,681		340,716
Total balance	$	191,752	$	125,935	$	24,563	$	1,681	$	343,931

December 31, 2016	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans		Total
Allowance Balances:	(In thousands)
Ending balance:
Individually evaluated for           impairment	$	323	$	151	$	184	$	—	$	658
Collectively evaluated for           impairment		1,156		957		263		6		2,382
Total allowance for loan losses	$	1,479	$	1,108	$	447	$	6	$	3,040
Loan Balances:
Ending balance:
Individually evaluated for           impairment	$	1,527	$	1,067	$	547	$	—	$	3,141
Collectively evaluated for           impairment		191,897		120,890		22,668		2,193		337,648
Total balance	$	193,424	$	121,957	$	23,215	$	2,193	$	340,789

Total loans in the above tables do not include deferred loan origination fees of $745,000 and $747,000 or loans in process of $6.1 million and $4.7 million, respectively, for March 31, 2017 and December 31, 2016.

14 

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Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

The following tables present the credit risk profile of the Bank’s loan portfolio based on rating category and payment activity as of March 31, 2017 and December 31, 2016:

March 31, 2017	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans
	(In thousands)
Rating *
Pass (Risk 1-4)	$	187,844	$	121,483	$	23,813	$	1,681
Special Mention (Risk 5)		—		2,023		35		—
Substandard (Risk 6)		3,908		2,429		715		—
Total	$	191,752	$	125,935	$	24,563	$	1,681

December 31, 2016	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans
	(In thousands)
Rating *
Pass (Risk 1-4)	$	189,975	$	119,503	$	22,427	$	2,193
Special Mention (Risk 5)		—		—		—		—
Substandard (Risk 6)		3,449		2,454		788		—
Total	$	193,424	$	121,957	$	23,215	$	2,193

There were no loans classified as Doubtful (Risk 7) at either March 31, 2017 or at December 31, 2016.

* Ratings are generally assigned to consumer and residential mortgage loans on a “pass” or “fail” basis, where “fail” results in a substandard classification. Commercial loans, both secured by real estate or other assets or unsecured, are analyzed in accordance with an analytical matrix codified in the Bank’s loan policy that produces a risk rating as described below.

Risk 1 is unquestioned credit quality for any credit product. Loans are secured by cash and near cash collateral with immediate access to proceeds.

Risk 2 is very low risk with strong credit and repayment sources. Borrower is well capitalized in a stable industry, financial ratios exceed peers and financial trends are positive.

Risk 3 is very favorable risk with highly adequate credit strength and repayment sources. Borrower has good overall financial condition and adequate capitalization.

Risk 4 is acceptable, average risk with adequate credit strength and repayment sources. Collateral positions must be within Bank policies.

Risk 5 or “Special Mention,” also known as “watch,” has potential weakness that deserves Management’s close attention. This risk includes loans where the borrower has developed financial uncertainties or the borrower is resolving the financial uncertainties. Bank credits have been secured or negotiations will be ongoing to secure further collateral.

Risk 6 or “Substandard” loans are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged. This risk category contains loans that exhibit a weakening of the borrower’s credit strength with limited credit access and all nonperforming loans.

Risk 7 or “Doubtful” loans are significantly under protected by the current net worth and paying capacity of the borrower or of the collateral pledged. This risk category contains loans that are likely to experience a loss of some magnitude, but where the amount of the expected loss is not known with enough certainty to allow for an accurate calculation of a loss amount for charge- off. This category is considered to be temporary until a charge-off amount can be reasonably determined.

15 

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Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

The following tables present the Bank’s loan portfolio aging analysis for March 31, 2017 and December 31, 2016:

March 31, 2017	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In thousands)
One-to-four family      residential loans	$	683	$	282	$	364	$	1,329	$	190,423	$	191,752	$	—
All other mortgage      loans		766		—		63		829		125,106		125,935		—
Commercial      business loans		71		—		29		100		24,463		24,563		6
Consumer loans		—		—		—		—		1,681		1,681		—
Total	$	1,520	$	282	$	456	$	2,258	$	341,673	$	343,931	$	6

December 31, 2016	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In thousands)
One-to-four family      residential loans	$	442	$	419	$	959	$	1,820	$	191,604	$	193,424	$	—
All other mortgage      loans		—		—		63		63		121,894		121,957		—
Commercial      business loans		15		—		23		38		23,177		23,215		—
Consumer loans		8		—		—		8		2,185		2,193		—
Total	$	465	$	419	$	1,045	$	1,929	$	338,860	$	340,789	$	—

Nonaccrual loans were comprised of the following at:

Nonaccrual loans	March 31, 2017		December 31, 2016
	(In thousands)
One-to-four family residential loans	$	1,656	$	1,473
Nonresidential real estate loans		63		62
All other mortgage loans		—		—
Commercial business loans		23		23
Consumer loans		—		—
Total	$	1,742	$	1,558

16 

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Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Bank will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. Information with respect to the Company’s impaired loans at March 31, 2017 and December 31, 2016 in combination with activity for the three months ended March 31, 2017 and 2016 is presented below:

	As of March 31, 2017						Three months ended March 31, 2017
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation      allowance
One-to-four family residential loans	$	1,202	$	1,216	$	—	$	1,162	$	10
All other mortgage loans		223		223		—		225		5
Commercial business loans		—		—		—		—		—
Loans with a specific valuation allowance
One-to-four family residential loans		381		436		263		394		—
All other mortgage loans		836		836		145		839		12
Commercial business loans		573		573		180		560		6
Total:
One-to-four family residential loans	$	1,583	$	1,652	$	263	$	1,556	$	10
All other mortgage loans		1,059		1,059		145		1,064		17
Commercial business loans		573		573		180		560		6
	$	3,215	$	3,284	$	588	$	3,180	$	33

17 

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Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

	As of December 31, 2016						Three months ended March 31, 2016
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation      allowance
One-to-four family residential loans	$	1,121	$	1,189	$	—	$	1,065	$	10
All other mortgage loans		226		226		—		519		17
Commercial business loans		—		—		—		—		—
Loans with a specific valuation allowance
One-to-four family residential loans		406		406		323		1,171		—
All other mortgage loans		841		841		151		622		—
Commercial business loans		547		547		184		31		1
Total:
One-to-four family residential loans	$	1,527	$	1,595	$	323	$	2,236	$	10
All other mortgage loans		1,067		1,067		151		1,141		17
Commercial business loans		547		547		184		31		1
	$	3,141	$	3,209	$	658	$	3,408	$	28

The interest income recognized in the above tables reflects interest income recognized and is not materially different from the cash basis method.

All TDR classifications are due to concessions being granted to borrowers experiencing financial difficulties. Concessions to borrowers can include exceptions to loan policy including high loan-to-value ratios, no private mortgage insurance (“PMI”) and high debt-to-income ratios, as well as term and rate exceptions. There were two TDR classifications of $134,000 that occurred in the 2017 year-to-date period. One of these borrowers received a rate concession, while the second borrower was advanced additional funds.

18 

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Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

There were $415,000 of TDR classifications that occurred in the 2016 year-to-date period and included the renewal of an interest-only loan as the customer repayments had not been in accordance with the original loan terms. The remaining loans are to the same borrower and are on a nonaccrual status. TDR has been individually evaluated for impairment with the appropriate specific valuation allowance included in the allowance for loan losses calculation. There were no TDR classifications which defaulted during the three months ended March 31, 2017 and 2016. The Company considers TDRs that become 90 days or more past due under modified terms as subsequently defaulted.

	Quarter-to-Date
Troubled Debt Restructurings	Number of loans		Pre-modification Recorded Principal Balance		Post-modification Recorded Principal Balance
			(dollars in thousands)
March 31, 2017
One-to-four family residential loans		2	$	134	$	134
March 31, 2016
All other mortgage loans		8	$	415	$	415

Foreclosed assets held for sale include those properties that the Bank has obtained legal title to through a formal foreclosure process or the borrower conveying all interest in the property to the Bank through the completion of a deed in lieu of foreclosure or similar legal agreement. The following table presents the balance of mortgage loans collateralized by residential real estate properties held as foreclosed assets at March 31, 2017 and December 31, 2016.

	March 31, 2017		December 31, 2016
	Recorded Investment
	(In thousands)
One-to-four family residential loans	$	—	$	2

Banks foreclose on certain properties in the normal course of business when it is more probable than not that the loan balance will not be recovered through scheduled payments. Foreclosure is usually a last resort and begins after all other collection efforts have been exhausted. The following table presents the balance of those mortgage loans collateralized by residential real estate properties that are in the formal process of foreclosure at March 31, 2017 and December 31, 2016.

	March 31, 2017		December 31, 2016
	Recorded Investment
	(In thousands)
One-to-four family residential loans	$	209	$	97

19 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Note 5: Goodwill

The following table presents the balance of goodwill at March 31, 2017 and December 31, 2016:

	March 31, 2017		December 31, 2016
	(In thousands)
Goodwill	$	1,719	$	1,719

The Company is required to annually test goodwill for impairment or more frequently if impairment indicators exist. The Company’s testing of goodwill at November 30, 2016 indicated there was no impairment in the carrying value of the related asset.

Note 6: Repurchase Agreements

Repurchase agreements are offered by the Bank to commercial business customers to provide them with an opportunity to earn a return on their excess cash balances. These repurchase agreements are considered secured borrowings and are reported in other short-term borrowings. On a daily basis the Bank transfers securities to these customers in exchange for their cash and subsequently agrees to repurchase those same securities the next business day. In the event the Bank is unable to repurchase the securities from the customer, the customer will then have a claim against those securities.

The following tables present the contractual maturity of the repurchase agreements, and the fair value and type of securities pledged as collateral in exchange for these short-term borrowings at March 31, 2017 and December 31, 2016.

20 

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Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

	March 31, 2017		December 31, 2016
	(In thousands)
Repurchase Agreements
Mortgage-backed securities of government      sponsored entities	$	7,259	$	7,246
Gross amount of recognized liabilities for      repurchase agreements in other short-term      borrowings	$	7,259	$	7,246

The contractual maturities of the repurchase agreements is overnight and continuous for both March 31, 2017 and December 31, 2016.

Note 7: Earnings Per Share

Basic earnings per common share is computed based upon the weighted-average number of common shares outstanding during the period, less shares in the Company’s Employee Stock Ownership Plan (“ESOP”) that are unallocated and not committed to be released. There were no dilutive shares at March 31, 2017 or March 31, 2016.

The computations are as follows:

	Three months ended March 31,
	2017		2016
Net income (in thousands)	$	571	$	707
Weighted-average common shares outstanding		2,754,573		2,747,567
Net income per share	$	0.21	$	0.26

21 

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Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Note 8: Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory–and possibly additional discretionary–actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and the Bank’s capital classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Furthermore the Bank’s regulators could require adjustments to regulatory capital not reflected in these financial statements.

The Bank must give notice to, or under certain conditions specified by regulation, apply to, the Federal Reserve Bank of Cleveland prior to declaring a dividend to the Company. Under existing regulatory guidance, a dividend is generally permissible without regulatory approval if the institution is considered to be “well capitalized” and the dividend does not exceed current year-to-date net income plus the change in retained earnings for the previous two calendar years.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the following table) of Tier 1 capital to average assets, of Tier 1 common equity capital to risk-weighted assets, of Tier 1 capital to risk-weighted assets, and of total risk-based capital to risk-weighted assets, all as defined in the regulations. Management believes, as of March 31, 2017, that the Bank met all capital adequacy requirements to which it is subject.

As of March 31, 2017, based on the computations for the call report the Bank is classified as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain capital ratios as set forth in the table below. There are no conditions or events since March 31, 2017, that management believes have changed the Bank’s capital classification.

The Bank’s actual capital amounts and ratios as of March 31, 2017 and December 31, 2016 are presented in the following table.

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of March 31, 2017
Tier 1 capital to average assets	$	38,605		8.7	%	$	17,808		4.0	%	$	22,260		5.0	%
Tier 1 common equity capital to risk-      weighted assets		38,605		13.1	%		13,288		4.5	%		19,193		6.5	%
Tier 1 capital to risk-weighted assets		38,605		13.1	%		17,717		6.0	%		23,623		8.0	%
Total risk-based capital to risk-      weighted assets		41,649		14.1	%		23,623		8.0	%		29,528		10.0	%
As of December 31, 2016
Tier 1 capital to average assets	$	38,133		8.5	%	$	17,850		4.0	%	$	22,313		5.0	%
Tier 1 common equity capital to risk-      weighted assets		38,133		13.0	%		13,159		4.5	%		19,007		6.5	%
Tier 1 capital to risk-weighted assets		38,133		13.0	%		17,545		6.0	%		23,393		8.0	%
Total risk-based capital to risk-      weighted assets		41,176		14.1	%		23,393		8.0	%		29,241		10.0	%

22 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Effective January 1, 2015, new regulatory capital requirements commonly referred to as “Basel III” were implemented and are reflected in the capital table above. Management opted out of the accumulated other comprehensive income treatment under the new requirements, and as such unrealized gains and losses from available-for-sale securities will continue to be excluded from Bank regulatory capital.

Implementation of the deductions and other adjustments to Common Equity Tier 1 (CET1) began on January 1, 2015, and will phase in over a four-year period (beginning at 40% on January 1, 2015, with an additional 20% per year thereafter).  Under the new rule, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, a banking organization must hold a capital conservation buffer composed of CET1 capital above its minimum risk-based capital requirements.  The implementation of the capital conservation buffer began on January 1, 2016, at the 0.625% level and will phase in over a four-year period (increasing by that amount on each subsequent January 1 until it reaches 2.5% on January 1, 2019).

Note 9: Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), included in stockholders’ equity, are as follows:

	Gross Unrealized Gains on Available-for- Sale Securities		Net Unrealized Loss for Unfunded Status of Split-Dollar Life Insurance Plan Liability (tax-free)			Gross Unrealized Loss for Unfunded Status of Defined Benefit Plan			Tax Effect		Total Accumulated Other Comprehensive Income (Loss)
	(In thousands)
March 31, 2017	$	233	$	(160	)	$	(750	)	$	176	$	(501	)
December 31, 2016	$	162	$	(131	)	$	(750	)	$	200	$	(519	)

There were no amounts reclassified out of accumulated other comprehensive income (loss) during the

three months ended March 31, 2017 or 2016.

Note 10: Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

Level 1 Quoted prices in active markets for identical assets or liabilities

Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

23 

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Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Recurring Measurements

Following is a description of the valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the Company’s consolidated balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Available-for-sale Securities

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy.

The following table presents the fair value measurements of assets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2017 and December 31, 2016:

			Fair Value Measurement Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
U.S. government agencies	$	9	$	—	$	9	$	—
Mortgage-backed securities           of government sponsored           entities		54,471		—		54,471		—
State and political           subdivisions		12,017		—		12,017		—

			Fair Value Measurement Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
December 31, 2016
U.S. government agencies	$	11	$	—	$	11	$	—
Mortgage-backed securities           of government sponsored           entities		58,614		—		58,614		—
Private-label collateralized           mortgage obligations		40		—		40		—
State and political           subdivisions		12,044		—		12,044		—

24 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Nonrecurring Measurements

Certain assets may be required to be measured at fair value on a nonrecurring basis in periods subsequent to their initial recognition. These assets are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

Collateral-dependent Impaired Loans, Net of ALLL

The estimated fair value of collateral-dependent impaired loans is based on the appraised fair value of the collateral, less estimated cost to sell. Collateral-dependent impaired loans are classified within Level 3 of the fair value hierarchy.

The Company considers the appraisal or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by the office of the Chief Financial Officer. Appraisals are reviewed for accuracy and consistency by the Credit Analyst. Appraisers are selected from the list of approved appraisers maintained by management. The appraised values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral. These discounts and estimates are developed by the office of the Chief Financial Officer by comparison to historical results.

Foreclosed Assets Held for Sale

Foreclosed assets held for sale are carried at the lower of fair value at acquisition date or current estimated fair value, less estimated cost to sell when the real estate is acquired. Estimated fair value of real estate is based on appraisals or evaluations. Foreclosed assets held for sale are classified within Level 3 of the fair value hierarchy.

Appraisals of real estate are obtained when the real estate is acquired and subsequently as deemed necessary by the Chief Financial Officer. Appraisals are reviewed internally for accuracy and consistency in accordance with regulatory requirements. Appraisers are selected from the list of approved appraisers maintained by management.

The following table presents the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2017 and December 31, 2016.

25 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

			Fair Value Measurement Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
Foreclosed assets	$	—		—		—	$	—
December 31, 2016
Collateral-dependent           impaired loans	$	1,053	$	—	$	—	$	1,053
Foreclosed assets		2		—		—		2

Unobservable (Level 3) Inputs

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements in thousands.

	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
March 31, 2017
Foreclosed assets	$	—	Value from Land Bank	N/A	N/A
December 31, 2016
Collateral-dependent                 impaired loans	$	1,053	Market comparable properties and specialized equipment discounts	Discounts	25%
Foreclosed assets		2	Expected selling price	Selling Costs	10%

There were no changes in the inputs or methodologies used to determine fair value at March 31, 2017 as compared to December 31, 2016.

26 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

The following table presents estimated fair values of the Company’s financial instruments not carried at fair value. The fair values of certain of these instruments were calculated by discounting expected cash flows, which involves significant judgments by management and uncertainties. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate.

			Fair Value Measurements Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
Financial assets
Cash and cash equivalents	$	11,274	$	11,274	$	—	$	—
Held-to-maturity securities		11,343		—		11,117		—
Loans, net of allowance for           loan losses		334,076		—		—		344,783
Federal Home Loan Bank           stock		4,226		—		4,226		—
Interest receivable		1,309		—		1,309		—
Financial liabilities
Deposits		378,258		44,157		303,300		—
Other short-term borrowings		7,259		—		7,259		—
Federal Home Loan Bank           advances		18,000		—		17,948		—
Advances from borrowers           for taxes and insurance		781		—		781		—
Interest payable		32		—		32		—

27 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

			Fair Value Measurements Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
December 31, 2016
Financial assets
Cash and cash  equivalents	$	16,756	$	16,756	$	—	$	—
Held-to-maturity securities		9,559		—		9,339
Loans, net of allowance for           loan losses		332,283		—		—		341,999
Federal Home Loan Bank           stock		4,226		—		4,226		—
Interest receivable		1,146		—		1,146		—
Financial liabilities
Deposits		383,733		47,946		306,291		—
Other short-term borrowings		7,246		—		7,246		—
Federal Home Loan Bank           advances		18,000		—		17,938		—
Advances from borrowers           for taxes and insurance		1,306		—		1,306		—
Interest payable		29		—		29		—

The following methods and assumptions were used to estimate the fair value of each class of financial instruments.

Cash and Cash Equivalents, Interest Receivable and Federal Home Loan Bank Stock

The carrying amount approximates fair value.

Held-to-maturity Securities

The fair value of held-to-maturity securities was estimated by using pricing models that contain market pricing and information, quoted prices of securities with similar characteristics or discounted cash flows that use credit-adjusted discount rates.

28 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Loans

The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics were aggregated for purposes of the calculations.

Deposits

Deposits include savings accounts, checking accounts and certain money market deposits. The carrying amount approximates fair value. The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.

Interest Payable, Other Short-Term Borrowings and Advances From Borrowers for Taxes and Insurance

The carrying amount approximates fair value.

Federal Home Loan Bank Advances

Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate the fair value of existing debt.

Commitments to Originate Loans, Letters of Credit and Lines of Credit

The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair values of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date. Fair values of commitments were not material at March 31, 2017 and December 31, 2016.

Note 11: Recent Accounting Developments

FASB ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, was issued in August 2014. The amendments in this update provide guidance in Generally Accepted Accounting Principles (GAAP) about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

FASB ASU 2015-10, Technical Corrections and Improvements was issued in June, 2015. The amendments in this Update represent changes to clarify the Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to entities. The amendments in this Update that

29 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of this update. The adoption of the amendments that required transition guidance did not have a material impact on the Company’s consolidated financial statements. The adoption of the other amendments in this update did not have a material impact on the Company’s consolidated financial statements.

FASB ASU 2016-01, Financial Instruments–Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities was issued in January 2016. The amendments in this Update make targeted improvements to generally accepted accounting principles and address certain aspects of recognition, measurement, presentation, and disclosure of financial statements. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Except as specifically stated, early adoption of the amendments in this Update are not permitted. This standard is not expected to have a material impact on the Company’s consolidated financial statements. The Company is no longer required to disclose the method and assumptions used to estimate the fair value of financial instruments measured at amortized cost.

FASB ASU 2016-04, Liabilities-Extinguishments of Liabilities (Subtopic 405-20), was issued in March 2016. The amendments in this Update apply to entities that offer certain prepaid stored-value products, including prepaid gift cards, prepaid telecommunication cards, and travelers checks. The amendments in this Update contain specific guidance for the derecognition of pre-paid stored value product liabilities and are an improvement to GAAP because they specify how pre-paid stored-value product liabilities with the Update’s scope should be derecognized. The amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Earlier application is permitted, including adoption in an interim period. This standard is not expected to have a material impact on the Company’s consolidated financial statements, because the Company does not currently have any liabilities related to stored value cards.

FASB ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, was issued in June 2016. The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal year. Early adoption of the amendments in this Update are allowed for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. An entity will apply the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The effect of a prospective transition approach is to maintain the same amortized cost basis before and after the effective date of this Update. The Company is studying the implications of this update, including following evolving regulatory and industry guidance, and gathering additional detailed historical data. The effect of this Update on the Company’s financial statements is not known at this time.

30 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

FASB ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, was issued in August 2016. The amendments in this Update provide guidance on how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This Update addresses eight specific cash flow issues with the objective of reducing the diversity in practice. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. An entity that elects early adoption must adopt all the amendments in the same period. The amendments in this Update should be applied using a retrospective transition method to each period presented. The amendments in this Update are not expected to have a material impact on the Company’s consolidated financial statements, because the Company has limited exposure to those cash flow items included in the Update.

FASB ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash, was issued in November 2016. The amendments in this Update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. The amendments in this Update are not expected to have a material impact on the Company’s consolidated financial statements. The cash flow presentation will be expanded to include the activity related to restricted cash, or required cash reserve balances upon adoption.

FASB ASU 2016-19, Technical Corrections and Improvements, was issued in December 2016. The amendments in this Update cover a wide range of Topics in the Accounting Standards Codification. The amendments generally fall into one of several categories including, amendments related to differences between original guidance and the Accounting Standards Codification, guidance clarification and reference corrections, simplification, or minor improvements. Most of the amendments in this Update do not require transition guidance and are effective upon issuance of this Update. The amendments in this Update are not expected to have a material impact on the Company’s consolidated financial statements, because the Company has limited exposure and disclosures relating to those items included in this Update.

FASB ASU 2017-01, Business Combinations, (Topic 805), Clarifying the Definition of a Business, was issued in January 2017. The amendments in this Update clarify the definition of a business, with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this Update should be applied to annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments in this Update should be applied prospectively on or after the effective date. The amendments in this Update are not expected to have a material impact on the Company’s consolidated financial statements, because the Company historically has experienced minimal acquisitions or disposals, if any.

FASB ASU 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments – Equity Method and Joint Ventures (Topic 323), Amendments to SEC paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings, was issued in January 2017. The amendments in this Update provide guidance on the disclosures required regarding the reporting and financial statement impact of recently issued but not yet adopted standards. The Changes and Corrections in this

31 

Index 

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Update are effective upon release. The amendments in this update will require the Company to provide increased disclosure with respect to adopting current and future accounting Updates.

FASB ASU 2017-04, Intangibles-Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment, was issued in January 2017. The amendments in this Update modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. The amendments in this Update should be adopted for the annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment performed on testing dates after January 1, 2017. The amendments in this Update are not expected to have a material impact on the Company’s consolidated financial statements.

FASB ASU 2017-07, Compensation – Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, was issued in March 2017. The amendments in this Update require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered to the pertinent employees during the period.The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. The amendements in this Update also allow for the service cost component to be eligible for capitalization when applicable. The amendments in this Update are effective for annual periods after December 31, 2017, including interim periods within those annual periods. Early adoption is permitted and should be made within the first interim period that financial statements are issued. The amendments in this Update should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The amendments in this Update are not expected to have a material impact on the Company’s consolidated financial statements.

FASB ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt Securities, was issued in March 2017. The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. The amendments require the premium to be amortized to the earlies call date. The amendments do not require an accounting change for securities held at a discount, the discount continues to be amortized to maturity. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. The amendments in this Update are expected to have a negative impact on earnings during the shortened amortization period if the bond is not called. However, if the bond is not called, earnings should improve past the call date. If the bond is called as scheduled, the Updates in this amendment will not have a material impact on the Company’s consolidated financial statements.

32 

Index 

Wayne Savings Bancshares, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations

Strategic Initiatives

As part of an ongoing strategic planning process, which includes annual plan updates and regular progress reviews by the Board of Directors, the Company continues to be engaged in several initiatives to improve the returns to shareholders over a foreseeable time horizon through the following activities:

· A strategic focus on core customer service, community relationships and staff alignment. Continued development of staff by investing in customer service behavior development training resulting in more efficient workflows, efficiencies and providing a better customer experience.

· Continued growth of commercial business assets to increase higher yielding, shorter duration assets, while maintaining a residential mortgage loan portfolio and reducing the investment securities portfolio, subject to liquidity constraints.

· Modifying the culture from a transaction-oriented thrift culture to a relationship-oriented commercial bank culture through appropriate staffing and training. Management also continues to evaluate unique revenue-producing activities and opportunities.

Critical Accounting Policies

Critical Accounting Policies – The Company’s critical accounting policy relates to the allowance for loan losses. The Company has established a systematic method of periodically reviewing the credit quality of the loan portfolio in order to establish a sufficient allowance for loan losses. The allowance for loan losses is based on management’s current judgments about the credit quality of individual loans and segments of the loan portfolio. The allowance for loan losses is established through a provision and considers all known internal and external factors that affect loan repayment as of the reporting date. Such evaluation, which includes a review of all loans on which full repayment may not be reasonably assured, considers among other matters, the estimated net realizable value or the fair value of the underlying collateral, economic conditions, historical loan loss experience, management’s knowledge of inherent risks in the portfolio that are probable and reasonably estimable and other factors, including those required by regulation that warrant recognition in providing an appropriate loan loss allowance. Management has discussed the development and selection of this critical accounting policy with the audit committee of the Board of Directors.

Discussion of Financial Condition Changes from December 31, 2016 to March 31, 2017

At March 31, 2017, the Company had total assets of $448.6 million, a decrease of $6.2 million, from total assets at December 31, 2016. The decrease in total assets includes a $5.5 million decrease in cash and cash equivalents, and a $2.4 million decrease in securities balances, partially offset by a $1.8 million increase in net loans compared to December 31, 2016.

33 

Index 

Wayne Savings Bancshares, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations

Total securities decreased $2.4 million to $77.8 million at March 31, 2017, compared to December 31, 2016. The decrease in securities is primarily due to investing the principal and interest cash flows received from securities into higher yielding loans. The decrease included principal repayments of $4.1 million, amortization of premiums of $231,000, and a $71,000 increase in unrealized gains on available-for-sale securities, partially offset by purchases totaling $1.8 million, during the three months ended March 31, 2017.

Net loans receivable increased $1.8 million at March 31, 2017 compared to December 31, 2016. The Bank originated $20.8 million of loans, received payments of $19.0 million, and originated and sold $1.7 million of 30-year fixed-rate residential mortgage loans into the secondary market. The increase in net loan balances is mainly due to new origination in excess of principal reductions during the current year period.

The allowance for loan losses remained at $3.0 million primarily due to a provision for loan losses expense of $27,000 partially offset by a loan charge-off of $23,000. Total impaired assets were $3.2 million, or 0.72% of total assets at March 31, 2017, compared to $3.1 million, or 0.69% of total assets at December 31, 2016.

Management continues to focus on risk selection and the returns generated in return for risks taken in making its lending and investment decisions. Key areas of risk reviewed for each potential loan origination and securities purchase include credit, interest rate and liquidity risk. Interest rate risk arises mainly from longer term fixed-rate loans. Credit risk arises mainly from loan structure and underwriting conditions. The effects of additional loan portfolio risks generated by competitive pressures in the Company’s market area are evaluated relative to the projected returns to ensure acceptable financial performance over a long-term horizon. As part of an overall strategy to manage liquidity and interest rate risk, management continues to execute a strategy of immediately selling certain newly originated 30-year fixed-rate residential mortgage loans into the secondary market to limit the interest rate risk exposure on the balance sheet and to utilize the secondary market as a backup source of liquidity. Loans sold into the secondary market are sold with representations and warranties. In the event that those representations and warranties are violated, repurchase of loans may be required. No repurchases have been required in recent periods and management believes that the bank is in full compliance with applicable selling and servicing guides. Similarly, in order to further limit the overall interest rate risk on the balance sheet, the Company focuses on the origination of shorter-term and adjustable-rate secured commercial loans and limits the retention of long-term fixed-rate residential mortgages. These strategies have the effect of generating lower loan yields in the short term due to the loans being priced off the lower yield short end of the yield curve. The principal source of liquidity is the Bank’s investment securities portfolio. To the extent that loan demand is insufficient in any given period, investments in the securities portfolio are made to provide cash flows to fund loan demand in future periods (a source of liquidity), while also limiting the interest rate risk exposure of the Company. As loan volume increases relative to investment volume, risk-based capital ratios will likely decline, because loans generally require a higher allocation of risk-based capital compared to investments. As demonstrated by quarterly balance sheet presentations, and as a result of general economic and competitive conditions, loan demand and originations are volatile on a sequential quarter basis, which in turn results in volatility in quarterly investment securities balances. The longer term trend and strategic direction is for an increase in higher yielding loan balances relative to lower yielding investment securities balances.

34 

Index 

Wayne Savings Bancshares, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations

The following table sets forth certain information regarding the Company’s loan portfolio for the dates indicated.

	March 31, 2017					December 31, 2016
	Balance		Percent of total loans			Balance		Percent of total loans
	(Dollars in thousands)
Mortgage loans:
One-to-four family residential(1)	$	191,752		55.75	%	$	193,424		56.76	%
Residential construction loans		3,320		0.97	%		2,744		0.81	%
Multi-family residential		12,614		3.67	%		11,425		3.35	%
Nonresidential real estate/land(2)		110,001		31.98	%		107,788		31.63	%
Total mortgage loans		317,687		92.37	%		315,381		92.54	%
Other loans:
Consumer loans(3)		1,681		0.49	%		1,604		0.47	%
Commercial business loans		24,563		7.14	%		23,804		6.99	%
Total other loans		26,244		7.63	%		25,408		7.46	%
Total loans before net items		343,931		100.00	%		340,789		100.00	%
Less:
Loans in process		6,066					4,719
Deferred loan origination fees		745					747
Allowance for loan losses		3,044					3,040
Total loans receivable, net	$	334,076				$	332,283

⁽¹⁾ Includes equity loans collateralized by second mortgages in the aggregate amount of $15.8 million at March 31, 2017 and $15.8 million at December 31, 2016. Such loans are secured by one-to-four family residential properties and are underwritten to conform with bank loan policies.

⁽²⁾ Includes commercial loans secured by residential real estate of $33.6 million at March 31, 2017 and $33.0 million at December 31, 2015, and land loans of $5.6 million at March 31, 2017 and $4.9 million at December 31, 2016.

⁽³⁾ Includes second mortgage loans of $203,000 at March 31, 2017 and $217,000 at December 31, 2016.

35 

Index 

Wayne Savings Bancshares, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations

Goodwill of $1.7 million is carried on the Company’s balance sheet as a result of the acquisition of Stebbins Bancshares in June 2004. In accordance with FASB ASC 350, this goodwill is tested for impairment on at least an annual basis. Management evaluated the goodwill using an analysis of required measures of value, including the current stock price as an indicator of minority interest value, change of control multiples as a measure of controlling interest value and discounted cash flow analysis as a measure of going concern value and applied a weighting based on appraisal standards to arrive at a valuation conclusion that indicated no impairment at November 30, 2016. Management believes that there were no interim impairment indicators that would require another evaluation at March 31, 2017.

Deposits totaled $378.3 million at March 31, 2017, a decrease of $5.5 million from $383.7 million at December 31, 2016. This decrease includes a $3.0 million decrease in demand deposits and a $6.6 million decrease in time deposits, partially offset by a $4.2 million increase in savings and money market balances. The Company continues to monitor deposit activity closely to respond to changes in customer preference for types of deposits and competitive pressure.

Other short-term borrowings, which consist solely of repurchase agreements with commercial customers of the Bank, increased to $7.3 million at March 31, 2017 from $7.2 million at December 31, 2016. The increase was due to an increase in excess funds held by those commercial customers holding repurchase agreements. These customer repurchase agreements are offered by the Bank in order to retain commercial customer funds and to afford those commercial customers the opportunity to earn a return on a short-term secured transaction. Average balances are shown in the tables below and reflect no significant variation during the periods. The interest rate paid on these borrowings was 0.16% at March 31, 2017 and 0.15% at December 31, 2016.

Advances from the Federal Home Loan Bank (FHLB) totaled $18.0 million, at both March 31, 2017 and December 31, 2016. The Company uses advances from the FHLB for both short-term cash management purposes and to extend the term to maturity of liabilities for interest rate risk management purposes. The cost of longer term liabilities purchased from the FHLB is generally less expensive than obtaining a similar term to maturity through retail certificates of deposit. Repricing risk associated with advances is mitigated through the laddering of advance maturities over time. The weighted-average cost of FHLB advances was 1.30% at March 31, 2017 compared to 1.32% at December 31, 2016.

Stockholders’ equity increased by $371,000 during the period ended March 31, 2017. This increase was due to net income of $571,000, and a $47,000 increase in unrealized gains on available-for-sale securities, partially offset by $248,000 in shareholder dividends, and a $29,000 increase in the unrecognized loss on the BOLI split-dollar life insurance policy.

On September 22, 2016, the Company announced that its Board of Directors adopted a new stock repurchase program. Under the new stock repurchase program, the Company is authorized to repurchase up to 69,546 shares, or 2.5%, of its issued and outstanding shares of common stock.

36 

Index 

Wayne Savings Bancshares, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations

Comparison of Operating Results for the Three Months Ended March 31, 2017 and 2016

General

Net income for the three months ended March 31, 2017, totaled $571,000, a decrease of $136,000, compared to $707,000 for the three month period ended March 31, 2016. The decrease in net income was primarily due to increased administrative expenses that the Company has incurred as a result of a proxy contest that has been instituted by a hedge fund in connection with the election of directors at the Company’s upcoming 2017 annual meeting of stockholders.  Excluding these incremental expenses (which were approximately $200,000 in the first quarter), the Company’s net income would have been $703,000 or $0.26 per common share for the quarter ended March 31, 2017.

37 

Index 

Wayne Savings Bancshares, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations

Average Balance Sheet

The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented.

	For the three months ended March 31,
	2017						2016
	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate
	(Dollars in thousands)
Interest-earning assets:
Loans receivable, net(1)	$	333,157	$	3,439		4.13%	$	298,812	$	3,169		4.24%
Investment securities(2)		79,454		482		2.43%		101,074		628		2.49%
Interest-bearing deposits(3)		10,844		56		2.07%		9,795		44		1.80%
Total interest-earning assets		423,455		3,977		3.76%		409,681		3,841		3.75%
Noninterest-earning assets		23,496						24,208
Total assets	$	446,951					$	433,889
Interest-bearing liabilities:
Deposits	$	375,589	$	445		0.47%	$	361,881	$	421		0.47%
Other short-term borrowings		7,377		3		0.16%		5,867		2		0.14%
Borrowings		18,513		60		1.30%		21,649		70		1.29%
Total interest-bearing liabilities		401,479		508		0.51%		389,397		493		0.51%
Noninterest-bearing liabilities		4,174						4,101
Total liabilities		405,653						393,498
Stockholders’ equity		41,298						40,391
Total liabilities and                stockholders’ equity	$	446,951					$	433,889
Net interest income			$	3,469					$	3,348
Interest rate spread(4)						3.25%						3.24%
Net yield on interest-earning          assets(5)						3.28%						3.27%
Ratio of average interest-earning assets to average interest- bearing liabilities						105.47%						105.21%

⁽¹⁾ Includes nonaccrual loan balances.

⁽²⁾ Includes mortgage-backed securities both designated as available-for-sale and held-to-maturity.

⁽³⁾ Includes interest-bearing deposits in other financial institutions and Federal Home Loan Bank stock..

⁽⁴⁾ Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

⁽⁵⁾ Net yield on interest-earning assets represents net interest income as a percentage of average interest-earning assets.

38 

Index 

Wayne Savings Bancshares, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations

 

Interest Income

Interest income increased $136,000, and totaled $4.0 million for the three month period ended March 31, 2017, compared to $3.8 million for the three month period ended March 31, 2016. The increase was due to both an increase in the average balance of interest-earning assets and the weighted-average yield. The average balance of interest-earning assets increased by $13.8 million and totaled $423.5 million for the 2017 period from $409.7 million in the 2016 period. The weighted-average yield was 3.76% for the three months ended March 31, 2017, and increased by 1 basis point compared to 3.75% for the three months ended March 31, 2016.

Interest income on loans was $3.4 million for the three month period ended March 31, 2017, and increased $270,000 compared to the three month period ended March 31, 2016. The increase was primarily due to an increase in the average balance of loans, partially offset by a decrease in the weighted-average yield. The average balance of loans increased by $34.3 million from $298.8 million in the 2016 period to $331.1 million for the 2017 period. The weighted-average yield was 4.13% for the three months ended March 31, 2017 ,and decreased by 11 basis points compared to 4.24% for the three months ended March 31, 2016.

Interest income on securities decreased $146,000 during the three months ended March 31, 2017, compared to the same period in 2016. This decrease was due to both a decrease in the average balance of investment securities, and a decrease in the weighted-average rate. The average balance of investment securities decreased $21.6 million from $101.1 million in the 2016 period to $79.5 million in the 2017 period, and the weighted-average rate decreased 6 basis points from 2.49% in the 2016 period to 2.43% for the 2017 period. The decrease in the average balance was due to investing excess cash into the loan portfolio, while the decrease in yield was primarily due to the maturity and repayment of higher yielding investments and purchases of new investment securities at lower yields.

Dividends on Federal Home Loan Bank stock and other income totaled $56,000 for the three month period ended March 31, 2017, and increased $12,000 compared to the same period in 2016. The increase was due to a 27 basis point increase in the weighted-average rate from 1.80% in the 2016 period to 2.07% in the 2017 period, and a $1.0 million increase in the average balance outstanding.

Interest Expense

Interest expense totaled $508,000 for the three month period ended March 31, 2017, an increase of $15,000 compared to the three month period ended March 31, 2016. This increase was due to an increase in the average balance of total interest-bearing liabilities, while the weighted-average cost of funds remained unchanged at 0.51%. The average balance of total interest-bearing liabilities increased $12.1 million from $389.4 million in the 2016 period to $401.5 million in the 2017 period.

39 

Index 

Wayne Savings Bancshares, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations

 

Interest expense on deposits for the three month period ended March 31, 2017 totaled $445,000, an increase of $24,000 compared to $421,000 for the same period in the previous year. The increase was primarily due to a $13.7 million increase in the average balance, while the weighted-average cost was unchanged, and was 0.47% for both the three month periods ended March 31, 2017 and 2016. The increase in the average balance was due to a $6.8 million increase in demand deposits, and a $9.3 million increase in savings and money market balances, partially offset by a $2.4 million decrease in certificates of deposits. The increase in the demand, and savings and money market balances is due to the Company’s focus on growing lower-cost deposits while allowing the higher-cost certificates to mature, which allowed deposits to grow without a corresponding increase in the cost.

Interest expense on other short-term borrowings totaled $3,000 for the three month period ended March 31, 2017, and increased $1,000 from the same period in the previous year. The weighted-average cost of short-term borrowings increased 2 basis points from 0.14% in the 2016 period to 0.16% in the 2017 period, and the average balance of short-term borrowings increased $1.5 million compared to the prior year period.

Interest expense on Federal Home Loan Bank advances totaled $60,000 for the three month period ended March 31, 2017, a decrease of $10,000 from $70,000 in the 2016 period. The decrease was primarily due to a $3.1 million decrease in the average balance outstanding from $21.6 million in the 2016 period to $18.5 million in the 2017 period, partially offset by a 1 basis point increase in the weighted-average cost from 1.29% in the 2016 period to 1.30% in the 2017 period. The decrease in the average balance was due to the scheduled maturities of fixed-rate term advances, while the increase in the weighted-average cost was due to the scheduled maturity of lower rate advance.

Net Interest Income

Net interest income totaled $3.5 million for the three months ended March 31, 2017, and increased $121,000 compared to the three month period ended March 31, 2016. The increase in net interest income was primarily due to a $13.8 million increase in the average balance of interest-earning assets and a favorable shift in the composition of earning assets compared to the prior year quarter. The increase in the average balance of earning assets was substantially due to a $34.3 million increase in the average balance of higher yielding loans, partially offset by a $20.6 million net decline in lower yielding investments and interest-bearing deposits compared to the prior year quarter. This increase was also due to a 1 basis point increase in the net interest spread from 3.24% at March 31, 2016 to 3.25% at March 31, 2017. The increase in the net interest spread is a result of yields on interest-earning assets increasing more than the rate paid on interest-bearing liabilities.

40 

Index 

Wayne Savings Bancshares, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations

 

Provision (Credit) for Loan Losses

Management recorded a $27,000 provision for loan losses for the three month period ended March 31, 2017, compared to a credit for loan losses of $67,000 for the three month period ended March 31, 2016. The increase is primarily due to increases in loan balances from year to year. There were charge-offs totaling $23,000 in the current year quarter while there were no charge-offs in the prior year quarter. Impaired loans totaled $3.2 million at March 31, 2017, an increase of $74,000 compared to $3.1 million at December 31, 2016.

Noninterest Income

Noninterest income totaled $487,000 for the three month period ended March 31, 2017, and increased $35,000, from $452,000 for the same period in 2016. The increase was due to a $28,000 increase in other operating income, primarily due to an increase in income from annuity sales compared to the same period last year.

Noninterest Expense

Noninterest expense totaled $3.2 million for the three month period ended March 31, 2017, an increase of $251,000 from $2.9 million for the three months ended March 31, 2016.  The majority of this additional expense is comprised of approximately $200,000 in administrative expenses incurred in connection with the proxy contest referenced above.  The remainder of the increase includes a $38,000 increase in salaries and employee benefits, a $31,000 increase in audit and accounting expense and a $27,000 increase in other operating expense, partially offset by a $25,000 decrease in federal deposit insurance premiums compared to the prior year quarter.  The increase in salaries and employee benefits was due in part to merit-based compensation increases and increased education and training costs to facilitate the strategic initiative of enhanced customer service.  The other portion of this increase was due to severance expenses of $52,000 that the Company incurred in connection with its continuing efforts to maximize its workforce efficiency.  These increases were partially offset by a decline in healthcare costs due to a change in providers compared to the prior year quarter. The increase in audit and accounting expense is due to an increase in the expense related to internal audit. The increase in other noninterest expense was due to an increase in internet banking expense, loan expense and special services, partially offset by a decrease in stationery, printing and supplies and Real Estate-owned expense. The decrease in the federal deposit insurance premiums is due to a lower assessment rate compared to the prior year quarter.

Federal Income Taxes

Federal income tax expense totaled $199,000 for the three month period ended March 31, 2017, a decrease of $53,000 compared to $252,000 for three month period ended March 31, 2016. The decrease was primarily due to a $189,000 decrease in pretax income compared to the prior year period, and a decrease in the effective tax rate. The effective tax rate in the current year quarter was 25.8% compared to 26.3% for the prior year quarter. The effective rate is below the statutory rate of 34% due to certain income items that are not subject to tax.

41 

Index 

Wayne Savings Bancshares, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations

 

Forward-Looking Statements

This document contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and similar expressions. These forward-looking statements include statements of goals, intentions and expectations, statements regarding prospects and business strategy, statements regarding asset quality and market risk, and estimates of future costs, benefits and results.

These forward-looking statements are subject to significant risks, assumptions and uncertainties, including, among other things, the following: (1) general economic conditions, (2) competitive pressure among financial services companies, (3) changes in interest rates, (4) deposit flows, (5) loan demand, (6) changes in legislation or regulation, (7) changes in accounting principles, policies and guidelines, (8) litigation liabilities, including costs, expenses, settlements and judgments, and (9) other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. We have no obligation to update or revise any forward-looking statements to reflect any changed assumptions, any unanticipated events or any changes in the future.

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk

Management believes there has been no material change in the Company’s market risk since the Company’s Form 10-K was filed with the Securities and Exchange Commission for the year ended December 31, 2016.

ITEM 4 Controls and Procedures

(a)       Evaluation of disclosure controls and procedures.

Under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective in timely alerting them to the material information relating to the Company (or our consolidated subsidiaries) required to be included in the Company’s periodic SEC filings.

(b)       Changes in internal controls.

There has been no change made in the Company’s internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

42 

Index 

Wayne Savings Bancshares, Inc.
PART II

 

ITEM 1. Legal Proceedings

Not applicable.

ITEM 1A. Risk Factors

There have been no material changes in the risk factors set forth in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable.

(b) Not applicable.

(c) The following table sets forth certain information regarding repurchases by the Company for the quarter ended March 31, 2017.

Months ended	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of the announced plan		Maximum number of shares which may still be purchased as part of the announced plan
January 31, 2017		—	$	—		—		69,546
February 28, 2017		—		—		—		69,546
March 31, 2017		—		—		—		69,546
Total		—	$	—		—		69,546

Notes to the Table:

On September 22, 2016, the Company announced the authorization by the Board of Directors of a new program for the repurchase of up to 69,546 shares, or 2.5%, of the Company’s outstanding shares of common stock.

ITEM 3. Defaults Upon Senior Securities

Not applicable.

ITEM 4. Mine Safety Disclosures

Not applicable.

43 

Index 

Wayne Savings Bancshares, Inc.
PART II

 

ITEM 5. Other Information

Not applicable.

ITEM 6. Exhibits

Exhibit
Number	Description
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
32	Written Statement of Chief Executive Officer and Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
101	Interactive financial data (XBRL)

44 

Index 

Wayne Savings Bancshares, Inc.

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:  May 4, 2017	By:	/s/David L. Lehman
		David L. Lehman
		President and Chief Executive Officer
Date:    May 4, 2017	By:	/s/Myron Swartzentruber
		Myron Swartzentruber
		Senior Vice President and
		Chief Financial Officer

45 

EX-31.1

Exhibit 31.1

Pursuant to Rule 13a-14(a) and 15d-14(a)

OF THE SECURITIES AND EXCHANGE ACT OF 1934

Certification of the Chief Executive Officer

I, David L. Lehman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Wayne Savings Bancshares, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements and other financial information included in this quarterly report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(c) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) disclosed in this quarterly report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 4, 2017	/s/David L. Lehman
Date	David L. Lehman
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Pursuant to Rule 13a-14(a) and 15d-14(a)

OF THE SECURITIES AND EXCHANGE ACT OF 1934

Certification of the Chief financial Officer

I, Myron Swartzentruber, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Wayne Savings Bancshares, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements and other financial information included in this quarterly report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(c) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) disclosed in this quarterly report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 4, 2017	/s/Myron Swartzentruber
Date	Myron Swartzentruber
	Senior Vice President and
	Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

I, David L. Lehman, President and Chief Executive Officer, and Myron Swartzentruber, Senior Vice President and Chief Financial Officer, of Wayne Savings Bancshares, Inc. (the “Company”), hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2017, (the “Report”) fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 4, 2017	/s/David L. Lehman
Date	David L. Lehman
	President and Chief Executive Officer
May 4, 2017	/s/Myron Swartzentruber
Date	Myron Swartzentruber
	Senior Vice President and
	Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 30, 2017
Document And Entity Information
Entity Registrant Name	WAYNE SAVINGS BANCSHARES INC /DE/
Entity Central Index Key	0001036030
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		2,781,839
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2017

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Assets
Cash and due from banks	$ 6,429	$ 10,138
Interest-bearing deposits	4,845	6,618
Cash and cash equivalents	11,274	16,756
Available-for-sale securities	66,497	70,709
Held-to-maturity securities	11,343	9,559
Loans, net of allowance for loan losses of $3,044 and $3,040 at March 31, 2017 and December 31, 2016, respectively	334,076	332,283
Premises and equipment	6,269	6,420
Federal Home Loan Bank stock	4,226	4,226
Foreclosed assets held for sale, net		2
Accrued interest receivable	1,309	1,146
Bank-owned life insurance	9,893	9,827
Goodwill	1,719	1,719
Prepaid federal income taxes	163	264
Other assets	1,848	1,880
Total assets	448,617	454,791
Deposits
Demand	108,171	111,213
Savings and money market	145,203	141,029
Time	124,884	131,491
Total deposits	378,258	383,733
Other short-term borrowings	7,259	7,246
Federal Home Loan Bank advances	18,000	18,000
Deferred federal income taxes	182	184
Interest payable and other liabilities	3,519	4,600
Total liabilities	407,218	413,763
Commitments and Contingencies
Stockholders' Equity
Preferred stock, 500,000 shares of $.10 par value authorized; no shares issued
Common stock, $.10 par value; authorized 9,000,000 shares; 3,978,731 shares issued	398	398
Additional paid-in capital	36,054	36,041
Retained earnings	22,640	22,317
Shares acquired by ESOP	(256)	(273)
Accumulated other comprehensive loss	(501)	(519)
Treasury stock, at cost: Common: 1,196,892 shares at March 31, 2017 and December 31, 2016.	(16,936)	(16,936)
Total stockholders' equity	41,399	41,028
Total liabilities and stockholders' equity	$ 448,617	$ 454,791

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Allowance for loan losses	$ 3,044	$ 3,040
Preferred stock, par value	$ 0.10	$ 0.10
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares authorized	9,000,000	9,000,000
Common stock, shares issued	3,978,731	3,978,731
Treasury stock, shares	1,196,892	1,196,892

XML

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Interest and Dividend Income
Loans	$ 3,439	$ 3,169
Securities	482	628
Dividends on Federal Home Loan Bank stock and other	56	44
Total interest and dividend income	3,977	3,841
Interest Expense
Deposits	445	421
Other short-term borrowings	3	2
Federal Home Loan Bank advances	60	70
Total interest expense	508	493
Net Interest Income	3,469	3,348
Provision (Credit) for Loan Losses	27	(67)
Net Interest Income After Provision (Credit) for Loan Losses	3,442	3,415
Noninterest Income
Deposit service charges	152	137
Gain on loan sales	33	48
Earnings and amortization on bank-owned life insurance	73	73
Interchange fees	103	96
Other operating	126	98
Total noninterest income	487	452
Noninterest Expense
Salaries and employee benefits	1,724	1,686
Net occupancy and equipment expense	526	527
Federal deposit insurance premiums	46	71
Franchise taxes	91	88
Advertising and marketing	70	69
Legal	191	60
Audit and accounting	110	79
Stockholder expense	76	30
Other	325	298
Total noninterest expense	3,159	2,908
Income Before Federal Income Taxes	770	959
Provision for Federal Income Taxes	199	252
Net Income	571	707
Other comprehensive income:
Unrealized gains on available-for-sale securities	71	479
Unrecognized loss on split-dollar life insurance policy	(29)
Tax expense	(24)	(163)
Other comprehensive income	18	316
Total comprehensive income	$ 589	$ 1,023
Basic and Diluted Earnings Per Share	$ 0.21	$ 0.26
Dividends Per Share	$ 0.09	$ 0.09

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating Activities
Net income	$ 571	$ 707
Items not requiring (providing) cash
Depreciation and amortization	173	157
Provision (credit) for loan losses	27	(67)
Amortization of premiums and discounts on securities	231	283
Amortization of mortgage servicing rights	11	7
Amortization of deferred loan origination fees	(23)	(36)
Increase in value of bank-owned life insurance	(66)	(67)
Amortization expense of stock benefit plan	30	22
Provision for impairment on foreclosed assets held for sale	2	3
Loss on sale of foreclosed assets held for sale		4
Net gain on sale of loans	(33)	(48)
Proceeds from sale of loans in the secondary market	1,689	1,114
Origination of loans for sale in the secondary market	(1,656)	(1,066)
Deferred income taxes	(26)	14
Changes in
Accrued interest receivable	(163)	(199)
Other assets	122	174
Interest payable and other liabilities	(586)	(310)
Net cash provided by operating activities	303	692
Investing Activities
Purchase of held-to-maturity securities	(1,813)
Proceeds from maturities and paydowns of available-for-sale securities	4,066	6,291
Proceeds from maturities and paydowns of held-to-maturity securities	16	13
Net change in loans	(1,797)	(13,003)
Purchase of premises and equipment	(22)	(133)
Proceeds from the sale of foreclosed assets		70
Net cash provided by (used in) investing activities	450	(6,762)
Financing Activities
Net change in deposits	(5,475)	3,147
Net change in other short-term borrowings	13	632
Proceeds from Federal Home Loan Bank advances	9,600	13,375
Repayments of Federal Home Loan Bank advances	(9,600)	(13,375)
Advances by borrowers for taxes and insurance	(525)	(482)
Dividends on common stock	(248)	(247)
Net cash (used in) provided by financing activities	(6,235)	3,050
Change in Cash and Cash Equivalents	(5,482)	(3,020)
Cash and Cash Equivalents, Beginning of period	16,756	11,156
Cash and Cash Equivalents, End of period	11,274	8,136
Supplemental Cash Flows Information
Interest paid on deposits and borrowings	505	492
Federal income taxes paid	100
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Transfers from loans to foreclosed assets held for sale		106
Recognition of mortgage servicing rights	25	16
Dividends payable	$ 250	$ 250

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Note 1: Basis of Presentation

The accompanying unaudited condensed consolidated financial statements as of March 31, 2017 and for the three months ended March 31, 2017 and 2016, were prepared in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto of Wayne Savings Bancshares, Inc. (the “Company”) included in the Annual Report on Form 10-K for the year ended December 31, 2016. Reference is made to the accounting policies of the Company described in the Notes to the Consolidated Financial Statements contained in its Annual Report on Form 10-K.

In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of the unaudited financial statements have been included. The results of operations for the three months ended March 31, 2017, are not necessarily indicative of the results which may be expected for the full year. The condensed consolidated balance sheet of the Company as of December 31, 2016 has been derived from the consolidated balance sheet of the Company as of that date.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

XML

Principles of Consolidation

3 Months Ended

Mar. 31, 2017

Principles of Consolidation [Abstract]

Principles of Consolidation

Note 2: Principles of Consolidation

The accompanying condensed consolidated financial statements include Wayne Savings Bancshares, Inc. and the Company’s wholly-owned subsidiary, Wayne Savings Community Bank (“Wayne Savings” or the “Bank”).

Wayne Savings has eleven full-service offices in Wayne, Holmes, Ashland, Medina and Stark counties. All significant intercompany transactions and balances have been eliminated in the consolidation.

XML

Securities

3 Months Ended

Mar. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Securities

Note 3: Securities

The amortized cost and fair values, together with gross unrealized gains and losses, of securities are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Available-for-sale securities
March 31, 2017
U.S. government agencies	$	9	$	—	$	—	$	9
Mortgage-backed securities of           government sponsored entities		54,558		390		477		54,471
State and political subdivisions		11,697		374		54		12,017
Totals	$	66,264	$	764	$	531	$	66,497

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale securities	(In thousands)
December 31, 2016:
U.S. government agencies	$	11	$	—	$	—	$	11
Mortgage-backed securities of           government sponsored entities		58,797		399		582		58,614
Private-label collateralized mortgage           obligations		41		—		1		40
State and political subdivisions		11,698		402		56		12,044
Totals	$	70,547	$	801	$	639	$	70,709

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Held-to-maturity Securities:
March 31, 2017
U.S. government agencies	$	16	$	—	$	—	$	16
Mortgage-backed securities of           government sponsored entities		693		3		1		695
State and political subdivisions		10,634		15		243		10,406
Totals	$	11,343	$	18	$	244	$	11,117

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Held-to-maturity Securities:	(In thousands)
December 31, 2016:
U.S. government agencies	$	21	$	—	$	—	$	21
Mortgage-backed securities of           government sponsored entities		704		7		—		711
State and political subdivisions		8,834		12		239		8,607
Totals	$	9,559	$	19	$	239	$	9,339

Amortized cost and fair value of available-for-sale securities and held-to-maturity securities at March 31, 2017 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
One to five years	$	5,213	$	5,437	$	2,057	$	2,051
Five to ten years		4,553		4,622		2,894		2,826
After ten years		1,940		1,967		5,699		5,545
		11,706		12,026		10,650		10,422
Mortgage-backed securities of      government sponsored entities		54,558		54,471		693		695
Totals	$	66,264	$	66,497	$	11,343	$	11,117

The carrying value of securities pledged as collateral to secure public deposits and for other purposes was $40.8 million at March 31, 2017, compared to $43.7 million at December 31, 2016.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. The total fair value of these investments at March 31, 2017 and December 31, 2016 was $47.6 million and $49.8 million, which represented approximately 61% and 62%, respectively, of the Company’s total aggregate fair value of the available-for-sale and held-to-maturity investment portfolios. These decreases resulted primarily from changes in market interest rates.

Based on an evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the decreases in fair value for these securities are temporary at March 31, 2017.

Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

The following table shows the gross unrealized losses and fair value of the Company’s temporarily impaired investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

	March 31, 2017
	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
Mortgage-backed securities of      government sponsored entities	$	30,327	$	351	$	7,570	$	127	$	37,897	$	478
State and political subdivisions		8,786		208		929		89		9,715		297
Total temporarily impaired securities	$	39,113	$	559	$	8,499	$	216	$	47,612	$	775

	December 31, 2016
	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
Mortgage-backed securities of      government sponsored entities	$	32,810	$	409	$	7,978	$	173	$	40,788	$	582
Private-label collateralized      mortgage obligations		—		—		40		1		40		1
State and political subdivisions		8,087		204		929		91		9,016		295
Total temporarily impaired securities	$	40,897	$	613	$	8,947	$	265	$	49,844	$	878

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Credit Quality of Loans and the Allowance for Loan Losses

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Credit Quality of Loans and the Allowance for Loan Losses

Note 4: Credit Quality of Loans and the Allowance for Loan Losses

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoffs are reported at their outstanding principal balances adjusted for unearned income, charge-offs, the allowance for loan losses, any unamortized deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans.

For loans amortized at cost, interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized as a level yield adjustment over the term of the loan.

The accrual of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well secured and in process of collection. Past due status is determined based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current for a period of six months and future payments are reasonably assured.

Allowance for Loan Losses

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to income. Loan losses are charged against the allowance when management believes the collectibility of a loan balance is in question. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical charge-off experience and expected loss given default derived from the Company’s internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by using the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogenous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment measurements, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower.

The risk characteristics of each portfolio segment are as follows:

Residential Real Estate Loans

For residential mortgage loans that are secured by one-to-four family residences and are generally owner occupied, the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in one-to-four family residences. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

All Other Mortgage Loans

All other mortgage loans consist of residential construction loans, nonresidential real estate loans, land loans and multi-family real estate loans.

Residential construction loan proceeds are disbursed in increments as construction progresses and as inspections warrant. Construction loans are typically structured as permanent one-to-four family loans originated by the Company with a 12-month construction phase. Accordingly, upon completion of the construction phase, there is no change in interest rate or term to maturity of the original construction loan, nor is a new permanent loan originated. These loans are generally owner occupied and the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded.

Nonresidential real estate loans are negotiated on a case-by-case basis. Loans secured by nonresidential real estate generally involve a greater degree of risk than one-to-four family residential mortgage loans and carry larger loan balances. This increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the effects of general economic conditions on income-producing properties, and the increased difficulty of evaluating and monitoring these types of loans. Furthermore, the repayment of loans secured by nonresidential real estate is typically dependent upon the successful operation of the related real estate project. If the cash flow from the project is reduced, the borrower’s ability to repay the loan may be impaired.

The Company also originates a limited number of land loans secured by individual improved and unimproved lots for future residential construction. In addition, the Company originates loans to commercial customers with land held as the collateral.

Multi-family real estate loans generally involve a greater degree of credit risk than one-to-four family residential mortgage loans and carry larger loan balances. This increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the effects of general economic conditions on income-producing properties, and the increased difficulty of evaluating and monitoring these types of loans. Furthermore, the repayment of loans secured by multi-family real estate is typically dependent upon the successful operation of the related real estate property. If the cash flow from the project is reduced, the borrower’s ability to repay the loan may be impaired.

Commercial Business Loans

Commercial business loans carry a higher degree of risk than one-to-four family residential loans. Such lending typically involves large loan balances concentrated in a single borrower or groups of related borrowers for rental or business properties. In addition, the payment experience on loans secured by income-producing properties is typically dependent on the success of the operation of the related project and thus is typically affected by adverse conditions in the real estate market and in the economy. The Company originates commercial loans generally in the $50,000 to $1,000,000 range with the majority of these loans being under $500,000. Commercial loans are generally underwritten based on the borrower’s ability to pay and assets such as buildings, land and equipment are taken as additional loan collateral. Each loan is evaluated for a level of risk and assigned a rating from “1” (the highest quality rating) to “7” (the lowest quality rating).

Consumer Loans

Consumer loans entail greater credit risk than residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly, such as automobiles, mobile homes, boats, and recreational vehicles. In such cases, repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and the remaining deficiency often does not warrant further substantial collection efforts against the borrower. In particular, amounts realizable on the sale of repossessed automobiles may be significantly reduced based upon the condition of the automobiles and the lack of demand for used automobiles.

The following presents by portfolio segment the activity in the allowance for loan losses for the three months ended March 31, 2017 and 2016:

Three months ended March 31, 2017	One-to-four family residential			All other mortgage loans		Commercial business loans		Consumer loans		Total
	(In thousands)
Beginning balance	$	1,479		$	1,108	$	447	$	6	$	3,040
Provision charged to           expense		(12	)		21		18		—		27
Losses charged off		(23	)		—		—		—		(23	)
Recoveries		—			—		—		—		—
Ending balance	$	1,444		$	1,129	$	465	$	6	$	3,044

Three months ended March 31, 2016	One-to-four family residential			All other mortgage loans			Commercial business loans		Consumer loans		Total
	(In thousands)
Beginning balance	$	1,346		$	1,210		$	279	$	2	$	2,837
Provision (Credit)           charged to expense		(68	)		(3	)		2		2		(67	)
Losses charged off		—			—			—		—		—
Recoveries		1			—			—		—		1
Ending balance	$	1,279		$	1,207		$	281	$	4	$	2,771

The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on the portfolio segment and impairment method as of March 31, 2017 and December 31, 2016:

March 31, 2017	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans		Total
Allowance Balances:	(In thousands)
Ending balance:
Individually evaluated for           impairment	$	263	$	145	$	180	$	—	$	588
Collectively evaluated for           impairment		1,181		984		285		6		2,456
Total allowance for loan losses	$	1,444	$	1,129	$	465	$	6	$	3,044
Loan Balances:
Ending balance:
Individually evaluated for           impairment	$	1,583	$	1,059	$	573	$	—	$	3,215
Collectively evaluated for           impairment		190,169		124,876		23,990		1,681		340,716
Total balance	$	191,752	$	125,935	$	24,563	$	1,681	$	343,931

December 31, 2016	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans		Total
Allowance Balances:	(In thousands)
Ending balance:
Individually evaluated for           impairment	$	323	$	151	$	184	$	—	$	658
Collectively evaluated for           impairment		1,156		957		263		6		2,382
Total allowance for loan losses	$	1,479	$	1,108	$	447	$	6	$	3,040
Loan Balances:
Ending balance:
Individually evaluated for           impairment	$	1,527	$	1,067	$	547	$	—	$	3,141
Collectively evaluated for           impairment		191,897		120,890		22,668		2,193		337,648
Total balance	$	193,424	$	121,957	$	23,215	$	2,193	$	340,789

Total loans in the above tables do not include deferred loan origination fees of $745,000 and $747,000 or loans in process of $6.1 million and $4.7 million, respectively, for March 31, 2017 and December 31, 2016.

The following tables present the credit risk profile of the Bank’s loan portfolio based on rating category and payment activity as of March 31, 2017 and December 31, 2016:

March 31, 2017	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans
	(In thousands)
Rating *
Pass (Risk 1-4)	$	187,844	$	121,483	$	23,813	$	1,681
Special Mention (Risk 5)		—		2,023		35		—
Substandard (Risk 6)		3,908		2,429		715		—
Total	$	191,752	$	125,935	$	24,563	$	1,681

December 31, 2016	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans
	(In thousands)
Rating *
Pass (Risk 1-4)	$	189,975	$	119,503	$	22,427	$	2,193
Special Mention (Risk 5)		—		—		—		—
Substandard (Risk 6)		3,449		2,454		788		—
Total	$	193,424	$	121,957	$	23,215	$	2,193

There were no loans classified as Doubtful (Risk 7) at either March 31, 2017 or at December 31, 2016.

* Ratings are generally assigned to consumer and residential mortgage loans on a “pass” or “fail” basis, where “fail” results in a substandard classification. Commercial loans, both secured by real estate or other assets or unsecured, are analyzed in accordance with an analytical matrix codified in the Bank’s loan policy that produces a risk rating as described below.

Risk 1 is unquestioned credit quality for any credit product. Loans are secured by cash and near cash collateral with immediate access to proceeds.

Risk 2 is very low risk with strong credit and repayment sources. Borrower is well capitalized in a stable industry, financial ratios exceed peers and financial trends are positive.

Risk 3 is very favorable risk with highly adequate credit strength and repayment sources. Borrower has good overall financial condition and adequate capitalization.

Risk 4 is acceptable, average risk with adequate credit strength and repayment sources. Collateral positions must be within Bank policies.

Risk 5 or “Special Mention,” also known as “watch,” has potential weakness that deserves Management’s close attention. This risk includes loans where the borrower has developed financial uncertainties or the borrower is resolving the financial uncertainties. Bank credits have been secured or negotiations will be ongoing to secure further collateral.

Risk 6 or “Substandard” loans are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged. This risk category contains loans that exhibit a weakening of the borrower’s credit strength with limited credit access and all nonperforming loans.

Risk 7 or “Doubtful” loans are significantly under protected by the current net worth and paying capacity of the borrower or of the collateral pledged. This risk category contains loans that are likely to experience a loss of some magnitude, but where the amount of the expected loss is not known with enough certainty to allow for an accurate calculation of a loss amount for charge- off. This category is considered to be temporary until a charge-off amount can be reasonably determined.

The following tables present the Bank’s loan portfolio aging analysis for March 31, 2017 and December 31, 2016:

March 31, 2017	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In thousands)
One-to-four family      residential loans	$	683	$	282	$	364	$	1,329	$	190,423	$	191,752	$	—
All other mortgage      loans		766		—		63		829		125,106		125,935		—
Commercial      business loans		71		—		29		100		24,463		24,563		6
Consumer loans		—		—		—		—		1,681		1,681		—
Total	$	1,520	$	282	$	456	$	2,258	$	341,673	$	343,931	$	6

December 31, 2016	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In thousands)
One-to-four family      residential loans	$	442	$	419	$	959	$	1,820	$	191,604	$	193,424	$	—
All other mortgage      loans		—		—		63		63		121,894		121,957		—
Commercial      business loans		15		—		23		38		23,177		23,215		—
Consumer loans		8		—		—		8		2,185		2,193		—
Total	$	465	$	419	$	1,045	$	1,929	$	338,860	$	340,789	$	—

Nonaccrual loans were comprised of the following at:

Nonaccrual loans	March 31, 2017		December 31, 2016
	(In thousands)
One-to-four family residential loans	$	1,656	$	1,473
Nonresidential real estate loans		63		62
All other mortgage loans		—		—
Commercial business loans		23		23
Consumer loans		—		—
Total	$	1,742	$	1,558

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Bank will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. Information with respect to the Company’s impaired loans at March 31, 2017 and December 31, 2016 in combination with activity for the three months ended March 31, 2017 and 2016 is presented below:

	As of March 31, 2017						Three months ended March 31, 2017
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation      allowance
One-to-four family residential loans	$	1,202	$	1,216	$	—	$	1,162	$	10
All other mortgage loans		223		223		—		225		5
Commercial business loans		—		—		—		—		—
Loans with a specific valuation allowance
One-to-four family residential loans		381		436		263		394		—
All other mortgage loans		836		836		145		839		12
Commercial business loans		573		573		180		560		6
Total:
One-to-four family residential loans	$	1,583	$	1,652	$	263	$	1,556	$	10
All other mortgage loans		1,059		1,059		145		1,064		17
Commercial business loans		573		573		180		560		6
	$	3,215	$	3,284	$	588	$	3,180	$	33

	As of December 31, 2016						Three months ended March 31, 2016
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation      allowance
One-to-four family residential loans	$	1,121	$	1,189	$	—	$	1,065	$	10
All other mortgage loans		226		226		—		519		17
Commercial business loans		—		—		—		—		—
Loans with a specific valuation allowance
One-to-four family residential loans		406		406		323		1,171		—
All other mortgage loans		841		841		151		622		—
Commercial business loans		547		547		184		31		1
Total:
One-to-four family residential loans	$	1,527	$	1,595	$	323	$	2,236	$	10
All other mortgage loans		1,067		1,067		151		1,141		17
Commercial business loans		547		547		184		31		1
	$	3,141	$	3,209	$	658	$	3,408	$	28

The interest income recognized in the above tables reflects interest income recognized and is not materially different from the cash basis method.

All TDR classifications are due to concessions being granted to borrowers experiencing financial difficulties. Concessions to borrowers can include exceptions to loan policy including high loan-to-value ratios, no private mortgage insurance (“PMI”) and high debt-to-income ratios, as well as term and rate exceptions. There were two TDR classifications of $134,000 that occurred in the 2017 year-to-date period. One of these borrowers received a rate concession, while the second borrower was advanced additional funds.

There were $415,000 of TDR classifications that occurred in the 2016 year-to-date period and included the renewal of an interest-only loan as the customer repayments had not been in accordance with the original loan terms. The remaining loans are to the same borrower and are on a nonaccrual status. TDR has been individually evaluated for impairment with the appropriate specific valuation allowance included in the allowance for loan losses calculation. There were no TDR classifications which defaulted during the three months ended March 31, 2017 and 2016. The Company considers TDRs that become 90 days or more past due under modified terms as subsequently defaulted.

	Quarter-to-Date
Troubled Debt Restructurings	Number of loans		Pre-modification Recorded Principal Balance		Post-modification Recorded Principal Balance
			(dollars in thousands)
March 31, 2017
One-to-four family residential loans		2	$	134	$	134
March 31, 2016
All other mortgage loans		8	$	415	$	415

Foreclosed assets held for sale include those properties that the Bank has obtained legal title to through a formal foreclosure process or the borrower conveying all interest in the property to the Bank through the completion of a deed in lieu of foreclosure or similar legal agreement. The following table presents the balance of mortgage loans collateralized by residential real estate properties held as foreclosed assets at March 31, 2017 and December 31, 2016.

	March 31, 2017		December 31, 2016
	Recorded Investment
	(In thousands)
One-to-four family residential loans	$	—	$	2

Banks foreclose on certain properties in the normal course of business when it is more probable than not that the loan balance will not be recovered through scheduled payments. Foreclosure is usually a last resort and begins after all other collection efforts have been exhausted. The following table presents the balance of those mortgage loans collateralized by residential real estate properties that are in the formal process of foreclosure at March 31, 2017 and December 31, 2016.

	March 31, 2017		December 31, 2016
	Recorded Investment
	(In thousands)
One-to-four family residential loans	$	209	$	97

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Goodwill

3 Months Ended

Mar. 31, 2017

Goodwill [Abstract]

Goodwill

Note 5: Goodwill

The following table presents the balance of goodwill at March 31, 2017 and December 31, 2016:

	March 31, 2017		December 31, 2016
	(In thousands)
Goodwill	$	1,719	$	1,719

The Company is required to annually test goodwill for impairment or more frequently if impairment indicators exist. The Company’s testing of goodwill at November 30, 2016 indicated there was no impairment in the carrying value of the related asset.

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Repurchase Agreements

3 Months Ended

Mar. 31, 2017

Disclosure of Repurchase Agreements [Abstract]

Repurchase Agreements

Note 6: Repurchase Agreements

Repurchase agreements are offered by the Bank to commercial business customers to provide them with an opportunity to earn a return on their excess cash balances. These repurchase agreements are considered secured borrowings and are reported in other short-term borrowings. On a daily basis the Bank transfers securities to these customers in exchange for their cash and subsequently agrees to repurchase those same securities the next business day. In the event the Bank is unable to repurchase the securities from the customer, the customer will then have a claim against those securities.

The following tables present the contractual maturity of the repurchase agreements, and the fair value and type of securities pledged as collateral in exchange for these short-term borrowings at March 31, 2017 and December 31, 2016.

	March 31, 2017		December 31, 2016
	(In thousands)
Repurchase Agreements
Mortgage-backed securities of government      sponsored entities	$	7,259	$	7,246
Gross amount of recognized liabilities for      repurchase agreements in other short-term      borrowings	$	7,259	$	7,246

The contractual maturities of the repurchase agreements is overnight and continuous for both March 31, 2017 and December 31, 2016.

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Earnings Per Share

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Share

Note 7: Earnings Per Share

Basic earnings per common share is computed based upon the weighted-average number of common shares outstanding during the period, less shares in the Company’s Employee Stock Ownership Plan (“ESOP”) that are unallocated and not committed to be released. There were no dilutive shares at March 31, 2017 or March 31, 2016.

The computations are as follows:

	Three months ended March 31,
	2017		2016
Net income (in thousands)	$	571	$	707
Weighted-average common shares outstanding		2,754,573		2,747,567
Net income per share	$	0.21	$	0.26

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Regulatory Matters

3 Months Ended

Mar. 31, 2017

Regulatory Matters [Abstract]

Regulatory Matters

Note 8: Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory–and possibly additional discretionary–actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and the Banks’ capital classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Furthermore the Bank’s regulators could require adjustments to regulatory capital not reflected in these financial statements.

The Bank must give notice to, or under certain conditions specified by regulation, apply to, the Federal Reserve Bank of Cleveland prior to declaring a dividend to the Company. Under existing regulatory guidance, a dividend is generally permissible without regulatory approval if the institution is considered to be “well capitalized” and the dividend does not exceed current year-to-date net income plus the change in retained earnings for the previous two calendar years.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the following table) of Tier 1 capital to average assets, of Tier 1 common equity capital to risk-weighted assets, of Tier 1 capital to risk-weighted assets, and of total risk-based capital to risk-weighted assets, all as defined in the regulations. Management believes, as of March 31, 2017, that the Bank met all capital adequacy requirements to which it is subject.

As of March 31, 2017, based on the computations for the call report the Bank is classified as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain capital ratios as set forth in the table below. There are no conditions or events since March 31, 2017, that management believes have changed the Bank’s capital classification.

The Bank’s actual capital amounts and ratios as of March 31, 2017 and December 31, 2016 are presented in the following table.

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of March 31, 2017
Tier 1 capital to average assets	$	38,605		8.7	%	$	17,808		4.0	%	$	22,260		5.0	%
Tier 1 common equity capital to risk-      weighted assets		38,605		13.1	%		13,288		4.5	%		19,193		6.5	%
Tier 1 capital to risk-weighted assets		38,605		13.1	%		17,717		6.0	%		23,623		8.0	%
Total risk-based capital to risk-      weighted assets		41,649		14.1	%		23,623		8.0	%		29,528		10.0	%
As of December 31, 2016
Tier 1 capital to average assets	$	38,133		8.5	%	$	17,850		4.0	%	$	22,313		5.0	%
Tier 1 common equity capital to risk-      weighted assets		38,133		13.0	%		13,159		4.5	%		19,007		6.5	%
Tier 1 capital to risk-weighted assets		38,133		13.0	%		17,545		6.0	%		23,393		8.0	%
Total risk-based capital to risk-      weighted assets		41,176		14.1	%		23,393		8.0	%		29,241		10.0	%

Effective January 1, 2015, new regulatory capital requirements commonly referred to as “Basel III” were implemented and are reflected in the capital table above. Management opted out of the accumulated other comprehensive income treatment under the new requirements, and as such unrealized gains and losses from available-for-sale securities will continue to be excluded from Bank regulatory capital.

Implementation of the deductions and other adjustments to Common Equity Tier 1 (CET1) began on January 1, 2015, and will phase in over a four-year period (beginning at 40% on January 1, 2015, with an additional 20% per year thereafter).  Under the new rule, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, a banking organization must hold a capital conservation buffer composed of CET1 capital above its minimum risk-based capital requirements.  The implementation of the capital conservation buffer began on January 1, 2016, at the 0.625% level and will phase in over a four-year period (increasing by that amount on each subsequent January 1 until it reaches 2.5% on January 1, 2019).

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2017

Stockholders' Equity Note [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 9: Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), included in stockholders’ equity, are as follows:

	Gross Unrealized Gains on Available-for- Sale Securities		Net Unrealized Loss for Unfunded Status of Split-Dollar Life Insurance Plan Liability (tax-free)			Gross Unrealized Loss for Unfunded Status of Defined Benefit Plan			Tax Effect		Total Accumulated Other Comprehensive Income (Loss)
	(In thousands)
March 31, 2017	$	233	$	(160	)	$	(750	)	$	176	$	(501	)
December 31, 2016	$	162	$	(131	)	$	(750	)	$	200	$	(519	)

There were no amounts reclassified out of accumulated other comprehensive income (loss) during the

three months ended March 31, 2017 or 2016.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 10: Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

Level 1 Quoted prices in active markets for identical assets or liabilities

Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

Recurring Measurements

Following is a description of the valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the Company’s consolidated balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Available-for-sale Securities

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy.

The following table presents the fair value measurements of assets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2017 and December 31, 2016:

			Fair Value Measurement Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
U.S. government agencies	$	9	$	—	$	9	$	—
Mortgage-backed securities           of government sponsored           entities		54,471		—		54,471		—
State and political           subdivisions		12,017		—		12,017		—

			Fair Value Measurement Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
December 31, 2016
U.S. government agencies	$	11	$	—	$	11	$	—
Mortgage-backed securities           of government sponsored           entities		58,614		—		58,614		—
Private-label collateralized           mortgage obligations		40		—		40		—
State and political           subdivisions		12,044		—		12,044		—

Nonrecurring Measurements

Certain assets may be required to be measured at fair value on a nonrecurring basis in periods subsequent to their initial recognition. These assets are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

Collateral-dependent Impaired Loans, Net of ALLL

The estimated fair value of collateral-dependent impaired loans is based on the appraised fair value of the collateral, less estimated cost to sell. Collateral-dependent impaired loans are classified within Level 3 of the fair value hierarchy.

The Company considers the appraisal or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by the office of the Chief Financial Officer. Appraisals are reviewed for accuracy and consistency by the Credit Analyst. Appraisers are selected from the list of approved appraisers maintained by management. The appraised values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral. These discounts and estimates are developed by the office of the Chief Financial Officer by comparison to historical results.

Foreclosed Assets Held for Sale

Foreclosed assets held for sale are carried at the lower of fair value at acquisition date or current estimated fair value, less estimated cost to sell when the real estate is acquired. Estimated fair value of real estate is based on appraisals or evaluations. Foreclosed assets held for sale are classified within Level 3 of the fair value hierarchy.

Appraisals of real estate are obtained when the real estate is acquired and subsequently as deemed necessary by the Chief Financial Officer. Appraisals are reviewed internally for accuracy and consistency in accordance with regulatory requirements. Appraisers are selected from the list of approved appraisers maintained by management.

The following table presents the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2017 and December 31, 2016.

			Fair Value Measurement Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
Foreclosed assets	$	—		—		—	$	—
December 31, 2016
Collateral-dependent           impaired loans	$	1,053	$	—	$	—	$	1,053
Foreclosed assets		2		—		—		2

Unobservable (Level 3) Inputs

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements in thousands.

	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
March 31, 2017
Foreclosed assets	$	—	Value from Land Bank	N/A	N/A
December 31, 2016
Collateral-dependent                 impaired loans	$	1,053	Market comparable properties and specialized equipment discounts	Discounts	25%
Foreclosed assets		2	Expected selling price	Selling Costs	10%

There were no changes in the inputs or methodologies used to determine fair value at March 31, 2017 as compared to December 31, 2016.

The following table presents estimated fair values of the Company’s financial instruments not carried at fair value. The fair values of certain of these instruments were calculated by discounting expected cash flows, which involves significant judgments by management and uncertainties. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate.

			Fair Value Measurements Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
Financial assets
Cash and cash equivalents	$	11,274	$	11,274	$	—	$	—
Held-to-maturity securities		11,343		—		11,117		—
Loans, net of allowance for           loan losses		334,076		—		—		344,783
Federal Home Loan Bank           stock		4,226		—		4,226		—
Interest receivable		1,309		—		1,309		—
Financial liabilities
Deposits		378,258		44,157		303,300		—
Other short-term borrowings		7,259		—		7,259		—
Federal Home Loan Bank           advances		18,000		—		17,948		—
Advances from borrowers           for taxes and insurance		781		—		781		—
Interest payable		32		—		32		—

			Fair Value Measurements Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
December 31, 2016
Financial assets
Cash and cash  equivalents	$	16,756	$	16,756	$	—	$	—
Held-to-maturity securities		9,559		—		9,339
Loans, net of allowance for           loan losses		332,283		—		—		341,999
Federal Home Loan Bank           stock		4,226		—		4,226		—
Interest receivable		1,146		—		1,146		—
Financial liabilities
Deposits		383,733		47,946		306,291		—
Other short-term borrowings		7,246		—		7,246		—
Federal Home Loan Bank           advances		18,000		—		17,938		—
Advances from borrowers           for taxes and insurance		1,306		—		1,306		—
Interest payable		29		—		29		—

The following methods and assumptions were used to estimate the fair value of each class of financial instruments.

Cash and Cash Equivalents, Interest Receivable and Federal Home Loan Bank Stock

The carrying amount approximates fair value.

Held-to-maturity Securities

The fair value of held-to-maturity securities was estimated by using pricing models that contain market pricing and information, quoted prices of securities with similar characteristics or discounted cash flows that use credit-adjusted discount rates.

Loans

The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics were aggregated for purposes of the calculations.

Deposits

Deposits include savings accounts, checking accounts and certain money market deposits. The carrying amount approximates fair value. The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.

Interest Payable, Other Short-Term Borrowings and Advances From Borrowers for Taxes and Insurance

The carrying amount approximates fair value.

Federal Home Loan Bank Advances

Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate the fair value of existing debt.

Commitments to Originate Loans, Letters of Credit and Lines of Credit

The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair values of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date. Fair values of commitments were not material at March 31, 2017 and December 31, 2016.

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Recent Accounting Developments

3 Months Ended

Mar. 31, 2017

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Developments

Note 11: Recent Accounting Developments

FASB ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, was issued in August 2014. The amendments in this update provide guidance in Generally Accepted Accounting Principles (GAAP) about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

FASB ASU 2015-10, Technical Corrections and Improvements was issued in June, 2015. The amendments in this Update represent changes to clarify the Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to entities. The amendments in this Update that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of this update. The adoption of the amendments that required transition guidance did not have a material impact on the Company’s consolidated financial statements. The adoption of the other amendments in this update did not have a material impact on the Company’s consolidated financial statements.

FASB ASU 2016-01, Financial Instruments–Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities was issued in January 2016. The amendments in this Update make targeted improvements to generally accepted accounting principles and address certain aspects of recognition, measurement, presentation, and disclosure of financial statements. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Except as specifically stated, early adoption of the amendments in this Update are not permitted. This standard is not expected to have a material impact on the Company’s consolidated financial statements. The Company is no longer required to disclose the method and assumptions used to estimate the fair value of financial instruments measured at amortized cost.

FASB ASU 2016-04, Liabilities-Extinguishments of Liabilities (Subtopic 405-20), was issued in March 2016. The amendments in this Update apply to entities that offer certain prepaid stored-value products, including prepaid gift cards, prepaid telecommunication cards, and travelers checks. The amendments in this Update contain specific guidance for the derecognition of pre-paid stored value product liabilities and are an improvement to GAAP because they specify how pre-paid stored-value product liabilities with the Update’s scope should be derecognized. The amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Earlier application is permitted, including adoption in an interim period. This standard is not expected to have a material impact on the Company’s consolidated financial statements, because the Company does not currently have any liabilities related to stored value cards.

FASB ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, was issued in June 2016. The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal year. Early adoption of the amendments in this Update are allowed for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. An entity will apply the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The effect of a prospective transition approach is to maintain the same amortized cost basis before and after the effective date of this Update. The Company is studying the implications of this update, including following evolving regulatory and industry guidance, and gathering additional detailed historical data. The effect of this Update on the Company’s financial statements is not known at this time.

FASB ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, was issued in August 2016. The amendments in this Update provide guidance on how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This Update addresses eight specific cash flow issues with the objective of reducing the diversity in practice. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. An entity that elects early adoption must adopt all the amendments in the same period. The amendments in this Update should be applied using a retrospective transition method to each period presented. The amendments in this Update are not expected to have a material impact on the Company’s consolidated financial statements, because the Company has limited exposure to those cash flow items included in the Update.

FASB ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash, was issued in November 2016. The amendments in this Update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. The amendments in this Update are not expected to have a material impact on the Company’s consolidated financial statements. The cash flow presentation will be expanded to include the activity related to restricted cash, or required cash reserve balances upon adoption.

FASB ASU 2016-19, Technical Corrections and Improvements, was issued in December 2016. The amendments in this Update cover a wide range of Topics in the Accounting Standards Codification. The amendments generally fall into one of several categories including, amendments related to differences between original guidance and the Accounting Standards Codification, guidance clarification and reference corrections, simplification, or minor improvements. Most of the amendments in this Update do not require transition guidance and are effective upon issuance of this Update. The amendments in this Update are not expected to have a material impact on the Company’s consolidated financial statements, because the Company has limited exposure and disclosures relating to those items included in this Update.

FASB ASU 2017-01, Business Combinations, (Topic 805), Clarifying the Definition of a Business, was issued in January 2017. The amendments in this Update clarify the definition of a business, with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this Update should be applied to annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments in this Update should be applied prospectively on or after the effective date. The amendments in this Update are not expected to have a material impact on the Company’s consolidated financial statements, because the Company historically has experienced minimal acquisitions or disposals, if any.

FASB ASU 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments – Equity Method and Joint Ventures (Topic 323), Amendments to SEC paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings, was issued in January 2017. The amendments in this Update provide guidance on the disclosures required regarding the reporting and financial statement impact of recently issued but not yet adopted standards. The Changes and Corrections in this Update are effective upon release. The amendments in this update will require the Company to provide increased disclosure with respect to adopting current and future accounting Updates.

FASB ASU 2017-04, Intangibles-Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment, was issued in January 2017. The amendments in this Update modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. The amendments in this Update should be adopted for the annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment performed on testing dates after January 1, 2017. The amendments in this Update are not expected to have a material impact on the Company’s consolidated financial statements.

FASB ASU 2017-07, Compensation – Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, was issued in March 2017. The amendments in this Update require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered to the pertinent employees during the period.The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. The amendements in this Update also allow for the service cost component to be eligible for capitalization when applicable. The amendments in this Update are effective for annual periods after December 31, 2017, including interim periods within those annual periods. Early adoption is permitted and should be made within the first interim period that financial statements are issued. The amendments in this Update should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The amendments in this Update are not expected to have a material impact on the Company’s consolidated financial statements.

FASB ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt Securities, was issued in March 2017. The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. The amendments require the premium to be amortized to the earlies call date. The amendments do not require an accounting change for securities held at a discount, the discount continues to be amortized to maturity. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. The amendments in this Update are expected to have a negative impact on earnings during the shortened amortization period if the bond is not called. However, if the bond is not called, earnings should improve past the call date. If the bond is called as scheduled, the Updates in this amendment will not have a material impact on the Company’s consolidated financial statements.

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Securities (Tables)

3 Months Ended

Mar. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Schedule of Available for Sale Securities

The amortized cost and fair values, together with gross unrealized gains and losses, of securities are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Available-for-sale securities
March 31, 2017
U.S. government agencies	$	9	$	—	$	—	$	9
Mortgage-backed securities of           government sponsored entities		54,558		390		477		54,471
State and political subdivisions		11,697		374		54		12,017
Totals	$	66,264	$	764	$	531	$	66,497

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale securities	(In thousands)
December 31, 2016:
U.S. government agencies	$	11	$	—	$	—	$	11
Mortgage-backed securities of           government sponsored entities		58,797		399		582		58,614
Private-label collateralized mortgage           obligations		41		—		1		40
State and political subdivisions		11,698		402		56		12,044
Totals	$	70,547	$	801	$	639	$	70,709

Schedule of Held To Maturity Securities

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Held-to-maturity Securities:
March 31, 2017
U.S. government agencies	$	16	$	—	$	—	$	16
Mortgage-backed securities of           government sponsored entities		693		3		1		695
State and political subdivisions		10,634		15		243		10,406
Totals	$	11,343	$	18	$	244	$	11,117

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Held-to-maturity Securities:	(In thousands)
December 31, 2016:
U.S. government agencies	$	21	$	—	$	—	$	21
Mortgage-backed securities of           government sponsored entities		704		7		—		711
State and political subdivisions		8,834		12		239		8,607
Totals	$	9,559	$	19	$	239	$	9,339

Schedule of Expected Maturities of Available for Sale and Held To Maturity Securities

	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
One to five years	$	5,213	$	5,437	$	2,057	$	2,051
Five to ten years		4,553		4,622		2,894		2,826
After ten years		1,940		1,967		5,699		5,545
		11,706		12,026		10,650		10,422
Mortgage-backed securities of      government sponsored entities		54,558		54,471		693		695
Totals	$	66,264	$	66,497	$	11,343	$	11,117

Schedule of Securities in a Gross Unrealized Loss Position

The following table shows the gross unrealized losses and fair value of the Company’s temporarily impaired investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

	March 31, 2017
	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
Mortgage-backed securities of      government sponsored entities	$	30,327	$	351	$	7,570	$	127	$	37,897	$	478
State and political subdivisions		8,786		208		929		89		9,715		297
Total temporarily impaired securities	$	39,113	$	559	$	8,499	$	216	$	47,612	$	775

	December 31, 2016
	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
Mortgage-backed securities of      government sponsored entities	$	32,810	$	409	$	7,978	$	173	$	40,788	$	582
Private-label collateralized      mortgage obligations		—		—		40		1		40		1
State and political subdivisions		8,087		204		929		91		9,016		295
Total temporarily impaired securities	$	40,897	$	613	$	8,947	$	265	$	49,844	$	878

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Credit Quality of Loans and the Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Schedule of Allowance for Loan Losses

The following presents by portfolio segment the activity in the allowance for loan losses for the three months ended March 31, 2017 and 2016:

Three months ended March 31, 2017	One-to-four family residential			All other mortgage loans		Commercial business loans		Consumer loans		Total
	(In thousands)
Beginning balance	$	1,479		$	1,108	$	447	$	6	$	3,040
Provision charged to           expense		(12	)		21		18		—		27
Losses charged off		(23	)		—		—		—		(23	)
Recoveries		—			—		—		—		—
Ending balance	$	1,444		$	1,129	$	465	$	6	$	3,044

Three months ended March 31, 2016	One-to-four family residential			All other mortgage loans			Commercial business loans		Consumer loans		Total
	(In thousands)
Beginning balance	$	1,346		$	1,210		$	279	$	2	$	2,837
Provision (Credit)           charged to expense		(68	)		(3	)		2		2		(67	)
Losses charged off		—			—			—		—		—
Recoveries		1			—			—		—		1
Ending balance	$	1,279		$	1,207		$	281	$	4	$	2,771

The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on the portfolio segment and impairment method as of March 31, 2017 and December 31, 2016:

March 31, 2017	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans		Total
Allowance Balances:	(In thousands)
Ending balance:
Individually evaluated for           impairment	$	263	$	145	$	180	$	—	$	588
Collectively evaluated for           impairment		1,181		984		285		6		2,456
Total allowance for loan losses	$	1,444	$	1,129	$	465	$	6	$	3,044
Loan Balances:
Ending balance:
Individually evaluated for           impairment	$	1,583	$	1,059	$	573	$	—	$	3,215
Collectively evaluated for           impairment		190,169		124,876		23,990		1,681		340,716
Total balance	$	191,752	$	125,935	$	24,563	$	1,681	$	343,931

December 31, 2016	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans		Total
Allowance Balances:	(In thousands)
Ending balance:
Individually evaluated for           impairment	$	323	$	151	$	184	$	—	$	658
Collectively evaluated for           impairment		1,156		957		263		6		2,382
Total allowance for loan losses	$	1,479	$	1,108	$	447	$	6	$	3,040
Loan Balances:
Ending balance:
Individually evaluated for           impairment	$	1,527	$	1,067	$	547	$	—	$	3,141
Collectively evaluated for           impairment		191,897		120,890		22,668		2,193		337,648
Total balance	$	193,424	$	121,957	$	23,215	$	2,193	$	340,789

Schedule of Loans Receivable by Credit Risk Profile

The following tables present the credit risk profile of the Bank’s loan portfolio based on rating category and payment activity as of March 31, 2017 and December 31, 2016: 

March 31, 2017	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans
	(In thousands)
Rating *
Pass (Risk 1-4)	$	187,844	$	121,483	$	23,813	$	1,681
Special Mention (Risk 5)		—		2,023		35		—
Substandard (Risk 6)		3,908		2,429		715		—
Total	$	191,752	$	125,935	$	24,563	$	1,681

December 31, 2016	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans
	(In thousands)
Rating *
Pass (Risk 1-4)	$	189,975	$	119,503	$	22,427	$	2,193
Special Mention (Risk 5)		—		—		—		—
Substandard (Risk 6)		3,449		2,454		788		—
Total	$	193,424	$	121,957	$	23,215	$	2,193

There were no loans classified as Doubtful (Risk 7) at either March 31, 2017 or at December 31, 2016.

* Ratings are generally assigned to consumer and residential mortgage loans on a “pass” or “fail” basis, where “fail” results in a substandard classification. Commercial loans, both secured by real estate or other assets or unsecured, are analyzed in accordance with an analytical matrix codified in the Bank’s loan policy that produces a risk rating as described below.

Risk 1 is unquestioned credit quality for any credit product. Loans are secured by cash and near cash collateral with immediate access to proceeds.

Risk 2 is very low risk with strong credit and repayment sources. Borrower is well capitalized in a stable industry, financial ratios exceed peers and financial trends are positive.

Risk 3 is very favorable risk with highly adequate credit strength and repayment sources. Borrower has good overall financial condition and adequate capitalization.

Risk 4 is acceptable, average risk with adequate credit strength and repayment sources. Collateral positions must be within Bank policies.

Risk 5 or “Special Mention,” also known as “watch,” has potential weakness that deserves Management’s close attention. This risk includes loans where the borrower has developed financial uncertainties or the borrower is resolving the financial uncertainties. Bank credits have been secured or negotiations will be ongoing to secure further collateral.

Risk 6 or “Substandard” loans are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged. This risk category contains loans that exhibit a weakening of the borrower’s credit strength with limited credit access and all nonperforming loans.

Risk 7 or “Doubtful” loans are significantly under protected by the current net worth and paying capacity of the borrower or of the collateral pledged. This risk category contains loans that are likely to experience a loss of some magnitude, but where the amount of the expected loss is not known with enough certainty to allow for an accurate calculation of a loss amount for charge- off. This category is considered to be temporary until a charge-off amount can be reasonably determined.

Schedule of Aging Analysis of Loans Receivable

The following tables present the Bank’s loan portfolio aging analysis for March 31, 2017 and December 31, 2016:

March 31, 2017	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In thousands)
One-to-four family      residential loans	$	683	$	282	$	364	$	1,329	$	190,423	$	191,752	$	—
All other mortgage      loans		766		—		63		829		125,106		125,935		—
Commercial      business loans		71		—		29		100		24,463		24,563		6
Consumer loans		—		—		—		—		1,681		1,681		—
Total	$	1,520	$	282	$	456	$	2,258	$	341,673	$	343,931	$	6

December 31, 2016	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In thousands)
One-to-four family      residential loans	$	442	$	419	$	959	$	1,820	$	191,604	$	193,424	$	—
All other mortgage      loans		—		—		63		63		121,894		121,957		—
Commercial      business loans		15		—		23		38		23,177		23,215		—
Consumer loans		8		—		—		8		2,185		2,193		—
Total	$	465	$	419	$	1,045	$	1,929	$	338,860	$	340,789	$	—

Schedule of Non-accrual Loans

Nonaccrual loans were comprised of the following at:

Nonaccrual loans	March 31, 2017		December 31, 2016
	(In thousands)
One-to-four family residential loans	$	1,656	$	1,473
Nonresidential real estate loans		63		62
All other mortgage loans		—		—
Commercial business loans		23		23
Consumer loans		—		—
Total	$	1,742	$	1,558

Schedule of Impaired Loans

Information with respect to the Company’s impaired loans at March 31, 2017 and December 31, 2016 in combination with activity for the three months ended March 31, 2017 and 2016 is presented below:

	As of March 31, 2017						Three months ended March 31, 2017
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation      allowance
One-to-four family residential loans	$	1,202	$	1,216	$	—	$	1,162	$	10
All other mortgage loans		223		223		—		225		5
Commercial business loans		—		—		—		—		—
Loans with a specific valuation allowance
One-to-four family residential loans		381		436		263		394		—
All other mortgage loans		836		836		145		839		12
Commercial business loans		573		573		180		560		6
Total:
One-to-four family residential loans	$	1,583	$	1,652	$	263	$	1,556	$	10
All other mortgage loans		1,059		1,059		145		1,064		17
Commercial business loans		573		573		180		560		6
	$	3,215	$	3,284	$	588	$	3,180	$	33

	As of December 31, 2016						Three months ended March 31, 2016
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation      allowance
One-to-four family residential loans	$	1,121	$	1,189	$	—	$	1,065	$	10
All other mortgage loans		226		226		—		519		17
Commercial business loans		—		—		—		—		—
Loans with a specific valuation allowance
One-to-four family residential loans		406		406		323		1,171		—
All other mortgage loans		841		841		151		622		—
Commercial business loans		547		547		184		31		1
Total:
One-to-four family residential loans	$	1,527	$	1,595	$	323	$	2,236	$	10
All other mortgage loans		1,067		1,067		151		1,141		17
Commercial business loans		547		547		184		31		1
	$	3,141	$	3,209	$	658	$	3,408	$	28

Schedule of Troubled Debt Restructurings

	Quarter-to-Date
Troubled Debt Restructurings	Number of loans		Pre-modification Recorded Principal Balance		Post-modification Recorded Principal Balance
			(dollars in thousands)
March 31, 2017
One-to-four family residential loans		2	$	134	$	134
March 31, 2016
All other mortgage loans		8	$	415	$	415

Schedule of balance of mortgage loans collateralized by residential real estate properties held as foreclosed assets

The following table presents the balance of mortgage loans collateralized by residential real estate properties held as foreclosed assets at March 31, 2017 and December 31, 2016.

	March 31, 2017		December 31, 2016
	Recorded Investment
	(In thousands)
One-to-four family residential loans	$	—	$	2

Schedule of balance of mortgage loans collateralized by residential real estate properties that are in formal process of foreclosure

 The following table presents the balance of those mortgage loans collateralized by residential real estate properties that are in the formal process of foreclosure at March 31, 2017 and December 31, 2016.

	March 31, 2017		December 31, 2016
	Recorded Investment
	(In thousands)
One-to-four family residential loans	$	209	$	97

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Goodwill (Tables)

3 Months Ended

Mar. 31, 2017

Goodwill [Abstract]

Schedule of balance of goodwill

The following table presents the balance of goodwill at March 31, 2017 and December 31, 2016:

	March 31, 2017		December 31, 2016
	(In thousands)
Goodwill	$	1,719	$	1,719

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Repurchase Agreements (Tables)

3 Months Ended

Mar. 31, 2017

Disclosure of Repurchase Agreements [Abstract]

Schedule of contractual maturity of repurchase agreements, and fair value and type of securities pledged as collateral in exchange for short-term borrowings

The following tables present the contractual maturity of the repurchase agreements, and the fair value and type of securities pledged as collateral in exchange for these short-term borrowings at March 31, 2017 and December 31, 2016.

	March 31, 2017		December 31, 2016
	(In thousands)
Repurchase Agreements
Mortgage-backed securities of government      sponsored entities	$	7,259	$	7,246
Gross amount of recognized liabilities for      repurchase agreements in other short-term      borrowings	$	7,259	$	7,246

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Schedule of Computations of Earnings Per Share

The computations are as follows:

	Three months ended March 31,
	2017		2016
Net income (in thousands)	$	571	$	707
Weighted-average common shares outstanding		2,754,573		2,747,567
Net income per share	$	0.21	$	0.26

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Regulatory Matters (Tables)

3 Months Ended

Mar. 31, 2017

Regulatory Matters [Abstract]

Schedule of Regulatory Capital Requirements

The Bank’s actual capital amounts and ratios as of March 31, 2017 and December 31, 2016 are presented in the following table. 

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of March 31, 2017
Tier 1 capital to average assets	$	38,605		8.7	%	$	17,808		4.0	%	$	22,260		5.0	%
Tier 1 common equity capital to risk-      weighted assets		38,605		13.1	%		13,288		4.5	%		19,193		6.5	%
Tier 1 capital to risk-weighted assets		38,605		13.1	%		17,717		6.0	%		23,623		8.0	%
Total risk-based capital to risk-      weighted assets		41,649		14.1	%		23,623		8.0	%		29,528		10.0	%
As of December 31, 2016
Tier 1 capital to average assets	$	38,133		8.5	%	$	17,850		4.0	%	$	22,313		5.0	%
Tier 1 common equity capital to risk-      weighted assets		38,133		13.0	%		13,159		4.5	%		19,007		6.5	%
Tier 1 capital to risk-weighted assets		38,133		13.0	%		17,545		6.0	%		23,393		8.0	%
Total risk-based capital to risk-      weighted assets		41,176		14.1	%		23,393		8.0	%		29,241		10.0	%

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2017

Stockholders' Equity Note [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), included in stockholders’ equity, are as follows:

	Gross Unrealized Gains on Available-for- Sale Securities		Net Unrealized Loss for Unfunded Status of Split-Dollar Life Insurance Plan Liability (tax-free)			Gross Unrealized Loss for Unfunded Status of Defined Benefit Plan			Tax Effect		Total Accumulated Other Comprehensive Income (Loss)
	(In thousands)
March 31, 2017	$	233	$	(160	)	$	(750	)	$	176	$	(501	)
December 31, 2016	$	162	$	(131	)	$	(750	)	$	200	$	(519	)

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Schedule of Fair Value Measured on a Recurring Basis

The following table presents the fair value measurements of assets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2017 and December 31, 2016:

			Fair Value Measurement Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
U.S. government agencies	$	9	$	—	$	9	$	—
Mortgage-backed securities           of government sponsored           entities		54,471		—		54,471		—
State and political           subdivisions		12,017		—		12,017		—

			Fair Value Measurement Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
December 31, 2016
U.S. government agencies	$	11	$	—	$	11	$	—
Mortgage-backed securities           of government sponsored           entities		58,614		—		58,614		—
Private-label collateralized           mortgage obligations		40		—		40		—
State and political           subdivisions		12,044		—		12,044		—

Schedule of Fair Value Measured on a Nonrecurring Basis

The following table presents the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2017 and December 31, 2016.

			Fair Value Measurement Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
Foreclosed assets	$	—		—		—	$	—
December 31, 2016
Collateral-dependent           impaired loans	$	1,053	$	—	$	—	$	1,053
Foreclosed assets		2		—		—		2

Schedule of Level 3 Fair Value Measurements

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements in thousands.

	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
March 31, 2017
Foreclosed assets	$	—	Value from Land Bank	N/A	N/A
December 31, 2016
Collateral-dependent                 impaired loans	$	1,053	Market comparable properties and specialized equipment discounts	Discounts	25%
Foreclosed assets		2	Expected selling price	Selling Costs	10%

Schedule of Fair Value of Financial Instruments

The following table presents estimated fair values of the Company’s financial instruments not carried at fair value. The fair values of certain of these instruments were calculated by discounting expected cash flows, which involves significant judgments by management and uncertainties. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate. 

			Fair Value Measurements Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
Financial assets
Cash and cash equivalents	$	11,274	$	11,274	$	—	$	—
Held-to-maturity securities		11,343		—		11,117		—
Loans, net of allowance for           loan losses		334,076		—		—		344,783
Federal Home Loan Bank           stock		4,226		—		4,226		—
Interest receivable		1,309		—		1,309		—
Financial liabilities
Deposits		378,258		44,157		303,300		—
Other short-term borrowings		7,259		—		7,259		—
Federal Home Loan Bank           advances		18,000		—		17,948		—
Advances from borrowers           for taxes and insurance		781		—		781		—
Interest payable		32		—		32		—

			Fair Value Measurements Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
December 31, 2016
Financial assets
Cash and cash  equivalents	$	16,756	$	16,756	$	—	$	—
Held-to-maturity securities		9,559		—		9,339
Loans, net of allowance for           loan losses		332,283		—		—		341,999
Federal Home Loan Bank           stock		4,226		—		4,226		—
Interest receivable		1,146		—		1,146		—
Financial liabilities
Deposits		383,733		47,946		306,291		—
Other short-term borrowings		7,246		—		7,246		—
Federal Home Loan Bank           advances		18,000		—		17,938		—
Advances from borrowers           for taxes and insurance		1,306		—		1,306		—
Interest payable		29		—		29		—

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Securities (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Carrying value of securities pledged as collateral to secure public deposits	$ 40.8	$ 43.7
Fair value of investments, carried at less than historical costs	$ 47.6	$ 49.8
Percentage available for sale Securities in unrealized loss positions out of total available for sale securities	61.00%	62.00%

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Securities (Schedule of Available for Sale Securities and Held To Maturity Securities) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Available-for-sale securities
Amortized Cost	$ 66,264	$ 70,547
Gross Unrealized Gains	764	801
Gross Unrealized Losses	531	639
Fair Value	66,497	70,709
Held-to-maturity Securities:
Amortized Cost	11,343	9,559
Gross Unrealized Gains	18	19
Gross Unrealized Losses	244	239
Fair Value	11,117	9,339
U.S. government agencies [Member]
Available-for-sale securities
Amortized Cost	9	11
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value	9	11
Held-to-maturity Securities:
Amortized Cost	16	21
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value	16	21
Mortgage-backed securities of government sponsored entities [Member]
Available-for-sale securities
Amortized Cost	54,558	58,797
Gross Unrealized Gains	390	399
Gross Unrealized Losses	477	582
Fair Value	54,471	58,614
Held-to-maturity Securities:
Amortized Cost	693	704
Gross Unrealized Gains	3	7
Gross Unrealized Losses	1
Fair Value	695	711
State and political subdivisions [Member]
Available-for-sale securities
Amortized Cost	11,697	11,698
Gross Unrealized Gains	374	402
Gross Unrealized Losses	54	56
Fair Value	12,017	12,044
Held-to-maturity Securities:
Amortized Cost	10,634	8,834
Gross Unrealized Gains	15	12
Gross Unrealized Losses	243	239
Fair Value	$ 10,406	8,607
Private-label collateralized mortgage obligations [Member]
Available-for-sale securities
Amortized Cost		41
Gross Unrealized Gains
Gross Unrealized Losses		1
Fair Value		$ 40

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Securities (Schedule of Expected Maturities of Available for Sale and Held To Maturity Securities) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Available-for-sale- Debt maturities, Amortized Cost
One to five years	$ 5,213
Five to ten years	4,553
After ten Years	1,940
Subtotal	11,706
Totals	66,264
Available for Sale Securities, Fair Values
One to five years	5,437
Five to ten years	4,622
After ten Years	1,967
Subtotal	12,026
Totals	66,497
Held to Maturity securities, Amortized Cost
One to five years	2,057
Five to ten years	2,894
After ten Years	5,699
Subtotal	10,650
Held-to-maturity securities	11,343	$ 9,559
Held to Maturity securities, Fair Values
One to five years	2,051
Five to ten years	2,826
After ten Years	5,545
Subtotal	10,422
Total	11,117	9,339
Mortgage-backed securities of government sponsored entities [Member]
Available-for-sale- Debt maturities, Amortized Cost
Maturities without single maturity date	54,558
Available for Sale Securities, Fair Values
Maturities without single maturity date	54,471
Held to Maturity securities, Amortized Cost
Held-to-maturity securities	693	704
Held to Maturity securities, Fair Values
Total	$ 695	$ 711

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Securities (Schedule of Securities in a Gross Unrealized Loss Position) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Securities with unrealized loss position
Less than 12 Months, Fair Value	$ 39,113	$ 40,897
Less than 12 Months, Unrealized Losses	559	613
More than 12 Months, Fair Value	8,499	8,947
More than 12 Months, Unrealized Losses	216	265
Total, Fair Value	47,612	49,844
Total, Unrealized Losses	775	878
Mortgage-backed securities of government sponsored entities [Member]
Securities with unrealized loss position
Less than 12 Months, Fair Value	30,327	32,810
Less than 12 Months, Unrealized Losses	351	409
More than 12 Months, Fair Value	7,570	7,978
More than 12 Months, Unrealized Losses	127	173
Total, Fair Value	37,897	40,788
Total, Unrealized Losses	478	582
State and political subdivisions [Member]
Securities with unrealized loss position
Less than 12 Months, Fair Value	8,786	8,087
Less than 12 Months, Unrealized Losses	208	204
More than 12 Months, Fair Value	929	929
More than 12 Months, Unrealized Losses	89	91
Total, Fair Value	9,715	9,016
Total, Unrealized Losses	$ 297	295
Private-label collateralized mortgage obligations [Member]
Securities with unrealized loss position
Less than 12 Months, Fair Value
Less than 12 Months, Unrealized Losses
More than 12 Months, Fair Value		40
More than 12 Months, Unrealized Losses		1
Total, Fair Value		40
Total, Unrealized Losses		$ 1

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Credit Quality of Loans and the Allowance for Loan Losses (Narrative) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Receivables [Abstract]
Deferred loan origination fees	$ 745	$ 747
Loans in process	6,100	4,700
Troubled Debt Restructurings considered as impaired	$ 134	$ 415

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Credit Quality of Loans and the Allowance for Loan Losses (Schedule of Activity in Allowance for Loan Losses) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Activity in the allowance for loan losses by portfolio segment
Beginning balance	$ 3,040	$ 2,837
Provision (Credit) charged to expense	27	(67)
Losses charged off	(23)
Recoveries		1
Ending balance	3,044	2,771
One-to-four family residential loans [Member]
Activity in the allowance for loan losses by portfolio segment
Beginning balance	1,479	1,346
Provision (Credit) charged to expense	(12)	(68)
Losses charged off	(23)
Recoveries		1
Ending balance	1,444	1,279
All other mortgage loans [Member]
Activity in the allowance for loan losses by portfolio segment
Beginning balance	1,108	1,210
Provision (Credit) charged to expense	21	(3)
Losses charged off
Recoveries
Ending balance	1,129	1,207
Commercial business loans [Member]
Activity in the allowance for loan losses by portfolio segment
Beginning balance	447	279
Provision (Credit) charged to expense	18	2
Losses charged off
Recoveries
Ending balance	465	281
Consumer loans [Member]
Activity in the allowance for loan losses by portfolio segment
Beginning balance	6	2
Provision (Credit) charged to expense		2
Losses charged off
Recoveries
Ending balance	$ 6	$ 4

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Credit Quality of Loans and the Allowance for Loan Losses (Schedule of Allowance for Loan Losses and Recorded Investment) (Details) - USD ($) $ in Thousands		Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		$ 588	$ 658
Collectively evaluated for impairment		2,456	2,382
Total allowance for loan losses		3,044	3,040	$ 2,771	$ 2,837
Individually evaluated for impairment		3,215	3,141
Collectively evaluated for impairment		340,716	337,648
Total balance		343,931	340,789
One-to-four family residential loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		263	323
Collectively evaluated for impairment		1,181	1,156
Total allowance for loan losses		1,444	1,479	1,279	1,346
Individually evaluated for impairment		1,583	1,527
Collectively evaluated for impairment		190,169	191,897
Total balance	[1]	191,752	193,424
All other mortgage loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		145	151
Collectively evaluated for impairment		984	957
Total allowance for loan losses		1,129	1,108	1,207	1,210
Individually evaluated for impairment		1,059	1,067
Collectively evaluated for impairment		124,876	120,890
Total balance	[1]	125,935	121,957
Commercial business loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		180	184
Collectively evaluated for impairment		285	263
Total allowance for loan losses		465	447	281	279
Individually evaluated for impairment		573	547
Collectively evaluated for impairment		23,990	22,668
Total balance	[1]	24,563	23,215
Consumer loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment
Collectively evaluated for impairment		6	6
Total allowance for loan losses		6	6	$ 4	$ 2
Individually evaluated for impairment
Collectively evaluated for impairment		1,681	2,193
Total balance	[1]	$ 1,681	$ 2,193

[1] Ratings are generally assigned to consumer and residential mortgage loans on a "pass" or "fail" basis, where "fail" results in a substandard classification. Commercial loans, both secured by real estate or other assets or unsecured, are analyzed in accordance with an analytical matrix codified in the Bank's loan policy that produces a risk rating as described below.

XML

Credit Quality of Loans and the Allowance for Loan Losses (Schedule of Loans Receivable by Credit Risk Profile) (Details) - USD ($) $ in Thousands		Mar. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross		$ 343,931	$ 340,789
One-to-four family residential loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]	191,752	193,424
One-to-four family residential loans [Member] | Pass (Risk 1-4) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]	187,844	189,975
One-to-four family residential loans [Member] | Special Mention (Risk 5) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]
One-to-four family residential loans [Member] | Substandard (Risk 6) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]	3,908	3,449
All other mortgage loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]	125,935	121,957
All other mortgage loans [Member] | Pass (Risk 1-4) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]	121,483	119,503
All other mortgage loans [Member] | Special Mention (Risk 5) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]	2,023
All other mortgage loans [Member] | Substandard (Risk 6) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]	2,429	2,454
Commercial business loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]	24,563	23,215
Commercial business loans [Member] | Pass (Risk 1-4) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]	23,813	22,427
Commercial business loans [Member] | Special Mention (Risk 5) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]	35
Commercial business loans [Member] | Substandard (Risk 6) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]	715	788
Consumer loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]	1,681	2,193
Consumer loans [Member] | Pass (Risk 1-4) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]	1,681	2,193
Consumer loans [Member] | Special Mention (Risk 5) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]
Consumer loans [Member] | Substandard (Risk 6) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable, gross	[1]

[1] Ratings are generally assigned to consumer and residential mortgage loans on a "pass" or "fail" basis, where "fail" results in a substandard classification. Commercial loans, both secured by real estate or other assets or unsecured, are analyzed in accordance with an analytical matrix codified in the Bank's loan policy that produces a risk rating as described below.

XML

Credit Quality of Loans and the Allowance for Loan Losses (Schedule of Aging Analysis of Loans Receivable) (Details) - USD ($) $ in Thousands		Mar. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		$ 2,258	$ 1,929
Current		341,673	338,860
Total Loans receivable		343,931	340,789
Total Loans >90 Days and Accruing		6
30-59 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		1,520	465
60-89 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		282	419
Greater Than 90 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		456	1,045
One-to-four family residential loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		1,329	1,820
Current		190,423	191,604
Total Loans receivable	[1]	191,752	193,424
Total Loans >90 Days and Accruing
One-to-four family residential loans [Member] | 30-59 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		683	442
One-to-four family residential loans [Member] | 60-89 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		282	419
One-to-four family residential loans [Member] | Greater Than 90 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		364	959
All other mortgage loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		829	63
Current		125,106	121,894
Total Loans receivable	[1]	125,935	121,957
Total Loans >90 Days and Accruing
All other mortgage loans [Member] | 30-59 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		766
All other mortgage loans [Member] | 60-89 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due
All other mortgage loans [Member] | Greater Than 90 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		63	63
Commercial business loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		100	38
Current		24,463	23,177
Total Loans receivable	[1]	24,563	23,215
Total Loans >90 Days and Accruing		6
Commercial business loans [Member] | 30-59 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		71	15
Commercial business loans [Member] | 60-89 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due
Commercial business loans [Member] | Greater Than 90 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due		29	23
Consumer loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due			8
Current		1,681	2,185
Total Loans receivable	[1]	1,681	2,193
Total Loans >90 Days and Accruing
Consumer loans [Member] | 30-59 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due			8
Consumer loans [Member] | 60-89 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due
Consumer loans [Member] | Greater Than 90 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Past Due

[1] Ratings are generally assigned to consumer and residential mortgage loans on a "pass" or "fail" basis, where "fail" results in a substandard classification. Commercial loans, both secured by real estate or other assets or unsecured, are analyzed in accordance with an analytical matrix codified in the Bank's loan policy that produces a risk rating as described below.

XML

Credit Quality of Loans and the Allowance for Loan Losses (Schedule of Non-accrual Loans) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-accrual loans	$ 1,742	$ 1,558
One-to-four family residential loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-accrual loans	1,656	1,473
Nonresidential real estate loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-accrual loans	63	62
All other mortgage loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-accrual loans
Commercial business loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-accrual loans	23	23
Consumer loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-accrual loans

XML

Credit Quality of Loans and the Allowance for Loan Losses (Schedule of Impaired Loans) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Financing Receivable, Impaired [Line Items]
Specific Allowance	$ 588		$ 658
Recorded Balance	3,215		3,141
Unpaid Principal Balance	3,284		3,209
Average Investment in Impaired Loans	3,180	$ 3,408
Interest Income Recognized	33	28
One-to-four family residential loans [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific valuation allowance, Recorded Balance	1,202		1,121
Loans without a specific valuation allowance, Unpaid Principal Balance	1,216		1,189
Loans without a specific valuation allowance, Average Investment in Impaired Loans	1,162	1,065
Loans without a specific valuation allowance, Interest Income Recognized	10	10
Loans with a specific valuation allowance, Recorded Balance	381		406
Loans with a specific valuation allowance, Unpaid Principal Balance	436		406
Specific Allowance	263		323
Loans with a specific valuation allowance, Average Investment in Impaired Loans	394	1,171
Loans with a specific valuation allowance, Interest Income Recognized
Recorded Balance	1,583		1,527
Unpaid Principal Balance	1,652		1,595
Average Investment in Impaired Loans	1,556	2,236
Interest Income Recognized	10	10
All other mortgage loans [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific valuation allowance, Recorded Balance	223		226
Loans without a specific valuation allowance, Unpaid Principal Balance	223		226
Loans without a specific valuation allowance, Average Investment in Impaired Loans	225	519
Loans without a specific valuation allowance, Interest Income Recognized	5	17
Loans with a specific valuation allowance, Recorded Balance	836		841
Loans with a specific valuation allowance, Unpaid Principal Balance	836		841
Specific Allowance	145		151
Loans with a specific valuation allowance, Average Investment in Impaired Loans	839	622
Loans with a specific valuation allowance, Interest Income Recognized	12
Recorded Balance	1,059		1,067
Unpaid Principal Balance	1,059		1,067
Average Investment in Impaired Loans	1,064	1,141
Interest Income Recognized	17	17
Commercial business loans [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific valuation allowance, Recorded Balance
Loans without a specific valuation allowance, Unpaid Principal Balance
Loans without a specific valuation allowance, Average Investment in Impaired Loans
Loans without a specific valuation allowance, Interest Income Recognized
Loans with a specific valuation allowance, Recorded Balance	573		547
Loans with a specific valuation allowance, Unpaid Principal Balance	573		547
Specific Allowance	180		184
Loans with a specific valuation allowance, Average Investment in Impaired Loans	560	31
Loans with a specific valuation allowance, Interest Income Recognized	6	1
Recorded Balance	573		547
Unpaid Principal Balance	573		$ 547
Average Investment in Impaired Loans	560	31
Interest Income Recognized	$ 6	$ 1

XML

Credit Quality of Loans and the Allowance for Loan Losses (Schedule of Troubled Debt Restructurings) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($) N	Mar. 31, 2016 USD ($) N
One-to-four family residential loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | N	2
Pre-modification Recorded Principal Balance	$ 134
Post-modification Recorded Principal Balance	$ 134
All other mortgage loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | N		8
Pre-modification Recorded Principal Balance		$ 415
Post-modification Recorded Principal Balance		$ 415

XML

Credit Quality of Loans and the Allowance for Loan Losses (Schedule of Loans Collateralized by Residential Real Estate Properties) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded investment		$ 2
One-to-four family residential loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded investment		2
Recorded investment of assets in process of foreclosure	$ 209	$ 97

XML

Goodwill (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Goodwill [Abstract]
Goodwill	$ 1,719	$ 1,719

XML

Repurchase Agreements (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Assets Sold under Agreements to Repurchase [Line Items]
Gross amount of recognized liabilities for repurchase agreements included in other short-term borrowings	$ 7,259	$ 7,246
Mortgage-backed securities of government sponsored entities [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Total Borrowings	$ 7,259	$ 7,246

XML

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Net income	$ 571	$ 707
Weighted-average common shares outstanding	2,754,573	2,747,567
Net income per share	$ 0.21	$ 0.26

XML

Regulatory Matters (Narrative) (Details)	3 Months Ended
	Mar. 31, 2017
Regulatory Matters [Abstract]
Common Equity Tier 1, phase period	4 years
Deductions and other adjustments percentage in first year	40.00%
Deductions and other adjustments percentage in after first year	20.00%
Common Equity Tier 1, capital conservation buffer ratio	0.625%
Common Equity Tier 1, capital conservation buffer phase period	4 years
Common Equity Tier 1, maximum capital conservation buffer ratio	2.50%

XML

Regulatory Matters (Schedule of Regulatory Capital Requirements) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Tier 1 capital to average assets
Tier 1 Capital	$ 38,605	$ 38,133
Tier 1 Capital (to average assets) ratio	8.70%	8.50%
Minimum amount of Tier 1 Capital for adequacy purposes	$ 17,808	$ 17,850
Minimum amount of Tier 1 Capital for adequacy purposes, ratio	4.00%	4.00%
Minimum Tier 1 Capital required to be well-capitalized	$ 22,260	$ 22,313
Minimum Tier 1 Capital required to be well-capitalized, ratio	5.00%	5.00%
Tier 1 common equity capital to risk-weighted assets
Tier 1 Common equity capital	$ 38,605	$ 38,133
Tier 1 Common equity capital ratio	13.10%	13.00%
Minimum amount of Tier 1 Common equity capital for adequacy purposes	$ 13,288	$ 13,159
Minimum amount of Tier 1 Common equity capital for adequacy purposes ratio	4.50%	4.50%
Minimum amount of Tier 1 Common equity capital to be well-capitalized	$ 19,193	$ 19,007
Minimum amount of Tier 1 Common equity capital to be well-capitalized ratio	6.50%	6.50%
Tier 1 capital to risk-weighted assets
Tier 1 Capital	$ 38,605	$ 38,133
Tier 1 Capital (to risk-weighted assets) ratio	13.10%	13.00%
Minimum amount of Tier 1 Capital for adequacy purposes	$ 17,717	$ 17,545
Minimum amount of Tier 1 Capital for adequacy purposes, ratio	6.00%	6.00%
Minimum Tier 1 Capital required to be well-capitalized	$ 23,623	$ 23,393
Minimum Tier 1 Capital required to be well-capitalized, ratio	8.00%	8.00%
Total risk-based capital to risk-weighted assets
Total Capital	$ 41,649	$ 41,176
Total Capital (to risk-weighted assets) ratio	14.10%	14.10%
Minimum amount of capital for adequacy purposes	$ 23,623	$ 23,393
Minimum amount of capital for adequacy purposes, ratio	8.00%	8.00%
Minimum Capital required to be well-capitalized	$ 29,528	$ 29,241
Minimum Capital required to be well-capitalized, ratio	10.00%	10.00%

XML

Accumulated Other Comprehensive Income (Loss) (Schedule of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Stockholders' Equity Note [Abstract]
Gross Unrealized Gains on Available-for-Sale Securities	$ 233	$ 162
Net Unrealized Loss for Unfunded Status of Split-Dollar Life Insurance Plan Liability (tax-free)	(160)	(131)
Gross Unrealized Loss for Unfunded Status of Defined Benefit Plan	(750)	(750)
Tax Effect	176	200
Total Accumulated Other Comprehensive Income (Loss)	$ (501)	$ (519)

XML

Fair Value Measurements (Schedule of Fair Value Measured on a Recurring Basis) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Recurring Fair Value Measurements
Available-for-sale securities	$ 66,497	$ 70,709
U.S. government agencies [Member]
Recurring Fair Value Measurements
Available-for-sale securities	9	11
U.S. government agencies [Member] | Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Recurring Fair Value Measurements
Available-for-sale securities
U.S. government agencies [Member] | Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member]
Recurring Fair Value Measurements
Available-for-sale securities	9	11
U.S. government agencies [Member] | Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Recurring Fair Value Measurements
Available-for-sale securities
U.S. government agencies [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value [Member]
Recurring Fair Value Measurements
Available-for-sale securities	9	11
Mortgage-backed securities of government sponsored entities [Member]
Recurring Fair Value Measurements
Available-for-sale securities	54,471	58,614
Mortgage-backed securities of government sponsored entities [Member] | Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Recurring Fair Value Measurements
Available-for-sale securities
Mortgage-backed securities of government sponsored entities [Member] | Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member]
Recurring Fair Value Measurements
Available-for-sale securities	54,471	58,614
Mortgage-backed securities of government sponsored entities [Member] | Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Recurring Fair Value Measurements
Available-for-sale securities
Mortgage-backed securities of government sponsored entities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value [Member]
Recurring Fair Value Measurements
Available-for-sale securities	54,471	58,614
Private-label collateralized mortgage obligations [Member]
Recurring Fair Value Measurements
Available-for-sale securities		40
Private-label collateralized mortgage obligations [Member] | Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Recurring Fair Value Measurements
Available-for-sale securities
Private-label collateralized mortgage obligations [Member] | Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member]
Recurring Fair Value Measurements
Available-for-sale securities		40
Private-label collateralized mortgage obligations [Member] | Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Recurring Fair Value Measurements
Available-for-sale securities
Private-label collateralized mortgage obligations [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value [Member]
Recurring Fair Value Measurements
Available-for-sale securities		40
State and political subdivisions [Member]
Recurring Fair Value Measurements
Available-for-sale securities	12,017	12,044
State and political subdivisions [Member] | Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Recurring Fair Value Measurements
Available-for-sale securities
State and political subdivisions [Member] | Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member]
Recurring Fair Value Measurements
Available-for-sale securities	12,017	12,044
State and political subdivisions [Member] | Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Recurring Fair Value Measurements
Available-for-sale securities
State and political subdivisions [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value [Member]
Recurring Fair Value Measurements
Available-for-sale securities	$ 12,017	$ 12,044

XML

Fair Value Measurements (Schedule of Fair Value Measured on a Nonrecurring Basis) (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral-dependent impaired loans
Foreclosed assets
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral-dependent impaired loans
Foreclosed assets
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral-dependent impaired loans		1,053
Foreclosed assets		2
Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral-dependent impaired loans		1,053
Foreclosed assets		$ 2

XML

Fair Value Measurements (Schedule of Level 3 Fair Value Measurements) (Details) - USD ($)
$ in Thousands

3 Months Ended

12 Months Ended

Mar. 31, 2017

Dec. 31, 2016

Collateral-dependent impaired loans [Member]

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]

Collateral-dependent impaired loans

$ 1,053

Valuation Technique

Market comparable properties and specialized equipment discounts

Unobservable Input

Discounts

Weighted Average

25%

Foreclosed assets [Member]

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]

Foreclosed assets

$ 2

Valuation Technique

Value from Land Bank

Expected selling price

Unobservable Input

Selling Costs

Weighted Average

10%

XML

Fair Value Measurements (Schedule of Fair Value of Financial Instruments) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financial assets
Held-to-maturity securities	$ 11,117	$ 9,339
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Financial assets
Cash and cash equivalents	11,274	16,756
Held-to-maturity securities
Loans, net of allowance for loan losses
Federal Home Loan Bank stock
Interest receivable
Financial liabilities
Deposits	44,157	47,946
Other short-term borrowings
Federal Home Loan Bank advances
Advances from borrowers for taxes and insurance
Interest payable
Significant Other Observable Inputs (Level 2) [Member]
Financial assets
Cash and cash equivalents
Held-to-maturity securities	11,117	9,339
Loans, net of allowance for loan losses
Federal Home Loan Bank stock	4,226	4,226
Interest receivable	1,309	1,146
Financial liabilities
Deposits	303,300	306,291
Other short-term borrowings	7,259	7,246
Federal Home Loan Bank advances	17,948	17,938
Advances from borrowers for taxes and insurance	781	1,306
Interest payable	32	29
Significant Unobservable Inputs (Level 3) [Member]
Financial assets
Cash and cash equivalents
Held-to-maturity securities
Loans, net of allowance for loan losses	344,783	341,999
Federal Home Loan Bank stock
Interest receivable
Financial liabilities
Deposits
Other short-term borrowings
Federal Home Loan Bank advances
Advances from borrowers for taxes and insurance
Interest payable
Carrying Amount [Member]
Financial assets
Cash and cash equivalents	11,274	16,756
Held-to-maturity securities	11,343	9,559
Loans, net of allowance for loan losses	334,076	332,283
Federal Home Loan Bank stock	4,226	4,226
Interest receivable	1,309	1,146
Financial liabilities
Deposits	378,258	383,733
Other short-term borrowings	7,259	7,246
Federal Home Loan Bank advances	18,000	18,000
Advances from borrowers for taxes and insurance	781	1,306
Interest payable	$ 32	$ 29