10-K

  UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: June 30, 2014 or

[  ] 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. 001-33246

MSB FINANCIAL CORP.

(Exact name of Registrant as specified in its Charter)

United States	34-1981437
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

1902 Long Hill Road, Millington, New Jersey	07946-0417
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: 908-647-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $0.10 par value	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES [  ] NO [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES [  ] NO [X]

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 [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 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 [  ] NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer    o	Accelerated filer    o
Non-accelerated filer    o (Do not check if a smaller reporting company)	Smaller reporting company    x

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). YES [  ] NO [X]

The aggregate market value of the voting stock held by non-affiliates of the Registrant, based on the closing price of the Registrant’s common stock as quoted on the Nasdaq Stock Market LLC on December 31, 2013, was approximately $15.3 million.

As of September 16, 2014 there were 5,010,437 shares outstanding of the Registrant’s common stock.

DOCUMENTS INCORPORATED BY REFERENCE

1. Portions of the Proxy Statement for the 2014 Annual Meeting of Shareholders. (Parts II and III)

MSB FINANCIAL CORP.

FORM 10-K

FOR THE FISCAL YEAR ENDED JUNE 30, 2014

INDEX

PART 1		Page
Item 1.	Business	1
Item 1A.	Risk Factors	30
Item 1B.	Unresolved Staff Comments	30
Item 2.	Properties	30
Item 3.	Legal Proceedings	30
Item 4.	Mine Safety Disclosures	30
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters    and Issuer Purchases of Equity Securities	31
Item 6.	Selected Financial Data	32
Item 7.	Management’s Discussion and Analysis of Financial Condition    and Results of Operations	32
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	43
Item 8.	Financial Statements and Supplementary Data	44
Item 9.	Changes in and Disagreements with Accountants on Accounting and    Financial Disclosure	44
Item 9A.	Controls and Procedures	45
Item 9B.	Other Information	46
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	46
Item 11.	Executive Compensation	46
Item 12.	Security Ownership of Certain Beneficial Owners and Management and    Related Stockholder Matters	46
Item 13.	Certain Relationships and Related Transactions, and Director    Independence	47
Item 14.	Principal Accounting Fees and Services	47
PART IV
Item 15.	Exhibits, Financial Statement Schedules	47
SIGNATURES

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PART I

Forward-Looking Statements

MSB Financial Corp. (the “Company”) may from time to time make written or oral “forward-looking statements,” including statements contained in the Company’s filings with the Securities and Exchange Commission (including this Annual Report on Form 10-K and the exhibits thereto), in its reports to stockholders and in other communications by the Company, which are made in good faith by the Company pursuant to the “safe harbor” provisions of the private securities litigation reform act of 1995.

These forward-looking statements involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations, estimates and intentions, that are subject to change based on various important factors (some of which are beyond the Company’s control). The following factors, among others, could cause the Company’s financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: The strength of the United States economy in general and the strength of the local economies in which the Company conducts operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the board of governors of the federal reserve system, inflation, interest rate, market and monetary fluctuations; the timely development of and acceptance of new products and services of the Company and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors’ products and services; the willingness of users to substitute competitors’ products and services for the Company’s products and services; the success of the Company in gaining regulatory approval of its products and services, when required; the impact of changes in financial services’ laws and regulations (including laws concerning taxes, banking, securities and insurance); technological changes, acquisitions; market volatility; changes in consumer spending and saving habits; and the success of the Company at managing the risks involved in the foregoing.

The Company cautions that the foregoing list of important factors is not exclusive. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.

Item 1. Business

General

The Company is a federally chartered corporation organized in 2004 for the purpose of acquiring all of the capital stock that Millington Savings Bank (the “Bank”) issued in its mutual holding company reorganization. During the fiscal year ended June 30, 2007, the Company conducted its initial public offering and sold 2,529,281 shares including 202,342 shares acquired by the Employee Stock Ownership Plan for net proceeds of approximately $24.5 million. The Company’s principal executive offices are located at 1902 Long Hill Road, Millington, New Jersey 07946-0417 and its telephone number at that address is (908) 647-4000.

MSB Financial, MHC (the “MHC”) is a federally chartered mutual holding company that was formed in 2004 in connection with the mutual holding company reorganization. The MHC has not engaged in any significant business since its formation. So long as the MHC is in existence, it will at all times own a majority of the outstanding stock of the Company.

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The Bank is a New Jersey-chartered stock savings bank and its deposits are insured by the Federal Deposit Insurance Corporation. As of June 30, 2014, the Bank had 53 full time equivalent employees.  The Bank maintains a website at www.millingtonsb.com.  Information on the Bank’s website should not be treated as part of this Annual Report on Form 10-K.

The Bank is regulated by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation.  The MHC and the Company are regulated as savings and loan holding companies by the Board of Governors of the Federal Reserve System (“FRB”), as successor to the Office of Thrift Supervision (“OTS”) under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).

Throughout this document, references to “we,” “us,” or “our” refer to the Bank or Company, or both, as the context indicates.

Competition

We operate in a market area with a high concentration of banking and other financial institutions, and we face substantial competition in attracting deposits and in originating loans. A number of our competitors are significantly larger institutions with greater financial and managerial resources and lending limits. Our ability to compete successfully is a significant factor affecting our growth potential and profitability.

Our competition for deposits and loans historically has come from other insured financial institutions such as local and regional commercial banks, savings institutions, and credit unions located in our primary market area. We also compete with mortgage banking and finance companies for real estate loans and with commercial banks and savings institutions for consumer loans, and we face competition for funds from investment products such as mutual funds, short-term money funds and corporate and government securities. There are large competitors operating throughout our total market area, and we also face strong competition from other community-based financial institutions.

Lending Activities

We have traditionally and currently focused on the origination of one- to four-family loans and home equity loans and lines of credit, which together comprise a substantial portion of the total loan portfolio. We also provide financing for commercial real estate, including multi-family dwellings/apartment buildings, service/retail and mixed-use properties, churches and non-profit properties, medical and dental facilities and other commercial real estate. We also originate residential and commercial construction loans and commercial and industrial loans. Our consumer loans are comprised of auto loans, personal loans and account loans and overdraft lines of credit.

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Loan Portfolio Composition.The following tables analyze the composition of the Company’s loan portfolio by loan category at the dates indicated.  Except as set forth below, there were no concentrations of loans exceeding 10% of total loans.

	At June 30,
	2014					2013					2012					2011					2010
	Amount			Percent		Amount			Percent		Amount			Percent		Amount			Percent		Amount			Percent
		(Dollars in thousands)
Type of Loans:
One- to four-family real estate	$	143,283		60.50	%	$	136,704		59.79	%	$	141,927		57.65	%	$	149,399		57.66	%	$	155,241		56.94	%
Commercial real estate		32,036		13.53			32,171		14.07			32,181		13.07			32,559		12.57			33,776		12.39
Construction		12,517		5.29			8,895		3.89			11,669		4.74			16,633		6.42			16,639		6.10
Home equity		38,484		16.25			40,682		17.79			49,224		19.99			50,240		19.39			56,862		20.86
Commercial and industrial		9,666		4.08			9,267		4.05			10,092		4.10			9,325		3.60			9,190		3.37
Consumer		832		0.35			929		0.41			1,107		0.45			941		0.36			918		0.34
Total loans receivable		236,818		100.00	%		228,648		100.00	%		246,200		100.00	%		259,097		100.00	%		272,626		100.00	%
Less:
Construction loans in process		(2,491	)				(745	)				(2,261	)				(3,452	)				(4,027	)
Allowance for loan losses		(3,686	)				(4,270	)				(3,065	)				(2,170	)				(2,588	)
Deferred loan fees		(366	)				(377	)				(354	)				(224	)				(197	)
Total loans receivable, net	$	230,275				$	223,256				$	240,520				$	253,251				$	265,814

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Loan Maturity Schedule. The following table sets forth the maturity of the Company’s loan portfolio at June 30, 2014. Demand loans, loans having no stated maturity, and overdrafts are presented as due in one year or less. The construction loans presented in the table as of June 30, 2014 are net of $2,491,000 of undistributed amounts. The table presents contractual maturities and does not reflect repricing or the effect of prepayments. Actual maturities may differ.

	At June 30, 2014
	One- to Four- Family Real Estate		Commercial Real Estate		Construction		Consumer		Home Equity		Commercial and Industrial		Total
	(In thousands)
Amounts Due:
Within 1 Year	$	6,267	$	1,068	$	8,033	$	199	$	1,699	$	2,226	$	19,492
After 1 year:
1 to 5 years		14,119		14,674		1,993		69		11,254		5,922		48,031
5 to 10 years		8,808		2,336		-		-		10,190		385		21,719
After 10 years		114,089		13,958		-		564		15,341		1,133		145,085
Total due after one year		137,016		30,968		1,993		633		36.785		7,440		214,835
Total	$	143,283	$	32,036	$	10,026	$	832	$	38,484	$	9,666	$	234,327

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The following table sets forth the dollar amount of all loans at June 30, 2014 due after June 30, 2015, which have fixed interest rates and which have floating or adjustable interest rates.

	Fixed Rates		Floating or Adjustable Rates		Total
	(In thousands)
One-to four-family real estate	$	127,336	$	9,680	$	137,016
Commercial real estate		30,968		-		30,968
Construction		1,993		-		1,993
Consumer		633		-		633
Home equity		14,206		22,579		36,785
Commercial and industrial		3,309		4,131		7,440
Total	$	178,445	$	36,390	$	214,835

One- to Four-Family Real Estate Mortgages. Our primary lending activity consists of the origination of one- to four-family first mortgage loans. Fixed rate, conventional mortgage loans are offered by the Company with terms from 5 to 30 years.

We originate adjustable rate mortgages, or ARMs, with up to 30 year terms at rates based upon the U.S. Treasury One Year Constant Maturity as an index. Our ARMs currently reset on an annual basis, beginning with the first year, and have a 200 basis point annual increase cap and a 600 basis point lifetime adjustment cap.  We do not originate “teaser” rate or negative amortization loans.

We are also offering a two-step loan program whereby we offer an initial rate for a fixed period of time, normally 7 to 10 years, and thereafter there is one preset interest rate adjustment based on competitive rates.

Substantially all residential mortgages include “due on sale” clauses, which are provisions giving us the right to declare a loan immediately payable if the borrower sells or otherwise transfers an interest in the property to a third party. Property appraisals on real estate securing one-to four-family residential loans are made by state certified or licensed independent appraisers and are performed in accordance with applicable regulations and policies. We require title insurance policies on all first lien one-to four-family residential loans and all home equity loans over $250,000.  Homeowners, liability, fire and, if applicable, flood insurance policies are also required.

We provide financing on residential investment properties with 5 to 30 year fixed duration mortgages. Our investment property lending product is available to individuals or proprietorships, partnerships, limited liability corporations, and corporations with personal guarantees. All investment property is underwritten on its ability substantially to carry itself, unless the property is a two-family residence with the mortgagor living in one of the units. Preference is given to those loans where rental income covers all operating expenses, including but not limited to principal and interest, real estate taxes, hazard insurance, utilities, maintenance, and reserve. The cash coverage ratio to cover operating expenses must be at least 1.25 times.  Any negative cash flow will be included in borrower’s total debt ratio.

We generally originate one-to four-family first mortgage loans for primary residences with loan-to-value ratios ranging from 65% up to 80% depending on the collateral value and investment properties with loan-to-value ratios ranging from 65% up to 75%.

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Commercial Real Estate Mortgages. Our commercial real estate lending includes multi-family dwellings/apartment buildings, service/retail and mixed-use properties, churches and non-profit properties, medical and dental facilities and other commercial real estate. Our commercial real estate mortgage loans are either 3 to 10 year balloon mortgages (with a maximum amortization period of 25 years) or 15 year fixed duration mortgages. This type of lending is made available to proprietorships, partnerships, limited liability companies and corporations with personal guarantees. All commercial property is underwritten on its ability substantially to provide satisfactory cash flows.  A cash flow and lease analysis is performed for each property. Preference is given to those loans where rental income covers all operating expenses, including but not limited to principal and interest, real estate tax, hazard insurance, utilities, maintenance, and reserve. The cash coverage ratio to cover operating expenses must be at least 1.25 times.  Any negative cash flow will be included in the limit on the borrower’s total debt ratio. Cash from other assets of the borrower, who may own multiple properties and generate a surplus, can be made available to cover debt-service shortages of the financed property. The loan-to-value ratio on commercial real estate loans ranges from 65% to 75%.

The management skills of the borrower are judged on the basis of his/her professional experience and must be documented to meet the Company’s satisfaction in relation to the desired project. The assets of the borrower must indicate his/her ability to support the proposed investment, both in terms of liquidity and net worth, and tangible history of the borrower’s capability and experience must be evident.

Unlike single-family residential mortgage loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment and other income, and which are secured by real property the value of which tends to be more easily ascertainable, multi-family and commercial real estate loans typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business or rental income. As a result, the availability of funds for the repayment of commercial real estate and multi-family loans may be substantially dependent on the success of the business itself and the general economic environment. Commercial real estate and multi-family loans, therefore, have greater credit risk than one-to four-family residential mortgages or consumer loans. In addition, commercial real estate and multi-family loans generally result in larger balances to single borrowers, or related groups of borrowers and also generally require substantially greater evaluation and oversight efforts.

Construction Loans. We originate construction loans for an owner-occupied residence or to a builder with a valid contract of sale. With prior Board of Director approval, we also provide financing for speculative residential or commercial construction and development. Individual consideration is given to builders based on their past performance, workmanship, and financial worth. Our construction lending includes loans for construction or major renovations or improvements of owner-occupied residences.  The portfolio is virtually divided equally between owner-occupied properties and real estate developers.

Construction loans are mortgages up to 18 months in duration. Funds are disbursed periodically upon inspections made by our inspectors on the percentage of work completed, as per the approved budget. Funds disbursed may not exceed 50% of the loan-to-value of land and up to 80% of the loan-to-value of improvements any time during construction.  Interest rates on disbursed funds are based on the rates and terms set at the time of closing.  The majority of our construction loans are variable rate loans with rates tied to the prime rate published in The Wall Street Journal, plus a premium. The Bank also has established a floor rate on all new transactions.  A minimum of interest-only payments on disbursed funds must be made on a monthly basis.

Construction lending is generally considered to involve a higher degree of credit risk than residential mortgage lending. If the estimate of construction cost proves to be inaccurate, we may be compelled to advance additional funds to complete the construction with repayment dependent, in part, on

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the success of the ultimate project rather than the ability of a borrower or guarantor to repay the loan. If we are forced to foreclose on a project prior to completion, there is no assurance that we will be able to recover the entire unpaid portion of the loan. In addition, we may be required to fund additional amounts to complete a project and may have to hold the property for an indeterminate period of time.

Consumer Loans. Our consumer lending products consist of new and used auto loans, secured and unsecured personal loans, account loans and overdraft lines of credit. The maximum term for a loan on a new or used automobile is six years and four years, respectively. We will lend up to 80% of retail value or dealer invoice on a car loan. We offer a reduction on the interest rate for car loans if payments are automatically deducted from a Millington Savings Bank checking or statement savings account.

Our personal loans have terms of up to four years with a minimum and maximum balance of $1,000 and $5,000, respectively. A reduction to the interest rate is offered for loans with automatic debit repayment from a Millington Savings Bank checking or statement savings account. Our account loans permit a depositor to borrow up to 90% of his or her funds on deposit with us in certificate of deposit accounts. The interest rate is the current rate paid to the depositor, plus a premium. A minimum payment of interest only is required. We offer an overdraft line of credit with a minimum of $500 and up to a maximum of $5,000 and an interest rate tied to the prime rate published in The Wall Street Journal, plus a premium.

Consumer lending is generally considered to involve a higher degree of credit risk than residential mortgage lending. Consumer loan repayment is dependent on the borrower’s continuing financial stability and can be adversely affected by job loss, divorce, illness, personal bankruptcy and other factors. The application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount which can be recovered on consumer loans in the event of a default. Account loans are fully secured.

Home Equity Loans and Lines of Credit. We offer fixed rate home equity loans and variable rate home equity lines of credit with a minimum credit limit of $5,000. Collateral valuation is established through a variety of methods, including an on-line appraisal valuation estimator, drive by appraisals, recent assessed tax value, purchase price or consideration value as evidenced by a deed or property search report or a report of real estate comparables from a licensed realtor. Loan requests over $100,000, however, require full appraisals, and requests over $500,000 require Loan Committee approval. Loan requests over $3.0 million require Board approval.  The loan-to-value limit on home equity lending varies depending on the collateral value and ranges from 65% up to 80% on owner occupied property and from 65% up to 75% on investment property. The variable rate on home equity lines of credit is adjusted monthly and is currently set at prime for owner occupied properties and prime plus a premium for investment properties. The fixed rate loans on investment property are also higher than fixed rate owner occupied home equity loans. We generally provide home equity financing only for a first or second lien position.

Our fixed rate home equity loans have terms of 5 to 30 years. Our variable rate home equity lines of credit have terms of 15 years, and we also offer an interest only home equity line of credit based on a 10 year term. The loan-to-value limit on interest only home equity financing is 70% on owner-occupied property and 60% on investment property. We also offer bridge loans with a variable rate and a 70% loan-to-value limit on owner-occupied property and 60% on investment property.

Commercial and Industrial Loans. We offer revolving lines of credit to businesses to finance short-term working capital needs like accounts receivable and inventory. These lines of credit may be unsecured or secured by accounts receivable and inventory or real estate. We generally provide such financing for no more than a 3 year term and with a variable rate.

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We also originate commercial term loans to fund longer-term borrowing needs such as purchasing equipment, property improvements or other fixed asset needs. These loans are secured by new and used machinery, equipment, fixtures, furniture or other long-term fixed assets and have terms of 1 to 15 years. We originate commercial term loans for other general long-term business purposes, and these loans are secured by real estate. Principal and interest on commercial term loans is payable monthly.

The normal minimum amount for our commercial term loans and lines of credit is $5,000. The maximum amount is based on the Loan to Value limits set in our policy.  We typically do not provide working capital loans to businesses outside our normal market area or to new businesses where repayment is dependent solely on future profitable operation of the business. We avoid originating loans for which the primary source of repayment could be liquidation of the collateral securing the loan in light of poor repayment prospects. We typically require personal guarantees on all commercial loans, regardless of other collateral securing the loan.

The loan-to-value limits on commercial lending vary according to the collateral. Loans secured by real estate may be originated for up to 80% loan-to-value. Other limits are as follows: Savings accounts-90% of the deposit amount; new equipment-75% of purchase price; and used equipment-lesser of 75% of purchase price or 75% of current market value.

Loans to One Borrower. The Bank’s regulatory limit on total loans to any borrower or attributed to any one borrower is 15% of unimpaired capital and surplus. Accordingly, as of June 30, 2014, our loans to one borrower legal limit was approximately $5.6 million.

The Bank’s lending policies require Board approval before any borrower’s existing and/or committed borrowings from the Bank may exceed $4.5 million in the aggregate. Any single loan in excess of $3.0 million also requires prior Board approval.

At June 30, 2014, the Bank’s largest lending relationship with a single borrower totaled $5.2 million, consisting of a $4.1 million loan, a $932,000 loan and a $170,000 loan.  Two of the loans were secured by commercial properties and the other loan was secured by a single family residence and all were performing according to their terms.

Loan Originations, Purchases, Sales, Solicitation and Processing. Our customary sources of loan applications include repeat customers, referrals from realtors and other professionals and “walk-in” customers. Our residential loan originations are driven by the Bank’s reputation, as opposed to being advertising driven.

We normally do not sell loans into the secondary mortgage market and did not sell any loans in the five year period ended June 30, 2014.  It is our policy to retain the loans we originate in our portfolio. We have not uniformly originated our real estate mortgage loans to meet the documentation standards to sell loans in the secondary mortgage market. We may do so, however, in the future if we find it desirable in connection with interest rate risk management to sell longer term fixed rate mortgages into the secondary mortgage market.

We did not purchase any whole loans in the five-year period ended June 30, 2014. We did, however, purchase insignificant participation interests in loans originated by other banks during this period.

 Loan Approval Procedures and Authority. Lending policies and loan approval limits are approved and adopted by the Board of Directors. Lending authority is vested primarily in President and

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Chief Executive Officer and Vice President and Chief Lending Officer. Each of these officers may approve loans within the following limits: first mortgage real estate and construction loans up to $500,000; home equity loans up to $500,000; consumer loans up to $500,000; and commercial loans up to $500,000.  Loans in excess of $500,000 but under $3.0 million require the approval of the Loan Committee.  Prior Board approval is required for all loan products in excess of $3.0 million. The Board also must give prior approval for any aggregation of existing and/or committed loans to one borrower that exceeds $4.5 million. Certain other Bank employees also have limited lending authority.

Asset Quality

Loan Delinquencies and Collection Procedures. The Company’s procedures for delinquent loans are as follows:

15 days delinquent:	late charge added, first delinquent notice mailed
30 days delinquent:	second delinquent notice mailed
45 days delinquent:	additional late charge, third delinquent notice mailed, telephone contact made
60 days delinquent:	telephone contact made, separate letter mailed
90 days delinquent:	decision made to refer to attorney to send demand letter
120 days delinquent:	attorney to file complaint to begin legal action

When a loan is 90 days delinquent, the Vice President - Lending or the President may determine to refer it to an attorney to send demand letter.  After 120 days, attorney is able to start the foreclosure proceedings by filing a complaint with the court.  All reasonable attempts are made to collect from borrowers prior to referral to an attorney for collection. In certain instances, we may modify the loan or grant a limited moratorium on loan payments to enable the borrower to reorganize his or her financial affairs, and we attempt to work with the borrower to establish a repayment schedule to cure the delinquency.

As to mortgage loans, if a foreclosure action is taken and the loan is not reinstated, paid in full or refinanced, the property is sold at judicial sale at which we may be the buyer if there are no adequate offers to satisfy the debt. Any property acquired as the result of foreclosure or by deed in lieu of foreclosure is classified as real estate owned until it is sold or otherwise disposed of. When real estate owned is acquired, it is recorded at the lower of cost or its fair market value less estimated selling costs. The initial write-down of the property is charged to the allowance for loan losses. Adjustments to the carrying value of the property that result from subsequent declines in value are charged to operations in the period in which the declines occur. At June 30, 2014, we had $409,000 in other real estate owned.

As to commercial loans, the Company requests updated financial statements when the loan becomes 90 days delinquent. As to account loans, the outstanding balance is collected from the related account along with accrued interest when the loan is 180 days delinquent.

Loans are reviewed on a regular basis, and all delinquencies of 60 days or more are reported to the Board of Directors. Loans are placed on non-accrual status when they are more than 90 days delinquent,except for such loans which are “well secured” and “in the process of collection.”  In addition a loan may be placed on non-accrual status at any time if, in the opinion of management, the collection of the loan in full is doubtful. An asset is “well secured” if it is secured (1) by collateral in the form of liens on or pledges of real or personal property, including securities, that have a realizable value sufficient to discharge the debt (including accrued interest) in full, or (2) by the guarantee of a financially responsible party.  An asset is “in process of collection” if collection of the asset is proceeding in due course either (1) through legal action, including judgment enforcement procedures, or (2) in appropriate circumstances,

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through collection efforts not involving legal action which are reasonably expected to result in repayment of the debt or its restoration to a current status in the near future.

Loans with interest accrued and unpaid during the year placed on non-accrual status and are charged against interest income.  Interest accrued and unpaid in prior years is charged against the allowance for loan losses.  Subsequent payments are either applied to the outstanding principal balance or recorded as interest income, depending on the assessment of the ultimate collectability of the loan. At June 30, 2014, we had approximately $8.0 million of loans that were held on a non-accrual basis, all of which were classified as impaired with $137,000 subject to specific loss allowances totaling $73,000.

Non-Performing Assets. The following table provides information regarding our non-performing loans and other non-performing assets as of the dates indicated.

	At June 30,
	2014			2013			2012			2011		2010
	(Dollars in thousands)
Loans accounted for on a non-accrual basis:
One-to four-family real estate	$	4,346		$	7,955		$	9,003		$	8,317	$	6,764
Commercial real estate		1,248			2,587			2,337			3,132		3,465
Construction		137			601			1,258			1,027		864
Consumer		-			802			—			2		9
Home equity		1,586			1,502			923			950		2,281
Commercial and industrial		635			—			1,064			642		514
Total		7,952			13,447			14,585			14,070		13,897
Accruing loans contractually past due
90 days or more:
One-to four-family real estate		310			501			1,263			1,369		1,439
Commercial real estate		—			—			—			—		—
Construction		—			—			—			—		—
Consumer		—			—			1			—		2
Home equity		51			146			906			934		321
Commercial and industrial		—			—			—			—		—
Total		361			647			2,170			2,303		1,762
Total non-performing loans	$	8,313		$	14,094		$	16,755		$	16,373	$	15,659
Total non-performing assets (1)	$	8,722		$	14,624		$	16,755		$	17,234	$	16,726
Accruing loans modified in troubled debt restructuring	$	13,439		$	11,848		$	7,061		$	543	$	6,555
Total non-performing loans to total loans		3.51	%		6.16	%		6.81	%		6.32		5.74	%
Total non-performing loans to total assets		2.41	%		4.00	%		4.82	%		4.69		4.36	%
Total non-performing assets to total assets		2.53	%		4.15	%		4.82	%		4.93		4.66	%

2014

__________________

(1) Total non-performing assets consist of total non-performing loans and other real estate owned of $409, $530, $-, $861 and $1,067 at June 30, 2014, 2013, 2012, 2011 and 2010, respectively.

At June 30, 2014, there were no loans not disclosed in the table above where known information about possible credit problems of borrowers causes management to have serious doubts as to the ability of such borrowers to comply with present loan repayment terms and which may result in disclosure of such loans in the future.

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During the year ended June 30, 2014, gross interest income of $400,000 would have been recorded on loans accounted for on a non-accrual basis and $533,000 would have been recorded on troubled debt restructurings if those loans had been current in accordance with their original terms, and $275,000 and $585,000, respectively, of interest collected on such loans was included in income.  

Classified Assets. The Company in compliance with the Uniform Credit Classification and Account Management Policy adopted by the Federal Deposit Insurance Corporation, and the Company has an internal loan review program, whereby non-performing loans are classified as special mention, substandard, doubtful or loss. It is our policy to review the loan portfolio, in accordance with regulatory classification procedures, on at least a quarterly basis. When a loan is classified as substandard or doubtful, management is required to evaluate the loan for impairment. When management classifies a portion of a loan as loss, a reserve equal to 100% of the loss amount is required to be established or the loan is to be charged-off, if a conforming loss event has occurred.

An asset that does not currently expose the Company to a sufficient degree of risk to warrant an adverse classification, but which possesses credit deficiencies or potential weaknesses that deserve management’s close attention is classified as “special mention.”

An asset classified as “substandard” is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Assets so classified have well-defined weaknesses and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

An asset classified as “doubtful” has all the weaknesses inherent in a “substandard” asset with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of a loss on a doubtful asset is high.

That portion of an asset classified as “loss” is considered uncollectible and of such little value that its continuance as an asset, without charge-off, is not warranted. This classification does not necessarily mean that an asset has absolutely no recovery or salvage value; but rather, it is not practical or desirable to defer writing off a basically worthless asset even though partial recovery may be affected in the future.

Management’s classification of assets is reviewed by the Board on a regular basis and by the regulatory agencies as part of their examination process.

The following table discloses the Company’s classification of assets as of June 30, 2014.

	At June 30, 2014
	(In thousands)
Special Mention	$	3,612
Substandard		4,170
Doubtful		-
Loss		73
Total	$	7,855

At June 30, 2014, 13 out of the 23 loans adversely classified totaling $2.0 million are included as non-performing loans in the non-performing assets table.

11

Allowance for Credit Losses. The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded credit commitments.  The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the Statement of Financial Condition date and is recorded as a reduction to loans. The reserve for unfunded credit commitments represents management’s estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities on the consolidated Statement of Financial Condition. The allowance for credit losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. All, or part, of the principal balance of loans receivable that are deemed uncollectible are charged against the allowance when management determines that the repayment of that amount is highly unlikely.    Any subsequent recoveries are credited to the allowance.  Non-residential consumer loans are generally charged off no later than 120 days past due on a contractual basis, earlier in the event of bankruptcy, or if there is an amount deemed uncollectible.  

Management, in determining the allowance for loan losses, considers the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available. The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For 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 pools of loans by loan class.  These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these classes of loans, adjusted for qualitative factors.  Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation.  The unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

The allowance calculation methodology includes segregation of the total loan portfolio into segments. The Company’s loans receivable portfolio is comprised of the following segments: residential mortgage, commercial real estate, construction, consumer and commercial and industrial. Some segments of the Company’s loan receivable portfolio are further disaggregated into classes which allows management to better monitor risk and performance.

The residential mortgage loan segment is disaggregated into two classes: one-to four-family loans, which are primarily first liens, and home equity loans, which consist of first and second liens.  The commercial real estate loan segment consists of both owner and non-owner occupied loans which have medium risk due to historical activity on these type loans.  The construction loan segment is further disaggregated into two classes: one-to four-family owner occupied, which includes land loans, whereby the owner is known and there is less risk, and other, whereby the property is generally under development and tends to have more risk than the one-to four-family owner occupied loans.  The commercial and industrial loan segment consists of loans made for the purpose of financing the activities of commercial customers. The majority of commercial and industrial loans are secured by real estate and thus carry a lower risk than traditional commercial and industrial loans.  The consumer loan segment consists primarily of installment loans and overdraft lines of credit connected with customer deposit accounts.  

Management evaluates individual loans in all of the loan segments (including loans in residential mortgage and consumer segments) for possible impairment if the recorded investment in the loan is

12

greater than $200,000 and if the loan is either in nonaccrual status or risk rated Substandard or worse or has been modified in a troubled debt restructuring.  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.

Loans whose terms are modified are classified as troubled debt restructurings if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty.  Concessions granted under a troubled debt restructuring generally involve a reduction in interest rate, a below market interest rate based on risk, or an extension of a loan’s stated maturity date. Nonaccrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification.   Loans classified as troubled debt restructurings are designated as impaired.

The evaluation of the need and amount of the allowance for impaired loans and whether a loan can be removed from impairment status is made on a quarterly basis.  The Company’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition.

In addition, the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation, as an integral part of their examination processes, periodically review our loan and real estate owned portfolios and the related allowance for loan losses and valuation allowance for real estate owned. They may require the allowance for loan losses or the valuation allowance for real estate owned to be increased based on their review of information available at the time of the examination, which would negatively affect our earnings.

13 

The following table sets forth information with respect to the Company’s allowance for loan losses for the periods indicated:

	Year Ended June 30,
	2014			2013			2012			2011			2010
	(Dollars in thousands)
Allowance balance at beginning of period	$	4,270		$	3,065		$	2,170		$	2,588		$	1,808
Provision for loan losses		600			4,044			2,217			1,686			1,600
Charge-offs:
One-to four-family real estate		522			1,574			857			1,134			6
Commercial real estate		340			348			5			155			166
Construction		119			333			—			34			487
Consumer		9			5			17			8			14
Home equity		15			293			443			759			148
Commercial and industrial		236			342			2			14			—
Total charge-offs		1,241			2,895			1,324			2,104			821
Recoveries:
Consumer		57			56			2			—			1
Net charge-offs	$	1,184		$	2,839		$	1,322		$	2,104		$	820
Allowance balance at end of period	$	3,686		$	4,270		$	3,065		$	2,170		$	2,588
Total loans outstanding at end of period	$	236,818		$	228,648		$	246,200		$	259,097		$	272,626
Average loans outstanding during period	$	232,148		$	237,776		$	248,124		$	264,476		$	277,379
Allowance for loan losses as a      percentage of non-performing loans		44.34	%		30.30	%		18.29	%		13.25	%		16.53	%
Allowance for loan losses as a      percentage of total loans		1.56	%		1.87	%		1.24	%		0.84	%		0.95	%
Net loans charged-off as a      percentage of average loans		0.51	%		1.19	%		0.53	%		0.80	%		0.30	%

14 

Allocation of Allowance for Loan Losses. The following table sets forth the allocation of the Company’s allowance for loan losses by loan category and the percent of loans in each category to total loans receivable at the dates indicated. The portion of the loan loss allowance allocated to each loan category does not represent the total available for future losses that may occur within the loan category since the total loan loss allowance is a valuation allocation applicable to the entire loan portfolio.

	At June 30,
	2014					2013					2012					2011					2010
	Amount		Percent of Loans to Total Loans			Amount		Percent of Loans to Total Loans			Amount		Percent of Loans to Total Loans			Amount		Percent of Loans to Total Loans			Amount		Percent of Loans to Total Loans
	(Dollars in thousands)
One-to-four family real estate	$	1,851		60.50	%	$	2,488		59.79	%	$	1,251		57.65	%	$	733		57.66	%	$	969		56.94	%
Commercial real estate		860		13.53			706		14.07			445		13.07			303		12.57			507		12.39
Construction		379		5.29			238		3.89			527		4.74			514		6.42			272		6.10
Home equity		332		16.25			548		17.79			557		19.99			397		19.39			665		20.86
Commercial  and industrial		256		4.08			276		4.05			272		4.10			211		3.60			164		3.37
Consumer		8		0.35			11		0.41			13		0.45			12		0.36			11		0.34
Unallocated		-		-			3		-			-		-			-		-			-		-
Total allowance	$	3,686		100.00	%	$	4,270		100.00	%	$	3,065		100.00	%	$	2,170		100.00	%	$	2,588		100.00	%

15 

Securities Portfolio

Our investment policy is designed to manage cash flows and foster earnings within prudent interest rate risk and credit risk guidelines. The portfolio mix is governed by our short term and long term liquidity needs. Rate-of-return, cash flow, rating and guarantor-backing are also considered when making investment decisions. The purchase of principal only and stripped coupon interest only security instruments is specifically not authorized by our investment policy. Furthermore, other than government related securities which may not be rated, we only purchase securities with a rating of AAA or AA. We invest primarily in mortgage-backed securities, U.S. Government obligations, U.S. Government agency issued securities and to a lesser extent in Corporate Bonds and Certificates of Deposits.

Mortgage-backed securities represent a participation interest in a pool of mortgages issued by U.S. government agencies or government-sponsored enterprises, such as Federal Home Loan Mortgage Corporation (“Freddie Mac”), the Government National Mortgage Association (“Ginnie Mae”), and the Federal National Mortgage Association (“Fannie Mae”), as well as non-government, private corporate issuers. Mortgage-backed securities are pass-through securities and generally yield less than the mortgage loans underlying the securities. The characteristics of the underlying pool of mortgages, i.e., fixed-rate or adjustable-rate, as well as prepayment risk, are passed on to the certificate holder.

Mortgage-backed securities issued or sponsored by U.S. government agencies and government-sponsored entities are guaranteed as to the payment of principal and interest to investors.

Corporate bonds often pay higher rates than government or municipal bonds, because they tend to be riskier.  The bond holder receives interest payments (yield) and principal and is repaid on a fixed maturity date.  Corporate bonds can mature anywhere between 1 to 30 years and changes in interest rates are generally reflected in the bond prices.  Corporate bonds carry no claims to ownership and do not pay a dividend, but are considered to be less risky than stocks, since the company has to pay off all of its debts (including bonds) before it handles its obligations to stockholders.  Corporate bonds have a wide range of ratings and yields because the financial health of the issuers can vary widely,

Accounting standards require that securities be categorized as “held to maturity,” “trading securities” or “available for sale,” based on management’s intent as to the ultimate disposition of each security. These standards allow debt securities to be classified as “held to maturity” and reported in financial statements at amortized cost if the reporting entity has the positive intent and ability to hold these securities to maturity. Securities that might be sold in response to changes in market interest rates, changes in the security’s prepayment risk, increases in loan demand, or other similar factors cannot be classified as “held to maturity.”

At June 30, 2014, our entire securities portfolio was classified as held to maturity.  All securities are purchased with the intent to hold each security until maturity.  Securities not classified as “held to maturity” or as “trading securities” are classified as “available for sale” and are reported at fair value with unrealized gains and losses on the securities impacting equity.  The Company held  no available for sale or trading securities during or as of years ending June 30, 2014 and 2013.

Individual securities are considered impaired when their fair values are less than their amortized cost. Management evaluates all securities with unrealized losses quarterly to determine if such impairments are “temporary” or “other-than-temporary” in accordance with applicable accounting guidance.  Accordingly, the Company accounts for temporary impairments based upon security classification as either trading, available for sale or held to maturity.  Temporary impairments on “available for sale” securities would be recognized, on a tax-effected basis, through other comprehensive

16

income with offsetting entries adjusting the carrying value of the security and the balance of deferred taxes.  Temporary impairments of “held to maturity” securities are not recognized in the consolidated financial statements; however, information concerning the amount and duration of impairments on held to maturity securities is disclosed in the notes to the consolidated financial statements.  The carrying value of securities held in a trading portfolio would be adjusted to fair value through earnings on a quarterly basis.

Other-than-temporary impairments on securities that the Company has decided to sell or will more likely than not be required to sell prior to the full recovery of their fair value to a level equal to or exceeding amortized cost are recognized in earnings.  Otherwise, the other-than-temporary impairment is bifurcated into credit-related and noncredit-related components.  The credit-related impairment generally represents the amount by which the present value of the cash flows expected to be collected on a debt security falls below its amortized cost.  The noncredit-related component represents the remaining portion of the impairment not otherwise designated as credit-related. Credit-related other-than-temporary impairments are recognized in earnings while noncredit-related other-than-temporary impairments are recognized, net of deferred taxes, in other comprehensive income.

At June 30, 2014, our securities portfolio did not contain securities of any issuer, other than the U.S. Government agencies and government-sponsored enterprises, having an aggregate book value in excess of 10% of stockholders’ equity.  We do not currently participate in hedging programs, interest rate caps, floors or swaps, or other activities involving the use of off-balance sheet derivative financial instruments, however, we may in the future utilize such instruments if we believe it would be beneficial for managing our interest rate risk.

17 

The following table sets forth certain information regarding the carrying values, weighted average yields and maturities of our held to maturity securities portfolio at June 30, 2014. Our held to maturity securities portfolio is carried at amortized cost.  This table shows contractual maturities and does not reflect repricing or the effect of prepayments. Actual maturities of the securities held by us may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without prepayment penalties. Callable securities pose reinvestment risk because we may not be able to reinvest the proceeds from called securities at an equivalent or higher interest rate.

	At June 30, 2014
	One Year or Less				One to Five Years				Five to Ten Years				More than Ten Years				Total Investment Securities
	Carrying Value		Average Yield		Carrying Value		Average Yield		Carrying Value		Average Yield		Carrying Value		Average Yield		Carrying Value		Average Yield		Market Value
	(Dollars in thousands)
U.S. Government Agency Obligations	$	-	-	%	$	23,000	1.37	%	$	12,177	2.41	%	$	14,000	3.31	%	$	49,177	2.18	%	$	47,675
Mortgage-Backed Securities:
Government National       Mortgage Association		-	-			1	9.21			13	1.97			-	-			14	2.69			14
Federal Home Loan       Mortgage Corporation		-	-			56	2.22			16	3.57			2,854	1.92			2,926	1.93			2,892
Federal National Mortgage       Association		-	-			1,008	1.21			19,631	2.61			2,510	2.13			23,149	2.50			23,309
Corporate bonds		-	-			4,630	1.62			-	-			-	-			4,630	1.62			4,681
Certificate of deposits		1,425	0.82			3,611	1.08			-	-			-	-			5,036	1.01			5,065
Total	$	1,425	0.82	%	$	32,306	1.37	%	$	31,837	2.54	%	$	19,364	2.95	%	$	84,932	2.16	%	$	83,636

18 

The following table sets forth the carrying value of our held to maturity securities portfolio at the dates indicated. Securities classified as held to maturity are shown at our amortized cost.

	At June 30
	2014		2013		2012
	(In thousands)
U.S. Government Agency Obligations	$	49,177	$	46,194	$	37,018
Government National Mortgage Association		14		17		20
Federal Home Loan Mortgage Corporation		2,926		3,397		325
Federal National Mortgage Association		23,149		21,354		9,775
Corporate bonds		4,630		4,669		2,143
Certificates of deposits		5,036		5,281		1,425
Total securities held to maturity	$	84,932	$	80,912	$	50,706

Sources of Funds

General. Deposits are our major source of funds for lending and other investment purposes. To the extent that our loan originations may exceed the funding available from deposits, we have borrowed funds from the Federal Home Loan Bank to supplement the amount of funds for lending and funding daily operations.

In addition, we derive funds from loan and mortgage-backed securities principal repayments, interest, and proceeds from the maturity and call of investment securities. Loan and securities payments are a relatively stable source of funds, while deposit inflows and outflows are significantly influenced by pricing strategies and money market conditions.

Deposits. Our current deposit products include checking and savings accounts, certificates of deposit and fixed or variable rate individual retirement accounts (IRAs). Deposit account terms vary, primarily as to the required minimum balance amount, the amount of time, if any, that the funds must remain on deposit and the applicable interest rate. Our savings account menu includes regular passbook, statement, money market and club accounts. We also offer a six-level tiered savings account. Our certificates of deposit currently range in terms from 6 months to 10 years. Our IRAs are available with the same maturities as certificates of deposit accounts, with the exception of the 30 month term. We offer a two year certificate of deposit that permits the depositor to increase the interest rate to the current two year rate once during the term.

Deposits are obtained primarily from within New Jersey. The Bank also utilizes brokered deposits as a funding source.  As of June 30, 2014 the Bank did not have any brokered deposits.  Premiums or incentives for opening accounts are sometimes offered. We periodically select particular certificate of deposit maturities for promotion in connection with asset/liability management and interest rate risk concerns.

The determination of deposit and certificate interest rates is based upon a number of factors, including: (1) need for funds based on loan demand, current maturities of deposits and other cash flow needs; (2) a current survey of a selected group of competitors’ rates for similar products; (3) economic conditions; and (4) business plan projections.

A large percentage of our deposits are in certificates of deposit. The inflow of certificates of deposit and the retention of such deposits upon maturity are significantly influenced by general interest rates and money market conditions, making certificates of deposit traditionally a more volatile source of funding than core deposits. Our liquidity could be reduced if a significant amount of certificates of deposit maturing within a short period of time were not renewed. To the extent that such deposits do not remain with us, they may need to be replaced with borrowings which could increase our cost of funds and negatively impact our net interest rate spread and our financial condition.

19 

The following table sets forth the distribution of average deposits for the periods indicated and the weighted average nominal interest rates for each period on each category of deposits presented.

	For the Year Ended June 30,
	2014						2013						2012
	Average Balance		Percent of Total Deposits		Weighted Average Nominal Rate		Average Balance		Percent of Total Deposits		Weighted Average Nominal Rate		Average Balance		Percent of Total Deposits		Weighted Average Nominal Rate
	(Dollars in thousands)
Non-interest-bearing demand	$	21,598	7.98	%	—	%	$	18,691	6.64	%	—	%	$	16,094	5.65	%	—	%
Interest-bearing demand		39,356	14.54		0.13			36,918	13.12		0.14			34,012	11.94		0.18
Savings and club		107,960	39.88		0.22			110,916	39.42		0.23			112,901	39.63		0.37
Certificates of deposit		101,801	37.60		1.35			114,876	40.82		1.48			121,858	42.78		1.78
Total deposits	$	270,715	100.00	%	0.66	%	$	281,401	100.00	%	0.76	%	$	284,865	100.00	%	0.93

20 

The following table sets forth certificates of deposit classified by interest rate categories as of the dates indicated.

	At June 30,
	2014				2013				2012
	Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total
	(Dollars in thousands)
Interest Rate:
Under - 1.00%	$	57,698	58.56	%	$	54,101	49.21	%	$	46,094	38.52	%
1.00% - 1.99%		19,758	20.05			31,737	28.86			44,694	37.35
2.00% - 2.99%		7,618	7.73			9,575	8.71			10,728	8.97
3.00% - 3.99%		6,055	6.15			6,774	6.16			7,225	6.04
4.00% - 4.99%		1,188	1.21			1,414	1.29			3,177	2.65
5.00% - 5.99%		6,211	6.30			6,347	5.77			7,712	6.45
6.00%+		-	-			-	-			26	0.02
Total	$	98,528	100.00	%	$	109,948	100.00	%	$	119,656	100.00	%

The following table sets forth the amount and maturities of certificates of deposit at June 30, 2014.

	Amount Due
	Year Ended June 30,
	2015		2016		2017		2018		2019		After June 30, 2019		Total
	(Dollars in thousands)
Interest Rate:
Under - 1.00%	$	48,655	$	8,506	$	536	$	-	$	-	$	1	$	57,698
1.00% - 1.99%		7,195		2,964		5,764		1,872		1,323		640		19,758
2.00% - 2.99%		878		4,089		1,478		-		-		1,173		7,618
3.00% - 3.99%		3,302		2,071		-		82		282		318		6,055
4.00% - 4.99%		204		90		-		727		167		-		1,188
5.00% - 5.99%		1,908		1,338		1,376		834		755		-		6,211
6.00%+		-		-		-		-		-		-		-
Total	$	62,142	$	19,058	$	9,154	$	3,515	$	2,527	$	2,132	$	98,528

21 

The following table shows the amount of the Company’s certificates of deposit of $100,000 or more by time remaining until maturity as of June 30, 2014.

	Certificates of Deposit
	(In thousands)
Remaining Time Until Maturity:
Within three months	$	5,910
Three through six months		19,826
Six through twelve months		12,529
Over twelve months		3,510
Total	$	41,775

Borrowings. To supplement our deposits as a source of funds for lending or investment, we have borrowed funds in the form of advances from the Federal Home Loan Bank of New York.  At June 30, 2014, our collateralized borrowing limit with the Federal Home Loan Bank was $69.5 million and our outstanding borrowings with the Federal Home Loan Bank totaled $30.0 million. Information regarding our total borrowings as of June 30, 2014 is set forth in the following table.

		At June 30, 2014
		Balance		Rate	Maturity
	(Dollars in thousands)
Total Borrowings:
Three year fixed rate  advance		$	5,000	0.780%	February 2016
Three year fixed rate  advance		$	5,000	0.780%	March 2016
Ten year fixed rate convertible advance		$	10,000	3.272%	November 2017
Ten year fixed rate convertible advance		$	10,000	3.460%	March 2018

In addition, the Bank had an $8.0 million overnight advance with the Federal Home Loan Bank of New York as of June 30, 2014 and did not have any overnight borrowings with the Federal Home Loan Bank as of June 30, 2013.

Advances from the Federal Home Loan Bank of New York are typically secured by the Federal Home Loan Bank stock and a portion of our residential mortgage loans and by other assets, mainly securities which are obligations of or guaranteed by the U.S. government. Additional information regarding our borrowings is included under Note 9 to our consolidated financial statements beginning on page F-1.

Subsidiary Activity

The Company has no direct subsidiaries other than the Bank. The Bank has one wholly owned subsidiary, Millington Savings Service Corp., formed in 1984. The service corporation is currently inactive.

Regulation and Supervision

The Bank and the Company operate in a highly regulated industry. This regulation establishes a comprehensive framework of activities in which they may engage and is intended primarily for the protection of the Deposit Insurance Fund and depositors. Set forth below is a brief description of certain

22

laws that relate to the regulation of the Bank and the Company. The description does not purport to be complete and is qualified in its entirety by reference to applicable laws and regulations.

Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the imposition of restrictions on operations, the classification of assets and the adequacy of the allowance for loan losses. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, or legislation, including changes in the regulations governing mutual holding companies, could have a material adverse impact on the Company and the Bank. The adoption of regulations or the enactment of laws that restrict the operations of the Bank and/or the Company or impose burdensome requirements upon one or both of them could reduce their profitability and could impair the value of the Bank’s franchise, resulting in negative effects on the trading price of the Company’s common stock.

Holding Company Regulation

General.  The Company is a savings and loan holding company within the meaning of Section 10 of the HOLA.  As a result of the Dodd-Frank Act, it is now required to file reports with the Federal Reserve and is subject to regulation and examination by the Federal Reserve, as successor to the OTS.  The Company must also obtain regulatory approval from the Federal Reserve before engaging in certain transactions, such as mergers with or acquisitions of other financial institutions.  In addition, the Federal Reserve has enforcement authority over the Company and any non-savings institution subsidiaries.  This permits the Federal Reserve to restrict or prohibit activities that it determines to be a serious risk to the Bank.  This regulation is intended primarily for the protection of the depositors and not for the benefit of stockholders of the Company.

The Federal Reserve has indicated that, to the greatest extent possible taking into account any unique characteristics of savings and loan holding companies and the requirements of the HOLA, it intends to apply its current supervisory approach to the supervision of bank holding companies to savings and loan holding companies.  The stated objective of the Federal Reserve is to ensure the savings and loan holding company and its non-depository subsidiaries are effectively supervised and can serve as a source of strength for, and do not threaten the safety and soundness of the subsidiary depository institutions.  The Federal Reserve has generally adopted the substantive provisions of former OTS regulations governing savings and loan holding companies on an with certain modifications as discussed below.

Activities Restrictions.  As a savings and loan holding company and as a subsidiary holding company of a mutual holding company, the Company is subject to statutory and regulatory restrictions on its business activities.  The non-banking activities of the Company and its non-savings institution subsidiaries are restricted to certain activities specified by the Federal Reserve regulation, which include performing services and holding properties used by a savings institution subsidiary, activities authorized for savings and loan holding companies as of March 5, 1987 and non-banking activities permissible for bank holding companies pursuant to the Bank Holding Company Act of 1956, as amended, or authorized for financial holding companies pursuant to the Gramm-Leach-Bliley Act.  Before engaging in any non-banking activity or acquiring a company engaged in any such activities, the Company must file with the Federal Reserve either a prior notice or (in the case of non-banking activities permissible for bank holding companies) an application regarding its planned activity or acquisition.  Under the Dodd-Frank Act, a savings and loan holding company may only engage in activities authorized for financial holding companies if they meet all of the criteria to qualify as a financial holding company. Accordingly, the Federal Reserve will require savings and loan holding companies to elect to be treated as financial holding companies in order to engage in financial holding company activities.  In order to make such an election, the savings and loan holding company and its depository institution subsidiaries must be well capitalized and well managed.

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Mergers and Acquisitions.  The Company must obtain approval from the Federal Reserve before acquiring, directly or indirectly, more than 5% of the voting stock of another savings institution or savings and loan holding company or acquiring such an institution or holding company by merger, consolidation, or purchase of its assets.  Federal law also prohibits a savings and loan holding company from acquiring more than 5% of a company engaged in activities other than those authorized for savings and loan holding companies by federal law; or acquiring or retaining control of a depository institution that is not insured by the FDIC.  In evaluating an application for the Company to acquire control of a savings institution, the Federal Reserve would consider the financial and managerial resources and future prospects of the Company and the target institution, the effect of the acquisition on the risk to the insurance funds, the convenience and the needs of the community and competitive factors.

Waivers of Dividends by MSB Financial MHC.  OTS policies had permitted mutual holding companies to waive the receipt of dividends and, when permitted, the MHC had waived the receipt of dividends from the Company.  However, under current Federal Reserve regulations, any notice of waiver of dividends must include a board resolution together with any supporting materials relied upon by the MHC board to conclude that the dividend waiver is consistent with the board’s fiduciary duties.  The resolution must include; (i) a description of the conflict of interest that exists because of a MHC director’s ownership of stock in the subsidiary declaring the dividend and any actions taken to eliminate the conflict of interest, such as a waiver by the directors of their right to receive dividends; (ii) a finding by the MHC that the waiver is consistent with its fiduciary duties despite any conflict of interest; (iii) an affirmation that the MHC is able to meet the terms of any loan agreement for which the stock of the subsidiary is pledged or to which the MHC is subject; and (iv) any affirmation that  a majority of the MHC’s members have approved a waiver of dividends within the past 12 months and that the proxy statement used for such vote included certain disclosures.  The MHC did not waive any dividends during the year ended June 30, 2014.

 Conversion of the MHC to Stock Form.  Federal regulations permit the MHC to convert from the mutual form of organization to the capital stock form of organization, commonly referred to as a second step conversion.  In a second step conversion a new holding company would be formed as a successor to the Company, the MHC’s corporate existence would end and certain depositors of the Bank would receive the right to subscribe for shares of the new holding company.  In a second step conversion, each share of common stock held by stockholders other than the MHC would be automatically converted into a number of shares of common stock of the new holding company determined pursuant to an exchange ratio that ensures that the Company’s stockholders own the same percentage of common stock in the new holding company as they owned in the Company immediately prior to the second step conversion.   The total number of shares held by the Company’s stockholders after a second step conversion also would be increased by any purchases by the Company’s stockholders in the stock offering of the new holding company conducted as part of the second step conversion.

Under the Dodd-Frank Act, waived dividends must be taken into account in determining the appropriate exchange ratio for a second-step conversion of a mutual holding company unless the mutual holding company has waived dividends prior to December 1, 2009.

Acquisition of Control.  Under the Federal Change in Bank Control Act, a notice must be submitted to the Federal Reserve if any person (including a company), or group acting in concert, seeks to acquire “control” of a savings and loan holding company.  An acquisition of “control” can occur upon the acquisition of 10% or more of the voting stock of a savings and loan holding company or as otherwise defined by the Federal Reserve.  Under the Change in Bank Control Act, the Federal Reserve has 60 days from the filing of a complete notice to act, taking into consideration certain factors, including the financial

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and managerial resources of the acquirer and the anti-trust effects of the acquisition.  Any company that so acquires control is then subject to regulation as a savings and loan holding company.

Regulation of the Bank

General.As a New Jersey chartered, FDIC-insured bank, the Bank is regulated by the New Jersey Department of Banking and Insurance and the FDIC. The Bank’s operations are subject to extensive regulation, including restrictions or requirements with respect to loans to one borrower, the percentage of non-mortgage loans or investments to total assets, capital distributions, permissible investments and lending activities, liquidity, transactions with affiliates and community reinvestment. The Bank must file regulatory reports concerning its activities and financial condition, and must obtain regulatory approvals prior to entering into certain transactions, such as mergers with or acquisitions of other financial institutions. The New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation regularly examine the Bank and prepare reports to the Bank’s Board of Directors on deficiencies, if any, found in its operations. The regulatory authorities have substantial discretion to impose enforcement action on an institution that fails to comply with applicable regulatory requirements, particularly with respect to its capital requirements.

Federal Deposit Insurance. The Bank’s deposits are insured to applicable limits by the FDIC.  The maximum deposit insurance amount is $250,000.  The FDIC has adopted a risk-based premium system that provides for quarterly assessments based on an insured institution’s ranking in one of four risk categories based on their examination ratings and capital ratios.  The assessment base is the institution’s average consolidated assets less average tangible equity.  Insured banks with more than $1.0 billion in assets must calculate quarterly average assets based on daily balances while smaller banks and newly chartered banks may use weekly averages.  In the case of a merger, the average assets of the surviving bank for the quarter must include the average assets of the merged institution for the period in the quarter prior to the merger. Average assets would be reduced by goodwill and other intangibles.  Average tangible equity equals Tier 1 capital. For institutions with more than $1.0 billion in assets average tangible equity must be calculated on a weekly basis while smaller institutions may use the quarter-end balance.  The base assessment rate for insured institutions in Risk Category I range from 5 to 9 basis points and for institutions in Risk Categories II, III, and IV, the base assessment rate is 14, 23 and 35 basis points, respectively.  An institution’s assessment rate is reduced based on the amount of its outstanding unsecured long-term debt and for institutions in Risk Categories II, III and IV may be increased based on their brokered deposits.

In addition, all FDIC-insured institutions are required to pay assessments to the FDIC to fund interest payments on bonds issued by the Financing Corporation (“FICO”), an agency of the Federal government established to recapitalize the Federal Savings and Loan Insurance Corporation.  The FICO assessment rates, which are determined quarterly, averaged 0.62 basis points of insured deposits on an annualized basis in fiscal year 2014.  These assessments will continue until the FICO bonds mature in 2017.

Regulatory Capital Requirements.  Federal Deposit Insurance Corporation capital regulations require savings institutions to meet three minimum capital standards: (1) tangible capital equal to 1.5% of total adjusted assets, (2) “Tier 1” or “core” capital equal to at least 4% (3% if the institution has received the highest possible rating on its most recent examination) of total adjusted assets, and (3) risk-based capital equal to 8% of total risk-weighted assets. At June 30, 2014, the Bank was in compliance with the minimum capital standards and qualified as “well capitalized.”  For the Bank’s compliance with these regulatory capital standards, see Note 14 to the consolidated financial statements. In assessing an institution’s capital adequacy, the Federal Deposit Insurance Corporation takes into consideration not

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only these numeric factors but also qualitative factors, and has the authority to establish higher capital requirements for individual institutions where necessary.

The Federal Deposit Insurance Corporation may require any savings institution that has a risk-based capital ratio of less than 8%, a ratio of Tier 1 capital to risk-weighted assets of less than 4% or a ratio of Tier 1 capital to total adjusted assets of less than 4% (3% if the institution has received the highest rating on its most recent examination) to take certain action to increase its capital ratios. If the savings institution’s capital is significantly below the minimum required levels of capital or if it is unsuccessful in increasing its capital ratios, the institution’s activities may be restricted.

For purposes of the capital regulations, tangible capital is defined as core capital less all intangible assets except for certain mortgage servicing rights. Tier 1 or core capital is defined as common stockholders’ equity, non-cumulative perpetual preferred stock and related surplus, minority interests in the equity accounts of consolidated subsidiaries, and certain non-withdrawable accounts and pledged deposits of mutual Banks. The Bank does not have any non-withdrawable accounts or pledged deposits. Tier 1 and core capital are reduced by an institution’s intangible assets, with limited exceptions for certain mortgage and non-mortgage servicing rights and purchased credit card relationships. Both core and tangible capital are further reduced by an amount equal to the savings institution’s debt and equity investments in “non-includable” subsidiaries engaged in activities not permissible for national banks other than subsidiaries engaged in activities undertaken as agent for customers or in mortgage banking activities and subsidiary depository institutions or their holding companies.

The risk-based capital standard for savings institutions requires the maintenance of total capital of 8% of risk-weighted assets. Total capital equals the sum of core and supplementary capital. The components of supplementary capital include, among other items, cumulative perpetual preferred stock, perpetual subordinated debt, mandatory convertible subordinated debt, intermediate-term preferred stock, the portion of the allowance for loan losses not designated for specific loan losses and up to 45% of unrealized gains on equity securities. The portion of the allowance for loan and lease losses includable in supplementary capital is limited to a maximum of 1.25% of risk-weighted assets. Overall, supplementary capital is limited to 100% of core capital. For purposes of determining total capital, a savings institution’s assets are reduced by the amount of capital instruments held by other depository institutions pursuant to reciprocal arrangements and by the amount of the institution’s equity investments (other than those deducted from core and tangible capital) and its high loan-to-value ratio land loans and non-residential construction loans.

A savings institution’s risk-based capital requirement is measured against risk-weighted assets, which equal the sum of each on-balance-sheet asset and the credit-equivalent amount of each off-balance-sheet item after being multiplied by an assigned risk weight. These risk weights range from 0% for cash to 100% for delinquent loans, property acquired through foreclosure, commercial loans, and certain other assets.

Qualified Thrift Lender Test.Savings institutions must meet a qualified thrift lender test or they become subject to the business activity restrictions and branching rules applicable to national banks. To qualify as a qualified thrift lender, a savings institution must either (i) be deemed a “domestic building and loan association” under the Internal Revenue Code by maintaining at least 60% of its total assets in specified types of assets, including cash, certain government securities, loans secured by and other assets related to residential real property, educational loans and investments in premises of the institution or (ii) satisfy the statutory qualified thrift lender test set forth in the Home Owners’ Loan Act by maintaining at least 65% of its portfolio assets in qualified thrift investments (defined to include residential mortgages and related equity investments, certain mortgage-related securities, small business loans, student loans and credit card loans). For purposes of the statutory qualified thrift lender test, portfolio assets are defined

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as total assets minus goodwill and other intangible assets, the value of property used by the institution in conducting its business, and specified liquid assets up to 20% of total assets. A savings institution must maintain its status as a qualified thrift lender on a monthly basis in at least nine out of every twelve months. The Bank met the qualified thrift lender test as of June 30, 2014 and in each of the last twelve months and, therefore, qualifies as a qualified thrift lender.

A bank that fails the qualified thrift lender test and does not convert to a bank charter generally will be prohibited from:  (1) engaging in any new activity not permissible for a national bank, (2) paying dividends not permissible under national bank regulations, and (3) establishing any new branch office in a location not permissible for a national bank in the institution’s home state. In addition, if the institution does not requalify under the qualified thrift lender test within three years after failing the test, the institution would be prohibited from engaging in any activity not permissible for a national bank and would have to repay any outstanding advances from the Federal Home Loan Bank as promptly as possible.

Community Reinvestment Act. Under the Community Reinvestment Act, every insured depository institution, including the Bank, has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods. The Community Reinvestment Act does not establish specific lending requirements or programs for financial institutions nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community. The Community Reinvestment Act requires the depository institution’s record of meeting the credit needs of its community to be assessed and taken into account in the evaluation of certain applications by such institution, such as a merger or the establishment of a branch office by the Bank. An unsatisfactory Community Reinvestment Act examination rating may be used as the basis for the denial of an application. The Bank received a “satisfactory” rating in its most recent Community Reinvestment Act examination.
 

Federal Home Loan Bank System. The Bank is a member of the Federal Home Loan Bank of New York, which is one of twelve regional federal home loan banks. Each Federal Home Loan Bank serves as a reserve or central bank for its members within its assigned region. It is funded primarily from funds deposited by financial institutions and proceeds derived from the sale of consolidated obligations of the Federal Home Loan Bank System. It makes loans to members pursuant to policies and procedures established by its board of directors.

As a member, the Bank is required to purchase and maintain stock in the Federal Home Loan Bank of New York in an amount equal to the greater of 1% of its aggregate unpaid residential mortgage loans, home purchase contracts or similar obligations at the beginning of each year or 5% of its outstanding Federal Home Loan Bank advances.   The FHLB imposes various limitations on advances such as limiting the amount of certain types of real estate related collateral to 30% of a member’s capital and limiting total advances to a member.

The Federal Home Loan Banks are required to provide funds for the resolution of troubled savings institutions and to contribute to affordable housing programs through direct loans or interest subsidies on advances targeted for community investment and low- and moderate-income housing projects. These contributions have adversely affected the level of Federal Home Loan Bank dividends paid and could continue to do so in the future. In addition, these requirements could result in the Federal Home Loan Banks imposing a higher rate of interest on advances to their members.

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Changes to Regulatory Capital Requirements

In July 2013, the federal banking agencies approved amendments to their regulatory capital rules to conform them with the international regulatory standards agreed to by the Basel Committee on Banking Supervision in the accord often referred to as “Basel III”.  The revisions establish new higher capital ratio requirements, tighten the definitions of capital, impose new operating restrictions on banking organizations with insufficient capital buffers and increase the risk weighting of certain assets including residential mortgages. The new capital requirements apply to all banks and savings associations, bank holding companies with more than $500 million in assets and all savings and loan holding companies regardless of asset size. The rules became effective for institutions with over $250 billion in assets and internationally active institutions starting in January 2014 and will become effective for all other institutions beginning in January 2015.  The following discussion summarizes the changes that are most likely to affect the Company and the Bank.

New and Higher Capital Requirements.  The regulations establish a new capital measure called “Common Equity Tier 1 Capital” which will consist of common stock instruments and related surplus (net of treasury stock), retained earnings, accumulated other comprehensive income and, subject to certain adjustments, minority common equity interests in subsidiaries.  Unlike the current rules which exclude unrealized gains and losses on available-for-sale debt securities from regulatory capital, the rules would generally require accumulated other comprehensive income to flow through to regulatory capital.  Depository institutions and their holding companies would be required to maintain Common Equity Tier 1 Capital equal to 4.5% of risk-weighted assets by 2015.

The regulations increase the required ratio of Tier 1 Capital to risk-weighted assets from the current 4% to 6% by 2015. Tier 1 Capital would consist of Common Equity Tier 1 Capital plus Additional Tier 1 Capital elements which would include non-cumulative perpetual preferred stock.  Cumulative preferred stock (other than cumulative preferred stock issued to the U.S. Treasury under the TARP Capital Purchase Program or the Small Business Lending Fund) will no longer qualify as Additional Tier 1 Capital.  Trust preferred securities and other non-qualifying capital instruments issued prior to May 19, 2010 by bank and savings and loan holding companies with less than $15 billion in assets as of December 31, 2009, or by mutual holding companies may continue to be included in Tier 1 Capital but will be phased out over 10 years beginning in 2016 for all other banking organizations.  These elements, however, could be included in Tier 2 Capital which could also include qualifying subordinated debt.  The regulations also require a minimum Tier 1 leverage ratio of 4% for all institutions eliminating the 3% option for institutions with the highest supervisory ratings.  The minimum required ratio of total capital to risk-weighted assets would remain at 8%.

Capital Buffer Requirement. In addition to higher capital requirements, depository institutions and their holding companies will be required to maintain a capital buffer of at least 2.5% of risk-weighted assets over and above the minimum risk-based capital requirements.  Institutions that do not maintain the required capital buffer will become subject to progressively more stringent limitations on the percentage of earnings that can be paid out in dividends or used for stock repurchases and on the payment of discretionary bonuses to senior executive management.  The capital buffer requirement will be phased in over four years beginning in 2016.  The capital buffer requirement effectively raises the minimum required risk-based capital ratios to 7% Common Equity Tier 1 Capital, 8.5% Tier 1 Capital and 10.5% Total Capital on a fully phased-in basis.

Changes to Prompt Corrective Action Capital Categories.  The Prompt Corrective Action rules have been amended to incorporate a Common Equity Tier 1 Capital requirement and to raise the capital requirements for certain capital categories.  In order to be adequately capitalized for purposes of the prompt corrective action rules, a banking organization will be required to have at least an 8% Total Risk-

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Based Capital Ratio, a 6% Tier 1 Risk-Based Capital Ratio, a 4.5% Common Equity Tier 1 Risk Based Capital Ratio and a 4% Tier 1 Leverage Ratio.  To be well capitalized, a banking organization will be required to have at least a 10% Total Risk-Based Capital Ratio, an 8% Tier 1 Risk-Based Capital Ratio, a 6.5% Common Equity Tier 1 Risk Based Capital Ratio and a 5% Tier 1 Leverage Ratio.

Additional Deductions from Capital. Banking organizations will be required to deduct goodwill and other intangible assets (other than certain mortgage servicing assets), net of associated deferred tax liabilities, from Common Equity Tier 1 Capital.  Deferred tax assets arising from temporary timing differences that could not be realized through net operating loss carrybacks would continue to be deducted but deferred tax assets that could be realized through NOL carrybacks would not be deducted but would be subject to 100% risk weighting.  Defined benefit pension fund assets, net of any associated deferred tax liability, will be deducted from Common Equity Tier 1 Capital unless the banking organization has unrestricted and unfettered access to such assets.  Reciprocal cross-holdings of capital instruments in any other financial institutions will now be deducted from capital, not just holdings in other depository institutions.  For this purpose, financial institutions are broadly defined to include securities and commodities firms, hedge and private equity funds and non-depository lenders.  Banking organizations will also be required to deduct non-significant investments (less than 10% of outstanding stock) in other financial institutions to the extent these exceed 10% of Common Equity Tier 1 Capital subject to a 15% of Common Equity Tier 1 Capital cap.  Greater than 10% investments must be deducted if they exceed 10% of Common Equity Tier 1 Capital.  If the aggregate amount of certain items excluded from capital deduction due to a 10% threshold exceeds 17.65% of Common Equity Tier 1 Capital, the excess must be deducted.  Savings associations will continue to be required to deduct investments in subsidiaries engaged in activities not permitted for national banks.

Changes in Risk-Weightings.  The federal banking agencies did not adopt a proposed regulation that would have significantly changed the risk-weighting for residential mortgages.  However, the regulations do apply a 250% risk-weighting to mortgage servicing rights, deferred tax assets that cannot be realized through NOL carrybacks and significant (greater than 10%) investments in other financial institutions. The regulations also create a new 150% risk-weighting category for “high volatility commercial real estate loans” which are credit facilities for the acquisition, construction or development of real property other than one- to four-family residential properties or commercial real projects where: (i) the loan-to-value ratio is not in excess of interagency real estate lending standards; and (ii) the borrower has contributed capital equal to not less than 15% of the real estate’s “as completed” value before the loan was made.

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Item 1A. Risk Factors

Not applicable as the Company is a “smaller reporting company.”

Item 1B. Unresolved Staff Comments

Not applicable.

Item 2. Properties

At June 30, 2014, our investment in property and equipment, net of depreciation and amortization, totaled $8.5 million, including leasehold improvements and construction in progress. The following table lists our offices.

Office Location	Year Facility Opened		Leased or Owned
Millington Main Office 1902 Long Hill Road Millington, NJ	1994	(1)	Owned
Dewy Meadow Branch Office 415 King George Road Basking Ridge, NJ	2002		Leased
RiverWalk Branch Office 675 Martinsville Road Basking Ridge, NJ	2005	(2)	Leased
Martinsville Branch Office 1924 Washington Valley Road Martinsville, NJ	2006		Leased
Bernardsville Branch Office 122 Morristown Road Bernardsville, NJ	2008		Owned

__________________

(1) The Bank’s main office opened in 1911 in Millington, New Jersey. The Bank moved into its current main office in 1994.

(2) The Bank’s first branch office opened in 1998 in Liberty Corner, New Jersey. This office was relocated in 2005.

Item 3. Legal Proceedings

The Bank, from time to time, is a party to routine litigation which arises in the normal course of business, such as claims to enforce liens, condemnation proceedings on properties in which we hold security interests, claims involving the making and servicing of real property loans, and other issues incident to our business. There were no lawsuits pending or known to be contemplated against the Company or the Bank at June 30, 2014 that would have a material effect on operations or income.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Purchases of Equity Securities

(a)           Market Information. The Company’s common stock trades on the NASDAQ Stock Market under the symbol “MSBF”. The table below shows the reported high and low closing prices of common stock reported by NASDAQ and dividends declared during the periods indicated.

	High		Low		Dividends
2013
Quarter ended September 30, 2012	$	6.09	$	5.25	$	-
Quarter ended December 31, 2012	$	7.34	$	4.26	$	-
Quarter ended March 31, 2013	$	7.72	$	6.50	$	-
Quarter ended June 30, 2013	$	7.88	$	6.06	$	-
2014
Quarter ended September 30, 2013	$	7.86	$	7.01	$	-
Quarter ended December 31, 2013	$	8.82	$	7.01	$	-
Quarter ended March 31, 2014	$	9.10	$	7.00	$	-
Quarter ended June 30, 2014	$	8.30	$	7.87	$	-

Dividends. Declarations of dividends by the Board of Directors depend on a number of factors, including investment opportunities, growth objectives, financial condition, profitability, tax considerations, minimum capital requirements, regulatory limitations, and general economic as well as stock market conditions. The timing, frequency and amount of dividends are determined by the Board of Directors.

Stockholders. As of September 19, 2014, there were approximately 528 shareholders of record of the Company’s common stock. This number does not include brokerage firms, banks and registered clearing agents acting as nominees for an indeterminate number of beneficial (“street name”) owners.

(b) Use of Proceeds.

Not applicable.

(c)   Issuer Purchases of Equity Securities.

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Treasury stock repurchases during the fourth quarter of fiscal year 2014 for the Company were as follows:

				Total number of shares	Maximum number of
				Purchased as part of	Shares that may be
	Total number of	Average price		Publicly announced	Purchased under the
Period	shares purchased	paid per share		plans or programs	plans or programs
April, 2014	-	$	-	-	59,837
May, 2014	-		-	-	59,837
June, 2014	-		-	-	59,837
			-
Total	-	$	-	-

Item 6. Selected Financial Data

Not applicable as the Company is a smaller reporting company.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion and analysis reflects the Company’s consolidated financial statements and other relevant statistical data and is intended to enhance your understanding of our financial condition and results of operations. You should read the information in this section in conjunction with the Company’s consolidated financial statements and accompanying notes thereto beginning on page F-1 following Item 15 of this Form 10-K.

Overview

Our primary business is attracting retail deposits from the general public and using those deposits, together with funds generated from operations, principal repayments on securities and loans and borrowed funds, for our lending and investing activities. Our loan portfolio consists of one-to-four-family residential real estate mortgages, commercial real estate mortgages, construction loans, commercial and industrial loans, home equity loans and lines of credit, and other consumer loans. We also invest in U.S. Government obligations and mortgage-backed securities and, to a lesser extent, corporate bonds.

We reported net income of $988,000 for the fiscal year ended June 30, 2014 as compared to a net loss of $1.4 million for fiscal 2013.

Net interest income for fiscal 2014 was up approximately $259,000 or 2.8% as compared to fiscal 2013.   Non-interest expense decreased by $131,000 or 1.6%, while non-interest income increased by $74,000 or 11.4% for the same comparative period.  The net interest rate spread decreased in fiscal 2014 to 2.86%, compared to 2.90% for fiscal 2013, mainly as a result of a lower interest rate environment.  For the year ended June 30, 2014, interest income decreased by $40,000 or 0.3% while interest expense decreased by $299,000 or 11.0% as compared to fiscal 2013.

Total assets were $345.2 million at June 30, 2014, a 2.1% decrease compared to $352.6 million at June 30, 2013. The decrease in assets occurred primarily as the result of a $17.4 million decrease in cash and cash equivalent balances, offset in part by a $7.0 million increase in loans receivable, net and a $4.0 million increase in securities held to maturity.  Deposits were $263.4 million at June 30, 2014, compared to $280.5 million at June 30, 2013.  FHLB advances were $38.0 million at June 30, 2014 compared to $30.0 million at June 30, 2013.

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Stockholders’ equity at June 30, 2014 was $40.8 million compared to our stockholders’ equity at the prior fiscal year-end of $39.5 million. The Company had net income of $988,000 for the fiscal year ended June 30, 2014.   The increase in paid in capital of $143,000 was related primarily to the recognition of stock based compensation expense, while the unallocated common stock held by ESOP decreased by $168,000.  The accumulated other comprehensive loss balance increased by $2,000 for the year ended June 30, 2014, while treasury stock remained unchanged for both  comparative fiscal year end dates.  Our return on average equity for fiscal 2014 was 2.46% compared to (3.45%) for fiscal 2013.

The Company experienced a reduction in deposits during the year ended June 30, 2014, primarily due to an extended low interest rate environment.  Cash and cash equivalents decreased by $17.4 million or 70.5% and deposits decreased by $17.1 million or 6.1%, while loans receivable, net, and investment securities held to maturity increased by $7.0 million or 3.1% and $4.0 million or 5.0%, respectively.  The Company’s borrowings increased by $8.0 million or 26.7% as of June 30, 2014 compared to June 30, 2013.

Critical Accounting Policies

Our accounting policies are integral to understanding the results reported and are described in Note 2 to our consolidated financial statements beginning on page F-1. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated statements of financial condition and revenues and expenses for the periods then ended. Actual results could differ significantly from those estimates. A material estimate that is particularly susceptible to significant change relates to the determination of the allowance for loan losses.

The allowance for loan losses is established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is maintained at a level by management which represents the evaluation of known and inherent risks in the loan portfolio at the consolidated balance sheet date that are both probable and reasonable to estimate. Management’s periodic evaluation of the adequacy of the allowance is based on the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions, and other relevant factors. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant change, including the amounts and timing of future cash flows expected to be received on impaired loans.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examinations.

The allowance calculation methodology includes segregation of the total loan portfolio into segments. The Company’s loans receivable portfolio is comprised of the following segments: residential mortgage, commercial real estate, construction, consumer and, commercial and industrial. Some segments of the Company’s loan receivable portfolio are further disaggregated into classes which allows management to better monitor risk and performance.

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The residential mortgage loan segment is disaggregated into two classes: one-to four-family loans, which are primarily first liens, and home equity loans, which consist of first and second liens.  The commercial real estate loan segment consists of both owner and non-owner occupied loans which have medium risk due to historical activity on these type loans.  The construction loan segment is further disaggregated into two classes: one-to four-family owner occupied, which includes land loans, whereby the owner is known and there is less risk, and other, whereby the property is generally under development and tends to have more risk than the one-to four-family owner occupied loans.  The commercial and industrial loan segment consists of loans made for the purpose of financing the activities of commercial customers. The majority of commercial and industrial loans are secured by real estate and thus carry a lower risk than traditional commercial and industrial loans.  The consumer loan segment consists primarily of installment loans (direct and indirect) and overdraft lines of credit connected with customer deposit accounts.  

The allowance consists of specific, general and unallocated components. The specific component is related to loans that are classified as impaired.  For loans 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 pools of loans by loan class and is based on historical loss experience adjusted for qualitative factors. These qualitative risk factors include:

1.	Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices.
2.	National, regional, and local economic and business conditions as well as the condition of various market segments, including the value of underlying collateral for collateral dependent loans.
3.	Nature and volume of the portfolio and terms of loans.
4.	Experience, ability, and depth of lending management and staff.
5.	Volume and severity of past due, classified and nonaccrual loans as well as and other loan modifications.
6.	Quality of the Company’s loan review system, and the degree of oversight by the Company’s Board of Directors.
7.	Existence and effect of any concentrations of credit and changes in the level of such concentrations.
8.	Effect of external factors, such as competition and legal and regulatory requirements.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation.

The unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

Management evaluates individual loans in all of the loan segments (including loans in residential mortgage and consumer segments) for possible impairment if the loan is either in nonaccrual status or is risk rated Substandard or worse or has been modified in a troubled debt restructuring.  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

34

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.

Loans the terms of which are modified are classified as troubled debt restructurings if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty.  Concessions granted under a troubled debt restructuring generally involve a reduction in interest rate below market rate given the associated credit risk, or an extension of a loan’s stated maturity date. Non-accrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification.   Loans classified as troubled debt restructurings are designated as impaired until they are ultimately repaid in full or foreclosed and sold.

Once the determination has been made that a loan is impaired, impairment is measured by comparing the recorded investment in the loan to one of the following:(a) present value of expected cash flows (discounted at the loan’s effective interest rate), (b) loan’s observable market price or (c) fair value of collateral adjusted for expected selling costs.  The method is selected on a loan by loan basis with management primarily utilizing the fair value of collateral method.

The estimated fair values of the real estate collateral are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property.

The estimated fair values of the non-real estate collateral, such as accounts receivable, inventory and equipment, are determined based on the borrower’s financial statements, inventory reports, accounts receivable agings or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets.

The evaluation of the need and amount of the allowance for impaired loans and whether a loan can be removed from impairment status is made on a quarterly basis.  The Company’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition.

Comparison of Financial Condition at June 30, 2014 and 2013

General. Total assets were $345.2 million at June 30, 2014, compared to $352.6 million at June 30, 2013.  The Company experienced a $17.4 million or 70.5% decrease in cash and cash equivalent balances and a $1.1 million or 25.5% decrease in other asset balances, while loans receivable, net, and securities held to maturity balances increased by $7.0 million and $4.0 million or 3.1% and 5.0%, respectively.  Deposits decreased $17.1 million or 6.1%, while advances from the Federal Home Loan Bank of New York increased by $8.0 million of 26.7%.  The decrease in cash and cash equivalent balances was primarily due to the decrease in deposit balances, while the increase in loans receivable, net and securities held to maturity balances was primarily achieved through  increases in borrowings from the Federal Home Loan Bank of New York during this period.

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Total assets decreased by $7.3 million or 2.1% between years, as did total liabilities by $8.6 million or 2.8%, and the ratio of average interest-earning assets to average-interest bearing liabilities increased to 114.09% for fiscal 2014 as compared to 109.33% for fiscal 2013.  Stockholders’ equity increased $1.3 million or 3.3% to $40.8 million at June 30, 2014 compared to $39.5 million at June 30, 2013.

Loans. Loans receivable, net, increased $7.0 million, or 3.1% from $223.3 million at June 30, 2013 to $230.3 million at June 30, 2014. As a percentage of assets, loans increased to 66.7% from 63.3%. The Company’s one-to-four family and construction loans grew by $6.6 million and $3.6 million or 4.8% and 40.7%, respectively, as did commercial and industrial and personal loans by $399,000 and $4,000, or 4.3% and 12.5%, respectively.  Correspondingly, home equity and commercial real estate loans decreased by $2.2 million and $135,000 or 5.4% and 0.4%, respectively, as did automobile, overdraft protection and deposit account loans decreased by $78,000, $14,000 and $9,000 or 70.3%, 8.0% and 1.5%, respectively, between June 30, 2013 and June 30, 2014.

Securities. Our portfolio of securities held to maturity was at $84.9 million at June 30, 2014 as compared to $80.9 million at June 30, 2013. Maturities, calls and principal repayments during the year totaled $4.3 million as compared to $41.6 million during the prior year. We purchased $8.4 million of new securities during the year ended June 30, 2014 compared to $71.8 million during the year ended June 30, 2013.

Deposits. Total deposits at June 30, 2014 were $263.4 million, a $17.1 million decrease as compared to $280.5 million at June 30, 2013. Demand deposits, in aggregate, increased by $4.5 million, and certificates of deposit accounts decreased by $11.4 million, while savings and club accounts decreased by $10.1 million.

Borrowings. Total borrowings were $38.0 million at June 30, 2014 compared to $30.0 million at June 30, 2013.  The Company borrowed $8.0 million in overnight funds at June 30, 2014 from the Federal Home Loan Bank of New York and did not have any short-term borrowings at June 30, 2013.  The Company did not repay any long term borrowings during the fiscal year ended June 30, 2014.

Equity. Stockholders’ equity was $40.8 million at June 30, 2014 compared to $39.5 million at June 30, 2013, an increase of $1.3 million or 3.3%. The Company had net income of $988,000 for the fiscal year ended June 30, 2014.  The increase in paid-in capital of $143,000 related primarily to recognition of stock based compensation expense, while the unallocated common stock held by ESOP decreased by $168,000.  The accumulated other comprehensive loss balance increased by $2,000 at  June 30, 2014 compared to  June 30, 2013, while treasury stock remained unchanged for the same comparative period end dates.

Comparison of Operating Results for the Two Years Ended June 30, 2014

General. Our results of operations depend primarily on our net interest income. Net interest income is the difference between the interest income we earn on our interest-earning assets and the interest we pay on our interest-bearing liabilities. It is a function of the average balances of loans and investments versus deposits and borrowed funds outstanding in any one period and the yields earned on those loans and investments and the cost of those deposits and borrowed funds. Our results of operations are also affected by our provision for loan losses, non-interest income and non-interest expense. Non-interest income includes service fees and charges, and income on bank owned life insurance. Non-interest expense includes salaries and employee benefits, occupancy and equipment expense and other general and administrative expenses such as service bureau fees and advertising costs.

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The Company reported net income of $988,000 for the year ended June 30, 2014 compared to a net loss of $1.4 million for the year ended June 30, 2013, representing a $2.4 million or 171.3% increase.  This increase was primarily due to a decrease in the provision for loan losses, an increase in net interest income and non-interest income and, a decrease in non-interest expenses offset by an increase in income taxes for the year ended June 30, 2014, compared to the year ended June 30, 2013.

Net Interest Income. Net interest income for the year ended June 30, 2014 amounted to $9.6 million, 2.8% higher than net interest income for the year ended June 30, 2013 of $9.3 million. Interest income decreased by $40,000, or 0.3%, and interest expense decreased by $299,000 or 11.0% for the year ended June 30, 2014.

Average earning assets increased by $9.3 million or 3.0% for the year ended June 30, 2014, compared to the year ended June 30, 2013, while the average rate on earning assets decreased by 13 basis points to 3.72% for the year ended June 30, 2014, resulting in a decrease of $40,000 or 0.3% in total interest income compared to the year ended June 30, 2013.Interest income on loans decreased by $402,000 or 3.9% for the year ended June 30, 2014, compared to the year ended June 30, 2013, as a result of decreases in both the average yield on loans receivable and the average balance of loans outstanding.   The average yield decreased by 7 basis points to 4.32%. Average loans receivable balances decreased $5.6 million or 2.4% to $232.1 million for the year ended June 30, 2014, compared to $237.8 million for the year ended June 30, 2013. Interest income on securities held to maturity increased by $366,000 or 24.3% for the year ended June 30, 2014, compared to the year ended June 30, 2013. Average securities held to maturity balances increased $16.6 million or 24.0% for the year ended June 30, 2014, compared to the year ended June 30, 2013 and, the yield increased  1 basis point to 2.19% for the year ended June 30, 2014, compared to the year ended June 30, 2013. Interest income on other interest-earning assets decreased by $4,000 or 4.3% for the year ended June 30, 2014, compared to the year ended June 30, 2013 due to a $1.7 million or 28.3% decrease in average balance, offset by a 52 basis point increase in yield to 2.08%.

Total interest expense decreased $299,000 or 11.0% for the year ended June 30, 2014, compared to the year ended June 30, 2013. Average interest-bearing liabilities decreased $3.8 million or 1.3%, from $286.0 million for the year ended June 30, 2013, to $282.2 million for the year ended June 30, 2014, and the average rate on interest-bearing liabilities decreased by 9 basis points to 0.86 % for the year ended June 30, 2014, resulting in a decrease of $299,000 or 11.0% in total interest expense compared to the year ended June 30, 2013. Interest expense on deposits decreased $352,000 or 17.5% for the year ended June 30, 2014, compared to the year ended June 30, 2013, as a result of a 10 basis point reduction to 0.66% in the average rate on interest-bearing deposits, and a $13.6 million or 5.2% decrease in average balance of interest-bearing deposits. The average balance of NOW, super NOW and money market demand account balances increased $2.4 million or 6.6%, while the average balance of savings balances decreased $3.0 million or 2.7%, and the average balance of certificates of deposit decreased by $13.1 million or 11.4% for the year ended June 30, 2014 compared to the same period ended June 30, 2013. The average rate on savings and club deposits, NOW, super NOW and money market demand accounts and certificates of deposit decreased by 1 basis point, 1 basis point, and 13 basis points, respectively, for the year ended June 30, 2014 compared to the year ended June 30, 2013.  Total interest expense on FHLB advances was $767,000 for the year ended June 30, 2014 compared to $714,000 for the year ended June 30, 2013.  Average FHLB advances were $33.1 million for the year ended June 30, 2014 compared to $23.3 million for the year ended June 30, 2013, an increase of $9.8 million or 41.9%.  The average rate on FHLB advances decreased by 74 basis points to 2.32% for the year ended June 30, 2014 compared to the year ended June 30, 2013.

Our net interest rate spread was 2.86% for the year ended June 30, 2014 compared to 2.90% for the year ended June 30, 2013. The spread decreased during the year ended June 30, 2014 as our average

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yield on interest-earning assets decreased by 13 basis points to 3.72% from 3.85%, offset in part by a decrease in the cost of interest-bearing liabilities of 9 basis points to 0.86% from 0.95%, compared to the same period ended June 30, 2013.

Provision for Loan Losses. The loan loss provision for the year ended June 30, 2014 was $600,000 compared to $4.0 million for the year ended June 30, 2013.  The provision for loan losses for the year ended June 30, 2013 included an additional provision of $2.0 million deemed necessary to support the Company’s planned asset disposition strategy approved by the Company’s Board of Directors during the quarter ended December 31, 2012, the goal of which was to rapidly reduce (through strategies such as short sales, cash for keys, deeds in lieu of foreclosure and/or bulk sales) the dollar amount of non-performing loans in the Company’s loan portfolio and thereby reduce the costs associated with the foreclosure process.  The Company’s management reviews the level of the allowance for loan losses on a quarterly basis based on a variety of factors including, but not limited to, (1) the risk characteristics of the loan portfolio, (2) current economic conditions, (3) actual losses previously experienced, (4) the Company’s level of loan growth and (5) the existing level of reserves for loan losses that are probable and estimable. This analysis resulted in a lower provision for loan loss being required for the year ended June 30, 2014.  The reduction in the level of provision for loan loss primarily reflects lower levels of specific reserves related to non-performing loans individually evaluated for impairment which continued to decrease as a result of various above mentioned disposition activities.  Also, there was a stabilization of the quantitative and qualitative factors during the twelve months ended June 30, 2014 compared to-upward-trending factors during the twelve period ended June 30, 2013, thus further reducing the need for additional provisions as of June 30, 2014.  The Company had $1.2 million in charge-offs and $57,000 in recoveries for the year ended June 30, 2014 compared to $2.9 million in charge-offs and $56,000 in recoveries for the year ended June 30, 2013.  The Company had $8.3 million in non-performing loans as of June 30, 2014, compared to $14.1 million as of June 30, 2013.  The allowance for loan losses as a percentage of total loans was 1.56% at June 30, 2014, compared to 1.87% at June 30, 2013, while the allowance for loan losses as a percentage of non-performing loans ratio increased from 30.30% at June 30, 2013 to 44.34% at June 30, 2014, due to decreases in total non-performing loans at June 30, 2014 compared to June 30, 2013.  Non-performing loans to total loans and net charge-offs to average loans outstanding ratios were 3.51% and 0.51%, respectively, at and for the year ended June, 30, 2014 compared to 6.16% and 1.19% at and for the year ended June 30, 2013.

Non-Interest Income. This category includes fees derived from checking accounts, ATM transactions, debit card use and mortgage related fees. It also includes increases in the cash-surrender value of our bank owned life insurance. Overall, non-interest income was $724,000 for the year ended June 30, 2014 compared to $650,000 for the year ended June 30, 2013, an increase of $74,000 or 11.4%.

Income from fees and service charges totaled $407,000 for the year ended June 30, 2014 compared to $329,000 for the year ended June 30, 2013, an increase of $78,000 or 23.7%.  The increase was due in part to an increase in certificate of deposit and demand deposit account services fees, an increase in ATM fees, and a $22,000 penalty fee received on the early prepayment of a mortgage-backed security that the Bank had held in its held to maturity investment portfolio.

The unrealized loss on the Bank’s trading security portfolio was $1,000 for the year ended June 30, 2013.  The Bank had liquidated its trading security portfolio during the year ended June 30, 2013.

Income on bank owned life insurance was $217,000  in each of the years ended June 30, 2014 and 2013.

Other non-interest income was $100,000 and $103,000 for the years ended June 30, 2014 and 2013, respectively.  The decrease was primarily attributable to a decrease in miscellaneous operating

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income, offset by an increase in income from late charges.

 Non-Interest Expenses. Total non-interest expenses decreased by $131,000 or 1.6% during the year ended June 30, 2014 and amounted to $8.2 million as compared to $8.3 million for the year ended June 30, 2013.

Other non-interest expense totaled $860,000 for the year ended June 30, 2014, compared to $983,000 for the year ended June 30, 2013, a decrease of $123,000 or 12.5%.  The decrease in other non-interest expense was primarily attributable to decreases in other real estate and non-operating expenses.  Salaries and employee benefits expense decreased by $75,000 or 1.9% to $3.8 million for the year ended June 30, 2014 compared to $3.9 million for the year ended June 30, 2013.  The decrease in salaries and employee benefits expense was primarily due a decrease in stock based compensation expense.  Occupancy and equipment expense decreased by $60,000 or 4.3% to $1.3 for the year ended June 30, 2014 compared to $1.4 million for the year ended June 30, 2013.  The decrease in occupancy and equipment expense was primarily due to a decrease in depreciation expense.  Directors’ compensation expense totaled $444,000 for the year ended June 30, 2014 compared to $495,000 for the year ended June 30, 2013, representing a reduction of $51,000 or 10.3%.  The decrease in directors’ compensation expense was primarily due a decrease in stock based compensation expense.  Advertising expense totaled $144,000 for the year ended June 30, 2014 compared to $162,000 for the year ended June 30, 2013, representing a reduction of $18,000 or 11.1%.  The decrease in advertising expense was attributable to a reduction in spending. FDIC assessment expense totaled $410,000 for the year ended June 30, 2014 compared to $291,000 for the year ended June 30, 2013, an increase of $119,000 or 40.9%.  The increase in FDIC assessment expense related to the increase in factors used in calculation of the assessment.  Service bureau fees increased by $73,000 or 13.2% to $626,000 for the year ended June 30, 2014 compared to $553,000 for the year ended June 30, 2013.  The increase in service bureau fees was related to the expansion of services.  Professional services expense increased slightly by $4,000 or 0.7% to $547,000 for the year ended June 30, 2014 compared to $543,000 for the year ended June 30, 2013.

Income Taxes. The income tax expense for the year ended June 30, 2014 was $548,000 or 35.7% of income before taxes as compared to a tax benefit of $987,000 or 41.6% of the reported loss before income taxes for the year ended June 30, 2013.

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Average Balance Sheet. The following tables set forth certain information for the years ended June 30, 2014, 2013 and 2012.  The average yields and costs are derived by dividing interest income and expense by the average daily balance of assets and liabilities, respectively, for the periods presented.

	Year Ended June 30,
	2014								2013								2012
	Average  Balance			Interest Earned/ Paid		Average Yield/ Cost			Average Balance			Interest Earned/ Paid		Average Yield/ Cost			Average Balance			Interest Earned/ Paid		Average Yield/ Cost
	(Dollars in thousands)
Interest-earning assets:
Loans receivable(1)	$	232,148		$	10,033		4.32	%	$	237,776		$	10,435		4.39	%	$	248,124		$	11,783		4.75	%
Securities		85,561			1,870		2.19	%		68,978			1,504		2.18	%		60,710			1,929		3.18	%
Other interest-earning assets(2)		4,276			89		2.08	%		5,963			93		1.56	%		6,572			89		1.35	%
Total interest-earning assets		321,985			11,992		3.72	%		312,717			12,032		3.85	%		315,406			13,801		4.38	%
Non-interest-earning assets		24,258								33,567								32,443
Total assets	$	346,243							$	346,284							$	347,849
Interest-bearing liabilities:
NOW, super NOW & money market demand	$	39,356			50		0.13	%	$	36,918			51		0.14	%	$	34,012			60		0.18	%
Savings and club deposits		107,960			234		0.22	%		110,916			251		0.23	%		112,901			417		0.37	%
Certificates of deposit		101,801			1,371		1.35	%		114,876			1,705		1.48	%		121,858			2,175		1.78	%
Total interest-bearing deposits		249,117			1,655		0.66	%		262,710			2,007		0.76	%		268,771			2,652		0.99	%
Federal Home Loan Bank of New York advances		33,108			767		2.32	%		23,329			714		3.06	%		20,000			684		3.42	%
Total interest-bearing liabilities		282,225			2,422		0.86	%		286,039			2,721		0.95	%		288,771			3,336		1.16	%
Non-interest-bearing deposits		21,598								18,691								16,094
Other non-interest-bearing liabilities		2,198								1,438								1,964
Total liabilities		306,021								306,168								306,829
Stockholders’ equity		40,222								40,116								41,020
Total liabilities and stockholders’ equity	$	346,243							$	346,284							$	347,849
Net interest income/net interest rate spread(3)				$	9,570		2.86	%				$	9.311		2.90	%				$	10,465		3.22	%
Net interest margin(4)							2.97	%							2.98	%							3.32	%
Ratio of interest-earning assets to interest-bearing liabilities		114.09	%							109.33	%							109.22	%

________________

(1) Non-accruing loans have been included, and the effect of such inclusion was not material.  The allowance for loan losses is excluded, while construction loans in process and deferred fees are included.

(2) Includes Federal Home Loan Bank of New York stock at cost and term deposits with other financial institutions.

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

(4)         Net interest margin represents net interest income as a percentage of average interest-earning assets.

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Rate/Volume Analysis. The following table reflects the sensitivity of our interest income and interest expense to changes in volume and in prevailing interest rates during the periods indicated. Each category reflects the:  (1) changes in volume (changes in volume multiplied by past rate); (2) changes in rate (changes in rate multiplied by past volume); and (3) net change. The net change attributable to the combined impact of volume and rate has been allocated proportionally to the absolute dollar amounts of change in each.

	Year Ended June 30,									Year Ended June 30,
	2014 vs. 2013									2013 vs. 2012
	Increase (Decrease)									Increase (Decrease)
	Due to									Due to
	Volume				Rate			Net		Volume				Rate	Net
	(In thousands)
Interest and dividend income:
Loans receivable	$	(240	)	$	(162	)	$	(402	)	$	(478	)	$	(870	)	$	(1,348	)
Securities		359			7			366			238			(663	)		(425	)
Other interest-earning assets		(30	)		26			(4	)		(9	)		13			4
Increase  (decrease) in      total interest income		89			(129	)		(40	)		(249	)		(1,520	)		(1,769	)
Interest expense:
NOW and money market accounts		3			(4	)		(1	)		5			(14	)		(9	)
Savings and club		(6	)		(11	)		(17	)		(7	)		(159	)		(166	)
Certificates of deposit		(189	)		(145	)		(334	)		(119	)		(351	)		(470	)
Total interest-bearing deposits		(192	)		(160	)		(352	)		(121	)		(524	)		(645	)
Federal Home Loan Bank of New York advances		253			(200	)		53			107			(77	)		30
Increase in total interest expense		61			(360	)		(299	)		(14	)		(601	)		(615	)
Change in net interest income	$	28		$	231		$	259		$	(235	)	$	(919	)	$	(1,154	)

Liquidity, Commitments and Capital Resources

The Bank must be capable of meeting its customer obligations at all times. Potential liquidity demands include funding loan commitments, cash withdrawals from deposit accounts and other funding needs as they present themselves. Accordingly, liquidity is measured by our ability to have sufficient cash reserves on hand, at a reasonable cost and/or with minimum losses.

Senior management is responsible for managing our overall liquidity position and risk and is responsible for ensuring that our liquidity needs are being met on both a daily and long term basis. The Financial Review Committee, comprised of senior management and chaired by President and Chief Executive Officer is responsible for establishing and reviewing our liquidity procedures, guidelines, and strategy on a periodic basis.

Our approach to managing day-to-day liquidity is measured through our daily calculation of investable funds and/or borrowing needs to ensure adequate liquidity. In addition, senior management constantly evaluates our short-term and long-term liquidity risk and strategy based on current market conditions, outside investment and/or borrowing opportunities, short and long-term economic trends, and anticipated short and long-term liquidity requirements. The Bank’s loan and deposit rates may be adjusted as another means of managing short and long-term liquidity needs. We do not at present participate in derivatives or other types of hedging instruments to meet liquidity demands, as we take a conservative approach in managing liquidity.

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At June 30, 2014, the Bank had outstanding commitments to originate loans of $2.1 million, unused lines of credit of $20.1 million (including $16.8 million for home equity lines of credit), and standby letters of credit of $247,000. Certificates of deposit scheduled to mature in one year or less at June 30, 2014, totaled $62.1 million.

The Bank had contractual obligations related to the long-term operating leases for the three branch locations that it leases (Dewy Meadow, RiverWalk and Martinsville). For additional information regarding the Bank’s lease commitments as of June 30, 2014, see Note 10 to our consolidated financial statements beginning on page F-1.

The Bank has access to cash through borrowings from the Federal Home Loan Bank, as needed, to meet its day-to-day funding obligations. At June 30, 2014, its total loans to deposits ratio was 87.4%. At June 30, 2014, the Bank’s collateralized borrowing limit with the Federal Home Loan Bank was $69.5 million, of which $30.0 million was outstanding. As of June 30, 2014, the Bank also had a $20.0 million line of credit with a financial institution for reverse repurchase agreements (which is a form of borrowing) that it could access if necessary.

Consistent with its goals to operate a sound and profitable financial organization, the Bank actively seeks to maintain its status as a well-capitalized institution in accordance with regulatory standards. As of June 30, 2014, the Bank exceeded all applicable regulatory capital requirements.  See Note 14 to our consolidated financial statements beginning at page F-1 for more information about the Bank’s regulatory capital compliance.

Off-Balance Sheet Arrangements

We are a party to financial instruments with off-balance-sheet risk in the normal course of our business of investing in loans and securities as well as in the normal course of maintaining and improving the Bank facilities. These financial instruments include significant purchase commitments such as commitments to purchase investment securities or mortgage-backed securities and commitments to extend credit to meet the financing needs of our customers. At June 30, 2014, our significant off-balance sheet commitments consisted of commitments to originate loans of $2.1 million, construction loans in process of $2.5 million, unused lines of credit of $20.1 million (including $16.8 million for home equity lines of credit) and standby letters of credit of $247,000.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance-sheet instruments. Since a number of commitments typically expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. For additional information regarding our outstanding lending commitments at June 30, 2014, see Note 15 to our consolidated financial statements beginning on page F-1.

42 

Impact of Inflation

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These principles require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative purchasing power of money over time due to inflation.

Our primary assets and liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates, however, do not necessarily move in the same direction or with the same magnitude as the price of goods and services, since such prices are affected by inflation. In a period of rapidly rising interest rates, the liquidity and maturities of our assets and liabilities are critical to the maintenance of acceptable performance levels.

The principal effect of inflation on earnings, as distinct from levels of interest rates, is in the area of non-interest expense. Expense items such as employee compensation, employee benefits and occupancy and equipment costs may be subject to increases as a result of inflation. An additional effect of inflation is the possible increase in the dollar value of the collateral securing loans that we have made. We are unable to determine the extent, if any, to which properties securing our loans have appreciated in dollar value due to inflation.

Recent Accounting Pronouncements

Note 20 to the consolidated financial statements is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Management of Interest Rate Risk and Market Risk

Qualitative Analysis. Because the majority of our assets and liabilities are sensitive to changes in interest rates, a significant form of market risk for us is interest rate risk, or changes in interest rates.

We derive our income mainly from the difference or “spread” between the interest earned on loans, securities and other interest-earning assets, and interest paid on deposits, borrowings and other interest-bearing liabilities. In general, the larger the spread, the more we earn. When market rates of interest change, the interest we receive on our assets and the interest we pay on our liabilities will fluctuate. This can cause decreases in our spread and can adversely affect our income.

Several years ago market interest rates were at historically low levels. Beginning in June 2004 through June 2007, the U.S. Federal Reserve increased its target federal funds rate, raising it 17 times, from 1.00% to 5.25% during this period. The Federal Reserve subsequently reduced its target federal fund rate 3 times during the fiscal year ended June 30, 2009 from 0 to 1/4%.  A normalization of the prior year’s inverted yield occurred during that year as a result of the Federal Reserves policy. The Federal Reserve did not make any further changes to it federal funds rate during the fiscal year-ended June 30, 2014.  The federal funds rate and other short-term market interest rates, which we use as a guide to our deposit pricing, have decreased, while intermediate-and long-term market interest rates have remained stable, which we use as a guide to our loan pricing, have not decreased nor increased proportionately. The Bank has begun to realize a reduction in its deposit portfolio average rate more recently.

Quantitative Analysis. The following table presents the Bank’s net portfolio value as of June 30, 2014. The Bank outsources its interest rate risk modeling and the net portfolio values in this table were calculated by an outside consultant, based on information provided by the Bank.

43

		At June 30, 2014
		Net Portfolio Value			Net Portfolio Value as % of Present Value of Assets
Changes in Rates		$ Amount	$ Change		% Change		Net Portfolio Value Ratio		Basis Point Change
		(In thousands)
+500	bp	___		(48,299)		-100.00		0.00		(1,389 bp)
+400	bp	16,574		( 31,725)		-65.68		5.59		(830 bp)
+300	bp	25,350		(22,949)		-47.52		8.18		(571 bp)
+200	bp	35,611		(12,688)		-26.27		11.00		(289 bp)
+100	bp	43,558		(4,741)		-9.82		12.94		(95 bp)
0	bp	48,299		N/A		N/A		13.89		N/A

    (1) The -100bp and -200bp scenarios are not disclosed due to the low prevailing interest rate environment

Future interest rates or their effect on net portfolio value or net interest income are not predictable. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, prepayments, and deposit run-offs, and should not be relied upon as indicative of actual results. Certain shortcomings are inherent in this type of computation. Although certain assets and liabilities may have similar maturity or periods of repricing, they may react at different times and in different degrees to changes in the market interest rates. The interest rate on certain types of assets and liabilities, such as demand deposits and savings accounts, may fluctuate in advance of changes in market interest rates, while rates on other types of assets and liabilities may lag behind changes in market interest rates. Certain assets, such as adjustable rate mortgages, generally have features that restrict changes in interest rates on a short-term basis and over the life of the asset. In the event of a change in interest rates, prepayments and early withdrawal levels could deviate significantly from those assumed in making calculations set forth above. Additionally, an increased credit risk may result as the ability of many borrowers to service their debt may decrease in the event of an interest rate increase.

Notwithstanding the discussion above, the quantitative interest rate analysis presented above indicates that a rapid increase or decrease in interest rates would adversely affect our net interest margin and earnings.

Item 8. Financial Statements and Supplementary Data

The Company’s consolidated financial statements are contained in this Annual Report on Form 10-K immediately following Item 15.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

On July 2, 2013, the Company dismissed ParenteBeard LLC (“ParenteBeard”), as the Company’s auditors and, with the approval of the Audit Committee of the Company’s Board of Directors, on July 2, 2013, appointed BDO USA, LLP (“BDO”) as its independent registered public accounting firm.

The report of ParenteBeard on the Company’s consolidated financial statements as of and for the fiscal year ended June 30, 2012 and 2011 did not contain any adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles.

During the Company’s two most recent fiscal years and during the interim period from the end of the most recently completed fiscal year through the date of their dismissal, there were (i) no disagreements with ParenteBeard on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of

44 

ParenteBeard would have caused it to make reference to such disagreement in its reports on the Company’s financial statements; and (ii) no “reportable events” (as such term is defined in Item 304(a)(2)(v) of Regulation S-K).

Item 9A. Controls and Procedures

    (a)Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule l3a-l5(e) promulgated under the Securities Exchange Act of 1934, as amended) as of June 30, 2014. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of June 30, 2014.

     (b)Internal Control Over Financial Reporting

1.           Management's Annual Report on Internal Control Over Financial Reporting.

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a- 15(f). The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that  transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of the changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Under supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control-Integrated Framework, management concluded that our internal control over financial reporting was effective as of June 30, 2014.

/s/ Michael A. Shriner	/s/ Jeffrey E. Smith
Michael A. Shriner	Jeffrey E. Smith
President and Chief Executive Officer	Vice President and Chief Financial Officer

45 

2. Report of Independent Registered Public Accounting Firm

Not applicable as the Company is a smaller reporting company.

3.   Changes in Internal Control over Financial Reporting

No change in the Company’s internal controls over financial reporting (as defined in Rule l3a-l5(f) promulgated under the Securities Exchange Act of 1934, as amended) occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information that appears under the headings “Proposal I – Election of Directors,” “Section 16(a) Beneficial Reporting Compliance” and “Corporate Governance” in the Registrant’s definitive proxy statement for the Registrant’s 2014 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission (the “Proxy Statement”) is incorporated herein by reference.

The Company has adopted a Code of Ethics that applies to its CEO and CFO/Chief Accounting Officer.  A copy of the Code of Ethics is posted on the Company’s website at www.millingtonsb.com/about-us/investor-relations.

Item 11. Executive Compensation

The information that appears under the headings “Executive Compensation” and “Director Compensation” in the Proxy Statement is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

(a) Security Ownership of Certain Beneficial Owners. Information required by this item is incorporated herein by reference to the section captioned “Principal Holders of our Common Stock” in the Proxy Statement.

(b) Security Ownership of Management. Information required by this item is incorporated herein by reference to the section captioned “Principal Holders of our Common Stock” and “Proposal I – Election of Directors” in the Proxy Statement.

(c) Changes in Control. Management of the Company knows of no arrangements, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the registrant.

(d) Securities Authorized for Issuance Under Equity Compensation Plans. Set forth below is information as of June 30, 2014 with respect to compensation plans under which equity securities of the Registrant are authorized for issuance.

46

Equity Compensation Plan Information
	(A) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		(B) Weighted-average Exercise Price of Outstanding Options, Warrants and Rights	(C) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A))
Equity compensation plans approved by shareholders:
2008 Stock Compensation and Incentive Plan (1)	385,574	$	10.75	0
Total	385,574	$	10.75	0

___________

(1)   Includes 110,164 shares of restricted stock awards approved on November 9, 2009 by the Company’s stockholders which were granted on December 14, 2009 with a weighted average grant price of $8.15.  All shares were granted as of December 14, 2009.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information required by this item is incorporated by reference to the information contained under the sections captioned “Corporate Governance-Director Independence” and “Related Party Transactions “ in the Proxy Statement.

Item 14. Principal Accounting Fees and Services

The information relating to this item is incorporated herein by reference to the information contained under the section captioned “Proposal II – Ratification of the Appointment of the Independent Registered Public Accounting Firm” in the Proxy Statement.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(1)           The following financial statements and the reports of independent registered public accounting firms appear in this Annual Report on Form 10-K immediately after this Item 15:

Consolidated Statements of Financial Condition as of June 30, 2014 and 2013

Consolidated Statements of Comprehensive Income (Loss) For the Years Ended June 30, 2014 and 2013

Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended June 30, 2014 and 2013

Consolidated Statements of Cash Flows for the Years Ended June 30, 2014 and 2013

Notes to Consolidated Financial Statements

(2)           All schedules are omitted because they are not required or applicable, or the required information is shown in the consolidated financial statements or the notes thereto.

(3)           The following exhibits are filed as part of this report:

47

 

3.1 Charter of MSB Financial Corp. *

3.2 Bylaws of MSB Financial Corp. *

4 Stock Certificate of MSB Financial Corp.*

10.1 Employment Agreement with Michael A. Shriner, As Amended and Restated

10.2 Employment Agreement with Jeffrey E. Smith, As Amended and Restated

10.3 Employment Agreement with Nancy E. Schmitz, As Amended and Restated

10.4 Form of Executive Life Insurance Agreement*

10.5 Millington Savings Bank Executive Incentive Retirement Plan Agreement for the Benefit of Senior Officers*

10.6 Millington Savings Bank Directors Consultation and Retirement Plan*

10.7 MSB Financial Corp. 2008 Stock Compensation and Incentive Plan, As Amended and Restated**

16 Letter of concurrence from ParenteBeard, LLC ***

21 Subsidiaries of the Registrant

23.1 Consent of BDO USA, LLP

31.1 Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS XBRL Instance Document ****

101.SCH XBRL Schema Document ****

101.CAL XBRL Calculation Linkbase Document ****

101.LAB XBRL Labels Linkbase Document ****

101.PRE XBRL Presentation Linkbase Document ****

_______________

* Incorporated by reference to the Registrant’s Form S-1 Registration Statement File No. 333-137294)

** Incorporated by reference to the Registrant’s Form S-8 Registration Statement File No. 333-164264)

*** Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K filed on July 8, 2013. (File No. 001-33246).

**** Submitted as Exhibits 101 to this Form 10-K are documents formatted in XBRL (Extensible Business Reporting Language).

48

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

MSB Financial Corp.

Millington, New Jersey

We have audited the accompanying consolidated statement of financial condition of MSB Financial Corp. and Subsidiaries (collectively the “Company”) as of June 30, 2014 and 2013 and the related consolidated statements of comprehensive income (loss), changes in stockholders’ equity, and cash flows for the years then ended.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of MSB Financial Corp. and Subsidiaries at June 30, 2014 and 2013, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ BDO USA, LLP

New York, New York

September 26, 2014

F-1 

MSB Financial Corp. and Subsidiaries

Consolidated Statements of Financial Condition

	June 30,
	2014			2013
	(Dollars in thousands)
Cash and due from banks	$	6,432		$	19,941
Interest-earning demand deposits with banks		876			4,814
Cash and Cash Equivalents		7,308			24,755
Securities held to maturity (fair value of $83,636 and $78,367,         respectively)		84,932			80,912
Loans receivable, net of allowance for loan losses of $3,686 and $4,270,         respectively		230,275			223,256
Other real estate owned		409			530
Premises and equipment		8,486			8,882
Federal Home Loan Bank of New York stock, at cost		2,190			1,827
Bank owned life insurance		7,136			6,919
Accrued interest receivable		1,318			1,229
Other assets		3,192			4,282
Total Assets	$	345,246		$	352,592
Liabilities and Stockholders’ Equity
Liabilities
Deposits:
Non-interest bearing	$	22,206		$	18,559
Interest bearing		241,183			261,908
Total Deposits		263,389			280,467
Advances from Federal Home Loan Bank of New York		38,000			30,000
Advance payments by borrowers for taxes and insurance		494			132
Other liabilities		2,553			2,480
Total Liabilities		304,436			313,079
Commitments and Contingencies		—			—
Stockholders’ Equity
Common stock, par value $0.10; 10,000,000 shares authorized; 5,620,625 issued; 5,010,437 and 5,010,437 shares outstanding		562			562
Paid-in capital		24,616			24,473
Retained earnings		21,670			20,682
Unallocated common stock held by ESOP (75,878 and 92,740 shares, respectively)		(759	)		(927	)
Treasury stock, at cost, 610,188 and 610,188 shares, respectively		(5,244	)		(5,244	)
Accumulated other comprehensive loss		(35	)		(33	)
Total Stockholders’ Equity		40,810			39,513
Total Liabilities and Stockholders’ Equity	$	345,246		$	352,592

See notes to consolidated financial statements.

F-2 

MSB Financial Corp. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

	Years Ended June 30,
	2014		2013
	(Dollars in thousands)
Interest Income
Loans receivable, including fees	$	10,033	$	10,435
Securities held to maturity		1,870		1,504
Other		89		93
Total Interest Income		11,992		12,032
Interest Expense
Deposits		1,655		2,007
Borrowings		767		714
Total Interest Expense		2,422		2,721
Net Interest Income		9,570		9,311
Provision for Loan Losses		600		4,044
Net Interest Income after Provision for Loan Losses		8,970		5,267
Non-Interest Income
Fees and service charges		407		329
Income from bank owned life insurance		217		217
Unrealized gain on trading securities		-		1
Other		100		103
Total Non-Interest Income		724		650
Non-Interest Expenses
Salaries and employee benefits		3,784		3,859
Directors compensation		444		495
Occupancy and equipment		1,343		1,403
Service bureau fees		626		553
Advertising		144		162
FDIC assessment		410		291
Professional services		547		543
Other		860		983
Total Non-Interest Expenses		8,158		8,289
Income (Loss) before Income Taxes		1,536		(2,372	)
Income Tax Expense (Benefit)		548		(987	)
Net Income (Loss)	$	988	$	(1,385	)
Weighted average number of shares of common stock outstanding-basic and diluted		4,926		4,933
Earnings (Loss) per common share-basic and diluted	$	0.20	$	(0.28	)

See notes to consolidated financial statements.

F-3

MSB Financial Corp. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss) – (Continued)

	Years Ended June 30,
	2014			2013
	(Dollars in thousands)
Other comprehensive (loss) income, net of tax
Defined benefit pension plans:
Actuarial loss arising during period, net of tax of $1 and $36,  respectively	$	2		$	50
Reclassification adjustment for prior service cost included in net income, net of tax of $2 and $4, respectively		2			7
Reclassification adjustment for net actuarial (gain) loss included in net income, net of tax ($5) and $6, respectively		(6	)		11
Other comprehensive (loss)  income		(2	)		68
Comprehensive income (loss)	$	986		$	(1,317	)

See notes to consolidated financial statements.

F-4 

MSB Financial Corp. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

									Unallocated
									Common						Accumulated
									Stock						Other			Total
	Common		Paid-In			Retained			Held by			Treasury			Comprehensive			Stockholders'
	Stock		Capital			Earnings			ESOP			Stock			Loss			Equity
	(Dollars in thousands)
Balance - June 30, 2012	$	562	$	24,214		$	22,067		$	(1,096	)	$	(4,768	)	$	(101	)	$	40,878
Net loss							(1,385	)											(1,385	)
Other comprehensive income, net of tax																68			68
Allocation of ESOP stock				(58	)					169									111
Treasury stock repurchased (74,855 Shares)													(476	)					(476	)
Amortization of restricted stock plan shares (22,023 Shares)				180															180
Stock-based compensation				137															137
Balance - June 30, 2013	$	562	$	24,473		$	20,682		$	(927	)	$	(5,244	)	$	(33	)	$	39,513
Net  income							988												988
Other comprehensive loss, net of tax																(2	)		(2	)
Allocation of ESOP stock				(37	)					168									131
Amortization of restricted stock plan shares (21,584 Shares)				180															180
Balance - June 30, 2014	$	562	$	24,616		$	21,670		$	(759	)	$	(5,244	)	$	(35	)	$	40,810

See notes to consolidated financial statements.

F-5 

MSB Financial Corp. and Subsidiaries

Consolidated Statements of Cash Flows

	Years Ended June 30,
	2014			2013
	(Dollars in thousands)
Cash Flows from Operating Activities
Net income (loss)	$	988		$	(1,385	)
Adjustments to reconcile net income (loss) to net cash provided by        operating activities:
Net accretion of securities discounts and deferred loan fees and costs		(13	)		(263	)
Depreciation and amortization of premises and equipment		496			567
Stock based compensation and allocation of ESOP stock		311			428
Provision for loan losses		600			4,044
Loss on impairment of other real estate owned		—			64
Gain on sale of other real estate owned		(142	)		(62	)
Decrease (increase) in net deferred tax asset		448			(494	)
Income from bank owned life insurance		(217	)		(217	)
Unrealized gain  on trading securities		—			(1	)
(Increase) decrease in accrued interest receivable		(89	)		112
Decrease in other assets		644			257
Increase in other liabilities		69			77
Net Cash Provided by Operating Activities		3,095			3,127
Cash Flows from Investing Activities
Activity in held to maturity securities:
Purchases		(8,380	)		(71,755	)
Maturities, calls and principal repayments		4,262			41,622
(Increase) decrease in loans receivable		(9,203	)		10,674
Purchase of bank premises and equipment		(100	)		(49	)
Purchase of bank owned life insurance		—			(588	)
Purchase of Federal Home Loan Bank of New York stock		(565	)		(462	)
Redemption of Federal Home Loan Bank of New York stock		202			—
Capitalized improvements of other real estate owned		(87	)		(72	)
Proceeds from the sale of other real estate owned		2,045			2,276
Proceeds from sale of trading securities		—			53
Net Cash Used in Investing Activities		(11,826	)		(18,301	)
Cash Flows from Financing Activities
Net decrease in deposits		(17,078	)		(3,331	)
Advances from Federal Home Loan Bank of New York		11,500			10,000
Repayment of advances from Federal Home Loan Bank of New York		(3,500	)		—
Increase in advance payments by borrowers for taxes and insurance		362			35
Cash dividends paid to minority shareholders		—			(56	)
Purchase of treasury stock		—			(476	)
Net Cash  (Used in) Provided by Financing Activities		(8,716	)		6,172
Net Decrease  in Cash and Cash Equivalents		(17,447	)		(9,002	)
Cash and Cash Equivalents – Beginning		24,755			33,757
Cash and Cash Equivalents – Ending	$	7,308		$	24,755

See notes to consolidated financial statements.

F-6 

MSB Financial Corp. and Subsidiaries

Consolidated Statements of Cash Flows (Continued)

	Years Ended June 30,
	2014		2013
	(Dollars in thousands)
Supplementary Cash Flows Information
Interest paid	$	2,425	$	2,723
Income taxes paid	$	1	$	239
Loan receivable transferred to other real estate	$	1,695	$	2,736

See notes to consolidated financial statements.

F-7 

Note 1 – Organization and Business

MSB Financial Corp. (the “Company”) is a federally-chartered corporation organized in 2004 for the purpose of acquiring all of the capital stock that Millington Savings Bank (the “Bank”) issued in its mutual holding company reorganization. The Company’s principal business is the ownership and operation of the Bank.

MSB Financial, MHC (the “MHC”) is a federally-chartered mutual holding company that was formed in 2004 in connection with the mutual holding company reorganization. The MHC has not engaged in any significant business other than its ownership interest in the Company since its formation. So long as the MHC is in existence, it will at all times own a majority of the outstanding stock of the Company. At June 30, 2014, the MHC owned 61.7% of the Company’s outstanding common shares.

The Bank is a New Jersey chartered stock savings bank and its deposits are insured by the Federal Deposit Insurance Corporation (the “FDIC”). The primary business of the Bank is attracting retail deposits from the general public and using those deposits together with funds generated from operations, principal repayments on securities and loans and borrowed funds, for its lending and investing activities. The Bank’s loan portfolio primarily consists of one-to-four family and home equity residential loans, commercial loans, and construction loans. It also invests in U.S. government obligations and mortgage-backed securities. The Bank is regulated by the New Jersey Department of Banking and Insurance and the FDIC. The Board of Governors of the Federal Reserve System (the “Federal Reserve”) regulates the MHC and the Company as savings and loan holding companies.

The primary business of Millington Savings Service Corp (the “Service Corp”) was the ownership and operation of a single commercial rental property, which was sold during the year ended June 30, 2007. Currently the Service Corp is inactive.

Note 2 - Summary of Significant Accounting Policies

Basis of Consolidated Financial Statement Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, the Bank and the Bank’s wholly owned subsidiary, the Service Corp. All significant intercompany accounts and transactions have been eliminated in consolidation.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated statements of financial condition and revenues and expenses for the periods then ended. Actual results could differ significantly from those estimates.

A material estimate that is particularly susceptible to significant change relates to the determination of the allowance for loan losses. Management believes that the allowance for loan losses is adequate. While management uses all available information to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions in the Bank’s market area.  In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for loan losses. Such agencies may require the Bank to recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examinations.

The Company has evaluated events and transactions occurring subsequent to the consolidated statement of financial condition date of June 30, 2014 for items that should potentially be recognized or disclosed in these consolidated financial statements.  The evaluation was conducted through the date these consolidated financial statements were issued.

F-8

Note 2 - Summary of Significant Accounting Policies (Continued)

Cash and Cash Equivalents

Cash and cash equivalents include cash and amounts due from depository institutions and interest-bearing deposits with banks with original maturities of three months or less.

Securities

Investments in debt securities that the Company has the positive intent and ability to hold to maturity are classified as held to maturity securities and reported at amortized cost. Debt and equity securities that are bought and held principally for the purpose of being sold in the near term are classified as trading securities and reported at fair value, with unrealized holding gains and losses included in earnings. Debt and equity securities not classified as trading securities or as held to maturity securities are classified as available for sale securities and reported at fair value, with unrealized holding gains or losses, net of applicable income taxes, reported in a separate component of stockholders’ equity.  The Company had no trading or available for sale securities as of June 30, 2014 and 2013.

Individual securities are considered impaired when their fair value is less than amortized cost. Management evaluates all securities with unrealized losses quarterly to determine if such impairments are “temporary” or “other-than-temporary” in accordance with applicable accounting guidance.  Accordingly, the Company accounts for temporary impairments based upon a security’s classification as trading, available for sale or held to maturity.  Temporary impairments on available for sale securities are recognized, on a tax-effected basis, through other comprehensive income (loss) with offsetting entries adjusting the carrying value of the security and the balance of deferred taxes.  Temporary impairments of held to maturity securities are not recognized in the consolidated financial statements; however, information concerning the amount and duration of impairments on held to maturity securities is disclosed in the notes to the consolidated financial statements.  The carrying value of securities held in the trading portfolio is adjusted to fair value through earnings on a monthly basis.

Other-than-temporary impairments on securities that the Company has decided to sell or will more likely than not be required to sell prior to the full recovery of their fair value to a level equal to or exceeding amortized cost are recognized in earnings.  Otherwise, the other-than-temporary impairment is bifurcated into credit-related and noncredit-related components.  The credit-related impairment generally represents the amount by which the present value of the cash flows expected to be collected on a debt security falls below its amortized cost.  The noncredit-related component represents the remaining portion of the impairment not otherwise designated as credit-related. Credit-related other-than-temporary impairments are recognized in earnings while noncredit-related other-than-temporary impairments are recognized, net of deferred taxes, in other comprehensive income (loss).

The Company reviews its investment portfolio on a quarterly basis for indications of impairment. This review includes analyzing the length of time and the extent to which the fair value of a security has been lower than the cost, and the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer.  The Company also assesses its intent with regard to selling or holding each security as well as any conditions which may require the sale of security prior to the recovery of fair value to a level which equals or exceeds amortized cost.

Discounts and premiums on securities are accreted/amortized to maturity by use of the level-yield method. Gain or loss on sales of securities is based on the specific identification method.

F-9 

Note 2 - Summary of Significant Accounting Policies (Continued)

Concentration of Risk

The Bank’s lending activities are concentrated in loans secured by real estate located in the State of New Jersey.

Loans Receivable

Loans are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct loan origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Company is generally amortizing these amounts over the contractual life of the loan.

For all classes of loans receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due or when management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. Certain loans may remain on accrual status if they are in the process of collection and are either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans, including impaired loans, generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt.  The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments.

Allowance for Credit Losses

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the statement of financial condition date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities, when required, on the consolidated statement of financial condition. The allowance for credit losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. All, or part, of the principal balance of loans receivable that are deemed uncollectible are charged against the allowance for loan losses when management determines that the repayment of that amount is highly unlikely.  Any subsequent recoveries are credited to the allowance for loan losses.  Non-residential consumer loans are generally charged off no later than 120 days past due on a contractual basis, earlier in the event of bankruptcy, or if there is an amount deemed uncollectible.  

The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance.  The allowance is based on the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, the composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examinations.

The allowance calculation methodology includes segregation of the total loan portfolio into segments. The Company’s loans receivable portfolio is comprised of the following segments: residential mortgage, commercial real estate, construction, commercial and industrial and consumer.  Some segments of the

F-10

Note 2 - Summary of Significant Accounting Policies (Continued)

Company’s loan receivable portfolio are further disaggregated into classes which allow management to more accurately monitor risk and performance.

The residential mortgage loan segment is disaggregated into two classes: one-to-four family loans, which are primarily first liens, and home equity loans, which consist of first and second liens.  The commercial real estate loan segment includes owner and non-owner occupied loans which have medium risk based on historical experience with these type of loans.  The construction loan segment is further disaggregated into two classes: one-to-four family owner-occupied, which includes land loans, whereby the owner is known and there is less risk, and other, whereby the property is generally under development and tends to have more risk than the one-to-four family owner-occupied loans.  The commercial and industrial loan segment consists of loans made for the purpose of financing the activities of commercial customers. The majority of commercial and industrial loans are secured by real estate and thus carry a lower risk than traditional commercial and industrial loans.  The consumer loan segment consists primarily of installment loans and overdraft lines of credit connected with customer deposit accounts.

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For 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 pools of loans by loan class. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these classes of loans, adjusted for qualitative factors.  These qualitative risk factors include:

1.	Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices.
2.	National, regional, and local economic and business conditions as well as the condition of various market segments, including the value of underlying collateral for collateral dependent loans.
3.	Nature and volume of the portfolio and terms of loans.
4.	Experience, ability, and depth of lending management and staff.
5.	Volume and severity of past due, classified and nonaccrual loans as well as and other loan modifications.
6.	Quality of the Company’s loan review system, and the degree of oversight by the Company’s Board of Directors.
7.	Existence and effect of any concentrations of credit and changes in the level of such concentrations.
8.	Effect of external factors, such as competition and legal and regulatory requirements.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation.

An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

Impaired Loans

Management evaluates individual loans in all of the loan segments (including loans in the residential mortgage and consumer segments) for possible impairment if the recorded investment in the loan is greater than $200,000 and if the loan is either in nonaccrual status or is risk rated Substandard or worse or has been modified in a troubled debt restructuring.  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

F-11

Note 2 - Summary of Significant Accounting Policies (Continued)

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.

Loans whose terms are modified are classified as a troubled debt restructuring (“TDR”) if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a TDR generally involve a reduction in interest rate below market rate given the associated credit risk, or an extension of a loan’s stated maturity date or capitalization of interest and/or escrow. Nonaccrual TDRs are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification.  Loans classified as TDRs are designated as impaired until they are ultimately repaid in full or foreclosed and sold.  The nature and extent of impairment of TDRs, including those which experienced a subsequent default, is considered in the determination of an appropriate level of allowance for loan losses.

Once the determination has been made that a loan is impaired, impairment is measured by comparing the recorded investment in the loan to one of the following: (a) the present value of expected cash flows (discounted at the loan’s effective interest rate), (b) the loan’s observable market price or (c) the fair value of collateral adjusted for expected selling costs.  The method is selected on a loan by loan basis with management primarily utilizing the fair value of collateral method.

The estimated fair values of the real estate collateral are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property.

The estimated fair values of the non-real estate collateral, such as accounts receivable, inventory and equipment, are determined based on the borrower’s financial statements, inventory reports, accounts receivable agings or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets.

The evaluation of the need and amount of the allowance for impaired loans and whether a loan can be removed from impairment status is made on a quarterly basis.  The Company’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition.

Other Real Estate Owned

Other real estate owned represents real estate acquired through formal foreclosure or by taking possession of the real estate and is initially recorded at the lower of cost or fair value, less estimated selling costs establishing a new cost basis.  Write-downs required at the time of acquisition are charged to the allowance for loan losses establishing a new cost basis.  Thereafter, the Company maintains an allowance for decreases in the properties’ estimated fair value, through charges to earnings.  Such charges are included in other non-interest expense along with any additional property maintenance.

F-12

Note 2 - Summary of Significant Accounting Policies (Continued)

Premises and Equipment

Premises and equipment are comprised of land, at cost, and buildings, building improvements, furnishings and equipment and leasehold improvements, at cost, less accumulated depreciation and amortization. Depreciation and amortization charges are computed on the straight-line method over the following estimated useful lives:

	Years
Building and improvements	5 - 50
Furnishings and equipment	3 – 7
Leasehold improvements	Shorter of useful life
	or term of lease

Significant renewals and betterments are capitalized to the premises and equipment account. Maintenance and repairs are charged to operations in the year incurred. Rental income is netted against occupancy costs in the consolidated statements of income.

Federal Home Loan Bank Stock

Federal law requires a member institution of the Federal Home Loan Bank (“FHLB”) system to hold restricted stock of its district’s FHLB according to a predetermined formula based on advances available and outstanding. The restricted stock is carried at cost.  Management’s determination of whether these shares are impaired is based on an assessment of the ultimate recoverability of its cost rather than by recognizing temporary declines in value.  The determination of whether a decline affects the ultimate recoverability of cost is influenced by criteria such as (1) the significance of the decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB.

Management believes no impairment charge was necessary related to the FHLB restricted stock during fiscal years 2014 or 2013.

Bank Owned Life Insurance

Bank owned life insurance is carried at net cash surrender value. The change in the net cash surrender value is recorded as a component of non-interest income.

Defined Benefit Plans

In accordance with applicable guidance prescribed in FASB ASC 715, “Compensation – Retirement Benefits”, the Company recognizes the over-funded or under-funded status of a defined benefit postretirement plan as an asset or liability in the consolidated statement of financial condition, with changes in the funded status recorded through other comprehensive income (loss) in the year in which those changes occur.  The funded status of the plan is calculated using actuarial concepts which involve making assumptions regarding discount rate, mortality, expected rate of compensation increases and others.

Stock-based Compensation Plans

In accordance with FASB ASC 718, “Compensation – Stock Compensation”, the Company recognizes compensation expense for the total of the fair value of all share-based compensation awards granted over the requisite service periods.  In addition, ASC 718 requires that cash flow activity be reported on a financing

F-13

Note 2 - Summary of Significant Accounting Policies (Continued)

rather than an operating cash flow basis for the benefits, if any, of realized tax deductions in excess of previously recognized tax benefits on compensation expense.

Advertising

The Company expenses advertising and marketing costs as incurred.

Income Taxes Expense (Benefit)

The Company and its subsidiaries file a consolidated federal income tax return with the MHC. Federal income taxes are allocated based on the contribution of their respective income or loss to the consolidated income tax return. Separate state income tax returns are filed.

Federal and state income taxes have been provided in these consolidated financial statements on the basis of reported income (loss). The amounts reflected on the income tax returns differ from these provisions due principally to temporary differences in the reporting of certain items of income and expense for financial reporting and income tax reporting purposes. Deferred income taxes are recorded to recognize such temporary differences.

The Company follows the provisions of FASB ASC 740, “Income Taxes”, formerly FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes (“FIN48”).  ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognizing, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the Company’s evaluation under ASC 740, no significant income tax uncertainties have been identified. Therefore, the Company recognized no adjustment for unrecognized income tax benefits for the years ended June 30, 2014 and 2013. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the consolidated statement of income (loss). The Company did not recognize any interest and penalties for the years ended June 30, 2014 and 2013.  The tax years subject to examination by the taxing authorities are the years ended June 30, 2013, 2012, and 2011.

Off-Balance Sheet Credit-Related Financial Instruments

In the ordinary course of business, the Company enters into commitments to extend credit, including commitments under lines of credit. Such financial instruments are recorded when they are funded.

Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding, exclusive of the Employee Stock Ownership Plan (“ESOP”) shares not yet committed to be released. Diluted earnings per share is calculated by adjusting the weighted average number of shares of common stock outstanding to include the effect of contracts or securities exercisable (such as stock options) or which could be converted into common stock, if dilutive, using the treasury stock method. Diluted earnings (loss) per share did not differ from basic earnings (loss) per share for the years ended June 30, 2014 and 2013, as the 275,410 weighted average number of outstanding stock options for the years ended June 30, 2014 and 2013, were all anti-dilutive and the Company incurred a net loss during 2013.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) includes benefit plans amounts recognized under ASC 715, “Compensation-Retirement Benefits”.  This item of other comprehensive income (loss) reflects, net of tax, prior service costs and unrealized net losses that had not been recognized in the consolidated financial statements prior to the implementation of ASC 715 along with actuarial losses arising during the current period.

F-14

Note 2 - Summary of Significant Accounting Policies (Continued)

Interest Rate Risk

The Bank is principally engaged in the business of attracting deposits from the general public and using these deposits, together with other funds, to purchase securities and to make loans primarily secured by real estate. The potential for interest-rate risk exists as a result of the generally shorter duration of the Bank’s interest-sensitive liabilities compared to the generally longer duration of its interest-sensitive assets. In a rising rate environment, liabilities will generally reprice faster than assets, thereby reducing net interest income. For this reason, management regularly monitors the maturity structure of the Bank’s assets and liabilities in order to measure its level of interest-rate risk and to plan for future volatility.

Note 3 - Stock Offering and Stock Repurchase Program

A Registration Statement on Form S-1 (File No. 333-137294), as amended, was filed by the Company with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, relating to the offer for sale of up to 2,199,375 shares (subject to increase to 2,529,281 shares) of its common stock at $10.00 per share. The offering closed on January 4, 2007 and 2,529,281 shares were sold for gross proceeds of $25,292,810, including 202,342 shares sold to the Bank’s newly established ESOP. Net proceeds of the offering totaled approximately $24.5 million. Concurrent with the closing of the offering, the MHC received 3,091,344 shares of Company common stock in exchange for the 10,000 shares previously owned. At June 30, 2014, the MHC is the majority stockholder of the Company owning 61.7% of the Company’s outstanding common stock. Prior to January 4, 2007, the MHC owned 100% of the Company’s outstanding 10,000 shares of common stock.

Since the first repurchase program authorized by the Company’s Board of Directors on January 29, 2008, the Company has repurchased 610,188 shares of the Company’s common stock through several repurchase programs.  The Company did not repurchase any shares during the year ended June 30, 2014.

The Company did not declare or pay any cash dividends during the years ended June 30, 2014 and 2013.

F-15

Note 4 - Securities Held to Maturity

The amortized cost of securities held to maturity and their fair values are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
June 30, 2014:
U.S. Government agencies	$	49,177	$	49	$	1,551	$	47,675
Mortgage-backed securities		26,089		464		338		26,215
Corporate bonds		4,630		56		5		4,681
Certificates of deposits		5,036		30		1		5,065
	$	84,932	$	599	$	1,895	$	83,636
June 30, 2013:
U.S. Government agencies	$	46,194	$	84	$	2,131	$	44,147
Mortgage-backed securities		24,768		297		754		24,311
Corporate bonds		4,669		15		72		4,612
Certificates of deposits		5,281		17		1		5,297
	$	80,912	$	413	$	2,958	$	78,367

All mortgage-backed securities at June 30, 2014 and 2013 have been issued by FNMA, FHLMC or GNMA and are secured by 1-4 family residential real estate.

The amortized cost and fair value of securities held to maturity at June 30, 2014, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost			Fair Value
	(In thousands)
U.S. Government agencies:
Due after one year through five years	$	23,000	$		22,497
Due after five years through ten years		12,177			11,835
Due thereafter		14,000			13,343
		49,177			47, 675
Mortgage-backed securities		26,089			26,215
Corporate Bonds
Due after one year through five years		4,630			4,681
Certificates of Deposits
Due within one year		1,425			1,427
Due after one year through five years		3,611			3,638
		5,036			5,065
	$	84,932		$	83,636

F-16

Note 4 - Securities Held to Maturity (Continued)

There were no sales of securities held to maturity during the years ended June 30, 2014 and 2013.  At June 30, 2014 and 2013 securities held to maturity with a fair value of approximately $764,000 and $782,000, respectively, were pledged to secure public funds on deposit.

The following table provides the gross unrealized losses and fair value of securities in an unrealized loss position, by the length of time that such securities have been in a continuous unrealized loss position:

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In thousands)
June 30, 2014:
U.S. Government         agencies	$	36,339	$	1,341	$	6,290	$	210	$	42,629	$	1,551
Mortgage-backed securities		17,022		325		816		13		17,838		338
Corporate bonds		1,031		5		—		—		1,031		5
Certificates of deposits		489		1		—		—		489		1
	$	54,881	$	1,672	$	7,106	$	223	$	61,987	$	1,895
June 30, 2013:
U.S. Government         agencies	$	42,048	$	2,131	$	—	$	—	$	42,048	$	2,131
Mortgage-backed securities		18,401		754		—		—		18,401		754
Corporate bonds		2,980		72		—		—		2,980		72
Certificates of deposits		246		1		—		—		246		1
	$	63,675	$	2,958	$	—	$	—	$	63,675	$	2,958

At June 30, 2014, management concluded that the unrealized losses above (which related to thirty-one U.S. Government agency bonds, twenty-two mortgage-backed securities, two corporate bonds and two certificate of deposit compared to thirty-one U.S. Government agency bonds, fourteen mortgage-backed securities, five corporate bonds and one certificate of deposit, as of June 30, 2013) were temporary in nature since they were not related to the underlying credit quality of the issuer.  The Company does not intend to sell these securities and it is not more-likely-than-not that the Company would be required to sell these securities prior to the full recovery of fair value to a level which equals or exceeds amortized cost.  The losses above are primarily related to market conditions and are considered noncredit related and temporary.

F-17

Note 5 - Loans Receivable and Allowance for Loan Losses

The composition of total loans receivable at June 30, 2014 and 2013 was as follows:

	2014			2013
	(In thousands)
Residential mortgage:
One-to-four family	$	143,283		$	136,704
Home equity		38,484			40,682
		181,767			177,386
Commercial real estate		32,036			32,171
Construction		12,517			8,895
Commercial and industrial		9,666			9,267
		54,219			50,333
Consumer:
Deposit accounts		602			611
Automobile		33			111
Personal		36			32
Overdraft protection		161			175
		832			929
Total Loans Receivable		236,818			228,648
Loans in process		(2,491	)		(745	)
Deferred loan fees		(366	)		(377	)
	$	233,961		$	227,526

F-18 

Note 5 - Loans Receivable and Allowance for Loan Losses (Continued)

The following tables present impaired loans by class, segregated by those for which a related allowance was required and those for which a related allowance was not necessary as of June 30, 2014 and 2013.

	June 30, 2014						Year Ended June 30, 2014
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
	(In thousands)
With no related allowance recorded:
Residential mortgage
One-to-four family	$	15,975	$	16,667	$	-	$	14,982	$	620
Home equity		1,740		1,756		-		2,019		41
Commercial real estate		1,973		2,431		-		1,404		76
Construction         One-to-four family owner-occupied		1,707		1,936		-		1,365		97
Other		750		750		-		920		36
Commercial and industrial		648		1,187		-		813		36
		22,793		24,727		-		21,503		906
With an allowance recorded:
Residential mortgage
One-to-four family		-		-		-		632		-
Home equity		-		-		-		294		-
Commercial real estate		-		-		-		752		-
Construction
One-to-four family owner-occupied		-		-		-		341		-
Other		137		138		73		110		3
Commercial and industrial		-		-		-		-		-
		137		138		73		2,129		3
Total:
Residential mortgage
One-to-four family		15,975		16,667		-		15,614		620
Home equity		1,740		1,756		-		2,313		41
Commercial real estate		1,973		2,431		-		2,156		76
Construction
One-to-four family owner-occupied		1,707		1,936		-		1,706		97
Other		887		888		73		1,030		39
Commercial and industrial		648		1,187		-		813		36
	$	22,930	$	24,865	$	73	$	23,632	$	909

(1)   As of June 30, 2014, impaired loans listed above include $16.7 million of loans previously modified in TDRs and as such are considered impaired under GAAP.  As of June 30, 2014, $13.4 million of these loans have been performing in accordance with their modified terms for an extended period of time and as such were removed from non-accrual status and considered performing.

F-19 

Note 5 - Loans Receivable and Allowance for Loan Losses (Continued)

	June 30, 2013						Year Ended June 30, 2013
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
	(In thousands)
With no related allowance recorded:
Residential mortgage
One-to-four family	$	13,817	$	14,747	$	-	$	11,978	$	437
Home equity		3,376		3,406		-		3,399		127
Commercial real estate		1,796		1,867		-		1,742		65
Construction         One-to-four family occupied		-		-		-		387		-
Other		1,601		1,510				671		16
Commercial and industrial		750		1,103		-		536		29
		21,340		22,633		-		18,713		674
With an allowance recorded:
Residential mortgage
One-to-four family		1,469		1,720		58		3,219		34
Home equity		891		1,214		233		737		7
Commercial real estate		1,444		1,804		88		1,512		17
Construction
One-to-four family occupied		1,707		1,936		23		1,230		87
Other		-		-		-		646		-
Commercial and industrial		150		100		31		449		5
		5,661		6,774		433		7,793		150
Total:
Residential mortgage
One-to-four family		15,286		16,467		58		15,197		471
Home equity		4,267		4,620		233		4,136		134
Commercial real estate		3,240		3,671		88		3,254		82
Construction
One-to-four family occupied		1,707		1,936		23		1,617		87
Other		1,601		1,510		-		1,317		16
Commercial and industrial		900		1,203		31		985		34
	$	27,001	$	29,407	$	433	$	26,506	$	824

(1) As of June 30, 2013, impaired loans listed above included $18.1 million of loans previously modified in TDRs and as such are considered impaired under GAAP.  As of June 30, 2013, $11.8 million of these loans have been performing in accordance with their modified terms for an extended period of time and as such were removed from nonaccrual status and considered performing.

Credit Quality Indicators

Management uses an eight point internal risk rating system to monitor the credit quality of the loans in the Company’s commercial real estate, construction and commercial and industrial loan segments.  The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually or when credit deficiencies, such as delinquent loan payments, arise. The criticized rating categories utilized by management generally follow bank regulatory definitions. The first six risk rating categories are considered not criticized, and are aggregated as “Pass” rated.  The “Special Mention” category includes assets that are currently protected, but are potentially weak, resulting in increased credit risk and deserving management’s close attention.  If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects.  Loans classified “Substandard” have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected.  They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any.  Loans classified “Doubtful” have all the weaknesses inherent in loans classified “Substandard” with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable.  Loans classified as a “Loss” are considered uncollectible and subsequently charged off.

F-20 

Note 5 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table presents the classes of the loans receivable portfolio summarized by the aggregate “Pass” and the criticized categories of “Special Mention”, “Substandard”, “Doubtful” and “Loss” within the internal risk rating system as of June 30, 2014 and 2013:

As of June 30, 2014	Pass		Special Mention		Substandard		Doubtful		Loss		Total
	(In thousands)
Commercial real estate	$	27,280	$	3,062	$	1,621	$	-	$	-	$	31,963
Construction
One-to-four family owner-occupied		850		-		1,707		-		-		2,557
Other		6,851		445		64		-		73		7,433
Commercial and industrial		8,769		105		778		-		-		9.652
Total	$	43,750	$	3,612	$	4,170	$	-	$	73	$	51,605

As of June 30, 2013	Pass		Special Mention		Substandard		Doubtful		Loss		Total
	(In thousands)
Commercial real estate	$	27,025	$	2,491	$	2,515	$	-	$	72	$	32,103
Construction
One-to-four family owner-occupied		2,845		-		1,693		-		14		4,552
Other		1,980		988		-		601		-		3,569
Commercial and industrial		8,188		113		923		-		22		9,246
Total	$	40,038	$	3,592	$	5,131	$	601	$	108	$	49,470

Management further monitors the performance and credit quality of the loan receivable portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due.  

F-21 

Note 5 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table represents the classes of the loans receivable portfolio summarized by aging categories of performing loans and non-accrual loans as of June 30, 2014 and 2013:

As of  June 30, 2014	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivables		Nonaccrual Loans		Loans Receivable > 90 Days and Accruing
	(In thousands)
Residential Mortgage
One-to-four family	$	2,496		1,381		2,185		6,062	$	137,048	$	143,110	$	4,346	$	310
Home equity		32		125		1,207		1,364		37,049		38,413		1,586		51
Commercial real estate		-		-		1,248		1,248		30,715		31,963		1,248		-
Construction
One-to-four family owner-occupied		-		-		-		-		2,557		2,557		-		-
Other		-		-		-		-		7,433		7,433		137		-
Commercial and industrial		9		-		170		179		9,473		9,652		635		-
Consumer		4		-		-		4		829		833		-		-
Total	$	2,541	$	1,506	$	4,810	$	8,857	$	225,104	$	233,961	$	7,952	$	361

As of  June  30, 2013	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivables		Nonaccrual Loans		Loans Receivable > 90 Days and Accruing
	(In thousands)
Residential Mortgage
One-to-four family	$	3,910		1,525		5,822		11,257	$	125,189	$	136,446	$	7,955	$	501
Home equity		412		127		1,317		1,856		38,825		40,681		1,502		146
Commercial real estate		782		-		1,805		2,587		29,516		32,103		2,587		-
Construction
One-to-four family owner-occupied		-		-		-		-		4,552		4,552		-		-
Other		1,000		-		601		1,601		1,968		3,569		601		-
Commercial and industrial		472		49		280		801		8,445		9,246		-		-
Consumer		5		-		-		5		924		929		802		-
Total	$	6,581	$	1,701	$	9,825	$	18,107	$	209,419	$	227,526	$	13,447	$	647

F-22

Note 5 - Loans Receivable and Allowance for Loan Losses (Continued)

Allowance for Loan Losses

The following table summarizes the allowance for loan losses and the loan receivable balances, by the portfolio segment segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of June 30, 2014 and 2013.

	As of June 30, 2014
	Residential Mortgage		Commercial Real Estate		Construction		Commercial and Industrial		Consumer		Total
	(In thousands)
Allowance for loan
losses:
Ending Balance	$	2,183	$	860	$	379	$	256	$	8	$	3,686
Ending balance: individually evaluated for impairment	$	-	$	-	$	73	$	-	$	-	$	73
Ending balance: collectively evaluated for impairment	$	2,183	$	860	$	306	$	256	$	8	$	3,613
Loans receivables:
Ending balance	$	181,524	$	31,963	$	9,990	$	9,652	$	832	$	233,961
Ending balance: individually evaluated  for impairment	$	17,715	$	1,973	$	2,594	$	648	$	-	$	22,930
Ending balance: collectively evaluated for impairment	$	163,809	$	29,990	$	7,396	$	9,004	$	832	$	211,031

F-23 

Note 5 - Loans Receivable and Allowance for Loan Losses (Continued)

	As of June 30, 2013
	Residential Mortgage		Commercial Real Estate		Construction		Commercial and Industrial		Consumer		Unallocated		Total
Allowance for loan	(In thousands)
losses:
Ending Balance	$	3,036	$	706	$	238	$	276	$	11	$	3	$	4,270
Ending balance: individually evaluated for impairment	$	291	$	88	$	23	$	31	$	-	$	-	$	433
Ending balance: collectively evaluated for impairment	$	2,745	$	618	$	215	$	245	$	11	$	3	$	3,837
Loans receivables:
Ending balance	$	177,127	$	32,103	$	8,121	$	9,246	$	929	$	-	$	227,526
Ending balance: individually evaluated  for impairment	$	19,553	$	3,240	$	3,308	$	900	$	-	$	-	$	27,001
Ending balance: collectively evaluated for impairment	$	157,574	$	28,863	$	4,813	$	8,346	$	929	$	-	$	200,525

F-24 

Note 5 - Loans Receivable and Allowance for Loan Losses (Continued)

Federal regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate.

The following table presents changes in the allowance for loan losses for the years ended June 30, 2014 and 2013:

	Year Ended June 30, 2014
	Residential  Mortgage			Commercial Real Estate			Construction			Commercial and Industrial			Consumer			Unallocated			Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning	$	3,036		$	706		$	238		$	276		$	11		$	3		$	4,270
Provisions		(351	)		494			246			208			6			(3	)		600
Loans charged-off		(537	)		(340	)		(119	)		(236	)		(9	)		-			(1,241	)
Recoveries		35			-			14			8			-			-			57
Balance, ending	$	2,183		$	860		$	379		$	256		$	8		$	-		$	3,686

	Year Ended June 30, 2013
	Residential  Mortgage			Commercial Real Estate			Construction			Commercial and Industrial			Consumer			Unallocated		Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning	$	1,808		$	445		$	527		$	272		$	13		$	-	$	3,065
Provisions		3,039			609			44			346			3			3		4,044
Loans charged-off		(1,867	)		(348	)		(333	)		(342	)		(5	)		-		(2,895	)
Recoveries		56			-			-			-			-			-		56
Balance, ending	$	3,036		$	706		$	238		$	276		$	11		$	3	$	4,270

F-25 

Note 5 - Loans Receivable and Allowance for Loan Losses (Continued)

Troubled Debt Restructurings

The recorded investment balance of TDRs totaled $16.7 million and $18.1 million at June 30, 2014 and June 30, 2013, respectively.  The majority of the Company’s TDRs are on accrual status. TDRs on accrual status were $13.4 million and $11.8 million at June 30, 2014 and June 30, 2013, while TDRs on non-accrual status were $3.2 million and $6.2 million at those respective dates.  At June 30, 2014 and 2013, the allowance for loan losses included specific reserves of $73,000 and $152,000, respectively, related to TDRs.

The Company had two loans modified as TDRs during the year ended June 30, 2014.  One of the loans was a residential adjustable rate mortgage whereby the borrower was able to pay past due interest and escrow.  The past due principal was re-amortized over the remaining term. There was no change in the interest rate or maturity date.  The other loan was a fixed rate mortgage whereby the past due taxes were capitalized and the Company granted interest-only payments until March 2015.  In addition, tax escrows will be required on an on-going basis.  There was no change in the interest rate or maturity date.

The Company had eighteen loans modified in TDRs during the year ended June 30, 2013. Three of these loans were restructured as interest only for a one-year period. Four of the loans were commercial lines of credit that were extended for another twelve months of which two were given higher rates and two remained at the same rate. One loan had the maturity extended from a 20-year term to a 30-year term with a reduced rate.  Five loans had interest rates reduced for a five-year period. One loan had a rate reduction for a one-year period.  One commercial construction loan was restructured bringing in a new owner and scheduling annual principal step-downs over a three-year period which will result in a full payout. Three loans were restructured by capitalizing past due amounts of interest and escrow and granting lower rates.

F-26

Note 5 - Loans Receivable and Allowance for Loan Losses (Continued)

The following tables summarize by class loans modified into TDRs during the years ended June 30, 2014 and 2013.

	Year Ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
			((Dollars in thousands)
Residential Mortgage
One-to-four family		2	$	1,054	$	1,071
Total		2	$	1,054	$	1,071

	Year Ended June 30, 2013
	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
One-to-four family		10	$	3,625	$	3,582
Commercial real estate		3		1,119		1.063
Construction
Other		1		1,150		987
Commercial and industrial		4		214		214
Total		18	$	6,108	$	5,846

F-27

Note 5 - Loans Receivable and Allowance for Loan Losses (Continued)

The following tables summarize loans modified in TDRs during the previous 12 months and for which there was a subsequent payment default during the years ended June 30, 2014 and June 30, 2013.  A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

	Year Ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investments			Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
Commercial real estate		1	$	409	$		409
Commercial and industrial		2		23			68
Total		3	$	432		$	477

	Year Ended June 30, 2013
	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
One-to-four family		1	$	156	$	127
Total		1	$	156	$	127

F-28 

Note 6 - Premises and Equipment

The components of premises and equipment at June 30, 2014 and 2013 were as follows:

	2014			2013
	(In thousands)
Land	$	1,937		$	1,937
Buildings and improvements		8,477			8,469
Leasehold improvements		1,767			1,787
Furnishings and equipment		1,835			1,887
Assets being developed for future use		15			3
		14,031			14,083
Accumulated depreciation and amortization		(5,545	)		(5,201	)
	$	8,486		$	8,882

Note 7 - Accrued Interest Receivable

The components of interest receivable at June 30, 2014 and 2013 were as follows:

	2014		2013
	(In thousands)
Loans	$	886	$	847
Securities held to maturity		432		382
	$	1,318	$	1,229

F-29 

Note 8 - Deposits

Deposits at June 30, 2014 and 2013 consist of the following classifications:

	2014				2013
	Amount		Average Rate		Amount		Average Rate
	(Dollars in thousands)
Non-interest bearing demand	$	22,206	—	%	$	18,559	—	%
NOW		31,899	0.15			31,973	0.14
Super NOW		4,791	0.20			3,991	0.20
Savings and club		102,241	0.21			112,385	0.21
Money market demand		3,724	0.23			3,611	0.23
Certificates of deposit		98,528	1.32			109,948	1.40
	$	263,389	0.60	%	$	280,467	0.65	%

A summary of certificates of deposit by maturity at June 30, 2014 is as follows (in thousands):

Year ended June 30:
2015	$	62,142
2016		19,058
2017		9,154
2018		3,515
2019		2,527
Thereafter		2,132
	$	98,528

The aggregate amount of certificates of deposit with a minimum denomination of $100,000 was approximately $41,775,000 and $44,740,000 at June 30, 2014 and 2013, respectively. Generally, deposits in excess of $250,000 are not insured by the FDIC.

A summary of interest expense on deposits for the years ended June 30, 2014 and 2013 is as follows:

	2014		2013
	(In thousands)
NOW, super NOW and money market demand	$	50	$	51
Savings and club		233		251
Certificates of deposit		1,372		1,705
	$	1,655	$	2,007

F-30

Note 9 - Borrowings

The Company participates in the FHLB of New York (the “FHLB of NY”) Overnight Advance Program. Advances under this program allow the Company to borrow up to the balance of its qualifying mortgage loans that have been pledged as collateral, less any related outstanding indebtedness. As of June 30, 2014 and 2013, the Company had $69.5 million and $80.8 million, respectively, available for borrowing under this agreement.

Term advances due to the FHLB of NY at June 30, 2014 and 2013 consisted of the following:

Maturity	Fixed Interest Rate			2014		2013
				(in thousands)
February 25, 2016		0.780	%	$	5,000	$	5,000
March 07, 2016		0.780			5,000		5,000
November 27, 2017		3.272			10,000		10,000
March 05, 2018		3.460			10,000		10,000
		2.504	%	$	30,000	$	30,000

The advances are secured by a blanket assignment of unpledged and qualifying mortgage loans.

In addition, the Company had an $8.0 million overnight advance with the Federal Home Loan Bank of New York as of June 30, 2014.  The Company did not have any overnight advances with the Federal Home Loan Bank as of June 30, 2013.

As of June 30, 2014, the Company also had a $20.0 million line of credit with a financial institution for reverse repurchase agreements that it could access if necessary.  There were no amounts outstanding on the line at June 30, 2014 and 2013.

Note 10 - Lease Commitments and Total Rental Expense

The Company leases three branch locations under long-term operating leases. Future minimum lease payments by year and in the aggregate, under noncancellable operating leases with initial or remaining terms of one year or more, consisted of the following at June 30, 2014 (in thousands):

Year Ended June 30:
2015	$	415
2016		415
2017		431
2018		333
2019		263
Thereafter		307
	$	2,164

The total rental expense for all leases was approximately $407,000 for the years ended June 30, 2014 and 2013,  respectively.

F-31

Note 11 - Income Taxes

The total tax expense (benefit) consisted of the following for the years ended June 30, 2014 and 2013:

	2014		2013
	(In thousands)
Current income tax expense (benefit):
Federal	$	7	$	(394	)
State		93		(99	)
		100		(493	)
Deferred income tax expense (benefi)t:
Federal		408		(384	)
State		40		(110	)
		448		(494	)
	$	548	$	(987	)

A reconciliation of the statutory federal income tax at a rate of 34% to the income tax expense (benefit) included in the statements of comprehensive (loss) income at June 30, 2014 and 2013, is as follows:

	2014					2013
	Amount			% of Pretax Income		Amount			% of Pretax Income
	(Dollars in thousands)
Federal income tax at statutory rate	$	522		34.0	%	$	(807	)	34.0	%
State tax, net of federal benefit		88		5.8			(138	)	5.8
Bank Owned Life Insurance		(74	)	(4.8	)		(69	)	2.9
Stock options		(19	)	(1.3	)		57		(2.4	)
Other		31		2.0			(30	)	1.3
	$	548		35.7	%	$	(987	)	41.6	%

The components of the net deferred tax asset at June 30, 2014 and 2013 were as follows:

	2014				2013
	(In thousands)
Deferred tax assets:
Allowances for losses on loans and commitments	$	1,484		$	1,717
Uncollected interest		142			425
Benefit plans		1,007			962
Restricted stock award		72			72
Other		63			56
		2,768			3,232
Deferred tax liabilities
Depreciation		(148	)		(166	)
Net deferred tax asset	$	2,620		$	3,066

F-32

Note 11 - Income Taxes (Continued)

Retained earnings included $1,466,000 at June 30, 2014 and 2013, for which no provision for income tax has been made. These amounts represent deductions for bad debt reserves for tax purposes which were only allowed to savings institutions which met certain definitional tests prescribed by the Internal Revenue Code of 1986, as amended. The Small Business Job Protection Act of 1996 (the “Act”) eliminated the special bad debt deduction granted solely to thrifts. Under the terms of the Act, there would be no recapture of the pre-1988 (base year) reserves. However, these pre-1988 reserves would be subject to recapture under the rules of the Internal Revenue Code if the Bank itself pays a cash dividend in excess of earnings and profits, or liquidates. The Act also provides for the recapture of deductions arising from the “applicable excess reserve” defined as the total amount of reserve over the base year reserve. The Bank’s total reserve exceeds the base year reserve and deferred taxes have been provided for this excess.

F-33

Note 12 - Benefit Plans

Directors’ Retirement Plan

The Bank has a Directors’ Retirement Plan, which provides that certain directors meeting specified age and service requirements may retire and continue to be paid. This plan is unfunded.

The following table sets forth the accumulated benefit obligation, the changes in the plan’s projected benefit obligation and the plan’s funded status as of and for the years ended June 30, 2014 and 2013:

	2014			2013
	(Dollars in thousands)
Accumulated benefit obligation – ending	$	1,356		$	1,231
Projected benefit obligation – beginning	$	1,380		$	1,340
Service cost		22			17
Interest cost		67			56
Actuarial loss		19			(10	)
Benefit payments		(34	)		(23	)
Projected benefit obligation – ending	$	1,454		$	1,380
Plan assets at fair value – beginning	$	—		$	—
Employer contribution		34			23
Benefit payments		(34	)		(23	)
Plan assets at fair value – ending	$	—		$	—
Funded status at end of year (included in other liabilities)	$	1,454		$	1,380
Assumptions:
Discount rate		4.50	%		5.00	%
Rate of compensation increase		3.00	%		3.00	%

F-34 

Note 12 - Benefit Plans (Continued)

Directors’ Retirement Plan (Continued)

Net periodic pension cost for the years ended June 30, 2014 and 2013 included the following:

	2014			2013
	(Dollars in thousands)
Service cost	$	22		$	17
Interest cost		67			56
Amortization of unrecognized loss		17			33
Amortization of unrecognized past service liability		4			11
Net periodic pension cost	$	110		$	117
Assumptions:
Discount rate		5.00	%		4.25	%
Rate of compensation		3.00	%		3.00	%

For the year ended June 30, 2015 the Bank expects to contribute $69,000 to the plan.

Estimated future benefit payments for the years ending June 30, which reflect expected future service, as appropriate, are as follows (in thousands):

2015	$	69
2016		96
2017		103
2018		110
2019		130
2020 – 2023		742

As of June 30, 2014 and 2013, unrecognized past service liabilities and actuarial losses aggregating approximately $240,000 and $244,000 respectively, were included, net of income taxes of $96,000 and $98,000 respectively, in accumulated other comprehensive loss. Approximately $22,000 of this amount is expected to be recognized as a component of net periodic pension cost during the year ending June 30, 2015.

F-35

Note 12 - Benefit Plans (Continued)

Executive Incentive Retirement Plan

The Bank has an unfunded, non-qualified executive incentive retirement plan covering all eligible executives. The plan provides for either a lump sum payment or equal annual installments for a period of fifteen years commencing on the first day of the calendar month following the termination of employment due to retirement, resignation, disability or death. The amount payable is based on the vested balance of the executive’s accumulated awards plus interest. The annual awards are based upon the executive’s base salary in effect at the beginning of the plan year and the Bank’s net income for the prior fiscal year. The percentage vested is based on the sum of the executive’s age and years of service.

The following table sets forth the accumulated benefit obligation, changes in the plan’s projected benefit obligation and the plan’s funded status as of and for the years ended June 30, 2014 and 2013:

	2014			2013
	(Dollars in thousands)
Accumulated benefit obligation – ending	$	459		$	442
Projected benefit obligation – beginning	$	442		$	472
Service cost		39			47
Interest cost		22			20
Actuarial gain		(22	)		(76	)
Benefits paid		(22	)		(21	)
Projected benefit obligation and funded status – ending (included in other liabilities)	$	459		$	442
Assumption:
Discount rate		4.50	%		5.00	%

Net periodic pension cost for the years ended June 30, 2014 and 2013, included the following:

	2014			2013
	(Dollars in thousands)
Service cost	$	39		$	47
Interest cost		22			20
Amortization of unrecognized gain		(28	)		(16	)
Net periodic pension cost	$	33		$	51
Assumption:
Discount rate		5.00	%		4.25	%

F-36

Note 12 - Benefit Plans (Continued)

Executive Incentive Retirement Plan (Continued)

For the year ending June 30, 2015, the Bank expects to contribute $31,000 to the plan.

Estimated future benefit payments for the years ending June 30, which reflect expected future service, as appropriate, are as follows (in thousands):

2015	$	31
2016		31
2017		32
2018		32
2019		33
2020 – 2023		233

As of June 30, 2014 and 2013, actuarial gains of approximately $182,000 and $188,000, respectively, were included, net of income taxes of $73,000 and $75,000, respectively, in accumulated other comprehensive loss.  Approximately $29,000 of this amount is expected to be recognized as a component of net periodic pension cost during the year ending June 30, 2015.

401(k) Savings and Profit Sharing Plan

The Bank sponsors a savings and profit sharing plan, pursuant to Section 401(k) of the Internal Revenue Code (“IRC”), for all eligible employees. The plan has a profit sharing component paid annually by the Bank of 3% of each eligible employee’s compensation. Employees may also elect to defer up to 80% of their compensation, subject to IRC limitations. The Bank will match 50% of the first 6% of the employee’s salary deferral up to a maximum of 3% of each employee’s compensation. The Plan expense amounted to approximately $53,000 and $48,000 for the years ended June 30, 2014 and 2013, respectively. The Bank terminated the annual 3% profit sharing component of the plan, effective December 31, 2012, but still matches 50% of the first 6% of the employee’s salary deferral up to a maximum of 3% of each employee’s compensation.

Employee Stock Ownership Plan

Effective upon completion of the Company’s initial public stock offering, the Bank established an Employee Stock Ownership Plan (“ESOP”) for all eligible employees who complete a twelve-month period of employment with the Bank, have attained the age of 21 and have completed at least 1,000 hours of service in a plan year. The ESOP used $2,023,420 in proceeds from a term loan obtained from the Company to purchase 202,342 shares of Company common stock. The term loan principal is payable over 48 equal quarterly installments through December 31, 2018. The interest rate on the term loan is 8.25%. Each quarter, the Bank intends to make discretionary contributions to the ESOP, which will be equal to principal and interest payments required on the term loan. The ESOP may further pay down the loan with dividends paid, if any, on the Company common stock owned by the ESOP.

Shares purchased with the loan proceeds provide collateral for the term loan and are held in a suspense account for future allocations among participants. Base compensation is the basis for allocation to participants of contributions to the ESOP and shares released from the suspense account, as described by the ESOP, in the year of allocation.

F-37 

Note 12 - Benefit Plans (Continued)

ESOP shares pledged as collateral were initially recorded as unallocated ESOP shares in the consolidated statement of financial condition. On a monthly basis, 1,405 shares are allocated and compensation expense is recorded equal to the number of allocated shares multiplied by the monthly average market price of the Company’s common stock and the allocated shares become outstanding for basic earnings per common share computations. The difference between the fair value of shares and the cost of the shares allocated by the ESOP is recorded as an adjustment to paid-in capital.  ESOP compensation expense was approximately $131,000 and $111,000 for the years ended June 30, 2014 and 2013, respectively.

ESOP shares at June 30 are summarized as follows:

	2014		2013
Allocated shares - beginning		109,602		92,741
Shares allocated during the year		16,862		16,861
Allocated shares - ending		126,464		109,602
Total ESOP Shares		202,342		202,342
Fair value of unallocated shares	$	614,612	$	669,576

Stock-Based Compensation

The Company maintains the MSB Financial Corp. 2008 Stock Compensation and Incentive Plan (the “2008 Plan”). Under this plan, the Company may grant options to purchase up to 275,410 shares of Company’s common stock. At June 30, 2013, there were no shares remaining for future option grants under the plan.

On May 9, 2008, options to purchase 275,410 shares of common stock at an exercise price of $10.75 per share were awarded and will expire no later than ten years following the grant date. The options granted vest over a five-year service period, with 20% of the awards vesting on each anniversary date of grant. The fair value of the options granted, as computed using the Black-Scholes option-pricing model, was determined to be $2.99 per option on the date of grant based upon the following underlying assumptions: a risk-free interest rate, expected option life, expected stock price volatility, and dividend yield of 3.33%, 6.5 years, 24.23%, and 1.11%, respectively.

Management recognized compensation expense for the fair value of the options, which have graded vesting, on a straight-line basis over the requisite service period of the awards. As of May 9, 2013 all shares in the plan became vested and the Company did not record any stock option expense during the fiscal year ended June 30, 2014 compared to $137,000 in stock option expense along with a $19,000 income tax benefit recorded during the fiscal year ended June 30, 2013.

F-38 

Note 12 - Benefit Plans (Continued)

A summary of stock options for the years ended June 30, 2014 and 2013 was as follows:

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Options	Price		Term	Value
Outstanding at June 30, 2013	275,410		10.75	4.8 years		—
Ou g at Outstanding at June 30, 2014	275,410		10.75	3.8 years		—
Exercisable at June 30, 2014	275,410		10.75	3.8 years		—

Shares issued upon the exercise of stock options are planned to be issued from treasury stock.  The 275,410 shares outstanding as of June 30, 2014 are fully vested.  There is no unrecognized compensation expense related to these options as of June 30, 2014.

On November 9, 2009, Company’s stockholders approved an amendment to the 2008 Plan to increase the number of shares of the Company’s common stock authorized for issuance under the 2008 Plan from 275,410 to 385,574, with such additional shares to be available for awards in the form of restricted stock awards.  On November 24, 2009, the Company purchased 110,164 shares of its common stock at a purchase price of $932,000, which amount, was charged to paid-in capital.  On December 14, 2009, the Board of Directors granted 110,164 shares of restricted stock to certain employees and directors.  The restricted stock awards are to be vested over a five year period and expensed accordingly based on the fair value at the date of grant.  For each of the fiscal years ended June 30, 2014 and 2013, the Company recognized approximately $180,000 in stock-based compensation expense related to restricted stock awards along with an income tax benefit of $72,000. Unrecognized compensation expense relating to unvested restricted stock awards outstanding at June 30, 2014 is $82,000. This amount will be recognized over a weighted average period of 0.5 years.

The following is a summary of the activity related to the Company’s restricted stock awards for the year ended June 30, 2014:

			Weighted
			Average
	Restricted		Grant Date
	Stock		Fair Value
Unvested at June 30, 2013	44,076		$	8.15
Vested	(21,584	)		8.15
Unvested at June 30, 2014	22,492		$	8.15

F-39

Note 13 - Transactions with Officers and Directors

The Bank has had, and may be expected to have in the future, banking transactions in the ordinary course of business with its officers, directors, their immediate families, and affiliated companies (commonly referred to as related parties), on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with others with the exception that all employees with one year of service, directors and executive officers are offered a 50 basis point reduction for consumer loans or primary residence mortgage loans. These persons were indebted to the Bank for loans totaling $7,728,000 and $9,956,000 at June 30, 2014 and 2013, respectively. During the year ended June 30, 2014, $755,000 of new loans and $571,000 of repayments were made. In addition, one director that was placed on emeritus status and non-voting status, resulted in a $2,412,000 reduction in loan indebtness to the Bank related to him and his immediate family.

Note 14 - Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by Federal and State 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 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 the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of tangible, core and risk-based capital as defined in the regulations. Management believes, as of June 30, 2014 and 2013, that the Bank met all capital adequacy requirements to which it is subject.

As of June 30, 2014, the most recent notification from the regulators categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum core, Tier 1 risk-based and total risk-based ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the institution’s category.

F-40

Note 14 - Regulatory Capital (Continued)

The following table presents a reconciliation of GAAP capital and regulatory capital and information as to the Bank’s capital levels at the dates presented:

											To be well capitalized
											under prompt
						For capital adequacy					corrective action
	Actual					purposes					provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
June 30, 2014:
Tangible	$	35,862		10.39	%	$	5,179		>1.50	%		N/A		N/A
Core (leverage)		35,862		10.39			13,812		>4.00			17,264		>5.00	%
Tier 1 risk-based		35,862		17.45			8,221		>4.00			12,331		>6.00
Total risk-based		38,444		18.71			16,442		>8.00			20,552		>10.00
June 30, 2013:
Tangible	$	34,651		9.93	%	$	5,234		>1.50	%		N/A		N/A
Core (leverage)		34,651		9.93			13,958		>4.00			17,447		>5.00	%
Tier 1 risk-based		34,651		16.87			8,216		>4.00			12,324		>6.00
Total risk-based		37,243		18.13			16,432		>8.00			20,539		>10.00

Note 15 - Commitments and Contingencies

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit. Such commitments involve, to varying degrees, elements of credit, and interest rate risk in excess of the amount recognized in the statements of financial condition.

The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

F-41

Note 15 - Commitments and Contingencies (Continued)

At June 30, 2014 and 2013, the following financial instruments were outstanding whose contract amounts represent credit risk:

	2014		2013
	(In thousands)
Commitments to grant loans	$	2,122	$	7,671
Unfunded commitments under lines of credit		20,093		23,659
Standby letters of credit		247		327
	$	22,462	$	31,657

At June 30, 2014, the commitments to grant loans included a $172,000 fixed rate mortgage loan with an interest rate of 4.00%; an adjustable rate mortgage loan of $200,000 with an initial rate of 4.00% adjusting to 6.25% after 10 years and a commercial real estate loan of $1,750,000 with 10 year balloon payment based on a 20 year amortization and an initial rate of 4.00% fixed for the first five years and a variable rate based on the Wall Street Journal Prime + 1.00% for the second five years.  Of the unfunded commitments under lines of credit at June 30, 2014, $16,805,706 was available under the Bank’s home equity lending program, $547,058 was available under the overdraft protection lending program and $2,740,392 was available under commercial lines of credit.  Amounts outstanding under these unfunded lines have interest rates ranging from 1.00% below prime rate to 4.00% over the prime rate.

At June 30, 2013, commitments to grant loans included $871,342 of fixed rate mortgage loans with interest rates ranging from 3.125% to 4.50%; adjustable rate mortgage loans of $2,700,000 with an initial rate of 3.25% adjusting to 6.00% after 10 years and a $4,100,000 variable rate construction loan based on the Wall Street Journal Prime Rate + 1.00%, with a floor rate of 5.00%.  Of the unfunded commitments under lines of credit at June 30, 2013, $19,398,349 was available under the Bank’s home equity lending program, $541,890 was available under the overdraft protection lending program and $3,718,882 was available under commercial lines of credit.  Amounts outstanding under these unfunded lines have interest rates ranging from 1.00% below prime rate to 4.00% over the prime rate.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation. Collateral held varies but primarily includes residential and income-producing commercial real estate properties.

Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending other loan commitments. The Bank requires collateral supporting these letters of credit when deemed necessary. Management believes that the proceeds obtained through a liquidation of such collateral would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees. The fair values of these obligations were immaterial as of June 30, 2014 and 2013.

F-42

Note 16 - Fair Value Measurements

The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures.

FASB ASC Topic 820, Fair Market Value Disclosures (“ASC 820”), defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

ASC 820 requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, ASC 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

· Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

· Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

· Level 3 Inputs – Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.  An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial

F-43

Note 16 - Fair Value Measurements (Continued)

instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Bank did not have any financial assets measured at fair value on a recurring basis as of June 30, 2014 and 2013.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Certain financial and non-financial assets are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

The following tables summarize those assets measured at fair value on a non-recurring basis as of June 30, 2014 and 2013:

	June 30, 2014
	Level 1 Inputs			Level 2 Inputs			Level 3 Inputs			Total Fair Value
	(In thousands)
Impaired loans		$	—		$	—		$	2,789		$	2,789

	June 30, 2013
	Level 1 Inputs			Level 2 Inputs			Level 3 Inputs			Total Fair Value
	(In thousands)
Impaired loans		$	—		$	—		$	15,066		$	15,066

F-44

Note 16 - Fair Value Measurements (Continued)

For Level 3 input assets measured at fair value on non-recurring basis as of June 30, 2014 and 2013, the significant unobservable inputs used in fair value measurements were as follows:

	June 30, 2014
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
	(Dollars in thousands)
Impaired loans	$	2,789	Appraisal of	Appraisal
			Collateral	adjustments	0% to - 19.4% (1.1%)
				Liquidation
				expense	4.2% to -57.9% (7.7%)

	June 30, 2013
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
	(Dollars in thousands)
Impaired loans	$	15,066	Appraisal of	Appraisal
			collateral	adjustments	0% to - 37.9% (3.5%)
				Liquidation
				expense	0.11% to -27.4% (7.9%)

An impaired loan is measured for impairment at the time the loan is identified as impaired.  Loans are considered impaired when based on current information and events it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement.  The Company’s impaired loans are generally collateral dependent and, as such, are carried at the lower of cost or estimated fair value less estimated selling costs.  Fair values are estimated through current appraisals and adjusted as necessary to reflect current market conditions and as such are classified as Level 3.

Other real estate is carried at the lower of cost or fair value less estimated selling costs.  The fair value of other real estate is determined based upon independent third-party appraisals of the properties.  These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.  As of June 30, 2014 and 2013, there was no further impairment of the other real estate owned below the cost basis established at the time the other real owned was originally recognized.  Accordingly, the table above does not include other real estate owned.

Disclosure about Fair Value of Financial Instruments

The fair value of a financial instrument is defined above. Significant estimates were used for the purposes of disclosing fair values. Estimated fair values have been determined using the best available data and estimation methodology suitable for each category of financial instruments. However, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective reporting dates, and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported.

The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.

F-45

Note 16 - Fair Value Measurements (Continued)

The following presents the carrying amount and the fair value as of June 30, 2014 and June 30, 2013, and placement in the fair value hierarchy as of June 30, 2013, of the Company’s financial instruments which are carried on the consolidated statement of financial condition at cost and are not measured or recorded at fair value on a recurring basis.  This table excludes financial instruments for which the carrying amount approximates fair value, which includes cash and cash equivalents, Federal Home Loan Bank stock, accrued interest receivable, interest and non-interest bearing demand, savings and club deposits, and accrued interest payable.

	Carrying		Fair		Level 1		Level 2		Level 3
	Amount		Value		Inputs		Inputs		Inputs
	(In thousands)
As of June 30, 2014
Financial assets:
Securities held to maturity	$	84,932	$	83,636	$	—	$	83,636	$	—
Loans receivable (1)		230,275		230,300		—		—		230,300
Financial liabilities:
Certificate of deposits		98,528		100,120		—		100,120		—
Advances from Federal Home Loan Bank of New York		38,000		39,281		—		39,281		—
As of June 30, 2013
Financial assets:
Securities held to maturity		80,912		78,367		—		78,367		—
Loans receivable (1)		223,256		227,556		—		—		227,556
Financial liabilities:
Certificate of deposits		109,948		111,797		—		111,797		—
Advances from Federal Home Loan Bank of New York		30,000		32,208		—		32,208		—
(1) Includes impaired loans measured at fair value on a non-recurring basis as discussed above.

Methods and assumptions used to estimate fair values of financial assets and liabilities previously disclosed are as follows:

Cash and Cash Equivalents

For cash and cash equivalents, the carrying amount is a reasonable estimate of fair value.

Securities Held to Maturity

The fair value for securities held to maturity is based on quoted market prices, where available. If quoted market prices are not available, fair value is estimated using quoted market prices for similar securities.

Loans Receivable

The fair value of loans is based upon a multitude of sources, including assumed current market rates by category and the Bank’s current offering rates.  Both fixed and variable rate loan fair values are derived at using a discounted cash flow methodology.  For variable rate loans, repricing terms, including next reprice date, reprice frequency and reprice rate are factored into the discounted cash flow formula.

Federal Home Loan Bank Stock

The carrying amount of Federal Home Loan Bank of New York stock approximates fair value since the Company is generally able to redeem this stock at par.

F-46

Note 16 - Fair Value Measurements (Continued)

Accrued Interest Receivable and Payable

The carrying amounts of accrued interest receivable and payable approximate fair value due to the short term nature of these instruments.

Deposits

Fair values for demand deposits, savings accounts and club accounts are, by definition, equal to the amount payable on demand at the reporting date. Fair values of fixed-maturity certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on similar instruments with similar maturities.

Advances from Federal Home Loan Bank of New York

Fair values of advances are estimated using discounted cash flow analyses, based on rates currently available to the Company for advances from the Federal Home Loan Bank of New York with similar terms and remaining maturities.

Off-Balance Sheet Financial Instruments

Fair values of commitments to extend credit are estimated using the fees currently charged to enter into similar agreement, into account market interest rates, the remaining terms, and the present credit worthiness of the counterparties.  As of June 30, 2014 and 2013, the fair value of the commitments to extend credit was not considered to be material.

F-47

Note 17 - Parent Only Financial Statements

Condensed Statements of Financial Condition
	June 30,
	2014			2013
	(In thousands)
Assets
Cash and due from banks	$	3,232		$	2,994
Loan receivable		996			1,172
Investments in subsidiaries		36,504			35,257
Other assets		178			1,172
Total Assets	$	40,910		$	40,595
Liabilities
Other liabilities	$	100		$	1,082
Total liabilities		100			1,082
Stockholders’ Equity
Common stock		562			562
Paid-in capital		24,616			24,473
Retained earnings		21,670			20,682
Unallocated common stock held by ESOP		(759	)		(927	)
Treasury stock		(5,244	)		(5,244	)
Accumulated other comprehensive loss		(35	)		(33	)
Total Stockholders’ Equity		40,810			39,513
Total Liabilities and Stockholders’ Equity	$	40,910		$	40,595

Condensed Statements of Comprehensive (Loss) Income
	Years Ended June 30,
	2014			2013
		(In thousands)
Equity in undistributed earnings of subsidiaries	$	1,118		$	(1,272	)
Interest income		91			105
Non-interest expense		(226	)		(221	)
Income (Loss) Before Income Taxes		983			(1,388	)
Income tax  benefit		(5)			(3	)
Net Income (Loss)	$	988		$	(1,385	)
Comprehensive Income (Loss)	$	986		$	(1,317	)

F-48

Note 17 - Parent Only Financial Statements (Continued)

Condensed Statements of Cash Flows
	Years Ended June 30,
	2014			2013
	(In thousands)
Cash Flows from Operating Activities
Net income (loss)	$	988		$	(1,385	)
Adjustments to reconcile net income (loss) to net cash  provided by operating activities:
Equity in undistributed earnings of subsidiaries		(1,118	)		1,272
Net change in other assets and liabilities		192			88
Net Cash Provided by (Used in) Operating Activities		62			(25	)
Cash Flows from Investing Activities
Repayment of ESOP loan receivable		176			162
Net Cash Provided by Investing Activities		176			162
Cash Flows from Financing Activities
Dividends paid to minority stockholders		-			(56	)
Purchase of treasury stock		-			(476	)
Capital distribution to Bank		-			(1,000	)
Net Cash Used in Financing Activities		-			(1,532	)
Net Increase (Decrease) in Cash and Cash Equivalents		238			(1,395	)
Cash and Cash Equivalents - Beginning		2,994			4,389
Cash and Cash Equivalents - Ending	$	3,232		$	2,994

F-49 

Note 18 - Quarterly Results of Operations (Unaudited)

The following is a condensed summary of quarterly results of operations for the years ended June 30, 2014 and 2013:

	Year Ended June 30, 2014
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(In thousands, except per share data)
Interest income	$	2,965	$	3,005	$	3,038	$	2,984
Interest expense		632		617		585		588
Net Interest Income		2,333		2,388		2,453		2,396
Provision for loan losses		150		150		150		150
Net Interest Income after Provision for Loan Losses		2,183		2,238		2,303		2,246
Non-interest income		181		182		184		177
Non-interest expenses		1,987		2,037		2,117		2,017
Income before Income Taxes		377		383		370		406
Income tax expense		129		132		127		160
Net Income	$	248	$	251	$	243	$	246
Earnings per share:
Basic and diluted	$	0.05	$	0.05	$	0.05	$	0.05

F-50 

Note 18 - Quarterly Results of Operations (Unaudited) (Continued)

	Year Ended June 30, 2013
	First			Second			Third		Fourth
	Quarter			Quarter			Quarter		Quarter
	(In thousands except per share data)
Interest income	$	3,142		$	3,000		$	2,985	$	2,905
Interest expense		727			689			648		657
Net Interest Income		2,415			2,311			2,337		2,248
Provision for loan losses		746			2,973			175		150
Net Interest Income (Loss) after Provision for Loan Losses		1,669			(662	)		2,162		2,098
Non-interest income		159			162			159		170
Non-interest expenses		2,004			2,122			2,188		1,975
(Loss) Income before Income Taxes		(176	)		(2,622	)		133		293
Income tax (benefit) expense		(84	)		(1,047	)		44		100
Net (Loss) Income	$	(92	)	$	(1,575	)	$	89	$	193
(Loss) Earnings per share:
Basic and diluted	$	(0.02	)	$	(0.32	)	$	0.02	$	0.04

F-51

Note 19 – Reclassifications Out of Accumulated Other Comprehensive Income

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss) (a)					Affected Line Item in the Consolidated Statements of Comprehensive Income (Loss)
	Twelve Months Ended June 30, 2014
	(In thousands)
Amortization of defined benefit pension items:
Prior service costs		$	(4	)	(b)		Directors compensation
Unrecognized loss			(17	)	(b)		Directors compensation
Unrecognized gain			28		(b)		Salary and employee benefits
			7				Total before tax
			(3	)			Income tax (expense)
Total reclassifications for the period		$	4				Net of tax

(a)           Amounts in parenthesis indicate debits to profit/loss.

(b) These accumulated other comprehensive components are included in the computation of net periodic pension cost.  (See Note 12 for additional details).

Note 20 – Recent Accounting Pronouncements

In February 2013, FASB issued Accounting Standards Update (“ASU”) 2013-02, Other Comprehensive Income – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which amends FASB ASC Top 220, Comprehensive Income (Topic 220). The amendments in this update supersede and replace the presentation requirements for reclassifications out of accumulated other comprehensive income in ASUs 2011-05 and 2011-12 for all public and private organizations. The amendments require an entity to provide additional information about reclassifications out of accumulated other comprehensive income.  The new requirement about presenting information about amounts reclassified out of accumulated other comprehensive income and their corresponding effect on net income present, in one place, information about significant amounts reclassified and, in some cases, cross-references to related footnote disclosures. Previously, this information was presented in different places throughout the financial statements.  For public entities, the amendments of this update were effective prospectively for annual reporting periods beginning after December 15, 2012 and interim periods within those years.  The adoption of ASU 2011-05 as of July 1, 2013, did not have a significant impact on the Company’s presentation of the comprehensive income.

            In July 2013, FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss (NOL) carryforward, a similar tax loss, or a tax credit carryforward exists.  The FASB’s objective in issuing this ASU is to eliminate diversity in practice resulting from a lack of guidance on this topic in current U.S. GAAP.  This ASU applies to all entities with unrecognized tax benefits that also have tax loss or tax credit carryforwards in the same tax jurisdiction as of the reporting date.  For public entities, the guidance is effective for the fiscal years beginning after December 15, 2013 and interim periods within those years.  The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In January 2014, FASB issued ASU 2014-04, Receivables – Troubled Debt Restructurings by Creditors, which clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real

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estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement.  Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.  For public entities, the guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014.  We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements

             In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP.  The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures).  We are currently evaluating the impact of the pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard in 2017.

In June 2014, FASB issued ASU 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures, which amends previously issued guidance on this topic.The amendments in this Update require two accounting changes.  (1) repurchase-to-maturity transactions will be accounted for as secured borrowing transactions on the balance sheet, rather than sales and (2) for repurchase financing arrangements, the amendments require separate accounting for a transfer of a financial asset executed contemporaneously with (or in contemplation of) a repurchase agreement with the same counterparty, which also will generally result in secured borrowing accounting for the repurchase agreement. This ASU also introduces new disclosures to increase transparency about the types of collateral pledged for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions that are accounted for as secured borrowings. The ASU also requires a transferor to disclose information about transactions accounted for as a sale in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets through an agreement with the transferee.  For public entities, the accounting changes and disclosure for certain transactions accounted for as a sale are effective for the first interim or annual period beginning after December 15, 2014. The disclosure for transactions accounted for as secured borrowings is required for annual periods beginning after December 15, 2014, and for interim periods beginning after March 15, 2015. All entities are required to present changes in accounting for transactions outstanding on the effective date as a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption.  We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 as of September 26, 2014.
	MSB FINANCIAL CORP.
		/s/ Michael A. Shriner
	By:	Michael A. Shriner
		President and Chief Executive Officer
		(Duly Authorized Representative)
Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below on September 26, 2014 by the following persons on behalf of the registrant and in the capacities indicated.
/s/ Michael A. Shriner	/s/ W. Scott Gallaway
Michael A. Shriner President, Chief Executive Officer and Director	W. Scott Gallaway Chairman of the Board and Director
/s/ E. Haas Gallaway, Jr.	/s/ Dr. Thomas G. McCain
E. Haas Gallaway, Jr. Director	Dr. Thomas G. McCain Director
/s/ Donald J. Musso	/s/ Ferdinand J. Rossi
Donald J. Musso Director	Ferdinand J. Rossi Director
/s/ Gary T. Jolliffe	/s/ Jeffrey E. Smith
Gary T. Jolliffe Director	Jeffrey E. Smith Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

EX-10.1

EMPLOYMENT AGREEMENT

As Amended and Restated

THIS EMPLOYMENT AGREEMENT, as Amended and Restated (this “Agreement”), is entered into this the 1st day of August, 2014 ("Effective Date") by and between Millington Savings Bank, Millington, New Jersey (the "Bank") and Michael A. Shriner (the "Employee").

WHEREAS, the Employee has heretofore been employed by the Bank as its President and Chief Executive Officer and is experienced in all phases of the business of the Bank; and

WHEREAS, the parties have previously entered into an employment agreement, which agreement has been renewed and amended from time to time ("Prior Agreement"); and

WHEREAS, the Bank wishes to make certain revisions to such Prior Agreement related to the term of employment; and

WHEREAS, the Bank desires to be ensured of the Employee's continued active participation in the business of the Bank; and

WHEREAS, the parties wish to set forth the continuing relationship of the parties.

NOW, THEREFORE, in consideration of the covenants and the mutual agreements herein contained, the parties hereby agree as follows:

1.           Employment.  The Employee is hereby employed by the Bank in the capacity as its President and Chief Executive Officer. The Employee hereby accepts said employment and agrees to render such administrative and management services to the Bank and its parent holding company, MSB Financial Corp. ("Parent") as are currently rendered and as are customarily performed by persons situated in a similar executive capacity.  The Employee shall promote the business of the Bank. The Employee's other duties shall be such as the Board of Directors for the Bank (the "Board of Directors" or "Board") may from time to time reasonably direct, including normal duties as an officer of the Bank.  The Employee's employment shall be for no definite period of time, and the Employee or the Bank may terminate such employment relationship at any time for any reason or no reason.  The employment at-will relationship remains in full force and effect regardless of any statements to the contrary made by company personnel or set forth in any documents other than those explicitly made to the contrary and signed by the Chairman of the Board of the Bank.

2.           Base Compensation.  The Bank agrees to pay the Employee during the Term (as hereinafter defined) of this Agreement a salary at the rate of not less than $250,000.00 per annum, payable in cash not less frequently than monthly; provided, that the rate of such salary shall be reviewed by the Board of Directors not less often than annually, and Employee shall be entitled to receive annually an increase at such percentage or in such an amount as the Board of Directors in its sole discretion may determine from time to time.  The base salary may not be decreased without the Employee's express written consent.

3.           Discretionary Bonus.  The Employee shall be entitled to participate in an equitable manner with all other senior management employees of the Bank in discretionary bonuses that may be authorized and declared by the Board of Directors to its senior management employees from time to time.  No other compensation provided for in this Agreement shall be deemed a substitute for the Employee's right to participate in such discretionary bonuses when and as declared by the Board of Directors.

4.           (a)           Participation in Retirement and Medical Plans.  The Employee shall be entitled to participate in and receive the benefits of any plan or policy of the Bank which may be or may become applicable to senior management relating to pension or other retirement benefit plans, profit-sharing, stock options or incentive plans, life insurance, short and long term disability, medical, dental, eye-care, prescription drugs or medical reimbursement plans, or other benefit plans applicable to employees or senior management of the Bank.

(b)           Employee Benefits; Expenses.  The Employee shall be eligible to participate in and receive the benefits applicable to any fringe benefits that may be or may become applicable to the Bank's senior management employees, including a reasonable expense account, and any other benefits that are commensurate with the responsibilities and functions to be performed by the Employee under this Agreement.  The Bank shall reimburse Employee for all reasonable out-of-pocket expenses that Employee shall incur in connection with his service for the Bank.

5.           Term.  The term of this Agreement shall be for the period commencing on the Effective Date and ending thirty-six (36) months thereafter on July 31, 2017 ("Term").  Additionally, not later than each annual anniversary date from the Effective Date, the Term of this Agreement shall be extended for up to an additional one-year period beyond the then effective expiration date so that the remaining Term shall thereafter be thirty-six months upon a determination and resolution of the Board of Directors that the performance of the Employee has met the requirements and standards of the Board, and that the Term of such Agreement shall be extended.  References herein to the Term of this Agreement shall refer both to the initial term and successive terms.

6.           Loyalty; Noncompetition.

(a)           During the Term, Employee shall devote his full time and attention to the performance of his employment under this Agreement, and the Employee shall not engage in any business or activity contrary to the business affairs or interests of the Bank or Parent.

(b)           Nothing contained in this Section 6 shall be deemed to prevent or limit the right of Employee to invest in the capital stock or other securities of any business dissimilar from that of the Bank or Parent, or, solely as a passive or minority investor, in any business.

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7.           Standards.  During the Term, the Employee shall perform his duties in accordance with such reasonable standards expected of employees with comparable positions in comparable organizations and as may be established from time to time by the Board of Directors.

8.           Vacation and Sick Leave.  At such reasonable times as the Board of Directors shall in its discretion permit, the Employee shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment under this Agreement, with all such voluntary absences to count as vacation time; provided that:

(a)           The Employee shall be entitled to annual vacation leave in accordance with the policies as are periodically established by the Board of Directors for senior management employees of the Bank; but in no event shall such vacation leave be for a period of less than five weeks annually.

(b)           The Employee shall not be entitled to accumulate unused vacation from one fiscal year to the next, except to the extent authorized by the Board of Directors for senior management employees of the Bank.

(c)           The Employee shall not be entitled to accumulate unused sick leave from one fiscal year to the next, except to the extent authorized by the Board of Directors for senior management employees of the Bank.

(d)           The Employee shall be entitled to receive additional compensation for any unused vacation leave or sick leave upon termination of employment, except to the extent otherwise determined by the Board of Directors.

9.           Termination and Termination Pay.

The Employee's employment under this Agreement shall be terminated upon any of the following occurrences:

(a)           The death of the Employee during the Term of this Agreement, in which event the Employee's estate shall be entitled to receive the compensation due the Employee through the last day of the calendar month in which Employee's death shall have occurred.

(b)           The Bank may terminate the Employee's employment at any time with or without Just Cause within its sole discretion.  This Agreement shall not be deemed to give Employee any right to be retained in the employment or service of the Bank, or to interfere with the right of the Bank to terminate the employment of the Employee at any time, but any termination by the Bank other than termination for Just Cause, shall not prejudice the Employee's right to compensation or other benefits detailed under the Agreement.  The Employee shall have no right to receive compensation or other benefits for any period after termination for Just Cause.  The Bank may within its sole discretion, acting in good faith, terminate the Employee for Just Cause and shall notify such Employee

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 accordingly.  Termination for "Just Cause" shall include termination because of the Employee's personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of the Agreement.

(c)           Except as provided pursuant to Section 12 herein, in the event of the Employee's Termination of Employment by the Bank without Just Cause during the Term of this Agreement, the Bank shall be obligated to continue to pay the Employee the salary provided pursuant to Section 2 herein, up to the date of termination of the remaining Term (including any renewal term) of this Agreement, but in no event for a period of less than twelve months, and the cost of Employee obtaining all health, life, disability, and other benefits which the Employee would be eligible to participate in through such date based upon the benefit levels substantially equal to those being provided Employee at the date of Termination of Employment.  The provisions of this Section 9(c) shall survive the expiration of this Agreement.

(d)           The voluntary Termination of Employment by the Employee during the Term of this Agreement with the delivery of no less than 60 days written notice to the Board of Directors, other than pursuant to Section 12(b), in which case the Employee shall be entitled to receive only the compensation, vested rights, and all employee benefits up to the date of such termination.

10.Regulatory Exclusion.  

Notwithstanding anything herein to the contrary, any payments made to the Employee pursuant to this Agreement, or otherwise, shall be subject to and conditioned upon compliance with 12 U.S.C. § 1828(k) and the Federal Deposit Insurance Corporation Regulations at 12 C.F.R. Part 359, Golden Parachute and Indemnification Payments promulgated thereunder.

11.           Disability.  If the Employee shall become disabled or incapacitated to the extent that he is unable to perform his duties hereunder, by reason of medically determinable physical or mental impairment, as determined by a doctor engaged by the Board of Directors, Employee shall nevertheless continue to receive the compensation and benefits provided under the terms of this Agreement as follows: 100% of such compensation and benefits for a period of 12 months, but not exceeding the remaining Term of the Agreement, and 65% thereafter for the remainder of the Term of the Agreement.  Such benefits noted herein shall be reduced by any benefits otherwise provided to the Employee during such period under the provisions of disability insurance coverage in effect for Bank employees. Thereafter, Employee shall be eligible to receive benefits provided by the Bank under the provisions of disability insurance coverage in effect for Bank employees.  Upon returning to active full-time employment, the Employee's full compensation as set forth in this Agreement shall be reinstated as of the date of commencement of such activities.  In the event that the Employee returns to active employment on other than a full-time basis, then his compensation (as set forth in Section 2 of this Agreement) shall be reduced in proportion to the time spent in said employment, or as shall otherwise be agreed to by the parties.

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12.           Change in Control.

(a)           Notwithstanding any provision herein to the contrary, in the event of the Employee's involuntary Termination of Employment within 24 months following any Change in Control of the Bank or Parent, absent Just Cause, Employee shall be paid an amount equal to the product of 2.999 times the Employee's "base amount" as defined in Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code") and regulations promulgated thereunder.  Said sum shall be paid in one (1) lump sum as of the date of such Termination of Employment, and such payments shall be in lieu of any other future payments which the Employee would be otherwise entitled to receive under Section 9 of this Agreement. Additionally, the Employee and his dependents shall remain eligible to participate in the medical and dental insurance programs offered by the Bank to its employees through the remaining Term of the Agreement, or such lesser period to the extent that such participation is permissible under the Bank’s plan without the Bank incurring penalties or taxes in accordance with Section 4980D of the Code associated with such participation, at the Employee’s own expense based upon the premium contribution rate determined under COBRA.  Notwithstanding the foregoing, all sums payable hereunder shall be reduced in such manner and to such extent so that no such payments made hereunder when aggregated with all other payments to be made to the Employee by the Bank or the Parent, or any successors thereto, shall be deemed an "excess parachute payment" in accordance with Section 280G of the Code and be subject to the excise tax provided at Section 4999(a) of the Code.  The term "Change in Control" shall refer to:  (i) a change in ownership of the Bank or the Parent under paragraph (A) below, or (ii) a change in effective control of the Bank or the Parent under paragraph (B) below, or (iii) a change in the ownership of a substantial portion of the assets of the Bank or the Parent under paragraph (C) below:

(A) CHANGE IN THE OWNERSHIP OF THE BANK OR THE PARENT. A change in the ownership of the Bank or the Parent shall occur on the date that any one person, or more than one person acting as a group (as defined in paragraph (B)), acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of such corporation. However, if any one person or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of a corporation, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the corporation (or to cause a change in the effective control of the corporation (within the meaning of paragraph (B) below). An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the corporation acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this section. This paragraph (A) applies only when there is a transfer of stock of a corporation (or issuance of stock of a corporation) and stock in such corporation remains outstanding after the transaction.

(B) CHANGE IN THE EFFECTIVE CONTROL OF THE BANK OR THE PARENT. A change in the effective control of the Bank or the Parent shall occur on the date that either (i) any one person, or more than one person acting as a group (as determined below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the corporation possessing 30 percent or more of the total voting power of the stock of such corporation; or (ii) a majority of members of the corporation's board of

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directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the corporation's board of directors prior to the date of the appointment or election, provided that for purposes of this paragraph (B)(ii), the term corporation refers solely to a corporation for which no other corporation is a majority shareholder. In the absence of an event described in paragraph (i) or (ii), a change in the effective control of a corporation will not have occurred. If any one person, or more than one person acting as a group, is considered to effectively control a corporation (within the meaning of this paragraph (B)), the acquisition of additional control of the corporation by the same person or persons is not considered to cause a change in the effective control of the corporation (or to cause a change in the ownership of the corporation within the meaning of paragraph (A)). Persons will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time, or as a result of the same public offering.

(C) CHANGE IN THE OWNERSHIP OF A SUBSTANTIAL PORTION OF THE BANK'S OR PARENT’S ASSETS. A change in the ownership of a substantial portion of the Bank's or Parent’s assets shall occur on the date that any one person, or more than one person acting as a group (as determined below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the corporation immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. There is no Change in Control event under this paragraph (C) when there is a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately after the transfer.

(D) Each of the sub-paragraphs (A) through (C) above shall be construed and interpreted consistent with the requirements of Section 409A of the Code and any Treasury regulations or other guidance issued thereunder.  However, a change in control shall not be deemed to have occurred as a result of a holding company reorganization of the Bank and simultaneous acquisition of more than 50 percent of the Bank's stock (following the Bank's conversion to stock form) by a parent savings and loan holding company or bank holding company.

The provisions of this Section 12(a) shall survive the expiration of this Agreement occurring after a Change in Control.

(b)       Notwithstanding any other provision of this Agreement to the contrary, Employee may effect a voluntary Termination of Employment under this Agreement within 24 months following a Change in Control of the Bank or Parent for Good Reason (as defined below) and Employee shall thereupon be entitled to receive the payment and benefits described in Section 12(a) of this Agreement. The Employee must provide written notice to the Bank of the existence of the event or condition constituting such Good Reason within ninety (90) days of the initial occurrence of the event or the condition alleged to constitute “Good Reason.”  Upon delivery of such notice by the Employee, the Bank shall have a period of thirty (30) days thereafter during which it or they may remedy in good faith the condition constituting such Good Reason, and the Employee's employment shall continue in effect during such time so long as the Bank makes diligent efforts during such time

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to cure such Good Reason. In the event that the Bank shall remedy in good faith the event or condition constituting Good Reason, then such notice of termination shall be null and void, and the Bank shall not be required to pay the amount due to the Employee under this Section 12(b).  The Bank’s remedy of any Good Reason event or condition with or without notice from the Employee shall not relieve the Bank from any obligations to the Employee under this Agreement or otherwise and shall not affect the Employee's rights upon the reoccurrence of the same, or the occurrence of any other, Good Reason event or condition. The provisions of this Section 12(b) shall survive the expiration of this Agreement occurring after a Change in Control.

“Good Reason” shall exist if, without Employee’s express written consent, the Bank materially breaches any of its obligations under this Agreement. Without limitation, such a material breach shall be deemed to occur upon the occurrence of any of the following:

(1)       a material diminution in the Employee's base compensation;

(2)       a material diminution in the Employee’s authority, duties, or responsibilities;

(3)       a material diminution in the budget over which the Employee retains authority;

(4)       a material change in the geographic location of the Employee’s office location;

(5)       a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Employee is required to report, including a requirement that the Employee is required to report to a corporate officer or employee instead of reporting directly to the board of directors of the Bank; or

(6)       any other action or inaction that constitutes a material breach by the Bank of this Agreement.

13.           Successors and Assigns.

(a)           This Agreement shall inure to the benefit of and be binding upon any corporate or other successor of the Bank or Parent which shall acquire, directly or indirectly, by merger, consolidation, purchase or otherwise, all or substantially all of the assets or stock of the Bank or Parent.

(b)           Since the Bank is contracting for the unique and personal skills of the Employee, the Employee shall be precluded from assigning or delegating his rights or duties hereunder without first obtaining the written consent of the Bank.

14.           Amendment; Waiver.  No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing, signed by the Employee and such officer or officers as may be specifically designated by the Board of Directors of the Bank to sign on its behalf.  No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by

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such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

15.           Applicable Law.  This agreement shall be governed in all respects whether as to validity, construction, capacity, performance or otherwise, by the laws of the State of New Jersey, except to the extent that Federal law shall be deemed to apply.

16.           Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

17.           Arbitration.  Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled solely by arbitration in accordance with the rules then in effect of the district office of the American Arbitration Association ("AAA") nearest to the home office of the Bank, and judgment upon the award rendered may be entered in any court having jurisdiction thereof, except to the extent that the parties may otherwise reach a mutual settlement of such issue.  Further, the settlement of the dispute to be approved by the Board of the Bank may include a provision for the reimbursement by the Bank to the Employee for all reasonable costs and expenses, including reasonable attorneys' fees, arising from such dispute, proceedings or actions, or the Board of the Bank or the Parent may authorize such reimbursement of such reasonable costs and expenses by separate action upon a written action and determination of the Board following settlement of the dispute.  Such reimbursement shall be paid within ten (10) days of Employee furnishing to the Bank or Parent evidence, which may be in the form, among other things, of a canceled check or receipt, of any costs or expenses incurred by Employee.

18.           Confidential Information.  The Employee acknowledges that during his employment he will learn and have access to confidential information regarding the Bank and the Parent and its customers and businesses ("Confidential Information").  The Employee agrees and covenants not to disclose or use for his own benefit, or the benefit of any other person or entity, any such Confidential Information, unless or until the Bank or the Parent consents to such disclosure or use or such information becomes common knowledge in the industry or is otherwise legally in the public domain.  The Employee shall not knowingly disclose or reveal to any unauthorized person any Confidential Information relating to the Bank, the Parent, or any subsidiaries or affiliates, or to any of the businesses operated by them, and the Employee confirms that such information constitutes the exclusive property of the Bank and the Parent.  The Employee shall not otherwise knowingly act or conduct himself (a) to the material detriment of the Bank or the Parent, or its subsidiaries, or affiliates, or (b) in a manner which is inimical or contrary to the interests of the Bank or the Parent.  Employee acknowledges and agrees that the existence of this Agreement and its terms and conditions constitutes Confidential Information of the Bank, and the Employee agrees not to disclose the Agreement or its contents without the prior written consent of the Bank.  Notwithstanding the foregoing, the Bank reserves the right in its sole discretion to make disclosure of this Agreement as it deems necessary or appropriate in compliance with its regulatory reporting requirements.  Notwithstanding anything herein to the contrary, failure by the Employee to comply with the provisions of this Section may result in the immediate termination of the Agreement within the sole discretion of the Bank, disciplinary action against the Employee taken by the Bank, including but not

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limited to the Termination of Employment of the Employee for breach of the Agreement and the provisions of this Section, and other remedies that may be available in law or in equity.

19.          Indemnification; Insurance.

(a)           Indemnification.  The Bank agrees to indemnify the Employee and his heirs, executors, and administrators to the fullest extent permitted under applicable law and regulations, including, without limitation, regulations at 12 U.S.C. Section 1828(k), against any and all expenses and liabilities reasonably incurred by the Employee in connection with or arising out of any action, suit or proceeding in which the Employee may be involved by reason of his having been a director or officer of the Bank or any of its subsidiaries or affiliates, whether or not the Employee is a director or officer at the time of incurring any such expenses or liabilities.  Such expenses and liabilities shall include, but shall not be limited to, judgments, court costs and attorney's fees and the cost of reasonable settlements.  The Employee shall be entitled to indemnification in respect of a settlement only if the Board of Directors of the Bank has approved such settlement.  Notwithstanding anything herein to the contrary, (i) indemnification for expenses shall not extend to matters for which the Employee has been terminated for, and (ii) the obligations of this Section 19 shall survive the termination of this Agreement.  Nothing contained herein shall be deemed to provide indemnification prohibited by applicable law or regulation.

(b)           Insurance.  During the Term of the Agreement, the Bank shall provide the Employee (and his heirs, executors, and administrators) with coverage under a directors' and officers' liability policy at the Bank's expense, at least equivalent to such coverage otherwise provided to the other directors and senior officers of the Bank.

20.          Entire Agreement.  This Agreement together with any understanding or modifications thereof as agreed to in writing by the parties, shall constitute the entire agreement between the parties hereto, and such Agreement shall supersede all prior agreements, whether in writing or otherwise, including the Prior Agreement, in all respects.

  21.          Effect of Code Section 409A.

(a)       Notwithstanding anything contained herein to the contrary, this Agreement shall be construed in a manner consistent with Section 409A of the Code and the parties shall take such actions as are required to comply in good faith with the provisions of Section 409A of the Code such that payments shall not be made to the Employee at such time if such payments shall subject the Employee to the penalty tax under Code Section 409A, but rather such payments shall be made by the Bank to the Employee at the earliest time permissible thereafter without the Employee having liability for such penalty tax under Section Code 409A.

(b)       Notwithstanding anything in this Agreement to the contrary, if the Bank in good faith determines, as of the effective date of Employee's Termination of Employment that the Employee is a “specified employee” within the meaning of Section 409A of the Code and if the payment under Sections 9  or 12 does not qualify as a short-term deferral under Code Section 409A and Treas. Reg. §1.409A-1(b)(4) (or any similar or successor provisions), and that an amount (or any

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portion of an amount) payable to Employee hereunder, is required to be suspended or delayed for six months in order to satisfy the requirements of Section 409A of the Code, then the Bank will so advise Employee, and any such payment (or the minimum amount thereof) shall be suspended and accrued for six months (“Six-Month Delay”), whereupon such amount or portion thereof shall be paid to Employee in a lump sum on the first day of the seventh month following the effective date of Employee's Termination of Employment.  The limitations of this Six-Month Delay shall only be effective if the stock of the Parent or a parent corporation is publicly traded as set forth at Section 409A(a)(2)(B)(i) of the Code.

"Specified Employee" means, for an applicable twelve (12) month period beginning on April 1, a key employee (as described in Code Section 416(i), determined without regard to paragraph (5) thereof) during the calendar year ending on the December 31 immediately preceding such April 1.

"Termination of Employment" shall have the same meaning as "separation from service", as that phrase is defined in Section 409A of the Code (taking into account all rules and presumptions provided for in the Section 409A regulations). Whether a “Termination of Employment” takes place is determined based on whether the facts and circumstances indicate that the Bank and Employee reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Employee would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Bank if the Employee has been providing services to the Bank less than 36 months). Facts and circumstances to be considered in making this determination include, but are not limited to, whether the Employee continues to be treated as an Employee for other purposes (such as continuation of salary and participation in employee benefit programs), whether similarly situated service providers have been treated consistently, and whether the Employee is permitted, and realistically available, to perform services for other service recipients in the same line of business.  The Employee is presumed to have separated from service where the level of bona fide services performed decreases to a level equal to 20 percent or less of the average level of services performed by the Employee during the immediately preceding 36-month period.  The Employee will be presumed not to have separated from service where the level of bona fide services performed continues at a level that is a 50 percent or more of the average level of service performed by the Employee during the immediately preceding 36-month period.  No presumption applies to a decrease in the level of bona fide services performed to a level that is more than 20 percent and less than 50 percent of the average level of bona fide services performed during the immediately preceding 36-month period.  The presumption is rebuttable by demonstrating that the Bank and the Employee reasonably anticipated that as of a certain date the level of bona fide services would be reduced permanently to a level less than or equal to 20 percent of the average level of bona fide services provided during the immediately preceding 36-month period or full period of services provided to the Bank if the Employee has been providing services to the Bank for a period of less than 36 months (or that the level of bona fide services would not be so reduced).

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For periods during which the Employee is on a paid bona fide leave of absence and has not otherwise terminated employment, the Employee is treated as providing bona fide services at a level equal to the level of services that the Employee would have been required to perform to receive the compensation paid with respect to such leave of absence.  Periods during which the Employee is on an unpaid bona fide leave of absence and has not otherwise terminated employment are disregarded for purposes of determining the applicable 36-month (or shorter) period).  Bona fide leave of absence means that there is a reasonable expectation that the Employee will return to perform services for the Bank.

(c)       Notwithstanding the Six-Month Delay rule set forth in Section 21(b) above:

(i)         To the maximum extent permitted under Code Section 409A and Treas. Reg. §1.409A-1(b)(9)(iii) (or any similar or successor provisions), the Bank will pay the Employee an amount equal to the lesser of two times (1) the maximum amount that may be taken into account under a qualified plan pursuant to Code Section 401(a)(17) for the year in which the Employee's Termination of Employment occurs, and (2) the sum of the Employee's annualized compensation based upon the annual rate of pay for services provided to the Bank for the taxable year of the Employee preceding the taxable year of the Employee in which his Termination of Employment occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Employee had not had a Termination of Employment); provided that amounts paid under this Section 21(c)(i) must be paid no later than the last day of the second taxable year of the Employee following the taxable year of the Employee in which occurs the Termination of Employment and such amounts paid will count toward, and will not be in addition to, the total payment amount required to be made to the Employee by the Bank under Sections 9 or 12; and

(ii)         To the maximum extent permitted under Code Section 409A and Treas. Reg. §1.409A-1(b)(9)(v)(D) (or any similar or successor provisions), within ten (10) days of the Termination of Employment, the Bank will pay the Employee an amount equal to the applicable dollar amount under Code Section 402(g)(1)(B) for the year of the Employee's Termination of Employment; provided that the amount paid under this Section 21(c)(ii) will count toward, and will not be in addition to, the total payment amount required to be made to the Employee by the Bank under Sections 9 or 12.

(d)       To the extent that any reimbursements or in-kind payments are subject to Code Section 409A, then such expenses (other than medical expenses) must be incurred before the last day of the second taxable year following the taxable year in which the termination occurred, provided that any reimbursement for such expenses be paid before the Employee's third taxable year following the taxable year in which the termination occurred.  For medical expenses, to the extent the Agreement entitles the Employee to reimbursement by the Bank of payments of medical expenses incurred and paid by the Employee but not reimbursed by a person other than the Bank and allowable as a deduction under Code Section 213 (disregarding the requirement of Code Section 213(a) that the deduction is available only to the extent that such expenses exceed 7.5 percent of adjusted gross income), then the reimbursement applies during the period of time during which the Employee would be entitled (or would, but for the Agreement, be entitled) to continuation coverage under a

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group health plan of the Bank under Code Section 4980B (COBRA) if the Employee elected such coverage and paid the applicable premiums.

THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first hereinabove written.

MILLINGTON SAVINGS BANK

ATTEST: By: /s/ W. Scott Gallaway                

          W. Scott Gallaway

           Chairman of the Board

/s/ Nancy E. Schmitz______________

Secretary

WITNESS:

/s/ Susan L. Kircheim                                /s/ Michael A. Shriner                                 

Michael A. Shriner, Employee

EX-10.2

EMPLOYMENT AGREEMENT

As Amended and Restated

THIS EMPLOYMENT AGREEMENT, as Amended and Restated (this “Agreement”) is entered into this the 1st day of August, 2014 ("Effective Date") by and between Millington Savings Bank, Millington, New Jersey (the "Bank") and Jeffrey E. Smith (the "Employee").

WHEREAS, the Employee has heretofore been employed by the Bank as Vice President, Chief Financial Officer and Treasurer of the Bank and is experienced in all phases of the business of the Bank; and

WHEREAS, the parties have previously entered into an employment agreement, which agreement has been renewed and amended from time to time ("Prior Agreement"); and

WHEREAS, the Bank wishes to make certain revisions to such Prior Agreement related to the term of employment; and

WHEREAS, the Bank desires to be ensured of the Employee's continued active participation in the business of the Bank; and

WHEREAS, the parties wish to set forth the continuing relationship of the parties.

NOW, THEREFORE, in consideration of the covenants and the mutual agreements herein contained, the parties hereby agree as follows:

1.           Employment.  The Employee is hereby employed by the Bank in the capacity as the Vice President, Chief Financial Officer and Treasurer. The Employee hereby accepts said employment and agrees to render such administrative and management services to the Bank and its parent holding company, MSB Financial Corp. ("Parent") as are currently rendered and as are customarily performed by persons situated in a similar executive capacity.  The Employee shall promote the business of the Bank. The Employee's other duties shall be such as the Board of Directors for the Bank (the "Board of Directors" or "Board") may from time to time reasonably direct, including normal duties as an officer of the Bank.  The Employee's employment shall be for no definite period of time, and the Employee or the Bank may terminate such employment relationship at any time for any reason or no reason.  The employment at-will relationship remains in full force and effect regardless of any statements to the contrary made by company personnel or set forth in any documents other than those explicitly made to the contrary and signed by the President or the Chairman of the Board of the Bank.

2.           Base Compensation.  The Bank agrees to pay the Employee during the Term (as hereinafter defined) of this Agreement a salary at the rate of not less than $153,556.52 per annum, payable in cash not less frequently than monthly; provided, that the rate of such salary shall be reviewed by the Board of Directors not less often than annually, and Employee shall be entitled to receive annually an increase at such percentage or in such an amount as the Board of Directors in its

sole discretion may determine from time to time.  The base salary may not be decreased without the Employee's express written consent.

3.           Discretionary Bonus.  The Employee shall be entitled to participate in an equitable manner with all other senior management employees of the Bank in discretionary bonuses that may be authorized and declared by the Board of Directors to its senior management employees from time to time.  No other compensation provided for in this Agreement shall be deemed a substitute for the Employee's right to participate in such discretionary bonuses when and as declared by the Board of Directors.

4.           (a)           Participation in Retirement and Medical Plans.  The Employee shall be entitled to participate in and receive the benefits of any plan or policy of the Bank which may be or may become applicable to senior management relating to pension or other retirement benefit plans, profit-sharing, stock options or incentive plans, life insurance, short and long term disability, medical, dental, eye-care, prescription drugs or medical reimbursement plans, or other benefit plans applicable to employees or senior management of the Bank.

(b)           Employee Benefits; Expenses.  The Employee shall be eligible to participate in and receive the benefits applicable to any fringe benefits that may be or may become applicable to the Bank's senior management employees, including a reasonable expense account, and any other benefits that are commensurate with the responsibilities and functions to be performed by the Employee under this Agreement.  The Bank shall reimburse Employee for all reasonable out-of-pocket expenses that Employee shall incur in connection with his service for the Bank.

5.           Term.  The term of this Agreement shall be for the period commencing on the Effective Date and ending thirty-six (36) months thereafter on July 31, 2017 ("Term").  Additionally, not later than each annual anniversary date from the Effective Date, the Term of this Agreement shall be extended for up to an additional one-year period beyond the then effective expiration date so that the remaining Term shall thereafter be thirty-six months upon a determination and resolution of the Board of Directors that the performance of the Employee has met the requirements and standards of the Board, and that the Term of such Agreement shall be extended.  References herein to the Term of this Agreement shall refer both to the initial term and successive terms.

6.           Loyalty; Noncompetition.

(a)           During the Term, Employee shall devote his full time and attention to the performance of his employment under this Agreement, and the Employee shall not engage in any business or activity contrary to the business affairs or interests of the Bank or Parent.

(b)           Nothing contained in this Section 6 shall be deemed to prevent or limit the right of Employee to invest in the capital stock or other securities of any business dissimilar from that of the Bank or Parent, or, solely as a passive or minority investor, in any business.

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7.           Standards.  During the Term, the Employee shall perform his duties in accordance with such reasonable standards expected of employees with comparable positions in comparable organizations and as may be established from time to time by the Board of Directors.

8.           Vacation and Sick Leave.  At such reasonable times as the Board of Directors shall in its discretion permit, the Employee shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment under this Agreement, with all such voluntary absences to count as vacation time; provided that:

(a)           The Employee shall be entitled to annual vacation leave in accordance with the policies as are periodically established by the Board of Directors for senior management employees of the Bank; but in no event shall such vacation leave be for a period of less than five weeks annually.

(b)           The Employee shall not be entitled to accumulate unused vacation from one fiscal year to the next, except to the extent authorized by the Board of Directors for senior management employees of the Bank.

(c)           The Employee shall not be entitled to accumulate unused sick leave from one fiscal year to the next, except to the extent authorized by the Board of Directors for senior management employees of the Bank.

(d)           The Employee shall be entitled to receive additional compensation for any unused vacation leave or sick leave upon termination of employment, except to the extent otherwise determined by the Board of Directors.

9.           Termination and Termination Pay.

The Employee's employment under this Agreement shall be terminated upon any of the following occurrences:

(a)           The death of the Employee during the Term of this Agreement, in which event the Employee's estate shall be entitled to receive the compensation due the Employee through the last day of the calendar month in which Employee's death shall have occurred.

(b)           The Bank may terminate the Employee's employment at any time with or without Just Cause within its sole discretion.  This Agreement shall not be deemed to give Employee any right to be retained in the employment or service of the Bank, or to interfere with the right of the Bank to terminate the employment of the Employee at any time, but any termination by the Bank other than termination for Just Cause, shall not prejudice the Employee's right to compensation or other benefits detailed under the Agreement.  The Employee shall have no right to receive compensation or other benefits for any period after termination for Just Cause.  The Bank may within its sole discretion, acting in good faith, terminate the Employee for Just Cause and shall notify such Employee

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 accordingly.  Termination for "Just Cause" shall include termination because of the Employee's personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of the Agreement.

(c)           Except as provided pursuant to Section 12 herein, in the event of the Employee's Termination of Employment by the Bank without Just Cause during the Term of this Agreement, the Bank shall be obligated to continue to pay the Employee the salary provided pursuant to Section 2 herein, up to the date of termination of the remaining Term (including any renewal term) of this Agreement, but in no event for a period of less than twelve months, and the cost of Employee obtaining all health, life, disability, and other benefits which the Employee would be eligible to participate in through such date based upon the benefit levels substantially equal to those being provided Employee at the date of Termination of Employment.  The provisions of this Section 9(c) shall survive the expiration of this Agreement.

(d)           The voluntary Termination of Employment by the Employee during the Term of this Agreement with the delivery of no less than 60 days written notice to the Board of Directors, other than pursuant to Section 12(b), in which case the Employee shall be entitled to receive only the compensation, vested rights, and all employee benefits up to the date of such termination.

10.Regulatory Exclusion.

Notwithstanding anything herein to the contrary, any payments made to the Employee pursuant to this Agreement, or otherwise, shall be subject to and conditioned upon compliance with 12 U.S.C. § 1828(k) and the Federal Deposit Insurance Corporation Regulations at 12 C.F.R. Part 359, Golden Parachute and Indemnification Payments promulgated thereunder.

11.           Disability.  If the Employee shall become disabled or incapacitated to the extent that he is unable to perform his duties hereunder, by reason of medically determinable physical or mental impairment, as determined by a doctor engaged by the Board of Directors, Employee shall nevertheless continue to receive the compensation and benefits provided under the terms of this Agreement as follows: 100% of such compensation and benefits for a period of 12 months, but not exceeding the remaining Term of the Agreement, and 65% thereafter for the remainder of the Term of the Agreement.  Such benefits noted herein shall be reduced by any benefits otherwise provided to the Employee during such period under the provisions of disability insurance coverage in effect for Bank employees. Thereafter, Employee shall be eligible to receive benefits provided by the Bank under the provisions of disability insurance coverage in effect for Bank employees.  Upon returning to active full-time employment, the Employee's full compensation as set forth in this Agreement shall be reinstated as of the date of commencement of such activities.  In the event that the Employee returns to active employment on other than a full-time basis, then his compensation (as set forth in Section 2 of this Agreement) shall be reduced in proportion to the time spent in said employment, or as shall otherwise be agreed to by the parties.

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12.           Change in Control.

(a)           Notwithstanding any provision herein to the contrary, in the event of the Employee's involuntary Termination of Employment within 24 months following any Change in Control of the Bank or Parent, absent Just Cause, Employee shall be paid an amount equal to the product of 2.999 times the Employee's "base amount" as defined in Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code") and regulations promulgated thereunder.  Said sum shall be paid in one (1) lump sum as of the date of such Termination of Employment, and such payments shall be in lieu of any other future payments which the Employee would be otherwise entitled to receive under Section 9 of this Agreement. Additionally, the Employee and his dependents shall remain eligible to participate in the medical and dental insurance programs offered by the Bank to its employees through the remaining Term of the Agreement, or such lesser period to the extent that such participation is permissible under the Bank’s plan without the Bank incurring penalties or taxes in accordance with Section 4980D of the Code associated with such participation, at the Employee’s own expense based upon the premium contribution rate determined under COBRA.  Notwithstanding the foregoing, all sums payable hereunder shall be reduced in such manner and to such extent so that no such payments made hereunder when aggregated with all other payments to be made to the Employee by the Bank or the Parent, or any successors thereto, shall be deemed an "excess parachute payment" in accordance with Section 280G of the Code and be subject to the excise tax provided at Section 4999(a) of the Code.  The term "Change in Control" shall refer to:  (i) a change in ownership of the Bank or the Parent under paragraph (A) below, or (ii) a change in effective control of the Bank or the Parent under paragraph (B) below, or (iii) a change in the ownership of a substantial portion of the assets of the Bank or the Parent under paragraph (C) below:

(A) CHANGE IN THE OWNERSHIP OF THE BANK OR THE PARENT. A change in the ownership of the Bank or the Parent shall occur on the date that any one person, or more than one person acting as a group (as defined in paragraph (B)), acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of such corporation. However, if any one person or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of a corporation, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the corporation (or to cause a change in the effective control of the corporation (within the meaning of paragraph (B) below). An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the corporation acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this section. This paragraph (A) applies only when there is a transfer of stock of a corporation (or issuance of stock of a corporation) and stock in such corporation remains outstanding after the transaction.

(B) CHANGE IN THE EFFECTIVE CONTROL OF THE BANK OR THE PARENT. A change in the effective control of the Bank or the Parent shall occur on the date that either (i) any one person, or more than one person acting as a group (as determined below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the corporation possessing 30 percent or more of the total voting power of the stock of such corporation; or (ii) a majority of members of the corporation's board of

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directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the corporation's board of directors prior to the date of the appointment or election, provided that for purposes of this paragraph (B)(ii), the term corporation refers solely to a corporation for which no other corporation is a majority shareholder. In the absence of an event described in paragraph (i) or (ii), a change in the effective control of a corporation will not have occurred. If any one person, or more than one person acting as a group, is considered to effectively control a corporation (within the meaning of this paragraph (B)), the acquisition of additional control of the corporation by the same person or persons is not considered to cause a change in the effective control of the corporation (or to cause a change in the ownership of the corporation within the meaning of paragraph (A)). Persons will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time, or as a result of the same public offering.

(C) CHANGE IN THE OWNERSHIP OF A SUBSTANTIAL PORTION OF THE BANK'S OR PARENT’S ASSETS. A change in the ownership of a substantial portion of the Bank's or Parent’s assets shall occur on the date that any one person, or more than one person acting as a group (as determined below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the corporation immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. There is no Change in Control event under this paragraph (C) when there is a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately after the transfer.

(D) Each of the sub-paragraphs (A) through (C) above shall be construed and interpreted consistent with the requirements of Section 409A of the Code and any Treasury regulations or other guidance issued thereunder.  However, a change in control shall not be deemed to have occurred as a result of a holding company reorganization of the Bank and simultaneous acquisition of more than 50 percent of the Bank's stock (following the Bank's conversion to stock form) by a parent savings and loan holding company or bank holding company.

The provisions of this Section 12(a) shall survive the expiration of this Agreement occurring after a Change in Control.

(b)       Notwithstanding any other provision of this Agreement to the contrary, Employee may effect a voluntary Termination of Employment under this Agreement within 24 months following a Change in Control of the Bank or Parent for Good Reason (as defined below) and Employee shall thereupon be entitled to receive the payment and benefits described in Section 12(a) of this Agreement. The Employee must provide written notice to the Bank of the existence of the event or condition constituting such Good Reason within ninety (90) days of the initial occurrence of the event or the condition alleged to constitute “Good Reason.”  Upon delivery of such notice by the Employee, the Bank shall have a period of thirty (30) days thereafter during which it or they may remedy in good faith the condition constituting such Good Reason, and the Employee's employment shall continue in effect during such time so long as the Bank makes diligent efforts during such time

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to cure such Good Reason. In the event that the Bank shall remedy in good faith the event or condition constituting Good Reason, then such notice of termination shall be null and void, and the Bank shall not be required to pay the amount due to the Employee under this Section 12(b).  The Bank’s remedy of any Good Reason event or condition with or without notice from the Employee shall not relieve the Bank from any obligations to the Employee under this Agreement or otherwise and shall not affect the Employee's rights upon the reoccurrence of the same, or the occurrence of any other, Good Reason event or condition. The provisions of this Section 12(b) shall survive the expiration of this Agreement occurring after a Change in Control.

“Good Reason” shall exist if, without Employee’s express written consent, the Bank materially breaches any of its obligations under this Agreement. Without limitation, such a material breach shall be deemed to occur upon the occurrence of any of the following:

(1)       a material diminution in the Employee's base compensation;

(2)       a material diminution in the Employee’s authority, duties, or responsibilities;

(3)       a material diminution in the budget over which the Employee retains authority;

(4)       a material change in the geographic location of the Employee’s office location; or

(5)       any other action or inaction that constitutes a material breach by the Bank of this Agreement.

13.           Successors and Assigns.

(a)           This Agreement shall inure to the benefit of and be binding upon any corporate or other successor of the Bank or Parent which shall acquire, directly or indirectly, by merger, consolidation, purchase or otherwise, all or substantially all of the assets or stock of the Bank or Parent.

(b)           Since the Bank is contracting for the unique and personal skills of the Employee, the Employee shall be precluded from assigning or delegating his rights or duties hereunder without first obtaining the written consent of the Bank.

14.           Amendment; Waiver.  No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing, signed by the Employee and such officer or officers as may be specifically designated by the Board of Directors of the Bank to sign on its behalf.  No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

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15.           Applicable Law.  This agreement shall be governed in all respects whether as to validity, construction, capacity, performance or otherwise, by the laws of the State of New Jersey, except to the extent that Federal law shall be deemed to apply.

16.           Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

17.           Arbitration.  Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled solely by arbitration in accordance with the rules then in effect of the district office of the American Arbitration Association ("AAA") nearest to the home office of the Bank, and judgment upon the award rendered may be entered in any court having jurisdiction thereof, except to the extent that the parties may otherwise reach a mutual settlement of such issue.  Further, the settlement of the dispute to be approved by the Board of the Bank may include a provision for the reimbursement by the Bank to the Employee for all reasonable costs and expenses, including reasonable attorneys' fees, arising from such dispute, proceedings or actions, or the Board of the Bank or the Parent may authorize such reimbursement of such reasonable costs and expenses by separate action upon a written action and determination of the Board following settlement of the dispute.  Such reimbursement shall be paid within ten (10) days of Employee furnishing to the Bank or Parent evidence, which may be in the form, among other things, of a canceled check or receipt, of any costs or expenses incurred by Employee.

18.           Confidential Information.  The Employee acknowledges that during his employment he will learn and have access to confidential information regarding the Bank and the Parent and its customers and businesses ("Confidential Information").  The Employee agrees and covenants not to disclose or use for his own benefit, or the benefit of any other person or entity, any such Confidential Information, unless or until the Bank or the Parent consents to such disclosure or use or such information becomes common knowledge in the industry or is otherwise legally in the public domain.  The Employee shall not knowingly disclose or reveal to any unauthorized person any Confidential Information relating to the Bank, the Parent, or any subsidiaries or affiliates, or to any of the businesses operated by them, and the Employee confirms that such information constitutes the exclusive property of the Bank and the Parent.  The Employee shall not otherwise knowingly act or conduct himself (a) to the material detriment of the Bank or the Parent, or its subsidiaries, or affiliates, or (b) in a manner which is inimical or contrary to the interests of the Bank or the Parent.  Employee acknowledges and agrees that the existence of this Agreement and its terms and conditions constitutes Confidential Information of the Bank, and the Employee agrees not to disclose the Agreement or its contents without the prior written consent of the Bank.  Notwithstanding the foregoing, the Bank reserves the right in its sole discretion to make disclosure of this Agreement as it deems necessary or appropriate in compliance with its regulatory reporting requirements.  Notwithstanding anything herein to the contrary, failure by the Employee to comply with the provisions of this Section may result in the immediate termination of the Agreement within the sole discretion of the Bank, disciplinary action against the Employee taken by the Bank, including but not limited to the Termination of Employment of the Employee for breach of the Agreement and the provisions of this Section, and other remedies that may be available in law or in equity.

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19.          Indemnification; Insurance.

(a)           Indemnification.  The Bank agrees to indemnify the Employee and his heirs, executors, and administrators to the fullest extent permitted under applicable law and regulations, including, without limitation, regulations at 12 U.S.C. Section 1828(k), against any and all expenses and liabilities reasonably incurred by the Employee in connection with or arising out of any action, suit or proceeding in which the Employee may be involved by reason of his having been a director or officer of the Bank or any of its subsidiaries or affiliates, whether or not the Employee is a director or officer at the time of incurring any such expenses or liabilities.  Such expenses and liabilities shall include, but shall not be limited to, judgments, court costs and attorney's fees and the cost of reasonable settlements.  The Employee shall be entitled to indemnification in respect of a settlement only if the Board of Directors of the Bank has approved such settlement.  Notwithstanding anything herein to the contrary, (i) indemnification for expenses shall not extend to matters for which the Employee has been terminated for, and (ii) the obligations of this Section 19 shall survive the termination of this Agreement.  Nothing contained herein shall be deemed to provide indemnification prohibited by applicable law or regulation.

(b)           Insurance.  During the Term of the Agreement, the Bank shall provide the Employee (and his heirs, executors, and administrators) with coverage under a directors' and officers' liability policy at the Bank's expense, at least equivalent to such coverage otherwise provided to the other directors and senior officers of the Bank.

20.         Entire Agreement.  This Agreement together with any understanding or modifications thereof as agreed to in writing by the parties, shall constitute the entire agreement between the parties hereto, and such Agreement shall supersede all prior agreements, whether in writing or otherwise, including the Prior Agreement, in all respects.

  21.         Effect of Code Section 409A.

(a)       Notwithstanding anything contained herein to the contrary, this Agreement shall be construed in a manner consistent with Section 409A of the Code and the parties shall take such actions as are required to comply in good faith with the provisions of Section 409A of the Code such that payments shall not be made to the Employee at such time if such payments shall subject the Employee to the penalty tax under Code Section 409A, but rather such payments shall be made by the Bank to the Employee at the earliest time permissible thereafter without the Employee having liability for such penalty tax under Section Code 409A.

(b)       Notwithstanding anything in this Agreement to the contrary, if the Bank in good faith determines, as of the effective date of Employee's Termination of Employment that the Employee is a “specified employee” within the meaning of Section 409A of the Code and if the payment under Sections 9  or 12 does not qualify as a short-term deferral under Code Section 409A and Treas. Reg. §1.409A-1(b)(4) (or any similar or successor provisions), and that an amount (or any portion of an amount) payable to Employee hereunder, is required to be suspended or delayed for six months in order to satisfy the requirements of Section 409A of the Code, then the Bank will so advise Employee, and any such payment (or the minimum amount thereof) shall be suspended and

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accrued for six months (“Six-Month Delay”), whereupon such amount or portion thereof shall be paid to Employee in a lump sum on the first day of the seventh month following the effective date of Employee's Termination of Employment.  The limitations of this Six-Month Delay shall only be effective if the stock of the Parent or a parent corporation is publicly traded as set forth at Section 409A(a)(2)(B)(i) of the Code.

"Specified Employee" means, for an applicable twelve (12) month period beginning on April 1, a key employee (as described in Code Section 416(i), determined without regard to paragraph (5) thereof) during the calendar year ending on the December 31 immediately preceding such April 1.

"Termination of Employment" shall have the same meaning as "separation from service", as that phrase is defined in Section 409A of the Code (taking into account all rules and presumptions provided for in the Section 409A regulations). Whether a “Termination of Employment” takes place is determined based on whether the facts and circumstances indicate that the Bank and Employee reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Employee would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Bank if the Employee has been providing services to the Bank less than 36 months). Facts and circumstances to be considered in making this determination include, but are not limited to, whether the Employee continues to be treated as an Employee for other purposes (such as continuation of salary and participation in employee benefit programs), whether similarly situated service providers have been treated consistently, and whether the Employee is permitted, and realistically available, to perform services for other service recipients in the same line of business.  The Employee is presumed to have separated from service where the level of bona fide services performed decreases to a level equal to 20 percent or less of the average level of services performed by the Employee during the immediately preceding 36-month period.  The Employee will be presumed not to have separated from service where the level of bona fide services performed continues at a level that is a 50 percent or more of the average level of service performed by the Employee during the immediately preceding 36-month period.  No presumption applies to a decrease in the level of bona fide services performed to a level that is more than 20 percent and less than 50 percent of the average level of bona fide services performed during the immediately preceding 36-month period.  The presumption is rebuttable by demonstrating that the Bank and the Employee reasonably anticipated that as of a certain date the level of bona fide services would be reduced permanently to a level less than or equal to 20 percent of the average level of bona fide services provided during the immediately preceding 36-month period or full period of services provided to the Bank if the Employee has been providing services to the Bank for a period of less than 36 months (or that the level of bona fide services would not be so reduced).

For periods during which the Employee is on a paid bona fide leave of absence and has not otherwise terminated employment, the Employee is treated as providing bona fide services at a level equal to the level of services that the Employee would have been required to perform to receive the compensation paid with respect to such leave of absence.  Periods during which the Employee is on

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an unpaid bona fide leave of absence and has not otherwise terminated employment are disregarded for purposes of determining the applicable 36-month (or shorter) period).  Bona fide leave of absence means that there is a reasonable expectation that the Employee will return to perform services for the Bank.

(c)       Notwithstanding the Six-Month Delay rule set forth in Section 21(b) above:

(i)         To the maximum extent permitted under Code Section 409A and Treas. Reg. §1.409A-1(b)(9)(iii) (or any similar or successor provisions), the Bank will pay the Employee an amount equal to the lesser of two times (1) the maximum amount that may be taken into account under a qualified plan pursuant to Code Section 401(a)(17) for the year in which the Employee's Termination of Employment occurs, and (2) the sum of the Employee's annualized compensation based upon the annual rate of pay for services provided to the Bank for the taxable year of the Employee preceding the taxable year of the Employee in which his Termination of Employment occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Employee had not had a Termination of Employment); provided that amounts paid under this Section 21(c)(i) must be paid no later than the last day of the second taxable year of the Employee following the taxable year of the Employee in which occurs the Termination of Employment and such amounts paid will count toward, and will not be in addition to, the total payment amount required to be made to the Employee by the Bank under Sections 9 or 12; and

(ii)         To the maximum extent permitted under Code Section 409A and Treas. Reg. §1.409A-1(b)(9)(v)(D) (or any similar or successor provisions), within ten (10) days of the Termination of Employment, the Bank will pay the Employee an amount equal to the applicable dollar amount under Code Section 402(g)(1)(B) for the year of the Employee's Termination of Employment; provided that the amount paid under this Section 21(c)(ii) will count toward, and will not be in addition to, the total payment amount required to be made to the Employee by the Bank under Sections 9 or 12.

(d)       To the extent that any reimbursements or in-kind payments are subject to Code Section 409A, then such expenses (other than medical expenses) must be incurred before the last day of the second taxable year following the taxable year in which the termination occurred, provided that any reimbursement for such expenses be paid before the Employee's third taxable year following the taxable year in which the termination occurred.  For medical expenses, to the extent the Agreement entitles the Employee to reimbursement by the Bank of payments of medical expenses incurred and paid by the Employee but not reimbursed by a person other than the Bank and allowable as a deduction under Code Section 213 (disregarding the requirement of Code Section 213(a) that the deduction is available only to the extent that such expenses exceed 7.5 percent of adjusted gross income), then the reimbursement applies during the period of time during which the Employee would be entitled (or would, but for the Agreement, be entitled) to continuation coverage under a group health plan of the Bank under Code Section 4980B (COBRA) if the Employee elected such coverage and paid the applicable premiums.

THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first hereinabove written.

MILLINGTON SAVINGS BANK

ATTEST: By: /s/ Michael A. Shriner                

          Michael A. Shriner, President

/s/ Nancy E. Schmitz______________

Secretary

WITNESS:

/s/ Susan L. Kircheim                                /s/ Jeffrey E. Smith                            

Jeffrey E. Smith, Employee

EX-10.3

EMPLOYMENT AGREEMENT

As Amended and Restated

THIS EMPLOYMENT AGREEMENT, as Amended and Restated (this “Agreement”), is entered into this the 1st day of August, 2014 ("Effective Date") by and between Millington Savings Bank, Millington, New Jersey (the "Bank") and Nancy E. Schmitz (the "Employee").

WHEREAS, the Employee has heretofore been employed by the Bank as Chief Lending Officer of the Bank and is experienced in all phases of the business of the Bank; and

WHEREAS, the parties have previously entered into an employment agreement, which agreement has been renewed and amended from time to time ("Prior Agreement"); and

WHEREAS, the Bank wishes to make certain revisions to such Prior Agreement related to the term of employment; and

WHEREAS, the Bank desires to be ensured of the Employee's continued active participation in the business of the Bank; and

WHEREAS, the parties wish to set forth the continuing relationship of the parties.

NOW, THEREFORE, in consideration of the covenants and the mutual agreements herein contained, the parties hereby agree as follows:

1.           Employment.  The Employee is hereby employed by the Bank in the capacity as the Chief Lending Officer. The Employee hereby accepts said employment and agrees to render such administrative and management services to the Bank and its parent holding company, MSB Financial Corp. ("Parent") as are currently rendered and as are customarily performed by persons situated in a similar executive capacity.  The Employee shall promote the business of the Bank. The Employee's other duties shall be such as the Board of Directors for the Bank (the "Board of Directors" or "Board") may from time to time reasonably direct, including normal duties as an officer of the Bank.  The Employee's employment shall be for no definite period of time, and the Employee or the Bank may terminate such employment relationship at any time for any reason or no reason.  The employment at-will relationship remains in full force and effect regardless of any statements to the contrary made by company personnel or set forth in any documents other than those explicitly made to the contrary and signed by the President or the Chairman of the Board of the Bank.

2.           Base Compensation.  The Bank agrees to pay the Employee during the Term (as hereinafter defined) of this Agreement a salary at the rate of not less than $132,896.40 per annum, payable in cash not less frequently than monthly; provided, that the rate of such salary shall be reviewed by the Board of Directors not less often than annually, and Employee shall be entitled to receive annually an increase at such percentage or in such an amount as the Board of Directors in its sole discretion may determine from time to time.  The base salary may not be decreased without the Employee's express written consent.

3.           Discretionary Bonus.  The Employee shall be entitled to participate in an equitable manner with all other senior management employees of the Bank in discretionary bonuses that may be authorized and declared by the Board of Directors to its senior management employees from time to time.  No other compensation provided for in this Agreement shall be deemed a substitute for the Employee's right to participate in such discretionary bonuses when and as declared by the Board of Directors.

4.           (a)           Participation in Retirement and Medical Plans.  The Employee shall be entitled to participate in and receive the benefits of any plan or policy of the Bank which may be or may become applicable to senior management relating to pension or other retirement benefit plans, profit-sharing, stock options or incentive plans, life insurance, short and long term disability, medical, dental, eye-care, prescription drugs or medical reimbursement plans, or other benefit plans applicable to employees or senior management of the Bank.

(b)           Employee Benefits; Expenses.  The Employee shall be eligible to participate in and receive the benefits applicable to any fringe benefits that may be or may become applicable to the Bank's senior management employees, including a reasonable expense account, and any other benefits that are commensurate with the responsibilities and functions to be performed by the Employee under this Agreement.  The Bank shall reimburse Employee for all reasonable out-of-pocket expenses that Employee shall incur in connection with her service for the Bank.

5.           Term.  The term of this Agreement shall be for the period commencing on the Effective Date and ending twelve (12) months thereafter on July 31, 2015 ("Term").  Additionally, not later than each annual anniversary date from the Effective Date, the Term of this Agreement shall be extended for up to an additional one-year period beyond the then effective expiration date so that the remaining Term shall thereafter be twelve months upon a determination and resolution of the Board of Directors that the performance of the Employee has met the requirements and standards of the Board, and that the Term of such Agreement shall be extended.  References herein to the Term of this Agreement shall refer both to the initial term and successive terms.

6.           Loyalty; Noncompetition.

(a)           During the Term, Employee shall devote her full time and attention to the performance of her employment under this Agreement, and the Employee shall not engage in any business or activity contrary to the business affairs or interests of the Bank or Parent.

(b)           Nothing contained in this Section 6 shall be deemed to prevent or limit the right of Employee to invest in the capital stock or other securities of any business dissimilar from that of the Bank or Parent, or, solely as a passive or minority investor, in any business.

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7.           Standards.  During the Term, the Employee shall perform her duties in accordance with such reasonable standards expected of employees with comparable positions in comparable organizations and as may be established from time to time by the Board of Directors.

8.           Vacation and Sick Leave.   At such reasonable times as the Board of Directors shall in its discretion permit, the Employee shall be entitled, without loss of pay, to absent herself voluntarily from the performance of her employment under this Agreement, with all such voluntary absences to count as vacation time; provided that:

(a)           The Employee shall be entitled to annual vacation leave in accordance with the policies as are periodically established by the Board of Directors for senior management employees of the Bank; but in no event shall such vacation leave be for a period of less than five weeks annually.

(b)           The Employee shall not be entitled to accumulate unused vacation from one fiscal year to the next, except to the extent authorized by the Board of Directors for senior management employees of the Bank.

(c)           The Employee shall not be entitled to accumulate unused sick leave from one fiscal year to the next, except to the extent authorized by the Board of Directors for senior management employees of the Bank.

(d)           The Employee shall be entitled to receive additional compensation for any unused vacation leave or sick leave upon termination of employment, except to the extent otherwise determined by the Board of Directors.

9.           Termination and Termination Pay.

The Employee's employment under this Agreement shall be terminated upon any of the following occurrences:

(a)           The death of the Employee during the Term of this Agreement, in which event the Employee's estate shall be entitled to receive the compensation due the Employee through the last day of the calendar month in which Employee's death shall have occurred.

(b)           The Bank may terminate the Employee's employment at any time with or without Just Cause within its sole discretion.  This Agreement shall not be deemed to give Employee any right to be retained in the employment or service of the Bank, or to interfere with the right of the Bank to terminate the employment of the Employee at any time, but any termination by the Bank other than termination for Just Cause, shall not prejudice the Employee's right to compensation or other benefits detailed under the Agreement.  The Employee shall have no right to receive compensation or other benefits for any period after termination for Just Cause.  The Bank may within its sole discretion, acting in good faith, terminate the Employee for Just Cause and shall notify such Employee

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accordingly.  Termination for "Just Cause" shall include termination because of the Employee's personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of the Agreement.

(c)           Except as provided pursuant to Section 12 herein, in the event of the Employee's Termination of Employment by the Bank without Just Cause during the Term of this Agreement, the Bank shall be obligated to continue to pay the Employee the salary provided pursuant to Section 2 herein, up to the date of termination of the remaining Term (including any renewal term) of this Agreement, but in no event for a period of less than twelve months, and the cost of Employee obtaining all health, life, disability, and other benefits which the Employee would be eligible to participate in through such date based upon the benefit levels substantially equal to those being provided Employee at the date of Termination of Employment.  The provisions of this Section 9(c) shall survive the expiration of this Agreement.

(d)           The voluntary Termination of Employment by the Employee during the Term of this Agreement with the delivery of no less than 60 days written notice to the Board of Directors, other than pursuant to Section 12(b), in which case the Employee shall be entitled to receive only the compensation, vested rights, and all employee benefits up to the date of such termination.

10.Regulatory Exclusion.

Notwithstanding anything herein to the contrary, any payments made to the Employee pursuant to this Agreement, or otherwise, shall be subject to and conditioned upon compliance with 12 U.S.C. § 1828(k) and the Federal Deposit Insurance Corporation Regulations at 12 C.F.R. Part 359, Golden Parachute and Indemnification Payments promulgated thereunder.

11.           Disability.  If the Employee shall become disabled or incapacitated to the extent that she is unable to perform her duties hereunder, by reason of medically determinable physical or mental impairment, as determined by a doctor engaged by the Board of Directors, Employee shall nevertheless continue to receive the compensation and benefits provided under the terms of this Agreement as follows: 100% of such compensation and benefits for a period of 12 months, but not exceeding the remaining Term of the Agreement, and 65% thereafter for the remainder of the Term of the Agreement.  Such benefits noted herein shall be reduced by any benefits otherwise provided to the Employee during such period under the provisions of disability insurance coverage in effect for Bank employees. Thereafter, Employee shall be eligible to receive benefits provided by the Bank under the provisions of disability insurance coverage in effect for Bank employees.  Upon returning to active full-time employment, the Employee's full compensation as set forth in this Agreement shall be reinstated as of the date of commencement of such activities.  In the event that the Employee returns to active employment on other than a full-time basis, then her compensation (as set forth in Section 2 of this Agreement) shall be reduced in proportion to the time spent in said employment, or as shall otherwise be agreed to by the parties.

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12.           Change in Control.

(a)           Notwithstanding any provision herein to the contrary, in the event of the Employee's involuntary Termination of Employment within 24 months following any Change in Control of the Bank or Parent, absent Just Cause, Employee shall be paid an amount equal to the product of one (1.0) times the Employee's "base amount" as defined in Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code") and regulations promulgated thereunder.  Said sum shall be paid in one (1) lump sum as of the date of such Termination of Employment, and such payments shall be in lieu of any other future payments which the Employee would be otherwise entitled to receive under Section 9 of this Agreement. Additionally, the Employee and her dependents shall remain eligible to participate in the medical and dental insurance programs offered by the Bank to its employees through the remaining Term of the Agreement at the Employee’s own expense based upon the premium contribution rate determined under COBRA. Notwithstanding the foregoing, all sums payable hereunder shall be reduced in such manner and to such extent so that no such payments made hereunder when aggregated with all other payments to be made to the Employee by the Bank or the Parent, or any successors thereto, shall be deemed an "excess parachute payment" in accordance with Section 280G of the Code and be subject to the excise tax provided at Section 4999(a) of the Code.  The term "Change in Control" shall refer to:  (i) a change in ownership of the Bank or the Parent under paragraph (A) below, or (ii) a change in effective control of the Bank or the Parent under paragraph (B) below, or (iii) a change in the ownership of a substantial portion of the assets of the Bank or the Parent under paragraph (C) below:

(A) CHANGE IN THE OWNERSHIP OF THE BANK OR THE PARENT. A change in the ownership of the Bank or the Parent shall occur on the date that any one person, or more than one person acting as a group (as defined in paragraph (B)), acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of such corporation. However, if any one person or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of a corporation, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the corporation (or to cause a change in the effective control of the corporation (within the meaning of paragraph (B) below). An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the corporation acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this section. This paragraph (A) applies only when there is a transfer of stock of a corporation (or issuance of stock of a corporation) and stock in such corporation remains outstanding after the transaction.

(B) CHANGE IN THE EFFECTIVE CONTROL OF THE BANK OR THE PARENT. A change in the effective control of the Bank or the Parent shall occur on the date that either (i) any one person, or more than one person acting as a group (as determined below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the corporation possessing 30 percent or more of the total voting power of the stock of such corporation; or (ii) a majority of members of the corporation's board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the corporation's board of directors prior to the date of the

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appointment or election, provided that for purposes of this paragraph (B)(ii), the term corporation refers solely to a corporation for which no other corporation is a majority shareholder. In the absence of an event described in paragraph (i) or (ii), a change in the effective control of a corporation will not have occurred. If any one person, or more than one person acting as a group, is considered to effectively control a corporation (within the meaning of this paragraph (B)), the acquisition of additional control of the corporation by the same person or persons is not considered to cause a change in the effective control of the corporation (or to cause a change in the ownership of the corporation within the meaning of paragraph (A)). Persons will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time, or as a result of the same public offering.

(C) CHANGE IN THE OWNERSHIP OF A SUBSTANTIAL PORTION OF THE BANK'S OR PARENT’S ASSETS. A change in the ownership of a substantial portion of the Bank's or Parent’s assets shall occur on the date that any one person, or more than one person acting as a group (as determined below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the corporation immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. There is no Change in Control event under this paragraph (C) when there is a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately after the transfer.

(D) Each of the sub-paragraphs (A) through (C) above shall be construed and interpreted consistent with the requirements of Section 409A of the Code and any Treasury regulations or other guidance issued thereunder.  However, a change in control shall not be deemed to have occurred as a result of a holding company reorganization of the Bank and simultaneous acquisition of more than 50 percent of the Bank's stock (following the Bank's conversion to stock form) by a parent savings and loan holding company or bank holding company.

The provisions of this Section 12(a) shall survive the expiration of this Agreement occurring after a Change in Control.

(b)       Notwithstanding any other provision of this Agreement to the contrary, Employee may effect a voluntary Termination of Employment under this Agreement within 24 months following a Change in Control of the Bank or Parent for Good Reason (as defined below) and Employee shall thereupon be entitled to receive the payment and benefits described in Section 12(a) of this Agreement. The Employee must provide written notice to the Bank of the existence of the event or condition constituting such Good Reason within ninety (90) days of the initial occurrence of the event or the condition alleged to constitute “Good Reason.”  Upon delivery of such notice by the Employee, the Bank shall have a period of thirty (30) days thereafter during which it or they may remedy in good faith the condition constituting such Good Reason, and the Employee's employment shall continue in effect during such time so long as the Bank makes diligent efforts during such time to cure such Good Reason. In the event that the Bank shall remedy in good faith the event or condition constituting Good Reason, then such notice of termination shall be null and void, and the

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Bank shall not be required to pay the amount due to the Employee under this Section 12(b).  The Bank’s remedy of any Good Reason event or condition with or without notice from the Employee shall not relieve the Bank from any obligations to the Employee under this Agreement or otherwise and shall not affect the Employee's rights upon the reoccurrence of the same, or the occurrence of any other, Good Reason event or condition. The provisions of this Section 12(b) shall survive the expiration of this Agreement occurring after a Change in Control.

“Good Reason” shall exist if, without Employee’s express written consent, the Bank materially breaches any of its obligations under this Agreement. Without limitation, such a material breach shall be deemed to occur upon the occurrence of any of the following:

(1)       a material diminution in the Employee's base compensation;

(2)       a material diminution in the Employee’s authority, duties, or responsibilities;

(3)       a material diminution in the budget over which the Employee retains authority;

(4)       a material change in the geographic location of the Employee’s office location; or

(5)       any other action or inaction that constitutes a material breach by the Bank of this Agreement.

13.           Successors and Assigns.

(a)           This Agreement shall inure to the benefit of and be binding upon any corporate or other successor of the Bank or Parent which shall acquire, directly or indirectly, by merger, consolidation, purchase or otherwise, all or substantially all of the assets or stock of the Bank or Parent.

(b)           Since the Bank is contracting for the unique and personal skills of the Employee, the Employee shall be precluded from assigning or delegating her rights or duties hereunder without first obtaining the written consent of the Bank.

14.           Amendment; Waiver.  No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing, signed by the Employee and such officer or officers as may be specifically designated by the Board of Directors of the Bank to sign on its behalf.  No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

15.           Applicable Law.  This agreement shall be governed in all respects whether as to validity, construction, capacity, performance or otherwise, by the laws of the State of New Jersey, except to the extent that Federal law shall be deemed to apply.

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16.           Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

17.           Arbitration.  Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be solely settled by arbitration in accordance with the rules then in effect of the district office of the American Arbitration Association ("AAA") nearest to the home office of the Bank, and judgment upon the award rendered may be entered in any court having jurisdiction thereof, except to the extent that the parties may otherwise reach a mutual settlement of such issue.  Further, the settlement of the dispute to be approved by the Board of the Bank may include a provision for the reimbursement by the Bank to the Employee for all reasonable costs and expenses, including reasonable attorneys' fees, arising from such dispute, proceedings or actions, or the Board of the Bank or the Parent may authorize such reimbursement of such reasonable costs and expenses by separate action upon a written action and determination of the Board following settlement of the dispute.  Such reimbursement shall be paid within ten (10) days of Employee furnishing to the Bank or Parent evidence, which may be in the form, among other things, of a canceled check or receipt, of any costs or expenses incurred by Employee.

18.           Confidential Information.  The Employee acknowledges that during her employment she will learn and have access to confidential information regarding the Bank and the Parent and its customers and businesses ("Confidential Information").  The Employee agrees and covenants not to disclose or use for her own benefit, or the benefit of any other person or entity, any such Confidential Information, unless or until the Bank or the Parent consents to such disclosure or use or such information becomes common knowledge in the industry or is otherwise legally in the public domain.  The Employee shall not knowingly disclose or reveal to any unauthorized person any Confidential Information relating to the Bank, the Parent, or any subsidiaries or affiliates, or to any of the businesses operated by them, and the Employee confirms that such information constitutes the exclusive property of the Bank and the Parent.  The Employee shall not otherwise knowingly act or conduct herself (a) to the material detriment of the Bank or the Parent, or its subsidiaries, or affiliates, or (b) in a manner which is inimical or contrary to the interests of the Bank or the Parent.  Employee acknowledges and agrees that the existence of this Agreement and its terms and conditions constitutes Confidential Information of the Bank, and the Employee agrees not to disclose the Agreement or its contents without the prior written consent of the Bank.  Notwithstanding the foregoing, the Bank reserves the right in its sole discretion to make disclosure of this Agreement as it deems necessary or appropriate in compliance with its regulatory reporting requirements.  Notwithstanding anything herein to the contrary, failure by the Employee to comply with the provisions of this Section may result in the immediate termination of the Agreement within the sole discretion of the Bank, disciplinary action against the Employee taken by the Bank, including but not limited to the Termination of Employment of the Employee for breach of the Agreement and the provisions of this Section, and other remedies that may be available in law or in equity.

19.           Indemnification; Insurance.

(a)           Indemnification.  The Bank agrees to indemnify the Employee and her heirs, executors, and administrators to the fullest extent permitted under applicable law and regulations,

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including, without limitation, regulations at 12 U.S.C. Section 1828(k), against any and all expenses and liabilities reasonably incurred by the Employee in connection with or arising out of any action, suit or proceeding in which the Employee may be involved by reason of her having been a director or officer of the Bank or any of its subsidiaries or affiliates, whether or not the Employee is a director or officer at the time of incurring any such expenses or liabilities.  Such expenses and liabilities shall include, but shall not be limited to, judgments, court costs and attorney's fees and the cost of reasonable settlements.  The Employee shall be entitled to indemnification in respect of a settlement only if the Board of Directors of the Bank has approved such settlement.  Notwithstanding anything herein to the contrary, (i) indemnification for expenses shall not extend to matters for which the Employee has been terminated for, and (ii) the obligations of this Section 19 shall survive the termination of this Agreement.  Nothing contained herein shall be deemed to provide indemnification prohibited by applicable law or regulation.

(b)           Insurance.  During the Term of the Agreement, the Bank shall provide the Employee (and her heirs, executors, and administrators) with coverage under a directors' and officers' liability policy at the Bank's expense, at least equivalent to such coverage otherwise provided to the other directors and senior officers of the Bank.

20.           Entire Agreement.  This Agreement together with any understanding or modifications thereof as agreed to in writing by the parties, shall constitute the entire agreement between the parties hereto, and such Agreement shall supersede all prior agreements, whether in writing or otherwise, including the Prior Agreement, in all respects.

21.         Effect of Code Section 409A

(a)       Notwithstanding anything contained herein to the contrary, this Agreement shall be construed in a manner consistent with Section 409A of the Code and the parties shall take such actions as are required to comply in good faith with the provisions of Section 409A of the Code such that payments shall not be made to the Employee at such time if such payments shall subject the Employee to the penalty tax under Code Section 409A, but rather such payments shall be made by the Bank to the Employee at the earliest time permissible thereafter without the Employee having liability for such penalty tax under Section Code 409A.

(b)       Notwithstanding anything in this Agreement to the contrary, if the Bank in good faith determines, as of the effective date of Employee's Termination of Employment that the Employee is a “specified employee” within the meaning of Section 409A of the Code and if the payment under Sections 9  or 12 does not qualify as a short-term deferral under Code Section 409A and Treas. Reg. §1.409A-1(b)(4) (or any similar or successor provisions), and that an amount (or any portion of an amount) payable to Employee hereunder, is required to be suspended or delayed for six months in order to satisfy the requirements of Section 409A of the Code, then the Bank will so advise Employee, and any such payment (or the minimum amount thereof) shall be suspended and accrued for six months (“Six-Month Delay”), whereupon such amount or portion thereof shall be paid to Employee in a lump sum on the first day of the seventh month following the effective date of Employee's Termination of Employment.  The limitations of this Six-Month Delay shall only be

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effective if the stock of the Parent or a parent corporation is publicly traded as set forth at Section 409A(a)(2)(B)(i) of the Code.

"Specified Employee" means, for an applicable twelve (12) month period beginning on April 1, a key employee (as described in Code Section 416(i), determined without regard to paragraph (5) thereof) during the calendar year ending on the December 31 immediately preceding such April 1.

"Termination of Employment" shall have the same meaning as "separation from service", as that phrase is defined in Section 409A of the Code (taking into account all rules and presumptions provided for in the Section 409A regulations). Whether a “Termination of Employment” takes place is determined based on whether the facts and circumstances indicate that the Bank and Employee reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Employee would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Bank if the Employee has been providing services to the Bank less than 36 months). Facts and circumstances to be considered in making this determination include, but are not limited to, whether the Employee continues to be treated as an Employee for other purposes (such as continuation of salary and participation in employee benefit programs), whether similarly situated service providers have been treated consistently, and whether the Employee is permitted, and realistically available, to perform services for other service recipients in the same line of business.  The Employee is presumed to have separated from service where the level of bona fide services performed decreases to a level equal to 20 percent or less of the average level of services performed by the Employee during the immediately preceding 36-month period.  The Employee will be presumed not to have separated from service where the level of bona fide services performed continues at a level that is a 50 percent or more of the average level of service performed by the Employee during the immediately preceding 36-month period.  No presumption applies to a decrease in the level of bona fide services performed to a level that is more than 20 percent and less than 50 percent of the average level of bona fide services performed during the immediately preceding 36-month period.  The presumption is rebuttable by demonstrating that the Bank and the Employee reasonably anticipated that as of a certain date the level of bona fide services would be reduced permanently to a level less than or equal to 20 percent of the average level of bona fide services provided during the immediately preceding 36-month period or full period of services provided to the Bank if the Employee has been providing services to the Bank for a period of less than 36 months (or that the level of bona fide services would not be so reduced).

For periods during which the Employee is on a paid bona fide leave of absence and has not otherwise terminated employment, the Employee is treated as providing bona fide services at a level equal to the level of services that the Employee would have been required to perform to receive the compensation paid with respect to such leave of absence.  Periods during which the Employee is on an unpaid bona fide leave of absence and has not otherwise terminated employment are disregarded for purposes of determining the applicable 36-month (or shorter) period).  Bona fide leave of absence

10

means that there is a reasonable expectation that the Employee will return to perform services for the Bank.

(c)       Notwithstanding the Six-Month Delay rule set forth in Section 21(b) above:

 (i)         To the maximum extent permitted under Code Section 409A and Treas. Reg. §1.409A-1(b)(9)(iii) (or any similar or successor provisions), the Bank will pay the Employee an amount equal to the lesser of two times (1) the maximum amount that may be taken into account under a qualified plan pursuant to Code Section 401(a)(17) for the year in which the Employee's Termination of Employment occurs, and (2) the sum of the Employee's annualized compensation based upon the annual rate of pay for services provided to the Bank for the taxable year of the Employee preceding the taxable year of the Employee in which her Termination of Employment occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Employee had not had a Termination of Employment); provided that amounts paid under this Section 21(c)(i) must be paid no later than the last day of the second taxable year of the Employee following the taxable year of the Employee in which occurs the Termination of Employment and such amounts paid will count toward, and will not be in addition to, the total payment amount required to be made to the Employee by the Bank under Sections 9 or 12; and

(ii)         To the maximum extent permitted under Code Section 409A and Treas. Reg. §1.409A-1(b)(9)(v)(D) (or any similar or successor provisions), within ten (10) days of the Termination of Employment, the Bank will pay the Employee an amount equal to the applicable dollar amount under Code Section 402(g)(1)(B) for the year of the Employee's Termination of Employment; provided that the amount paid under this Section 21(c)(ii) will count toward, and will not be in addition to, the total payment amount required to be made to the Employee by the Bank under Sections 9 or 12.

  (d)       To the extent that any reimbursements or in-kind payments are subject to Code Section 409A, then such expenses (other than medical expenses) must be incurred before the last day of the second taxable year following the taxable year in which the termination occurred, provided that any reimbursement for such expenses be paid before the Employee's third taxable year following the taxable year in which the termination occurred.  For medical expenses, to the extent the Agreement entitles the Employee to reimbursement by the Bank of payments of medical expenses incurred and paid by the Employee but not reimbursed by a person other than the Bank and allowable as a deduction under Code Section 213 (disregarding the requirement of Code Section 213(a) that the deduction is available only to the extent that such expenses exceed 7.5 percent of adjusted gross income), then the reimbursement applies during the period of time during which the Employee would be entitled (or would, but for the Agreement, be entitled) to continuation coverage under a group health plan of the Bank under Code Section 4980B (COBRA) if the Employee elected such coverage and paid the applicable premiums.

THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.

11

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first hereinabove written.

MILLINGTON SAVINGS BANK

ATTEST: By: /s/ Michael A. Shriner                

          Michael A. Shriner, President

/s/ Betty G. Zangari______________

WITNESS:

/s/ Susan L. Kircheim                                /s/ Nancy E. Schmitz                                 

Nancy E. Schmitz, Employee

EX-21

SUBSIDIARIES OF THE REGISTRANT

Parent
MSB Financial Corp.
	State or Other Jurisdiction Of Incorporation	Percentage Ownership
Subsidiaries
Millington Savings Bank	New Jersey	100%
Subsidiaries of Millington Savings Bank
Millington Savings Service Corp.	New Jersey	100%

EX-23.1

Consent of Independent Registered Public Accounting Firm

MSB Financial Corp.

Millington, New Jersey

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-139955, 333-150968 and 333-164264) of MSB Financial Corp. of our report dated September 26, 2014, relating to the consolidated financial statements, which appears in this Form 10-K.

/s/ BDO USA, LLP

New York, New York

September 26, 2014

EX-31.1

Exhibit 31.1

SECTION 302 CERTIFICATION

I, Michael A. Shriner, Chief Executive Officer, certify that:

1.I have reviewed this annual report on Form 10-K of MSB Financial Corp.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 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(e) 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 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 report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably 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.

	/s/ Michael A. Shriner
Date:  September 26, 2014	Michael A. Shriner President and Chief Executive Officer

EX-31.2

Exhibit 31.2

SECTION 302 CERTIFICATION

I, Jeffrey E. Smith, Chief Financial Officer, certify that:

1.I have reviewed this annual report on Form 10-K of MSB Financial Corp.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 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(e) 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 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 report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably 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.

	/s/ Jeffrey E. Smith
Date:  September 26, 2014	Jeffrey E. Smith Vice President and Chief Financial Officer

EX-32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K for the year ended June 30, 2014 (the “Report”) of MSB Financial Corp. (the “Corporation”) as filed with the Securities and Exchange Commission on the date hereof, we, Michael A. Shriner, President and Chief Executive Officer, and Jeffrey E. Smith, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

/s/ Michael A. Shriner	/s/ Jeffrey E. Smith
Michael A. Shriner	Jeffrey E. Smith
President and CEO	Vice President and CFO
September 26, 2014	September 26, 2014

XML

Note 12 - Benefit Plans (Tables)

12 Months Ended

Jun. 30, 2014

Disclosure Text Block Supplement [Abstract]

Schedule of Share-based Compensation, Employee Stock Purchase Plan, Activity [Table Text Block]

	2014			2013
	(Dollars in thousands)
Accumulated benefit obligation – ending	$	1,356		$	1,231
Projected benefit obligation – beginning	$	1,380		$	1,340
Service cost		22			17
Interest cost		67			56
Actuarial loss		19			(10	)
Benefit payments		(34	)		(23	)
Projected benefit obligation – ending	$	1,454		$	1,380
Plan assets at fair value – beginning	$	—		$	—
Employer contribution		34			23
Benefit payments		(34	)		(23	)
Plan assets at fair value – ending	$	—		$	—
Funded status at end of year (included in other liabilities)	$	1,454		$	1,380
Assumptions:
Discount rate		4.50	%		5.00	%
Rate of compensation increase		3.00	%		3.00	%

	2014			2013
	(Dollars in thousands)
Accumulated benefit obligation – ending	$	459		$	442
Projected benefit obligation – beginning	$	442		$	472
Service cost		39			47
Interest cost		22			20
Actuarial gain		(22	)		(76	)
Benefits paid		(22	)		(21	)
Projected benefit obligation and funded status – ending (included in other liabilities)	$	459		$	442
Assumption:
Discount rate		4.50	%		5.00	%

Schedule of Net Benefit Costs [Table Text Block]

	2014			2013
	(Dollars in thousands)
Service cost	$	22		$	17
Interest cost		67			56
Amortization of unrecognized loss		17			33
Amortization of unrecognized past service liability		4			11
Net periodic pension cost	$	110		$	117
Assumptions:
Discount rate		5.00	%		4.25	%
Rate of compensation		3.00	%		3.00	%

	2014			2013
	(Dollars in thousands)
Service cost	$	39		$	47
Interest cost		22			20
Amortization of unrecognized gain		(28	)		(16	)
Net periodic pension cost	$	33		$	51
Assumption:
Discount rate		5.00	%		4.25	%

Schedule of Expected Benefit Payments [Table Text Block]

2015	$	69
2016		96
2017		103
2018		110
2019		130
2020 – 2023		742

2015	$	31
2016		31
2017		32
2018		32
2019		33
2020 – 2023		233

Employee Stock Ownership Plan (ESOP) Disclosures [Table Text Block]

	2014		2013
Allocated shares - beginning		109,602		92,741
Shares allocated during the year		16,862		16,861
Allocated shares - ending		126,464		109,602
Total ESOP Shares		202,342		202,342
Fair value of unallocated shares	$	614,612	$	669,576

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Options	Price		Term	Value
Outstanding at June 30, 2013	275,410		10.75	4.8 years		—
Outstanding at June 30, 2014	275,410		10.75	3.8 years		—
Exercisable at June 30, 2014	275,410		10.75	3.8 years		—

Schedule of Unvested Restricted Stock Units Roll Forward [Table Text Block]

			Weighted
			Average
	Restricted		Grant Date
	Stock		Fair Value
Unvested at June 30, 2013	44,076		$	8.15
Vested	(21,584	)		8.15
Unvested at June 30, 2014	22,492		$	8.15

XML

Note 5 - Loans Receivable and Allowance for Credit Losses (Details) (USD $)	9 Months Ended	12 Months Ended
	Mar. 31, 2014	Jun. 30, 2014	Jun. 30, 2013
Note 5 - Loans Receivable and Allowance for Credit Losses (Details) [Line Items]
Financing Receivable, Modifications, Recorded Investment		$ 16,700,000	$ 18,100,000
Impaired Financing Receivable, Recorded Investment		22,930,000	27,001,000
Financing Receivable, Modifications, Accrual Status, Recorded Investment		13,400,000	11,800,000
Financing Receivable, Modifications, Nonaccrual Status, Recorded Investment		3,200,000	6,200,000
Financing Receivable, Allowance For Credit Losses, Troubled Debt Restructuring		73,000	152,000
Financing Receivable, Modifications, Number of Contracts	18	2	18
Performing Financing Receivable [Member]
Note 5 - Loans Receivable and Allowance for Credit Losses (Details) [Line Items]
Impaired Financing Receivable, Recorded Investment		$ 13,400,000	$ 11,800,000

XML

Note 2 - Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment	12 Months Ended
	Jun. 30, 2014
Building and Building Improvements [Member] | Minimum [Member]
Note 2 - Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment [Line Items]
Property plant and equipment, estimated useful life	5 years
Building and Building Improvements [Member] | Maximum [Member]
Note 2 - Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment [Line Items]
Property plant and equipment, estimated useful life	50 years
Furniture and Fixtures [Member] | Minimum [Member]
Note 2 - Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment [Line Items]
Property plant and equipment, estimated useful life	3 years
Furniture and Fixtures [Member] | Maximum [Member]
Note 2 - Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment [Line Items]
Property plant and equipment, estimated useful life	7 years
Leasehold Improvements [Member]
Note 2 - Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment [Line Items]
Leasehold improvements	Shorter of useful life or term of lease

XML

Note 10 - Lease Commitments and Total Rental Expense (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Leases [Abstract]
Operating Leases, Rent Expense, Net	$ 407,000	$ 407,000

XML

Note 5 - Loans Receivable and Allowance for Credit Losses (Details) - Composition of Total Loans Receivable (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 233,961	$ 227,526
Loans in process	(2,491)	(745)
Deferred loan fees	(366)	(377)
Residential Mortgage: One-to-Four Family [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	143,283	136,704
Residential Mortgage: Home Equity [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	38,484	40,682
Total Residential Mortgage Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	181,767	177,386
Commercial Real Estate Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	32,036	32,171
Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	12,517	8,895
Commercial and Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	9,666	9,267
Commercial Real Estate Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	54,219	50,333
Consumer: Deposit Accounts [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	602	611
Consumer: Automobile [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	33	111
Consumer: Personal Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	36	32
Consumer: Overdraft Protection [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	161	175
Total Consumer Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	832	929
Financing Receivable Before Loans In Process And Deferred Loan Fees [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 236,818	$ 228,648

XML

Note 12 - Benefit Plans (Details) - Net Periodic Pension Cost (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Note 12 - Benefit Plans (Details) - Net Periodic Pension Cost [Line Items]
Amortization of unrecognized gain	$ 6	$ (11)
Directors Retirement Plan [Member]
Note 12 - Benefit Plans (Details) - Net Periodic Pension Cost [Line Items]
Service cost	22	17
Interest cost	67	56
Amortization of unrecognized loss	17	33
Amortization of unrecognized past service liability	4	11
Net periodic pension cost	110	117
Assumptions:
Discount rate	5.00%	4.25%
Rate of compensation	3.00%	3.00%
Executive Incentive Retirement Plan [Member]
Note 12 - Benefit Plans (Details) - Net Periodic Pension Cost [Line Items]
Service cost	39	47
Interest cost	22	20
Amortization of unrecognized gain	(28)	(16)
Net periodic pension cost	$ 33	$ 51
Assumptions:
Discount rate	5.00%	4.25%

XML

Note 1 - Organization and Business (Details)	Jun. 30, 2014
Disclosure Text Block [Abstract]
Equity Method Investment, Ownership Percentage	61.70%

XML

Note 6 - Premises and Equipment (Tables)

12 Months Ended

Jun. 30, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

	2014			2013
	(In thousands)
Land	$	1,937		$	1,937
Buildings and improvements		8,477			8,469
Leasehold improvements		1,767			1,787
Furnishings and equipment		1,835			1,887
Assets being developed for future use		15			3
		14,031			14,083
Accumulated depreciation and amortization		(5,545	)		(5,201	)
	$	8,486		$	8,882

XML

Note 12 - Benefit Plans (Details) - Estimated Future Benefit Payments (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Directors Retirement Plan [Member]
Note 12 - Benefit Plans (Details) - Estimated Future Benefit Payments [Line Items]
2015	$ 69
2016	96
2017	103
2018	110
2019	130
2020 – 2023	742
Executive Incentive Retirement Plan [Member]
Note 12 - Benefit Plans (Details) - Estimated Future Benefit Payments [Line Items]
2015	31
2016	31
2017	32
2018	32
2019	33
2020 – 2023	$ 233

XML

Note 11 - Income Taxes (Details) - Income Tax Expense (Benefit) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2014	Jun. 30, 2013
Current income tax expense (benefit):
Federal									$ 7	$ (394)
State									93	(99)
									100	(493)
Deferred income tax expense (benefi)t:
Federal									408	(384)
State									40	(110)
									448	(494)
	$ 160	$ 127	$ 132	$ 129	$ 100	$ 44	$ (1,047)	$ (84)	$ 548	$ (987)

XML

Note 16 - Fair Value Measurements (Details) - Additional Qualitative Information About Level 3 Assets (Fair Value, Inputs, Level 3 [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Appraisal Adjustments [Member] | Minimum [Member]
Note 16 - Fair Value Measurements (Details) - Additional Qualitative Information About Level 3 Assets [Line Items]
Range	0.00%
Weighted Average	0.00%
Appraisal Adjustments [Member] | Maximum [Member]
Note 16 - Fair Value Measurements (Details) - Additional Qualitative Information About Level 3 Assets [Line Items]
Range	(19.40%)
Weighted Average	19.40%
Appraisal Adjustments [Member] | Weighted Average [Member]
Note 16 - Fair Value Measurements (Details) - Additional Qualitative Information About Level 3 Assets [Line Items]
Range	1.10%
Weighted Average	(1.10%)
Appraisal Adjustments [Member]
Note 16 - Fair Value Measurements (Details) - Additional Qualitative Information About Level 3 Assets [Line Items]
Fair Value Estimate (in Dollars)	$ 2,789
Valuation Techniques	Appraisal of Collateral
Liquidation Expenses [Member] | Minimum [Member]
Note 16 - Fair Value Measurements (Details) - Additional Qualitative Information About Level 3 Assets [Line Items]
Range	4.20%	0.11%
Weighted Average	(4.20%)	(0.11%)
Liquidation Expenses [Member] | Maximum [Member]
Note 16 - Fair Value Measurements (Details) - Additional Qualitative Information About Level 3 Assets [Line Items]
Range	(57.90%)	(27.40%)
Weighted Average	57.90%	27.40%
Liquidation Expenses [Member] | Weighted Average [Member]
Note 16 - Fair Value Measurements (Details) - Additional Qualitative Information About Level 3 Assets [Line Items]
Range	7.70%	7.90%
Weighted Average	(7.70%)	(7.90%)
Minimum [Member] | Appraisal Adjustments [Member]
Note 16 - Fair Value Measurements (Details) - Additional Qualitative Information About Level 3 Assets [Line Items]
Range		0.00%
Weighted Average		0.00%
Maximum [Member] | Appraisal Adjustments [Member]
Note 16 - Fair Value Measurements (Details) - Additional Qualitative Information About Level 3 Assets [Line Items]
Range		(37.90%)
Weighted Average		37.90%
Weighted Average [Member] | Appraisal Adjustments [Member]
Note 16 - Fair Value Measurements (Details) - Additional Qualitative Information About Level 3 Assets [Line Items]
Range		3.50%
Weighted Average		(3.50%)
Appraisal Adjustments [Member]
Note 16 - Fair Value Measurements (Details) - Additional Qualitative Information About Level 3 Assets [Line Items]
Fair Value Estimate (in Dollars)		$ 15,066
Valuation Techniques		Appraisal of collateral

XML

Note 5 - Loans Receivable and Allowance for Credit Losses (Details) - Financing Receivable Credit Quality Indicators (USD $)	Jun. 30, 2014	Jun. 30, 2013
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	$ 51,605,000	$ 49,470,000
Commercial Real Estate Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	27,280,000	27,025,000
Commercial Real Estate Segment [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	3,062,000	2,491,000
Commercial Real Estate Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	1,621,000	2,515,000
Commercial Real Estate Segment [Member] | Loss [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net		72,000
Commercial Real Estate Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	31,963,000	32,103,000
Construction: One-to-Four Family Occupied [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	850,000	2,845,000
Construction: One-to-Four Family Occupied [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	1,707,000	1,693,000
Construction: One-to-Four Family Occupied [Member] | Loss [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net		14,000
Construction: One-to-Four Family Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	2,557,000	4,552,000
Construction: Other [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	6,851,000	1,980,000
Construction: Other [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	445,000	988,000
Construction: Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	64,000
Construction: Other [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net		601,000
Construction: Other [Member] | Loss [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	73,000
Construction: Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	7,433,000	3,569,000
Commercial and Industrial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	8,769,000	8,188,000
Commercial and Industrial [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	105,000	113,000
Commercial and Industrial [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	778,000	923,000
Commercial and Industrial [Member] | Loss [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net		22,000
Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	9,652	9,246,000
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	43,750,000	40,038,000
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	3,612,000	3,592,000
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	4,170,000	5,131,000
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net		601,000
Loss [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	$ 73,000	$ 108,000

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Note 12 - Benefit Plans (Details) (USD $)	1 Months Ended	0 Months Ended	3 Months Ended								12 Months Ended			0 Months Ended		12 Months Ended						12 Months Ended
	Nov. 24, 2009	May 09, 2008	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2014	Jun. 30, 2013	Nov. 09, 2009	May 09, 2008 Employee Stock Option [Member]	Dec. 14, 2009 Restricted Stock [Member]	Jun. 30, 2014 Restricted Stock [Member]	Jun. 30, 2013 Restricted Stock [Member]	Jun. 30, 2014 Deferred Profit Sharing [Member]	Jun. 30, 2014 Directors Retirement Plan [Member]	Jun. 30, 2013 Directors Retirement Plan [Member]	Dec. 14, 2009 Directors Retirement Plan [Member]	Jun. 30, 2014 Executive Incentive Retirement Plan [Member]	Jun. 30, 2013 Executive Incentive Retirement Plan [Member]
Note 12 - Benefit Plans (Details) [Line Items]
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year																			$ 69,000			$ 31,000
Defined Benefit Plan, Accumulated Other Comprehensive Income Net Prior Service Cost (Credit), after Tax																				244,000	240,000	182,000	188,000
Defined Benefit Plan, Accumulated Other Comprehensive Income Net Prior Service Cost Credit, Tax			0								0								96,000	98,000		73,000	75,000
Defined Benefit Plan, Benefit Costs Expected To Be Recognized In Net Periodic Plan Cost In Subsequent Fiscal Year																			22,000			29,000
Defined Contribution Plan Employer Contribution Percent																		3.00%
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent											80.00%
Defined Contribution Plan, Employer Matching Contribution, Percent of Match											50.00%
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay											6.00%
Defined Contribution Plan Maximum Annual Contributions Per Employee with Employer Match,Percent											3.00%
Defined Contribution Plan, Cost Recognized											53,000	48,000
Employee Stock Ownership Plan Eligibility Minimum Employment Period											12 months
Employee Stock Ownership Plan Eligibility Minimum Age											21 years
Employee Stock Ownership Plan Eligibility Minimum Hours of Service											1000 years
Employer Loan To Employee Stock Ownership Plan			2,023,420								2,023,420
Employee Stock Ownership Plan (ESOP), Shares in ESOP (in Shares)			202,342				202,342				202,342	202,342
Employer Loan To Employee Stock Ownership Plan, Interest Rate											8.25%
Employee Stock Ownership Plan, Number Of Shares Allocated Per Month (in Shares) (in Shares)											1,405
Employee Stock Ownership Plan (ESOP), Compensation Expense											131,000	111,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares)		275,410											385,574
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)							0					0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price (in Dollars per share)		$ 10.75	$ 10.75				$ 10.75				$ 10.75	$ 10.75
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period														5 years	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights		20%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share)		$ 2.99
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate		3.33%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term		6 years 6 months
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate		24.23%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate		1.11%
Stock or Unit Option Plan Expense												137,000
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense												19,000
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares)	110,164
Stock Issued During Period, Value, Restricted Stock Award, Gross	932,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares)															110,164
Allocated Share-based Compensation Expense																180,000	180,000
Income Tax Expense (Benefit)			160,000	127,000	132,000	129,000	100,000	44,000	(1,047,000)	(84,000)	548,000	(987,000)				72,000	(72,000)
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options																$ 82,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition																6 months

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Note 15 - Commitments and Contingencies (Details) - Financial Instruments Whose Contract Amounts Represent Credit Risk (USD $)	Jun. 30, 2014	Jun. 30, 2013
Note 15 - Commitments and Contingencies (Details) - Financial Instruments Whose Contract Amounts Represent Credit Risk [Line Items]
Financial instrument	$ 22,462,000	$ 31,657,000
Commitments To Grant Loans [Member]
Note 15 - Commitments and Contingencies (Details) - Financial Instruments Whose Contract Amounts Represent Credit Risk [Line Items]
Financial instrument	2,122,000	7,671,000
Unfunded Commitments Under Lines Of Credit [Member]
Note 15 - Commitments and Contingencies (Details) - Financial Instruments Whose Contract Amounts Represent Credit Risk [Line Items]
Financial instrument	20,093,000	23,659,000
Standby Letters of Credit [Member]
Note 15 - Commitments and Contingencies (Details) - Financial Instruments Whose Contract Amounts Represent Credit Risk [Line Items]
Financial instrument	$ 247,000	$ 327,000

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Note 12 - Benefit Plans (Details) - Summary of Stock Options (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	May 09, 2008
Summary of Stock Options [Abstract]
Options outstanding	275,410	275,410
Options outstanding, weighted average exercise price	$ 10.75	$ 10.75	$ 10.75
Options outstanding, weighted average remaining contractual term	3 years 292 days	4 years 292 days
Exercisable at June 30, 2014	275,410
Exercisable at June 30, 2014	$ 10.75
Exercisable at June 30, 2014	3 years 292 days

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Note 16 - Fair Value Measurements (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Fair Value Disclosures [Abstract]
Assets, Fair Value Disclosure, Recurring	$ 0	$ 0

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Note 12 - Benefit Plans (Details) - Net Funded Status (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Directors Retirement Plan [Member]
Note 12 - Benefit Plans (Details) - Net Funded Status [Line Items]
Accumulated benefit obligation – ending	$ 1,356	$ 1,231
Projected benefit obligation – beginning	1,380	1,340
Service cost	22	17
Interest cost	67	56
	19	(10)
Benefit payments	(34)	(23)
Funded status at end of year (included in other liabilities)	1,454	1,380
Assumptions:
Discount rate	4.50%	5.00%
Rate of compensation increase	3.00%	3.00%
Projected benefit obligation – beginning	1,454	1,380
Employer contribution	34	23
Executive Incentive Retirement Plan [Member]
Note 12 - Benefit Plans (Details) - Net Funded Status [Line Items]
Accumulated benefit obligation – ending	459	442
Projected benefit obligation – beginning	442	472
Service cost	39	47
Interest cost	22	20
	(22)	(76)
Benefit payments	(22)	(21)
Assumptions:
Discount rate	4.50%	5.00%
Projected benefit obligation – beginning	$ 459	$ 442

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Note 10 - Lease Commitments and Total Rental Expense (Details) - Future Minimum Lease Payments (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Future Minimum Lease Payments [Abstract]
2015	$ 415
2016	415
2017	431
2018	333
2019	263
Thereafter	307
	$ 2,164

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Note 17 - Parent Only Financial Statements

12 Months Ended

Jun. 30, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

Note 17 - Parent Only Financial Statements

Condensed Statements of Financial Condition
	June 30,
	2014			2013
	(In thousands)
Assets
Cash and due from banks	$	3,232		$	2,994
Loan receivable		996			1,172
Investments in subsidiaries		36,504			35,257
Other assets		178			1,172
Total Assets	$	40,910		$	40,595
Liabilities
Other liabilities	$	100		$	1,082
Total liabilities		100			1,082
Stockholders’ Equity
Common stock		562			562
Paid-in capital		24,616			24,473
Retained earnings		21,670			20,682
Unallocated common stock held by ESOP		(759	)		(927	)
Treasury stock		(5,244	)		(5,244	)
Accumulated other comprehensive loss		(35	)		(33	)
Total Stockholders’ Equity		40,810			39,513
Total Liabilities and Stockholders’ Equity	$	40,910		$	40,595

Condensed Statements of Comprehensive (Loss) Income
	Years Ended June 30,
	2014			2013
		(In thousands)
Equity in undistributed earnings of subsidiaries	$	1,118		$	(1,272	)
Interest income		91			105
Non-interest expense		(226	)		(221	)
Income (Loss) Before Income Taxes		983			(1,388	)
Income tax  benefit		(5)			(3	)
Net Income (Loss)	$	988		$	(1,385	)
Comprehensive Income (Loss)	$	986		$	(1,317	)

Condensed Statements of Cash Flows
	Years Ended June 30,
	2014			2013
	(In thousands)
Cash Flows from Operating Activities
Net income (loss)	$	988		$	(1,385	)
Adjustments to reconcile net income (loss) to net cash  provided by operating activities:
Equity in undistributed earnings of subsidiaries		(1,118	)		1,272
Net change in other assets and liabilities		192			88
Net Cash Provided by (Used in) Operating Activities		62			(25	)
Cash Flows from Investing Activities
Repayment of ESOP loan receivable		176			162
Net Cash Provided by Investing Activities		176			162
Cash Flows from Financing Activities
Dividends paid to minority stockholders		-			(56	)
Purchase of treasury stock		-			(476	)
Capital distribution to Bank		-			(1,000	)
Net Cash Used in Financing Activities		-			(1,532	)
Net Increase (Decrease) in Cash and Cash Equivalents		238			(1,395	)
Cash and Cash Equivalents - Beginning		2,994			4,389
Cash and Cash Equivalents - Ending	$	3,232		$	2,994

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Note 4 - Securities Held to Maturity (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Note 4 - Securities Held to Maturity (Details) [Line Items]
Proceeds from Sale of Held-to-maturity Securities (in Dollars)	$ 0	$ 0
Held-to-maturity Securities Pledged as Collateral (in Dollars)	$ 764,000	$ 782,000
US Government Agencies Debt Securities [Member]
Note 4 - Securities Held to Maturity (Details) [Line Items]
Held-to-maturity, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	31	31
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Note 4 - Securities Held to Maturity (Details) [Line Items]
Held-to-maturity, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	22	14
Corporate Debt Securities [Member]
Note 4 - Securities Held to Maturity (Details) [Line Items]
Held-to-maturity, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	2	5
Certificates of Deposit [Member]
Note 4 - Securities Held to Maturity (Details) [Line Items]
Held-to-maturity, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	2	1

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Note 16 - Fair Value Measurements (Tables)

12 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements, Nonrecurring [Table Text Block]

	June 30, 2014
	Level 1 Inputs			Level 2 Inputs			Level 3 Inputs			Total Fair Value
	(In thousands)
Impaired loans		$	—		$	—		$	2,789		$	2,789

	June 30, 2013
	Level 1 Inputs			Level 2 Inputs			Level 3 Inputs			Total Fair Value
	(In thousands)
Impaired loans		$	—		$	—		$	15,066		$	15,066

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block]

	June 30, 2014
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
	(Dollars in thousands)
Impaired loans	$	2,789	Appraisal of Collateral	Appraisal adjustments	0%	to	-19.4%	(1.1%)
				Liquidation expense	4.2%	to	-57.9%	(7.7%)

	June 30, 2013
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
	(Dollars in thousands)
Impaired loans	$	15,066	Appraisal of collateral	Appraisal adjustments	0%	to	- 37.9%	(3.5%)
				Liquidiation  expense	0.11%	to	-27.4%	(7.9%)

Fair Value, by Balance Sheet Grouping [Table Text Block]

	Carrying		Fair		Level 1		Level 2		Level 3
	Amount		Value		Inputs		Inputs		Inputs
	(In thousands)
As of June 30, 2014
Financial assets:
Securities held to maturity	$	84,932	$	83,636	$	—	$	83,636	$	—
Loans receivable (1)		230,275		230,300		—		—		230,300
Financial liabilities:
Certificate of deposits		98,528		100,120		—		100,120		—
Advances from Federal Home Loan Bank of New York		38,000		39,281		—		39,281		—
As of June 30, 2013
Financial assets:
Securities held to maturity		80,912		78,367		—		78,367		—
Loans receivable (1)		223,256		227,556		—		—		227,556
Financial liabilities:
Certificate of deposits		109,948		111,797		—		111,797		—
Advances from Federal Home Loan Bank of New York		30,000		32,208		—		32,208		—
(1) Includes impaired loans measured at fair value on a non-recurring basis as discussed above.

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Note 11 - Income Taxes (Details) - Components of Deferred Tax Assets and Liabilities (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Deferred tax assets:
Allowances for losses on loans and commitments	$ 1,484	$ 1,717
Uncollected interest	142	425
Benefit plans	1,007	962
Restricted stock award	72	72
Other	63	56
	2,768	3,232
Deferred tax liabilities
Depreciation	(148)	(166)
Net deferred tax asset	$ 2,620	$ 3,066

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Note 10 - Lease Commitments and Total Rental Expense (Tables)

12 Months Ended

Jun. 30, 2014

Leases [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Year Ended June 30:
2015	$	415
2016		415
2017		431
2018		333
2019		263
Thereafter		307
	$	2,164

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Note 4 - Securities Held to Maturity (Details) - Held-to-Maturity Securities by Contractual Maturity (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Note 4 - Securities Held to Maturity (Details) - Held-to-Maturity Securities by Contractual Maturity [Line Items]
Amortized cost	$ 84,932	$ 80,912
Fair value	83,636	78,367
US Government Agencies Debt Securities [Member]
Note 4 - Securities Held to Maturity (Details) - Held-to-Maturity Securities by Contractual Maturity [Line Items]
Due after one year through five years, amortized cost	23,000
Due after one year through five years, fair value	22,497
Due after five years through ten years	12,177
Due after five years through ten years	11,835
Due thereafter	14,000
Due thereafter	13,343
Amortized cost	49,177
Fair value	47,675	44,147
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Note 4 - Securities Held to Maturity (Details) - Held-to-Maturity Securities by Contractual Maturity [Line Items]
Amortized cost	26,089
Fair value	26,215	24,311
Corporate Debt Securities [Member]
Note 4 - Securities Held to Maturity (Details) - Held-to-Maturity Securities by Contractual Maturity [Line Items]
Due after one year through five years, amortized cost	4,630
Due after one year through five years, fair value	4,681
Fair value	4,681	4,612
Certificates of Deposit [Member]
Note 4 - Securities Held to Maturity (Details) - Held-to-Maturity Securities by Contractual Maturity [Line Items]
Due after one year through five years, amortized cost	3,611
Due after one year through five years, fair value	3,638
Due within one year	1,425
Due within one year	1,427
Amortized cost	5,036
Fair value	$ 5,065	$ 5,297

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Note 8 - Deposits (Details) - Interest Expense by Deposit Type (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Interest Expense by Deposit Type [Abstract]
NOW, super NOW and money market demand	$ 50	$ 51
Savings and club	233	251
Certificates of deposit	1,372	1,705
	$ 1,655	$ 2,007

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Note 5 - Loans Receivable and Allowance for Credit Losses (Details) - Troubled Debt Restructurings on Financing Receivables (USD $)	9 Months Ended	12 Months Ended
	Mar. 31, 2014	Jun. 30, 2014	Jun. 30, 2013
Residential Mortgage
Financing Receivable, Modifications, Number of Contracts	18	2	18
Financing Receivable, Modifications, Pre-Modification Recorded Investment		$ 1,054,000	$ 6,108,000
Financing Receivable, Modifications, Post-Modification Recorded Investment		1,071,000	5,846,000
Residential Mortgage
Financing Receivable, Modifications, Number of Contracts, Subsequent Default		3	1
Financing Receivable, Modifications, Pre-Modification Recorded Investment, Subsequent Default		432,000	156,000
Financing Receivable, Modifications, Post-Modification Recorded Investment, Subsequent Default		477,000	127,000
Residential Mortgage: One-to-Four Family [Member]
Residential Mortgage
Financing Receivable, Modifications, Number of Contracts		2	10
Financing Receivable, Modifications, Pre-Modification Recorded Investment		1,054,000	3,625,000
Financing Receivable, Modifications, Post-Modification Recorded Investment		1,071,000	3,582,000
Residential Mortgage
Financing Receivable, Modifications, Number of Contracts, Subsequent Default			1
Financing Receivable, Modifications, Pre-Modification Recorded Investment, Subsequent Default			156,000
Financing Receivable, Modifications, Post-Modification Recorded Investment, Subsequent Default			127,000
Commercial Real Estate Segment [Member]
Residential Mortgage
Financing Receivable, Modifications, Number of Contracts			3
Financing Receivable, Modifications, Pre-Modification Recorded Investment			1,119,000
Financing Receivable, Modifications, Post-Modification Recorded Investment			1,063
Residential Mortgage
Financing Receivable, Modifications, Number of Contracts, Subsequent Default		1
Financing Receivable, Modifications, Pre-Modification Recorded Investment, Subsequent Default		409,000
Financing Receivable, Modifications, Post-Modification Recorded Investment, Subsequent Default		409,000
Construction: Other [Member]
Residential Mortgage
Financing Receivable, Modifications, Number of Contracts			1
Financing Receivable, Modifications, Pre-Modification Recorded Investment			1,150,000
Financing Receivable, Modifications, Post-Modification Recorded Investment			987,000
Commercial and Industrial [Member]
Residential Mortgage
Financing Receivable, Modifications, Number of Contracts			4
Financing Receivable, Modifications, Pre-Modification Recorded Investment			214,000
Financing Receivable, Modifications, Post-Modification Recorded Investment			214,000
Residential Mortgage
Financing Receivable, Modifications, Number of Contracts, Subsequent Default		2
Financing Receivable, Modifications, Pre-Modification Recorded Investment, Subsequent Default		23,000
Financing Receivable, Modifications, Post-Modification Recorded Investment, Subsequent Default		$ 68,000

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Note 2 - Summary of Significant Accounting Policies (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items]
Available-for-sale Securities	$ 0	$ 0
Asset Impairment Charges	0	0
Unrecognized Tax Benefits, Period Increase (Decrease)	0	0
Income Tax Examination, Penalties and Interest Expense	$ 0	$ 0
Employee Stock Option [Member]
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares)	275,410	275,410

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Note 1 - Organization and Business

12 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Nature of Operations [Text Block]

Note 1 – Organization and Business

MSB Financial Corp. (the “Company”) is a federally-chartered corporation organized in 2004 for the purpose of acquiring all of the capital stock that Millington Savings Bank (the “Bank”) issued in its mutual holding company reorganization. The Company’s principal business is the ownership and operation of the Bank.

MSB Financial, MHC (the “MHC”) is a federally-chartered mutual holding company that was formed in 2004 in connection with the mutual holding company reorganization. The MHC has not engaged in any significant business other than its ownership interest in the Company since its formation. So long as the MHC is in existence, it will at all times own a majority of the outstanding stock of the Company. At June 30, 2014, the MHC owned 61.7% of the Company’s outstanding common shares.

The Bank is a New Jersey chartered stock savings bank and its deposits are insured by the Federal Deposit Insurance Corporation (the “FDIC”). The primary business of the Bank is attracting retail deposits from the general public and using those deposits together with funds generated from operations, principal repayments on securities and loans and borrowed funds, for its lending and investing activities. The Bank’s loan portfolio primarily consists of one-to-four family and home equity residential loans, commercial loans, and construction loans. It also invests in U.S. government obligations and mortgage-backed securities. The Bank is regulated by the New Jersey Department of Banking and Insurance and the FDIC. The Board of Governors of the Federal Reserve System (the “Federal Reserve”) regulates the MHC and the Company as savings and loan holding companies.

The primary business of Millington Savings Service Corp (the “Service Corp”) was the ownership and operation of a single commercial rental property, which was sold during the year ended June 30, 2007. Currently the Service Corp is inactive.

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Note 6 - Premises and Equipment (Details) - Components of Premises and Equipment (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Property, Plant and Equipment [Line Items]
Property Plant and Equipment, Gross	$ 14,031	$ 14,083
Accumulated depreciation and amortization	(5,545)	(5,201)
	8,486	8,882
Land [Member]
Property, Plant and Equipment [Line Items]
Property Plant and Equipment, Gross	1,937	1,937
Building and Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Property Plant and Equipment, Gross	8,477	8,469
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property Plant and Equipment, Gross	1,767	1,787
Furnishings and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property Plant and Equipment, Gross	1,835	1,887
Assets Being Developedfor Future Use [Member]
Property, Plant and Equipment [Line Items]
Property Plant and Equipment, Gross	$ 15	$ 3

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Note 17 - Parent Only Financial Statements (Tables)

12 Months Ended

Jun. 30, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Balance Sheet [Table Text Block]

Condensed Statements of Financial Condition
	June 30,
	2014			2013
	(In thousands)
Assets
Cash and due from banks	$	3,232		$	2,994
Loan receivable		996			1,172
Investments in subsidiaries		36,504			35,257
Other assets		178			1,172
Total Assets	$	40,910		$	40,595
Liabilities
Other liabilities	$	100		$	1,082
Total liabilities		100			1,082
Stockholders’ Equity
Common stock		562			562
Paid-in capital		24,616			24,473
Retained earnings		21,670			20,682
Unallocated common stock held by ESOP		(759	)		(927	)
Treasury stock		(5,244	)		(5,244	)
Accumulated other comprehensive loss		(35	)		(33	)
Total Stockholders’ Equity		40,810			39,513
Total Liabilities and Stockholders’ Equity	$	40,910		$	40,595

Condensed Income Statement [Table Text Block]

Condensed Statements of Comprehensive (Loss) Income
	Years Ended June 30,
	2014			2013
		(In thousands)
Equity in undistributed earnings of subsidiaries	$	1,118		$	(1,272	)
Interest income		91			105
Non-interest expense		(226	)		(221	)
Income (Loss) Before Income Taxes		983			(1,388	)
Income tax  benefit		(5)			(3	)
Net Income (Loss)	$	988		$	(1,385	)
Comprehensive Income (Loss)	$	986		$	(1,317	)

Condensed Cash Flow Statement [Table Text Block]

Condensed Statements of Cash Flows
	Years Ended June 30,
	2014			2013
	(In thousands)
Cash Flows from Operating Activities
Net income (loss)	$	988		$	(1,385	)
Adjustments to reconcile net income (loss) to net cash  provided by operating activities:
Equity in undistributed earnings of subsidiaries		(1,118	)		1,272
Net change in other assets and liabilities		192			88
Net Cash Provided by (Used in) Operating Activities		62			(25	)
Cash Flows from Investing Activities
Repayment of ESOP loan receivable		176			162
Net Cash Provided by Investing Activities		176			162
Cash Flows from Financing Activities
Dividends paid to minority stockholders		-			(56	)
Purchase of treasury stock		-			(476	)
Capital distribution to Bank		-			(1,000	)
Net Cash Used in Financing Activities		-			(1,532	)
Net Increase (Decrease) in Cash and Cash Equivalents		238			(1,395	)
Cash and Cash Equivalents - Beginning		2,994			4,389
Cash and Cash Equivalents - Ending	$	3,232		$	2,994

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Accounting Policies, by Policy (Policies)

12 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Basis of Consolidated Financial Statement Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, the Bank and the Bank’s wholly owned subsidiary, the Service Corp. All significant intercompany accounts and transactions have been eliminated in consolidation.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated statements of financial condition and revenues and expenses for the periods then ended. Actual results could differ significantly from those estimates.

A material estimate that is particularly susceptible to significant change relates to the determination of the allowance for loan losses. Management believes that the allowance for loan losses is adequate. While management uses all available information to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions in the Bank’s market area.  In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for loan losses. Such agencies may require the Bank to recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examinations.

The Company has evaluated events and transactions occurring subsequent to the consolidated statement of financial condition date of June 30, 2014 for items that should potentially be recognized or disclosed in these consolidated financial statements.  The evaluation was conducted through the date these consolidated financial statements were issued.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

Cash and cash equivalents include cash and amounts due from depository institutions and interest-bearing deposits with banks with original maturities of three months or less.

Investment, Policy [Policy Text Block]

Securities

Investments in debt securities that the Company has the positive intent and ability to hold to maturity are classified as held to maturity securities and reported at amortized cost. Debt and equity securities that are bought and held principally for the purpose of being sold in the near term are classified as trading securities and reported at fair value, with unrealized holding gains and losses included in earnings. Debt and equity securities not classified as trading securities or as held to maturity securities are classified as available for sale securities and reported at fair value, with unrealized holding gains or losses, net of applicable income taxes, reported in a separate component of stockholders’ equity.  The Company had no trading or available for sale securities as of June 30, 2014 and 2013.

Individual securities are considered impaired when their fair value is less than amortized cost. Management evaluates all securities with unrealized losses quarterly to determine if such impairments are “temporary” or “other-than-temporary” in accordance with applicable accounting guidance.  Accordingly, the Company accounts for temporary impairments based upon a security’s classification as trading, available for sale or held to maturity.  Temporary impairments on available for sale securities are recognized, on a tax-effected basis, through other comprehensive income (loss) with offsetting entries adjusting the carrying value of the security and the balance of deferred taxes.  Temporary impairments of held to maturity securities are not recognized in the consolidated financial statements; however, information concerning the amount and duration of impairments on held to maturity securities is disclosed in the notes to the consolidated financial statements.  The carrying value of securities held in the trading portfolio is adjusted to fair value through earnings on a monthly basis.

Other-than-temporary impairments on securities that the Company has decided to sell or will more likely than not be required to sell prior to the full recovery of their fair value to a level equal to or exceeding amortized cost are recognized in earnings.  Otherwise, the other-than-temporary impairment is bifurcated into credit-related and noncredit-related components.  The credit-related impairment generally represents the amount by which the present value of the cash flows expected to be collected on a debt security falls below its amortized cost.  The noncredit-related component represents the remaining portion of the impairment not otherwise designated as credit-related. Credit-related other-than-temporary impairments are recognized in earnings while noncredit-related other-than-temporary impairments are recognized, net of deferred taxes, in other comprehensive income (loss).

The Company reviews its investment portfolio on a quarterly basis for indications of impairment. This review includes analyzing the length of time and the extent to which the fair value of a security has been lower than the cost, and the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer.  The Company also assesses its intent with regard to selling or holding each security as well as any conditions which may require the sale of security prior to the recovery of fair value to a level which equals or exceeds amortized cost.

Discounts and premiums on securities are accreted/amortized to maturity by use of the level-yield method. Gain or loss on sales of securities is based on the specific identification method.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Risk

The Bank’s lending activities are concentrated in loans secured by real estate located in the State of New Jersey.

Loans and Leases Receivable, Lease Financing, Policy [Policy Text Block]

Loans Receivable

Loans are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct loan origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Company is generally amortizing these amounts over the contractual life of the loan.

For all classes of loans receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due or when management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. Certain loans may remain on accrual status if they are in the process of collection and are either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans, including impaired loans, generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt.  The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments.

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

Allowance for Credit Losses

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the statement of financial condition date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities, when required, on the consolidated statement of financial condition. The allowance for credit losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. All, or part, of the principal balance of loans receivable that are deemed uncollectible are charged against the allowance for loan losses when management determines that the repayment of that amount is highly unlikely.  Any subsequent recoveries are credited to the allowance for loan losses.  Non-residential consumer loans are generally charged off no later than 120 days past due on a contractual basis, earlier in the event of bankruptcy, or if there is an amount deemed uncollectible.  

The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance.  The allowance is based on the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, the composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examinations.

The allowance calculation methodology includes segregation of the total loan portfolio into segments. The Company’s loans receivable portfolio is comprised of the following segments: residential mortgage, commercial real estate, construction, commercial and industrial and consumer.  Some segments of the

Company’s loan receivable portfolio are further disaggregated into classes which allow management to more accurately monitor risk and performance.

The residential mortgage loan segment is disaggregated into two classes: one-to-four family loans, which are primarily first liens, and home equity loans, which consist of first and second liens.  The commercial real estate loan segment includes owner and non-owner occupied loans which have medium risk based on historical experience with these type of loans.  The construction loan segment is further disaggregated into two classes: one-to-four family owner-occupied, which includes land loans, whereby the owner is known and there is less risk, and other, whereby the property is generally under development and tends to have more risk than the one-to-four family owner-occupied loans.  The commercial and industrial loan segment consists of loans made for the purpose of financing the activities of commercial customers. The majority of commercial and industrial loans are secured by real estate and thus carry a lower risk than traditional commercial and industrial loans.  The consumer loan segment consists primarily of installment loans and overdraft lines of credit connected with customer deposit accounts.

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For 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 pools of loans by loan class. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these classes of loans, adjusted for qualitative factors.  These qualitative risk factors include:

1.	Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices.
2.	National, regional, and local economic and business conditions as well as the condition of various market segments, including the value of underlying collateral for collateral dependent loans.
3.	Nature and volume of the portfolio and terms of loans.
4.	Experience, ability, and depth of lending management and staff.
5.	Volume and severity of past due, classified and nonaccrual loans as well as and other loan modifications.
6.	Quality of the Company’s loan review system, and the degree of oversight by the Company’s Board of Directors.
7.	Existence and effect of any concentrations of credit and changes in the level of such concentrations.
8.	Effect of external factors, such as competition and legal and regulatory requirements.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation.

An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

Impaired Financing Receivable, Policy [Policy Text Block]

Impaired Loans

Management evaluates individual loans in all of the loan segments (including loans in the residential mortgage and consumer segments) for possible impairment if the recorded investment in the loan is greater than $200,000 and if the loan is either in nonaccrual status or is risk rated Substandard or worse or has been modified in a troubled debt restructuring.  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.

Loans whose terms are modified are classified as a troubled debt restructuring (“TDR”) if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a TDR generally involve a reduction in interest rate below market rate given the associated credit risk, or an extension of a loan’s stated maturity date or capitalization of interest and/or escrow. Nonaccrual TDRs are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification.  Loans classified as TDRs are designated as impaired until they are ultimately repaid in full or foreclosed and sold.  The nature and extent of impairment of TDRs, including those which experienced a subsequent default, is considered in the determination of an appropriate level of allowance for loan losses.

Once the determination has been made that a loan is impaired, impairment is measured by comparing the recorded investment in the loan to one of the following: (a) the present value of expected cash flows (discounted at the loan’s effective interest rate), (b) the loan’s observable market price or (c) the fair value of collateral adjusted for expected selling costs.  The method is selected on a loan by loan basis with management primarily utilizing the fair value of collateral method.

The estimated fair values of the real estate collateral are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property.

The estimated fair values of the non-real estate collateral, such as accounts receivable, inventory and equipment, are determined based on the borrower’s financial statements, inventory reports, accounts receivable agings or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets.

The evaluation of the need and amount of the allowance for impaired loans and whether a loan can be removed from impairment status is made on a quarterly basis.  The Company’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition.

Real Estate Owned, Valuation Allowance, Policy [Policy Text Block]

Other Real Estate Owned

Other real estate owned represents real estate acquired through formal foreclosure or by taking possession of the real estate and is initially recorded at the lower of cost or fair value, less estimated selling costs establishing a new cost basis.  Write-downs required at the time of acquisition are charged to the allowance for loan losses establishing a new cost basis.  Thereafter, the Company maintains an allowance for decreases in the properties’ estimated fair value, through charges to earnings.  Such charges are included in other non-interest expense along with any additional property maintenance.

Property, Plant and Equipment, Policy [Policy Text Block]

Premises and Equipment

Premises and equipment are comprised of land, at cost, and buildings, building improvements, furnishings and equipment and leasehold improvements, at cost, less accumulated depreciation and amortization. Depreciation and amortization charges are computed on the straight-line method over the following estimated useful lives:

	Years
Building and improvements	5 - 50
Furnishings and equipment	3 – 7
Leasehold improvements	Shorter of useful life or term of lease

Significant renewals and betterments are capitalized to the premises and equipment account. Maintenance and repairs are charged to operations in the year incurred. Rental income is netted against occupancy costs in the consolidated statements of income.

Securities Owned Not Readily Marketable, Policy [Policy Text Block]

Federal Home Loan Bank Stock

Federal law requires a member institution of the Federal Home Loan Bank (“FHLB”) system to hold restricted stock of its district’s FHLB according to a predetermined formula based on advances available and outstanding. The restricted stock is carried at cost.  Management’s determination of whether these shares are impaired is based on an assessment of the ultimate recoverability of its cost rather than by recognizing temporary declines in value.  The determination of whether a decline affects the ultimate recoverability of cost is influenced by criteria such as (1) the significance of the decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB.

Management believes no impairment charge was necessary related to the FHLB restricted stock during fiscal years 2014 or 2013.

Policyholder Accounts, Policy [Policy Text Block]

Bank Owned Life Insurance

Bank owned life insurance is carried at net cash surrender value. The change in the net cash surrender value is recorded as a component of non-interest income.

Pension and Other Postretirement Plans, Pensions, Policy [Policy Text Block]

Defined Benefit Plans

In accordance with applicable guidance prescribed in FASB ASC 715, “Compensation – Retirement Benefits”, the Company recognizes the over-funded or under-funded status of a defined benefit postretirement plan as an asset or liability in the consolidated statement of financial condition, with changes in the funded status recorded through other comprehensive income (loss) in the year in which those changes occur.  The funded status of the plan is calculated using actuarial concepts which involve making assumptions regarding discount rate, mortality, expected rate of compensation increases and others.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-based Compensation Plans

In accordance with FASB ASC 718, “Compensation – Stock Compensation”, the Company recognizes compensation expense for the total of the fair value of all share-based compensation awards granted over the requisite service periods.  In addition, ASC 718 requires that cash flow activity be reported on a financing

rather than an operating cash flow basis for the benefits, if any, of realized tax deductions in excess of previously recognized tax benefits on compensation expense.

Advertising Costs, Policy [Policy Text Block]

Advertising

The Company expenses advertising and marketing costs as incurred.

Income Tax, Policy [Policy Text Block]

Income Taxes Expense (Benefit)

The Company and its subsidiaries file a consolidated federal income tax return with the MHC. Federal income taxes are allocated based on the contribution of their respective income or loss to the consolidated income tax return. Separate state income tax returns are filed.

Federal and state income taxes have been provided in these consolidated financial statements on the basis of reported income (loss). The amounts reflected on the income tax returns differ from these provisions due principally to temporary differences in the reporting of certain items of income and expense for financial reporting and income tax reporting purposes. Deferred income taxes are recorded to recognize such temporary differences.

The Company follows the provisions of FASB ASC 740, “Income Taxes”, formerly FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes (“FIN48”).  ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognizing, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the Company’s evaluation under ASC 740, no significant income tax uncertainties have been identified. Therefore, the Company recognized no adjustment for unrecognized income tax benefits for the years ended June 30, 2014 and 2013. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the consolidated statement of income (loss). The Company did not recognize any interest and penalties for the years ended June 30, 2014 and 2013.  The tax years subject to examination by the taxing authorities are the years ended June 30, 2013, 2012, and 2011.

Off-Balance-Sheet Credit Exposure, Policy [Policy Text Block]

Off-Balance Sheet Credit-Related Financial Instruments

In the ordinary course of business, the Company enters into commitments to extend credit, including commitments under lines of credit. Such financial instruments are recorded when they are funded.

Earnings Per Share, Policy [Policy Text Block]

Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding, exclusive of the Employee Stock Ownership Plan (“ESOP”) shares not yet committed to be released. Diluted earnings per share is calculated by adjusting the weighted average number of shares of common stock outstanding to include the effect of contracts or securities exercisable (such as stock options) or which could be converted into common stock, if dilutive, using the treasury stock method. Diluted earnings (loss) per share did not differ from basic earnings (loss) per share for the years ended June 30, 2014 and 2013, as the 275,410 weighted average number of outstanding stock options for the years ended June 30, 2014 and 2013, were all anti-dilutive and the Company incurred a net loss during 2013.

Comprehensive Income, Policy [Policy Text Block]

Other Comprehensive Income (Loss)

Other comprehensive income (loss) includes benefit plans amounts recognized under ASC 715, “Compensation-Retirement Benefits”.  This item of other comprehensive income (loss) reflects, net of tax, prior service costs and unrealized net losses that had not been recognized in the consolidated financial statements prior to the implementation of ASC 715 along with actuarial losses arising during the current period.

Interest Expense, Policy [Policy Text Block]

Interest Rate Risk

The Bank is principally engaged in the business of attracting deposits from the general public and using these deposits, together with other funds, to purchase securities and to make loans primarily secured by real estate. The potential for interest-rate risk exists as a result of the generally shorter duration of the Bank’s interest-sensitive liabilities compared to the generally longer duration of its interest-sensitive assets. In a rising rate environment, liabilities will generally reprice faster than assets, thereby reducing net interest income. For this reason, management regularly monitors the maturity structure of the Bank’s assets and liabilities in order to measure its level of interest-rate risk and to plan for future volatility.

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Note 20 - Recent Accounting Pronouncements

12 Months Ended

Jun. 30, 2014

Accounting Changes and Error Corrections [Abstract]

Accounting Changes and Error Corrections [Text Block]

Note 20 – Recent Accounting Pronouncements

In February 2013, FASB issued Accounting Standards Update (“ASU”) 2013-02, Other Comprehensive Income – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which amends FASB ASC Top 220, Comprehensive Income (Topic 220). The amendments in this update supersede and replace the presentation requirements for reclassifications out of accumulated other comprehensive income in ASUs 2011-05 and 2011-12 for all public and private organizations. The amendments require an entity to provide additional information about reclassifications out of accumulated other comprehensive income.  The new requirement about presenting information about amounts reclassified out of accumulated other comprehensive income and their corresponding effect on net income present, in one place, information about significant amounts reclassified and, in some cases, cross-references to related footnote disclosures. Previously, this information was presented in different places throughout the financial statements.  For public entities, the amendments of this update were effective prospectively for annual reporting periods beginning after December 15, 2012 and interim periods within those years.  The adoption of ASU 2011-05 as of July 1, 2013, did not have a significant impact on the Company’s presentation of the comprehensive income.

            In July 2013, FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss (NOL) carryforward, a similar tax loss, or a tax credit carryforward exists.  The FASB’s objective in issuing this ASU is to eliminate diversity in practice resulting from a lack of guidance on this topic in current U.S. GAAP.  This ASU applies to all entities with unrecognized tax benefits that also have tax loss or tax credit carryforwards in the same tax jurisdiction as of the reporting date.  For public entities, the guidance is effective for the fiscal years beginning after December 15, 2013 and interim periods within those years.  The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In January 2014, FASB issued ASU 2014-04, Receivables – Troubled Debt Restructurings by Creditors, which clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real

estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement.  Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.  For public entities, the guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014.  We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements

             In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP.  The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures).  We are currently evaluating the impact of the pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard in 2017.

In June 2014, FASB issued ASU 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures, which amends previously issued guidance on this topic.The amendments in this Update require two accounting changes.  (1) repurchase-to-maturity transactions will be accounted for as secured borrowing transactions on the balance sheet, rather than sales and (2) for repurchase financing arrangements, the amendments require separate accounting for a transfer of a financial asset executed contemporaneously with (or in contemplation of) a repurchase agreement with the same counterparty, which also will generally result in secured borrowing accounting for the repurchase agreement. This ASU also introduces new disclosures to increase transparency about the types of collateral pledged for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions that are accounted for as secured borrowings. The ASU also requires a transferor to disclose information about transactions accounted for as a sale in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets through an agreement with the transferee.  For public entities, the accounting changes and disclosure for certain transactions accounted for as a sale are effective for the first interim or annual period beginning after December 15, 2014. The disclosure for transactions accounted for as secured borrowings is required for annual periods beginning after December 15, 2014, and for interim periods beginning after March 15, 2015. All entities are required to present changes in accounting for transactions outstanding on the effective date as a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption.  We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

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Note 5 - Loans Receivable and Allowance for Credit Losses (Details) - Impaired Loans by Class (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Residential mortgage
Recorded Investment, with No Related Allowance Recorded	$ 22,793	$ 21,340
Unpaid Principal Balance, with No Related Allowance Recorded	24,727	22,633
Average Recorded Investment, with No Related Allowance Recorded	21,503	18,713
Interest Income Recognized, with No Related Allowance Recorded	906	674
Residential mortgage
Recorded Investment, with an Allowance Recorded	137	5,661
Unpaid Principal Balance, with an Allowance Recorded	138	6,774
Related Allowance	73	433
Average Recorded Investment, with an Allowance Recorded	2,129	7,793
Interest Income Recognized, with an Allowance Recorded	3	150
Residential mortgage
Recorded Investment, Total	22,930	27,001
Unpaid Principal Balance, Total	24,865	29,407
Related Allowance, Total	73	433
Average Recorded Investment, Total	23,632	26,506
Interest Income Recognized, Total	909	824
Residential Mortgage: One-to-Four Family [Member]
Residential mortgage
Recorded Investment, with No Related Allowance Recorded	15,975	13,817
Unpaid Principal Balance, with No Related Allowance Recorded	16,667	14,747
Average Recorded Investment, with No Related Allowance Recorded	14,982	11,978
Interest Income Recognized, with No Related Allowance Recorded	620	437
Residential mortgage
Recorded Investment, with an Allowance Recorded		1,469
Unpaid Principal Balance, with an Allowance Recorded		1,720
Related Allowance		58
Average Recorded Investment, with an Allowance Recorded	632	3,219
Interest Income Recognized, with an Allowance Recorded		34
Residential mortgage
Recorded Investment, Total	15,975	15,286
Unpaid Principal Balance, Total	16,667	16,467
Related Allowance, Total		58
Average Recorded Investment, Total	15,614	15,197
Interest Income Recognized, Total	620	471
Residential Mortgage: Home Equity [Member]
Residential mortgage
Recorded Investment, with No Related Allowance Recorded	1,740	3,376
Unpaid Principal Balance, with No Related Allowance Recorded	1,756	3,406
Average Recorded Investment, with No Related Allowance Recorded	2,019	3,399
Interest Income Recognized, with No Related Allowance Recorded	41	127
Residential mortgage
Recorded Investment, with an Allowance Recorded		891
Unpaid Principal Balance, with an Allowance Recorded		1,214
Related Allowance		233
Average Recorded Investment, with an Allowance Recorded	294	737
Interest Income Recognized, with an Allowance Recorded		7
Residential mortgage
Recorded Investment, Total	1,740	4,267
Unpaid Principal Balance, Total	1,756	4,620
Related Allowance, Total		233
Average Recorded Investment, Total	2,313	4,136
Interest Income Recognized, Total	41	134
Commercial Real Estate Portfolio Segment [Member]
Residential mortgage
Recorded Investment, with No Related Allowance Recorded	1,973	1,796
Unpaid Principal Balance, with No Related Allowance Recorded	2,431	1,867
Average Recorded Investment, with No Related Allowance Recorded	1,404	1,742
Interest Income Recognized, with No Related Allowance Recorded	76	65
Residential mortgage
Recorded Investment, with an Allowance Recorded		1,444
Unpaid Principal Balance, with an Allowance Recorded		1,804
Related Allowance		88
Average Recorded Investment, with an Allowance Recorded	752	1,512
Interest Income Recognized, with an Allowance Recorded		17
Residential mortgage
Recorded Investment, Total	1,973	3,240
Unpaid Principal Balance, Total	2,431	3,671
Related Allowance, Total		88
Average Recorded Investment, Total	2,156	3,254
Interest Income Recognized, Total	76	82
Construction: One-to-Four Family Occupied [Member]
Residential mortgage
Recorded Investment, with No Related Allowance Recorded	1,707
Unpaid Principal Balance, with No Related Allowance Recorded	1,936
Average Recorded Investment, with No Related Allowance Recorded	1,365	387
Interest Income Recognized, with No Related Allowance Recorded	97
Residential mortgage
Recorded Investment, with an Allowance Recorded		1,707
Unpaid Principal Balance, with an Allowance Recorded		1,936
Related Allowance		23
Average Recorded Investment, with an Allowance Recorded	341	1,230
Interest Income Recognized, with an Allowance Recorded		87
Residential mortgage
Recorded Investment, Total	1,707	1,707
Unpaid Principal Balance, Total	1,936	1,936
Related Allowance, Total		23
Average Recorded Investment, Total	1,706	1,617
Interest Income Recognized, Total	97	87
Construction: Other [Member]
Residential mortgage
Recorded Investment, with No Related Allowance Recorded	750	1,601
Unpaid Principal Balance, with No Related Allowance Recorded	750	1,510
Average Recorded Investment, with No Related Allowance Recorded	920	671
Interest Income Recognized, with No Related Allowance Recorded	36	16
Residential mortgage
Recorded Investment, with an Allowance Recorded	137
Unpaid Principal Balance, with an Allowance Recorded	138
Related Allowance	73
Average Recorded Investment, with an Allowance Recorded	110	646
Interest Income Recognized, with an Allowance Recorded	3
Residential mortgage
Recorded Investment, Total	887	1,601
Unpaid Principal Balance, Total	888	1,510
Related Allowance, Total	73
Average Recorded Investment, Total	1,030	1,317
Interest Income Recognized, Total	39	16
Commercial and Industrial [Member]
Residential mortgage
Recorded Investment, with No Related Allowance Recorded	648	750
Unpaid Principal Balance, with No Related Allowance Recorded	1,187	1,103
Average Recorded Investment, with No Related Allowance Recorded	813	536
Interest Income Recognized, with No Related Allowance Recorded	36	29
Residential mortgage
Recorded Investment, with an Allowance Recorded		150
Unpaid Principal Balance, with an Allowance Recorded		100
Related Allowance		31
Average Recorded Investment, with an Allowance Recorded		449
Interest Income Recognized, with an Allowance Recorded		5
Residential mortgage
Recorded Investment, Total	648	900
Unpaid Principal Balance, Total	1,187	1,203
Related Allowance, Total		31
Average Recorded Investment, Total	813	985
Interest Income Recognized, Total	$ 36	$ 34

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Note 18 - Quarterly Results of Operations (Unaudited) (Tables)

12 Months Ended

Jun. 30, 2014

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information [Table Text Block]

	Year Ended June 30, 2014
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(In thousands, except per share data)
Interest income	$	2,965	$	3,005	$	3,038	$	2,984
Interest expense		632		617		585		588
Net Interest Income		2,333		2,388		2,453		2,396
Provision for loan losses		150		150		150		150
Net Interest Income after Provision for Loan Losses		2,183		2,238		2,303		2,246
Non-interest income		181		182		184		177
Non-interest expenses		1,987		2,037		2,117		2,017
Income before Income Taxes		377		383		370		406
Income tax expense		129		132		127		160
Net Income	$	248	$	251	$	243	$	246
Earnings per share:
Basic and diluted	$	0.05	$	0.05	$	0.05	$	0.05

	Year Ended June 30, 2013
	First			Second			Third		Fourth
	Quarter			Quarter			Quarter		Quarter
	(In thousands except per share data)
Interest income	$	3,142		$	3,000		$	2,985	$	2,905
Interest expense		727			689			648		657
Net Interest Income		2,415			2,311			2,337		2,248
Provision for loan losses		746			2,973			175		150
Net Interest Income (Loss) after Provision for Loan Losses		1,669			(662	)		2,162		2,098
Non-interest income		159			162			159		170
Non-interest expenses		2,004			2,122			2,188		1,975
(Loss) Income before Income Taxes		(176	)		(2,622	)		133		293
Income tax (benefit) expense		(84	)		(1,047	)		44		100
Net (Loss) Income	$	(92	)	$	(1,575	)	$	89	$	193
(Loss) Earnings per share:
Basic and diluted	$	(0.02	)	$	(0.32	)	$	0.02	$	0.04

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Note 2 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Schedule of Estimated Useful Lives [Table Text Block]

	Years
Building and improvements	5 - 50
Furnishings and equipment	3 – 7
Leasehold improvements	Shorter of useful life or term of lease

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Note 4 - Securities Held to Maturity (Tables)

12 Months Ended

Jun. 30, 2014

Investment Holdings [Text Block] [Abstract]

Unrealized Gain (Loss) on Investments [Table Text Block]

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
June 30, 2014:
U.S. Government agencies	$	49,177	$	49	$	1,551	$	47,675
Mortgage-backed securities		26,089		464		338		26,215
Corporate bonds		4,630		56		5		4,681
Certificates of deposits		5,036		30		1		5,065
	$	84,932	$	599	$	1,895	$	83,636
June 30, 2013:
U.S. Government agencies	$	46,194	$	84	$	2,131	$	44,147
Mortgage-backed securities		24,768		297		754		24,311
Corporate bonds		4,669		15		72		4,612
Certificates of deposits		5,281		17		1		5,297
	$	80,912	$	413	$	2,958	$	78,367

Investments Classified by Contractual Maturity Date [Table Text Block]

	Amortized Cost			Fair Value
	(In thousands)
U.S. Government agencies:
Due after one year through five years	$	23,000	$		22,497
Due after five years through ten years		12,177			11,835
Due thereafter		14,000			13,343
		49,177			47, 675
Mortgage-backed securities		26,089			26,215
Corporate Bonds
Due after one year through five years		4,630			4,681
Certificates of Deposits
Due within one year		1,425			1,427
Due after one year through five years		3,611			3,638
		5,036			5,065
	$	84,932		$	83,636

Schedule of Unrealized Loss on Investments [Table Text Block]

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In thousands)
June 30, 2014:
U.S. Government         agencies	$	36,339	$	1,341	$	6,290	$	210	$	42,629	$	1,551
Mortgage-backed securities		17,022		325		816		13		17,838		338
Corporate bonds		1,031		5		—		—		1,031		5
Certificates of deposits		489		1		—		—		489		1
	$	54,881	$	1,672	$	7,106	$	223	$	61,987	$	1,895
June 30, 2013:
U.S. Government         agencies	$	42,048	$	2,131	$	—	$	—	$	42,048	$	2,131
Mortgage-backed securities		18,401		754		—		—		18,401		754
Corporate bonds		2,980		72		—		—		2,980		72
Certificates of deposits		246		1		—		—		246		1
	$	63,675	$	2,958	$	—	$	—	$	63,675	$	2,958

XML

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash Flows from Operating Activities
Net income (loss)	$ 988	$ (1,385)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net accretion of securities discounts and deferred loan fees and costs	(13)	(263)
Depreciation and amortization of premises and equipment	496	567
Stock based compensation and allocation of ESOP stock	311	428
Provision for loan losses	600	4,044
Loss on impairment of other real estate owned		64
Gain on sale of other real estate owned	(142)	(62)
Decrease (increase) in net deferred tax asset	448	(494)
Income from bank owned life insurance	(217)	(217)
Unrealized gain on trading securities		(1)
(Increase) decrease in accrued interest receivable	(89)	112
Decrease in other assets	644	257
Increase in other liabilities	69	77
Net Cash Provided by Operating Activities	3,095	3,127
Activity in held to maturity securities:
Purchases	(8,380)	(71,755)
Maturities, calls and principal repayments	4,262	41,622
(Increase) decrease in loans receivable	(9,203)	10,674
Purchase of bank premises and equipment	(100)	(49)
Purchase of bank owned life insurance		(588)
Purchase of Federal Home Loan Bank of New York stock	(565)	(462)
Redemption of Federal Home Loan Bank of New York stock	202
Capitalized improvements of other real estate owned	(87)	(72)
Proceeds from the sale of other real estate owned	2,045	2,276
Proceeds from sale of trading securities		53
Net Cash Used in Investing Activities	(11,826)	(18,301)
Cash Flows from Financing Activities
Net decrease in deposits	(17,078)	(3,331)
Advances from Federal Home Loan Bank of New York	11,500	10,000
Repayment of advances from Federal Home Loan Bank of New York	(3,500)
Increase in advance payments by borrowers for taxes and insurance	362	35
Cash dividends paid to minority shareholders		(56)
Purchase of treasury stock		(476)
Net Cash (Used in) Provided by Financing Activities	(8,716)	6,172
Net Decrease in Cash and Cash Equivalents	(17,447)	(9,002)
Cash and Cash Equivalents – Beginning	24,755	33,757
Cash and Cash Equivalents – Ending	7,308	24,755
Supplementary Cash Flows Information
Interest paid	2,425	2,723
Income taxes paid	1	239
Loan receivable transferred to other real estate	$ 1,695	$ 2,736

XML

Note 5 - Loans Receivable and Allowance for Credit Losses (Tables)

12 Months Ended

Jun. 30, 2014

Note 5 - Loans Receivable and Allowance for Credit Losses (Tables) [Line Items]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	2014			2013
	(In thousands)
Residential mortgage:
One-to-four family	$	143,283		$	136,704
Home equity		38,484			40,682
		181,767			177,386
Commercial real estate		32,036			32,171
Construction		12,517			8,895
Commercial and industrial		9,666			9,267
		54,219			50,333
Consumer:
Deposit accounts		602			611
Automobile		33			111
Personal		36			32
Overdraft protection		161			175
		832			929
Total Loans Receivable		236,818			228,648
Loans in process		(2,491	)		(745	)
Deferred loan fees		(366	)		(377	)
	$	233,961		$	227,526

Impaired Financing Receivables [Table Text Block]

	June 30, 2014						Year Ended June 30, 2014
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
	(In thousands)
With no related allowance recorded:
Residential mortgage
One-to-four family	$	15,975	$	16,667	$	-	$	14,982	$	620
Home equity		1,740		1,756		-		2,019		41
Commercial real estate		1,973		2,431		-		1,404		76
Construction         One-to-four family owner-occupied		1,707		1,936		-		1,365		97
Other		750		750		-		920		36
Commercial and industrial		648		1,187		-		813		36
		22,793		24,727		-		21,503		906
With an allowance recorded:
Residential mortgage
One-to-four family		-		-		-		632		-
Home equity		-		-		-		294		-
Commercial real estate		-		-		-		752		-
Construction
One-to-four family owner-occupied		-		-		-		341		-
Other		137		138		73		110		3
Commercial and industrial		-		-		-		-		-
		137		138		73		2,129		3
Total:
Residential mortgage
One-to-four family		15,975		16,667		-		15,614		620
Home equity		1,740		1,756		-		2,313		41
Commercial real estate		1,973		2,431		-		2,156		76
Construction
One-to-four family owner-occupied		1,707		1,936		-		1,706		97
Other		887		888		73		1,030		39
Commercial and industrial		648		1,187		-		813		36
	$	22,930	$	24,865	$	73	$	23,632	$	909

	June 30, 2013						Year Ended June 30, 2013
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
	(In thousands)
With no related allowance recorded:
Residential mortgage
One-to-four family	$	13,817	$	14,747	$	-	$	11,978	$	437
Home equity		3,376		3,406		-		3,399		127
Commercial real estate		1,796		1,867		-		1,742		65
Construction         One-to-four family occupied		-		-		-		387		-
Other		1,601		1,510				671		16
Commercial and industrial		750		1,103		-		536		29
		21,340		22,633		-		18,713		674
With an allowance recorded:
Residential mortgage
One-to-four family		1,469		1,720		58		3,219		34
Home equity		891		1,214		233		737		7
Commercial real estate		1,444		1,804		88		1,512		17
Construction
One-to-four family occupied		1,707		1,936		23		1,230		87
Other		-		-		-		646		-
Commercial and industrial		150		100		31		449		5
		5,661		6,774		433		7,793		150
Total:
Residential mortgage
One-to-four family		15,286		16,467		58		15,197		471
Home equity		4,267		4,620		233		4,136		134
Commercial real estate		3,240		3,671		88		3,254		82
Construction
One-to-four family occupied		1,707		1,936		23		1,617		87
Other		1,601		1,510		-		1,317		16
Commercial and industrial		900		1,203		31		985		34
	$	27,001	$	29,407	$	433	$	26,506	$	824

Financing Receivable Credit Quality Indicators [Table Text Block]

As of June 30, 2014	Pass		Special Mention		Substandard		Doubtful		Loss		Total
	(In thousands)
Commercial real estate	$	27,280	$	3,062	$	1,621	$	-	$	-	$	31,963
Construction
One-to-four family owner-occupied		850		-		1,707		-		-		2,557
Other		6,851		445		64		-		73		7,433
Commercial and industrial		8,769		105		778		-		-		9.652
Total	$	43,750	$	3,612	$	4,170	$	-	$	73	$	51,605

As of June 30, 2013	Pass		Special Mention		Substandard		Doubtful		Loss		Total
	(In thousands)
Commercial real estate	$	27,025	$	2,491	$	2,515	$	-	$	72	$	32,103
Construction
One-to-four family owner-occupied		2,845		-		1,693		-		14		4,552
Other		1,980		988		-		601		-		3,569
Commercial and industrial		8,188		113		923		-		22		9,246
Total	$	40,038	$	3,592	$	5,131	$	601	$	108	$	49,470

Past Due Financing Receivables [Table Text Block]

As of  June 30, 2014	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivables		Nonaccrual Loans		Loans Receivable > 90 Days and Accruing
	(In thousands)
Residential Mortgage
One-to-four family	$	2,496		1,381		2,185		6,062	$	137,048	$	143,110	$	4,346	$	310
Home equity		32		125		1,207		1,364		37,049		38,413		1,586		51
Commercial real estate		-		-		1,248		1,248		30,715		31,963		1,248		-
Construction
One-to-four family owner-occupied		-		-		-		-		2,557		2,557		-		-
Other		-		-		-		-		7,433		7,433		137		-
Commercial and industrial		9		-		170		179		9,473		9,652		635		-
Consumer		4		-		-		4		829		833		-		-
Total	$	2,541	$	1,506	$	4,810	$	8,857	$	225,104	$	233,961	$	7,952	$	361

As of  June  30, 2013	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivables		Nonaccrual Loans		Loans Receivable > 90 Days and Accruing
	(In thousands)
Residential Mortgage
One-to-four family	$	3,910		1,525		5,822		11,257	$	125,189	$	136,446	$	7,955	$	501
Home equity		412		127		1,317		1,856		38,825		40,681		1,502		146
Commercial real estate		782		-		1,805		2,587		29,516		32,103		2,587		-
Construction
One-to-four family owner-occupied		-		-		-		-		4,552		4,552		-		-
Other		1,000		-		601		1,601		1,968		3,569		601		-
Commercial and industrial		472		49		280		801		8,445		9,246		-		-
Consumer		5		-		-		5		924		929		802		-
Total	$	6,581	$	1,701	$	9,825	$	18,107	$	209,419	$	227,526	$	13,447	$	647

Allowance for Credit Losses on Financing Receivables [Table Text Block]

	As of June 30, 2014
	Residential Mortgage		Commercial Real Estate		Construction		Commercial and Industrial		Consumer		Total
	(In thousands)
Allowance for loan
losses:
Ending Balance	$	2,183	$	860	$	379	$	256	$	8	$	3,686
Ending balance: individually evaluated for impairment	$	-	$	-	$	73	$	-	$	-	$	73
Ending balance: collectively evaluated for impairment	$	2,183	$	860	$	306	$	256	$	8	$	3,613
Loans receivables:
Ending balance	$	181,524	$	31,963	$	9,990	$	9,652	$	832	$	233,961
Ending balance: individually evaluated  for impairment	$	17,715	$	1,973	$	2,594	$	648	$	-	$	22,930
Ending balance: collectively evaluated for impairment	$	163,809	$	29,990	$	7,396	$	9,004	$	832	$	211,031

	As of June 30, 2013
	Residential Mortgage		Commercial Real Estate		Construction		Commercial and Industrial		Consumer		Unallocated		Total
Allowance for loan	(In thousands)
losses:
Ending Balance	$	3,036	$	706	$	238	$	276	$	11	$	3	$	4,270
Ending balance: individually evaluated for impairment	$	291	$	88	$	23	$	31	$	-	$	-	$	433
Ending balance: collectively evaluated for impairment	$	2,745	$	618	$	215	$	245	$	11	$	3	$	3,837
Loans receivables:
Ending balance	$	177,127	$	32,103	$	8,121	$	9,246	$	929	$	-	$	227,526
Ending balance: individually evaluated  for impairment	$	19,553	$	3,240	$	3,308	$	900	$	-	$	-	$	27,001
Ending balance: collectively evaluated for impairment	$	157,574	$	28,863	$	4,813	$	8,346	$	929	$	-	$	200,525

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	Year Ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
			((Dollars in thousands)
Residential Mortgage
One-to-four family		2	$	1,054	$	1,071
Total		2	$	1,054	$	1,071

	Year Ended June 30, 2013
	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
One-to-four family		10	$	3,625	$	3,582
Commercial real estate		3		1,119		1.063
Construction
Other		1		1,150		987
Commercial and industrial		4		214		214
Total		18	$	6,108	$	5,846

	Year Ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investments			Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
Commercial real estate		1	$	409	$		409
Commercial and industrial		2		23			68
Total		3	$	432		$	477

	Year Ended June 30, 2013
	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
One-to-four family		1	$	156	$	127
Total		1	$	156	$	127

Additional Information [Member]

Note 5 - Loans Receivable and Allowance for Credit Losses (Tables) [Line Items]

Allowance for Credit Losses on Financing Receivables [Table Text Block]

	Year Ended June 30, 2014
	Residential  Mortgage			Commercial Real Estate			Construction			Commercial and Industrial			Consumer			Unallocated			Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning	$	3,036		$	706		$	238		$	276		$	11		$	3		$	4,270
Provisions		(351	)		494			246			208			6			(3	)		600
Loans charged-off		(537	)		(340	)		(119	)		(236	)		(9	)		-			(1,241	)
Recoveries		35			-			14			8			-			-			57
Balance, ending	$	2,183		$	860		$	379		$	256		$	8		$	-		$	3,686

	Year Ended June 30, 2013
	Residential  Mortgage			Commercial Real Estate			Construction			Commercial and Industrial			Consumer			Unallocated		Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning	$	1,808		$	445		$	527		$	272		$	13		$	-	$	3,065
Provisions		3,039			609			44			346			3			3		4,044
Loans charged-off		(1,867	)		(348	)		(333	)		(342	)		(5	)		-		(2,895	)
Recoveries		56			-			-			-			-			-		56
Balance, ending	$	3,036		$	706		$	238		$	276		$	11		$	3	$	4,270

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Note 13 - Transactions with Officers and Directors (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Note 13 - Transactions with Officers and Directors (Details) [Line Items]
Loans and Leases Receivable, Related Parties	$ 7,728,000	$ 9,956,000
Loans and Leases Receivable, Related Parties, Additions	755,000
Loans and Leases Receivable, Related Parties, Collections	571,000
Director [Member]
Note 13 - Transactions with Officers and Directors (Details) [Line Items]
Loans and Leases Receivable, Related Parties, Collections	$ 2,412,000

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Note 14 - Regulatory Capital (Tables)

12 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

											To be well capitalized
											under prompt
						For capital adequacy					corrective action
	Actual					purposes					provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
June 30, 2014:
Tangible	$	35,862		10.39	%	$	5,179		>1.50	%		N/A		N/A
Core (leverage)		35,862		10.39			13,812		>4.00			17,264		>5.00	%
Tier 1 risk-based		35,862		17.45			8,221		>4.00			12,331		>6.00
Total risk-based		38,444		18.71			16,442		>8.00			20,552		>10.00
June 30, 2013:
Tangible	$	34,651		9.93	%	$	5,234		>1.50	%		N/A		N/A
Core (leverage)		34,651		9.93			13,958		>4.00			17,447		>5.00	%
Tier 1 risk-based		34,651		16.87			8,216		>4.00			12,324		>6.00
Total risk-based		37,243		18.13			16,432		>8.00			20,539		>10.00

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Note 4 - Securities Held to Maturity (Details) - Held-to-Maturity Securities in Unrealized Loss Positions (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Note 4 - Securities Held to Maturity (Details) - Held-to-Maturity Securities in Unrealized Loss Positions [Line Items]
Less than 12 Months, Fair Value	$ 54,881	$ 63,675
Less than 12 Months, Gross Unrealized Losses	1,672	2,958
More than 12 Months, Fair Value	7,106
More than 12 Months, Gross Unrealized Losses	223
Total, Fair Value	61,987	63,675
Total, Gross Unrealized Losses	1,895	2,958
US Government Agencies Debt Securities [Member]
Note 4 - Securities Held to Maturity (Details) - Held-to-Maturity Securities in Unrealized Loss Positions [Line Items]
Less than 12 Months, Fair Value	36,339	42,048
Less than 12 Months, Gross Unrealized Losses	1,341	2,131
More than 12 Months, Fair Value	6,290
More than 12 Months, Gross Unrealized Losses	210
Total, Fair Value	42,629	42,048
Total, Gross Unrealized Losses	1,551	2,131
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Note 4 - Securities Held to Maturity (Details) - Held-to-Maturity Securities in Unrealized Loss Positions [Line Items]
Less than 12 Months, Fair Value	17,022	18,401
Less than 12 Months, Gross Unrealized Losses	325	754
More than 12 Months, Fair Value	816
More than 12 Months, Gross Unrealized Losses	13
Total, Fair Value	17,838	18,401
Total, Gross Unrealized Losses	338	754
Corporate Debt Securities [Member]
Note 4 - Securities Held to Maturity (Details) - Held-to-Maturity Securities in Unrealized Loss Positions [Line Items]
Less than 12 Months, Fair Value	1,031	2,980
Less than 12 Months, Gross Unrealized Losses	5	72
Total, Fair Value	1,031	2,980
Total, Gross Unrealized Losses	5	72
Certificates of Deposit [Member]
Note 4 - Securities Held to Maturity (Details) - Held-to-Maturity Securities in Unrealized Loss Positions [Line Items]
Less than 12 Months, Fair Value	489	246
Less than 12 Months, Gross Unrealized Losses	1	1
Total, Fair Value	489	246
Total, Gross Unrealized Losses	$ 1	$ 1

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Note 11 - Income Taxes (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	34.00%	34.00%
Retained Earnings with no Provision For Income Tax	$ 1,466,000	$ 1,466,000

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Consolidated Statements of Financial Condition (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Cash and due from banks	$ 6,432	$ 19,941
Interest-earning demand deposits with banks	876	4,814
Cash and Cash Equivalents	7,308	24,755
Securities held to maturity (fair value of $83,636 and $78,367, respectively)	84,932	80,912
Loans receivable, net of allowance for loan losses of $3,686 and $4,270, respectively	230,275	223,256
Other real estate owned	409	530
Premises and equipment	8,486	8,882
Federal Home Loan Bank of New York stock, at cost	2,190	1,827
Bank owned life insurance	7,136	6,919
Accrued interest receivable	1,318	1,229
Other assets	3,192	4,282
Total Assets	345,246	352,592
Deposits:
Non-interest bearing	22,206	18,559
Interest bearing	241,183	261,908
Total Deposits	263,389	280,467
Advances from Federal Home Loan Bank of New York	38,000	30,000
Advance payments by borrowers for taxes and insurance	494	132
Other liabilities	2,553	2,480
Total Liabilities	304,436	313,079
Commitments and Contingencies
Stockholders’ Equity
Common stock, par value $0.10; 10,000,000 shares authorized; 5,620,625 issued; 5,010,437 and 5,010,437 shares outstanding	562	562
Paid-in capital	24,616	24,473
Retained earnings	21,670	20,682
Unallocated common stock held by ESOP (75,878 and 92,740 shares, respectively)	(759)	(927)
Treasury stock, at cost, 610,188 and 610,188 shares, respectively	(5,244)	(5,244)
Accumulated other comprehensive loss	(35)	(33)
Total Stockholders’ Equity	40,810	39,513
Total Liabilities and Stockholders’ Equity	$ 345,246	$ 352,592

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Note 19 - Reclassifications Out of Accumulated Other Comprehensive Income (Tables)

12 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss) (a)					Affected Line Item in the Consolidated Statements of Comprehensive Income (Loss)
	Twelve Months Ended June 30, 2014
	(In thousands)
Amortization of defined benefit pension items:
Prior service costs		$	(4	)	(b)		Directors compensation
Unrecognized loss			(17	)	(b)		Directors compensation
Unrecognized gain			28		(b)		Salary and employee benefits
			7				Total before tax
			(3	)			Income tax (expense)
Total reclassifications for the period		$	4				Net of tax

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Consolidated Statements of Changes in Stockholders’ Equity (USD $) In Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Unallocated Common Stock Heldby ESOP [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance - June 30 at Jun. 30, 2012
Net income (loss)			$ (1,385)				$ (1,385)
Other comprehensive income (loss), net of tax						68	68
Allocation of ESOP stock		(58)		169			111
Treasury stock repurchased (74,855 Shares)					(476)		(476)
Amortization of restricted stock plan shares		180					180
Stock-based compensation		137					137
Balance - June 30 at Jun. 30, 2013	562	24,473	20,682	(927)	(5,244)	(33)	39,513
Net income (loss)			988				988
Other comprehensive income (loss), net of tax						(2)	(2)
Allocation of ESOP stock		(37)		168			131
Amortization of restricted stock plan shares		180					180
Balance - June 30 at Jun. 30, 2014	$ 562	$ 24,616	$ 21,670	$ (759)	$ (5,244)	$ (35)	$ 40,810

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Note 18 - Quarterly Results of Operations (Unaudited) (Details) - Quarterly Results of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2014	Jun. 30, 2013
Quarterly Results of Operations [Abstract]
Interest income	$ 2,984	$ 3,038	$ 3,005	$ 2,965	$ 2,905	$ 2,985	$ 3,000	$ 3,142	$ 11,992	$ 12,032
Interest expense	588	585	617	632	657	648	689	727	2,422	2,721
Net Interest Income	2,396	2,453	2,388	2,333	2,248	2,337	2,311	2,415	9,570	9,311
Provision for loan losses	150	150	150	150	150	175	2,973	746	600	4,044
Net Interest Income after Provision for Loan Losses	2,246	2,303	2,238	2,183	2,098	2,162	(662)	1,669	8,970	5,267
Non-interest income	177	184	182	181	170	159	162	159	724	650
Non-interest expenses	2,017	2,117	2,037	1,987	1,975	2,188	2,122	2,004	8,158	8,289
Income before Income Taxes	406	370	383	377	293	133	(2,622)	(176)	1,536	(2,372)
Income tax expense	160	127	132	129	100	44	(1,047)	(84)	548	(987)
Net Income	$ 246	$ 243	$ 251	$ 248	$ 193	$ 89	$ (1,575)	$ (92)	$ 988	$ (1,385)
Earnings per share:
Basic and diluted (in Dollars per share)	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.04	$ 0.02	$ (0.32)	$ (0.02)	$ 0.20	$ (0.28)

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Note 5 - Loans Receivable and Allowance for Credit Losses (Details) - Allowance for Loan Losses (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2012
losses:
Ending Balance	$ 3,686	$ 4,270	$ 3,065
Ending balance: individually evaluated for impairment	73	433
Ending balance: collectively evaluated for impairment	3,613	3,837
Loans receivables:
Ending balance	233,961	227,526
Ending balance: individually evaluated for impairment	22,930	27,001
Ending balance: collectively evaluated for impairment	211,031	200,525
Residential Portfolio Segment [Member]
losses:
Ending Balance	2,183	3,036	1,808
Ending balance: individually evaluated for impairment		291
Ending balance: collectively evaluated for impairment	2,183	2,745
Loans receivables:
Ending balance	181,524	177,127
Ending balance: individually evaluated for impairment	17,715	19,553
Ending balance: collectively evaluated for impairment	163,809	157,574
Commercial Real Estate Portfolio Segment [Member]
losses:
Ending Balance	860	706	445
Ending balance: individually evaluated for impairment		88
Ending balance: collectively evaluated for impairment	860	618
Loans receivables:
Ending balance	31,963	32,103
Ending balance: individually evaluated for impairment	1,973	3,240
Ending balance: collectively evaluated for impairment	29,990	28,863
Construction [Member]
losses:
Ending Balance	379	238	527
Ending balance: individually evaluated for impairment	73	23
Ending balance: collectively evaluated for impairment	306	215
Loans receivables:
Ending balance	9,990	8,121
Ending balance: individually evaluated for impairment	2,594	3,308
Ending balance: collectively evaluated for impairment	7,396	4,813
Commercial and Industrial [Member]
losses:
Ending Balance	256	276	272
Ending balance: individually evaluated for impairment		31
Ending balance: collectively evaluated for impairment	256	245
Loans receivables:
Ending balance	9,652	9,246
Ending balance: individually evaluated for impairment	648	900
Ending balance: collectively evaluated for impairment	9,004	8,346
Consumer Portfolio Segment [Member]
losses:
Ending Balance	8	11	13
Ending balance: collectively evaluated for impairment	8	11
Loans receivables:
Ending balance	832	929
Ending balance: collectively evaluated for impairment	832	929
Unallocated [Member]
losses:
Ending Balance		3
Ending balance: collectively evaluated for impairment		$ 3

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Note 8 - Deposits (Tables)

12 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Schedule Of Deposit Liabilities [Table Text Block]

	2014				2013
	Amount		Average Rate		Amount		Average Rate
	(Dollars in thousands)
Non-interest bearing demand	$	22,206	—	%	$	18,559	—	%
NOW		31,899	0.15			31,973	0.14
Super NOW		4,791	0.20			3,991	0.20
Savings and club		102,241	0.21			112,385	0.21
Money market demand		3,724	0.23			3,611	0.23
Certificates of deposit		98,528	1.32			109,948	1.40
	$	263,389	0.60	%	$	280,467	0.65	%

Certificates Of Deposit By Maturity [Table Text Block]

Year ended June 30:
2015	$	62,142
2016		19,058
2017		9,154
2018		3,515
2019		2,527
Thereafter		2,132
	$	98,528

Interest Expense By Deposit Type [Table Text Block]

	2014		2013
	(In thousands)
NOW, super NOW and money market demand	$	50	$	51
Savings and club		233		251
Certificates of deposit		1,372		1,705
	$	1,655	$	2,007

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Note 8 - Deposits (Details) - Deposit Liabilities (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Deposit Liabilities [Abstract]
Non-interest bearing demand	$ 22,206	$ 18,559
NOW	31,899	31,973
NOW	0.15%	0.14%
Super NOW	4,791	3,991
Super NOW	0.20%	0.20%
Savings and club	102,241	112,385
Savings and club	0.21%	0.21%
Money market demand	3,724	3,611
Money market demand	0.23%	0.23%
Certificates of deposit	98,528	109,948
Certificates of deposit	1.32%	1.40%
	$ 263,389	$ 280,467
	0.60%	0.65%

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Note 14 - Regulatory Capital

12 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note 14 - Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by Federal and State 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 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 the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of tangible, core and risk-based capital as defined in the regulations. Management believes, as of June 30, 2014 and 2013, that the Bank met all capital adequacy requirements to which it is subject.

As of June 30, 2014, the most recent notification from the regulators categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum core, Tier 1 risk-based and total risk-based ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the institution’s category.

The following table presents a reconciliation of GAAP capital and regulatory capital and information as to the Bank’s capital levels at the dates presented:

											To be well capitalized
											under prompt
						For capital adequacy					corrective action
	Actual					purposes					provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
June 30, 2014:
Tangible	$	35,862		10.39	%	$	5,179		>1.50	%		N/A		N/A
Core (leverage)		35,862		10.39			13,812		>4.00			17,264		>5.00	%
Tier 1 risk-based		35,862		17.45			8,221		>4.00			12,331		>6.00
Total risk-based		38,444		18.71			16,442		>8.00			20,552		>10.00
June 30, 2013:
Tangible	$	34,651		9.93	%	$	5,234		>1.50	%		N/A		N/A
Core (leverage)		34,651		9.93			13,958		>4.00			17,447		>5.00	%
Tier 1 risk-based		34,651		16.87			8,216		>4.00			12,324		>6.00
Total risk-based		37,243		18.13			16,432		>8.00			20,539		>10.00

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Note 9 - Borrowings (Tables)

12 Months Ended

Jun. 30, 2014

Subordinated Borrowings [Abstract]

Schedule of Federal Home Loan Bank, Advances, by Branch of FHLB Bank [Table Text Block]

Maturity	Fixed Interest Rate			2014		2013
				(in thousands)
February 25, 2016		0.780	%	$	5,000	$	5,000
March 07, 2016		0.780			5,000		5,000
November 27, 2017		3.272			10,000		10,000
March 05, 2018		3.460			10,000		10,000
		2.504	%	$	30,000	$	30,000

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Note 16 - Fair Value Measurements

12 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Note 16 - Fair Value Measurements

The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures.

FASB ASC Topic 820, Fair Market Value Disclosures (“ASC 820”), defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

ASC 820 requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, ASC 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

· Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

· Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

· Level 3 Inputs – Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.  An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial

instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Bank did not have any financial assets measured at fair value on a recurring basis as of June 30, 2014 and 2013.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Certain financial and non-financial assets are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

The following tables summarize those assets measured at fair value on a non-recurring basis as of June 30, 2014 and 2013:

	June 30, 2014
	Level 1 Inputs			Level 2 Inputs			Level 3 Inputs			Total Fair Value
	(In thousands)
Impaired loans		$	—		$	—		$	2,789		$	2,789

	June 30, 2013
	Level 1 Inputs			Level 2 Inputs			Level 3 Inputs			Total Fair Value
	(In thousands)
Impaired loans		$	—		$	—		$	15,066		$	15,066

For Level 3 input assets measured at fair value on non-recurring basis as of June 30, 2014 and 2013, the significant unobservable inputs used in fair value measurements were as follows:

	June 30, 2014
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
	(Dollars in thousands)
Impaired loans	$	2,789	Appraisal of Collateral	Appraisal adjustments	0%	to	-19.4%	(1.1%)
				Liquidation expense	4.2%	to	-57.9%	(7.7%)

	June 30, 2013
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
	(Dollars in thousands)
Impaired loans	$	15,066	Appraisal of collateral	Appraisal adjustments	0%	to	- 37.9%	(3.5%)
				Liquidiation  expense	0.11%	to	-27.4%	(7.9%)

An impaired loan is measured for impairment at the time the loan is identified as impaired.  Loans are considered impaired when based on current information and events it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement.  The Company’s impaired loans are generally collateral dependent and, as such, are carried at the lower of cost or estimated fair value less estimated selling costs.  Fair values are estimated through current appraisals and adjusted as necessary to reflect current market conditions and as such are classified as Level 3.

Other real estate is carried at the lower of cost or fair value less estimated selling costs.  The fair value of other real estate is determined based upon independent third-party appraisals of the properties.  These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.  As of June 30, 2014 and 2013, there was no further impairment of the other real estate owned below the cost basis established at the time the other real owned was originally recognized.  Accordingly, the table above does not include other real estate owned.

Disclosure about Fair Value of Financial Instruments

The fair value of a financial instrument is defined above. Significant estimates were used for the purposes of disclosing fair values. Estimated fair values have been determined using the best available data and estimation methodology suitable for each category of financial instruments. However, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective reporting dates, and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported.

The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.

The following presents the carrying amount and the fair value as of June 30, 2014 and June 30, 2013, and placement in the fair value hierarchy as of June 30, 2013, of the Company’s financial instruments which are carried on the consolidated statement of financial condition at cost and are not measured or recorded at fair value on a recurring basis.  This table excludes financial instruments for which the carrying amount approximates fair value, which includes cash and cash equivalents, Federal Home Loan Bank stock, accrued interest receivable, interest and non-interest bearing demand, savings and club deposits, and accrued interest payable.

	Carrying		Fair		Level 1		Level 2		Level 3
	Amount		Value		Inputs		Inputs		Inputs
	(In thousands)
As of June 30, 2014
Financial assets:
Securities held to maturity	$	84,932	$	83,636	$	—	$	83,636	$	—
Loans receivable (1)		230,275		230,300		—		—		230,300
Financial liabilities:
Certificate of deposits		98,528		100,120		—		100,120		—
Advances from Federal Home Loan Bank of New York		38,000		39,281		—		39,281		—
As of June 30, 2013
Financial assets:
Securities held to maturity		80,912		78,367		—		78,367		—
Loans receivable (1)		223,256		227,556		—		—		227,556
Financial liabilities:
Certificate of deposits		109,948		111,797		—		111,797		—
Advances from Federal Home Loan Bank of New York		30,000		32,208		—		32,208		—
(1) Includes impaired loans measured at fair value on a non-recurring basis as discussed above.

Methods and assumptions used to estimate fair values of financial assets and liabilities previously disclosed are as follows:

Cash and Cash Equivalents

For cash and cash equivalents, the carrying amount is a reasonable estimate of fair value.

Securities Held to Maturity

The fair value for securities held to maturity is based on quoted market prices, where available. If quoted market prices are not available, fair value is estimated using quoted market prices for similar securities.

Loans Receivable

The fair value of loans is based upon a multitude of sources, including assumed current market rates by category and the Bank’s current offering rates.  Both fixed and variable rate loan fair values are derived at using a discounted cash flow methodology.  For variable rate loans, repricing terms, including next reprice date, reprice frequency and reprice rate are factored into the discounted cash flow formula.

Federal Home Loan Bank Stock

The carrying amount of Federal Home Loan Bank of New York stock approximates fair value since the Company is generally able to redeem this stock at par.

Accrued Interest Receivable and Payable

The carrying amounts of accrued interest receivable and payable approximate fair value due to the short term nature of these instruments.

Deposits

Fair values for demand deposits, savings accounts and club accounts are, by definition, equal to the amount payable on demand at the reporting date. Fair values of fixed-maturity certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on similar instruments with similar maturities.

Advances from Federal Home Loan Bank of New York

Fair values of advances are estimated using discounted cash flow analyses, based on rates currently available to the Company for advances from the Federal Home Loan Bank of New York with similar terms and remaining maturities.

Off-Balance Sheet Financial Instruments

Fair values of commitments to extend credit are estimated using the fees currently charged to enter into similar agreement, into account market interest rates, the remaining terms, and the present credit worthiness of the counterparties.  As of June 30, 2014 and 2013, the fair value of the commitments to extend credit was not considered to be material.

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Note 9 - Borrowings (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Note 9 - Borrowings (Details) [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 20,000,000
Long-term Line of Credit	0	0
Federal Home Loan Bank of New York [Member]
Note 9 - Borrowings (Details) [Line Items]
Federal Home Loan Bank, Advances, General Debt Obligations, Amount of Available, Unused Funds	69,500,000	80,800,000
Federal Home Loan Bank Advances	$ 8,000,000	$ 0

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Consolidated Statements of Changes in Stockholders’ Equity (Parentheticals)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Treasury stock repurchased, Shares	0	74,855
Amortization of restricted stock plan shares, Shares	21,584	22,023

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Consolidated Statements of Financial Condition (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Securities held to maturity, fair value (in Dollars)	$ 83,636	$ 78,367
Loans receivable, allowance for loan losses (in Dollars)	$ 3,686	$ 4,270
Common stock par value (in Dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	5,620,625	5,620,625
Common stock, shares outstanding	5,010,437	5,010,437
Unallocated common stock held by ESOP, shares	75,878	92,740
Treasury stock, shares	610,188	610,188

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Note 9 - Borrowings

12 Months Ended

Jun. 30, 2014

Subordinated Borrowings [Abstract]

Subordinated Borrowings Disclosure [Text Block]

Note 9 - Borrowings

The Company participates in the FHLB of New York (the “FHLB of NY”) Overnight Advance Program. Advances under this program allow the Company to borrow up to the balance of its qualifying mortgage loans that have been pledged as collateral, less any related outstanding indebtedness. As of June 30, 2014 and 2013, the Company had $69.5 million and $80.8 million, respectively, available for borrowing under this agreement.

Term advances due to the FHLB of NY at June 30, 2014 and 2013 consisted of the following:

Maturity	Fixed Interest Rate			2014		2013
				(in thousands)
February 25, 2016		0.780	%	$	5,000	$	5,000
March 07, 2016		0.780			5,000		5,000
November 27, 2017		3.272			10,000		10,000
March 05, 2018		3.460			10,000		10,000
		2.504	%	$	30,000	$	30,000

The advances are secured by a blanket assignment of unpledged and qualifying mortgage loans.

In addition, the Company had an $8.0 million overnight advance with the Federal Home Loan Bank of New York as of June 30, 2014.  The Company did not have any overnight advances with the Federal Home Loan Bank as of June 30, 2013.

As of June 30, 2014, the Company also had a $20.0 million line of credit with a financial institution for reverse repurchase agreements that it could access if necessary.  There were no amounts outstanding on the line at June 30, 2014 and 2013.

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Note 17 - Parent Only Financial Statements (Details) - Condensed Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash Flows from Operating Activities
Net income (loss)	$ 988	$ (1,385)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net Cash Provided by (Used in) Operating Activities	3,095	3,127
Cash Flows from Investing Activities
Net Cash Provided by Investing Activities	(11,826)	(18,301)
Cash Flows from Financing Activities
Purchase of treasury stock		(476)
Net Cash Used in Financing Activities	(8,716)	6,172
Net Increase (Decrease) in Cash and Cash Equivalents	(17,447)	(9,002)
Cash and Cash Equivalents	7,308	24,755
Beginning of Period [Member] | Parent Company [Member]
Cash Flows from Financing Activities
Cash and Cash Equivalents	2,994	4,389
End of Period [Member] | Parent Company [Member]
Cash Flows from Financing Activities
Cash and Cash Equivalents	3,232	2,994
Parent Company [Member]
Cash Flows from Operating Activities
Net income (loss)	988	(1,385)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries	(1,118)	1,272
Net change in other assets and liabilities	192	88
Net Cash Provided by (Used in) Operating Activities	62	(25)
Cash Flows from Investing Activities
Repayment of ESOP loan receivable	176	162
Net Cash Provided by Investing Activities	176	162
Cash Flows from Financing Activities
Dividends paid to minority stockholders		(56)
Purchase of treasury stock		(476)
Capital distribution to Bank		(1,000)
Net Cash Used in Financing Activities		(1,532)
Net Increase (Decrease) in Cash and Cash Equivalents	$ 238	$ (1,395)

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Note 17 - Parent Only Financial Statements (Details) - Condensed Statements of Financial Condition (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Assets
Cash and due from banks	$ 6,432	$ 19,941
Loan receivable	230,275	223,256
Other assets	3,192	4,282
Total Assets	345,246	352,592
Liabilities
Other liabilities	2,553	2,480
Total liabilities	304,436	313,079
Stockholders’ Equity
Common stock	562	562
Retained earnings	21,670	20,682
Unallocated common stock held by ESOP	(759)	(927)
Treasury stock	(5,244)	(5,244)
Total Stockholders’ Equity	40,810	39,513
Total Liabilities and Stockholders’ Equity	345,246	352,592
Parent Company [Member]
Assets
Cash and due from banks	3,232	2,994
Loan receivable	996	1,172
Investments in subsidiaries	36,504	35,257
Other assets	178	1,172
Total Assets	40,910	40,595
Liabilities
Other liabilities	100	1,082
Total liabilities	100	1,082
Stockholders’ Equity
Common stock	562	562
Paid-in capital	24,616	24,473
Retained earnings	21,670	20,682
Unallocated common stock held by ESOP	(759)	(927)
Treasury stock	(5,244)	(5,244)
Accumulated other comprehensive loss	(35)	(33)
Total Stockholders’ Equity	40,810	39,513
Total Liabilities and Stockholders’ Equity	$ 40,910	$ 40,595

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Document And Entity Information (USD $)	12 Months Ended
	Jun. 30, 2014	Sep. 16, 2014	Dec. 31, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	MSB FINANCIAL CORP.
Document Type	10-K
Current Fiscal Year End Date	--06-30
Entity Common Stock, Shares Outstanding		5,010,437
Entity Public Float			$ 15,300,000
Amendment Flag	false
Entity Central Index Key	0001374783
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY

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Note 10 - Lease Commitments and Total Rental Expense

12 Months Ended

Jun. 30, 2014

Leases [Abstract]

Leases of Lessor Disclosure [Text Block]

Note 10 - Lease Commitments and Total Rental Expense

The Company leases three branch locations under long-term operating leases. Future minimum lease payments by year and in the aggregate, under noncancellable operating leases with initial or remaining terms of one year or more, consisted of the following at June 30, 2014 (in thousands):

Year Ended June 30:
2015	$	415
2016		415
2017		431
2018		333
2019		263
Thereafter		307
	$	2,164

The total rental expense for all leases was approximately $407,000 for the years ended June 30, 2014 and 2013,  respectively.

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Note 12 - Benefit Plans (Details) - ESOP Plan Activity (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
ESOP Plan Activity [Abstract]
Allocated shares - beginning	109,602	92,741
Shares allocated during the year	16,862	16,861
Allocated shares - ending	126,464	109,602
Total ESOP Shares	202,342	202,342
Fair value of unallocated shares (in Dollars)	$ 614,612	$ 669,576

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Note 16 - Fair Value Measurements (Details) - Fair Value, Assets and Liabilities (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Jun. 30, 2013
Financial assets:
Securities held to maturity	$ 83,636		$ 78,367
Carrying Amount [Member]
Financial assets:
Securities held to maturity	84,932		80,912
Loans receivable	230,275	[1]	223,256	[1]
Financial liabilities:
Certificate of deposits	98,528		109,948
Advances from Federal Home Loan Bank of New York	38,000		30,000
Estimate of Fair Value Measurement [Member]
Financial assets:
Securities held to maturity	83,636		78,367
Loans receivable	230,300	[1]	227,556	[1]
Financial liabilities:
Certificate of deposits	100,120		111,797
Advances from Federal Home Loan Bank of New York	39,281		32,208
Fair Value, Inputs, Level 1 [Member]
Financial assets:
Loans receivable		[1]		[1]
Fair Value, Inputs, Level 2 [Member]
Financial assets:
Securities held to maturity	83,636		78,367
Loans receivable		[1]		[1]
Financial liabilities:
Certificate of deposits	100,120		111,797
Advances from Federal Home Loan Bank of New York	39,281		32,208
Fair Value, Inputs, Level 3 [Member]
Financial assets:
Loans receivable	$ 230,300	[1]	$ 227,556	[1]

[1] Includes impaired loans measured at fair value on a non-recurring basis as discussed above.

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Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Interest Income
Loans receivable, including fees	$ 10,033	$ 10,435
Securities held to maturity	1,870	1,504
Other	89	93
Total Interest Income	11,992	12,032
Interest Expense
Deposits	1,655	2,007
Borrowings	767	714
Total Interest Expense	2,422	2,721
Net Interest Income	9,570	9,311
Provision for Loan Losses	600	4,044
Net Interest Income after Provision for Loan Losses	8,970	5,267
Non-Interest Income
Fees and service charges	407	329
Income from bank owned life insurance	217	217
Unrealized gain on trading securities		1
Other	100	103
Total Non-Interest Income	724	650
Non-Interest Expenses
Salaries and employee benefits	3,784	3,859
Directors compensation	444	495
Occupancy and equipment	1,343	1,403
Service bureau fees	626	553
Advertising	144	162
FDIC assessment	410	291
Professional services	547	543
Other	860	983
Total Non-Interest Expenses	8,158	8,289
Income (Loss) before Income Taxes	1,536	(2,372)
Income Tax Expense (Benefit)	548	(987)
Net Income (Loss)	988	(1,385)
Weighted average number of shares of common stock outstanding-basic and diluted (in Shares)	4,926	4,933
Earnings (Loss) per common share-basic and diluted (in Dollars per share)	$ 0.20	$ (0.28)
Defined benefit pension plans:
Actuarial loss arising during period, net of tax of $1 and $36, respectively	2	50
Reclassification adjustment for prior service cost included in net income, net of tax of $2 and $4, respectively	2	7
Reclassification adjustment for net actuarial (gain) loss included in net income, net of tax ($5) and $6, respectively	(6)	11
Other comprehensive (loss) income	(2)	68
Comprehensive income (loss)	$ 986	$ (1,317)

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Note 4 - Securities Held to Maturity

12 Months Ended

Jun. 30, 2014

Investment Holdings [Text Block] [Abstract]

Investment Holdings [Text Block]

Note 4 - Securities Held to Maturity

The amortized cost of securities held to maturity and their fair values are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
June 30, 2014:
U.S. Government agencies	$	49,177	$	49	$	1,551	$	47,675
Mortgage-backed securities		26,089		464		338		26,215
Corporate bonds		4,630		56		5		4,681
Certificates of deposits		5,036		30		1		5,065
	$	84,932	$	599	$	1,895	$	83,636
June 30, 2013:
U.S. Government agencies	$	46,194	$	84	$	2,131	$	44,147
Mortgage-backed securities		24,768		297		754		24,311
Corporate bonds		4,669		15		72		4,612
Certificates of deposits		5,281		17		1		5,297
	$	80,912	$	413	$	2,958	$	78,367

All mortgage-backed securities at June 30, 2014 and 2013 have been issued by FNMA, FHLMC or GNMA and are secured by 1-4 family residential real estate.

The amortized cost and fair value of securities held to maturity at June 30, 2014, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost			Fair Value
	(In thousands)
U.S. Government agencies:
Due after one year through five years	$	23,000	$		22,497
Due after five years through ten years		12,177			11,835
Due thereafter		14,000			13,343
		49,177			47, 675
Mortgage-backed securities		26,089			26,215
Corporate Bonds
Due after one year through five years		4,630			4,681
Certificates of Deposits
Due within one year		1,425			1,427
Due after one year through five years		3,611			3,638
		5,036			5,065
	$	84,932		$	83,636

There were no sales of securities held to maturity during the years ended June 30, 2014 and 2013.  At June 30, 2014 and 2013 securities held to maturity with a fair value of approximately $764,000 and $782,000, respectively, were pledged to secure public funds on deposit.

The following table provides the gross unrealized losses and fair value of securities in an unrealized loss position, by the length of time that such securities have been in a continuous unrealized loss position:

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In thousands)
June 30, 2014:
U.S. Government         agencies	$	36,339	$	1,341	$	6,290	$	210	$	42,629	$	1,551
Mortgage-backed securities		17,022		325		816		13		17,838		338
Corporate bonds		1,031		5		—		—		1,031		5
Certificates of deposits		489		1		—		—		489		1
	$	54,881	$	1,672	$	7,106	$	223	$	61,987	$	1,895
June 30, 2013:
U.S. Government         agencies	$	42,048	$	2,131	$	—	$	—	$	42,048	$	2,131
Mortgage-backed securities		18,401		754		—		—		18,401		754
Corporate bonds		2,980		72		—		—		2,980		72
Certificates of deposits		246		1		—		—		246		1
	$	63,675	$	2,958	$	—	$	—	$	63,675	$	2,958

At June 30, 2014, management concluded that the unrealized losses above (which related to thirty-one U.S. Government agency bonds, twenty-two mortgage-backed securities, two corporate bonds and two certificate of deposit compared to thirty-one U.S. Government agency bonds, fourteen mortgage-backed securities, five corporate bonds and one certificate of deposit, as of June 30, 2013) were temporary in nature since they were not related to the underlying credit quality of the issuer.  The Company does not intend to sell these securities and it is not more-likely-than-not that the Company would be required to sell these securities prior to the full recovery of fair value to a level which equals or exceeds amortized cost.  The losses above are primarily related to market conditions and are considered noncredit related and temporary.

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Note 3 - Stock Offering and Stock Repurchase Program

12 Months Ended

Jun. 30, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 3 - Stock Offering and Stock Repurchase Program

A Registration Statement on Form S-1 (File No. 333-137294), as amended, was filed by the Company with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, relating to the offer for sale of up to 2,199,375 shares (subject to increase to 2,529,281 shares) of its common stock at $10.00 per share. The offering closed on January 4, 2007 and 2,529,281 shares were sold for gross proceeds of $25,292,810, including 202,342 shares sold to the Bank’s newly established ESOP. Net proceeds of the offering totaled approximately $24.5 million. Concurrent with the closing of the offering, the MHC received 3,091,344 shares of Company common stock in exchange for the 10,000 shares previously owned. At June 30, 2014, the MHC is the majority stockholder of the Company owning 61.7% of the Company’s outstanding common stock. Prior to January 4, 2007, the MHC owned 100% of the Company’s outstanding 10,000 shares of common stock.

Since the first repurchase program authorized by the Company’s Board of Directors on January 29, 2008, the Company has repurchased 610,188 shares of the Company’s common stock through several repurchase programs.  The Company did not repurchase any shares during the year ended June 30, 2014.

The Company did not declare or pay any cash dividends during the years ended June 30, 2014 and 2013.

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Note 15 - Commitments and Contingencies

12 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 15 - Commitments and Contingencies

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit. Such commitments involve, to varying degrees, elements of credit, and interest rate risk in excess of the amount recognized in the statements of financial condition.

The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

At June 30, 2014 and 2013, the following financial instruments were outstanding whose contract amounts represent credit risk:

	2014		2013
	(In thousands)
Commitments to grant loans	$	2,122	$	7,671
Unfunded commitments under lines of credit		20,093		23,659
Standby letters of credit		247		327
	$	22,462	$	31,657

At June 30, 2014, the commitments to grant loans included a $172,000 fixed rate mortgage loan with an interest rate of 4.00%; an adjustable rate mortgage loan of $200,000 with an initial rate of 4.00% adjusting to 6.25% after 10 years and a commercial real estate loan of $1,750,000 with 10 year balloon payment based on a 20 year amortization and an initial rate of 4.00% fixed for the first five years and a variable rate based on the Wall Street Journal Prime + 1.00% for the second five years.  Of the unfunded commitments under lines of credit at June 30, 2014, $16,805,706 was available under the Bank’s home equity lending program, $547,058 was available under the overdraft protection lending program and $2,740,392 was available under commercial lines of credit.  Amounts outstanding under these unfunded lines have interest rates ranging from 1.00% below prime rate to 4.00% over the prime rate.

At June 30, 2013, commitments to grant loans included $871,342 of fixed rate mortgage loans with interest rates ranging from 3.125% to 4.50%; adjustable rate mortgage loans of $2,700,000 with an initial rate of 3.25% adjusting to 6.00% after 10 years and a $4,100,000 variable rate construction loan based on the Wall Street Journal Prime Rate + 1.00%, with a floor rate of 5.00%.  Of the unfunded commitments under lines of credit at June 30, 2013, $19,398,349 was available under the Bank’s home equity lending program, $541,890 was available under the overdraft protection lending program and $3,718,882 was available under commercial lines of credit.  Amounts outstanding under these unfunded lines have interest rates ranging from 1.00% below prime rate to 4.00% over the prime rate.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation. Collateral held varies but primarily includes residential and income-producing commercial real estate properties.

Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending other loan commitments. The Bank requires collateral supporting these letters of credit when deemed necessary. Management believes that the proceeds obtained through a liquidation of such collateral would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees. The fair values of these obligations were immaterial as of June 30, 2014 and 2013.

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Note 11 - Income Taxes

12 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 11 - Income Taxes

The total tax expense (benefit) consisted of the following for the years ended June 30, 2014 and 2013:

	2014		2013
	(In thousands)
Current income tax expense (benefit):
Federal	$	7	$	(394	)
State		93		(99	)
		100		(493	)
Deferred income tax expense (benefi)t:
Federal		408		(384	)
State		40		(110	)
		448		(494	)
	$	548	$	(987	)

A reconciliation of the statutory federal income tax at a rate of 34% to the income tax expense (benefit) included in the statements of comprehensive (loss) income at June 30, 2014 and 2013, is as follows:

	2014					2013
	Amount			% of Pretax Income		Amount			% of Pretax Income
	(Dollars in thousands)
Federal income tax at statutory rate	$	522		34.0	%	$	(807	)	34.0	%
State tax, net of federal benefit		88		5.8			(138	)	5.8
Bank Owned Life Insurance		(74	)	(4.8	)		(69	)	2.9
Stock options		(19	)	(1.3	)		57		(2.4	)
Other		31		2.0			(30	)	1.3
	$	548		35.7	%	$	(987	)	41.6	%

The components of the net deferred tax asset at June 30, 2014 and 2013 were as follows:

	2014				2013
	(In thousands)
Deferred tax assets:
Allowances for losses on loans and commitments	$	1,484		$	1,717
Uncollected interest		142			425
Benefit plans		1,007			962
Restricted stock award		72			72
Other		63			56
		2,768			3,232
Deferred tax liabilities
Depreciation		(148	)		(166	)
Net deferred tax asset	$	2,620		$	3,066

Retained earnings included $1,466,000 at June 30, 2014 and 2013, for which no provision for income tax has been made. These amounts represent deductions for bad debt reserves for tax purposes which were only allowed to savings institutions which met certain definitional tests prescribed by the Internal Revenue Code of 1986, as amended. The Small Business Job Protection Act of 1996 (the “Act”) eliminated the special bad debt deduction granted solely to thrifts. Under the terms of the Act, there would be no recapture of the pre-1988 (base year) reserves. However, these pre-1988 reserves would be subject to recapture under the rules of the Internal Revenue Code if the Bank itself pays a cash dividend in excess of earnings and profits, or liquidates. The Act also provides for the recapture of deductions arising from the “applicable excess reserve” defined as the total amount of reserve over the base year reserve. The Bank’s total reserve exceeds the base year reserve and deferred taxes have been provided for this excess.

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Note 14 - Regulatory Capital (Details) - Reconciliation of GAAP Capital and Regulatory Capital (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Tangible	$ 35,862	$ 34,651
Tangible	10.39%	9.93%
Tangible	5,179	5,234
Tangible
Core (leverage)	35,862	34,651
Core (leverage)	10.39%	9.93%
Core (leverage)	13,812	13,958
Core (leverage)	17,264	17,447
Tier 1 risk-based	35,862	34,651
Tier 1 risk-based	17.45%	16.87%
Tier 1 risk-based	8,221	8,216
Tier 1 risk-based	12,331	12,324
Total risk-based	38,444	37,243
Total risk-based	18.71%	18.13%
Total risk-based	16,442	16,432
Total risk-based	$ 20,552	$ 20,539
Minimum [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Tangible	1.50%	1.50%
Tangible
Core (leverage)	4.00%	4.00%
Core (leverage)	5.00%	5.00%
Tier 1 risk-based	4.00%	4.00%
Tier 1 risk-based	6.00%	6.00%
Total risk-based	8.00%	8.00%
Total risk-based	10.00%	10.00%

XML

Note 7 - Accrued Interest Receivable

12 Months Ended

Jun. 30, 2014

Accrued Interest Receivable Disclosure [Text Block] [Abstract]

Accrued Interest Receivable Disclosure [Text Block]

Note 7 - Accrued Interest Receivable

The components of interest receivable at June 30, 2014 and 2013 were as follows:

	2014		2013
	(In thousands)
Loans	$	886	$	847
Securities held to maturity		432		382
	$	1,318	$	1,229

XML

Note 5 - Loans Receivable and Allowance for Credit Losses (Details) - Change in Allowance for Credit Loss (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Allowance for loan losses:
Balance, beginning	$ 4,270	$ 3,065
Balance, ending	3,686	4,270
Provisions	600	4,044
Loans charged-off	(1,241)	(2,895)
Recoveries	57	56
Residential Portfolio Segment [Member]
Allowance for loan losses:
Balance, beginning	3,036	1,808
Balance, ending	2,183	3,036
Provisions	(351)	3,039
Loans charged-off	(537)	(1,867)
Recoveries	35	56
Commercial Real Estate Portfolio Segment [Member]
Allowance for loan losses:
Balance, beginning	706	445
Balance, ending	860	706
Provisions	494	609
Loans charged-off	(340)	(348)
Construction [Member]
Allowance for loan losses:
Balance, beginning	238	527
Balance, ending	379	238
Provisions	246	44
Loans charged-off	(119)	(333)
Recoveries	14
Commercial and Industrial [Member]
Allowance for loan losses:
Balance, beginning	276	272
Balance, ending	256	276
Provisions	208	346
Loans charged-off	(236)	(342)
Recoveries	8
Consumer Portfolio Segment [Member]
Allowance for loan losses:
Balance, beginning	11	13
Balance, ending	8	11
Provisions	6	3
Loans charged-off	(9)	(5)
Unallocated [Member]
Allowance for loan losses:
Balance, beginning	3
Balance, ending		3
Provisions	$ (3)	$ 3

XML

Note 5 - Loans Receivable and Allowance for Credit Losses

12 Months Ended

Jun. 30, 2014

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 5 - Loans Receivable and Allowance for Loan Losses

The composition of total loans receivable at June 30, 2014 and 2013 was as follows:

	2014			2013
	(In thousands)
Residential mortgage:
One-to-four family	$	143,283		$	136,704
Home equity		38,484			40,682
		181,767			177,386
Commercial real estate		32,036			32,171
Construction		12,517			8,895
Commercial and industrial		9,666			9,267
		54,219			50,333
Consumer:
Deposit accounts		602			611
Automobile		33			111
Personal		36			32
Overdraft protection		161			175
		832			929
Total Loans Receivable		236,818			228,648
Loans in process		(2,491	)		(745	)
Deferred loan fees		(366	)		(377	)
	$	233,961		$	227,526

The following tables present impaired loans by class, segregated by those for which a related allowance was required and those for which a related allowance was not necessary as of June 30, 2014 and 2013.

	June 30, 2014						Year Ended June 30, 2014
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
	(In thousands)
With no related allowance recorded:
Residential mortgage
One-to-four family	$	15,975	$	16,667	$	-	$	14,982	$	620
Home equity		1,740		1,756		-		2,019		41
Commercial real estate		1,973		2,431		-		1,404		76
Construction         One-to-four family owner-occupied		1,707		1,936		-		1,365		97
Other		750		750		-		920		36
Commercial and industrial		648		1,187		-		813		36
		22,793		24,727		-		21,503		906
With an allowance recorded:
Residential mortgage
One-to-four family		-		-		-		632		-
Home equity		-		-		-		294		-
Commercial real estate		-		-		-		752		-
Construction
One-to-four family owner-occupied		-		-		-		341		-
Other		137		138		73		110		3
Commercial and industrial		-		-		-		-		-
		137		138		73		2,129		3
Total:
Residential mortgage
One-to-four family		15,975		16,667		-		15,614		620
Home equity		1,740		1,756		-		2,313		41
Commercial real estate		1,973		2,431		-		2,156		76
Construction
One-to-four family owner-occupied		1,707		1,936		-		1,706		97
Other		887		888		73		1,030		39
Commercial and industrial		648		1,187		-		813		36
	$	22,930	$	24,865	$	73	$	23,632	$	909

(1)   As of June 30, 2014, impaired loans listed above include $16.7 million of loans previously modified in TDRs and as such are considered impaired under GAAP.  As of June 30, 2014, $13.4 million of these loans have been performing in accordance with their modified terms for an extended period of time and as such were removed from non-accrual status and considered performing.

	June 30, 2013						Year Ended June 30, 2013
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
	(In thousands)
With no related allowance recorded:
Residential mortgage
One-to-four family	$	13,817	$	14,747	$	-	$	11,978	$	437
Home equity		3,376		3,406		-		3,399		127
Commercial real estate		1,796		1,867		-		1,742		65
Construction         One-to-four family occupied		-		-		-		387		-
Other		1,601		1,510				671		16
Commercial and industrial		750		1,103		-		536		29
		21,340		22,633		-		18,713		674
With an allowance recorded:
Residential mortgage
One-to-four family		1,469		1,720		58		3,219		34
Home equity		891		1,214		233		737		7
Commercial real estate		1,444		1,804		88		1,512		17
Construction
One-to-four family occupied		1,707		1,936		23		1,230		87
Other		-		-		-		646		-
Commercial and industrial		150		100		31		449		5
		5,661		6,774		433		7,793		150
Total:
Residential mortgage
One-to-four family		15,286		16,467		58		15,197		471
Home equity		4,267		4,620		233		4,136		134
Commercial real estate		3,240		3,671		88		3,254		82
Construction
One-to-four family occupied		1,707		1,936		23		1,617		87
Other		1,601		1,510		-		1,317		16
Commercial and industrial		900		1,203		31		985		34
	$	27,001	$	29,407	$	433	$	26,506	$	824

(1) As of June 30, 2013, impaired loans listed above included $18.1 million of loans previously modified in TDRs and as such are considered impaired under GAAP.  As of June 30, 2013, $11.8 million of these loans have been performing in accordance with their modified terms for an extended period of time and as such were removed from nonaccrual status and considered performing.

Credit Quality Indicators

Management uses an eight point internal risk rating system to monitor the credit quality of the loans in the Company’s commercial real estate, construction and commercial and industrial loan segments.  The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually or when credit deficiencies, such as delinquent loan payments, arise. The criticized rating categories utilized by management generally follow bank regulatory definitions. The first six risk rating categories are considered not criticized, and are aggregated as “Pass” rated.  The “Special Mention” category includes assets that are currently protected, but are potentially weak, resulting in increased credit risk and deserving management’s close attention.  If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects.  Loans classified “Substandard” have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected.  They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any.  Loans classified “Doubtful” have all the weaknesses inherent in loans classified “Substandard” with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable.  Loans classified as a “Loss” are considered uncollectible and subsequently charged off.

The following table presents the classes of the loans receivable portfolio summarized by the aggregate “Pass” and the criticized categories of “Special Mention”, “Substandard”, “Doubtful” and “Loss” within the internal risk rating system as of June 30, 2014 and 2013:

As of June 30, 2014	Pass		Special Mention		Substandard		Doubtful		Loss		Total
	(In thousands)
Commercial real estate	$	27,280	$	3,062	$	1,621	$	-	$	-	$	31,963
Construction
One-to-four family owner-occupied		850		-		1,707		-		-		2,557
Other		6,851		445		64		-		73		7,433
Commercial and industrial		8,769		105		778		-		-		9.652
Total	$	43,750	$	3,612	$	4,170	$	-	$	73	$	51,605

As of June 30, 2013	Pass		Special Mention		Substandard		Doubtful		Loss		Total
	(In thousands)
Commercial real estate	$	27,025	$	2,491	$	2,515	$	-	$	72	$	32,103
Construction
One-to-four family owner-occupied		2,845		-		1,693		-		14		4,552
Other		1,980		988		-		601		-		3,569
Commercial and industrial		8,188		113		923		-		22		9,246
Total	$	40,038	$	3,592	$	5,131	$	601	$	108	$	49,470

Management further monitors the performance and credit quality of the loan receivable portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due.  

The following table represents the classes of the loans receivable portfolio summarized by aging categories of performing loans and non-accrual loans as of June 30, 2014 and 2013:

As of  June 30, 2014	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivables		Nonaccrual Loans		Loans Receivable > 90 Days and Accruing
	(In thousands)
Residential Mortgage
One-to-four family	$	2,496		1,381		2,185		6,062	$	137,048	$	143,110	$	4,346	$	310
Home equity		32		125		1,207		1,364		37,049		38,413		1,586		51
Commercial real estate		-		-		1,248		1,248		30,715		31,963		1,248		-
Construction
One-to-four family owner-occupied		-		-		-		-		2,557		2,557		-		-
Other		-		-		-		-		7,433		7,433		137		-
Commercial and industrial		9		-		170		179		9,473		9,652		635		-
Consumer		4		-		-		4		829		833		-		-
Total	$	2,541	$	1,506	$	4,810	$	8,857	$	225,104	$	233,961	$	7,952	$	361

As of  June  30, 2013	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivables		Nonaccrual Loans		Loans Receivable > 90 Days and Accruing
	(In thousands)
Residential Mortgage
One-to-four family	$	3,910		1,525		5,822		11,257	$	125,189	$	136,446	$	7,955	$	501
Home equity		412		127		1,317		1,856		38,825		40,681		1,502		146
Commercial real estate		782		-		1,805		2,587		29,516		32,103		2,587		-
Construction
One-to-four family owner-occupied		-		-		-		-		4,552		4,552		-		-
Other		1,000		-		601		1,601		1,968		3,569		601		-
Commercial and industrial		472		49		280		801		8,445		9,246		-		-
Consumer		5		-		-		5		924		929		802		-
Total	$	6,581	$	1,701	$	9,825	$	18,107	$	209,419	$	227,526	$	13,447	$	647

Allowance for Loan Losses

The following table summarizes the allowance for loan losses and the loan receivable balances, by the portfolio segment segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of June 30, 2014 and 2013.

	As of June 30, 2014
	Residential Mortgage		Commercial Real Estate		Construction		Commercial and Industrial		Consumer		Total
	(In thousands)
Allowance for loan
losses:
Ending Balance	$	2,183	$	860	$	379	$	256	$	8	$	3,686
Ending balance: individually evaluated for impairment	$	-	$	-	$	73	$	-	$	-	$	73
Ending balance: collectively evaluated for impairment	$	2,183	$	860	$	306	$	256	$	8	$	3,613
Loans receivables:
Ending balance	$	181,524	$	31,963	$	9,990	$	9,652	$	832	$	233,961
Ending balance: individually evaluated  for impairment	$	17,715	$	1,973	$	2,594	$	648	$	-	$	22,930
Ending balance: collectively evaluated for impairment	$	163,809	$	29,990	$	7,396	$	9,004	$	832	$	211,031

	As of June 30, 2013
	Residential Mortgage		Commercial Real Estate		Construction		Commercial and Industrial		Consumer		Unallocated		Total
Allowance for loan	(In thousands)
losses:
Ending Balance	$	3,036	$	706	$	238	$	276	$	11	$	3	$	4,270
Ending balance: individually evaluated for impairment	$	291	$	88	$	23	$	31	$	-	$	-	$	433
Ending balance: collectively evaluated for impairment	$	2,745	$	618	$	215	$	245	$	11	$	3	$	3,837
Loans receivables:
Ending balance	$	177,127	$	32,103	$	8,121	$	9,246	$	929	$	-	$	227,526
Ending balance: individually evaluated  for impairment	$	19,553	$	3,240	$	3,308	$	900	$	-	$	-	$	27,001
Ending balance: collectively evaluated for impairment	$	157,574	$	28,863	$	4,813	$	8,346	$	929	$	-	$	200,525

Federal regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate.

The following table presents changes in the allowance for loan losses for the years ended June 30, 2014 and 2013:

	Year Ended June 30, 2014
	Residential  Mortgage			Commercial Real Estate			Construction			Commercial and Industrial			Consumer			Unallocated			Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning	$	3,036		$	706		$	238		$	276		$	11		$	3		$	4,270
Provisions		(351	)		494			246			208			6			(3	)		600
Loans charged-off		(537	)		(340	)		(119	)		(236	)		(9	)		-			(1,241	)
Recoveries		35			-			14			8			-			-			57
Balance, ending	$	2,183		$	860		$	379		$	256		$	8		$	-		$	3,686

	Year Ended June 30, 2013
	Residential  Mortgage			Commercial Real Estate			Construction			Commercial and Industrial			Consumer			Unallocated		Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning	$	1,808		$	445		$	527		$	272		$	13		$	-	$	3,065
Provisions		3,039			609			44			346			3			3		4,044
Loans charged-off		(1,867	)		(348	)		(333	)		(342	)		(5	)		-		(2,895	)
Recoveries		56			-			-			-			-			-		56
Balance, ending	$	3,036		$	706		$	238		$	276		$	11		$	3	$	4,270

Troubled Debt Restructurings

The recorded investment balance of TDRs totaled $16.7 million and $18.1 million at June 30, 2014 and June 30, 2013, respectively.  The majority of the Company’s TDRs are on accrual status. TDRs on accrual status were $13.4 million and $11.8 million at June 30, 2014 and June 30, 2013, while TDRs on non-accrual status were $3.2 million and $6.2 million at those respective dates.  At June 30, 2014 and 2013, the allowance for loan losses included specific reserves of $73,000 and $152,000, respectively, related to TDRs.

The Company had two loans modified as TDRs during the year ended June 30, 2014.  One of the loans was a residential adjustable rate mortgage whereby the borrower was able to pay past due interest and escrow.  The past due principal was re-amortized over the remaining term. There was no change in the interest rate or maturity date.  The other loan was a fixed rate mortgage whereby the past due taxes were capitalized and the Company granted interest-only payments until March 2015.  In addition, tax escrows will be required on an on-going basis.  There was no change in the interest rate or maturity date.

The Company had eighteen loans modified in TDRs during the year ended June 30, 2013. Three of these loans were restructured as interest only for a one-year period. Four of the loans were commercial lines of credit that were extended for another twelve months of which two were given higher rates and two remained at the same rate. One loan had the maturity extended from a 20-year term to a 30-year term with a reduced rate.  Five loans had interest rates reduced for a five-year period. One loan had a rate reduction for a one-year period.  One commercial construction loan was restructured bringing in a new owner and scheduling annual principal step-downs over a three-year period which will result in a full payout. Three loans were restructured by capitalizing past due amounts of interest and escrow and granting lower rates.

The following tables summarize by class loans modified into TDRs during the years ended June 30, 2014 and 2013.

	Year Ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
			((Dollars in thousands)
Residential Mortgage
One-to-four family		2	$	1,054	$	1,071
Total		2	$	1,054	$	1,071

	Year Ended June 30, 2013
	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
One-to-four family		10	$	3,625	$	3,582
Commercial real estate		3		1,119		1.063
Construction
Other		1		1,150		987
Commercial and industrial		4		214		214
Total		18	$	6,108	$	5,846

The following tables summarize loans modified in TDRs during the previous 12 months and for which there was a subsequent payment default during the years ended June 30, 2014 and June 30, 2013.  A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

	Year Ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investments			Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
Commercial real estate		1	$	409	$		409
Commercial and industrial		2		23			68
Total		3	$	432		$	477

	Year Ended June 30, 2013
	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
One-to-four family		1	$	156	$	127
Total		1	$	156	$	127

XML

Note 6 - Premises and Equipment

12 Months Ended

Jun. 30, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

Note 6 - Premises and Equipment

The components of premises and equipment at June 30, 2014 and 2013 were as follows:

	2014			2013
	(In thousands)
Land	$	1,937		$	1,937
Buildings and improvements		8,477			8,469
Leasehold improvements		1,767			1,787
Furnishings and equipment		1,835			1,887
Assets being developed for future use		15			3
		14,031			14,083
Accumulated depreciation and amortization		(5,545	)		(5,201	)
	$	8,486		$	8,882

XML

Note 8 - Deposits

12 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Deposit Liabilities Disclosures [Text Block]

Note 8 - Deposits

Deposits at June 30, 2014 and 2013 consist of the following classifications:

	2014				2013
	Amount		Average Rate		Amount		Average Rate
	(Dollars in thousands)
Non-interest bearing demand	$	22,206	—	%	$	18,559	—	%
NOW		31,899	0.15			31,973	0.14
Super NOW		4,791	0.20			3,991	0.20
Savings and club		102,241	0.21			112,385	0.21
Money market demand		3,724	0.23			3,611	0.23
Certificates of deposit		98,528	1.32			109,948	1.40
	$	263,389	0.60	%	$	280,467	0.65	%

A summary of certificates of deposit by maturity at June 30, 2014 is as follows (in thousands):

Year ended June 30:
2015	$	62,142
2016		19,058
2017		9,154
2018		3,515
2019		2,527
Thereafter		2,132
	$	98,528

The aggregate amount of certificates of deposit with a minimum denomination of $100,000 was approximately $41,775,000 and $44,740,000 at June 30, 2014 and 2013, respectively. Generally, deposits in excess of $250,000 are not insured by the FDIC.

A summary of interest expense on deposits for the years ended June 30, 2014 and 2013 is as follows:

	2014		2013
	(In thousands)
NOW, super NOW and money market demand	$	50	$	51
Savings and club		233		251
Certificates of deposit		1,372		1,705
	$	1,655	$	2,007

XML

Note 8 - Deposits (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Disclosure Text Block [Abstract]
Certificates of Deposit, at Carrying Value	$ 41,775,000	$ 44,740,000

XML

Note 15 - Commitments and Contingencies (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment (in Dollars)	$ 22,462,000	$ 31,657,000
Fixed Rate Residential Mortgage [Member] | Commitments To Grant Loans [Member] | Minimum [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment, Interest Rate		3.125%
Fixed Rate Residential Mortgage [Member] | Commitments To Grant Loans [Member] | Maximum [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment, Interest Rate		4.50%
Fixed Rate Residential Mortgage [Member] | Commitments To Grant Loans [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment (in Dollars)	172,000	871,342
Other Commitment, Interest Rate	4.00%
Adjustable Rate Residential Mortgage [Member] | Commitments To Grant Loans [Member] | Initial Rate [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment, Interest Rate	4.00%	3.25%
Adjustable Rate Residential Mortgage [Member] | Commitments To Grant Loans [Member] | Interest Rate As After Ten Years [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment, Interest Rate	6.25%	6.00%
Adjustable Rate Residential Mortgage [Member] | Commitments To Grant Loans [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment (in Dollars)	200,000	2,700,000
Commercial Real Estate Loan [Member] | Commitments To Grant Loans [Member] | Initial Rate [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment, Interest Rate	4.00%
Commercial Real Estate Loan [Member] | Commitments To Grant Loans [Member] | Loan Terms Years Five Through Ten [Member] | Prime Rate [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment, Interest Rate	1.00%
Commercial Real Estate Loan [Member] | Commitments To Grant Loans [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment (in Dollars)	1,750,000
Balloon Payment Term	10 years
Amortization Period	20 years
Residential Mortgage: Home Equity [Member] | Unfunded Commitments Under Lines Of Credit [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment (in Dollars)	16,805,706	19,398,349
Consumer: Overdraft Protection [Member] | Unfunded Commitments Under Lines Of Credit [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment (in Dollars)	547,058	541,890
Commercial Loan [Member] | Unfunded Commitments Under Lines Of Credit [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment (in Dollars)	2,740,392	3,718,882
Variable Rate Loans [Member] | Commitments To Grant Loans [Member] | Prime Rate [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment, Interest Rate		1.00%
Variable Rate Loans [Member] | Commitments To Grant Loans [Member] | Minimum [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment, Interest Rate		5.00%
Variable Rate Loans [Member] | Commitments To Grant Loans [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment (in Dollars)		$ 4,100,000
Unfunded Commitments Under Lines Of Credit [Member] | Prime Rate [Member] | Minimum [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment, Interest Rate	1.00%	1.00%
Unfunded Commitments Under Lines Of Credit [Member] | Prime Rate [Member] | Maximum [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Other Commitment, Interest Rate	4.00%	4.00%

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Note 8 - Deposits (Details) - Certificates of Deposit by Maturity (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Certificates of Deposit by Maturity [Abstract]
2015	$ 62,142
2016	19,058
2017	9,154
2018	3,515
2019	2,527
Thereafter	2,132
	$ 98,528	$ 109,948

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Note 7 - Accrued Interest Receivable (Details) - Components of Interest Receivable (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Note 7 - Accrued Interest Receivable (Details) - Components of Interest Receivable [Line Items]
Interest receivable	$ 1,318	$ 1,229
Loans 1 [Member]
Note 7 - Accrued Interest Receivable (Details) - Components of Interest Receivable [Line Items]
Interest receivable	886	847
Securities Heldto Maturity [Member]
Note 7 - Accrued Interest Receivable (Details) - Components of Interest Receivable [Line Items]
Interest receivable	$ 432	$ 382

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Note 17 - Parent Only Financial Statements (Details) - Condensed Statements of Comprehensive (Loss) Income (USD $)	3 Months Ended								12 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2014	Jun. 30, 2013
Condensed Income Statements, Captions [Line Items]
Non-interest expense	$ 2,017,000	$ 2,117,000	$ 2,037,000	$ 1,987,000	$ 1,975,000	$ 2,188,000	$ 2,122,000	$ 2,004,000	$ 8,158,000	$ 8,289,000
Income (Loss) Before Income Taxes	406,000	370,000	383,000	377,000	293,000	133,000	(2,622,000)	(176,000)	1,536,000	(2,372,000)
Income tax benefit	160,000	127,000	132,000	129,000	100,000	44,000	(1,047,000)	(84,000)	548,000	(987,000)
Net Income (Loss)	246,000	243,000	251,000	248,000	193,000	89,000	(1,575,000)	(92,000)	988,000	(1,385,000)
Comprehensive Income (Loss)									986,000	(1,317,000)
Parent Company [Member]
Condensed Income Statements, Captions [Line Items]
Equity in undistributed earnings of subsidiaries									1,118,000	(1,272,000)
Interest income									91,000	105,000
Non-interest expense									(226,000)	(221,000)
Income (Loss) Before Income Taxes									983,000	(1,388,000)
Income tax benefit									(5,000)	(3,000)
Net Income (Loss)									988,000	(1,385,000)
Comprehensive Income (Loss)									$ 986,000	$ (1,317,000)

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Note 7 - Accrued Interest Receivable (Tables)

12 Months Ended

Jun. 30, 2014

Accrued Interest Receivable Disclosure [Text Block] [Abstract]

Interest and Other Income [Table Text Block]

	2014		2013
	(In thousands)
Loans	$	886	$	847
Securities held to maturity		432		382
	$	1,318	$	1,229

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Note 4 - Securities Held to Maturity (Details) - Amortized Cost and Estimated Fair Value of Held-to-Maturity Securities (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Note 4 - Securities Held to Maturity (Details) - Amortized Cost and Estimated Fair Value of Held-to-Maturity Securities [Line Items]
Amortized cost	$ 84,932	$ 80,912
Gross unrealized gains	599	413
Gross unrealized losses	1,895	2,958
Fair value	83,636	78,367
US Government Agencies Debt Securities [Member]
Note 4 - Securities Held to Maturity (Details) - Amortized Cost and Estimated Fair Value of Held-to-Maturity Securities [Line Items]
Amortized cost	49,177	46,194
Gross unrealized gains	49	84
Gross unrealized losses	1,551	2,131
Fair value	47,675	44,147
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Note 4 - Securities Held to Maturity (Details) - Amortized Cost and Estimated Fair Value of Held-to-Maturity Securities [Line Items]
Amortized cost	26,089	24,768
Gross unrealized gains	464	297
Gross unrealized losses	338	754
Fair value	26,215	24,311
Corporate Debt Securities [Member]
Note 4 - Securities Held to Maturity (Details) - Amortized Cost and Estimated Fair Value of Held-to-Maturity Securities [Line Items]
Amortized cost	4,630	4,669
Gross unrealized gains	56	15
Gross unrealized losses	5	72
Fair value	4,681	4,612
Certificates of Deposit [Member]
Note 4 - Securities Held to Maturity (Details) - Amortized Cost and Estimated Fair Value of Held-to-Maturity Securities [Line Items]
Amortized cost	5,036	5,281
Gross unrealized gains	30	17
Gross unrealized losses	1	1
Fair value	$ 5,065	$ 5,297

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Note 13 - Transactions with Officers and Directors

12 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note 13 - Transactions with Officers and Directors

The Bank has had, and may be expected to have in the future, banking transactions in the ordinary course of business with its officers, directors, their immediate families, and affiliated companies (commonly referred to as related parties), on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with others with the exception that all employees with one year of service, directors and executive officers are offered a 50 basis point reduction for consumer loans or primary residence mortgage loans. These persons were indebted to the Bank for loans totaling $7,728,000 and $9,956,000 at June 30, 2014 and 2013, respectively. During the year ended June 30, 2014, $755,000 of new loans and $571,000 of repayments were made. In addition, one director that was placed on emeritus status and non-voting status, resulted in a $2,412,000 reduction in loan indebtness to the Bank related to him and his immediate family.

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Note 18 - Quarterly Results of Operations (Unaudited)

12 Months Ended

Jun. 30, 2014

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information [Text Block]

Note 18 - Quarterly Results of Operations (Unaudited)

The following is a condensed summary of quarterly results of operations for the years ended June 30, 2014 and 2013:

	Year Ended June 30, 2014
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(In thousands, except per share data)
Interest income	$	2,965	$	3,005	$	3,038	$	2,984
Interest expense		632		617		585		588
Net Interest Income		2,333		2,388		2,453		2,396
Provision for loan losses		150		150		150		150
Net Interest Income after Provision for Loan Losses		2,183		2,238		2,303		2,246
Non-interest income		181		182		184		177
Non-interest expenses		1,987		2,037		2,117		2,017
Income before Income Taxes		377		383		370		406
Income tax expense		129		132		127		160
Net Income	$	248	$	251	$	243	$	246
Earnings per share:
Basic and diluted	$	0.05	$	0.05	$	0.05	$	0.05

	Year Ended June 30, 2013
	First			Second			Third		Fourth
	Quarter			Quarter			Quarter		Quarter
	(In thousands except per share data)
Interest income	$	3,142		$	3,000		$	2,985	$	2,905
Interest expense		727			689			648		657
Net Interest Income		2,415			2,311			2,337		2,248
Provision for loan losses		746			2,973			175		150
Net Interest Income (Loss) after Provision for Loan Losses		1,669			(662	)		2,162		2,098
Non-interest income		159			162			159		170
Non-interest expenses		2,004			2,122			2,188		1,975
(Loss) Income before Income Taxes		(176	)		(2,622	)		133		293
Income tax (benefit) expense		(84	)		(1,047	)		44		100
Net (Loss) Income	$	(92	)	$	(1,575	)	$	89	$	193
(Loss) Earnings per share:
Basic and diluted	$	(0.02	)	$	(0.32	)	$	0.02	$	0.04

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Note 19 - Reclassifications Out of Accumulated Other Comprehensive Income (Details) - Reclassifications Out of Accumulated Other Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2014
Amortization of defined benefit pension items:
Prior service costs	$ (4)	[1],[2]
Unrecognized loss	(17)	[1],[2]
Unrecognized gain	28	[1],[2]
	7	[1]
	(3)	[1]
Total reclassifications for the period	$ 4	[1]

[1] Amounts in parenthesis indicate debits to profit/loss.

[2] These accumulated other comprehensive components are included in the computation of net periodic pension cost. (See Note 12 for additional details).

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Note 3 - Stock Offering and Stock Repurchase Program (Details) (USD $)	0 Months Ended	12 Months Ended		0 Months Ended				77 Months Ended
	Jan. 04, 2007	Jun. 30, 2014	Jun. 30, 2013	Jan. 04, 2007 Employee Stock [Member]	Jan. 04, 2007 Minimum [Member]	Jan. 04, 2007 Maximum [Member]	Jan. 04, 2007 Seventh Stock Repurchase Program [Member]	Jun. 30, 2014 Sixth Stock Repurchase Program [Member]
Note 3 - Stock Offering and Stock Repurchase Program (Details) [Line Items]
Stock Issued During Period, Shares, New Issues					2,199,375
Sale of Stock, Price Per Share (in Dollars per share)	$ 10.00
Sale of Stock, Number of Shares Issued in Transaction				202,342		2,529,281
Sale Of Stock Consideration Received Gross (in Dollars)	$ 25,292,810
Sale of Stock, Consideration Received on Transaction (in Dollars)	24,500,000
Sale Of Stock Consideration Received Shares	3,091,344
Sale of Stock, Percentage of Ownership after Transaction		61.70%
Sale of Stock, Percentage of Ownership before Transaction							100.00%
Common Stock, Shares, Outstanding	10,000	5,010,437	5,010,437
Stock Repurchased During Period, Shares								610,188
Treasury Stock, Shares, Acquired		0	74,855
Dividends, Common Stock, Cash (in Dollars)		$ 0	$ 0

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Note 15 - Commitments and Contingencies (Tables)

12 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Financial Instruments Whose Contract Amounts Represent Credit Risk [Table Text Block]

	2014		2013
	(In thousands)
Commitments to grant loans	$	2,122	$	7,671
Unfunded commitments under lines of credit		20,093		23,659
Standby letters of credit		247		327
	$	22,462	$	31,657

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Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parentheticals) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Actuarial loss arising during period, Tax	$ 1	$ 36
Reclassification adjustment for prior service cost included in net income, Tax	2	4
Reclassification adjustment for net actuarial (gain) loss included in net income, Tax	$ (5)	$ 6

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Note 16 - Fair Value Measurements (Details) - Fair Value Assets Measured on Nonrecurring Basis (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Fair Value, Inputs, Level 1 [Member]
Note 16 - Fair Value Measurements (Details) - Fair Value Assets Measured on Nonrecurring Basis [Line Items]
Impaired loans	$ 0	$ 0
Fair Value, Inputs, Level 2 [Member]
Note 16 - Fair Value Measurements (Details) - Fair Value Assets Measured on Nonrecurring Basis [Line Items]
Impaired loans	0	0
Fair Value, Inputs, Level 3 [Member]
Note 16 - Fair Value Measurements (Details) - Fair Value Assets Measured on Nonrecurring Basis [Line Items]
Impaired loans	2,789	15,066
Fair Value, Measurements, Nonrecurring [Member]
Note 16 - Fair Value Measurements (Details) - Fair Value Assets Measured on Nonrecurring Basis [Line Items]
Impaired loans	$ 2,789	$ 15,066

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Note 2 - Summary of Significant Accounting Policies

12 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Note 2 - Summary of Significant Accounting Policies

Basis of Consolidated Financial Statement Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, the Bank and the Bank’s wholly owned subsidiary, the Service Corp. All significant intercompany accounts and transactions have been eliminated in consolidation.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated statements of financial condition and revenues and expenses for the periods then ended. Actual results could differ significantly from those estimates.

A material estimate that is particularly susceptible to significant change relates to the determination of the allowance for loan losses. Management believes that the allowance for loan losses is adequate. While management uses all available information to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions in the Bank’s market area.  In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for loan losses. Such agencies may require the Bank to recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examinations.

The Company has evaluated events and transactions occurring subsequent to the consolidated statement of financial condition date of June 30, 2014 for items that should potentially be recognized or disclosed in these consolidated financial statements.  The evaluation was conducted through the date these consolidated financial statements were issued.

Cash and Cash Equivalents

Cash and cash equivalents include cash and amounts due from depository institutions and interest-bearing deposits with banks with original maturities of three months or less.

Securities

Investments in debt securities that the Company has the positive intent and ability to hold to maturity are classified as held to maturity securities and reported at amortized cost. Debt and equity securities that are bought and held principally for the purpose of being sold in the near term are classified as trading securities and reported at fair value, with unrealized holding gains and losses included in earnings. Debt and equity securities not classified as trading securities or as held to maturity securities are classified as available for sale securities and reported at fair value, with unrealized holding gains or losses, net of applicable income taxes, reported in a separate component of stockholders’ equity.  The Company had no trading or available for sale securities as of June 30, 2014 and 2013.

Individual securities are considered impaired when their fair value is less than amortized cost. Management evaluates all securities with unrealized losses quarterly to determine if such impairments are “temporary” or “other-than-temporary” in accordance with applicable accounting guidance.  Accordingly, the Company accounts for temporary impairments based upon a security’s classification as trading, available for sale or held to maturity.  Temporary impairments on available for sale securities are recognized, on a tax-effected basis, through other comprehensive income (loss) with offsetting entries adjusting the carrying value of the security and the balance of deferred taxes.  Temporary impairments of held to maturity securities are not recognized in the consolidated financial statements; however, information concerning the amount and duration of impairments on held to maturity securities is disclosed in the notes to the consolidated financial statements.  The carrying value of securities held in the trading portfolio is adjusted to fair value through earnings on a monthly basis.

Other-than-temporary impairments on securities that the Company has decided to sell or will more likely than not be required to sell prior to the full recovery of their fair value to a level equal to or exceeding amortized cost are recognized in earnings.  Otherwise, the other-than-temporary impairment is bifurcated into credit-related and noncredit-related components.  The credit-related impairment generally represents the amount by which the present value of the cash flows expected to be collected on a debt security falls below its amortized cost.  The noncredit-related component represents the remaining portion of the impairment not otherwise designated as credit-related. Credit-related other-than-temporary impairments are recognized in earnings while noncredit-related other-than-temporary impairments are recognized, net of deferred taxes, in other comprehensive income (loss).

The Company reviews its investment portfolio on a quarterly basis for indications of impairment. This review includes analyzing the length of time and the extent to which the fair value of a security has been lower than the cost, and the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer.  The Company also assesses its intent with regard to selling or holding each security as well as any conditions which may require the sale of security prior to the recovery of fair value to a level which equals or exceeds amortized cost.

Discounts and premiums on securities are accreted/amortized to maturity by use of the level-yield method. Gain or loss on sales of securities is based on the specific identification method.

Concentration of Risk

The Bank’s lending activities are concentrated in loans secured by real estate located in the State of New Jersey.

Loans Receivable

Loans are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct loan origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Company is generally amortizing these amounts over the contractual life of the loan.

For all classes of loans receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due or when management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. Certain loans may remain on accrual status if they are in the process of collection and are either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans, including impaired loans, generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt.  The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments.

Allowance for Credit Losses

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the statement of financial condition date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities, when required, on the consolidated statement of financial condition. The allowance for credit losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. All, or part, of the principal balance of loans receivable that are deemed uncollectible are charged against the allowance for loan losses when management determines that the repayment of that amount is highly unlikely.  Any subsequent recoveries are credited to the allowance for loan losses.  Non-residential consumer loans are generally charged off no later than 120 days past due on a contractual basis, earlier in the event of bankruptcy, or if there is an amount deemed uncollectible.  

The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance.  The allowance is based on the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, the composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examinations.

The allowance calculation methodology includes segregation of the total loan portfolio into segments. The Company’s loans receivable portfolio is comprised of the following segments: residential mortgage, commercial real estate, construction, commercial and industrial and consumer.  Some segments of the

Company’s loan receivable portfolio are further disaggregated into classes which allow management to more accurately monitor risk and performance.

The residential mortgage loan segment is disaggregated into two classes: one-to-four family loans, which are primarily first liens, and home equity loans, which consist of first and second liens.  The commercial real estate loan segment includes owner and non-owner occupied loans which have medium risk based on historical experience with these type of loans.  The construction loan segment is further disaggregated into two classes: one-to-four family owner-occupied, which includes land loans, whereby the owner is known and there is less risk, and other, whereby the property is generally under development and tends to have more risk than the one-to-four family owner-occupied loans.  The commercial and industrial loan segment consists of loans made for the purpose of financing the activities of commercial customers. The majority of commercial and industrial loans are secured by real estate and thus carry a lower risk than traditional commercial and industrial loans.  The consumer loan segment consists primarily of installment loans and overdraft lines of credit connected with customer deposit accounts.

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For 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 pools of loans by loan class. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these classes of loans, adjusted for qualitative factors.  These qualitative risk factors include:

1.	Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices.
2.	National, regional, and local economic and business conditions as well as the condition of various market segments, including the value of underlying collateral for collateral dependent loans.
3.	Nature and volume of the portfolio and terms of loans.
4.	Experience, ability, and depth of lending management and staff.
5.	Volume and severity of past due, classified and nonaccrual loans as well as and other loan modifications.
6.	Quality of the Company’s loan review system, and the degree of oversight by the Company’s Board of Directors.
7.	Existence and effect of any concentrations of credit and changes in the level of such concentrations.
8.	Effect of external factors, such as competition and legal and regulatory requirements.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation.

An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

Impaired Loans

Management evaluates individual loans in all of the loan segments (including loans in the residential mortgage and consumer segments) for possible impairment if the recorded investment in the loan is greater than $200,000 and if the loan is either in nonaccrual status or is risk rated Substandard or worse or has been modified in a troubled debt restructuring.  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.

Loans whose terms are modified are classified as a troubled debt restructuring (“TDR”) if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a TDR generally involve a reduction in interest rate below market rate given the associated credit risk, or an extension of a loan’s stated maturity date or capitalization of interest and/or escrow. Nonaccrual TDRs are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification.  Loans classified as TDRs are designated as impaired until they are ultimately repaid in full or foreclosed and sold.  The nature and extent of impairment of TDRs, including those which experienced a subsequent default, is considered in the determination of an appropriate level of allowance for loan losses.

Once the determination has been made that a loan is impaired, impairment is measured by comparing the recorded investment in the loan to one of the following: (a) the present value of expected cash flows (discounted at the loan’s effective interest rate), (b) the loan’s observable market price or (c) the fair value of collateral adjusted for expected selling costs.  The method is selected on a loan by loan basis with management primarily utilizing the fair value of collateral method.

The estimated fair values of the real estate collateral are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property.

The estimated fair values of the non-real estate collateral, such as accounts receivable, inventory and equipment, are determined based on the borrower’s financial statements, inventory reports, accounts receivable agings or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets.

The evaluation of the need and amount of the allowance for impaired loans and whether a loan can be removed from impairment status is made on a quarterly basis.  The Company’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition.

Other Real Estate Owned

Other real estate owned represents real estate acquired through formal foreclosure or by taking possession of the real estate and is initially recorded at the lower of cost or fair value, less estimated selling costs establishing a new cost basis.  Write-downs required at the time of acquisition are charged to the allowance for loan losses establishing a new cost basis.  Thereafter, the Company maintains an allowance for decreases in the properties’ estimated fair value, through charges to earnings.  Such charges are included in other non-interest expense along with any additional property maintenance.

Premises and Equipment

Premises and equipment are comprised of land, at cost, and buildings, building improvements, furnishings and equipment and leasehold improvements, at cost, less accumulated depreciation and amortization. Depreciation and amortization charges are computed on the straight-line method over the following estimated useful lives:

	Years
Building and improvements	5 - 50
Furnishings and equipment	3 – 7
Leasehold improvements	Shorter of useful life or term of lease

Significant renewals and betterments are capitalized to the premises and equipment account. Maintenance and repairs are charged to operations in the year incurred. Rental income is netted against occupancy costs in the consolidated statements of income.

Federal Home Loan Bank Stock

Federal law requires a member institution of the Federal Home Loan Bank (“FHLB”) system to hold restricted stock of its district’s FHLB according to a predetermined formula based on advances available and outstanding. The restricted stock is carried at cost.  Management’s determination of whether these shares are impaired is based on an assessment of the ultimate recoverability of its cost rather than by recognizing temporary declines in value.  The determination of whether a decline affects the ultimate recoverability of cost is influenced by criteria such as (1) the significance of the decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB.

Management believes no impairment charge was necessary related to the FHLB restricted stock during fiscal years 2014 or 2013.

Bank Owned Life Insurance

Bank owned life insurance is carried at net cash surrender value. The change in the net cash surrender value is recorded as a component of non-interest income.

Defined Benefit Plans

In accordance with applicable guidance prescribed in FASB ASC 715, “Compensation – Retirement Benefits”, the Company recognizes the over-funded or under-funded status of a defined benefit postretirement plan as an asset or liability in the consolidated statement of financial condition, with changes in the funded status recorded through other comprehensive income (loss) in the year in which those changes occur.  The funded status of the plan is calculated using actuarial concepts which involve making assumptions regarding discount rate, mortality, expected rate of compensation increases and others.

Stock-based Compensation Plans

In accordance with FASB ASC 718, “Compensation – Stock Compensation”, the Company recognizes compensation expense for the total of the fair value of all share-based compensation awards granted over the requisite service periods.  In addition, ASC 718 requires that cash flow activity be reported on a financing

rather than an operating cash flow basis for the benefits, if any, of realized tax deductions in excess of previously recognized tax benefits on compensation expense.

Advertising

The Company expenses advertising and marketing costs as incurred.

Income Taxes Expense (Benefit)

The Company and its subsidiaries file a consolidated federal income tax return with the MHC. Federal income taxes are allocated based on the contribution of their respective income or loss to the consolidated income tax return. Separate state income tax returns are filed.

Federal and state income taxes have been provided in these consolidated financial statements on the basis of reported income (loss). The amounts reflected on the income tax returns differ from these provisions due principally to temporary differences in the reporting of certain items of income and expense for financial reporting and income tax reporting purposes. Deferred income taxes are recorded to recognize such temporary differences.

The Company follows the provisions of FASB ASC 740, “Income Taxes”, formerly FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes (“FIN48”).  ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognizing, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the Company’s evaluation under ASC 740, no significant income tax uncertainties have been identified. Therefore, the Company recognized no adjustment for unrecognized income tax benefits for the years ended June 30, 2014 and 2013. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the consolidated statement of income (loss). The Company did not recognize any interest and penalties for the years ended June 30, 2014 and 2013.  The tax years subject to examination by the taxing authorities are the years ended June 30, 2013, 2012, and 2011.

Off-Balance Sheet Credit-Related Financial Instruments

In the ordinary course of business, the Company enters into commitments to extend credit, including commitments under lines of credit. Such financial instruments are recorded when they are funded.

Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding, exclusive of the Employee Stock Ownership Plan (“ESOP”) shares not yet committed to be released. Diluted earnings per share is calculated by adjusting the weighted average number of shares of common stock outstanding to include the effect of contracts or securities exercisable (such as stock options) or which could be converted into common stock, if dilutive, using the treasury stock method. Diluted earnings (loss) per share did not differ from basic earnings (loss) per share for the years ended June 30, 2014 and 2013, as the 275,410 weighted average number of outstanding stock options for the years ended June 30, 2014 and 2013, were all anti-dilutive and the Company incurred a net loss during 2013.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) includes benefit plans amounts recognized under ASC 715, “Compensation-Retirement Benefits”.  This item of other comprehensive income (loss) reflects, net of tax, prior service costs and unrealized net losses that had not been recognized in the consolidated financial statements prior to the implementation of ASC 715 along with actuarial losses arising during the current period.

Interest Rate Risk

The Bank is principally engaged in the business of attracting deposits from the general public and using these deposits, together with other funds, to purchase securities and to make loans primarily secured by real estate. The potential for interest-rate risk exists as a result of the generally shorter duration of the Bank’s interest-sensitive liabilities compared to the generally longer duration of its interest-sensitive assets. In a rising rate environment, liabilities will generally reprice faster than assets, thereby reducing net interest income. For this reason, management regularly monitors the maturity structure of the Bank’s assets and liabilities in order to measure its level of interest-rate risk and to plan for future volatility.

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Note 5 - Loans Receivable and Allowance for Credit Losses (Details) - Past Due Financing Receivables (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	$ 2,541	$ 6,581
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	1,506	1,701
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	4,810	9,825
Financing Receivable, Recorded Investment, Past Due	8,857	18,107
Financing Receivable, Recorded Investment, Current	225,104	209,419
Loans and Leases Receivable, Net	233,961	227,526
Financing Receivable, Recorded Investment, Nonaccrual Status	7,952	13,447
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	361	647
Residential Mortgage: One-to-Four Family [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	2,496	3,910
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	1,381	1,525
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	2,185	5,822
Financing Receivable, Recorded Investment, Past Due	6,062	11,257
Financing Receivable, Recorded Investment, Current	137,048	125,189
Loans and Leases Receivable, Net	143,110	136,446
Financing Receivable, Recorded Investment, Nonaccrual Status	4,346	7,955
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	310	501
Residential Mortgage: Home Equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	32	412
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	125	127
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	1,207	1,317
Financing Receivable, Recorded Investment, Past Due	1,364	1,856
Financing Receivable, Recorded Investment, Current	37,049	38,825
Loans and Leases Receivable, Net	38,413	40,681
Financing Receivable, Recorded Investment, Nonaccrual Status	1,586	1,502
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	51	146
Commercial Real Estate Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due		782
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	1,248	1,805
Financing Receivable, Recorded Investment, Past Due	1,248	2,587
Financing Receivable, Recorded Investment, Current	30,715	29,516
Loans and Leases Receivable, Net	31,963	32,103
Financing Receivable, Recorded Investment, Nonaccrual Status	1,248	2,587
Construction: One-to-Four Family Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Current	2,557	4,552
Loans and Leases Receivable, Net	2,557	4,552
Construction: Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due		1,000
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due		601
Financing Receivable, Recorded Investment, Past Due		1,601
Financing Receivable, Recorded Investment, Current	7,433	1,968
Loans and Leases Receivable, Net	7,433	3,569
Financing Receivable, Recorded Investment, Nonaccrual Status	137	601
Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	9	472
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due		49
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	170	280
Financing Receivable, Recorded Investment, Past Due	179	801
Financing Receivable, Recorded Investment, Current	9,473	8,445
Loans and Leases Receivable, Net	9,652	9,246
Financing Receivable, Recorded Investment, Nonaccrual Status	635
Total Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	4	5
Financing Receivable, Recorded Investment, Past Due	4	5
Financing Receivable, Recorded Investment, Current	829	924
Loans and Leases Receivable, Net	833	929
Financing Receivable, Recorded Investment, Nonaccrual Status		$ 802

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Note 12 - Benefit Plans (Details) - Restricted Stock Activity (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Restricted Stock Activity [Abstract]
Restricted Stock	22,492	44,076
Weighted Average Grant Date Fair Value	$ 8.15	$ 8.15
Vested	(21,584)
Vested	$ 8.15

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Note 9 - Borrowings (Details) - Term Advances Due to the FHLB (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Fixed interest rate	2.504%
FHLB Advances	$ 30,000	$ 30,000
Federal Home Loan Bankof New York 1 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Fixed interest rate	0.78%
FHLB Advances	5,000	5,000
Federal Home Loan Bankof New York 2 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Fixed interest rate	0.78%
FHLB Advances	5,000	5,000
Federal Home Loan Bankof New York 3 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Fixed interest rate	3.272%
FHLB Advances	10,000	10,000
Federal Home Loan Bankof New York 4 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Fixed interest rate	3.46%
FHLB Advances	$ 10,000	$ 10,000

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Note 19 - Reclassifications Out of Accumulated Other Comprehensive Income

12 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Reclassifications [Text Block]

Note 19 – Reclassifications Out of Accumulated Other Comprehensive Income

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss) (a)					Affected Line Item in the Consolidated Statements of Comprehensive Income (Loss)
	Twelve Months Ended June 30, 2014
	(In thousands)
Amortization of defined benefit pension items:
Prior service costs		$	(4	)	(b)		Directors compensation
Unrecognized loss			(17	)	(b)		Directors compensation
Unrecognized gain			28		(b)		Salary and employee benefits
			7				Total before tax
			(3	)			Income tax (expense)
Total reclassifications for the period		$	4				Net of tax

(a)           Amounts in parenthesis indicate debits to profit/loss.

(b) These accumulated other comprehensive components are included in the computation of net periodic pension cost.  (See Note 12 for additional details).

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Note 11 - Income Taxes (Details) - Effective Income Tax Rate Reconciliation (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2014	Jun. 30, 2013
Effective Income Tax Rate Reconciliation [Abstract]
Federal income tax at statutory rate									$ 522	$ (807)
Federal income tax at statutory rate									34.00%	34.00%
State tax, net of federal benefit									88	(138)
State tax, net of federal benefit									5.80%	5.80%
Bank Owned Life Insurance									(74)	(69)
Bank Owned Life Insurance									(4.80%)	2.90%
Stock options									(19)	57
Stock options									(1.30%)	(2.40%)
Other									31	(30)
Other									2.00%	1.30%
	$ 160	$ 127	$ 132	$ 129	$ 100	$ 44	$ (1,047)	$ (84)	$ 548	$ (987)
									35.70%	41.60%

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Note 11 - Income Taxes (Tables)

12 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	2014		2013
	(In thousands)
Current income tax expense (benefit):
Federal	$	7	$	(394	)
State		93		(99	)
		100		(493	)
Deferred income tax expense (benefi)t:
Federal		408		(384	)
State		40		(110	)
		448		(494	)
	$	548	$	(987	)

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	2014					2013
	Amount			% of Pretax Income		Amount			% of Pretax Income
	(Dollars in thousands)
Federal income tax at statutory rate	$	522		34.0	%	$	(807	)	34.0	%
State tax, net of federal benefit		88		5.8			(138	)	5.8
Bank Owned Life Insurance		(74	)	(4.8	)		(69	)	2.9
Stock options		(19	)	(1.3	)		57		(2.4	)
Other		31		2.0			(30	)	1.3
	$	548		35.7	%	$	(987	)	41.6	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	2014				2013
	(In thousands)
Deferred tax assets:
Allowances for losses on loans and commitments	$	1,484		$	1,717
Uncollected interest		142			425
Benefit plans		1,007			962
Restricted stock award		72			72
Other		63			56
		2,768			3,232
Deferred tax liabilities
Depreciation		(148	)		(166	)
Net deferred tax asset	$	2,620		$	3,066

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Note 12 - Benefit Plans

12 Months Ended

Jun. 30, 2014

Disclosure Text Block Supplement [Abstract]

Compensation and Employee Benefit Plans [Text Block]

Note 12 - Benefit Plans

Directors’ Retirement Plan

The Bank has a Directors’ Retirement Plan, which provides that certain directors meeting specified age and service requirements may retire and continue to be paid. This plan is unfunded.

The following table sets forth the accumulated benefit obligation, the changes in the plan’s projected benefit obligation and the plan’s funded status as of and for the years ended June 30, 2014 and 2013:

	2014			2013
	(Dollars in thousands)
Accumulated benefit obligation – ending	$	1,356		$	1,231
Projected benefit obligation – beginning	$	1,380		$	1,340
Service cost		22			17
Interest cost		67			56
Actuarial loss		19			(10	)
Benefit payments		(34	)		(23	)
Projected benefit obligation – ending	$	1,454		$	1,380
Plan assets at fair value – beginning	$	—		$	—
Employer contribution		34			23
Benefit payments		(34	)		(23	)
Plan assets at fair value – ending	$	—		$	—
Funded status at end of year (included in other liabilities)	$	1,454		$	1,380
Assumptions:
Discount rate		4.50	%		5.00	%
Rate of compensation increase		3.00	%		3.00	%

Net periodic pension cost for the years ended June 30, 2014 and 2013 included the following:

	2014			2013
	(Dollars in thousands)
Service cost	$	22		$	17
Interest cost		67			56
Amortization of unrecognized loss		17			33
Amortization of unrecognized past service liability		4			11
Net periodic pension cost	$	110		$	117
Assumptions:
Discount rate		5.00	%		4.25	%
Rate of compensation		3.00	%		3.00	%

For the year ended June 30, 2015 the Bank expects to contribute $69,000 to the plan.

Estimated future benefit payments for the years ending June 30, which reflect expected future service, as appropriate, are as follows (in thousands):

2015	$	69
2016		96
2017		103
2018		110
2019		130
2020 – 2023		742

As of June 30, 2014 and 2013, unrecognized past service liabilities and actuarial losses aggregating approximately $240,000 and $244,000 respectively, were included, net of income taxes of $96,000 and $98,000 respectively, in accumulated other comprehensive loss. Approximately $22,000 of this amount is expected to be recognized as a component of net periodic pension cost during the year ending June 30, 2015.

Executive Incentive Retirement Plan

The Bank has an unfunded, non-qualified executive incentive retirement plan covering all eligible executives. The plan provides for either a lump sum payment or equal annual installments for a period of fifteen years commencing on the first day of the calendar month following the termination of employment due to retirement, resignation, disability or death. The amount payable is based on the vested balance of the executive’s accumulated awards plus interest. The annual awards are based upon the executive’s base salary in effect at the beginning of the plan year and the Bank’s net income for the prior fiscal year. The percentage vested is based on the sum of the executive’s age and years of service.

The following table sets forth the accumulated benefit obligation, changes in the plan’s projected benefit obligation and the plan’s funded status as of and for the years ended June 30, 2014 and 2013:

	2014			2013
	(Dollars in thousands)
Accumulated benefit obligation – ending	$	459		$	442
Projected benefit obligation – beginning	$	442		$	472
Service cost		39			47
Interest cost		22			20
Actuarial gain		(22	)		(76	)
Benefits paid		(22	)		(21	)
Projected benefit obligation and funded status – ending (included in other liabilities)	$	459		$	442
Assumption:
Discount rate		4.50	%		5.00	%

Net periodic pension cost for the years ended June 30, 2014 and 2013, included the following:

	2014			2013
	(Dollars in thousands)
Service cost	$	39		$	47
Interest cost		22			20
Amortization of unrecognized gain		(28	)		(16	)
Net periodic pension cost	$	33		$	51
Assumption:
Discount rate		5.00	%		4.25	%

For the year ending June 30, 2015, the Bank expects to contribute $31,000 to the plan.

Estimated future benefit payments for the years ending June 30, which reflect expected future service, as appropriate, are as follows (in thousands):

2015	$	31
2016		31
2017		32
2018		32
2019		33
2020 – 2023		233

As of June 30, 2014 and 2013, actuarial gains of approximately $182,000 and $188,000, respectively, were included, net of income taxes of $73,000 and $75,000, respectively, in accumulated other comprehensive loss.  Approximately $29,000 of this amount is expected to be recognized as a component of net periodic pension cost during the year ending June 30, 2015.

401(k) Savings and Profit Sharing Plan

The Bank sponsors a savings and profit sharing plan, pursuant to Section 401(k) of the Internal Revenue Code (“IRC”), for all eligible employees. The plan has a profit sharing component paid annually by the Bank of 3% of each eligible employee’s compensation. Employees may also elect to defer up to 80% of their compensation, subject to IRC limitations. The Bank will match 50% of the first 6% of the employee’s salary deferral up to a maximum of 3% of each employee’s compensation. The Plan expense amounted to approximately $53,000 and $48,000 for the years ended June 30, 2014 and 2013, respectively. The Bank terminated the annual 3% profit sharing component of the plan, effective December 31, 2012, but still matches 50% of the first 6% of the employee’s salary deferral up to a maximum of 3% of each employee’s compensation.

Employee Stock Ownership Plan

Effective upon completion of the Company’s initial public stock offering, the Bank established an Employee Stock Ownership Plan (“ESOP”) for all eligible employees who complete a twelve-month period of employment with the Bank, have attained the age of 21 and have completed at least 1,000 hours of service in a plan year. The ESOP used $2,023,420 in proceeds from a term loan obtained from the Company to purchase 202,342 shares of Company common stock. The term loan principal is payable over 48 equal quarterly installments through December 31, 2018. The interest rate on the term loan is 8.25%. Each quarter, the Bank intends to make discretionary contributions to the ESOP, which will be equal to principal and interest payments required on the term loan. The ESOP may further pay down the loan with dividends paid, if any, on the Company common stock owned by the ESOP.

Shares purchased with the loan proceeds provide collateral for the term loan and are held in a suspense account for future allocations among participants. Base compensation is the basis for allocation to participants of contributions to the ESOP and shares released from the suspense account, as described by the ESOP, in the year of allocation.

ESOP shares pledged as collateral were initially recorded as unallocated ESOP shares in the consolidated statement of financial condition. On a monthly basis, 1,405 shares are allocated and compensation expense is recorded equal to the number of allocated shares multiplied by the monthly average market price of the Company’s common stock and the allocated shares become outstanding for basic earnings per common share computations. The difference between the fair value of shares and the cost of the shares allocated by the ESOP is recorded as an adjustment to paid-in capital.  ESOP compensation expense was approximately $131,000 and $111,000 for the years ended June 30, 2014 and 2013, respectively.

ESOP shares at June 30 are summarized as follows:

	2014		2013
Allocated shares - beginning		109,602		92,741
Shares allocated during the year		16,862		16,861
Allocated shares - ending		126,464		109,602
Total ESOP Shares		202,342		202,342
Fair value of unallocated shares	$	614,612	$	669,576

Stock-Based Compensation

The Company maintains the MSB Financial Corp. 2008 Stock Compensation and Incentive Plan (the “2008 Plan”). Under this plan, the Company may grant options to purchase up to 275,410 shares of Company’s common stock. At June 30, 2013, there were no shares remaining for future option grants under the plan.

On May 9, 2008, options to purchase 275,410 shares of common stock at an exercise price of $10.75 per share were awarded and will expire no later than ten years following the grant date. The options granted vest over a five-year service period, with 20% of the awards vesting on each anniversary date of grant. The fair value of the options granted, as computed using the Black-Scholes option-pricing model, was determined to be $2.99 per option on the date of grant based upon the following underlying assumptions: a risk-free interest rate, expected option life, expected stock price volatility, and dividend yield of 3.33%, 6.5 years, 24.23%, and 1.11%, respectively.

Management recognized compensation expense for the fair value of the options, which have graded vesting, on a straight-line basis over the requisite service period of the awards. As of May 9, 2013 all shares in the plan became vested and the Company did not record any stock option expense during the fiscal year ended June 30, 2014 compared to $137,000 in stock option expense along with a $19,000 income tax benefit recorded during the fiscal year ended June 30, 2013.

A summary of stock options for the years ended June 30, 2014 and 2013 was as follows:

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Options	Price		Term	Value
Outstanding at June 30, 2013	275,410		10.75	4.8 years		—
Outstanding at June 30, 2014	275,410		10.75	3.8 years		—
Exercisable at June 30, 2014	275,410		10.75	3.8 years		—

Shares issued upon the exercise of stock options are planned to be issued from treasury stock.  The 275,410 shares outstanding as of June 30, 2014 are fully vested.  There is no unrecognized compensation expense related to these options as of June 30, 2014.

On November 9, 2009, Company’s stockholders approved an amendment to the 2008 Plan to increase the number of shares of the Company’s common stock authorized for issuance under the 2008 Plan from 275,410 to 385,574, with such additional shares to be available for awards in the form of restricted stock awards.  On November 24, 2009, the Company purchased 110,164 shares of its common stock at a purchase price of $932,000, which amount, was charged to paid-in capital.  On December 14, 2009, the Board of Directors granted 110,164 shares of restricted stock to certain employees and directors.  The restricted stock awards are to be vested over a five year period and expensed accordingly based on the fair value at the date of grant.  For each of the fiscal years ended June 30, 2014 and 2013, the Company recognized approximately $180,000 in stock-based compensation expense related to restricted stock awards along with an income tax benefit of $72,000. Unrecognized compensation expense relating to unvested restricted stock awards outstanding at June 30, 2014 is $82,000. This amount will be recognized over a weighted average period of 0.5 years.

The following is a summary of the activity related to the Company’s restricted stock awards for the year ended June 30, 2014:

			Weighted
			Average
	Restricted		Grant Date
	Stock		Fair Value
Unvested at June 30, 2013	44,076		$	8.15
Vested	(21,584	)		8.15
Unvested at June 30, 2014	22,492		$	8.15