10-Q

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 10-Q

(Mark One)
X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934
For the quarterly period ended			June 30, 2017
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 Number  001-37506
MSB FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
MARYLAND							34-1981437
(State or other jurisdiction of							(I.R.S. Employer
incorporation or organization)							Identification Number)
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
Indicate by check markwhether 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 Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [  ]					Accelerated filer [  ]
Non-accelerated filer [  ]					Smaller reporting company [X]
					Emerging growth company [  ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act .  [  ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes [  ] No  [X]
The number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: August 14, 2017:
$0.01 par value common stock 5,756,077 shares outstanding

1

MSB FINANCIAL CORP. AND SUBSIDIARIES

INDEX

		Page
		Number
PART I - FINANCIAL INFORMATION
Item 1:	Consolidated Financial Statements (Unaudited)
	Consolidated Statements of Financial Condition
	at June 30, 2017 and December 31, 2016	3
	Consolidated Statements of Income for the
	Three and Six Months Ended June 30, 2017 and 2016	4
	Consolidated Statements of Comprehensive Income for the
	Three and Six Months Ended June 30, 2017 and 2016	5
	Consolidated Statements of Cash Flows for the Six Months
	Ended June 30, 2017 and 2016	6
	Notes to Consolidated Financial Statements (Unaudited)	7
Item 2:	Management's Discussion and Analysis of	31
	Financial Condition and Results of Operations
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4:	Controls and Procedures	38
PART II - OTHER INFORMATION
Item 1:	Legal Proceedings	38
Item 1A:	Risk Factors	38
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3:	Defaults Upon Senior Securities	39
Item 4:	Mine Safety Disclosures	39
Item 5:	Other Information	39
Item 6:	Exhibits	40
SIGNATURES		41
CERTIFICATIONS

2

ITEM 1 – CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MSB FINANCIAL CORP. AND SUBSIDARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

	June 30,			December 31,
	2017			2016
(Dollars in thousands, except per share amounts)
Cash and due from banks	$	1,839		$	1,388
Interest-earning demand deposits with banks		7,195			19,994
Cash and Cash Equivalents		9,034			21,382
Securities held to maturity (fair value of $42,523 and $43,894, respectively)		42,441			44,104
Loans receivable, net of allowance for loan losses of $4,925 and $4,476, respectively		426,370			368,007
Premises and equipment		8,902			8,957
Federal Home Loan Bank of New York stock, at cost		2,263			1,433
Bank owned life insurance		13,996			13,784
Accrued interest receivable		1,402			1,378
Other assets		2,690			2,601
Total Assets	$	507,098		$	461,646
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Non-interest bearing	$	44,584		$	44,365
Interest bearing		345,479			317,934
Total Deposits		390,063			362,299
Advances from Federal Home Loan Bank of New York		38,675			22,675
Advance payments by borrowers for taxes and insurance		822			792
Other liabilities		2,549			2,695
Total Liabilities		432,109			388,461
Stockholders' Equity
Preferred stock, par value $0.01; 1,000,000 shares authorized; no shares issued or outstanding		-			-
Common stock, par value $0.01; 49,000,000 shares authorized; 5,737,077 and 5,714,182 issued; 5,737,077 and 5,714,182 outstanding, respectively		57			57
Paid-in capital		52,217			51,809
Retained earnings		24,651			23,370
Unallocated common stock held by ESOP (195,868 and 201,316 shares, respectively)		(1,875	)		(1,929	)
Accumulated other comprehensive loss		(61	)		(122	)
Total Stockholders' Equity		74,989			73,185
Total Liabilities and Stockholders' Equity	$	507,098		$	461,646

See notes to unaudited consolidated financial statements.

3

MSB FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three months ended June 30,				Six months ended June 30,
(Dollars in thousands, except per share amounts)	2017		2016		2017		2016
Interest Income:
Loans receivable, including fees	$	4,444	$	3,082	$	8,444	$	5,920
Securities held to maturity		247		331		498		762
Other		36		40		78		69
Total Interest Income		4,727		3,453		9,020		6,751
Interest Expense
Deposits		579		339		1,081		653
Borrowings		224		183		420		379
Total Interest Expense		803		522		1,501		1,032
Net Interest Income		3,924		2,931		7,519		5,719
Provision for Loan Losses		300		190		495		320
Net Interest Income after Provision for Loan Losses		3,624		2,741		7,024		5,399
Non-Interest Income
Fees and service charges		98		97		169		170
Income from bank owned life insurance		105		57		212		113
Other		16		358		25		370
Total Non-Interest Income		219		512		406		653
Non-Interest Expenses
Salaries and employee benefits		1,578		1,460		3,084		2,887
Directors compensation		187		124		363		227
Occupancy and equipment		429		348		823		682
Service bureau fees		49		292		97		505
Advertising		5		10		8		21
FDIC assessment		37		66		70		137
Professional services		349		373		708		612
Other		184		236		382		402
Total Non-Interest Expenses		2,818		2,909		5,535		5,473
Income before Income Taxes		1,025		344		1,895		579
Income Tax Expense		293		121		614		197
Net Income	$	732	$	223	$	1,281	$	382
Earnings per share:
Basic	$	0.13	$	0.04	$	0.23	$	0.07
Diluted	$	0.13	$	0.04	$	0.23	$	0.07
See notes to unaudited consolidated financial statements.

4

MSB FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three months ended June 30,					Six months ended June 30,
(Dollars in thousands)	2017		2016			2017		2016
Net Income	$	732		223			1,281		382
Other comprehensive income, net of tax
Defined benefit pension plans:
Reclassification adjustment for prior service cost included    in net income, net of tax of $-, $2, $- and $4, respectively	$	-	$	(2	)	$	-	$	(5	)
Reclassification adjustment for net actuarial loss    included in net income, net of tax of $(20), $(2), $(40),and $(3), respectively		30		2			61		4
Total other comprehensive income (loss)		30		-			61		(1	)
Comprehensive income	$	762	$	223		$	1,342	$	381
See notes to unaudited consolidated financial statements.

5

MSB FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
(Dollars in thousands)	2017			2016
Cash Flows from Operating Activities:
Net Income	$	1,281		$	382
Adjustments to reconcile net income to net
cash provided by operating activities:
Net accretion of securities premiums and discounts and deferred loan fees and costs		(77	)		(44	)
Depreciation and amortization of premises and equipment		272			195
Stock-based compensation and allocation of ESOP stock		249			106
Provision for loan losses		495			320
Income from bank owned life insurance		(212	)		(113	)
(Increase) decrease in accrued interest receivable		(24	)		139
(Increase) decrease in other assets		(129	)		508
(Decrease) increase in other liabilities		(45	)		37
Net Cash Provided by Operating Activities		1,810			1,530
Cash Flows from Investing Activities:
Activity in held to maturity securities:
Purchases		(1,182	)		-
Maturities, calls and principal repayments		2,807			25,516
Net increase in loans receivable		(42,594	)		(30,481	)
Purchased loan participations		(23,399	)		-
Sold loan participations		7,250			-
Purchase of premises and equipment		(217	)		(237	)
Purchase of Federal Home Loan Bank of NY stock		(6,261	)		-
Redemption of Federal Home Loan Bank of NY stock		5,431			393
Net Cash Used in Investing Activities		(58,165	)		(4,809	)
Cash Flows from Financing Activities:
Net increase in deposits		27,764			31,019
Increase (decrease) in advances from Federal Home Loan Bank of NY		16,000			(10,000	)
Proceeds from exercise of stock options		321			-
Repurchase of common stock		(108	)		-
Increase in advance payments by borrowers for taxes and insurance		30			139
Purchase of common stock for equity plan		-			(1,467	)
Net Cash Provided by Financing Activities		44,007			19,691
Net (decrease) increase in Cash and Cash Equivalents		(12,348	)		16,412
Cash and Cash Equivalents – Beginning		21,382			12,303
Cash and Cash Equivalents – Ending	$	9,034		$	28,715
Supplementary Cash Flows Information
Interest paid	$	1,497		$	1,039
Income taxes paid		795			68

See notes to unaudited consolidated financial statements.

6

MSB FINANCIAL CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1 – Organization and Business

MSB Financial Corp. (the "Company") is a Maryland-chartered corporation organized in 2014 to be the successor to MSB Financial Corp., a federal corporation ("Old MSB") upon completion of the second-step conversion of Millington Bank (the "Bank") from the two-tier mutual holding company structure to the stock holding company structure. MSB Financial, MHC (the "MHC") was the former mutual holding company for Old MSB prior to completion of the second-step conversion.  In conjunction with the second-step conversion, each of the MHC and Old MSB ceased to exist.

The Company's principal business is the ownership and operation of the Bank. The Bank is a New Jersey-chartered stock savings bank and its deposits are insured by the Federal Deposit Insurance Corporation. 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 real estate 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 Federal Deposit Insurance Corporation. The Board of Governors of the Federal Reserve System (the "Federal Reserve") regulates the Company as a bank holding company.

The primary business of Millington Savings Service Corp (the "Service Corp"), the Bank's wholly-owned subsidiary, was the ownership and operation of a single commercial rental property. This property was sold during the year ended June 30, 2007. Currently the Service Corp is inactive.

Subsequent Events

The Company has evaluated events and transactions occurring subsequent to the statement of financial condition date of June 30, 2017, 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.

On August 4, 2017, certain directors, executive officers and directors emeriti executed options to purchase 212,468 shares of Common Stock at a per share exercise price of $9.4323.  In lieu of issuing shares of Common Stock upon the exercise of such options, the Company made a cash payment to such optionees equal to the excess of the closing price of the Common Stock on the Nasdaq Stock Market on August 4, 2017 of $17.30 over the per share exercise price of such options of $9.4323 multiplied by the number of options being exercised.  An aggregate of $1.7 million was paid to the optionees.

Note 2 – Basis of Consolidated Financial Statement Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank, and the Bank's wholly owned subsidiary the Service Corp. All significant intercompany accounts and transactions have been eliminated in consolidation.  These consolidated financial statements were prepared in accordance with instructions for Form 10-Q and Regulation S-X, and therefore, do not include all information or notes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America ("GAAP").

In the opinion of management, all adjustments, consisting of only normal recurring adjustments or accruals, which are necessary for a fair presentation of the consolidated financial statements have been made at June 30, 2017 and for the three and six months ended June 30, 2017 and 2016.  The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results which may be expected for an entire fiscal year or other interim periods.

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.

7

Note 2 – Basis of Consolidated Financial Statement Presentation (Continued)
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.

Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under 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 GAAP.  The standard was initially 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).

The FASB subsequently issued ASU 2015-14 which states that public business entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 31, 2017, including interim reporting periods within that reporting period.

The FASB also subsequently issued ASUs Nos. 2016-08, 2016-10, 2016-12, 2016-20 and 2017-05 to augment, amend and clarify the original pronouncement.  Other than significantly increased disclosure, we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall. The guidance in this ASU among other things, (1) requires equity investments with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (2) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (3) eliminates the requirement for public businesses entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (4) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (5) requires an entity to present separately in other comprehensive income the portion of the change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (6) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (7) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. The guidance in this ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This ASU revises the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability for all leases. The new lease guidance also simplified the accounting for sale and leaseback transactions primarily due to the recognition of lease assets and lease liabilities. ASU 2016-02 is effective for the first interim period within annual periods beginning after December 15, 2018, with early adoption permitted.

8

Note 2 – Basis of Consolidated Financial Statement Presentation (Continued)

The standard is required to be adopted using the modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We currently expect that upon adoption of ASU 2016-02, right-of-use assets and lease liabilities will be recognized in our consolidated statements of condition in amounts that will be material; however, we do not expect a material impact to our consolidated income statement.

In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, Compensation – Stock Compensation (Topic 718). This ASU changes several aspects of the accounting for share-based payment award transactions, including: (1) accounting and cash flow classification for excess tax benefits and deficiencies, (2) forfeitures, and (3) tax withholding requirements and cash flow classification. The standard is effective for public companies for annual and interim periods in fiscal years beginning after December 15, 2016. Early adoption is permitted for the interim or annual period provided that the entire standard is adopted. If an entity early adopts the standard in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The adoption of ASU 2016-09 effective January 1, 2017, did not have a material impact on our consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments. This ASU requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using an expected credit loss model. Under this model, entities will estimate credit losses over the entire contractual term of the instrument. The standard is effective for public companies in annual and interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in the interim or annual period provided that the entire standard is adopted. We are currently evaluating the impact of ASU 2016-13 on our consolidated financial statements. We have taken steps to begin preparations for implementation, such as evaluating changes to our current loss recognition model and evaluating the potential use of outside professionals for an updated model.

In August 2016, the FASB issued ASU 2016-15; Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The amendments in this Update address the following eight specific cash flow issues with the objective of reducing the existing diversity in practice: (1) debt prepayments or debt extinguishment cost (cash outflow-financing), (2) settlement of debt instruments with coupon interest rates insignificant to the effective interest rate, interest payment (cash outflow-operating), or principal payment (cash outflow-financing), (3) contingent consideration payments made soon after a business combination (cash outflow-investing), (4) proceeds from the settlement of insurance claims (classification on basis of the nature of each loss), (5) proceeds from the corporate/bank-owned life insurance, proceeds (cash inflow-investing), payments (cash outflow-investing/operating), (6) distribution received from equity method investees, cumulative earnings approach (cash inflow-investing), nature of distribution approach (cash inflow-operating/investing), (7) beneficial interest in securitization transactions, assets (noncash transaction), cash receipts from trade receivable (cash inflow-investing), (8) separately identifiable cash flows (classified based on source-financing/investing/operating).  The amendments in this Update are effective for public business entities for the fiscal years beginning after December 15, 2017 and interim periods within those fiscal years.  Early adoption is permitted, including adoption in an interim period.  If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.  An entity that elects early adoption must adopt all of the amendments in the same period.   We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

9

Note 2 – Basis of Consolidated Financial Statement Presentation (Continued)

            In February 2017, FASB issued Accounting Standards Update No. 2017-07, "Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ("ASU 2017-07"). To improve the consistency, transparency, and usefulness of financial information for users, the amendments in ASU 2017-07 require that an employer disaggregate the service cost component from the other components of net benefit cost and report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendments in ASU 2017-07 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2017-07 should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. We intend to adopt ASU 2017-07 during the first quarter of 2018 and it will have no effect on our results of operations because it only impacts the presentation of certain information on the statements of income.

In March 2017, FASB issued Accounting Standards Update No. 2017-08, "Receivables —Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities" ("ASU 2017-08"). ASU 2017-08 amends guidance on the amortization period of premiums on certain purchased callable debt securities. Specifically, the amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. The amendments affect all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer at the earliest call date. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.  Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle.  The effect of ASU 2017-08 would be lower interest income and a corresponding lower yield as the amortization period would be shortened.  As of June 30, 2017 we do not hold any callable debt securities that were purchased at a premium.  We intend to adopt ASU 2017-08 during the first quarter of 2019.

In May 2017, FASB issued Accounting Standards Update No. 2017-09, "Scope of Modification Accounting," which clarifies Topic 718, "Compensation – Stock Compensation," such that an entity must apply modification accounting to changes in the terms or conditions of a share-based payment award unless all of the following criteria are met:  (1) the fair value of the modified award is the same as the fair value of the original award immediately before the modification (the ASU indicates that if the modification does not affect any of the inputs to the valuation technique used to value the award, the entity is not required to estimate the value immediately before and after the modification); (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the modification; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the modification.  The ASU is effective for all entities for fiscal years beginning after December 15, 2017, including interim periods within those years.  Early adoption is permitted, including adoption in an interim period.  We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

10

Note 3 – Earnings Per Share

The following table shows the computation of basic and diluted earnings per share:

	Three Months Ended June 30,				Six Months Ended June 30,
(In Thousands, Except Per Share Data)	2017		2016		2017		2016
Numerator:
Net income	$	732	$	223	$	1,281	$	382
Denominator:
Weighted average common shares		5,540		5,743		5,530		5,744
Dilutive potential common shares		139		78		131		74
Weighted average fully diluted shares		5,679		5,821		5,661		5,818
Earnings per share:
Basic	$	0.13	$	0.04	$	0.23	$	0.07
Dilutive	$	0.13	$	0.04	$	0.23	$	0.07

11

Note 4 - Securities Held to Maturity

The amortized cost of securities held to maturity and their estimated fair values as of June 30, 2017 and December 31, 2016 are summarized as follows:

(In Thousands)	Amortized Cost		GrossUnrealized Gains		GrossUnrealized Losses		Estimated Fair Value
June 30, 2017
U.S. Government agencies:
Due within one year	$	2,000	$	-	$	1	$	1,999
Due after one year through five years		4,500		-		29		4,471
Total U.S. Government agencies		6,500		-		30		6,470
Mortgage-backed securities		25,014		458		129		25,343
Corporate bonds:
Due after one year through five years		2,023		18		-		2,041
Due after five through ten years		1,000		-		10		990
Due after ten years		4,000		-		227		3,773
Total Corporate bonds		7,023		18		237		6,804
State and political subdivisions:
Due within one year		101		-		1		100
Due after one through five years		661		2		1		662
Due after five through ten years		537		1		-		538
Total State and political subdivisions		1,299		3		2		1,300
Certificates of deposit:
Due within one year		2,160		1		1		2,160
Due after one year through five years		445		1		-		446
Total Certificates of deposit		2,605		2		1		2,606
Total Securities held to maturity	$	42,441	$	481	$	399	$	42,523

12

Note 4 - Securities Held to Maturity – Continued

(In Thousands)	Amortized Cost		GrossUnrealized Gains		GrossUnrealized Losses		Estimated Fair Value
December 31, 2016
U.S. Government agencies:
Due within one year	$	1,000	$	-	$	2	$	998
Due after one year through five years		5,500		1		40		5,461
Total U.S. Government Agencies		6,500		1		42		6,459
Mortgage-backed securities		24,663		366		224		24,805
Corporate bonds:
Due within one year		2,002		2		-		2,004
Due after one year through five years		2,032		15		13		2,034
Due after five years through ten years		1,000		-		42		958
Due thereafter		4,000		-		253		3,747
Total Corporate bonds		9,034		17		308		8,743
State and political subdivisions:
Due within one year		101		-		-		101
Due after one through five years		663		-		11		652
Due after five through ten years		538		-		18		520
Total State and political subdivisions		1,302		-		29		1,273
Certificates of deposit:
Due within one year		1,670		6		-		1,676
Due after one through five years		935		4		1		938
Total Certificates of deposit		2,605		10		1		2,614
Total Securities held to maturity	$	44,104	$	394	$	604	$	43,894

All mortgage-backed securities at June 30, 2017 and December 31, 2016 have been issued by FNMA, FHLMC or GNMA and are secured by one-to-four family residential real estate. The amortized cost and estimated fair value of securities held to maturity at June 30, 2017 and December 31, 2016, as shown above, are reported in total.  Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

There were no sales of securities held to maturity during the six months ended June 30, 2017 or 2016.  At June 30, 2017 and December 31, 2016, securities held to maturity with a fair value of approximately $1.0 million were pledged to secure public funds on deposit.

13

Note 4 - Securities Held to Maturity - Continued

The following tables set forth the gross unrealized losses and fair value of securities in an unrealized loss position as of June 30, 2017 and December 31, 2016, and the length of time that such securities have been in an unrealized loss position:

	Less than 12 Months				More than 12 Months				Total
	Estimated Fair Value		GrossUnrealized Losses		Estimated Fair Value		GrossUnrealized Losses		Estimated Fair Value		GrossUnrealized Losses
(In Thousands)
June 30, 2017
U.S. Government agencies	$	5,470	$	30	$	-	$	-	$	5,470	$	30
Mortgage-backed    securities		8,658	$	120		357		9		9,015	$	129
Corporate bonds		-		-		4,763		237		4,763		237
State and political subdivisions		263		2		-		-		263		2
Certificates of deposit		690		1		-		-		690		1
Total securities with gross unrealized losses	$	15,081	$	153	$	5,120	$	246	$	20,201	$	399

	Less than 12 Months				More than 12 Months				Total
	Estimated Fair Value		GrossUnrealized Losses		Estimated Fair Value		GrossUnrealized Losses		Estimated Fair Value		GrossUnrealized Losses
(In Thousands)
December 31, 2016
U.S. Government agencies	$	5,458	$	42	$	-	$	-	$	5,458	$	42
Mortgage-backed    securities		13,456		224		-		-		13,456		224
Corporate bonds		1,988		13		4,705		295		6,693		308
State and political subdivisions		1,172		28		101		1		1,273		29
Certificates of deposit		245		1		-		-		245		1
Total securities with gross unrealized losses	$	22,319	$	308	$	4,806	$	296	$	27,125	$	604

At June 30, 2017, management concluded that the unrealized losses summarized above (which related to five U.S. Government agency bonds, thirteen mortgage-backed securities, three corporate bonds, two state and political subdivision securities and three certificate of deposits, compared to five U.S. Government agency bonds, fourteen mortgage-backed securities, six corporate bonds, eight state and political subdivision bonds, and one certificate of deposit as of December 31, 2016) are temporary in nature since they are 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 anticipated recovery of the remaining amortized cost.  Management believes that the losses above are primarily related to the change in market interest rates. Accordingly, the Company has not recognized any other-than-temporary impairment loss on these securities.

14

Note 5 - Loans Receivable and Allowance for Credit Losses

The composition of loans receivable at June 30, 2017 and December 31, 2016 was as follows:

(In Thousands)	June 30, 2017		December 31, 2016
Residential mortgage:
One-to-four family	$	164,448	$	160,534
Home equity		29,021		32,262
Total residential mortgages		193,469		192,796
Commercial loans:
Commercial and multi-family real estate		153,984		124,656
Construction		29,623		16,554
Commercial and industrial		67,686		45,246
Total commercial loans		251,293		186,456
Consumer:		434		446
Total loans receivable		445,196		379,698
Less:
Loans in process		13,315		6,557
Deferred loan fees		586		658
Allowance for loan losses		4,925		4,476
Total adjustments		18,826		11,691
Loans receivable, net	$	426,370	$	368,007

Allowance for Loan Losses

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 types 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.

15

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

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 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.

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.

16

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

The following tables provide an analysis of the allowance for loan losses and the loan receivable balances, by 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, 2017 and 2016:

(in thousands)	Residential  Mortgage			Commercial and Multi-Family Real Estate			Construction			Commercial and Industrial			Consumer			Unallocated				Total
Three Months Ended June 30, 2017
Allowance for loan losses:
Balance, beginning	$	1,785		$	1,426		$	339		$	1,022		$	7		$	47		$	4,626
Provisions (credits)		26			172			(24	)		141			4			(19	)		300
Loans charged-off		—			—			—			—			(2	)		—			(2	)
Recoveries		1			—			—			—			—			—			1
Balance, ending	$	1,812		$	1,598		$	315		$	1,163		$	9		$	28		$	4,925
Six Months Ended June 30, 2017
Allowance for loan losses:
Balance, beginning	$	1,808		$	1,441		$	248		$	882		$	6		$	91		$	4,476
Provisions (credits)		3			200			67			282			6			(63	)		495
Loans charged-off		(2	)		(43	)		—			(1	)		(3	)		—			(49	)
Recoveries		3			—			—			—			—			—			3
Balance, ending	$	1,812		$	1,598		$	315		$	1,163		$	9		$	28		$	4,925
Period-end allowance allocated to:
Loans individually evaluated for impairment	$	100		$	—		$	—		$	—		$	—		$	—		$	100
Loans collectively evaluated for impairment		1,712			1,598			315			1,163			9			28			4,925
Ending Balance	$	1,812		$	1,598		$	315		$	1,163		$	9		$	28		$	4,925
Period-end loan balances evaluated for:
Loans individually evaluated for impairment	$	14,562		$	1,750		$	—		$	212		$	—		$	—		$	16,524
Loans collectively evaluated for impairment		178,797			151,945			16,226			67,368			435			—			414,771
Ending Balance	$	193,359		$	153,695		$	16,226		$	67,580		$	435		$	—		$	431,295

17

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

(in thousands)	Residential  Mortgage			Commercial and Multi-Family Real Estate		Construction		Commercial and Industrial		Consumer			Unallocated				Total
Three Months Ended June 30, 2016
Allowance for loan losses:
Balance, beginning	$	1,899		$	1,084	$	153	$	277	$	7		$	251		$	3,671
Provisions (credits)		(66	)		238		10		37		9			(38	)		190
Loans charged-off		—			—		—		—		(1	)		—			(1	)
Recoveries		9			—		—		—		—			—			9
Balance, ending	$	1,842		$	1,322	$	163	$	314	$	15		$	213		$	3,869
Six Months Ended June 30, 2016
Allowance for loan losses:
Balance, beginning	$	1,927		$	1,015	$	143	$	235	$	9		$	273		$	3,602
Provisions (credits)		(34	)		307		20		79		8			(60	)		320
Loans charged-off		(64	)		—		—		—		(3	)		—			(67	)
Recoveries		13			—		—		—		1			—			14
Balance, ending	$	1,842		$	1,322	$	163	$	314	$	15		$	213		$	3,869
Period-end allowance allocated to:
Loans  individually evaluated for impairment	$	—		$	—	$	—	$	—	$	5		$	—		$	5
Loans  collectively evaluated for impairment		1,842			1,322		163		314		10			213			3,864
Ending Balance	$	1,842		$	1,322	$	163	$	314	$	15		$	213		$	3,869
Period-end loan balances evaluated for:
Loans individually evaluated for impairment	$	15,214		$	1,193	$	—	$	544	$	5		$	—		$	16,956
Loans collectively evaluated for impairment		177,286			78,705		8,141		14,891		458			—			279,481
Ending Balance	$	192,500		$	79,898	$	8,141	$	15,435	$	463		$	—		$	296,437

Nonaccrual and Past Due Loans

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. 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.

18

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 nonaccrual loans as of June 30, 2017 and December 31, 2016:

(In Thousands) As of June 30, 2017	30-59 Days Past Due and Still Accruing		60-89 Days Past Due and Still Accruing		Greater than 90 Days and Still Accruing		Total Past Due and Still Accruing		Accruing Current Balances		Nonaccrual Loans(1)		Total Loans Receivables
Residential Mortgage
One-to-four family	$	1,863	$	660	$	—	$	2,523	$	155,855	$	5,962	$	164,340
Home equity		630		64		—		694		28,209		116		29,019
Commercial and multi-family real estate		—		—		—		—		152,959		736		153,695
Construction		—		—		—		—		16,226		—		16,226
Commercial and industrial		299		—		—		299		67,179		102		67,580
Consumer		5		2		—		7		428		—		435
Total	$	2,797	$	726	$	—	$	3,523	$	420,856	$	6,916	$	431,295

(1) Nonaccrual loans at June 30, 2017, included $4,555,000 that were 90 days or more delinquent, none that were 60-89 days delinquent, $703,000 that were 30-59 days delinquent, and $1,658,000 that were current or less than 30 days delinquent. Loans are restored to accrual status when the obligation is brought current and has performed in accordance with the contractual terms for a reasonable period of time (generally six months).

(In Thousands) As of December 31, 2016	30-59 Days Past Due and Still Accruing		60-89 Days Past Due and Still Accruing		Greater than 90 Days and Still Accruing		Total Past Due and Still Accruing		Accruing Current Balances		Nonaccrual Loans (1)		Total Loans Receivables
Residential Mortgage
One-to-four family	$	2,433	$	1,944	$	—	$	4,377	$	150,260	$	5,744	$	160,381
Home equity		591		34		—		625		31,500		126		32,251
Commercial and multi-family real estate		374		—		—		374		123,182		760		124,316
Construction		—		—		—		—		9,934		—		9,934
Commercial and industrial		—		—		—		—		44,805		350		45,155
Consumer		—		—		—		—		446		—		446
Total	$	3,398	$	1,978	$	—	$	5,376	$	360,127	$	6,980	$	372,483

(1) Nonaccrual loans at December 31, 2016, included $5,521,000 that were 90 days or more delinquent, $30,000 that were 60-89 days delinquent, $964,000 that were 30-59 days delinquent, and $464,000 that were current or less than 30 days delinquent. Loans are restored to accrual status when the obligation is brought current and has performed in accordance with the contractual terms for a reasonable period of time (generally six months).

19

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

Impaired Loans

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.

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 aging schedules 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.

The following tables provide an analysis of the impaired loans at June 30, 2017 and December 31, 2016 and the average balances of such loans for the six months and year, respectively, then ended:

(In thousands) June 30, 2017	Recorded Investment		Loans withNo Related Reserve		Loans withRelated Reserve		Related Reserve		ContractualPrincipal Balance		Average Recorded Investment
Residential mortgage
One-to-four family	$	13,240	$	11,339	$	1,901	$	100	$	13,325	$	12,948
Home equity		1,322		1,322		-		-		1,329		1,322
Commercial and multi-family real estate		1,750		1,750		-		-		1,813		1,596
Commercial and industrial		212		212		-		-		212		365
Total	$	16,524	$	14,623	$	1,901	$	100	$	16,679	$	16,231

20

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

(In thousands) December 31, 2016	Recorded Investment		Loans withNo Related Reserve		Loans withRelated Reserve		Related Reserve		ContractualPrincipal Balance		Average Recorded Investment
Residential mortgage
One-to-four family	$	12,509	$	10,395	$	2,114	$	101	$	12,891	$	12,795
Home equity		1,311		1,311		-		-		1,401		1,981
Commercial and multi-family real estate		1,529		1,529		-		-		2,149		1,278
Commercial and industrial		511		357		154		102		961		548
Consumer		-		-		-		-		-		1
Total	$	15,860	$	13,592	$	2,268	$	203	$	17,402	$	16,603

As of June 30, 2017 and December 31, 2016, impaired loans listed above include $11.8 million and $10.7 million, respectively, of loans modified in troubled debt restructurings ("TDR") and as such are considered impaired under GAAP.  As of June 30, 2017 and December 31, 2016, $9.2 million and $8.5 million, respectively, 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.

Interest income of $89,000 and $153,000 was recognized on impaired loans during the three months ended June 30, 2017 and 2016. The average balance of impaired loans for the three months ended June 30, 2017 and June 30, 2016 were $16.4 million and $16.8 million, respectively. During the six months ended June 30, 2017 and 2016, interest income of $195,000 and $318,000, respectively, was recognized on impaired loans. The average balance of impaired loans for the six months ended June 30, 2017 and June 30, 2016 was $16.2 million and $16.9 million, respectively.

Credit Quality Indicators

Management uses a nine 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 Bank's rating categories are as follows:

1 – 5: The first five risk rating categories are considered not criticized, and are aggregated as "Pass" rated.

6: "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. 

7: "Substandard" loans 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.  This includes loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any.

8: "Doubtful" loans 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. 

9: "Loss" loans are considered uncollectible and subsequently charged off.

21

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, 2017 and December 31, 2016:

(In Thousands) As of June 30, 2017	Pass		Special Mention		Substandard		Doubtful		Loss		Total
Commercial and multi-family real estate	$	150,781	$	1,831	$	1,083	$	—	$	—	$	153,695
Construction		16,226		—		—		—		—		16,226
Commercial and industrial		67,122		222		236		—		—		67,580
Total	$	234,129	$	2,053	$	1,319	$	—	$	—	$	237,501

(In Thousands) As of December 31, 2016	Pass		Special Mention		Substandard		Doubtful		Loss		Total
Commercial and multi-family real estate	$	122,804	$	—	$	1,512	$	—	$	—	$	124,316
Construction		8,759		1,175		—		—		—		9,934
Commercial and industrial		44,537		86		532		—		—		45,155
Total	$	176,100	$	1,261	$	2,044	$	—	$	—	$	179,405

Management further monitors the performance and credit quality of the residential portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. These credit quality indicators are assessed in the aggregate in these relatively homogeneous portfolios. Loans greater than 90 days past due are generally considered nonperforming and placed on nonaccrual status. 

(In Thousands)	Residential mortgage					Consumer				Total Residential and Consumer
	Jun. 30, 2017			Dec. 31, 2016		Jun. 30, 2017		Dec. 31, 2016		Jun. 30, 2017		Dec. 31, 2016
Nonperforming		$	6,078	$	5,870	$	—	$	—	$	6,078	$	5,870
Performing			187,281		186,762		435		446		187,716		187,208
Total		$	193,359	$	192,632	$	435	$	446	$	193,794	$	193,078

22

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

Troubled Debt Restructurings

Loans the terms of which are modified are classified as a TDR if, in connection with the modification, 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 the loan's interest rate below market rates 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.

The recorded investment balance of TDRs totaled $11.8 millionat June 30, 2017 compared with $10.7 million at December 31, 2016.  The majority of the Company's TDRs are on accrual status. Accruing TDRs totaled $9.2 million at June 30, 2017 versus $8.5 million at December 31, 2016.  The total of TDRs on non-accrual status was $2.6 millionat June 30, 2017 and $2.2 million at December 31, 2016.

For the three months ended June 30, 2017, the terms of five loans were modified into two TDRs.  The Company refinanced and consolidated a one-to-four family loan and three commercial loans into a multi-family & commercial loan with an adjustable interest rate from a fixed interest rate. In addition, the Company refinanced a one-to-four family loan and capitalized the interest.  For the three months ended June 30, 2016, the Company did not modify any loans as a TDR.

For the six months ended June 30, 2017, the terms of twelve loans were modified into five TDRs. The Company refinanced and consolidated a one-to-four family and one home equity mortgage loan which was restructured to an adjustable interest rate from a fixed interest rate. In addition, the Company restructured a one-to-four family loan, a home equity loan and a commercial line of credit. These loans were consolidated into one one-to-four family TDR with an extended maturity date. The Company restructured a commercial loan and a multi-family real estate loan into one TDR and extended the maturity date. The Company refinanced and consolidated a one-to-four family loan and three commercial loans into a multi-family & commercial loan with an adjustable interest rate from a fixed interest rate.  In addition, the Company refinanced a one-to-four family loan and capitalized the interest.  For the six months ended June 30, 2016, the Company did not modify any loans as a TDR.

23

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

The following tables summarize by class loans modified into TDRs during the three and six months ended June 30, 2017:

	Three Months Ended June 30, 2017
	Number of Contracts		Pre-Modification Outstanding Recorded Investments			Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
One-to-four family		2		$	444		$	405
Commercial and multi-family real estate		-			-			263
Commercial		3			153			-
Total		5		$	597		$	668

	Six Months Ended June 30, 2017
	Number of Contracts		Pre-Modification Outstanding Recorded Investments			Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
One-to-four family		4		$	1,019		$	1,283
Home equity		2			99			-
Commercial and multi-family real estate		1			419			661
Commercial		5			283			-
Total		12		$	1,820		$	1,944

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.  There were no loans modified in TDRs during the previous 12 months and for which there was a subsequent payment default for the three and six months ended June 30, 2017 and 2016.

There was no Other Real Estate Owned ("OREO") at June 30, 2017 and December 31, 2016. We may obtain physical possession of residential real estate collateralizing consumer mortgage loans via foreclosure or in-substance repossession. At June 30, 2017 and December 31, 2016, we had consumer loans with a carrying value of $2.4and $1.8 million, respectively, collateralized by residential real estate property for which formal foreclosure proceedings were in process.

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Note 6 - Fair Value Measurements

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

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Note 6 - Fair Value Measurements (Continued)

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 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, 2017 and December 31, 2016.

Assets 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 table summarizes those assets measured at fair value on a non-recurring basis as of June 30, 2017 and December 31, 2016:

	As of June 30, 2017
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(In thousands)
Impaired loans	$	—	$	—	$	1,801		$	1,801

	As of December 31, 2016
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(In thousands)
Impaired loans	$	—	$	—	$	2,065		$	2,065

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Note 6 - Fair Value Measurements (Continued)

For Level 3 assets measured at fair value on a non-recurring basis as of June 30, 2017 and December 31, 2016, the significant unobservable inputs used in fair value measurements were as follows:

		As of June 30, 2017
		Fair Value Estimate	Valuation Techniques	Unobservable Input		Range (Weighted Average)
		(Dollars in thousands)
Impaired loans	$	1,801	Appraisal of		Appraisal
			collateral		adjustments	23.0% (23.0%)
					Liquidation
					expense	28.0% (28.0%)

		As of December 31, 2016
		Fair Value Estimate	Valuation Techniques	Unobservable Input		Range (Weighted Average)
		(Dollars in thousands)
Impaired loans	$	2,065	Appraisal of		Appraisal
			collateral		adjustments	0% to 22.6% (19.4%)
					Liquidation
					expense	5.4% to 18.3 (6.8%)

A 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 payments 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.

Disclosure about Fair Value of Financial Instruments

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.

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Note 6 - Fair Value Measurements (Continued)

The following presents the carrying amount and the fair value as of June 30, 2017 and December 31, 2016, and placement in the fair value hierarchy of the Company's financial instruments which are carried on the consolidated statement of financial condition at cost and are not recorded at fair value on a recurring basis.  This table excludes financial instruments for which 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
As of June 30, 2017	Amount		Value		Inputs		Inputs		Inputs
			(In thousands)
Financial assets:
Securities held to maturity	$	42,441	$	42,523	$	—	$	42,523	$	—
Loans receivable (1)		426,370		429,154		—		—		429,154
Financial liabilities:
Certificate of deposits		128,854		130,880		—		130,880		—
Advances from Federal Home Loan Bank of New York		38,675		38,905		—		38,905		—
As of December 31, 2016
Financial assets:
Securities held to maturity	$	44,104	$	43,894	$	—	$	43,894	$	—
Loans receivable (1)		368,007		373,325		—		-		373,325
Financial liabilities:
Certificate of deposits		103,627		105,375		—		105,375		—
Advances from Federal Home Loan Bank of New York		22,675		23,087		—		23,087		—
(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 instruments 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 Company's current offering rates.  Both fixed and variable rate loan fair values are derived using a discounted cash flow methodology.  For variable rate loans, repricing terms, including next repricing date, repricing frequency and repricing rate are factored into the discounted cash flow formula.

Federal Home Loan Bank of New York 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.

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Note 6 - 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 and savings 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 agreements, taking into account market interest rates, the remaining terms, and the present credit worthiness of the counterparties.  As of June 30, 2017 and December 31, 2016, the fair value of the commitments to extend credit was not considered to be material.

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Note 7 – Retirement Plans

Periodic expenses for the Company's retirement plans, which include the Directors' Retirement Plan and the Executive Incentive Retirement Plan, were as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2017		2016			2017		2016
	(In thousands)
Service cost	$	-	$	3		$	-	$	7
Interest cost		5		32			10		55
Amortization of unrecognized loss (gain)		50		4			101		7
Amortization of past service liability		-		(5	)		-		(10	)
Net periodic benefit cost	$	55	$	34		$	111	$	59

The Company previously disclosed in its Form 10-K as of December 31, 2016 that it expected to contribute $84,000 to the Plan during the current fiscal year.  As of June 30, 2017, the Company contributed $42,000.

Note 8 – Reclassifications Out of Accumulated Other Comprehensive Income

Details about AccumulatedOther Comprehensive Income (Loss) Components	Amount Reclassifiedfrom AccumulatedOther Comprehensive Income  (Loss) (a)			Amount Reclassifiedfrom AccumulatedOther Comprehensive Income (Loss) (a)		Affected Line Item in the Consolidated Statements of Comprehensive Income
	Three Months Ended June 30, 2017			Six Months Ended June 30, 2017
	(In thousands)
Amortization of defined benefit pension items:
Prior service costs		$          -	(b)		$          -	Directors compensation
Unrecognized loss		(50)	(b)		(101)	Directors compensation
Total before tax		(50)			(101)	Total before tax
Income tax expense		20			40	Income tax expense
Total reclassifications for the period		$       (30)			$       (61)	Net of tax

Details about AccumulatedOther Comprehensive Income (Loss) Components	Amount Reclassifiedfrom AccumulatedOther Comprehensive Income  (Loss) (a)			Amount Reclassifiedfrom AccumulatedOther Comprehensive Income (Loss) (a)		Affected Line Item in the Consolidated Statements of Comprehensive Income
	Three Months Ended June 30, 2016			Six Months Ended June 30, 2016
	(In thousands)
Amortization of defined benefit pension items:
Prior service costs		$          4	(b)		$           9	Directors compensation
Unrecognized loss		(4)	(b)		(7)	Directors compensation
		-			2	Total before tax
		-			(1)	Income tax expense
Total reclassifications for the period		$       -			$           1	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 7 for additional details).

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ITEM 2 – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Form 10-Q contains forward-looking statements, which can be identified by the use of words such as "believes," "expects," "anticipates," "estimates" or similar expressions. Forward – looking statements include:

● Statements of our goals, intentions and expectations;

● Statements regarding our business plans, prospects, growth and operating strategies;

● Statements regarding the quality of our loan and investment portfolios; and

● Estimates of our risks and future costs and benefits.

These forward-looking statements are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements due to, among others, the following factors:

● General economic conditions, either nationally or in our market area, that are worse than expected;

● The volatility of the financial and securities markets, including changes with respect to the market value of our financial assets;

● Changes in government regulation affecting financial institutions and the potential expenses associated therewith;

● Changes in the interest rate environment that reduce our interest margins or reduce the fair value of financial instruments;

● Our ability to enter into new markets and/or expand product offerings successfully and take advantage of growth opportunities;

● Increased competitive pressures among financial services companies;

● Changes in consumer spending, borrowing and savings habits;

● Legislative or regulatory changes that adversely affect our business;

● Adverse changes in the securities markets;

● Our ability to successfully manage our growth; and

● Changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board.

No forward-looking statement can be guaranteed and we specifically disclaim any obligation to update any forward-looking statement.

Critical Accounting Policies

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 position 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 represents our best estimate of losses known and inherent in our loan portfolio that are both probable and reasonable to estimate. In determining the amount of the allowance for loan losses, we consider the losses inherent in our loan portfolio and changes in the nature

31

and volume of our loan activities, along with general economic and real estate market conditions. We utilize a two-tier approach: (1) identification of impaired loans for which specific reserves may be established; and (2) establishment of general valuation allowances on the remainder of the loan portfolio. We maintain a loan review system which provides for a systematic review of the loan portfolio and the early identification of potential impaired loans. Such system takes into consideration, among other things, delinquency status, size of loan, type of collateral and the financial condition of the borrower. Specific loan loss allowances are established for identified loans based on a review of such information and/or appraisals of the underlying collateral. General loan loss allowances are based upon a combination of factors including, but not limited to, actual loan loss experience, composition of the loan portfolio, current economic conditions and management's judgment.

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 based on their judgments about information available to them at the time of their examinations.

Although specific and general loan loss allowances are established in accordance with management's best estimate, actual losses are dependent upon future events and, as such, further provisions for loan losses may be necessary in order to increase the level of the allowance for loan losses. For example, our evaluation of the allowance includes consideration of current economic conditions, and a change in economic conditions could reduce the ability of our borrowers to make timely repayments of their loans. This could result in increased delinquencies and increased non-performing loans, and thus a need to make increased provisions to the allowance for loan losses, which would be a charge to income during the period the provision is made, resulting in a reduction to our earnings. A change in economic conditions could also adversely affect the value of the properties collateralizing our real estate loans, resulting in increased charge-offs against the allowance and reduced recoveries, and thus a need to make increased provisions to the allowance for loan losses. Furthermore, a change in the composition of our loan portfolio or growth of our loan portfolio could result in the need for additional provisions.

Comparison of Financial Condition at June 30, 2017 and December 31, 2016

General. Total assets were $507.1 million at June 30, 2017, compared to $461.6 million at December 31, 2016, an increase of $45.5 million or 9.9%. During the period the Company experienced growth of $58.4 million, or 15.9%, in loans receivable, net. Federal Home Loan Bank of New York ("FHLBNY") stock increased $830,000, or 57.9%, due to increased borrowings during the period. The Company increased its FHLBNY overnight borrowings by $16.0 million, or 70.6%, during the six months ended June 30, 2017. Offsetting these increases were a decrease in cash and cash equivalents of $12.3 million, or 57.8%, and a decrease in securities, held to maturity of $1.7 million, or 3.8% from December 31, 2016 to June 30, 2017.

The ratio of average interest-earning assets to average-interest bearing liabilities was 126.1% for the six month period ended June 30, 2017 as compared to 135.2% for the six months ended June 30, 2016.

Loans. Loans receivable, net, increased by $58.4 million, or 15.9%, from $368.0 million at December 31, 2016 to $426.4 million at June 30, 2017.  Loans receivable, net represented 84.1% of the Company's assets at June 30, 2017 compared to 79.7% at December 31, 2016.  The Bank's commercial and multi-family real estate loan portfolio grew by $29.3 million or 23.5% since December 31, 2016; the commercial and industrial portfolio increased by $22.4 million on stronger loan demand, while the construction loan portfolio increased approximately $6.3 million as a result of loans utilizing funds to complete projects.  The residential mortgage portfolio increased $673,000 to $193.5 million from $192.8 million as of year-end 2016. All remaining portfolios were consistent with year-end levels.

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Securities. Our portfolio of securities held to maturity totaled $42.4 million at June 30, 2017 as compared to $44.1 million at December 31, 2016.   Maturities, calls and principal repayments during the six months ended June 30, 2017 totaled $2.8 million and one purchase totaling $1.2 million was made during the first six months of 2017.

Deposits. Total deposits at June 30, 2017 were $390.1 million compared with $362.3 million at December 31, 2016.  Overall, deposits increased by $27.8 million, or 7.7%, with growth occurring in consumer deposits offset by a few large business relationships utilizing cash for their business needs. The Company experienced growth in the non-transactional categories with an increase of $25.3 million in certificates of deposit, $4.5 million in money market accounts, and $2.4 million in savings accounts while transactional accounts decreased $4.5 million.

Borrowings. Total borrowings at June 30, 2017 were $38.7 million compared with $22.7 million at December 31, 2016. Overnight advances with the Federal Home Loan Bank of New York at June 30, 2017 were $16.0 million while there were none at December 31, 2016

Equity. Stockholders' equity was $75.0 million at June 30, 2017 compared to $73.2 million at December 31, 2016, an increase of $1.8 million, or 2.5%. The increase in shareholders' equity was primarily due to a $1.3 million increase in retained earnings related to net income.

Comparison of Operating Results for the Three and Six Months Ended June 30, 2017 and 2016

General.The Company had net income of $1.3 million for the six months ended June 30, 2017 compared to net income of $382,000 for the six months ended June 30, 2016,as an increase of $1.8 million in net interest income was offset by a decrease of $247,000 in non-interest income and increases of $175,000 in the provision for loan losses and $417,000 in income tax expense. Non-interest income decreased primarily as a result of a $350,000 settlement received in six months ended June 30, 2016 from a wire fraud loss that was incurred in the fourth quarter of 2014. The increase in the provision expense was related to the loan growth the Company experienced during the year.

During the three month period ended June 30, 2017, the Company recorded net income of $732,000 compared with net income for three month period ended June 30, 2016 of $223,000, resulting from an increase of $993,000 in net interest income, offset by a decrease of $293,000 in non-interest income and increases of $110,000 in the provision for loan losses and $172,000 in income tax expense.Non-interest income decreased primarily as a result of a $350,000 settlement received in three months ended June 30, 2016 from a wire fraud loss that was incurred in the fourth quarter of 2014. The increase in provision expense related to the loan growth the Company experienced during the quarter.

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Net Interest Income.

The following tables provide information concerning the balances, yields and rates on interest-earning assets and interest-bearing liabilities during the periods indicated:

	For the three months ended
	06/30/2017								06/30/2016
Average Balance Sheet (In Thousands)	Average Balance			Interest Income/ Expense		Yield			Average Balance			Interest Income/ Expense		Yield
Interest-earning assets:
Loans receivable	$	417,065		$	4,444		4.26	%	$	285,649		$	3,082		4.32	%
Securities held to maturity		41,885			247		2.36			62,585			331		2.12
Other interest-earning assets		9,625			36		1.50			21,430			40		0.75
Total interest-earning assets		468,575			4,727		4.04			369,664			3,453		3.74
Allowance for loan loss		(4,695	)							(3,718	)
Non-interest-earning assets		28,978								21,833
Total non-interest-earning assets		24,283								18,115
Total Assets	$	492,858							$	387,779
Interest-bearing liabilities:
Demand & money market	$	106,094		$	102		0.38	%	$	60,006		$	37		0.25	%
Savings and club deposits		104,953			62		0.24			104,283			58		0.22
Certificates of deposit		122,855			415		1.35			85,702			244		1.14
Total interest-bearing deposits		333,902			579		0.69			249,991			339		0.54
Federal Home Loan Bank advances		37,715			224		2.38			22,675			183		3.23
Total interest-bearing liabilities		371,617			803		0.86			272,666			522		0.77
Non-interest-bearing deposit		43,030								33,964
Other non-interest-bearing liabilities		3,363								3,745
Total Liabilities		418,010								310,375
Equity		74,848								77,404
Total Liabilities and Equity	$	492,858							$	387,779
Net Interest Spread					3,924		3.18	%					2,931		2.97	%
Net Interest Margin							3.35	%							3.17	%
Ratio of Interest Earning Assets to Interest Bearing Liabilities		126.09	%							135.57	%

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	For the six months ended
	06/30/2017								06/30/2016
Average Balance Sheet (In Thousands)	Average Balance			Interest Income/ Expense		Yield			Average Balance			Interest Income/ Expense		Yield
Interest-earning assets:
Loans receivable	$	399,822		$	8,444		4.22	%	$	278,732		$	5,920		4.25	%
Securities held to maturity		42,581			498		2.34			69,758			762		2.18
Other interest-earning assets		10,475			78		1.49			14,930			69		0.92
Total interest-earning assets		452,878			9,020		3.98			363,420			6,751		3.72
Allowance for loan loss		(4,610	)							(3,670	)
Non-interest-earning assets		28,674								21,740
Total non-interest-earning assets		24,064								18,070
Total Assets	$	476,942							$	381,490
Interest-bearing liabilities:
Demand & money market	$	106,066		$	197		0.37	%	$	54,228		$	58		0.21	%
Savings and club deposits		104,367			120		0.23			103,364			114		0.22
Certificates of deposit		114,729			764		1.33			85,070			481		1.13
Total interest-bearing deposits		325,162			1,081		0.66			242,662			653		0.54
Federal Home Loan Bank advances		33,874			420		2.48			26,214			379		2.89
Total interest-bearing liabilities		359,036			1,501		0.84			268,876			1,032		0.77
Non-interest-bearing deposit		40,440								31,793
Other non-interest-bearing liabilities		3,078								3,783
Total Liabilities		402,554								304,452
Equity		74,388								77,038
Total Liabilities and Equity	$	476,942							$	381,490
Net Interest Spread					7,519		3.14	%					5,719		2.95	%
Net Interest Margin							3.32	%							3.15	%
Ratio of Interest Earning Assets to Interest Bearing Liabilities		126.14	%							135.16	%

The Company's net interest margin increased 18 basis points to 3.35% for the quarter ended June 30, 2017 compared to 3.17% for the quarter ended June 30, 2016. The yield on interest-earning assets increased by 30 basis points year over year while the cost of interest-bearing liabilities increased nine basis points. The increase in the yield on interest-earning assets was attributable to the increase in commercial loan volume during the quarter. The increase in the cost of interest-bearing liabilities was attributable to the increase in percentage of certificates of deposit in the deposit portfolio year over year.

For the six months ended June 30, 2017, the net interest margin increased 17 basis points to 3.32% compared to 3.15% for the six months ended June 30, 2016. The average yield on interest-earning assets increased 26 basis points year over year and the average cost of interest-bearing liabilities increased seven basis points. Similar to the quarterly discussion, the increase in the average yield on interest-earning assets was attributable to the increase in commercial loan volume year over year. The increase in the cost of interest-bearing liabilities was attributable to the increase in percentage of certificates of deposit in the deposit portfolio year over year.

35

Provision for Loan Losses.  The provision for loan losses increased by $110,000 to $300,000 for the three months ended June 30, 2017 compared to a provision of $190,000 for the three months ended June 30, 2016.We recorded a provision for loan losses of $495,000 for the six month period ended June 30, 2017, compared to a provision for $320,000 for the six month period ended June 30, 2016. The increased provision level during the current year period is attributable to the increased size of the loan portfolio at June 30, 2017 compared to June 30, 2016. 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.  The Company had $6.9 million in nonperforming loans as of June 30, 2016 compared to $7.4 million as of June 30, 2016.  The allowance for loan losses to total loans ratio was 1.14% at June 30, 2017 compared to 1.31% at June 30, 2016, while the allowance for loan losses to non-performing loans ratio was 71.21% at June 30, 2017 compared to 52.14% at June 30, 2016.  Non-performing loans to total loans and net charge-offs to average loans outstanding ratios were at 1.60% and 0.02%, respectively, at and for the six months ended June 30, 2017 compared to 2.50% and 0.04% at and for the six months ended June 30, 2016.

Non-Interest Income. Non-interest income decreased $293,000, or 57.2%, to $219,000 during the three months ended June 30, 2017 compared to $512,000 for the three months ended June 30, 2016. The decreased was primarily attributable to a $350,000 settlement received during the 2016 period from a wire loss the Company incurred and expensed in the fourth quarter of 2014. Non-interest income was $406,000 for the six months ended June 30, 2016 compared to $653,000 for the comparable 2016 timeframe. The decrease of $247,000, or 37.8%, year over year primarily resulted from the wire settlement.

Non-Interest Expenses. During the three months ended June 30, 2017, non-interest expenses decreased $91,000 to $2.8 million from $2.9 million for the three months ended June 30, 2016. The decrease was primarily attributable to service bureau fees, partially offset by an increase in salaries and employee benefits.  Service bureau fees decreased by $243,000 or 83.2% as the Company completed its full data conversion on May 13, 2016. Salaries and employee benefits increased by $118,000, or 8.1%, as the need for increased staffing occurred.  In addition, stock options and restricted stock awards were granted during June 2016.  The 2017 periods reflect additional expense associated with such awards.  Occupancy and Equipment expenses increased $81,000, or 23.3% primarily due to software depreciation expenses on the core system. Directors' compensation increased $63,000, or 50.8% primarily due to the termination of the directors' retirement plan as well as the expense associated with stock options and restricted stock awards.

Non-interest expense increased $62,000 to $5.5 million for the year to date period ended June 30, 2017 as compared to the same period ended June 30, 2016.  Salaries and benefits, Occupancy and Equipment and professional services increased by $197,000, $141,000, and $96,000, respectively, for the six-months ended June 30, 2017 compared to the same six month period a year earlier.  The increase in salaries and benefits was primarily due to an increase need in staffing as well as the expense associated with the stock options and restricted stock awards granted during June 2016.  As previously discussed, the decrease in service bureau fees was primarily the result of the Company's full data conversion that was completed on May 13, 2016.  Directors' compensation increased $136,000, or 59.9% primarily due to the termination of the directors' retirement plan as well as the expense associated with stock options and restricted stock awards.

36

Income Taxes. The income tax expense for the three months ended June 30, 2017 was $293,000 or 28.6% of the reported income before income taxes compared to a tax expense of $121,000 or 35.2% for the three months ended June 30, 2016. The income tax expense for the six months ended June 30, 2017 was $614,000, or 32.4% of the reported income before income taxes, compared to tax expense of $197,000, or 34.0% of the reported income before income taxes for the six months ended June 30, 2016. The change in tax rate is a result of a permanent tax deduction due to restricted stock that vested during the quarter in addition to non-qualified stock options that were exercised during the quarter.

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 the 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.

At June 30, 2017, the Bank had outstanding commitments to originate loans of $19.4 million, construction loans in process of $13.3 million, unused lines of credit of $51.2 million (including $35.9 million for commercial lines of credit and $12.8 million for home equity lines of credit), and standby letters of credit of $359,000. Certificates of deposit scheduled to mature in one year or less at June 30, 2017, totaled $57.2 million.

As of June 30, 2017, the Bank had contractual obligations related to the long-term operating leases for the three branch locations that it leases (Loan Production Office, RiverWalk and Martinsville).

The Bank generates cash through deposits and/or borrowings from the FHLBNY to meet its day-to-day funding obligations when required.  At June 30, 2017, the total loans receivable to deposits ratio was 109.3%.At June 30, 2017, the Bank's collateralized borrowing limit with the FHLBNY was $79.3 million, of which $38.7 million was outstanding.As of June 30, 2017, the Bank also had a $13.0 million line of credit with two financial institutions 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, 2017, the Company and the Bank exceeded all applicable regulatory capital requirements.

37

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This item is not applicable to the Company as it is a smaller reporting company.

ITEM 4 – 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, 2017. 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, 2017.

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.

PART II – OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

There were no material pending legal proceedings at June 30, 2017 to which the Company or its subsidiaries is a party other than ordinary routine litigation incidental to their respective businesses. 

ITEM 1A – RISK FACTORS

This item is not applicable to the Company as it is a smaller reporting company.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company did not repurchase any shares of its common stock during the quarter ended June 30, 2017.

38

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4 – MINE SAFETY DISCLOSURES

Not applicable

ITEM 5 – OTHER INFORMATION

None

39

ITEM 6 – EXHIBITS

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
101.DEF	XBRL Definition Linkbase Document

40

SIGNATURES

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

	MSB FINANCIAL CORP.
	(Registrant)
Date August 14, 2017	/s/ Michael A. Shriner
	Michael A. Shriner
	President and Chief Executive Officer
Date August 14, 2017	/s/ John S. Kaufman
	John S. Kaufman
	Vice President and Chief Financial Officer

EX-31.1

Exhibit 31.1

SECTION 302 CERTIFICATION

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

1. I have reviewed this Quarterly Report on Form 10-Q 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.

August 14, 2017	/s/ Michael A. Shriner
Date	Michael A. Shriner President and Chief Executive Officer

EX-31.2

Exhibit 31.2

SECTION 302 CERTIFICATION

I, John S. Kaufman, Vice President and Chief Financial Officer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q 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.

August 14, 2017	/s/ John S. Kaufman
Date	John S. Kaufman 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 (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 John S. Kaufman, Vice President and 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/ John S. Kaufman
Michael A. Shriner	John S. Kaufman
President and CEO	Vice President and CFO
August 14, 2017	August 14, 2017

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 14, 2017
Document Information [Line Items]
Entity Registrant Name	MSB FINANCIAL CORP
Entity Central Index Key	0001635261
Trading Symbol	msbf
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		5,756,077
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Statements of Financial Condition (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Cash and due from banks	$ 1,839	$ 1,388
Interest-earning demand deposits with banks	7,195	19,994
Cash and Cash Equivalents	9,034	21,382
Securities held to maturity (fair value of $42,523 and $43,894, respectively)	42,441	44,104
Loans receivable, net of allowance for loan losses of $4,925 and $4,476, respectively	426,370	368,007
Premises and equipment	8,902	8,957
Federal Home Loan Bank of New York stock, at cost	2,263	1,433
Bank owned life insurance	13,996	13,784
Accrued interest receivable	1,402	1,378
Other assets	2,690	2,601
Total Assets	507,098	461,646
Deposits:
Non-interest bearing	44,584	44,365
Interest bearing	345,479	317,934
Total Deposits	390,063	362,299
Advances from Federal Home Loan Bank of New York	38,675	22,675
Advance payments by borrowers for taxes and insurance	822	792
Other liabilities	2,549	2,695
Total Liabilities	432,109	388,461
Stockholders’ Equity
Preferred stock, par value $0.01; 1,000,000 shares authorized; no shares issued or outstanding	0	0
Common stock, par value $0.01; 49,000,000 shares authorized; 5,737,077 and 5,714,182 issued; 5,737,077 and 5,714,182 outstanding, respectively	57	57
Paid-in capital	52,217	51,809
Retained earnings	24,651	23,370
Unallocated common stock held by ESOP (195,868 and 201,316 shares, respectively)	(1,875)	(1,929)
Accumulated other comprehensive loss	(61)	(122)
Total Stockholders’ Equity	74,989	73,185
Total Liabilities and Stockholders’ Equity	$ 507,098	$ 461,646

XML

Consolidated Statements of Financial Condition (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Securities held to maturity, fair value	$ 42,523	$ 43,894
Loans receivable, allowance for loan losses	$ 4,925	$ 4,476
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	49,000,000	49,000,000
Common stock, share issued (in shares)	5,737,077	5,714,182
Common stock, share outstanding (in shares)	5,737,077	5,714,182
Unallocated common stock held by ESOP, shares (in shares)	195,868	201,316

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Interest Income:
Loans receivable, including fees	$ 4,444	$ 3,082	$ 8,444	$ 5,920
Securities held to maturity	247	331	498	762
Other	36	40	78	69
Total Interest Income	4,727	3,453	9,020	6,751
Interest Expense
Deposits	579	339	1,081	653
Borrowings	224	183	420	379
Total Interest Expense	803	522	1,501	1,032
Net Interest Income	3,924	2,931	7,519	5,719
Provision for Loan Losses	300	190	495	320
Net Interest Income after Provision for Loan Losses	3,624	2,741	7,024	5,399
Non-Interest Income
Fees and service charges	98	97	169	170
Income from bank owned life insurance	105	57	212	113
Other	16	358	25	370
Total Non-Interest Income	219	512	406	653
Non-Interest Expenses
Salaries and employee benefits	1,578	1,460	3,084	2,887
Directors compensation	187	124	363	227
Occupancy and equipment	429	348	823	682
Service bureau fees	49	292	97	505
Advertising	5	10	8	21
FDIC assessment	37	66	70	137
Professional services	349	373	708	612
Other	184	236	382	402
Total Non-Interest Expenses	2,818	2,909	5,535	5,473
Income before Income Taxes	1,025	344	1,895	579
Income Tax Expense	293	121	614	197
Net Income	$ 732	$ 223	$ 1,281	$ 382
Earnings per share:
Basic (in dollars per share)	$ 0.13	$ 0.04	$ 0.23	$ 0.07
Diluted (in dollars per share)	$ 0.13	$ 0.04	$ 0.23	$ 0.07

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Net Income	$ 732	$ 223	$ 1,281	$ 382
Defined benefit pension plans:
Reclassification adjustment for prior service cost included in net income, net of tax of $-, $2, $- and $4, respectively		(2)		(5)
Reclassification adjustment for net actuarial loss included in net income, net of tax of $(20), $(2), $(40), and $(3), respectively	30	2	61	4
Total other comprehensive income (loss)	30		61	(1)
Comprehensive income	$ 762	$ 223	$ 1,342	$ 381

XML

Consolidated Statements of Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Reclassification adjustment for prior service cost included in net income, tax		$ 2		$ 4
Reclassification adjustment for net actuarial loss included in net income, tax	$ (20)	$ (2)	$ (40)	$ (3)

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash Flows from Operating Activities:
Net Income	$ 1,281	$ 382
Adjustments to reconcile net income to net cash provided by operating activities:
Net accretion of securities premiums and discounts and deferred loan fees and costs	(77)	(44)
Depreciation and amortization of premises and equipment	272	195
Stock-based compensation and allocation of ESOP stock	249	106
Provision for Loan Losses	495	320
Income from bank owned life insurance	(212)	(113)
(Increase) decrease in accrued interest receivable	(24)	139
(Increase) decrease in other assets	(129)	508
(Decrease) increase in other liabilities	(45)	37
Net Cash Provided by Operating Activities	1,810	1,530
Cash Flows from Investing Activities:
Purchases	(1,182)
Maturities, calls and principal repayments	2,807	25,516
Net increase in loans receivable	(42,594)	(30,481)
Purchased loan participations	(23,399)
Sold loan participations	7,250
Purchase of premises and equipment	(217)	(237)
Purchase of Federal Home Loan Bank of NY stock	(6,261)
Redemption of Federal Home Loan Bank of NY stock	5,431	393
Net Cash Used in Investing Activities	(58,165)	(4,809)
Cash Flows from Financing Activities:
Net increase in deposits	27,764	31,019
Increase (decrease) in advances from Federal Home Loan Bank of NY	16,000	(10,000)
Proceeds from exercise of stock options	321
Repurchase of common stock	(108)
Increase in advance payments by borrowers for taxes and insurance	30	139
Purchase of common stock for equity plan		(1,467)
Net Cash Provided by Financing Activities	44,007	19,691
Net (decrease) increase in Cash and Cash Equivalents	(12,348)	16,412
Cash and Cash Equivalents – Beginning	21,382	12,303
Cash and Cash Equivalents – Ending	9,034	28,715
Supplementary Cash Flows Information
Interest paid	1,497	1,039
Income taxes paid	$ 795	$ 68

XML

Note 1 - Organization and Business

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Nature of Operations [Text Block]

Note

1

– Organization and Business

MSB Financial Corp. (the “Company”) is a Maryland-chartered corporation organized in

2014

to be the successor to MSB Financial Corp., a federal corporation (“Old MSB”) upon completion of the

second

-step conversion of Millington Bank (the “Bank”) from the

two

-tier mutual holding company structure to the stock holding company structure. MSB Financial, MHC (the “MHC”) was the former mutual holding company for Old MSB prior to completion of the

second

-step conversion. In conjunction with the

second

-step conversion, each of the MHC and Old MSB ceased to exist.

The Company’s principal business is the ownership and operation of the Bank. The Bank is a New Jersey-chartered stock savings bank and its deposits are insured by the Federal Deposit Insurance Corporation. 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 real estate 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 Federal Deposit Insurance Corporation. The Board of Governors of the Federal Reserve System (the “Federal Reserve”) regulates the Company as a bank holding company.

The primary business of Millington Savings Service Corp (the “Service Corp”), the Bank’s wholly-owned subsidiary, was the ownership and operation of a single commercial rental property. This property was sold during the year ended

June 30, 2007.

Currently the Service Corp is inactive.

Subsequent Events

The Company has evaluated events and transactions occurring subsequent to the statement of financial condition date of

June 30, 2017,

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.

On

August 4, 2017,

certain directors, executive officers and directors emeriti executed options to purchase

212,468

shares of Common Stock at a per share exercise price of

$9.4323.

In lieu of issuing shares of Common Stock upon the exercise of such options, the Company made a cash payment to such optionees equal to the excess of the closing price of the Common Stock on the Nasdaq Stock Market on

August 4, 2017

of

$17.30

over the per share exercise price of such options of

$9.4323

multiplied by the number of options being exercised. An aggregate of

$1.7

million was paid to the optionees.

XML

Note 2 - Basis of Consolidated Financial Statement Presentation

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note

2

– Basis of Consolidated Financial Statement Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank, and the Bank’s wholly owned subsidiary the Service Corp. All significant intercompany accounts and transactions have been eliminated in consolidation. These consolidated financial statements were prepared in accordance with instructions for Form

10

-Q and Regulation S-

X,

and therefore, do

not

include all information or notes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

I

n the opinion of management, all adjustments, consisting of only normal recurring adjustments or accruals, which are necessary for a fair presentation of the consolidated financial statements have been made at

June 30,

2017

and for the

three

and

six

months ended

June 30, 2017

and

2016.

The results of operations for the

three

and

six

months ended

June 30, 2017

are

not

necessarily indicative of the results which

may

be expected for an entire fiscal year or other interim periods.

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.

Recent Accounting Pronouncements

In

May 2014,

the FASB issued Accounting Standards Update (ASU)

No.

2014

-

09,

Revenue from Contracts with Customers (ASU

2014

-

09

), which supersedes nearly all existing revenue recognition guidance under 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 GAAP. The standard was initially 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).

The FASB subsequently issued ASU

2015

-

14

which states that public business entities should apply the guidance in ASU

2014

-

09

to annual reporting periods beginning after

December 31, 2017,

including interim reporting periods within that reporting period.

The FASB also subsequently issued ASUs Nos.

2016

-

08,

2016

-

10,

2016

-

12,

2016

-

20

and

2017

-

05

to augment, amend and clarify the original pronouncement. Other than significantly increased disclosure, we do

not

expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In

January 2016,

the FASB issued ASU

No.

2016

-

01,

Financial Instruments - Overall. The guidance in this ASU among other things, (

1

) requires equity investments with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (

2

) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (

3

) eliminates the requirement for public businesses entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (

4

) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (

5

) requires an entity to present separately in other comprehensive income the portion of the change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (

6

) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (

7

) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-

for-sale securities. The guidance in this ASU is effective for fiscal years beginning after

December 15, 2017,

including interim periods within those fiscal years. We do

not

expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In

February 2016,

the FASB issued ASU

No.

2016

-

02,

Leases (Topic

842

). This ASU revises the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability for all leases. The new lease guidance also simplified the accounting for sale and leaseback transactions primarily due to the recognition of lease assets and lease liabilities. ASU

2016

-

02

is effective for the

first

interim period within annual periods beginning after

December 15, 2018,

with early adoption permitted.

The standard is required to be adopted using the modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We currently expect that upon adoption of ASU

2016

-

02,

right-of-use assets and lease liabilities will be recognized in our consolidated statements of condition in amounts that will be material; however, we do

not

expect a material impact to our consolidated income statement.

In

March 2016,

the FASB issued ASU

No.

2016

-

09,

Improvements to Employee Share-Based Payment Accounting, Compensation – Stock Compensation (Topic

718

). This ASU changes several aspects of the accounting for share-based payment award transactions, including: (

1

) accounting and cash flow classification for excess tax benefits and deficiencies, (

2

) forfeitures, and (

3

) tax withholding requirements and cash flow classification. The standard is effective for public companies for annual and interim periods in fiscal years beginning after

December 15, 2016.

Early adoption is permitted for the interim or annual period provided that the entire standard is adopted. If an entity early adopts the standard in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The adoption of ASU

2016

-

09

effective

January 1, 2017,

did

not

have a material impact on our consolidated financial statements.

In

June 2016,

the FASB issued ASU

No.

2016

-

13,

Measurement of Credit Losses on Financial Instruments. This ASU requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using an expected credit loss model. Under this model, entities will estimate credit losses over the entire contractual term of the instrument. The standard is effective for public companies in annual and interim periods in fiscal years beginning after

December 15, 2019.

Early adoption is permitted, including adoption in the interim or annual period provided that the entire standard is adopted. We are currently evaluating the impact of ASU

2016

-

13

on our consolidated financial statements. We have taken steps to begin preparations for implementation, such as evaluating changes to our current loss recognition model and evaluating the potential use of outside professionals for an updated model.

In

August 2016,

the FASB issued ASU

2016

-

15;

Statement of Cash Flows (Topic

230

): Classification of Certain Cash Receipts and Cash Payments. The amendments in this Update address the following

eight

specific cash flow issues with the objective of reducing the existing diversity in practice: (

1

) debt prepayments or debt extinguishment cost (cash outflow-financing), (

2

) settlement of debt instruments with coupon interest rates insignificant to the effective interest rate, interest payment (cash outflow-operating), or principal payment (cash outflow-financing), (

3

) contingent consideration payments made soon after a business combination (cash outflow-investing), (

4

) proceeds from the settlement of insurance claims (classification on basis of the nature of each loss), (

5

) proceeds from the corporate/bank-owned life insurance, proceeds (cash inflow-investing), payments (cash outflow-investing/operating), (

6

) distribution received from equity method investees, cumulative earnings approach (cash inflow-investing), nature of distribution approach (cash inflow-operating/investing), (

7

) beneficial interest in securitization transactions, assets (noncash transaction), cash receipts from trade receivable (cash inflow-investing), (

8

) separately identifiable cash flows (classified based on source-financing/investing/operating).  The amendments in this Update are effective for public business entities for the fiscal years beginning after

December 15, 2017

and interim periods within those fiscal years.  Early adoption is permitted, including adoption in an interim period.  If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.  An entity that elects early adoption must adopt all of the amendments in the same period.   We do

not

expect the adoption of this guidance to have a material impact on our consolidated financial statements.

            In

February 2017,

FASB issued Accounting Standards Update

No.

2017

-

07,

“Compensation—Retirement Benefits (Topic

715

): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU

2017

-

07”

). To improve the consistency, transparency, and usefulness of financial information for users, the amendments in ASU

2017

-

07

require that an employer disaggregate the service cost component from the other components of net benefit cost and report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if

one

is presented. The amendments in ASU

2017

-

07

are effective for public business entities for annual periods beginning after

December 15, 2017,

including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have

not

been issued or made available for issuance. The amendments in ASU

2017

-

07

should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. We intend to adopt ASU

2017

-

07

during the

first

quarter of

2018

and it will have

no

effect on our results of operations because it only impacts the presentation of certain information on the statements of income.

In

March 2017,

FASB issued Accounting Standards Update

No.

2017

-

08,

“Receivables —Nonrefundable Fees and Other Costs (Subtopic

310

-

20

): Premium Amortization on Purchased Callable Debt Securities” (“ASU

2017

-

08”

). ASU

2017

-

08

amends guidance on the amortization period of premiums on certain purchased callable debt securities. Specifically, the amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. The amendments affect all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer at the earliest call date. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2018.

Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. The effect of ASU

2017

-

08

would be lower interest income and a corresponding lower yield as the amortization period would be shortened. As of

June 30, 2017

we do

not

hold any callable debt securities that were purchased at a premium. We intend to adopt ASU

2017

-

08

during the

first

quarter of

2019.

In

May 2017,

FASB issued Accounting Standards Update

No.

2017

-

09,

“Scope of Modification Accounting,” which clarifies Topic

718,

“Compensation – Stock Compensation,” such that an entity must apply modification accounting to changes in the terms or conditions of a share-based payment award unless all of the following criteria are met:  (

1

) the fair value of the modified award is the same as the fair value of the original award immediately before the modification (the ASU indicates that if the modification does

not

affect any of the inputs to the valuation technique used to value the award, the entity is

not

required to estimate the value immediately before and after the modification); (

2

) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the modification; and (

3

) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the modification.  The ASU is effective for all entities for fiscal years beginning after

December 15, 2017,

including interim periods within those years.  Early adoption is permitted, including adoption in an interim period. We do

not

expect the adoption of this guidance to have a material impact on our consolidated financial statements.

XML

Note 3 - Earnings Per Share

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Earnings Per Share [Text Block]

Note

3

– Earnings Per Share

The following table shows the computation of basic and diluted earnings per share:

	Three Months Ended June 30,				Six Months Ended June 30,
(In Thousands, Except Per Share Data)	2017		2016		2017		2016
Numerator:
Net income	$	732	$	223	$	1,281	$	382
Denominator:
Weighted average common shares		5,540		5,743		5,530		5,744
Dilutive potential common shares		139		78		131		74
Weighted average fully diluted shares		5,679		5,821		5,661		5,818
Earnings per share:
Basic	$	0.13	$	0.04	$	0.23	$	0.07
Dilutive	$	0.13	$	0.04	$	0.23	$	0.07

XML

Note 4 - Securities Held to Maturity

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Investment Holdings [Text Block]

Note

4

- Securities Held to Maturity

The amortized cost of securities held to maturity and their estimated fair values as of

June 30, 2017

and

December 31, 2016

are summarized as follows:

(In Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2017
U.S U.S. Government agencies:
Due within one year	$	2,000	$	-	$	1	$	1,999
Due after one year through five years		4,500		-		29		4,471
Total U.S. Government agencies		6,500		-		30		6,470
Mortgage-backed securities		25,014		458		129		25,343
Corporate bonds:
Due after one year through five years		2,023		18		-		2,041
Due after five through ten years		1,000		-		10		990
Due after ten years		4,000		-		227		3,773
Total Corporate bonds		7,023		18		237		6,804
State and political subdivisions:
Due within one year		101		-		1		100
Due after one through five years		661		2		1		662
Due after five through ten years		537		1		-		538
Total State and political subdivisions		1,299		3		2		1,300
Certificates of deposit:
Due within one year		2,160		1		1		2,160
Due after one year through five years		445		1		-		446
Total Certificates of deposit		2,605		2		1		2,606
Total Securities held to maturity	$	42,441	$	481	$	399	$	42,523

(In Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2016
U.S U.S. Government agencies:
Due within one year	$	1,000	$	-	$	2	$	998
Due after one year through five years		5,500		1		40		5,461
Total U.S. Government Agencies		6,500		1		42		6,459
Mortgage-backed securities		24,663		366		224		24,805
Corporate bonds:
Due within one year		2,002		2		-		2,004
Due after one year through five years		2,032		15		13		2,034
Due after five years through ten years		1,000		-		42		958
Due thereafter		4,000		-		253		3,747
Total Corporate bonds		9,034		17		308		8,743
State and political subdivisions:
Due within one year		101		-		-		101
Due after one through five years		663		-		11		652
Due after five through ten years		538		-		18		520
Total State and political subdivisions		1,302		-		29		1,273
Certificates of deposit:
Due within one year		1,670		6		-		1,676
Due after one through five years		935		4		1		938
Total Certificates of deposit		2,605		10		1		2,614
Total Securities held to maturity	$	44,104	$	394	$	604	$	43,894

All mortgage-backed securities at

June 30, 2017

and

December 31, 2016

have been issued by FNMA, FHLMC or GNMA and are secured by

one

-to-

four

family residential real estate. The amortized cost and estimated fair value of securities held to maturity at

June 30, 2017

and

December 31, 2016,

as shown above, are reported in total. Expected maturities

may

differ from contractual maturities because borrowers

may

have the right to call or prepay obligations with or without call or prepayment penalties.

There were

no

sales of securities held to maturity during the

six

months ended

June 30, 2017

or

2016.

At

June 30, 2017

and

December 31, 2016,

securities held to maturity with a fair value of approximately

$1.0

million were pledged to secure public funds on deposit.

The following tables set forth the gross unrealized losses and fair value of securities in an unrealized loss position as of

June 30, 2017

and

December 31, 2016,

and the length of time that such securities have been in an unrealized loss position:

	Less than 12 Months				More than 12 Months				Total
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In T housands)
June 30, 2017
U.S. Government agencies	$	5,470	$	30	$	-	$	-	$	5,470	$	30
Mortgage-backed securities		8,658	$	120		357		9		9,015	$	129
Corporate bonds		-		-		4,763		237		4,763		237
State and political subdivisions		263		2		-		-		263		2
Certificates of deposit		690		1		-		-		690		1
Total securities with gross unrealized losses	$	15,081	$	153	$	5,120	$	246	$	20,201	$	399

	Less than 12 Months				More than 12 Months				Total
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In T housands)
December 31, 2016
U.S. Government agencies	$	5,458	$	42	$	-	$	-	$	5,458	$	42
Mortgage-backed securities		13,456		224		-		-		13,456		224
Corporate bonds		1,988		13		4,705		295		6,693		308
State and political subdivisions		1,172		28		101		1		1,273		29
Certificates of deposit		245		1		-		-		245		1
Total securities with gross unrealized losses	$	22,319	$	308	$	4,806	$	296	$	27,125	$	604

At

June 30, 2017,

management concluded that the unrealized losses summarized above (which related to

five

U.S. Government agency bonds,

thirteen

mortgage-backed securities,

three

corporate bonds,

two

state and political subdivision securities and

three

certificate of deposits, compared to

five

U.S. Government agency bonds,

fourteen

mortgage-backed securities,

six

corporate bonds,

eight

state and political subdivision bonds, and

one

certificate of deposit as of

December 31, 2016)

are temporary in nature since they are

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 anticipated recovery of the remaining amortized cost. Management believes that the losses above are primarily related to the change in market interest rates. Accordingly, the Company has

not

recognized any other-than-temporary impairment loss on these securities.

XML

Note 5 - Loans Receivable and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note

5

- Loans Receivable and Allowance for Credit Losses

The composition of loans receivable at

June 30, 2017

and

December 31, 2016

was as follows:

(In Thousands)	June 30, 2017		December 31, 2016
Residential mortgage:
One-to-four family	$	164,448	$	160,534
Home equity		29,021		32,262
Total residential mortgages		193,469		192,796
Commercial loans:
Commercial and multi-family real estate		153,984		124,656
Construction		29,623		16,554
Commercial and industrial		67,686		45,246
Total commercial loans		251,293		186,456
Consumer:		434		446
Total loans receivable		445,196		379,698
Less:
Loans in process		13,315		6,557
Deferred loan fees		586		658
Allowance for loan losses		4,925		4,476
Total adjustments		18,826		11,691
Loans receivable, net	$	426,370	$	368,007

Allowance for Loan Losses

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 types 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 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.

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 tables provide an analysis of the allowance for loan losses and the loan receivable balances, by 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, 2017

and

2016:

(in thousands)	Residential Mortgage			Commercial and Multi- Family Real Estate			Construction			Commercial and Industrial			Consumer			Unallocated			Total
Three Months Ended June 30, 201 7
Allowance for loan losses:
Balance, beginning	$	1,785		$	1,426		$	339		$	1,022		$	7		$	47		$	4,626
Provisions (credits)		26			172			(24	)		141			4			(19	)		300
Loans charged-off		—			—			—			—			(2	)		—			(2	)
Recoveries		1			—			—			—			—			—			1
Balance, ending	$	1,812		$	1,598		$	315		$	1,163		$	9		$	28		$	4,925
Six Months Ended June 30 , 2017
Allowance for loan losses:
Balance, beginning	$	1,808		$	1,441		$	248		$	882		$	6		$	91		$	4,476
Provisions (credits)		3			200			67			282			6			(63	)		495
Loans charged-off		(2	)		(43	)		—			(1	)		(3	)		—			(49	)
Recoveries		3			—			—			—			—			—			3
Balance, ending	$	1,812		$	1,598		$	315		$	1,163		$	9		$	28		$	4,925
Period-end allowance allocated to:
Loans individually evaluated for impairment	$	100		$	—		$	—		$	—		$	—		$	—		$	100
Loans collectively evaluated for impairment		1,712			1,598			315			1,163			9			28			4,925
Ending Balance	$	1,812		$	1,598		$	315		$	1,163		$	9		$	28		$	4,925
Period-end loan balances evaluated for:
Loans individually evaluated for impairment	$	14,562		$	1,750		$	—		$	212		$	—		$	—		$	16,524
Loans collectively evaluated for impairment		178,797			151,945			16,226			67,368			435			—			414,771
Ending Balance	$	193,359		$	153,695		$	16,226		$	67,580		$	435		$	—		$	431,295

(in thousands)	Residential Mortgage			Commercial and Multi- Family Real Estate		Construction		Commercial and Industrial		Consumer			Unallocated			Total
Three Months Ended June 30, 2016
Allowance for loan losses:
Balance, beginning	$	1,899		$	1,084	$	153	$	277	$	7		$	251		$	3,671
Provisions (credits)		(66	)		238		10		37		9			(38	)		190
Loans charged-off		—			—		—		—		(1	)		—			(1	)
Recoveries		9			—		—		—		—			—			9
Balance, ending	$	1,842		$	1,322	$	163	$	314	$	15		$	213		$	3,869
Six Months Ended June 30, 2016
Allowance for loan losses:
Balance, beginning	$	1,927		$	1,015	$	143	$	235	$	9		$	273		$	3,602
Provisions (credits)		(34	)		307		20		79		8			(60	)		320
Loans charged-off		(64	)		—		—		—		(3	)		—			(67	)
Recoveries		13			—		—		—		1			—			14
Balance, ending	$	1,842		$	1,322	$	163	$	314	$	15		$	213		$	3,869
Period-end allowance allocated to:
Loans individually evaluated for impairment	$	—		$	—	$	—	$	—	$	5		$	—		$	5
Loans collectively evaluated for impairment		1,842			1,322		163		314		10			213			3,864
Ending Balance	$	1,842		$	1,322	$	163	$	314	$	15		$	213		$	3,869
Period-end loan balances evaluated for:
Loans individually evaluated for impairment	$	15,214		$	1,193	$	—	$	544	$	5		$	—		$	16,956
Loans collectively evaluated for impairment		177,286			78,705		8,141		14,891		458			—			279,481
Ending Balance	$	192,500		$	79,898	$	8,141	$	15,435	$	463		$	—		$	296,437

Nonaccrual and Past Due Loans

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. 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.

The following table represents the classes of the loans receivable portfolio summarized by aging categories of performing loans and nonaccrual loans as of

June 30, 2017

and

December 31, 2016:

(In Thousands) As of June 30 , 2017	30-59 Days Past Due and Still Accruing		60-89 Days Past Due and Still Accruing		Greater than 90 Days and Still Accruing		Total Past Due and Still Accruing		Accruing Current Balances		Nonaccrual Loans(1)		Total Loans Receivables
Residential Mortgage
One-to-four family	$	1,863	$	660	$	—	$	2,523	$	155,855	$	5,962	$	164,340
Home equity		630		64		—		694		28,209		116		29,019
Commercial and multi-family real estate		—		—		—		—		152,959		736		153,695
Construction		—		—		—		—		16,226		—		16,226
Commercial and industrial		299		—		—		299		67,179		102		67,580
Consumer		5		2		—		7		428		—		435
Total	$	2,797	$	726	$	—	$	3,523	$	420,856	$	6,916	$	431,295

( 1 ) Nonaccrual loans at June 30, 2017, included $4,555,000 that were 90 days or more delinquent, none that were 60 - 89 days delinquent, $703,000 that were 30 - 59 days delinquent, and $1,658,000 that were current or less than 30 days delinquent. Loans are restored to accrual status when the obligation is brought current and has performed in accordance with the contractual terms for a reasonable period of time (generally six months).

(In Thousands) As of December 31, 2016	30-59 Days Past Due and Still Accruing		60-89 Days Past Due and Still Accruing		Greater than 90 Days and Still Accruing		Total Past Due and Still Accruing		Accruing Current Balances		Nonaccrual Loans (1)		Total Loans Receivables
Residential Mortgage
One-to-four family	$	2,433	$	1,944	$	—	$	4,377	$	150,260	$	5,744	$	160,381
Home equity		591		34		—		625		31,500		126		32,251
Commercial and multi-family real estate		374		—		—		374		123,182		760		124,316
Construction		—		—		—		—		9,934		—		9,934
Commercial and industrial		—		—		—		—		44,805		350		45,155
Consumer		—		—		—		—		446		—		446
Total	$	3,398	$	1,978	$	—	$	5,376	$	360,127	$	6,980	$	372,483

( 1 ) Nonaccrual loans at December 31, 2016, included $5,521,000 that were 90 days or more delinquent, $30,000 that were 60 - 89 days delinquent, $964,000 that were 30 - 59 days delinquent, and $464,000 that were current or less than 30 days delinquent. Loans are restored to accrual status when the obligation is brought current and has performed in accordance with the contractual terms for a reasonable period of time (generally six months).

Impaired Loans

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.

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 aging schedules 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.

The following tables provide an analysis of the impaired loans at

June 30, 2017

and

December 31, 2016

and the average balances of such loans for the

six

months and year, respectively, then ended:

(In thousands) June 30, 2017	Recorded Investment		Loans with No Related Reserve		Loans with Related Reserve		Related Reserve		Contractual Principal Balance		Average Recorded Investment
Residential mortgage
One-to-four family	$	13,240	$	11,339	$	1,901	$	100	$	13,325	$	12,948
Home equity		1,322		1,322		-		-		1,329		1,322
Commercial and multi-family real estate		1,750		1,750		-		-		1,813		1,596
Commercial and industrial		212		212		-		-		212		365
Total	$	16,524	$	14,623	$	1,901	$	100	$	16,679	$	16,231

(In thousands) December 31, 2016	Recorded Investment		Loans with No Related Reserve		Loans with Related Reserve		Related Reserve		Contractual Principal Balance		Average Recorded Investment
Residential mortgage
One-to-four family	$	12,509	$	10,395	$	2,114	$	101	$	12,891	$	12,795
Home equity		1,311		1,311		-		-		1,401		1,981
Commercial and multi-family real estate		1,529		1,529		-		-		2,149		1,278
Commercial and industrial		511		357		154		102		961		548
Consumer		-		-		-		-		-		1
Total	$	15,860	$	13,592	$	2,268	$	203	$	17,402	$	16,603

As of

June 30, 2017

and

December 31, 2016,

impaired loans listed above include

$11.8

million and

$10.7

million, respectively, of loans modified in troubled debt restructurings (“TDR”) and as such are considered impaired under GAAP. As of

June 30, 2017

and

December 31, 2016,

$9.2

million and

$8.5

million, respectively, 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.

Interest income of

$89,000

and

$153,000

was recognized on impaired loans during the

three

months ended

June 30, 2017

and

2016.

The average balance of impaired loans for the

three

months ended

June 30, 2017

and

June 30, 2016

were

$16.4

million and

$16.8

million, respectively. During the

six

months ended

June 30, 2017

and

2016,

interest income of

$195,000

and

$318,000,

respectively, was recognized on impaired loans. The average balance of impaired loans for the

six

months ended

June 30, 2017

and

June 30, 2016

was

$16.2

million and

$16.9

million, respectively.

Credit Quality Indicators

Management uses a

nine

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 Bank’s rating categories are as follows:

1

–

5:

The

first

five

risk rating categories are considered

not

criticized, and are aggregated as “Pass” rated.

6:

“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. 

7:

“Substandard” loans 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.  This includes loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any.

8:

“Doubtful” loans 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. 

9:

“Loss” loans 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, 2017

and

December 31, 2016:

(In Thousands) As of June 30, 2017	Pass		Special Mention		Substandard		Doubtful		Loss		Total
Commercial and multi-family real estate	$	150,781	$	1,831	$	1,083	$	—	$	—	$	153,695
Construction		16,226		—		—		—		—		16,226
Commercial and industrial		67,122		222		236		—		—		67,580
Total	$	234,129	$	2,053	$	1,319	$	—	$	—	$	237,501

(In Thousands) As of December 31, 2016	Pass		Special Mention		Substandard		Doubtful		Loss		Total
Commercial and multi-family real estate	$	122,804	$	—	$	1,512	$	—	$	—	$	124,316
Construction		8,759		1,175		—		—		—		9,934
Commercial and industrial		44,537		86		532		—		—		45,155
Total	$	176,100	$	1,261	$	2,044	$	—	$	—	$	179,405

Management further monitors the performance and credit quality of the residential portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. These credit quality indicators are assessed in the aggregate in these relatively homogeneous portfolios. Loans greater than

90

days past due are generally considered nonperforming and placed on nonaccrual status. 

(In Thousands)	Residential mortgage				Consumer				Total Residential and Consumer
	Jun. 30, 2017		Dec. 31, 2016		Jun. 30, 2017		Dec. 31, 2016		Jun. 30, 2017		Dec. 31, 2016
Nonperforming	$	6,078	$	5,870	$	—	$	—	$	6,078	$	5,870
Performing		187,281		186,762		435		446		187,716		187,208
Total	$	193,359	$	192,632	$	435	$	446	$	193,794	$	193,078

Troubled Debt Restructurings

Loans the terms of which are modified are classified as a TDR if, in connection with the modification, 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 the loan’s interest rate below market rates 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.

The recorded investment balance of TDRs totaled

$11.8

million

at

June 30, 2017

compared with

$10.7

million at

December 31, 2016.

The majority of the Company’s TDRs are on accrual status. Accruing TDRs totaled

$9.2

million at

June 30, 2017

versus

$8.5

million at

December 31, 2016.

The total of TDRs on non-accrual status was

$2.6

million

at

June 30, 2017

and

$2.2

million at

December 31, 2016.

For the

three

months ended

June 30, 2017,

the terms of

five

loans were modified into

two

TDRs. The Company refinanced and consolidated a

one

-to-

four

family loan and

three

commercial loans into a multi-family & commercial loan with an adjustable interest rate from a fixed interest rate. In addition, the Company refinanced a

one

-to-

four

family loan and capitalized the interest. For the

three

months ended

June 30, 2016,

the Company did

not

modify any loans as a TDR.

For the

six

months ended

June 30, 2017,

the terms of

twelve

loans were modified into

five

TDRs. The Company refinanced and consolidated a

one

-to-

four

family and

one

home equity mortgage loan which was restructured to an adjustable interest rate from a fixed interest rate. In addition, the Company restructured a

one

-to-

four

family loan, a home equity loan and a commercial line of credit. These loans were consolidated into

one one

-to-

four

family TDR with an extended maturity date. The Company restructured a commercial loan and a multi-family real estate loan into

one

TDR and extended the maturity date. The Company refinanced and consolidated a

one

-to-

four

family loan and

three

commercial loans into a multi-family & commercial loan with an adjustable interest rate from a fixed interest rate. In addition, the Company refinanced a

one

-to-

four

family loan and capitalized the interest. For the

six

months ended

June 30, 2016,

the Company did

not

modify any loans as a TDR.

The following tables summarize by class loans modified into TDRs during the the

three

and

six

months ended

June 30, 2017:

	Three Months Ended June 30, 2017
	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
One-to-four family		2	$	444	$	405
Commercial and multi-family real estate		-		-		263
Commercial		3		153		-
Total		5	$	597	$	668

	Six Months Ended June 30, 2017
	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
One-to-four family		4	$	1,019	$	1,283
Home equity		2		99		-
Commercial and multi-family real estate		1		419		661
Commercial		5		283		-
Total		12	$	1,820	$	1,944

A loan is considered to be in payment default once it is

90

days contractually past due under the modified terms. There were

no

loans modified in TDRs during the previous

12

months and for which there was a subsequent payment default for the

three

and

six

months ended

June 30, 2017

and

2016.

 

There was

no

Other Real Estate Owned (“OREO”) at

June 30, 2017

and

December 31, 2016.

We

may

obtain physical possession of residential real estate collateralizing consumer mortgage loans via foreclosure or in-substance repossession. At

June 30, 2017

and

December 31, 2016,

we had consumer loans with a carrying value of

$2.4

and

$1.8

million, respectively, collateralized by residential real estate property for which formal foreclosure proceedings were in process.

XML

Note 6 - Fair Value Measurements

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note

6

- Fair Value Measurements

The Company uses fair value measurements to record fair value adjustments to certain assets and certain liabilities 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 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, 2017

and

December 31, 2016.

Assets 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 table summarizes those assets measured at fair value on a non-recurring basis as of

June 30, 2017

and

December 31, 2016:

	As of June 30, 2017
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(In thousands)
Impaired loans	$	—	$	—	$	1,801	$	1,801

	As of December 31, 2016
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(In thousands)
Impaired loans	$	—	$	—	$	2,065	$	2,065

For Level

3

assets measured at fair value on a non-recurring basis as of

June 30, 2017

and

December 31, 2016,

the significant unobservable inputs used in fair value measurements were as follows:

	As of June 30, 2017
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
	(Dollars in thousands)
Impaired loans	$	1,801	Appraisal of collateral	Appraisal adjustments		23.0%	(23.0%)
				Liquidation expense		28.0%	(28.0%)

	As of December 31, 2016
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
	(Dollars in thousands)
Impaired loans	$	2,065	Appraisal of	Appraisal
			collateral	adjustments	0%	to	22.6%	(19.4%)
				Liquidation
				expense	5.4%	to	18.3	(6.8%)

A 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 payments 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.

Disclosure about Fair Value of Financial Instruments

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, 2017

and

December 31, 2016,

and placement in the fair value hierarchy of the Company’s financial instruments which are carried on the consolidated statement of financial condition at cost and are

not

recorded at fair value on a recurring basis. This table excludes financial instruments for which 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
As of June 3 0 , 201 7	Amount		Value		Inputs		Inputs		Inputs
	(In thousands)
Financial assets:
Securities held to maturity	$	42,441	$	42,523	$	-	$	42,523	$	-
Loans receivable (1)		426,370		429,154		-		-		429,154
Financial liabilities:
Certificate of deposits		128,854		130,880		-		130,880		-
Advances from Federal Home Loan Bank of New York		38,675		38,905		-		38,905		-
As of December 31, 2016
Financial assets:
Securities held to maturity	$	44,104	$	43,894	$	—	$	43,894	$	—
Loans receivable (1)		368,007		373,325		—		-		373,325
Financial liabilities:
Certificate of deposits		103,627		105,375		—		105,375		—
Advances from Federal Home Loan Bank of New York		22,675		23,087		—		23,087		—

(

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 instruments 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 Company’s current offering rates.  Both fixed and variable rate loan fair values are derived using a discounted cash flow methodology.  For variable rate loans, repricing terms, including next repricing date, repricing frequency and repricing rate are factored into the discounted cash flow formula.

Federal Home Loan Bank of New York 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 and savings 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 agreements, taking into account market interest rates, the remaining terms, and the present credit worthiness of the counterparties. As of

June 30, 2017

and

December 31, 2016,

the fair value of the commitments to extend credit was

not

considered to be material.

XML

Note 7 - Retirement Plans

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note

7

– Retirement Plans

Periodic expenses for the Company’s retirement plans, which include the Directors’ Retirement Plan and the Executive Incentive Retirement Plan, were as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2017		2016			2017		2016
	(In thousands)
Service cost	$	-	$	3		$	-	$	7
Interest cost		5		32			10		55
Amortization of unrecognized loss (gain)		50		4			101		7
Amortization of past service liability		-		(5	)		-		(10	)
Net periodic benefit cost	$	55	$	34		$	111	$	59

The Company previously disclosed in its Form

10

-K as of

December 31, 2016

that it expected to contribute

$84,000

to the Plan during the current fiscal year. As of

June 30, 2017,

the Company contributed

$42,000.

XML

Note 8 - Reclassifications Out of Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Reclassifications [Text Block]

Note

8

– Reclassifications Out of Accumulated Other Comprehensive Income

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss) (a)				Amount Reclassified from Accumulated Other Comprehensive Income (Loss) (a)			Affected Line Item in the Consolidated Statements of Comprehensive Income
	Three Months Ended June 3 0 , 201 7				Six Months Ended June 3 0 , 201 7
	(In thousands)
Amortization of defined benefit pension items:
Prior service costs	$	-		(b)	$	-		Directors compensation
Unrecognized loss		(50	)	(b)		(101	)	Directors compensation
Total before tax		(50	)			(101	)	Total before tax
Income tax expense		20				40		Income tax expense
Total reclassifications for the period	$	(30	)		$	(61	)	Net of tax

Details about Accumulated Other Comprehensive  Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss) (a)				Amount Reclassified from Accumulated Other Comprehensive Income (Loss) (a)			Affected Line Item in the Consolidated Statements of Comprehensive Income
	Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	(In thousands)
Amortization of defined benefit pension items:
Prior service costs	$	4		(b)	$	9		Directors compensation
Unrecognized loss		(4	)	(b)		(7	)	Directors compensation
		-				2		Total before tax
		-				(1	)	Income tax expense
Total reclassifications for the period	$	-			$	1		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 7 for additional details).

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank, and the Bank’s wholly owned subsidiary the Service Corp. All significant intercompany accounts and transactions have been eliminated in consolidation. These consolidated financial statements were prepared in accordance with instructions for Form

10

-Q and Regulation S-

X,

and therefore, do

not

include all information or notes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

I

n the opinion of management, all adjustments, consisting of only normal recurring adjustments or accruals, which are necessary for a fair presentation of the consolidated financial statements have been made at

June 30,

2017

and for the

three

and

six

months ended

June 30, 2017

and

2016.

The results of operations for the

three

and

six

months ended

June 30, 2017

are

not

necessarily indicative of the results which

may

be expected for an entire fiscal year or other interim periods.

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.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In

May 2014,

the FASB issued Accounting Standards Update (ASU)

No.

2014

-

09,

Revenue from Contracts with Customers (ASU

2014

-

09

), which supersedes nearly all existing revenue recognition guidance under 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 GAAP. The standard was initially 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).

The FASB subsequently issued ASU

2015

-

14

which states that public business entities should apply the guidance in ASU

2014

-

09

to annual reporting periods beginning after

December 31, 2017,

including interim reporting periods within that reporting period.

The FASB also subsequently issued ASUs Nos.

2016

-

08,

2016

-

10,

2016

-

12,

2016

-

20

and

2017

-

05

to augment, amend and clarify the original pronouncement. Other than significantly increased disclosure, we do

not

expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In

January 2016,

the FASB issued ASU

No.

2016

-

01,

Financial Instruments - Overall. The guidance in this ASU among other things, (

1

) requires equity investments with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (

2

) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (

3

) eliminates the requirement for public businesses entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (

4

) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (

5

) requires an entity to present separately in other comprehensive income the portion of the change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (

6

) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (

7

) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-

for-sale securities. The guidance in this ASU is effective for fiscal years beginning after

December 15, 2017,

including interim periods within those fiscal years. We do

not

expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In

February 2016,

the FASB issued ASU

No.

2016

-

02,

Leases (Topic

842

). This ASU revises the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability for all leases. The new lease guidance also simplified the accounting for sale and leaseback transactions primarily due to the recognition of lease assets and lease liabilities. ASU

2016

-

02

is effective for the

first

interim period within annual periods beginning after

December 15, 2018,

with early adoption permitted.

The standard is required to be adopted using the modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We currently expect that upon adoption of ASU

2016

-

02,

right-of-use assets and lease liabilities will be recognized in our consolidated statements of condition in amounts that will be material; however, we do

not

expect a material impact to our consolidated income statement.

In

March 2016,

the FASB issued ASU

No.

2016

-

09,

Improvements to Employee Share-Based Payment Accounting, Compensation – Stock Compensation (Topic

718

). This ASU changes several aspects of the accounting for share-based payment award transactions, including: (

1

) accounting and cash flow classification for excess tax benefits and deficiencies, (

2

) forfeitures, and (

3

) tax withholding requirements and cash flow classification. The standard is effective for public companies for annual and interim periods in fiscal years beginning after

December 15, 2016.

Early adoption is permitted for the interim or annual period provided that the entire standard is adopted. If an entity early adopts the standard in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The adoption of ASU

2016

-

09

effective

January 1, 2017,

did

not

have a material impact on our consolidated financial statements.

In

June 2016,

the FASB issued ASU

No.

2016

-

13,

Measurement of Credit Losses on Financial Instruments. This ASU requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using an expected credit loss model. Under this model, entities will estimate credit losses over the entire contractual term of the instrument. The standard is effective for public companies in annual and interim periods in fiscal years beginning after

December 15, 2019.

Early adoption is permitted, including adoption in the interim or annual period provided that the entire standard is adopted. We are currently evaluating the impact of ASU

2016

-

13

on our consolidated financial statements. We have taken steps to begin preparations for implementation, such as evaluating changes to our current loss recognition model and evaluating the potential use of outside professionals for an updated model.

In

August 2016,

the FASB issued ASU

2016

-

15;

Statement of Cash Flows (Topic

230

): Classification of Certain Cash Receipts and Cash Payments. The amendments in this Update address the following

eight

specific cash flow issues with the objective of reducing the existing diversity in practice: (

1

) debt prepayments or debt extinguishment cost (cash outflow-financing), (

2

) settlement of debt instruments with coupon interest rates insignificant to the effective interest rate, interest payment (cash outflow-operating), or principal payment (cash outflow-financing), (

3

) contingent consideration payments made soon after a business combination (cash outflow-investing), (

4

) proceeds from the settlement of insurance claims (classification on basis of the nature of each loss), (

5

) proceeds from the corporate/bank-owned life insurance, proceeds (cash inflow-investing), payments (cash outflow-investing/operating), (

6

) distribution received from equity method investees, cumulative earnings approach (cash inflow-investing), nature of distribution approach (cash inflow-operating/investing), (

7

) beneficial interest in securitization transactions, assets (noncash transaction), cash receipts from trade receivable (cash inflow-investing), (

8

) separately identifiable cash flows (classified based on source-financing/investing/operating).  The amendments in this Update are effective for public business entities for the fiscal years beginning after

December 15, 2017

and interim periods within those fiscal years.  Early adoption is permitted, including adoption in an interim period.  If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.  An entity that elects early adoption must adopt all of the amendments in the same period.   We do

not

expect the adoption of this guidance to have a material impact on our consolidated financial statements.

            In

February 2017,

FASB issued Accounting Standards Update

No.

2017

-

07,

“Compensation—Retirement Benefits (Topic

715

): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU

2017

-

07”

). To improve the consistency, transparency, and usefulness of financial information for users, the amendments in ASU

2017

-

07

require that an employer disaggregate the service cost component from the other components of net benefit cost and report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if

one

is presented. The amendments in ASU

2017

-

07

are effective for public business entities for annual periods beginning after

December 15, 2017,

including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have

not

been issued or made available for issuance. The amendments in ASU

2017

-

07

should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. We intend to adopt ASU

2017

-

07

during the

first

quarter of

2018

and it will have

no

effect on our results of operations because it only impacts the presentation of certain information on the statements of income.

In

March 2017,

FASB issued Accounting Standards Update

No.

2017

-

08,

“Receivables —Nonrefundable Fees and Other Costs (Subtopic

310

-

20

): Premium Amortization on Purchased Callable Debt Securities” (“ASU

2017

-

08”

). ASU

2017

-

08

amends guidance on the amortization period of premiums on certain purchased callable debt securities. Specifically, the amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. The amendments affect all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer at the earliest call date. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2018.

Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. The effect of ASU

2017

-

08

would be lower interest income and a corresponding lower yield as the amortization period would be shortened. As of

June 30, 2017

we do

not

hold any callable debt securities that were purchased at a premium. We intend to adopt ASU

2017

-

08

during the

first

quarter of

2019.

In

May 2017,

FASB issued Accounting Standards Update

No.

2017

-

09,

“Scope of Modification Accounting,” which clarifies Topic

718,

“Compensation – Stock Compensation,” such that an entity must apply modification accounting to changes in the terms or conditions of a share-based payment award unless all of the following criteria are met:  (

1

) the fair value of the modified award is the same as the fair value of the original award immediately before the modification (the ASU indicates that if the modification does

not

affect any of the inputs to the valuation technique used to value the award, the entity is

not

required to estimate the value immediately before and after the modification); (

2

) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the modification; and (

3

) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the modification.  The ASU is effective for all entities for fiscal years beginning after

December 15, 2017,

including interim periods within those years.  Early adoption is permitted, including adoption in an interim period. We do

not

expect the adoption of this guidance to have a material impact on our consolidated financial statements.

XML

Note 3 - Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
(In Thousands, Except Per Share Data)	2017		2016		2017		2016
Numerator:
Net income	$	732	$	223	$	1,281	$	382
Denominator:
Weighted average common shares		5,540		5,743		5,530		5,744
Dilutive potential common shares		139		78		131		74
Weighted average fully diluted shares		5,679		5,821		5,661		5,818
Earnings per share:
Basic	$	0.13	$	0.04	$	0.23	$	0.07
Dilutive	$	0.13	$	0.04	$	0.23	$	0.07

XML

Note 4 - Securities Held to Maturity (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Investments Classified by Contractual Maturity Date [Table Text Block]

(In Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2017
U.S U.S. Government agencies:
Due within one year	$	2,000	$	-	$	1	$	1,999
Due after one year through five years		4,500		-		29		4,471
Total U.S. Government agencies		6,500		-		30		6,470
Mortgage-backed securities		25,014		458		129		25,343
Corporate bonds:
Due after one year through five years		2,023		18		-		2,041
Due after five through ten years		1,000		-		10		990
Due after ten years		4,000		-		227		3,773
Total Corporate bonds		7,023		18		237		6,804
State and political subdivisions:
Due within one year		101		-		1		100
Due after one through five years		661		2		1		662
Due after five through ten years		537		1		-		538
Total State and political subdivisions		1,299		3		2		1,300
Certificates of deposit:
Due within one year		2,160		1		1		2,160
Due after one year through five years		445		1		-		446
Total Certificates of deposit		2,605		2		1		2,606
Total Securities held to maturity	$	42,441	$	481	$	399	$	42,523

(In Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2016
U.S U.S. Government agencies:
Due within one year	$	1,000	$	-	$	2	$	998
Due after one year through five years		5,500		1		40		5,461
Total U.S. Government Agencies		6,500		1		42		6,459
Mortgage-backed securities		24,663		366		224		24,805
Corporate bonds:
Due within one year		2,002		2		-		2,004
Due after one year through five years		2,032		15		13		2,034
Due after five years through ten years		1,000		-		42		958
Due thereafter		4,000		-		253		3,747
Total Corporate bonds		9,034		17		308		8,743
State and political subdivisions:
Due within one year		101		-		-		101
Due after one through five years		663		-		11		652
Due after five through ten years		538		-		18		520
Total State and political subdivisions		1,302		-		29		1,273
Certificates of deposit:
Due within one year		1,670		6		-		1,676
Due after one through five years		935		4		1		938
Total Certificates of deposit		2,605		10		1		2,614
Total Securities held to maturity	$	44,104	$	394	$	604	$	43,894

Schedule of Unrealized Loss on Investments [Table Text Block]

	Less than 12 Months				More than 12 Months				Total
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In T housands)
June 30, 2017
U.S. Government agencies	$	5,470	$	30	$	-	$	-	$	5,470	$	30
Mortgage-backed securities		8,658	$	120		357		9		9,015	$	129
Corporate bonds		-		-		4,763		237		4,763		237
State and political subdivisions		263		2		-		-		263		2
Certificates of deposit		690		1		-		-		690		1
Total securities with gross unrealized losses	$	15,081	$	153	$	5,120	$	246	$	20,201	$	399

	Less than 12 Months				More than 12 Months				Total
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In T housands)
December 31, 2016
U.S. Government agencies	$	5,458	$	42	$	-	$	-	$	5,458	$	42
Mortgage-backed securities		13,456		224		-		-		13,456		224
Corporate bonds		1,988		13		4,705		295		6,693		308
State and political subdivisions		1,172		28		101		1		1,273		29
Certificates of deposit		245		1		-		-		245		1
Total securities with gross unrealized losses	$	22,319	$	308	$	4,806	$	296	$	27,125	$	604

XML

Note 5 - Loans Receivable and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

(In Thousands)	June 30, 2017		December 31, 2016
Residential mortgage:
One-to-four family	$	164,448	$	160,534
Home equity		29,021		32,262
Total residential mortgages		193,469		192,796
Commercial loans:
Commercial and multi-family real estate		153,984		124,656
Construction		29,623		16,554
Commercial and industrial		67,686		45,246
Total commercial loans		251,293		186,456
Consumer:		434		446
Total loans receivable		445,196		379,698
Less:
Loans in process		13,315		6,557
Deferred loan fees		586		658
Allowance for loan losses		4,925		4,476
Total adjustments		18,826		11,691
Loans receivable, net	$	426,370	$	368,007

Allowance for Credit Losses on Financing Receivables [Table Text Block]

(in thousands)	Residential Mortgage			Commercial and Multi- Family Real Estate			Construction			Commercial and Industrial			Consumer			Unallocated			Total
Three Months Ended June 30, 201 7
Allowance for loan losses:
Balance, beginning	$	1,785		$	1,426		$	339		$	1,022		$	7		$	47		$	4,626
Provisions (credits)		26			172			(24	)		141			4			(19	)		300
Loans charged-off		—			—			—			—			(2	)		—			(2	)
Recoveries		1			—			—			—			—			—			1
Balance, ending	$	1,812		$	1,598		$	315		$	1,163		$	9		$	28		$	4,925
Six Months Ended June 30 , 2017
Allowance for loan losses:
Balance, beginning	$	1,808		$	1,441		$	248		$	882		$	6		$	91		$	4,476
Provisions (credits)		3			200			67			282			6			(63	)		495
Loans charged-off		(2	)		(43	)		—			(1	)		(3	)		—			(49	)
Recoveries		3			—			—			—			—			—			3
Balance, ending	$	1,812		$	1,598		$	315		$	1,163		$	9		$	28		$	4,925
Period-end allowance allocated to:
Loans individually evaluated for impairment	$	100		$	—		$	—		$	—		$	—		$	—		$	100
Loans collectively evaluated for impairment		1,712			1,598			315			1,163			9			28			4,925
Ending Balance	$	1,812		$	1,598		$	315		$	1,163		$	9		$	28		$	4,925
Period-end loan balances evaluated for:
Loans individually evaluated for impairment	$	14,562		$	1,750		$	—		$	212		$	—		$	—		$	16,524
Loans collectively evaluated for impairment		178,797			151,945			16,226			67,368			435			—			414,771
Ending Balance	$	193,359		$	153,695		$	16,226		$	67,580		$	435		$	—		$	431,295

(in thousands)	Residential Mortgage			Commercial and Multi- Family Real Estate		Construction		Commercial and Industrial		Consumer			Unallocated			Total
Three Months Ended June 30, 2016
Allowance for loan losses:
Balance, beginning	$	1,899		$	1,084	$	153	$	277	$	7		$	251		$	3,671
Provisions (credits)		(66	)		238		10		37		9			(38	)		190
Loans charged-off		—			—		—		—		(1	)		—			(1	)
Recoveries		9			—		—		—		—			—			9
Balance, ending	$	1,842		$	1,322	$	163	$	314	$	15		$	213		$	3,869
Six Months Ended June 30, 2016
Allowance for loan losses:
Balance, beginning	$	1,927		$	1,015	$	143	$	235	$	9		$	273		$	3,602
Provisions (credits)		(34	)		307		20		79		8			(60	)		320
Loans charged-off		(64	)		—		—		—		(3	)		—			(67	)
Recoveries		13			—		—		—		1			—			14
Balance, ending	$	1,842		$	1,322	$	163	$	314	$	15		$	213		$	3,869
Period-end allowance allocated to:
Loans individually evaluated for impairment	$	—		$	—	$	—	$	—	$	5		$	—		$	5
Loans collectively evaluated for impairment		1,842			1,322		163		314		10			213			3,864
Ending Balance	$	1,842		$	1,322	$	163	$	314	$	15		$	213		$	3,869
Period-end loan balances evaluated for:
Loans individually evaluated for impairment	$	15,214		$	1,193	$	—	$	544	$	5		$	—		$	16,956
Loans collectively evaluated for impairment		177,286			78,705		8,141		14,891		458			—			279,481
Ending Balance	$	192,500		$	79,898	$	8,141	$	15,435	$	463		$	—		$	296,437

Past Due Financing Receivables [Table Text Block]

(In Thousands) As of June 30 , 2017	30-59 Days Past Due and Still Accruing		60-89 Days Past Due and Still Accruing		Greater than 90 Days and Still Accruing		Total Past Due and Still Accruing		Accruing Current Balances		Nonaccrual Loans(1)		Total Loans Receivables
Residential Mortgage
One-to-four family	$	1,863	$	660	$	—	$	2,523	$	155,855	$	5,962	$	164,340
Home equity		630		64		—		694		28,209		116		29,019
Commercial and multi-family real estate		—		—		—		—		152,959		736		153,695
Construction		—		—		—		—		16,226		—		16,226
Commercial and industrial		299		—		—		299		67,179		102		67,580
Consumer		5		2		—		7		428		—		435
Total	$	2,797	$	726	$	—	$	3,523	$	420,856	$	6,916	$	431,295

(In Thousands) As of December 31, 2016	30-59 Days Past Due and Still Accruing		60-89 Days Past Due and Still Accruing		Greater than 90 Days and Still Accruing		Total Past Due and Still Accruing		Accruing Current Balances		Nonaccrual Loans (1)		Total Loans Receivables
Residential Mortgage
One-to-four family	$	2,433	$	1,944	$	—	$	4,377	$	150,260	$	5,744	$	160,381
Home equity		591		34		—		625		31,500		126		32,251
Commercial and multi-family real estate		374		—		—		374		123,182		760		124,316
Construction		—		—		—		—		9,934		—		9,934
Commercial and industrial		—		—		—		—		44,805		350		45,155
Consumer		—		—		—		—		446		—		446
Total	$	3,398	$	1,978	$	—	$	5,376	$	360,127	$	6,980	$	372,483

Impaired Financing Receivables [Table Text Block]

(In thousands) June 30, 2017	Recorded Investment		Loans with No Related Reserve		Loans with Related Reserve		Related Reserve		Contractual Principal Balance		Average Recorded Investment
Residential mortgage
One-to-four family	$	13,240	$	11,339	$	1,901	$	100	$	13,325	$	12,948
Home equity		1,322		1,322		-		-		1,329		1,322
Commercial and multi-family real estate		1,750		1,750		-		-		1,813		1,596
Commercial and industrial		212		212		-		-		212		365
Total	$	16,524	$	14,623	$	1,901	$	100	$	16,679	$	16,231

(In thousands) December 31, 2016	Recorded Investment		Loans with No Related Reserve		Loans with Related Reserve		Related Reserve		Contractual Principal Balance		Average Recorded Investment
Residential mortgage
One-to-four family	$	12,509	$	10,395	$	2,114	$	101	$	12,891	$	12,795
Home equity		1,311		1,311		-		-		1,401		1,981
Commercial and multi-family real estate		1,529		1,529		-		-		2,149		1,278
Commercial and industrial		511		357		154		102		961		548
Consumer		-		-		-		-		-		1
Total	$	15,860	$	13,592	$	2,268	$	203	$	17,402	$	16,603

Financing Receivable Credit Quality Indicators [Table Text Block]

(In Thousands) As of June 30, 2017	Pass		Special Mention		Substandard		Doubtful		Loss		Total
Commercial and multi-family real estate	$	150,781	$	1,831	$	1,083	$	—	$	—	$	153,695
Construction		16,226		—		—		—		—		16,226
Commercial and industrial		67,122		222		236		—		—		67,580
Total	$	234,129	$	2,053	$	1,319	$	—	$	—	$	237,501

(In Thousands) As of December 31, 2016	Pass		Special Mention		Substandard		Doubtful		Loss		Total
Commercial and multi-family real estate	$	122,804	$	—	$	1,512	$	—	$	—	$	124,316
Construction		8,759		1,175		—		—		—		9,934
Commercial and industrial		44,537		86		532		—		—		45,155
Total	$	176,100	$	1,261	$	2,044	$	—	$	—	$	179,405

Schedule of Financing Receivables Performance Status [Table Text Block]

(In Thousands)	Residential mortgage				Consumer				Total Residential and Consumer
	Jun. 30, 2017		Dec. 31, 2016		Jun. 30, 2017		Dec. 31, 2016		Jun. 30, 2017		Dec. 31, 2016
Nonperforming	$	6,078	$	5,870	$	—	$	—	$	6,078	$	5,870
Performing		187,281		186,762		435		446		187,716		187,208
Total	$	193,359	$	192,632	$	435	$	446	$	193,794	$	193,078

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	Three Months Ended June 30, 2017
	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
One-to-four family		2	$	444	$	405
Commercial and multi-family real estate		-		-		263
Commercial		3		153		-
Total		5	$	597	$	668

	Six Months Ended June 30, 2017
	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
			(Dollars in thousands)
Residential Mortgage
One-to-four family		4	$	1,019	$	1,283
Home equity		2		99		-
Commercial and multi-family real estate		1		419		661
Commercial		5		283		-
Total		12	$	1,820	$	1,944

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Note 6 - Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Fair Value Measurements, Nonrecurring [Table Text Block]

	As of June 30, 2017
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(In thousands)
Impaired loans	$	—	$	—	$	1,801	$	1,801

	As of December 31, 2016
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(In thousands)
Impaired loans	$	—	$	—	$	2,065	$	2,065

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block]

	As of June 30, 2017
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
	(Dollars in thousands)
Impaired loans	$	1,801	Appraisal of collateral	Appraisal adjustments		23.0%	(23.0%)
				Liquidation expense		28.0%	(28.0%)

	As of December 31, 2016
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
	(Dollars in thousands)
Impaired loans	$	2,065	Appraisal of	Appraisal
			collateral	adjustments	0%	to	22.6%	(19.4%)
				Liquidation
				expense	5.4%	to	18.3	(6.8%)

Fair Value, by Balance Sheet Grouping [Table Text Block]

	Carrying		Fair		Level 1		Level 2		Level 3
As of June 3 0 , 201 7	Amount		Value		Inputs		Inputs		Inputs
	(In thousands)
Financial assets:
Securities held to maturity	$	42,441	$	42,523	$	-	$	42,523	$	-
Loans receivable (1)		426,370		429,154		-		-		429,154
Financial liabilities:
Certificate of deposits		128,854		130,880		-		130,880		-
Advances from Federal Home Loan Bank of New York		38,675		38,905		-		38,905		-
As of December 31, 2016
Financial assets:
Securities held to maturity	$	44,104	$	43,894	$	—	$	43,894	$	—
Loans receivable (1)		368,007		373,325		—		-		373,325
Financial liabilities:
Certificate of deposits		103,627		105,375		—		105,375		—
Advances from Federal Home Loan Bank of New York		22,675		23,087		—		23,087		—

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Note 7 - Retirement Plans (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Net Benefit Costs [Table Text Block]

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2017		2016			2017		2016
	(In thousands)
Service cost	$	-	$	3		$	-	$	7
Interest cost		5		32			10		55
Amortization of unrecognized loss (gain)		50		4			101		7
Amortization of past service liability		-		(5	)		-		(10	)
Net periodic benefit cost	$	55	$	34		$	111	$	59

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Note 8 - Reclassifications Out of Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

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)				Amount Reclassified from Accumulated Other Comprehensive Income (Loss) (a)			Affected Line Item in the Consolidated Statements of Comprehensive Income
	Three Months Ended June 3 0 , 201 7				Six Months Ended June 3 0 , 201 7
	(In thousands)
Amortization of defined benefit pension items:
Prior service costs	$	-		(b)	$	-		Directors compensation
Unrecognized loss		(50	)	(b)		(101	)	Directors compensation
Total before tax		(50	)			(101	)	Total before tax
Income tax expense		20				40		Income tax expense
Total reclassifications for the period	$	(30	)		$	(61	)	Net of tax

Details about Accumulated Other Comprehensive  Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss) (a)				Amount Reclassified from Accumulated Other Comprehensive Income (Loss) (a)			Affected Line Item in the Consolidated Statements of Comprehensive Income
	Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	(In thousands)
Amortization of defined benefit pension items:
Prior service costs	$	4		(b)	$	9		Directors compensation
Unrecognized loss		(4	)	(b)		(7	)	Directors compensation
		-				2		Total before tax
		-				(1	)	Income tax expense
Total reclassifications for the period	$	-			$	1		Net of tax

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Note 1 - Organization and Business (Details Textual) - Subsequent Event [Member] $ / shares in Units, $ in Millions	Aug. 04, 2017 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercised with No Shares Issued | shares	212,468
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price	$ 9.4323
Share Price	$ 17.30
Payment For Stock Options Exercised | $	$ 1.7

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Note 2 - Basis of Consolidated Financial Statement Presentation (Details Textual) xbrli-pure in Thousands	Jun. 30, 2017
Callable Debt Securities Purchased at Premium	0

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Note 3 - Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Net income	$ 732	$ 223	$ 1,281	$ 382
Weighted average common shares (in shares)	5,540	5,743	5,530	5,744
Dilutive potential common shares (in shares)	139	78	131	74
Weighted average fully diluted shares (in shares)	5,679	5,821	5,661	5,818
Basic (in dollars per share)	$ 0.13	$ 0.04	$ 0.23	$ 0.07
Dilutive (in dollars per share)	$ 0.13	$ 0.04	$ 0.23	$ 0.07

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Note 4 - Securities Held to Maturity (Details Textual) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Other than Temporary Impairment Losses, Investments, Held-to-maturity Securities	$ 0		$ 0
Held-to-maturity Securities Pledged as Collateral	1,000		$ 1,000
Proceeds from Sale of Held-to-maturity Securities	$ 0	$ 0
Certificates of Deposit [Member]
Held-to-maturity, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	3		1
US Government Agencies Debt Securities [Member]
Held-to-maturity, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	5		5
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Held-to-maturity, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	13		14
Corporate Debt Securities [Member]
Held-to-maturity, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	3		6
US States and Political Subdivisions Debt Securities [Member]
Held-to-maturity, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	2		8

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Note 4 - Securities Held to Maturity - Held-to-maturity Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Amortized cost	$ 42,441	$ 44,104
Gross unrealized gains	481	394
Gross unrealized losses	399	604
Estimated fair value	42,523	43,894
Certificates of Deposit [Member]
Amortized cost, due within one year		1,670
Gross unrealized gains, due within one year		6
Gross unrealized losses, due within one year
Estimated fair value, due within one year		1,676
Amortized cost, due after one year to five years	445	935
Gross unrealized gains, due after one year to five years	1	4
Gross unrealized losses, due after one year to five years		1
Estimated fair value, due after one year to five years	446	938
Amortized cost	2,605	2,605
Gross unrealized gains	2	10
Gross unrealized losses	1	1
Estimated fair value	2,606	2,614
US Government Agencies Debt Securities [Member]
Amortized cost, due within one year	2,000	1,000
Gross unrealized gains, due within one year
Gross unrealized losses, due within one year	1	2
Estimated fair value, due within one year	1,999	998
Amortized cost, due after one year to five years	4,500	5,500
Gross unrealized gains, due after one year to five years		1
Gross unrealized losses, due after one year to five years	29	40
Estimated fair value, due after one year to five years	4,471	5,461
Amortized cost	6,500	6,500
Gross unrealized gains		1
Gross unrealized losses	30	42
Estimated fair value	6,470	6,459
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Amortized cost, without single maturity date	25,014	24,663
Gross unrealized gains, without single maturity date	458	366
Gross unrealized losses, without single maturity date	129	224
Estimated fair value, without single maturity date	25,343	24,805
Corporate Debt Securities [Member]
Amortized cost, due within one year	101	2,002
Gross unrealized gains, due within one year		2
Gross unrealized losses, due within one year	1
Estimated fair value, due within one year	100	2,004
Amortized cost, due after one year to five years	2,023	2,032
Gross unrealized gains, due after one year to five years	18	15
Gross unrealized losses, due after one year to five years		13
Estimated fair value, due after one year to five years	2,041	2,034
Amortized cost, due after five through ten years	1,000	1,000
Gross unrealized gains, due after five through ten years
Gross unrealized losses, due after five through ten years	10	42
Estimated fair value, due after five through ten years	990	958
Amortized cost, due after ten years	4,000	4,000
Gross unrealized gains, due after ten years
Gross unrealized gains, due after ten years
Gross unrealized losses, due after ten years	227	253
Estimated fair value, due after ten years	3,773	3,747
Amortized cost	7,023	9,034
Gross unrealized gains	18	17
Gross unrealized losses	237	308
Estimated fair value	6,804	8,743
US States and Political Subdivisions Debt Securities [Member]
Amortized cost, due within one year	2,160	101
Gross unrealized gains, due within one year	1
Gross unrealized losses, due within one year	1
Estimated fair value, due within one year	2,160	101
Amortized cost, due after one year to five years	661	663
Gross unrealized gains, due after one year to five years	2
Gross unrealized losses, due after one year to five years	1	11
Estimated fair value, due after one year to five years	662	652
Amortized cost, due after five through ten years	537	538
Gross unrealized gains, due after five through ten years	1
Gross unrealized losses, due after five through ten years		18
Estimated fair value, due after five through ten years	538	520
Amortized cost	1,299	1,302
Gross unrealized gains	3
Gross unrealized losses	2	29
Estimated fair value	$ 1,300	$ 1,273

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Note 4 - Securities Held to Maturity - Held-to-maturity Securities in Unrealized Loss Positions (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Securities in an unrealized loss position, less than 12 months, gross unrealized losses	$ 153	$ 308
Securities in an unrealized loss position, more than 12 months, fair value	5,120	4,806
Securities in an unrealized loss position, more than 12 months, gross unrealized losses	246	296
Securities in an unrealized loss position, fair value	20,201	27,125
Securities in an unrealized loss position, gross unrealized losses	399	604
Securities in an unrealized loss position, less than 12 months, fair value	15,081	22,319
Certificates of Deposit [Member]
Securities in an unrealized loss position, less than 12 months, gross unrealized losses	1	1
Securities in an unrealized loss position, more than 12 months, fair value
Securities in an unrealized loss position, more than 12 months, gross unrealized losses
Securities in an unrealized loss position, fair value	690	245
Securities in an unrealized loss position, gross unrealized losses	1	1
Securities in an unrealized loss position, less than 12 months, fair value	690	245
US Government Agencies Debt Securities [Member]
Securities in an unrealized loss position, less than 12 months, gross unrealized losses	30	42
Securities in an unrealized loss position, more than 12 months, fair value
Securities in an unrealized loss position, more than 12 months, gross unrealized losses
Securities in an unrealized loss position, fair value	5,470	5,458
Securities in an unrealized loss position, gross unrealized losses	30	42
Securities in an unrealized loss position, less than 12 months, fair value	5,470	5,458
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Securities in an unrealized loss position, less than 12 months, gross unrealized losses	120	224
Securities in an unrealized loss position, more than 12 months, fair value	357
Securities in an unrealized loss position, more than 12 months, gross unrealized losses	9
Securities in an unrealized loss position, fair value	9,015	13,456
Securities in an unrealized loss position, gross unrealized losses	129	224
Securities in an unrealized loss position, less than 12 months, fair value	8,658	13,456
Corporate Debt Securities [Member]
Securities in an unrealized loss position, less than 12 months, gross unrealized losses		13
Securities in an unrealized loss position, more than 12 months, fair value	4,763	4,705
Securities in an unrealized loss position, more than 12 months, gross unrealized losses	237	295
Securities in an unrealized loss position, fair value	4,763	6,693
Securities in an unrealized loss position, gross unrealized losses	237	308
Securities in an unrealized loss position, less than 12 months, fair value		1,988
US States and Political Subdivisions Debt Securities [Member]
Securities in an unrealized loss position, less than 12 months, gross unrealized losses	2	28
Securities in an unrealized loss position, more than 12 months, fair value		101
Securities in an unrealized loss position, more than 12 months, gross unrealized losses		1
Securities in an unrealized loss position, fair value	263	1,273
Securities in an unrealized loss position, gross unrealized losses	2	29
Securities in an unrealized loss position, less than 12 months, fair value	$ 263	$ 1,172

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Note 5 - Loans Receivable and Allowance for Credit Losses (Details Textual)		3 Months Ended			6 Months Ended			12 Months Ended
		Jun. 30, 2017 USD ($)		Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($)		Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Financing Receivable, Recorded Investment, Nonaccrual Status		$ 6,916,000	[1]		$ 6,916,000	[1]		$ 6,980,000	[2]
Financing Receivable, Modifications, Recorded Investment		11,800,000			11,800,000			10,700,000
Impaired Financing Receivable, Interest Income, Accrual Method		89,000		$ 153,000	195,000		$ 318,000
Impaired Financing Receivable, Average Recorded Investment		16,400,000		$ 16,800,000	16,231,000		$ 16,900,000	16,603,000
Mortgage Loans in Process of Foreclosure, Amount		$ 2,400,000			$ 2,400,000			1,800,000
Financing Receivable, Number of Troubled Debt Restructurings Into Which Loans Were Modified		2			5
Real Estate Acquired Through Foreclosure		$ 0			$ 0			0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts		0		0	0		0
Financing Receivable, Modifications, Number of Contracts		5		0	12		0
Commercial Portfolio Segment [Member]
Financing Receivable, Modifications, Number of Contracts		3			5
Commercial Portfolio Segment [Member] | Fixed Interest Rate to Adjustable Interest Rate [Member]
Financing Receivable, Modifications, Number of Contracts		3			3
Residential Portfolio Segment [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status		$ 116,000	[1]		$ 116,000	[1]		126,000	[2]
Impaired Financing Receivable, Average Recorded Investment					$ 1,322,000			1,981,000
Financing Receivable, Modifications, Number of Contracts					2
Residential Portfolio Segment [Member] | One-to-Four Family [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status	[1]	$ 5,962,000			$ 5,962,000
Impaired Financing Receivable, Average Recorded Investment					$ 12,948,000			12,795,000
Financing Receivable, Modifications, Number of Contracts		2			4
Residential Portfolio Segment [Member] | Fixed Interest Rate to Adjustable Interest Rate [Member] | Home Equity Loan [Member]
Financing Receivable, Modifications, Number of Contracts					1
Residential Portfolio Segment [Member] | Fixed Interest Rate to Adjustable Interest Rate [Member] | One-to-Four Family [Member]
Financing Receivable, Modifications, Number of Contracts		1			1
Residential Portfolio Segment [Member] | Extended Maturity [Member] | Home Equity Loan [Member]
Financing Receivable, Modifications, Number of Contracts					1
Residential Portfolio Segment [Member] | Extended Maturity [Member] | One-to-Four Family [Member]
Financing Receivable, Modifications, Number of Contracts					1
Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status		$ 736,000	[1]		$ 736,000	[1]		760,000	[2]
Financing Receivable, Modifications, Number of Contracts					1
Commercial and Multi-Family Real Estate Portfolio Segment [Member] | Extended Maturity [Member]
Financing Receivable, Number of Troubled Debt Restructurings Into Which Loans Were Modified					1
Commercial Line of Credit [Member] | Extended Maturity [Member]
Financing Receivable, Modifications, Number of Contracts					1
Performing Financial Instruments [Member]
Financing Receivable, Modifications, Recorded Investment		$ 9,200,000			$ 9,200,000			8,500,000
Nonperforming Financial Instruments [Member]
Financing Receivable, Modifications, Recorded Investment		2,600,000			2,600,000			2,200,000
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status		4,555,000			4,555,000			5,521,000
Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status		0			0			30,000
Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status		703,000			703,000			964,000
Financing Receivables, 1 to 29 Days Past Due [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status		$ 1,658,000			$ 1,658,000			$ 464,000

[1] Nonaccrual loans at June 30, 2017, included $4,555,000 that were 90 days or more delinquent, none that were 60-89 days delinquent, $703,000 that were 30-59 days delinquent, and $1,658,000 that were current or less than 30 days delinquent.

[2] Nonaccrual loans at December 31, 2016, included $5,521,000 that were 90 days or more delinquent, $30,000 that were 60-89 days delinquent, $964,000 that were 30-59 days delinquent, and $464,000 that were current or less than 30 days delinquent.

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Note 5 - Loans Receivable and Allowance for Credit Losses - Composition of Total Loans Receivable (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Loans receivable, gross	$ 445,196	$ 379,698
Loans in process	13,315	6,557
Deferred loan fees	586	658
Loans receivable, allowance for loan losses	4,925	4,476
Total adjustments	18,826	11,691
Loans receivable, net	426,370	368,007
Residential Portfolio Segment [Member]
Loans receivable, gross	193,469	192,796
Residential Portfolio Segment [Member] | One-to-Four Family [Member]
Loans receivable, gross	164,448	160,534
Residential Portfolio Segment [Member] | Home Equity Loan [Member]
Loans receivable, gross	29,021	32,262
Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Loans receivable, gross	153,984	124,656
Construction Portfolio Segment [Member]
Loans receivable, gross	29,623	16,554
Commercial and Industrial Portfolio Segment [Member]
Loans receivable, gross	67,686	45,246
Commercial and Multi-family Real Estate, Construction and Commercial and Industrial Portfolio Segment [Member]
Loans receivable, gross	251,293	186,456
Consumer Portfolio Segment [Member]
Loans receivable, gross	$ 434	$ 446

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Note 5 - Loans Receivable and Allowance for Credit Losses - Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Loans individually evaluated for impairment	$ 16,524	$ 16,956	$ 16,524	$ 16,956
Loans collectively evaluated for impairment	414,771	279,481	414,771	279,481
Ending Balance	431,295	296,437	431,295	296,437
Loans individually evaluated for impairment	100	5	100	5
Loans collectively evaluated for impairment	4,925	3,864	4,925	3,864
Balance	4,925	3,869	4,925	3,869
Balance	4,626	3,671	4,476	3,602
Provisions (credits)	300	190	495	320
Loans charged-off	(2)	(1)	(49)	(67)
Recoveries	1	9	3	14
Residential Portfolio Segment [Member]
Loans individually evaluated for impairment	14,562	15,214	14,562	15,214
Loans collectively evaluated for impairment	178,797	177,286	178,797	177,286
Ending Balance	193,359	192,500	193,359	192,500
Loans individually evaluated for impairment	100		100
Loans collectively evaluated for impairment	1,712	1,842	1,712	1,842
Balance	1,812	1,842	1,812	1,842
Balance	1,785	1,899	1,808	1,927
Provisions (credits)	26	(66)	3	(34)
Loans charged-off			(2)	(64)
Recoveries	1	9	3	13
Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Loans individually evaluated for impairment	1,750	1,193	1,750	1,193
Loans collectively evaluated for impairment	151,945	78,705	151,945	78,705
Ending Balance	153,695	79,898	153,695	79,898
Loans individually evaluated for impairment
Loans collectively evaluated for impairment	1,598	1,322	1,598	1,322
Balance	1,598	1,322	1,598	1,322
Balance	1,426	1,084	1,441	1,015
Provisions (credits)	172	238	200	307
Loans charged-off			(43)
Recoveries
Construction Portfolio Segment [Member]
Loans individually evaluated for impairment
Loans collectively evaluated for impairment	16,226	8,141	16,226	8,141
Ending Balance	16,226	8,141	16,226	8,141
Loans individually evaluated for impairment
Loans collectively evaluated for impairment	315	163	315	163
Balance	315	163	315	163
Balance	339	153	248	143
Provisions (credits)	(24)	10	67	20
Loans charged-off
Recoveries
Commercial and Industrial Portfolio Segment [Member]
Loans individually evaluated for impairment	212	544	212	544
Loans collectively evaluated for impairment	67,368	14,891	67,368	14,891
Ending Balance	67,580	15,435	67,580	15,435
Loans individually evaluated for impairment
Loans collectively evaluated for impairment	1,163	314	1,163	314
Balance	1,163	314	1,163	314
Balance	1,022	277	882	235
Provisions (credits)	141	37	282	79
Loans charged-off			(1)
Recoveries
Consumer Portfolio Segment [Member]
Loans individually evaluated for impairment		5		5
Loans collectively evaluated for impairment	435	458	435	458
Ending Balance	435	463	435	463
Loans individually evaluated for impairment		5		5
Loans collectively evaluated for impairment	9	10	9	10
Balance	9	15	9	15
Balance	7	7	6	9
Provisions (credits)	4	9	6	8
Loans charged-off	(2)	(1)	(3)	(3)
Recoveries				1
Unallocated Financing Receivables [Member]
Loans individually evaluated for impairment
Loans collectively evaluated for impairment
Ending Balance
Loans individually evaluated for impairment
Loans collectively evaluated for impairment	28	213	28	213
Balance	28	213	28	213
Balance	47	251	91	273
Provisions (credits)	(19)	(38)	(63)	(60)
Loans charged-off
Recoveries

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Note 5 - Loans Receivable and Allowance for Credit Losses - Past Due Financing Receivables (Details) - USD ($)		Jun. 30, 2017		Dec. 31, 2016		Jun. 30, 2016
Total Loans Receivables		$ 431,295,000		$ 372,483,000		$ 296,437,000
Loans receivable, past due		3,523,000		5,376,000
Current		420,856,000		360,127,000
Nonaccrual Loans		6,916,000	[1]	6,980,000	[2]
Residential Portfolio Segment [Member]
Total Loans Receivables		193,359,000		192,632,000		192,500,000
Residential Portfolio Segment [Member] | One-to-Four Family [Member]
Total Loans Receivables		164,340,000
Loans receivable, past due		2,523,000
Current		155,855,000
Nonaccrual Loans	[1]	5,962,000
Residential Portfolio Segment [Member] | One-to-Four Family Occupied [Member]
Total Loans Receivables				160,381,000
Loans receivable, past due				4,377,000
Current				150,260,000
Nonaccrual Loans	[2]			5,744,000
Residential Portfolio Segment [Member] | Home Equity Loan [Member]
Total Loans Receivables		29,019,000		32,251,000
Loans receivable, past due		694,000		625,000
Current		28,209,000		31,500,000
Nonaccrual Loans		116,000	[1]	126,000	[2]
Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Total Loans Receivables		153,695,000		124,316,000		79,898,000
Loans receivable, past due				374,000
Current		152,959,000		123,182,000
Nonaccrual Loans		736,000	[1]	760,000	[2]
Construction Portfolio Segment [Member]
Total Loans Receivables		16,226,000		9,934,000		8,141,000
Loans receivable, past due
Current		16,226,000		9,934,000
Nonaccrual Loans			[1]		[2]
Commercial and Industrial Portfolio Segment [Member]
Total Loans Receivables		67,580,000		45,155,000		15,435,000
Loans receivable, past due		299,000
Current		67,179,000		44,805,000
Nonaccrual Loans		102,000	[1]	350,000	[2]
Consumer Portfolio Segment [Member]
Total Loans Receivables		435,000		446,000		$ 463,000
Loans receivable, past due		7,000
Current		428,000		446,000
Nonaccrual Loans			[1]		[2]
Financing Receivables, 30 to 59 Days Past Due [Member]
Loans receivable, past due		2,797,000		3,398,000
Nonaccrual Loans		703,000		964,000
Financing Receivables, 30 to 59 Days Past Due [Member] | Residential Portfolio Segment [Member] | One-to-Four Family [Member]
Loans receivable, past due		1,863,000
Financing Receivables, 30 to 59 Days Past Due [Member] | Residential Portfolio Segment [Member] | One-to-Four Family Occupied [Member]
Loans receivable, past due				2,433,000
Financing Receivables, 30 to 59 Days Past Due [Member] | Residential Portfolio Segment [Member] | Home Equity Loan [Member]
Loans receivable, past due		630,000		591,000
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Loans receivable, past due				374,000
Financing Receivables, 30 to 59 Days Past Due [Member] | Construction Portfolio Segment [Member]
Loans receivable, past due
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial and Industrial Portfolio Segment [Member]
Loans receivable, past due		299,000
Financing Receivables, 30 to 59 Days Past Due [Member] | Consumer Portfolio Segment [Member]
Loans receivable, past due		5,000
Financing Receivables, 60 to 89 Days Past Due [Member]
Loans receivable, past due		726,000		1,978,000
Nonaccrual Loans		0		30,000
Financing Receivables, 60 to 89 Days Past Due [Member] | Residential Portfolio Segment [Member] | One-to-Four Family [Member]
Loans receivable, past due		660,000
Financing Receivables, 60 to 89 Days Past Due [Member] | Residential Portfolio Segment [Member] | One-to-Four Family Occupied [Member]
Loans receivable, past due				1,944,000
Financing Receivables, 60 to 89 Days Past Due [Member] | Residential Portfolio Segment [Member] | Home Equity Loan [Member]
Loans receivable, past due		64,000		34,000
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Loans receivable, past due
Financing Receivables, 60 to 89 Days Past Due [Member] | Construction Portfolio Segment [Member]
Loans receivable, past due
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial and Industrial Portfolio Segment [Member]
Loans receivable, past due
Financing Receivables, 60 to 89 Days Past Due [Member] | Consumer Portfolio Segment [Member]
Loans receivable, past due		2,000
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans receivable, past due
Nonaccrual Loans		4,555,000		5,521,000
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Residential Portfolio Segment [Member] | One-to-Four Family [Member]
Loans receivable, past due
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Residential Portfolio Segment [Member] | One-to-Four Family Occupied [Member]
Loans receivable, past due
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Residential Portfolio Segment [Member] | Home Equity Loan [Member]
Loans receivable, past due
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Loans receivable, past due
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Construction Portfolio Segment [Member]
Loans receivable, past due
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial and Industrial Portfolio Segment [Member]
Loans receivable, past due
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Consumer Portfolio Segment [Member]
Loans receivable, past due

[1] Nonaccrual loans at June 30, 2017, included $4,555,000 that were 90 days or more delinquent, none that were 60-89 days delinquent, $703,000 that were 30-59 days delinquent, and $1,658,000 that were current or less than 30 days delinquent.

[2] Nonaccrual loans at December 31, 2016, included $5,521,000 that were 90 days or more delinquent, $30,000 that were 60-89 days delinquent, $964,000 that were 30-59 days delinquent, and $464,000 that were current or less than 30 days delinquent.

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Note 5 - Loans Receivable and Allowance for Credit Losses - Impaired Loans by Class (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Average loan balances	$ 16,400,000	$ 16,800,000	$ 16,231,000	$ 16,900,000	$ 16,603,000
Recorded investment	16,524,000		16,524,000		15,860,000
Loans with no related reserve	14,623,000		14,623,000		13,592,000
Loans with related reserve	1,901,000		1,901,000		2,268,000
Related reserve	100,000		100,000		203,000
Contractual principal balance	16,679,000		16,679,000		17,402,000
Residential Portfolio Segment [Member] | One-to-Four Family [Member]
Average loan balances			12,948,000		12,795,000
Recorded investment	13,240,000		13,240,000		12,509,000
Loans with no related reserve	11,339,000		11,339,000		10,395,000
Loans with related reserve	1,901,000		1,901,000		2,114,000
Related reserve	100,000		100,000		101,000
Contractual principal balance	13,325,000		13,325,000		12,891,000
Residential Portfolio Segment [Member] | Home Equity Loan [Member]
Average loan balances			1,322,000		1,981,000
Recorded investment	1,322,000		1,322,000		1,311,000
Loans with no related reserve	1,322,000		1,322,000		1,311,000
Loans with related reserve
Related reserve
Contractual principal balance	1,329,000		1,329,000		1,401,000
Residential Portfolio Segment [Member] | Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Average loan balances			1,596,000		1,278,000
Recorded investment	1,750,000		1,750,000		1,529,000
Loans with no related reserve	1,750,000		1,750,000		1,529,000
Loans with related reserve
Related reserve
Contractual principal balance	1,813,000		1,813,000		2,149,000
Commercial and Industrial Portfolio Segment [Member]
Average loan balances			365,000		548,000
Recorded investment	212,000		212,000		511,000
Loans with no related reserve	212,000		212,000		357,000
Loans with related reserve					154,000
Related reserve					102,000
Contractual principal balance	$ 212,000		$ 212,000		961,000
Consumer Portfolio Segment [Member]
Average loan balances					1,000
Recorded investment
Loans with no related reserve
Loans with related reserve
Related reserve
Contractual principal balance

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Note 5 - Loans Receivable and Allowance for Credit Losses - Financing Receivable Credit Quality Indicators (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Loans receivable	$ 237,501	$ 179,405
Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Loans receivable	153,695	124,316
Construction [Member]
Loans receivable	16,226	9,934
Commercial and Industrial Portfolio Segment [Member]
Loans receivable	67,580	45,155
Pass [Member]
Loans receivable	234,129	176,100
Pass [Member] | Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Loans receivable	150,781	122,804
Pass [Member] | Construction [Member]
Loans receivable	16,226	8,759
Pass [Member] | Commercial and Industrial Portfolio Segment [Member]
Loans receivable	67,122	44,537
Special Mention [Member]
Loans receivable	2,053	1,261
Special Mention [Member] | Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Loans receivable	1,831
Special Mention [Member] | Construction [Member]
Loans receivable		1,175
Special Mention [Member] | Commercial and Industrial Portfolio Segment [Member]
Loans receivable	222	86
Substandard [Member]
Loans receivable	1,319	2,044
Substandard [Member] | Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Loans receivable	1,083	1,512
Substandard [Member] | Construction [Member]
Loans receivable
Substandard [Member] | Commercial and Industrial Portfolio Segment [Member]
Loans receivable	236	532
Doubtful [Member]
Loans receivable
Doubtful [Member] | Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Loans receivable
Doubtful [Member] | Construction [Member]
Loans receivable
Doubtful [Member] | Commercial and Industrial Portfolio Segment [Member]
Loans receivable
Loss [Member]
Loans receivable
Loss [Member] | Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Loans receivable
Loss [Member] | Construction [Member]
Loans receivable
Loss [Member] | Commercial and Industrial Portfolio Segment [Member]
Loans receivable

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Note 5 - Loans Receivable and Allowance for Credit Losses - Impaired Financing Receivable Performance Status (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Total Loans Receivables	$ 431,295	$ 372,483	$ 296,437
Residential Portfolio Segment [Member]
Total Loans Receivables	193,359	192,632	192,500
Consumer Portfolio Segment [Member]
Total Loans Receivables	435	446	$ 463
Total Residential and Consumer [Member]
Total Loans Receivables	193,794	193,078
Nonperforming Financial Instruments [Member] | Residential Portfolio Segment [Member]
Total Loans Receivables	6,078	5,870
Nonperforming Financial Instruments [Member] | Consumer Portfolio Segment [Member]
Total Loans Receivables
Nonperforming Financial Instruments [Member] | Total Residential and Consumer [Member]
Total Loans Receivables	6,078	5,870
Performing Financial Instruments [Member] | Residential Portfolio Segment [Member]
Total Loans Receivables	187,281	186,762
Performing Financial Instruments [Member] | Consumer Portfolio Segment [Member]
Total Loans Receivables	435	446
Performing Financial Instruments [Member] | Total Residential and Consumer [Member]
Total Loans Receivables	$ 187,716	$ 187,208

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Note 5 - Loans Receivable and Allowance for Credit Losses - Class Loans Modified into TDRs (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016	Jun. 30, 2017 USD ($)	Jun. 30, 2016
Troubled Debt Restructurings, Pre-Modification Outstanding Recorded Investments	$ 597		$ 1,820
Troubled Debt Restructurings, Post-Modification Outstanding Recorded Investments	$ 668		$ 1,944
Troubled Debt Restructurings, Number of Contracts	5	0	12	0
Residential Portfolio Segment [Member] | One-to-Four Family [Member]
Troubled Debt Restructurings, Pre-Modification Outstanding Recorded Investments	$ 444		$ 1,019
Troubled Debt Restructurings, Post-Modification Outstanding Recorded Investments	$ 405		$ 1,283
Troubled Debt Restructurings, Number of Contracts	2		4
Residential Portfolio Segment [Member] | Home Equity Loan [Member]
Troubled Debt Restructurings, Pre-Modification Outstanding Recorded Investments			$ 99
Troubled Debt Restructurings, Post-Modification Outstanding Recorded Investments
Troubled Debt Restructurings, Number of Contracts			2
Commercial and Multi-Family Real Estate Portfolio Segment [Member]
Troubled Debt Restructurings, Pre-Modification Outstanding Recorded Investments			$ 419
Troubled Debt Restructurings, Post-Modification Outstanding Recorded Investments	$ 263		$ 661
Troubled Debt Restructurings, Number of Contracts			1
Commercial Portfolio Segment [Member]
Troubled Debt Restructurings, Pre-Modification Outstanding Recorded Investments	$ 153		$ 283
Troubled Debt Restructurings, Post-Modification Outstanding Recorded Investments
Troubled Debt Restructurings, Number of Contracts	3		5

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Note 6 - Fair Value Measurements (Details Textual) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Assets, Fair Value Disclosure, Recurring	$ 0	$ 0

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Note 6 - Fair Value Measurements - Fair Value Assets Measured on Nonrecurring Basis (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Impaired loans	$ 1,801	$ 2,065
Fair Value, Inputs, Level 1 [Member]
Impaired loans
Fair Value, Inputs, Level 2 [Member]
Impaired loans
Fair Value, Inputs, Level 3 [Member]
Impaired loans	$ 1,801	$ 2,065

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Note 6 - Fair Value Measurements - Additional Qualitative Information About Level 3 Assets (Details) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Appraisal Adjustments [Member]
Range	23.00%
Fair value estimate	$ 1,801	$ 2,065
Valuation techniques	Appraisal of collateral	Appraisal of collateral
Appraisal Adjustments [Member] | Weighted Average [Member]
Range	23.00%	19.40%
Appraisal Adjustments [Member] | Minimum [Member]
Range		0.00%
Appraisal Adjustments [Member] | Maximum [Member]
Range		22.60%
Liquidation Expenses [Member]
Range	28.00%
Fair value estimate
Liquidation Expenses [Member] | Weighted Average [Member]
Range	28.00%	6.80%
Liquidation Expenses [Member] | Minimum [Member]
Range		5.40%
Liquidation Expenses [Member] | Maximum [Member]
Range		18.30%

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Note 6 - Fair Value Measurements - Fair Value, Assets and Liabilities (Details) - USD ($) $ in Thousands		Jun. 30, 2017	Dec. 31, 2016
Estimated fair value		$ 42,523	$ 43,894
Reported Value Measurement [Member]
Loans receivable	[1]	426,370	368,007
Certificate of deposits		128,854	103,627
Advances from Federal Home Loan Bank of New York		38,675	22,675
Estimated fair value		42,441	44,104
Estimate of Fair Value Measurement [Member]
Loans receivable	[1]	429,154	373,325
Certificate of deposits		130,880	105,375
Advances from Federal Home Loan Bank of New York		38,905	23,087
Estimated fair value		42,523	43,894
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Loans receivable	[1]
Certificate of deposits
Advances from Federal Home Loan Bank of New York
Estimated fair value
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Loans receivable	[1]
Certificate of deposits		130,880	105,375
Advances from Federal Home Loan Bank of New York		38,905	23,087
Estimated fair value		42,523	43,894
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Loans receivable	[1]	429,154	373,325
Certificate of deposits
Advances from Federal Home Loan Bank of New York
Estimated fair value

[1] Includes impaired loans measured at fair value on a non-recurring basis as discussed above.

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Note 7 - Retirement Plans (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year		$ 84,000
Defined Benefit Plan, Plan Assets, Contributions by Employer	$ 42,000

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Note 7 - Retirement Plans - Net Periodic Pension Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Amortization of unrecognized loss (gain)	$ (30)	$ (2)	$ (61)	$ (4)
Directors' Retirement Plan and Executive Incentive Retirement Plan [Member]
Service cost		3		7
Interest cost	5	32	10	55
Amortization of unrecognized loss (gain)	50	4	101	7
Amortization of past service liability		(5)		(10)
Net periodic benefit cost	$ 55	$ 34	$ 111	$ 59

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Note 8 - Reclassifications out of Accumulated Other Comprehensive Income - Reclassifications out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands		3 Months Ended				6 Months Ended
		Jun. 30, 2017		Jun. 30, 2016		Jun. 30, 2017	Jun. 30, 2016
Total reclassifications for the period	[1]	$ (30)				$ (61)	$ 1
Prior service costs	[1],[2]			4			9
Unrecognized loss	[1]	(50)	[2]	(4)	[2]	(101)	(7)
Total before tax	[1]	(50)				(101)	2
Income tax expense	[1]	$ 20				$ 40	$ (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 7 for additional details).