10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2017

OR

[   ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______________ to _______________

Commission File No. 000-55530

New Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Maryland	47-4314938
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
45 North Whittaker Street, New Buffalo, Michigan	49117
(Address of Principal Executive Offices)	(Zip Code)

(269) 469-2222

(Registrant’s telephone number)

N/A

(Former name or former address, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such 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 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, smaller reporting company, or an emerging growth company. See the 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 [   ] (Do not check if smaller reporting company) Emerging growth company [ X ]	Smaller reporting company [X]

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]

As of May 12, 2017, the latest practicable date, 696,600 shares of the Registrant’s common stock, par value $0.01 per share, were issued and outstanding.

New Bancorp, Inc.

Form 10-Q

Index

		Page
Part I. Financial Information
Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2017 (unaudited) and December 31, 2016	2
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2017 and 2016 (unaudited)	3
	Condensed Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2017	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2017 and 2016 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 4.	Controls and Procedures	33
Part II. Other Information
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	34
	Signature Pages	35

1

Part I. – Financial Information

Item 1. Financial Statements

New Bancorp, Inc.

Condensed Consolidated Balance Sheets

March 31, 2017 (Unaudited) and December 31, 2016

(In Thousands, except share data)

	March 31,			December 31,
	2017			2016
Assets
Cash and due from banks	$	1,510		$	1,419
Interest-earning demand deposits		9,110			8,438
Federal funds sold		4,840			-
Cash and cash equivalents		15,460			9,857
Interest-earning time deposits in banks		992			992
Loans, net of allowance for loan losses of $1,042, and $1,063 at March 31, 2017 and December 31, 2016, respectively		86,695			83,008
Premises and equipment		1,896			1,934
Federal Home Loan Bank stock		468			468
Foreclosed real estate held for sale, net		561			586
Accrued interest receivable		221			203
Bank owned life insurance		5,460			5,418
Mortgage servicing rights		566			483
Prepaid expenses and other assets		2,786			269
Total assets	$	115,105		$	103,218
Liabilities and Shareholders' Equity
Liabilities
Deposits
Demand	$	29,879		$	28,676
Savings and money market accounts		15,984			16,404
Time		43,595			31,761
Total deposits		89,458			76,841
Federal funds purchased		-			1,000
Borrowings		10,027			10,027
Other liabilities		1,060			781
Total liabilities		100,545			88,649
Commitments and Contingencies		-			-
Redeemable common stock held by Employee Stock Ownership Plan (ESOP)		91			73
Shareholders' Equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued		-			-
Common stock, $0.01 par value, 4,000,000 shares authorized, 696,600 shares issued and outstanding		7			7
Additional paid-in capital		5,764			5,761
Unearned ESOP shares		(494	)		(501	)
Retained earnings		9,283			9,302
Total shareholders' equity		14,560			14,569
Less maximum cash obligation related to ESOP shares		(91	)		(73	)
Total shareholders' equity less maximum cash obligation related to ESOP shares		14,469			14,496
Total liabilities and shareholders' equity	$	115,105		$	103,218

The accompanying notes are an integral part of these financial statements.

2

New Bancorp, Inc.

Condensed Consolidated Statements of Operations

For the Three Months Ended March 31, 2017 and 2016 (Unaudited)

(In Thousands, except per share data)

	Three Months Ended March 31,
	2017			2016
Interest Income
Loans	$	931		$	825
Interest-bearing deposits		18			12
Total interest income		949			837
Interest Expense
Deposits		166			153
Borrowings		39			33
Total interest expense		205			186
Net Interest Income		744			651
Provision for Loan Losses		-			-
Net Interest Income After Provision for Loan Losses		744			651
Noninterest Income
Service charges and fees		66			62
Gain on sale of loans		214			18
Gain on sale of foreclosed real estate, net		29			-
Income from bank owned life insurance		42			42
Loan servicing fees, net		14			18
Other operating		11			8
Total noninterest income		376			148
Noninterest Expense
Salaries and employee benefits		630			566
Occupancy and equipment		95			117
Data processing fees		114			101
FDIC insurance premiums		8			20
Insurance premiums		10			13
Professional services		121			124
Impairment losses and expenses of foreclosed real estate		9			5
Other		152			110
Total noninterest expense		1,139			1,056
Net Loss	$	(19	)	$	(257	)
Loss per share - basic and diluted	$	(0.03	)		(0.40)

The accompanying notes are an integral part of these financial statements.

3

New Bancorp, Inc.

Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

For the Three Months Ended March 31, 2017

(In Thousands)

											Maximum Cash
					Shares						Obligation
	Common		Additional		Acquired			Retained			Related to
	Stock		Paid In Capital		by ESOP			Earnings			ESOP Shares			Total
Balance at January 1, 2017	$	7	$	5,761	$	(501	)	$	9,302		$	(73	)	$	14,496
Maximum cash obligation related to ESOP shares		-		-		-			-			(18	)		(18	)
ESOP shares earned		-		3		7			-			-			10
Net loss for the three months ended March 31, 2017		-		-		-			(19	)		-			(19	)
Balance at March 31, 2017	$	7	$	5,764	$	(494	)	$	9,283		$	(91	)	$	14,469

The accompanying notes are an integral part of these financial statements.

4

New Bancorp, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the Three Months Ended March 31, 2017 and 2016

(In Thousands)

	Three Months Ended March 31,
	2017			2016
Operating Activities
Net loss	$	(19	)	$	(257	)
Items not requiring (providing) cash
Depreciation and amortization		55			50
Deferred loan origination fees, costs, premiums, and discounts, net		(3	)		1
Gain on sale of loans		(214	)		(18	)
Proceeds from sales of loans originated for sale		1,444			707
Loans originated for sale		(3,597	)		(695	)
Gain on sale of foreclosed real estate		(29	)		-
ESOP shares earned		10			-
Cash surrender value of life insurance		(42	)		(42	)
Changes in
Accrued interest receivable		(18	)		13
Prepaid expenses and other assets		(2,519	)		53
Other liabilities		281			187
Net cash used in operating activities		(4,651	)		(1	)
Investing Activities
Net change in loans		(1,411	)		1,928
Purchase of premises and equipment		(6	)		(37	)
Proceeds from sale of foreclosed assets		54			-
Net cash provided by (used in) investing activities		(1,363	)		1,891
Financing Activities
Net increase in deposits		12,617			2,707
Net change in federal funds purchased		(1,000	)		-
Net cash provided by financing activities		11,617			2,707
Increase in Cash and Cash Equivalents		5,603			4,597
Cash and Cash Equivalents, Beginning of Period		9,857			8,810
Cash and Cash Equivalents, End of Period	$	15,460		$	13,407
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Interest on deposits and borrowings	$	200		$	189

The accompanying notes are an integral part of these financial statements.

5

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

Note 1:Basis of Presentation

The accompanying condensed consolidated balance sheet of New Bancorp, Inc. (the Company) as of December 31, 2016, which has been derived from audited financial statements, and the unaudited condensed consolidated financial statements of the Company as of March 31, 2017 and for the three months ended March 31, 2017 and 2016, were prepared in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto of the Company for the year ended December 31, 2016 included in the Company’s Form 10-K. Reference is made to the accounting policies of the Company described in the Notes to the Financial Statements contained in the Form 10-K.

In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of the unaudited financial statements have been included to present fairly the financial position as of March 31, 2017 and the results of operations and cash flows for the three months ended March 31, 2017 and 2016. All interim amounts have not been audited and the results of operations for the three months ended March 31, 2017 herein, are not necessarily indicative of the results of operations to be expected for the entire year.

Principles of Consolidation

The consolidated financial statements as of and for the periods ended March 31, 2017 and December 31, 2016, include New Bancorp, Inc. and its wholly-owned subsidiary the New Buffalo Savings Bank “the Bank”, together referred to as the “Company.” Intercompany transactions and balances have been eliminated in consolidation. The conversion to stock form, including the formation of New Bancorp, Inc., was completed on October 19, 2015.

Use of Estimates

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

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, valuation of deferred tax assets and fair values of financial instruments.

              Reclassifications

Certain reclassifications have been made to the December 31, 2016 financial statements to conform to the March 31, 2017 financial statement presentation.  These reclassifications had no effect on our results of operations. 

6

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

Note 2:Securities

The Company had no investment securities at March 31, 2017 and December 31, 2016. The Company had no sales of investment securities during the three month periods ended March 31, 2017 and 2016.

Note 3:Loans and Allowance for Loan Losses

The Company’s loan and allowance for loan losses policies are as follows:

Loans Receivable

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

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

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

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

Allowance for Loan Losses

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

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

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical charge-off experience and expected loss given default derived from the Bank’s internal risk rating process.

7

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data.

Classes of loans at March 31, 2017 and December 31, 2016 include:

	March 31,			December 31,
	2017			2016
	(Unaudited)
	(In thousands)
Real estate loans
Residential	$	43,656		$	43,036
Commercial		34,132			32,175
Construction and land		10,139			9,543
Commercial business		1,193			383
Consumer and other		689			776
Total loans		89,809			85,913
Less:
Net deferred loan fees, premiums and discounts		(105	)		(70	)
Undisbursed loans in process		(1,967	)		(1,772	)
Allowance for loan losses		(1,042	)		(1,063	)
Net loans	$	86,695		$	83,008

Residential Real Estate: The residential real estate loans are generally secured by owner-occupied and non owner occupied 1-4 family residences. The Bank’s portfolio of home equity loans totaled $4.6 million and $4.7 million at March 31, 2017 and December 31, 2016, respectively, the majority of which were secured by first liens, or by second liens on properties where the Bank also holds the first lien. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers. Credit risk in these loans can be impacted by economic conditions within the Bank’s market areas that might impact either property values or a borrower’s personal income. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

Commercial Real Estate: Commercial real estate loans typically involve larger principal amounts, and repayment of these loans is generally dependent on the successful operations of the property securing the loan or the business conducted on the property securing the loan. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economy in the Bank’s market area.

8

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

Construction and Land: Construction and land loans are usually based upon estimates of costs and estimated value of the completed project and include independent appraisal reviews and a financial analysis of the developers and property owners. Sources of repayment of these loans may include permanent loans, sales of developed property or an interim loan commitment from the Bank until permanent financing is obtained. These loans are considered to be higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, general economic conditions and the availability of long-term financing. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economy in the Bank’s market area.

Commercial Business: The commercial business loan portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and expansions. The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations.

Consumer: The consumer loan portfolio consists of various term and line of credit loans such as automobile loans and loans for other personal purposes. Repayment for these types of loans will come from a borrower’s income sources that are typically independent of the loan purpose. Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions in the Bank’s market area) and the creditworthiness of a borrower.

9

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

The following tables present by portfolio segment, the activity in the allowance for loan losses for the three months ended March 31, 2017 and 2016 and the recorded investment in loans and impairment method as of March 31, 2017 and December 31, 2016:

	For the Three Months Ended March 31, 2017 (Unaudited)
	Real Estate
						Construction		Commercial
	Residential			Commercial		and Land		Business			Consumer		Total
	(In thousands)
Allowance for loan losses:
Balance, January 1, 2017	$	656		$	326	$	72	$	4		$	5	$	1,063
Provision (credit) for loan losses		(66	)		39		6		18			3		-
Charge-offs		(12	)		-		-		(9	)		-		(21	)
Recoveries		-			-		-		-			-		-
Balance, March 31, 2017	$	578		$	365	$	78	$	13		$	8	$	1,042

			For the Three Months ended March 31, 2016
Allowance for loan losses:
Balance, January 1, 2016	$	648	$	383		$	102		$	19		$	3	$	1,155
Provision (credit) for loan losses		91		(72	)		(11	)		(12	)		4		-
Charge-offs		-		-			-			-			-		-
Recoveries		-		-			-			-			-		-
Balance, March 31 , 2016	$	739	$	311		$	91		$	7		$	7	$	1,155

	March 31, 2017 (Unaudited)
	Real Estate
					Construction		Commercial
	Residential		Commercial		and Land		Business		Consumer		Total
	(In thousands)
Allowance for loan losses:
Ending balance, individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance, collectively evaluated for impairment	$	578	$	365	$	78	$	13	$	8	$	1,042
Loans:
Ending balance	$	43,656	$	34,132	$	10,139	$	1,193	$	689	$	89,809
Ending balance; individually evaluated for impairment	$	2,757	$	528	$	1,681	$	-	$	-	$	4,966
Ending balance; collectively evaluated for impairment	$	40,899	$	33,604	$	8,458	$	1,193	$	689	$	84,843

10

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

	December 31, 2016
	Real Estate
					Construction		Commercial
	Residential		Commercial		and Land		Business		Consumer		Total
	(In thousands)
Allowance for loan losses:
Ending balance	$	656	$	326	$	72	$	4	$	5	$	1,063
Ending balance, individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance, collectively evaluated for impairment	$	656	$	326	$	72	$	4	$	5	$	1,063
Loans:
Ending balance	$	43,036	$	32,175	$	9,543	$	383	$	776	$	85,913
Ending balance; individually evaluated for impairment	$	2,779	$	533	$	1,709	$	-	$	-	$	5,021
Ending balance; collectively evaluated for impairment	$	40,257	$	31,642	$	7,834	$	383	$	776	$	80,892

11

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

Internal Risk Categories

The Bank has adopted a standard loan grading system for all loans. Loans are selected for a grading review based on certain characteristics, including concentrations of credit and upon delinquency of 90 days or more. Definitions are as follows:

Pass: Loans categorized as Pass are higher quality loans that do not fit any of the other categories described below.

Special Mention/Watch: The loans identified as special mention/watch have an obvious flaw or a potential weakness that deserves special management attention, but which has not yet impacted collectability. These flaws or weaknesses, if left uncorrected, may result in the deterioration of the prospects of repayment or the deterioration of the Bank’s credit position.

Substandard: These are loans with a well-defined weakness, where the Bank has a serious concern about the borrower’s ability to make full repayment if the weaknesses are not corrected. The loan may contain a flaw, which could impact the borrower’s ability to repay, or the borrower’s continuance as a “going concern”. When collateral values are not sufficient to secure the loan and other weaknesses are present, the loan may be rated substandard. A loan will also be graded substandard when full repayment is expected, but it must come from the liquidation of collateral. All loans that are past due 90 days or more are classified as substandard.

Doubtful: These are loans with major defined weaknesses, where future charge-off of a part of the credit is highly likely. The primary repayment source is no longer viable and the viability of the secondary source of repayment is in doubt. The amount of loss is uncertain due to circumstances within the credit that are not yet fully developed and the loan is rated “Doubtful” until the loss can be accurately estimated.

Loss: These are loans that represent near term charge-offs. Loans classified as loss are considered uncollectible and of such little value that it is not desirable to continue carrying them as assets on the Bank’s financial statements, even though partial recovery may be possible at some future time.

12

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

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

	March 31, 2017
	Real Estate
					Construction		Commercial
	Residential		Commercial		and Land		Business		Consumer		Total
	(In thousands)
Pass	$	41,496	$	33,604	$	8,823	$	1,193	$	689	$	85,805
Special mention/Watch		290		-		-		-		-		290
Substandard		1,870		528		1,316		-		-		3,714
Doubtful		-		-		-		-		-		-
Total	$	43,656	$	34,132	$	10,139	$	1,193	$	689	$	89,809

	December 31, 2016
	Real Estate
					Construction		Commercial
	Residential		Commercial		and Land		Business		Consumer		Total
	(In thousands)
Pass	$	40,724	$	31,677	$	8,520	$	348	$	766	$	82,035
Special mention/Watch		415		-		-		-		10		425
Substandard		1,897		498		1,023		35		-		3,453
Doubtful		-		-		-		-		-		-
Total	$	43,036	$	32,175	$	9,543	$	383	$	776	$	85,913

The Company evaluates the loan risk grading system definitions and allowance for loan losses methodology on an ongoing basis. No significant changes were made to either during the past year.

13

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

The following tables present the Company’s loan portfolio aging analysis of the recorded investment in loans as of March 31, 2017 and December 31, 2016:

	March 31, 2017 (Unaudited)
													Total Loans >
	30-59 Days		60-89 Days		Greater Than		Total				Total Loans		90 Days &
	Past Due		Past Due		90 Days		Past Due		Current		Receivable		Accruing
	(In thousands)
Real estate
Residential	$	272	$	-	$	314	$	586	$	43,070	$	43,656	$	-
Commercial		-		-		-		-		34,132		34,132		-
Construction and land		-		-		-		-		10,139		10,139		-
Commercial business		-		-		-		-		1,193		1,193		-
Consumer		-		-		-		-		689		689		-
Total	$	272	$	-	$	314	$	586	$	89,223	$	89,809	$	-

	December 31, 2016
													Total Loans >
	30-59 Days		60-89 Days		Greater Than		Total				Total Loans		90 Days &
	Past Due		Past Due		90 Days		Past Due		Current		Receivable		Accruing
	(In thousands)
Real estate
Residential	$	194	$	-	$	327	$	521	$	42,515	$	43,036	$	-
Commercial		-		-		4		4		32,171		32,175		-
Construction and land		-		-		-		-		9,543		9,543		-
Commercial business		-		-		-		-		383		383		-
Consumer		-		-		-		-		776		776
Total	$	194	$	-	$	331	$	525	$	85,388	$	85,913	$	-

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Bank will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming multi-family and commercial loans but also include loans modified in troubled debt restructurings.

14

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

The following table presents impaired loans as of March 31, 2017 and for the three month periods ended March 31, 2017 and 2016:

	As of						For the Three Months Ended
	March 31, 2017						March 31, 2017				March 31, 2016
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Balance of Impaired Loans		Interest Income Recognized		Average Balance of Impaired Loans		Interest Income Recognized
	(Unaudited)
	(In thousands)
Loans without a specific valuation allowance:
Real estate
Residential	$	2,757	$	2,874	$	-	$	2,510	$	37	$	1,451	$	15
Commercial		528		528		-		528		7		236		4
Construction and land		1,681		1,681		-		1,713		25		1,739		21
Commercial business						-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Loans with a specific valuation allowance:
Real estate
Residential		-		-		-		-		-		270		1
Commercial		-		-		-		-		-		-		-
Construction and land		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Totals	$	4,966	$	5,083	$	-	$	4,751	$	69	$	3,696	$	41

15

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

The following table presents impaired loans as of December 31, 2016:

	As of December 31, 2016
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Balance of Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation allowance:
Real estate
Residential	$	2,779	$	2,936	$	-	$	2,420	$	140
Commercial		533		560		-		230		28
Construction and land		1,709		1,709		-		1,760		95
Commercial business		-		-		-		-		-
Consumer		-		-		-		-		-
Loans with a specific valuation allowance:
Real estate
Residential		-		-		-		-		-
Commercial		-		-		-		-		-
Construction and land		-		-		-		-		-
Commercial business		-		-		-		-		-
Consumer		-		-		-		-		-
Totals	$	5,021	$	5,205	$	-	$	4,410	$	263

The following table presents the Company’s nonaccrual loans at March 31, 2017 and December 31, 2016. The table excludes performing troubled debt restructurings.

	March 31, 2017		December 31, 2016
	(In thousands)
Real estate loans
Residential	$	617	$	614
Commercial		-		4
Construction and land		-		-
Commercial business		-		-
Consumer and other		-		-
Total nonaccrual	$	617	$	618

16

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

At March 31, 2017 (unaudited) and December 31, 2016, the Company had certain loans that were modified in troubled debt restructurings (TDRs) and impaired. The modification of terms of such loans generally included one or a combination of the following: an extension of the maturity date or a reduction of the stated interest rate.

During the three months ended March 31, 2017 and 2016, there were no new loan modifications classified as TDRs.

The Company had no TDRs modified in the twelve months ended March 31, 2017 and 2016 that subsequently defaulted. A loan is considered to be in payment default once it is 30 days contractually past due under the loan’s modified terms.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Bank’s internal underwriting policy.

Foreclosed real estate held for sale consisted of residential real estate at March 31, 2017 and December 31, 2016. There were $323,000 of residential real estate loans in the process of foreclosure at March 31, 2017 and December 31, 2016.

17

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

Note 4:Regulatory Matters

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

At March 31, 2017 and December 31, 2016, quantitative measures established by regulation to ensure capital adequacy requires the Bank to maintain minimum amounts and ratios (set forth in the table below), of total capital, Tier 1 capital and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 leverage capital to average total assets.

Basel III was effective for the Company on January 1, 2015. Basel III requires the Company and the Bank to maintain minimum amounts and ratios of common equity Tier 1 capital to risk weighted assets, as defined in the regulation. Under the new Basel III rules, in order to avoid limitations on capital distributions, including dividends, the Company must hold a capital conservation buffer above the adequately capitalized common equity Tier 1 capital to risk-weighted assets ratio. The capital conservation buffer is being phased in from zero percent to 2.50 percent by 2019. Under Basel III, the Company and Bank elected to opt-out of including accumulated other comprehensive income in regulatory capital.

Management believes, as of March 31, 2017 (unaudited) and December 31, 2016, that the Bank meets all capital adequacy requirements to which it is subject.

As of March 31, 2017 (unaudited) and December 31, 2016, the most recent notification categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based and Tier I leverage capital ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s category.

18

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

The Bank’s actual capital amounts and ratios are presented in the following table:

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
As of March 31, 2017
Total Capital
(to Risk-Weighted Assets)	$	13,989		17.8	%	$	6,273		8.0	%	$	7,841		10.0	%
Tier 1 Capital
(to Risk-Weighted Assets)	$	13,008		16.6	%	$	4,705		6.0	%	$	6,273		8.0	%
Common Equity Tier I Capital
(to Risk-Weighted Assets)	$	13,008		16.6	%	$	3,529		4.5	%	$	5,097		6.5	%
Tier I Leverage Capital
(to Average Total Assets)	$	13,008		12.1	%	$	4,299		4.0	%	$	5,374		5.0	%
As of December 31, 2016
Total Capital
(to Risk-Weighted Assets)	$	13,943		17.6	%	$	6,327		8.0	%	$	7,908		10.0	%
Tier I Capital
(to Risk-Weighted Assets)	$	12,954		16.4	%	$	4,745		6.0	%	$	6,327		8.0	%
Common Equity Tier I Capital
(to Risk-Weighted Assets)	$	12,954		16.4	%	$	3,559		4.5	%	$	5,140		6.5	%
Tier I Capital
(to Total Assets)	$	12,954		12.9	%	$	4,024		4.0	%	$	5,030		5.0	%

Note 5:Disclosures about Fair Value of Assets and Liabilities

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

Level 1 Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 Significant unobservable inputs that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

19

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

Nonrecurring Measurements

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

			Fair Value Measurement Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
Impaired loans, collateral dependent	$	220	$	-	$	-	$	220
December 31, 2016
Impaired loans, collateral dependent	$	232	$	-	$	-	$	232

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a non-recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

Collateral-dependent Impaired Loans, Net of ALLL

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

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

20

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

Unobservable (Level 3) Inputs

The following table presents quantitative information about unobservable inputs used in nonrecurring Level 3 fair value measurements:

	Fair Value		Valuation Technique	Unobservable Inputs	Range
	(In thousands)
March 31, 2017
Impaired loans (collateral dependent)	$	220	Marketable comparable properties	Marketability discount	17%	-	24%
December 31, 2016
Impaired loans (collateral dependent)	$	232	Marketable comparable properties	Marketability discount	10%	-	15%

21

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

Fair Value of Financial Instruments

The following table presents the estimated fair values of the Company’s financial instruments not carried at fair value and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2017 and December 31, 2016.

					Fair Value Measurement Using
	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
Financial assets
Cash and due from banks	$	1,510	$	1,510	$	1,510	$	-	$	-
Interest-earning demand deposits		9,110		4,270		4,270		-		-
Federal funds sold		4,840		4,840		4,840		-		-
Interest-earning time deposits in banks		992		992		-		992		-
Loans, net		86,695		86,511		-		-		86,511
Federal Home Loan Bank stock		468		468		-		468		-
Accrued interest receivable		221		221		-		221		-
Servicing rights		566		566		-		-		566
Financial liabilities
Deposits		89,458		89,720		45,863		43,857		-
Advances from the Federal Home Loan Bank		10,027		10,120		-		10,120		-
Accrued interest payable		12		12		-		12		-
December 31, 2016
Financial assets
Cash and due from banks	$	1,419	$	1,419	$	1,419	$	-	$	-
Interest-earning demand deposits		8,438		8,438		8,438		-		-
Interest-earning time deposits in banks		992		992		-		992		-
Loans, net		83,008		83,538		-		-		83,538
Federal Home Loan Bank stock		468		468		-		468		-
Accrued interest receivable		203		203		-		203		-
Servicing rights		483		483		-		-		483
Financial liabilities
Deposits		76,841		77,104		45,080		32,024		-
Federal funds purchased		1,000		1,000		1,000		-		-
Advances from the Federal Home Loan Bank		10,027		10,127		-		10,127		-
Accrued interest payable		7		7		-		7		-

The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying balance sheets at amounts other than fair value.

Cash and Due from Banks, Interest-earning Demand Deposits and Federal Funds Sold

The carrying amount approximates fair value.

22

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

Interest-earning Time Deposits in Banks

The carrying amount approximates fair value.

Loans

Fair value is estimated by discounting the future cash flows using the market rates at which similar notes would be made to borrowers with similar credit ratings and for the same remaining maturities. The market rates used are based on current rates the Bank would impose for similar loans and reflect a market participant assumption about risks associated with nonperformance, illiquidity, and the structure and term of the loans along with local economic and market conditions.

Federal Home Loan Bank Stock

Fair value is estimated at book value due to restrictions that limit the sale or transfer of such securities.

Accrued Interest Receivable and Payable

The carrying amount approximates fair value. The carrying amount is determined using the interest rate, balance and last payment date.

Servicing Rights

Servicing rights do not trade in an active, open market with readily observable prices. Accordingly, fair value is estimated using discounted cash flow models having significant inputs of discount rate, prepayment speed and default rate.

Deposits

Fair value of term deposits is estimated by discounting the future cash flows using rates of similar deposits with similar maturities. The market rates used were obtained from a knowledgeable independent third party and reviewed by the Bank. The rates were the average of current rates offered by local competitors of the Bank.

The estimated fair value of demand, NOW, savings and money market deposits is the book value since rates are regularly adjusted to market rates and amounts are payable on demand at the reporting date.

Federal Funds Purchased

The carrying amount approximates fair value.

23

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

Federal Home Loan Bank Advances

Fair value is estimated by discounting the future cash flows using rates of similar advances with similar maturities. These rates were obtained from current rates offered by the Federal Home Loan Bank.

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

The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates.

The fair values of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date.

Note 6:Recent Accounting Pronouncements

The Company is an emerging growth company and as such will be subject to the effective dates noted for the private companies if they differ from the effective dates noted for public companies.

FASB ASU 2014-09, Revenue from Contracts with Customers

In May 2014, the FASB issued Accounting Standards Update (ASU) 2014-09, “Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In March, 2016 the FASB issued ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the guidance in determining revenue recognition as principal versus agent. In April 2016, the FASB issued ASU 2016-10, “Identifying Performance Obligations and Licensing,” which provides guidance in accounting for immaterial performance obligations and shipping and handling. In May 2016, the FASB issued ASU 2016-12, “Narrow-Scope Improvements and Practical Expedients” which provides clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for noncash consideration and completed contracts at transition. This ASU also provides a practical expedient for contract modifications.

The amendments are effective, as to the Company,  for annual reporting periods beginning after December 15, 2017 and for interim reporting periods within such annual periods. The Company is currently evaluating the impact of adopting the guidance.

24

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

FASB ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities”. For public business entities, the amendments in this update include the elimination of the requirement to disclose the method(s) and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, the requirement to use the exit price notion when measuring fair value of financial instruments for disclosure purposes, the requirement to present separately in other comprehensive income the portion of the total change in the 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, the requirement for separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or accompanying notes to the financial statements, and the amendments clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets.

The amendments in this update are effective, as to the Company, for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption of the amendments in this update is not permitted, except that early application by public business entities to financial statements of fiscal years or interim periods that have not yet been issued or, by all other entities, that have not yet been made available for issuance are permitted as of the beginning of the fiscal year of adoption for the following amendment: An entity should present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk if the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. An entity should apply the amendments to this update by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is currently evaluating the impact of adopting this guidance on the Company’s financial statements. Adoption of ASU No. 2016-01 is not expected to have a material impact on the Company's results of operations or financial position

FASB ASU 2016-02, Leases

In February 2016 the FASB issued ASU 2016-02, “Leases”. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:

● A lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and

● A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, “Revenue from Contracts with Customers”.

25

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing.

The amendments in ASU 2016-02 are effective, as to the Company, for years beginning after December 15, 2019, and for interim periods for years beginning after January 1, 2020.  Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and    operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. Management is currently evaluating the impact of adopting this guidance on the Company’s financial statements.

FASB ASU 2016-13, Financial Instruments – Credit Losses

In June 2016, FASB issued ASU 2016-13, “Financial Instruments - Credit Losses”.  The amendments in this Update replace the incurred loss model with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. ASU No. 2016-13 replaces the incurred loss impairment methodology with a new methodology that reflects expected credit losses over the lives of the loans and requires consideration of a broader range of information to inform credit loss estimates. The ASU requires an organization to estimate all expected credit losses for financial assets measured at amortized cost, including loans and held-to-maturity debt securities, based on historical experience, current conditions, and reasonable and supportable forecasts. Additional disclosures are required. ASU No. 2016-13 is effective, as to the Company, for fiscal years, beginning after December 15, 2020, and interim periods within those fiscal years, beginning after December 15, 2021.  Management expects that the implementation of ASU No. 2016-13 may increase the balance of the allowance for loan losses and is continuing to evaluate the potential impact on the Company's results of operations and financial position.

Note 7:Loss Per Share

Basic loss per share (“LPS”) is calculated by dividing net loss applicable to common stock by the weighted-average number of shares of common stock outstanding during the period. Unallocated common shares held by the Company’s Employee Stock Ownership Plan (the “ESOP”) are shown as a reduction in stockholders’ equity and are excluded from weighted-average common shares outstanding for basic and diluted LPS calculations until they are committed to be released.

Loss per share for the three months ended March 31, 2017 and 2016 was $0.03 and $0.40, respectively, calculated using 696,600 average shares issued, less 49,458 and 52,353 unallocated average shares held by the ESOP for each respective period. The Company had no dilutive or potentially dilutive securities at March 31, 2017 and 2016.

26

New Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

Note 8:Employee Stock Ownership Plan

As part of the Company’s stock conversion, shares were purchased by the ESOP with a loan from New Bancorp. All employees of the Bank meeting certain tenure requirements are entitled to participate in the ESOP. Compensation expense related to the ESOP was $10,000 and $5,000 for the three month periods ended March 31, 2017 and 2016, respectively.  The stock price at the formation date was $10.00. The aggregate fair value of the 49,458 unallocated shares was $717,000 based on the $14.50 closing price of our common stock on March 31, 2017.

Note 9:Change in Corporate Form

On October 19, 2015, the Bank converted into a federal stock savings bank and established a stock holding company, New Bancorp, Inc., as parent of the Bank.

The Bank converted to the stock form of ownership, followed by the issuance of all of the Bank’s outstanding stock to New Bancorp, Inc. The Bank became the wholly owned subsidiary of the Company, and the Company issued and sold shares of its capital stock pursuant to an independent

valuation appraisal of the Bank and the Company. The stock was priced at $10.00 per share. In addition, the Bank’s board of directors adopted an employee stock ownership plan (ESOP) which subscribed for 8% of the common stock sold in the offering. The Conversion was completed on October 19, 2015 and resulted in the issuance of 696,600 common shares by the Company. The cost of the Conversion and issuing the capital stock totaled $1.2 million and was deducted from the proceeds of the offering.

In accordance with OCC regulations, at the time of the Conversion, the Bank substantially restricted retained earnings by establishing a liquidation account. The liquidation account will be maintained for the benefit of eligible holders who continue to maintain their accounts at the Bank after the Conversion. The liquidation account will be reduced annually to the extent that eligible account holders have reduced their qualifying deposits. Subsequent increases will not restore an

eligible account holder’s interest in the liquidation account. In the event of a complete liquidation of the Bank, and only in such event, each eligible account holder will be entitled to receive a distribution from the liquidation account in an amount proportionate to the adjusted qualifying account balances then held. The Bank may not pay dividends if those dividends would reduce equity capital below the required liquidation account amount. The conversion was accounted for as a change in corporate form with the historic basis of the Bank’s assets, liabilities and equity unchanged as a result.

27

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

Management’s discussion and analysis of the financial condition at March 31, 2017 and results of operations for the three months ended March 31, 2017 and 2016 is intended to assist in understanding the financial condition and results of operations of the Bank. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto, appearing on Part I, Item 1 of this quarterly report on Form 10-Q.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and words of similar meaning. These forward-looking statements include, but are not limited to:

● 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 based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

● our ability to manage our operations in the event of adverse economic conditions nationally and in our market area;

● adverse changes in the financial industry, securities, credit and national and local real estate markets (including real estate values);

● significant increases in our loan losses, including as a result of our inability to resolve classified and non-performing assets or reduce risks associated with our loans, and management’s assumptions in determining the adequacy of the allowance for loan losses;

● credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and in our allowance for loan losses and provision for loan losses;

● the use of estimates in determining fair value of certain of our assets, which may prove to be incorrect and result in significant declines in valuations;

● competition among depository and other financial institutions;

● our success in increasing our residential real estate and commercial real estate lending, and selling certain of our residential real estate loans;

28

● our ability to attract and maintain deposits and our success in introducing new financial products;

● our ability to improve our asset quality even as we increase our commercial real estate lending;

● changes in interest rates generally, including changes in the relative differences between short term and long term interest rates and in deposit interest rates, that may affect our net interest margin and funding sources;

● fluctuations in the demand for loans, which may be affected by the number of unsold homes, land and other properties in our market areas and by declines in the value of real estate in our market area;

● changes in consumer spending, borrowing and savings habits;

● declines in the yield on our assets resulting from the current low interest rate environment;

● risks related to a high concentration of loans secured by real estate located in our market area;

● the results of examinations by our regulators, including the possibility that our regulators may, among other things, require us to increase our allowance for loan losses, write down assets, change our regulatory capital position, limit our ability to borrow funds or maintain or increase deposits, or prohibit us from paying dividends, which could adversely affect our dividends and earnings;

● changes in the level of government support of housing finance;

● our ability to enter new markets successfully and capitalize on growth opportunities;

● changes in laws or government regulations or policies affecting financial institutions, including the Dodd-Frank Act and the JOBS Act, which could result in, among other things, increased deposit insurance premiums and assessments, capital requirements, regulatory fees and compliance costs, particularly the new capital regulations, and the resources we have available to address such changes;

● changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board and the Securities and Exchange Commission;

● changes in our compensation and benefit plans, and our ability to retain key members of our senior management team and to address staffing needs in response to product demand or to implement our strategic plans;

● loan delinquencies and changes in the underlying cash flows of our borrowers;

● our ability to control costs and expenses, particularly those associated with operating as a publicly traded company;

● the failure or security breaches of computer systems on which we depend;

● the ability of key third-party service providers to perform their obligations to us;

● changes in the financial condition or future prospects of issuers of securities that we own; and

29

● other economic, competitive, governmental, regulatory and operational factors affecting our operations, pricing, products and services.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

Critical Accounting Policies

There are no material changes to the critical accounting policies disclosed in New Bancorp, Inc.’s Annual Report on Form 10-K, as filed with the Securities and Exchange on March 30, 2017.

Comparison of Financial Condition at March 31, 2017 and December 31, 2016

Total Assets. Total assets were $115.1 million at March 31, 2017, an increase of $11.9 million, or 11.5%, compared to $103.2 million at December 31, 2016. The increase was due primarily to an increase of $5.6 million in cash and cash equivalents and $3.7 million in loans.

Loans, net. Loans, net increased $3.7 million, or 4.4%, to $86.7 million at March 31, 2017 from $83.0 million at December 31, 2016. During the three months ended March 31, 2017, we originated $8.4 million of loans, consisting primarily of $5.6 million of commercial real estate loans, $1.4 million of construction and land loans, $877,000 of one-to four- family residential, and $438,000 of commercial business, and sold $3.6 million of loans. During the three months ended March 31, 2017, one- to four-family residential real estate loans increased $620,000, or 1.4%, to $43.7 million at March 31, 2017, from December 31, 2016, while commercial real estate loans increased $2.0 million, or 6.1%, to $34.1 million at March 31, 2017.

Increases in loan balances reflect our strategy to grow and diversify our loan portfolio, with an emphasis on increasing both commercial and residential loans. During 2016 the Company added three loan officers, with specializations in Small Business Administration (SBA) loans, commercial real estate loans and residential loans. Commercial loan originations during the three months ended March 31, 2017 included commercial real estate loans and commercial loans guaranteed by the SBA’s 7(a) program. These SBA loans are subsequently sold, with servicing retained. We intend to continue to increase commercial lending, including SBA loans, in future years. The Bank also engages in a program to sell certain fixed-rate, 30-year term mortgage loans in the secondary market. The Bank primarily sells loans on a servicing retained basis, in transactions with the Federal Home Loan Bank of Indianapolis, through its mortgage purchase program, and the Federal Home Loan Mortgage Corporation (Freddie Mac). Management intends to continue loan sales activity in future periods.

Bank Owned Life Insurance. At March 31, 2017, our investment in bank owned life insurance was $5.5 million, an increase of $42,000, from $5.4 million at December 31, 2016. We invested in bank owned life insurance to provide us with a funding offset for certain benefit plan obligations. While these benefit plans have been terminated and the obligations have been paid, bank owned life insurance also generally provides us noninterest income that is non-taxable. Federal bank regulatory guidance cautions against an investment in bank owned life insurance that exceeds 25% of an institution’s Tier 1 capital. The guidance states that an institution which has an investment in bank owned life insurance exceeding this amount make a determination that the amount of investment does not constitute an imprudent capital concentration. We have not made additional contributions to bank owned life insurance since 2002.

Foreclosed Real Estate. Foreclosed real estate decreased $25,000, or 4.3%, to $561,000 at March 31, 2017 from $586,000 at December 31, 2016, as we had a sale of a foreclosure property with a carrying value of $25,000. At March 31, 2017, our foreclosed real estate was comprised of two parcels of residential real estate.

30

Deposits. Deposits increased $12.6 million, or 16.4%, to $89.4 million at March 31, 2017 from $76.8 million at December 31, 2016. Our core deposits increased $783,000, or 1.7%, to $45.9 million at March 31, 2017 from $45.1 million at December 31, 2016. Certificates of deposit increased $11.8 million, or 37.3%, to $43.6 million at March 31, 2017 from $31.8 million at December 31, 2016. During 2016, the Company implemented a strategy designed to promote growth in core deposits. Specifically the Company hired a director of retail banking and began to offer demand and savings accounts using the Kasasa program. Management intends to focus its efforts to increase core deposits, with a special emphasis on growth in consumer and business demand deposits.

Borrowings. Federal Home Loan Bank advances totaled $10.0 million at both March 31, 2017 and December 31, 2016. The average cost of outstanding advances from the Federal Home Loan Bank was 1.72% at March 31, 2017, compared to the Bank’s cost of deposits of 0.85% at that date.

Total Equity. Total equity before maximum cash obligation related to ESOP shares, decreased $9,000, or 0.1%, to $14.6 million at March 31, 2017 compared to December 31, 2016. The decrease resulted primarily from the net loss of $19,000 during the three months ended March 31, 2017.

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

General. Net loss for the three months ended March 31, 2017 was $19,000, compared to a net loss of $257,000 for the three months ended March 31, 2016. This $238,000 decrease in the net loss was primarily due to a $228,000 increase in noninterest income, and a $93,000 increase in net interest income, which were partially offset by an increase in non-interest expense of $83,000.

Interest Income. Interest income increased $112,000, or 13.4%, to $949,000 for the three months ended March 31, 2017 from $837,000 for the three months ended March 31, 2016. This increase was primarily attributable to a $106,000 increase in interest on loans receivable, and a $6,000 increase in interest on other interest-earning deposits. The average balance of loans during the three months ended March 31, 2017 increased $9.2 million, or 11.9%, to $86.0 million from $76.8 million for the three months ended March 31, 2016, while the average yield on loans increased four basis points to 4.33%. The average balance of other interest-earning deposits, including certificates of deposit in other banks and federal funds sold decreased $1.4 million to $1.6 million for the three months ended March 31, 2017 from $3.0 million for the three months ended March 31, 2016.

Interest Expense. Total interest expense increased $19,000, or 10.2%, to $205,000 for the three months ended March 31, 2017 from $186,000 for the three months ended March 31, 2016. Interest expense on deposits increased $13,000, or 8.5%, to $166,000 for the three months ended March 31, 2017 from $153,000 for the three months ended March 31, 2016. The increase was primarily due to an increase in the average deposits of $6.5 million, while the average cost of deposits remained unchanged period to period at 0.88%. Interest expense on borrowings increased $6,000, or 18.2%, to $39,000 for the three months ended March 31, 2017 from $33,000 for the three months ended March 31, 2016, The increase was due primarily to a $3.1 million increase in the average balance outstanding, which was partially offset by a decrease in the average cost of these advances to 1.6% for the three months ended March 31, 2017 compared to 1.9% for the three months ended March 31, 2016.

Net Interest Income. Net interest income increased $93,000, or 14.3%, to $744,000 for the three months ended March 31, 2017 compared to $651,000 for the three months ended March 31, 2016. The increase was due to a 17 basis points increase in our interest rate spread to 3.38% for the three months ended March 31, 2017 from 3.21% for the three months ended March 31, 2016. Our net interest margin increased to 3.39% for the three months ended March 31, 2017 from 3.26% for the three months ended March 31, 2016.

31

Provision for Loan Losses. Based on our analysis of the factors described in “Critical Accounting Policies – Allowance for Loan Losses,” we did not record a provision for loan losses for either of the three months ended March 31, 2017 and 2016. The allowance for loan losses was $1.0 million, or 1.18% of total loans, at March 31, 2017, compared to $1.2 million, or 1.52% of total loans, at March 31, 2016. Total nonperforming loans were $617,000 at March 31, 2017, compared to $1.3 million at March 31, 2016. Classified (substandard, doubtful and loss) loans were $3.7 million at March 31, 2017 and $1.9 million at March 31, 2016, and total loans past due greater than 30 days were $586,000 and $1.1 million at those respective dates. We had net charge-offs of $21,000 during the three months ended March 31, 2017 and no charge offs or recoveries for the three months ended March 31, 2016. As a percentage of nonperforming loans, the allowance for loan losses was 168.9% at March 31, 2017 compared to 91.7% at March 31, 2016.

The allowance for loan losses reflects the estimate we believe to be appropriate to cover incurred probable losses which were inherent in the loan portfolio at March 31, 2017 and 2016. While we believe the estimates and assumptions used in our determination of the adequacy of the allowance are reasonable, the actual amount of future provisions may exceed the amount of past provisions, and the increase in future provisions that may be required may adversely impact our financial condition and results of operations.

Non-Interest Income. Non-interest income increased $228,000, or 154.0%, to $376,000 for the three months ended March 31, 2017 from $148,000 for the three months ended March 31, 2016. The increase was primarily due to an increase of $196,000 in gains on sales of loans. The gain on sales of loans amounted to $214,000 during the three months ended March 31, 2017, compared to $18,000 in the year earlier period, due primarily to an increase in volume of SBA loan sales. The Company did not start its SBA lending program until the second quarter of 2016.

Non-Interest Expense. Non-interest expense increased $83,000, or 7.9%, to $1.1 million for the three months ended March 31, 2017 compared to $1.0 million for the three months ended March 31, 2016. The increase was due primarily to a $64,000, or 11.3%, increase in salaries and employee benefits, and an increase in other expense of $42,000 or 38.2%, for the three months ended March 31, 2017, partially offset by a decrease of $22,000, or 18.9%, in occupancy and equipment expenses. The increase in salaries and employee benefits was due primarily to the addition of new officers, and increased costs related to employee benefits, including healthcare and the ESOP plan. In accordance with our strategic plans to grow our core deposit base and to expand our emphasis on Small Business Administration lending and our commercial lending in the Detroit metropolitan area to our east, during 2016 we added a director of retail banking, and two loan officers to our loan origination staff. The increase in other expenses was primarily due to the Kasasa program, which we adopted during second quarter of 2016 to develop new checking and savings products in accordance with our strategy to grow core deposits, and increases due to public filing expenses.

Federal Income Taxes. The Company did not record a federal income tax provision during either of the three month periods ended March 31, 2017 and 2016. The federal income tax provision was affected by the full impairment valuation allowance recorded on the Company’s net deferred tax assets in both 2017 and 2016. Management evaluated the deferred tax asset based upon a projection of future operating results and determined that a full impairment valuation allowance was required at both March 31, 2017 and 2016. The Bank has a total valuation allowance on its net deferred tax assets of $4.5 million at March 31, 2017. The deferred tax asset will only be recognized in future periods upon the Company’s ability to realize and maintain profitable results of operations.

32

Liquidity and Capital Resources

Our primary sources of funds are deposits, principal and interest payments on loans, and proceeds from the sale of loans and advances from the FHLB-Indianapolis. While maturities and scheduled amortization of loans are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by market interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments including interest-bearing demand deposits. The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period.

 Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash used in operating activities was $4.7 million and $1,000 for the three months ended March 31, 2017 and 2016, respectively. Net cash provided by (used in) investing activities, which consists primarily of net change in loans receivable was $(1.4 million) and $1.9 million for the three months ended March 31, 2017 and 2016, respectively. Net cash provided by financing activities, which is comprised of net change in deposits, was $11.6 million and $2.7 million for the three months ended March 31, 2017 and 2016, respectively.

At March 31, 2017, we exceeded all of our regulatory capital requirements with a Tier 1 leverage capital level of $13.0 million, or 12.1% of adjusted average assets, which is above the required level of $4.3 million or 4.0%; total risk-based capital of $14.0 million, or 17.8% of risk-weighted assets, which is above the required level of $6.3 million, or 8.0%; and common equity Tier 1 capital of $13.0 million, or 16.6% of risk-weighted assets, which is above the required level of $3.5 million, or 4.5% of risk-weighted assets. Accordingly, New Buffalo Savings Bank was categorized as well capitalized at March 31, 2017. Management is not aware of any conditions or events since the most recent notification that would change our category.

At March 31, 2017, we had no outstanding commitments to originate loans and lines of credit of $10.0 million. We anticipate that we will have sufficient funds available to meet our current loan origination commitments. Certificates of deposit that are scheduled to mature in less than one year from March 31, 2017 totaled $14.5 million. Management expects that a substantial portion of the maturing certificates of deposit will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize FHLB-Indianapolis advances or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable, as the Registrant 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 the Principal Financial Officer and Controller, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of March 31, 2017. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Principal Financial Officer and Controller, concluded that the Registrant’s disclosure controls and procedures were effective.

During the quarter ended March 31, 2017, there have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

33

Part II – Other Information

Item 1. Legal Proceedings

The Bank is subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the Bank’s or the Company’s financial condition or results of operations.

Item 1A. Risk Factors

Not applicable, as the Registrant is a smaller reporting company.

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

(a) There were no sales of unregistered securities during the period covered by this Report.

(b) Not applicable.

(c) There were no issuer repurchases of securities during the period covered by this Report.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of Principal Financial Officer and Controller pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32 Certification of Chief Executive Officer and Principal Financial Officer and Controller pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

34

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.

	NEW BANCORP, INC.
Date:  May 12, 2017	/s/ Richard C. Sauerman
	Richard C. Sauerman
	President and Chief Executive Officer
Date:  May 12, 2017	/s/ Shawna L. Zawada
	Shawna L. Zawada
	Principal Financial Officer/Controller

35

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Richard C. Sauerman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of New Bancorp, Inc.;

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 consolidated 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 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:

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.

Date:  May 12, 2017	/s/ Richard C. Sauerman
	Richard C. Sauerman
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer/Controller

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Shawna L. Zawada, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of New Bancorp, Inc.;

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 consolidated 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 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:

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.

Date:  May 12, 2017	/s/ Shawna L. Zawada
	Shawna L. Zawada
	Principal Financial Officer and Controller

EX-32

Exhibit 32

Certification of Chief Executive Officer and Principal Financial Officer/Controller

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Richard C. Sauerman, President and Chief Executive Officer of New Bancorp, Inc., (the “Company”) and Shawna L. Zawada, Principal Financial Officer/Controller of the Company, each certify in his capacity as an officer of the Company that he has reviewed the quarterly report on Form 10-Q for the quarter ended March 31, 2017 (the “Report”) and that to the best of his knowledge:

1. the Report fully complies with the requirements of Sections 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 Company.

Date:  May 12, 2017	/s/ Richard C. Sauerman
	Richard C. Sauerman
	President and Chief Executive Officer
Date:  May 12, 2017	/s/ Shawna L. Zawada
	Shawna L. Zawada
	Principal Financial Officer and Controller

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 12, 2017
Document Information [Line Items]
Entity Registrant Name	New Bancorp, Inc.
Entity Central Index Key	0001644482
Trading Symbol	nwbb
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)		696,600
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Assets
Cash and due from banks	$ 1,510	$ 1,419
Interest-earning demand deposits	9,110	8,438
Federal funds sold	4,840
Cash and cash equivalents	15,460	9,857
Interest-earning time deposits in banks	992	992
Loans, net of allowance for loan losses of $1,042, and $1,063 at March 31, 2017 and December 31, 2016, respectively	86,695	83,008
Premises and equipment	1,896	1,934
Federal Home Loan Bank stock	468	468
Foreclosed real estate held for sale, net	561	586
Accrued interest receivable	221	203
Bank owned life insurance	5,460	5,418
Mortgage servicing rights	566	483
Prepaid expenses and other assets	2,786	269
Total assets	115,105	103,218
Liabilities
Demand	29,879	28,676
Savings and money market accounts	15,984	16,404
Time	43,595	31,761
Total deposits	89,458	76,841
Federal funds purchased		1,000
Borrowings	10,027	10,027
Other liabilities	1,060	781
Total liabilities	100,545	88,649
Commitments and Contingencies
Redeemable common stock held by Employee Stock Ownership Plan (ESOP)	91	73
Shareholders' Equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued
Common stock, $0.01 par value, 4,000,000 shares authorized, 696,600 shares issued and outstanding	7	7
Additional paid-in capital	5,764	5,761
Unearned ESOP shares	(494)	(501)
Retained earnings	9,283	9,302
Total shareholders' equity	14,560	14,569
Less maximum cash obligation related to ESOP shares	(91)	(73)
Total shareholders' equity less maximum cash obligation related to ESOP shares	14,469	14,496
Total liabilities and shareholders' equity	$ 115,105	$ 103,218

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Allowance for loan losses	$ 1,042	$ 1,063
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
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	4,000,000	4,000,000
Common stock, shares issued (in shares)	696,600	696,600
Common stock, shares outstanding (in shares)	696,600	696,600

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Interest Income
Loans	$ 931	$ 825
Interest-bearing deposits	18	12
Total interest income	949	837
Interest Expense
Deposits	166	153
Borrowings	39	33
Total interest expense	205	186
Net Interest Income	744	651
Provision for Loan Losses
Net Interest Income After Provision for Loan Losses	744	651
Noninterest Income
Service charges and fees	66	62
Gain on sale of loans	214	18
Gain on sale of foreclosed real estate, net	29
Income from bank owned life insurance	42	42
Loan servicing fees, net	14	18
Other operating	11	8
Total noninterest income	376	148
Noninterest Expense
Salaries and employee benefits	630	566
Occupancy and equipment	95	117
Data processing fees	114	101
FDIC insurance premiums	8	20
Insurance premiums	10	13
Professional services	121	124
Impairment losses and expenses of foreclosed real estate	9	5
Other	152	110
Total noninterest expense	1,139	1,056
Net Loss	$ (19)	$ (257)
Loss per share - basic and diluted (in dollars per share)	$ (0.03)	$ (0.40)

XML

Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Shares Acquired by Employee Stock Ownership Plan [Member]	Retained Earnings [Member]	Maximum Cash Obligation Related to ESOP Shares [Member]	Total
Balance at Dec. 31, 2016	$ 7	$ 5,761	$ (501)	$ 9,302	$ (73)	$ 14,496
Maximum cash obligation related to ESOP shares					(18)	(18)
ESOP shares earned		3	7			10
Net loss for the three months ended March 31, 2017				(19)		(19)
Balance at Mar. 31, 2017	$ 7	$ 5,764	$ (494)	$ 9,283	$ (91)	$ 14,469

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating Activities
Net loss	$ (19,000)	$ (257,000)
Items not requiring (providing) cash
Depreciation and amortization	55,000	50,000
Deferred loan origination fees, costs, premiums, and discounts, net	(3,000)	1,000
Gain on sale of loans	(214,000)	(18,000)
Proceeds from sales of loans originated for sale	1,444,000	707,000
Loans originated for sale	(3,597,000)	(695,000)
Gain on sale of foreclosed real estate	(29,000)
ESOP shares earned	10,000	5,000
Cash surrender value of life insurance	(42,000)	(42,000)
Changes in
Accrued interest receivable	(18,000)	13,000
Prepaid expenses and other assets	(2,519,000)	53,000
Other liabilities	281,000	187,000
Net cash used in operating activities	(4,651,000)	(1,000)
Investing Activities
Net change in loans	(1,411,000)	1,928,000
Purchase of premises and equipment	(6,000)	(37,000)
Proceeds from sale of foreclosed assets	54,000
Net cash provided by (used in) investing activities	(1,363,000)	1,891,000
Financing Activities
Net increase in deposits	12,617,000	2,707,000
Net change in federal funds purchased	(1,000,000)
Net cash provided by financing activities	11,617,000	2,707,000
Increase in Cash and Cash Equivalents	5,603,000	4,597,000
Cash and Cash Equivalents, Beginning of Period	9,857,000	8,810,000
Cash and Cash Equivalents, End of Period	15,460,000	13,407,000
Supplemental Disclosure of Cash Flow Information
Interest on deposits and borrowings	$ 200,000	$ 189,000

XML

Note 1 - Basis of Presentation

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Basis of Presentation and Significant Accounting Policies [Text Block]

Note

1:

Basis of Presentation

The accompanying

condensed consolidated balance sheet of New Bancorp, Inc. (the Company) as of

December

31,

2016,

which has been derived from audited financial statements, and the unaudited condensed consolidated financial statements of the Company as of

March

31,

2017

and for the

three

months ended

March

31,

2017

and

2016,

were prepared in accordance with instructions for Form

10

-Q and Article

10

of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto of the Company for the year ended

December

31,

2016

included in the Company’s Form

10

-K. Reference is made to the accounting policies of the Company described in the Notes to the Financial Statements contained in the Form

10

-K.

In the opinion of management, all adjustments (consisting only of normal recurring adjustments)

which are necessary for a fair presentation of the unaudited financial statements have been included to present fairly the financial position as of

March

31,

2017

and the results of operations and cash flows for the

three

months ended

March

31,

2017

and

2016.

All interim amounts have not been audited and the results of operations for the

three

months ended

March

31,

2017

herein, are not necessarily indicative of the results of operations to be expected for the entire year.

Principles of Consolidation

The consolidated financial s

tatements as of and for the periods ended

March

31,

2017

and

December

31,

2016,

include New Bancorp, Inc. and its wholly-owned subsidiary the New Buffalo Savings Bank “the Bank”, together referred to as the “Company.” Intercompany transactions and balances have been eliminated in consolidation. The conversion to stock form, including the formation of New Bancorp, Inc., was completed on

October

19,

2015.

Use of Estimates

The preparation of financial statements in conformity with U.S.

generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, valuation of deferred tax assets and fair values of financial instruments.

              Reclassifications

Certain reclassifications have been made to the

December

31,

2016

financial statements to conform to the

March

31,

2017

financial statement presentation

.  These reclassifications had no effect on our results of operations. 

XML

Note 2 - Securities

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note

2:

Securities

The

Company had

no

investment securities at

March

31,

2017

and

December

31,

2016.

The Company had no sales of investment securities during the

three

month periods ended

March

31,

2017

and

2016.

XML

Note 3 - Loans and Allowance for Loan Losses

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

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

Note

3:

Loans and Allowance for Loan Losses

The Company

’s loan and allowance for loan losses policies are as follows:

Loans Receivable

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

For loans amortized at cost, interest income is accrued based on the unpaid princip

al balance. Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized as a level yield adjustment over the respective term of the loan.

The accrual of interest on mortgage and commercial loans is discontinued at the time the loan is

90

days past due unless the credit is well-secured and

in process of collection. Past-due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged off

is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Allowance for Loan Losses

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to income. Loan losses are charged against the allowance when ma

nagement believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management

’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that

may

affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired,

an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical charge-off experience and expected loss given default derived from the Bank’s internal risk rating process.

Other adjustments

may

be made to

the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data.

Classes of loans

at

March

31,

2017

and

December

31,

2016

include:

	March 31,			December 31,
	2017			2016
	(Unaudited)
	(In thousands)
Real estate loans
Residential	$	43,656		$	43,036
Commercial		34,132			32,175
Construction and land		10,139			9,543
Commercial business		1,193			383
Consumer and other		689			776
Total loans		89,809			85,913
Less:
Net deferred loan fees, premiums and discounts		(105	)		(70	)
Undisbursed loans in process		(1,967	)		(1,772	)
Allowance for loan losses		(1,042	)		(1,063	)
Net loans	$	86,695		$	83,008

Residential

Real Estate:

The residential real estate loans are generally secured by owner-occupied and non owner occupied 

1

-

4

family residences. The Bank’s portfolio of home equity loans totaled

$4.6

million and

$4.7

million at

March

31,

2017

and

December

31,

2016,

respectively, the majority of which were secured by

first

liens, or by

second

liens on properties where the Bank also holds the

first

lien. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers. Credit risk in these loans can be impacted by economic conditions within the Bank’s market areas that might impact either property values or a borrower’s personal income. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

Commercial Real Estate:

Commercial real estate loans typically involve larger principal amounts, and repayment of these loans is generally dependent on the successful operations of the property securing the loan or the business conducted on the property securing the loan. These loans are viewed primarily as cash flow loans and

secondarily

as loans secured by real estate. Credit risk in these loans

may

be impacted by the creditworthiness of a borrower, property values and the local economy in the Bank’s market area.

Construction and Land:

Construction and land loans are usually based upon estimates of costs and estimated value of the completed project and include independent appraisal reviews and a financial analysis of the developers and property owners. Sources of repayment of these loans

may

include permanent loans, sales of developed property or an interim loan commitment from the Bank until permanent financing is obtained. These loans are considered to be higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, general economic conditions and the availability of long-term financing. Credit risk in these loans

may

be impacted by the creditworthiness of a borrower, property values and the local economy in the Bank’s market area.

Commercial

Business

:

The commercial business loan portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and expansions. The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations.

Consumer:

The consumer loan portfolio consists of various term and line of credit loans such as automobile loans and loans for other personal purposes. Repayment for these types of loans will come from a borrower’s income sources that are typically independent of the loan purpose. Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions in the Bank’s market area) and the creditworthiness of a borrower.

The following table

s present by portfolio segment, the activity in the allowance for loan losses for the

three

months ended

March

31,

2017

and

2016

and the recorded investment in loans and impairment method as of

March

31,

2017

and

December

31,

2016:

	For the Three Months Ended March 31, 2017 (Unaudited)
	Real Estate
						Construction		Commercial
	Residential			Commercial		and Land		Business			Consumer		Total
	(In thousands)
Allowance for loan losses:
Balance, January 1, 2017	$	656		$	326	$	72	$	4		$	5	$	1,063
Provision (credit) for loan losses		(66	)		39		6		18			3		-
Charge-offs		(12	)		-		-		(9	)		-		(21	)
Recoveries		-			-		-		-			-		-
Balance, March 31, 2017	$	578		$	365	$	78	$	13		$	8	$	1,042

			For the Three Months ended March 31, 2016
Allowance for loan losses:
Balance, January 1, 2016	$	648	$	383		$	102		$	19		$	3	$	1,155
Provision (credit) for loan losses		91		(72	)		(11	)		(12	)		4		-
Charge-offs		-		-			-			-			-		-
Recoveries		-		-			-			-			-		-
Balance, March 31 , 2016	$	739	$	311		$	91		$	7		$	7	$	1,155

	March 31, 2017 (Unaudited)
	Real Estate
					Construction		Commercial
	Residential		Commercial		and Land		Business		Consumer		Total
	(In thousands)
Allowance for loan losses:
Ending balance, individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance, collectively evaluated for impairment	$	578	$	365	$	78	$	13	$	8	$	1,042
Loans:
Ending balance	$	43,656	$	34,132	$	10,139	$	1,193	$	689	$	89,809
Ending balance; individually evaluated for impairment	$	2,757	$	528	$	1,681	$	-	$	-	$	4,966
Ending balance; collectively evaluated for impairment	$	40,899	$	33,604	$	8,458	$	1,193	$	689	$	84,843

	December 31, 2016
	Real Estate
					Construction		Commercial
	Residential		Commercial		and Land		Business		Consumer		Total
	(In thousands)
Allowance for loan losses:
Ending balance	$	656	$	326	$	72	$	4	$	5	$	1,063
Ending balance, individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance, collectively evaluated for impairment	$	656	$	326	$	72	$	4	$	5	$	1,063
Loans:
Ending balance	$	43,036	$	32,175	$	9,543	$	383	$	776	$	85,913
Ending balance; individually evaluated for impairment	$	2,779	$	533	$	1,709	$	-	$	-	$	5,021
Ending balance; collectively evaluated for impairment	$	40,257	$	31,642	$	7,834	$	383	$	776	$	80,892

Internal Risk Categories

The Bank has adopted a standard loan grading system for all loans. Loans are selected for a grading review based on certain characteristics, including concentrations of credit and upon delinquency of

90

days or more. Definitions are as follows:

Pass

:

Loans categorized as Pass are higher quality loans that do not fit any of the other categories described below.

Special Mention

/Watch

: The loans identified as special mention/watch have an obvious flaw or a potential weakness that deserves special management attention, but which has not yet impacted collectability. These flaws or weaknesses, if left uncorrected,

may

result in the deterioration of the prospects of repayment or the deterioration of the Bank’s credit position.

Substandard

:These are loans with a well-defined weakness, where the Bank has a serious concern about the borrower’s ability to make full repayment if the weaknesses are not corrected. The loan

may

contain a flaw, which could impact the borrower’s ability to repay, or the borrower’s continuance as a “going concern”. When collateral values are not sufficient to secure the loan and other weaknesses are present, the loan

may

be rated substandard. A loan will also be graded substandard when full repayment is expected, but it must come from the liquidation of collateral. All loans that are past due

90

days or more are classified as substandard.

Doubtful

: These are loans with major defined weaknesses, where future charge-off of a part of the credit is highly likely. The primary repayment source is no longer viable and the viability of the

secondary

source of repayment is in doubt. The amount of loss is uncertain due to circumstances within the credit that are not yet fully developed and the loan is rated “Doubtful” until the loss can be accurately estimated.

Loss

: These are loans that represent near term charge-offs. Loans classified as loss are considered uncollectible and of such little value that it is not desirable to continue carrying them as assets on the Bank’s financial statements, even though partial recovery

may

be possible at some future time.

The following tables present the credit risk profile of the

Company’s loan portfolio based on internal rating category and payment activity as of

March

31,

2017

and

December

31,

2016:

	March 31, 2017
	Real Estate
					Construction		Commercial
	Residential		Commercial		and Land		Business		Consumer		Total
	(In thousands)
Pass	$	41,496	$	33,604	$	8,823	$	1,193	$	689	$	85,805
Special mention/Watch		290		-		-		-		-		290
Substandard		1,870		528		1,316		-		-		3,714
Doubtful		-		-		-		-		-		-
Total	$	43,656	$	34,132	$	10,139	$	1,193	$	689	$	89,809

	December 31, 2016
	Real Estate
					Construction		Commercial
	Residential		Commercial		and Land		Business		Consumer		Total
	(In thousands)
Pass	$	40,724	$	31,677	$	8,520	$	348	$	766	$	82,035
Special mention/Watch		415		-		-		-		10		425
Substandard		1,897		498		1,023		35		-		3,453
Doubtful		-		-		-		-		-		-
Total	$	43,036	$	32,175	$	9,543	$	383	$	776	$	85,913

The Company evaluates the loan risk grading system definitions and allowance for loan losses methodology on an ongoing basis. No significant changes were made to either during the past year.

The following tables present the

Company’s loan portfolio aging analysis of the recorded investment in loans as of

March

31,

2017

and

December

31,

2016:

	March 31, 2017 (Unaudited)
													Total Loans >
	30-59 Days		60-89 Days		Greater Than		Total				Total Loans		90 Days &
	Past Due		Past Due		90 Days		Past Due		Current		Receivable		Accruing
	(In thousands)
Real estate
Residential	$	272	$	-	$	314	$	586	$	43,070	$	43,656	$	-
Commercial		-		-		-		-		34,132		34,132		-
Construction and land		-		-		-		-		10,139		10,139		-
Commercial business		-		-		-		-		1,193		1,193		-
Consumer		-		-		-		-		689		689		-
Total	$	272	$	-	$	314	$	586	$	89,223	$	89,809	$	-

	December 31, 2016
													Total Loans >
	30-59 Days		60-89 Days		Greater Than		Total				Total Loans		90 Days &
	Past Due		Past Due		90 Days		Past Due		Current		Receivable		Accruing
	(In thousands)
Real estate
Residential	$	194	$	-	$	327	$	521	$	42,515	$	43,036	$	-
Commercial		-		-		4		4		32,171		32,175		-
Construction and land		-		-		-		-		9,543		9,543		-
Commercial business		-		-		-		-		383		383		-
Consumer		-		-		-		-		776		776
Total	$	194	$	-	$	331	$	525	$	85,388	$	85,913	$	-

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC

310

-

10

-

35

-

16),

when based on current information and events, it is probable the

Bank will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming multi-family and commercial loans but also include loans modified in troubled debt restructurings.

The following table present

s impaired loans as of

March

31,

2017

and for the

three

month periods ended

March

31,

2017

and

2016:

	As of						For the Three Months Ended
	March 31, 2017						March 31, 2017				March 31, 2016
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Balance of Impaired Loans		Interest Income Recognized		Average Balance of Impaired Loans		Interest Income Recognized
	(Unaudited)
	(In thousands)
Loans without a specific valuation allowance:
Real estate
Residential	$	2,757	$	2,874	$	-	$	2,510	$	37	$	1,451	$	15
Commercial		528		528		-		528		7		236		4
Construction and land		1,681		1,681		-		1,713		25		1,739		21
Commercial business						-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Loans with a specific valuation allowance:
Real estate
Residential		-		-		-		-		-		270		1
Commercial		-		-		-		-		-		-		-
Construction and land		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Totals	$	4,966	$	5,083	$	-	$	4,751	$	69	$	3,696	$	41

T

he following table presents impaired loans as of

December

31,

2016:

	As of December 31, 2016
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Balance of Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation allowance:
Real estate
Residential	$	2,779	$	2,936	$	-	$	2,420	$	140
Commercial		533		560		-		230		28
Construction and land		1,709		1,709		-		1,760		95
Commercial business		-		-		-		-		-
Consumer		-		-		-		-		-
Loans with a specific valuation allowance:
Real estate
Residential		-		-		-		-		-
Commercial		-		-		-		-		-
Construction and land		-		-		-		-		-
Commercial business		-		-		-		-		-
Consumer		-		-		-		-		-
Totals	$	5,021	$	5,205	$	-	$	4,410	$	263

The following table presents the

Company’s nonaccrual loans at

March

31,

2017

and

December

31,

2016.

The table excludes performing troubled debt restructurings.

	March 31, 2017		December 31, 2016
	(In thousands)
Real estate loans
Residential	$	617	$	614
Commercial		-		4
Construction and land		-		-
Commercial business		-		-
Consumer and other		-		-
Total nonaccrual	$	617	$	618

At

March

31,

2017

(unaudited) and

December

31,

2016,

the Company had certain loans that were modified in troubled debt restructurings (TDRs) and impaired. The modification of terms of such loans generally included

one

or a combination of the following: an extension of the maturity date or a reduction of the stated interest rate.

During the

three

months ended

March

31,

2017

and

2016,

there were

no

new loan modifications classified as TDRs.

The

Company had

no

TDRs modified in the

twelve

months ended

March

31,

2017

and

2016

that subsequently defaulted. A loan is considered to be in payment default once it is

30

days contractually past due under the loan’s modified terms.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the

Bank’s internal underwriting policy.

Foreclosed real estate held for sale consisted of residential real estate at

March

31,

2017

and

December

31,

2016.

There were

$323,000

of residential real estate loans in the process of foreclosure at

March

31,

2017

and

December

31,

2016.

XML

Note 4 - Regulatory Matters

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note

4:

Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory- and possibly additional discretionary- actions by regulators that, if undertaken, could have a direct material effect on the Bank

’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Furthermore, the Bank’s regulators could require adjustments to regulatory capital not reflected in these financial statements.

At

March

31,

2017

and

December

31,

2016,

quantitative measures established by regulation to ensure capital adequacy requires the Bank to maintain minimum amounts and ratios (set forth in the table below), of total capital, Tier

1

capital and common equity Tier

1

capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier

1

leverage capital to average total assets.

Basel III was effective for the Company on

January

1,

2015.

Basel III requires the Company and the Bank to maintain minimum amounts and ratios of common equity Tier

1

capital to risk weighted assets, as defined in the regulation. Under the new Basel III rules, in order to avoid limitations on capital distributions, including dividends, the Company must hold a capital conservation buffer above the adequately capitalized common equity Tier

1

capital to risk-weighted assets ratio. The capital conservation buffer is being phased in from

zero

percent to

2.50

percent by

2019.

Under Basel III, the Company and Bank elected to opt-out of including accumulated other comprehensive income in

regulatory capital.

Management believes, as of

March

31,

2017

(unaudited) and

December

31,

2016,

that the Bank meets all capital adequacy requirements to which it is subject.

As of

March

31,

2017

(unaudited) and

December

31,

2016,

the most recent notification categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based and Tier I leverage capital ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank

’s category.

New Bancorp, Inc.

Notes to Condensed

Consolidated

Financial Statements

The Bank

’s actual capital amounts and ratios are presented in the following table:

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
As of March 31, 2017
Total Capital
(to Risk-Weighted Assets)	$	13,989		17.8	%	$	6,273		8.0	%	$	7,841		10.0	%
Tier 1 Capital
(to Risk-Weighted Assets)	$	13,008		16.6	%	$	4,705		6.0	%	$	6,273		8.0	%
Common Equity Tier I Capital
(to Risk-Weighted Assets)	$	13,008		16.6	%	$	3,529		4.5	%	$	5,097		6.5	%
Tier I Leverage Capital
(to Average Total Assets)	$	13,008		12.1	%	$	4,299		4.0	%	$	5,374		5.0	%
As of December 31, 2016
Total Capital
(to Risk-Weighted Assets)	$	13,943		17.6	%	$	6,327		8.0	%	$	7,908		10.0	%
Tier I Capital
(to Risk-Weighted Assets)	$	12,954		16.4	%	$	4,745		6.0	%	$	6,327		8.0	%
Common Equity Tier I Capital
(to Risk-Weighted Assets)	$	12,954		16.4	%	$	3,559		4.5	%	$	5,140		6.5	%
Tier I Capital
(to Total Assets)	$	12,954		12.9	%	$	4,024		4.0	%	$	5,030		5.0	%

XML

Note 5 - Disclosures About Fair Value of Assets and Liabilities

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note

5:

Disclosures about Fair Value of Assets and Liabilities

Fair value is the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of

three

levels of inputs that

may

be used to measure fair value:

Level 1 Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 Significant unobservable inputs that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Nonrecurring Measurements

The following table presents fair value measurements of assets measured at fair value on a non-recurring basis and the level within the fair value hierarchy in which fair value measurements fall at

March

31,

2017

and

December

31,

2016:

			Fair Value Measurement Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
Impaired loans, collateral dependent	$	220	$	-	$	-	$	220
December 31, 2016
Impaired loans, collateral dependent	$	232	$	-	$	-	$	232

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a non-recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level

3

of the fair value hierarchy, the process used to develop the reported fair value is described below.

Collateral-dependent Impaired Loans, Net of ALLL

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

3

of the fair value hierarchy.

The Bank considers the appraisal or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that

may

affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by management

. Appraisals are reviewed for accuracy and consistency by management. Appraisers are selected from the list of approved appraisers maintained by management. The appraised values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral. These discounts and estimates are developed by management by comparison to historical results.

Unobservable (Level

3)

Inputs

The following table presents quantitative information about unobservable inputs used in nonrecurring Level

3

fair value measurements:

	Fair Value		Valuation Technique	Unobservable Inputs	Range
	(In thousands)
March 31, 2017
Impaired loans (collateral dependent)	$	220	Marketable comparable properties	Marketability discount	17%	-	24%
December 31, 2016
Impaired loans (collateral dependent)	$	232	Marketable comparable properties	Marketability discount	10%	-	15%

Fair Value of Financial Instruments

The following table presents the estimated fair values of the

Company’s financial instruments not carried at fair value and the level within the fair value hierarchy in which the fair value measurements fall at

March

31,

2017

and

December

31,

2016.

					Fair Value Measurement Using
	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
Financial assets
Cash and due from banks	$	1,510	$	1,510	$	1,510	$	-	$	-
Interest-earning demand deposits		9,110		4,270		4,270		-		-
Federal funds sold		4,840		4,840		4,840		-		-
Interest-earning time deposits in banks		992		992		-		992		-
Loans, net		86,695		86,511		-		-		86,511
Federal Home Loan Bank stock		468		468		-		468		-
Accrued interest receivable		221		221		-		221		-
Servicing rights		566		566		-		-		566
Financial liabilities
Deposits		89,458		89,720		45,863		43,857		-
Advances from the Federal Home Loan Bank		10,027		10,120		-		10,120		-
Accrued interest payable		12		12		-		12		-
December 31, 2016
Financial assets
Cash and due from banks	$	1,419	$	1,419	$	1,419	$	-	$	-
Interest-earning demand deposits		8,438		8,438		8,438		-		-
Interest-earning time deposits in banks		992		992		-		992		-
Loans, net		83,008		83,538		-		-		83,538
Federal Home Loan Bank stock		468		468		-		468		-
Accrued interest receivable		203		203		-		203		-
Servicing rights		483		483		-		-		483
Financial liabilities
Deposits		76,841		77,104		45,080		32,024		-
Federal funds purchased		1,000		1,000		1,000		-		-
Advances from the Federal Home Loan Bank		10,027		10,127		-		10,127		-
Accrued interest payable		7		7		-		7		-

The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying balance sheets at amounts other than fair value.

Cash and

Due from Banks, Interest-earning Demand Deposits and Federal Funds Sold

The carrying amount approximates fair value.

Interest-earning Time Deposits in Banks

The carrying amount approximates fair value.

Loans

Fair value is estimated by discounting the future cash flows using the market rates at which similar notes would be made to borrowers with similar credit ratings and for the same remaining maturities. The market rates used are based on current rates the Bank would impose for similar loans and reflect a market participant assumption

about risks associated with nonperformance, illiquidity, and the structure and term of the loans along with local economic and market conditions.

Federal Home Loan Bank Stock

Fair value is estimated at book value due to restrictions that limit the sale or transfer of such securities.

Accrued Interest Receivable and Payable

The carrying amount approximates fair value. The carrying amount is determined using the interest rate, balance and last payment date.

Servicing Rights

S

ervicing rights do not trade in an active, open market with readily observable prices. Accordingly, fair value is estimated using discounted cash flow models having significant inputs of discount rate, prepayment speed and default rate.

Deposits

Fair value of term deposits is estimated by discounting the future cash flows using rates of similar deposits with similar maturities. The market rates used were obtained from a knowledgeable independent

third

party and reviewed by the

Bank. The rates were the average of current rates offered by local competitors of the Bank.

The estimated fair val

ue of demand, NOW, savings and money market deposits is the book value since rates are regularly adjusted to market rates and amounts are payable on demand at the reporting date.

Federal Funds Purchased

The carrying amount approximates fair value.

F

ederal Home Loan Bank Advances

Fair value is estimated by discounting the future cash flows using rates of similar advances with similar maturities. These rates were obtained from current rates offered by

the Federal Home Loan Bank.

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

The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates.

The fair values of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date.

XML

Note 6 - Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

Note

6:

Recent Accounting Pronouncements

The

Company is an emerging growth company and as such will be subject to the effective dates noted for the private companies if they differ from the effective dates noted for public companies.

FASB ASU

2014

-

09,

Revenue from Contracts with Customers

In

May

2014,

the FASB issued

Accounting Standards Update (ASU)

2014

-

09,

“Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In

March,

2016

the FASB issued ASU

2016

-

08,

“Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the guidance in determining revenue recognition as principal versus agent. In

April

2016,

the FASB issued ASU

2016

-

10,

“Identifying Performance Obligations and Licensing,” which provides guidance in accounting for immaterial performance obligations and shipping and handling. In

May

2016,

the FASB issued ASU

2016

-

12,

“Narrow-Scope Improvements and Practical Expedients” which provides clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for noncash consideration and completed contracts at transition. This ASU also provides a practical expedient for contract modifications.

The amendments are effective, as to the Company,  for annual reporting periods beginning after

December

15,

2017

and for interim reporting periods within such annual periods. The Company is currently evaluating the impact of adopting the guidance.

FASB ASU

2016

-

01,

Recognition and Measurement of Financial Assets and Financial Liabilities

In

January

2016,

the

FASB issued ASU

2016

-

01,

 “Recognition and Measurement of Financial Assets and Financial Liabilities”. For public business entities, the amendments in this update include the elimination of the requirement to disclose the method(s) and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, the requirement to use the exit price notion when measuring fair value of financial instruments for disclosure purposes, the requirement to present separately in other comprehensive income the portion of the total change in the 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, the requirement for separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or accompanying notes to the financial statements, and the amendments clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets.

The amendments in this update are effective, as to the Company, for fiscal years beginning after

December

15,

2017,

including interim periods within those fiscal years.

Early adoption of the amendments in this update is not permitted, except that early application by public business entities to financial statements of fiscal years or interim periods that have not yet been issued or, by all other entities, that have not yet been made available for issuance are permitted as of the beginning of the fiscal year of adoption for the following amendment: An entity should present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk if the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. An entity should apply the amendments to this update by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is currently evaluating the impact of adopting this guidance on the Company’s financial statements.

Adoption of ASU No.

2016

-

01

is not expected to have a material impact on the Company's results of operations or financial position

FASB ASU

2016

-

02,

Leases

In

February

2016

the

FASB issued ASU

2016

-

02,

“Leases”. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:

● A lease liability, which is a lessee ‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and

● A right-of-use asset, which is an asset that represents the lessee ’s right to use, or control the use of, a specified asset for the lease term.

Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic

606,

“Revenue from Contracts with Customers”.

The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing.

The amendments in ASU

2016

-

02

are effective, as to the Company, for years beginning after

December

15,

2019,

 and for interim periods for years beginning after

January

1,

2020.

  Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and    operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors

may

not apply a full retrospective transition approach. Management is currently evaluating the impact of adopting this guidance on the Company’s financial statements.

FASB ASU

2016

-

13,

Financial Instruments

– Credit Losses

In

June

2016,

FASB issued ASU

2016

-

13,

“

Financial Instruments - Credit Losses”.  The amendments in this Update replace the incurred loss model with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates.

ASU No.

2016

-

13

replaces the incurred loss impairment methodology with a new methodology that reflects expected credit losses over the lives of the loans and requires consideration of a broader range of information to inform credit loss

estimates. The ASU requires an organization to estimate

all expected credit losses for financial assets measured at amortized cost, including loans and held-to-maturity debt securities, based on historical experience, current conditions, and reasonable and

supportable forecasts. Additional disclosures are required. ASU No.

2016

-

13

is effective, as to the Company, for fiscal years, beginning after

December

15,

2020,

and interim periods within those fiscal years, beginning after

December

15,

2021.

 Management expects that the implementation of ASU No.

2016

-

13

may

increase the balance of the allowance for loan losses and i

s continuing to evaluate the potential impact on the Company's results of operations and financial position.

XML

Note 7 - Loss Per Share

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Earnings Per Share [Text Block]

Note

7:

Loss Per Share

Basic

loss per share (“LPS”) is calculated by dividing net loss applicable to common stock by the weighted-average number of shares of common stock outstanding during the period. Unallocated common shares held by the Company’s Employee Stock Ownership Plan (the “ESOP”) are shown as a reduction in stockholders’ equity and are excluded from weighted-average common shares outstanding for basic and diluted LPS calculations until they are committed to be released.

Loss

per share for the

three

months ended

March

31,

2017

and

2016

 was

$0.03

and

$0.40,

respectively, calculated using

696,600

average shares issued, less

49,458

and

52,353

unallocated average shares held by the ESOP for each respective period. The Company had

no

dilutive or potentially dilutive securities at

March

31,

2017

and

2016.

XML

Note 8 - Employee Stock Ownership Plan

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Compensation and Employee Benefit Plans [Text Block]

Note

8:

Employee Stock Ownership Plan

As part of the Company

’s stock conversion, shares were purchased by the ESOP with a loan from New Bancorp. All employees of the Bank meeting certain

tenure

requirements are entitled to

participate in the ESOP. Compensation expense related to the

ESOP was

$10,000

and

$5,000

for the

three

month periods ended

March

31,

2017

and

2016,

respectively

. 

The stock price at the formation date was

$10.00.

The aggregate fair value of the

49,458

unallocated shares was

$717,000

based on the

$14.50

closing price of our common stock on

March

31,

2017.

XML

Note 9 - Change in Corporate Form

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Change in Corporate Form [Text Block]

Note

9:

Change in Corporate Form

On

October

19,

2015,

the

Bank converted into a federal stock savings bank and established a stock holding company, New Bancorp, Inc., as parent of the Bank.

The Bank converted to the stock form of ownership, followed by the issuance of all of the Bank

’s outstanding stock to New Bancorp, Inc. The Bank became the wholly owned subsidiary of the Company, and the Company issued and sold shares of its capital stock pursuant to an independent

valuation apprai

sal of the Bank and the Company. The stock was priced at

$10.00

per share. In addition, the Bank’s board of directors adopted an employee stock ownership plan (ESOP) which subscribed for

8%

of the common stock sold in the offering. The Conversion was completed on

October

19,

2015

and resulted in the issuance of

696,600

common shares by the Company.

The cost of the Conversion and issuing the capital stock

totaled

$1.2

million and was deducted from the proceeds of the offering.

In accordance with OCC regulations, at the time of the Conversion, the Bank substantially restricted retained earnings by establishing a liquidation account. The liquidation account will be maintained for the benefit of eligible holders who continue to maintain their accounts at the Bank after the Conversion. The liquidation account will be reduced annually to the extent that eligible account holders have reduced their qualifying deposits. Subsequent increases will not restore an

eligible account holder

’s interest in the liquidation account. In the event of a complete liquidation of the Bank, and only in such event, each eligible account holder will be entitled to receive a distribution from the liquidation account in an amount proportionate to the adjusted qualifying account balances then held. The Bank

may

not pay dividends if those dividends would reduce equity capital below the required liquidation account amount.

The conversion was accounted for as a change in corporate form with the historic basis of the Bank

’s assets, liabilities and equity unchanged as a result.

XML

Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The consolidated financial s

tatements as of and for the periods ended

March

31,

2017

and

December

31,

2016,

include New Bancorp, Inc. and its wholly-owned subsidiary the New Buffalo Savings Bank “the Bank”, together referred to as the “Company.” Intercompany transactions and balances have been eliminated in consolidation. The conversion to stock form, including the formation of New Bancorp, Inc., was completed on

October

19,

2015.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with U.S.

generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, valuation of deferred tax assets and fair values of financial instruments.

Reclassification, Policy [Policy Text Block]

              Reclassifications

Certain reclassifications have been made to the

December

31,

2016

financial statements to conform to the

March

31,

2017

financial statement presentation

.  These reclassifications had no effect on our results of operations. 

New Accounting Pronouncements, Policy [Policy Text Block]

FASB ASU

2014

-

09,

Revenue from Contracts with Customers

In

May

2014,

the FASB issued

Accounting Standards Update (ASU)

2014

-

09,

“Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In

March,

2016

the FASB issued ASU

2016

-

08,

“Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the guidance in determining revenue recognition as principal versus agent. In

April

2016,

the FASB issued ASU

2016

-

10,

“Identifying Performance Obligations and Licensing,” which provides guidance in accounting for immaterial performance obligations and shipping and handling. In

May

2016,

the FASB issued ASU

2016

-

02

-

12,

“Narrow-Scope Improvements and Practical Expedients” which provides clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for noncash consideration and completed contracts at transition. This ASU also provides a practical expedient for contract modifications.

The amendments are effective for annual reporting periods beginning after

December

15,

2017

and for interim reporting periods within such annual periods. The Company is currently evaluating the impact of adopting the guidance.

FASB ASU

2016

-

01,

Recognition and Measurement of Financial Assets and Financial Liabilities

In

January

2016,

the

FASB issued ASU

2016

-

01,

 “Recognition and Measurement of Financial Assets and Financial Liabilities”. For public business entities, the amendments in this update include the elimination of the requirement to disclose the method(s) and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, the requirement to use the exit price notion when measuring fair value of financial instruments for disclosure purposes, the requirement to present separately in other comprehensive income the portion of the total change in the 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, the requirement for separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or accompanying notes to the financial statements, and the amendments clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets.

For public business entities, the amendments in this update are effective for fiscal years beginning after

December

15,

2017,

including interim periods within those fiscal years.

Early adoption of the amendments in this update is not permitted, except that early application by public business entities to financial statements of fiscal years or interim periods that have not yet been issued or, by all other entities, that have not yet been made available for issuance are permitted as of the beginning of the fiscal year of adoption for the following amendment: An entity should present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk if the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. An entity should apply the amendments to this update by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is currently evaluating the impact of adopting this guidance on the Company’s financial statements.

Adoption of ASU No.

2016

-

01

is not expected to have a material impact on the Company's results of operations or financial position

FASB ASU

2016

-

02,

Leases

In

February

2016

the

FASB issued ASU

2016

-

02,

“Leases”. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:

● A lease liability, which is a lessee ‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and

● A right-of-use asset, which is an asset that represents the lessee ’s right to use, or control the use of, a specified asset for the lease term.

Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic

606,

“Revenue from Contracts with Customers”.

The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing.

Public business entities should apply the amendments in ASU

2016

-

02

for fiscal years beginning after

December

15,

2018,

including interim periods within those fiscal years (i.e.,

January

1,

2019,

for a calendar year entity). Early application is permitted for all public business entities upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and    operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors

may

not apply a full retrospective transition approach. Management is currently evaluating the impact of adopting this guidance on the Company’s financial statements.

FASB ASU

2016

-

13,

Financial Instruments

– Credit Losses

In

June

2016,

FASB issued ASU

2016

-

13,

“

Financial Instruments - Credit Losses”.  The amendments in this Update replace the incurred loss model with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates.

ASU No.

2016

-

13

replaces the incurred loss impairment methodology with a new methodology that reflects expected credit losses over the lives of the loans and requires consideration of a broader range of information to inform credit loss

estimates. The ASU requires an organization to estimate

all expected credit losses for financial assets measured at amortized cost, including loans and held-to-maturity debt securities, based on historical experience, current conditions, and reasonable and

supportable forecasts. Additional disclosures are required. ASU No.

2016

-

13

will take effect for U.S. Securities and Exchange Commission (SEC) filers for fiscal years, and interim periods within those fiscal years, beginning after

December

15,

2019.

Early application will be permitted for fiscal years, and interim periods within those fiscal years, beginning after

December

15,

2018.

Management expects that the implementation of ASU No.

2016

-

13

may

increase the balance of the allowance for loan losses and i

s continuing to evaluate the potential impact on the Company's results of operations and financial position.

XML

Note 3 - Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2017

Notes Tables

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

	March 31,			December 31,
	2017			2016
	(Unaudited)
	(In thousands)
Real estate loans
Residential	$	43,656		$	43,036
Commercial		34,132			32,175
Construction and land		10,139			9,543
Commercial business		1,193			383
Consumer and other		689			776
Total loans		89,809			85,913
Less:
Net deferred loan fees, premiums and discounts		(105	)		(70	)
Undisbursed loans in process		(1,967	)		(1,772	)
Allowance for loan losses		(1,042	)		(1,063	)
Net loans	$	86,695		$	83,008

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

	For the Three Months Ended March 31, 2017 (Unaudited)
	Real Estate
						Construction		Commercial
	Residential			Commercial		and Land		Business			Consumer		Total
	(In thousands)
Allowance for loan losses:
Balance, January 1, 2017	$	656		$	326	$	72	$	4		$	5	$	1,063
Provision (credit) for loan losses		(66	)		39		6		18			3		-
Charge-offs		(12	)		-		-		(9	)		-		(21	)
Recoveries		-			-		-		-			-		-
Balance, March 31, 2017	$	578		$	365	$	78	$	13		$	8	$	1,042

			For the Three Months ended March 31, 2016
Allowance for loan losses:
Balance, January 1, 2016	$	648	$	383		$	102		$	19		$	3	$	1,155
Provision (credit) for loan losses		91		(72	)		(11	)		(12	)		4		-
Charge-offs		-		-			-			-			-		-
Recoveries		-		-			-			-			-		-
Balance, March 31 , 2016	$	739	$	311		$	91		$	7		$	7	$	1,155

	March 31, 2017 (Unaudited)
	Real Estate
					Construction		Commercial
	Residential		Commercial		and Land		Business		Consumer		Total
	(In thousands)
Allowance for loan losses:
Ending balance, individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance, collectively evaluated for impairment	$	578	$	365	$	78	$	13	$	8	$	1,042
Loans:
Ending balance	$	43,656	$	34,132	$	10,139	$	1,193	$	689	$	89,809
Ending balance; individually evaluated for impairment	$	2,757	$	528	$	1,681	$	-	$	-	$	4,966
Ending balance; collectively evaluated for impairment	$	40,899	$	33,604	$	8,458	$	1,193	$	689	$	84,843

	December 31, 2016
	Real Estate
					Construction		Commercial
	Residential		Commercial		and Land		Business		Consumer		Total
	(In thousands)
Allowance for loan losses:
Ending balance	$	656	$	326	$	72	$	4	$	5	$	1,063
Ending balance, individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance, collectively evaluated for impairment	$	656	$	326	$	72	$	4	$	5	$	1,063
Loans:
Ending balance	$	43,036	$	32,175	$	9,543	$	383	$	776	$	85,913
Ending balance; individually evaluated for impairment	$	2,779	$	533	$	1,709	$	-	$	-	$	5,021
Ending balance; collectively evaluated for impairment	$	40,257	$	31,642	$	7,834	$	383	$	776	$	80,892

Financing Receivable Credit Quality Indicators [Table Text Block]

	March 31, 2017
	Real Estate
					Construction		Commercial
	Residential		Commercial		and Land		Business		Consumer		Total
	(In thousands)
Pass	$	41,496	$	33,604	$	8,823	$	1,193	$	689	$	85,805
Special mention/Watch		290		-		-		-		-		290
Substandard		1,870		528		1,316		-		-		3,714
Doubtful		-		-		-		-		-		-
Total	$	43,656	$	34,132	$	10,139	$	1,193	$	689	$	89,809

	December 31, 2016
	Real Estate
					Construction		Commercial
	Residential		Commercial		and Land		Business		Consumer		Total
	(In thousands)
Pass	$	40,724	$	31,677	$	8,520	$	348	$	766	$	82,035
Special mention/Watch		415		-		-		-		10		425
Substandard		1,897		498		1,023		35		-		3,453
Doubtful		-		-		-		-		-		-
Total	$	43,036	$	32,175	$	9,543	$	383	$	776	$	85,913

Past Due Financing Receivables [Table Text Block]

	March 31, 2017 (Unaudited)
													Total Loans >
	30-59 Days		60-89 Days		Greater Than		Total				Total Loans		90 Days &
	Past Due		Past Due		90 Days		Past Due		Current		Receivable		Accruing
	(In thousands)
Real estate
Residential	$	272	$	-	$	314	$	586	$	43,070	$	43,656	$	-
Commercial		-		-		-		-		34,132		34,132		-
Construction and land		-		-		-		-		10,139		10,139		-
Commercial business		-		-		-		-		1,193		1,193		-
Consumer		-		-		-		-		689		689		-
Total	$	272	$	-	$	314	$	586	$	89,223	$	89,809	$	-

	December 31, 2016
													Total Loans >
	30-59 Days		60-89 Days		Greater Than		Total				Total Loans		90 Days &
	Past Due		Past Due		90 Days		Past Due		Current		Receivable		Accruing
	(In thousands)
Real estate
Residential	$	194	$	-	$	327	$	521	$	42,515	$	43,036	$	-
Commercial		-		-		4		4		32,171		32,175		-
Construction and land		-		-		-		-		9,543		9,543		-
Commercial business		-		-		-		-		383		383		-
Consumer		-		-		-		-		776		776
Total	$	194	$	-	$	331	$	525	$	85,388	$	85,913	$	-

Impaired Financing Receivables [Table Text Block]

	As of						For the Three Months Ended
	March 31, 2017						March 31, 2017				March 31, 2016
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Balance of Impaired Loans		Interest Income Recognized		Average Balance of Impaired Loans		Interest Income Recognized
	(Unaudited)
	(In thousands)
Loans without a specific valuation allowance:
Real estate
Residential	$	2,757	$	2,874	$	-	$	2,510	$	37	$	1,451	$	15
Commercial		528		528		-		528		7		236		4
Construction and land		1,681		1,681		-		1,713		25		1,739		21
Commercial business						-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Loans with a specific valuation allowance:
Real estate
Residential		-		-		-		-		-		270		1
Commercial		-		-		-		-		-		-		-
Construction and land		-		-		-		-		-		-		-
Commercial business		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Totals	$	4,966	$	5,083	$	-	$	4,751	$	69	$	3,696	$	41

	As of December 31, 2016
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Balance of Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation allowance:
Real estate
Residential	$	2,779	$	2,936	$	-	$	2,420	$	140
Commercial		533		560		-		230		28
Construction and land		1,709		1,709		-		1,760		95
Commercial business		-		-		-		-		-
Consumer		-		-		-		-		-
Loans with a specific valuation allowance:
Real estate
Residential		-		-		-		-		-
Commercial		-		-		-		-		-
Construction and land		-		-		-		-		-
Commercial business		-		-		-		-		-
Consumer		-		-		-		-		-
Totals	$	5,021	$	5,205	$	-	$	4,410	$	263

Schedule of Financing Receivables, Non Accrual Status [Table Text Block]

	March 31, 2017		December 31, 2016
	(In thousands)
Real estate loans
Residential	$	617	$	614
Commercial		-		4
Construction and land		-		-
Commercial business		-		-
Consumer and other		-		-
Total nonaccrual	$	617	$	618

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Note 4 - Regulatory Matters (Tables)

3 Months Ended

Mar. 31, 2017

Notes Tables

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
As of March 31, 2017
Total Capital
(to Risk-Weighted Assets)	$	13,989		17.8	%	$	6,273		8.0	%	$	7,841		10.0	%
Tier 1 Capital
(to Risk-Weighted Assets)	$	13,008		16.6	%	$	4,705		6.0	%	$	6,273		8.0	%
Common Equity Tier I Capital
(to Risk-Weighted Assets)	$	13,008		16.6	%	$	3,529		4.5	%	$	5,097		6.5	%
Tier I Leverage Capital
(to Average Total Assets)	$	13,008		12.1	%	$	4,299		4.0	%	$	5,374		5.0	%
As of December 31, 2016
Total Capital
(to Risk-Weighted Assets)	$	13,943		17.6	%	$	6,327		8.0	%	$	7,908		10.0	%
Tier I Capital
(to Risk-Weighted Assets)	$	12,954		16.4	%	$	4,745		6.0	%	$	6,327		8.0	%
Common Equity Tier I Capital
(to Risk-Weighted Assets)	$	12,954		16.4	%	$	3,559		4.5	%	$	5,140		6.5	%
Tier I Capital
(to Total Assets)	$	12,954		12.9	%	$	4,024		4.0	%	$	5,030		5.0	%

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Note 5 - Disclosures About Fair Value of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2017

Notes Tables

Fair Value Measurements, Nonrecurring [Table Text Block]

			Fair Value Measurement Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
Impaired loans, collateral dependent	$	220	$	-	$	-	$	220
December 31, 2016
Impaired loans, collateral dependent	$	232	$	-	$	-	$	232

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

	Fair Value		Valuation Technique	Unobservable Inputs	Range
	(In thousands)
March 31, 2017
Impaired loans (collateral dependent)	$	220	Marketable comparable properties	Marketability discount	17%	-	24%
December 31, 2016
Impaired loans (collateral dependent)	$	232	Marketable comparable properties	Marketability discount	10%	-	15%

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

					Fair Value Measurement Using
	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
March 31, 2017
Financial assets
Cash and due from banks	$	1,510	$	1,510	$	1,510	$	-	$	-
Interest-earning demand deposits		9,110		4,270		4,270		-		-
Federal funds sold		4,840		4,840		4,840		-		-
Interest-earning time deposits in banks		992		992		-		992		-
Loans, net		86,695		86,511		-		-		86,511
Federal Home Loan Bank stock		468		468		-		468		-
Accrued interest receivable		221		221		-		221		-
Servicing rights		566		566		-		-		566
Financial liabilities
Deposits		89,458		89,720		45,863		43,857		-
Advances from the Federal Home Loan Bank		10,027		10,120		-		10,120		-
Accrued interest payable		12		12		-		12		-
December 31, 2016
Financial assets
Cash and due from banks	$	1,419	$	1,419	$	1,419	$	-	$	-
Interest-earning demand deposits		8,438		8,438		8,438		-		-
Interest-earning time deposits in banks		992		992		-		992		-
Loans, net		83,008		83,538		-		-		83,538
Federal Home Loan Bank stock		468		468		-		468		-
Accrued interest receivable		203		203		-		203		-
Servicing rights		483		483		-		-		483
Financial liabilities
Deposits		76,841		77,104		45,080		32,024		-
Federal funds purchased		1,000		1,000		1,000		-		-
Advances from the Federal Home Loan Bank		10,027		10,127		-		10,127		-
Accrued interest payable		7		7		-		7		-

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Note 2 - Securities (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Available-for-sale Securities	$ 0		$ 0
Proceeds from Sale of Available-for-sale Securities	$ 0	$ 0

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Note 3 - Loans and Allowance for Loan Losses (Details Textual) xbrli-pure in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($)	Mar. 31, 2016	Dec. 31, 2016 USD ($)
Financing Receivable, Modifications, Number of Contracts	0	0
Mortgage Loans in Process of Foreclosure, Amount	$ 323,000		$ 323,000
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0
Residential Portfolio Segment [Member] | Home Equity Loan [Member]
Loans and Leases Receivable, Collateral for Secured Borrowings	$ 4,600,000		$ 4,700,000

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Note 3 - Loans and Allowance for Loan Losses - Classes of Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
Loans	$ 89,809	$ 85,913
Net deferred loan fees, premiums and discounts	(105)	(70)
Undisbursed loans in process	(1,967)	(1,772)
Allowance for loan losses	(1,042)	(1,063)	$ (1,155)	$ (1,155)
Net loans	86,695	83,008
Residential Portfolio Segment [Member]
Loans	43,656	43,036
Allowance for loan losses	(578)	(656)	(739)	(648)
Commercial Real Estate Portfolio Segment [Member]
Loans	34,132	32,175
Allowance for loan losses	(365)	(326)	(311)	(383)
Construction and Land Real Estate [Member]
Loans	10,139	9,543
Allowance for loan losses	(78)	(72)	(91)	(102)
Commercial Portfolio Segment [Member]
Loans	1,193	383
Allowance for loan losses	(13)	(4)	(7)	(19)
Consumer Portfolio Segment [Member]
Loans	689	776
Allowance for loan losses	$ (8)	$ (5)	$ (7)	$ (3)

XML

Note 3 - Loans and Allowance for Loan Losses - Activity in Allowance for Loan Losses and Recorded Investment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Dec. 31, 2016
Balance	$ 1,063	$ 1,155
Provision (credit) for loan losses
Charge-offs	(21)
Recoveries
Balance	1,042	1,155
Allowance for loan losses, individually evaluated for impairment
Allowance for loan losses, collectively evaluated for impairment			1,042	1,063
Loans			89,809	85,913
Loans; individually evaluated for impairment			4,966	5,021
Loans; collectively evaluated for impairment			84,843	80,892
Allowance for loan losses	1,042	1,155	1,042	1,063
Residential Portfolio Segment [Member]
Balance	656	648
Provision (credit) for loan losses	(66)	91
Charge-offs	(12)
Recoveries
Balance	578	739
Allowance for loan losses, individually evaluated for impairment
Allowance for loan losses, collectively evaluated for impairment			578	656
Loans			43,656	43,036
Loans; individually evaluated for impairment			2,757	2,779
Loans; collectively evaluated for impairment			40,899	40,257
Allowance for loan losses	656	648	578	656
Commercial Real Estate Portfolio Segment [Member]
Balance	326	383
Provision (credit) for loan losses	39	(72)
Charge-offs
Recoveries
Balance	365	311
Allowance for loan losses, individually evaluated for impairment
Allowance for loan losses, collectively evaluated for impairment			365	326
Loans			34,132	32,175
Loans; individually evaluated for impairment			528	533
Loans; collectively evaluated for impairment			33,604	31,642
Allowance for loan losses	326	383	365	326
Construction and Land Real Estate [Member]
Balance	72	102
Provision (credit) for loan losses	6	(11)
Charge-offs
Recoveries
Balance	78	91
Allowance for loan losses, individually evaluated for impairment
Allowance for loan losses, collectively evaluated for impairment			78	72
Loans			10,139	9,543
Loans; individually evaluated for impairment			1,681	1,709
Loans; collectively evaluated for impairment			8,458	7,834
Allowance for loan losses	72	102	78	72
Commercial Portfolio Segment [Member]
Balance	4	19
Provision (credit) for loan losses	18	(12)
Charge-offs	(9)
Recoveries
Balance	13	7
Allowance for loan losses, individually evaluated for impairment
Allowance for loan losses, collectively evaluated for impairment			13	4
Loans			1,193	383
Loans; individually evaluated for impairment
Loans; collectively evaluated for impairment			1,193	383
Allowance for loan losses	4	19	13	4
Consumer Portfolio Segment [Member]
Balance	5	3
Provision (credit) for loan losses	3	4
Charge-offs
Recoveries
Balance	8	7
Allowance for loan losses, individually evaluated for impairment
Allowance for loan losses, collectively evaluated for impairment			8	5
Loans			689	776
Loans; individually evaluated for impairment
Loans; collectively evaluated for impairment			689	776
Allowance for loan losses	$ 5	$ 3	$ 8	$ 5

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Note 3 - Loans and Allowance for Loan Losses - Credit Risk Profile Based on Internal Rating Category (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Loans	$ 89,809	$ 85,913
Residential Portfolio Segment [Member]
Loans	43,656	43,036
Commercial Real Estate Portfolio Segment [Member]
Loans	34,132	32,175
Construction and Land Real Estate [Member]
Loans	10,139	9,543
Commercial Portfolio Segment [Member]
Loans	1,193	383
Consumer Portfolio Segment [Member]
Loans	689	776
Pass [Member]
Loans	85,805	82,035
Pass [Member] | Residential Portfolio Segment [Member]
Loans	41,496	40,724
Pass [Member] | Commercial Real Estate Portfolio Segment [Member]
Loans	33,604	31,677
Pass [Member] | Construction and Land Real Estate [Member]
Loans	8,823	8,520
Pass [Member] | Commercial Portfolio Segment [Member]
Loans	1,193	348
Pass [Member] | Consumer Portfolio Segment [Member]
Loans	689	766
Special Mention [Member]
Loans	290	425
Special Mention [Member] | Residential Portfolio Segment [Member]
Loans	290	415
Special Mention [Member] | Commercial Real Estate Portfolio Segment [Member]
Loans
Special Mention [Member] | Construction and Land Real Estate [Member]
Loans
Special Mention [Member] | Commercial Portfolio Segment [Member]
Loans
Special Mention [Member] | Consumer Portfolio Segment [Member]
Loans		10
Substandard [Member]
Loans	3,714	3,453
Substandard [Member] | Residential Portfolio Segment [Member]
Loans	1,870	1,897
Substandard [Member] | Commercial Real Estate Portfolio Segment [Member]
Loans	528	498
Substandard [Member] | Construction and Land Real Estate [Member]
Loans	1,316	1,023
Substandard [Member] | Commercial Portfolio Segment [Member]
Loans		35
Substandard [Member] | Consumer Portfolio Segment [Member]
Loans
Doubtful [Member]
Loans
Doubtful [Member] | Residential Portfolio Segment [Member]
Loans
Doubtful [Member] | Commercial Real Estate Portfolio Segment [Member]
Loans
Doubtful [Member] | Construction and Land Real Estate [Member]
Loans
Doubtful [Member] | Commercial Portfolio Segment [Member]
Loans
Doubtful [Member] | Consumer Portfolio Segment [Member]
Loans

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Note 3 - Loans and Allowance for Loan Losses - Aging Analysis of the Recorded Investment in Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Loans past due	$ 586	$ 525
Current	89,223	85,388
Loans	89,809	85,913
90 days past due and still accruing
Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	272	194
Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	314	331
Residential Portfolio Segment [Member]
Loans past due	586	521
Current	43,070	42,515
Loans	43,656	43,036
90 days past due and still accruing
Residential Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	272	194
Residential Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due
Residential Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	314	327
Commercial Real Estate Portfolio Segment [Member]
Loans past due		4
Current	34,132	32,171
Loans	34,132	32,175
90 days past due and still accruing
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due		4
Construction and Land Real Estate [Member]
Loans past due
Current	10,139	9,543
Loans	10,139	9,543
90 days past due and still accruing
Construction and Land Real Estate [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due
Construction and Land Real Estate [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due
Construction and Land Real Estate [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due
Commercial Portfolio Segment [Member]
Loans past due
Current	1,193	383
Loans	1,193	383
90 days past due and still accruing
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due
Commercial Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due
Consumer Portfolio Segment [Member]
Loans past due
Current	689	776
Loans	689	776
90 days past due and still accruing
Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due
Consumer Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due
Consumer Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due

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Note 3 - Loans and Allowance for Loan Losses - Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Specific allowance
Recorded balance	4,966		5,021
Unpaid principal balance	5,083		5,205
Average balance of impaired loans	4,751	$ 3,696	4,410
Interest income recognized	69	41	263
Residential Portfolio Segment [Member]
Recorded balance, with no valuation allowance	2,757		2,779
Unpaid principal balance, with no valuation allowance	2,874		2,936
Average balance of impaired loans, without a valuation allowance	2,510	1,451	2,420
Interest income recognized, without a valuation allowance	37	15	140
Recorded balance, with a valuation allowance
Unpaid principal balance, with a valuation allowance
Specific allowance
Average balance of impaired loans, with a valuation allowance		270
Interest income recognized, with a valuation allowance		1
Commercial Real Estate Portfolio Segment [Member]
Recorded balance, with no valuation allowance	528		533
Unpaid principal balance, with no valuation allowance	528		560
Average balance of impaired loans, without a valuation allowance	528	236	230
Interest income recognized, without a valuation allowance	7	4	28
Recorded balance, with a valuation allowance
Unpaid principal balance, with a valuation allowance
Specific allowance
Average balance of impaired loans, with a valuation allowance
Interest income recognized, with a valuation allowance
Construction and Land Real Estate [Member]
Recorded balance, with no valuation allowance	1,681		1,709
Unpaid principal balance, with no valuation allowance	1,681		1,709
Average balance of impaired loans, without a valuation allowance	1,713	1,739	1,760
Interest income recognized, without a valuation allowance	25	21	95
Recorded balance, with a valuation allowance
Unpaid principal balance, with a valuation allowance
Specific allowance
Average balance of impaired loans, with a valuation allowance
Interest income recognized, with a valuation allowance
Commercial Portfolio Segment [Member]
Recorded balance, with no valuation allowance
Unpaid principal balance, with no valuation allowance
Average balance of impaired loans, without a valuation allowance
Interest income recognized, without a valuation allowance
Recorded balance, with a valuation allowance
Unpaid principal balance, with a valuation allowance
Specific allowance
Average balance of impaired loans, with a valuation allowance
Interest income recognized, with a valuation allowance
Consumer Portfolio Segment [Member]
Recorded balance, with no valuation allowance
Unpaid principal balance, with no valuation allowance
Average balance of impaired loans, without a valuation allowance
Interest income recognized, without a valuation allowance
Recorded balance, with a valuation allowance
Unpaid principal balance, with a valuation allowance
Specific allowance
Average balance of impaired loans, with a valuation allowance
Interest income recognized, with a valuation allowance

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Note 3 - Loans and Allowance for Loan Losses - Nonaccrual Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Nonaccrual loans	$ 617	$ 618
Residential Portfolio Segment [Member]
Nonaccrual loans	617	614
Commercial Real Estate Portfolio Segment [Member]
Nonaccrual loans		4
Construction and Land Real Estate [Member]
Nonaccrual loans
Commercial Portfolio Segment [Member]
Nonaccrual loans
Consumer Portfolio Segment [Member]
Nonaccrual loans

XML

Note 4 - Regulatory Matters (Details Textual)	Jan. 01, 2019	Mar. 31, 2017
Capital Conservation Buffer		0.00%
Scenario, Forecast [Member]
Capital Conservation Buffer	2.50%

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Note 4 - Regulatory Matters - Actual Capital Amounts and Ratios (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Capital	$ 13,989,000	$ 13,943,000
Capital to Risk Weighted Assets	17.80%	17.60%
Capital Required for Capital Adequacy	$ 6,273,000	$ 6,327,000
Capital Required for Capital Adequacy to Risk Weighted Assets	8.00%	8.00%
Capital Required to be Well Capitalized	$ 7,841,000	$ 7,908,000
Capital Required to be Well Capitalized to Risk Weighted Assets	10.00%	10.00%
Tier 1 Capital	$ 13,008,000	$ 12,954,000
Tier 1 Capital to Risk Weighted Assets	16.60%	16.40%
Tier 1 Risk Based Capital Required for Capital Adequacy	$ 4,705,000	$ 4,745,000
Tier 1 Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	6.00%	6.00%
Tier 1 Risk Based Capital Required to be Well Capitalized	$ 6,273,000	$ 6,327,000
Tier 1 Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	8.00%	8.00%
Common Equity Tier I Capital	$ 13,008,000	$ 12,954
Common Equity Tier I Capital to Risk Weighted Assets	16.60%	16.40%
Common Equity Tier 1 Risk Based Capital Required for Capital Adequacy	$ 3,529,000	$ 3,559
Common Equity Tier 1 Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	4.50%	4.50%
Common Equity Tier 1 Risk Based Capital Required to be Well Capitalized	$ 5,097,000	$ 5,140
Common Equity Tier 1 Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	6.50%	6.50%
Tier 1 Leverage Capital	$ 13,008,000	$ 12,954,000
Tier 1 Leverage Capital to Average Assets	12.10%	12.90%
Tier 1 Leverage Capital Required for Capital Adequacy	$ 4,299,000	$ 4,024,000
Tier 1 Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%
Tier 1 Leverage Capital Required to be Well Capitalized	$ 5,374,000	$ 5,030,000
Tier I Leverage Capital Required to be Well Capitalized to Risk Weighted Assets	5.00%	5.00%

XML

Note 5 - Disclosures About Fair Value of Assets and Liabilities - Assets Measured at Fair Value on a Non-Recurring Basis (Details) - Impaired Loans, Collateral-Dependent [Member] - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Assets, fair value, non-recurring basis	$ 220	$ 232
Fair Value, Inputs, Level 1 [Member]
Assets, fair value, non-recurring basis
Fair Value, Inputs, Level 2 [Member]
Assets, fair value, non-recurring basis
Fair Value, Inputs, Level 3 [Member]
Assets, fair value, non-recurring basis	$ 220	$ 232

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Note 5 - Disclosures About Fair Value of Assets and Liabilities - Quantitative Information About Unobservable Inputs (Details) - Impaired Loans, Collateral-Dependent [Member] - Market Approach Valuation Technique [Member] - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Fair value	$ 220	$ 232
Valuation technique	Marketable comparable properties	Marketable comparable properties
Unobservable input	Marketability discount	Marketability discount
Minimum [Member]
Marketability discount	17.00%	10.00%
Maximum [Member]
Marketability discount	24.00%	15.00%

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Note 5 - Disclosures About Fair Value of Assets and Liabilities - Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Reported Value Measurement [Member]
Financial assets
Cash and due from banks	$ 1,510	$ 1,419
Interest-earning demand deposits	9,110	8,438
Federal funds sold	4,840	1,000
Interest-earning time deposits in banks	992	992
Loans, net	86,695	83,008
Federal Home Loan Bank stock	468	468
Accrued interest receivable	221	203
Servicing rights	566	483
Financial liabilities
Deposits	89,458	76,841
Advances from the Federal Home Loan Bank	10,027	10,027
Accrued interest payable	12	7
Federal funds sold	4,840	1,000
Estimate of Fair Value Measurement [Member]
Financial assets
Cash and due from banks	1,510	1,419
Interest-earning demand deposits	4,270	8,438
Federal funds sold	4,840	1,000
Interest-earning time deposits in banks	992	992
Loans, net	86,511	83,538
Federal Home Loan Bank stock	468	468
Accrued interest receivable	221	203
Servicing rights	566	483
Financial liabilities
Deposits	89,720	77,104
Advances from the Federal Home Loan Bank	10,120	10,127
Accrued interest payable	12	7
Federal funds sold	4,840	1,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Financial assets
Cash and due from banks	1,510	1,419
Interest-earning demand deposits	4,270	8,438
Federal funds sold	4,840	1,000
Interest-earning time deposits in banks
Loans, net
Federal Home Loan Bank stock
Accrued interest receivable
Servicing rights
Financial liabilities
Deposits	45,863	45,080
Advances from the Federal Home Loan Bank
Accrued interest payable
Federal funds sold	4,840	1,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Financial assets
Cash and due from banks
Interest-earning demand deposits
Federal funds sold
Interest-earning time deposits in banks	992	992
Loans, net
Federal Home Loan Bank stock	468	468
Accrued interest receivable	221	203
Servicing rights
Financial liabilities
Deposits	43,857	32,024
Advances from the Federal Home Loan Bank	10,120	10,127
Accrued interest payable	12	7
Federal funds sold
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Financial assets
Cash and due from banks
Interest-earning demand deposits
Federal funds sold
Interest-earning time deposits in banks
Loans, net	86,511	83,538
Federal Home Loan Bank stock
Accrued interest receivable
Servicing rights	566	483
Financial liabilities
Deposits
Advances from the Federal Home Loan Bank
Accrued interest payable
Federal funds sold

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Note 7 - Loss Per Share (Details Textual) - $ / shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Oct. 19, 2015
Earnings Per Share, Basic and Diluted	$ (0.03)	$ (0.40)
Common Stock, Shares, Issued	696,600	696,600	696,600	696,600
Weighted Average Number of Shares, Employee Stock Ownership Plan Shares Not Committed to be Released	49,458	52,353
Weighted Average Number Diluted Shares Outstanding Adjustment	0	0

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Note 8 - Employee Stock Ownership Plan (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Employee Stock Ownership Plan (ESOP), Compensation Expense	$ 10,000	$ 5,000
Share Price at Formation Date	$ 10
Shares Held in Employee Stock Option Plan, Committed-to-be-Released	49,458
Employee Stock Ownership Plan (ESOP), Deferred Shares, Fair Value	$ 717,000
Share Price	$ 14.50

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Note 9 - Change in Corporate Form (Details Textual) - USD ($) $ / shares in Units, $ in Millions	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Oct. 19, 2015
Sale of Stock, Price Per Share				$ 10
Common Stock, Subscriptions, Percentage				8.00%
Common Stock, Shares, Issued	696,600	696,600	696,600	696,600
Costs of Conversion and to Issue Stock				$ 1.2