10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______to_______

Commission File Number 001-37914

OTTAWA BANCORP, INC.

(Exact name of registrant as specified in its charter)

Maryland (State or other jurisdiction of incorporation or  organization)	81-2959182 (I.R.S. Employer Identification Number)
925 LaSalle Street	61350
Ottawa, Illinois (Address of principal executive offices)	(Zip Code)

(815) 433-2525

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year,

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 filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ 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 definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer ☐	Accelerated filer ☐
Non-Accelerated filer ☐ (Do not check if a smaller reporting company)	Smaller Reporting Company  ☒
	Emerging Growth Company ☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class	Outstanding as of November 14, 2017
Common Stock, $0.01 par value	3,469,402

OTTAWA BANCORP, INC.

FORM 10-Q

For the quarterly period ended September 30, 2017

INDEX

		Page Number
PART I – FINANCIAL INFORMATION
Item 1	Financial Statements	3
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3	Quantitative and Qualitative Disclosures about Market Risk	37
Item 4	Controls and Procedures	37
PART II – OTHER INFORMATION
Item 1	Legal Proceedings	37
Item 1A	Risk Factors	37
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3	Defaults upon Senior Securities	38
Item 4	Mine Safety Disclosures	38
Item 5	Other Information	38
Item 6	Exhibits	38
SIGNATURES		39

2

Part I – Financial Information

ITEM 1 – FINANCIAL STATEMENTS

OTTAWA BANCORP, INC.

Consolidated Balance Sheets

September 30, 2017 and December 31, 2016

(Unaudited)

	September 30,			December 31,
	2017			2016
Assets
Cash and due from banks	$	2,093,049		$	3,916,559
Interest bearing deposits		845,235			2,030,090
Total cash and cash equivalents		2,938,284			5,946,649
Time deposits		250,000			250,000
Federal funds sold		3,705,000			1,690,000
Securities available for sale		30,176,272			44,560,680
Non-marketable equity securities		752,221			753,321
Loans, net of allowance for loan losses of $2,366,245 and $2,247,449 at September 30, 2017 and December 31, 2016, respectively		190,754,189			160,586,129
Loans held for sale		659,099			305,072
Premises and equipment, net		6,725,000			6,843,906
Accrued interest receivable		781,619			785,484
Foreclosed real estate		83,500			33,000
Deferred tax assets		2,505,692			2,593,786
Cash value of life insurance		2,281,760			2,245,578
Goodwill		649,869			649,869
Core deposit intangible		303,818			359,000
Other assets		3,165,409			2,558,910
Total assets	$	245,731,732		$	230,161,384
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Non-interest bearing	$	12,693,586		$	9,974,536
Interest bearing		166,196,571			162,572,485
Total deposits		178,890,157			172,547,021
Accrued interest payable		3,693			224
FHLB advances		9,114,999			1,121,153
Other liabilities		3,711,694			3,748,953
Total liabilities		191,720,543			177,417,351
Commitments and contingencies
Redeemable common stock held by ESOP plan		1,098,101			807,629
Stockholders' Equity
Common stock, $.01 par value, 100,000,000 shares authorized; 3,469,402 and 3,467,402 shares issued at September 30, 2017 and December 31, 2016, respectively		34,694			34,674
Additional paid-in-capital		37,181,196			37,117,311
Retained earnings		18,340,443			17,455,472
Unallocated ESOP shares		(1,799,136	)		(1,932,648	)
Accumulated other comprehensive income		253,992			69,224
		54,011,189			52,744,033
Less:
Maximum cash obligation related to ESOP shares		(1,098,101	)		(807,629	)
Total stockholders' equity		52,913,088			51,936,404
Total liabilities and stockholders' equity	$	245,731,732		$	230,161,384

See accompanying notes to these unaudited consolidated financial statements.

3

OTTAWA BANCORP, INC.

Consolidated Statements of Income

Three and Nine Months Ended September 30, 2017 and 2016

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Interest and dividend income:
Interest and fees on loans	$	2,204,397	$	1,857,478	$	6,291,581	$	5,432,531
Securities:
Residential mortgage-backed and related securities		98,541		122,919		360,557		423,463
State and municipal securities		116,431		133,429		373,999		404,133
Dividends on non-marketable equity securities		1,812		1,058		5,154		5,218
Interest-bearing deposits		5,357		11,903		21,403		22,301
Total interest and dividend income		2,426,538		2,126,787		7,052,694		6,287,646
Interest expense:
Deposits		247,897		205,843		676,374		611,533
Borrowings		20,564		15,181		35,624		26,921
Total interest expense		268,461		221,024		711,998		638,454
Net interest income		2,158,077		1,905,763		6,340,696		5,649,192
Provision for loan losses		210,000		25,000		460,000		302,500
Net interest income after provision for loan losses		1,948,077		1,880,763		5,880,696		5,346,692
Other income:
Gain on sale of securities		77,028		-		98,230		8,418
Gain on sale of loans		205,375		142,646		522,360		330,316
Gain on sale of foreclosed real estate		5,182		76,759		29,242		188,207
Gain on sale of repossessed assets		1,123		-		15,419		1,680
Loan origination and servicing income		159,078		102,652		462,787		239,186
Origination of mortgage servicing rights, net of amortization		21,293		14,879		55,405		42,433
Customer service fees		123,288		118,761		360,359		318,688
Income on bank owned life insurance		11,999		12,560		36,182		37,287
Other		28,940		29,269		89,044		77,885
Total other income		633,306		497,526		1,669,028		1,244,100
Other expenses:
Salaries and employee benefits		1,047,416		840,038		3,124,939		2,504,956
Directors fees		40,800		40,800		122,400		122,400
Occupancy		158,716		171,425		484,496		477,615
Deposit insurance premium		15,437		37,122		41,648		127,114
Legal and professional services		92,007		83,012		282,129		257,957
Data processing		144,137		130,864		435,244		386,597
Loss on sale of securities		47,603		-		55,169		3,261
Loan expense		152,645		124,851		403,088		284,672
Valuation adjustments and expenses on foreclosed real estate		2,662		31,703		10,184		100,639
Loss on sale of OREO		336		4,716		336		4,716
Loss on sale of repossessed assets		-		-		274		-
Other		269,710		269,245		807,889		747,318
Total other expenses		1,971,469		1,733,776		5,767,796		5,017,245
Income before income tax expense		609,914		644,513		1,781,928		1,573,547
Income tax expense		155,163		223,251		504,332		520,063
Net income	$	454,751	$	421,262	$	1,277,596	$	1,053,484
Basic earnings per share	$	0.14	$	0.15	$	0.39	$	0.37
Diluted earnings per share	$	0.14	$	0.15	$	0.39	$	0.36
Dividends per share	$	0.04	$	-	$	0.12	$	-

See accompanying notes to these unaudited consolidated financial statements.

4

OTTAWA BANCORP, INC.

Consolidated Statements of Comprehensive Income

Three and Nine Months Ended September 30, 2017 and 2016

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net income	$	454,751		$	421,262		$	1,277,596		$	1,053,484
Other comprehensive income, before tax:
Securities available for sale:
Unrealized holding (losses) gains arising during the period		(62,663	)		(80,126	)		354,599			372,176
Reclassification adjustment for (gains) included in net income		(29,425	)		-			(43,061	)		(5,157	)
Other comprehensive (loss) income, before tax		(92,088	)		(80,126	)		311,538			367,019
Income tax (benefit) expense related to items of other comprehensive (loss) income		(31,109	)		(31,341	)		126,770			143,560
Other comprehensive (loss) income, net of tax		(60,979	)		(48,785	)		184,768			223,459
Comprehensive income	$	393,772		$	372,477		$	1,462,364		$	1,276,943

See accompanying notes to these unaudited consolidated financial statements.

5

OTTAWA BANCORP, INC.

Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2017 and 2016

 (Unaudited)

	2017			2016
Cash Flows from Operating Activities
Net income	$	1,277,596		$	1,053,484
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		184,080			178,279
Provision for loan losses		460,000			302,500
Provision for deferred income taxes		(38,676	)		484,450
Net amortization of premiums and discounts on securities		382,730			493,126
Gain on sale of securities, net		(43,061	)		(5,157	)
Origination of mortgage loans held for sale		(16,894,581	)		(12,746,064	)
Proceeds from sale of mortgage loans held for sale		17,062,914			12,365,680
Gain on sale of loans, net		(522,360	)		(330,316	)
Origination of mortgage servicing rights, net of amortization		(55,405	)		(42,433	)
Gain on sale of foreclosed real estate, net		(29,242	)		(183,491	)
Write down of foreclosed real estate		-			28,551
Gain on sale of repossessed assets, net		(15,145	)		(1,680	)
ESOP compensation expense		190,277			44,258
MRP compensation expense		-			3,304
Compensation expense on RRP options granted		-			4,371
Amortization of core deposit intangible		55,182			69,000
Amortization (accretion) of fair value adjustments on acquired:
Loans		184,879			90,729
Certificates of deposit		(14,000	)		(53,000	)
Federal Home Loan Bank Advances		5,209			2,777
Increase in cash surrender value of life insurance		(36,182	)		(37,287	)
Change in assets and liabilities:
(Increase) decrease in accrued interest receivable		3,865			(24,608	)
Increase in other assets		(553,594	)		(1,296,435	)
Increase in accrued interest payable and other liabilities		(33,790	)		(449,093	)
Net cash provided by (used in) operating activities		1,570,696			(49,055	)
Cash Flows from Investing Activities
Securities available for sale:
Purchases		(1,308,450	)		(3,806,910	)
Sales, calls, maturities and paydowns		15,664,727			6,521,328
Sale of non-marketable equity securities		1,100			604,800
Net increase in loans		(31,066,772	)		(15,380,158	)
Net decrease in federal funds sold		(2,015,000	)		(52,747,000	)
Proceeds from sale of foreclosed real estate		193,075			490,062
Proceeds from sale of repossessed assets		57,145			22,805
Purchase of premises and equipment		(65,174	)		(16,489	)
Net cash used in investing activities		(18,539,349	)		(64,311,562	)
Cash Flows from Financing Activities
Net increase in deposits		6,357,136			55,205,102
Proceeds from Federal Home Loan Bank advances		8,000,000			10,000,000
Principal reduction of Federal Home Loan Bank advances		(11,363	)		(3,511,197	)
Proceeds from stock options exercised		7,140			-
Dividends paid		(392,625	)		-
Net cash provided by financing activities		13,960,288			61,693,905
Net decrease in cash and cash equivalents		(3,008,365	)		(2,666,712	)
Cash and cash equivalents:
Beginning of period		5,946,649			7,135,719
End of period	$	2,938,284		$	4,469,007
(Continued)

See accompanying notes to these unaudited consolidated financial statements.

6

OTTAWA BANCORP, INC.

Consolidated Statements of Cash Flows (Continued)

Nine Months Ended September 30, 2017 and 2016

 (Unaudited)

	2017		2016
Supplemental Disclosures of Cash Flow Information
Cash payments for:
Interest paid to depositors	$	672,905	$	610,230
Interest paid on borrowings		35,624		26,921
Income taxes paid, net of refunds received		515,444		-
Supplemental Schedule of Noncash Investing and Financing Activities
Real estate acquired through or in lieu of foreclosure		218,256		235,190
Other assets acquired in settlement of loans		39,500		46,000
Sale of foreclosed real estate through loan origination		3,923		128,000
Increase in ESOP put option liability		290,472		184,906

See accompanying notes to these unaudited consolidated financial statements.

7

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

NOTE 1 – NATURE OF BUSINESS

Ottawa Bancorp, Inc. (the “Company”) is a Maryland corporation that was incorporated in May 2016 to be the successor to Ottawa Savings Bancorp, Inc. (“Ottawa Savings Bancorp”) upon completion of the second-step conversion of Ottawa Savings Bank (the “Bank”) from the two-tier mutual holding company structure to the stock holding company structure. Ottawa Savings Bancorp MHC was the former mutual holding company for Ottawa Savings Bancorp prior to completion of the second-step conversion. In conjunction with the second-step conversion, Ottawa Savings Bancorp MHC merged into Ottawa Savings Bancorp (and ceased to exist), and Ottawa Savings Bancorp merged into the Company, with the Company as the surviving entity. The second-step conversion was completed on October 11, 2016, at which time the Company sold, for gross proceeds of $23.8 million, a total of 2,383,950 shares of common stock at $10.00 per share, including 190,716 shares purchased by the Bank’s employee stock ownership plan. Capital increased an additional $126,000 due to cash contributed by Ottawa Savings Bancorp MHC upon merging into Ottawa Savings Bancorp, Inc. Also as part of the second-step conversion, treasury shares held by Ottawa Savings Bancorp, Inc. were retired and each of the existing outstanding shares of Ottawa Savings Bancorp common stock owned by persons other than Ottawa Savings Bancorp MHC was converted into 1.1921 of a share of Company common stock.

On December 31, 2014, Ottawa Savings Bancorp completed a merger with Twin Oaks Savings Bank (“Twin Oaks”), whereby Twin Oaks was merged with and into the Bank, with the Bank as the surviving institution (the “Merger”). As a result of the Merger, the Bank increased its market share in the LaSalle County market and expanded into Grundy County.

The primary business of the Company is the ownership of the Bank. Through the Bank, the Company is engaged in providing a variety of financial services to individual and corporate customers in the Ottawa, Marseilles, and Morris, Illinois areas, which are primarily agricultural areas consisting of several rural communities with small to medium sized businesses. The Bank’s primary source of revenue is interest and fees related to single-family residential loans to middle-income individuals.

NOTE 2 – BASIS OF PRESENTATION

The consolidated financial statements presented in this quarterly report include the accounts of the Company and the Bank. The consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and predominant practices followed by the financial services industry, and are unaudited. In the opinion of the Company’s management, all adjustments, consisting of normal recurring adjustments, which the Company considers necessary to fairly state the Company’s financial position and the results of operations and cash flows have been recorded. The interim financial statements should be read in conjunction with the audited financial statements and accompanying notes of the Company for the year ended December 31, 2016. The results of the Company’s operations for any interim period are not necessarily indicative of the results of the Company’s operations for any other interim period or for a full fiscal year.

NOTE 3 – USE OF ESTIMATES

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements. Changes in these estimates and assumptions are considered reasonably possible and may have a material impact on the consolidated financial statements and, thus, actual results could differ from the amounts reported and disclosed herein.

At September 30, 2017, there were no material changes in the Company’s significant accounting policies from those disclosed in the Form 10-K filed with the Securities and Exchange Commission on March 29, 2017.

NOTE 4 – CRITICAL ACCOUNTING POLICIES

We consider accounting policies involving significant judgments and assumptions by management that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. We consider the allowance for loan losses to be our critical accounting policy.

8

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

 Allowance for Loan Losses. The allowance for loan losses is an amount necessary to absorb known or inherent losses that are both probable and reasonably estimable and is established through a provision for loan losses charged to earnings. 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 each 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.

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

NOTE 5 – EARNINGS PER SHARE 

Basic earnings per share is based on net income divided by the weighted average number of shares outstanding during the period, including allocated and committed-to-be-released Employee Stock Ownership Plan (“ESOP”) shares and vested Management Recognition Plan (“MRP”) shares. Diluted earnings per share show the dilutive effect, if any, of additional common shares issuable under stock options and awards.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net income available to common stockholders	$	454,751		$	421,262		$	1,277,596		$	1,053,484
Basic potential common shares:
Weighted average shares outstanding		3,468,228			2,894,123			3,467,680			2,894,123
Weighted average unallocated ESOP shares		(185,243	)		(17,374	)		(189,903	)		(18,638	)
Weighted average unvested MRP shares		-			(1,047	)		-			(1,047	)
Basic weighted average shares outstanding		3,282,985			2,875,702			3,277,777			2,874,438
Dilutive potential common shares:
Weighted average unrecognized compensation on MRP shares		-			890			-			913
Weighted average RRP options outstanding		14,726			21,017			14,419			14,963
Dilutive weighted average shares outstanding		3,297,711			2,897,609			3,292,196			2,890,314
Basic earnings per share	$	0.14		$	0.15		$	0.39		$	0.37
Diluted earnings per share	$	0.14		$	0.15		$	0.39		$	0.36

NOTE 6 – EMPLOYEE STOCK OWNERSHIP PLAN

On May 6, 2005, the Company adopted an employee stock ownership plan (“ESOP”) for the benefit of substantially all employees. On July 8, 2005, the ESOP borrowed $763,140 from the Company and used those funds to acquire 76,314 shares of the Company’s stock in the initial public offering at a price of $10.00 per share. On October 11, 2016, the ESOP borrowed $1,907,160 from the Company and used those funds to acquire 190,716 shares of the Company’s stock in its conversion to a fully-public stock holding company at a price of $10.00 per share.

9

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

 Shares purchased by the ESOP with the loan proceeds are held in a suspense account and are allocated to ESOP participants on a pro rata basis as principal and interest payments are made by the ESOP to the Company. The loan is secured by shares purchased with the loan proceeds and will be repaid by the ESOP with funds from the Company’s discretionary contributions to the ESOP and earnings on the ESOP assets. Annual principal and interest payments of approximately $239,000 are to be made by the ESOP.

As shares are released from collateral, the Company will report compensation expense equal to the current market price of the shares, and the shares will become outstanding for earnings-per-share (“EPS”) computations. Dividends on allocated ESOP shares reduce retained earnings, and dividends on unallocated ESOP shares reduce accrued interest.

A terminated participant or the beneficiary of a deceased participant who received a distribution of employer stock from the ESOP has the right to require the Company to purchase such shares at their fair market value any time within 60 days of the distribution date. If this right is not exercised, an additional 60-day exercise period is available in the year following the year in which the distribution is made and begins after a new valuation of the stock has been determined and communicated to the participant or beneficiary. At September 30, 2017, 78,548 shares at a fair value of $13.98 have been classified as mezzanine capital.

The following table reflects the status of the shares held by the ESOP:

	September 30,			December 31,
	2017			2016
Shares allocated		99,578			85,493
Shares withdrawn from the plan		(21,030	)		(21,030	)
Unallocated shares		182,112			196,197
Total ESOP shares		260,660			260,660
Fair value of unallocated shares	$	2,545,926		$	2,497,588

NOTE 7 – INVESTMENT SECURITIES

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

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
September 30, 2017:
Securities Available for Sale
State and municipal securities	$	14,127,744	$	362,444	$	-	$	14,490,188
Residential mortgage-backed securities		15,623,293		169,900		107,109		15,686,084
	$	29,751,037	$	532,344	$	107,109	$	30,176,272
December 31, 2016:
Securities Available for Sale
State and municipal securities	$	18,019,050	$	200,924	$	63,836	$	18,156,138
Residential mortgage-backed securities		26,427,933		242,541		265,932		26,404,542
	$	44,446,983	$	443,465	$	329,768	$	44,560,680

10

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

 The amortized cost and fair value at September 30, 2017, by contractual maturity, are shown below. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be called or prepaid without penalties. Therefore, stated maturities of residential mortgage-backed securities are not disclosed.

	Securities Available for Sale
	Amortized		Fair
	Cost		Value
Due in three months or less	$	51,165	$	51,201
Due after three months through one year		719,463		725,446
Due after one year through five years		3,400,877		3,491,427
Due after five years through ten years		4,222,380		4,371,933
Due after ten years		5,733,859		5,850,181
Residential mortgage-backed securities		15,623,293		15,686,084
	$	29,751,037	$	30,176,272

The following table reflects securities with gross unrealized losses for less than 12 months and for 12 months or more at September 30, 2017 and December 31, 2016:

	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
September 30, 2017
Securities Available for Sale
State and municipal securities	$	-	$	-	$	-	$	-	$	-	$	-
Residential mortgage-backed securities		6,567,434		54,427		3,740,463		52,682		10,307,897		107,109
	$	6,567,434	$	54,427	$	3,740,463	$	52,682	$	10,307,897	$	107,109
December 31, 2016
Securities Available for Sale
State and municipal securities	$	4,734,681	$	63,836	$	-	$	-	$	4,734,681	$	63,836
Residential mortgage-backed securities		13,364,755		187,191		4,422,865		78,741		17,787,620		265,932
	$	18,099,436	$	251,027	$	4,422,865	$	78,741	$	22,522,301	$	329,768

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability to retain and whether it is not more likely than not the Company will be required to sell its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysts’ reports.

At September 30, 2017, 20 securities had unrealized losses with an aggregate depreciation of 1.03% from the Company’s amortized cost basis. The Company does not consider these investments to be other than temporarily impaired at September 30, 2017 due to the following:

● Decline in value is attributable to interest rates.

● The value did not decline due to credit quality.

● The Company does not intend to sell these securities.

● The Company has adequate liquidity such that it will not more likely than not have to sell these securities before recovery of the amortized cost basis, which may be at maturity.

There were proceeds of $6.6 million from the sales of securities for the three months ended September 30, 2017 and no sales proceeds for the three months ended September 30, 2016. The sales during the three months ended September 30, 2017 resulted in gross realized gains of $77,028 and gross realized losses of $47,603, for net realized gains of $29,425. The tax provision applicable to the realized gains amounted to $11,422 and $0 respectively, for the three months ended September 30, 2017 and 2016.

11

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

 There were proceeds of $11.6 million from the sales of securities for the nine months ended September 30, 2017 and proceeds of $1.7 million for the nine months ended September 30, 2016. The sales during the nine months ended September 30, 2017 resulted in gross realized gains of $98,230 and gross realized losses of $55,169, for net realized gains of $43,061. The sales during the nine months ended September 30, 2016 resulted in gross realized gains of $8,418 and gross realized losses of $3,261, for net realized gains of $5,157. The tax provision applicable to the realized gains amounted to $16,715 and $2,002, respectively, for the nine months ended September 30, 2017 and 2016.

NOTE 8 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

 The components of loans, net of deferred loan costs (fees), are as follows:

	September 30,			December 31,
	2017			2016
Mortgage loans:
One-to-four family residential loans	$	118,518,298		$	103,871,686
Multi-family residential loans		5,012,752			5,182,611
Total mortgage loans		123,531,050			109,054,297
Other loans:
Non-residential real estate loans		29,962,862			22,560,167
Commercial loans		17,051,906			16,645,226
Consumer direct		4,636,078			2,859,703
Purchased auto		17,938,538			11,714,185
Total other loans		69,589,384			53,779,281
Gross loans		193,120,434			162,833,578
Less: Allowance for loan losses		(2,366,245	)		(2,247,449	)
Loans, net	$	190,754,189		$	160,586,129

The following table reflects the carrying amount of loans acquired in the Twin Oaks merger, which are included in the loan categories above as of the dates indicated.

	September 30,			December 31,
	2017			2016
Mortgage loans:
One-to-four family residential loans	$	15,618,555		$	18,062,672
Multi-family residential loans		267,322			272,378
Total mortgage loans		15,885,877			18,335,050
Other loans:
Non-residential real estate loans		2,187,087			2,352,952
Commercial loans		746,014			779,595
Consumer direct		71,065			196,340
Total other loans		3,004,166			3,328,887
Gross loans		18,890,043			21,663,937
Less: Allowance for loan losses		(100,000	)		(100,000	)
Loans, net	$	18,790,043		$	21,563,937

Total loans acquired in the Merger were recorded at a fair value of $29,795,910 and had a contractual amount due of $31,831,910 as of the acquisition date which was December 31, 2014. FASB ASC 310-20, Nonrefundable Fees and Other Costs, specifies the approach that needs to be used when the Bank expects to receive all of the contractual principal and interest payments due under an individual loan. Loans not considered to have deteriorated credit quality at the acquisition date had a contractual balance due of approximately $28,638,000 and an estimated fair value of approximately $28,472,000. The loan discount recorded at the date of the acquisition consisted of an accretable yield component of approximately $407,000 and an accretable credit component of approximately $(573,000), for a net fair value adjustment of approximately $(166,000).

12

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

Loans acquired with deteriorated credit quality and accounted for under FASB ASC Topic 310-30 as of the acquisition date had a contractual balance due of approximately $3,194,000 and an estimated fair value of approximately $1,324,000. The estimate of the contractual cash flows not expected to be collected due to credit quality was approximately $1,870,000 which consists of an accretable discount of $(362,000) and non-accretable discount of $(1,508,000).

The following table reflects activity for the loans acquired with deteriorated credit quality for the three and nine months ended September 30, 2017 and 2016:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Balance, beginning of period	$	255,747		$	498,912		$	461,334		$	575,605
Payment activity		(131,108	)		(42,422	)		(482,073	)		(134,325	)
Transfer to OREO		-			-			-			(44,417	)
Accretion into interest income		24,931			23,345			170,309			82,972
	$	149,570		$	479,835		$	149,570		$	479,835

The contractual amount outstanding for the loans acquired with deteriorated credit quality totaled $470,000 and $1,108,000 as of September 30, 2017 and December 31, 2016, respectively.

The following table reflects activity in the accretable yield for the loans acquired with deteriorated credit quality for the three and nine months ended September 30, 2017 and 2016:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Balance, beginning of period	$	35,668		$	124,583		$	82,869		$	175,342
Net reclassification from non-accretable yield		3,292			-			101,469			8,868
Accretion into interest income		(24,931	)		(23,345	)		(170,309	)		(82,972	)
	$	14,029		$	101,238		$	14,029		$	101,238

Purchases of loans receivable, segregated by class of loans, for the periods indicated were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Purchased auto loans	$	4,979,707	$	1,010,717	$	10,035,353	$	9,351,997

Net (charge-offs) / recoveries, segregated by class of loans, for the periods indicated were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
One-to-four family	$	(84,240	)	$	17,802		$	(251,231	)	$	(173,225	)
Multi-family		3,972			3,972			12,148			11,915
Non-residential		(1,726	)		-			(53,686	)		-
Consumer direct		(1,756	)		1,551			(2,503	)		5,005
Purchased auto		(591	)		(28,212	)		(45,932	)		(62,047	)
Net (charge-offs)/recoveries	$	(84,341	)	$	(4,887	)	$	(341,204	)	$	(218,352	)

13

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2017 and 2016:

September 30, 2017	One-to- four family			Multi- family			Non- residential			Commercial		Consumer direct			Purchased auto			Total
Balance at beginning of period	$	1,430,917		$	101,473		$	233,492		$	111,904	$	117,500		$	245,300		$	2,240,586
Provision charged to income		148,036			(6,870	)		27,876			12,134		(17,583	)		46,407			210,000
Loans charged off		(86,439	)		-			(1,726	)		-		(3,282	)		(2,685	)		(94,132	)
Recoveries of loans previously charged off		2,199			3,972			-			-		1,526			2,094			9,791
Balance at end of period	$	1,494,713		$	98,575		$	259,642		$	124,038	$	98,161		$	291,116		$	2,366,245

September 30, 2016	One-to- four family			Multi- family			Non- residential		Commercial		Consumer direct		Purchased auto			Total
Balance at beginning of period	$	1,574,598		$	167,485		$	275,347	$	53,256	$	60,491	$	156,864		$	2,288,041
Provision charged to income		(28,679	)		(132,076	)		98,221		21,914		22,610		43,010			25,000
Loans charged off		(2,698	)		-			-		-		-		(29,718	)		(32,416	)
Recoveries of loans previously charged off		20,500			3,972			-		-		1,551		1,506			27,529
Balance at end of period	$	1,563,721		$	39,381		$	373,568	$	75,170	$	84,652	$	171,662		$	2,308,154

The following table presents the activity in the allowance for loan losses by portfolio segment for the nine months ended September 30, 2017 and 2016:

September 30, 2017	One-to- four family			Multi- family			Non- residential			Commercial		Consumer direct			Purchased auto			Total
Balance at beginning of period	$	1,426,954		$	93,481		$	367,326		$	96,823	$	79,253		$	183,612		$	2,247,449
Provision charged to income		318,990			(7,054	)		(53,998	)		27,215		21,411			153,436			460,000
Loans charged off		(259,356	)		-			(61,686	)		-		(8,633	)		(63,848	)		(393,523	)
Recoveries of loans previously charged off		8,125			12,148			8,000			-		6,130			17,916			52,319
Balance at end of period	$	1,494,713		$	98,575		$	259,642		$	124,038	$	98,161		$	291,116		$	2,366,245

September 30, 2016	One-to- four family			Multi- family			Non- residential		Commercial		Consumer direct		Purchased auto			Total
Balance at beginning of period	$	1,727,582		$	142,237		$	198,340	$	51,306	$	37,187	$	67,354		$	2,224,006
Provision charged to income		9,364			(114,771	)		175,228		23,864		42,460		166,355			302,500
Loans charged off		(233,264	)		-			-		-		-		(68,011	)		(301,275	)
Recoveries of loans previously charged off		60,039			11,915			-		-		5,005		5,964			82,923
Balance at end of period	$	1,563,721		$	39,381		$	373,568	$	75,170	$	84,652	$	171,662		$	2,308,154

14

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

 The following table presents the recorded investment in loans and the related allowances allocated by portfolio segment and based on impairment method as of September 30, 2017 and December 31, 2016:

	One-to-
	four		Multi-		Non-				Consumer		Purchased
September 30, 2017	family		family		residential		Commercial		direct		auto		Total
Loans individually evaluated for impairment	$	1,375,976	$	-	$	368,020	$	12,970	$	-	$	3,468	$	1,760,434
Loans acquired with deteriorated credit quality		149,571		-		-		-		-		-		149,571
Loans collectively evaluated for impairment		116,992,751		5,012,752		29,594,842		17,038,936		4,636,078		17,935,070		191,210,429
Balance at end of period	$	118,518,298	$	5,012,752	$	29,962,862	$	17,051,906	$	4,636,078	$	17,938,538	$	193,120,434
Period-end amount allocated to:
Loans individually evaluated for impairment	$	50,861	$	-	$	62,471	$	-	$	-	$	1,734	$	115,066
Loans acquired with deteriorated credit quality		23,638		-		-		-		-		-		23,638
Loans collectively evaluated for impairment		1,420,214		98,575		197,171		124,038		98,161		289,382		2,227,541
Balance at end of period	$	1,494,713	$	98,575	$	259,642	$	124,038	$	98,161	$	291,116	$	2,366,245

	One-to-
	four		Multi-		Non-				Consumer		Purchased
December 31, 2016	family		family		residential		Commercial		direct		auto		Total
Loans individually evaluated for impairment	$	2,142,851	$	-	$	2,264,763	$	-	$	-	$	24,564	$	4,432,178
Loans acquired with deteriorated credit quality		461,334		-		-		-		-		-		461,334
Loans collectively evaluated for impairment		101,267,501		5,182,611		20,295,404		16,645,226		2,859,703		11,689,621		157,940,066
Balance at end of period	$	103,871,686	$	5,182,611	$	22,560,167	$	16,645,226	$	2,859,703	$	11,714,185	$	162,833,578
Period-end amount allocated to:
Loans individually evaluated for impairment	$	208,186	$	-	$	185,172	$	-	$	-	$	12,282	$	405,640
Loans acquired with deteriorated credit quality		34,401		-		-		-		-		-		34,401
Loans collectively evaluated for impairment		1,184,367		93,481		182,154		96,823		79,253		171,330		1,807,408
Balance at end of period	$	1,426,954	$	96,481	$	367,326	$	96,823	$	79,253	$	183,612	$	2,247,449

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.

The following table presents loans individually evaluated for impairment, by class of loans, as of September 30, 2017 and December 31, 2016:

September 30, 2017	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
One-to-four family	$	1,570,305	$	984,882	$	540,665	$	1,525,547	$	74,499	$	1,896,563
Multi-family		-		-		-		-		-		-
Non-residential		368,020		-		368,020		368,020		62,471		879,038
Commercial		12,970		12,970		-		12,970		-		3,222
Consumer direct		-		-		-		-		-		-
Purchased auto		3,468		-		3,468		3,468		1,734		14,830
	$	1,954,763	$	997,852	$	912,153	$	1,910,005	$	138,704	$	2,793,653

15

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

December 31, 2016	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
One-to-four family	$	2,688,197	$	1,428,073	$	1,176,112	$	2,604,185	$	242,587	$	2,634,763
Multi-family		-		-		-		-		-		-
Non-residential		2,435,424		-		2,264,763		2,264,763		185,172		2,030,894
Commercial		-		-		-		-		-		-
Consumer direct		-		-		-		-		-		-
Purchased auto		24,564		-		24,564		24,564		12,282		9,261
	$	5,148,185	$	1,428,073	$	3,465,439	$	4,893,512	$	440,041	$	4,674,918

For the three and nine months ended September 30, 2017, the Company recognized approximately $3,000 and $9,000, respectively in cash basis interest income on impaired loans. For the three and nine months ended September 30, 2016, the Company recognized approximately $3,000 in cash basis interest income on impaired loans.

At September 30, 2017, there were 28 impaired loans totaling approximately $1.9 million, compared to 38 impaired loans totaling approximately $4.9 million at December 31, 2016. The change in impaired loans was a result of the pay-off of eight impaired loans totaling approximately $2.4 million, write-downs on four impaired loans totaling approximately $0.2 million, writing down and moving seven impaired loans totaling approximately $351,000 to OREO/repossessed assets, upgrading and returning two loans totaling approximately $83,000 to accrual status, and payments of approximately $298,000, offset by the addition of seven loans totaling approximately $376,000 to the impaired loan list.

Our loan portfolio also includes certain loans that have been modified in a troubled debt restructuring (“TDR”), where economic concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from our loss mitigation activities and could include reductions in the interest rate, payment extensions, forbearance or other actions. TDRs are classified as non-performing at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period of at least six months.

When we modify loans in a TDR, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, or use the current fair value of the collateral, less estimated selling costs, for collateral dependent loans. If we determine that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, we evaluate all TDRs, including those that have payment defaults, for possible impairment and recognize impairment through the allowance.

         Impaired loans at September 30, 2017 included $0.5 million of loans whose terms have been modified in troubled debt restructurings, compared to $2.4 million at December 31, 2016. The amount of TDR loans included in impaired loans decreased approximately $1.9 million as a result of pay-offs on three TDRs totaling $1.7 million and charge-offs totaling $0.2 million on three TDRs. The remaining restructured loans are being monitored by management and remain on nonaccrual status as they have not, per accounting guidelines, performed in accordance with their restructured terms for the requisite period of time (generally at least six consecutive months) to be returned to accrual status.

There were no new loans classified as TDRs during the three months ended September 30, 2017 and 2016.

16

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

 Loans classified as TDRs during the nine months ended September 30, 2017 and 2016, segregated by class, are shown in the tables below.

	Nine Months Ended						Nine Months Ended
	September 30, 2017						September 30, 2016
	Number of Modifications		Recorded Investment		Increase in Allowance		Number of Modifications		Recorded Investment		Increase in Allowance
	(as of period end)						(as of period end)
One-to-four family		-	$	-	$	-		2	$	80,814	$	-
Multi-family		-		-		-		-		-		-
Non-residential		-		-		-		-		-		-
Commercial		-		-		-		-		-		-
Consumer direct		-		-		-		-		-		-
Purchased auto		-		-		-		-		-		-
		-	$	-	$	-		2	$	80,814	$	-

There were no TDR loans that were restructured during the twelve months prior to September 30, 2017 and 2016 that had payment defaults (i.e., 60 days or more past due following a modification) during the three or nine months ended September 30, 2017 and 2016.

All TDRs are evaluated for possible impairment and any impairment identified is recognized through the allowance. Additionally, the qualitative factors are updated quarterly for trends in economic and non-performing factors, including collateral securing TDRs.

The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days still on accrual status, by class of loans, as of September 30, 2017 and December 31, 2016:

September 30, 2017	Nonaccrual		Loans Past Due Over 90 Days Still Accruing
One-to-four family	$	1,609,874	$	-
Multi-family		-		-
Non-residential		368,020		-
Commercial		12,970		-
Consumer direct		-		-
Purchased auto		3,468		-
	$	1,994,332	$	-

December 31, 2016	Nonaccrual		Loans Past Due Over 90 Days Still Accruing
One-to-four family	$	2,693,055	$	-
Multi-family		-		-
Non-residential		2,264,763		-
Commercial		-		-
Consumer direct		-		-
Purchased auto		24,564		-
	$	4,982,382	$	-

17

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

 The following table presents the aging of the recorded investment in loans, by class of loans, as of September 30, 2017 and December 31, 2016:

September 30, 2017	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
One-to-four family	$	2,098,295	$	244,158	$	110,260	$	2,452,713	$	116,065,585	$	118,518,298
Multi-family		-		-		-		-		5,012,752		5,012,752
Non-residential		490,913		-		-		490,913		29,471,949		29,962,862
Commercial		12,970		-		-		12,970		17,038,936		17,051,906
Consumer direct		-		-		-		-		4,636,078		4,636,078
Purchased auto		-		-		3,468		3,468		17,935,070		17,938,538
	$	2,602,178	$	244,158	$	113,728	$	2,960,064	$	190,160,370	$	193,120,434

December 31, 2016	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
One-to-four family	$	1,879,438	$	22,562	$	1,089,635	$	2,991,635	$	100,880,051	$	103,871,686
Multi-family		-		-		-		-		5,182,611		5,182,611
Non-residential		118,132		-		680,802		798,934		21,761,233		22,560,167
Commercial		-		-		-		-		16,645,226		16,645,226
Consumer direct		1,105		-		-		1,105		2,858,598		2,859,703
Purchased auto		4,364		-		24,564		28,928		11,685,257		11,714,185
	$	2,003,039	$	22,562	$	1,795,001	$	3,820,602	$	159,012,976	$	162,833,578

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. For commercial and non-residential real estate loans, the Company’s credit quality indicator is internally assigned risk ratings. Each commercial and non-residential real estate loan is assigned a risk rating upon origination. The risk rating is reviewed annually, at a minimum, and on an as needed basis depending on the specific circumstances of the loan.

          For residential real estate loans, multi-family, consumer direct and purchased auto loans, the Company’s credit quality indicator is performance determined by delinquency status. Delinquency status is updated regularly by the Company’s loan system for real estate loans, multi-family and consumer direct loans. The Company receives monthly reports on the delinquency status of the purchased auto loan portfolio from the servicing company. Generally, when residential real estate loans, multi-family and consumer direct loans become over 90 days past due, they are classified as substandard. Periodically, based on subsequent performance over 6-12 months, these loans could be upgraded to special mention.

The Company uses the following definitions for risk ratings:

● Pass – loans classified as pass are of a higher quality and do not fit any of the other “rated” categories below (e.g., special mention, substandard or doubtful). The likelihood of loss is considered remote.

● Special Mention – loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

● Substandard – loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

● Doubtful – loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

● Not Rated – loans in this bucket are not evaluated on an individual basis.

18

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

 At September 30, 2017 and December 31, 2016, the risk category of loans by class is as follows:

September 30, 2017	Pass		Special Mention		Substandard		Doubtful		Not rated		Total Loans
One-to-four family	$	-	$	409,575	$	1,525,547	$	-	$	116,583,176	$	118,518,298
Multi-family		-		122,073		-		-		4,890,679		5,012,752
Non-residential		29,346,282		248,560		368,020		-		-		29,962,862
Commercial		17,038,936		-		12,970		-		-		17,051,906
Consumer direct		-		-		-		-		4,636,078		4,636,078
Purchased auto		-		-		3,468		-		17,935,070		17,938,538
Total	$	46,385,218	$	780,208	$	1,910,005	$	-	$	144,045,003	$	193,120,434

December 31, 2016	Pass		Special Mention		Substandard		Doubtful		Not rated		Total Loans
One-to-four family	$	-	$	562,215	$	2,604,185	$	-	$	100,705,286	$	103,871,686
Multi-family		-		127,987		-		-		5,054,624		5,182,611
Non-residential		20,102,176		193,228		2,264,763		-		-		22,560,167
Commercial		16,645,226		-		-		-		-		16,645,226
Consumer direct		-		-		-		-		2,859,703		2,859,703
Purchased auto		-		-		24,564		-		11,689,621		11,714,185
Total	$	36,747,402	$	883,430	$	4,893,512	$	-	$	120,309,234	$	162,833,578

At September 30, 2017, the Company held approximately $0.1 million in foreclosed residential real estate property, compared to approximately $33,000 at December 31, 2016. In addition, the Company also held approximately $0.1 million and $0.5 million in consumer mortgage loans that are collateralized by residential real estate properties that were in the process of foreclosure at September 30, 2017 and December 31, 2016, respectively.

NOTE 9 – STOCK COMPENSATION

Total stock-based compensation expense was approximately $0 and $8,000 for the nine-month periods ended September 30, 2017 and 2016, respectively. In accordance with FASB ASC 718, Compensation-Stock Compensation, compensation expense is recognized on a straight-line basis over the grantees’ vesting period or to the grantees’ retirement eligibility date, if earlier. During the nine months ended September 30, 2017 and 2016, the Company did not grant additional options or shares under the Management Recognition Plan (MRP).

NOTE 10 – RECENT ACCOUNTING DEVELOPMENTS

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 outlines a single model for companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract and will also require additional disclosures. The new authoritative guidance was originally effective for reporting periods after December 15, 2016. In August 2015, ASU 2015-14, Revenue from Contracts with Customers (Topic 606) was issued to delay the effective date of ASU 2014-09 by one year. The FASB issued four subsequent ASUs in 2016 which are intended to improve and clarify the implementation guidance related to ASU 2014-09. The Company’s revenue is comprised of net interest income, which is explicitly excluded from the scope of ASU 2014-09, and non-interest income. ASU 2014-09 may require the Company to change how it recognizes certain recurring revenues related to non-interest income; however, it is not expected to have a material impact on its Consolidated Financial Statements and related disclosures. The Company expects to adopt the standard in the first quarter of 2018 with a cumulative effect adjustment to opening retained earnings, if such adjustment is deemed to be significant.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 will be effective for the Company on January 1, 2018. The Company does not believe the adoption of the new financial instruments standard will have a material impact on its consolidated financial statements.

19

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under the new guidance in this ASU, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee`s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) 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 also 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. ASU 2016-02 is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. 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. The Company is currently evaluating the effect that this standard will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This ASU simplifies the treatment and accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. ASU 2016-09 became effective for us on January 1, 2017 and did not have a material impact on our consolidated financial statements. The Company believes that in the future the adoption of this update may result in a marginal amount of volatility within income tax expense, depending on the amount and timing of share-based compensation award activity such as the vesting of restricted stock awards and restricted stock units, as well as the exercise of stock options.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 31, 2018, including interim periods within those fiscal years. The Company is currently evaluating the potential impact of ASU 2016-13 on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU simplifies measurement of goodwill and eliminates Step 2 from the goodwill impairment test. The Company should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The impairment charge is limited to the amount of goodwill allocated to that reporting unit. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not believe the adoption of this standard will have a material impact on its consolidated financial statements.

In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities, which shortens the period of amortization of the premium on certain callable debt securities to the earliest call date. Currently, generally accepted accounting principles (“GAAP”) excludes certain callable debt securities from consideration of early repayment of principal even if the holder is certain that the call will be exercised. As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings. ASU 2017-08 requires that premiums on certain callable debt securities be amortized to the shortest call date. Securities within the scope of this ASU are those that have explicit, noncontingent call features that are callable at fixed prices and on preset dates. This ASU is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The impact of adopting this ASU is dependent on the materiality of callable debt securities at the time of adoption.

20

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

NOTE 11 – BORROWINGS

A summary of outstanding advances from the Federal Home Loan Bank of Chicago is as follows:

	September 30,		December 31,
	2017		2016
Matures 02/15/2018 at 1.27%, fixed	$	1,000,000	$	-
Matures 03/30/2018 at 1.72%, fixed		498,714		496,784
Matures 05/15/2018 at 1.34%, fixed		2,000,000		-
Matures 09/25/2018 at 1.46%, fixed		2,000,000		-
Matures 04/01/2019 at 2.00%, fixed		496,543		494,906
Matures 08/30/2019 at 1.56%, fixed		3,000,000		-
Matures 10/03/2022 at 1.48%, fixed		119,742		129,463
	$	9,114,999	$	1,121,153

NOTE 12 – FAIR VALUE MEASUREMENT AND DISCLOSURE

FASB ASC Topic 820, Fair Value Measurements and Disclosures, clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants and is not adjusted for transaction costs. This guidance also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement inputs) and the lowest priority to unobservable inputs (Level 3 measurement inputs). The three levels of the fair value hierarchy under FASB ASC 820 are described below:

Basis of Fair Value Measurement:

• Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets.

• Level 2 - Significant other observable inputs other than Level 1 prices such as quoted prices in markets that are not active, quoted prices for similar assets, or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset.

• Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Following is a description of valuation methodologies used for assets and liabilities recorded at fair value:

Securities Available for Sale

Securities classified as available for sale are recorded at fair value on a recurring basis using pricing obtained from an independent pricing service. Where quoted market prices are available in an active market, securities are classified within Level 1. The Company has no securities classified within Level 1. If quoted market prices are not available, the pricing service estimates the fair values by using pricing models or quoted prices of securities with similar characteristics. For these securities, the inputs used by the pricing service to determine fair value consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and bonds’ terms and conditions, among other things resulting in classification within Level 2. Level 2 securities include state and municipal securities, and residential mortgage-backed securities. In cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3. The Company has no securities classified within Level 3.

Foreclosed Assets

Foreclosed assets, consisting of foreclosed real estate and repossessed assets, are adjusted to fair value less estimated costs to sell upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at the lower of cost or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the foreclosed asset as non-recurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the foreclosed asset as non-recurring Level 3.

21

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

Impaired Loans

Impaired loans are evaluated and adjusted to the lower of carrying value or fair value less estimated costs to sell at the time the loan is identified as impaired. Impaired loans are carried at the lower of cost or fair value.  Fair value is measured based on the value of the collateral securing these loans. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the impaired loan as non-recurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the impaired loan as non-recurring Level 3.

The Company did not have any transfers of assets or liabilities between Levels 1 and 2 of the fair value hierarchy during the nine months ended September 30, 2017 and the year ended December 31, 2016. The Company’s policy for determining transfers between levels occurs at the end of the reporting period when circumstances in the underlying valuation criteria change and result in transfers between levels.

The tables below present the recorded amounts of assets measured at fair value on a recurring basis at September 30, 2017 and December 31, 2016.

							Total
September 30, 2017	Level 1		Level 2		Level 3		Fair Value
State and municipal securities available for sale	$	-	$	14,490,188	$	-	$	14,490,188
Residential mortgage-backed securities available for sale		-		15,686,084		-		15,686,084
	$	-	$	30,176,272	$	-	$	30,176,272

							Total
December 31, 2016	Level 1		Level 2		Level 3		Fair Value
State and municipal securities available for sale	$	-	$	18,156,138	$	-	$	18,156,138
Residential mortgage-backed securities available for sale		-		26,404,542		-		26,404,542
	$	-	$	44,560,680	$	-	$	44,560,680

The tables below present the recorded amounts of assets measured at fair value on a non-recurring basis at September 30, 2017 and December 31, 2016.

							Total
September 30, 2017	Level 1		Level 2		Level 3		Fair Value
Foreclosed assets	$	-	$	-	$	83,500	$	83,500
Impaired loans, net		-		-		773,449		773,449

							Total
December 31, 2016	Level 1		Level 2		Level 3		Fair Value
Foreclosed assets	$	-	$	-	$	35,500	$	35,500
Impaired loans, net		-		-		3,025,398		3,025,398

22

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

The following tables present additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized Level 3 inputs to determine fair value.

	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable
	Estimate		Techniques	Input	Range
September 30, 2017
Foreclosed assets	$	83,500	Appraisal of collateral	Appraisal adjustments		-81.4%
Impaired loans, net	$	662,195	Appraisal of collateral	Appraisal adjustments	-36.3	to	-55.9%
Impaired loans, net	$	111,254	Discounted Future Cash Flows	Payment Stream		N/A
				Discount Rate		10%
December 31, 2016
Foreclosed assets	$	35,500	Appraisal of collateral	Appraisal adjustments	-23%	to	-50%
Impaired loans, net	$	2,856,621	Appraisal of collateral	Appraisal adjustments	-14.5	to	-86.5%
Impaired loans, net	$	168,777	Discounted Future Cash Flows	Payment Stream		N/A
				Discount Rate		10%

In accordance with accounting pronouncements, the carrying value and estimated fair value of the Company’s financial instruments as of September 30, 2017 and December 31, 2016, are as follows:

			Fair Value Measurements at
	Carrying		September 30, 2017 using:
	Amount		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	2,938,284	$	2,938,284	$	-	$	-	$	2,938,284
Time deposits		250,000		250,000		-		-		250,000
Federal funds sold		3,705,000		3,705,000		-		-		3,705,000
Securities		30,928,493		-		30,176,272		752,221		30,928,493
Net loans		190,754,189		-		-		193,127,599		193,127,599
Loans held for sale		659,099		659,099		-		-		659,099
Accrued interest receivable		781,619		781,619		-		-		781,619
Mortgage servicing rights		406,949		-		-		406,949		406,949
Financial Liabilities:
Non-interest bearing deposits		12,693,586		12,693,586		-		-		12,693,586
Interest bearing deposits		166,196,571		-		-		166,823,607		166,823,607
Accrued interest payable		3,693		3,693		-		-		3,693
FHLB advances		9,114,999		-		8,270,081		-		8,270,081

23

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

	Carrying		December 31, 2016 using:
	Amount		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	5,946,649	$	5,946,649	$	-	$	-	$	5,946,649
Time deposits		250,000		250,000		-		-		250,000
Federal funds sold		1,690,000		1,690,000		-		-		1,690,000
Securities		45,314,001		-		44,560,680		753,321		45,314,001
Net loans		160,586,129		-		-		161,967,000		161,967,000
Loans held for sale		305,072		305,072		-		-		305,072
Mortgage servicing rights		351,544		-		-		351,544		351,544
Accrued interest receivable		785,484		785,484		-		-		785,484
Financial Liabilities:
Non-interest bearing deposits		9,974,536		9,974,536		-		-		9,974,536
Interest bearing deposits		162,572,485		-		-		155,963,464		155,963,464
Accrued interest payable		224		224		-		-		224
FHLB advances		1,121,153		-		1,151,000		-		1,151,000

The following methods and assumptions were used by the Bank in estimating the fair value of financial instruments:

Cash and cash equivalents: The carrying amounts reported in the balance sheets for cash and cash equivalents approximate fair values.  

Time deposits: The carrying amounts reported in the balance sheets for time deposits approximate fair values.  

Federal funds sold: The carrying amounts reported in the balance sheets for federal funds sold approximate fair values.  

Securities: The Company obtains fair value measurements of available for sale securities from an independent pricing service. See Note 11 - Fair Value Measurement and Disclosure for further detail on how fair values of securities available for sale are determined. The carrying value of non-marketable equity securities approximates fair value.

Loans: For variable-rate loans that re-price frequently and with no significant change in credit risk, fair values are based on carrying amounts. The fair values for other loans (for example, fixed rate commercial real estate and rental property mortgage loans and commercial and industrial loans) are estimated using discounted cash flow analysis, based on market interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Loan fair value estimates include judgments regarding future expected loss experience and risk characteristics. Fair values for impaired loans are estimated using underlying collateral values, where applicable or discounted cash flows.

Loans held for sale: The carrying amounts reported in the balance sheets for loans held for sale approximate fair values, as usually these loans are originated with the intent to sell and funding of the sales usually occurs within three days.

Accrued interest receivable and payable: The carrying amounts of accrued interest receivable and payable approximate fair values.

Mortgage servicing rights: The carrying amounts of mortgage servicing rights approximate their fair values.

Deposits: The fair values disclosed for demand deposits are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). The carrying amounts of variable-rate, fixed-term money market accounts and certificates of deposit approximate their fair values. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates currently offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.

24

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

 FHLB advances: The fair value of FHLB advances is estimated by discounting future cash flows at the currently offered rates for borrowings of similar remaining maturities.

 Loan commitments: Commitments to extend credit were evaluated and fair value was 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 counter-parties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The Bank does not charge fees to enter into these agreements. At September 30, 2017 and December 31, 2016, the fair values of the commitments are immaterial in nature.

In addition, other assets and liabilities of the Bank that are not defined as financial instruments, such as property and equipment, are not included in the above disclosures. Also, non-financial instruments typically not recognized in financial statements nevertheless may have value but are not included in the above disclosures. These include, among other items, the estimated earnings power of core deposit accounts, the trained work force, customer goodwill and similar items.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s discussion and analysis of the financial condition and results of operations is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the Unaudited Consolidated Financial Statements and footnotes appearing in Part I, Item 1 of this document.

FORWARD-LOOKING INFORMATION

               Statements contained in this report that are not historical facts may constitute forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended), which involve significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by the use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “plan,” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain and actual results may differ from those predicted. The Company undertakes no obligation to update these forward-looking statements in the future. The Company cautions readers of this report that a number of important factors could cause the Company’s actual results subsequent to September 30, 2017 to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from those predicted and could affect the future prospects of the Company include, but are not limited to, fluctuations in market rates of interest and loan and deposit pricing, changes in the securities or financial market, a deterioration of general economic conditions either nationally or locally, our ability to realize estimated benefits (including, but not limited to, cost savings, synergies and growth) from acquired or merged entities, our ability to successfully integrate acquired or merged entities with us (including Twin Oaks), legislative or regulatory changes that adversely affect our business, adverse developments or changes in the composition of our loan or investment portfolios, significant increases in competition, changes in real estate values, difficulties in identifying attractive acquisition opportunities or strategic partners to complement our Company’s approach and the products and services the Company offers, the possible dilutive effect of potential acquisitions or expansion, and our ability to raise new capital as needed and the timing, amount and type of such capital raises. The consequence of these factors, many of which could hurt our business, could include, among other things, increased loan delinquencies, an escalation in problem assets and foreclosures, a decline in demand for our products and services, a reduction in the value of certain assets held by us, an inability to meet our liquidity needs and an inability to engage in certain lines of business. These risks and uncertainties should be considered in evaluating forward-looking statements. Additionally, other risks and uncertainties may be described in the Company’s Annual Report on form 10-K as filed with the Securities and Exchange Commission on March 29, 2017.

GENERAL

Our business activities are primarily conducted through Ottawa Savings Bank, headquartered in Ottawa, Illinois, which is located in north-central Illinois approximately 80 miles southwest of Chicago. Ottawa Savings Bank conducts business from its main office in Ottawa and through its branch offices located in Marseilles and Morris, Illinois and loan production offices located in Joliet and Peru, Illinois. Ottawa Savings Bank’s market area includes all of LaSalle County and parts of Grundy County in Illinois. On December 31, 2014, Ottawa Savings Bancorp acquired Twin Oaks Savings Bank (“Twin Oaks”) and merged Twin Oaks with and into Ottawa Savings Bank, which facilitated Ottawa Savings Bank’s expansion into Grundy County (the “Merger”).

25

Ottawa Savings Bank’s principal business consists of originating one-to-four family residential real estate mortgage loans and home equity lines of credit, and to a lesser extent, non-residential real estate, multi-family and construction loans. We also offer commercial and industrial loans and other consumer loans. We offer a variety of retail deposits to the general public in the areas surrounding our main office and our branch offices. We offer our customers a variety of deposit products with interest rates that are competitive with those of similar products offered by other financial institutions in our market area. We also utilize borrowings as a source of funds. Our revenues are derived primarily from interest on loans and, to a lesser extent, interest on investment securities and mortgage-backed securities. We also generate revenues from other income including realized gains on sales of loans associated with loan production, deposit fees and service charges, realized gains on sales of other real estate owned, realized gains on sales of securities and loan fees.

COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2017 AND DECEMBER 31, 2016

The Company's total assets increased $15.6 million, or 6.8%, to $245.7 million at September 30, 2017, from $230.2 million at December 31, 2016. The increase was primarily due to increases in the net loan portfolio of $30.2 million and federal funds sold of $2.0 million. These increases were partially offset by a decrease in securities available for sale of $14.4 million and a decrease in cash and cash equivalents of $3.0 million.    

Cash and cash equivalents decreased $3.0 million, or 50.6%, to $2.9 million at September 30, 2017 from $5.9 million at December 31, 2016. The decrease in cash and cash equivalents was primarily a result of cash used in investing activities of $18.5 million exceeding cash provided by financing activities of $13.9 million and cash provided by operating activities of $1.6 million. The cash used in investing activities included a gross increase in loans of $31.1 million and the purchase of $1.3 million in securities available for sale, offset by security sales, maturities and pay-downs of $15.7 million and an increase in federal funds sold of $2.0 million.

Federal funds sold increased to $3.7 million at September 30, 2017, from $1.7 million at December 31, 2016.

Securities available-for-sale decreased $14.4 million, or 32.3%, to $30.2 million at September 30, 2017 from $44.6 million at December 31, 2016. The decrease was primarily due to sales and maturities of $11.6 million and pay-downs of $4.1 million, exceeding new securities purchases of $1.3 million. Cash proceeds from the sales and maturities of securities were used to fund the loan growth, as the yield earned on the loan originations was higher than those earned in the security portfolio.

Loans, net of the allowance for loan losses, increased $30.2 million, or 18.8%, to $190.8 million at September 30, 2017, from $160.6 million at December 31, 2016. The increase in loans, net of the allowance for loan losses, was primarily due to a $14.6 million increase in one-to-four family loans, a $7.4 million increase in non-residential real estate loans, and a $6.2 million increase in the purchased auto portfolio. The Company also experienced growth in most other loan categories during the nine months ended September 30, 2017.

Total deposits increased $6.3 million, or 3.7%, to $178.9 million at September 30, 2017 from $172.5 million at December 31, 2016. At September 30, 2017 checking/money market accounts increased by $3.7 million, savings accounts increased by $1.8 million and certificates of deposit increased by $0.8 million as compared to December 31, 2016. Management is focusing efforts on growing core deposits to improve the deposit mix in the portfolio. Additionally, management continues to strategically price deposit rates as interest rates begin to rise in order to retain certificate of deposit customers, while still maintaining a healthy interest rate spread.

FHLB advances increased $8.0 million, to $9.1 million at September 30, 2017 compared to $1.1 million at December 31, 2016 to fund the loan growth experienced during the nine months ended September 30, 2017.

Stockholders’ equity increased $1.0 million, or 1.9%, to $52.9 million at September 30, 2017 from $51.9 million at December 31, 2016. The increase is primarily a result of net income of $1.3 million for the nine months ended September 30, 2017 and an increase in other comprehensive income of $0.2 million related to an increase in the fair value of securities available for sale, partially off-set by dividends of $0.4 million paid to stockholders and an approximately $0.1 million net decrease related to ESOP shares.

The Company’s non-performing assets consist of non-accrual loans, foreclosed real estate and other repossessed assets. Loans are generally placed on non-accrual status when it is apparent all of the contractual payments (i.e. principal and interest) will not be received; however, they may be placed on non-accrual status sooner if management has significant doubt as to the collection of all amounts due. Interest previously accrued but uncollected is reversed and charged against interest income.

26

The non-performing assets to total assets ratio was 0.85% at September 30, 2017, which is down from 2.18% at December 31, 2016. During the first nine months of 2017, non-performing assets decreased 58.6% to $2.1 million from $5.0 million as of December 31, 2016. The decrease in non-performing assets was primarily due to the decrease in non-accrual loans as a result of the pay-off of eight impaired loans totaling approximately $2.4 million, write-downs on four impaired loans totaling approximately $0.2 million, writing down and moving seven impaired loans totaling approximately $351,000 to OREO/repossessed assets, upgrading and returning two loans totaling approximately $83,000 to accrual status, and payments of approximately $298,000, offset by the addition of seven loans totaling approximately $376,000 to the impaired loan list. Additionally, foreclosed real estate increased approximately $50,000, while other repossessed assets decreased approximately $2,000.

The following table summarizes non-performing assets for the prior five quarters.

	September 30,		June 30,		March 31,		December 31,		September 30,
	2017		2017		2017		2016		2016
	(In Thousands)
Non-accrual:
One-to-four family	$	1,610	$	1,814	$	2,175	$	2,693	$	2,310
Multi-family		-		-		-		-		-
Non-residential real estate		368		458		618		2,265		1,880
Commercial		13		-		-		-		-
Consumer direct		-		-		-		-		-
Purchased auto		3		26		26		24		13
Total non-accrual loans		1,994		2,298		2,819		4,982		4,203
Past due greater than 90 days and still accruing:
One-to-four family		-		-		-		-		-
Non-residential real estate		-		-		-		-		-
Commercial		-		-		-		-		-
Consumer direct		-		-		-		-		-
Total nonperforming loans		1,994		2,298		2,819		4,982		4,203
Foreclosed real estate		83		-		-		33		33
Other repossessed assets		-		13		8		2		42
Total nonperforming assets	$	2,077	$	2,311	$	2,827	$	5,017	$	4,278

The table below presents selected asset quality ratios for the prior five quarters.

	September 30,			June 30,			March 31,			December 31,			September 30,
	2017			2017			2017			2016			2016
Allowance for loan losses as a percent of gross loans receivable		1.23	%		1.21	%		1.26	%		1.35	%		1.45	%
Allowance for loan losses as a percent of total nonperforming loans		118.66	%		97.52	%		77.47	%		45.10	%		54.91	%
Nonperforming loans as a percent of gross loans receivable		1.00	%		1.24	%		1.63	%		3.00	%		2.64	%
Nonperforming loans as a percent of total assets		0.81	%		0.97	%		1.19	%		2.16	%		1.52	%
Nonperforming assets as a percent of total assets		0.85	%		0.98	%		1.20	%		2.18	%		1.55	%

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016

General.  Net income for the three months ended September 30, 2017 increased approximately $34,000, or 8.0%, to approximately $455,000 compared to net income of approximately $421,000 for the three months ended September 30, 2016. The increase was primarily attributed to an increase in net interest income after provision for loan losses of approximately $67,000, an increase in total other income of approximately $135,000, and a decrease in income tax expense of approximately $68,000, partially offset by an increase of approximately $237,000 in other expenses.    

27

Net Interest Income. The following table summarizes interest and dividend income and interest expense for the three months ended September 30, 2017 and 2016.

	Three Months Ended
	September 30,
	2017		2016		$ change			% change
	(Dollars in thousands)
Interest and dividend income:
Interest and fees on loans	$	2,204	$	1,858	$	346			18.62	%
Securities:
Residential mortgage-backed securities		99		123		(24	)		(19.51	)
State and municipal securities		116		133		(17	)		(12.78	)
Dividends on non-marketable equity securities		2		1		1			100.00
Interest-bearing deposits		5		12		(7	)		(58.33	)
Total interest and dividend income		2,426		2,127		299			14.06
Interest expense:
Deposits		248		206		42			20.39
Borrowings		20		15		5			33.33
Total interest expense		268		221		47			21.27
Net interest income	$	2,158	$	1,906	$	252			13.22	%

28

The following table presents for the periods indicated the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. No tax equivalent adjustments were made. All average balances are monthly average balances. Non-accruing loans have been included in the table as loans carrying a zero yield. The amortization of loan fees is included in computing interest income; however, such fees are not material.

	Three Months Ended September 30,
	2017							2016
					AVERAGE							AVERAGE
	AVERAGE				YIELD/			AVERAGE				YIELD/
	BALANCE		INTEREST		COST			BALANCE		INTEREST		COST
	(Dollars in thousands)
Assets
Interest-earning assets
Loans receivable, net (1)	$	187,221	$	2,204		4.71	%	$	153,844	$	1,858		4.83	%
Securities, net (2)		35,044		215		2.45	%		44,714		256		2.29	%
Non-marketable equity securities		752		2		1.06	%		753		1		0.53	%
Interest-bearing deposits		2,589		5		0.77	%		19,523		12		0.25	%
Total interest-earning assets		225,606		2,426		4.30	%		218,834		2,127		3.89	%
Non-interest-earning assets		18,692							19,010
Total assets		244,298							237,844
Liabilities and Equity
Interest-bearing liabilities
Money Market accounts	$	30,312	$	21		0.28	%	$	30,654	$	16		0.21	%
Savings accounts		26,200		5		0.08	%		41,010		6		0.08	%
Certificates of Deposit accounts		82,258		218		1.06	%		83,908		181		0.86	%
Checking accounts		28,643		4		0.06	%		28,916		3		0.04	%
Advances and borrowed funds		7,558		20		1.06	%		8,238		15		0.73	%
Total interest-bearing liabilities		174,971		268		0.61	%		192,726		221		0.46	%
Non-interest-bearing liabilities		16,443							12,547
Total liabilities		191,414							205,273
Equity		52,884							32,571
Total liabilities and equity		244,298							237,844
Net interest income			$	2,158						$	1,906
Net interest rate spread (3)						3.69	%						3.43	%
Net interest margin (4)						3.83	%						3.48	%
Ratio of average interest-earning assets to average interest-bearing liabilities						128.94	%						113.55	%

(1) Amount is net of deferred loan origination (costs) fees, undisbursed loan funds, unamortized discounts and allowance for loan losses and includes non-performing loans.

(2) Includes unamortized discounts and premiums.

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

(4) Net interest margin represents net interest income divided by average interest-earning assets.

29

The following table summarizes the changes in net interest income due to rate and volume for the three months ended September 30, 2017 and 2016. The column “Net” is segmented into the changes attributable to variations in volume and the changes attributable to changes in interest rates. The variations attributable to simultaneous volume and rate changes have been proportionately allocated to rate and volume.

	Three Months Ended September 30,
	2017 Compared to 2016
	Increase (Decrease) Due to
	VOLUME			RATE			NET
	(Dollars in Thousands)
Interest and dividends earned on
Loans receivable, net	$	393		$	(47	)	$	346
Securities, net		(59	)		18			(41	)
Non-marketable equity securities		-			1			1
Interest-bearing deposits		(33	)		26			(7	)
Total interest-earning assets	$	301		$	(2	)	$	299
Interest expense on
Money Market accounts	$	-		$	5		$	5
Passbook accounts		(1	)		-			(1	)
Certificates of Deposit accounts		(4	)		41			37
Checking		-			1			1
Advances and borrowed funds		(2	)		7			5
Total interest-bearing liabilities		(7	)		54			47
Change in net interest income	$	308		$	(56	)	$	252

Net interest income increased by $0.3 million, or 13.2%, to $2.2 million for the three months ended September 30, 2017, from $1.9 million for the three months ended September 30, 2016. Interest and dividend income increased $0.3 million, or 14.1%, primarily due to an increase in the average balances of interest-earning assets of $6.8 million. The increase in net interest income was partially off-set by a slight increase in interest expense as the average cost of funds increased 15 basis points to 0.61% for the three months ended September 30, 2017. The increase in cost of funds was partially off-set by a decrease in the average balance of interest-bearing liabilities of $17.8 million during the three months ended September 30, 2017. The average balance of interest-bearing liabilities was temporarily inflated at September 30, 2016, due to $50.1 million of funds received late in the third quarter as a result of the subscription and community offerings for shares of Company common stock in connection with the Bank’s second-step conversion completed on October 11, 2016. The net interest margin increased during the three months ended September 30, 2017 to 3.83% compared to 3.48% for the three months ended September 30, 2016.

Provision for Loan Losses. Management recorded a loan loss provision of $0.2 million and $25,000 for the three-month periods ended September 30, 2017 and 2016, respectively. General reserves at September 30, 2017 were higher when compared to September 30, 2016, as the balances in all loan categories increased during the twelve months ended September 30, 2017. Additionally, net charge-offs during the third quarter of 2017 were $84,000 compared to $5,000 during the third quarter of 2016. These increases were partially off-set by improvements in historical loss levels and changes in qualitative factors during the twelve months ended September 30, 2017, as compared to the same period in 2016. Additionally, specific reserves as of September 30, 2017 were lower than they were as of September 30, 2016, due to several large credits being resolved during 2017 that had larger reserves as of September 30, 2016. Collateral values of real estate have stabilized and are increasing from recessionary valuation levels, but economic conditions in the local markets continue to lag national indicators, including higher levels of unemployment locally of 4.6% in LaSalle County, 5.1% in Grundy County, and 5.0% for the State of Illinois, versus the national level of 4.2%. Based on a review of the loans that were in the loan portfolio at September 30, 2017, management believes that the allowance is maintained at a level that represents its best estimate of inherent losses in the loan portfolio that were both probable and reasonably estimable.

Management uses available information to establish the appropriate level of the allowance for loan losses. Future additions or reductions to the allowance may be necessary based on estimates that are susceptible to change as a result of changes in economic conditions and other factors. As a result, our allowance for loan losses may not be sufficient to cover actual loan losses, and future provisions for loan losses could materially adversely affect the Company’s operating results. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize adjustments to the allowance based on their judgments about information available to them at the time of their examination.

30

Other Income. The following table summarizes other income for the three months ended September 30, 2017 and 2016.

	Three months ended
	September 30,
	2017		2016		$ change			% change
	(Dollars in thousands)
Other income:
Gain on sale of securities	$	77	$	-	$	77			100.00	%
Gain on sale of loans		205		143		62			43.36
Gain on sale of foreclosed real estate		5		77		(72	)		(93.51	)
Gain on sale of repossessed assets		1		-		1			100.00
Loan origination and servicing income		159		103		56			54.37
Origination of mortgage servicing rights, net of amortization		21		15		6			40.00
Customer service fees		123		119		4			3.36
Income on bank owned life insurance		12		12		-			-
Other		30		29		1			3.45
Total other income	$	633	$	498	$	135			27.11	%

The increase in total other income was primarily due to an increase in gains on sale of loans and an increase in loan origination and servicing income, as a result of increases in loan originations and loans originated for sale into the secondary market. There was also an increase in the gain on sale of securities. The increases were partially offset by a decrease in the gain on sale of foreclosed real estate due to the sale of fewer OREO properties during the three months ended September 30, 2017 as compared to the three months ended September 30, 2016.

Other Expense. The following table summarizes other expense for the three months ended September 30, 2017 and 2016.

	Three months ended
	September 30,
	2017			2016			$ change			% change
	(Dollars in thousands)
Other expenses:
Salaries and employee benefits	$	1,047		$	840		$	207			24.64	%
Directors fees		41			41			-			-
Occupancy		159			171			(12	)		(7.02	)
Deposit insurance premium		15			37			(22	)		(59.46	)
Legal and professional services		92			83			9			10.84
Data processing		144			131			13			9.92
Loss on sale of securities		48			-			48			100.00
Loan expense		153			125			28			22.40
Valuation adjustments and expenses on foreclosed real estate		3			32			(29	)		(90.63	)
Loss on sale of foreclosed real estate		-			5			(5	)		(100.00	)
Other		269			269			-			-
Total other expenses	$	1,971		$	1,734		$	237			13.67	%
Efficiency ratio (1)		70.62	%		72.13	%

(1) Computed as other expenses divided by the sum of net interest income and other income.

The increase in other expense was primarily due to an increase in salaries and employee benefits, which was due to both additional personnel to support our mortgage lending area as well as annual merit increases. The efficiency ratio decreased due to increased net interest income and other income for the 2017 period.

Income Taxes. The Company recorded income tax expense of $0.2 million for both the three months ended September 30, 2017 and 2016, respectively. For the three months ended September 30, 2017, the Company had net income of $0.5 million with approximately $0.1 million in tax exempt income, compared to net income of $0.4 million with approximately $0.1 million in tax exempt income for the three months ended September 30, 2016.

31

The Company’s income tax differed from the maximum statutory federal rate of 35% for the three months ended September 30, 2017 and 2016, as follows:

	Three Months Ended
	September 30,
	2017			2016
Expected income taxes	$	213,470		$	225,580
Income tax effect of:
State taxes, net of federal tax benefit		(23,717	)		32,218
Tax exempt interest		(38,407	)		(44,331	)
Income taxed at lower rates		(6,099	)		(6,445	)
Other		9,916			16,229
	$	155,163		$	223,251

COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016

General. Net income for the nine months ended September 30, 2017 was $1.3 million compared to $1.1 for the nine months ended September 30, 2016. The increase was primarily attributed to the increase in net interest income after provision for loan losses of $0.5 million and a $0.4 million increase in total other income. These favorable variances were partially offset by an increase of $0.7 million in other expenses.

Net Interest Income. The following table summarizes interest and dividend income and interest expense for the nine months ended September 30, 2017 and 2016.

	Nine Months Ended
	September 30,
	2017		2016		$ change			% change
	(Dollars in thousands)
Interest and dividend income:
Interest and fees on loans	$	6,292	$	5,433	$	859			15.81	%
Securities:
Residential mortgage-backed securities		361		424		(63	)		(14.86	)
State and municipal securities		374		404		(30	)		(7.43	)
Dividends on non-marketable equity securities		5		5		-			-
Interest-bearing deposits		21		22		(1	)		(4.55	)
Total interest and dividend income		7,053		6,288		765			12.17
Interest expense:
Deposits		676		612		64			10.46
Borrowings		36		27		9			33.33
Total interest expense		712		639		73			11.42
Net interest income	$	6,341	$	5,649	$	692			12.25	%

32

The following table presents for the periods indicated the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. No tax equivalent adjustments were made. All average balances are monthly average balances. Non-accruing loans have been included in the table as loans carrying a zero yield. The amortization of loan fees is included in computing interest income; however, such fees are not material.

	Nine Months Ended September 30,
	2017							2016
					AVERAGE							AVERAGE
	AVERAGE				YIELD/			AVERAGE				YIELD/
	BALANCE		INTEREST		COST			BALANCE		INTEREST		COST
	(Dollars in thousands)
Assets
Interest-earning assets
Loans receivable, net (1)	$	176,476	$	6,292		4.75	%	$	147,498	$	5,433		4.91	%
Securities, net (2)		40,063		735		2.45	%		46,380		828		2.38	%
Non-marketable equity securities		753		5		0.89	%		955		5		0.70	%
Interest-bearing deposits		2,692		21		1.04	%		9,374		22		0.31	%
Total interest-earning assets		219,984		7,053		4.27	%		204,207		6,288		4.11	%
Non-interest-earning assets		18,817							18,559
Total assets		238,801							222,766
Liabilities and Equity
Interest-bearing liabilities
Money Market accounts	$	30,464	$	54		0.24	%	$	30,750	$	48		0.21	%
Savings accounts		26,247		14		0.07	%		29,754		15		0.07	%
Certificates of Deposit accounts		81,544		597		0.98	%		85,281		539		0.84	%
Checking accounts		28,819		11		0.05	%		27,835		10		0.05	%
Advances and borrowed funds		3,488		36		1.38	%		3,927		27		0.92	%
Total interest-bearing liabilities		170,562		712		0.56	%		177,547		639		0.48	%
Non-interest-bearing liabilities		15,668							13,544
Total liabilities		186,230							191,091
Equity		52,571							31,675
Total liabilities and equity		238,801							222,766
Net interest income			$	6,341						$	5,649
Net interest rate spread (3)						3.71	%						3.63	%
Net interest margin (4)						3.84	%						3.69	%
Ratio of average interest-earning assets to average interest-bearing liabilities						128.98	%						115.02	%

(1) Amount is net of deferred loan origination (costs) fees, undisbursed loan funds, unamortized discounts and allowance for loan losses and includes non-performing loans.

(2) Includes unamortized discounts and premiums.

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

(4) Net interest margin represents net interest income divided by average interest-earning assets.

33

The following table summarizes the changes in net interest income due to rate and volume for the nine months ended September 30, 2017 and 2016. The column “Net” is segmented into the changes attributable to variations in volume and the changes attributable to changes in interest rates. The variations attributable to simultaneous volume and rate changes have been proportionately allocated to rate and volume.

	Nine Months Ended September 30,
	2017 Compared to 2016
	Increase (Decrease) Due to
	VOLUME			RATE			NET
	(Dollars in Thousands)
Interest and dividends earned on
Loans receivable, net	$	1,033		$	(174	)	$	859
Securities, net		(116	)		23			(93	)
Non-marketable equity securities		(1	)		1			-
Interest-bearing deposits		(52	)		51			(1	)
Total interest-earning assets	$	864		$	(99	)	$	765
Interest expense on
Money Market accounts	$	(1	)	$	7		$	6
Passbook accounts		(1	)		-			(1	)
Certificates of Deposit accounts		(27	)		85			58
Checking		1			-			1
Advances and borrowed funds		(4	)		13			9
Total interest-bearing liabilities		(32	)		105			73
Change in net interest income	$	896		$	(204	)	$	692

Net interest income increased by $0.7 million, or 12.2%, to $6.3 million for the nine months ended September 30, 2017, from $5.6 million for the nine months ended September 30, 2016. Interest and dividend income increased $0.8 million, or 12.2%, primarily due to an increase in the average balances of interest-earning assets of $15.8 million and a 3.9% increase in the yield on interest-earning assets to 4.27%. The increase in net interest income was partially off-set by an increase in interest expense as the average cost of funds increased eight basis points to 0.56% for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The increase in cost of funds was slightly off-set by a decrease in the average balance of interest-bearing liabilities of $7.0 million during the nine months ended September 30, 2017. The average balance of interest-bearing liabilities was temporarily inflated at September 30, 2016, due to $50.1 million of funds received late in the third quarter as a result of the subscription and community offerings for shares of Company common stock in connection with the Bank’s second-step conversion completed on October 11, 2016. The net interest margin increased during the nine months ended September 30, 2017 to 3.84% compared to 3.69% for the nine months ended September 30, 2016.

Provision for Loan Losses. Management recorded a loan loss provision of $0.5 million and $0.3 million for the nine-month periods ended September 30, 2017 and 2016, respectively. General reserves at September 30, 2017 were higher when compared to September 30, 2016, as the balances in all loan categories increased during the twelve months ended September 30, 2017. Additionally, net charge-offs during the nine months ended September 30, 2017 were $0.3 million compared to $0.2 million during the same period of 2016. These increases were partially off-set by improvements in historical loss levels and changes in qualitative factors during the twelve months ended September 30, 2017, as compared to the same period in 2016. Additionally, specific reserves as of September 30, 2017 were lower than they were as of September 30, 2016, due to several large credits being resolved during 2017 that had larger reserves as of September 30, 2016. Collateral values of real estate have stabilized and are increasing from recessionary valuation levels, but economic conditions in the local markets continue to lag national indicators, including higher levels of unemployment locally of 4.6% in LaSalle County, 5.1% in Grundy County, and 5.0% for the State of Illinois, versus the national level of 4.2%. Based on a review of the loans that were in the loan portfolio at September 30, 2017, management believes that the allowance is maintained at a level that represents its best estimate of inherent losses in the loan portfolio that were both probable and reasonably estimable.

Management uses available information to establish the appropriate level of the allowance for loan losses. Future additions or reductions to the allowance may be necessary based on estimates that are susceptible to change as a result of changes in economic conditions and other factors. As a result, our allowance for loan losses may not be sufficient to cover actual loan losses, and future provisions for loan losses could materially adversely affect the Company’s operating results. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize adjustments to the allowance based on their judgments about information available to them at the time of their examination.

34

 Other Income. The following table summarizes other income for the nine months ended September 30, 2017 and 2016.

	Nine months ended
	September 30,
	2017		2016		$ change			% change
	(Dollars in thousands)
Other income:
Gain on sale of securities	$	98	$	8	$	90			1,125.00	%
Gain on sale of loans		522		331		191			57.70
Gain on sale of foreclosed real estate		29		188		(159	)		(84.57	)
Gain on sale of repossessed assets		15		2		13			650.00
Loan origination and servicing income		463		239		224			(93.72	)
Origination of mortgage servicing rights, net of amortization		55		42		13			(30.95	)
Customer service fees		360		319		41			12.85
Income on bank owned life insurance		36		37		(1	)		(2.70	)
Other		91		78		13			16.67
Total other income	$	1,669	$	1,244	$	425			34.16	%

The increase in total other income was primarily due to an increase in gains on sale of loans and an increase in loan origination and servicing income, as a result of increases in loan originations and loans originated for sale into the secondary market. Also contributing to the increase was an increase in gains on sale of securities, due to the sale of more securities during the current period, with the cash proceeds used to fund loan growth. The increases were partially offset by a decrease in the gain on sale of foreclosed real estate due to the sale of fewer foreclosed properties during the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016.

Other Expense. The following table summarizes other expense for the nine months ended September 30, 2017 and 2016.

	Nine months ended
	September 30,
	2017			2016			$ change			% change
	(Dollars in thousands)
Other expenses:
Salaries and employee benefits	$	3,125		$	2,505		$	620			24.75	%
Directors fees		122			122			-			-
Occupancy		485			478			7			1.46
Deposit insurance premium		42			127			(85	)		(66.93	)
Legal and professional services		282			258			24			9.30
Data processing		436			386			50			12.95
Loss on sale of securities		55			3			52			1,733.33
Loan expense		403			285			118			41.40
Valuation adjustments and expenses on foreclosed real estate		10			101			(91	)		(90.10	)
Loss on sale of foreclosed real estate		-			5			(5	)		(100.00	)
Other		808			747			61			8.17
Total other expenses	$	5,768		$	5,017		$	751			14.97	%
Efficiency ratio (1)		72.01	%		72.78	%

(1) Computed as other expenses divided by the sum of net interest income and other income.

The increase in other expense was primarily due to an increase in salaries and employee benefits, which was due to both additional personnel to support our mortgage lending area as well as annual merit increases. The efficiency ratio decreased due to increased net interest income and other income for the 2017 period.

35

Income Taxes. The Company recorded income tax expense of $0.5 million for both the nine months ended September 30, 2017 and 2016, respectively. For the nine months ended September 30, 2017, the Company had net income of $1.3 million with approximately $0.4 million in tax exempt income, compared to net income of $1.1 million with approximately $0.4 million in tax exempt income for the nine months ended September 30, 2016.

The Company’s income tax differed from the maximum statutory federal rate of 35% for the nine months ended September 30, 2017 and 2016, as follows:

	Nine Months Ended
	September 30,
	2017			2016
Expected income taxes	$	623,675		$	550,741
Income tax effect of:
State taxes, net of federal tax benefit		31,581			80,219
Tax exempt interest		(123,848	)		(134,320	)
Income taxed at lower rates		(17,819	)		(15,735	)
Other		(9,257	)		39,158
	$	504,332		$	520,063

LIQUIDITY AND CAPITAL RESOURCES

Liquidity. Liquidity management for the Bank is measured and monitored on both a short and long-term basis, allowing management to better understand and react to emerging balance sheet trends. After assessing actual and projected cash flow needs, management seeks to obtain funding at the most economical cost to the Bank. Our primary sources of funds are deposits, amortization, prepayments and maturities of outstanding loans and mortgage-backed and related securities, and other short-term investments, and funds provided from operations. While scheduled payments from amortization of loans and mortgage-backed related securities and maturing investment securities and short-term investments are relatively predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. We invest excess funds in short-term interest-earning assets, including federal funds sold, which enable us to meet lending requirements or long-term investments when loan demand is low.

At September 30, 2017, the Bank had outstanding commitments to originate $5.4 million in loans, unfunded lines of credit of $14.7 million, and $6.3 million in commitments to fund construction loans. In addition, as of September 30, 2017, the total amount of certificates of deposit that were scheduled to mature in the next 12 months was $37.0 million. Based on prior experience, management believes that a majority of such deposits will remain with us, although there can be no assurance that this will be the case. In the event a significant portion of our deposits are not retained by us, we will have to utilize other funding sources, such as Federal Home Loan Bank of Chicago (“FHLBC”) advances, in order to maintain our level of assets. Alternatively, we could reduce our level of liquid assets, such as our cash and cash equivalents. As of September 30, 2017, the Bank had $68.3 million of available credit from the FHLBC and there were $9.1 million in FHLBC advances outstanding. In addition, as of September 30, 2017 the Bank had $7.9 million of available credit from Bankers Bank of Wisconsin to purchase federal funds.

The Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Company is responsible for paying any dividends declared to its shareholders and for any repurchased shares of its common stock. Whether dividends are declared, and the timing and amount of any dividends declared, is subject to the discretion of our Board of Directors and depends on various factors, including our net earnings, financial condition, cash requirements, future prospects and other factors that our Board of Directors deems relevant to its analysis and decision making. The Company’s primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to the Company in any calendar year, without the receipt of prior approval from the regulatory agencies but with prior notice to the regulatory agencies, cannot exceed net income for that year to date plus retained net income (as defined) for the preceding two calendar years. At September 30 2017, the Company had cash and cash equivalents of $9.4 million.

36

Capital. The Bank is required to maintain regulatory capital sufficient to meet Total capital, Tier 1 capital, Common equity Tier 1 capital, and Tier 1 Leverage ratios of at least 8.0%, 6.0%, 4.5% and 4.0%, respectively. The Bank exceeded each of its minimum capital requirements for capital adequacy purposes and was considered “well capitalized” within the meaning of federal regulatory requirements with ratios at September 30, 2017 of 24.11%, 22.86%, 22.86%, and 17.07%, respectively, compared to ratios at December 31, 2016 of 26.76%, 25.51%, 25.51% and 16.84%, respectively. As of January 1, 2017, the Bank must hold 1.25% of risk-weighted assets, with such amount increasing by 0.625% annually, until fully implemented at 2.5% in January 2019, as a capital conservation buffer composed of common equity Tier 1 capital above its minimum risk-based capital requirements, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments. As a savings and loan holding company with less than $1.0 billion in assets, the Company is not subject to separate capital requirements.

OFF-BALANCE SHEET ARRANGEMENTS

For the nine months ended September 30, 2017, we did not engage in any off-balance sheet transactions reasonably likely to have a material effect on our financial condition, results of operations or cash flows.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This Item is not applicable as the Company is a smaller reporting company.

ITEM 4. CONTROLS AND PROCEDURES

Controls and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation under the supervision and with the participation of the Company’s principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended, with the Securities and Exchange Commission (the “SEC”) (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including, its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

In addition, there have been no changes in the Company’s internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II – Other Information

ITEM 1 - LEGAL PROCEEDINGS

The Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business that, in the aggregate, are believed by management to be material to the financial condition and results of operations of the Company.

ITEM 1A - RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part 1, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016, which could materially affect our business, financial condition or future results. As of September 30, 2017, the risk factors of the Company have not changed materially from those reported in the Company’s Annual Report on Form 10-K. However, the risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

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

Not applicable.

37

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4 - MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 - OTHER INFORMATION

Not applicable.

ITEM 6 - EXHIBITS

Exhibit No.       Description

3.1	Articles of Incorporation of Ottawa Bancorp, Inc. (incorporated by reference to Exhibit 3.1 to Company’s Registration Statement on Form S-1 (File No. 333-211860) initially filed with the Securities and Exchange Commission on June 6, 2016) http://www.sec.gov/Archives/edgar/data/1675192/000119312516613800/d189351dex31.htm
3.2	Bylaws of Ottawa Bancorp, Inc. (incorporated by reference to Exhibit 3.2 to Company’s Registration Statement on Form S-1 (File No. 333-211860) initially filed on June 6, 2016) http://www.sec.gov/Archives/edgar/data/1675192/000119312516613800/d189351dex32.htm
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1	Section 1350 Certifications
101.0	The following materials from the Ottawa Bancorp, Inc. Quarterly Report on Form 10-Q for the nine months ended September 30, 2017 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Financial Condition, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Statements of Comprehensive Income; (iv) The Condensed Consolidated Statements of Cash Flows and (v) related notes.

38

Signature

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.

	OTTAWA BANCORP, INC.
	Registrant
Date: November 14, 2017	/s/ Jon L. Kranov
	Jon L. Kranov
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: November 14, 2017	/s/ Marc N. Kingry
	Marc N. Kingry
	Chief Financial Officer
	(Principal Financial Officer)

39

EX-31.1

Exhibit 31.1

Rule 13a-14 Certification

I, Jon L. Kranov, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Ottawa Bancorp, Inc.,

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

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

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

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

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

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

(d)     Disclosed in this 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;

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 registrant's board of directors (or persons performing the equivalent function):

(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: November 14, 2017
	/s/ Jon L. Kranov
	Jon L. Kranov
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Rule 13a-14 Certification

I, Marc N. Kingry, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Ottawa Bancorp, Inc.,

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

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

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

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

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

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

(d)     Disclosed in this 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;

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 registrant's board of directors (or persons performing the equivalent function):

(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: November 14, 2017
	/s/ Marc N. Kingry
	Marc N. Kingry
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ottawa Bancorp, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

/s/ Jon L. Kranov

Jon L. Kranov

President and Chief Executive Officer

November 14, 2017

/s/ Marc N. Kingry

Marc N. Kingry

Chief Financial Officer

November 14, 2017

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 14, 2017
Document Information [Line Items]
Entity Registrant Name	Ottawa Bancorp Inc
Entity Central Index Key	0001675192
Trading Symbol	ottw
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)		3,469,402
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Assets
Cash and due from banks	$ 2,093,049	$ 3,916,559
Interest bearing deposits	845,235	2,030,090
Total cash and cash equivalents	2,938,284	5,946,649
Time deposits	250,000	250,000
Federal funds sold	3,705,000	1,690,000
Securities available for sale	30,176,272	44,560,680
Non-marketable equity securities	752,221	753,321
Loans, net of allowance for loan losses of $2,366,245 and $2,247,449 at September 30, 2017 and December 31, 2016, respectively	190,754,189	160,586,129
Loans held for sale	659,099	305,072
Premises and equipment, net	6,725,000	6,843,906
Accrued interest receivable	781,619	785,484
Foreclosed real estate	83,500	33,000
Deferred tax assets	2,505,692	2,593,786
Cash value of life insurance	2,281,760	2,245,578
Goodwill	649,869	649,869
Core deposit intangible	303,818	359,000
Other assets	3,165,409	2,558,910
Total assets	245,731,732	230,161,384
Liabilities
Non-interest bearing	12,693,586	9,974,536
Interest bearing	166,196,571	162,572,485
Total deposits	178,890,157	172,547,021
Accrued interest payable	3,693	224
FHLB advances	9,114,999	1,121,153
Other liabilities	3,711,694	3,748,953
Total liabilities	191,720,543	177,417,351
Commitments and contingencies
Redeemable common stock held by ESOP plan	1,098,101	807,629
Stockholders' Equity
Common stock, $.01 par value, 100,000,000 shares authorized; 3,469,402 and 3,467,402 shares issued at September 30, 2017 and December 31, 2016, respectively	34,694	34,674
Additional paid-in-capital	37,181,196	37,117,311
Retained earnings	18,340,443	17,455,472
Unallocated ESOP shares	(1,799,136)	(1,932,648)
Accumulated other comprehensive income	253,992	69,224
	54,011,189	52,744,033
Less:
Maximum cash obligation related to ESOP shares	(1,098,101)	(807,629)
Total stockholders' equity	52,913,088	51,936,404
Total liabilities and stockholders' equity	$ 245,731,732	$ 230,161,384

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Allowance for loan losses	$ 2,366,245	$ 2,247,449
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	3,469,402	3,467,402

XML

Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Interest and dividend income:
Interest and fees on loans	$ 2,204,397	$ 1,857,478	$ 6,291,581	$ 5,432,531
Securities:
Residential mortgage-backed and related securities	98,541	122,919	360,557	423,463
State and municipal securities	116,431	133,429	373,999	404,133
Dividends on non-marketable equity securities	1,812	1,058	5,154	5,218
Interest-bearing deposits	5,357	11,903	21,403	22,301
Total interest and dividend income	2,426,538	2,126,787	7,052,694	6,287,646
Interest expense:
Deposits	247,897	205,843	676,374	611,533
Borrowings	20,564	15,181	35,624	26,921
Total interest expense	268,461	221,024	711,998	638,454
Net interest income	2,158,077	1,905,763	6,340,696	5,649,192
Provision for loan losses	210,000	25,000	460,000	302,500
Net interest income after provision for loan losses	1,948,077	1,880,763	5,880,696	5,346,692
Other income:
Gain on sale of securities	77,028		98,230	8,418
Gain on sale of loans	205,375	142,646	522,360	330,316
Gain on sale of foreclosed real estate	5,182	76,759	29,242	183,491
Gain on sale of repossessed assets	1,123		15,419	1,680
Loan origination and servicing income	159,078	102,652	462,787	239,186
Origination of mortgage servicing rights, net of amortization	21,293	14,879	55,405	42,433
Customer service fees	123,288	118,761	360,359	318,688
Income on bank owned life insurance	11,999	12,560	36,182	37,287
Other	28,940	29,269	89,044	77,885
Total other income	633,306	497,526	1,669,028	1,244,100
Other expenses:
Salaries and employee benefits	1,047,416	840,038	3,124,939	2,504,956
Directors fees	40,800	40,800	122,400	122,400
Occupancy	158,716	171,425	484,496	477,615
Deposit insurance premium	15,437	37,122	41,648	127,114
Legal and professional services	92,007	83,012	282,129	257,957
Data processing	144,137	130,864	435,244	386,597
Loss on sale of securities	47,603		55,169	3,261
Loan expense	152,645	124,851	403,088	284,672
Valuation adjustments and expenses on foreclosed real estate	2,662	31,703	10,184	100,639
Loss on sale of OREO	336	4,716	336	4,716
Loss on sale of repossessed assets			274
Other	269,710	269,245	807,889	747,318
Total other expenses	1,971,469	1,733,776	5,767,796	5,017,245
Income before income tax expense	609,914	644,513	1,781,928	1,573,547
Income tax expense	155,163	223,251	504,332	520,063
Net income	$ 454,751	$ 421,262	$ 1,277,596	$ 1,053,484
Basic earnings per share (in dollars per share)	$ 0.14	$ 0.15	$ 0.39	$ 0.37
Diluted earnings per share (in dollars per share)	0.14	0.15	0.39	0.36
Dividends per share (in dollars per share)	$ 0.04		$ 0.12

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net income	$ 454,751	$ 421,262	$ 1,277,596	$ 1,053,484
Other comprehensive income, before tax:
Unrealized holding (losses) gains arising during the period	(62,663)	(80,126)	354,599	372,176
Reclassification adjustment for (gains) included in net income	(29,425)		(43,061)	(5,157)
Other comprehensive (loss) income, before tax	(92,088)	(80,126)	311,538	367,019
Income tax (benefit) expense related to items of other comprehensive (loss) income	(31,109)	(31,341)	126,770	143,560
Other comprehensive (loss) income, net of tax	(60,979)	(48,785)	184,768	223,459
Comprehensive income	$ 393,772	$ 372,477	$ 1,462,364	$ 1,276,943

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash Flows from Operating Activities
Net income	$ 1,277,596	$ 1,053,484
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	184,080	178,279
Provision for loan losses	460,000	302,500
Provision for deferred income taxes	(38,676)	484,450
Net amortization of premiums and discounts on securities	382,730	493,126
Gain on sale of securities, net	(43,061)	(5,157)
Origination of mortgage loans held for sale	(16,894,581)	(12,746,064)
Proceeds from sale of mortgage loans held for sale	17,062,914	12,365,680
Gain on sale of loans, net	(522,360)	(330,316)
Origination of mortgage servicing rights, net of amortization	(55,405)	(42,433)
Gain on sale of foreclosed real estate, net	(29,242)	(183,491)
Write down of foreclosed real estate		28,551
Gain on sale of repossessed assets, net	(15,145)	(1,680)
ESOP compensation expense	190,277	44,258
MRP compensation expense		3,304
Compensation expense on RRP options granted		4,371
Amortization of core deposit intangible	55,182	69,000
Amortization (accretion) of fair value adjustments on acquired:
Loans	184,879	90,729
Certificates of deposit	(14,000)	(53,000)
Federal Home Loan Bank Advances	5,209	2,777
Increase in cash surrender value of life insurance	(36,182)	(37,287)
Change in assets and liabilities:
(Increase) decrease in accrued interest receivable	3,865	(24,608)
Increase in other assets	(553,594)	(1,296,435)
Increase in accrued interest payable and other liabilities	(33,790)	(449,093)
Net cash provided by (used in) operating activities	1,570,696	(49,055)
Cash Flows from Investing Activities
Purchases	(1,308,450)	(3,806,910)
Sales, calls, maturities and paydowns	15,664,727	6,521,328
Sale of non-marketable equity securities	1,100	604,800
Net increase in loans	(31,066,772)	(15,380,158)
Net decrease in federal funds sold	(2,015,000)	(52,747,000)
Proceeds from sale of foreclosed real estate	193,075	490,062
Proceeds from sale of repossessed assets	57,145	22,805
Purchase of premises and equipment	(65,174)	(16,489)
Net cash used in investing activities	(18,539,349)	(64,311,562)
Cash Flows from Financing Activities
Net increase in deposits	6,357,136	55,205,102
Proceeds from Federal Home Loan Bank advances	8,000,000	10,000,000
Principal reduction of Federal Home Loan Bank advances	(11,363)	(3,511,197)
Proceeds from stock options exercised	7,140
Dividends paid	(392,625)
Net cash provided by financing activities	13,960,288	61,693,905
Net decrease in cash and cash equivalents	(3,008,365)	(2,666,712)
Cash and cash equivalents:
Beginning of period	5,946,649	7,135,719
End of period	2,938,284	4,469,007
Supplemental Disclosures of Cash Flow Information
Income taxes paid, net of refunds received	515,444
Supplemental Schedule of Noncash Investing and Financing Activities
Real estate acquired through or in lieu of foreclosure	218,256	235,190
Other assets acquired in settlement of loans	39,500	46,000
Sale of foreclosed real estate through loan origination	3,923	128,000
Increase in ESOP put option liability	290,472	184,906
Interest Paid to Depositors [Member]
Supplemental Disclosures of Cash Flow Information
Interest paid	672,905	610,230
Interest Paid on Borrowings [Member]
Supplemental Disclosures of Cash Flow Information
Interest paid	$ 35,624	$ 26,921

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Note 1 - Nature of Business

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Nature of Operations [Text Block]

NOTE

1

– NATURE OF BUSINESS

Ottawa Bancorp, Inc. (the “Company”) is a Maryland corporation that was incorporated in

May 2016

to be the successor

to Ottawa Savings Bancorp, Inc. (“Ottawa Savings Bancorp”) upon completion of the

second

-step conversion of Ottawa Savings Bank (the “Bank”) from the

two

-tier mutual holding company structure to the stock holding company structure. Ottawa Savings Bancorp MHC was the former mutual holding company for Ottawa Savings Bancorp prior to completion of the

second

-step conversion. In conjunction with the

second

-step conversion, Ottawa Savings Bancorp MHC merged into Ottawa Savings Bancorp (and ceased to exist), and Ottawa Savings Bancorp merged into the Company, with the Company as the surviving entity. The

second

-step conversion was completed on

October 11, 2016,

at which time the Company sold, for gross proceeds of

$23.8

million, a total of

2,383,950

shares of common stock at

$10.00

per share, including

190,716

shares purchased by the Bank’s employee stock ownership plan. Capital increased an additional

$126,000

due to cash contributed by Ottawa Savings Bancorp MHC upon merging into Ottawa Savings Bancorp, Inc. Also as part of the

second

-step conversion, treasury shares held by Ottawa Savings Bancorp, Inc. were retired and each of the existing outstanding shares of Ottawa Savings Bancorp common stock owned by persons other than Ottawa Savings Bancorp MHC was converted into

1.1921

of a share of Company common stock.

On

December 31, 2014,

Ottawa Savings Bancorp completed a merger with Twin Oaks Savings Bank (“Twin Oaks”),

whereby Twin Oaks was merged with and into the Bank, with the Bank as the surviving institution (the “Merger”). As a result of the Merger, the Bank increased its market share in the LaSalle County market and expanded into Grundy County.

The primary business of the Company is the ownership of the Bank. Through the Bank, the Company is engaged in

providing a variety of financial services to individual and corporate customers in the Ottawa, Marseilles, and Morris, Illinois areas, which are primarily agricultural areas consisting of several rural communities with small to medium sized businesses. The Bank’s primary source of revenue is interest and fees related to single-family residential loans to middle-income individuals.

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Note 2 - Basis of Presentation

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Basis of Accounting [Text Block]

NOTE

2

– BASIS OF PRESENTATION

The consolidated financial statements presented in this quarterly report include the accounts of the Company and the Bank. The consolidated financial statements of the Company have been prepared in accordance with

U.S. generally accepted accounting principles (“GAAP”) for interim financial information and predominant practices followed by the financial services industry, and are unaudited. In the opinion of the Company’s management, all adjustments, consisting of normal recurring adjustments, which the Company considers necessary to fairly state the Company’s financial position and the results of operations and cash flows have been recorded. The interim financial statements should be read in conjunction with the audited financial statements and accompanying notes of the Company for the year ended

December 31, 2016.

The results of the Company’s operations for any interim period are

not

necessarily indicative of the results of the Company’s operations for any other interim period or for a full fiscal year.

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Note 3 - Use of Estimates

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Use of Estimates [Text Block]

NOTE

3

– USE OF ESTIMATES

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements. Changes in these estimates and assumptions are considered reasonably possible and

may

have a material impact on the consolidated financial statements and, thus, actual results could differ from the amounts reported and disclosed herein.

At

September 30, 2017,

there were

no

material changes in the Company’s significant accounting policies from those disclosed in the Form

10

-K filed with the Securities and Exchange Commission on

March 29, 2017.

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Note 4 - Critical Accounting Policies

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Significant Accounting Policies [Text Block]

NOTE

4

– CRITICAL ACCOUNTING POLICIES

We consider accounting policies involving significant judgments and assumptions by management that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. We consider the allowance for loan losses to be our critical accounting polic

y.

 Allowance for Loan Losses

. The allowance for loan losses is an amount necessary to absorb known or inherent losses that are both probable and reasonably estimable and is established through a provision for loan losses charged to earnings. 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 each 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.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are

not

classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for commercial and non-residential loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

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Note 5 - Earnings Per Share

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE

5

– EARNINGS PER SHARE

 

Basic earnings per share is based on net income

divided by the weighted average number of shares outstanding during the period, including allocated and committed-to-be-released Employee Stock Ownership Plan (“ESOP”) shares and vested Management Recognition Plan (“MRP”) shares. Diluted earnings per share show the dilutive effect, if any, of additional common shares issuable under stock options and awards.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net income available to common stockholders	$	454,751		$	421,262		$	1,277,596		$	1,053,484
Basic potential common shares:
Weighted average shares outstanding		3,468,228			2,894,123			3,467,680			2,894,123
Weighted average unallocated ESOP shares		(185,243	)		(17,374	)		(189,903	)		(18,638	)
Weighted average unvested MRP shares		-			(1,047	)		-			(1,047	)
Basic weighted average shares outstanding		3,282,985			2,875,702			3,277,777			2,874,438
Dilutive potential common shares:
Weighted average unrecognized compensation on MRP shares		-			890			-			913
Weighted average RRP options outstanding		14,726			21,017			14,419			14,963
Dilutive weighted average shares outstanding		3,297,711			2,897,609			3,292,196			2,890,314
Basic earnings per share	$	0.14		$	0.15		$	0.39		$	0.37
Diluted earnings per share	$	0.14		$	0.15		$	0.39		$	0.36

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Note 6 - Employee Stock Ownership Plan

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE

6

– EMPLOYEE STOCK OWNERSHIP PLAN

On

May 6, 2005,

the Company adopted an employee stock ownership plan (“ESOP”) for the benefit of substantially all employees. On

July 8, 2005,

the ESOP borrowed

$763,140

from the Company and used those funds to acquire

76,314

shares of the Company’s stock in the initial public offering at a price of

$10.00

per share. On

October 11, 2016,

the ESOP borrowed

$1,907,160

from the Company and used those funds to acquire

190,716

shares of the Company’s stock in its conversion to a fully-public stock holding company at a price of

$10.00

per share.

Shares purchased by the ESOP with the loan proceeds are held in a suspense account and are allocated to ESOP participants on a pro rata basis as principal and interest payments are made by the ESOP to the Company. The loan is secured by shares purchased with the loan proceeds and will be repaid by the ESOP with funds from the Company

’s discretionary contributions to the ESOP and earnings on the ESOP assets. Annual principal and interest payments of approximately

$239,000

are to be made by the ESOP.

As shares are released from collateral, the Company will report compensation expense equal to the current market price of the shares, and the shares will become outstanding for earnings-per-share (“EPS”) computations. Dividends on allocated ESOP shares reduce retained earnings, and dividends on unallocated ESOP shares reduce accrued interest.

A terminated participant or the beneficiary of a deceased participant who received a distribution of employer stock from the ESOP has the right to require the Company to purchase such shares at their fair market value any time within

60

days of the distribution date. If this right is

not

exercised, an additional

60

-day exercise period is available in the year following the year in which the distribution is made and begins after a new valuation of the stock has been determined and communicated to the participant or beneficiary. At

September 30, 2017,

78,548

shares at a fair value of

$13.98

have been classified as mezzanine capital.

The following table reflects the status of the shares held by the ESOP:

	September 30,			December 31,
	2017			2016
Shares allocated		99,578			85,493
Shares withdrawn from the plan		(21,030	)		(21,030	)
Unallocated shares		182,112			196,197
Total ESOP shares		260,660			260,660
Fair value of unallocated shares	$	2,545,926		$	2,497,588

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Note 7 - Investments Securities

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

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

N

OTE

7

– INVESTMENT SECURITIES

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

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
September 30, 2017:
Securities Available for Sale
State and municipal securities	$	14,127,744	$	362,444	$	-	$	14,490,188
Residential mortgage-backed securities		15,623,293		169,900		107,109		15,686,084
	$	29,751,037	$	532,344	$	107,109	$	30,176,272
December 31, 2016:
Securities Available for Sale
State and municipal securities	$	18,019,050	$	200,924	$	63,836	$	18,156,138
Residential mortgage-backed securities		26,427,933		242,541		265,932		26,404,542
	$	44,446,983	$	443,465	$	329,768	$	44,560,680

The amortized cost and fair value at

September 30, 2017,

by contractual maturity, are shown below. Maturities

may

differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities

may

be called or prepaid without penalties. Therefore, stated maturities of residential mortgage-backed securities are

not

disclosed.

	Securities Available for Sale
	Amortized		Fair
	Cost		Value
Due in three months or less	$	51,165	$	51,201
Due after three months through one year		719,463		725,446
Due after one year through five years		3,400,877		3,491,427
Due after five years through ten years		4,222,380		4,371,933
Due after ten years		5,733,859		5,850,181
Residential mortgage-backed securities		15,623,293		15,686,084
	$	29,751,037	$	30,176,272

The following table reflects securities with gross unrealized losses for less than

12

months and for

12

months or more at

September 30, 2017

and

December 31, 2016:

	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
September 30, 2017
Securities Available for Sale
State and municipal securities	$	-	$	-	$	-	$	-	$	-	$	-
Residential mortgage-backed securities		6,567,434		54,427		3,740,463		52,682		10,307,897		107,109
	$	6,567,434	$	54,427	$	3,740,463	$	52,682	$	10,307,897	$	107,109
December 31, 2016
Securities Available for Sale
State and municipal securities	$	4,734,681	$	63,836	$	-	$	-	$	4,734,681	$	63,836
Residential mortgage-backed securities		13,364,755		187,191		4,422,865		78,741		17,787,620		265,932
	$	18,099,436	$	251,027	$	4,422,865	$	78,741	$	22,522,301	$	329,768

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (

1

) the length of time and the extent to which the fair value has been less than cost, (

2

) the financial condition and near-term prospects of the issuer, and (

3

) the intent and ability to retain and whether it is

not

more likely than

not

the Company will be required to sell its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer

’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysts’ reports.

At

September 30, 2017,

20

securities had unrealized losses with an aggregate depreciation of

1.03%

from the Company’s amortized cost basis. The Company does

not

consider these investments to be other than temporarily impaired at

September 30, 2017

due to the following:

● Decline in value is attributable to interest rates.

● The value did not decline due to credit quality.

● The Company does not intend to sell these securities.

● The Company has adequate liquidity such that it will not more likely than not have to sell these securities before recovery of the amortized cost basis, which may be at maturity.

There were proceeds of $

6.6

million from the sales of securities for the

three

months ended

September 30, 2017

and

no

sales proceeds for the

three

months ended

September 30, 2016.

The sales during the

three

months ended

September 30, 2017

resulted in gross realized gains of

$77,028

and gross realized losses of

$47,603,

for net realized gains of

$29,425.

The tax provision applicable to the realized gains amounted to

$11,422

and

$0

respectively, for the

three

months ended

September 30, 2017

and

2016.

There were

proceeds of

$11.6

million from the sales of securities for the

nine

months ended

September 30, 2017

and proceeds of

$1.7

million for the

nine

months ended

September 30, 2016.

The sales during the

nine

months ended

September 30, 2017

resulted in gross realized gains of

$98,230

and gross realized losses of

$55,169,

for net realized gains of

$43,061.

The sales during the

nine

months ended

September 30, 2016

resulted in gross realized gains of

$8,418

and gross realized losses of

$3,261,

for net realized gains of

$5,157.

The tax provision applicable to the realized gains amounted to

$16,715

and

$2,002,

respectively, for the

nine

months ended

September 30, 2017

and

2016.

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Note 8 - Loans and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

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

NOTE

8

– L

OANS AND ALLOWANCE FOR CREDIT LOSSES

 

The components of loans, net of deferred loan costs (fees), are as follows:

	September 30,			December 31,
	2017			2016
Mortgage loans:
One-to-four family residential loans	$	118,518,298		$	103,871,686
Multi-family residential loans		5,012,752			5,182,611
Total mortgage loans		123,531,050			109,054,297
Other loans:
Non-residential real estate loans		29,962,862			22,560,167
Commercial loans		17,051,906			16,645,226
Consumer direct		4,636,078			2,859,703
Purchased auto		17,938,538			11,714,185
Total other loans		69,589,384			53,779,281
Gross loans		193,120,434			162,833,578
Less: Allowance for loan losses		(2,366,245	)		(2,247,449	)
Loans, net	$	190,754,189		$	160,586,129

The following table reflects the carrying amount of loans acquired in the Twin Oaks merger, which are included in the loan categories above as of the dates indicated.

	September 30,			December 31,
	2017			2016
Mortgage loans:
One-to-four family residential loans	$	15,618,555		$	18,062,672
Multi-family residential loans		267,322			272,378
Total mortgage loans		15,885,877			18,335,050
Other loans:
Non-residential real estate loans		2,187,087			2,352,952
Commercial loans		746,014			779,595
Consumer direct		71,065			196,340
Total other loans		3,004,166			3,328,887
Gross loans		18,890,043			21,663,937
Less: Allowance for loan losses		(100,000	)		(100,000	)
Loans, net	$	18,790,043		$	21,563,937

Total loans acquired in the Merger were recorded at a fair value of

$29,795,910

and had a contractual amount due of

$31,831,910

as of the acquisition date which was

December 31, 2014.

FASB ASC

310

-

20,

Nonrefundable Fees and Other Costs, specifies the approach that needs to be used when the Bank expects to receive all of the contractual principal and interest payments due under an individual loan. Loans

not

considered to have deteriorated credit quality at the acquisition date had a contractual balance due of approximately

$28,638,000

and an estimated fair value of approximately

$28,472,000.

The loan discount recorded at the date of the acquisition consisted of an accretable yield component of approximately

$407,000

and an accretable credit component of approximately $(

573,000

), for a net fair value adjustment of approximately $(

166,000

).

Loans acquired with deteriorated credit quality and accounted for under FASB ASC Topic

310

-

30

as of the acquisition date had a contractual balance due of approximately

$3,194,000

and an estimated fair value of approximately

$1,324,000.

The estimate of the contractual cash flows

not

expected to be collected due to credit quality was approximately

$1,870,000

which consists of an accretable discount of $(

362,000

) and non-accretable discount of $(

1,508,000

).

The following table reflects activity for the loans acquired with deteriorated credit quality for the

three

and

nine

months ended

September 30, 2017

and

2016:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Balance, beginning of period	$	255,747		$	498,912		$	461,334		$	575,605
Payment activity		(131,108	)		(42,422	)		(482,073	)		(134,325	)
Transfer to OREO		-			-			-			(44,417	)
Accretion into interest income		24,931			23,345			170,309			82,972
	$	149,570		$	479,835		$	149,570		$	479,835

The contractual amount outstanding for the loans acquired with deteriorated credit quality totaled

$470,000

and

$1,108,000

as of

September 30, 2017

and

December 31, 2016,

respectively.

The following table reflects activity in the accretable yield for the loans acquired with deteriorated credit quality for the

three

and

nine

months ended

September 30, 2017

and

2016:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Balance, beginning of period	$	35,668		$	124,583		$	82,869		$	175,342
Net reclassification from non-accretable yield		3,292			-			101,469			8,868
Accretion into interest income		(24,931	)		(23,345	)		(170,309	)		(82,972	)
	$	14,029		$	101,238		$	14,029		$	101,238

Purchases of loans receivable, segregated by class of loans, for the periods indicated were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Purchased auto loans	$	4,979,707	$	1,010,717	$	10,035,353	$	9,351,997

Net (charge-offs) / recoveries, segregated by class of loans, for the periods indicated were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
One-to-four family	$	(84,240	)	$	17,802		$	(251,231	)	$	(173,225	)
Multi-family		3,972			3,972			12,148			11,915
Non-residential		(1,726	)		-			(53,686	)		-
Consumer direct		(1,756	)		1,551			(2,503	)		5,005
Purchased auto		(591	)		(28,212	)		(45,932	)		(62,047	)
Net (charge-offs)/recoveries	$	(84,341	)	$	(4,887	)	$	(341,204	)	$	(218,352	)

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

three

months ended

September 30, 2017

and

2016:

September 30, 2017	One-to- four family			Multi- family			Non- residential			Commercial		Consumer direct			Purchased auto			Total
Balance at beginning of period	$	1,430,917		$	101,473		$	233,492		$	111,904	$	117,500		$	245,300		$	2,240,586
Provision charged to income		148,036			(6,870	)		27,876			12,134		(17,583	)		46,407			210,000
Loans charged off		(86,439	)		-			(1,726	)		-		(3,282	)		(2,685	)		(94,132	)
Recoveries of loans previously charged off		2,199			3,972			-			-		1,526			2,094			9,791
Balance at end of period	$	1,494,713		$	98,575		$	259,642		$	124,038	$	98,161		$	291,116		$	2,366,245

September 30, 2016	One-to- four family			Multi- family			Non- residential		Commercial		Consumer direct		Purchased auto			Total
Balance at beginning of period	$	1,574,598		$	167,485		$	275,347	$	53,256	$	60,491	$	156,864		$	2,288,041
Provision charged to income		(28,679	)		(132,076	)		98,221		21,914		22,610		43,010			25,000
Loans charged off		(2,698	)		-			-		-		-		(29,718	)		(32,416	)
Recoveries of loans previously charged off		20,500			3,972			-		-		1,551		1,506			27,529
Balance at end of period	$	1,563,721		$	39,381		$	373,568	$	75,170	$	84,652	$	171,662		$	2,308,154

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

nine

months ended

September 30, 2017

and

2016:

September 30, 2017	One-to- four family			Multi- family			Non- residential			Commercial		Consumer direct			Purchased auto			Total
Balance at beginning of period	$	1,426,954		$	93,481		$	367,326		$	96,823	$	79,253		$	183,612		$	2,247,449
Provision charged to income		318,990			(7,054	)		(53,998	)		27,215		21,411			153,436			460,000
Loans charged off		(259,356	)		-			(61,686	)		-		(8,633	)		(63,848	)		(393,523	)
Recoveries of loans previously charged off		8,125			12,148			8,000			-		6,130			17,916			52,319
Balance at end of period	$	1,494,713		$	98,575		$	259,642		$	124,038	$	98,161		$	291,116		$	2,366,245

September 30, 2016	One-to- four family			Multi- family			Non- residential		Commercial		Consumer direct		Purchased auto			Total
Balance at beginning of period	$	1,727,582		$	142,237		$	198,340	$	51,306	$	37,187	$	67,354		$	2,224,006
Provision charged to income		9,364			(114,771	)		175,228		23,864		42,460		166,355			302,500
Loans charged off		(233,264	)		-			-		-		-		(68,011	)		(301,275	)
Recoveries of loans previously charged off		60,039			11,915			-		-		5,005		5,964			82,923
Balance at end of period	$	1,563,721		$	39,381		$	373,568	$	75,170	$	84,652	$	171,662		$	2,308,154

The following table presents the recorded investment in loans and the related allowances allocated by portfolio segment and based on impairment method as of

September 30, 2017

and

December 31, 2016:

	One-to-
	four		Multi-		Non-				Consumer		Purchased
September 30, 2017	family		family		residential		Commercial		direct		auto		Total
Loans individually evaluated for impairment	$	1,375,976	$	-	$	368,020	$	12,970	$	-	$	3,468	$	1,760,434
Loans acquired with deteriorated credit quality		149,571		-		-		-		-		-		149,571
Loans collectively evaluated for impairment		116,992,751		5,012,752		29,594,842		17,038,936		4,636,078		17,935,070		191,210,429
Balance at end of period	$	118,518,298	$	5,012,752	$	29,962,862	$	17,051,906	$	4,636,078	$	17,938,538	$	193,120,434
Period-end amount allocated to:
Loans individually evaluated for impairment	$	50,861	$	-	$	62,471	$	-	$	-	$	1,734	$	115,066
Loans acquired with deteriorated credit quality		23,638		-		-		-		-		-		23,638
Loans collectively evaluated for impairment		1,420,214		98,575		197,171		124,038		98,161		289,382		2,227,541
Balance at end of period	$	1,494,713	$	98,575	$	259,642	$	124,038	$	98,161	$	291,116	$	2,366,245

	One-to-
	four		Multi-		Non-				Consumer		Purchased
December 31, 2016	family		family		residential		Commercial		direct		auto		Total
Loans individually evaluated for impairment	$	2,142,851	$	-	$	2,264,763	$	-	$	-	$	24,564	$	4,432,178
Loans acquired with deteriorated credit quality		461,334		-		-		-		-		-		461,334
Loans collectively evaluated for impairment		101,267,501		5,182,611		20,295,404		16,645,226		2,859,703		11,689,621		157,940,066
Balance at end of period	$	103,871,686	$	5,182,611	$	22,560,167	$	16,645,226	$	2,859,703	$	11,714,185	$	162,833,578
Period-end amount allocated to:
Loans individually evaluated for impairment	$	208,186	$	-	$	185,172	$	-	$	-	$	12,282	$	405,640
Loans acquired with deteriorated credit quality		34,401		-		-		-		-		-		34,401
Loans collectively evaluated for impairment		1,184,367		93,481		182,154		96,823		79,253		171,330		1,807,408
Balance at end of period	$	1,426,954	$	96,481	$	367,326	$	96,823	$	79,253	$	183,612	$	2,247,449

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.

The following table presents loans individually evaluated for impairment, by class of loans, as of

September 30, 2017

and

December 31, 2016:

September 30, 2017	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
One-to-four family	$	1,570,305	$	984,882	$	540,665	$	1,525,547	$	74,499	$	1,896,563
Multi-family		-		-		-		-		-		-
Non-residential		368,020		-		368,020		368,020		62,471		879,038
Commercial		12,970		12,970		-		12,970		-		3,222
Consumer direct		-		-		-		-		-		-
Purchased auto		3,468		-		3,468		3,468		1,734		14,830
	$	1,954,763	$	997,852	$	912,153	$	1,910,005	$	138,704	$	2,793,653

December 31, 2016	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
One-to-four family	$	2,688,197	$	1,428,073	$	1,176,112	$	2,604,185	$	242,587	$	2,634,763
Multi-family		-		-		-		-		-		-
Non-residential		2,435,424		-		2,264,763		2,264,763		185,172		2,030,894
Commercial		-		-		-		-		-		-
Consumer direct		-		-		-		-		-		-
Purchased auto		24,564		-		24,564		24,564		12,282		9,261
	$	5,148,185	$	1,428,073	$	3,465,439	$	4,893,512	$	440,041	$	4,674,918

For the

three

and

nine

months ended

September 30, 2017,

the Company recognized approximately

$3,000

and

$9,000,

respectively in cash basis interest income on impaired loans. For the

three

and

nine

months ended

September 30, 2016,

the Company recognized approximately

$3,000

in cash basis interest income on impaired loans.

At

September 30, 2017,

there were

28

impaired loans totaling approximately

$1.9

million, compared to

38

impaired loans totaling approximately

$4.9

million at

December 31, 2016.

The change in impaired loans was a result of the pay-off of

eight

impaired loans totaling approximately

$2.4

million, write-downs on

four

impaired loans totaling approximately

$0.2

million, writing down and moving

seven

impaired loans totaling approximately

$351,000

to OREO/repossessed assets, upgrading and returning

two

loans totaling approximately

$83,000

to accrual status, and payments of approximately

$298,000,

offset by the addition of

seven

loans totaling approximately

$376,000

to the impaired loan list.

Our loan portfolio also includes certain loans that have been modified in a troubled debt restructuring (

“TDR”), where economic concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from our loss mitigation activities and could include reductions in the interest rate, payment extensions, forbearance or other actions. TDRs are classified as non-performing at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period of at least

six

months.

When we modify loans in a TDR, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, or use the current fair value of the collateral, less estimated selling costs, for collateral dependent loans. If we determine that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, we evaluate all TDRs, including those that have payment defaults, for possible impairment and recognize impairment through the allowance.

        

Impaired loans at

September 30, 2017

included

$0.5

million of loans whose terms have been modified in troubled debt restructurings, compared to

$2.4

million at

December 31, 2016.

The amount of TDR loans included in impaired loans decreased approximately

$1.9

million as a result of pay-offs on

three

TDRs totaling

$1.7

million and charge-offs totaling

$0.2

million on

three

TDRs. The remaining restructured loans are being monitored by management and remain on nonaccrual status as they have

not,

per accounting guidelines, performed in accordance with their restructured terms for the requisite period of time (generally at least

six

consecutive months) to be returned to accrual status.

There were

no

new loans classified as TDRs during the

three

months ended

September 30, 2017

and

2016.

L

oans classified as TDRs during the

nine

months ended

September 30, 2017

and

2016,

segregated by class, are shown in the tables below.

	Nine Months Ended						Nine Months Ended
	September 30, 2017						September 30, 2016
	Number of Modifications		Recorded Investment		Increase in Allowance		Number of Modifications		Recorded Investment		Increase in Allowance
	(as of period end)						(as of period end)
One-to-four family		-	$	-	$	-		2	$	80,814	$	-
Multi-family		-		-		-		-		-		-
Non-residential		-		-		-		-		-		-
Commercial		-		-		-		-		-		-
Consumer direct		-		-		-		-		-		-
Purchased auto		-		-		-		-		-		-
		-	$	-	$	-		2	$	80,814	$	-

There were

no

TDR loans that were restructured during the

twelve

months prior to

September 30, 2017

and

2016

that had payment defaults (i.e.,

60

days or more past due following a modification) during the

three

or

nine

months ended

September 30, 2017

and

2016.

All TDRs are evaluated for possible impairment and any impairment identified is recognized through the allowance.

Additionally, the qualitative factors are updated quarterly for trends in economic and non-performing factors, including collateral securing TDRs.

The following table presents the recorded investment in nonaccrual loans and loans past due over

90

days still on accrual status, by class of loans, as of

September 30, 2017

and

December 31, 2016:

September 30, 2017	Nonaccrual		Loans Past Due Over 90 Days Still Accruing
One-to-four family	$	1,609,874	$	-
Multi-family		-		-
Non-residential		368,020		-
Commercial		12,970		-
Consumer direct		-		-
Purchased auto		3,468		-
	$	1,994,332	$	-

December 31, 2016	Nonaccrual		Loans Past Due Over 90 Days Still Accruing
One-to-four family	$	2,693,055	$	-
Multi-family		-		-
Non-residential		2,264,763		-
Commercial		-		-
Consumer direct		-		-
Purchased auto		24,564		-
	$	4,982,382	$	-

The following table presents the aging of the recorded investment in loans, by class of loans, as of

September 30, 2017

and

December 31, 2016:

September 30, 2017	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
One-to-four family	$	2,098,295	$	244,158	$	110,260	$	2,452,713	$	116,065,585	$	118,518,298
Multi-family		-		-		-		-		5,012,752		5,012,752
Non-residential		490,913		-		-		490,913		29,471,949		29,962,862
Commercial		12,970		-		-		12,970		17,038,936		17,051,906
Consumer direct		-		-		-		-		4,636,078		4,636,078
Purchased auto		-		-		3,468		3,468		17,935,070		17,938,538
	$	2,602,178	$	244,158	$	113,728	$	2,960,064	$	190,160,370	$	193,120,434

December 31, 2016	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
One-to-four family	$	1,879,438	$	22,562	$	1,089,635	$	2,991,635	$	100,880,051	$	103,871,686
Multi-family		-		-		-		-		5,182,611		5,182,611
Non-residential		118,132		-		680,802		798,934		21,761,233		22,560,167
Commercial		-		-		-		-		16,645,226		16,645,226
Consumer direct		1,105		-		-		1,105		2,858,598		2,859,703
Purchased auto		4,364		-		24,564		28,928		11,685,257		11,714,185
	$	2,003,039	$	22,562	$	1,795,001	$	3,820,602	$	159,012,976	$	162,833,578

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors.

The Company analyzes loans individually by classifying the loans as to credit risk. For commercial and non-residential real estate loans, the Company’s credit quality indicator is internally assigned risk ratings. Each commercial and non-residential real estate loan is assigned a risk rating upon origination. The risk rating is reviewed annually, at a minimum, and on an as needed basis depending on the specific circumstances of the loan.

          

For residential real estate loans, multi-family, consumer direct and purchased auto loans, the Company’s credit quality indicator is performance determined by delinquency status. Delinquency status is updated regularly by the Company’s loan system for real estate loans, multi-family and consumer direct loans. The Company receives monthly reports on the delinquency status of the purchased auto loan portfolio from the servicing company. Generally, when residential real estate loans, multi-family and consumer direct loans become over

90

days past due, they are classified as substandard. Periodically, based on subsequent performance over

6

-

12

months, these loans could be upgraded to special mention.

The Company uses the following definitions for risk ratings:

● Pass – loans classified as pass are of a higher quality and do not fit any of the other “rated” categories below (e.g., special mention, substandard or doubtful). The likelihood of loss is considered remote.

● Special Mention – loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

● Substandard – loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

● Doubtful – loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

● Not Rated – loans in this bucket are not evaluated on an individual basis.

A

t

September 30, 2017

and

December 31, 2016,

the risk category of loans by class is as follows:

September 30, 2017	Pass		Special Mention		Substandard		Doubtful		Not rated		Total Loans
One-to-four family	$	-	$	409,575	$	1,525,547	$	-	$	116,583,176	$	118,518,298
Multi-family		-		122,073		-		-		4,890,679		5,012,752
Non-residential		29,346,282		248,560		368,020		-		-		29,962,862
Commercial		17,038,936		-		12,970		-		-		17,051,906
Consumer direct		-		-		-		-		4,636,078		4,636,078
Purchased auto		-		-		3,468		-		17,935,070		17,938,538
Total	$	46,385,218	$	780,208	$	1,910,005	$	-	$	144,045,003	$	193,120,434

December 31, 2016	Pass		Special Mention		Substandard		Doubtful		Not rated		Total Loans
One-to-four family	$	-	$	562,215	$	2,604,185	$	-	$	100,705,286	$	103,871,686
Multi-family		-		127,987		-		-		5,054,624		5,182,611
Non-residential		20,102,176		193,228		2,264,763		-		-		22,560,167
Commercial		16,645,226		-		-		-		-		16,645,226
Consumer direct		-		-		-		-		2,859,703		2,859,703
Purchased auto		-		-		24,564		-		11,689,621		11,714,185
Total	$	36,747,402	$	883,430	$	4,893,512	$	-	$	120,309,234	$	162,833,578

At

September 30, 2017,

the Company held approximately

$0.1

million in foreclosed residential real estate property, compared to approximately

$33,000

at

December 31, 2016.

In addition, the Company also held approximately

$0.1

million and

$0.5

million in consumer mortgage loans that are collateralized by residential real estate properties that were in the process of foreclosure at

September 30, 2017

and

December 31, 2016,

respectively.

XML

Note 9 - Stock Compensation

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Shareholders' Equity and Share-based Payments [Text Block]

NOTE

9

– STOCK COMPENSATION

Total stock-based compensation expense

was approximately

$0

and

$8,000

for the

nine

-month periods ended

September 30, 2017

and

2016,

respectively. In accordance with FASB ASC

718,

Compensation-Stock Compensation

,

compensation expense is recognized on a straight-line basis over the grantees’ vesting period or to the grantees’ retirement eligibility date, if earlier. During the

nine

months ended

September 30, 2017

and

2016,

the Company did

not

grant additional options or shares under the Management Recognition Plan (MRP).

XML

Note 10 - Recent Accounting Developments

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

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

NOTE

1

0

– RECENT ACCOUNTING DEVELOPMENTS

In

May 2014,

the FASB issued ASU

No.

2014

-

09,

Revenue from Contracts with Customers

(Topic

606

). ASU

2014

-

09

outlines a single model for companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU

2014

-

09

will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract and will also require additional disclosures. The new authoritative guidance was originally effective for reporting periods after

December 15, 2016.

In

August 2015,

ASU

2015

-

14,

Revenue from Contracts with Customers (Topic

606

)was issued to delay the effective date of ASU

2014

-

09

by

one

year. The FASB issued

four

subsequent ASUs in

2016

which are intended to improve and clarify the implementation guidance related to ASU

2014

-

09.

The Company’s revenue is comprised of net interest income, which is explicitly excluded from the scope of ASU

2014

-

09,

and non-interest income. ASU

2014

-

09

may

require the Company to change how it recognizes certain recurring revenues related to non-interest income; however, it is

not

expected to have a material impact on its Consolidated Financial Statements and related disclosures. The Company expects to adopt the standard in the

first

quarter of

2018

with a cumulative effect adjustment to opening retained earnings, if such adjustment is deemed to be significant.

In

January 2016,

the FASB issued ASU

2016

-

01,

Financial Instruments

—Overall (Subtopic

825

-

10

): Recognition and Measurement of Financial Assets and Financial Liabilities, which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU

2016

-

01

will be effective for the Company on

January 1, 2018.

The Company does

not

believe the adoption of the new financial instruments standard will have a material impact on its consolidated financial statements.

In

February 2016,

the FASB issued ASU

2016

-

02,

Leases (Topic

842

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

1

) a lease liability, which is a lessee`s obligation to make lease payments arising from a lease, measured on a discounted basis; and (

2

) 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 also 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. ASU

2016

-

02

is effective for public business entities for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. Early application is permitted. 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. The Company is currently evaluating the effect that this standard will have on its

consolidated financial statements.

In

March 2016,

the FASB issued ASU

2016

-

09,

Compensation

– Stock Compensation (Topic

718

): Improvements to Employee Share-Based Payment Accounting. This ASU simplifies the treatment and accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, the amendments in this update are effective for annual periods beginning after

December 15, 2016,

and interim periods within those annual periods. ASU

2016

-

09

became effective for us on

January 1, 2017

and did

not

have a material impact on our consolidated financial statements. The Company believes that in the future the adoption of this update

may

result in a marginal amount of volatility within income tax expense, depending on the amount and timing of share-based compensation award activity such as the vesting of restricted stock awards and restricted stock units, as well as the exercise of stock options.

In

June 2016,

the FASB issued ASU

2016

-

13,

Financial Instruments - Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments. ASU

2016

-

13

requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization

’s portfolio. In addition, ASU

2016

-

13

amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU

2016

-

13

is effective for public business entities for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after

December 31, 2018,

including interim periods within those fiscal years. The Company is currently evaluating the potential impact of ASU

2016

-

13

on its consolidated financial statements.

In

January 2017,

the FASB issued ASU

2017

-

04,

Intangibles

– Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment. This ASU simplifies measurement of goodwill and eliminates Step

2

from the goodwill impairment test. The Company should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The impairment charge is limited to the amount of goodwill allocated to that reporting unit. The amendments in this update are effective for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. Early adoption is permitted for goodwill impairment tests performed on testing dates after

January 1, 2017.

The Company does

not

believe the adoption of this standard will have a material impact on its consolidated financial statements.

In

March 2017,

the FASB issued ASU

2017

-

08,

 Receivables – Nonrefundable Fees and Other Costs (Subtopic

310

-

20

), Premium Amortization on Purchased Callable Debt Securities, which shortens the period of amortization of the premium on certain callable debt securities to the earliest call date. Currently, generally accepted accounting principles (“GAAP”) excludes certain callable debt securities from consideration of early repayment of principal even if the holder is certain that the call will be exercised. As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings. ASU

2017

-

08

requires that premiums on certain callable debt securities be amortized to the shortest call date. Securities within the scope of this ASU are those that have explicit, noncontingent call features that are callable at fixed prices and on preset dates. This ASU is effective for annual periods beginning after

December 15, 2018,

including interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The impact of adopting this ASU is dependent on the materiality of callable debt securities at the time of adoption.

XML

Note 11 - Borrowings

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

11

– BORROWINGS

A summary of outstanding advances from the Federal Home Loan Bank of Chicago is as follows:

	September 30,		December 31,
	2017		2016
Matures 02/15/2018 at 1.27%, fixed	$	1,000,000	$	-
Matures 03/30/2018 at 1.72%, fixed		498,714		496,784
Matures 05/15/2018 at 1.34%, fixed		2,000,000		-
Matures 09/25/201 8 at 1.46%, fixed		2,000,000		-
Matures 04/01/2019 at 2.00%, fixed		496,543		494,906
Matures 08/30/2019 at 1.56%, fixed		3,000,000		-
Matures 10/03/2022 at 1.48%, fixed		119,742		129,463
	$	9,114,999	$	1,121,153

XML

Note 12 - Fair Value Measurement and Disclosure

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Fair Value, Measurement Inputs, Disclosure [Text Block]

NOTE

1

2

– FAIR VALUE MEASUREMENT AND DISCLOSURE

FASB ASC Topic

8

20,

Fair Value Measurements and Disclosures, clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants and is

not

adjusted for transaction costs. This guidance also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level

1

measurement inputs) and the lowest priority to unobservable inputs (Level

3

measurement inputs). The

three

levels of the fair value hierarchy under FASB ASC

820

are described below:

Basis of Fair Value Measurement:

• Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets.

• Level 2 - Significant other observable inputs other than Level 1 prices such as quoted prices in markets that are not active, quoted prices for similar assets, or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset.

• Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Following is a description of valuation methodologies used for assets and liabilities recorded at fair value

:

Securities Available for Sale

Securities classified as available for sale are recorded at fair value on a recurring basis using pricing obtained from an independent pricing service. Where quoted market prices are available in an active market, securities are classified within Level

1.

The Company has

no

securities classified within Level

1.

If quoted market prices are

not

available, the pricing service estimates the fair values by using pricing models or quoted prices of securities with similar characteristics. For these securities, the inputs used by the pricing service to determine fair value consider observable data that

may

include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and bonds

’ terms and conditions, among other things resulting in classification within Level

2.

Level

2

securities include state and municipal securities, and residential mortgage-backed securities. In cases where Level

1

or Level

2

inputs are

not

available, securities are classified within Level

3.

The Company has

no

securities classified within Level

3.

Foreclosed Assets

Foreclosed assets, consisting of foreclosed real estate and repossessed assets, are adjusted to fair value less estimated costs to sell upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at the lower of cost or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the foreclosed asset as non-recurring Level

2.

When an appraised value is

not

available or management determines the fair value of the collateral is further impaired below the appraised value and there is

no

observable market price, the Company records the foreclosed asset as non-recurring Level

3.

Impaired Loans

Impaired loans are evaluated and adjusted to the lower of carrying value or fair value less estimated costs to sell at the time the loan is identified as impaired. Impaired loans are carried at the lower of cost or fair value.  Fair value is measured based on the value of the collateral securing these loans. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the impaired loan as non-recurring Level

2.

When an appraised value is

not

available or management determines the fair value of the collateral is further impaired below the appraised value and there is

no

observable market price, the Company records the impaired loan as non-recurring Level

3.

The Company did

not

have any transfers of assets or liabilities between Levels

1

and

2

of the fair value hierarchy

during the

nine

months ended

September 30, 2017

and the year ended

December 31, 2016.

The Company’s policy for determining transfers between levels occurs at the end of the reporting period when circumstances in the underlying valuation criteria change and result in transfers between levels.

The tables below present the recorded amount

s of assets measured at fair value on a recurring basis at

September 30, 2017

and

December 31, 2016.

							Total
September 30, 2017	Level 1		Level 2		Level 3		Fair Value
State and municipal securities available for sale	$	-	$	14,490,188	$	-	$	14,490,188
Residential mortgage-backed securities available for sale		-		15,686,084		-		15,686,084
	$	-	$	30,176,272	$	-	$	30,176,272

							Total
December 31, 2016	Level 1		Level 2		Level 3		Fair Value
State and municipal securities available for sale	$	-	$	18,156,138	$	-	$	18,156,138
Residential mortgage-backed securities available for sale		-		26,404,542		-		26,404,542
	$	-	$	44,560,680	$	-	$	44,560,680

The tables below present the recorded amount

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

September 30, 2017

and

December 31, 2016.

							Total
September 30, 2017	Level 1		Level 2		Level 3		Fair Value
Foreclosed assets	$	-	$	-	$	83,500	$	83,500
Impaired loans, net		-		-		773,449		773,449

							Total
December 31, 2016	Level 1		Level 2		Level 3		Fair Value
Foreclosed assets	$	-	$	-	$	35,500	$	35,500
Impaired loans, net		-		-		3,025,398		3,025,398

The following tables present additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized Level

3

inputs to determine fair value.

	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable
	Estimate		Techniques	Input	Range
September 30, 2017
Foreclosed assets	$	83,500	Appraisal of collateral	Appraisal adjustments		-81.4%
Impaired loans, net	$	662,195	Appraisal of collateral	Appraisal adjustments	-36.3	to	-55.9%
Impaired loans, net	$	111,254	Discounted Future Cash Flows	Payment Stream		N/A
				Discount Rate		10%
December 31, 2016
Foreclosed assets	$	35,500	Appraisal of collateral	Appraisal adjustments	-23%	to	-50%
Impaired loans, net	$	2,856,621	Appraisal of collateral	Appraisal adjustments	-14.5	to	-86.5%
Impaired loans, net	$	168,777	Discounted Future Cash Flows	Payment Stream		N/A
				Discount Rate		10%

In accordance with accounting pronouncements, the carrying value and estimated

fair value of the Company’s financial instruments as of

September 30, 2017

and

December 31, 2016,

are as follows:

			Fair Value Measurements at
	Carrying		September 30, 2017 using:
	Amount		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	2,938,284	$	2,938,284	$	-	$	-	$	2,938,284
Time deposits		250,000		250,000		-		-		250,000
Federal funds sold		3,705,000		3,705,000		-		-		3,705,000
Securities		30,928,493		-		30,176,272		752,221		30,928,493
Net loans		190,754,189		-		-		193,127,599		193,127,599
Loans held for sale		659,099		659,099		-		-		659,099
Accrued interest receivable		781,619		781,619		-		-		781,619
Mortgage servicing rights		406,949		-		-		406,949		406,949
Financial Liabilities:
Non-interest bearing deposits		12,693,586		12,693,586		-		-		12,693,586
Interest bearing deposits		166,196,571		-		-		166,823,607		166,823,607
Accrued interest payable		3,693		3,693		-		-		3,693
FHLB advances		9,114,999		-		8,270,081		-		8,270,081

	Carrying		December 31, 2016 using:
	Amount		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	5,946,649	$	5,946,649	$	-	$	-	$	5,946,649
Time deposits		250,000		250,000		-		-		250,000
Federal funds sold		1,690,000		1,690,000		-		-		1,690,000
Securities		45,314,001		-		44,560,680		753,321		45,314,001
Net loans		160,586,129		-		-		161,967,000		161,967,000
Loans held for sale		305,072		305,072		-		-		305,072
Mortgage servicing rights		351,544		-		-		351,544		351,544
Accrued interest receivable		785,484		785,484		-		-		785,484
Financial Liabilities:
Non-interest bearing deposits		9,974,536		9,974,536		-		-		9,974,536
Interest bearing deposits		162,572,485		-		-		155,963,464		155,963,464
Accrued interest payable		224		224		-		-		224
FHLB advances		1,121,153		-		1,151,000		-		1,151,000

The following methods and assumptions were used by the Bank in estimating the fair value of financial instruments:

Cash and

c

ash

e

quivalents

:

The carrying amounts reported in the balance sheets for cash and cash equivalents approximate fair values.  

Time deposits

:

The carrying amounts reported in the balance sheets for time deposits approximate fair values.  

Federal

f

unds

s

old

:

The carrying amounts reported in the balance sheets for federal funds sold approximate fair values.  

Securities:

The Company obtains fair value measurements of available for sale securities from an independent pricing service. See Note

11

- Fair Value Measurement and Disclosure for further detail on how fair values of securities available for sale are determined. The carrying value of non-marketable equity securities approximates fair value.

Loans:

For variable-rate loans that re-price frequently and with

no

significant change in credit risk, fair values are based on carrying amounts. The fair values for other loans (for example, fixed rate commercial real estate and rental property mortgage loans and commercial and industrial loans) are estimated using discounted cash flow analysis, based on market interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Loan fair value estimates include judgments regarding future expected loss experience and risk characteristics. Fair values for impaired loans are estimated using underlying collateral values, where applicable or discounted cash flows.

Loans held for sale

:

The carrying amounts reported in the balance sheets for loans held for sale approximate fair values, as usually these loans are originated with the intent to sell and funding of the sales usually occurs within

three

days.

Accrued

i

nterest

r

eceivable

and

p

ayable

:

The carrying amounts of accrued interest receivable and payable approximate fair values.

Mortgage

s

ervicing

r

ights

:

The carrying amounts of mortgage servicing rights approximate their fair values.

Deposits:

The fair values disclosed for demand deposits are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). The carrying amounts of variable-rate, fixed-term money market accounts and certificates of deposit approximate their fair values. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates currently offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.

FHLB

a

dvances

:

The fair value of FHLB advances is estimated by discounting future cash flows at the currently offered rates for borrowings of similar remaining maturities.

 

Loan

c

ommitments

:

Commitments to extend credit were evaluated and fair value was 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 counter-parties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The Bank does

not

charge fees to enter into these agreements. At

September 30, 2017

and

December 31, 2016,

the fair values of the commitments are immaterial in nature.

In addition, other assets and liabilities of the Bank that are

not

defined as financial instruments, such as property and equipment, are

not

included in the above disclosures. Also, non-financial instruments typically

not

recognized in financial statements nevertheless

may

have value but are

not

included in the above disclosures. These include, among other items, the estimated earnings power of core deposit accounts, the trained work force, customer goodwill and similar items.

XML

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

Allowance for Loan Losses

. The allowance for loan losses is an amount necessary to absorb known or inherent losses that are both probable and reasonably estimable and is established through a provision for loan losses charged to earnings. 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 each 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.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are

not

classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for commercial and non-residential loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

XML

Note 5 - Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net income available to common stockholders	$	454,751		$	421,262		$	1,277,596		$	1,053,484
Basic potential common shares:
Weighted average shares outstanding		3,468,228			2,894,123			3,467,680			2,894,123
Weighted average unallocated ESOP shares		(185,243	)		(17,374	)		(189,903	)		(18,638	)
Weighted average unvested MRP shares		-			(1,047	)		-			(1,047	)
Basic weighted average shares outstanding		3,282,985			2,875,702			3,277,777			2,874,438
Dilutive potential common shares:
Weighted average unrecognized compensation on MRP shares		-			890			-			913
Weighted average RRP options outstanding		14,726			21,017			14,419			14,963
Dilutive weighted average shares outstanding		3,297,711			2,897,609			3,292,196			2,890,314
Basic earnings per share	$	0.14		$	0.15		$	0.39		$	0.37
Diluted earnings per share	$	0.14		$	0.15		$	0.39		$	0.36

XML

Note 6 - Employee Stock Ownership Plan (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

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

	September 30,			December 31,
	2017			2016
Shares allocated		99,578			85,493
Shares withdrawn from the plan		(21,030	)		(21,030	)
Unallocated shares		182,112			196,197
Total ESOP shares		260,660			260,660
Fair value of unallocated shares	$	2,545,926		$	2,497,588

XML

Note 7 - Investments Securities (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Summary of Investment Holdings, Schedule of Investments [Table Text Block]

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
September 30, 2017:
Securities Available for Sale
State and municipal securities	$	14,127,744	$	362,444	$	-	$	14,490,188
Residential mortgage-backed securities		15,623,293		169,900		107,109		15,686,084
	$	29,751,037	$	532,344	$	107,109	$	30,176,272
December 31, 2016:
Securities Available for Sale
State and municipal securities	$	18,019,050	$	200,924	$	63,836	$	18,156,138
Residential mortgage-backed securities		26,427,933		242,541		265,932		26,404,542
	$	44,446,983	$	443,465	$	329,768	$	44,560,680

Investments Classified by Contractual Maturity Date [Table Text Block]

	Securities Available for Sale
	Amortized		Fair
	Cost		Value
Due in three months or less	$	51,165	$	51,201
Due after three months through one year		719,463		725,446
Due after one year through five years		3,400,877		3,491,427
Due after five years through ten years		4,222,380		4,371,933
Due after ten years		5,733,859		5,850,181
Residential mortgage-backed securities		15,623,293		15,686,084
	$	29,751,037	$	30,176,272

Schedule of Unrealized Loss on Investments [Table Text Block]

	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
September 30, 2017
Securities Available for Sale
State and municipal securities	$	-	$	-	$	-	$	-	$	-	$	-
Residential mortgage-backed securities		6,567,434		54,427		3,740,463		52,682		10,307,897		107,109
	$	6,567,434	$	54,427	$	3,740,463	$	52,682	$	10,307,897	$	107,109
December 31, 2016
Securities Available for Sale
State and municipal securities	$	4,734,681	$	63,836	$	-	$	-	$	4,734,681	$	63,836
Residential mortgage-backed securities		13,364,755		187,191		4,422,865		78,741		17,787,620		265,932
	$	18,099,436	$	251,027	$	4,422,865	$	78,741	$	22,522,301	$	329,768

XML

Note 8 - Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

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

	September 30,			December 31,
	2017			2016
Mortgage loans:
One-to-four family residential loans	$	118,518,298		$	103,871,686
Multi-family residential loans		5,012,752			5,182,611
Total mortgage loans		123,531,050			109,054,297
Other loans:
Non-residential real estate loans		29,962,862			22,560,167
Commercial loans		17,051,906			16,645,226
Consumer direct		4,636,078			2,859,703
Purchased auto		17,938,538			11,714,185
Total other loans		69,589,384			53,779,281
Gross loans		193,120,434			162,833,578
Less: Allowance for loan losses		(2,366,245	)		(2,247,449	)
Loans, net	$	190,754,189		$	160,586,129

Schedule of Loans Acquired in Merger [Table Text Block]

	September 30,			December 31,
	2017			2016
Mortgage loans:
One-to-four family residential loans	$	15,618,555		$	18,062,672
Multi-family residential loans		267,322			272,378
Total mortgage loans		15,885,877			18,335,050
Other loans:
Non-residential real estate loans		2,187,087			2,352,952
Commercial loans		746,014			779,595
Consumer direct		71,065			196,340
Total other loans		3,004,166			3,328,887
Gross loans		18,890,043			21,663,937
Less: Allowance for loan losses		(100,000	)		(100,000	)
Loans, net	$	18,790,043		$	21,563,937

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Table Text Block]

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Balance, beginning of period	$	255,747		$	498,912		$	461,334		$	575,605
Payment activity		(131,108	)		(42,422	)		(482,073	)		(134,325	)
Transfer to OREO		-			-			-			(44,417	)
Accretion into interest income		24,931			23,345			170,309			82,972
	$	149,570		$	479,835		$	149,570		$	479,835

Certain Loans Acquired in Transfer Accretable Yield [Table Text Block]

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Balance, beginning of period	$	35,668		$	124,583		$	82,869		$	175,342
Net reclassification from non-accretable yield		3,292			-			101,469			8,868
Accretion into interest income		(24,931	)		(23,345	)		(170,309	)		(82,972	)
	$	14,029		$	101,238		$	14,029		$	101,238

Schedule Of Loans Purchased [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Purchased auto loans	$	4,979,707	$	1,010,717	$	10,035,353	$	9,351,997

Schedule of Credit Losses for Financing Receivables, Current [Table Text Block]

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
One-to-four family	$	(84,240	)	$	17,802		$	(251,231	)	$	(173,225	)
Multi-family		3,972			3,972			12,148			11,915
Non-residential		(1,726	)		-			(53,686	)		-
Consumer direct		(1,756	)		1,551			(2,503	)		5,005
Purchased auto		(591	)		(28,212	)		(45,932	)		(62,047	)
Net (charge-offs)/recoveries	$	(84,341	)	$	(4,887	)	$	(341,204	)	$	(218,352	)

Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent [Table Text Block]

September 30, 2017	One-to- four family			Multi- family			Non- residential			Commercial		Consumer direct			Purchased auto			Total
Balance at beginning of period	$	1,430,917		$	101,473		$	233,492		$	111,904	$	117,500		$	245,300		$	2,240,586
Provision charged to income		148,036			(6,870	)		27,876			12,134		(17,583	)		46,407			210,000
Loans charged off		(86,439	)		-			(1,726	)		-		(3,282	)		(2,685	)		(94,132	)
Recoveries of loans previously charged off		2,199			3,972			-			-		1,526			2,094			9,791
Balance at end of period	$	1,494,713		$	98,575		$	259,642		$	124,038	$	98,161		$	291,116		$	2,366,245

September 30, 2016	One-to- four family			Multi- family			Non- residential		Commercial		Consumer direct		Purchased auto			Total
Balance at beginning of period	$	1,574,598		$	167,485		$	275,347	$	53,256	$	60,491	$	156,864		$	2,288,041
Provision charged to income		(28,679	)		(132,076	)		98,221		21,914		22,610		43,010			25,000
Loans charged off		(2,698	)		-			-		-		-		(29,718	)		(32,416	)
Recoveries of loans previously charged off		20,500			3,972			-		-		1,551		1,506			27,529
Balance at end of period	$	1,563,721		$	39,381		$	373,568	$	75,170	$	84,652	$	171,662		$	2,308,154

September 30, 2017	One-to- four family			Multi- family			Non- residential			Commercial		Consumer direct			Purchased auto			Total
Balance at beginning of period	$	1,426,954		$	93,481		$	367,326		$	96,823	$	79,253		$	183,612		$	2,247,449
Provision charged to income		318,990			(7,054	)		(53,998	)		27,215		21,411			153,436			460,000
Loans charged off		(259,356	)		-			(61,686	)		-		(8,633	)		(63,848	)		(393,523	)
Recoveries of loans previously charged off		8,125			12,148			8,000			-		6,130			17,916			52,319
Balance at end of period	$	1,494,713		$	98,575		$	259,642		$	124,038	$	98,161		$	291,116		$	2,366,245

September 30, 2016	One-to- four family			Multi- family			Non- residential		Commercial		Consumer direct		Purchased auto			Total
Balance at beginning of period	$	1,727,582		$	142,237		$	198,340	$	51,306	$	37,187	$	67,354		$	2,224,006
Provision charged to income		9,364			(114,771	)		175,228		23,864		42,460		166,355			302,500
Loans charged off		(233,264	)		-			-		-		-		(68,011	)		(301,275	)
Recoveries of loans previously charged off		60,039			11,915			-		-		5,005		5,964			82,923
Balance at end of period	$	1,563,721		$	39,381		$	373,568	$	75,170	$	84,652	$	171,662		$	2,308,154

	One-to-
	four		Multi-		Non-				Consumer		Purchased
September 30, 2017	family		family		residential		Commercial		direct		auto		Total
Loans individually evaluated for impairment	$	1,375,976	$	-	$	368,020	$	12,970	$	-	$	3,468	$	1,760,434
Loans acquired with deteriorated credit quality		149,571		-		-		-		-		-		149,571
Loans collectively evaluated for impairment		116,992,751		5,012,752		29,594,842		17,038,936		4,636,078		17,935,070		191,210,429
Balance at end of period	$	118,518,298	$	5,012,752	$	29,962,862	$	17,051,906	$	4,636,078	$	17,938,538	$	193,120,434
Period-end amount allocated to:
Loans individually evaluated for impairment	$	50,861	$	-	$	62,471	$	-	$	-	$	1,734	$	115,066
Loans acquired with deteriorated credit quality		23,638		-		-		-		-		-		23,638
Loans collectively evaluated for impairment		1,420,214		98,575		197,171		124,038		98,161		289,382		2,227,541
Balance at end of period	$	1,494,713	$	98,575	$	259,642	$	124,038	$	98,161	$	291,116	$	2,366,245

	One-to-
	four		Multi-		Non-				Consumer		Purchased
December 31, 2016	family		family		residential		Commercial		direct		auto		Total
Loans individually evaluated for impairment	$	2,142,851	$	-	$	2,264,763	$	-	$	-	$	24,564	$	4,432,178
Loans acquired with deteriorated credit quality		461,334		-		-		-		-		-		461,334
Loans collectively evaluated for impairment		101,267,501		5,182,611		20,295,404		16,645,226		2,859,703		11,689,621		157,940,066
Balance at end of period	$	103,871,686	$	5,182,611	$	22,560,167	$	16,645,226	$	2,859,703	$	11,714,185	$	162,833,578
Period-end amount allocated to:
Loans individually evaluated for impairment	$	208,186	$	-	$	185,172	$	-	$	-	$	12,282	$	405,640
Loans acquired with deteriorated credit quality		34,401		-		-		-		-		-		34,401
Loans collectively evaluated for impairment		1,184,367		93,481		182,154		96,823		79,253		171,330		1,807,408
Balance at end of period	$	1,426,954	$	96,481	$	367,326	$	96,823	$	79,253	$	183,612	$	2,247,449

Impaired Financing Receivables [Table Text Block]

September 30, 2017	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
One-to-four family	$	1,570,305	$	984,882	$	540,665	$	1,525,547	$	74,499	$	1,896,563
Multi-family		-		-		-		-		-		-
Non-residential		368,020		-		368,020		368,020		62,471		879,038
Commercial		12,970		12,970		-		12,970		-		3,222
Consumer direct		-		-		-		-		-		-
Purchased auto		3,468		-		3,468		3,468		1,734		14,830
	$	1,954,763	$	997,852	$	912,153	$	1,910,005	$	138,704	$	2,793,653

December 31, 2016	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
One-to-four family	$	2,688,197	$	1,428,073	$	1,176,112	$	2,604,185	$	242,587	$	2,634,763
Multi-family		-		-		-		-		-		-
Non-residential		2,435,424		-		2,264,763		2,264,763		185,172		2,030,894
Commercial		-		-		-		-		-		-
Consumer direct		-		-		-		-		-		-
Purchased auto		24,564		-		24,564		24,564		12,282		9,261
	$	5,148,185	$	1,428,073	$	3,465,439	$	4,893,512	$	440,041	$	4,674,918

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	Nine Months Ended						Nine Months Ended
	September 30, 2017						September 30, 2016
	Number of Modifications		Recorded Investment		Increase in Allowance		Number of Modifications		Recorded Investment		Increase in Allowance
	(as of period end)						(as of period end)
One-to-four family		-	$	-	$	-		2	$	80,814	$	-
Multi-family		-		-		-		-		-		-
Non-residential		-		-		-		-		-		-
Commercial		-		-		-		-		-		-
Consumer direct		-		-		-		-		-		-
Purchased auto		-		-		-		-		-		-
		-	$	-	$	-		2	$	80,814	$	-

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

September 30, 2017	Nonaccrual		Loans Past Due Over 90 Days Still Accruing
One-to-four family	$	1,609,874	$	-
Multi-family		-		-
Non-residential		368,020		-
Commercial		12,970		-
Consumer direct		-		-
Purchased auto		3,468		-
	$	1,994,332	$	-

December 31, 2016	Nonaccrual		Loans Past Due Over 90 Days Still Accruing
One-to-four family	$	2,693,055	$	-
Multi-family		-		-
Non-residential		2,264,763		-
Commercial		-		-
Consumer direct		-		-
Purchased auto		24,564		-
	$	4,982,382	$	-

Past Due Financing Receivables [Table Text Block]

September 30, 2017	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
One-to-four family	$	2,098,295	$	244,158	$	110,260	$	2,452,713	$	116,065,585	$	118,518,298
Multi-family		-		-		-		-		5,012,752		5,012,752
Non-residential		490,913		-		-		490,913		29,471,949		29,962,862
Commercial		12,970		-		-		12,970		17,038,936		17,051,906
Consumer direct		-		-		-		-		4,636,078		4,636,078
Purchased auto		-		-		3,468		3,468		17,935,070		17,938,538
	$	2,602,178	$	244,158	$	113,728	$	2,960,064	$	190,160,370	$	193,120,434

December 31, 2016	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
One-to-four family	$	1,879,438	$	22,562	$	1,089,635	$	2,991,635	$	100,880,051	$	103,871,686
Multi-family		-		-		-		-		5,182,611		5,182,611
Non-residential		118,132		-		680,802		798,934		21,761,233		22,560,167
Commercial		-		-		-		-		16,645,226		16,645,226
Consumer direct		1,105		-		-		1,105		2,858,598		2,859,703
Purchased auto		4,364		-		24,564		28,928		11,685,257		11,714,185
	$	2,003,039	$	22,562	$	1,795,001	$	3,820,602	$	159,012,976	$	162,833,578

Financing Receivable Credit Quality Indicators [Table Text Block]

September 30, 2017	Pass		Special Mention		Substandard		Doubtful		Not rated		Total Loans
One-to-four family	$	-	$	409,575	$	1,525,547	$	-	$	116,583,176	$	118,518,298
Multi-family		-		122,073		-		-		4,890,679		5,012,752
Non-residential		29,346,282		248,560		368,020		-		-		29,962,862
Commercial		17,038,936		-		12,970		-		-		17,051,906
Consumer direct		-		-		-		-		4,636,078		4,636,078
Purchased auto		-		-		3,468		-		17,935,070		17,938,538
Total	$	46,385,218	$	780,208	$	1,910,005	$	-	$	144,045,003	$	193,120,434

December 31, 2016	Pass		Special Mention		Substandard		Doubtful		Not rated		Total Loans
One-to-four family	$	-	$	562,215	$	2,604,185	$	-	$	100,705,286	$	103,871,686
Multi-family		-		127,987		-		-		5,054,624		5,182,611
Non-residential		20,102,176		193,228		2,264,763		-		-		22,560,167
Commercial		16,645,226		-		-		-		-		16,645,226
Consumer direct		-		-		-		-		2,859,703		2,859,703
Purchased auto		-		-		24,564		-		11,689,621		11,714,185
Total	$	36,747,402	$	883,430	$	4,893,512	$	-	$	120,309,234	$	162,833,578

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Note 11 - Borrowings (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Debt [Table Text Block]

	September 30,		December 31,
	2017		2016
Matures 02/15/2018 at 1.27%, fixed	$	1,000,000	$	-
Matures 03/30/2018 at 1.72%, fixed		498,714		496,784
Matures 05/15/2018 at 1.34%, fixed		2,000,000		-
Matures 09/25/201 8 at 1.46%, fixed		2,000,000		-
Matures 04/01/2019 at 2.00%, fixed		496,543		494,906
Matures 08/30/2019 at 1.56%, fixed		3,000,000		-
Matures 10/03/2022 at 1.48%, fixed		119,742		129,463
	$	9,114,999	$	1,121,153

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Note 12 - Fair Value Measurement and Disclosure (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

							Total
September 30, 2017	Level 1		Level 2		Level 3		Fair Value
State and municipal securities available for sale	$	-	$	14,490,188	$	-	$	14,490,188
Residential mortgage-backed securities available for sale		-		15,686,084		-		15,686,084
	$	-	$	30,176,272	$	-	$	30,176,272

							Total
December 31, 2016	Level 1		Level 2		Level 3		Fair Value
State and municipal securities available for sale	$	-	$	18,156,138	$	-	$	18,156,138
Residential mortgage-backed securities available for sale		-		26,404,542		-		26,404,542
	$	-	$	44,560,680	$	-	$	44,560,680

Fair Value Measurements, Nonrecurring [Table Text Block]

							Total
September 30, 2017	Level 1		Level 2		Level 3		Fair Value
Foreclosed assets	$	-	$	-	$	83,500	$	83,500
Impaired loans, net		-		-		773,449		773,449

							Total
December 31, 2016	Level 1		Level 2		Level 3		Fair Value
Foreclosed assets	$	-	$	-	$	35,500	$	35,500
Impaired loans, net		-		-		3,025,398		3,025,398

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

	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable
	Estimate		Techniques	Input	Range
September 30, 2017
Foreclosed assets	$	83,500	Appraisal of collateral	Appraisal adjustments		-81.4%
Impaired loans, net	$	662,195	Appraisal of collateral	Appraisal adjustments	-36.3	to	-55.9%
Impaired loans, net	$	111,254	Discounted Future Cash Flows	Payment Stream		N/A
				Discount Rate		10%
December 31, 2016
Foreclosed assets	$	35,500	Appraisal of collateral	Appraisal adjustments	-23%	to	-50%
Impaired loans, net	$	2,856,621	Appraisal of collateral	Appraisal adjustments	-14.5	to	-86.5%
Impaired loans, net	$	168,777	Discounted Future Cash Flows	Payment Stream		N/A
				Discount Rate		10%

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

			Fair Value Measurements at
	Carrying		September 30, 2017 using:
	Amount		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	2,938,284	$	2,938,284	$	-	$	-	$	2,938,284
Time deposits		250,000		250,000		-		-		250,000
Federal funds sold		3,705,000		3,705,000		-		-		3,705,000
Securities		30,928,493		-		30,176,272		752,221		30,928,493
Net loans		190,754,189		-		-		193,127,599		193,127,599
Loans held for sale		659,099		659,099		-		-		659,099
Accrued interest receivable		781,619		781,619		-		-		781,619
Mortgage servicing rights		406,949		-		-		406,949		406,949
Financial Liabilities:
Non-interest bearing deposits		12,693,586		12,693,586		-		-		12,693,586
Interest bearing deposits		166,196,571		-		-		166,823,607		166,823,607
Accrued interest payable		3,693		3,693		-		-		3,693
FHLB advances		9,114,999		-		8,270,081		-		8,270,081

	Carrying		December 31, 2016 using:
	Amount		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	5,946,649	$	5,946,649	$	-	$	-	$	5,946,649
Time deposits		250,000		250,000		-		-		250,000
Federal funds sold		1,690,000		1,690,000		-		-		1,690,000
Securities		45,314,001		-		44,560,680		753,321		45,314,001
Net loans		160,586,129		-		-		161,967,000		161,967,000
Loans held for sale		305,072		305,072		-		-		305,072
Mortgage servicing rights		351,544		-		-		351,544		351,544
Accrued interest receivable		785,484		785,484		-		-		785,484
Financial Liabilities:
Non-interest bearing deposits		9,974,536		9,974,536		-		-		9,974,536
Interest bearing deposits		162,572,485		-		-		155,963,464		155,963,464
Accrued interest payable		224		224		-		-		224
FHLB advances		1,121,153		-		1,151,000		-		1,151,000

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Note 1 - Nature of Business (Details Textual)	Oct. 11, 2016 USD ($) $ / shares shares
Proceeds from Issuance of Common Stock, Gross | $	$ 23,800,000
Stock Issued During Period, Shares, New Issues | shares	2,383,950
Shares Issued, Price Per Share | $ / shares	$ 10
Second-step Conversion, Stock Conversion Ratio	1.1921
Ottawa Savings Bancorp MHC [Member]
Cash Acquired from Acquisition | $	$ 126,000
Unallocated ESOP Shares [Member]
Stock Issued During Period, Shares, Employee Stock Ownership Plan | shares	190,716

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Note 5 - Earnings Per Share - Earnings Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net income available to common stockholders	$ 454,751	$ 421,262	$ 1,277,596	$ 1,053,484
Basic potential common shares:
Weighted average shares outstanding (in shares)	3,468,228	2,894,123	3,467,680	2,894,123
Weighted average unallocated ESOP shares (in shares)	(185,243)	(17,374)	(189,903)	(18,638)
Weighted average unvested MRP shares (in shares)		(1,047)		(1,047)
Basic weighted average shares outstanding (in shares)	3,282,985	2,875,702	3,277,777	2,874,438
Dilutive potential common shares:
Dilutive weighted average shares outstanding (in shares)	3,297,711	2,897,609	3,292,196	2,890,314
Basic earnings per share (in dollars per share)	$ 0.14	$ 0.15	$ 0.39	$ 0.37
Diluted earnings per share (in dollars per share)	$ 0.14	$ 0.15	$ 0.39	$ 0.36
Management Recognition Plan [Member]
Dilutive potential common shares:
Dilutive weighted average shares outstanding (in shares)		890		913
Recognition and Retention Plan [Member]
Dilutive potential common shares:
Dilutive weighted average shares outstanding (in shares)	14,726	21,017	14,419	14,963

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Note 6 - Employee Stock Ownership Plan (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016	Oct. 11, 2016	May 06, 2005
Loan to Employee Stock Ownership Plan			$ 1,907,160	$ 763,140
Employee Stock Ownership Plan (ESOP), Shares in ESOP	260,660	260,660	190,716	76,314
Sale of Stock, Price Per Share			$ 10	$ 10
Employee Stock Ownership Plan ESOP Interest and Principal Payments from ESOP	$ 239,000
Employee Stock Ownership Plan (ESOP), Number of Allocated Shares	99,578	85,493
Mezzanine Capital [Member]
Employee Stock Ownership Plan (ESOP), Number of Allocated Shares	78,548
Fair Value Per Share	$ 13.98

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Note 6 - Employee Stock Ownership Plan - Employee Stock Ownership Plan (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016	Oct. 11, 2016	May 06, 2005
Shares allocated (in shares)	99,578	85,493
Shares withdrawn from the plan (in shares)	(21,030)	(21,030)
Unallocated shares (in shares)	182,112	196,197
Total ESOP shares (in shares)	260,660	260,660	190,716	76,314
Fair value of unallocated shares	$ 2,545,926	$ 2,497,588

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Note 7 - Investments Securities (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	20		20
Aggregate Percentage Loss On Securities With Unrealized Loss Position	1.03%		1.03%
Other than Temporary Impairment Losses, Investments			$ 0
Proceeds from Sale of Available-for-sale Securities	$ 6,600,000	$ 0	11,600,000	$ 1,700,000
Available-for-sale Securities, Gross Realized Gains	77,028		98,230	8,418
Available-for-sale Securities, Gross Realized Losses	47,603		55,169	3,261
Available-for-sale Securities, Gross Realized Gain (Loss)	29,425		43,061	5,157
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax	$ 11,422	$ 0	$ 16,715	$ 2,002

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Note 7 - Investment Securities - Amortized Cost and Fair Values of Securities (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Securities available for sale, amortized cost	$ 29,751,037	$ 44,446,983
Securities available for sale, gross unrealized gains	532,344	443,465
Securities available for sale, gross unrealized losses	107,109	329,768
Securities available for sale	30,176,272	44,560,680
US States and Political Subdivisions Debt Securities [Member]
Securities available for sale, amortized cost	14,127,744	18,019,050
Securities available for sale, gross unrealized gains	362,444	200,924
Securities available for sale, gross unrealized losses		63,836
Securities available for sale	14,490,188	18,156,138
Residential Mortgage Backed Securities [Member]
Securities available for sale, amortized cost	15,623,293	26,427,933
Securities available for sale, gross unrealized gains	169,900	242,541
Securities available for sale, gross unrealized losses	107,109	265,932
Securities available for sale	$ 15,686,084	$ 26,404,542

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Note 7 - Investment Securities - Securities by Contractual Maturity (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Securities available for sale, due in three months or less, amortized cost	$ 51,165
Securities available for sale, due in three months or less, fair value	51,201
Securities available for sale, due after three months through one year, amortized cost	719,463
Securities available for sale, due after three months through one year, fair value	725,446
Securities available for sale, due after one year through five years, amortized cost	3,400,877
Securities available for sale, due after one year through five years, fair value	3,491,427
Securities available for sale, due after five years through ten years, amortized cost	4,222,380
Securities available for sale, due after five years through ten years, fair value	4,371,933
Securities available for sale, due after ten years, amortized cost	5,733,859
Securities available for sale, due after ten years, fair value	5,850,181
Residential mortgage-backed securities, amortized cost	15,623,293
Residential mortgage-backed securities, fair value	15,686,084
Securities available for sale, amortized cost	29,751,037
Securities available for sale, fair value	$ 30,176,272	$ 44,560,680

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Note 7 - Investment Securities - Securities With Gross Unrealized Losses (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Securities available for sale, less than 12 months, fair value	$ 6,567,434	$ 18,099,436
Securities available for sale, less than 12 months, unrealized losses	54,427	251,027
Securities available for sale, 12 months or more, fair value	3,740,463	4,422,865
Securities available for sale, 12 months or more, unrealized losses	52,682	78,741
Securities available for sale, fair value	10,307,897	22,522,301
Securities available for sale, unrealized losses	107,109	329,768
US States and Political Subdivisions Debt Securities [Member]
Securities available for sale, less than 12 months, fair value		4,734,681
Securities available for sale, less than 12 months, unrealized losses		63,836
Securities available for sale, 12 months or more, fair value	0
Securities available for sale, 12 months or more, unrealized losses	0
Securities available for sale, fair value		4,734,681
Securities available for sale, unrealized losses		63,836
Residential Mortgage Backed Securities [Member]
Securities available for sale, less than 12 months, fair value	6,567,434	13,364,755
Securities available for sale, less than 12 months, unrealized losses	54,427	187,191
Securities available for sale, 12 months or more, fair value	3,740,463	4,422,865
Securities available for sale, 12 months or more, unrealized losses	52,682	78,741
Securities available for sale, fair value	10,307,897	17,787,620
Securities available for sale, unrealized losses	$ 107,109	$ 265,932

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Note 8 - Loans and Allowance for Credit Losses (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield	$ 14,029	$ 101,238	$ 14,029	$ 101,238	$ 35,668	$ 82,869	$ 124,583	$ 175,342
Impaired Financing Receivable, Interest Income, Cash Basis Method	$ 3,000	$ 3,000	$ 9,000	$ 3,000
Number of Impaired Loans	28		28			38
Impaired Financing Receivable, Recorded Investment	$ 1,910,005		$ 1,910,005			$ 4,893,512
Impaired Loans, Additions, Number			7
Impaired Loans, Additions, Value			$ 376,000
Financing Receivable, Modifications, Number of Contracts	0	0		2
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Real Estate Acquired Through Foreclosure	$ 83,500		$ 83,500			33,000
Mortgage Loans in Process of Foreclosure, Amount	100,000		100,000			500,000
Residential Portfolio Segment [Member]
Real Estate Acquired Through Foreclosure	$ 100,000		$ 100,000			33,000
Paid Off or Charged Off [Member]
Number of Impaired Loans	8		8
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down			$ 2,400,000
Written Down [Member]
Number of Impaired Loans	4		4
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down			$ 200,000
Written Down and Moved to OREO [Member]
Number of Impaired Loans	7		7
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down			$ 351,000
Returned To Accrual Status [Member]
Number of Impaired Loans	2		2
Impaired Financing Receivable, Recorded Investment	$ 83,000		$ 83,000
Impaired Loan [Member]
Payments for (Proceeds from) Loans Receivable			298,000
Troubled Debt Restructurings [Member]
Impaired Financing Receivable, Recorded Investment	500,000		500,000			2,400,000
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down			0.20
Financing Receivables, Impaired, Troubled Debt Restructuring, Decreased			$ 1,900,000
Financing Receivable, Modifications, Number of Contracts Paid-off			3
Proceeds from Impaired Loans, Principal Payment			$ 1,700,000
Financing Receivable, Modifications, Number of Contracts Charge-off			3
Twin Oaks [Member]
Business Combination, Acquired Receivables, Gross Contractual Amount									$ 28,638,000
Business Combination, Acquired Receivable, Fair Value									28,472,000
Twin Oaks [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Business Combination, Acquired Receivables, Gross Contractual Amount	$ 470,000		$ 470,000			$ 1,108,000
Loans Receivable [Member] | Twin Oaks [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Financial Assets									31,831,910
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Outstanding Balance									407,000
Certain Loans Acquired in Transfer, Accretable Yield									573,000
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net									166,000
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Acquired During Period, Contractually Required Payments Receivable at Acquisition									3,194,000
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Acquired During Period, Cash Flows Expected to be Collected at Acquisition									1,324,000
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Carrying Amount, Net									1,870,000
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield									362,000
Certain Loans Acquired in Transfer, Nonaccretable Difference									1,508,000
Loans Receivable [Member] | Twin Oaks [Member] | Estimate of Fair Value Measurement [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Financial Assets									$ 29,795,910

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Note 8 - Loans and Allowance for Credit Losses - Components of Loans, Net of Deferred Loan Costs (Fees) (Details) - USD ($)	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Gross loans	$ 193,120,434		$ 162,833,578
Less: Allowance for loan losses	(2,366,245)	$ (2,240,586)	(2,247,449)	$ (2,308,154)	$ (2,288,041)	$ (2,224,006)
Loans, net	190,754,189		160,586,129
Residential Portfolio Segment [Member]
Gross loans	123,531,050		109,054,297
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Gross loans	118,518,298		103,871,686
Less: Allowance for loan losses	(1,494,713)	(1,430,917)	(1,426,954)	(1,563,721)	(1,574,598)	(1,727,582)
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Gross loans	5,012,752		5,182,611
Less: Allowance for loan losses	(98,575)	(101,473)	(93,481)	(39,381)	(167,485)	(142,237)
Nonresidential Real Estate Portfolio Segment [Member]
Gross loans	29,962,862		22,560,167
Less: Allowance for loan losses	(259,642)	(233,492)	(367,326)	(373,568)	(275,347)	(198,340)
Commercial Portfolio Segment [Member]
Gross loans	17,051,906		16,645,226
Less: Allowance for loan losses	(124,038)	(111,904)	(96,823)	(75,170)	(53,256)	(51,306)
Consumer Portfolio Segment [Member]
Gross loans	4,636,078		2,859,703
Less: Allowance for loan losses	(98,161)	(117,500)	(79,253)	(84,652)	(60,491)	(37,187)
Purchased Auto Loans [Member]
Gross loans	17,938,538		11,714,185
Less: Allowance for loan losses	(291,116)	$ (245,300)	(183,612)	$ (171,662)	$ (156,864)	$ (67,354)
Non-mortgage Loans [Member]
Gross loans	$ 69,589,384		$ 53,779,281

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Note 8 - Loans and Allowance for Credit Losses - Carrying Amount of Loans Acquired in Twin Oaks Merger (Details) - USD ($)	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Gross loans	$ 193,120,434		$ 162,833,578
Less: Allowance for loan losses	(2,366,245)	$ (2,240,586)	(2,247,449)	$ (2,308,154)	$ (2,288,041)	$ (2,224,006)
Loans, net	190,754,189		160,586,129
Twin Oaks [Member]
Gross loans	18,890,043		21,663,937
Less: Allowance for loan losses	(100,000)		(100,000)
Loans, net	18,790,043		21,563,937
Residential Portfolio Segment [Member]
Gross loans	123,531,050		109,054,297
Residential Portfolio Segment [Member] | Twin Oaks [Member]
Gross loans	15,885,877		18,335,050
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Gross loans	118,518,298		103,871,686
Less: Allowance for loan losses	(1,494,713)	(1,430,917)	(1,426,954)	(1,563,721)	(1,574,598)	(1,727,582)
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Twin Oaks [Member]
Gross loans	15,618,555		18,062,672
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Gross loans	5,012,752		5,182,611
Less: Allowance for loan losses	(98,575)	(101,473)	(93,481)	(39,381)	(167,485)	(142,237)
Residential Portfolio Segment [Member] | Multi-family Loans [Member] | Twin Oaks [Member]
Gross loans	267,322		272,378
Nonresidential Real Estate Portfolio Segment [Member]
Gross loans	29,962,862		22,560,167
Less: Allowance for loan losses	(259,642)	(233,492)	(367,326)	(373,568)	(275,347)	(198,340)
Nonresidential Real Estate Portfolio Segment [Member] | Twin Oaks [Member]
Gross loans	2,187,087		2,352,952
Commercial Portfolio Segment [Member]
Gross loans	17,051,906		16,645,226
Less: Allowance for loan losses	(124,038)	(111,904)	(96,823)	(75,170)	(53,256)	(51,306)
Commercial Portfolio Segment [Member] | Twin Oaks [Member]
Gross loans	746,014		779,595
Consumer Portfolio Segment [Member]
Gross loans	4,636,078		2,859,703
Less: Allowance for loan losses	(98,161)	$ (117,500)	(79,253)	$ (84,652)	$ (60,491)	$ (37,187)
Consumer Portfolio Segment [Member] | Twin Oaks [Member]
Gross loans	71,065		196,340
Non-mortgage Loans [Member]
Gross loans	69,589,384		53,779,281
Non-mortgage Loans [Member] | Twin Oaks [Member]
Gross loans	$ 3,004,166		$ 3,328,887

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Note 8 - Loans and Allowance for Credit Losses - Loans Acquired With Deteriorated Credit Quality (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Balance, beginning of period	$ 255,747	$ 498,912	$ 461,334	$ 575,605
Payment activity	(131,108)	(42,422)	(482,073)	(134,325)
Transfer to OREO				(44,417)
Accretion into interest income	24,931	23,345	170,309	82,972
Balance, Ending of year	$ 149,570	$ 479,835	$ 149,570	$ 479,835

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Note 8 - Loans and Allowance for Credit Losses - Accretable Yield of Loans Acquired With Deteriorated Credit Quality (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Balance, beginning of period	$ 35,668	$ 124,583	$ 82,869	$ 175,342
Net reclassification from non-accretable yield	3,292		101,469	8,868
Accretion into interest income	(24,931)	(23,345)	(170,309)	(82,972)
Balance, ending of year	$ 14,029	$ 101,238	$ 14,029	$ 101,238

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Note 8 - Loans and Allowance for Credit Losses - Purchases of Loans Receivable (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Purchased Auto Loans [Member]
Purchases of loans receivable	$ 4,979,707	$ 1,010,717	$ 10,035,353	$ 9,351,997

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Note 8 - Loans and Allowance for Credit Losses - Net (Charge-offs) Recoveries (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net (charge-offs)/recoveries	$ (84,341)	$ (4,887)	$ (341,204)	$ (218,352)
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Net (charge-offs)/recoveries	(84,240)	17,802	(251,231)	(173,225)
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Net (charge-offs)/recoveries	3,972	3,972	12,148	11,915
Nonresidential Real Estate Portfolio Segment [Member]
Net (charge-offs)/recoveries	(1,726)		(53,686)
Consumer Portfolio Segment [Member]
Net (charge-offs)/recoveries	(1,756)	1,551	(2,503)	5,005
Purchased Auto Loans [Member]
Net (charge-offs)/recoveries	$ (591)	$ (28,212)	$ (45,932)	$ (62,047)

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Note 8 - Loans and Allowance for Credit Losses - Recorded Investment in Loans and the Related Allowances (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Dec. 31, 2016
Balance at beginning of period	$ 2,240,586	$ 2,288,041	$ 2,247,449	$ 2,224,006
Provision for loan losses	210,000	25,000	460,000	302,500
Loans charged off	(94,132)	(32,416)	(393,523)	(301,275)
Recoveries of loans previously charged off	9,791	27,529	52,319	82,923
Balance at end of period	2,366,245	2,308,154	2,366,245	2,308,154
Loans individually evaluated for impairment					$ 1,760,434	$ 4,432,178
Gross loans					193,120,434	162,833,578
Loans collectively evaluated for impairment					191,210,429	157,940,066
Loans individually evaluated for impairment					115,066	405,640
Allowance for loan losses	2,366,245	2,288,041	2,366,245	2,308,154	2,366,245	2,247,449
Loans collectively evaluated for impairment					2,227,541	1,807,408
Receivables Acquired with Deteriorated Credit Quality [Member]
Balance at beginning of period			34,401
Balance at end of period	23,638		23,638
Gross loans					149,571	461,334
Allowance for loan losses	23,638		23,638		23,638	34,401
Residential Portfolio Segment [Member]
Gross loans					123,531,050	109,054,297
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Balance at beginning of period	1,430,917	1,574,598	1,426,954	1,727,582
Provision for loan losses	148,036	(28,679)	318,990	9,364
Loans charged off	(86,439)	(2,698)	(259,356)	(233,264)
Recoveries of loans previously charged off	2,199	20,500	8,125	60,039
Balance at end of period	1,494,713	1,563,721	1,494,713	1,563,721
Loans individually evaluated for impairment					1,375,976	2,142,851
Gross loans					118,518,298	103,871,686
Loans collectively evaluated for impairment					116,992,751	101,267,501
Loans individually evaluated for impairment					50,861	208,186
Allowance for loan losses	1,430,917	1,574,598	1,494,713	1,563,721	1,494,713	1,426,954
Loans collectively evaluated for impairment					1,420,214	1,184,367
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Balance at beginning of period			34,401
Balance at end of period	23,638		23,638
Gross loans					149,571	461,334
Allowance for loan losses	23,638		23,638		23,638	34,401
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Balance at beginning of period	101,473	167,485	93,481	142,237
Provision for loan losses	(6,870)	(132,076)	(7,054)	(114,771)
Loans charged off	0	0	0	0
Recoveries of loans previously charged off	3,972	3,972	12,148	11,915
Balance at end of period	98,575	39,381	98,575	39,381
Loans individually evaluated for impairment					0	0
Gross loans					5,012,752	5,182,611
Loans collectively evaluated for impairment					5,012,752	5,182,611
Loans individually evaluated for impairment					0	0
Allowance for loan losses	101,473	167,485	98,575	39,381	98,575	93,481
Loans collectively evaluated for impairment					98,575	93,481
Residential Portfolio Segment [Member] | Multi-family Loans [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Balance at beginning of period			0
Balance at end of period	0		0
Gross loans					0	0
Allowance for loan losses	0		0		0	0
Nonresidential Real Estate Portfolio Segment [Member]
Balance at beginning of period	233,492	275,347	367,326	198,340
Provision for loan losses	27,876	98,221	(53,998)	175,228
Loans charged off	(1,726)	0	(61,686)	0
Recoveries of loans previously charged off	0	0	8,000	0
Balance at end of period	259,642	373,568	259,642	373,568
Loans individually evaluated for impairment					368,020	2,264,763
Gross loans					29,962,862	22,560,167
Loans collectively evaluated for impairment					29,594,842	20,295,404
Loans individually evaluated for impairment					62,471	185,172
Allowance for loan losses	233,492	275,347	259,642	373,568	259,642	367,326
Loans collectively evaluated for impairment					197,171	182,154
Nonresidential Real Estate Portfolio Segment [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Balance at beginning of period			0
Balance at end of period	0		0
Gross loans					0	0
Allowance for loan losses	0		0		0	0
Commercial Portfolio Segment [Member]
Balance at beginning of period	111,904	53,256	96,823	51,306
Provision for loan losses	12,134	21,914	27,215	23,864
Loans charged off	0	0	0	0
Recoveries of loans previously charged off	0	0	0	0
Balance at end of period	124,038	75,170	124,038	75,170
Loans individually evaluated for impairment					12,970	0
Gross loans					17,051,906	16,645,226
Loans collectively evaluated for impairment					17,038,936	16,645,226
Loans individually evaluated for impairment					0	0
Allowance for loan losses	111,904	53,256	124,038	75,170	124,038	96,823
Loans collectively evaluated for impairment					124,038	96,823
Commercial Portfolio Segment [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Balance at beginning of period			0
Balance at end of period	0		0
Gross loans					0	0
Allowance for loan losses	0		0		0	0
Consumer Portfolio Segment [Member]
Balance at beginning of period	117,500	60,491	79,253	37,187
Provision for loan losses	(17,583)	22,610	21,411	42,460
Loans charged off	(3,282)	0	(8,633)	0
Recoveries of loans previously charged off	1,526	1,551	6,130	5,005
Balance at end of period	98,161	84,652	98,161	84,652
Loans individually evaluated for impairment					0	0
Gross loans					4,636,078	2,859,703
Loans collectively evaluated for impairment					4,636,078	2,859,703
Loans individually evaluated for impairment					0	0
Allowance for loan losses	117,500	60,491	98,161	84,652	98,161	79,253
Loans collectively evaluated for impairment					98,161	79,253
Consumer Portfolio Segment [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Balance at beginning of period			0
Balance at end of period	0		0
Gross loans					0	0
Allowance for loan losses	0		0		0	0
Purchased Auto Loans [Member]
Balance at beginning of period	245,300	156,864	183,612	67,354
Provision for loan losses	46,407	43,010	153,436	166,355
Loans charged off	(2,685)	(29,718)	(63,848)	(68,011)
Recoveries of loans previously charged off	2,094	1,506	17,916	5,964
Balance at end of period	291,116	171,662	291,116	171,662
Loans individually evaluated for impairment					3,468	24,564
Gross loans					17,938,538	11,714,185
Loans collectively evaluated for impairment					17,935,070	11,689,621
Loans individually evaluated for impairment					1,734	12,282
Allowance for loan losses	245,300	$ 156,864	291,116	$ 171,662	291,116	183,612
Loans collectively evaluated for impairment					289,382	171,330
Purchased Auto Loans [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Balance at beginning of period			0
Balance at end of period	0		0
Gross loans					0	0
Allowance for loan losses	$ 0		$ 0		$ 0	$ 0

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Note 8 - Loans and Allowance for Credit Losses - Loans Individually Evaluated for Impairment (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Unpaid Contractual Principal Balance	$ 1,954,763	$ 5,148,185
Recorded Investment With No Allowance	997,852	1,428,073
Recorded Investment With Allowance	912,153	3,465,439
Total Recorded Investment	1,910,005	4,893,512
Related Allowance	138,704	440,041
Average Recorded Investment	2,793,653	4,674,918
Unpaid Contractual Principal Balance	1,954,763	5,148,185
Recorded Investment With No Allowance	997,852	1,428,073
Recorded Investment With Allowance	912,153	3,465,439
Related Allowance	138,704	440,041
Average Recorded Investment	2,793,653	4,674,918
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Unpaid Contractual Principal Balance	1,570,305	2,688,197
Recorded Investment With No Allowance	984,882	1,428,073
Recorded Investment With Allowance	540,665	1,176,112
Total Recorded Investment	1,525,547	2,604,185
Related Allowance	74,499	242,587
Average Recorded Investment	1,896,563	2,634,763
Unpaid Contractual Principal Balance	1,570,305	2,688,197
Recorded Investment With No Allowance	984,882	1,428,073
Recorded Investment With Allowance	540,665	1,176,112
Related Allowance	74,499	242,587
Average Recorded Investment	1,896,563	2,634,763
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Unpaid Contractual Principal Balance	0	0
Recorded Investment With No Allowance	0	0
Recorded Investment With Allowance	0	0
Total Recorded Investment	0	0
Related Allowance	0	0
Average Recorded Investment	0	0
Unpaid Contractual Principal Balance	0	0
Recorded Investment With No Allowance	0	0
Recorded Investment With Allowance	0	0
Related Allowance	0	0
Average Recorded Investment	0	0
Nonresidential Real Estate Portfolio Segment [Member]
Unpaid Contractual Principal Balance	368,020	2,435,424
Recorded Investment With No Allowance
Recorded Investment With Allowance	368,020	2,264,763
Total Recorded Investment	368,020	2,264,763
Related Allowance	62,471	185,172
Average Recorded Investment	879,038	2,030,894
Unpaid Contractual Principal Balance	368,020	2,435,424
Recorded Investment With No Allowance
Recorded Investment With Allowance	368,020	2,264,763
Related Allowance	62,471	185,172
Average Recorded Investment	879,038	2,030,894
Commercial Portfolio Segment [Member]
Unpaid Contractual Principal Balance	12,970	0
Recorded Investment With No Allowance	12,970	0
Recorded Investment With Allowance	0	0
Total Recorded Investment	12,970	0
Related Allowance	0	0
Average Recorded Investment	3,222	0
Unpaid Contractual Principal Balance	12,970	0
Recorded Investment With No Allowance	12,970	0
Recorded Investment With Allowance	0	0
Related Allowance	0	0
Average Recorded Investment	3,222	0
Consumer Portfolio Segment [Member]
Unpaid Contractual Principal Balance	0	0
Recorded Investment With No Allowance	0	0
Recorded Investment With Allowance	0	0
Total Recorded Investment	0	0
Related Allowance	0	0
Average Recorded Investment	0	0
Unpaid Contractual Principal Balance	0	0
Recorded Investment With No Allowance	0	0
Recorded Investment With Allowance	0	0
Related Allowance	0	0
Average Recorded Investment	0	0
Purchased Auto Loans [Member]
Unpaid Contractual Principal Balance	3,468	24,564
Recorded Investment With No Allowance	0	0
Recorded Investment With Allowance	3,468	24,564
Total Recorded Investment	3,468	24,564
Related Allowance	1,734	12,282
Average Recorded Investment	14,830	9,261
Unpaid Contractual Principal Balance	3,468	24,564
Recorded Investment With No Allowance	0	0
Recorded Investment With Allowance	3,468	24,564
Related Allowance	1,734	12,282
Average Recorded Investment	$ 14,830	$ 9,261

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Note 8 - Loans and Allowance for Credit Losses - Troubled Debt Restructurings (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)
Number of Modifications	0	0		2
Recorded Investment		$ 80,814		$ 80,814
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Number of Modifications				2
Recorded Investment		80,814		$ 80,814
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Number of Modifications
Recorded Investment
Nonresidential Real Estate Portfolio Segment [Member]
Number of Modifications
Recorded Investment
Commercial Portfolio Segment [Member]
Number of Modifications
Recorded Investment
Consumer Portfolio Segment [Member]
Number of Modifications
Recorded Investment
Purchased Auto Loans [Member]
Number of Modifications
Recorded Investment

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Note 8 - Loans and Allowance for Credit Losses - Nonaccrual Loans and Loans Past Due Over 90 Days (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Nonaccrual Loans	$ 1,994,332	$ 4,982,382
Loans Past Due Over 90 Days Still Accruing	0	0
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Nonaccrual Loans	1,609,874	2,693,055
Loans Past Due Over 90 Days Still Accruing	0	0
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Nonaccrual Loans	0	0
Loans Past Due Over 90 Days Still Accruing	0	0
Nonresidential Real Estate Portfolio Segment [Member]
Nonaccrual Loans	368,020	2,264,763
Loans Past Due Over 90 Days Still Accruing	0	0
Commercial Portfolio Segment [Member]
Nonaccrual Loans	12,970	0
Loans Past Due Over 90 Days Still Accruing	0	0
Consumer Portfolio Segment [Member]
Nonaccrual Loans	0	0
Loans Past Due Over 90 Days Still Accruing	0	0
Purchased Auto Loans [Member]
Nonaccrual Loans	3,468	24,564
Loans Past Due Over 90 Days Still Accruing	$ 0	$ 0

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Note 8 - Loans and Allowance for Credit Losses - Aging of the Recorded Investment in Loans (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Loans past due	$ 2,960,064	$ 3,820,602
Loans, current	190,160,370	159,012,976
Total loans	193,120,434	162,833,578
Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	2,602,178	2,003,039
Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	244,158	22,562
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	113,728	1,795,001
Residential Portfolio Segment [Member]
Total loans	123,531,050	109,054,297
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Loans past due	2,452,713	2,991,635
Loans, current	116,065,585	100,880,051
Total loans	118,518,298	103,871,686
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	2,098,295	1,879,438
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	244,158	22,562
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	110,260	1,089,635
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Loans past due	0	0
Loans, current	5,012,752	5,182,611
Total loans	5,012,752	5,182,611
Residential Portfolio Segment [Member] | Multi-family Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	0	0
Residential Portfolio Segment [Member] | Multi-family Loans [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	0	0
Residential Portfolio Segment [Member] | Multi-family Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	0	0
Nonresidential Real Estate Portfolio Segment [Member]
Loans past due	490,913	798,934
Loans, current	29,471,949	21,761,233
Total loans	29,962,862	22,560,167
Nonresidential Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	490,913	118,132
Nonresidential Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	0	0
Nonresidential Real Estate Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	0	680,802
Commercial Portfolio Segment [Member]
Loans past due	12,970	0
Loans, current	17,038,936	16,645,226
Total loans	17,051,906	16,645,226
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	12,970	0
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	0	0
Commercial Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	0	0
Consumer Portfolio Segment [Member]
Loans past due	0	1,105
Loans, current	4,636,078	2,858,598
Total loans	4,636,078	2,859,703
Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	0	1,105
Consumer Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	0	0
Consumer Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	0	0
Purchased Auto Loans [Member]
Loans past due	3,468	28,928
Loans, current	17,935,070	11,685,257
Total loans	17,938,538	11,714,185
Purchased Auto Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	0	4,364
Purchased Auto Loans [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	0	0
Purchased Auto Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	$ 3,468	$ 24,564

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Note 8 - Loans and Allowance for Credit Losses - Loans by Risk Category (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Gross loans	$ 193,120,434	$ 162,833,578
Pass [Member]
Gross loans	46,385,218	36,747,402
Special Mention [Member]
Gross loans	780,208	883,430
Substandard [Member]
Gross loans	1,910,005	4,893,512
Doubtful [Member]
Gross loans	0	0
Not Rated [Member]
Gross loans	144,045,003	120,309,234
Residential Portfolio Segment [Member]
Gross loans	123,531,050	109,054,297
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Gross loans	118,518,298	103,871,686
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Pass [Member]
Gross loans	0	0
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Special Mention [Member]
Gross loans	409,575	562,215
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Substandard [Member]
Gross loans	1,525,547	2,604,185
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Doubtful [Member]
Gross loans	0	0
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Not Rated [Member]
Gross loans	116,583,176	100,705,286
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Gross loans	5,012,752	5,182,611
Residential Portfolio Segment [Member] | Multi-family Loans [Member] | Pass [Member]
Gross loans	0	0
Residential Portfolio Segment [Member] | Multi-family Loans [Member] | Special Mention [Member]
Gross loans	122,073	127,987
Residential Portfolio Segment [Member] | Multi-family Loans [Member] | Substandard [Member]
Gross loans	0	0
Residential Portfolio Segment [Member] | Multi-family Loans [Member] | Doubtful [Member]
Gross loans	0	0
Residential Portfolio Segment [Member] | Multi-family Loans [Member] | Not Rated [Member]
Gross loans	4,890,679	5,054,624
Nonresidential Real Estate Portfolio Segment [Member]
Gross loans	29,962,862	22,560,167
Nonresidential Real Estate Portfolio Segment [Member] | Pass [Member]
Gross loans	29,346,282	20,102,176
Nonresidential Real Estate Portfolio Segment [Member] | Special Mention [Member]
Gross loans	248,560	193,228
Nonresidential Real Estate Portfolio Segment [Member] | Substandard [Member]
Gross loans	368,020	2,264,763
Nonresidential Real Estate Portfolio Segment [Member] | Doubtful [Member]
Gross loans	0	0
Nonresidential Real Estate Portfolio Segment [Member] | Not Rated [Member]
Gross loans	0	0
Commercial Portfolio Segment [Member]
Gross loans	17,051,906	16,645,226
Commercial Portfolio Segment [Member] | Pass [Member]
Gross loans	17,038,936	16,645,226
Commercial Portfolio Segment [Member] | Special Mention [Member]
Gross loans	0	0
Commercial Portfolio Segment [Member] | Substandard [Member]
Gross loans	12,970	0
Commercial Portfolio Segment [Member] | Doubtful [Member]
Gross loans	0	0
Commercial Portfolio Segment [Member] | Not Rated [Member]
Gross loans	0	0
Consumer Portfolio Segment [Member]
Gross loans	4,636,078	2,859,703
Consumer Portfolio Segment [Member] | Pass [Member]
Gross loans	0	0
Consumer Portfolio Segment [Member] | Special Mention [Member]
Gross loans	0	0
Consumer Portfolio Segment [Member] | Substandard [Member]
Gross loans	0	0
Consumer Portfolio Segment [Member] | Doubtful [Member]
Gross loans	0	0
Consumer Portfolio Segment [Member] | Not Rated [Member]
Gross loans	4,636,078	2,859,703
Purchased Auto Loans [Member]
Gross loans	17,938,538	11,714,185
Purchased Auto Loans [Member] | Pass [Member]
Gross loans	0	0
Purchased Auto Loans [Member] | Special Mention [Member]
Gross loans	0	0
Purchased Auto Loans [Member] | Substandard [Member]
Gross loans	3,468	24,564
Purchased Auto Loans [Member] | Doubtful [Member]
Gross loans	0	0
Purchased Auto Loans [Member] | Not Rated [Member]
Gross loans	$ 17,935,070	$ 11,689,621

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Note 9 - Stock Compensation (Details Textual) - USD ($) shares in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Allocated Share-based Compensation Expense	$ 0	$ 8,000
Management Recognition Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	0	0

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Note 11 - Borrowings - Outstanding Advances (Details) - Federal Home Loan Bank of Chicago [Member] - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Advances from FHLB	$ 9,114,999	$ 1,121,153
Matures 02/15/2018 at 1.27% [Member]
Advances from FHLB	1,000,000
Matures 03/30/2018 at 1.72% [Member]
Advances from FHLB	498,714	496,784
Matures 05/15/2018 at 1.34% [Member]
Advances from FHLB	2,000,000
Matures 09/25/2018 at 1.46% [Member]
Advances from FHLB	2,000,000
Matures 04/01/2019 at 2.00% [Member]
Advances from FHLB	496,543	494,906
Matures 08/30/2019 at 1.56% [Member]
Advances from FHLB	3,000,000
Matures 10/03/2022 at 1.48% [Member]
Advances from FHLB	$ 119,742	$ 129,463

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Note 11 - Borrowings - Outstanding Advances (Details) (Parentheticals) - Federal Home Loan Bank of Chicago [Member]	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Matures 02/15/2018 at 1.27% [Member]
Maturity date on fixed rate advance	Feb. 15, 2018
Interest rate, fixed	1.27%
Matures 03/30/2018 at 1.72% [Member]
Maturity date on fixed rate advance	Mar. 30, 2018	Mar. 30, 2018
Interest rate, fixed	1.72%	1.72%
Matures 05/15/2018 at 1.34% [Member]
Maturity date on fixed rate advance	May 15, 2018
Interest rate, fixed	1.34%
Matures 09/25/2018 at 1.46% [Member]
Maturity date on fixed rate advance	Sep. 25, 2018
Interest rate, fixed	1.46%
Matures 04/01/2019 at 2.00% [Member]
Maturity date on fixed rate advance	Apr. 01, 2019	Apr. 01, 2019
Interest rate, fixed	2.00%	2.00%
Matures 08/30/2019 at 1.56% [Member]
Maturity date on fixed rate advance	Aug. 30, 2019
Interest rate, fixed	1.56%
Matures 10/03/2022 at 1.48% [Member]
Maturity date on fixed rate advance	Oct. 03, 2022	Oct. 03, 2022
Interest rate, fixed	1.48%	1.48%

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Note 12 - Fair Value Measurement and Disclosure (Details Textual) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Available-for-sale Securities	$ 30,176,272	$ 44,560,680
Fair Value, Inputs, Level 1 [Member]
Available-for-sale Securities	0
Fair Value, Inputs, Level 3 [Member]
Available-for-sale Securities	$ 0

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Note 12 - Fair Value Measurement and Disclosure - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Securities available for sale	$ 30,176,272	$ 44,560,680
Fair Value, Measurements, Recurring [Member]
Securities available for sale	30,176,272	44,560,680
Fair Value, Inputs, Level 1 [Member]
Securities available for sale	0
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	0	0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	30,176,272	44,560,680
Fair Value, Inputs, Level 3 [Member]
Securities available for sale	0
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	0	0
US States and Political Subdivisions Debt Securities [Member]
Securities available for sale	14,490,188	18,156,138
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	14,490,188	18,156,138
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	0	0
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	14,490,188	18,156,138
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	0	0
Residential Mortgage Backed Securities [Member]
Securities available for sale	15,686,084	26,404,542
Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	15,686,084	26,404,542
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	0	0
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	15,686,084	26,404,542
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	$ 0	$ 0

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Note 12 - Fair Value Measurement and Disclosure - Assets Measured at Fair Value on a Non-recurring Basis (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Foreclosed assets	$ 83,500	$ 35,500
Impaired loans, net	773,449	3,025,398
Fair Value, Inputs, Level 1 [Member]
Foreclosed assets	0	0
Impaired loans, net	0	0
Fair Value, Inputs, Level 2 [Member]
Foreclosed assets	0	0
Impaired loans, net	0	0
Fair Value, Inputs, Level 3 [Member]
Foreclosed assets	83,500	35,500
Impaired loans, net	$ 773,449	$ 3,025,398

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Note 12 - Fair Value Measurement and Disclosure - Quantitative Information About Assets Measured at Fair Value (Details) - Fair Value, Inputs, Level 3 [Member] - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Market Approach Valuation Technique [Member] | Foreclosed Assets [Member]
Assets, fair value disclosure, noncrecurring	$ 83,500	$ 35,500
Appraisal adjustments	(81.40%)
Market Approach Valuation Technique [Member] | Foreclosed Assets [Member] | Minimum [Member]
Appraisal adjustments		(23.00%)
Market Approach Valuation Technique [Member] | Foreclosed Assets [Member] | Maximum [Member]
Appraisal adjustments		(50.00%)
Market Approach Valuation Technique [Member] | Impaired Loans [Member]
Assets, fair value disclosure, noncrecurring	$ 662,195	$ 2,856,621
Market Approach Valuation Technique [Member] | Impaired Loans [Member] | Minimum [Member]
Appraisal adjustments	(36.30%)	(14.50%)
Market Approach Valuation Technique [Member] | Impaired Loans [Member] | Maximum [Member]
Appraisal adjustments	(55.90%)	(86.50%)
Income Approach Valuation Technique [Member] | Impaired Loans [Member]
Assets, fair value disclosure, noncrecurring	$ 111,254	$ 168,777
Discount Rate	10.00%	10.00%

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Note 12 - Fair Value Measurement and Disclosure - Estimated Fair Values of Financial Instruments (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Reported Value Measurement [Member]
Cash and cash equivalents	$ 2,938,284	$ 5,946,649
Time deposits	250,000	250,000
Federal funds sold	3,705,000	1,690,000
Securities	30,928,493	45,314,001
Net loans	190,754,189	160,586,129
Loans held for sale	659,099	305,072
Accrued interest receivable	781,619	785,484
Mortgage servicing rights	406,949	351,544
Accrued interest payable	3,693	224
FHLB advances	9,114,999	1,121,153
Reported Value Measurement [Member] | Non-Interest Bearing Deposits [Member]
Deposits	12,693,586	9,974,536
Reported Value Measurement [Member] | Interest Bearing Deposits, Liabilities [Member]
Deposits	166,196,571	162,572,485
Estimate of Fair Value Measurement [Member]
Cash and cash equivalents	2,938,284	5,946,649
Time deposits	250,000	250,000
Federal funds sold	3,705,000	1,690,000
Securities	30,928,493	45,314,001
Net loans	193,127,599	161,967,000
Loans held for sale	659,099	305,072
Accrued interest receivable	781,619	785,484
Mortgage servicing rights	406,949	351,544
Accrued interest payable	3,693	224
FHLB advances	8,270,081	1,151,000
Estimate of Fair Value Measurement [Member] | Non-Interest Bearing Deposits [Member]
Deposits	12,693,586	9,974,536
Estimate of Fair Value Measurement [Member] | Interest Bearing Deposits, Liabilities [Member]
Deposits	166,823,607	155,963,464
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents	2,938,284	5,946,649
Time deposits	250,000	250,000
Federal funds sold	3,705,000	1,690,000
Securities
Net loans
Loans held for sale	659,099	305,072
Accrued interest receivable	781,619	785,484
Mortgage servicing rights
Accrued interest payable	3,693	224
FHLB advances
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | Non-Interest Bearing Deposits [Member]
Deposits	12,693,586	9,974,536
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | Interest Bearing Deposits, Liabilities [Member]
Deposits
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Cash and cash equivalents
Time deposits
Federal funds sold
Securities	30,176,272	44,560,680
Net loans
Loans held for sale
Accrued interest receivable
Mortgage servicing rights
Accrued interest payable
FHLB advances	8,270,081	1,151,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | Non-Interest Bearing Deposits [Member]
Deposits
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Bearing Deposits, Liabilities [Member]
Deposits
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Cash and cash equivalents
Time deposits
Federal funds sold
Securities	752,221	753,321
Net loans	193,127,599	161,967,000
Loans held for sale
Accrued interest receivable
Mortgage servicing rights	406,949	351,544
Accrued interest payable
FHLB advances
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | Non-Interest Bearing Deposits [Member]
Deposits
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | Interest Bearing Deposits, Liabilities [Member]
Deposits	$ 166,823,607	$ 155,963,464