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 March 31, 2018

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	(Zip Code)
(Address of principal executive offices)

(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 May 10, 2018
Common Stock, $0.01 par value	3,407,440

OTTAWA BANCORP, INC.

FORM 10-Q

For the quarterly period ended March 31, 2018

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	24
Item 3	Quantitative and Qualitative Disclosures about Market Risk	32
Item 4	Controls and Procedures	32
PART II – OTHER INFORMATION
Item 1	Legal Proceedings	32
Item 1A	Risk Factors	32
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3	Defaults upon Senior Securities	33
Item 4	Mine Safety Disclosures	33
Item 5	Other Information	33
Item 6	Exhibits	33
SIGNATURES		34

2

Part I – Financial Information

ITEM 1 – FINANCIAL STATEMENTS

OTTAWA BANCORP, INC.

Consolidated Balance Sheets

March 31, 2018 and December 31, 2017

(Unaudited)

	March 31,			December 31,
	2018			2017
Assets
Cash and due from banks	$	2,598,874		$	2,426,924
Interest bearing deposits		576,308			1,328,893
Total cash and cash equivalents		3,175,182			3,755,817
Time deposits		250,000			250,000
Federal funds sold		1,758,000			939,000
Securities available for sale		25,453,506			26,045,675
Non-marketable equity securities		817,137			918,387
Loans, net of allowance for loan losses of $2,570,533 and $2,472,446 at March 31, 2018 and December 31, 2017, respectively		220,221,604			207,035,091
Loans held for sale		208,484			499,375
Premises and equipment, net		6,616,841			6,670,088
Accrued interest receivable		812,928			794,449
Foreclosed real estate		24,000			84,100
Deferred tax assets		1,943,254			1,870,490
Cash surrender value of life insurance		2,305,570			2,293,800
Goodwill		649,869			649,869
Core deposit intangible		271,500			286,000
Other assets		3,458,293			3,307,734
Total assets	$	267,966,168		$	255,399,875
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Non-interest bearing	$	11,814,608		$	11,562,801
Interest bearing		185,927,881			171,211,823
Total deposits		197,742,489			182,774,624
Accrued interest payable		6,890			661
FHLB advances		12,857,023			15,105,287
Other liabilities		4,900,205			4,416,368
Total liabilities		215,506,607			202,296,940
Commitments and contingencies
Redeemable common stock held by ESOP plan		1,203,326			1,202,014
Stockholders' Equity
Common stock, $.01 par value, 12,000,000 shares authorized; 3,415,490 and 3,451,802 shares issued at March 31, 2018 and December 31, 2017, respectively		34,155			34,518
Additional paid-in-capital		36,329,217			36,949,508
Retained earnings		17,828,165			17,720,962
Unallocated ESOP shares		(1,710,128	)		(1,754,632	)
Accumulated other comprehensive (loss) income		(21,848	)		152,579
		52,459,561			53,102,935
Less:
Maximum cash obligation related to ESOP shares		(1,203,326	)		(1,202,014	)
Total stockholders' equity		51,256,235			51,900,921
Total liabilities and stockholders' equity	$	267,966,168		$	255,399,875

See accompanying notes to these unaudited consolidated financial statements.

3

OTTAWA BANCORP, INC.

Consolidated Statements of Income

Three Months Ended March 31, 2018 and 2017

(Unaudited)

	Three Months Ended
	March 31,
	2018		2017
Interest and dividend income:
Interest and fees on loans	$	2,398,669	$	1,972,750
Securities:
Residential mortgage-backed and related securities		67,466		135,868
State and municipal securities		100,448		130,629
Dividends on non-marketable equity securities		4,186		1,794
Interest-bearing deposits		15,794		9,321
Total interest and dividend income		2,586,563		2,250,362
Interest expense:
Deposits		332,524		205,269
Borrowings		48,144		6,996
Total interest expense		380,668		212,265
Net interest income		2,205,895		2,038,097
Provision for loan losses		125,500		90,000
Net interest income after provision for loan losses		2,080,395		1,948,097
Other income:
Gain on sale of securities		-		42
Gain on sale of loans		133,211		107,093
Gain on sale of foreclosed real estate		42,035		24,060
Gain on sale of repossessed assets		557		3,044
Loan origination and servicing income		162,872		100,991
Origination of mortgage servicing rights, net of amortization		12,854		15,411
Customer service fees		122,995		115,859
Increase in cash surrender value of life insurance		11,770		12,025
Other		24,938		27,965
Total other income		511,232		406,490
Other expenses:
Salaries and employee benefits		1,012,444		994,366
Directors fees		48,000		40,800
Occupancy		174,071		163,539
Deposit insurance premium		16,396		13,514
Legal and professional services		88,701		96,158
Data processing		154,773		138,493
Loan expense		168,807		118,323
Valuation adjustments and expenses on foreclosed real estate		9,012		5,462
Loss on sale of repossessed assets		3,265		274
Other		264,416		245,085
Total other expenses		1,939,885		1,816,014
Income before income tax expense		651,742		538,573
Income tax expense		172,160		181,273
Net income	$	479,582	$	357,300
Basic earnings per share	$	0.15	$	0.11
Diluted earnings per share	$	0.15	$	0.11
Dividends per share	$	0.115	$	0.04

See accompanying notes to these unaudited consolidated financial statements.

4

OTTAWA BANCORP, INC.

Consolidated Statements of Comprehensive Income  

Three Months Ended March 31, 2018 and 2017

 (Unaudited)

	Three Months Ended
	March 31,
	2018			2017
Net income	$	479,582		$	357,300
Other comprehensive income, before tax:
Securities available for sale:
Unrealized holding (losses) gains arising during the period		(243,971	)		153,819
Reclassification adjustment for (gains) included in net income		-			(42	)
Other comprehensive (loss) income, before tax		(243,971	)		153,777
Income tax (benefit) expense related to items of other comprehensive (loss) income		(69,544	)		60,150
Other comprehensive (loss) income, net of tax		(174,427	)		93,627
Comprehensive income	$	305,155		$	450,927

See accompanying notes to these unaudited consolidated financial statements.

5

OTTAWA BANCORP, INC.

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2018 and 2017

   (Unaudited)

	2018			2017
Cash Flows from Operating Activities
Net income	$	479,582		$	357,300
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		59,806			60,785
Provision for loan losses		125,500			90,000
Provision for deferred income taxes		(3,220	)		137,990
Net amortization of premiums and discounts on securities		62,550			139,549
Gain on sale of securities, net		-			(42	)
Origination of mortgage loans held for sale		(4,481,167	)		(4,083,851	)
Proceeds from sale of mortgage loans held for sale		4,905,269			3,807,016
Gain on sale of loans, net		(133,211	)		(107,093	)
Origination of mortgage servicing rights, net of amortization		(12,854	)		(15,411	)
Gain on sale of foreclosed real estate, net		(42,035	)		(24,060	)
Loss (gain) on sale of repossessed assets, net		2,708			(2,770	)
ESOP compensation expense		65,773			61,892
Amortization of core deposit intangible		14,500			19,545
Amortization (accretion) of fair value adjustments on acquired:
Loans		9,487			69,554
Certificates of deposit		-			(8,000	)
Federal Home Loan Bank Advances		1,736			1,737
Increase in cash surrender value of life insurance		(11,770	)		(12,025	)
Change in assets and liabilities:
Increase in accrued interest receivable		(18,479	)		(12,759	)
Increase in other assets		(111,124	)		(83,111	)
Increase in accrued interest payable and other liabilities		117,687			382,298
Net cash provided by operating activities		1,030,738			778,544
Cash Flows from Investing Activities
Securities available for sale:
Purchases		(665,765	)		(1,223,896	)
Sales, calls, maturities and paydowns		951,413			1,806,128
Sale of non-marketable equity securities		101,250			-
Net increase in loans		(13,393,000	)		(6,716,676	)
Net increase in federal funds sold		(819,000	)		(1,094,000	)
Proceeds from sale of foreclosed real estate		126,135			84,493
Proceeds from sale of repossessed assets		18,211			13,270
Purchase of premises and equipment		(6,559	)		(14,672	)
Net cash used in investing activities		(13,687,315	)		(7,145,353	)
Cash Flows from Financing Activities
Net increase in deposits		14,967,865			5,529,575
Proceeds from Federal Home Loan Bank advances		3,250,000			-
Principal reduction of Federal Home Loan Bank advances		(5,500,000	)		-
Proceeds from stock options exercised		65,135			-
Shares repurchased and cancelled		(707,058	)		-
Dividends paid		-			(130,848	)
Net cash provided by financing activities		12,075,942			5,398,727
Net decrease in cash and cash equivalents		(580,635	)		(968,082	)
Cash and cash equivalents:
Beginning of period		3,755,817			5,946,649
End of period	$	3,175,182		$	4,978,567

(Continued)

See accompanying notes to these unaudited consolidated financial statements.

6

OTTAWA BANCORP, INC.

Consolidated Statements of Cash Flows (Continued)

Three Months Ended March 31, 2018 and 2017

(Unaudited) 

	2018		2017
Supplemental Disclosures of Cash Flow Information
Cash payments for:
Interest paid to depositors	$	326,295	$	203,822
Interest paid on borrowings		48,144		6,996
Income taxes paid, net of refunds received		300		-
Supplemental Schedule of Noncash Investing and Financing Activities
Real estate acquired through or in lieu of foreclosure		24,000		31,356
Other assets acquired in settlement of loans		47,500		16,000
Sale of foreclosed real estate through loan origination		-		3,923
Increase in ESOP put option liability		1,312		101,120

See accompanying notes to these unaudited consolidated financial statements.

7

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

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. 

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, 2017. 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 March 31, 2018, 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 28, 2018.

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. Diluted earnings per share show the dilutive effect, if any, of additional common shares issuable under stock options and awards.

	Three Months Ended
	March 31,
	2018			2017
Net income available to common stockholders	$	479,582		$	357,300
Basic potential common shares:
Weighted average shares outstanding		3,429,002			3,467,402
Weighted average unallocated ESOP shares		(175,801	)		(194,580	)
Basic weighted average shares outstanding		3,253,201			3,272,822
Dilutive potential common shares:
Weighted average RRP options outstanding		8,679			15,559
Dilutive weighted average shares outstanding		3,261,880			3,288,381
Basic earnings per share	$	0.15		$	0.11
Diluted earnings per share	$	0.15		$	0.11

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.

9

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

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 March 31, 2018, 87,706 shares at a fair value of $13.72 have been classified as mezzanine capital.

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

	March 31,			December 31,
	2018			2017
Shares allocated		108,966			104,272
Shares withdrawn from the plan		(21,260	)		(21,030	)
Unallocated shares		172,724			177,418
Total ESOP shares		260,430			260,660
Fair value of unallocated shares	$	2,369,773		$	2,561,916

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
March 31, 2018:
Securities Available for Sale
State and municipal securities	$	14,167,731	$	126,910	$	34,288	$	14,260,353
Residential mortgage-backed securities		11,316,333		85,535		208,715		11,193,153
	$	25,484,064	$	212,445	$	243,003	$	25,453,506
December 31, 2017:
Securities Available for Sale
State and municipal securities	$	13,756,573	$	221,320	$	7,460	$	13,970,433
Residential mortgage-backed securities		12,075,689		121,840		122,287		12,075,242
	$	25,832,262	$	343,160	$	129,747	$	26,045,675

The amortized cost and fair value at March 31, 2018, 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	$	656,688	$	657,797
Due after three months through one year		53,577		53,392
Due after one year through five years		5,463,925		5,520,054
Due after five years through ten years		3,984,336		4,008,977
Due after ten years		4,009,205		4,020,133
Residential mortgage-backed securities		11,316,333		11,193,153
	$	25,484,064	$	25,453,506

10

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

The following table reflects securities with gross unrealized losses for less than 12 months and for 12 months or more at March 31, 2018 and December 31, 2017:

	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
March 31, 2018
Securities Available for Sale
State and municipal securities	$	3,251,485	$	34,288	$	-	$	-	$	3,251,485	$	34,288
Residential mortgage-backed securities		2,697,169		41,502		5,714,098		167,213		8,411,267		208,715
	$	5,948,654	$	75,790	$	5,714,098	$	167,213	$	11,662,752	$	243,003
December 31, 2017
Securities Available for Sale
State and municipal securities	$	1,435,888	$	7,460	$	-	$	-	$	1,435,888	$	7,460
Residential mortgage-backed securities		2,035,206		12,564		6,209,019		109,723		8,244,225		122,287
	$	3,471,094	$	20,024	$	6,209,019	$	109,723	$	9,680,113	$	129,747

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 March 31, 2018, 40 securities had unrealized losses with an aggregate depreciation of 2.04% from the Company’s amortized cost basis. The Company does not consider these investments to be other than temporarily impaired at March 31, 2018 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 no proceeds from the sales of securities for the three months ended March 31, 2018 and proceeds of $0.4 million for the three months ended March 31, 2017. The sales during the three months ended March 31, 2017 resulted in gross realized gains of $42 and gross no realized losses. The tax provision applicable to the realized gains amounted to $0 and $16 respectively, for the three months ended March 31, 2018 and 2017.

11

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

NOTE 8 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

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

	March 31,			December 31,
	2018			2017
Mortgage loans:
One-to-four family residential loans	$	130,287,273		$	124,118,335
Multi-family residential loans		6,510,667			5,664,524
Total mortgage loans		136,797,940			129,782,859
Other loans:
Non-residential real estate loans		33,710,232			32,133,094
Commercial loans		20,922,937			20,759,262
Consumer direct		8,529,670			6,281,712
Purchased auto		22,831,358			20,550,610
Total other loans		85,994,197			79,724,678
Gross loans		222,792,137			209,507,537
Less: Allowance for loan losses		(2,570,533	)		(2,472,446	)
Loans, net	$	220,221,604		$	207,035,091

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.

	March 31,			December 31,
	2018			2017
Mortgage loans:
One-to-four family residential loans	$	13,501,289		$	14,811,329
Multi-family residential loans		263,894			265,625
Total mortgage loans		13,765,183			15,076,954
Other loans:
Non-residential real estate loans		1,982,720			2,120,630
Commercial loans		576,293			571,538
Consumer direct		47,551			59,353
Total other loans		2,606,564			2,751,521
Gross loans		16,371,747			17,828,475
Less: Allowance for loan losses		(135,000	)		(135,000	)
Loans, net	$	16,236,747		$	17,693,475

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).

12

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

The following table reflects activity for the loans acquired with deteriorated credit quality for the three months ended March 31, 2018 and 2017:

	Three Months Ended
	March 31,
	2018			2017
Balance, beginning of period	$	144,528		$	461,334
Payment activity		(11,438	)		(225,489	)
Transfer to foreclosed real estate		-			-
Accretion into interest income		4,443			64,791
	$	137,533		$	300,636

The contractual amount outstanding for the loans acquired with deteriorated credit quality totaled $465,000 and $468,000 as of March 31, 2018 and December 31, 2017, respectively.

The following table reflects activity in the accretable yield for the loans acquired with deteriorated credit quality for the three months ended March 31, 2018 and 2017:

	Three Months Ended
	March 31,
	2018			2017
Balance, beginning of period	$	9,592		$	82,869
Net reclassification from non-accretable yield		-			29,891
Accretion into interest income		(4,443	)		(64,791	)
	$	5,149		$	47,969

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

	Three Months Ended March 31,
	2018		2017
Purchased auto loans	$	4,034,864	$	1,534,937

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

	Three Months Ended March 31,
	2018			2017
One-to-four family	$	(2,283	)	$	(86,067	)
Multi-family		3,972			-
Non-residential		-			(51,960	)
Consumer direct		1,727			2,327
Purchased auto		(30,829	)		(18,068	)
Net (charge-offs)/recoveries	$	(27,413	)	$	(153,768	)

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 March 31, 2018 and 2017:

	One-to-
	four			Multi-			Non-					Consumer			Purchased
March 31, 2018	family			family			residential		Commercial			direct			auto			Total
Balance at beginning of period	$	1,477,419		$	21,970		$	371,093	$	153,596		$	140,269		$	308,099		$	2,472,446
Provision charged to income		114,187			(816	)		1,187		(521	)		(44,411	)		55,874			125,500
Loans charged off		(6,724	)		-			-		-			-			(36,194	)		(42,918	)
Recoveries of loans previously charged off		4,441			3,972			-		-			1,727			5,365			15,505
Balance at end of period	$	1,589,323		$	25,126		$	372,280	$	153,075		$	97,585		$	333,144		$	2,570,533

	One-to-
	four			Multi-		Non-					Consumer		Purchased
March 31, 2017	family			family		residential			Commercial		direct		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		108,120			2,219		(64,902	)		4,280		17,471		22,812			90,000
Loans charged off		(89,515	)		-		(59,960	)		-		-		(30,312	)		(179,787	)
Recoveries of loans previously charged off		3,448			-		8,000			-		2,327		12,244			26,019
Balance at end of period	$	1,449,007		$	95,700	$	250,464		$	101,103	$	99,051	$	188,356		$	2,183,681

The following table presents the recorded investment in loans and the related allowances allocated by portfolio segment and based on impairment method as of March 31, 2018 and December 31, 2017:

	One-to-
	four		Multi-		Non-				Consumer		Purchased
March 31, 2018	family		family		residential		Commercial		direct		auto		Total
Loans individually evaluated for impairment	$	759,861	$	-	$	344,837	$	3,235	$	-	$	12,828	$	1,120,761
Loans acquired with deteriorated credit quality		137,532		-		-		-		-		-		137,532
Loans collectively evaluated for impairment		129,389,880		6,510,667		33,365,395		20,919,702		8,529,670		22,818,530		221,533,844
Balance at end of period	$	130,287,273	$	6,510,667	$	33,710,232	$	20,922,937	$	8,529,670	$	22,831,358	$	222,792,137
Period-end amount allocated to:
Loans individually evaluated for impairment	$	125,076	$	-	$	102,225	$	-	$	-	$	6,414	$	233,715
Loans acquired with deteriorated credit quality		12,843		-		-		-		-		-		12,843
Loans collectively evaluated for impairment		1,451,404		25,126		270,055		153,075		97,585		326,730		2,323,975
Balance at end of period	$	1,589,323	$	25,126	$	372,280	$	153,075	$	97,585	$	333,144	$	2,570,533

14

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

	One-to-
	four		Multi-		Non-				Consumer		Purchased
December 31, 2017	family		family		residential		Commercial		direct		auto		Total
Loans individually evaluated for impairment	$	986,321	$	-	$	355,203	$	10,454	$	-	$	985	$	1,352,963
Loans acquired with deteriorated credit quality		144,528		-		-		-		-		-		144,528
Loans collectively evaluated for impairment		122,987,486		5,664,524		31,777,891		20,748,808		6,281,712		20,549,625		208,010,046
Balance at end of period	$	124,118,335	$	5,664,524	$	32,133,094	$	20,759,262	$	6,281,712	$	20,550,610	$	209,507,537
Period-end amount allocated to:
Loans individually evaluated for impairment	$	78,820	$	-	$	110,055	$	-	$	-	$	493	$	189,368
Loans acquired with deteriorated credit quality		40,408		-		-		-		-		-		40,408
Loans collectively evaluated for impairment		1,358,191		21,970		261,038		153,596		140,269		307,606		2,242,670
Balance at end of period	$	1,477,419	$	21,970	$	371,093	$	153,596	$	140,269	$	308,099	$	2,472,446

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 March 31, 2018 and December 31, 2017:

March 31, 2018	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	$	897,393	$	402,755	$	494,638	$	897,393	$	137,919	$	1,120,597
Multi-family		-		-		-		-		-		-
Non-residential		344,837		-		344,837		344,837		102,225		348,337
Commercial		3,235		3,235		-		3,235		-		3,839
Consumer direct		-		-		-		-		-		-
Purchased auto		12,828		-		12,828		12,828		6,414		4,276
	$	1,258,293	$	405,990	$	852,303	$	1,258,293	$	246,558	$	1,477,049

December 31, 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	$	1,130,849	$	746,579	$	384,270	$	1,130,849	$	119,228	$	1,795,888
Multi-family		-		-		-		-		-		-
Non-residential		355,203		-		355,203		355,203		110,055		749,271
Commercial		10,454		10,454		-		10,454		-		5,341
Consumer direct		-		-		-		-		-		-
Purchased auto		985		-		985		985		493		11,205
	$	1,497,491	$	757,033	$	740,458	$	1,497,491	$	229,776	$	2,561,705

15

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

For the three months ended March 31, 2018, the Company recognized no cash basis interest income on impaired loans. For the three months ended March 31, 2017, the Company recognized approximately $3,000 in cash basis interest income on impaired loans.

At March 31, 2018 there were 19 impaired loans totaling approximately $1.3 million, compared to 19 impaired loans totaling approximately $1.5 million at December 31, 2017. The change in impaired loans was a result of writing down and moving two impaired loans totaling approximately $28,000 to foreclosed real estate/repossessed assets, upgrading and returning one loan of approximately $323,000 to accrual status, and payments of approximately $38,000, offset by the addition of three loans totaling approximately $149,000 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 March 31, 2018 included approximately $145,000 of loans whose terms have been modified in troubled debt restructurings, compared to approximately $473,000 at December 31, 2017. The amount of TDR loans included in impaired loans decreased approximately $328,000 as a result of upgrading and returning one loan of approximately $323,000 to accrual status and payments of approximately $5,000. 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 March 31, 2018 and 2017.

There were no TDR loans that were restructured during the twelve months prior to March 31, 2018 and 2017 that had payment defaults (i.e., 60 days or more past due following a modification) during the three months ended March 31, 2018 and 2017.

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 March 31, 2018 and December 31, 2017:

March 31, 2018	Nonaccrual		Loans Past Due Over 90 Days Still Accruing
One-to-four family	$	897,393	$	-
Multi-family		-		-
Non-residential		344,837		-
Commercial		3,235		-
Consumer direct		-		-
Purchased auto		12,828		-
	$	1,258,293	$	-

16

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

December 31, 2017	Nonaccrual		Loans Past Due Over 90 Days Still Accruing
One-to-four family	$	1,213,662	$	-
Multi-family		-		-
Non-residential		355,203		-
Commercial		10,454		-
Consumer direct		-		-
Purchased auto		985		-
	$	1,580,304	$	-

The following table presents the aging of the recorded investment in loans, by class of loans, as of March 31, 2018 and December 31, 2017:

March 31, 2018	Loans 30-59 Days Past Due		Loans 60-8 9 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
One-to-four family	$	864,289	$	473,875	$	438,946	$	1,777,110	$	128,510,163	$	130,287,273
Multi-family		-		-		-		-		6,510,667		6,510,667
Non-residential		344,837		-		-		344,837		33,365,395		33,710,232
Commercial		23,991		-		-		23,991		20,898,946		20,922,937
Consumer direct		75,521		-		-		75,521		8,454,149		8,529,670
Purchased auto		17,099		-		12,828		29,927		22,801,431		22,831,358
	$	1,325,737	$	473,875	$	451,774	$	2,251,386	$	220,540,751	$	222,792,137

December 31, 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	$	860,502	$	985,661	$	99,601	$	1,945,764	$	122,172,571	$	124,118,335
Multi-family		-		-		-		-		5,664,524		5,664,524
Non-residential		478,930		394,634		-		873,564		31,259,530		32,133,094
Commercial		-		10,454		-		10,454		20,748,808		20,759,262
Consumer direct		-		-		-		-		6,281,712		6,281,712
Purchased auto		30,352		-		985		31,337		20,519,273		20,550,610
	$	1,369,784	$	1,390,749	$	100,586	$	2,861,119	$	206,646,418	$	209,507,537

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.

17

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

● 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.

At March 31, 2018 and December 31, 2017, the risk category of loans by class is as follows:

March 31, 2018	Pass		Special Mention		Substandard		Doubtful		Not rated		Total Loans
One-to-four family	$	-	$	1,213,262	$	897,393	$	-	$	128,176,618	$	130,287,273
Multi-family		-		-		-		-		6,510,667		6,510,667
Non-residential		33,127,423		237,972		344,837		-		-		33,710,232
Commercial		20,919,702		-		3,235		-		-		20,922,937
Consumer direct		-		-		-		-		8,529,670		8,529,670
Purchased auto		-		-		12,828		-		22,818,530		22,831,358
Total	$	54,047,125	$	1,451,234	$	1,258,293	$	-	$	166,035,485	$	222,792,137

December 31, 2017	Pass		Special Mention		Substandard		Doubtful		Not rated		Total Loans
One-to-four family	$	-	$	529,738	$	1,130,849	$	-	$	122,457,748	$	124,118,335
Multi-family		-		-		-		-		5,664,524		5,664,524
Non-residential		31,531,886		246,005		355,203		-		-		32,133,094
Commercial		20,748,808		-		10,454		-		-		20,759,262
Consumer direct		-		-		-		-		6,281,712		6,281,712
Purchased auto		-		-		985		-		20,549,625		20,550,610
Total	$	52,280,694	$	775,743	$	1,497,491	$	-	$	154,953,609	$	209,507,537

At March 31, 2018, the Company held $24,000 in foreclosed residential real estate property, compared to $84,100 at December 31, 2017. In addition, the Company also held $0 and $23,000 in consumer mortgage loans that are collateralized by residential real estate properties that were in the process of foreclosure at March 31, 2018 and December 31, 2017, respectively.

NOTE 9 – STOCK COMPENSATION

Total stock-based compensation expense was $0 for both of the three-month periods ended March 31, 2018 and 2017, 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 three months ended March 31, 2018 and 2017, 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 requires that companies recognize revenue based on the value of transferred goods or services as they occur in the contract and might require additional disclosures, depending on the impact of the adoption of the standard. 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 standard does not apply to the majority of the Company’s revenue, including revenue associated with financial instruments such as loans, investment securities, and certain non-interest income, such as bank-owned life insurance, dividends on Federal Home Loan Bank (“FHLB”) stock, and gains or losses on sales of investment securities. The Company has completed its overall assessment of non-interest income and review of related contracts potentially affected by the guidance. The Company adopted the guidance on January 1, 2018 and a cumulative effect adjustment to retained earnings was not necessary.

18

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

The standard allowed the use of either the full retrospective or modified retrospective transition method. We elected to apply the modified retrospective transition method to incomplete contracts as of the initial date of application on January 1, 2018. The adoption of the new standards did not have a material impact on our financial condition or results of operations as the revenue recognition patterns under the new standards did not change significantly from our current practice of recognizing the in-scope non-interest income. In addition, we did not retroactively revise prior period amounts or record a cumulative adjustment to retained earnings upon adoption. We considered the nature, amount, timing, and uncertainty of revenue from contracts with customers and determined that significant revenue streams are sufficiently disaggregated in the consolidated statements of income.

Descriptions of our significant revenue-generating transactions that are within the scope of the new revenue recognition standards, which are presented in the consolidated statements of income as components of non-interest income, are as follows:

● Service charges on deposit accounts. The Company earns fees from its deposit customers for transaction-based, account maintenance and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Similarly, overdraft fees are recognized at the point in time that the overdraft occurs as this corresponds with the Company's performance obligation. Service charges on deposit accounts are withdrawn from the customer's account balance.

● Gains/losses on sale of foreclosed real estate and repossessed assets. The Company records a gain or loss from the sale of foreclosed real estate and repossessed assets when control of the property transfers to the buyer, which generally occurs at the time of the executed deed or title. When the Company finances the sale of foreclosed real estate and repossessed assets to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the foreclosed real estate or repossessed asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain or loss on sale if a significant component is present.

● Other. Other noninterest income consists of other recurring revenue streams such as transaction fees, safe deposit rental income, and insurance commissions. Transaction fees primarily include check printing sales commissions, collection fees, and wire transfer fees which arise from in-branch transactions. Insurance commissions are agent commissions earned by the Company and earned upon the effective date of the bound coverage. Merchant referral income is associated with a program whereby the Company receives a share of processing revenue that is generated from clients that were referred by the Company to the service provider. Revenue is recognized at the point in time when the transaction occurs.

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 was effective for the Company on January 1, 2018.  The adoption of the new financial instruments standard did not have a material impact on the consolidated financial statements. There was no cumulative effect adjustment recorded with the adoption of this guidance.

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 financial statements.

19

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

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 No. 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.

NOTE 11 – BORROWINGS

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

	March 31,		December 31,
	2018		2017
Open lines of credit at 1.46%	$	-	$	4,000,000
Open lines of credit at 1.82%		3,250,000		-
Matured 02/15/2018 at 1.27%, fixed		-		1,000,000
Matured 03/30/2018 at 1.72%, fixed		-		499,357
Matures 05/15/2018 at 1.34%, fixed		2,000,000		2,000,000
Matures 09/25/2018 at 1.46%, fixed		2,000,000		2,000,000
Matures 04/01/2019 at 2.00%, fixed		497,635		497,089
Matures 08/30/2019 at 1.56%, fixed		3,000,000		3,000,000
Matures 12/16/2019 at 2.08%, fixed		2,000,000		2,000,000
Matures 10/03/2022 at 1.48%, fixed		109,388		108,841
	$	12,857,023	$	15,105,287

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.

20

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

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 three months ended March 31, 2018 and the year ended December 31, 2017. 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 March 31, 2018 and December 31, 2017.

							Total
March 31, 2018	Level 1		Level 2		Level 3		Fair Value
State and municipal securities available for sale	$	-	$	14,260,353	$	-	$	14,260,353
Residential mortgage-backed securities available for sale		-		11,193,153		-		11,193,153
	$	-	$	25,453,506	$	-	$	25,453,506

							Total
December 31, 2017	Level 1		Level 2		Level 3		Fair Value
State and municipal securities available for sale	$	-	$	13,970,433	$	-	$	13,970,433
Residential mortgage-backed securities available for sale		-		12,075,242		-		12,075,242
	$	-	$	26,045,675	$	-	$	26,045,675

The tables below present the recorded amounts of assets measured at fair value on a non-recurring basis at March 31, 2018 and December 31, 2017.

							Total
March 31, 2018	Level 1		Level 2		Level 3		Fair Value
Foreclosed assets	$	-	$	-	$	50,581	$	50,581
Impaired loans, net		-		-		605,745		605,745

21

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
March 31, 2018
Foreclosed assets	$	50,581	Appraisal of collateral	Appraisal adjustments	-40%	to	-64%
Impaired loans, net	$	594,956	Appraisal of collateral	Appraisal adjustments	-15%	to	-64.4%
Impaired loans, net	$	10,789	Discounted Future Cash Flows	Payment Stream		N/A
				Discount Rate		10%
December 31, 2017
Foreclosed assets	$	84,100	Appraisal of collateral	Appraisal adjustments		-42
Impaired loans, net	$	415,567	Appraisal of collateral	Appraisal adjustments	-50%	to	61.5%
Impaired loans, net	$	95,115	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 March 31, 2018 and December 31, 2017, are as follows:

			Fair Value Measurements at
	Carrying		March 31, 2018 using:
	Amount		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	3,175,182	$	3,175,182	$	-	$	-	$	3,175,182
Time deposits		250,000		250,000		-		-		250,000
Federal funds sold		1,758,000		1,758,000		-		-		1,758,000
Securities		26,270,643		-		25,453,506		817,137		26,270,643
Net loans		220,221,604		-		-		217,146,000		217,146,000
Loans held for sale		208,484		-		208,484		-		208,484
Accrued interest receivable		812,928		812,928		-		-		812,928
Mortgage servicing rights		436,376		-		-		436,376		436,376
Financial Liabilities:
Non-interest bearing deposits		11,814,608		11,814,608		-		-		11,814,608
Interest bearing deposits		185,927,881		-		-		186,856,000		186,856,000
Accrued interest payable		6,890		6,890		-		-		6,890
FHLB advances		12,857,023		-		12,799,000		-		12,799,000

22

OTTAWA BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

(continued)

	Carrying		December 31, 2017 using:
	Amount		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	3,755,817	$	3,755,817	$	-	$	-	$	3,755,817
Time deposits		250,000		250,000		-		-		250,000
Federal funds sold		939,000		939,000		-		-		939,000
Securities		26,964,062		-		26,045,675		918,387		26,964,062
Net loans		207,035,091		-		-		208,823,729		208,823,729
Loans held for sale		499,375		-		499,375		-		499,375
Accrued interest receivable		794,449		794,449		-		-		794,449
Mortgage servicing rights		423,522		-		-		423,522		423,522
Financial Liabilities:
Non-interest bearing deposits		11,562,801		11,562,801		-		-		11,562,801
Interest bearing deposits		171,211,823		-		-		171,915,595		171,915,595
Accrued interest payable		661		661		-		-		661
FHLB advances		15,105,287		-		15,080,025		-		15,080,025

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 12 - 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 represent an exit price for 2018, but do not necessarily represent an exit price for years prior. Loan fair value estimates also 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.

23

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 March 31, 2018 and December 31, 2017, 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 March 31, 2018 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, 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. Except to the extent required by applicable law or regulation the Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made. 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 28, 2018.

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 Shorewood and Peru, Illinois. Ottawa Savings Bank’s market area includes LaSalle County, Grundy County and parts of contiguous counties 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.

24

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 MARCH 31, 2018 AND DECEMBER 31, 2017

The Company's total assets increased $12.6 million, or 4.9%, to $268.0 million at March 31, 2018, from $255.4 million at December 31, 2017. The increase was primarily due to an increase of $13.2 million in the net loan portfolio and an increase in federal funds sold of $0.8 million, offset by decreases in securities available for sale of $0.6 million and decreases in cash and cash equivalents of $0.6 million.

Cash and cash equivalents decreased $0.6 million, or 15.5%, to $3.2 million at March 31, 2018 from $3.8 million at December 31, 2017. The decrease in cash and cash equivalents was primarily a result of cash used in investing activities of $13.7 million exceeding cash provided by financing activities of $12.1 million and cash provided by operating activities of $1.0 million. The cash used in investing activities included a net increase in loans of $13.4 million, an increase in federal funds sold of $0.8 million and the purchase of $0.7 million in securities available for sale, offset by available for sale security maturities and pay-downs of $1.0 million, the sale of non-marketable equity securities of $0.1 million and proceeds from the sale of foreclosed real estate of $0.1 million. The net cash provided by financing activities includes increases in deposits of $15.0 million, proceeds from Federal Home Loan Bank advances of $3.2 million and proceeds from stock options exercised of $0.1 million, partially offset by a principal reduction in Federal Home Loan Bank advances of $5.5 million, and shares repurchased and cancelled of $0.7 million.

Federal funds sold increased $0.8 million, or 87.2%, to $1.8 million at March 31, 2018, from $1.0 million at December 31, 2017.

Securities available-for-sale decreased $0.6 million, or 2.3%, to $25.4 million at March 31, 2018, from $26.0 million at December 31, 2017. The decrease was due to pay-downs of $0.7 million, calls and maturities of $0.3 million and amortization and unrealized losses totaling $0.3 million, exceeding new securities purchases of $0.7 million.

Net loans increased by $13.2 million, or 6.4% to $220.2 million at March 31, 2018, compared to $207.0 million at December 31, 2017, primarily as a result of a $6.2 million increase in one-to-four family loans, a $2.3 million increase in purchased auto loans, a $2.2 million increase in consumer direct loans and a $1.6 million increase in non-residential real estate loans. The Company also experienced growth in all other loan categories during the three months ended March 31, 2018. The increases were slightly off-set by an increase in the allowance for loan losses of $0.1 million.

Total deposits increased $15.0 million, or 8.2%, to $197.7 million at March 31, 2018, from $182.8 million at December 31, 2017. At March 31, 2018 checking accounts increased by $6.3 million, savings accounts increased by $0.8 million and certificates of deposit increased by $8.1 million as compared to December 31, 2017. The increases were off-set by a decrease in money market accounts of $0.2 million. 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 decreased $2.2 million, or 14.9% to $12.9 million at March 31, 2018, compared to $15.1 million at December 31, 2017.

Stockholders’ equity decreased approximately $0.6 million, or 1.2% to $51.3 million at March 31, 2018, from $51.9 million at December 31, 2017. The decrease reflects $0.7 million to repurchase and cancel 50,305 outstanding shares, $0.4 million in declared dividends and a decrease in other comprehensive income of $0.2 million related to a decrease in the fair value of securities available for sale. These decreases were partially off-set by net income of $0.5 million for the three months ended March 31, 2018 and proceeds from stock options exercised and the allocation of ESOP shares totaling approximately $0.1 million.

25

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.

The non-performing assets to total assets ratio was 0.49% at March 31, 2018 which is down from 0.65% at December 31, 2017. During the first three months of 2018, non-performing assets decreased 21.4% to $1.3 million from $1.7 million as of December 31, 2017. The decrease in non-performing assets was primarily due to the decrease in non-accrual loans as a result of writing down and moving two impaired loans totaling approximately $28,000 to foreclosed real estate/repossessed assets, upgrading and returning one loan of approximately $323,000 to accrual status, and payments of approximately $38,000, offset by the addition of three loans totaling approximately $149,000 to the impaired loan list. Additionally, foreclosed real estate decreased approximately $60,000, while other repossessed assets increased approximately $27,000.

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

	March 31,		December 31,		September 30,		June 30,		March 31,
	2018		2017		2017		2017		2017
	(In Thousands)
Non-accrual:
One-to-four family	$	896	$	1,214	$	1,610	$	1,814	$	2,175
Multi-family		-		-		-		-		-
Non-residential real estate		345		355		368		458		618
Commercial		3		10		13		-		-
Consumer direct		-		-		-		-		-
Purchased auto		13		1		3		26		26
Total non-accrual loans		1,257		1,580		1,994		2,298		2,819
Past due greater than 90 days and still accruing:
One-to-four family		-		-		-		-		-
Non-residential real estate		-		-		-		-		-
Commercial		-		-		-		-		-
Consumer direct		-		-		-		-		-
Total nonperforming loans		1,257		1,580		1,994		2,298		2,819
Foreclosed real estate		24		84		83		-		-
Other repossessed assets		27		-		-		13		8
Total nonperforming assets	$	1,308	$	1,664	$	2,077	$	2,311	$	2,827

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

	March 31,			December 31,			September 30,			June 30,			March 31,
	2018			2017			2017			2017			2017
Allowance for loan losses as a percent of gross loans receivable		1.15	%		1.18	%		1.23	%		1.21	%		1.26	%
Allowance for loan losses as a percent of total nonperforming loans		204.53	%		156.46	%		118.66	%		97.52	%		77.47	%
Nonperforming loans as a percent of gross loans receivable		0.56	%		0.75	%		1.00	%		1.24	%		1.63	%
Nonperforming loans as a percent of total assets		0.47	%		0.62	%		0.81	%		0.97	%		1.19	%
Nonperforming assets as a percent of total assets		0.49	%		0.65	%		0.85	%		0.98	%		1.20	%

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017

General. Net income for the three months ended March 31, 2018 was $0.5 million compared to net income of $0.4 million for the three months ended March 31, 2017. The increase in income of $0.1 million or 34.2%, was primarily attributed to an increase in net interest income after provision for loan losses of $0.1 million and an increase in total other income of $0.1 million, partially off-set by an increase in total other expenses of $0.1 million.

26

Net Interest Income. The following table summarizes interest and dividend income and interest expense for the three months ended March 31, 2018 and 2017.

	Three Months Ended
	March 31,
	2018		2017		$ change			% change
	(Dollars in thousands)
Interest and dividend income:
Interest and fees on loans	$	2,399	$	1,973	$	426			21.59	%
Securities:
Residential mortgage-backed securities		68		136		(68	)		(50.00	)
State and municipal securities		100		130		(30	)		(23.08	)
Dividends on non-marketable equity securities		4		2		2			100.00
Interest-bearing deposits		16		9		7			77.78
Total interest and dividend income		2,587		2,250		337			14.98
Interest expense:
Deposits		333		205		128			62.44
Borrowings		48		7		41			585.71
Total interest expense		381		212		169			79.72
Net interest income	$	2,206	$	2,038	$	168			8.24	%

27

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 March 31,
	2018							2017
					AVERAGE							AVERAGE
	AVERAGE				YIELD/			AVERAGE				YIELD/
	BALANCE		INTEREST		COST			BALANCE		INTEREST		COST
	(Dollars in thousands)
Assets
Interest-earning assets
Loans receivable, net (1)	$	212,991	$	2,399		4.51	%	$	164,672	$	1,973		4.79	%
Securities, net (2)		25,298		168		2.66	%		43,689		266		2.44	%
Non-marketable equity securities		774		4		2.07	%		753		2		1.06	%
Interest-bearing deposits		4,047		16		1.58	%		4,405		9		0.82	%
Total interest-earning assets		243,110		2,587		4.26	%		213,519		2,250		4.22	%
Non-interest-earning assets		18,692							18,955
Total assets		261,802							232,474
Liabilities and Equity
Interest-bearing liabilities
Money Market accounts	$	27,185	$	19		0.28	%	$	30,448	$	16		0.21	%
Savings accounts		26,335		5		0.08	%		25,182		4		0.06	%
Certificates of Deposit accounts		96,849		303		1.25	%		81,036		182		0.90	%
Checking accounts		32,583		6		0.07	%		27,710		3		0.04	%
Advances and borrowed funds		11,361		48		1.69	%		1,122		7		2.50	%
Total interest-bearing liabilities		194,313		381		0.78	%		165,498		212		0.51	%
Non-interest-bearing liabilities		8,265							14,776
Total liabilities		202,578							180,274
Equity		59,224							52,200
Total liabilities and equity		261,802							232,474
Net interest income			$	2,206						$	2,038
Net interest rate spread (3)						3.47	%						3.71	%
Net interest margin (4)						3.63	%						3.82	%
Ratio of average interest-earning assets to average interest-bearing liabilities						125.11	%						129.02	%

(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.

28

The following table summarizes the changes in net interest income due to rate and volume for the three months ended March 31, 2018 and 2017. 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 March 31,
	2018 Compared to 2017
	Increase (Decrease) Due to
	VOLUME			RATE			NET
	(Dollars in Thousands)
Interest and dividends earned on
Loans receivable, net	$	543		$	(117	)	$	426
Securities, net		(122	)		24			(98	)
Non-marketable equity securities		-			2			2
Interest-bearing deposits		(1	)		8			7
Total interest-earning assets	$	420		$	(83	)	$	337
Interest expense on
Money Market accounts	$	(2	)	$	5		$	3
Passbook accounts		-			1			1
Certificates of Deposit accounts		50			71			121
Checking		1			2			3
Advances and borrowed funds		43			(2	)		41
Total interest-bearing liabilities		92			77			169
Change in net interest income	$	328		$	(160	)	$	168

Net interest income increased by $0.2 million, or 8.2%, to $2.2 million for the three months ended March 31, 2018, from $2.0 million for the three months ended March 31, 2017. Interest and dividend income increased $0.3 million, or 15.0%, primarily due to an increase in the average balances of interest-earning assets of $29.6 million. The increase in net interest income was partially off-set by an increase in interest expense as the average cost of funds increased 27 basis points to 0.78% for the three months ended March 31, 2018. The net interest margin decreased 5.0% during the three months ended March 31, 2018 to 3.63% from 3.82%.

Provision for Loan Losses. Management recorded a loan loss provision of approximately $0.1 million for both of the three-month periods ended March 31, 2018 and 2017. The allowance for loan losses was $2.6 million, or 1.15% of total gross loans at March 31, 2018, compared to $2.2 million, or 1.26% of gross loans at March 31, 2017. Net charge-offs during the first quarter of 2018 were approximately $27,000 compared to $0.2 million during the first quarter of 2017. General reserves were higher at March 31, 2018, when compared to March 31, 2017, as the balances in all loan categories increased during the twelve months ended March 31, 2018. The general reserve increases to the allowance due to loan volume increases were partially off-set by improvements in historical loss levels and changes in qualitative factors during the twelve months ended March 31, 2018, as compared to the same period ended March 31, 2017. Additionally, specific reserves as of March 31, 2018 were lower than they were as of March 31, 2017. 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 5.6% in LaSalle County, 7.6% in Grundy County, and 4.6% for the State of Illinois, versus the national level of 4.1%. Based on a review of the loans that were in the loan portfolio at March 31, 2018, 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.

29

Other Income. The following table summarizes other income for the three months ended March 31, 2018 and 2017.

	Three months ended
	March 31,
	2018		2017		$ change			% change
	(Dollars in thousands)
Other income:
Gain on sale of loans	$	133	$	107	$	26			24.30
Gain on sale of foreclosed real estate		42		24		18			75.00
Gain on sale of repossessed assets		-		3		(3	)		(100.00	)
Loan origination and servicing income		163		101		62			61.39
Origination of mortgage servicing rights, net of amortization		13		15		(2	)		(13.33	)
Customer service fees		123		116		7			6.03
Increase in cash surrender value of life insurance		12		12		-			-
Other		25		28		(3	)		(10.71	)
Total other income	$	511	$	406	$	105			25.86	%

The increase in total other income was primarily due to higher revenues related to mortgage banking activity, as gain on sale of loans and loan origination and servicing income increased as a result of increases in originations and sales during the three months ended March 31, 2018, as compared to the three months ended March 31, 2017. Additionally, gains on sales of foreclosed real estate increased as a result of selling one property at a gain of $42,000 during the three months ended March 31, 2018 as compared to selling two properties at gains totaling $24,000 during the three months ended March 31, 2017.

Other Expense. The following table summarizes other expense for the three months ended March 31, 2018 and 2017.

	Three months ended
	March 31,
	2018			2017			$ change			% change
	(Dollars in thousands)
Other expenses:
Salaries and employee benefits	$	1,012		$	994		$	18			1.81	%
Directors fees		48			41			7			17.07
Occupancy		174			164			10			6.10
Deposit insurance premium		16			14			2			14.29
Legal and professional services		89			96			(7	)		(7.29	)
Data processing		155			139			16			11.51
Loan expense		169			118			51			43.22
Valuation adjustments and expenses on foreclosed real estate		9			5			4			80.00
Loss on sale of foreclosed real estate		3			-			3			100.00
Other		265			245			20			8.16
Total other expenses	$	1,940		$	1,816		$	124			6.83	%
Efficiency ratio (1)		71.40	%		74.30	%

(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 increased loan expenses, higher data processing expense, and higher other expenses. The higher loan expenses are primarily a result of the increase in purchased auto loans and in-house auto loans, while the increase in data processing expense is due to the increase in accounts processed and annual increases. The efficiency ratio decreased due to increased net interest income and other income for the 2018 period.

Income Taxes. The Company recorded income tax expense of $0.2 million for both the three-month periods ended March 31, 2018 and 2017, respectively. For the three months ended March 31, 2018, the Company had net income of $0.5 million with approximately $0.1 million in tax exempt income and an Illinois tax rate of 9.5%, compared to net income of $0.4 million with approximately $0.1 million in tax exempt income and an Illinois tax rate of 7.75% for the three months ended March 31, 2017.

30

The Company’s income tax differed from the maximum statutory federal rate of 21% and 35% for the three months ended March 31, 2018 and 2017, respectively as follows:

	Three Months Ended
	March 31,
	2018			2017
Expected income taxes	$	136,866		$	188,501
Income tax effect of:
State taxes, net of federal tax benefit		49,318			27,747
Tax exempt interest		(19,676	)		(43,363	)
Income taxed at lower rates		(6,517	)		(5,386	)
Other		12,169			13,774
	$	172,160		$	181,273

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 March 31, 2018, the Bank had outstanding commitments to originate $4.4 million in loans, unfunded lines of credit of $16.6 million, and $5.5 million in commitments to fund construction loans. In addition, as of March 31, 2018, the total amount of certificates of deposit that were scheduled to mature in the next 12 months was $40.1 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 March 31, 2018, the Bank had $66.3 million of available credit from the FHLBC and there were $12.9 million in FHLBC advances outstanding. In addition, as of March 31, 2018 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 March 31, 2018, the Company had cash and cash equivalents of $8.5 million.

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 March 31, 2018 of 21.66%, 20.41%, 20.41%, and 16.08%, respectively, compared to ratios at December 31, 2017 of 22.52%, 21.27%, 21.27% and 16.21%, respectively. As of January 1, 2018, the Bank must hold 1.875% 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.

31

OFF-BALANCE SHEET ARRANGEMENTS

For the three months ended March 31, 2018, 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, 2017, which could materially affect our business, financial condition or future results. As of March 31, 2018, 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

On November 15, 2017, the Company announced that it has authorized a stock repurchase program to acquire up to 346,740 shares of the Company’s outstanding common stock, or approximately 10% of its outstanding shares. Repurchases will be conducted through open market purchases, which may include purchases under a trading plan adopted pursuant to Securities and Exchange Commission Rule 10b5-1, or through privately negotiated transactions. Repurchases will be made from time to time depending on market conditions and other factors. 

32

The following table sets forth information regarding the Company’s repurchases of its common stock during the three months ended March 31, 2018:

					Number of Shares		Maximum Number
					Purchased as Part		of Shares that
	Number		Average		of Publicly		may yet be
	of Shares		Price Paid		Announced		Purchased Under
	Purchased		per Share		Programs		the Program
January 1-31, 2018		10,640		14.50		10,640		318,500
February 1-28, 2018		29,400		13.92		29,400		289,100
March 1-31, 2018		10,265		13.96		10,265		278,835
Total		50,305		14.06		50,305		278,835

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)
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)
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 three months ended March 31, 2018 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.

33

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: May 11, 2018	/s/ Jon L. Kranov
	Jon L. Kranov
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: May 11, 2018	/s/ Marc N. Kingry
	Marc N. Kingry
	Chief Financial Officer
	(Principal Financial Officer)

34

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: May 11, 2018
	/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: May 11, 2018
	/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 March 31, 2018 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

May 11, 2018

/s/ Marc N. Kingry

Marc N. Kingry

Chief Financial Officer

May 11, 2018

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 10, 2018
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)		3,407,440
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Assets
Cash and due from banks	$ 2,598,874	$ 2,426,924
Interest bearing deposits	576,308	1,328,893
Total cash and cash equivalents	3,175,182	3,755,817
Time deposits	250,000	250,000
Federal funds sold	1,758,000	939,000
Securities available for sale	25,453,506	26,045,675
Non-marketable equity securities	817,137	918,387
Loans, net of allowance for loan losses of $2,570,533 and $2,472,446 at March 31, 2018 and December 31, 2017, respectively	220,221,604	207,035,091
Loans held for sale	208,484	499,375
Premises and equipment, net	6,616,841	6,670,088
Accrued interest receivable	812,928	794,449
Foreclosed real estate	24,000	84,100
Deferred tax assets	1,943,254	1,870,490
Cash surrender value of life insurance	2,305,570	2,293,800
Goodwill	649,869	649,869
Core deposit intangible	271,500	286,000
Other assets	3,458,293	3,307,734
Total assets	267,966,168	255,399,875
Deposits:
Non-interest bearing	11,814,608	11,562,801
Interest bearing	185,927,881	171,211,823
Total deposits	197,742,489	182,774,624
Accrued interest payable	6,890	661
FHLB advances	12,857,023	15,105,287
Other liabilities	4,900,205	4,416,368
Total liabilities	215,506,607	202,296,940
Commitments and contingencies
Redeemable common stock held by ESOP plan	1,203,326	1,202,014
Stockholders' Equity
Common stock, $.01 par value, 12,000,000 shares authorized; 3,415,490 and 3,451,802 shares issued at March 31, 2018 and December 31, 2017, respectively	34,155	34,518
Additional paid-in-capital	36,329,217	36,949,508
Retained earnings	17,828,165	17,720,962
Unallocated ESOP shares	(1,710,128)	(1,754,632)
Accumulated other comprehensive (loss) income	(21,848)	152,579
	52,459,561	53,102,935
Less:
Maximum cash obligation related to ESOP shares	(1,203,326)	(1,202,014)
Total stockholders' equity	51,256,235	51,900,921
Total liabilities and stockholders' equity	$ 267,966,168	$ 255,399,875

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Allowance for loan losses	$ 2,570,533	$ 2,472,446
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	12,000,000	12,000,000
Common stock, shares issued (in shares)	3,415,490	3,451,802

XML

Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Interest and dividend income:
Interest and fees on loans	$ 2,398,669	$ 1,972,750
Securities:
Residential mortgage-backed and related securities	67,466	135,868
State and municipal securities	100,448	130,629
Dividends on non-marketable equity securities	4,186	1,794
Interest-bearing deposits	15,794	9,321
Total interest and dividend income	2,586,563	2,250,362
Interest expense:
Deposits	332,524	205,269
Borrowings	48,144	6,996
Total interest expense	380,668	212,265
Net interest income	2,205,895	2,038,097
Provision for loan losses	125,500	90,000
Net interest income after provision for loan losses	2,080,395	1,948,097
Other income:
Gain on sale of securities		42
Gain on sale of loans	133,211	107,093
Gain on sale of foreclosed real estate	42,035	24,060
Gain on sale of repossessed assets	557	3,044
Loan origination and servicing income	162,872	100,991
Origination of mortgage servicing rights, net of amortization	12,854	15,411
Increase in cash surrender value of life insurance	11,770	12,025
Other	24,938	27,965
Total other income	511,232	406,490
Other expenses:
Salaries and employee benefits	1,012,444	994,366
Directors fees	48,000	40,800
Occupancy	174,071	163,539
Deposit insurance premium	16,396	13,514
Legal and professional services	88,701	96,158
Data processing	154,773	138,493
Loan expense	168,807	118,323
Valuation adjustments and expenses on foreclosed real estate	9,012	5,462
Loss on sale of repossessed assets	3,265	274
Other	264,416	245,085
Total other expenses	1,939,885	1,816,014
Income before income tax expense	651,742	538,573
Income tax expense	172,160	181,273
Net income	$ 479,582	$ 357,300
Basic earnings per share (in dollars per share)	$ 0.15	$ 0.11
Diluted earnings per share (in dollars per share)	0.15	0.11
Dividends per share (in dollars per share)	$ 0.115	$ 0.04
Bank Servicing [Member]
Other income:
Customer service fees	$ 122,995	$ 115,859

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Net income	$ 479,582	$ 357,300
Other comprehensive income, before tax:
Unrealized holding (losses) gains arising during the period	(243,971)	153,819
Reclassification adjustment for (gains) included in net income		(42)
Other comprehensive (loss) income, before tax	(243,971)	153,777
Income tax (benefit) expense related to items of other comprehensive (loss) income	(69,544)	60,150
Other comprehensive (loss) income, net of tax	(174,427)	93,627
Comprehensive income	$ 305,155	$ 450,927

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash Flows from Operating Activities
Net income	$ 479,582	$ 357,300
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	59,806	60,785
Provision for loan losses	125,500	90,000
Provision for deferred income taxes	(3,220)	137,990
Net amortization of premiums and discounts on securities	62,550	139,549
Gain on sale of securities, net		(42)
Origination of mortgage loans held for sale	(4,481,167)	(4,083,851)
Proceeds from sale of mortgage loans held for sale	4,905,269	3,807,016
Gain on sale of loans, net	(133,211)	(107,093)
Origination of mortgage servicing rights, net of amortization	(12,854)	(15,411)
Gain on sale of foreclosed real estate, net	(42,035)	(24,060)
Loss (gain) on sale of repossessed assets, net	2,708	(2,770)
ESOP compensation expense	65,773	61,892
Amortization of core deposit intangible	14,500	19,545
Amortization (accretion) of fair value adjustments on acquired:
Loans	9,487	69,554
Certificates of deposit		(8,000)
Federal Home Loan Bank Advances	1,736	1,737
Increase in cash surrender value of life insurance	(11,770)	(12,025)
Change in assets and liabilities:
Increase in accrued interest receivable	(18,479)	(12,759)
Increase in other assets	(111,124)	(83,111)
Increase in accrued interest payable and other liabilities	117,687	382,298
Net cash provided by operating activities	1,030,738	778,544
Cash Flows from Investing Activities
Purchases	(665,765)	(1,223,896)
Sales, calls, maturities and paydowns	951,413	1,806,128
Sale of non-marketable equity securities	101,250
Net increase in loans	(13,393,000)	(6,716,676)
Net increase in federal funds sold	(819,000)	(1,094,000)
Proceeds from sale of foreclosed real estate	126,135	84,493
Proceeds from sale of repossessed assets	18,211	13,270
Purchase of premises and equipment	(6,559)	(14,672)
Net cash used in investing activities	(13,687,315)	(7,145,353)
Cash Flows from Financing Activities
Net increase in deposits	14,967,865	5,529,575
Proceeds from Federal Home Loan Bank advances	3,250,000
Principal reduction of Federal Home Loan Bank advances	(5,500,000)
Proceeds from stock options exercised	65,135
Shares repurchased and cancelled	(707,058)
Dividends paid		(130,848)
Net cash provided by financing activities	12,075,942	5,398,727
Net decrease in cash and cash equivalents	(580,635)	(968,082)
Cash and cash equivalents:
Beginning of period	3,755,817	5,946,649
End of period	3,175,182	4,978,567
Supplemental Disclosures of Cash Flow Information
Income taxes paid, net of refunds received	300
Supplemental Schedule of Noncash Investing and Financing Activities
Real estate acquired through or in lieu of foreclosure	24,000	31,356
Other assets acquired in settlement of loans	47,500	16,000
Sale of foreclosed real estate through loan origination		3,923
Increase in ESOP put option liability	1,312	101,120
Interest Paid to Depositors [Member]
Supplemental Disclosures of Cash Flow Information
Interest paid	326,295	203,822
Interest Paid on Borrowings [Member]
Supplemental Disclosures of Cash Flow Information
Interest paid	$ 48,144	$ 6,996

XML

Note 1 - Nature of Business

3 Months Ended

Mar. 31, 2018

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. 

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.

XML

Note 2 - Basis of Presentation

3 Months Ended

Mar. 31, 2018

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, 2017.

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

3 Months Ended

Mar. 31, 2018

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

March 31, 2018,

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 28, 2018.

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Note 4 - Critical Accounting Policies

3 Months Ended

Mar. 31, 2018

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 policy.

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

3 Months Ended

Mar. 31, 2018

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. Diluted earnings per share show the dilutive effect, if any, of additional common shares issuable under stock options and awards.

	Three Months Ended
	March 31,
	2018			2017
Net income available to common stockholders	$	479,582		$	357,300
Basic potential common shares:
Weighted average shares outstanding		3,429,002			3,467,402
Weighted average unallocated ESOP shares		(175,801	)		(194,580	)
Basic weighted average shares outstanding		3,253,201			3,272,822
Dilutive potential common shares:
Weighted average RRP options outstanding		8,679			15,559
Dilutive weighted average shares outstanding		3,261,880			3,288,381
Basic earnings per share	$	0.15		$	0.11
Diluted earnings per share	$	0.15		$	0.11

XML

Note 6 - Employee Stock Ownership Plan

3 Months Ended

Mar. 31, 2018

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

March 31, 2018,

87,706

shares at a fair value of

$13.72

have been classified as mezzanine capital.

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

	March 31,			December 31,
	2018			2017
Shares allocated		108,966			104,272
Shares withdrawn from the plan		(21,260	)		(21,030	)
Unallocated shares		172,724			177,418
Total ESOP shares		260,430			260,660
Fair value of unallocated shares	$	2,369,773		$	2,561,916

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Note 7 - Investments Securities

3 Months Ended

Mar. 31, 2018

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
March 31, 2018:
Securities Available for Sale
State and municipal securities	$	14,167,731	$	126,910	$	34,288	$	14,260,353
Residential mortgage-backed securities		11,316,333		85,535		208,715		11,193,153
	$	25,484,064	$	212,445	$	243,003	$	25,453,506
December 31, 2017:
Securities Available for Sale
State and municipal securities	$	13,756,573	$	221,320	$	7,460	$	13,970,433
Residential mortgage-backed securities		12,075,689		121,840		122,287		12,075,242
	$	25,832,262	$	343,160	$	129,747	$	26,045,675

The amortized cost and fair value at

March 31, 2018,

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	$	656,688	$	657,797
Due after three months through one year		53,577		53,392
Due after one year through five years		5,463,925		5,520,054
Due after five years through ten years		3,984,336		4,008,977
Due after ten years		4,009,205		4,020,133
Residential mortgage-backed securities		11,316,333		11,193,153
	$	25,484,064	$	25,453,506

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

12

months and for

12

months or more at

March 31, 2018

and

December 31, 2017:

	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
March 31, 2018
Securities Available for Sale
State and municipal securities	$	3,251,485	$	34,288	$	-	$	-	$	3,251,485	$	34,288
Residential mortgage-backed securities		2,697,169		41,502		5,714,098		167,213		8,411,267		208,715
	$	5,948,654	$	75,790	$	5,714,098	$	167,213	$	11,662,752	$	243,003
December 31, 2017
Securities Available for Sale
State and municipal securities	$	1,435,888	$	7,460	$	-	$	-	$	1,435,888	$	7,460
Residential mortgage-backed securities		2,035,206		12,564		6,209,019		109,723		8,244,225		122,287
	$	3,471,094	$	20,024	$	6,209,019	$	109,723	$	9,680,113	$	129,747

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

March 31, 2018,

40

securities had unrealized losses with an aggregate depreciation of

2.04%

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

not

consider these investments to be other than temporarily impaired at

March 31, 2018

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

no

proceeds from the sales of securities for the

three

months ended

March 31, 2018

and proceeds of

$0.4

million for the

three

months ended

March 31, 2017.

The sales during the

three

months ended

March 31, 2017

resulted in gross realized gains of

$42

and gross

no

realized losses. The tax provision applicable to the realized gains amounted to

$0

and

$16

respectively, for the

three

months ended

March 31, 2018

and

2017.

XML

Note 8 - Loans and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2018

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:

	March 31,			December 31,
	2018			2017
Mortgage loans:
One-to-four family residential loans	$	130,287,273		$	124,118,335
Multi-family residential loans		6,510,667			5,664,524
Total mortgage loans		136,797,940			129,782,859
Other loans:
Non-residential real estate loans		33,710,232			32,133,094
Commercial loans		20,922,937			20,759,262
Consumer direct		8,529,670			6,281,712
Purchased auto		22,831,358			20,550,610
Total other loans		85,994,197			79,724,678
Gross loans		222,792,137			209,507,537
Less: Allowance for loan losses		(2,570,533	)		(2,472,446	)
Loans, net	$	220,221,604		$	207,035,091

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.

	March 31,			December 31,
	2018			2017
Mortgage loans:
One-to-four family residential loans	$	13,501,289		$	14,811,329
Multi-family residential loans		263,894			265,625
Total mortgage loans		13,765,183			15,076,954
Other loans:
Non-residential real estate loans		1,982,720			2,120,630
Commercial loans		576,293			571,538
Consumer direct		47,551			59,353
Total other loans		2,606,564			2,751,521
Gross loans		16,371,747			17,828,475
Less: Allowance for loan losses		(135,000	)		(135,000	)
Loans, net	$	16,236,747		$	17,693,475

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

months ended

March 31, 2018

and

2017:

	Three Months Ended
	March 31,
	2018			2017
Balance, beginning of period	$	144,528		$	461,334
Payment activity		(11,438	)		(225,489	)
Transfer to foreclosed real estate		-			-
Accretion into interest income		4,443			64,791
	$	137,533		$	300,636

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

$465,000

and

$468,000

as of

March 31, 2018

and

December 31, 2017,

respectively.

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

three

months ended

March 31, 2018

and

2017:

	Three Months Ended
	March 31,
	2018			2017
Balance, beginning of period	$	9,592		$	82,869
Net reclassification from non-accretable yield		-			29,891
Accretion into interest income		(4,443	)		(64,791	)
	$	5,149		$	47,969

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

	Three Months Ended March 31,
	2018		2017
Purchased auto loans	$	4,034,864	$	1,534,937

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

	Three Months Ended March 31,
	2018			2017
One-to-four family	$	(2,283	)	$	(86,067	)
Multi-family		3,972			-
Non-residential		-			(51,960	)
Consumer direct		1,727			2,327
Purchased auto		(30,829	)		(18,068	)
Net (charge-offs)/recoveries	$	(27,413	)	$	(153,768	)

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

three

months ended

March 31, 2018

and

2017:

	One-to-
	four			Multi-			Non-					Consumer			Purchased
March 31, 2018	family			family			residential		Commercial			direct			auto			Total
Balance at beginning of period	$	1,477,419		$	21,970		$	371,093	$	153,596		$	140,269		$	308,099		$	2,472,446
Provision charged to income		114,187			(816	)		1,187		(521	)		(44,411	)		55,874			125,500
Loans charged off		(6,724	)		-			-		-			-			(36,194	)		(42,918	)
Recoveries of loans previously charged off		4,441			3,972			-		-			1,727			5,365			15,505
Balance at end of period	$	1,589,323		$	25,126		$	372,280	$	153,075		$	97,585		$	333,144		$	2,570,533

	One-to-
	four			Multi-		Non-					Consumer		Purchased
March 31, 2017	family			family		residential			Commercial		direct		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		108,120			2,219		(64,902	)		4,280		17,471		22,812			90,000
Loans charged off		(89,515	)		-		(59,960	)		-		-		(30,312	)		(179,787	)
Recoveries of loans previously charged off		3,448			-		8,000			-		2,327		12,244			26,019
Balance at end of period	$	1,449,007		$	95,700	$	250,464		$	101,103	$	99,051	$	188,356		$	2,183,681

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

March 31, 2018

and

December 31, 2017:

	One-to-
	four		Multi-		Non-				Consumer		Purchased
March 31, 2018	family		family		residential		Commercial		direct		auto		Total
Loans individually evaluated for impairment	$	759,861	$	-	$	344,837	$	3,235	$	-	$	12,828	$	1,120,761
Loans acquired with deteriorated credit quality		137,532		-		-		-		-		-		137,532
Loans collectively evaluated for impairment		129,389,880		6,510,667		33,365,395		20,919,702		8,529,670		22,818,530		221,533,844
Balance at end of period	$	130,287,273	$	6,510,667	$	33,710,232	$	20,922,937	$	8,529,670	$	22,831,358	$	222,792,137
Period-end amount allocated to:
Loans individually evaluated for impairment	$	125,076	$	-	$	102,225	$	-	$	-	$	6,414	$	233,715
Loans acquired with deteriorated credit quality		12,843		-		-		-		-		-		12,843
Loans collectively evaluated for impairment		1,451,404		25,126		270,055		153,075		97,585		326,730		2,323,975
Balance at end of period	$	1,589,323	$	25,126	$	372,280	$	153,075	$	97,585	$	333,144	$	2,570,533

	One-to-
	four		Multi-		Non-				Consumer		Purchased
December 31, 2017	family		family		residential		Commercial		direct		auto		Total
Loans individually evaluated for impairment	$	986,321	$	-	$	355,203	$	10,454	$	-	$	985	$	1,352,963
Loans acquired with deteriorated credit quality		144,528		-		-		-		-		-		144,528
Loans collectively evaluated for impairment		122,987,486		5,664,524		31,777,891		20,748,808		6,281,712		20,549,625		208,010,046
Balance at end of period	$	124,118,335	$	5,664,524	$	32,133,094	$	20,759,262	$	6,281,712	$	20,550,610	$	209,507,537
Period-end amount allocated to:
Loans individually evaluated for impairment	$	78,820	$	-	$	110,055	$	-	$	-	$	493	$	189,368
Loans acquired with deteriorated credit quality		40,408		-		-		-		-		-		40,408
Loans collectively evaluated for impairment		1,358,191		21,970		261,038		153,596		140,269		307,606		2,242,670
Balance at end of period	$	1,477,419	$	21,970	$	371,093	$	153,596	$	140,269	$	308,099	$	2,472,446

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

March 31, 2018

and

December 31, 2017:

March 31, 2018	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	$	897,393	$	402,755	$	494,638	$	897,393	$	137,919	$	1,120,597
Multi-family		-		-		-		-		-		-
Non-residential		344,837		-		344,837		344,837		102,225		348,337
Commercial		3,235		3,235		-		3,235		-		3,839
Consumer direct		-		-		-		-		-		-
Purchased auto		12,828		-		12,828		12,828		6,414		4,276
	$	1,258,293	$	405,990	$	852,303	$	1,258,293	$	246,558	$	1,477,049

December 31, 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	$	1,130,849	$	746,579	$	384,270	$	1,130,849	$	119,228	$	1,795,888
Multi-family		-		-		-		-		-		-
Non-residential		355,203		-		355,203		355,203		110,055		749,271
Commercial		10,454		10,454		-		10,454		-		5,341
Consumer direct		-		-		-		-		-		-
Purchased auto		985		-		985		985		493		11,205
	$	1,497,491	$	757,033	$	740,458	$	1,497,491	$	229,776	$	2,561,705

For the

three

months ended

March 31, 2018,

the Company recognized

no

cash basis interest income on impaired loans. For the

three

months ended

March 31, 2017,

the Company recognized approximately

$3,000

in cash basis interest income on impaired loans.

At

March 31, 2018

there were

19

impaired loans totaling approximately

$1.3

million, compared to

19

impaired loans totaling approximately

$1.5

million at

December 31, 2017.

The change in impaired loans was a result of writing down and moving

two

impaired loans totaling approximately

$28,000

to foreclosed real estate/repossessed assets, upgrading and returning

one

loan of approximately

$323,000

to accrual status, and payments of approximately

$38,000,

offset by the addition of

three

loans totaling approximately

$149,000

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

March 31, 2018

included approximately

$145,000

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

$473,000

at

December 31, 2017.

The amount of TDR loans included in impaired loans decreased approximately

$328,000

as a result of upgrading and returning

one

loan of approximately

$323,000

to accrual status and payments of approximately

$5,000.

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

March 31, 2018

and

2017.

There were

no

TDR loans that were restructured during the

twelve

months prior to

March 31, 2018

and

2017

that had payment defaults (i.e.,

60

days or more past due following a modification) during the

three

months ended

March 31, 2018

and

2017.

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

March 31, 2018

and

December 31, 2017:

March 31, 2018	Nonaccrual		Loans Past Due Over 90 Days Still Accruing
One-to-four family	$	897,393	$	-
Multi-family		-		-
Non-residential		344,837		-
Commercial		3,235		-
Consumer direct		-		-
Purchased auto		12,828		-
	$	1,258,293	$	-

December 31, 2017	Nonaccrual		Loans Past Due Over 90 Days Still Accruing
One-to-four family	$	1,213,662	$	-
Multi-family		-		-
Non-residential		355,203		-
Commercial		10,454		-
Consumer direct		-		-
Purchased auto		985		-
	$	1,580,304	$	-

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

March 31, 2018

and

December 31, 2017:

March 31, 2018	Loans 30-59 Days Past Due		Loans 60-8 9 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
One-to-four family	$	864,289	$	473,875	$	438,946	$	1,777,110	$	128,510,163	$	130,287,273
Multi-family		-		-		-		-		6,510,667		6,510,667
Non-residential		344,837		-		-		344,837		33,365,395		33,710,232
Commercial		23,991		-		-		23,991		20,898,946		20,922,937
Consumer direct		75,521		-		-		75,521		8,454,149		8,529,670
Purchased auto		17,099		-		12,828		29,927		22,801,431		22,831,358
	$	1,325,737	$	473,875	$	451,774	$	2,251,386	$	220,540,751	$	222,792,137

December 31, 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	$	860,502	$	985,661	$	99,601	$	1,945,764	$	122,172,571	$	124,118,335
Multi-family		-		-		-		-		5,664,524		5,664,524
Non-residential		478,930		394,634		-		873,564		31,259,530		32,133,094
Commercial		-		10,454		-		10,454		20,748,808		20,759,262
Consumer direct		-		-		-		-		6,281,712		6,281,712
Purchased auto		30,352		-		985		31,337		20,519,273		20,550,610
	$	1,369,784	$	1,390,749	$	100,586	$	2,861,119	$	206,646,418	$	209,507,537

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.

At

March 31, 2018

and

December 31, 2017,

the risk category of loans by class is as follows:

March 31, 2018	Pass		Special Mention		Substandard		Doubtful		Not rated		Total Loans
One-to-four family	$	-	$	1,213,262	$	897,393	$	-	$	128,176,618	$	130,287,273
Multi-family		-		-		-		-		6,510,667		6,510,667
Non-residential		33,127,423		237,972		344,837		-		-		33,710,232
Commercial		20,919,702		-		3,235		-		-		20,922,937
Consumer direct		-		-		-		-		8,529,670		8,529,670
Purchased auto		-		-		12,828		-		22,818,530		22,831,358
Total	$	54,047,125	$	1,451,234	$	1,258,293	$	-	$	166,035,485	$	222,792,137

December 31, 2017	Pass		Special Mention		Substandard		Doubtful		Not rated		Total Loans
One-to-four family	$	-	$	529,738	$	1,130,849	$	-	$	122,457,748	$	124,118,335
Multi-family		-		-		-		-		5,664,524		5,664,524
Non-residential		31,531,886		246,005		355,203		-		-		32,133,094
Commercial		20,748,808		-		10,454		-		-		20,759,262
Consumer direct		-		-		-		-		6,281,712		6,281,712
Purchased auto		-		-		985		-		20,549,625		20,550,610
Total	$	52,280,694	$	775,743	$	1,497,491	$	-	$	154,953,609	$	209,507,537

At

March 31, 2018,

the Company held

$24,000

in foreclosed residential real estate property, compared to

$84,100

at

December 31, 2017.

In addition, the Company also held

$0

and

$23,000

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

March 31, 2018

and

December 31, 2017,

respectively.

XML

Note 9 - Stock Compensation

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

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

NOTE

9

– STOCK COMPENSATION

Total stock-based compensation expense was

$0

for both of the

three

-month periods ended

March 31, 2018

and

2017,

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

three

months ended

March 31, 2018

and

2017,

the Company did

not

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

XML

Note 10 - Recent Accounting Developments

3 Months Ended

Mar. 31, 2018

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

requires that companies recognize revenue based on the value of transferred goods or services as they occur in the contract and might require additional disclosures, depending on the impact of the adoption of the standard. 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 standard does

not

apply to the majority of the Company’s revenue, including revenue associated with financial instruments such as loans, investment securities, and certain non-interest income, such as bank-owned life insurance, dividends on Federal Home Loan Bank (“FHLB”) stock, and gains or losses on sales of investment securities. The Company has completed its overall assessment of non-interest income and review of related contracts potentially affected by the guidance. The Company adopted the guidance on

January 1, 2018

and a cumulative effect adjustment to retained earnings was

not

necessary.

The standard allowed the use of either the full retrospective or modified retrospective transition method. We elected to apply the modified retrospective transition method to incomplete contracts as of the initial date of application on

January 1, 2018.

The adoption of the new standards did

not

have a material impact on our financial condition or results of operations as the revenue recognition patterns under the new standards did

not

change significantly from our current practice of recognizing the in-scope non-interest income. In addition, we did

not

retroactively revise prior period amounts or record a cumulative adjustment to retained earnings upon adoption. We considered the nature, amount, timing, and uncertainty of revenue from contracts with customers and determined that significant revenue streams are sufficiently disaggregated in the consolidated statements of income.

Descriptions of our significant revenue-generating transactions that are within the scope of the new revenue recognition standards, which are presented in the consolidated statements of income as components of non-interest income, are as follows:

● Service charges on deposit accounts. The Company earns fees from its deposit customers for transaction-based, account maintenance and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Similarly, overdraft fees are recognized at the point in time that the overdraft occurs as this corresponds with the Company's performance obligation. Service charges on deposit accounts are withdrawn from the customer's account balance.

● Gains/losses on sale of foreclosed real estate and repossessed assets. The Company records a gain or loss from the sale of foreclosed real estate and repossessed assets when control of the property transfers to the buyer, which generally occurs at the time of the executed deed or title. When the Company finances the sale of foreclosed real estate and repossessed assets to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the foreclosed real estate or repossessed asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain or loss on sale if a significant component is present.

● Other. Other noninterest income consists of other recurring revenue streams such as transaction fees, safe deposit rental income, and insurance commissions. Transaction fees primarily include check printing sales commissions, collection fees, and wire transfer fees which arise from in-branch transactions. Insurance commissions are agent commissions earned by the Company and earned upon the effective date of the bound coverage. Merchant referral income is associated with a program whereby the Company receives a share of processing revenue that is generated from clients that were referred by the Company to the service provider. Revenue is recognized at the point in time when the transaction occurs.

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

was effective for the Company on

January 1, 2018. 

The adoption of the new financial instruments standard did

not

have a material impact on the consolidated financial statements. There was

no

cumulative effect adjustment recorded with the adoption of this guidance.

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 financial statements.

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

No.

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

3 Months Ended

Mar. 31, 2018

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:

	March 31,		December 31,
	2018		2017
Open lines of credit at 1.46%	$	-	$	4,000,000
Open lines of credit at 1.82%		3,250,000		-
Matured 02/15/2018 at 1.27%, fixed		-		1,000,000
Matured 03/30/2018 at 1.72%, fixed		-		499,357
Matures 05/15/2018 at 1.34%, fixed		2,000,000		2,000,000
Matures 09/25/2018 at 1.46%, fixed		2,000,000		2,000,000
Matures 04/01/2019 at 2.00%, fixed		497,635		497,089
Matures 08/30/2019 at 1.56%, fixed		3,000,000		3,000,000
Matures 12/16/2019 at 2.08%, fixed		2,000,000		2,000,000
Matures 10/03/2022 at 1.48%, fixed		109,388		108,841
	$	12,857,023	$	15,105,287

XML

Note 12 - Fair Value Measurement and Disclosure

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]

NOTE

1

2

– 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.

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

three

months ended

March 31, 2018

and the year ended

December 31, 2017.

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

March 31, 2018

and

December 31, 2017.

							Total
March 31, 2018	Level 1		Level 2		Level 3		Fair Value
State and municipal securities available for sale	$	-	$	14,260,353	$	-	$	14,260,353
Residential mortgage-backed securities available for sale		-		11,193,153		-		11,193,153
	$	-	$	25,453,506	$	-	$	25,453,506

							Total
December 31, 2017	Level 1		Level 2		Level 3		Fair Value
State and municipal securities available for sale	$	-	$	13,970,433	$	-	$	13,970,433
Residential mortgage-backed securities available for sale		-		12,075,242		-		12,075,242
	$	-	$	26,045,675	$	-	$	26,045,675

The tables below present the recorded amounts of assets measured at fair value on a non-recurring basis at

March 31, 2018

and

December 31, 2017.

							Total
March 31, 2018	Level 1		Level 2		Level 3		Fair Value
Foreclosed assets	$	-	$	-	$	50,581	$	50,581
Impaired loans, net		-		-		605,745		605,745

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
March 31, 2018
Foreclosed assets	$	50,581	Appraisal of collateral	Appraisal adjustments	-40%	to	-64%
Impaired loans, net	$	594,956	Appraisal of collateral	Appraisal adjustments	-15%	to	-64.4%
Impaired loans, net	$	10,789	Discounted Future Cash Flows	Payment Stream		N/A
				Discount Rate		10%
December 31, 2017
Foreclosed assets	$	84,100	Appraisal of collateral	Appraisal adjustments		-42
Impaired loans, net	$	415,567	Appraisal of collateral	Appraisal adjustments	-50%	to	61.5%
Impaired loans, net	$	95,115	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

March 31, 2018

and

December 31, 2017,

are as follows:

			Fair Value Measurements at
	Carrying		March 31, 2018 using:
	Amount		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	3,175,182	$	3,175,182	$	-	$	-	$	3,175,182
Time deposits		250,000		250,000		-		-		250,000
Federal funds sold		1,758,000		1,758,000		-		-		1,758,000
Securities		26,270,643		-		25,453,506		817,137		26,270,643
Net loans		220,221,604		-		-		217,146,000		217,146,000
Loans held for sale		208,484		-		208,484		-		208,484
Accrued interest receivable		812,928		812,928		-		-		812,928
Mortgage servicing rights		436,376		-		-		436,376		436,376
Financial Liabilities:
Non-interest bearing deposits		11,814,608		11,814,608		-		-		11,814,608
Interest bearing deposits		185,927,881		-		-		186,856,000		186,856,000
Accrued interest payable		6,890		6,890		-		-		6,890
FHLB advances		12,857,023		-		12,799,000		-		12,799,000

	Carrying		December 31, 2017 using:
	Amount		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	3,755,817	$	3,755,817	$	-	$	-	$	3,755,817
Time deposits		250,000		250,000		-		-		250,000
Federal funds sold		939,000		939,000		-		-		939,000
Securities		26,964,062		-		26,045,675		918,387		26,964,062
Net loans		207,035,091		-		-		208,823,729		208,823,729
Loans held for sale		499,375		-		499,375		-		499,375
Accrued interest receivable		794,449		794,449		-		-		794,449
Mortgage servicing rights		423,522		-		-		423,522		423,522
Financial Liabilities:
Non-interest bearing deposits		11,562,801		11,562,801		-		-		11,562,801
Interest bearing deposits		171,211,823		-		-		171,915,595		171,915,595
Accrued interest payable		661		661		-		-		661
FHLB advances		15,105,287		-		15,080,025		-		15,080,025

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

12

- 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 represent an exit price for

2018,

but do

not

necessarily represent an exit price for years prior. Loan fair value estimates also 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

March 31, 2018

and

December 31, 2017,

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)

3 Months Ended

Mar. 31, 2018

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.

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Note 5 - Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2018

Notes Tables

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

	Three Months Ended
	March 31,
	2018			2017
Net income available to common stockholders	$	479,582		$	357,300
Basic potential common shares:
Weighted average shares outstanding		3,429,002			3,467,402
Weighted average unallocated ESOP shares		(175,801	)		(194,580	)
Basic weighted average shares outstanding		3,253,201			3,272,822
Dilutive potential common shares:
Weighted average RRP options outstanding		8,679			15,559
Dilutive weighted average shares outstanding		3,261,880			3,288,381
Basic earnings per share	$	0.15		$	0.11
Diluted earnings per share	$	0.15		$	0.11

XML

Note 6 - Employee Stock Ownership Plan (Tables)

3 Months Ended

Mar. 31, 2018

Notes Tables

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

	March 31,			December 31,
	2018			2017
Shares allocated		108,966			104,272
Shares withdrawn from the plan		(21,260	)		(21,030	)
Unallocated shares		172,724			177,418
Total ESOP shares		260,430			260,660
Fair value of unallocated shares	$	2,369,773		$	2,561,916

XML

Note 7 - Investments Securities (Tables)

3 Months Ended

Mar. 31, 2018

Notes Tables

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

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
March 31, 2018:
Securities Available for Sale
State and municipal securities	$	14,167,731	$	126,910	$	34,288	$	14,260,353
Residential mortgage-backed securities		11,316,333		85,535		208,715		11,193,153
	$	25,484,064	$	212,445	$	243,003	$	25,453,506
December 31, 2017:
Securities Available for Sale
State and municipal securities	$	13,756,573	$	221,320	$	7,460	$	13,970,433
Residential mortgage-backed securities		12,075,689		121,840		122,287		12,075,242
	$	25,832,262	$	343,160	$	129,747	$	26,045,675

Investments Classified by Contractual Maturity Date [Table Text Block]

	Securities Available for Sale
	Amortized		Fair
	Cost		Value
Due in three months or less	$	656,688	$	657,797
Due after three months through one year		53,577		53,392
Due after one year through five years		5,463,925		5,520,054
Due after five years through ten years		3,984,336		4,008,977
Due after ten years		4,009,205		4,020,133
Residential mortgage-backed securities		11,316,333		11,193,153
	$	25,484,064	$	25,453,506

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
March 31, 2018
Securities Available for Sale
State and municipal securities	$	3,251,485	$	34,288	$	-	$	-	$	3,251,485	$	34,288
Residential mortgage-backed securities		2,697,169		41,502		5,714,098		167,213		8,411,267		208,715
	$	5,948,654	$	75,790	$	5,714,098	$	167,213	$	11,662,752	$	243,003
December 31, 2017
Securities Available for Sale
State and municipal securities	$	1,435,888	$	7,460	$	-	$	-	$	1,435,888	$	7,460
Residential mortgage-backed securities		2,035,206		12,564		6,209,019		109,723		8,244,225		122,287
	$	3,471,094	$	20,024	$	6,209,019	$	109,723	$	9,680,113	$	129,747

XML

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

3 Months Ended

Mar. 31, 2018

Notes Tables

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

	March 31,			December 31,
	2018			2017
Mortgage loans:
One-to-four family residential loans	$	130,287,273		$	124,118,335
Multi-family residential loans		6,510,667			5,664,524
Total mortgage loans		136,797,940			129,782,859
Other loans:
Non-residential real estate loans		33,710,232			32,133,094
Commercial loans		20,922,937			20,759,262
Consumer direct		8,529,670			6,281,712
Purchased auto		22,831,358			20,550,610
Total other loans		85,994,197			79,724,678
Gross loans		222,792,137			209,507,537
Less: Allowance for loan losses		(2,570,533	)		(2,472,446	)
Loans, net	$	220,221,604		$	207,035,091

Schedule of Loans Acquired in Merger [Table Text Block]

	March 31,			December 31,
	2018			2017
Mortgage loans:
One-to-four family residential loans	$	13,501,289		$	14,811,329
Multi-family residential loans		263,894			265,625
Total mortgage loans		13,765,183			15,076,954
Other loans:
Non-residential real estate loans		1,982,720			2,120,630
Commercial loans		576,293			571,538
Consumer direct		47,551			59,353
Total other loans		2,606,564			2,751,521
Gross loans		16,371,747			17,828,475
Less: Allowance for loan losses		(135,000	)		(135,000	)
Loans, net	$	16,236,747		$	17,693,475

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

	Three Months Ended
	March 31,
	2018			2017
Balance, beginning of period	$	144,528		$	461,334
Payment activity		(11,438	)		(225,489	)
Transfer to foreclosed real estate		-			-
Accretion into interest income		4,443			64,791
	$	137,533		$	300,636

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

	Three Months Ended
	March 31,
	2018			2017
Balance, beginning of period	$	9,592		$	82,869
Net reclassification from non-accretable yield		-			29,891
Accretion into interest income		(4,443	)		(64,791	)
	$	5,149		$	47,969

Schedule Of Loans Purchased [Table Text Block]

	Three Months Ended March 31,
	2018		2017
Purchased auto loans	$	4,034,864	$	1,534,937

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

	Three Months Ended March 31,
	2018			2017
One-to-four family	$	(2,283	)	$	(86,067	)
Multi-family		3,972			-
Non-residential		-			(51,960	)
Consumer direct		1,727			2,327
Purchased auto		(30,829	)		(18,068	)
Net (charge-offs)/recoveries	$	(27,413	)	$	(153,768	)

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

	One-to-
	four			Multi-			Non-					Consumer			Purchased
March 31, 2018	family			family			residential		Commercial			direct			auto			Total
Balance at beginning of period	$	1,477,419		$	21,970		$	371,093	$	153,596		$	140,269		$	308,099		$	2,472,446
Provision charged to income		114,187			(816	)		1,187		(521	)		(44,411	)		55,874			125,500
Loans charged off		(6,724	)		-			-		-			-			(36,194	)		(42,918	)
Recoveries of loans previously charged off		4,441			3,972			-		-			1,727			5,365			15,505
Balance at end of period	$	1,589,323		$	25,126		$	372,280	$	153,075		$	97,585		$	333,144		$	2,570,533

	One-to-
	four			Multi-		Non-					Consumer		Purchased
March 31, 2017	family			family		residential			Commercial		direct		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		108,120			2,219		(64,902	)		4,280		17,471		22,812			90,000
Loans charged off		(89,515	)		-		(59,960	)		-		-		(30,312	)		(179,787	)
Recoveries of loans previously charged off		3,448			-		8,000			-		2,327		12,244			26,019
Balance at end of period	$	1,449,007		$	95,700	$	250,464		$	101,103	$	99,051	$	188,356		$	2,183,681

	One-to-
	four		Multi-		Non-				Consumer		Purchased
March 31, 2018	family		family		residential		Commercial		direct		auto		Total
Loans individually evaluated for impairment	$	759,861	$	-	$	344,837	$	3,235	$	-	$	12,828	$	1,120,761
Loans acquired with deteriorated credit quality		137,532		-		-		-		-		-		137,532
Loans collectively evaluated for impairment		129,389,880		6,510,667		33,365,395		20,919,702		8,529,670		22,818,530		221,533,844
Balance at end of period	$	130,287,273	$	6,510,667	$	33,710,232	$	20,922,937	$	8,529,670	$	22,831,358	$	222,792,137
Period-end amount allocated to:
Loans individually evaluated for impairment	$	125,076	$	-	$	102,225	$	-	$	-	$	6,414	$	233,715
Loans acquired with deteriorated credit quality		12,843		-		-		-		-		-		12,843
Loans collectively evaluated for impairment		1,451,404		25,126		270,055		153,075		97,585		326,730		2,323,975
Balance at end of period	$	1,589,323	$	25,126	$	372,280	$	153,075	$	97,585	$	333,144	$	2,570,533

	One-to-
	four		Multi-		Non-				Consumer		Purchased
December 31, 2017	family		family		residential		Commercial		direct		auto		Total
Loans individually evaluated for impairment	$	986,321	$	-	$	355,203	$	10,454	$	-	$	985	$	1,352,963
Loans acquired with deteriorated credit quality		144,528		-		-		-		-		-		144,528
Loans collectively evaluated for impairment		122,987,486		5,664,524		31,777,891		20,748,808		6,281,712		20,549,625		208,010,046
Balance at end of period	$	124,118,335	$	5,664,524	$	32,133,094	$	20,759,262	$	6,281,712	$	20,550,610	$	209,507,537
Period-end amount allocated to:
Loans individually evaluated for impairment	$	78,820	$	-	$	110,055	$	-	$	-	$	493	$	189,368
Loans acquired with deteriorated credit quality		40,408		-		-		-		-		-		40,408
Loans collectively evaluated for impairment		1,358,191		21,970		261,038		153,596		140,269		307,606		2,242,670
Balance at end of period	$	1,477,419	$	21,970	$	371,093	$	153,596	$	140,269	$	308,099	$	2,472,446

Impaired Financing Receivables [Table Text Block]

March 31, 2018	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	$	897,393	$	402,755	$	494,638	$	897,393	$	137,919	$	1,120,597
Multi-family		-		-		-		-		-		-
Non-residential		344,837		-		344,837		344,837		102,225		348,337
Commercial		3,235		3,235		-		3,235		-		3,839
Consumer direct		-		-		-		-		-		-
Purchased auto		12,828		-		12,828		12,828		6,414		4,276
	$	1,258,293	$	405,990	$	852,303	$	1,258,293	$	246,558	$	1,477,049

December 31, 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	$	1,130,849	$	746,579	$	384,270	$	1,130,849	$	119,228	$	1,795,888
Multi-family		-		-		-		-		-		-
Non-residential		355,203		-		355,203		355,203		110,055		749,271
Commercial		10,454		10,454		-		10,454		-		5,341
Consumer direct		-		-		-		-		-		-
Purchased auto		985		-		985		985		493		11,205
	$	1,497,491	$	757,033	$	740,458	$	1,497,491	$	229,776	$	2,561,705

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

March 31, 2018	Nonaccrual		Loans Past Due Over 90 Days Still Accruing
One-to-four family	$	897,393	$	-
Multi-family		-		-
Non-residential		344,837		-
Commercial		3,235		-
Consumer direct		-		-
Purchased auto		12,828		-
	$	1,258,293	$	-

December 31, 2017	Nonaccrual		Loans Past Due Over 90 Days Still Accruing
One-to-four family	$	1,213,662	$	-
Multi-family		-		-
Non-residential		355,203		-
Commercial		10,454		-
Consumer direct		-		-
Purchased auto		985		-
	$	1,580,304	$	-

Past Due Financing Receivables [Table Text Block]

March 31, 2018	Loans 30-59 Days Past Due		Loans 60-8 9 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
One-to-four family	$	864,289	$	473,875	$	438,946	$	1,777,110	$	128,510,163	$	130,287,273
Multi-family		-		-		-		-		6,510,667		6,510,667
Non-residential		344,837		-		-		344,837		33,365,395		33,710,232
Commercial		23,991		-		-		23,991		20,898,946		20,922,937
Consumer direct		75,521		-		-		75,521		8,454,149		8,529,670
Purchased auto		17,099		-		12,828		29,927		22,801,431		22,831,358
	$	1,325,737	$	473,875	$	451,774	$	2,251,386	$	220,540,751	$	222,792,137

December 31, 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	$	860,502	$	985,661	$	99,601	$	1,945,764	$	122,172,571	$	124,118,335
Multi-family		-		-		-		-		5,664,524		5,664,524
Non-residential		478,930		394,634		-		873,564		31,259,530		32,133,094
Commercial		-		10,454		-		10,454		20,748,808		20,759,262
Consumer direct		-		-		-		-		6,281,712		6,281,712
Purchased auto		30,352		-		985		31,337		20,519,273		20,550,610
	$	1,369,784	$	1,390,749	$	100,586	$	2,861,119	$	206,646,418	$	209,507,537

Financing Receivable Credit Quality Indicators [Table Text Block]

March 31, 2018	Pass		Special Mention		Substandard		Doubtful		Not rated		Total Loans
One-to-four family	$	-	$	1,213,262	$	897,393	$	-	$	128,176,618	$	130,287,273
Multi-family		-		-		-		-		6,510,667		6,510,667
Non-residential		33,127,423		237,972		344,837		-		-		33,710,232
Commercial		20,919,702		-		3,235		-		-		20,922,937
Consumer direct		-		-		-		-		8,529,670		8,529,670
Purchased auto		-		-		12,828		-		22,818,530		22,831,358
Total	$	54,047,125	$	1,451,234	$	1,258,293	$	-	$	166,035,485	$	222,792,137

December 31, 2017	Pass		Special Mention		Substandard		Doubtful		Not rated		Total Loans
One-to-four family	$	-	$	529,738	$	1,130,849	$	-	$	122,457,748	$	124,118,335
Multi-family		-		-		-		-		5,664,524		5,664,524
Non-residential		31,531,886		246,005		355,203		-		-		32,133,094
Commercial		20,748,808		-		10,454		-		-		20,759,262
Consumer direct		-		-		-		-		6,281,712		6,281,712
Purchased auto		-		-		985		-		20,549,625		20,550,610
Total	$	52,280,694	$	775,743	$	1,497,491	$	-	$	154,953,609	$	209,507,537

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Note 11 - Borrowings (Tables)

3 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Debt [Table Text Block]

	March 31,		December 31,
	2018		2017
Open lines of credit at 1.46%	$	-	$	4,000,000
Open lines of credit at 1.82%		3,250,000		-
Matured 02/15/2018 at 1.27%, fixed		-		1,000,000
Matured 03/30/2018 at 1.72%, fixed		-		499,357
Matures 05/15/2018 at 1.34%, fixed		2,000,000		2,000,000
Matures 09/25/2018 at 1.46%, fixed		2,000,000		2,000,000
Matures 04/01/2019 at 2.00%, fixed		497,635		497,089
Matures 08/30/2019 at 1.56%, fixed		3,000,000		3,000,000
Matures 12/16/2019 at 2.08%, fixed		2,000,000		2,000,000
Matures 10/03/2022 at 1.48%, fixed		109,388		108,841
	$	12,857,023	$	15,105,287

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Note 12 - Fair Value Measurement and Disclosure (Tables)

3 Months Ended

Mar. 31, 2018

Notes Tables

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

							Total
March 31, 2018	Level 1		Level 2		Level 3		Fair Value
State and municipal securities available for sale	$	-	$	14,260,353	$	-	$	14,260,353
Residential mortgage-backed securities available for sale		-		11,193,153		-		11,193,153
	$	-	$	25,453,506	$	-	$	25,453,506

							Total
December 31, 2017	Level 1		Level 2		Level 3		Fair Value
State and municipal securities available for sale	$	-	$	13,970,433	$	-	$	13,970,433
Residential mortgage-backed securities available for sale		-		12,075,242		-		12,075,242
	$	-	$	26,045,675	$	-	$	26,045,675

Fair Value Measurements, Nonrecurring [Table Text Block]

							Total
March 31, 2018	Level 1		Level 2		Level 3		Fair Value
Foreclosed assets	$	-	$	-	$	50,581	$	50,581
Impaired loans, net		-		-		605,745		605,745

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable
	Estimate		Techniques	Input	Range
March 31, 2018
Foreclosed assets	$	50,581	Appraisal of collateral	Appraisal adjustments	-40%	to	-64%
Impaired loans, net	$	594,956	Appraisal of collateral	Appraisal adjustments	-15%	to	-64.4%
Impaired loans, net	$	10,789	Discounted Future Cash Flows	Payment Stream		N/A
				Discount Rate		10%
December 31, 2017
Foreclosed assets	$	84,100	Appraisal of collateral	Appraisal adjustments		-42
Impaired loans, net	$	415,567	Appraisal of collateral	Appraisal adjustments	-50%	to	61.5%
Impaired loans, net	$	95,115	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		March 31, 2018 using:
	Amount		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	3,175,182	$	3,175,182	$	-	$	-	$	3,175,182
Time deposits		250,000		250,000		-		-		250,000
Federal funds sold		1,758,000		1,758,000		-		-		1,758,000
Securities		26,270,643		-		25,453,506		817,137		26,270,643
Net loans		220,221,604		-		-		217,146,000		217,146,000
Loans held for sale		208,484		-		208,484		-		208,484
Accrued interest receivable		812,928		812,928		-		-		812,928
Mortgage servicing rights		436,376		-		-		436,376		436,376
Financial Liabilities:
Non-interest bearing deposits		11,814,608		11,814,608		-		-		11,814,608
Interest bearing deposits		185,927,881		-		-		186,856,000		186,856,000
Accrued interest payable		6,890		6,890		-		-		6,890
FHLB advances		12,857,023		-		12,799,000		-		12,799,000

	Carrying		December 31, 2017 using:
	Amount		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	3,755,817	$	3,755,817	$	-	$	-	$	3,755,817
Time deposits		250,000		250,000		-		-		250,000
Federal funds sold		939,000		939,000		-		-		939,000
Securities		26,964,062		-		26,045,675		918,387		26,964,062
Net loans		207,035,091		-		-		208,823,729		208,823,729
Loans held for sale		499,375		-		499,375		-		499,375
Accrued interest receivable		794,449		794,449		-		-		794,449
Mortgage servicing rights		423,522		-		-		423,522		423,522
Financial Liabilities:
Non-interest bearing deposits		11,562,801		11,562,801		-		-		11,562,801
Interest bearing deposits		171,211,823		-		-		171,915,595		171,915,595
Accrued interest payable		661		661		-		-		661
FHLB advances		15,105,287		-		15,080,025		-		15,080,025

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Note 5 - Earnings Per Share - Earnings Per Share (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Net income available to common stockholders	$ 479,582	$ 357,300
Basic potential common shares:
Weighted average shares outstanding (in shares)	3,429,002	3,467,402
Weighted average unallocated ESOP shares (in shares)	(175,801)	(194,580)
Basic weighted average shares outstanding (in shares)	3,253,201	3,272,822
Dilutive potential common shares:
Dilutive weighted average shares outstanding (in shares)	3,261,880	3,288,381
Basic earnings per share (in dollars per share)	$ 0.15	$ 0.11
Diluted earnings per share (in dollars per share)	$ 0.15	$ 0.11
Recognition and Retention Plan - DO NOT USE[Member]
Dilutive potential common shares:
Dilutive weighted average shares outstanding (in shares)	8,679	15,559

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Note 6 - Employee Stock Ownership Plan (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Oct. 11, 2016	Jul. 08, 2005
Loan to Employee Stock Ownership Plan			$ 1,907,160	$ 763,140
Employee Stock Ownership Plan (ESOP), Shares in ESOP, Total	260,430	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	108,966	104,272
Mezzanine Capital [Member]
Employee Stock Ownership Plan (ESOP), Number of Allocated Shares	87,706
Fair Value Per Share	$ 13.72

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Note 6 - Employee Stock Ownership Plan - Employee Stock Ownership Plan (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017	Oct. 11, 2016	Jul. 08, 2005
Shares allocated (in shares)	108,966	104,272
Shares withdrawn from the plan (in shares)	(21,260)	(21,030)
Unallocated shares (in shares)	172,724	177,418
Total ESOP shares (in shares)	260,430	260,660	190,716	76,314
Fair value of unallocated shares	$ 2,369,773	$ 2,561,916

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Note 7 - Investments Securities (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Total	40
Aggregate Percentage Loss On Securities With Unrealized Loss Position	2.04%
Other than Temporary Impairment Losses, Investments, Total	$ 0
Proceeds from Sale of Available-for-sale Securities, Total	0	$ 400,000
Debt Securities, Realized Gain (Loss), Total		42
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax, Total	$ 0	$ 16

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Note 7 - Investment Securities - Amortized Cost and Fair Values of Securities (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Securities available for sale, amortized cost	$ 25,484,064	$ 25,832,262
Securities available for sale, gross unrealized gains	212,445	343,160
Securities available for sale, gross unrealized losses	243,003	129,747
Securities available for sale	25,453,506	26,045,675
US States and Political Subdivisions Debt Securities [Member]
Securities available for sale, amortized cost	14,167,731	13,756,573
Securities available for sale, gross unrealized gains	126,910	221,320
Securities available for sale, gross unrealized losses	34,288	7,460
Securities available for sale	14,260,353	13,970,433
Residential Mortgage Backed Securities [Member]
Securities available for sale, amortized cost	11,316,333	12,075,689
Securities available for sale, gross unrealized gains	85,535	121,840
Securities available for sale, gross unrealized losses	208,715	122,287
Securities available for sale	$ 11,193,153	$ 12,075,242

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Note 7 - Investment Securities - Securities by Contractual Maturity (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Securities available for sale, due in three months or less, amortized cost	$ 656,688
Securities available for sale, due in three months or less, fair value	657,797
Securities available for sale, due after three months through one year, amortized cost	53,577
Securities available for sale, due after three months through one year, fair value	53,392
Securities available for sale, due after one year through five years, amortized cost	5,463,925
Securities available for sale, due after one year through five years, fair value	5,520,054
Securities available for sale, due after five years through ten years, amortized cost	3,984,336
Securities available for sale, due after five years through ten years, fair value	4,008,977
Securities available for sale, due after ten years, amortized cost	4,009,205
Securities available for sale, due after ten years, fair value	4,020,133
Residential mortgage-backed securities, amortized cost	11,316,333
Residential mortgage-backed securities, fair value	11,193,153
Securities available for sale, amortized cost	25,484,064	$ 25,832,262
Securities available for sale, fair value	$ 25,453,506	$ 26,045,675

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Note 7 - Investment Securities - Securities With Gross Unrealized Losses (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Securities available for sale, less than 12 months, fair value	$ 5,948,654	$ 3,471,094
Securities available for sale, less than 12 months, unrealized losses	75,790	20,024
Securities available for sale, 12 months or more, fair value	5,714,098	6,209,019
Securities available for sale, 12 months or more, unrealized losses	167,213	109,723
Securities available for sale, fair value	11,662,752	9,680,113
Securities available for sale, unrealized losses	243,003	129,747
US States and Political Subdivisions Debt Securities [Member]
Securities available for sale, less than 12 months, fair value	3,251,485	1,435,888
Securities available for sale, less than 12 months, unrealized losses	34,288	7,460
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	3,251,485	1,435,888
Securities available for sale, unrealized losses	34,288	7,460
Residential Mortgage Backed Securities [Member]
Securities available for sale, less than 12 months, fair value	2,697,169	2,035,206
Securities available for sale, less than 12 months, unrealized losses	41,502	12,564
Securities available for sale, 12 months or more, fair value	5,714,098	6,209,019
Securities available for sale, 12 months or more, unrealized losses	167,213	109,723
Securities available for sale, fair value	8,411,267	8,244,225
Securities available for sale, unrealized losses	$ 208,715	$ 122,287

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Note 8 - Loans and Allowance for Credit Losses (Details Textual)	3 Months Ended
	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2014 USD ($)
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield, Ending Balance	$ 5,149	$ 47,969	$ 9,592	$ 82,869
Impaired Financing Receivable, Interest Income, Cash Basis Method, Total	$ 0	$ 3,000
Number of Impaired Loans	19		19
Impaired Financing Receivable, Recorded Investment, Total	$ 1,258,293		$ 1,497,491
Impaired Loans, Additions, Number	3
Impaired Loans, Additions, Value	$ 149,000
Financing Receivable, Modifications, Number of Contracts	0	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0
Real Estate Acquired Through Foreclosure	$ 24,000		84,100
Mortgage Loans in Process of Foreclosure, Amount	0		23,000
Residential Portfolio Segment [Member]
Real Estate Acquired Through Foreclosure	$ 24,000		84,100
Written Down and Moved to OREO [Member]
Number of Impaired Loans	2
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down	$ 28,000
Returned To Accrual Status [Member]
Number of Impaired Loans	1
Impaired Financing Receivable, Recorded Investment, Total	$ 323,000
Impaired Loan [Member]
Payments for (Proceeds from) Loans Receivable, Total	38,000
Troubled Debt Restructurings [Member]
Impaired Financing Receivable, Recorded Investment, Total	145,000		473,000
Financing Receivables, Impaired, Troubled Debt Restructuring, Decreased	$ 328,000
Financing Receivable, Modifications, Number of Contracts Returned to Accrual Status	1
Financing Receivable, Modifications, Returned to Accrual Status	$ 323,000
Proceeds from Impaired Loans, Principal Payment	5,000
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] | Financial Asset Acquired with Credit Deterioration [Member]
Business Combination, Acquired Receivables, Gross Contractual Amount	$ 465,000		$ 468,000
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, Total					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, Ending Balance					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 ($)	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Gross loans	$ 222,792,137	$ 209,507,537
Less: Allowance for loan losses	(2,570,533)	(2,472,446)	$ (2,183,681)	$ (2,247,449)
Loans, net	220,221,604	207,035,091
Residential Portfolio Segment [Member]
Gross loans	136,797,940	129,782,859
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Gross loans	130,287,273	124,118,335
Less: Allowance for loan losses	(1,589,323)	(1,477,419)	(1,449,007)	(1,426,954)
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Gross loans	6,510,667	5,664,524
Less: Allowance for loan losses	(25,126)	(21,970)	(95,700)	(93,481)
Nonresidential Real Estate Portfolio Segment [Member]
Gross loans	33,710,232	32,133,094
Less: Allowance for loan losses	(372,280)	(371,093)	(250,464)	(367,326)
Commercial Portfolio Segment [Member]
Gross loans	20,922,937	20,759,262
Less: Allowance for loan losses	(153,075)	(153,596)	(101,103)	(96,823)
Consumer Portfolio Segment [Member]
Gross loans	8,529,670	6,281,712
Less: Allowance for loan losses	(97,585)	(140,269)	(99,051)	(79,253)
Purchased Auto Loans [Member]
Gross loans	22,831,358	20,550,610
Less: Allowance for loan losses	(333,144)	(308,099)	$ (188,356)	$ (183,612)
Non-mortgage Loans [Member]
Gross loans	$ 85,994,197	$ 79,724,678

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Note 8 - Loans and Allowance for Credit Losses - Carrying Amount of Loans Acquired in Twin Oaks Merger (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Gross loans	$ 222,792,137	$ 209,507,537
Less: Allowance for loan losses	(2,570,533)	(2,472,446)	$ (2,183,681)	$ (2,247,449)
Loans, net	220,221,604	207,035,091
Twin Oaks [Member]
Gross loans	16,371,747	17,828,475
Less: Allowance for loan losses	(135,000)	(135,000)
Loans, net	16,236,747	17,693,475
Residential Portfolio Segment [Member]
Gross loans	136,797,940	129,782,859
Residential Portfolio Segment [Member] | Twin Oaks [Member]
Gross loans	13,765,183	15,076,954
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Gross loans	130,287,273	124,118,335
Less: Allowance for loan losses	(1,589,323)	(1,477,419)	(1,449,007)	(1,426,954)
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Twin Oaks [Member]
Gross loans	13,501,289	14,811,329
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Gross loans	6,510,667	5,664,524
Less: Allowance for loan losses	(25,126)	(21,970)	(95,700)	(93,481)
Residential Portfolio Segment [Member] | Multi-family Loans [Member] | Twin Oaks [Member]
Gross loans	263,894	265,625
Nonresidential Real Estate Portfolio Segment [Member]
Gross loans	33,710,232	32,133,094
Less: Allowance for loan losses	(372,280)	(371,093)	(250,464)	(367,326)
Nonresidential Real Estate Portfolio Segment [Member] | Twin Oaks [Member]
Gross loans	1,982,720	2,120,630
Commercial Portfolio Segment [Member]
Gross loans	20,922,937	20,759,262
Less: Allowance for loan losses	(153,075)	(153,596)	(101,103)	(96,823)
Commercial Portfolio Segment [Member] | Twin Oaks [Member]
Gross loans	576,293	571,538
Consumer Portfolio Segment [Member]
Gross loans	8,529,670	6,281,712
Less: Allowance for loan losses	(97,585)	(140,269)	$ (99,051)	$ (79,253)
Consumer Portfolio Segment [Member] | Twin Oaks [Member]
Gross loans	47,551	59,353
Non-mortgage Loans [Member]
Gross loans	85,994,197	79,724,678
Non-mortgage Loans [Member] | Twin Oaks [Member]
Gross loans	$ 2,606,564	$ 2,751,521

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Note 8 - Loans and Allowance for Credit Losses - Loans Acquired With Deteriorated Credit Quality (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Balance, beginning of period	$ 144,528	$ 461,334
Payment activity	(11,438)	(225,489)
Transfer to foreclosed real estate
Accretion into interest income	4,443	64,791
Balance, Ending of year	$ 137,533	$ 300,636

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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
	Mar. 31, 2018	Mar. 31, 2017
Balance, beginning of period	$ 9,592	$ 82,869
Net reclassification from non-accretable yield		29,891
Accretion into interest income	(4,443)	(64,791)
Balance, ending of year	$ 5,149	$ 47,969

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Note 8 - Loans and Allowance for Credit Losses - Purchases of Loans Receivable (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Purchased Auto Loans [Member]
Purchases of loans receivable	$ 4,034,864	$ 1,534,937

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Note 8 - Loans and Allowance for Credit Losses - Net (Charge-offs) Recoveries (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Net (charge-offs)/recoveries	$ (27,413)	$ (153,768)
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Net (charge-offs)/recoveries	(2,283)	(86,067)
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Net (charge-offs)/recoveries	3,972
Nonresidential Real Estate Portfolio Segment [Member]
Net (charge-offs)/recoveries		(51,960)
Consumer Portfolio Segment [Member]
Net (charge-offs)/recoveries	1,727	2,327
Purchased Auto Loans [Member]
Net (charge-offs)/recoveries	$ (30,829)	$ (18,068)

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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
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Dec. 31, 2017
Balance at beginning of period	$ 2,472,446	$ 2,247,449
Provision for loan losses	125,500	90,000
Loans charged off	(42,918)	(179,787)
Recoveries of loans previously charged off	15,505	26,019
Balance at end of period	2,570,533	2,183,681
Loans individually evaluated for impairment			$ 1,120,761	$ 1,352,963
Gross loans			222,792,137	209,507,537
Loans collectively evaluated for impairment			221,533,844	208,010,046
Loans individually evaluated for impairment			233,715	189,368
Allowance for loan losses	2,570,533	2,247,449	2,570,533	2,472,446
Loans collectively evaluated for impairment			2,323,975	2,242,670
Financial Asset Acquired with Credit Deterioration [Member]
Balance at beginning of period	40,408
Balance at end of period	12,843
Gross loans			137,532	144,528
Allowance for loan losses	12,843		12,843	40,408
Residential Portfolio Segment [Member]
Gross loans			136,797,940	129,782,859
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Balance at beginning of period	1,477,419	1,426,954
Provision for loan losses	114,187	108,120
Loans charged off	(6,724)	(89,515)
Recoveries of loans previously charged off	4,441	3,448
Balance at end of period	1,589,323	1,449,007
Loans individually evaluated for impairment			759,861	986,321
Gross loans			130,287,273	124,118,335
Loans collectively evaluated for impairment			129,389,880	122,987,486
Loans individually evaluated for impairment			125,076	78,820
Allowance for loan losses	1,477,419	1,426,954	1,589,323	1,477,419
Loans collectively evaluated for impairment			1,451,404	1,358,191
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Balance at beginning of period	40,408
Balance at end of period	12,843
Gross loans			137,532	144,528
Allowance for loan losses	12,843		12,843	40,408
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Balance at beginning of period	21,970	93,481
Provision for loan losses	(816)	2,219
Loans charged off	0	0
Recoveries of loans previously charged off	3,972
Balance at end of period	25,126	95,700
Loans individually evaluated for impairment			0	0
Gross loans			6,510,667	5,664,524
Loans collectively evaluated for impairment			6,510,667	5,664,524
Loans individually evaluated for impairment			0	0
Allowance for loan losses	21,970	93,481	25,126	21,970
Loans collectively evaluated for impairment			25,126	21,970
Residential Portfolio Segment [Member] | Multi-family Loans [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Balance at beginning of period	0
Balance at end of period	0
Gross loans			0	0
Allowance for loan losses	0		0	0
Nonresidential Real Estate Portfolio Segment [Member]
Balance at beginning of period	371,093	367,326
Provision for loan losses	1,187	(64,902)
Loans charged off		(59,960)
Recoveries of loans previously charged off	0	8,000
Balance at end of period	372,280	250,464
Loans individually evaluated for impairment			344,837	355,203
Gross loans			33,710,232	32,133,094
Loans collectively evaluated for impairment			33,365,395	31,777,891
Loans individually evaluated for impairment			102,225	110,055
Allowance for loan losses	371,093	367,326	372,280	371,093
Loans collectively evaluated for impairment			270,055	261,038
Nonresidential Real Estate Portfolio Segment [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Balance at beginning of period	0
Balance at end of period	0
Gross loans			0	0
Allowance for loan losses	0		0	0
Commercial Portfolio Segment [Member]
Balance at beginning of period	153,596	96,823
Provision for loan losses	(521)	4,280
Loans charged off	0	0
Recoveries of loans previously charged off	0	0
Balance at end of period	153,075	101,103
Loans individually evaluated for impairment			3,235	10,454
Gross loans			20,922,937	20,759,262
Loans collectively evaluated for impairment			20,919,702	20,748,808
Loans individually evaluated for impairment			0	0
Allowance for loan losses	153,596	96,823	153,075	153,596
Loans collectively evaluated for impairment			153,075	153,596
Commercial Portfolio Segment [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Balance at beginning of period	0
Balance at end of period	0
Gross loans			0	0
Allowance for loan losses	0		0	0
Consumer Portfolio Segment [Member]
Balance at beginning of period	140,269	79,253
Provision for loan losses	(44,411)	17,471
Loans charged off		0
Recoveries of loans previously charged off	1,727	2,327
Balance at end of period	97,585	99,051
Loans individually evaluated for impairment			0	0
Gross loans			8,529,670	6,281,712
Loans collectively evaluated for impairment			8,529,670	6,281,712
Loans individually evaluated for impairment			0	0
Allowance for loan losses	140,269	79,253	97,585	140,269
Loans collectively evaluated for impairment			97,585	140,269
Consumer Portfolio Segment [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Balance at beginning of period	0
Balance at end of period	0
Gross loans			0	0
Allowance for loan losses	0		0	0
Purchased Auto Loans [Member]
Balance at beginning of period	308,099	183,612
Provision for loan losses	55,874	22,812
Loans charged off	(36,194)	(30,312)
Recoveries of loans previously charged off	5,365	12,244
Balance at end of period	333,144	188,356
Loans individually evaluated for impairment			12,828	985
Gross loans			22,831,358	20,550,610
Loans collectively evaluated for impairment			22,818,530	20,549,625
Loans individually evaluated for impairment			6,414	493
Allowance for loan losses	308,099	$ 183,612	333,144	308,099
Loans collectively evaluated for impairment			326,730	307,606
Purchased Auto Loans [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Balance at beginning of period	0
Balance at end of period	0
Gross loans			0	0
Allowance for loan losses	$ 0		$ 0	$ 0

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Note 8 - Loans and Allowance for Credit Losses - Loans Individually Evaluated for Impairment (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Unpaid Contractual Principal Balance	$ 1,258,293	$ 1,497,491
Recorded Investment With No Allowance	405,990	757,033
Recorded Investment With Allowance	852,303	740,458
Total Recorded Investment	1,258,293	1,497,491
Related Allowance	246,558	229,776
Average Recorded Investment	1,477,049	2,561,705
Unpaid Contractual Principal Balance	1,258,293	1,497,491
Recorded Investment With No Allowance	405,990	757,033
Recorded Investment With Allowance	852,303	740,458
Related Allowance	246,558	229,776
Average Recorded Investment	1,477,049	2,561,705
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Unpaid Contractual Principal Balance	897,393	1,130,849
Recorded Investment With No Allowance	402,755	746,579
Recorded Investment With Allowance	494,638	384,270
Total Recorded Investment	897,393	1,130,849
Related Allowance	137,919	119,228
Average Recorded Investment	1,120,597	1,795,888
Unpaid Contractual Principal Balance	897,393	1,130,849
Recorded Investment With No Allowance	402,755	746,579
Recorded Investment With Allowance	494,638	384,270
Related Allowance	137,919	119,228
Average Recorded Investment	1,120,597	1,795,888
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	344,837	355,203
Recorded Investment With No Allowance
Recorded Investment With Allowance	344,837	355,203
Total Recorded Investment	344,837	355,203
Related Allowance	102,225	110,055
Average Recorded Investment	348,337	749,271
Unpaid Contractual Principal Balance	344,837	355,203
Recorded Investment With No Allowance
Recorded Investment With Allowance	344,837	355,203
Related Allowance	102,225	110,055
Average Recorded Investment	348,337	749,271
Commercial Portfolio Segment [Member]
Unpaid Contractual Principal Balance	3,235	10,454
Recorded Investment With No Allowance	3,235	10,454
Recorded Investment With Allowance	0	0
Total Recorded Investment	3,235	10,454
Related Allowance	0	0
Average Recorded Investment	3,839	5,341
Unpaid Contractual Principal Balance	3,235	10,454
Recorded Investment With No Allowance	3,235	10,454
Recorded Investment With Allowance	0	0
Related Allowance	0	0
Average Recorded Investment	3,839	5,341
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	12,828	985
Recorded Investment With No Allowance	0	0
Recorded Investment With Allowance	12,828	985
Total Recorded Investment	12,828	985
Related Allowance	6,414	493
Average Recorded Investment	4,276	11,205
Unpaid Contractual Principal Balance	12,828	985
Recorded Investment With No Allowance	0	0
Recorded Investment With Allowance	12,828	985
Related Allowance	6,414	493
Average Recorded Investment	$ 4,276	$ 11,205

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Note 8 - Loans and Allowance for Credit Losses - Nonaccrual Loans and Loans Past Due Over 90 Days (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Nonaccrual Loans	$ 1,258,293	$ 1,580,304
Loans Past Due Over 90 Days Still Accruing		0
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Nonaccrual Loans	897,393	1,213,662
Loans Past Due Over 90 Days Still Accruing		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	344,837	355,203
Loans Past Due Over 90 Days Still Accruing	0	0
Commercial Portfolio Segment [Member]
Nonaccrual Loans	3,235	10,454
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	12,828	985
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 ($)	Mar. 31, 2018	Dec. 31, 2017
Loans past due	$ 2,251,386	$ 2,861,119
Loans, current	220,540,751	206,646,418
Total loans	222,792,137	209,507,537
Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	1,325,737	1,369,784
Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	473,875	1,390,749
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	451,774	100,586
Residential Portfolio Segment [Member]
Total loans	136,797,940	129,782,859
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Loans past due	1,777,110	1,945,764
Loans, current	128,510,163	122,172,571
Total loans	130,287,273	124,118,335
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	864,289	860,502
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	473,875	985,661
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	438,946	99,601
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Loans past due	0	0
Loans, current	6,510,667	5,664,524
Total loans	6,510,667	5,664,524
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	344,837	873,564
Loans, current	33,365,395	31,259,530
Total loans	33,710,232	32,133,094
Nonresidential Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	344,837	478,930
Nonresidential Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	0	394,634
Nonresidential Real Estate Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	0
Commercial Portfolio Segment [Member]
Loans past due	23,991	10,454
Loans, current	20,898,946	20,748,808
Total loans	20,922,937	20,759,262
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	23,991	0
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	0	10,454
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	75,521
Loans, current	8,454,149	6,281,712
Total loans	8,529,670	6,281,712
Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	75,521
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	29,927	31,337
Loans, current	22,801,431	20,519,273
Total loans	22,831,358	20,550,610
Purchased Auto Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	17,099	30,352
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	$ 12,828	$ 985

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Note 8 - Loans and Allowance for Credit Losses - Loans by Risk Category (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Gross loans	$ 222,792,137	$ 209,507,537
Pass [Member]
Gross loans	54,047,125	52,280,694
Special Mention [Member]
Gross loans	1,451,234	775,743
Substandard [Member]
Gross loans	1,258,293	1,497,491
Doubtful [Member]
Gross loans		0
Not Rated [Member]
Gross loans	166,035,485	154,953,609
Residential Portfolio Segment [Member]
Gross loans	136,797,940	129,782,859
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member]
Gross loans	130,287,273	124,118,335
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	1,213,262	529,738
Residential Portfolio Segment [Member] | One- to Four-family Loan [Member] | Substandard [Member]
Gross loans	897,393	1,130,849
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	128,176,618	122,457,748
Residential Portfolio Segment [Member] | Multi-family Loans [Member]
Gross loans	6,510,667	5,664,524
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
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	6,510,667	5,664,524
Nonresidential Real Estate Portfolio Segment [Member]
Gross loans	33,710,232	32,133,094
Nonresidential Real Estate Portfolio Segment [Member] | Pass [Member]
Gross loans	33,127,423	31,531,886
Nonresidential Real Estate Portfolio Segment [Member] | Special Mention [Member]
Gross loans	237,972	246,005
Nonresidential Real Estate Portfolio Segment [Member] | Substandard [Member]
Gross loans	344,837	355,203
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	20,922,937	20,759,262
Commercial Portfolio Segment [Member] | Pass [Member]
Gross loans	20,919,702	20,748,808
Commercial Portfolio Segment [Member] | Special Mention [Member]
Gross loans	0	0
Commercial Portfolio Segment [Member] | Substandard [Member]
Gross loans	3,235	10,454
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	8,529,670	6,281,712
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	8,529,670	6,281,712
Purchased Auto Loans [Member]
Gross loans	22,831,358	20,550,610
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	12,828	985
Purchased Auto Loans [Member] | Doubtful [Member]
Gross loans	0	0
Purchased Auto Loans [Member] | Not Rated [Member]
Gross loans	$ 22,818,530	$ 20,549,625

XML

Note 9 - Stock Compensation (Details Textual) - USD ($) shares in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Allocated Share-based Compensation Expense, Total	$ 0	$ 0
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 ($)	Mar. 31, 2018	Dec. 31, 2017
Advances from FHLB	$ 12,857,023	$ 15,105,287
Open lines of credit at 1.46% [Member]
Open lines of credit		4,000,000
Open lines of credit at 1.82% [Member]
Open lines of credit	3,250,000
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		499,357
Matures 05/15/2018 at 1.34% [Member]
Advances from FHLB	2,000,000	2,000,000
Matures 09/25/2018 at 1.46% [Member]
Advances from FHLB	2,000,000	2,000,000
Matures 04/01/2019 at 2.00% [Member]
Advances from FHLB	497,635	497,089
Matures 08/30/2019 at 1.56% [Member]
Advances from FHLB	3,000,000	3,000,000
Matures 12/16/2019 at 2.08% [Member]
Advances from FHLB	2,000,000	2,000,000
Matures 10/03/2022 at 1.48% [Member]
Advances from FHLB	$ 109,388	$ 108,841

XML

Note 11 - Borrowings - Outstanding Advances (Details) (Parentheticals)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Open lines of credit at 1.46% [Member]
Interest rate, fixed		1.46%
Open lines of credit at 1.82% [Member]
Interest rate, fixed		1.82%
Matures 02/15/2018 at 1.27% [Member]
Interest rate, fixed		1.27%
Maturity date on fixed rate advance		Feb. 15, 2018
Matures 03/30/2018 at 1.72% [Member]
Interest rate, fixed		1.72%
Maturity date on fixed rate advance		Mar. 30, 2018
Matures 05/15/2018 at 1.34% [Member] | Federal Home Loan Bank of Chicago [Member]
Interest rate, fixed	1.34%	1.34%
Maturity date on fixed rate advance	May 15, 2018	May 15, 2018
Matures 09/25/2018 at 1.46% [Member] | Federal Home Loan Bank of Chicago [Member]
Interest rate, fixed	1.46%	1.46%
Maturity date on fixed rate advance	Sep. 25, 2018	Sep. 25, 2018
Matures 04/01/2019 at 2.00% [Member] | Federal Home Loan Bank of Chicago [Member]
Interest rate, fixed	2.00%	2.00%
Maturity date on fixed rate advance	Apr. 01, 2019	Apr. 01, 2019
Matures 08/30/2019 at 1.56% [Member] | Federal Home Loan Bank of Chicago [Member]
Interest rate, fixed	1.56%	1.56%
Maturity date on fixed rate advance	Aug. 30, 2019	Aug. 30, 2019
Matures 12/16/2019 at 2.08% [Member] | Federal Home Loan Bank of Chicago [Member]
Interest rate, fixed	2.08%	2.08%
Maturity date on fixed rate advance	Dec. 16, 2019	Dec. 16, 2019
Matures 10/03/2022 at 1.48% [Member] | Federal Home Loan Bank of Chicago [Member]
Interest rate, fixed	1.48%	1.48%
Maturity date on fixed rate advance	Oct. 03, 2022	Oct. 03, 2022

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Note 12 - Fair Value Measurement and Disclosure (Details Textual) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Debt Securities, Available-for-sale, Total	$ 25,453,506	$ 26,045,675
Fair Value, Inputs, Level 1 [Member]
Debt Securities, Available-for-sale, Total	0
Fair Value, Inputs, Level 3 [Member]
Debt Securities, Available-for-sale, Total	$ 0

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Note 12 - Fair Value Measurement and Disclosure - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Securities available for sale	$ 25,453,506	$ 26,045,675
Fair Value, Measurements, Recurring [Member]
Securities available for sale	25,453,506	26,045,675
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	25,453,506	26,045,675
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	14,260,353	13,970,433
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	14,260,353	13,970,433
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	14,260,353	13,970,433
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	11,193,153	12,075,242
Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	11,193,153	12,075,242
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	11,193,153	12,075,242
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]	Mar. 31, 2018 USD ($)
Foreclosed assets	$ 50,581
Impaired loans, net	605,745
Fair Value, Inputs, Level 1 [Member]
Foreclosed assets	0
Impaired loans, net	0
Fair Value, Inputs, Level 2 [Member]
Foreclosed assets	0
Impaired loans, net	0
Fair Value, Inputs, Level 3 [Member]
Foreclosed assets	50,581
Impaired loans, net	$ 605,745

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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]	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Measurement Input, Discount Rate [Member]
Impaired loans, net range	10	10
Valuation, Market Approach [Member] | Measurement Input, Appraised Value [Member]
Foreclosed assets	$ 50,581	$ 84,100
Foreclosed assets range		(42)
Impaired loans, net	$ 594,956	$ 415,567
Valuation, Market Approach [Member] | Measurement Input, Appraised Value [Member] | Minimum [Member]
Foreclosed assets range	(40)
Impaired loans, net range	(15)	(50)
Valuation, Market Approach [Member] | Measurement Input, Appraised Value [Member] | Maximum [Member]
Foreclosed assets range	(64)
Impaired loans, net range	(64.4)	61.5
Valuation, Income Approach [Member] | Payment Stream [Member]
Impaired loans, net	$ 10,789	$ 95,115

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Note 12 - Fair Value Measurement and Disclosure - Estimated Fair Values of Financial Instruments (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Reported Value Measurement [Member]
Cash and cash equivalents	$ 3,175,182	$ 3,755,817
Time deposits	250,000	250,000
Federal funds sold	1,758,000	939,000
Securities	26,270,643	26,964,062
Net loans	220,221,604	207,035,091
Loans held for sale	208,484	499,375
Accrued interest receivable	812,928	794,449
Mortgage servicing rights	436,376	423,522
Accrued interest payable	6,890	661
FHLB advances	12,857,023	15,105,287
Reported Value Measurement [Member] | Non-Interest Bearing Deposits [Member]
Deposits	11,814,608	11,562,801
Reported Value Measurement [Member] | Interest Bearing Deposits, Liabilities [Member]
Deposits	185,927,881	171,211,823
Estimate of Fair Value Measurement [Member]
Cash and cash equivalents	3,175,182	3,755,817
Time deposits	250,000	250,000
Federal funds sold	1,758,000	939,000
Securities	26,270,643	26,964,062
Net loans	217,146,000	208,823,729
Loans held for sale	208,484	499,375
Accrued interest receivable	812,928	794,449
Mortgage servicing rights	436,376	423,522
Accrued interest payable	6,890	661
FHLB advances	12,799,000	15,080,025
Estimate of Fair Value Measurement [Member] | Non-Interest Bearing Deposits [Member]
Deposits	11,814,608	11,562,801
Estimate of Fair Value Measurement [Member] | Interest Bearing Deposits, Liabilities [Member]
Deposits	186,856,000	171,915,595
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents	3,175,182	3,755,817
Time deposits	250,000	250,000
Federal funds sold	1,758,000	939,000
Securities
Net loans
Loans held for sale
Accrued interest receivable	812,928	794,449
Mortgage servicing rights
Accrued interest payable	6,890	661
FHLB advances
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | Non-Interest Bearing Deposits [Member]
Deposits	11,814,608	11,562,801
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	25,453,506	26,045,675
Net loans
Loans held for sale	208,484	499,375
Accrued interest receivable
Mortgage servicing rights
Accrued interest payable
FHLB advances	12,799,000	15,080,025
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	817,137	918,387
Net loans	217,146,000	208,823,729
Loans held for sale
Accrued interest receivable
Mortgage servicing rights	436,376	423,522
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	$ 186,856,000	$ 171,915,595