10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended December 31, 2019
OR
☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from _______________ to _______________

Commission File No. 000-56049

TEB Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Maryland	83-2040340
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
2290 N Mayfair Road, Wauwatosa, WI	53226
(Address of Principal Executive Offices)	(Zip Code)

414-476-6434

(Registrant’s telephone number)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.

YES ☒   NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES ☒   NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	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 ☒

As of February 12, 2020,  2,624,343 shares of the Registrant’s common stock, par value $0.01 per share, were issued and outstanding.

		Page
Part I. Financial Information
Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets as of December 31, 2019 (Unaudited) and June 30, 2019	1
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended December 31, 2019 and 2018 (Unaudited)	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended December 31, 2019 and 2018 (Unaudited)	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended December 31, 2019 and 2018 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2019 and 2018 (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39
Item 4.	Controls and Procedures	39
Part II. Other Information
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	40
Item 6.	Exhibits	40
	Signature Page	41

Part I Financial Information

Item 1 Financial Statements

TEB BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

As of December 31, 2019 (Unaudited) and June 30, 2019

	December 31, 2019		June 30, 2019
ASSETS
Cash and due from banks	$	4,303,080	$	4,617,976
Federal funds sold		2,360,215		1,012,794
Cash and cash equivalents		6,663,295		5,630,770
Interest bearing deposits in banks		201,993		3,674,015
Available for sale securities - stated at fair value		22,299,909		20,542,118
Loans, less allowance for loan losses of $1,262,472 and $1,293,965 at December 31, 2019 and June 30, 2019, respectively		252,459,953		259,873,403
Loans held for sale		6,171,299		7,079,548
Other real estate owned, net		3,302,148		4,080,401
Premises and equipment, net		8,030,087		8,165,274
Federal Home Loan Bank stock		1,035,000		2,061,000
Accrued interest receivable and other assets		1,373,582		1,141,686
TOTAL ASSETS	$	301,537,266	$	312,248,215
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits
Demand	$	80,807,830	$	77,414,345
Savings and NOW		72,196,715		70,385,843
Certificates of deposit		95,683,611		86,761,271
Total Deposits		248,688,156		234,561,459
Federal Home Loan Bank borrowings		20,500,000		44,200,000
Advance payments by borrowers for property taxes and insurance		236,809		3,197,095
Accrued interest payable and other liabilities		6,852,049		5,882,086
Total Liabilities		276,277,014		287,840,640
STOCKHOLDERS’ EQUITY
Preferred stock ($0.01 par value, 5,000,000 authorized, no shares issued or outstanding as of December 31, 2019 and June 30, 2019, respectively)		—		—
Common stock ($0.01 par value, 20,000,000 authorized, 2,624,343 issued and outstanding as of December 31, 2019 and June 30, 2019)		26,243		26,243
Additional paid in capital		11,319,328		11,319,328
Retained earnings		16,840,148		15,910,369
Accumulated other comprehensive loss		(2,925,467)		(2,848,365)
Total Stockholders’ Equity		25,260,252		24,407,575
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	301,537,266	$	312,248,215

See accompanying notes to condensed consolidated financial statements

1

TEB BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six Months Ended December 31, 2019 and 2018 (Unaudited)

	Three months ended				Six months ended
	December 31,				December 31,
	2019		2018		2019		2018
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	2,837,250	$	2,928,655	$	5,761,686	$	5,860,134
Interest and dividends on investment securities		167,581		177,130		331,080		345,883
Interest on federal funds sold		11,903		6,988		33,616		12,094
Interest on deposits in banks		1,978		515		7,502		1,261
Total Interest Income		3,018,712		3,113,288		6,133,884		6,219,372
INTEREST EXPENSE
Interest on deposits		473,716		371,289		933,952		723,324
Interest on Federal Home Loan Bank borrowings		89,357		266,514		293,298		507,932
Interest on federal funds purchased		19		79		57		100
Total Interest Expense		563,092		637,882		1,227,307		1,231,356
Net interest income before provision for loan losses		2,455,620		2,475,406		4,906,577		4,988,016
Provision for loan losses		—		—		—		—
Net interest income after provision for loan losses		2,455,620		2,475,406		4,906,577		4,988,016
NON-INTEREST INCOME
Service fees on deposits		116,943		124,095		239,548		244,500
Service fees on loans		60,959		94,135		104,333		156,199
Gain on sales of mortgage loans		936,979		287,496		2,187,722		621,782
Income on sale of uninsured products		77,445		65,970		170,512		141,910
Gain on sale of other real estate owned		104,890		—		109,708		—
Other income		5,225		8,837		12,598		16,507
Total Non-Interest Income		1,302,441		580,533		2,824,421		1,180,898
NON-INTEREST EXPENSES
Compensation and benefits		2,041,970		1,821,496		4,191,127		3,641,360
Occupancy		492,766		487,174		982,917		964,114
Advertising		53,422		53,309		134,198		163,579
Data processing services		266,395		298,507		571,814		600,532
FDIC assessment		51,285		118,278		23,826		236,720
Cost of operations for other real estate owned		11,782		19,272		23,096		89,884
Insurance expense		41,600		41,701		81,155		83,816
Professional fees		168,417		70,297		287,487		188,650
Other expenses		268,541		192,506		505,599		387,558
Total Non-Interest Expenses		3,396,178		3,102,540		6,801,219		6,356,213
Income (loss) before income taxes		361,883		(46,601)		929,779		(187,299)
Income tax expense		—		—		—		—
NET INCOME (LOSS)	$	361,883	$	(46,601)	$	929,779	$	(187,299)
Basic income per share	$	0.14		*	$	0.35		*
Diluted income per share	$	0.14		*	$	0.35		*

*     Earnings per share for the three and six months ended December 31, 2018 is not applicable as no shares were outstanding for that period.

See accompanying notes to condensed consolidated financial statements.

2

TEB BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Three and Six Months Ended December 31, 2019 and 2018 (Unaudited)

	For the three months ended				For the six months ended
	December 31,		December 31,		December 31,		December 31,
	2019		2018		2019		2018
Net income (loss)	$	361,883	$	(46,601)	$	929,779	$	(187,299)
Other comprehensive income (loss), net of tax
Unrealized gains/losses on securities
Net unrealized holding gains (losses) arising during period		(87,138)		247,021		30,772		100,965
Tax effect		—		—		—		—
Change in pension obligation		(107,874)		—		(107,874)		—
Tax effect		—		—		—		—
Other comprehensive income (loss), net of tax		(195,012)		247,021		(77,102)		100,965
COMPREHENSIVE INCOME (LOSS)	$	166,871	$	200,420	$	852,677	$	(86,334)

See accompanying notes to condensed consolidated financial statements.

3

TEB BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Three and Six Months Ended December 31, 2019 and 2018 (Unaudited)

								Accumulated
				Additional				Other
	Number of	Common		Paid- In		Retained		Comprehensive
	Shares	Stock		Capital		Earnings		Loss		Total
June 30, 2018 (audited)	—	$	—	$	—	$	16,309,708	$	(2,207,576)	$	14,102,132
Net loss	—		—		—		(140,698)		—		(140,698)
Other comprehensive loss, net of tax	—		—		—		—		(146,056)		(146,056)
September 30, 2018	—		—		—		16,169,010		(2,353,632)		13,815,378
Net loss	—		—		—		(46,601)		—		(46,601)
Other comprehensive income, net of tax	—		—		—		—		247,021		247,021
December 31, 2018	—	$	—	$	—	$	16,122,409	$	(2,106,611)	$	14,015,798
June 30, 2019 (audited)	2,624,343	$	26,243	$	11,319,328	$	15,910,369	$	(2,848,365)	$	24,407,575
Net income	—		—		—		567,896		—		567,896
Other comprehensive income, net of tax	—		—		—		—		117,910		117,910
September 30, 2019	2,624,343		26,243		11,319,328		16,478,265		(2,730,455)		25,093,381
Net income	—		—		—		361,883		—		361,883
Other comprehensive loss, net of tax	—		—		—		—		(195,012)		(195,012)
December 31, 2019	2,624,343	$	26,243	$	11,319,328	$	16,840,148	$	(2,925,467)	$	25,260,252

See accompanying notes to condensed consolidated financial statements.

4

TEB BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended December 31, 2019 and 2018 (Unaudited)

	For the six months ended December 31,
	2019		2018
CASH FLOWS FROM  OPERATING ACTIVITIES
Net income (loss)	$	929,779	$	(187,299)
Adjustments to reconcile net income (loss) to net cash flows from operating activities
Provision for loan losses		—		—
Depreciation		282,449		278,919
Amortization and accretion		29,245		41,593
Origination of mortgage loans held for sale		(150,995,339)		(45,532,436)
Proceeds from sales of mortgage loans held for sale		154,091,310		49,815,774
Gain on sale of mortgage loans held for sale		(2,187,722)		(621,782)
Gain on sale of other real estate owned, net		(109,708)		—
Loss on sale or disposal of assets, net		1,650		—
Changes in assets and liabilities:
Accrued interest receivable and other assets		(231,896)		454,274
Accrued interest payable and other liabilities		862,089		(1,042,560)
Net cash flows provided by operating activities		2,671,857		3,206,483
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities or calls of securities available for sale		348,168		295,322
Purchase of securities available for sale		(2,104,432)		(650,000)
Change in loans		7,276,779		516,245
Changes from redemption (purchase) of FHLB stock		1,026,000		(274,500)
Change in interest bearing deposits in banks		3,472,022		(51,124)
Proceeds from sale of other real estate owned		1,061,484		251,025
Capital expenditures on other real estate owned		(36,852)		(27)
Proceeds from sale of premises and equipment		8,000		—
Purchase of premises and equipment, net		(156,912)		(156,279)
Net cash flows provided by (used in) investing activities		10,894,257		(69,338)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits		14,126,697		(6,658,959)
FHLB advance proceeds		847,200,000		318,550,000
FHLB advance repayments		(870,900,000)		(312,450,000)
Change in advance payments by borrowers for property taxes and insurance		(2,960,286)		(3,250,840)
Net cash flows used in financing activities		(12,533,589)		(3,809,799)
Net Change in Cash and Cash Equivalents		1,032,525		(672,654)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		5,630,770		6,134,146
CASH AND CASH EQUIVALENTS - END OF PERIOD	$	6,663,295	$	5,461,492
SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash paid for interest	$	908,675	$	712,263
Loans transferred to other real estate owned		136,671		418,849

See accompanying notes to condensed consolidated financial statements.

5

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

NOTE 1 – Summary of Significant Accounting Policies

Organization

On April 30, 2019, The Equitable Bank, S.S.B. (the “Bank”) converted to a stock savings bank and is now organized in the mutual holding company structure. The Bank issued all of its outstanding stock to a new holding company, TEB Bancorp, Inc. (the “Company”), which sold 1,309,547 shares of common stock to the public at 10.00 per share, representing 49.9% of its outstanding shares of common stock for gross proceeds of approximately $13.1 million. The net proceeds received were approximately $11.4 million after offering costs. TEB Bancorp, Inc. is organized as a corporation under the laws of the State of Maryland. The Bank utilized $100,000 of proceeds received from the offering as initial capitalization of TEB MHC. TEB MHC has been organized as a mutual holding company under the laws of the State of Wisconsin and owns 1,314,796 shares, or 50.1% of the outstanding common stock of TEB Bancorp, Inc.

The costs of the reorganization and the issuing of the common stock totaling $1,649,899 were deferred and deducted from the sales proceeds of the offering.

The Bank is a state-chartered savings bank providing a full range of financial services. The Bank grants commercial, residential and consumer loans, and accepts deposits from customers primarily in the Metropolitan Milwaukee area, which is in southeastern Wisconsin. The Bank is subject to competition from other financial institutions and nonfinancial institutions providing financial products. Additionally, the Bank is subject to the regulations of certain regulatory agencies and undergoes periodic examination by those regulatory agencies.

All depositors who had liquidation rights with respect to the Bank as of the effective date of the reorganization continue to have such rights solely with respect to the TEB MHC so long as they continue to hold their deposit accounts with the Bank. In addition, all persons who become depositors of the Bank subsequent to the reorganization will have such liquidation rights with respect to TEB MHC.

At December 31, 2019, the significant assets of TEB Bancorp, Inc. were the capital stock of the Bank and a deposit account held at the Bank. The liabilities of TEB Bancorp, Inc. were insignificant. The Company is subject to the financial reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company is subject to regulation and examination by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”).

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of TEB Bancorp, Inc. and its wholly-owned subsidiaries were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto of the Company as of and for the year ended June 30, 2019.

The interim condensed consolidated financial statements of the Company as of December 31, 2019, and for the three and six months ended December 31, 2019 and the condensed consolidated financial statements of the Bank for the three and six months ended December 31, 2018 are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.  Such adjustments are the only adjustments contained in the interim financial statements.  The results of operations for the three and six months

6

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

ended December 31, 2019, are not necessarily indicative of the results to be achieved for the year ending June 30, 2020 or any other period.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements as of and for the periods ending December 31, 2019 and June 30, 2019 include the accounts and operations of TEB Bancorp, Inc. and its wholly-owned subsidiaries, the Bank, Equitable Investment Corp. and Savings Financial Corporation. The unaudited condensed consolidated financial statements for the period ending December 31, 2018 include the accounts and operations of the Bank and its wholly-owned subsidiaries, Equitable Investment Corp. and Savings Financial Corporation. All significant intercompany accounts and transactions have been eliminated in consolidation.

Emerging Growth Company Status

The Jumpstart Our Business Startups Act (the "JOBS Act"), which was signed into law on April 5, 2012, has made numerous changes to the federal securities laws to facilitate access to capital markets. Under the JOBS Act, a company with total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year qualifies as an "emerging growth company". The Company qualifies as an emerging growth company and believes that it will continue to qualify as an emerging growth company.

An emerging growth company may elect to comply with new or amended accounting pronouncements in the same manner as a private company, but must make such election when the company is first required to file a registration statement. Such an election is irrevocable during the period a company is an emerging growth company. The Company has elected to comply with new or amended accounting pronouncements in the same manner as a private company. Accordingly, the financial statements may not be comparable to the financial statements of companies that comply with such new or revised accounting standards.

Use of Estimates

In preparing the unaudited condensed consolidated financial statements in conformity with U.S. GAAP, management of the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the pension actuarial assumptions, and the valuation of deferred tax assets.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash and balances due from banks and federal funds sold, all of which mature within 90 days. The Company maintains amounts due from banks, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

Interest Bearing Deposits in Banks

Interest bearing deposits in banks mature within one year and are carried at cost, which approximates fair value.

7

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

Securities

Available for sale securities are stated at fair value and unrealized holding gains and losses on available for sale securities are reported as accumulated other comprehensive income (loss), net of applicable deferred income tax and adjusted for any applicable valuation allowance, a separate component of equity. Available for sale securities are written down to market value through operations if an impairment of value is deemed other than temporary due to credit issues. Gains or losses on the sale of securities, if any, are determined on the specific identification method. Securities transactions are recorded on the trade date.

Loans

Loans are carried at the unpaid principal balance adjusted for deferred loan fees and costs and charge-offs. Loan origination and commitment fees and certain direct loan origination costs are deferred and the net amounts amortized as an adjustment of the related loan’s yield over the contractual life of the related loan.

Interest on loans is accrued on the unpaid principal balances as earned. Loans are normally placed on nonaccrual status when contractually past due 90 days or more as to interest or principal payments. Additionally, whenever management becomes aware of facts or circumstances that may adversely impact the collectability of principal or interest on a loan, it is management’s practice to place such loan on nonaccrual status immediately, rather than delaying such action until the loan becomes 90 days past due. When a loan is placed on nonaccrual, previously accrued and uncollected interest on such loan is reversed, amortization of related loan fees is suspended, and income is recorded only to the extent that loan payments are subsequently received in cash and a determination has been made that the principal balance of the loan is collectible. If collectability of the principal is in doubt, payments received are applied to loan principal.

A troubled debt restructuring (“TDR”) includes a loan modification where a borrower is experiencing financial difficulty and a concession is granted to that borrower that would not otherwise have been considered except for the borrower’s financial difficulties. All TDRs are classified as impaired loans. TDRs may be on accrual or nonaccrual status based upon the performance of the borrower and management’s assessment of collectability. Loans deemed nonaccrual may return to accrued status based on performance in accordance with terms of the restructuring, generally six months.

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 and the probability of collecting scheduled principal and interest payment when due.

Loans Held for Sale

Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated market value in the aggregate. Net unrealized losses are recognized through a valuation allowance by charges to operations. All sales are made without recourse.

Allowance for Loan Losses

The allowance for loan losses (“ALL”) is established as losses are estimated to have occurred through a provision for loan losses charged to expense. 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 ALL. The ALL consists of specific reserves on certain impaired loans from analyses developed through specific credit allocations for individual loans. The specific reserve relates to all loans for which the ALL is estimated on a loan by loan basis using either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market

8

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

price, or the fair value of the collateral if the loan is collateral dependent. The general reserve is based on the Company’s historical loss experience along with consideration of certain qualitative factors such as (i) changes in the nature, volume, and terms of loans, (ii) changes in lending personnel, (iii) changes in the quality of the loan review function, (iv) changes in nature and volume of past-due, nonaccrual, and/or classified loans, (v) changes in concentration of credit risk, (vi) changes in economic and industry conditions, (vii) changes in legal and regulatory requirements, (viii) unemployment and inflation statistics, and (ix) changes in underlying collateral values.

There are many factors affecting the ALL, some are quantitative while others require qualitative judgment. The ALL reflects management’s best estimate of the probable and inherent losses on loans. The adequacy of the ALL is reviewed and approved by the Company’s Board of Directors. Allocations of the ALL may be made for specific loans, but the entire ALL is available for any loan that, in management’s judgment, should be charged-off.

As an integral part of their examination process, various regulatory agencies review the ALL as well. Such agencies may require that changes in the ALL be recognized when such regulatory credit evaluations differ from those of management based on information available to the regulators at the time of their examinations.

Premises and Equipment, Net

Premises and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization expense is provided on the straight-line method over the estimated useful life of the asset for financial reporting purposes, and the straight-line and accelerated methods for income tax purposes. Amortization of leasehold improvements is provided on the straight-line method over the lesser of the term of the respective lease or the estimated economic life of the improvements.

Other Real Estate Owned, Net

Other real estate owned is initially recorded at the fair market value of the real estate acquired less the estimated costs to sell the real estate at the date title is received, establishing a new cost basis, with any write-down charged to the allowance for loan losses. Costs relating to development or improvement of property are capitalized up to the fair value of the property. Valuations are periodically performed by management and independent third parties and a charge to expense is taken if the carrying value of a property exceeds its fair value less estimated costs to sell. Income and expense related to the operations of other real estate owned is recorded net in “Cost of operations of other real estate owned” as a component of non-interest expenses on the condensed consolidated statements of operations. Gains and losses on the sale of other real estate owned are recorded in “Gain on sale of other real estate owned” as a component of non-interest income in the condensed consolidated statements of operations.

Federal Home Loan Bank Stock

The Bank is a member of the Federal Home Loan Bank (“FHLB”) system. Members are required to own a certain amount of FHLB stock based on the Bank’s level of borrowings from the FHLB and other factors, and may invest in additional amounts of FHLB stock. The Bank’s investment in FHLB of Chicago stock meets the minimum amount required by current regulations and is carried at cost, which approximates fair value. FHLB stock is evaluated quarterly for impairment. Based on management’s evaluation, no impairment has been recorded on these securities. Both cash and stock dividends are reported as income.

Defined Benefit Pension Plan

The Bank has a defined benefit pension plan (the “Plan”) covering substantially all of its employees hired prior to March 31, 2012. The benefits are based on years of service and the employee’s average monthly pay received during the five 

9

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

highest consecutive calendar years in the last 10 years of employment under the Plan. Management contributes annually the amounts necessary to provide for defined benefit payments upon retirement or death as determined by the Plan’s actuary. The Plan was frozen effective March 31, 2012 for all employees. No additional benefits are being accrued for active participants after that date and no new participants will be entered into the Plan.

The Bank records annual amounts relating to the Plan based on calculations that incorporate various actuarial and other assumptions including discount rates, mortality, assumed rates of return, compensation increases, and turnover rates. The Bank reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends where appropriate to do so. The effect of modifications to those assumptions is recorded in accumulated other comprehensive income (loss) and amortized to net periodic pension cost over future periods. The Bank believes that the assumptions utilized in recording its obligations under its plan are reasonable based on its experience and market conditions.

Comprehensive Income (Loss)

U.S. GAAP generally requires that recognized revenue, expenses, gains, and losses be included in earnings. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section and changes in the funded status of the pension plan, such items, along with net income (loss) are components of comprehensive income (loss).

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company recognizes the tax effects from an uncertain tax position in the consolidated financial statements only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized, upon ultimate settlement with the relevant tax authority. The Company recognizes interest and penalties accrued or released related to uncertain tax positions in current income tax expense or benefit.

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Advertising

Advertising costs are accrued and expensed in the period incurred.

10

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

Off-Balance Sheet Financial Instruments

In the ordinary course of business, the Bank has entered into off-balance-sheet financial instruments consisting of commitments to extend credit, commitments under credit card arrangements, commercial letters of credit and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they are funded or related fees are incurred or received.

Going Concern

On February 15, 2012, the Board of Directors of the Bank executed a Stipulation and Consent to the Issuance of an Amended Consent Order (“Amended Order”), jointly issued by the Federal Deposit Insurance Corporation (“FDIC”) and the WDFI. Following completion of the Bank's reorganization and capital raise as of April 30, 2019, the Bank's capital levels were above the required 8% for Tier 1 and 12% for Risk Based Capital per the Amended Order. The Amended Order was terminated by the FDIC and the WDFI on June 19, 2019. On June 14, 2019, the Bank entered into an agreement with the WDFI and the FDIC. The Bank's current regulatory capital results and requirements are outlined in Note 13 - "Regulatory Capital Requirements."

The condensed consolidated financial statements were prepared on a going concern basis as of December 31, 2019 and June 30, 2019. There is no longer substantial doubt as to the Company’s ability to continue as a going concern for a reasonable period of time from the date of the condensed consolidated financial statements.

Subsequent Events

Management has reviewed the Company's operations for potential disclosure or financial statement impacts related to events occurring after December 31, 2019, but prior to the release of these financial statements. Based on the results of this review, no subsequent event disclosure or financial statement impacts to these financial statements are required as of February 12, 2020.

Reclassification

Certain December 31, 2018 amounts have been reclassified to conform to the December 31, 2019 presentation. The reclassification had no effect on reported amounts of consolidated net loss or stockholders’ equity.

NOTE 2 – Recent Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) issues Accounting Standards Updates (“ASU”s) to the FASB Accounting Standards Codification (“ASC”). This section provides a summary description of recent ASUs that had or that management expects may have an impact on the consolidated financial statements issued upon adoption.  The Company is classified as an emerging growth company and has elected 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. Effective dates reflect this election.

Recently Adopted Accounting Pronouncements

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. Under the new guidance, the Company is no longer required to disclose the fair value of financial instruments measured at amortized cost. The Company has early adopted

11

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

this ASU beginning July 1, 2019. This ASU did not have a material impact on the Company’s consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” ASU 2017-07 applies to all entities that offer employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715, Compensation – Retirement Benefits. The amendments require that an employer disaggregate the service cost component from the other components of net benefit cost, with all updates being applied retrospectively. As the Company has historically not had any service cost component within net periodic pension cost, the impact of this ASU on the Company’s consolidated financial statements is not material.

Recently Issued, But Not Yet Effective Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Topic 842 was subsequently amended by ASU 2018-10, “Codification Improvements to Topic 842, Leases” and ASU 2018-11, “Leases (Topic 842)”. The amendments in this update increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. For leases with a term of 12 months or less, the amendments permit lessees to make an accounting policy election by class of underlying assets not to recognize lease assets and lease liabilities. For finance leases, the amendments in this update require a lessee to (1) recognize a right-of-use asset and lease liability, initially measured at the present value of the lease payments, on the balance sheet; (2) recognize interest on the lease liability separately from amortization of the right-of-use asset in the statement of operations; (3) classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the least liability and variable lease payments within operating activities in the statement of cash flows. For operating leases, the amendments in this update require a lessee to (1) recognized a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on the balance sheet; (2) recognized a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis; (3) classify all cash payments within operating activities in the statement of cash flows. On October 16, 2019, the FASB approved the proposal to delay the effective date for this standard for private and all other entities. Due to the Company’s extended transition period election, the amendments are effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company’s leases are operating leases and ASU 2016-02 will require the Company to add them to its consolidated balance sheet. The Company’s operating leases are predominately related to real estate. Management is currently evaluating other impacts this guidance will have on the consolidated results of operations, financial presentation, and cash flows of the Company.

In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606); Narrow-Scope Improvements and Practical Expedients.” ASU 2016-12 is intended to address certain specific issues identified by the FASB-IASB Joint Transition Resource Group for Revenue Recognition with respect to ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The updates are effective on a retrospective basis for the annual periods beginning after December 15, 2018, and interim periods beginning after December 15, 2019. Based on management’s evaluation under the current guidance, we estimate that substantially all of our interest income and non-interest income will not be impacted by the adoption of these standards, because either the revenue from those contracts with customers is covered by other guidance in U.S. GAAP, or the anticipated revenue recognition outcomes with the adoption of these standards will likely be similar to our current revenue recognition practices. Management has evaluated its non-interest revenue streams, including deposit related fees, service charges, and income on the sale of uninsured products to determine the potential impact of the adoption on the Company’s consolidated financial statements and expects no material changes. Management expects that the adoption of ASUs 2016-12 and 2014-09 will have no material effect on the consolidated results of operations, financial position, or cash flows of the Company.

12

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments.” Topic 326 was subsequently amended by ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses; ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses”; and ASU 2019-05, “Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief.” This ASU replaces the current incurred loss impairment methodology with a methodology that reflected expected credit losses measured at amortized cost and certain other instruments, including loans, held-to-maturity debt securities, net investments in leases, and off-balance-sheet credit exposures. On October 16, 2019, the FASB approved the proposal to delay the effective date for this standard for private and all other entities. Due to the Company’s extended transition period election, the update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Management is currently evaluating the potential impact on its consolidated results of operations, financial position, and cash flows; however, due to the significant differences in the revised guidance from existing U.S. GAAP, the implementation of this guidance may result in material changes in the Company’s accounting for credit losses on financial instruments.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 320) – Classification of Certain Cash Receipts and Cash Payments.” This ASU adds or clarifies guidance on eight cash flow issues. The update is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Earlier application is permitted. Management is currently evaluating the potential impact of the provisions of ASU 2016-15, but believes that its adoption will not have a material impact on the consolidated results of operations, financial position, or cash flows of the Company.

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.” ASU 2017-08 amends guidance on the amortization period of premiums on certain purchased callable debt securities. The amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. ASU 2017-08 is effective for annual periods beginning after December 15, 2019 with early adoption permitted. Management is currently evaluating the potential impact of the new standard on the consolidated results of operations, financial position, and cash flows of the Company.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820, including the removal, modification to, and addition of certain disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. This ASU has a minor impact to and simplifies the Company’s fair value disclosures, and no additional impact to the consolidated financial statements is expected.

In August 2018, the FASB issued ASU No. 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans.” ASU 2018-14 applies to all employers that sponsor defined benefit pension or other postretirement plans. The amendments require that an employer disclose an explanation of the reasons for significant gains and losses related to changes in the net benefit obligation for the period. Multiple disclosure requirements are also removed with this amendment, including: (1) the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year; (2) the amount and timing of plan assets expected to be returned to the employer; (3) related party disclosures about significant transactions between the employer or related parties and the plan; and (4) the effects of a one-percentage-point change in assumed health care cost trend rates on the aggregate of the service and interest cost components of net periodic benefit costs. Additional disclosure requirements contained within Subtopic 715-20 are also clarified. The amendments are effective for fiscal years ending after December 15, 2021. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the consolidated results of operations, financial position, or cash flows of the Company.

13

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

NOTE 3 – Earnings Per Share

Earnings per share is based on net income divided by the weighted average number of shares outstanding during the period. Earnings per share is presented for the three and six month periods ended December 31, 2019 and 2018.

	Three Months Ended		Three Months Ended	Six Months Ended		Six Months Ended
	December 31, 2019		December 31, 2018	December 31, 2019		December 31, 2018
Net income	$	361,883	*	$	929,779	*
Basic potential common shares
Weighted average shares outstanding		2,624,343	*		2,624,343	*
Basic weighted average shares outstanding		2,624,343	*		2,624,343	*
Diluted potential common shares		—	*		—	*
Diluted weighted average shares outstanding		2,624,343	*		2,624,343	*
Basic earnings per share	$	0.14	*	$	0.35	*
Diluted earnings per share	$	0.14	*	$	0.35	*

*     Earnings per share for the three and six months ended December 31, 2018 is not applicable as no shares were outstanding for that period.

NOTE 4 – Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer liabilities in an orderly transaction between market participants at the measurement date (exit price) and establishes a framework for measuring fair value.

To determine fair value the Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company is able to classify fair value balances based on the observability of those inputs. The guidance establishes a fair value hierarchy that prioritizes the inputs 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) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

>     Level 1 - Fair value is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as listed equities and U.S. Treasury securities.

>     Level 2 - Fair value is based upon quoted prices for similar, but not identical, assets and liabilities in active markets, and other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. This also includes quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data.

>     Level 3 - Fair value is based upon financial models using primarily unobservable inputs. Unobservable inputs reflect the Company's own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

14

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Assets

Available for sale securities Where quoted prices for securities are available in an active market, those securities are classified within Level 1 of the valuation hierarchy. If such quoted market prices are not available, then fair values are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Examples of securities with similar characteristics, which would generally be classified within Level 2 of the valuation hierarchy, include certain AAA-rated U.S. government sponsored agency securities, municipal obligations, and mortgage-backed securities. A security using financial models based upon primarily unobservable inputs, such as commercial paper, would generally be classified within Level 3 of the valuation hierarchy.

Loans The Company does not record loans at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses may be established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment. The fair value of impaired loans is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the collateral exceeds the recorded investments in such loans and for which carrying amount will remain at amortized cost. Impaired loans where an allowance is established based on the fair value of collateral or expected cash flows require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, less selling costs, the Company records the impaired loan as a non-recurring Level 3 valuation. At December 31, 2019 and June 30, 2019, substantially all of the impaired loans were evaluated based on the fair value of the collateral with adjustments to their appraised values ranging from 5%to 15% for selling costs.

Other real estate owned, net Assets on which the underlying collateral has been repossessed are initially recorded at the fair market value of the real estate acquired less estimated costs to sell, establishing a new cost basis.

Subsequently, other real estate owned is carried at the lower of carrying value 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, less selling costs, the Company records the repossessed asset as a non-recurring Level 3 valuation. At December 31, 2019 and June 30, 2019 substantially all of the other real estate owned was evaluated based on the fair value of the collateral with adjustments to their appraised values ranging from 5%  to  15% for selling costs.

The following tables set forth, by level within the fair value hierarchy, the Company's financial assets that were accounted for at fair value on a recurring and non-recurring basis as of December 31, 2019 and June 30, 2019, respectively. According to fair value guidance, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

15

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

	Fair Value as of December 31, 2019
	Level 1		Level 2		Level 3		Total
Securities classified as available for sale:
Obligations of states and political subdivisions	$	—	$	19,994,689	$	—	$	19,994,689
Mortgage-backed securities		—		1,487,715		—		1,487,715
Certificates of deposit		—		817,505		—		817,505
Total	$	—	$	22,299,909	$	—	$	22,299,909

	Fair Value as of June 30, 2019
	Level 1		Level 2		Level 3		Total
Securities classified as available for sale:
Obligations of states and political subdivisions	$	—	$	18,878,383	$	—	$	18,878,383
Mortgage-backed securities		—		1,106,138		—		1,106,138
Certificates of deposit		—		557,597		—		557,597
Total	$	—	$	20,542,118	$	—	$	20,542,118

Assets measured at fair value on non-recurring basis:

	Fair Value as of December 31, 2019
	Level 1		Level 2		Level 3		Total
Loans, net	$	—	$	—	$	211,112	$	211,112
Other real estate owned, net		—		—		3,302,148		3,302,148
Total	$	—	$	—	$	3,513,260	$	3,513,260

	Fair Value as of June 30, 2019
	Level 1		Level 2		Level 3		Total
Loans, net	$	—	$	—	$	274,750	$	274,750
Other real estate owned, net		—		—		4,080,401		4,080,401
Total	$	—	$	—	$	4,355,151	$	4,355,151

NOTE 5 – Cash and Due From Banks

The Bank is required to maintain vault cash and reserve balances with the Federal Reserve Bank of Chicago, based upon a percentage of deposits. These requirements were $1.9 million at December 31, 2019 and $1.5 million at June 30, 2019.

16

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

NOTE 6 – Available for Sale Securities

Amortized costs and fair values of available for sale securities are summarized as follows:

	December 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
Obligations of states and political subdivisions	$	19,825,512	$	234,343	$	65,166	$	19,994,689
Mortgage-backed securities		1,441,070		46,645		—		1,487,715
Certificates of deposit		800,000		17,505		—		817,505
	$	22,066,582	$	298,493	$	65,166	$	22,299,909

	June 30, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
Obligations of states and political subdivisions	$	18,719,370	$	217,627	$	58,614	$	18,878,383
Mortgage-backed securities		1,065,193		40,945		—		1,106,138
Certificates of deposit		555,000		2,597		—		557,597
	$	20,339,563	$	261,169	$	58,614	$	20,542,118

The following tables present the portion of the Company's available for sale securities portfolio which has gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position:

	December 31, 2019
	Continuous Unrealized				Continuous Unrealized
	Losses Existing for Less				Losses Existing for 12 Months
	Than 12 Months				or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Obligations of states and political subdivisions	$	1,573,342	$	23,737	$	1,095,636	$	41,429	$	2,668,978	$	65,166

Management does not believe any individual unrealized loss as of December 31, 2019 represents other than temporary impairment. The Bank holds $1.1 million, comprised of four securities, in obligations of states and political subdivisions, at December 31, 2019 that have an unrealized loss existing for 12 months or greater. Management believes the temporary impairment in fair value was caused by market fluctuations in interest rates. Although these securities are classified as available for sale, management does not have the intent to sell the security and it is more likely than not it will be able to hold the security through a recovery period or until maturity.

	June 30, 2019
	Continuous Unrealized				Continuous Unrealized
	Losses Existing for Less				Losses Existing for 12 Months
	Than 12 Months				or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Obligations of states and political subdivisions	$	208,583	$	22	$	2,935,133	$	58,592	$	3,143,716	$	58,614

Management does not believe any individual unrealized loss as of June 30, 2019 represents other than temporary impairment. The Bank holds $2.9 million, comprised of 12 securities, in obligations of states and political subdivisions at June 30, 2019 that have an unrealized loss existing for 12 months or greater. Management believes the temporary

17

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

impairment in fair value was caused by market fluctuations in interest rates. Although these securities are classified as available for sale, management does not have the intent to sell the security and it is more likely than not it will be able to hold the security through a recovery period or until maturity.

The amortized cost and fair value of available for sale securities as of December 31, 2019 are shown below by contractual maturity. Expected maturities of mortgage-backed securities will differ from contractual maturities since the anticipated maturities are not readily determinable.

	Amortized
	Cost		Fair Value
Due in one year or less	$	2,053,760	$	2,057,417
Due after one year through 5 years		10,818,717		10,929,129
Due after 5 years through 10 years		6,083,035		6,147,269
Due after 10 years		1,670,000		1,678,379
Subtotal		20,625,512		20,812,194
Mortgage backed securities
Due after one year through 5 years		1,015,619		1,058,723
Due after 5 years through 10 years		425,451		428,992
Total	$	22,066,582	$	22,299,909

During the three months ended December 31, 2019 and 2018, the Bank did not sell any available for sale securities. The Bank pledged $0 and $7,100,000 of available for sale securities at December 31, 2019 and June 30, 2019, respectively, as collateral on public deposits and for other purposes as required or permitted by law.

NOTE 7 – Loans and Allowance for Loan Losses

Major classifications of loans are as follows:

	December 31, 2019		June 30, 2019
Construction, land, development	$	7,242,065	$	4,318,845
1-4 family owner occupied		111,606,950		124,845,322
1-4 family non-owner occupied		20,152,740		20,968,812
Multifamily		77,933,467		73,246,392
Commercial owner occupied		8,198,761		8,508,011
Commercial non-owner occupied		19,265,342		19,502,545
Consumer and installment loans		9,323,100		9,777,441
Total loans		253,722,425		261,167,368
Less:
Allowance for loan losses		(1,262,472)		(1,293,965)
Loans, net	$	252,459,953	$	259,873,403

18

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

Non-performing loans are as follows:

	December 31, 2019		June 30, 2019
Nonaccrual Loans	$	1,112,843	$	1,524,868
Total non-performing loans	$	1,112,843	$	1,524,868
Restructured loans, accruing	$	—	$	—
Total impaired loans	$	1,112,843	$	1,524,868

19

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

Impaired loans are as follows as of and for the following periods ended:

	December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
With related allowance recorded
Recorded investment	$	—	$	97,774	$	—	$	—	$	191,014	$	—	$	108,728	$	397,516
Unpaid principal balance		—		97,774		—		—		191,014		—		108,728		397,516
Related allowance		—		43,470		—		—		76,086		—		66,848		186,404
With no related allowance recorded
Recorded investment	$	—	$	715,327	$	—	$	—	$	—	$	—	$	—	$	715,327
Unpaid principal balance		—		715,327		—		—		—		—		—		715,327
Related allowance		—		—		—		—		—		—		—		—
Total
Recorded investment	$	—	$	813,101	$	—	$	—	$	191,014	$	—	$	108,728	$	1,112,843
Unpaid principal balance		—		813,101		—		—		191,014		—		108,728		1,112,843
Related allowance		—		43,470		—		—		76,086		—		66,848		186,404
	Three Months Ended December 31, 2019
Average recorded balance	$	—	$	875,987	$	—	$	—	$	191,651	$	—	$	122,114	$	1,189,752
																—
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		—		4,012		—		—		1,079		—		—		5,091
Total interest on impaired loans	$	—	$	4,012	$	—	$	—	$	1,079	$	—	$	—	$	5,091
	Six Months Ended December 31, 2019
Average recorded balance	$	—	$	1,070,070	$	2,829	$	—	$	192,294	$	—	$	123,339	$	1,388,532
																—
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		—		8,803		298		—		4,382		—		—		13,483
Total interest on impaired loans	$	—	$	8,803	$	298	$	—	$	4,382	$	—	$	—	$	13,483

	June 30, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
With related allowance recorded
Recorded investment	$	—	$	70,608	$	—	$	—	$	193,601	$	—	$	113,856	$	378,065
Unpaid principal balance		—		70,608		—		—		193,601		—		113,856		378,065
Related allowance		—		5,772		—		—		44,564		—		52,979		103,315
With no related allowance recorded
Recorded investment	$	—	$	1,132,648	$	—	$	—	$	—	$	—	$	14,155	$	1,146,803
Unpaid principal balance		—		1,132,648		—		—		—		—		14,155		1,146,803
Related allowance		—		—		—		—		—		—		—		—
Total
Recorded investment	$	—	$	1,203,256	$	—	$	—	$	193,601	$	—	$	128,011	$	1,524,868
Unpaid principal balance		—		1,203,256		—		—		193,601		—		128,011		1,524,868
Related allowance		—		5,772		—		—		44,564		—		52,979		103,315
Average recorded balance	$	19,198	$	865,338	$	21,509	$	—	$	196,182	$	—	$	133,467	$	1,235,694
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		353		19,352		288		—		7,917		—		2,894		30,804
Total interest on impaired loans	$	353	$	19,352	$	288	$	—	$	7,917	$	—	$	2,894	$	30,804

20

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

	December 31, 2018
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
With related allowance recorded
Recorded investment	$	—	$	70,608	$	—	$	—	$	196,135	$	—	$	131,268	$	398,011
Unpaid principal balance		—		70,608		—		—		196,135		—		131,268		398,011
Related allowance		—		4,809		—		—		117,498		—		70,391		192,698
With no related allowance recorded
Recorded investment	$	—	$	889,964	$	22,993	$	—	$	—	$	—	$	7,601	$	920,558
Unpaid principal balance		—		889,964		22,993		—		—		—		7,601		920,558
Related allowance		—		—		—		—		—		—		—		—
Total
Recorded investment	$	—	$	960,572	$	22,993	$	—	$	196,135	$	—	$	138,869	$	1,318,569
Unpaid principal balance		—		960,572		22,993		—		196,135		—		138,869		1,318,569
Related allowance		—		4,809		—		—		117,498		—		70,391		192,698
	Three Months Ended December 31, 2018
Average recorded balance	$	—	$	728,723	$	11,496	$	—	$	196,335	$	—	$	136,350	$	1,072,904
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		3,531		1,947		348		—		1,078		—		1,000		7,904
Total interest on impaired loans	$	3,531	$	1,947	$	348	$	—	$	1,078	$	—	$	1,000	$	7,904
	Six Months Ended December 31, 2018
Average recorded balance	$	21,843	$	719,614	$	29,552	$	—	$	197,009	$	—	$	136,347	$	1,104,365
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		3,531		15,063		348		—		3,162		—		1,175		23,279
Total interest in impaired loans	$	3,531	$	15,063	$	348	$	—	$	3,162	$	—	$	1,175	$	23,279

Loans are individually evaluated for impairment once a weakness or adverse trend is identified that may jeopardize the repayment of the loan in accordance with the terms of the loan.

The following are the Company's risk rating definitions:

Pass: Loans in this category are to persons or entities that span from having financial characteristics of unquestioned strength to entities that have potential risks that if left uncorrected could at some point result in deterioration of the Bank’s credit position. Loans in this category are rated “1” through “4” with the lower risk being identified with a lower numerical rating. General characteristics that are monitored include borrower net worth, liquidity and entity profitability.

Special Mention: Loans in this category contain some weakness or potential weakness that if left uncorrected may result in the deterioration of the repayment capacity. Loans in this category are rated as a “5”.

Substandard: Loans in this category exhibit the same characteristics as “5” rated credits and are inadequately protected by the current net worth and paying capacity of the obligor and/or of the collateral pledged as security for the asset. Loans in this category are rated as a “6”.

Real Estate in Judgement: Loans in this category have been placed in non-accrual and the Bank has taken legal action to preserve its position. Loans in this category are rated as a “7”.

21

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

The following is a summary of loans by risk rating:

	December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
1-4	$	7,242,065	$	110,793,849	$	20,152,740	$	77,933,467	$	8,007,747	$	11,301,175	$	9,214,372	$	244,645,415
5		—		—		—		—		—		7,964,167		—		7,964,167
6		—		579,603		—		—		191,014		—		32,559		803,176
7		—		233,498		—		—		—		—		76,169		309,667
Total	$	7,242,065	$	111,606,950	$	20,152,740	$	77,933,467	$	8,198,761	$	19,265,342	$	9,323,100	$	253,722,425

	June 30, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
1-4	$	4,318,845	$	123,642,066	$	20,968,812	$	73,246,392	$	8,314,410	$	11,382,336	$	9,649,430	$	251,522,291
5		—		—		—		—		—		8,120,209		—		8,120,209
6		—		895,442		—		—		193,601		—		128,011		1,217,054
7		—		307,814		—		—		—		—		—		307,814
Total	$	4,318,845	$	124,845,322	$	20,968,812	$	73,246,392	$	8,508,011	$	19,502,545	$	9,777,441	$	261,167,368

The following is a summary of past due loans:

	December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
30‑59 days, accruing	$	35,697	$	1,887,777	$	58,833	$	—	$	—	$	25,871	$	50,118	$	2,058,296
60‑89 days, accruing		—		908,130		—		—		—		—		5,312		913,442
90 days & over or nonaccrual		—		813,101		—		—		191,014		—		108,728		1,112,843
Total	$	35,697	$	3,609,008	$	58,833	$	—	$	191,014	$	25,871	$	164,158	$	4,084,581

	June 30, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
30‑59 days, accruing	$	—	$	2,129,016	$	103,706	$	—	$	—	$	—	$	72,482	$	2,305,204
60‑89 days, accruing		—		450,183		—		—		—		—		25,220		475,403
90 days & over or nonaccrual		—		1,203,256		—		—		193,601		—		128,011		1,524,868
Total	$	—	$	3,782,455	$	103,706	$	—	$	193,601	$	—	$	225,713	$	4,305,475

Troubled Debt Restructurings (“TDRs”) involve the granting of some concession to a distressed borrower resulting in a loan modification such as; payment schedule changes, interest rate reductions, or principal charge-offs. There were no new TDRs during the six months ending December 31, 2019. There were also no TDRs that defaulted during the period that were modified within the previous six months as of December 31, 2019. There were no TDRs as of December 31, 2019 and June 30, 2019.

Loans that have previously been restructured in a troubled debt restructuring and are no longer impaired based on the terms specified in their restructuring agreement and are now at a rate equal to or greater than a rate the Bank is willing to accept for a loan with comparable risk are transferred out of TDR status. No loans were transferred out of TDR status during 2019.

22

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

The allowance for loan losses reflected in the accompanying condensed consolidated financial statements represents the allowance available to absorb probable and inherent loan losses in the loan portfolio. An analysis of changes in the allowance is presented in the following tabulation for the three and six months ended December 31, 2019 and 2018 and the year ended June 30, 2019:

	Three Months Ended December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Unallocated		Total
Allowance
Balance at 10/1/19	$	5,670	$	56,804	$	26,027	$	111,112	$	91,077	$	773,186	$	72,508	$	150,290	$	1,286,674
Charge-offs		—		(18,846)		—		—		—		—		(32,012)		—		(50,858)
Recoveries		—		4,820		—		—		—		—		21,836		—		26,656
Provision		5,193		57,197		(3,859)		5,788		(10,987)		36,536		23,682		(113,550)		—
Balance at 12/31/19	$	10,863	$	99,975	$	22,168	$	116,900	$	80,090	$	809,722	$	86,014	$	36,740	$	1,262,472
	Six Months Ended December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial				Not
	Land,		Owner		Non-Owner				Owner-		Non-Owner				Specifically
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Allocated		Total
Allowance
Balance at 6/30/19	$	4,319	$	67,593	$	26,630	$	109,870	$	61,193	$	738,366	$	70,058	$	215,936	$	1,293,965
Charge-offs		—		(18,846)		—		—		—		—		(39,838)		—		(58,684)
Recoveries		—		5,155		—		—		—		—		22,036		—		27,191
Provision		6,544		46,073		(4,462)		7,030		18,897		71,356		33,758		(179,196)		—
Balance at 12/31/19	$	10,863	$	99,975	$	22,168	$	116,900	$	80,090	$	809,722	$	86,014	$	36,740	$	1,262,472
Allowance
Ending balance individually evaluated for impairment	$	—	$	43,470	$	—	$	—	$	76,086	$	—	$	66,848	$	—	$	186,404
Ending balance collectively evaluated for impairment		10,863		56,505		22,168		116,900		4,004		809,722		19,166		36,740		1,076,068
Ending balance	$	10,863	$	99,975	$	22,168	$	116,900	$	80,090	$	809,722	$	86,014	$	36,740	$	1,262,472
Loans
Ending balance individually evaluated for impairment	$	—	$	813,101	$	—	$	—	$	191,014	$	—	$	108,728	$	—	$	1,112,843
Ending balance collectively evaluated for impairment		7,242,065		110,793,849		20,152,740		77,933,467		8,007,747		19,265,342		9,214,372		—		252,609,582
Total loans	$	7,242,065	$	111,606,950	$	20,152,740	$	77,933,467	$	8,198,761	$	19,265,342	$	9,323,100	$	—	$	253,722,425
Less allowance	$	10,863	$	99,975	$	22,168	$	116,900	$	80,090	$	809,722	$	86,014	$	36,740	$	1,262,472
Total loans, net	$	7,231,202	$	111,506,975	$	20,130,572	$	77,816,567	$	8,118,671	$	18,455,620	$	9,237,086	$	(36,740)	$	252,459,953

23

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

	June 30, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial				Not
	Land,		Owner		Non-Owner				Owner-		Non-Owner				Specifically
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Allocated		Total
Allowance
Balance at 6/30/18	$	4,758	$	7,300	$	71,053	$	71,101	$	131,906	$	925,355	$	98,096	$	14,590	$	1,324,159
Charge-offs		—		—		(44,534)		—		—		—		(15,809)		—		(60,343)
Recoveries		—		28,735		—		—		—		—		1,414		—		30,149
Provision		(439)		31,558		111		38,769		(70,713)		(186,989)		(13,643)		201,346		—
Balance at 6/30/19	$	4,319	$	67,593	$	26,630	$	109,870	$	61,193	$	738,366	$	70,058	$	215,936	$	1,293,965
Allowance
Ending balance individually evaluated for impairment	$	—	$	5,772	$	—	$	—	$	44,564	$	—	$	52,979	$	—	$	103,315
Ending balance collectively evaluated for impairment		4,319		61,821		26,630		109,870		16,629		738,366		17,079		215,936		1,190,650
Ending balance	$	4,319	$	67,593	$	26,630	$	109,870	$	61,193	$	738,366	$	70,058	$	215,936	$	1,293,965
Loans
Ending balance individually evaluated for impairment	$	—	$	1,203,256	$	—	$	—	$	193,601	$	—	$	128,011	$	—	$	1,524,868
Ending balance collectively evaluated for impairment		4,318,845		123,642,066		20,968,812		73,246,392		8,314,410		19,502,545		9,649,430		—		259,642,500
Total loans	$	4,318,845	$	124,845,322	$	20,968,812	$	73,246,392	$	8,508,011	$	19,502,545	$	9,777,441	$	—	$	261,167,368
Less allowance	$	4,319	$	67,593	$	26,630	$	109,870	$	61,193	$	738,366	$	70,058	$	215,936	$	1,293,965
Total loans, net	$	4,314,526	$	124,777,729	$	20,942,182	$	73,136,522	$	8,446,818	$	18,764,179	$	9,707,383	$	(215,936)	$	259,873,403

24

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

	Three Months Ended December 31, 2018
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Unallocated		Total
Allowance
Balance at 10/1/18	$	4,958	$	6,151	$	24,542	$	71,120	$	131,113	$	905,405	$	111,323	$	47,198	$	1,301,810
Charge-offs		—		—		(14,042)		—		—		—		(3)		—		(14,045)
Recoveries		—		6,744		—		—		—		—		503		—		7,247
Provision		(1,738)		12,955		18,034		39,984		3,175		(23,608)		(4,115)		(44,687)		—
Balance at 12/31/18	$	3,220	$	25,850	$	28,534	$	111,104	$	134,288	$	881,797	$	107,708	$	2,511	$	1,295,012
	Six Months Ended December 31, 2018
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial				Not
	Land,		Owner		Non-Owner				Owner-		Non-Owner				Specifically
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Allocated		Total
Allowance
Balance at 6/30/18	$	4,758	$	7,300	$	71,053	$	71,101	$	131,906	$	925,355	$	98,096	$	14,590	$	1,324,159
Charge-offs		—		—		(44,534)		—		—		—		(2,211)		—		(46,745)
Recoveries		—		16,784		—		—		—		—		814		—		17,598
Provision		(1,538)		1,766		2,015		40,003		2,382		(43,558)		11,009		(12,079)		—
Balance at 12/31/18	$	3,220	$	25,850	$	28,534	$	111,104	$	134,288	$	881,797	$	107,708	$	2,511	$	1,295,012
Allowance
Ending balance individually evaluated for impairment	$	—	$	4,809	$	—	$	—	$	117,498	$	—	$	70,391	$	—	$	192,698
Ending balance collectively evaluated for impairment		3,220		21,041		28,534		111,104		16,790		881,797		37,317		2,511		1,102,314
Ending balance	$	3,220	$	25,850	$	28,534	$	111,104	$	134,288	$	881,797	$	107,708	$	2,511	$	1,295,012
Loans
Ending balance individually evaluated for impairment	$	—	$	960,572	$	22,993	$	—	$	196,135	$	—	$	138,869	$	—	$	1,318,569
Ending balance collectively evaluated for impairment		3,220,671		123,768,658		22,292,226		74,069,572		8,394,869		20,782,399		10,511,753		—		263,040,148
Total loans	$	3,220,671	$	124,729,230	$	22,315,219	$	74,069,572	$	8,591,004	$	20,782,399	$	10,650,622	$	—	$	264,358,717
Less allowance	$	3,220	$	25,850	$	28,534	$	111,104	$	134,288	$	881,797	$	107,708	$	2,511	$	1,295,012
Total loans, net	$	3,217,451	$	124,703,380	$	22,286,685	$	73,958,468	$	8,456,716	$	19,900,602	$	10,542,914	$	(2,511)	$	263,063,705

NOTE 8 – Loan Servicing

The unpaid principal balance of loans serviced for others, which is not included in the condensed consolidated financial statements, was $2,717,538 and $2,828,576 at December 31, 2019 and June 30, 2019, respectively. The Bank maintained custodial balances in the amount of $0 at December 31, 2019 and June 30, 2019, respectively, in connection with the foregoing loan servicing.

25

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

NOTE 9 – Borrowings

Borrowings consist of the following:

	December 31, 2019		June 30, 2019
FHLB fixed rate advance (2.45%, matured 7/1/19)	$	—	$	7,500,000
FHLB fixed rate advance (2.43%, matured 7/2/19)		—		15,000,000
FHLB fixed rate advance (2.45%, matured 7/3/19)		—		5,000,000
FHLB fixed rate advance (2.43%, matured 7/3/19)		—		8,000,000
FHLB fixed rate advance (2.649%, matured 7/23/19)		—		2,500,000
FHLB fixed rate advance (2.649%, matured 7/24/19)		—		3,100,000
FHLB fixed rate advance (2.647%, matured 7/25/19)		—		3,100,000
FHLB fixed rate advance (1.72%, matures 1/2/20)		4,000,000		—
FHLB fixed rate advance (1.72%, matures 1/3/20)		7,500,000		—
FHLB fixed rate advance (1.72%, matures 1/6/20)		3,000,000		—
FHLB fixed rate advance (1.74%, matures 1/7/20)		1,000,000		—
FHLB fixed rate advance (1.74%, matures 1/7/20)		500,000
FHLB fixed rate advance (1.72%, matures 1/8/20)		4,500,000		—
	$	20,500,000	$	44,200,000

The Bank has a master contract agreement with the FHLB, which provides for borrowing up to the maximum $125,769,661 at December 31, 2019. The FHLB provides both fixed and floating rate advances. Within the master contract agreement, the Bank also has an open line of credit with the FHLB with a variable interest rate. There were $0 outstanding advances on the open line of credit as of December 31, 2019 and June 30, 2019.

Additionally, the Bank had $20,500,000 and $44,200,000 outstanding in term advances at December 31, 2019 and June 30, 2019, respectively. The advances are collateralized by a security agreement pledging a majority of the Bank’s one- to four-family and multifamily mortgages.

The Bank has an agreement with U.S. Bank, which provides for borrowing up to the maximum of $5,000,000, at December 31, 2019 and June 30, 2019. There were no amounts outstanding as of December 31, 2019 or June 30, 2019.

NOTE 10 – Income Taxes

The Company recognized no income tax expense for each of the three and six months ended December 31, 2019 and 2018. At the end of each interim period, management estimates the effective tax rate expected to be applicable for the full fiscal year and this rate is applied to the results for the year to date period, and adjusted for any items that are considered discrete in accordance with ASC 740‑270. The primary difference between the statutory tax rate and the effective rate for the period ending December 31, 2019 would be the anticipated change in valuation allowance. Management records a valuation allowance for deferred tax assets that are more likely than not to not be realized.

NOTE 11 – Defined Benefit Pension Plan

The Plan covers substantially all employees hired prior to March 31, 2012. The benefits are based on years of service and the employee’s average monthly pay received during the five highest consecutive calendar years in the last 10 years of employment under the Plan. Management contributes annually the amounts necessary to provide for defined benefit payments upon retirement or death as determined by the Plan’s actuary. The defined benefit pension plan was frozen effective March 31, 2012 for all employees. No additional benefits are being accrued for active participants after this date, and no new participants will be entered into the Plan.

26

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

In accordance with accounting guidance for defined benefit plans, the Bank recognizes the funded status of defined benefit pension and other post-retirement plans as a net asset or liability on its consolidated balance sheet.

The Bank recognized pension income of $21,174 and $42,348 for the three and six months ended December 31, 2019, respectively, and $25,422 and $63,555 for the three and six months ended December 31, 2018, respectively.

The Bank had a valuation of the Plan completed at fiscal year ending June 30, 2019, which included estimated amortizations from accumulated other comprehensive loss into net periodic pension cost during the next fiscal year of $215,747. The change in pension obligation reported in the condensed consolidated balance sheet, condensed consolidated statements of comprehensive income (loss), and in the condensed consolidated statements of changes in stockholders’ equity as of December 31, 2019 reflect this estimation.

NOTE 12 – Commitments and Contingencies

In the normal course of business, the Company is involved in various legal proceedings. In the opinion of management, any liability resulting from such proceedings would not have a material adverse effect on the consolidated financial statements.

The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, financial guarantees, and standby letters of credit. They involve, to varying degrees, elements of credit risk in excess of amounts recognized on the consolidated balance sheets.

The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and issuing letters of credit as they do for on-balance-sheet instruments.

A summary of the contract or notional amount of the Company's exposure to off-balance-sheet risk is as follows:

	December 31, 2019		June 30, 2019
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit to borrowers	$	17,340,177	$	18,668,750
Sold loan commitments		15,325,687		41,760,875
Credit card commitments		601,263		637,121

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

As of December 31, 2019 and June 30, 2019, the Company does not engage in the use of interest rate swaps, futures or option contracts.

27

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

NOTE 13 – Regulatory Capital Requirements

The Bank is subject to various regulatory capital requirements administered by the federal and state banking agencies. The final rules implementing BASEL Committee on Banking Supervisor’s Capital Guidance for U.S. banks (“BASEL III rules”) became effective for the Bank on January 1, 2015, with full compliance with all of the requirements having been phased in over a multi-year schedule, fully phased in January 1, 2019.

Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Bank’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table that follows) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), Tier 1 Common Equity (as defined), and Tier 1 capital (as defined) to average assets (as defined).

As of December 31, 2019 and June 30, 2019, the Bank was categorized as well capitalized.  To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier I risk-based, Tier I common equity, and Tier 1 leverage ratios as set forth in the following table.

The Bank completed a reorganization and capital raise as of April 30, 2019. The Bank’s capital levels after the capital raise met all capital adequacy requirements to which they were subject under the Consent Order and the Consent Order was subsequently terminated on June 19, 2019.

Listed below is a comparison of the Bank's actual capital amounts with the minimum requirements for adequately capitalized banks, as defined by the federal regulatory agencies' Prompt Corrective Action Rules as of December 31, 2019 and June 30, 2019.  Under Basel III rules, the Bank must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer was phased in from 0.625% beginning January 1, 2016 to 2.50% as of January 1, 2019. Failure to maintain the full amount of the buffer will result in restrictions on the Bank’s ability to make discretionary payments.

					For Capital Adequacy				To be Considered
	Actual				Purposes				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2019 (unaudited)
Total capital (to risk weighted assets)	$	28,637,477	14.70	%	$	15,587,728	8.00	%	$	19,484,660	10.00	%
Tier 1 capital (to risk weighted assets)		27,375,005	14.05	%		11,690,796	6.00	%		15,587,728	8.00	%
Common Equity Tier 1 (to risk weighted assets)		27,375,005	14.05	%		8,768,097	4.50	%		12,665,029	6.50	%
Tier 1 capital (to average assets)		27,375,005	9.15	%		11,966,041	4.00	%		14,957,551	5.00	%
As of June 30, 2019
Total capital (to risk weighted assets)	$	27,643,843	14.01	%	$	15,780,941	8.00	%	$	19,726,176	10.00	%
Tier 1 capital (to risk weighted assets)		26,349,878	13.36	%		11,835,706	6.00	%		15,780,941	8.00	%
Common Equity Tier 1 (to risk weighted assets)		26,349,878	13.36	%		8,876,779	4.50	%		12,822,015	6.50	%
Tier 1 capital (to average assets)		26,349,878	8.55	%		12,327,357	4.00	%		15,409,197	5.00	%

28

TEB BANCORP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of December 31, 2019 (Unaudited) and June 30, 2019 and For The Three and Six Months Ended

December 31, 2019 and 2018 (Unaudited)

A Wisconsin state-chartered savings bank is required by state law to maintain minimum net worth in an amount equal to at least 6.0% of its total assets. At December 31, 2019 and June 30, 2019, the Bank’s net worth was $24,449,538 with general loan loss reserve of $1,076,068 and $23,501,513 with general loan loss reserve of $1,190,650, totaling 8.5% and 7.9% of total assets, respectively, which meets the state of Wisconsin’s minimum net worth requirements.

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

The summary information presented below at December 31, 2019 and June 30, 2019 and for the three and six months ended December 31, 2019 and 2018 is derived in part from the financial statements of The Equitable Bank. The financial condition data at June 30, 2019 is derived from the audited financial statements of TEB Bancorp, Inc. The information as of December 31, 2019 and for the three and six months ended December 31, 2019 and 2018 is derived from unaudited financial statements of TEB Bancorp, Inc. for December 31, 2019 and The Equitable Bank for December 31, 2018 and reflects only normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim period presented. The following information is only a summary, and should be read in conjunction with our audited financial statements and notes as of and for the year ended June 30, 2019 and for the three and six months ended December 31, 2019 and 2018. The results of operations for the three and six months ended December 31, 2019 are not necessarily indicative of the results to be achieved for all of the year ending June 30, 2020.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

· statements of our goals, intentions and expectations;

· statements regarding our business plans, prospects, growth and operating strategies;

· statements regarding the quality of our loan and investment portfolios; and

· estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this quarterly report. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

· general economic conditions, either nationally or in our market areas, that are worse than expected;

· changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses;

· our ability to access cost-effective funding;

· fluctuations in real estate values and both residential and commercial real estate market conditions;

· demand for loans and deposits in our market area;

· our ability to implement and change our business strategies;

· competition among depository and other financial institutions;

· inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make;

30

· adverse changes in the securities or secondary mortgage markets;

· changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

· changes in the quality or composition of our loan or investment portfolios;

· technological changes that may be more difficult or expensive than expected, or the failure or breaches of information technology security systems;

· the inability of third-party providers to perform as expected;

· our ability to manage market risk, credit risk and operational risk in the current economic environment;

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

· our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames, and any goodwill charges related thereto;

· changes in consumer spending, borrowing and savings habits;

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

· our ability to retain key employees; and

· changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

Critical Accounting Policies

There are no material changes to the critical accounting policies disclosed in the Company’s Annual Report on Form 10‑K for the year ended June 30, 2019.

Comparison of Financial Condition at December 31, 2019 and June 30, 2019

Total assets decreased $10.7 million, or 3.4%, to $301.5 million at December 31, 2019 from $312.2 million at June 30, 2019. The decrease in assets was due to a decrease of $7.4 million in net loans held for investment and a $3.5 million decrease in interest bearing deposits in banks, offset by an increase in available-for-sale securities of $1.8 million and $1.0 million in cash and cash equivalents.

Cash and cash equivalents increased $1.0million, or 18.3%, to $6.7 million at December 31, 2019 from $5.6 million at June 30, 2019. This fluctuation in cash and cash equivalents is a normal part of business operations.

Net loans held for investment decreased $7.4 million, or 2.9%, to $252.5 million at December 31, 2019 from $259.9 million at June 30, 2019, primarily reflecting a decrease in one- to four-family owner occupied residential real estate loans of $13.2 million, or 10.6%, from $124.8 million at June 30, 2019 to $111.6 million at December 31, 2019. The decrease in one- to four-family owner occupied residential real estate loans resulted from loan payoffs and loan refinances during the six months ended. We currently sell the majority of the single family loans we originate. This decrease was partially offset by an increase in multifamily loans of $4.7 million, or 6.4%, to $77.9 million at December 31, 2019 from $73.2 million at June 30, 2019.

31

Other real estate owned decreased $778,000, or 19.1% to $3.3 million at December 31, 2019 from $4.1 million at June 30, 2019, due to the sale of four properties totaling $1.0 million, offset by two new properties added to other real estate owned totaling $137,000.

Interest bearing deposits decreased $3.5 million, or 94.5%, to $202,000 at December 31, 2019 from $3.7 million at June 30, 2019. We have invested excess cash into securities to improve our yield on our assets.

Available-for-sale securities increased $1.8 million, or 8.6%, to $22.3 million at December 31, 2019 from $20.5 million at June 30, 2019, due to the purchase of securities totaling $2.1 million, offset by maturities of $300,000.

Total deposits increased $14.1 million, or 6.0%, to $248.7 million at December 31, 2019 from $234.6 million at June 30, 2019. The increase was due to an increase in certificates of deposit of $8.9 million, or 10.3%, to $95.7 million at December 31, 2019 from $86.8 million at June 30, 2019. In recent periods prior to the termination of our amended Consent Order, we generally experienced certificate of deposit runoff at maturity because of our inability to pay competitive rates on deposits due to our classification as “adequately capitalized” for regulatory capital purposes, instead funding our operations with borrowings from the Federal Home Loan Bank of Chicago. Our classification as “adequately capitalized” (rather than “well-capitalized”) for regulatory capital purposes restricted our ability to accept, renew or roll over brokered deposits, and further restricted us from paying interest rates on deposits that exceed 75 basis points above national rates, as posted by the Federal Deposit Insurance Corporation. Although we had received a waiver from the Federal Deposit Insurance Corporation that permitted us to use local market area rates instead of national rates as the baseline in determining interest rates we could pay on deposits, this restriction limited our ability to compete for deposits in our market area, based on interest rates, in the current market rate environment. As the amended Consent Order was terminated on June 19, 2019, we were able to pay competitive rates starting in the quarter ended September 30, 2019. Certificate of deposit specials were run during the last six months, contributing to the increase. Savings and Now accounts increased $1.8 million, or 2.6%, from $70.4 million at June 30, 2019 to $72.2 million at December 31, 2019.

Borrowed funds, consisting solely of Federal Home Loan Bank advances, decreased $23.7 million, or 53.6%, to $20.5 million at December 31, 2019 from $44.2 million at June 30, 2019. We have had to rely on borrowings to fund our operations in recent periods as a result of deposit runoff, described above. As we generated certificate of deposit growth during the period, the excess cash was used to repay borrowings.

Total stockholders’ equity increased $853,000, or 3.5%, to $25.3 million at December 31, 2019 from $24.4 million at June 30, 2019. The increase was due primarily to net income of $930,000 during the six months ended December 31, 2019.

Comparison of Operating Results for the Three Months Ended December 31, 2019 and 2018

General. Net income was $362,000 for the three months ended December 31, 2019, compared to net loss of $47,000 for the three months ended December 31, 2018.  The change was primarily due to a $649,000 increase in gain on sales of mortgage loans, offset by a $220,000 increase in compensation and benefits expense, described in more detail below.

Interest Income. Interest income decreased $95,000, or 3.0%, to $3.0 million for the three months ended December 31, 2019 compared to $3.1 million for the three months ended December 31, 2018.  Interest income on loans, which is our primary source of interest income, decreased $91,000, or 3.1%, to $2.8 million for the three months ended December 31, 2019 compared to $2.9 million for the three months ended December 31, 2018.  Our annualized average yield on loans increased three basis points to 4.53% for the three months ended December 31, 2019 from 4.50% for the three months ended December 31, 2018, primarily due to an increase in interest income received on loans held for sale. The average balance of loans decreased $9.7 million, or 3.7%, to $250.8 million for the three months ended December 31, 2019 from $260.4 million for the three months ended December 31, 2018.

Interest Expense. Interest expense decreased $75,000, or 11.7%, to $563,000 for the three months ended December 31, 2019 compared to $638,000 for the three months ended December 31, 2018, due to decreases in market interest rates during the period. 

32

Interest expense on deposits increased $102,000, or 27.6%, to $474,000 for the three months ended December 31, 2019 from $371,000 for the three months ended December 31, 2018.  Specifically, interest expense on certificates of deposit increased $103,000, or 29.7%, to $450,000 for the three months ended December 31, 2019 from $347,000 for the three months ended December 31, 2018.  The increase resulted from a 36 basis point increase in the annualized average rate we paid on certificates of deposit to 1.88% for the three months ended December 31, 2019 from 1.52% for the three months ended December 31, 2018, reflecting recent increases in market interest rates. Also, a $4.2 million increase in the average balance of certificates of deposits to $95.6 million at December 31, 2019 from $91.4 million for the three months ended December 31, 2018. 

Interest expense on FHLB borrowings decreased $177,000 to $89,000 for the three months ended December 31, 2019 from $267,000 for the three months ended December 31, 2018.  This decrease resulted from decreases in both the average balance of FHLB borrowings and the average rate we paid on FHLB borrowings.  The average balance of borrowings decreased $24.8 million, or 56.5%, to $19.1 million for the three months ended December 31, 2019 from $43.8 million for the three months ended December 31, 2018, and the annualized average rate we paid on borrowings decreased 55 basis points to 1.88% for the three months ended December 31, 2019 from 2.43% for the three months ended December 31, 2018.  As described above, in the past, we have relied on borrowings to fund our operations as a result of certificate of deposit runoff, but in the current quarter we generated more certificates of deposit and were able to reduce our borrowings.

Net Interest Income. Net interest income decreased 20,000, or 0.8%, and was $2.5 million for each of the three months ended December 31, 2019 and 2018, primarily as a result of higher rates paid on certificates of deposit, as discussed above.  In addition, our net interest rate spread increased by one basis point to 3.42% for the three months ended December 31, 2019 from 3.41% for the three months ended December 31, 2018, and our net interest margin increased by seven basis points to 3.54% for the three months ended December 31, 2019 from 3.47% for the three months ended December 31, 2018, due to changes in market interest rates.       

Provision for Loan Losses.  Provisions for loan losses are charged to operations to establish an allowance for loan losses at a level necessary to absorb known and inherent losses in our loan portfolio that are both probable and reasonably estimable at the date of the financial statements. In evaluating the level of the allowance for loan losses, management analyzes several qualitative loan portfolio risk factors including, but not limited to, management’s ongoing review and grading of loans, facts and issues related to specific loans, historical loan loss and delinquency experience, trends in past due and non-accrual loans, existing risk characteristics of specific loans or loan pools, changes in the nature, volume and terms of loans, the fair value of underlying collateral, changes in lending personnel, current economic conditions and other qualitative and quantitative factors which could affect potential credit losses. See “Summary of Significant Accounting Policies” for additional information. 

After an evaluation of these factors, we recorded no provision for loan losses for the three months ended December 31, 2019 or 2018.  Our allowance for loan losses was $1.3 million at December 31, 2019 and September 30, 2019.  The allowance for loan losses to total loans was 0.50% at December 31, 2019 and 0.51% at September 30, 2019, while the allowance for loan losses to non-performing loans was 113.45% at December 31, 2019 and 84.86% at September 30, 2019. 

To the best of our knowledge, we have recorded all loan losses that are both probable and reasonable to estimate at December 31, 2019.  However, future changes in the factors described above, including, but not limited to, actual loss experience with respect to our loan portfolio, could result in material increases in our provision for loan losses. In addition, the WDFI and the Federal Deposit Insurance Corporation, as an integral part of their examination process, will periodically review our allowance for loan losses, and as a result of such reviews, we may have to adjust our allowance for loan losses.

Non-interest Income. Non-interest income increased $722,000, or 124.4%, to $1.3 million for the three months ended December 31, 2019 compared to $581,000 for the three months ended December 31, 2018.  Gain on sale of mortgage loans (consisting solely of one- to four-family residential real estate loans) increased $649,000, or 225.9%, to $937,000 for the three months ended December 31, 2019 compared to $287,000 for the three months ended December 31, 2018. 

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We originated for sale $63.9 million of mortgage loans during the 2019 period compared to $21.3 million of such originations during the 2018 period.

Non-interest Expenses. Non-interest expenses increased $294,000, or 9.5%, to $3.4 million for the three months ended December 31, 2019 from $3.1 million for the three months ended December 31, 2018. Compensation and benefits expense increased $220,000, or 12.1%, to $2.0 million for the three months ended December 31, 2019 from $1.8 million for the three months ended December 31, 2018, as we experienced an increase in payroll expense due to higher loan officer compensation as a result of increased loan origination volume.  The increase in compensation and benefits expense was offset by a decrease in FDIC assessment costs of $67,000, or 56.6%, to $51,000 for the three months ended December 31, 2019 from $118,000 for the three months ended December 31, 2018, as we are no longer subject to the Amended Order and our FDIC insurance premium decreased, our accrual has also decreased to $58,400 for the three months ended December 31, 2019 from $122,250 for the three months ended December 31, 2018.  Other expenses increased $76,000 or 39.5% to $269,000 for the three months ended December 31, 2019 compared to $193,000 as of December 31, 2018 due to increased costs of being a public company.

Income Tax Expense. We recognized no income tax expense or benefits for the three months ended December 31, 2019 and for the three months ended December 31, 2018 due to a full valuation allowance being recorded against the Company’s deferred tax assets.

Average Balance Sheets

The following table sets forth average balance sheets, average yields and costs, and certain other information at and for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Loan balances exclude loans held for sale.

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	For the Three Months Ended December 31,
	2019							2018
	Average					Average		Average					Average
	Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Rate (1)		Balance			Interest		Rate (1)
Interest-earning assets:
Loans	$	250,759,871		$	2,837,250	4.53	%	$	260,421,112		$	2,928,655	4.50	%
Securities		21,804,777			152,457	2.80	%		20,954,682			149,603	2.86	%
Federal Home Loan Bank stock		1,115,516			15,124	5.42	%		2,032,571			27,527	5.42	%
Other		3,805,111			13,881	1.46	%		1,556,801			7,503	1.93	%
Total interest-earning assets		277,485,275			3,018,712	4.35	%		284,965,166			3,113,288	4.37	%
Non-interest-earning assets		26,152,436							20,536,732
Total assets	$	303,637,711						$	305,501,898
Interest-bearing liabilities:
Demand deposits	$	49,897,476		$	7,554	0.06	%	$	46,495,773		$	7,066	0.06	%
Savings and NOW deposits		76,457,585			16,166	0.08	%		83,226,423			17,193	0.08	%
Certificates of deposit		95,616,025			449,996	1.88	%		91,366,799			347,030	1.52	%
Total interest-bearing deposits		221,971,086			473,716	0.85	%		221,088,995			371,289	0.67	%
Borrowings		19,056,846			89,376	1.88	%		43,811,900			266,593	2.43	%
Total interest-bearing liabilities		241,027,932			563,092	0.93	%		264,900,895			637,882	0.96	%
Non-interest-bearing liabilities		37,239,268							26,734,991
Total liabilities		278,267,200							291,635,886
Total equity		25,370,511							13,867,012
Total liabilities and equity	$	303,637,711						$	305,502,898
Net interest income				$	2,455,620						$	2,475,406
Net interest rate spread (2)						3.42	%						3.41	%
Net interest-earning assets (3)	$	36,457,343						$	20,064,271
Net interest margin (4)						3.54	%						3.47	%
Average interest-earning assets to interest-bearing liabilities		115.13	%						107.57	%

(1) Annualized

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

(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

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

Comparison of Operating Results for the Six Months Ended December 31, 2019 and 2018

General. Net income was $930,000 for the six months ended December 31, 2019, compared to net loss of $187,000 for the six months ended December 31, 2018. The change was primarily due to a $1.6 million increase in gain on sales of mortgage loans, offset by a $550,000 increase in compensation and benefits expense, described in more detail below.

Interest Income. Interest income decreased $85,000, or 1.4%, and was $6.1 million for the six months ended December 31, 2019 and $6.2 million for the six months ended December 31, 2018. Interest income on loans, which is our primary source of interest income, decreased $98,000, or 1.7%,  to $5.8 million for the six months ended December 31, 2019 compared to $5.9 million for the six months ended December 31, 2018. Our annualized average yield on loans increased seven basis points to 4.55% for the six months ended December 31, 2019 from 4.48% for the six months ended December 31, 2018, primarily due to an increase in interest income received on loans held for sale. The average balance of loans decreased $8.1 million, or 3.1%, to $253.5 million for the six months ended December 31, 2019 from $261.6 million for the six months ended December 31, 2018.

35

Interest Expense. Interest expense remained relatively unchanged, decreasing $4,000, or 0.3%, and was $1.2 million for the six months ended December 31, 2019 and 2018.

Interest expense on deposits increased $211,000, or 29.1%, to $934,000 for the six months ended December 31, 2019 from $723,000 for the six months ended December 31, 2018. Specifically, interest expense on certificates of deposit increased $213,000, or 31.6%, to $887,000 for the six months ended December 31, 2019 from $674,000 for the six months ended December 31, 2018. The increase resulted from a 44 basis point increase in the annualized average rate we paid on certificates of deposit to 1.88% for the six months ended December 31, 2019 from 1.44% for the six months ended December 31, 2018, reflecting recent increases in market interest rates. The increase was also due to an increase in the average balance of certificates of deposit, which increased $520,000, or 0.6%, to $94.4 million for the six months ended December 31, 2019 from $93.8 million for the six months ended December 31, 2018.

Interest expense on FHLB borrowings decreased $215,000 to $293,000 for the six months ended December 31, 2019 from $508,000 for the six months ended December 31, 2018. This decrease resulted from decreases in both the average balance of FHLB borrowings and the average rate we paid on FHLB borrowings. The average balance of borrowings decreased $16.8 million, or 38.5%, to $26.8 million for the six months ended December 31, 2019 from $43.6 million for the six months ended December 31, 2018, and the annualized average rate we paid on borrowings decreased 14 basis points to 2.19% for the six months ended December 31, 2019 from 2.33% for the six months ended December 31, 2018. As described above, in the past, we have relied on borrowings to fund our operations as a result of certificate of deposit runoff, but in the current period we generated more certificates of deposit and were able to reduce our borrowings.

Net Interest Income. Net interest income decreased $81,000, or 1.6%,  to $4.9 million for the six months ended December 31, 2019 from $5.0 million for the six months ended December 31, 2018, primarily as a result of higher rates paid on certificates of deposit, as discussed above. In addition, our net interest rate spread decreased by six basis points to 3.37% for the six months ended December 31, 2019 from 3.43% for the six months ended December 31, 2018, and our net interest margin increased by one basis point to 3.50% for the six months ended December 31, 2019 from 3.49% for the six months ended December 31, 2018, due to changes in market interest rates.       

Provision for Loan Losses. Provisions for loan losses are charged to operations to establish an allowance for loan losses at a level necessary to absorb known and inherent losses in our loan portfolio that are both probable and reasonably estimable at the date of the financial statements. In evaluating the level of the allowance for loan losses, management analyzes several qualitative loan portfolio risk factors including, but not limited to, management’s ongoing review and grading of loans, facts and issues related to specific loans, historical loan loss and delinquency experience, trends in past due and non-accrual loans, existing risk characteristics of specific loans or loan pools, changes in the nature, volume and terms of loans, the fair value of underlying collateral, changes in lending personnel, current economic conditions and other qualitative and quantitative factors which could affect potential credit losses. See “Summary of Significant Accounting Policies” for additional information.

After an evaluation of these factors, we recorded no provision for loan losses for the six months ended December 31, 2019 or 2018. Our allowance for loan losses was $1.3 million at December 31, 2019 and June 30, 2019. The allowance for loan losses to total loans was 0.50% at December 31, 2019 and 0.50% at June 30, 2019, while the allowance for loan losses to non-performing loans was 113.45% at December 31, 2019 and 84.86% at June 30, 2019.

To the best of our knowledge, we have recorded all loan losses that are both probable and reasonable to estimate at December 31, 2019. However, future changes in the factors described above, including, but not limited to, actual loss experience with respect to our loan portfolio, could result in material increases in our provision for loan losses. In addition, the WDFI and the Federal Deposit Insurance Corporation, as an integral part of their examination process, will periodically review our allowance for loan losses, and as a result of such reviews, we may have to adjust our allowance for loan losses.

Non-interest Income. Non-interest income increased $1.6 million, or 139.2%, to $2.8 million for the six months ended December 31, 2019 compared to $1.2 million for the six months ended December 31, 2018. Gain on sale of mortgage loans (consisting solely of one- to four-family residential real estate loans) increased $1.6 million, or 251.8%, to $2.2 million for the six months ended December 31, 2019 compared to $622,000 for the six months ended December 31,  

36

2018. We originated for sale $151.0 million of mortgage loans during the 2019 period compared to $45.5 million of such originations during the 2018 period.

Non-interest Expenses. Non-interest expenses increased $445,000, or 7.0%, to $6.8 million for the six months ended December 31, 2019 from $6.4 million for the six months ended December 31, 2018. Compensation and benefits expense increased $550,000, or 15.1%, to $4.2 million for the six months ended December 31, 2019 from $3.6 million for the six months ended December 31, 2018, as we experienced an increase in payroll expense due to higher loan officer compensation as a result of increased loan origination volume. The increase in compensation and benefits expense was offset by a decrease in FDIC assessment costs of $213,000, or 89.9%, to $24,000 for the six months ended December 31, 2019 from $237,000 for the six months ended December 31, 2018, as a result of $79,000 in Small Bank Assessment Credits from the FDIC. Additionally, as we are no longer subject to the Amended Order and our FDIC insurance premium decreased, our accrual has also decreased to $118,400 for the six months ended December 31, 2019 from $244,500 for the six months ended December 31, 2018. Other expenses increased $118,000 or 30.5% to $506,000 for the six months ended December 31, 2019 compared to $388,000 as of December 31, 2018 due to increased costs of being a public company.

Income Tax Expense. We recognized no income tax expense or benefits for the six months ended December 31, 2019 and for the six months ended December 31, 2018 due to a full valuation allowance being recorded against the Company’s deferred tax assets.

Average Balance Sheets

The following table sets forth average balance sheets, average yields and costs, and certain other information at and for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Loan balances exclude loans held for sale.

37

	For the Six Months Ended December 31,
	2019							2018
	Average					Average		Average					Average
	Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Rate (1)		Balance			Interest		Rate (1)
Interest-earning assets:
Loans	$	253,519,689		$	5,761,686	4.55	%	$	261,640,186		$	5,860,134	4.48	%
Securities		21,324,670			299,777	2.81	%		20,932,840			296,710	2.83	%
Federal Home Loan Bank stock		1,372,469			31,303	4.56	%		2,020,645			49,173	4.87	%
Other		4,527,447			41,118	1.82	%		1,410,023			13,355	1.89	%
Total interest-earning assets		280,744,275			6,133,884	4.37	%		286,003,694			6,219,372	4.35	%
Non-interest-earning assets		26,150,138							19,995,317
Total assets	$	306,894,413						$	305,999,011
Interest-bearing liabilities:
Demand deposits	$	48,951,864		$	14,289	0.06	%	$	46,597,127		$	14,012	0.06	%
Savings and NOW deposits		75,708,873			32,303	0.09	%		83,024,688			34,907	0.08	%
Certificates of deposit		94,358,720			887,360	1.88	%		93,838,349			674,405	1.44	%
Total interest-bearing deposits		219,019,457			933,952	0.85	%		223,460,164			723,324	0.65	%
Borrowings		26,834,247			293,355	2.19	%		43,605,520			508,032	2.33	%
Total interest-bearing liabilities		245,853,704			1,227,307	1.00	%		267,065,684			1,231,356	0.92	%
Non-interest-bearing liabilities		35,964,495							24,945,311
Total liabilities		281,818,199							292,010,995
Total equity		25,076,214							13,988,016
Total liabilities and equity	$	306,894,413						$	305,999,011
Net interest income				$	4,906,577						$	4,988,016
Net interest rate spread (2)						3.37	%						3.43	%
Net interest-earning assets (3)	$	34,890,571						$	18,938,010
Net interest margin (4)						3.50	%						3.49	%
Average interest-earning assets to interest-bearing liabilities		114.19	%						107.09	%

(1) Annualized

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

(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

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

Liquidity and Capital Resources

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans, and proceeds from maturities of securities. We also have the ability to borrow from the Federal Home Loan Bank of Chicago and from U.S. Bank. At December 31, 2019, we had a $125.8 million line of credit with the Federal Home Loan Bank of Chicago, and had $20.5 million of borrowings outstanding as of that date. We also had a $5.0 million line of credit with U.S. Bank, with no borrowings outstanding as of that date.

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments including interest-bearing demand deposits. The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities was $2.7 million for the six months ended December 31, 2019 and $3.2 million for the six months ended December 31, 2018. Net cash provided by investing activities, which consists primarily of net receipts on disbursements for loan originations and the purchase of securities, offset by

38

principal collections on loans, and proceeds from maturing securities and pay downs on securities, was $10.9 million and net cash used in investing activities was $69,000 for the six months ended December 31, 2019 and the six months ended December 31, 2018, respectively. Net cash used in financing activities, consisting of activity in deposit accounts and borrowings, was $12.5 million and $3.8 million for the six months ended December 31, 2019 and 2018, respectively.

We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience, current pricing strategy and regulatory restrictions, we anticipate that a substantial portion of maturing time deposits will be retained, and that we can supplement our funding with borrowings in the event that we allow these deposits to run off at maturity.

At December 31, 2019, The Equitable Bank was classified as “well capitalized” for regulatory capital purposes.

Item 3    Quantitative and Qualitative Disclosures About Market Risk.

Not applicable as the Company is a smaller reporting company.

Item 4    Controls and Procedures.

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report and, based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are operating in an effective manner.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II - Other Information

Item 1    Legal Proceedings.

In the ordinary course of business, there are legal proceedings against the Company and its subsidiaries. Management considers that the aggregate liabilities, if any, resulting from such actions would not have a material, adverse effect on the consolidated financial position of the Company.

Item 1A  Risk Factors.

Not applicable as the Company is a smaller reporting company.

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

Not applicable.

Item 3    Defaults Upon Senior Securities.

None

Item 4    Mine Safety Disclosures.

Not applicable.

39

Item 5    Other Information.

None.

Item 6    Exhibits.

The following exhibits are filed with this report:

Exhibit 31.1	Certification of Principal Executive Officer Pursuant to Rules 13a‑14 and 15d‑14 of the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002 is included herein as an exhibit to this Report.
Exhibit 31.2	Certification of Principal Financial Officer Pursuant to Rules 13a‑14 and 15d‑14 of the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002 is included herein as an exhibit to this Report.
Exhibit 32.1	Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) is included herein as an exhibit to this Report.
Exhibit 32.2	Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) is included herein as an exhibit to this Report.
Exhibit 101	The following financial statements from the TEB Bancorp Inc. Quarterly Report on Form 10‑Q for the quarter ended December 31, 2019, formatted in Extensive Business Reporting Language (XBRL); (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Changes in Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) the Notes to the Unaudited Condensed Consolidated Financial Statements are included herein as an exhibit to this report.

40

SIGNATURES

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

TEB BANCORP INC.

Date:	February 12, 2020	By:	/s/ John P. Matter
			John P. Matter, Chief Executive Officer
Date:	February 12, 2020	By:	/s/ Jennifer L. Provancher
			Jennifer L. Provancher, President and Chief Financial Officer

41

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934

and Section 302 of the Sarbanes-Oxley Act of 2002

I, John P. Matter, Chief Executive Officer of TEB Bancorp Inc. certify that:

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

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

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

4. The registrant’s other certifying officers 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)) for the registrant and have:

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

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

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

5. The registrant’s other certifying officers 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 functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 12, 2020	/s/ John P. Matter
	John P. Matter
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934

and Section 302 of the Sarbanes-Oxley Act of 2002

I, Jennifer L. Provancher, President and Chief Financial Officer of TEB Bancorp Inc. certify that:

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

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

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

4. The registrant’s other certifying officers 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)) for the registrant and have:

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

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

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

5. The registrant’s other certifying officers 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 functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 12, 2020
	/s/ Jennifer L. Provancher
	Jennifer L. Provancher
	President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

The undersigned executive officer of TEB Bancorp Inc. (the “Registrant”) hereby certifies that the Registrant’s Form 10-Q for the quarter ended December 31, 2019 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained therein fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: February 12, 2020
	/s/ John P. Matter
	John P. Matter, Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

The undersigned executive officer of TEB Bancorp Inc. (the “Registrant”) hereby certifies that the Registrant’s Form 10-Q for the quarter ended December 31, 2019 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained therein fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: February 12, 2020
	/s/ Jennifer L. Provancher
	Jennifer L. Provancher, President and Chief Financial Officer

XML

Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Income Taxes
Income tax expense	$ 0	$ 0	$ 0	$ 0

XML

Loan Servicing (Details) - USD ($)	Dec. 31, 2019	Jun. 30, 2019
Loan Servicing
Unpaid principal balance of loans serviced for others	$ 2,717,538	$ 2,828,576
Custodial balances maintained by bank	$ 0	$ 0

XML

Loans and Allowance for Loan Losses - Impaired loans (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Jun. 30, 2019
With related allowance recorded
Recorded investment	$ 397,516	$ 398,011	$ 397,516	$ 398,011	$ 378,065
Unpaid principal balance	397,516	398,011	397,516	398,011	378,065
Related allowance	186,404	192,698	186,404	192,698	103,315
With no related allowance recorded
Recorded investment	715,327	920,558	715,327	920,558	1,146,803
Unpaid principal balance	715,327	920,558	715,327	920,558	1,146,803
Related allowance	0	0	0	0	0
Total
Recorded investment	1,112,843	1,318,569	1,112,843	1,318,569	1,524,868
Unpaid principal balance	1,112,843	1,318,569	1,112,843	1,318,569	1,524,868
Related allowance	186,404	192,698	186,404	192,698	103,315
Average recorded balance	1,189,752	1,072,904	1,388,532	1,104,365	1,235,694
Interest income recognized while impaired		0	0	0	0
Interest income recognized on a cash basis while impaired	5,091	7,904	13,483	23,279	30,804
Total interest on impaired loans	5,091	7,904	13,483	23,279	30,804
Construction, Land, Development
With related allowance recorded
Recorded investment	0	0	0	0	0
Unpaid principal balance	0	0	0	0	0
Related allowance	0	0	0	0	0
With no related allowance recorded
Recorded investment	0	0	0	0	0
Unpaid principal balance	0	0	0	0	0
Related allowance	0	0	0	0	0
Total
Recorded investment	0	0	0	0	0
Unpaid principal balance	0	0	0	0	0
Related allowance	0	0	0	0	0
Average recorded balance	0	0	0	21,843	19,198
Interest income recognized while impaired	0	0	0	0	0
Interest income recognized on a cash basis while impaired	0	3,531	0	3,531	353
Total interest on impaired loans	0	3,531	0	3,531	353
1-4 Family Owner Occupied
With related allowance recorded
Recorded investment	97,774	70,608	97,774	70,608	70,608
Unpaid principal balance	97,774	70,608	97,774	70,608	70,608
Related allowance	43,470	4,809	43,470	4,809	5,772
With no related allowance recorded
Recorded investment	715,327	889,964	715,327	889,964	1,132,648
Unpaid principal balance	715,327	889,964	715,327	889,964	1,132,648
Related allowance	0	0	0	0	0
Total
Recorded investment	813,101	960,572	813,101	960,572	1,203,256
Unpaid principal balance	813,101	960,572	813,101	960,572	1,203,256
Related allowance	43,470	4,809	43,470	4,809	5,772
Average recorded balance	875,987	728,723	1,070,070	719,614	865,338
Interest income recognized while impaired	0	0	0	0	0
Interest income recognized on a cash basis while impaired	4,012	1,947	8,803	15,063	19,352
Total interest on impaired loans	4,012	1,947	8,803	15,063	19,352
1-4 Family Non-Owner Occupied
With related allowance recorded
Recorded investment	0	0	0	0	0
Unpaid principal balance	0	0	0	0	0
Related allowance	0	0	0	0	0
With no related allowance recorded
Recorded investment	0	22,993	0	22,993	0
Unpaid principal balance	0	22,993	0	22,993	0
Related allowance	0	0	0	0	0
Total
Recorded investment	0	22,993	0	22,993	0
Unpaid principal balance	0	22,993	0	22,993	0
Related allowance	0	0	0	0	0
Average recorded balance	0	11,496	2,829	29,552	21,509
Interest income recognized while impaired	0	0	0	0	0
Interest income recognized on a cash basis while impaired	0	348	298	348	288
Total interest on impaired loans	0	348	298	348	288
Multifamily
With related allowance recorded
Recorded investment	0	0	0	0	0
Unpaid principal balance	0	0	0	0	0
Related allowance	0	0	0	0	0
With no related allowance recorded
Recorded investment	0	0	0	0	0
Unpaid principal balance	0	0	0	0	0
Related allowance	0	0	0	0	0
Total
Recorded investment	0	0	0	0	0
Unpaid principal balance	0	0	0	0	0
Related allowance	0	0	0	0	0
Average recorded balance	0	0	0	0	0
Interest income recognized while impaired	0	0	0	0	0
Interest income recognized on a cash basis while impaired	0	0	0	0	0
Total interest on impaired loans	0	0	0	0	0
Commercial Owner Occupied
With related allowance recorded
Recorded investment	191,014	196,135	191,014	196,135	193,601
Unpaid principal balance	191,014	196,135	191,014	196,135	193,601
Related allowance	76,086	117,498	76,086	117,498	44,564
With no related allowance recorded
Recorded investment	0	0	0	0	0
Unpaid principal balance	0	0	0	0	0
Related allowance	0	0	0	0	0
Total
Recorded investment	191,014	196,135	191,014	196,135	193,601
Unpaid principal balance	191,014	196,135	191,014	196,135	193,601
Related allowance	76,086	117,498	76,086	117,498	44,564
Average recorded balance	191,651	196,335	192,294	197,009	196,182
Interest income recognized while impaired	0	0	0	0	0
Interest income recognized on a cash basis while impaired	1,079	1,078	4,382	3,162	7,917
Total interest on impaired loans	1,079	1,078	4,382	3,162	7,917
Commercial Non-Owner Occupied
With related allowance recorded
Recorded investment	0	0	0	0	0
Unpaid principal balance	0	0	0	0	0
Related allowance	0	0	0	0	0
With no related allowance recorded
Recorded investment	0	0	0	0	0
Unpaid principal balance	0	0	0	0	0
Related allowance	0	0	0	0	0
Total
Recorded investment	0	0	0	0	0
Unpaid principal balance	0	0	0	0	0
Related allowance	0	0	0	0	0
Average recorded balance	0	0	0	0	0
Interest income recognized while impaired	0	0	0	0	0
Interest income recognized on a cash basis while impaired	0	0	0	0	0
Total interest on impaired loans	0	0	0	0	0
Consumer and Installment Loan
With related allowance recorded
Recorded investment	108,728	131,268	108,728	131,268	113,856
Unpaid principal balance	108,728	131,268	108,728	131,268	113,856
Related allowance	66,848	70,391	66,848	70,391	52,979
With no related allowance recorded
Recorded investment	0	7,601	0	7,601	14,155
Unpaid principal balance	0	7,601	0	7,601	14,155
Related allowance	0	0	0	0	0
Total
Recorded investment	108,728	138,869	108,728	138,869	128,011
Unpaid principal balance	108,728	138,869	108,728	138,869	128,011
Related allowance	66,848	70,391	66,848	70,391	52,979
Average recorded balance	122,114	136,350	123,339	136,347	133,467
Interest income recognized while impaired	0	0	0	0	0
Interest income recognized on a cash basis while impaired	0	1,000	0	1,175	2,894
Total interest on impaired loans	$ 0	$ 1,000	$ 0	$ 1,175	$ 2,894

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Regulatory Capital Requirements

6 Months Ended

Dec. 31, 2019

Regulatory Capital Requirements

Regulatory Capital Requirements

NOTE 13 – Regulatory Capital Requirements

The Bank is subject to various regulatory capital requirements administered by the federal and state banking agencies. The final rules implementing BASEL Committee on Banking Supervisor’s Capital Guidance for U.S. banks (“BASEL III rules”) became effective for the Bank on January 1, 2015, with full compliance with all of the requirements having been phased in over a multi-year schedule, fully phased in January 1, 2019.

Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Bank’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table that follows) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), Tier 1 Common Equity (as defined), and Tier 1 capital (as defined) to average assets (as defined).

As of December 31, 2019 and June 30, 2019, the Bank was categorized as well capitalized.  To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier I risk-based, Tier I common equity, and Tier 1 leverage ratios as set forth in the following table.

The Bank completed a reorganization and capital raise as of April 30, 2019. The Bank’s capital levels after the capital raise met all capital adequacy requirements to which they were subject under the Consent Order and the Consent Order was subsequently terminated on June 19, 2019.

Listed below is a comparison of the Bank's actual capital amounts with the minimum requirements for adequately capitalized banks, as defined by the federal regulatory agencies' Prompt Corrective Action Rules as of December 31, 2019 and June 30, 2019.  Under Basel III rules, the Bank must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer was phased in from 0.625% beginning January 1, 2016 to 2.50% as of January 1, 2019. Failure to maintain the full amount of the buffer will result in restrictions on the Bank’s ability to make discretionary payments.

					For Capital Adequacy				To be Considered
	Actual				Purposes				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2019 (unaudited)
Total capital (to risk weighted assets)	$	28,637,477	14.70	%	$	15,587,728	8.00	%	$	19,484,660	10.00	%
Tier 1 capital (to risk weighted assets)		27,375,005	14.05	%		11,690,796	6.00	%		15,587,728	8.00	%
Common Equity Tier 1 (to risk weighted assets)		27,375,005	14.05	%		8,768,097	4.50	%		12,665,029	6.50	%
Tier 1 capital (to average assets)		27,375,005	9.15	%		11,966,041	4.00	%		14,957,551	5.00	%
As of June 30, 2019
Total capital (to risk weighted assets)	$	27,643,843	14.01	%	$	15,780,941	8.00	%	$	19,726,176	10.00	%
Tier 1 capital (to risk weighted assets)		26,349,878	13.36	%		11,835,706	6.00	%		15,780,941	8.00	%
Common Equity Tier 1 (to risk weighted assets)		26,349,878	13.36	%		8,876,779	4.50	%		12,822,015	6.50	%
Tier 1 capital (to average assets)		26,349,878	8.55	%		12,327,357	4.00	%		15,409,197	5.00	%

A Wisconsin state-chartered savings bank is required by state law to maintain minimum net worth in an amount equal to at least 6.0% of its total assets. At December 31, 2019 and June 30, 2019, the Bank’s net worth was $24,449,538 with general loan loss reserve of $1,076,068 and $23,501,513 with general loan loss reserve of $1,190,650, totaling 8.5% and 7.9% of total assets, respectively, which meets the state of Wisconsin’s minimum net worth requirements.

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Available for Sale Securities (Tables)

6 Months Ended

Dec. 31, 2019

Available for Sale Securities

Schedule of amortized costs and fair values of available for sale securities

	December 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
Obligations of states and political subdivisions	$	19,825,512	$	234,343	$	65,166	$	19,994,689
Mortgage-backed securities		1,441,070		46,645		—		1,487,715
Certificates of deposit		800,000		17,505		—		817,505
	$	22,066,582	$	298,493	$	65,166	$	22,299,909

	June 30, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
Obligations of states and political subdivisions	$	18,719,370	$	217,627	$	58,614	$	18,878,383
Mortgage-backed securities		1,065,193		40,945		—		1,106,138
Certificates of deposit		555,000		2,597		—		557,597
	$	20,339,563	$	261,169	$	58,614	$	20,542,118

Schedule of available for sale securities portfolio

	December 31, 2019
	Continuous Unrealized				Continuous Unrealized
	Losses Existing for Less				Losses Existing for 12 Months
	Than 12 Months				or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Obligations of states and political subdivisions	$	1,573,342	$	23,737	$	1,095,636	$	41,429	$	2,668,978	$	65,166

	June 30, 2019
	Continuous Unrealized				Continuous Unrealized
	Losses Existing for Less				Losses Existing for 12 Months
	Than 12 Months				or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Obligations of states and political subdivisions	$	208,583	$	22	$	2,935,133	$	58,592	$	3,143,716	$	58,614

Schedule of available for sale securities maturity categories

	Amortized
	Cost		Fair Value
Due in one year or less	$	2,053,760	$	2,057,417
Due after one year through 5 years		10,818,717		10,929,129
Due after 5 years through 10 years		6,083,035		6,147,269
Due after 10 years		1,670,000		1,678,379
Subtotal		20,625,512		20,812,194
Mortgage backed securities
Due after one year through 5 years		1,015,619		1,058,723
Due after 5 years through 10 years		425,451		428,992
Total	$	22,066,582	$	22,299,909

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Regulatory Capital Requirements (Tables)

6 Months Ended

Dec. 31, 2019

Regulatory Capital Requirements

Schedule of comparison of Bank's actual capital amounts with the minimum requirements for adequately capitalized banks

					For Capital Adequacy				To be Considered
	Actual				Purposes				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2019 (unaudited)
Total capital (to risk weighted assets)	$	28,637,477	14.70	%	$	15,587,728	8.00	%	$	19,484,660	10.00	%
Tier 1 capital (to risk weighted assets)		27,375,005	14.05	%		11,690,796	6.00	%		15,587,728	8.00	%
Common Equity Tier 1 (to risk weighted assets)		27,375,005	14.05	%		8,768,097	4.50	%		12,665,029	6.50	%
Tier 1 capital (to average assets)		27,375,005	9.15	%		11,966,041	4.00	%		14,957,551	5.00	%
As of June 30, 2019
Total capital (to risk weighted assets)	$	27,643,843	14.01	%	$	15,780,941	8.00	%	$	19,726,176	10.00	%
Tier 1 capital (to risk weighted assets)		26,349,878	13.36	%		11,835,706	6.00	%		15,780,941	8.00	%
Common Equity Tier 1 (to risk weighted assets)		26,349,878	13.36	%		8,876,779	4.50	%		12,822,015	6.50	%
Tier 1 capital (to average assets)		26,349,878	8.55	%		12,327,357	4.00	%		15,409,197	5.00	%

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Loans and Allowance for Loan Losses - Major classifications (Details) - USD ($)	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018
Loans and Leases Receivable Disclosure [Line Items]
Total loans	$ 253,722,425		$ 261,167,368	$ 264,358,717
Less: allowance for loan losses	(1,262,472)	$ (1,286,674)	(1,293,965)	(1,295,012)	$ (1,301,810)	$ (1,324,159)
Total	252,459,953		259,873,403	263,063,705
Construction, Land, Development
Loans and Leases Receivable Disclosure [Line Items]
Total loans	7,242,065		4,318,845	3,220,671
Less: allowance for loan losses	(10,863)	(5,670)	(4,319)	(3,220)	(4,958)	(4,758)
Total	7,231,202		4,314,526	3,217,451
1-4 Family Owner Occupied
Loans and Leases Receivable Disclosure [Line Items]
Total loans	111,606,950		124,845,322	124,729,230
Less: allowance for loan losses	(99,975)	(56,804)	(67,593)	(25,850)	(6,151)	(7,300)
Total	111,506,975		124,777,729	124,703,380
1-4 Family Non-Owner Occupied
Loans and Leases Receivable Disclosure [Line Items]
Total loans	20,152,740		20,968,812	22,315,219
Less: allowance for loan losses	(22,168)	(26,027)	(26,630)	(28,534)	(24,542)	(71,053)
Total	20,130,572		20,942,182	22,286,685
Multifamily
Loans and Leases Receivable Disclosure [Line Items]
Total loans	77,933,467		73,246,392	74,069,572
Less: allowance for loan losses	(116,900)	(111,112)	(109,870)	(111,104)	(71,120)	(71,101)
Total	77,816,567		73,136,522	73,958,468
Commercial Owner Occupied
Loans and Leases Receivable Disclosure [Line Items]
Total loans	8,198,761		8,508,011	8,591,004
Less: allowance for loan losses	(80,090)	(91,077)	(61,193)	(134,288)	(131,113)	(131,906)
Total	8,118,671		8,446,818	8,456,716
Commercial Non-Owner Occupied
Loans and Leases Receivable Disclosure [Line Items]
Total loans	19,265,342		19,502,545	20,782,399
Less: allowance for loan losses	(809,722)	(773,186)	(738,366)	(881,797)	(905,405)	(925,355)
Total	18,455,620		18,764,179	19,900,602
Consumer and Installment Loan
Loans and Leases Receivable Disclosure [Line Items]
Total loans	9,323,100		9,777,441	10,650,622
Less: allowance for loan losses	(86,014)	$ (72,508)	(70,058)	(107,708)	$ (111,323)	$ (98,096)
Total	$ 9,237,086		$ 9,707,383	$ 10,542,914

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Available for Sale Securities (Details) - USD ($)	Dec. 31, 2019	Jun. 30, 2019
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 22,066,582	$ 20,339,563
Gross Unrealized Gains	298,493	261,169
Gross Unrealized Losses	65,166	58,614
Fair Value	22,299,909	20,542,118
Obligations of states and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	19,825,512	18,719,370
Gross Unrealized Gains	234,343	217,627
Gross Unrealized Losses	65,166	58,614
Fair Value	19,994,689	18,878,383
Mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,441,070	1,065,193
Gross Unrealized Gains	46,645	40,945
Gross Unrealized Losses	0	0
Fair Value	1,487,715	1,106,138
Certificates of deposit
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	800,000	555,000
Gross Unrealized Gains	17,505	2,597
Gross Unrealized Losses	0	0
Fair Value	$ 817,505	$ 557,597

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Fair Value of Financial Instruments (Details) - Fair value on a recurring basis - USD ($)	Dec. 31, 2019	Jun. 30, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 22,299,909	$ 20,542,118
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	22,299,909	20,542,118
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Obligations of states and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	19,994,689	18,878,383
Obligations of states and political subdivisions | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Obligations of states and political subdivisions | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	19,994,689	18,878,383
Obligations of states and political subdivisions | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	1,487,715	1,106,138
Mortgage-backed securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Mortgage-backed securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	1,487,715	1,106,138
Mortgage-backed securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	817,505	557,597
Certificates of deposit | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Certificates of deposit | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	817,505	557,597
Certificates of deposit | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 0	$ 0

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Cash and Due From Banks

6 Months Ended

Dec. 31, 2019

Cash and Due From Banks

Cash and Due From Banks

NOTE 5 – Cash and Due From Banks

The Bank is required to maintain vault cash and reserve balances with the Federal Reserve Bank of Chicago, based upon a percentage of deposits. These requirements were $1.9 million at December 31, 2019 and $1.5 million at June 30, 2019.

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Borrowings

6 Months Ended

Dec. 31, 2019

Borrowings

Borrowings

NOTE 9 – Borrowings

Borrowings consist of the following:

	December 31, 2019		June 30, 2019
FHLB fixed rate advance (2.45%, matured 7/1/19)	$	—	$	7,500,000
FHLB fixed rate advance (2.43%, matured 7/2/19)		—		15,000,000
FHLB fixed rate advance (2.45%, matured 7/3/19)		—		5,000,000
FHLB fixed rate advance (2.43%, matured 7/3/19)		—		8,000,000
FHLB fixed rate advance (2.649%, matured 7/23/19)		—		2,500,000
FHLB fixed rate advance (2.649%, matured 7/24/19)		—		3,100,000
FHLB fixed rate advance (2.647%, matured 7/25/19)		—		3,100,000
FHLB fixed rate advance (1.72%, matures 1/2/20)		4,000,000		—
FHLB fixed rate advance (1.72%, matures 1/3/20)		7,500,000		—
FHLB fixed rate advance (1.72%, matures 1/6/20)		3,000,000		—
FHLB fixed rate advance (1.74%, matures 1/7/20)		1,000,000		—
FHLB fixed rate advance (1.74%, matures 1/7/20)		500,000
FHLB fixed rate advance (1.72%, matures 1/8/20)		4,500,000		—
	$	20,500,000	$	44,200,000

The Bank has a master contract agreement with the FHLB, which provides for borrowing up to the maximum $125,769,661 at December 31, 2019. The FHLB provides both fixed and floating rate advances. Within the master contract agreement, the Bank also has an open line of credit with the FHLB with a variable interest rate. There were $0 outstanding advances on the open line of credit as of December 31, 2019 and June 30, 2019.

Additionally, the Bank had $20,500,000 and $44,200,000 outstanding in term advances at December 31, 2019 and June 30, 2019, respectively. The advances are collateralized by a security agreement pledging a majority of the Bank’s one- to four-family and multifamily mortgages.

The Bank has an agreement with U.S. Bank, which provides for borrowing up to the maximum of $5,000,000, at December 31, 2019 and June 30, 2019. There were no amounts outstanding as of December 31, 2019 or June 30, 2019.

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Summary of Significant Accounting Policies

6 Months Ended

Dec. 31, 2019

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

NOTE 1 – Summary of Significant Accounting Policies

Organization

On April 30, 2019, The Equitable Bank, S.S.B. (the “Bank”) converted to a stock savings bank and is now organized in the mutual holding company structure. The Bank issued all of its outstanding stock to a new holding company, TEB Bancorp, Inc. (the “Company”), which sold 1,309,547 shares of common stock to the public at 10.00 per share, representing 49.9% of its outstanding shares of common stock for gross proceeds of approximately $13.1 million. The net proceeds received were approximately $11.4 million after offering costs. TEB Bancorp, Inc. is organized as a corporation under the laws of the State of Maryland. The Bank utilized $100,000 of proceeds received from the offering as initial capitalization of TEB MHC. TEB MHC has been organized as a mutual holding company under the laws of the State of Wisconsin and owns 1,314,796 shares, or 50.1% of the outstanding common stock of TEB Bancorp, Inc.

The costs of the reorganization and the issuing of the common stock totaling $1,649,899 were deferred and deducted from the sales proceeds of the offering.

The Bank is a state-chartered savings bank providing a full range of financial services. The Bank grants commercial, residential and consumer loans, and accepts deposits from customers primarily in the Metropolitan Milwaukee area, which is in southeastern Wisconsin. The Bank is subject to competition from other financial institutions and nonfinancial institutions providing financial products. Additionally, the Bank is subject to the regulations of certain regulatory agencies and undergoes periodic examination by those regulatory agencies.

All depositors who had liquidation rights with respect to the Bank as of the effective date of the reorganization continue to have such rights solely with respect to the TEB MHC so long as they continue to hold their deposit accounts with the Bank. In addition, all persons who become depositors of the Bank subsequent to the reorganization will have such liquidation rights with respect to TEB MHC.

At December 31, 2019, the significant assets of TEB Bancorp, Inc. were the capital stock of the Bank and a deposit account held at the Bank. The liabilities of TEB Bancorp, Inc. were insignificant. The Company is subject to the financial reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company is subject to regulation and examination by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”).

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of TEB Bancorp, Inc. and its wholly-owned subsidiaries were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto of the Company as of and for the year ended June 30, 2019.

The interim condensed consolidated financial statements of the Company as of December 31, 2019, and for the three and six months ended December 31, 2019 and the condensed consolidated financial statements of the Bank for the three and six months ended December 31, 2018 are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.  Such adjustments are the only adjustments contained in the interim financial statements.  The results of operations for the three and six months ended December 31, 2019, are not necessarily indicative of the results to be achieved for the year ending June 30, 2020 or any other period.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements as of and for the periods ending December 31, 2019 and June 30, 2019 include the accounts and operations of TEB Bancorp, Inc. and its wholly-owned subsidiaries, the Bank, Equitable Investment Corp. and Savings Financial Corporation. The unaudited condensed consolidated financial statements for the period ending December 31, 2018 include the accounts and operations of the Bank and its wholly-owned subsidiaries, Equitable Investment Corp. and Savings Financial Corporation. All significant intercompany accounts and transactions have been eliminated in consolidation.

Emerging Growth Company Status

The Jumpstart Our Business Startups Act (the "JOBS Act"), which was signed into law on April 5, 2012, has made numerous changes to the federal securities laws to facilitate access to capital markets. Under the JOBS Act, a company with total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year qualifies as an "emerging growth company". The Company qualifies as an emerging growth company and believes that it will continue to qualify as an emerging growth company.

An emerging growth company may elect to comply with new or amended accounting pronouncements in the same manner as a private company, but must make such election when the company is first required to file a registration statement. Such an election is irrevocable during the period a company is an emerging growth company. The Company has elected to comply with new or amended accounting pronouncements in the same manner as a private company. Accordingly, the financial statements may not be comparable to the financial statements of companies that comply with such new or revised accounting standards.

Use of Estimates

In preparing the unaudited condensed consolidated financial statements in conformity with U.S. GAAP, management of the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the pension actuarial assumptions, and the valuation of deferred tax assets.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash and balances due from banks and federal funds sold, all of which mature within 90 days. The Company maintains amounts due from banks, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

Interest Bearing Deposits in Banks

Interest bearing deposits in banks mature within one year and are carried at cost, which approximates fair value.

Securities

Available for sale securities are stated at fair value and unrealized holding gains and losses on available for sale securities are reported as accumulated other comprehensive income (loss), net of applicable deferred income tax and adjusted for any applicable valuation allowance, a separate component of equity. Available for sale securities are written down to market value through operations if an impairment of value is deemed other than temporary due to credit issues. Gains or losses on the sale of securities, if any, are determined on the specific identification method. Securities transactions are recorded on the trade date.

Loans

Loans are carried at the unpaid principal balance adjusted for deferred loan fees and costs and charge-offs. Loan origination and commitment fees and certain direct loan origination costs are deferred and the net amounts amortized as an adjustment of the related loan’s yield over the contractual life of the related loan.

Interest on loans is accrued on the unpaid principal balances as earned. Loans are normally placed on nonaccrual status when contractually past due 90 days or more as to interest or principal payments. Additionally, whenever management becomes aware of facts or circumstances that may adversely impact the collectability of principal or interest on a loan, it is management’s practice to place such loan on nonaccrual status immediately, rather than delaying such action until the loan becomes 90 days past due. When a loan is placed on nonaccrual, previously accrued and uncollected interest on such loan is reversed, amortization of related loan fees is suspended, and income is recorded only to the extent that loan payments are subsequently received in cash and a determination has been made that the principal balance of the loan is collectible. If collectability of the principal is in doubt, payments received are applied to loan principal.

A troubled debt restructuring (“TDR”) includes a loan modification where a borrower is experiencing financial difficulty and a concession is granted to that borrower that would not otherwise have been considered except for the borrower’s financial difficulties. All TDRs are classified as impaired loans. TDRs may be on accrual or nonaccrual status based upon the performance of the borrower and management’s assessment of collectability. Loans deemed nonaccrual may return to accrued status based on performance in accordance with terms of the restructuring, generally six months.

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 and the probability of collecting scheduled principal and interest payment when due.

Loans Held for Sale

Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated market value in the aggregate. Net unrealized losses are recognized through a valuation allowance by charges to operations. All sales are made without recourse.

Allowance for Loan Losses

The allowance for loan losses (“ALL”) is established as losses are estimated to have occurred through a provision for loan losses charged to expense. 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 ALL. The ALL consists of specific reserves on certain impaired loans from analyses developed through specific credit allocations for individual loans. The specific reserve relates to all loans for which the ALL is estimated on a loan by loan basis using either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. The general reserve is based on the Company’s historical loss experience along with consideration of certain qualitative factors such as (i) changes in the nature, volume, and terms of loans, (ii) changes in lending personnel, (iii) changes in the quality of the loan review function, (iv) changes in nature and volume of past-due, nonaccrual, and/or classified loans, (v) changes in concentration of credit risk, (vi) changes in economic and industry conditions, (vii) changes in legal and regulatory requirements, (viii) unemployment and inflation statistics, and (ix) changes in underlying collateral values.

There are many factors affecting the ALL, some are quantitative while others require qualitative judgment. The ALL reflects management’s best estimate of the probable and inherent losses on loans. The adequacy of the ALL is reviewed and approved by the Company’s Board of Directors. Allocations of the ALL may be made for specific loans, but the entire ALL is available for any loan that, in management’s judgment, should be charged-off.

As an integral part of their examination process, various regulatory agencies review the ALL as well. Such agencies may require that changes in the ALL be recognized when such regulatory credit evaluations differ from those of management based on information available to the regulators at the time of their examinations.

Premises and Equipment, Net

Premises and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization expense is provided on the straight-line method over the estimated useful life of the asset for financial reporting purposes, and the straight-line and accelerated methods for income tax purposes. Amortization of leasehold improvements is provided on the straight-line method over the lesser of the term of the respective lease or the estimated economic life of the improvements.

Other Real Estate Owned, Net

Other real estate owned is initially recorded at the fair market value of the real estate acquired less the estimated costs to sell the real estate at the date title is received, establishing a new cost basis, with any write-down charged to the allowance for loan losses. Costs relating to development or improvement of property are capitalized up to the fair value of the property. Valuations are periodically performed by management and independent third parties and a charge to expense is taken if the carrying value of a property exceeds its fair value less estimated costs to sell. Income and expense related to the operations of other real estate owned is recorded net in “Cost of operations of other real estate owned” as a component of non-interest expenses on the condensed consolidated statements of operations. Gains and losses on the sale of other real estate owned are recorded in “Gain on sale of other real estate owned” as a component of non-interest income in the condensed consolidated statements of operations.

Federal Home Loan Bank Stock

The Bank is a member of the Federal Home Loan Bank (“FHLB”) system. Members are required to own a certain amount of FHLB stock based on the Bank’s level of borrowings from the FHLB and other factors, and may invest in additional amounts of FHLB stock. The Bank’s investment in FHLB of Chicago stock meets the minimum amount required by current regulations and is carried at cost, which approximates fair value. FHLB stock is evaluated quarterly for impairment. Based on management’s evaluation, no impairment has been recorded on these securities. Both cash and stock dividends are reported as income.

Defined Benefit Pension Plan

The Bank has a defined benefit pension plan (the “Plan”) covering substantially all of its employees hired prior to March 31, 2012. The benefits are based on years of service and the employee’s average monthly pay received during the five highest consecutive calendar years in the last 10 years of employment under the Plan. Management contributes annually the amounts necessary to provide for defined benefit payments upon retirement or death as determined by the Plan’s actuary. The Plan was frozen effective March 31, 2012 for all employees. No additional benefits are being accrued for active participants after that date and no new participants will be entered into the Plan.

The Bank records annual amounts relating to the Plan based on calculations that incorporate various actuarial and other assumptions including discount rates, mortality, assumed rates of return, compensation increases, and turnover rates. The Bank reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends where appropriate to do so. The effect of modifications to those assumptions is recorded in accumulated other comprehensive income (loss) and amortized to net periodic pension cost over future periods. The Bank believes that the assumptions utilized in recording its obligations under its plan are reasonable based on its experience and market conditions.

Comprehensive Income (Loss)

U.S. GAAP generally requires that recognized revenue, expenses, gains, and losses be included in earnings. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section and changes in the funded status of the pension plan, such items, along with net income (loss) are components of comprehensive income (loss).

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company recognizes the tax effects from an uncertain tax position in the consolidated financial statements only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized, upon ultimate settlement with the relevant tax authority. The Company recognizes interest and penalties accrued or released related to uncertain tax positions in current income tax expense or benefit.

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Advertising

Advertising costs are accrued and expensed in the period incurred.

Off-Balance Sheet Financial Instruments

In the ordinary course of business, the Bank has entered into off-balance-sheet financial instruments consisting of commitments to extend credit, commitments under credit card arrangements, commercial letters of credit and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they are funded or related fees are incurred or received.

Going Concern

On February 15, 2012, the Board of Directors of the Bank executed a Stipulation and Consent to the Issuance of an Amended Consent Order (“Amended Order”), jointly issued by the Federal Deposit Insurance Corporation (“FDIC”) and the WDFI. Following completion of the Bank's reorganization and capital raise as of April 30, 2019, the Bank's capital levels were above the required 8% for Tier 1 and 12% for Risk Based Capital per the Amended Order. The Amended Order was terminated by the FDIC and the WDFI on June 19, 2019. On June 14, 2019, the Bank entered into an agreement with the WDFI and the FDIC. The Bank's current regulatory capital results and requirements are outlined in Note 13 - "Regulatory Capital Requirements."

The condensed consolidated financial statements were prepared on a going concern basis as of December 31, 2019 and June 30, 2019. There is no longer substantial doubt as to the Company’s ability to continue as a going concern for a reasonable period of time from the date of the condensed consolidated financial statements.

Subsequent Events

Management has reviewed the Company's operations for potential disclosure or financial statement impacts related to events occurring after December 31, 2019, but prior to the release of these financial statements. Based on the results of this review, no subsequent event disclosure or financial statement impacts to these financial statements are required as of February 12, 2020.

Reclassification

Certain December 31, 2018 amounts have been reclassified to conform to the December 31, 2019 presentation. The reclassification had no effect on reported amounts of consolidated net loss or stockholders’ equity.

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Defined Benefit Pension Plan - Additional information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Jun. 30, 2019
Defined Benefit Pension Plan
Consecutive period of employee's average month pay received to determine benefits under the Plan			5 years
Number of years of employment to determine pension benefit			10 years
Recognized pension income	$ 21,174	$ 25,422	$ 42,348	$ 63,555
Estimated amortizations from AOCI into net periodic pension cost during the next fiscal year					$ 215,747

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$ 2,837,250	$ 2,928,655	$ 5,761,686	$ 5,860,134
Interest and dividends on investment securities	167,581	177,130	331,080	345,883
Interest on federal funds sold	11,903	6,988	33,616	12,094
Interest on deposits in banks	1,978	515	7,502	1,261
Total Interest Income	3,018,712	3,113,288	6,133,884	6,219,372
INTEREST EXPENSE
Interest on deposits	473,716	371,289	933,952	723,324
Interest on Federal Home Loan Bank borrowings	89,357	266,514	293,298	507,932
Interest on federal funds purchased	19	79	57	100
Total Interest Expense	563,092	637,882	1,227,307	1,231,356
Net interest income before provision for loan losses	2,455,620	2,475,406	4,906,577	4,988,016
Provision for loan losses	0	0	0	0
Net interest income after provision for loan losses	2,455,620	2,475,406	4,906,577	4,988,016
NON-INTEREST INCOME
Service fees on deposits	116,943	124,095	239,548	244,500
Service fees on loans	60,959	94,135	104,333	156,199
Gain on sales of mortgage loans	936,979	287,496	2,187,722	621,782
Income on sale of uninsured products	77,445	65,970	170,512	141,910
Gain on sale of other real estate owned	104,890	0	109,708	0
Other income	5,225	8,837	12,598	16,507
Total Non-Interest Income	1,302,441	580,533	2,824,421	1,180,898
NON-INTEREST EXPENSES
Compensation and benefits	2,041,970	1,821,496	4,191,127	3,641,360
Occupancy	492,766	487,174	982,917	964,114
Advertising	53,422	53,309	134,198	163,579
Data processing services	266,395	298,507	571,814	600,532
FDIC assessment	51,285	118,278	23,826	236,720
Cost of operations for other real estate owned	11,782	19,272	23,096	89,884
Insurance expense	41,600	41,701	81,155	83,816
Professional fees	168,417	70,297	287,487	188,650
Other expenses	268,541	192,506	505,599	387,558
Total Non-Interest Expenses	3,396,178	3,102,540	6,801,219	6,356,213
Income (loss) before income taxes	361,883	(46,601)	929,779	(187,299)
Income tax expense	0	0	0	0
NET INCOME (LOSS)	$ 361,883	$ (46,601)	$ 929,779	$ (187,299)
Basic income per share	$ 0.14		$ 0.35
Diluted income per share	$ 0.14		$ 0.35

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Cash and Due From Banks (Details) - USD ($) $ in Millions	Dec. 31, 2019	Jun. 30, 2019
Cash and Due From Banks
Requirements for cash and reserve balances with Federal Reserve Bank deposits	$ 1.9	$ 1.5

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Earnings Per Share (Details) - USD ($)	3 Months Ended				6 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2019	Dec. 31, 2018
Earnings Per Share
Net income	$ 361,883	$ 567,896	$ (46,601)	$ (140,698)	$ 929,779	$ (187,299)
Basic potential common shares
Weighted average shares outstanding	2,624,343				2,624,343
Basic weighted average shares outstanding	2,624,343				2,624,343
Diluted potential common shares	0				0
Weighted Average Number of Shares Outstanding, Diluted, Total	2,624,343				2,624,343
Basic earnings per share	$ 0.14				$ 0.35
Diluted earnings per share	$ 0.14				$ 0.35

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Available for Sale Securities - Additional Information (Details)	Dec. 31, 2019 USD ($) security	Jun. 30, 2019 USD ($) security
Debt Securities, Available-for-sale [Line Items]
Available for sale securities pledged as collateral on public deposits	$ 0	$ 7,100,000
Obligations of states and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Continuous Unrealized Losses Existing for 12 Months or Greater, Fair Value	$ 1,095,636	$ 2,935,133
Number of securities with unrealized loss position | security	4	12

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Available for Sale Securities

6 Months Ended

Dec. 31, 2019

Available for Sale Securities

Available for Sale Securities

NOTE 6 – Available for Sale Securities

Amortized costs and fair values of available for sale securities are summarized as follows:

	December 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
Obligations of states and political subdivisions	$	19,825,512	$	234,343	$	65,166	$	19,994,689
Mortgage-backed securities		1,441,070		46,645		—		1,487,715
Certificates of deposit		800,000		17,505		—		817,505
	$	22,066,582	$	298,493	$	65,166	$	22,299,909

	June 30, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
Obligations of states and political subdivisions	$	18,719,370	$	217,627	$	58,614	$	18,878,383
Mortgage-backed securities		1,065,193		40,945		—		1,106,138
Certificates of deposit		555,000		2,597		—		557,597
	$	20,339,563	$	261,169	$	58,614	$	20,542,118

The following tables present the portion of the Company's available for sale securities portfolio which has gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position:

	December 31, 2019
	Continuous Unrealized				Continuous Unrealized
	Losses Existing for Less				Losses Existing for 12 Months
	Than 12 Months				or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Obligations of states and political subdivisions	$	1,573,342	$	23,737	$	1,095,636	$	41,429	$	2,668,978	$	65,166

Management does not believe any individual unrealized loss as of December 31, 2019 represents other than temporary impairment. The Bank holds $1.1 million, comprised of four securities, in obligations of states and political subdivisions, at December 31, 2019 that have an unrealized loss existing for 12 months or greater. Management believes the temporary impairment in fair value was caused by market fluctuations in interest rates. Although these securities are classified as available for sale, management does not have the intent to sell the security and it is more likely than not it will be able to hold the security through a recovery period or until maturity.

	June 30, 2019
	Continuous Unrealized				Continuous Unrealized
	Losses Existing for Less				Losses Existing for 12 Months
	Than 12 Months				or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Obligations of states and political subdivisions	$	208,583	$	22	$	2,935,133	$	58,592	$	3,143,716	$	58,614

Management does not believe any individual unrealized loss as of June 30, 2019 represents other than temporary impairment. The Bank holds $2.9 million, comprised of 12 securities, in obligations of states and political subdivisions at June 30, 2019 that have an unrealized loss existing for 12 months or greater. Management believes the temporary impairment in fair value was caused by market fluctuations in interest rates. Although these securities are classified as available for sale, management does not have the intent to sell the security and it is more likely than not it will be able to hold the security through a recovery period or until maturity.

The amortized cost and fair value of available for sale securities as of December 31, 2019 are shown below by contractual maturity. Expected maturities of mortgage-backed securities will differ from contractual maturities since the anticipated maturities are not readily determinable.

	Amortized
	Cost		Fair Value
Due in one year or less	$	2,053,760	$	2,057,417
Due after one year through 5 years		10,818,717		10,929,129
Due after 5 years through 10 years		6,083,035		6,147,269
Due after 10 years		1,670,000		1,678,379
Subtotal		20,625,512		20,812,194
Mortgage backed securities
Due after one year through 5 years		1,015,619		1,058,723
Due after 5 years through 10 years		425,451		428,992
Total	$	22,066,582	$	22,299,909

During the three months ended December 31, 2019 and 2018, the Bank did not sell any available for sale securities. The Bank pledged $0 and $7,100,000 of available for sale securities at December 31, 2019 and June 30, 2019, respectively, as collateral on public deposits and for other purposes as required or permitted by law.

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Income Taxes

6 Months Ended

Dec. 31, 2019

Income Taxes

Income Taxes

NOTE 10 – Income Taxes

The Company recognized no income tax expense for each of the three and six months ended December 31, 2019 and 2018. At the end of each interim period, management estimates the effective tax rate expected to be applicable for the full fiscal year and this rate is applied to the results for the year to date period, and adjusted for any items that are considered discrete in accordance with ASC 740‑270. The primary difference between the statutory tax rate and the effective rate for the period ending December 31, 2019 would be the anticipated change in valuation allowance. Management records a valuation allowance for deferred tax assets that are more likely than not to not be realized.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (INCOME) LOSS
Net income (loss)	$ 361,883	$ (46,601)	$ 929,779	$ (187,299)
Unrealized gains/losses on securities
Net unrealized holding gains (losses) arising during period	(87,138)	247,021	30,772	100,965
Tax effect	0	0	0	0
Change in pension obligation, net of tax	107,874	0	107,874	0
Tax Effect	0	0	0	0
Other comprehensive income (loss), net of tax	(195,012)	247,021	(77,102)	100,965
COMPREHENSIVE INCOME (LOSS)	$ 166,871	$ 200,420	$ 852,677	$ (86,334)

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Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2019	Feb. 12, 2020
Document and Entity Information
Document Type	10-Q
Document Period End Date	Dec. 31, 2019
Entity Registrant Name	TEB Bancorp, Inc.
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,624,343
Entity Central Index Key	0001751700
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

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Recent Accounting Pronouncements

6 Months Ended

Dec. 31, 2019

Recent Accounting Pronouncements

Recent Accounting Pronouncements

NOTE 2 – Recent Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) issues Accounting Standards Updates (“ASU”s) to the FASB Accounting Standards Codification (“ASC”). This section provides a summary description of recent ASUs that had or that management expects may have an impact on the consolidated financial statements issued upon adoption.  The Company is classified as an emerging growth company and has elected 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. Effective dates reflect this election.

Recently Adopted Accounting Pronouncements

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. Under the new guidance, the Company is no longer required to disclose the fair value of financial instruments measured at amortized cost. The Company has early adopted this ASU beginning July 1, 2019. This ASU did not have a material impact on the Company’s consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” ASU 2017-07 applies to all entities that offer employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715, Compensation – Retirement Benefits. The amendments require that an employer disaggregate the service cost component from the other components of net benefit cost, with all updates being applied retrospectively. As the Company has historically not had any service cost component within net periodic pension cost, the impact of this ASU on the Company’s consolidated financial statements is not material.

Recently Issued, But Not Yet Effective Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Topic 842 was subsequently amended by ASU 2018-10, “Codification Improvements to Topic 842, Leases” and ASU 2018-11, “Leases (Topic 842)”. The amendments in this update increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. For leases with a term of 12 months or less, the amendments permit lessees to make an accounting policy election by class of underlying assets not to recognize lease assets and lease liabilities. For finance leases, the amendments in this update require a lessee to (1) recognize a right-of-use asset and lease liability, initially measured at the present value of the lease payments, on the balance sheet; (2) recognize interest on the lease liability separately from amortization of the right-of-use asset in the statement of operations; (3) classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the least liability and variable lease payments within operating activities in the statement of cash flows. For operating leases, the amendments in this update require a lessee to (1) recognized a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on the balance sheet; (2) recognized a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis; (3) classify all cash payments within operating activities in the statement of cash flows. On October 16, 2019, the FASB approved the proposal to delay the effective date for this standard for private and all other entities. Due to the Company’s extended transition period election, the amendments are effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company’s leases are operating leases and ASU 2016-02 will require the Company to add them to its consolidated balance sheet. The Company’s operating leases are predominately related to real estate. Management is currently evaluating other impacts this guidance will have on the consolidated results of operations, financial presentation, and cash flows of the Company.

In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606); Narrow-Scope Improvements and Practical Expedients.” ASU 2016-12 is intended to address certain specific issues identified by the FASB-IASB Joint Transition Resource Group for Revenue Recognition with respect to ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The updates are effective on a retrospective basis for the annual periods beginning after December 15, 2018, and interim periods beginning after December 15, 2019. Based on management’s evaluation under the current guidance, we estimate that substantially all of our interest income and non-interest income will not be impacted by the adoption of these standards, because either the revenue from those contracts with customers is covered by other guidance in U.S. GAAP, or the anticipated revenue recognition outcomes with the adoption of these standards will likely be similar to our current revenue recognition practices. Management has evaluated its non-interest revenue streams, including deposit related fees, service charges, and income on the sale of uninsured products to determine the potential impact of the adoption on the Company’s consolidated financial statements and expects no material changes. Management expects that the adoption of ASUs 2016-12 and 2014-09 will have no material effect on the consolidated results of operations, financial position, or cash flows of the Company.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments.” Topic 326 was subsequently amended by ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses; ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses”; and ASU 2019-05, “Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief.” This ASU replaces the current incurred loss impairment methodology with a methodology that reflected expected credit losses measured at amortized cost and certain other instruments, including loans, held-to-maturity debt securities, net investments in leases, and off-balance-sheet credit exposures. On October 16, 2019, the FASB approved the proposal to delay the effective date for this standard for private and all other entities. Due to the Company’s extended transition period election, the update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Management is currently evaluating the potential impact on its consolidated results of operations, financial position, and cash flows; however, due to the significant differences in the revised guidance from existing U.S. GAAP, the implementation of this guidance may result in material changes in the Company’s accounting for credit losses on financial instruments.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 320) – Classification of Certain Cash Receipts and Cash Payments.” This ASU adds or clarifies guidance on eight cash flow issues. The update is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Earlier application is permitted. Management is currently evaluating the potential impact of the provisions of ASU 2016-15, but believes that its adoption will not have a material impact on the consolidated results of operations, financial position, or cash flows of the Company.

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.” ASU 2017-08 amends guidance on the amortization period of premiums on certain purchased callable debt securities. The amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. ASU 2017-08 is effective for annual periods beginning after December 15, 2019 with early adoption permitted. Management is currently evaluating the potential impact of the new standard on the consolidated results of operations, financial position, and cash flows of the Company.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820, including the removal, modification to, and addition of certain disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. This ASU has a minor impact to and simplifies the Company’s fair value disclosures, and no additional impact to the consolidated financial statements is expected.

In August 2018, the FASB issued ASU No. 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans.” ASU 2018-14 applies to all employers that sponsor defined benefit pension or other postretirement plans. The amendments require that an employer disclose an explanation of the reasons for significant gains and losses related to changes in the net benefit obligation for the period. Multiple disclosure requirements are also removed with this amendment, including: (1) the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year; (2) the amount and timing of plan assets expected to be returned to the employer; (3) related party disclosures about significant transactions between the employer or related parties and the plan; and (4) the effects of a one-percentage-point change in assumed health care cost trend rates on the aggregate of the service and interest cost components of net periodic benefit costs. Additional disclosure requirements contained within Subtopic 715-20 are also clarified. The amendments are effective for fiscal years ending after December 15, 2021. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the consolidated results of operations, financial position, or cash flows of the Company.

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Commitments and Contingencies (Details) - USD ($)	Dec. 31, 2019	Jun. 30, 2019
Commitments to extend credit to borrowers
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial instruments whose contract amounts represent credit risk	$ 17,340,177	$ 18,668,750
Sold loan commitments
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial instruments whose contract amounts represent credit risk	15,325,687	41,760,875
Credit card commitments
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial instruments whose contract amounts represent credit risk	$ 601,263	$ 637,121

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Loans and Allowance for Loan Losses - Changes In Allowance (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Jun. 30, 2019	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Allowance for Loan and Lease Losses [Roll Forward]
Balance at Beginning	$ 1,286,674	$ 1,301,810	$ 1,293,965	$ 1,324,159	$ 1,324,159
Charge-offs	(50,858)	(14,045)	(58,684)	(46,745)	(60,343)
Recoveries	26,656	7,247	27,191	17,598	30,149
Provision			0	0
Balance at Ending	1,262,472	1,295,012	1,262,472	1,295,012	1,293,965
Allowance
Ending balance individually evaluated for impairment						$ 186,404	$ 103,315	$ 192,698
Ending balance collectively evaluated for impairment						1,076,068	1,190,650	1,102,314
Ending balance						1,262,472	1,293,965	1,295,012
Loans
Ending balance individually evaluated for impairment						1,112,843	1,524,868	1,318,569
Ending balance collectively evaluated for impairment						252,609,582	259,642,500	263,040,148
Total loans						253,722,425	261,167,368	264,358,717
Less allowance	1,262,472	1,295,012	1,262,472	1,295,012	1,293,965	1,262,472	1,293,965	1,295,012
Total						252,459,953	259,873,403	263,063,705
Construction, Land, Development
Allowance for Loan and Lease Losses [Roll Forward]
Balance at Beginning	5,670	4,958	4,319	4,758	4,758
Provision	5,193	(1,738)	6,544	(1,538)	(439)
Balance at Ending	10,863	3,220	10,863	3,220	4,319
Allowance
Ending balance collectively evaluated for impairment						10,863	4,319	3,220
Ending balance						10,863	4,319	3,220
Loans
Ending balance collectively evaluated for impairment						7,242,065	4,318,845	3,220,671
Total loans						7,242,065	4,318,845	3,220,671
Less allowance	10,863	3,220	10,863	3,220	4,319	10,863	4,319	3,220
Total						7,231,202	4,314,526	3,217,451
1-4 Family Owner Occupied
Allowance for Loan and Lease Losses [Roll Forward]
Balance at Beginning	56,804	6,151	67,593	7,300	7,300
Charge-offs	(18,846)		(18,846)
Recoveries	4,820	6,744	5,155	16,784	28,735
Provision	57,197	12,955	46,073	1,766	31,558
Balance at Ending	99,975	25,850	99,975	25,850	67,593
Allowance
Ending balance individually evaluated for impairment						43,470	5,772	4,809
Ending balance collectively evaluated for impairment						56,505	61,821	21,041
Ending balance						99,975	67,593	25,850
Loans
Ending balance individually evaluated for impairment						813,101	1,203,256	960,572
Ending balance collectively evaluated for impairment						110,793,849	123,642,066	123,768,658
Total loans						111,606,950	124,845,322	124,729,230
Less allowance	99,975	25,850	99,975	25,850	67,593	99,975	67,593	25,850
Total						111,506,975	124,777,729	124,703,380
1-4 Family Non-Owner Occupied
Allowance for Loan and Lease Losses [Roll Forward]
Balance at Beginning	26,027	24,542	26,630	71,053	71,053
Charge-offs		(14,042)		(44,534)	(44,534)
Provision	(3,859)	18,034	(4,462)	2,015	111
Balance at Ending	22,168	28,534	22,168	28,534	26,630
Allowance
Ending balance collectively evaluated for impairment						22,168	26,630	28,534
Ending balance						22,168	26,630	28,534
Loans
Ending balance individually evaluated for impairment								22,993
Ending balance collectively evaluated for impairment						20,152,740	20,968,812	22,292,226
Total loans						20,152,740	20,968,812	22,315,219
Less allowance	22,168	28,534	22,168	28,534	26,630	22,168	26,630	28,534
Total						20,130,572	20,942,182	22,286,685
Multifamily
Allowance for Loan and Lease Losses [Roll Forward]
Balance at Beginning	111,112	71,120	109,870	71,101	71,101
Provision	5,788	39,984	7,030	40,003	38,769
Balance at Ending	116,900	111,104	116,900	111,104	109,870
Allowance
Ending balance collectively evaluated for impairment						116,900	109,870	111,104
Ending balance						116,900	109,870	111,104
Loans
Ending balance collectively evaluated for impairment						77,933,467	73,246,392	74,069,572
Total loans						77,933,467	73,246,392	74,069,572
Less allowance	116,900	111,104	116,900	111,104	109,870	116,900	109,870	111,104
Total						77,816,567	73,136,522	73,958,468
Commercial Owner Occupied
Allowance for Loan and Lease Losses [Roll Forward]
Balance at Beginning	91,077	131,113	61,193	131,906	131,906
Provision	(10,987)	3,175	18,897	2,382	(70,713)
Balance at Ending	80,090	134,288	80,090	134,288	61,193
Allowance
Ending balance individually evaluated for impairment						76,086	44,564	117,498
Ending balance collectively evaluated for impairment						4,004	16,629	16,790
Ending balance						80,090	61,193	134,288
Loans
Ending balance individually evaluated for impairment						191,014	193,601	196,135
Ending balance collectively evaluated for impairment						8,007,747	8,314,410	8,394,869
Total loans						8,198,761	8,508,011	8,591,004
Less allowance	80,090	134,288	80,090	134,288	61,193	80,090	61,193	134,288
Total						8,118,671	8,446,818	8,456,716
Commercial Non-Owner Occupied
Allowance for Loan and Lease Losses [Roll Forward]
Balance at Beginning	773,186	905,405	738,366	925,355	925,355
Provision	36,536	(23,608)	71,356	(43,558)	(186,989)
Balance at Ending	809,722	881,797	809,722	881,797	738,366
Allowance
Ending balance collectively evaluated for impairment						809,722	738,366	881,797
Ending balance						809,722	738,366	881,797
Loans
Ending balance collectively evaluated for impairment						19,265,342	19,502,545	20,782,399
Total loans						19,265,342	19,502,545	20,782,399
Less allowance	809,722	881,797	809,722	881,797	738,366	809,722	738,366	881,797
Total						18,455,620	18,764,179	19,900,602
Consumer and Installment Loan
Allowance for Loan and Lease Losses [Roll Forward]
Balance at Beginning	72,508	111,323	70,058	98,096	98,096
Charge-offs	(32,012)	(3)	(39,838)	(2,211)	(15,809)
Recoveries	21,836	503	22,036	814	1,414
Provision	23,682	(4,115)	33,758	11,009	(13,643)
Balance at Ending	86,014	107,708	86,014	107,708	70,058
Allowance
Ending balance individually evaluated for impairment						66,848	52,979	70,391
Ending balance collectively evaluated for impairment						19,166	17,079	37,317
Ending balance						86,014	70,058	107,708
Loans
Ending balance individually evaluated for impairment						108,728	128,011	138,869
Ending balance collectively evaluated for impairment						9,214,372	9,649,430	10,511,753
Total loans						9,323,100	9,777,441	10,650,622
Less allowance	86,014	107,708	86,014	107,708	70,058	86,014	70,058	107,708
Total						9,237,086	9,707,383	10,542,914
Not Specifically Allocated
Allowance for Loan and Lease Losses [Roll Forward]
Balance at Beginning	150,290	47,198	215,936	14,590	14,590
Provision	(113,550)	(44,687)	(179,196)	(12,079)	201,346
Balance at Ending	36,740	2,511	36,740	2,511	215,936
Allowance
Ending balance collectively evaluated for impairment						36,740	215,936	2,511
Ending balance						36,740	215,936	2,511
Loans
Less allowance	$ 36,740	$ 2,511	$ 36,740	$ 2,511	$ 215,936	36,740	215,936	2,511
Total						$ (36,740)	$ (215,936)	$ (2,511)

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Loans and Allowance for Loan Losses - Non-performing loans (Details) - USD ($)	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Loans and Allowance for Loan Losses
Nonaccrual Loans	$ 1,112,843	$ 1,524,868
Total non-performing loans	1,112,843	1,524,868	$ 1,318,569
Restructured loans, accruing	0	0
Total Impaired Loans	$ 1,112,843	$ 1,524,868	$ 1,318,569

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Borrowings - Additional Information (Details) - USD ($)	Dec. 31, 2019	Jun. 30, 2019
U.S. Bank
Debt Instrument [Line Items]
Maximum line of credit borrowing in master contract agreement	$ 5,000,000	$ 5,000,000
Line of credit outstanding	0	0
Federal Home Loan Bank ("FHLB")
Debt Instrument [Line Items]
Maximum line of credit borrowing in master contract agreement	125,769,661
Total outstanding in fixed rate term advances	20,500,000	44,200,000
Line of credit outstanding	$ 0	$ 0

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Summary of Significant Accounting Policies (Details) - USD ($)		6 Months Ended
	Apr. 30, 2019	Dec. 31, 2019	Jun. 30, 2019	Feb. 15, 2012
Impairment of Federal Home Loan Bank stock		$ 0
Consecutive period of employee's average month pay received to determine benefits under the Plan		5 years
Number of years of employment to determine pension benefit		10 years
Minimum Tier 1 capital of average assets		4.00%	4.00%	8.00%
Minimum total risk-based capital of risk weighted assets, revising capital plan submitted to FDIC and WDFI		6.00%	6.00%	12.00%
TEB MHC
Shares of common stock sold	1,309,547
Price per share	$ 10.00
Percentage of outstanding shares issued	49.90%
Gross proceeds from issuance	$ 13,100,000
Net proceeds from issuance of common stock	11,400,000
Payments Of Initial Capitalization	$ 100,000
Number of shares held by mutual holding company	1,314,796
Percentage of outstanding shares held by mutual holding company	50.10%
Cost of the reorganization and the issuing of the common stock, deferred	$ 1,649,899

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2019

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of TEB Bancorp, Inc. and its wholly-owned subsidiaries were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto of the Company as of and for the year ended June 30, 2019.

The interim condensed consolidated financial statements of the Company as of December 31, 2019, and for the three and six months ended December 31, 2019 and the condensed consolidated financial statements of the Bank for the three and six months ended December 31, 2018 are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.  Such adjustments are the only adjustments contained in the interim financial statements.  The results of operations for the three and six months ended December 31, 2019, are not necessarily indicative of the results to be achieved for the year ending June 30, 2020 or any other period.

Principles of Consolidation

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements as of and for the periods ending December 31, 2019 and June 30, 2019 include the accounts and operations of TEB Bancorp, Inc. and its wholly-owned subsidiaries, the Bank, Equitable Investment Corp. and Savings Financial Corporation. The unaudited condensed consolidated financial statements for the period ending December 31, 2018 include the accounts and operations of the Bank and its wholly-owned subsidiaries, Equitable Investment Corp. and Savings Financial Corporation. All significant intercompany accounts and transactions have been eliminated in consolidation.

Emerging Growth Company Status

Emerging Growth Company Status

The Jumpstart Our Business Startups Act (the "JOBS Act"), which was signed into law on April 5, 2012, has made numerous changes to the federal securities laws to facilitate access to capital markets. Under the JOBS Act, a company with total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year qualifies as an "emerging growth company". The Company qualifies as an emerging growth company and believes that it will continue to qualify as an emerging growth company.

An emerging growth company may elect to comply with new or amended accounting pronouncements in the same manner as a private company, but must make such election when the company is first required to file a registration statement. Such an election is irrevocable during the period a company is an emerging growth company. The Company has elected to comply with new or amended accounting pronouncements in the same manner as a private company. Accordingly, the financial statements may not be comparable to the financial statements of companies that comply with such new or revised accounting standards.

Use of Estimates

Use of Estimates

In preparing the unaudited condensed consolidated financial statements in conformity with U.S. GAAP, management of the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the pension actuarial assumptions, and the valuation of deferred tax assets.

Cash and Cash Equivalents

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash and balances due from banks and federal funds sold, all of which mature within 90 days. The Company maintains amounts due from banks, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

Interest Bearing Deposits in Banks

Interest Bearing Deposits in Banks

Interest bearing deposits in banks mature within one year and are carried at cost, which approximates fair value.

Securities

Securities

Available for sale securities are stated at fair value and unrealized holding gains and losses on available for sale securities are reported as accumulated other comprehensive income (loss), net of applicable deferred income tax and adjusted for any applicable valuation allowance, a separate component of equity. Available for sale securities are written down to market value through operations if an impairment of value is deemed other than temporary due to credit issues. Gains or losses on the sale of securities, if any, are determined on the specific identification method. Securities transactions are recorded on the trade date.

Loans

Loans

Loans are carried at the unpaid principal balance adjusted for deferred loan fees and costs and charge-offs. Loan origination and commitment fees and certain direct loan origination costs are deferred and the net amounts amortized as an adjustment of the related loan’s yield over the contractual life of the related loan.

Interest on loans is accrued on the unpaid principal balances as earned. Loans are normally placed on nonaccrual status when contractually past due 90 days or more as to interest or principal payments. Additionally, whenever management becomes aware of facts or circumstances that may adversely impact the collectability of principal or interest on a loan, it is management’s practice to place such loan on nonaccrual status immediately, rather than delaying such action until the loan becomes 90 days past due. When a loan is placed on nonaccrual, previously accrued and uncollected interest on such loan is reversed, amortization of related loan fees is suspended, and income is recorded only to the extent that loan payments are subsequently received in cash and a determination has been made that the principal balance of the loan is collectible. If collectability of the principal is in doubt, payments received are applied to loan principal.

A troubled debt restructuring (“TDR”) includes a loan modification where a borrower is experiencing financial difficulty and a concession is granted to that borrower that would not otherwise have been considered except for the borrower’s financial difficulties. All TDRs are classified as impaired loans. TDRs may be on accrual or nonaccrual status based upon the performance of the borrower and management’s assessment of collectability. Loans deemed nonaccrual may return to accrued status based on performance in accordance with terms of the restructuring, generally six months.

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 and the probability of collecting scheduled principal and interest payment when due.

Loans Held for Sale

Loans Held for Sale

Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated market value in the aggregate. Net unrealized losses are recognized through a valuation allowance by charges to operations. All sales are made without recourse.

Allowance for Loan Losses

Allowance for Loan Losses

The allowance for loan losses (“ALL”) is established as losses are estimated to have occurred through a provision for loan losses charged to expense. 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 ALL. The ALL consists of specific reserves on certain impaired loans from analyses developed through specific credit allocations for individual loans. The specific reserve relates to all loans for which the ALL is estimated on a loan by loan basis using either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. The general reserve is based on the Company’s historical loss experience along with consideration of certain qualitative factors such as (i) changes in the nature, volume, and terms of loans, (ii) changes in lending personnel, (iii) changes in the quality of the loan review function, (iv) changes in nature and volume of past-due, nonaccrual, and/or classified loans, (v) changes in concentration of credit risk, (vi) changes in economic and industry conditions, (vii) changes in legal and regulatory requirements, (viii) unemployment and inflation statistics, and (ix) changes in underlying collateral values.

There are many factors affecting the ALL, some are quantitative while others require qualitative judgment. The ALL reflects management’s best estimate of the probable and inherent losses on loans. The adequacy of the ALL is reviewed and approved by the Company’s Board of Directors. Allocations of the ALL may be made for specific loans, but the entire ALL is available for any loan that, in management’s judgment, should be charged-off.

As an integral part of their examination process, various regulatory agencies review the ALL as well. Such agencies may require that changes in the ALL be recognized when such regulatory credit evaluations differ from those of management based on information available to the regulators at the time of their examinations.

Premises and Equipment, Net

Premises and Equipment, Net

Premises and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization expense is provided on the straight-line method over the estimated useful life of the asset for financial reporting purposes, and the straight-line and accelerated methods for income tax purposes. Amortization of leasehold improvements is provided on the straight-line method over the lesser of the term of the respective lease or the estimated economic life of the improvements.

Other Real Estate Owned, Net

Other Real Estate Owned, Net

Other real estate owned is initially recorded at the fair market value of the real estate acquired less the estimated costs to sell the real estate at the date title is received, establishing a new cost basis, with any write-down charged to the allowance for loan losses. Costs relating to development or improvement of property are capitalized up to the fair value of the property. Valuations are periodically performed by management and independent third parties and a charge to expense is taken if the carrying value of a property exceeds its fair value less estimated costs to sell. Income and expense related to the operations of other real estate owned is recorded net in “Cost of operations of other real estate owned” as a component of non-interest expenses on the condensed consolidated statements of operations. Gains and losses on the sale of other real estate owned are recorded in “Gain on sale of other real estate owned” as a component of non-interest income in the condensed consolidated statements of operations.

Federal Home Loan Bank Stock

Federal Home Loan Bank Stock

The Bank is a member of the Federal Home Loan Bank (“FHLB”) system. Members are required to own a certain amount of FHLB stock based on the Bank’s level of borrowings from the FHLB and other factors, and may invest in additional amounts of FHLB stock. The Bank’s investment in FHLB of Chicago stock meets the minimum amount required by current regulations and is carried at cost, which approximates fair value. FHLB stock is evaluated quarterly for impairment. Based on management’s evaluation, no impairment has been recorded on these securities. Both cash and stock dividends are reported as income.

Defined Benefit Pension Plan

Defined Benefit Pension Plan

The Bank has a defined benefit pension plan (the “Plan”) covering substantially all of its employees hired prior to March 31, 2012. The benefits are based on years of service and the employee’s average monthly pay received during the five highest consecutive calendar years in the last 10 years of employment under the Plan. Management contributes annually the amounts necessary to provide for defined benefit payments upon retirement or death as determined by the Plan’s actuary. The Plan was frozen effective March 31, 2012 for all employees. No additional benefits are being accrued for active participants after that date and no new participants will be entered into the Plan.

The Bank records annual amounts relating to the Plan based on calculations that incorporate various actuarial and other assumptions including discount rates, mortality, assumed rates of return, compensation increases, and turnover rates. The Bank reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends where appropriate to do so. The effect of modifications to those assumptions is recorded in accumulated other comprehensive income (loss) and amortized to net periodic pension cost over future periods. The Bank believes that the assumptions utilized in recording its obligations under its plan are reasonable based on its experience and market conditions.

Comprehensive Loss

Comprehensive Income (Loss)

U.S. GAAP generally requires that recognized revenue, expenses, gains, and losses be included in earnings. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section and changes in the funded status of the pension plan, such items, along with net income (loss) are components of comprehensive income (loss).

Income Taxes

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company recognizes the tax effects from an uncertain tax position in the consolidated financial statements only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized, upon ultimate settlement with the relevant tax authority. The Company recognizes interest and penalties accrued or released related to uncertain tax positions in current income tax expense or benefit.

Transfers of Financial Assets

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Advertising

Advertising

Advertising costs are accrued and expensed in the period incurred.

Off-Balance Sheet Financial Instruments

Off-Balance Sheet Financial Instruments

In the ordinary course of business, the Bank has entered into off-balance-sheet financial instruments consisting of commitments to extend credit, commitments under credit card arrangements, commercial letters of credit and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they are funded or related fees are incurred or received.

Going Concern

Going Concern

On February 15, 2012, the Board of Directors of the Bank executed a Stipulation and Consent to the Issuance of an Amended Consent Order (“Amended Order”), jointly issued by the Federal Deposit Insurance Corporation (“FDIC”) and the WDFI. Following completion of the Bank's reorganization and capital raise as of April 30, 2019, the Bank's capital levels were above the required 8% for Tier 1 and 12% for Risk Based Capital per the Amended Order. The Amended Order was terminated by the FDIC and the WDFI on June 19, 2019. On June 14, 2019, the Bank entered into an agreement with the WDFI and the FDIC. The Bank's current regulatory capital results and requirements are outlined in Note 13 - "Regulatory Capital Requirements."

The condensed consolidated financial statements were prepared on a going concern basis as of December 31, 2019 and June 30, 2019. There is no longer substantial doubt as to the Company’s ability to continue as a going concern for a reasonable period of time from the date of the condensed consolidated financial statements.

Subsequent Events

Subsequent Events

Management has reviewed the Company's operations for potential disclosure or financial statement impacts related to events occurring after December 31, 2019, but prior to the release of these financial statements. Based on the results of this review, no subsequent event disclosure or financial statement impacts to these financial statements are required as of February 12, 2020.

Reclassification

Reclassification

Certain December 31, 2018 amounts have been reclassified to conform to the December 31, 2019 presentation. The reclassification had no effect on reported amounts of consolidated net loss or stockholders’ equity.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) issues Accounting Standards Updates (“ASU”s) to the FASB Accounting Standards Codification (“ASC”). This section provides a summary description of recent ASUs that had or that management expects may have an impact on the consolidated financial statements issued upon adoption.  The Company is classified as an emerging growth company and has elected 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. Effective dates reflect this election.

Recently Adopted Accounting Pronouncements

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. Under the new guidance, the Company is no longer required to disclose the fair value of financial instruments measured at amortized cost. The Company has early adopted this ASU beginning July 1, 2019. This ASU did not have a material impact on the Company’s consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” ASU 2017-07 applies to all entities that offer employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715, Compensation – Retirement Benefits. The amendments require that an employer disaggregate the service cost component from the other components of net benefit cost, with all updates being applied retrospectively. As the Company has historically not had any service cost component within net periodic pension cost, the impact of this ASU on the Company’s consolidated financial statements is not material.

Recently Issued, But Not Yet Effective Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Topic 842 was subsequently amended by ASU 2018-10, “Codification Improvements to Topic 842, Leases” and ASU 2018-11, “Leases (Topic 842)”. The amendments in this update increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. For leases with a term of 12 months or less, the amendments permit lessees to make an accounting policy election by class of underlying assets not to recognize lease assets and lease liabilities. For finance leases, the amendments in this update require a lessee to (1) recognize a right-of-use asset and lease liability, initially measured at the present value of the lease payments, on the balance sheet; (2) recognize interest on the lease liability separately from amortization of the right-of-use asset in the statement of operations; (3) classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the least liability and variable lease payments within operating activities in the statement of cash flows. For operating leases, the amendments in this update require a lessee to (1) recognized a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on the balance sheet; (2) recognized a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis; (3) classify all cash payments within operating activities in the statement of cash flows. On October 16, 2019, the FASB approved the proposal to delay the effective date for this standard for private and all other entities. Due to the Company’s extended transition period election, the amendments are effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company’s leases are operating leases and ASU 2016-02 will require the Company to add them to its consolidated balance sheet. The Company’s operating leases are predominately related to real estate. Management is currently evaluating other impacts this guidance will have on the consolidated results of operations, financial presentation, and cash flows of the Company.

In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606); Narrow-Scope Improvements and Practical Expedients.” ASU 2016-12 is intended to address certain specific issues identified by the FASB-IASB Joint Transition Resource Group for Revenue Recognition with respect to ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The updates are effective on a retrospective basis for the annual periods beginning after December 15, 2018, and interim periods beginning after December 15, 2019. Based on management’s evaluation under the current guidance, we estimate that substantially all of our interest income and non-interest income will not be impacted by the adoption of these standards, because either the revenue from those contracts with customers is covered by other guidance in U.S. GAAP, or the anticipated revenue recognition outcomes with the adoption of these standards will likely be similar to our current revenue recognition practices. Management has evaluated its non-interest revenue streams, including deposit related fees, service charges, and income on the sale of uninsured products to determine the potential impact of the adoption on the Company’s consolidated financial statements and expects no material changes. Management expects that the adoption of ASUs 2016-12 and 2014-09 will have no material effect on the consolidated results of operations, financial position, or cash flows of the Company.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments.” Topic 326 was subsequently amended by ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses; ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses”; and ASU 2019-05, “Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief.” This ASU replaces the current incurred loss impairment methodology with a methodology that reflected expected credit losses measured at amortized cost and certain other instruments, including loans, held-to-maturity debt securities, net investments in leases, and off-balance-sheet credit exposures. On October 16, 2019, the FASB approved the proposal to delay the effective date for this standard for private and all other entities. Due to the Company’s extended transition period election, the update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Management is currently evaluating the potential impact on its consolidated results of operations, financial position, and cash flows; however, due to the significant differences in the revised guidance from existing U.S. GAAP, the implementation of this guidance may result in material changes in the Company’s accounting for credit losses on financial instruments.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 320) – Classification of Certain Cash Receipts and Cash Payments.” This ASU adds or clarifies guidance on eight cash flow issues. The update is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Earlier application is permitted. Management is currently evaluating the potential impact of the provisions of ASU 2016-15, but believes that its adoption will not have a material impact on the consolidated results of operations, financial position, or cash flows of the Company.

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.” ASU 2017-08 amends guidance on the amortization period of premiums on certain purchased callable debt securities. The amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. ASU 2017-08 is effective for annual periods beginning after December 15, 2019 with early adoption permitted. Management is currently evaluating the potential impact of the new standard on the consolidated results of operations, financial position, and cash flows of the Company.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820, including the removal, modification to, and addition of certain disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. This ASU has a minor impact to and simplifies the Company’s fair value disclosures, and no additional impact to the consolidated financial statements is expected.

In August 2018, the FASB issued ASU No. 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans.” ASU 2018-14 applies to all employers that sponsor defined benefit pension or other postretirement plans. The amendments require that an employer disclose an explanation of the reasons for significant gains and losses related to changes in the net benefit obligation for the period. Multiple disclosure requirements are also removed with this amendment, including: (1) the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year; (2) the amount and timing of plan assets expected to be returned to the employer; (3) related party disclosures about significant transactions between the employer or related parties and the plan; and (4) the effects of a one-percentage-point change in assumed health care cost trend rates on the aggregate of the service and interest cost components of net periodic benefit costs. Additional disclosure requirements contained within Subtopic 715-20 are also clarified. The amendments are effective for fiscal years ending after December 15, 2021. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the consolidated results of operations, financial position, or cash flows of the Company.

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Loans and Allowance for Loan Losses (Tables)

6 Months Ended

Dec. 31, 2019

Loans and Allowance for Loan Losses

Schedule of loan classifications

	December 31, 2019		June 30, 2019
Construction, land, development	$	7,242,065	$	4,318,845
1-4 family owner occupied		111,606,950		124,845,322
1-4 family non-owner occupied		20,152,740		20,968,812
Multifamily		77,933,467		73,246,392
Commercial owner occupied		8,198,761		8,508,011
Commercial non-owner occupied		19,265,342		19,502,545
Consumer and installment loans		9,323,100		9,777,441
Total loans		253,722,425		261,167,368
Less:
Allowance for loan losses		(1,262,472)		(1,293,965)
Loans, net	$	252,459,953	$	259,873,403

Schedule of non-performing loans

	December 31, 2019		June 30, 2019
Nonaccrual Loans	$	1,112,843	$	1,524,868
Total non-performing loans	$	1,112,843	$	1,524,868
Restructured loans, accruing	$	—	$	—
Total impaired loans	$	1,112,843	$	1,524,868

Schedule of impaired loans

	December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
With related allowance recorded
Recorded investment	$	—	$	97,774	$	—	$	—	$	191,014	$	—	$	108,728	$	397,516
Unpaid principal balance		—		97,774		—		—		191,014		—		108,728		397,516
Related allowance		—		43,470		—		—		76,086		—		66,848		186,404
With no related allowance recorded
Recorded investment	$	—	$	715,327	$	—	$	—	$	—	$	—	$	—	$	715,327
Unpaid principal balance		—		715,327		—		—		—		—		—		715,327
Related allowance		—		—		—		—		—		—		—		—
Total
Recorded investment	$	—	$	813,101	$	—	$	—	$	191,014	$	—	$	108,728	$	1,112,843
Unpaid principal balance		—		813,101		—		—		191,014		—		108,728		1,112,843
Related allowance		—		43,470		—		—		76,086		—		66,848		186,404
	Three Months Ended December 31, 2019
Average recorded balance	$	—	$	875,987	$	—	$	—	$	191,651	$	—	$	122,114	$	1,189,752
																—
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		—		4,012		—		—		1,079		—		—		5,091
Total interest on impaired loans	$	—	$	4,012	$	—	$	—	$	1,079	$	—	$	—	$	5,091
	Six Months Ended December 31, 2019
Average recorded balance	$	—	$	1,070,070	$	2,829	$	—	$	192,294	$	—	$	123,339	$	1,388,532
																—
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		—		8,803		298		—		4,382		—		—		13,483
Total interest on impaired loans	$	—	$	8,803	$	298	$	—	$	4,382	$	—	$	—	$	13,483

	June 30, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
With related allowance recorded
Recorded investment	$	—	$	70,608	$	—	$	—	$	193,601	$	—	$	113,856	$	378,065
Unpaid principal balance		—		70,608		—		—		193,601		—		113,856		378,065
Related allowance		—		5,772		—		—		44,564		—		52,979		103,315
With no related allowance recorded
Recorded investment	$	—	$	1,132,648	$	—	$	—	$	—	$	—	$	14,155	$	1,146,803
Unpaid principal balance		—		1,132,648		—		—		—		—		14,155		1,146,803
Related allowance		—		—		—		—		—		—		—		—
Total
Recorded investment	$	—	$	1,203,256	$	—	$	—	$	193,601	$	—	$	128,011	$	1,524,868
Unpaid principal balance		—		1,203,256		—		—		193,601		—		128,011		1,524,868
Related allowance		—		5,772		—		—		44,564		—		52,979		103,315
Average recorded balance	$	19,198	$	865,338	$	21,509	$	—	$	196,182	$	—	$	133,467	$	1,235,694
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		353		19,352		288		—		7,917		—		2,894		30,804
Total interest on impaired loans	$	353	$	19,352	$	288	$	—	$	7,917	$	—	$	2,894	$	30,804

	December 31, 2018
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
With related allowance recorded
Recorded investment	$	—	$	70,608	$	—	$	—	$	196,135	$	—	$	131,268	$	398,011
Unpaid principal balance		—		70,608		—		—		196,135		—		131,268		398,011
Related allowance		—		4,809		—		—		117,498		—		70,391		192,698
With no related allowance recorded
Recorded investment	$	—	$	889,964	$	22,993	$	—	$	—	$	—	$	7,601	$	920,558
Unpaid principal balance		—		889,964		22,993		—		—		—		7,601		920,558
Related allowance		—		—		—		—		—		—		—		—
Total
Recorded investment	$	—	$	960,572	$	22,993	$	—	$	196,135	$	—	$	138,869	$	1,318,569
Unpaid principal balance		—		960,572		22,993		—		196,135		—		138,869		1,318,569
Related allowance		—		4,809		—		—		117,498		—		70,391		192,698
	Three Months Ended December 31, 2018
Average recorded balance	$	—	$	728,723	$	11,496	$	—	$	196,335	$	—	$	136,350	$	1,072,904
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		3,531		1,947		348		—		1,078		—		1,000		7,904
Total interest on impaired loans	$	3,531	$	1,947	$	348	$	—	$	1,078	$	—	$	1,000	$	7,904
	Six Months Ended December 31, 2018
Average recorded balance	$	21,843	$	719,614	$	29,552	$	—	$	197,009	$	—	$	136,347	$	1,104,365
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		3,531		15,063		348		—		3,162		—		1,175		23,279
Total interest in impaired loans	$	3,531	$	15,063	$	348	$	—	$	3,162	$	—	$	1,175	$	23,279

Schedule of loans by risk rating

	December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
1-4	$	7,242,065	$	110,793,849	$	20,152,740	$	77,933,467	$	8,007,747	$	11,301,175	$	9,214,372	$	244,645,415
5		—		—		—		—		—		7,964,167		—		7,964,167
6		—		579,603		—		—		191,014		—		32,559		803,176
7		—		233,498		—		—		—		—		76,169		309,667
Total	$	7,242,065	$	111,606,950	$	20,152,740	$	77,933,467	$	8,198,761	$	19,265,342	$	9,323,100	$	253,722,425

	June 30, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
1-4	$	4,318,845	$	123,642,066	$	20,968,812	$	73,246,392	$	8,314,410	$	11,382,336	$	9,649,430	$	251,522,291
5		—		—		—		—		—		8,120,209		—		8,120,209
6		—		895,442		—		—		193,601		—		128,011		1,217,054
7		—		307,814		—		—		—		—		—		307,814
Total	$	4,318,845	$	124,845,322	$	20,968,812	$	73,246,392	$	8,508,011	$	19,502,545	$	9,777,441	$	261,167,368

Schedule of aged analysis of past due loans

	December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
30‑59 days, accruing	$	35,697	$	1,887,777	$	58,833	$	—	$	—	$	25,871	$	50,118	$	2,058,296
60‑89 days, accruing		—		908,130		—		—		—		—		5,312		913,442
90 days & over or nonaccrual		—		813,101		—		—		191,014		—		108,728		1,112,843
Total	$	35,697	$	3,609,008	$	58,833	$	—	$	191,014	$	25,871	$	164,158	$	4,084,581

	June 30, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
30‑59 days, accruing	$	—	$	2,129,016	$	103,706	$	—	$	—	$	—	$	72,482	$	2,305,204
60‑89 days, accruing		—		450,183		—		—		—		—		25,220		475,403
90 days & over or nonaccrual		—		1,203,256		—		—		193,601		—		128,011		1,524,868
Total	$	—	$	3,782,455	$	103,706	$	—	$	193,601	$	—	$	225,713	$	4,305,475

Schedule of allowance for loan losses and recorded investment

	Three Months Ended December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Unallocated		Total
Allowance
Balance at 10/1/19	$	5,670	$	56,804	$	26,027	$	111,112	$	91,077	$	773,186	$	72,508	$	150,290	$	1,286,674
Charge-offs		—		(18,846)		—		—		—		—		(32,012)		—		(50,858)
Recoveries		—		4,820		—		—		—		—		21,836		—		26,656
Provision		5,193		57,197		(3,859)		5,788		(10,987)		36,536		23,682		(113,550)		—
Balance at 12/31/19	$	10,863	$	99,975	$	22,168	$	116,900	$	80,090	$	809,722	$	86,014	$	36,740	$	1,262,472
	Six Months Ended December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial				Not
	Land,		Owner		Non-Owner				Owner-		Non-Owner				Specifically
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Allocated		Total
Allowance
Balance at 6/30/19	$	4,319	$	67,593	$	26,630	$	109,870	$	61,193	$	738,366	$	70,058	$	215,936	$	1,293,965
Charge-offs		—		(18,846)		—		—		—		—		(39,838)		—		(58,684)
Recoveries		—		5,155		—		—		—		—		22,036		—		27,191
Provision		6,544		46,073		(4,462)		7,030		18,897		71,356		33,758		(179,196)		—
Balance at 12/31/19	$	10,863	$	99,975	$	22,168	$	116,900	$	80,090	$	809,722	$	86,014	$	36,740	$	1,262,472
Allowance
Ending balance individually evaluated for impairment	$	—	$	43,470	$	—	$	—	$	76,086	$	—	$	66,848	$	—	$	186,404
Ending balance collectively evaluated for impairment		10,863		56,505		22,168		116,900		4,004		809,722		19,166		36,740		1,076,068
Ending balance	$	10,863	$	99,975	$	22,168	$	116,900	$	80,090	$	809,722	$	86,014	$	36,740	$	1,262,472
Loans
Ending balance individually evaluated for impairment	$	—	$	813,101	$	—	$	—	$	191,014	$	—	$	108,728	$	—	$	1,112,843
Ending balance collectively evaluated for impairment		7,242,065		110,793,849		20,152,740		77,933,467		8,007,747		19,265,342		9,214,372		—		252,609,582
Total loans	$	7,242,065	$	111,606,950	$	20,152,740	$	77,933,467	$	8,198,761	$	19,265,342	$	9,323,100	$	—	$	253,722,425
Less allowance	$	10,863	$	99,975	$	22,168	$	116,900	$	80,090	$	809,722	$	86,014	$	36,740	$	1,262,472
Total loans, net	$	7,231,202	$	111,506,975	$	20,130,572	$	77,816,567	$	8,118,671	$	18,455,620	$	9,237,086	$	(36,740)	$	252,459,953

	June 30, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial				Not
	Land,		Owner		Non-Owner				Owner-		Non-Owner				Specifically
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Allocated		Total
Allowance
Balance at 6/30/18	$	4,758	$	7,300	$	71,053	$	71,101	$	131,906	$	925,355	$	98,096	$	14,590	$	1,324,159
Charge-offs		—		—		(44,534)		—		—		—		(15,809)		—		(60,343)
Recoveries		—		28,735		—		—		—		—		1,414		—		30,149
Provision		(439)		31,558		111		38,769		(70,713)		(186,989)		(13,643)		201,346		—
Balance at 6/30/19	$	4,319	$	67,593	$	26,630	$	109,870	$	61,193	$	738,366	$	70,058	$	215,936	$	1,293,965
Allowance
Ending balance individually evaluated for impairment	$	—	$	5,772	$	—	$	—	$	44,564	$	—	$	52,979	$	—	$	103,315
Ending balance collectively evaluated for impairment		4,319		61,821		26,630		109,870		16,629		738,366		17,079		215,936		1,190,650
Ending balance	$	4,319	$	67,593	$	26,630	$	109,870	$	61,193	$	738,366	$	70,058	$	215,936	$	1,293,965
Loans
Ending balance individually evaluated for impairment	$	—	$	1,203,256	$	—	$	—	$	193,601	$	—	$	128,011	$	—	$	1,524,868
Ending balance collectively evaluated for impairment		4,318,845		123,642,066		20,968,812		73,246,392		8,314,410		19,502,545		9,649,430		—		259,642,500
Total loans	$	4,318,845	$	124,845,322	$	20,968,812	$	73,246,392	$	8,508,011	$	19,502,545	$	9,777,441	$	—	$	261,167,368
Less allowance	$	4,319	$	67,593	$	26,630	$	109,870	$	61,193	$	738,366	$	70,058	$	215,936	$	1,293,965
Total loans, net	$	4,314,526	$	124,777,729	$	20,942,182	$	73,136,522	$	8,446,818	$	18,764,179	$	9,707,383	$	(215,936)	$	259,873,403

	Three Months Ended December 31, 2018
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Unallocated		Total
Allowance
Balance at 10/1/18	$	4,958	$	6,151	$	24,542	$	71,120	$	131,113	$	905,405	$	111,323	$	47,198	$	1,301,810
Charge-offs		—		—		(14,042)		—		—		—		(3)		—		(14,045)
Recoveries		—		6,744		—		—		—		—		503		—		7,247
Provision		(1,738)		12,955		18,034		39,984		3,175		(23,608)		(4,115)		(44,687)		—
Balance at 12/31/18	$	3,220	$	25,850	$	28,534	$	111,104	$	134,288	$	881,797	$	107,708	$	2,511	$	1,295,012
	Six Months Ended December 31, 2018
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial				Not
	Land,		Owner		Non-Owner				Owner-		Non-Owner				Specifically
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Allocated		Total
Allowance
Balance at 6/30/18	$	4,758	$	7,300	$	71,053	$	71,101	$	131,906	$	925,355	$	98,096	$	14,590	$	1,324,159
Charge-offs		—		—		(44,534)		—		—		—		(2,211)		—		(46,745)
Recoveries		—		16,784		—		—		—		—		814		—		17,598
Provision		(1,538)		1,766		2,015		40,003		2,382		(43,558)		11,009		(12,079)		—
Balance at 12/31/18	$	3,220	$	25,850	$	28,534	$	111,104	$	134,288	$	881,797	$	107,708	$	2,511	$	1,295,012
Allowance
Ending balance individually evaluated for impairment	$	—	$	4,809	$	—	$	—	$	117,498	$	—	$	70,391	$	—	$	192,698
Ending balance collectively evaluated for impairment		3,220		21,041		28,534		111,104		16,790		881,797		37,317		2,511		1,102,314
Ending balance	$	3,220	$	25,850	$	28,534	$	111,104	$	134,288	$	881,797	$	107,708	$	2,511	$	1,295,012
Loans
Ending balance individually evaluated for impairment	$	—	$	960,572	$	22,993	$	—	$	196,135	$	—	$	138,869	$	—	$	1,318,569
Ending balance collectively evaluated for impairment		3,220,671		123,768,658		22,292,226		74,069,572		8,394,869		20,782,399		10,511,753		—		263,040,148
Total loans	$	3,220,671	$	124,729,230	$	22,315,219	$	74,069,572	$	8,591,004	$	20,782,399	$	10,650,622	$	—	$	264,358,717
Less allowance	$	3,220	$	25,850	$	28,534	$	111,104	$	134,288	$	881,797	$	107,708	$	2,511	$	1,295,012
Total loans, net	$	3,217,451	$	124,703,380	$	22,286,685	$	73,958,468	$	8,456,716	$	19,900,602	$	10,542,914	$	(2,511)	$	263,063,705

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Fair Value of Financial Instruments

6 Months Ended

Dec. 31, 2019

Fair Value of Financial Instruments

Fair Value of Financial Instruments

NOTE 4 – Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer liabilities in an orderly transaction between market participants at the measurement date (exit price) and establishes a framework for measuring fair value.

To determine fair value the Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company is able to classify fair value balances based on the observability of those inputs. The guidance establishes a fair value hierarchy that prioritizes the inputs 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) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

>     Level 1 - Fair value is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as listed equities and U.S. Treasury securities.

>     Level 2 - Fair value is based upon quoted prices for similar, but not identical, assets and liabilities in active markets, and other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. This also includes quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data.

>     Level 3 - Fair value is based upon financial models using primarily unobservable inputs. Unobservable inputs reflect the Company's own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Assets

Available for sale securities Where quoted prices for securities are available in an active market, those securities are classified within Level 1 of the valuation hierarchy. If such quoted market prices are not available, then fair values are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Examples of securities with similar characteristics, which would generally be classified within Level 2 of the valuation hierarchy, include certain AAA-rated U.S. government sponsored agency securities, municipal obligations, and mortgage-backed securities. A security using financial models based upon primarily unobservable inputs, such as commercial paper, would generally be classified within Level 3 of the valuation hierarchy.

Loans The Company does not record loans at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses may be established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment. The fair value of impaired loans is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the collateral exceeds the recorded investments in such loans and for which carrying amount will remain at amortized cost. Impaired loans where an allowance is established based on the fair value of collateral or expected cash flows require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, less selling costs, the Company records the impaired loan as a non-recurring Level 3 valuation. At December 31, 2019 and June 30, 2019, substantially all of the impaired loans were evaluated based on the fair value of the collateral with adjustments to their appraised values ranging from 5%to 15% for selling costs.

Other real estate owned, net Assets on which the underlying collateral has been repossessed are initially recorded at the fair market value of the real estate acquired less estimated costs to sell, establishing a new cost basis.

Subsequently, other real estate owned is carried at the lower of carrying value 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, less selling costs, the Company records the repossessed asset as a non-recurring Level 3 valuation. At December 31, 2019 and June 30, 2019 substantially all of the other real estate owned was evaluated based on the fair value of the collateral with adjustments to their appraised values ranging from 5%  to  15% for selling costs.

The following tables set forth, by level within the fair value hierarchy, the Company's financial assets that were accounted for at fair value on a recurring and non-recurring basis as of December 31, 2019 and June 30, 2019, respectively. According to fair value guidance, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

	Fair Value as of December 31, 2019
	Level 1		Level 2		Level 3		Total
Securities classified as available for sale:
Obligations of states and political subdivisions	$	—	$	19,994,689	$	—	$	19,994,689
Mortgage-backed securities		—		1,487,715		—		1,487,715
Certificates of deposit		—		817,505		—		817,505
Total	$	—	$	22,299,909	$	—	$	22,299,909

	Fair Value as of June 30, 2019
	Level 1		Level 2		Level 3		Total
Securities classified as available for sale:
Obligations of states and political subdivisions	$	—	$	18,878,383	$	—	$	18,878,383
Mortgage-backed securities		—		1,106,138		—		1,106,138
Certificates of deposit		—		557,597		—		557,597
Total	$	—	$	20,542,118	$	—	$	20,542,118

Assets measured at fair value on non-recurring basis:

	Fair Value as of December 31, 2019
	Level 1		Level 2		Level 3		Total
Loans, net	$	—	$	—	$	211,112	$	211,112
Other real estate owned, net		—		—		3,302,148		3,302,148
Total	$	—	$	—	$	3,513,260	$	3,513,260

	Fair Value as of June 30, 2019
	Level 1		Level 2		Level 3		Total
Loans, net	$	—	$	—	$	274,750	$	274,750
Other real estate owned, net		—		—		4,080,401		4,080,401
Total	$	—	$	—	$	4,355,151	$	4,355,151

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Loan Servicing

6 Months Ended

Dec. 31, 2019

Loan Servicing

Loan Servicing

NOTE 8 – Loan Servicing

The unpaid principal balance of loans serviced for others, which is not included in the condensed consolidated financial statements, was $2,717,538 and $2,828,576 at December 31, 2019 and June 30, 2019, respectively. The Bank maintained custodial balances in the amount of $0 at December 31, 2019 and June 30, 2019, respectively, in connection with the foregoing loan servicing.

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Commitments and Contingencies

6 Months Ended

Dec. 31, 2019

Commitments and Contingencies

Commitments and Contingencies

NOTE 12 – Commitments and Contingencies

In the normal course of business, the Company is involved in various legal proceedings. In the opinion of management, any liability resulting from such proceedings would not have a material adverse effect on the consolidated financial statements.

The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, financial guarantees, and standby letters of credit. They involve, to varying degrees, elements of credit risk in excess of amounts recognized on the consolidated balance sheets.

The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and issuing letters of credit as they do for on-balance-sheet instruments.

A summary of the contract or notional amount of the Company's exposure to off-balance-sheet risk is as follows:

	December 31, 2019		June 30, 2019
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit to borrowers	$	17,340,177	$	18,668,750
Sold loan commitments		15,325,687		41,760,875
Credit card commitments		601,263		637,121

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

As of December 31, 2019 and June 30, 2019, the Company does not engage in the use of interest rate swaps, futures or option contracts.

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Available for Sale Securities - Company’s available for sale securities portfolio (Details) - Obligations of states and political subdivisions - USD ($)	Dec. 31, 2019	Jun. 30, 2019
Debt Securities, Available-for-sale [Line Items]
Continuous Unrealized Losses Existing for Less Than 12 Months, Fair Value	$ 1,573,342	$ 208,583
Continuous Unrealized Losses Existing for Less Than 12 Months, Unrealized Losses	23,737	22
Continuous Unrealized Losses Existing for 12 Months or Greater, Fair Value	1,095,636	2,935,133
Continuous Unrealized Losses Existing for 12 Months or Greater, Unrealized Losses	41,429	58,592
Total, Fair Value	2,668,978	3,143,716
Total, Unrealized Losses	$ 65,166	$ 58,614

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Fair Value of Financial Instruments - Fair value on non-recurring basis (Details) - USD ($)	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	$ 252,459,953	$ 259,873,403	$ 263,063,705
Other real estate owned, net	3,302,148	4,080,401
Fair value on non-recurring basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	211,112	274,750
Other real estate owned, net	3,302,148	4,080,401
Total	3,513,260	4,355,151
Fair value on non-recurring basis | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	0	0
Other real estate owned, net	0	0
Total	0	0
Fair value on non-recurring basis | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	0	0
Other real estate owned, net	0	0
Total	0	0
Fair value on non-recurring basis | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans, net	211,112	274,750
Other real estate owned, net	3,302,148	4,080,401
Total	$ 3,513,260	$ 4,355,151

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Jun. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)			$ 929,779	$ (187,299)
Adjustments to reconcile net income (loss) to net cash flows from operating activities
Provision for loan losses			0	0
Depreciation			282,449	278,919
Amortization and accretion			29,245	41,593
Origination of mortgage loans held for sale			(150,995,339)	(45,532,436)
Proceeds from sales of mortgage loans held for sale			154,091,310	49,815,774
Gain on sale of mortgage loans held for sale	$ (936,979)	$ (287,496)	(2,187,722)	(621,782)
Gain on sale of other real estate owned, net			(109,708)	0
Loss on sale or disposal of assets, net			1,650	0
Changes in assets and liabilities:
Accrued interest receivable and other assets			(231,896)	454,274
Accrued interest payable and other liabilities			862,089	(1,042,560)
Net cash flows provided by operating activities			2,671,857	3,206,483
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities or calls of securities available for sale			348,168	295,322
Purchase of securities available for sale			(2,104,432)	(650,000)
Change in loans			7,276,779	516,245
Changes from redemption (purchase) of FHLB stock			1,026,000	(274,500)
Change in interest bearing deposits in banks			3,472,022	(51,124)
Proceeds from sale of other real estate owned			1,061,484	251,025
Capital expenditures on other real estate owned			(36,852)	(27)
Proceeds from sale of premises and equipment			8,000	0
Purchase of premises and equipment, net			(156,912)	(156,279)
Net cash flows provided by (used in) investing activities			10,894,257	(69,338)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits			14,126,697	(6,658,959)
FHLB advance proceeds			847,200,000	318,550,000
FHLB advance repayments			(870,900,000)	(312,450,000)
Change in advance payments by borrowers for property taxes and insurance			(2,960,286)	(3,250,840)
Net cash flows used in financing activities			(12,533,589)	(3,809,799)
Net Change in Cash and Cash Equivalents			1,032,525	(672,654)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD			5,630,770	6,134,146	$ 6,134,146
CASH AND CASH EQUIVALENTS - END OF PERIOD	$ 6,663,295	$ 5,461,492	6,663,295	5,461,492	$ 5,630,770
SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash paid for interest			908,675	712,263
Loans transferred to other real estate owned			$ 136,671	$ 418,849

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($)	Dec. 31, 2019	Jun. 30, 2019
CONDENSED CONSOLIDATED BALANCE SHEETS
Allowance for loan losses	$ 1,262,472	$ 1,293,965
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	2,624,343	2,624,343
Common stock, shares outstanding	2,624,343	2,624,343

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Regulatory Capital Requirements - Additional Information (Details) - USD ($)	Jan. 01, 2019	Jan. 01, 2016	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Regulatory Capital Requirements
Movement of capital conservation buffer	2.50%	0.625%
Percentage of bank's net worth of total assets			6.00%
Bank's net worth of total assets			$ 24,449,538	$ 23,501,513
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment			$ 1,076,068	$ 1,190,650	$ 1,102,314
Percentage of net worth on assets			8.50%	7.90%

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Borrowings - Tabular Information (Details) - USD ($)	Dec. 31, 2019	Jun. 30, 2019
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	$ 20,500,000	$ 44,200,000
FHLB fixed rate advance (2.45%, matures 7/1/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	0	7,500,000
FHLB fixed rate advance (2.43%, matures 7/2/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	0	15,000,000
FHLB fixed rate advance (2.45%, matures 7/3/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	0	5,000,000
FHLB fixed rate advance (2.43%, matures 7/3/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	0	8,000,000
FHLB fixed rate advance (2.649%, matures 7/23/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	0	2,500,000
FHLB fixed rate advance (2.649%, matures 7/24/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	0	3,100,000
FHLB fixed rate advance (2.647%, matures 7/25/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	0	3,100,000
FHLB fixed rate advance (1.72%, matures 1/2/20)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	4,000,000	0
FHLB fixed rate advance (1.72%, matures 1/3/20)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	7,500,000	0
FHLB fixed rate advance (1.72%, matures 1/6/20)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	3,000,000	0
FHLB fixed rate advance (1.74%, matures 1/7/20)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	1,000,000	0
FHLB fixed rate advance (1.74%, matures 1/7/20)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	500,000	0
FHLB fixed rate advance (1.72%, matures 1/8/20)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank borrowings	$ 4,500,000	$ 0

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Loans and Allowance for Loan Losses - Risk rating (Details) - USD ($)	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 253,722,425	$ 261,167,368	$ 264,358,717
Construction, Land, Development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	7,242,065	4,318,845	3,220,671
1-4 Family Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	111,606,950	124,845,322	124,729,230
1-4 Family Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	20,152,740	20,968,812	22,315,219
Multifamily
Financing Receivable, Recorded Investment [Line Items]
Total Loans	77,933,467	73,246,392	74,069,572
Commercial Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	8,198,761	8,508,011	8,591,004
Commercial Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	19,265,342	19,502,545	20,782,399
Consumer and Installment Loan
Financing Receivable, Recorded Investment [Line Items]
Total Loans	9,323,100	9,777,441	$ 10,650,622
1-4
Financing Receivable, Recorded Investment [Line Items]
Total Loans	244,645,415	251,522,291
1-4 | Construction, Land, Development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	7,242,065	4,318,845
1-4 | 1-4 Family Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	110,793,849	123,642,066
1-4 | 1-4 Family Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	20,152,740	20,968,812
1-4 | Multifamily
Financing Receivable, Recorded Investment [Line Items]
Total Loans	77,933,467	73,246,392
1-4 | Commercial Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	8,007,747	8,314,410
1-4 | Commercial Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	11,301,175	11,382,336
1-4 | Consumer and Installment Loan
Financing Receivable, Recorded Investment [Line Items]
Total Loans	9,214,372	9,649,430
5
Financing Receivable, Recorded Investment [Line Items]
Total Loans	7,964,167	8,120,209
5 | Construction, Land, Development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
5 | 1-4 Family Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
5 | 1-4 Family Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
5 | Multifamily
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
5 | Commercial Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
5 | Commercial Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	7,964,167	8,120,209
5 | Consumer and Installment Loan
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
6
Financing Receivable, Recorded Investment [Line Items]
Total Loans	803,176	1,217,054
6 | Construction, Land, Development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
6 | 1-4 Family Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	579,603	895,442
6 | 1-4 Family Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
6 | Multifamily
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
6 | Commercial Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	191,014	193,601
6 | Commercial Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
6 | Consumer and Installment Loan
Financing Receivable, Recorded Investment [Line Items]
Total Loans	32,559	128,011
7
Financing Receivable, Recorded Investment [Line Items]
Total Loans	309,667	307,814
7 | Construction, Land, Development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
7 | 1-4 Family Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	233,498	307,814
7 | 1-4 Family Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
7 | Multifamily
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
7 | Commercial Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
7 | Commercial Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
7 | Consumer and Installment Loan
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 76,169	$ 0

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Dec. 31, 2019

Fair Value of Financial Instruments

Schedule of fair value assets measured on recurring basis

	Fair Value as of December 31, 2019
	Level 1		Level 2		Level 3		Total
Securities classified as available for sale:
Obligations of states and political subdivisions	$	—	$	19,994,689	$	—	$	19,994,689
Mortgage-backed securities		—		1,487,715		—		1,487,715
Certificates of deposit		—		817,505		—		817,505
Total	$	—	$	22,299,909	$	—	$	22,299,909

	Fair Value as of June 30, 2019
	Level 1		Level 2		Level 3		Total
Securities classified as available for sale:
Obligations of states and political subdivisions	$	—	$	18,878,383	$	—	$	18,878,383
Mortgage-backed securities		—		1,106,138		—		1,106,138
Certificates of deposit		—		557,597		—		557,597
Total	$	—	$	20,542,118	$	—	$	20,542,118

Schedule of fair value assets measured on nonrecurring basis

	Fair Value as of December 31, 2019
	Level 1		Level 2		Level 3		Total
Loans, net	$	—	$	—	$	211,112	$	211,112
Other real estate owned, net		—		—		3,302,148		3,302,148
Total	$	—	$	—	$	3,513,260	$	3,513,260

	Fair Value as of June 30, 2019
	Level 1		Level 2		Level 3		Total
Loans, net	$	—	$	—	$	274,750	$	274,750
Other real estate owned, net		—		—		4,080,401		4,080,401
Total	$	—	$	—	$	4,355,151	$	4,355,151

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Commitments and Contingencies (Tables)

6 Months Ended

Dec. 31, 2019

Commitments and Contingencies

Schedule of notional amount of exposure to off-balance-sheet risk

	December 31, 2019		June 30, 2019
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit to borrowers	$	17,340,177	$	18,668,750
Sold loan commitments		15,325,687		41,760,875
Credit card commitments		601,263		637,121

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Borrowings - Table Narrative (Details)	Dec. 31, 2019	Jun. 30, 2019
FHLB fixed rate advance (2.45%, matures 7/1/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Interest rate		2.45%
FHLB fixed rate advance (2.43%, matures 7/2/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Interest rate		2.43%
FHLB fixed rate advance (2.45%, matures 7/3/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Interest rate		2.45%
FHLB fixed rate advance (2.43%, matures 7/3/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Interest rate		2.43%
FHLB fixed rate advance (2.649%, matures 7/23/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Interest rate		2.649%
FHLB fixed rate advance (2.649%, matures 7/24/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Interest rate		2.649%
FHLB fixed rate advance (2.647%, matures 7/25/19)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Interest rate		2.647%
FHLB fixed rate advance (1.72%, matures 1/2/20)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Interest rate	1.72%
FHLB fixed rate advance (1.72%, matures 1/3/20)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Interest rate	1.72%
FHLB fixed rate advance (1.72%, matures 1/6/20)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Interest rate	1.72%
FHLB fixed rate advance (1.74%, matures 1/7/20)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Interest rate	1.74%
FHLB fixed rate advance (1.74%, matures 1/7/20)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Interest rate	1.74%
FHLB fixed rate advance (1.72%, matures 1/8/20)
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Interest rate	1.72%

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Loans and Allowance for Loan Losses - Past due loans (Details) - USD ($)	6 Months Ended
	Dec. 31, 2019	Jun. 30, 2019
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	$ 4,084,581	$ 4,305,475
TDR's granted during the period	0
TDR's defaulted during the period	0
TDR's outstanding	$ 0	0
Loans transferred out of TDR	0
30-59 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	2,058,296	2,305,204
60-89 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	913,442	475,403
90 days & over or nonaccrual
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	1,112,843	1,524,868
Construction, Land, Development
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	35,697	0
Construction, Land, Development | 30-59 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	35,697	0
Construction, Land, Development | 60-89 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	0	0
Construction, Land, Development | 90 days & over or nonaccrual
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	0	0
1-4 Family Owner Occupied
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	3,609,008	3,782,455
1-4 Family Owner Occupied | 30-59 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	1,887,777	2,129,016
1-4 Family Owner Occupied | 60-89 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	908,130	450,183
1-4 Family Owner Occupied | 90 days & over or nonaccrual
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	813,101	1,203,256
1-4 Family Non-Owner Occupied
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	58,833	103,706
1-4 Family Non-Owner Occupied | 30-59 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	58,833	103,706
1-4 Family Non-Owner Occupied | 60-89 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	0	0
1-4 Family Non-Owner Occupied | 90 days & over or nonaccrual
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	0	0
Multifamily
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	0	0
Multifamily | 30-59 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	0	0
Multifamily | 60-89 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	0	0
Multifamily | 90 days & over or nonaccrual
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	0	0
Commercial Owner Occupied
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	191,014	193,601
Commercial Owner Occupied | 30-59 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	0	0
Commercial Owner Occupied | 60-89 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	0	0
Commercial Owner Occupied | 90 days & over or nonaccrual
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	191,014	193,601
Commercial Non-Owner Occupied
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	25,871	0
Commercial Non-Owner Occupied | 30-59 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	25,871	0
Commercial Non-Owner Occupied | 60-89 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	0	0
Commercial Non-Owner Occupied | 90 days & over or nonaccrual
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	0	0
Consumer and Installment Loan
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	164,158	225,713
Consumer and Installment Loan | 30-59 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	50,118	72,482
Consumer and Installment Loan | 60-89 days, accruing
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	5,312	25,220
Consumer and Installment Loan | 90 days & over or nonaccrual
Loans and Leases Receivable Disclosure [Line Items]
Past due loans	$ 108,728	$ 128,011

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Earnings Per Share (Tables)

6 Months Ended

Dec. 31, 2019

Earnings Per Share

Schedule of loss per share

	Three Months Ended		Three Months Ended	Six Months Ended		Six Months Ended
	December 31, 2019		December 31, 2018	December 31, 2019		December 31, 2018
Net income	$	361,883	*	$	929,779	*
Basic potential common shares
Weighted average shares outstanding		2,624,343	*		2,624,343	*
Basic weighted average shares outstanding		2,624,343	*		2,624,343	*
Diluted potential common shares		—	*		—	*
Diluted weighted average shares outstanding		2,624,343	*		2,624,343	*
Basic earnings per share	$	0.14	*	$	0.35	*
Diluted earnings per share	$	0.14	*	$	0.35	*

*     Earnings per share for the three and six months ended December 31, 2018 is not applicable as no shares were outstanding for that period.

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Borrowings (Tables)

6 Months Ended

Dec. 31, 2019

Borrowings

Schedule for summary of borrowings

	December 31, 2019		June 30, 2019
FHLB fixed rate advance (2.45%, matured 7/1/19)	$	—	$	7,500,000
FHLB fixed rate advance (2.43%, matured 7/2/19)		—		15,000,000
FHLB fixed rate advance (2.45%, matured 7/3/19)		—		5,000,000
FHLB fixed rate advance (2.43%, matured 7/3/19)		—		8,000,000
FHLB fixed rate advance (2.649%, matured 7/23/19)		—		2,500,000
FHLB fixed rate advance (2.649%, matured 7/24/19)		—		3,100,000
FHLB fixed rate advance (2.647%, matured 7/25/19)		—		3,100,000
FHLB fixed rate advance (1.72%, matures 1/2/20)		4,000,000		—
FHLB fixed rate advance (1.72%, matures 1/3/20)		7,500,000		—
FHLB fixed rate advance (1.72%, matures 1/6/20)		3,000,000		—
FHLB fixed rate advance (1.74%, matures 1/7/20)		1,000,000		—
FHLB fixed rate advance (1.74%, matures 1/7/20)		500,000
FHLB fixed rate advance (1.72%, matures 1/8/20)		4,500,000		—
	$	20,500,000	$	44,200,000

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Defined Benefit Pension Plan

6 Months Ended

Dec. 31, 2019

Defined Benefit Pension Plan

Defined Benefit Pension Plan

NOTE 11 – Defined Benefit Pension Plan

The Plan covers substantially all employees hired prior to March 31, 2012. The benefits are based on years of service and the employee’s average monthly pay received during the five highest consecutive calendar years in the last 10 years of employment under the Plan. Management contributes annually the amounts necessary to provide for defined benefit payments upon retirement or death as determined by the Plan’s actuary. The defined benefit pension plan was frozen effective March 31, 2012 for all employees. No additional benefits are being accrued for active participants after this date, and no new participants will be entered into the Plan.

In accordance with accounting guidance for defined benefit plans, the Bank recognizes the funded status of defined benefit pension and other post-retirement plans as a net asset or liability on its consolidated balance sheet.

The Bank recognized pension income of $21,174 and $42,348 for the three and six months ended December 31, 2019, respectively, and $25,422 and $63,555 for the three and six months ended December 31, 2018, respectively.

The Bank had a valuation of the Plan completed at fiscal year ending June 30, 2019, which included estimated amortizations from accumulated other comprehensive loss into net periodic pension cost during the next fiscal year of $215,747. The change in pension obligation reported in the condensed consolidated balance sheet, condensed consolidated statements of comprehensive income (loss), and in the condensed consolidated statements of changes in stockholders’ equity as of December 31, 2019 reflect this estimation.

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Earnings Per Share

6 Months Ended

Dec. 31, 2019

Earnings Per Share

Earnings Per Share

NOTE 3 – Earnings Per Share

Earnings per share is based on net income divided by the weighted average number of shares outstanding during the period. Earnings per share is presented for the three and six month periods ended December 31, 2019 and 2018.

	Three Months Ended		Three Months Ended	Six Months Ended		Six Months Ended
	December 31, 2019		December 31, 2018	December 31, 2019		December 31, 2018
Net income	$	361,883	*	$	929,779	*
Basic potential common shares
Weighted average shares outstanding		2,624,343	*		2,624,343	*
Basic weighted average shares outstanding		2,624,343	*		2,624,343	*
Diluted potential common shares		—	*		—	*
Diluted weighted average shares outstanding		2,624,343	*		2,624,343	*
Basic earnings per share	$	0.14	*	$	0.35	*
Diluted earnings per share	$	0.14	*	$	0.35	*

*     Earnings per share for the three and six months ended December 31, 2018 is not applicable as no shares were outstanding for that period.

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Loans & Allowance for Loan Losses

6 Months Ended

Dec. 31, 2019

Loans and Allowance for Loan Losses

Loans and Allowance for Loan Losses

NOTE 7 – Loans and Allowance for Loan Losses

Major classifications of loans are as follows:

	December 31, 2019		June 30, 2019
Construction, land, development	$	7,242,065	$	4,318,845
1-4 family owner occupied		111,606,950		124,845,322
1-4 family non-owner occupied		20,152,740		20,968,812
Multifamily		77,933,467		73,246,392
Commercial owner occupied		8,198,761		8,508,011
Commercial non-owner occupied		19,265,342		19,502,545
Consumer and installment loans		9,323,100		9,777,441
Total loans		253,722,425		261,167,368
Less:
Allowance for loan losses		(1,262,472)		(1,293,965)
Loans, net	$	252,459,953	$	259,873,403

Non-performing loans are as follows:

	December 31, 2019		June 30, 2019
Nonaccrual Loans	$	1,112,843	$	1,524,868
Total non-performing loans	$	1,112,843	$	1,524,868
Restructured loans, accruing	$	—	$	—
Total impaired loans	$	1,112,843	$	1,524,868

Impaired loans are as follows as of and for the following periods ended:

	December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
With related allowance recorded
Recorded investment	$	—	$	97,774	$	—	$	—	$	191,014	$	—	$	108,728	$	397,516
Unpaid principal balance		—		97,774		—		—		191,014		—		108,728		397,516
Related allowance		—		43,470		—		—		76,086		—		66,848		186,404
With no related allowance recorded
Recorded investment	$	—	$	715,327	$	—	$	—	$	—	$	—	$	—	$	715,327
Unpaid principal balance		—		715,327		—		—		—		—		—		715,327
Related allowance		—		—		—		—		—		—		—		—
Total
Recorded investment	$	—	$	813,101	$	—	$	—	$	191,014	$	—	$	108,728	$	1,112,843
Unpaid principal balance		—		813,101		—		—		191,014		—		108,728		1,112,843
Related allowance		—		43,470		—		—		76,086		—		66,848		186,404
	Three Months Ended December 31, 2019
Average recorded balance	$	—	$	875,987	$	—	$	—	$	191,651	$	—	$	122,114	$	1,189,752
																—
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		—		4,012		—		—		1,079		—		—		5,091
Total interest on impaired loans	$	—	$	4,012	$	—	$	—	$	1,079	$	—	$	—	$	5,091
	Six Months Ended December 31, 2019
Average recorded balance	$	—	$	1,070,070	$	2,829	$	—	$	192,294	$	—	$	123,339	$	1,388,532
																—
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		—		8,803		298		—		4,382		—		—		13,483
Total interest on impaired loans	$	—	$	8,803	$	298	$	—	$	4,382	$	—	$	—	$	13,483

	June 30, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
With related allowance recorded
Recorded investment	$	—	$	70,608	$	—	$	—	$	193,601	$	—	$	113,856	$	378,065
Unpaid principal balance		—		70,608		—		—		193,601		—		113,856		378,065
Related allowance		—		5,772		—		—		44,564		—		52,979		103,315
With no related allowance recorded
Recorded investment	$	—	$	1,132,648	$	—	$	—	$	—	$	—	$	14,155	$	1,146,803
Unpaid principal balance		—		1,132,648		—		—		—		—		14,155		1,146,803
Related allowance		—		—		—		—		—		—		—		—
Total
Recorded investment	$	—	$	1,203,256	$	—	$	—	$	193,601	$	—	$	128,011	$	1,524,868
Unpaid principal balance		—		1,203,256		—		—		193,601		—		128,011		1,524,868
Related allowance		—		5,772		—		—		44,564		—		52,979		103,315
Average recorded balance	$	19,198	$	865,338	$	21,509	$	—	$	196,182	$	—	$	133,467	$	1,235,694
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		353		19,352		288		—		7,917		—		2,894		30,804
Total interest on impaired loans	$	353	$	19,352	$	288	$	—	$	7,917	$	—	$	2,894	$	30,804

	December 31, 2018
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
With related allowance recorded
Recorded investment	$	—	$	70,608	$	—	$	—	$	196,135	$	—	$	131,268	$	398,011
Unpaid principal balance		—		70,608		—		—		196,135		—		131,268		398,011
Related allowance		—		4,809		—		—		117,498		—		70,391		192,698
With no related allowance recorded
Recorded investment	$	—	$	889,964	$	22,993	$	—	$	—	$	—	$	7,601	$	920,558
Unpaid principal balance		—		889,964		22,993		—		—		—		7,601		920,558
Related allowance		—		—		—		—		—		—		—		—
Total
Recorded investment	$	—	$	960,572	$	22,993	$	—	$	196,135	$	—	$	138,869	$	1,318,569
Unpaid principal balance		—		960,572		22,993		—		196,135		—		138,869		1,318,569
Related allowance		—		4,809		—		—		117,498		—		70,391		192,698
	Three Months Ended December 31, 2018
Average recorded balance	$	—	$	728,723	$	11,496	$	—	$	196,335	$	—	$	136,350	$	1,072,904
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		3,531		1,947		348		—		1,078		—		1,000		7,904
Total interest on impaired loans	$	3,531	$	1,947	$	348	$	—	$	1,078	$	—	$	1,000	$	7,904
	Six Months Ended December 31, 2018
Average recorded balance	$	21,843	$	719,614	$	29,552	$	—	$	197,009	$	—	$	136,347	$	1,104,365
Interest income recognized while impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest income recognized on a cash basis while impaired		3,531		15,063		348		—		3,162		—		1,175		23,279
Total interest in impaired loans	$	3,531	$	15,063	$	348	$	—	$	3,162	$	—	$	1,175	$	23,279

Loans are individually evaluated for impairment once a weakness or adverse trend is identified that may jeopardize the repayment of the loan in accordance with the terms of the loan.

The following are the Company's risk rating definitions:

Pass: Loans in this category are to persons or entities that span from having financial characteristics of unquestioned strength to entities that have potential risks that if left uncorrected could at some point result in deterioration of the Bank’s credit position. Loans in this category are rated “1” through “4” with the lower risk being identified with a lower numerical rating. General characteristics that are monitored include borrower net worth, liquidity and entity profitability.

Special Mention: Loans in this category contain some weakness or potential weakness that if left uncorrected may result in the deterioration of the repayment capacity. Loans in this category are rated as a “5”.

Substandard: Loans in this category exhibit the same characteristics as “5” rated credits and are inadequately protected by the current net worth and paying capacity of the obligor and/or of the collateral pledged as security for the asset. Loans in this category are rated as a “6”.

Real Estate in Judgement: Loans in this category have been placed in non-accrual and the Bank has taken legal action to preserve its position. Loans in this category are rated as a “7”.

The following is a summary of loans by risk rating:

	December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
1-4	$	7,242,065	$	110,793,849	$	20,152,740	$	77,933,467	$	8,007,747	$	11,301,175	$	9,214,372	$	244,645,415
5		—		—		—		—		—		7,964,167		—		7,964,167
6		—		579,603		—		—		191,014		—		32,559		803,176
7		—		233,498		—		—		—		—		76,169		309,667
Total	$	7,242,065	$	111,606,950	$	20,152,740	$	77,933,467	$	8,198,761	$	19,265,342	$	9,323,100	$	253,722,425

	June 30, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
1-4	$	4,318,845	$	123,642,066	$	20,968,812	$	73,246,392	$	8,314,410	$	11,382,336	$	9,649,430	$	251,522,291
5		—		—		—		—		—		8,120,209		—		8,120,209
6		—		895,442		—		—		193,601		—		128,011		1,217,054
7		—		307,814		—		—		—		—		—		307,814
Total	$	4,318,845	$	124,845,322	$	20,968,812	$	73,246,392	$	8,508,011	$	19,502,545	$	9,777,441	$	261,167,368

The following is a summary of past due loans:

	December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
30‑59 days, accruing	$	35,697	$	1,887,777	$	58,833	$	—	$	—	$	25,871	$	50,118	$	2,058,296
60‑89 days, accruing		—		908,130		—		—		—		—		5,312		913,442
90 days & over or nonaccrual		—		813,101		—		—		191,014		—		108,728		1,112,843
Total	$	35,697	$	3,609,008	$	58,833	$	—	$	191,014	$	25,871	$	164,158	$	4,084,581

	June 30, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner		Consumer and
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Installment		Total
30‑59 days, accruing	$	—	$	2,129,016	$	103,706	$	—	$	—	$	—	$	72,482	$	2,305,204
60‑89 days, accruing		—		450,183		—		—		—		—		25,220		475,403
90 days & over or nonaccrual		—		1,203,256		—		—		193,601		—		128,011		1,524,868
Total	$	—	$	3,782,455	$	103,706	$	—	$	193,601	$	—	$	225,713	$	4,305,475

Troubled Debt Restructurings (“TDRs”) involve the granting of some concession to a distressed borrower resulting in a loan modification such as; payment schedule changes, interest rate reductions, or principal charge-offs. There were no new TDRs during the six months ending December 31, 2019. There were also no TDRs that defaulted during the period that were modified within the previous six months as of December 31, 2019. There were no TDRs as of December 31, 2019 and June 30, 2019.

Loans that have previously been restructured in a troubled debt restructuring and are no longer impaired based on the terms specified in their restructuring agreement and are now at a rate equal to or greater than a rate the Bank is willing to accept for a loan with comparable risk are transferred out of TDR status. No loans were transferred out of TDR status during 2019.

The allowance for loan losses reflected in the accompanying condensed consolidated financial statements represents the allowance available to absorb probable and inherent loan losses in the loan portfolio. An analysis of changes in the allowance is presented in the following tabulation for the three and six months ended December 31, 2019 and 2018 and the year ended June 30, 2019:

	Three Months Ended December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Unallocated		Total
Allowance
Balance at 10/1/19	$	5,670	$	56,804	$	26,027	$	111,112	$	91,077	$	773,186	$	72,508	$	150,290	$	1,286,674
Charge-offs		—		(18,846)		—		—		—		—		(32,012)		—		(50,858)
Recoveries		—		4,820		—		—		—		—		21,836		—		26,656
Provision		5,193		57,197		(3,859)		5,788		(10,987)		36,536		23,682		(113,550)		—
Balance at 12/31/19	$	10,863	$	99,975	$	22,168	$	116,900	$	80,090	$	809,722	$	86,014	$	36,740	$	1,262,472
	Six Months Ended December 31, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial				Not
	Land,		Owner		Non-Owner				Owner-		Non-Owner				Specifically
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Allocated		Total
Allowance
Balance at 6/30/19	$	4,319	$	67,593	$	26,630	$	109,870	$	61,193	$	738,366	$	70,058	$	215,936	$	1,293,965
Charge-offs		—		(18,846)		—		—		—		—		(39,838)		—		(58,684)
Recoveries		—		5,155		—		—		—		—		22,036		—		27,191
Provision		6,544		46,073		(4,462)		7,030		18,897		71,356		33,758		(179,196)		—
Balance at 12/31/19	$	10,863	$	99,975	$	22,168	$	116,900	$	80,090	$	809,722	$	86,014	$	36,740	$	1,262,472
Allowance
Ending balance individually evaluated for impairment	$	—	$	43,470	$	—	$	—	$	76,086	$	—	$	66,848	$	—	$	186,404
Ending balance collectively evaluated for impairment		10,863		56,505		22,168		116,900		4,004		809,722		19,166		36,740		1,076,068
Ending balance	$	10,863	$	99,975	$	22,168	$	116,900	$	80,090	$	809,722	$	86,014	$	36,740	$	1,262,472
Loans
Ending balance individually evaluated for impairment	$	—	$	813,101	$	—	$	—	$	191,014	$	—	$	108,728	$	—	$	1,112,843
Ending balance collectively evaluated for impairment		7,242,065		110,793,849		20,152,740		77,933,467		8,007,747		19,265,342		9,214,372		—		252,609,582
Total loans	$	7,242,065	$	111,606,950	$	20,152,740	$	77,933,467	$	8,198,761	$	19,265,342	$	9,323,100	$	—	$	253,722,425
Less allowance	$	10,863	$	99,975	$	22,168	$	116,900	$	80,090	$	809,722	$	86,014	$	36,740	$	1,262,472
Total loans, net	$	7,231,202	$	111,506,975	$	20,130,572	$	77,816,567	$	8,118,671	$	18,455,620	$	9,237,086	$	(36,740)	$	252,459,953

	June 30, 2019
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial				Not
	Land,		Owner		Non-Owner				Owner-		Non-Owner				Specifically
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Allocated		Total
Allowance
Balance at 6/30/18	$	4,758	$	7,300	$	71,053	$	71,101	$	131,906	$	925,355	$	98,096	$	14,590	$	1,324,159
Charge-offs		—		—		(44,534)		—		—		—		(15,809)		—		(60,343)
Recoveries		—		28,735		—		—		—		—		1,414		—		30,149
Provision		(439)		31,558		111		38,769		(70,713)		(186,989)		(13,643)		201,346		—
Balance at 6/30/19	$	4,319	$	67,593	$	26,630	$	109,870	$	61,193	$	738,366	$	70,058	$	215,936	$	1,293,965
Allowance
Ending balance individually evaluated for impairment	$	—	$	5,772	$	—	$	—	$	44,564	$	—	$	52,979	$	—	$	103,315
Ending balance collectively evaluated for impairment		4,319		61,821		26,630		109,870		16,629		738,366		17,079		215,936		1,190,650
Ending balance	$	4,319	$	67,593	$	26,630	$	109,870	$	61,193	$	738,366	$	70,058	$	215,936	$	1,293,965
Loans
Ending balance individually evaluated for impairment	$	—	$	1,203,256	$	—	$	—	$	193,601	$	—	$	128,011	$	—	$	1,524,868
Ending balance collectively evaluated for impairment		4,318,845		123,642,066		20,968,812		73,246,392		8,314,410		19,502,545		9,649,430		—		259,642,500
Total loans	$	4,318,845	$	124,845,322	$	20,968,812	$	73,246,392	$	8,508,011	$	19,502,545	$	9,777,441	$	—	$	261,167,368
Less allowance	$	4,319	$	67,593	$	26,630	$	109,870	$	61,193	$	738,366	$	70,058	$	215,936	$	1,293,965
Total loans, net	$	4,314,526	$	124,777,729	$	20,942,182	$	73,136,522	$	8,446,818	$	18,764,179	$	9,707,383	$	(215,936)	$	259,873,403

	Three Months Ended December 31, 2018
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial
	Land,		Owner		Non-Owner				Owner		Non-Owner
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Unallocated		Total
Allowance
Balance at 10/1/18	$	4,958	$	6,151	$	24,542	$	71,120	$	131,113	$	905,405	$	111,323	$	47,198	$	1,301,810
Charge-offs		—		—		(14,042)		—		—		—		(3)		—		(14,045)
Recoveries		—		6,744		—		—		—		—		503		—		7,247
Provision		(1,738)		12,955		18,034		39,984		3,175		(23,608)		(4,115)		(44,687)		—
Balance at 12/31/18	$	3,220	$	25,850	$	28,534	$	111,104	$	134,288	$	881,797	$	107,708	$	2,511	$	1,295,012
	Six Months Ended December 31, 2018
	Construction,		1-4 Family		1-4 Family				Commercial		Commercial				Not
	Land,		Owner		Non-Owner				Owner-		Non-Owner				Specifically
	Development		Occupied		Occupied		Multifamily		Occupied		Occupied		Consumer		Allocated		Total
Allowance
Balance at 6/30/18	$	4,758	$	7,300	$	71,053	$	71,101	$	131,906	$	925,355	$	98,096	$	14,590	$	1,324,159
Charge-offs		—		—		(44,534)		—		—		—		(2,211)		—		(46,745)
Recoveries		—		16,784		—		—		—		—		814		—		17,598
Provision		(1,538)		1,766		2,015		40,003		2,382		(43,558)		11,009		(12,079)		—
Balance at 12/31/18	$	3,220	$	25,850	$	28,534	$	111,104	$	134,288	$	881,797	$	107,708	$	2,511	$	1,295,012
Allowance
Ending balance individually evaluated for impairment	$	—	$	4,809	$	—	$	—	$	117,498	$	—	$	70,391	$	—	$	192,698
Ending balance collectively evaluated for impairment		3,220		21,041		28,534		111,104		16,790		881,797		37,317		2,511		1,102,314
Ending balance	$	3,220	$	25,850	$	28,534	$	111,104	$	134,288	$	881,797	$	107,708	$	2,511	$	1,295,012
Loans
Ending balance individually evaluated for impairment	$	—	$	960,572	$	22,993	$	—	$	196,135	$	—	$	138,869	$	—	$	1,318,569
Ending balance collectively evaluated for impairment		3,220,671		123,768,658		22,292,226		74,069,572		8,394,869		20,782,399		10,511,753		—		263,040,148
Total loans	$	3,220,671	$	124,729,230	$	22,315,219	$	74,069,572	$	8,591,004	$	20,782,399	$	10,650,622	$	—	$	264,358,717
Less allowance	$	3,220	$	25,850	$	28,534	$	111,104	$	134,288	$	881,797	$	107,708	$	2,511	$	1,295,012
Total loans, net	$	3,217,451	$	124,703,380	$	22,286,685	$	73,958,468	$	8,456,716	$	19,900,602	$	10,542,914	$	(2,511)	$	263,063,705

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Available for Sale Securities - Amortized cost and fair value of available for sale securities (Details) - USD ($)	Dec. 31, 2019	Jun. 30, 2019
Amortized Cost
Due in one year or less	$ 2,053,760
Due after one year through 5 years	10,818,717
Due after 5 years through 10 years	6,083,035
Due after 10 years	1,670,000
Subtotal	20,625,512
Total	22,066,582	$ 20,339,563
Fair Value
Due in one year or less	2,057,417
Due after one year through 5 years	10,929,129
Due after 5 years through 10 years	6,147,269
Due after 10 years	1,678,379
Subtotal	20,812,194
Totals	22,299,909	20,542,118
Mortgage-backed securities
Amortized Cost
Due after one year through 5 years	1,015,619
Due after 5 years through 10 years	425,451
Total	1,441,070	1,065,193
Fair Value
Due after one year through 5 years	1,058,723
Due after 5 years through 10 years	428,992
Totals	$ 1,487,715	$ 1,106,138

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Fair Value of Financial Instruments - Additional Information (Details) - Level 3 - Fair value on non-recurring basis - Measurement Input, Appraised Value [Member]	Dec. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)
Minimum
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans	0.05	0.05
Other real estate owned, net	0.05	0.05
Maximum
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans	0.15	0.15
Other real estate owned, net	0.15	0.15

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Regulatory Capital Requirements (Details) - USD ($)	Dec. 31, 2019	Jun. 30, 2019	Feb. 15, 2012
Total capital (to risk weighted assets)
Total capital (to risk weighted assets) Actual Amount	$ 28,637,477	$ 27,643,843
Total capital (to risk weighted assets) Actual Ratio	14.70%	14.01%
Total capital (to risk weighted assets) For Capital Adequacy Purposes Amount	$ 15,587,728	$ 15,780,941
Total capital (to risk weighted assets) For Capital Adequacy Purposes Ratio	8.00%	8.00%
Total capital (to risk weighted assets) To be Capitalized In Accordance with the Consent Order Amount	$ 19,484,660	$ 19,726,176
Total capital (to risk weighted assets) To be Capitalized In Accordance with the Consent Order Ratio	10.00%	10.00%
Tier 1 capital (to risk weighted assets)
Tier 1 capital (to risk weighted assets) Actual Amount	$ 27,375,005	$ 26,349,878
Tier 1 capital (to risk weighted assets) Actual Ratio	14.05%	13.36%
Tier 1 capital (to risk weighted assets) For Capital Adequacy Purposes Amount	$ 11,690,796	$ 11,835,706
Tier 1 capital (to risk weighted assets) For Capital Adequacy Purposes Ratio	6.00%	6.00%	12.00%
Tier 1 capital (to risk weighted assets) To be Capitalized In Accordance with the Consent Order Amount	$ 15,587,728	$ 15,780,941
Tier 1 capital (to risk weighted assets) To be Capitalized In Accordance with the Consent Order Ratio	8.00%	8.00%
Common Equity Tier 1 (to risk weighted assets)
Common Equity Tier 1 (to risk weighted assets) Actual Amount	$ 27,375,005	$ 26,349,878
Common Equity Tier 1 (to risk weighted assets) Actual Ratio	14.05%	13.36%
Common Equity Tier 1 (to risk weighted assets) For Capital Adequacy Purposes Amount	$ 8,768,097	$ 8,876,779
Common Equity Tier 1 (to risk weighted assets) For Capital Adequacy Purposes Ratio	4.50%	4.50%
Common Equity Tier 1 (to risk weighted assets) To be Capitalized In Accordance with the Consent Order Amount	$ 12,665,029	$ 12,822,015
Common Equity Tier 1 (to risk weighted assets) To be Capitalized In Accordance with the Consent Order Ratio	6.50%	6.50%
Tier 1 capital (to average assets)
Tier 1 capital (to average assets) Actual Amount	$ 27,375,005	$ 26,349,878
Tier 1 capital (to average assets) Actual Ratio	9.15%	8.55%
Tier 1 capital (to average assets) For Capital Adequacy Purposes Amount	$ 11,966,041	$ 12,327,357
Tier 1 capital (to average assets) For Capital Adequacy Purposes Ratio	4.00%	4.00%	8.00%
Tier 1 capital (to average assets) To be Capitalized In Accordance with the Consent Order Amount	$ 14,957,551	$ 15,409,197
Tier 1 capital (to average assets) To be Capitalized In Accordance with the Consent Order Ratio	5.00%	5.00%

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($)	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Total
BALANCES at Jun. 30, 2018			$ 16,309,708	$ (2,207,576)	$ 14,102,132
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)			(140,698)		(140,698)
Other Comprehensive Income (loss), net of tax				(146,056)	(146,056)
BALANCES at Sep. 30, 2018			16,169,010	(2,353,632)	13,815,378
BALANCES at Jun. 30, 2018			16,309,708	(2,207,576)	14,102,132
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)					(187,299)
Other Comprehensive Income (loss), net of tax					100,965
BALANCES at Dec. 31, 2018			16,122,409	(2,106,611)	14,015,798
BALANCES at Sep. 30, 2018			16,169,010	(2,353,632)	13,815,378
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)			(46,601)		(46,601)
Other Comprehensive Income (loss), net of tax				247,021	247,021
BALANCES at Dec. 31, 2018			16,122,409	(2,106,611)	14,015,798
BALANCES at Jun. 30, 2019	$ 26,243	$ 11,319,328	15,910,369	(2,848,365)	$ 24,407,575
BALANCES (in shares) at Jun. 30, 2019					2,624,343
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)			567,896		$ 567,896
Other Comprehensive Income (loss), net of tax				117,910	117,910
BALANCES at Sep. 30, 2019	26,243	11,319,328	16,478,265	(2,730,455)	$ 25,093,381
BALANCES (in shares) at Sep. 30, 2019					2,624,343
BALANCES at Jun. 30, 2019	26,243	11,319,328	15,910,369	(2,848,365)	$ 24,407,575
BALANCES (in shares) at Jun. 30, 2019					2,624,343
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)					$ 929,779
Other Comprehensive Income (loss), net of tax					(77,102)
BALANCES at Dec. 31, 2019	26,243	11,319,328	16,840,148	(2,925,467)	$ 25,260,252
BALANCES (in shares) at Dec. 31, 2019					2,624,343
BALANCES at Sep. 30, 2019	26,243	11,319,328	16,478,265	(2,730,455)	$ 25,093,381
BALANCES (in shares) at Sep. 30, 2019					2,624,343
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)			361,883		$ 361,883
Other Comprehensive Income (loss), net of tax				(195,012)	(195,012)
BALANCES at Dec. 31, 2019	$ 26,243	$ 11,319,328	$ 16,840,148	$ (2,925,467)	$ 25,260,252
BALANCES (in shares) at Dec. 31, 2019					2,624,343

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2019	Jun. 30, 2019
ASSETS
Cash and due from banks	$ 4,303,080	$ 4,617,976
Federal funds sold	2,360,215	1,012,794
Cash and cash equivalents	6,663,295	5,630,770
Interest bearing deposits in banks	201,993	3,674,015
Available for sale securities - stated at fair value	22,299,909	20,542,118
Loans, less allowance for loan losses of $1,262,472 and $1,293,965 at December 31, 2019 and June 30, 2019, respectively	252,459,953	259,873,403
Loans held for sale	6,171,299	7,079,548
Other real estate owned, net	3,302,148	4,080,401
Premises and equipment, net	8,030,087	8,165,274
Federal Home Loan Bank stock	1,035,000	2,061,000
Accrued interest receivable and other assets	1,373,582	1,141,686
TOTAL ASSETS	301,537,266	312,248,215
Deposits
Demand	80,807,830	77,414,345
Savings and NOW	72,196,715	70,385,843
Certificates of deposit	95,683,611	86,761,271
Total Deposits	248,688,156	234,561,459
Federal Home Loan Bank borrowings	20,500,000	44,200,000
Advance payments by borrowers for property taxes and insurance	236,809	3,197,095
Accrued interest payable and other liabilities	6,852,049	5,882,086
Total Liabilities	276,277,014	287,840,640
STOCKHOLDERS’ EQUITY
Preferred stock ($0.01 par value, 5,000,000 authorized, no shares issued or outstanding as of December 31, 2019 and June 30, 2019, respectively)
Common stock ($0.01 par value, 20,000,000 authorized, 2,624,343 issued and outstanding as of December 31, 2019 and June 30, 2019)	26,243	26,243
Additional paid in capital	11,319,328	11,319,328
Retained earnings	16,840,148	15,910,369
Accumulated other comprehensive loss	(2,925,467)	(2,848,365)
Total Stockholders’ Equity	25,260,252	24,407,575
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 301,537,266	$ 312,248,215