Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 7: Loans Receivable and Allowance for Loan Losses Loans receivable, excluding no March 31, 2017 $254,000 March 31, 2016, March 31, 2017 March 31, 2016 Legacy (1) Acquired Total Loans % of Total Legacy (1) Acquired Total Loans % of Total Real estate loans: One-to four-family: Residential (2) $ 67,126,677 $ 83,892,389 $ 151,019,066 44 % $ 46,263,709 $ 23,036,569 $ 69,300,278 31 % Residential construction 6,426,076 - 6,426,076 2 % 4,304,189 965,440 5,269,629 2 % Investor (3) 6,742,469 18,779,644 25,522,113 8 % 12,076,911 15,783,008 27,859,919 13 % Commercial 92,665,689 14,898,523 107,564,212 32 % 75,225,984 2,889,219 78,115,203 35 % Commercial construction 1,881,541 1,308,652 3,190,193 1 % 1,982,571 1,274,148 3,256,719 2 % Total real estate loans 174,842,452 118,879,208 293,721,660 87 % 139,853,364 43,948,384 183,801,748 83 % Commercial business 19,518,029 2,019,337 21,537,366 6 % 17,773,967 2,621,625 20,395,592 9 % Home equity loans 13,278,229 7,266,141 20,544,370 6 % 12,222,688 2,168,073 14,390,761 6 % Consumer 2,258,836 937,600 3,196,436 1 % 3,072,677 1,106,434 4,179,111 2 % Total Loans 209,897,546 129,102,286 338,999,832 100 % 172,922,696 49,844,516 222,767,212 100 % Net deferred loan origination fees and costs (143,070 ) - (143,070 ) (139,321 ) - (139,321 ) Loan premium (discount) 619,846 (543,410 ) 76,436 77,983 (846,818 ) (768,835 ) $ 210,374,322 $ 128,558,876 $ 338,933,198 $ 172,861,358 $ 48,997,698 $ 221,859,056 ( 1 As a result of the acquisition of Fraternity Community Bancorp, Inc., the parent company of Fraternity Federal Savings and Loan, in May 2016 September 2015, two ( 2 "Legacy" one four March 31, 2017 $23.4 March 2017. ( 3 "Investor" loans are residential mortgage loans secured by non-owner occupied one four Residential lending is generally considered to involve less risk than other forms of lending, although payment experience on these loans is dependent on economic and market conditions in the Bank's lending area. Construction loan repayments are generally dependent on the related properties or the financial condition of its borrower or guarantor. Accordingly, repayment of such loans can be more susceptible to adverse conditions in the real estate market and the regional economy. A substantial portion of the Bank's loan portfolio is real estate loans secured by residential and commercial real estate properties located in the Baltimore metropolitan area. Loans are extended only after evaluation of a customer's creditworthiness and other relevant factors on a case-by-case basis. The Bank generally does not 75% 95% 80%. Commercial business loans are made to provide funds for equipment and general corporate needs. Repayment of a loan primarily uses the funds obtained from the operation of the borrower’s business. Commercial loans also include lines of credit that are utilized to finance a borrower’s short-term credit needs and/or to finance a percentage of eligible receivables and inventory. The Company’s loan portfolio also includes a small portfolio of equipment leases, which consists of leases for essential commercial equipment used by small to medium sized businesses. The home equity loans consist of both conforming loans and revolving lines of credit to consumers which are secured by residential real estate. These loans are typically secured with second may The following tables detail activity in the allowance for loan losses by portfolio segment for the fiscal years ended March 31, 2017 2016. not not March 31, 2017 Residential Real Estate Investor Real Estate Commercial Real Estate Commercial Construction Commercial Business Home Equity Consumer Total Allowance for credit losses: Beginning balance $ 259,895 $ 168,132 $ 901,768 $ 42,377 $ 228,199 $ 82,012 $ 19,982 $ 1,702,365 Charge-offs (34,578 ) (1,801,438 ) (1,111,320 ) - (1,521 ) - (4,073 ) (2,952,930 ) Recoveries - 11,599 - - 29,257 - 9,518 50,374 Provision for credit losses 328,222 1,656,982 1,585,446 (33,346 ) (106,474 ) (11,941 ) (23,883 ) 3,395,006 Ending balance $ 553,539 $ 35,275 $ 1,375,894 $ 9,031 $ 149,461 $ 70,071 $ 1,544 $ 2,194,815 Allowance allocated to: Legacy Loans: Individually evaluated for impairment $ 284,177 $ - $ - $ - $ - $ - $ - $ 284,177 Collectively evaluated for impairment 269,362 34,093 1,375,894 9,031 149,461 70,071 1,544 1,909,456 Acquired Loans: Individually evaluated for impairment $ - $ 1,182 $ - $ - $ - $ - $ - $ 1,182 Collectively evaluated for impairment - - - - - - - - Loans: Legacy Loans: Individually evaluated for impairment $ 1,762,417 $ 16,919 $ 1,546,812 $ - $ 753,375 $ 12,040 $ - $ 4,091,563 Collectively evaluated for impairment 71,790,336 6,725,550 91,118,877 1,881,541 18,764,654 13,266,189 2,258,836 205,805,983 Ending balance $ 73,552,753 $ 6,742,469 $ 92,665,689 $ 1,881,541 $ 19,518,029 $ 13,278,229 $ 2,258,836 $ 209,897,546 Acquired Loans: individually evaluated for impairment $ 1,133,646 $ 186,888 $ 204,844 $ - $ - $ - $ 40,107 $ 1,565,485 collectively evaluated for impairment 82,758,743 18,592,756 14,693,679 1,308,652 2,019,337 7,266,141 897,493 127,536,801 Ending balance $ 83,892,389 $ 18,779,644 $ 14,898,523 $ 1,308,652 $ 2,019,337 $ 7,266,141 $ 937,600 $ 129,102,286 March 31, 2016 Residential Real Estate Investor Real Estate Commercial Real Estate Commercial Construction Commercial Business Home Equity Consumer Total Allowance for credit losses: Beginning balance $ 319,565 $ 114,005 $ 585,817 $ 67,835 $ 503,304 $ 98,983 $ 727 $ 1,690,236 Charge-offs (69,500 ) (222,238 ) (567,901 ) - (10,533 ) (6,000 ) (16,337 ) (892,509 ) Recoveries 848 24,835 - 236,904 192,336 - 9,715 464,638 Provision for credit losses 8,982 251,530 883,852 (262,362 ) (456,908 ) (10,971 ) 25,877 440,000 Ending balance $ 259,895 $ 168,132 $ 901,768 $ 42,377 $ 228,199 $ 82,012 $ 19,982 $ 1,702,365 Allowance allocated to: Legacy Loans: Individually evaluated for impairment $ 59,571 $ - $ - $ - $ - $ - $ - $ 59,571 Collectively evaluated for impairment 200,324 168,132 901,768 42,377 228,199 82,012 19,982 1,642,794 Acquired Loans: Individually evaluated for impairment $ - $ - $ - $ - $ - $ - $ - $ - Collectively evaluated for impairment - - - - - - - - Loans: Legacy Loans: Individually evaluated for impairment $ 1,891,602 $ 26,925 $ 2,717,144 $ - $ 1,279,233 $ 59,169 $ - $ 5,974,073 Collectively evaluated for impairment 48,676,296 12,049,986 72,508,840 1,982,571 16,494,734 12,163,519 3,072,677 166,948,623 Ending balance $ 50,567,898 $ 12,076,911 $ 75,225,984 $ 1,982,571 $ 17,773,967 $ 12,222,688 $ 3,072,677 $ 172,922,696 Acquired Loans: individually evaluated for impairment $ 412,934 $ 797,372 $ 211,239 $ - $ - $ - $ 42,488 $ 1,464,033 collectively evaluated for impairment 23,589,075 14,985,636 2,677,980 1,274,148 2,621,625 2,168,073 1,063,946 48,380,483 Ending balance $ 24,002,009 $ 15,783,008 $ 2,889,219 $ 1,274,148 $ 2,621,625 $ 2,168,073 $ 1,106,434 $ 49,844,516 Past due loans, segregated by age and class of loans, as March 31, 2017 2016, March 31, 2017 March 31, 2016 Legacy Acquired Total Legacy Acquired Total Current $ 207,328,184 $ 128,769,860 $ 336,098,044 $ 168,814,175 $ 48,317,673 $ 217,131,848 Accruing past due loans: 30-59 days past due: Real estate loans: Residential 69,618 - 69,618 468,887 - 468,887 Investor 320,971 - 320,971 - 42,800 42,800 Commercial - - - - - - Commercial construction 113,603 - 113,603 - - - Commercial business - - - - - - Home equity loans - - - - - - Consumer - - - 20,753 - 20,753 Total 30-59 days past due 504,192 - 504,192 489,640 42,800 532,440 60-89 days past due: Real estate loans: Residential 74,631 - 74,631 52,875 - 52,875 Investor - - - - - - Commercial - - - - - - Commercial construction - - - - - - Commercial business - - - - - - Home equity loans - - - - - - Consumer - - - - - - Total 60-89 days past due 74,631 - 74,631 52,875 - 52,875 90 or more days past due: Real estate loans: Residential - - - - - - Investor - 21,030 21,030 165,701 542,236 707,937 Commercial - - - - - - Commercial construction - - - - - - Commercial business - - - - - - Home equity loans - - - - - - Consumer - - - - - - Total 90 or more days past due - 21,030 21,030 165,701 542,236 707,937 Total accruing past due loans 578,823 21,030 599,853 708,216 585,036 1,293,252 Non-accruing loans: Real estate loans: Residential 426,354 248,663 675,017 474,877 300,301 775,178 Investor 13,976 57,131 71,107 37,062 637,971 675,033 Commercial 1,546,812 - 1,546,812 2,717,144 - 2,717,144 Commercial construction - - - - - - Commercial business - - - 121,760 - 121,760 Home equity loans 3,397 - 3,397 49,462 - 49,462 Consumer - 5,602 5,602 - 3,535 3,535 Non-accruing loans: 1,990,539 311,396 2,301,935 3,400,305 941,807 4,342,112 Total Loans $ 209,897,546 $ 129,102,286 $ 338,999,832 $ 172,922,696 $ 49,844,516 $ 222,767,212 Nonaccrual interest not accrued: Real estate loans: Residential $ 6,460 $ 35,177 $ 41,637 $ 10,666 $ 32,572 $ 43,238 Investor 6,982 23,293 30,275 7,828 85,809 93,637 Commercial 109,818 - 109,818 47,646 - 47,646 Commercial construction - - - - - - Commercial business - - - - - - Home equity loans 66 - 66 1,007 - 1,007 Consumer - 317 317 - 178 178 Total nonaccrual interest not accrued $ 123,326 $ 58,787 $ 182,113 $ 67,147 $ 118,559 $ 185,706 Impaired Loans as of March 31, 2017 2016 Impaired Loans at March 31, 2017 Unpaid Contractual Average Interest Principal Recorded Related Recorded Income Legacy: Balance Investment Allowance Investment Recognized With no related allowance recorded: Real estate loans: Residential $ 491,249 $ 360,590 $ - $ 373,618 $ 11,901 Investor 107,710 16,919 16,306 - Commercial 3,433,621 1,546,812 - 2,485,299 987 Commercial construction - - - - - Commercial business 1,177,632 753,375 - 832,437 107,063 Home equity loans 37,365 12,040 - 14,102 257 Consumer - - - - - With an allowance recorded: Real estate loans: Residential 1,432,212 1,401,827 284,177 1,428,128 54,121 Investor - - - - - Commercial - - - - - Commercial construction - - - - - Commercial business - - - - - Home equity loans - - - - - Consumer - - - - - Total legacy impaired 6,679,789 4,091,563 284,177 5,149,890 174,329 Acquired (1): With no related allowance recorded: Real estate loans: Residential 1,320,985 1,133,646 - 1,017,399 51,442 Investor 503,920 148,506 - 230,757 12,229 Commercial 254,844 204,844 - 208,057 7,770 Commercial construction - - - - - Commercial business - - - - - Home equity loans - - - - - Consumer 88,276 40,107 - 44,079 6,049 With an allowance recorded: Real estate loans: Residential - - - - - Investor 66,446 38,382 1,182 34,448 - Commercial - - - - - Commercial construction - - - - - Commercial business - - - - - Home equity loans - - - - - Consumer - - - - - Total acquired impaired 2,234,471 1,565,485 1,182 1,534,740 77,490 Total impaired $ 8,914,260 $ 5,657,048 $ 285,359 $ 6,684,630 $ 251,819 ( 1 Generally accepted accounting principles require that we record acquired loans at fair value at acquisition, which includes a discount for loans with credit impairment. These purchased credit impaired loans are not not Impaired Loans at March 31, 2016 Unpaid Contractual Average Interest Principal Recorded Related Recorded Income Legacy: Balance Investment Allowance Investment Recognized With no related allowance recorded: Real estate loans: Residential $ 690,915 $ 599,794 $ - $ 544,000 $ 7,857 Investor 119,822 26,925 - 14,586 2,437 Commercial 3,433,621 2,717,144 - 3,298,855 99,599 Commercial construction - - - - - Commercial business 1,884,258 1,279,233 - 1,557,871 147,101 Home equity loans 82,740 59,169 - 18,817 331 Consumer - - - - - With an allowance recorded: Real estate loans: Residential 1,306,083 1,291,808 59,571 1,306,414 53,204 Investor - - - - - Commercial - - - - - Commercial construction - - - - - Commercial business - - - - - Home equity loans - - - - - Consumer - - - - - Total legacy impaired 7,517,439 5,974,073 59,571 6,740,543 310,529 Acquired (1): With no related allowance recorded: Real estate loans: Residential 549,388 412,934 - 360,962 15,891 Investor 1,894,614 797,372 - 1,026,391 70,696 Commercial 261,239 211,239 - 212,806 9,978 Commercial construction - - - - - Commercial business - - - - - Home equity loans - - - - - Consumer 72,358 42,488 - 43,233 7,086 With an allowance recorded: Real estate loans: Residential - - - - - Investor - - - - - Commercial - - - - - Commercial construction - - - - - Commercial business - - - - - Home equity loans - - - - - Consumer - - - - - Total acquired impaired 2,777,599 1,464,033 - 1,643,392 103,651 Total impaired $ 10,295,038 $ 7,438,106 $ 59,571 $ 8,383,935 $ 414,180 ( 1 Generally accepted accounting principles require that we record acquired loans at fair value at acquisition, which includes a discount for loans with credit impairment. These purchased credit impaired loans are not not The following table documents changes in the carrying amount of acquired impaired loans (Purchase Credit Impaired of “PCI”) for the years ended March 31, 2017 2016 Recorded investment at beginning of period $ 919,729 $ - Fair value of loans acquired during the year 1,027,518 980,943 Accretion 28,036 25,937 Reductions for payments (633,348 ) (87,151 ) Recorded investment at end of period $ 1,341,935 $ 919,729 Oustanding principal balance at end of period $ 1,691,004 $ 1,260,429 A summary of changes in the accretable yield for PCI loans for the years ended March 31, 2017 2016 Accretable yield, beginning of period $ 32,629 $ - Addition from acquisition 55,046 59,142 Accretion (28,036 ) (25,937 ) Reclassification from nonaccretable difference - - Other changes, net - (576 ) Accretable yield, end of period $ 59,639 $ 32,629 Impaired loans also include certain loans that have been modified in troubled debt restructurings (TDRs) where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Bank's loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Generally, nonaccrual loans that are modified and considered TDRs are classified as nonperforming at the time of restructure and may six A summary of TDRs at March 31, 2017 2016 Number of March 31, 2017 contracts Performing Nonperforming Total Real estate loans: Residential 13 $ 1,261,603 $ 294,968 $ 1,556,571 Investor - - - - Commercial 2 - 1,546,812 1,546,812 Commercial construction - - - - Commercial business 1 643,999 - 643,999 Home equity loans - - - - Consumer - - - - 16 $ 1,905,602 $ 1,841,780 $ 3,747,382 Number of March 31, 2016 contracts Performing Nonperforming Total Real estate loans: Residential 12 $ 1,457,552 $ 101,449 $ 1,559,001 Investor - - - - Commercial 2 - 2,717,144 2,717,144 Commercial construction - - - - Commercial business 2 647,654 - 647,654 Home equity loans - - - - Consumer - - - - 16 $ 2,105,206 $ 2,818,593 $ 4,923,799 The following table presents the number of contracts and the dollar amount of TDRs that were added during the years ended March 31, 2017 2016. Loans Modified as a TDR for the fiscal year ended March 31, 2017 March 31, 2016 Number of Outstanding recorded Number of Outstanding recorded Troubled Debt Restructurings contracts investment contracts investment Real estate loans: Residential 3 $ 97,401 7 $ 147,578 There are no twelve March 31, 2017 2016. 2017, 11 one twelve October 2016 no 90 no March 31, 2017. In calculating the allowance for loan losses, individual TDRs are evaluated for impairment. TDRs are evaluated for impairment based upon either the present value of cash flows or, if collateral dependent, the lower of cost or fair value of the underlying collateral. If it is determined that the cash flows or underlying collateral is less than the carrying amount of the loan, the difference in value will be charged-off through earnings, unless the TDR is performing, in which case a specific reserve may Credit quality indicators As part of the ongoing monitoring of the credit quality of the Bank's loan portfolio, management tracks certain credit quality indicators including trends related to the risk grade of loans, the level of classified loans, net charge offs, nonperforming loans, and the general economic conditions in the Bank's market. The Bank utilizes a risk grading matrix to assign a risk grade to each of its loans. A description of the general characteristics of loans characterized as watch list or classified is as follows: Pass A pass loan is considered of sufficient quality to preclude a special mention or an adverse rating. Pass assets generally are well protected by the current net worth and paying capacity of the obligor or by the value of the asset or underlying collateral. Special Mention A special mention loan has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may not not Loans that would primarily fall into this notational category could have been previously classified adversely, but the deficiencies have since been corrected. Management should closely monitor recent payment history of the loan and value of the collateral. Borrowers may may may Substandard A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well defined weakness, or weaknesses, that jeopardize the collection or liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not Borrowers may Doubtful A doubtful loan has all the weaknesses inherent as a substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. A loan classified as doubtful exhibits loss potential. However, there is still sufficient reason to permit the loan to remain on the books. A doubtful classification could reflect the deterioration of the primary source of repayment and serious doubt exists as to the quality of the secondary source of repayment. Doubtful classifications should be used only when a distinct and known possibility of loss exists. When identified, adequate loss should be recorded for the specific assets. The entire asset should not Loss Loans classified as loss are considered uncollectable and of such little value that their continuance as loans is unjustified. A loss classification does not no may The following tables present the March 31, 2017 2016 no March 31, 2017 2016. March 31, 2017 March 31, 2016 LEGACY ACQUIRED TOTAL LEGACY ACQUIRED TOTAL Risk Rating: Rating - Pass: Real estate loans: Residential $ 71,721,341 $ 81,228,457 $ 152,949,798 $ 48,271,948 $ 23,799,344 $ 72,071,292 Investor 6,728,493 18,151,533 24,880,026 11,697,157 14,240,219 25,937,376 Commercial 84,789,748 13,387,987 98,177,735 66,824,956 2,677,980 69,502,936 Commercial construction 1,881,541 1,308,652 3,190,193 1,982,571 1,274,148 3,256,719 Commercial Business 19,376,763 2,019,337 21,396,100 13,629,957 2,621,625 16,251,582 Home Equity 13,269,478 7,133,164 20,402,642 12,163,519 2,168,073 14,331,592 Consumer 2,258,836 896,022 3,154,858 3,072,677 1,063,946 4,136,623 Total Pass 200,026,200 124,125,152 324,151,352 157,642,785 47,845,335 205,488,120 Rating - Special Mention: Real estate loans: Residential 1,499,436 1,724,987 3,224,423 1,920,315 - 1,920,315 Investor - 408,803 408,803 351,835 535,148 886,983 Commercial 6,329,129 1,305,692 7,634,821 5,683,884 - 5,683,884 Commercial construction - - - - - - Commercial Business - - - 3,477,579 - 3,477,579 Home Equity - 132,977 132,977 - - - Consumer - 788 788 - - - Total Special Mention 7,828,565 3,573,247 11,401,812 11,433,613 535,148 11,968,761 Rating - Substandard: Real estate loans: Residential 331,976 938,945 1,270,921 375,635 306,345 681,980 Investor 13,976 219,308 233,284 27,919 903,961 931,880 Commercial 1,546,812 204,844 1,751,656 2,717,144 211,239 2,928,383 Commercial construction - - - - - - Commercial Business 141,266 - 141,266 666,431 - 666,431 Home Equity 8,751 - 8,751 59,169 - 59,169 Consumer - 40,790 40,790 - 42,488 42,488 Total - Substandard 2,042,781 1,403,887 3,446,668 3,846,298 1,464,033 5,310,331 Rating - Doubtful - - - - - - Rating - Loss - - - - - - TOTAL LOANS $ 209,897,546 $ 129,102,286 $ 338,999,832 $ 172,922,696 $ 49,844,516 $ 222,767,212 In the normal course of business, the Bank has various outstanding commitments and contingent liabilities that are not no may not The Bank’s maximum exposure to credit loss in the event of nonperformance by the customer is the contractual amount of the credit commitment. Loan commitments, lines of credit, and letters of credit are made on the same terms, including collateral, as outstanding loans. The Bank has established an off-balance sheet reserve for potential losses associated with any outstanding commitment or unused line of credit. The off balance sheet reserve is a percentage of the outstanding commitment or unused line of credit that is based upon a discounted charge-off history associated with each respective loan segment. The reserve at March 31, 2017 2016 $55,000 $42,000, March 31, 2017, not The Bank had the following outstanding commitments and unused lines of credit as of March 31, 2017 2016: March 31, March 31, 2017 2016 Unused commercial lines of credit $ 10,733,345 $ 9,845,571 Unused home equity lines of credit 22,993,289 16,004,725 Unused consumer lines of credit 1,110,155 29,656 Residential construction loan commitments 8,047,156 8,166,473 Commercial construction loan commitments 7,091,564 1,384,932 Home equity loan commitments 84,000 536,000 Commercial loan commitments 1,089,218 411,500 Standby letter of credit 472,354 273,981 |