Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 6: Loans Receivable and Allowance for Loan Losses Loans receivable, excluding loans held for sale, consist of the following at June 30, 2017 March 31, 2017: June 30, 2017 March 31, 2017 Legacy (1) Acquired Total Loans % of Total Legacy (1) Acquired Total Loans % of Total Real estate loans: One-to four-family: Residential (2) $ 68,615,099 $ 80,296,553 $ 148,911,652 42 % $ 67,126,677 $ 83,892,389 $ 151,019,066 44 % Residential construction 6,803,657 - 6,803,657 2 % 6,426,076 - 6,426,076 2 % Investor (3) 7,811,461 18,433,397 26,244,858 7 % 6,742,469 18,779,644 25,522,113 8 % Commercial 92,628,423 14,399,402 107,027,825 30 % 92,665,689 14,898,523 107,564,212 32 % Commercial construction 2,326,457 1,191,507 3,517,964 1 % 1,881,541 1,308,652 3,190,193 1 % Total real estate loans 178,185,097 114,320,859 292,505,956 83 % 174,842,452 118,879,208 293,721,660 87 % Commercial business (4) 35,339,083 2,037,264 37,376,347 11 % 19,518,029 2,019,337 21,537,366 6 % Home equity loans 14,116,647 6,668,685 20,785,332 6 % 13,278,229 7,266,141 20,544,370 6 % Consumer 2,135,569 928,700 3,064,269 1 % 2,258,836 937,600 3,196,436 1 % Total Loans 229,776,396 123,955,508 353,731,904 100 % 209,897,546 129,102,286 338,999,832 100 % Net deferred loan origination fees and costs (140,537 ) - (140,537 ) (143,070 ) - (143,070 ) Loan premium (discount) 586,024 (509,138 ) 76,886 619,846 (543,410 ) 76,436 $ 230,221,883 $ 123,446,370 $ 353,668,253 $ 210,374,322 $ 128,558,876 $ 338,933,198 ( 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 ( 4 "Legacy" commercial business loans at June 30, 2017 $15.4 June 2017. 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 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 table details activity in the allowance for loan losses by portfolio segment for the three June 30, 2017 2016. not not June 30, 2017 Residential Real Estate Investor Real Estate Commercial Real Estate Commercial Construction Commercial Business Home Equity Consumer Total Allowance for credit losses: Beginning balance $ 553,539 $ 35,275 $ 1,375,894 $ 9,031 $ 149,461 $ 70,071 $ 1,544 $ 2,194,815 Charge-offs - (4,078 ) - - - - - (4,078 ) Recoveries - 5,307 - - 175 - 1,309 6,791 Provision for credit losses (8,982 ) 27,967 (63,736 ) 17,956 193,458 (5,410 ) (1,253 ) 160,000 Ending balance $ 544,557 $ 64,471 $ 1,312,158 $ 26,987 $ 343,094 $ 64,661 $ 1,600 $ 2,357,528 Allowance allocated to: Legacy Loans: Individually evaluated for impairment $ 278,573 $ - $ - $ - $ - $ - $ - $ 278,573 Collectively evaluated for impairment 265,984 64,471 1,312,158 26,987 343,094 64,661 1,600 2,078,955 Acquired Loans: Individually evaluated for impairment $ - $ - $ - $ - $ - $ - $ - $ - Collectively evaluated for impairment - - - - - - - - Loans: Legacy Loans: Individually evaluated for impairment $ 1,762,599 $ 7,772 $ 1,546,811 $ - $ 723,753 $ 10,980 $ - $ 4,051,915 Collectively evaluated for impairment 73,656,157 7,803,689 91,081,612 2,326,457 34,615,330 14,105,667 2,135,569 225,724,481 Ending balance $ 75,418,756 $ 7,811,461 $ 92,628,423 $ 2,326,457 $ 35,339,083 $ 14,116,647 $ 2,135,569 $ 229,776,396 Acquired Loans: Individually evaluated for impairment $ 1,177,729 $ 183,728 $ 203,215 $ - $ - $ - $ 68,772 $ 1,633,444 Collectively evaluated for impairment 79,118,824 18,249,669 14,196,187 1,191,507 2,037,264 6,668,685 859,928 122,322,064 Ending balance $ 80,296,553 $ 18,433,397 $ 14,399,402 $ 1,191,507 $ 2,037,264 $ 6,668,685 $ 928,700 $ 123,955,508 June 30, 2016 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 - (28,700 ) - - (1,521 ) - (1,280 ) (31,501 ) Recoveries - - - - 15,319 - 789 16,108 Provision for credit losses 223,997 64,784 8,992 (14,544 ) (54,562 ) (954 ) (17,713 ) 210,000 Ending balance $ 483,892 $ 204,216 $ 910,760 $ 27,833 $ 187,435 $ 81,058 $ 1,778 $ 1,896,972 Allowance allocated to: Legacy Loans: Individually evaluated for impairment $ 293,992 $ - $ - $ - $ 9,657 $ - $ - $ 303,649 Collectively evaluated for impairment 189,900 204,216 910,760 27,833 177,778 81,058 1,778 1,593,323 Acquired Loans: Individually evaluated for impairment $ - $ - $ - $ - $ - $ - $ - $ - Collectively evaluated for impairment - - - - - - - - Loans: Legacy Loans: Individually evaluated for impairment $ 2,153,753 $ 321,215 $ 2,673,131 $ - $ 1,000,250 $ 56,977 $ - $ 6,205,326 Collectively evaluated for impairment 48,813,333 11,504,219 78,482,502 2,348,741 14,985,423 12,236,608 2,875,534 171,246,360 Ending balance $ 50,967,086 $ 11,825,434 $ 81,155,633 $ 2,348,741 $ 15,985,673 $ 12,293,585 $ 2,875,534 $ 177,451,686 Acquired Loans: Individually evaluated for impairment $ 1,155,227 $ 1,469,259 $ 369,422 $ - $ - $ 10,663 $ 73,835 $ 3,078,406 Collectively evaluated for impairment 97,389,613 22,137,498 17,506,436 1,615,922 2,714,738 9,484,671 957,681 151,806,559 Ending balance $ 98,544,840 $ 23,606,757 $ 17,875,858 $ 1,615,922 $ 2,714,738 $ 9,495,334 $ 1,031,516 $ 154,884,965 Past due loans, segregated by age and class of loans, as of and for the three June 30, 2017 March 31, 2017, June 30, 2017 March 31, 2017 Legacy Acquired Total Legacy Acquired Total Current $ 224,251,862 $ 123,098,395 $ 347,350,257 $ 207,328,184 $ 128,769,860 $ 336,098,044 Accruing past due loans: 30-59 days past due: Real estate loans: Residential 75,992 131,204 207,196 69,618 - 69,618 Investor - 72,885 72,885 320,971 - 320,971 Commercial 3,160,843 - 3,160,843 - - - Commercial construction - 73,500 73,500 113,603 - 113,603 Commercial business - - - - - - Home equity loans - - - - - - Consumer - 4,089 4,089 - - - Total 30-59 days past due 3,236,835 281,678 3,518,513 504,192 - 504,192 60-89 days past due: Real estate loans: Residential 92,545 139,263 231,808 74,631 - 74,631 Investor - 78,009 78,009 - - - Commercial - - - - - - Commercial construction - - - - - - Commercial business - - - - - - Home equity loans - - - - - - Consumer - - - - - - Total 60-89 days past due 92,545 217,272 309,817 74,631 - 74,631 90 or more days past due: Real estate loans: Residential - - - - - - Investor 221,731 109,403 331,134 - 21,030 21,030 Commercial - - - - - - Commercial construction - - - - - - Commercial business - - - - - - Home equity loans - - - - - - Consumer - - - - - - Total 90 or more days past due 221,731 109,403 331,134 - 21,030 21,030 Total accruing past due loans 3,551,111 608,353 4,159,464 578,823 21,030 599,853 Non-accruing loans: Real estate loans: Residential 416,194 221,721 637,915 426,354 248,663 675,017 Investor 7,772 27,039 34,811 13,976 57,131 71,107 Commercial 1,546,811 - 1,546,811 1,546,812 - 1,546,812 Commercial construction - - - - - - Commercial business - - - - - - Home equity loans 2,646 - 2,646 3,397 - 3,397 Consumer - - - - 5,602 5,602 Non-accruing loans: 1,973,423 248,760 2,222,183 1,990,539 311,396 2,301,935 Total Loans $ 229,776,396 $ 123,955,508 $ 353,731,904 $ 209,897,546 $ 129,102,286 $ 338,999,832 Nonaccrual interest not accrued: Real estate loans: Residential $ 6,039 $ 31,864 $ 37,903 $ 6,460 $ 35,177 $ 41,637 Investor 6,256 8,301 14,557 6,982 23,293 30,275 Commercial - - - 109,818 - 109,818 Commercial construction - - - - - - Commercial business - - - - - - Home equity loans 63 - 63 66 - 66 Consumer - - - - 317 317 Total nonaccrual interest not accrued $ 12,358 $ 40,165 $ 52,523 $ 123,326 $ 58,787 $ 182,113 Impaired Loans as of and for the three June 30, 2017 March 31, 2017, Impaired Loans at June 30, 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 $ 581,380 $ 449,473 $ - $ 453,305 $ 288 Investor 50,947 7,772 7,847 - Commercial 3,433,621 1,546,811 - 1,546,812 - Commercial construction - - - - - Commercial business 1,138,939 723,753 - 740,966 25,151 Home equity loans 36,734 10,980 - 11,510 93 Consumer - - - - - With an allowance recorded: Real estate loans: Residential 1,340,394 1,313,126 278,573 1,317,495 12,802 Investor - - - - - Commercial - - - - - Commercial construction - - - - - Commercial business - - - - - Home equity loans - - - - - Consumer - - - - - Total legacy impaired 6,582,015 4,051,915 278,573 4,077,935 38,334 Acquired (1): With no related allowance recorded: Real estate loans: Residential 1,370,261 1,177,729 - 1,184,445 11,221 Investor 333,362 183,728 - 168,815 3,102 Commercial 253,215 203,215 - 203,870 1,912 Commercial construction - - - - - Commercial business - - - - - Home equity loans 44,852 - - - 288 Consumer 107,670 68,772 - 70,988 1,927 With an allowance recorded: Real estate loans: Residential - - - - - Investor - - - - - Commercial - - - - - Commercial construction - - - - - Commercial business - - - - - Home equity loans - - - - - Consumer - - - - - Total acquired impaired 2,109,360 1,633,444 - 1,628,118 18,450 Total impaired $ 8,691,375 $ 5,685,359 $ 278,573 $ 5,706,053 $ 56,784 ( 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, 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 The following table documents changes in the carrying amount of acquired impaired loans (Purchased Credit Impaired or “PCI”) for the three June 30, 2017 2016, June 30, 2017 June 30, 2016 Recorded investment at beginning of period $ 1,341,935 $ 919,729 Fair value of loans acquired during the year - 1,027,518 Accretion (360 ) 6,527 Reductions of payments (46,664 ) (11,670 ) Recorded investment at end of period $ 1,294,911 $ 1,942,104 Outstanding principal balance at end of period $ 1,630,658 $ 2,643,930 A summary of changes in the accretable yield for PCI loans for the three June 30, 2017 2016 June 30, 2017 June 30, 2016 Accretable yield at beginning of period $ 59,639 $ 32,629 Addition from acquisition - 55,046 Accretion 360 (6,527 ) Reclassification from nonaccretable difference - - Accretable yield at end of period $ 59,999 $ 81,148 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 June 30, 2017 March 31, 2017 Number of June 30, 2017 contracts Performing Nonperforming Total Real estate loans: Residential 14 $ 1,253,861 $ 289,565 $ 1,543,426 Investor - - - - Commercial 2 - 1,546,812 1,546,812 Commercial construction - - - - Commercial business - - - - Home equity loans - - - - Consumer 1 610,003 - 610,003 17 $ 1,863,864 $ 1,836,377 $ 3,700,241 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 The following table presents the number of contracts and the dollar amount of TDRs that were added during the three June 30, 2017 2016. There are no March 31, 2017. Loans Modified as a TDR for the three months ended June 30, 2017 June 30, 2016 Number of Outstanding recorded Number of Outstanding recorded Troubled Debt Restructurings contracts investment contracts investment Real estate loans: One-to four-family 1 $ 1,931 11 $ 712,786 The following table represents loans that were modified as TDRs within the previous 12 three June 30, 2017 2016. 90 Defaulted During the Three Months Ended June 30, 2017 Defaulted During the Three Months Ended June 30, 2016 Number of Recorded Number of Recorded TDR Loan Type Contracts Investment Contracts Investment One-to four-family - $ - 11 $ 261,563 The one four June 30, 2016 one $451,223 June 30, 2016. 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 June 30, 2017 March 31, 2017, no June 30, 2017 March 31, 2017. June 30, 2017 March 31, 2017 LEGACY ACQUIRED TOTAL LEGACY ACQUIRED TOTAL Risk Rating: Rating - Pass: Real estate loans: Residential $ 73,580,895 $ 78,192,680 $ 151,773,575 $ 71,721,341 $ 81,228,457 $ 152,949,798 Investor 7,803,689 17,924,246 25,727,935 6,728,493 18,151,533 24,880,026 Commercial 84,786,588 12,900,861 97,687,449 84,789,748 13,387,987 98,177,735 Commercial construction 2,326,457 1,191,507 3,517,964 1,881,541 1,308,652 3,190,193 Commercial Business 35,226,272 2,037,264 37,263,536 19,376,763 2,019,337 21,396,100 Home Equity 14,105,667 6,539,178 20,644,845 13,269,478 7,133,164 20,402,642 Consumer 2,135,569 889,891 3,025,460 2,258,836 896,022 3,154,858 Total Pass 219,965,137 119,675,627 339,640,764 200,026,200 124,125,152 324,151,352 Rating - Special Mention: Real estate loans: Residential 1,486,142 1,119,496 2,605,638 1,499,436 1,724,987 3,224,423 Investor - 325,422 325,422 - 408,803 408,803 Commercial 6,295,024 1,295,327 7,590,351 6,329,129 1,305,692 7,634,821 Commercial construction - - - - - - Commercial Business - - - - - - Home Equity - 129,507 129,507 - 132,977 132,977 Consumer - - - - 788 788 Total Special Mention 7,781,166 2,869,752 10,650,918 7,828,565 3,573,247 11,401,812 Rating - Substandard: Real estate loans: Residential 351,718 984,377 1,336,095 331,976 938,945 1,270,921 Investor 7,772 183,728 191,500 13,976 219,308 233,284 Commercial 1,546,812 203,215 1,750,027 1,546,812 204,844 1,751,656 Commercial construction - - - - - - Commercial Business 112,811 - 112,811 141,266 - 141,266 Home Equity 10,980 - 10,980 8,751 - 8,751 Consumer - 38,809 38,809 - 40,790 40,790 Total - Substandard 2,030,093 1,410,129 3,440,222 2,042,781 1,403,887 3,446,668 Rating - Doubtful - - - - - - Rating - Loss - - - - - - TOTAL LOANS $ 229,776,396 $ 123,955,508 $ 353,731,904 $ 209,897,546 $ 129,102,286 $ 338,999,832 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 June 30, 2017 March 31, 2017 $63,000 $55,000, June 30, 2017, not The Bank had the following outstanding commitments and unused lines of credit as of June 30, 2017 March 31, 2017: June 30, March 31, 2017 2017 Unused commercial lines of credit $ 13,942,528 $ 10,733,345 Unused home equity lines of credit 22,566,463 22,993,289 Unused consumer lines of credit 30,760 1,110,155 Residential mortgage loan commitments - - Residential construction loan commitments 8,435,236 8,047,156 Commercial construction loan commitments 6,812,988 7,091,564 Home equity loan commitments - 84,000 Commercial loan commitments 360,000 1,089,218 Standby letters of credit 206,367 472,354 |