Note 3 - Loans and Allowance for Credit Losses

12 Months Ended

Jun. 30, 2025

Notes to Financial Statements

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

NOTE 3—LOANS AND ALLOWANCE FOR CREDIT LOSSES

Major classifications of loans were as follows as of June 30:

		2025				2024
Commercial & Industrial		$	113,513			$	127,811
Commercial real estate:
Owner occupied			162,674				163,543
Non-owner occupied			163,768				146,529
Farmland			42,050				38,799
Land development			17,535				12,615
1-4 family residential real estate			201,602				197,143
Consumer			112,316				72,674
Total loans			813,458				759,114
Allowance for credit losses			(8,470	)			(7,930	)
Net loans		$	804,988			$	751,184

Total loans include net unamortized deferred loan costs of $2,674 and $1,577 as of June 30, 2025 and 2024, respectively.

The following tables present the activity in the allowance for credit losses by portfolio segment for the years ended June 30, 2025 and 2024.

		For the Year Ended June 30, 2025
																		1-4 Family
		Commercial				Commercial												Residential
		&				Real								Land				Real
		Industrial				Estate				Farmland				Development				Estate				Consumer				Total

ACL beginning balance		$	1,144			$	3,650			$	89			$	174			$	2,018			$	855			$	7,930
Provision for expected credit losses			357				(204	)			29				92				(10	)			873				1,137
Charge-offs			(253	)			—				—				—				—				(546	)			(799	)
Recoveries			1				—				—				—				2				199				202
ACL ending balance		$	1,249			$	3,446			$	118			$	266			$	2,010			$	1,381			$	8,470

		For the Year Ended June 30, 2024
																		1-4 Family
		Commercial				Commercial												Residential
		&				Real								Land				Real
		Industrial				Estate				Farmland				Development				Estate				Consumer				Total

ACL beginning balance		$	1,308			$	3,943			$	—			$	—			$	1,571			$	902			$	7,724
Cumulative effect of change in accounting principle			(455	)			(53	)			93				398				166				(97	)			52
Provision for expected credit losses			297				(240	)			(4	)			(224	)			277				450				556
Charge-offs			(6	)			—				—				—				—				(560	)			(566	)
Recoveries			—				—				—				—				4				160				164
ACL ending balance		$	1,144			$	3,650			$	89			$	174			$	2,018			$	855			$	7,930

The following tables present the amortized cost of non-accrual loans by class as of June 30, 2025, 2024 and 2023:

		June 30, 2025
										Interest Income
		Non-accrual				Total				Recognized during
		loans with				Non-accrual				the period on
		no ACL				loans				non-accrual loans
Commercial & Industrial		$	332			$	332			$	—
Commercial real estate:
Owner occupied			—				—				16
1 – 4 family residential real estate			440				598				—
Total		$	772			$	930			$	16

		June 30, 2024												June 30, 2023
										Interest Income
		Non-accrual				Total				Recognized during
		loans with				Non-accrual				the period on				Non-accrual
		no ACL				loans				non-accrual loans				Loans
Commercial & Industrial		$	51			$	308			$	—			$	—
Commercial real estate:
Owner occupied			189				189				75				51
1 – 4 family residential real estate			262				277				7				3
Total		$	502			$	774			$	82			$	54

The following tables present the aging of the amortized cost of past due loans as of June 30, 2025 and 2024 by class of loans:

		June 30, 2025
																										Loans 90
		Days Past Due																								Days Past
		30 – 59				60 - 89				90 Days or				Total				Loans Not								Due and
		Days				Days				Greater				Past Due				Past Due				Total				Accruing
Commercial & Industrial		$	77			$	48			$	332			$	457			$	113,056			$	113,513			$	—
Commercial real estate:
Owner occupied			—				—				—				—				162,674				162,674				—
Non-owner occupied			—				—				—				—				163,768				163,768				—
Farmland			—				—				—				—				42,050				42,050				—
Land development			—				—				—				—				17,535				17,535				—
1 – 4 family residential real estate			57				161				374				592				201,010				201,602				—
Consumer			245				33				101				379				111,937				112,316				101
Total		$	379			$	242			$	807			$	1,428			$	812,030			$	813,458			$	101

The above table includes the recorded investment in non-accrual loans of $73 in the loans not past due category, $151 in the 60 – 89 days past due category, and $706 in the 90 days or greater category.

		June 30, 2024
																										Loans 90
		Days Past Due																								Days Past
		30 – 59				60 - 89				90 Days or				Total				Loans Not								Due and
		Days				Days				Greater				Past Due				Past Due				Total				Accruing
Commercial & Industrial		$	—			$	—			$	308			$	308			$	127,503			$	127,811			$	—
Commercial real estate:
Owner occupied			311				—				189				500				163,043				163,543				—
Non-owner occupied			—				—				—				—				146,529				146,529				—
Farmland			—				—				—				—				38,799				38,799				—
Land development			—				—				—				—				12,615				12,615				—
1 – 4 family residential real estate			294				—				158				452				196,691				197,143				68
Consumer			575				98				16				689				71,985				72,674				16
Total		$	1,180			$	98			$	671			$	1,949			$	757,165			$	759,114			$	84

The above table includes the recorded investment in non-accrual loans of $187 in the loans not past due category and $587 in the 90 days or greater category.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, current economic trends and other relevant information. At the time of origination, the Company analyzes all commercial loans individually and classifies the loans by credit risk. Management regularly monitors commercial loans for any changes in the borrowers’ ability to service their debt and completes an annual review to confirm the risk rating for those loans with total outstanding loan relationships greater than $500. The Company uses the following definitions for risk ratings:

Pass. Loans classified as pass exhibit a wide array of characteristics but at a minimum represent minimal level of risk and are considered collectable. Borrowers in this rating may have leveraged but acceptable balance sheet positions, satisfactory asset quality, stable to favorable sales and earnings trends, acceptable liquidity, and adequate cash flow. While generally adhering to credit policy, these loans may exhibit occasional exceptions that do not result in undue risk. Borrowers are generally capable of absorbing setbacks, financial and otherwise.

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

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

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

Not Rated. Loans listed as not rated are included in groups of homogeneous loans. Past due information is the primary credit indicator for groups of homogenous loans.

Based on the most recent analysis performed, the following tables present the amortized cost by internal risk category and class of commercial loans as of June 30, 2025:

																										Revolving				Revolving
																										Loans				Loans
		Term Loans by Fiscal Year of Origination																								Amortized				Converted
		2025				2024				2023				2022				2021				Prior				Cost Basis				To Term				Total
Commercial & Industrial
Pass		$	31,506			$	13,318			$	17,215			$	16,821			$	4,604			$	4,677			$	23,164			$	91			$	111,396
Special Mention			—				411				80				183				375				145				923				—				2,117
Substandard			—				—				—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—				—				—
Total Commercial & Industrial		$	31,506			$	13,729			$	17,295			$	17,004			$	4,979			$	4,822			$	24,087			$	91			$	113,513
Current year-to-date gross write-offs		$	49			$	40			$	—			$	—			$	64			$	—			$	—			$	100			$	253
Commercial real estate:
Owner occupied:
Pass		$	12,350			$	16,042			$	21,391			$	26,435			$	19,268			$	48,946			$	4,452			$	—			$	148,884
Special Mention			2,320				7,582				—				—				619				2,701				411				—				13,633
Substandard			—				—				—				—				—				157				—				—				157
Doubtful			—				—				—				—				—				—				—				—				—
Total owner occupied		$	14,670			$	23,624			$	21,391			$	26,435			$	19,887			$	51,804			$	4,863			$	—			$	162,674
Current year-to-date gross write-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—
Non-owner occupied:
Pass		$	28,937			$	13,970			$	35,895			$	18,667			$	21,883			$	42,916			$	1,500			$	—			$	163,768
Special Mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—				—				—
Total non-owner occupied		$	28,937			$	13,970			$	35,895			$	18,667			$	21,883			$	42,916			$	1,500			$	—			$	163,768
Current year-to-date gross write-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

																										Revolving				Revolving
																										Loans				Loans
		Term Loans by Fiscal Year of Origination																								Amortized				Converted
		2025				2024				2023				2022				2021				Prior				Cost Basis				To Term				Total
Farmland:
Pass		$	6,063			$	1,759			$	5,696			$	5,648			$	5,084			$	16,448			$	1,225			$	127			$	42,050
Special Mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—				—				—
Total Farmland		$	6,063			$	1,759			$	5,696			$	5,648			$	5,084			$	16,448			$	1,225			$	127			$	42,050
Current year-to-date gross write-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—
Land Development:
Pass		$	4,922			$	7,912			$	1,950			$	324			$	332			$	494			$	1,601			$	—			$	17,535
Special Mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—				—				—
Total Land Development		$	4,922			$	7,912			$	1,950			$	324			$	332			$	494			$	1,601			$	—			$	17,535
Current year-to-date gross write-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—
Total:
Pass		$	83,778			$	53,001			$	82,147			$	67,895			$	51,171			$	113,481			$	31,942			$	218			$	483,633
Special Mention			2,320				7,993				80				183				994				2,846				1,334				—				15,750
Substandard			—				—				—				—				—				157				—				—				157
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	86,098			$	60,994			$	82,227			$	68,078			$	52,165			$	116,484			$	33,276			$	218			$	499,540

Management monitors the credit risk profile by payment activity for residential and consumer loan classes. Loans past due 90 days or more and loans on nonaccrual are considered nonperforming. The following table presents the amortized cost of residential real estate and consumer loans based on payment status as of June 30, 2025:

																										Revolving				Revolving
																										Loans				Loans
		Term Loans by Fiscal Year of Origination																								Amortized				Converted
		2025				2024				2023				2022				2021				Prior				Cost Basis				To Term				Total
1 – 4 family residential real estate:
Performing		$	20,297			$	18,547			$	19,403			$	27,391			$	45,186			$	41,453			$	28,663			$	63			$	201,003
Nonperforming			—				—				185				199				—				215				—				—				599
Total 1-4 family residential real estate		$	20,297			$	18,547			$	19,588			$	27,590			$	45,186			$	41,668			$	28,663			$	63			$	201,602
Current year-to-date gross write-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—
Consumer:
Performing		$	66,567			$	20,500			$	16,079			$	6,950			$	1,838			$	186			$	95			$	—			$	112,215
Nonperforming			—				—				72				29				—				—				—				—				101
Total consumer		$	66,567			$	20,500			$	16,151			$	6,979			$	1,838			$	186			$	95			$	—			$	112,316
Current year-to-date gross write-offs		$	49			$	26			$	199			$	251			$	19			$	2			$	—			$	—			$	546
Total:
Performing		$	86,864			$	39,047			$	35,482			$	34,341			$	47,024			$	41,639			$	28,758			$	63			$	313,218
Nonperforming			—				—				257				228				—				215				—				—				700
Total		$	86,864			$	39,047			$	35,739			$	34,569			$	47,024			$	41,854			$	28,758			$	63			$	313,918

The following tables present the amortized cost by internal risk category and class of commercial loans as of June 30, 2024:

																										Revolving				Revolving
																										Loans				Loans
		Term Loans by Fiscal Year of Origination																								Amortized				Converted
		2024				2023				2022				2021				2020				Prior				Cost Basis				To Term				Total
Commercial & Industrial
Pass		$	43,540			$	24,263			$	28,588			$	7,370			$	3,448			$	3,954			$	14,868			$	93			$	126,124
Special Mention			151				67				569				12				—				61				755				—				1,615
Substandard			—				—				—				8				—				—				—				—				8
Doubtful			—				—				—				—				—				—				64				—				64
Total Commercial & Industrial		$	43,691			$	24,330			$	29,157			$	7,390			$	3,448			$	4,015			$	15,687			$	93			$	127,811
Current year-to-date gross write-offs		$	—			$	—			$	—			$	—			$	—			$	6			$	—			$	—			$	6

Commercial real estate:
Owner occupied:
Pass		$	16,207			$	20,615			$	34,572			$	21,405			$	14,877			$	41,035			$	11,684			$	—			$	160,395
Special Mention			—				—				—				650				320				1,708				151				—				2,829
Substandard			—				—				—				—				—				254				—				—				254
Doubtful			—				—				—				14				—				51				—				—				65
Total owner occupied		$	16,207			$	20,615			$	34,572			$	22,069			$	15,197			$	43,048			$	11,835			$	—			$	163,543
Current year-to-date gross write-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—
Non-owner occupied:
Pass		$	16,395			$	37,241			$	22,324			$	23,564			$	11,616			$	34,570			$	819			$	—			$	146,529
Special Mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—				—				—
Total non-owner occupied		$	16,395			$	37,241			$	22,324			$	23,564			$	11,616			$	34,570			$	819			$	—			$	146,529
Current year-to-date gross write-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

Farmland:
Pass		$	1,543			$	5,854			$	5,867			$	5,309			$	2,280			$	16,591			$	1,201			$	143			$	38,788
Special Mention			—				—				—				—				—				11				—				—				11
Substandard			—				—				—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—				—				—
Total Farmland		$	1,543			$	5,854			$	5,867			$	5,309			$	2,280			$	16,602			$	1,201			$	143			$	38,799
Current year-to-date gross write-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

Land Development:
Pass		$	4,449			$	2,005			$	353			$	512			$	285			$	504			$	4,507			$	—			$	12,615
Special Mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—				—				—
Total Land Development		$	4,449			$	2,005			$	353			$	512			$	285			$	504			$	4,507			$	—			$	12,615
Current year-to-date gross write-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

Total:
Pass		$	82,134			$	89,978			$	91,704			$	58,160			$	32,506			$	96,654			$	33,079			$	236			$	484,451
Special Mention			151				67				569				662				320				1,780				906				—				4,455
Substandard			—				—				—				8				—				254				—				—				262
Doubtful			—				—				—				14				—				51				64				—				129
Total		$	82,285			$	90,045			$	92,273			$	58,844			$	32,826			$	98,739			$	34,049			$	236			$	489,297

Management monitors the credit risk profile by payment activity for residential and consumer loan classes. Loans past due 90 days or more and loans on nonaccrual are considered nonperforming. The following table presents the amortized cost of residential real estate and consumer loans based on payment status as of June 30, 2024:

																										Revolving				Revolving
																										Loans				Loans
		Term Loans by Fiscal Year of Origination																								Amortized				Converted
		2024				2023				2022				2021				2020				Prior				Cost Basis				To Term				Total
1 – 4 family residential real estate:
Performing		$	16,675			$	23,451			$	29,857			$	54,816			$	18,891			$	28,792			$	24,235			$	81			$	196,798
Nonperforming			—				—				277				—				—				68				—				—				345
Total 1-4 family residential real estate		$	16,675			$	23,451			$	30,134			$	54,816			$	18,891			$	28,860			$	24,235			$	81			$	197,143
Current year-to-date gross write-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—
Consumer:
Performing		$	29,800			$	25,179			$	12,422			$	4,241			$	586			$	236			$	194			$	—			$	72,658
Nonperforming			8				—				8				—				—				—				—				—				16
Total consumer		$	29,808			$	25,179			$	12,430			$	4,241			$	586			$	236			$	194			$	—			$	72,674
Current year-to-date gross write-offs		$	63			$	140			$	265			$	56			$	35			$	1			$	—			$	—			$	560
Total:
Performing		$	46,475			$	48,630			$	42,279			$	59,057			$	19,477			$	29,028			$	24,429			$	81			$	269,456
Nonperforming			8				—				285				—				—				68				—				—				361
Total		$	46,483			$	48,630			$	42,564			$	59,057			$	19,477			$	29,096			$	24,429			$	81			$	269,817

Modifications to Borrowers Experiencing Financial Difficulty

Occasionally, the Company modifies loans to borrowers experiencing financial difficulty to maximize collection of loan balances by providing principal forgiveness, term extension, an other-than insignificant payment delay, or an interest rate reduction. In some cases, the Company may provide multiple types of concessions on one loan. If principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. There were no modifications of loans to borrowers in financial distress completed during the twelve-month periods ended June 30, 2025 or 2024.

Collateral Dependent Loans

A loan is considered collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In such cases, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. The following table presents the amortized cost of collateral dependent loans and the related allowance for credit losses allocated to these loans:

June 30, 2025:		Real Estate				Other				ACL
1 – 4 family residential real estate		$	158			$	—			$	52

June 30, 2024:		Real Estate				Other				ACL
Commercial & Industrial		$	—			$	257			$	67
Commercial real estate:
Owner occupied			189				—				—
Total loans		$	189			$	257			$	67