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Document And Entity Information - shares	3 Months Ended
Document And Entity Information - shares	Sep. 30, 2015	Nov. 08, 2015
Document Information [Line Items]
Entity Registrant Name	NORTHEAST BANCORP /ME/
Trading Symbol	nbn
Document Type	10-Q
Current Fiscal Year End Date	--06-30
Amendment Flag	false
Entity Central Index Key	0000811831
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Nonvoting Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		1,022,717
Voting Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		8,559,312

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015
Assets
Cash and due from banks	$ 2,979	$ 2,789
Short-term investments	83,234	87,061
Total cash and cash equivalents	86,213	89,850
Available-for-sale securities, at fair value	101,344	101,908
Residential real estate loans held for sale	5,366	7,093
SBA loans held for sale	2,170	1,942
Total loans held for sale	7,536	9,035
Loans	625,842	612,137
Less: Allowance for loan losses	2,065	1,926
Loans, net	623,777	610,211
Premises and equipment, net	8,460	8,253
Real estate owned and other repossessed collateral, net	1,279	1,651
Federal Home Loan Bank stock, at cost	4,102	4,102
Intangible assets, net	2,078	2,209
Bank owned life insurance	15,387	15,276
Other assets	8,073	8,223
Total assets	858,249	850,718
Deposits:
Demand	62,687	60,383
Savings and interest checking	106,679	100,134
Money market	182,690	168,527
Time	341,422	345,715
Total deposits	693,478	674,759
Federal Home Loan Bank advances	30,159	30,188
Wholesale repurchase agreements		10,037
Short-term borrowings	2,479	2,349
Junior subordinated debentures issued to affiliated trusts	8,674	8,626
Capital lease obligation	1,312	1,368
Other liabilities	8,443	10,664
Total liabilities	744,545	737,991
Commitments and contingencies
Stockholders' equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at September 30, 2015 and June 30, 2015
Additional paid-in capital	84,937	85,506
Retained earnings	20,693	18,921
Accumulated other comprehensive loss	(1,519)	(1,288)
Total stockholders' equity	113,704	112,727
Total liabilities and stockholders' equity	858,249	850,718
Voting Common Stock [Member]
Stockholders' equity
Common stock	8,570	8,575
Nonvoting Common Stock [Member]
Stockholders' equity
Common stock	$ 1,023	$ 1,013

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2015	Jun. 30, 2015
Preferred stock, par value (in dollars per share) (in Dollars per share)	$ 1	$ 1
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shared issued	0	0
Preferred stock, shares outstanding	0	0
Voting Common Stock [Member]
Common stock, par value (in dollars per share) (in Dollars per share)	$ 1.00	$ 1.00
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	8,569,612	8,575,144
Common stock, outstanding	8,569,612	8,575,144
Nonvoting Common Stock [Member]
Common stock, par value (in dollars per share) (in Dollars per share)	$ 1.00	$ 1.00
Common stock, shares authorized	3,000,000	3,000,000
Common stock, shares issued	1,022,717	1,012,739
Common stock, outstanding	1,022,717	1,012,739

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Interest and dividend income:
Interest and fees on loans	$ 10,790	$ 10,922
Interest on available-for-sale securities	228	244
Other interest and dividend income	95	66
Total interest and dividend income	11,113	11,232
Interest expense:
Deposits	1,365	1,130
Federal Home Loan Bank advances	260	323
Wholesale repurchase agreements	67	73
Short-term borrowings	9	9
Junior subordinated debentures issued to affiliated trusts	154	206
Obligation under capital lease agreements	17	20
Total interest expense	1,872	1,761
Net interest and dividend income before provision for loan losses	9,241	9,471
Provision for loan losses	169	320
Net interest and dividend income after provision for loan losses	9,072	9,151
Noninterest income:
Fees for other services to customers	408	394
Gain on sales of residential loans held for sale	560	584
Gain on sales of portfolio loans	675	80
Loss recognized on real estate owned and other repossessed collateral, net	(59)	(23)
Bank-owned life insurance income	112	109
Other noninterest income	9	10
Total noninterest income	1,705	1,154
Noninterest expense:
Salaries and employee benefits	4,256	4,533
Occupancy and equipment expense	1,290	1,202
Professional fees	430	308
Data processing fees	349	345
Marketing expense	70	69
Loan acquisition and collection expense	451	274
FDIC insurance premiums	114	124
Intangible asset amortization	131	166
Other noninterest expense	719	689
Total noninterest expense	7,810	7,710
Income before income tax expense	2,967	2,595
Income tax expense	1,100	948
Net income	$ 1,867	$ 1,647
Weighted average shares outstanding during the period:
Basic (in Shares)	9,562,812	10,180,038
Diluted (in Shares)	9,562,812	10,180,038
Earnings per common share:
Basic (in Dollars per share)	$ 0.20	$ 0.16
Diluted (in Dollars per share)	0.20	0.16
Cash dividends declared per common share (in Dollars per share)	$ 0.01	$ 0.01

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Net income	$ 1,867	$ 1,647
Available-for-sale securities:
Change in net unrealized gain (loss) on available-for-sale securities	466	(275)
Total available-for-sale securities	466	(275)
Derivatives and hedging activities:
Change in accumulated loss on effective cash flow hedges	(838)	(272)
Reclassification adjustments for net gains included in net income		(9)
Total derivatives and hedging activities	(838)	(281)
Total other comprehensive loss, before tax	(372)	(556)
Income tax benefit related to other comprehensive loss	(141)	(188)
Other comprehensive loss, net of tax	(231)	(368)
Comprehensive income	$ 1,636	$ 1,279

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Voting Common Stock [Member] Common Stock [Member]	Nonvoting Common Stock [Member] Common Stock [Member]	Preferred Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance at Jun. 30, 2014	$ 9,260	$ 881	$ 0	$ 90,914	$ 12,294	$ (1,283)	$ 112,066
Balance (in Shares) at Jun. 30, 2014	9,260,331	880,963	0
Balance at Sep. 30, 2014	$ 9,367	$ 881	$ 0	90,809	13,839	(1,651)	113,245
Balance (in Shares) at Sep. 30, 2014	9,367,071	880,963	0
Net income					1,647		1,647
Other comprehensive loss, net of tax						(368)	(368)
Common stock repurchased	$ (14)			(120)			(134)
Common stock repurchased (in Shares)	(14,400)
Dividends on common stock					(102)		(102)
Stock-based compensation				136			136
Issuance of restricted common stock	$ 128			(128)
Issuance of restricted common stock (in Shares)	128,000
Forfeiture of restricted common stock	$ (7)			7
Forfeiture of restricted common stock (in Shares)	(6,860)
Balance at Jun. 30, 2015	$ 8,575	$ 1,013	$ 0	85,506	18,921	(1,288)	112,727
Balance (in Shares) at Jun. 30, 2015	8,575,144	1,012,739	0
Balance at Sep. 30, 2015	$ 8,570	$ 1,023	$ 0	84,937	20,693	(1,519)	113,704
Balance (in Shares) at Sep. 30, 2015	8,569,612	1,022,717	0
Net income					1,867		1,867
Other comprehensive loss, net of tax						$ (231)	(231)
Common stock repurchased	$ (53)			(495)			(548)
Common stock repurchased (in Shares)	(52,500)
Conversion of voting common stock to non-voting common stock	$ (10)	$ 10
Conversion of voting common stock to non-voting common stock (in Shares)	(9,978)	9,978
Dividends on common stock					$ (95)		(95)
Stock-based compensation				(16)			$ (16)
Issuance of restricted common stock	$ 98			(98)
Issuance of restricted common stock (in Shares)	97,500
Forfeiture of restricted common stock	$ (40)			$ 40
Forfeiture of restricted common stock (in Shares)	(40,554)

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Dividends per share	$ 0.01	$ 0.01

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating activities:
Net income	$ 1,867	$ 1,647
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Provision for loan losses	169	320
Loss (gain) on sale and impairment of real estate owned and other repossessed collateral, net	59	23
Originations of residential loans held for sale	(26,877)	(27,676)
Net proceeds from sales of residential loans held for sale	29,164	31,136
Gain on sales of residential loans held for sale, net	(560)	(584)
Gain on sales of portfolio loans, net	(675)	(80)
Amortization of intangible assets	131	166
Bank-owned life insurance income, net	(112)	(109)
Depreciation of premises and equipment	405	432
Loss on sale and disposal of premises and equipment, net	6	28
Stock-based compensation	(16)	136
Amortization of available-for-sale securities, net	222	262
Changes in other assets and liabilities:
Other assets	521	(367)
Other liabilities	(3,059)	(1,284)
Net cash (used in) provided by operating activities	(1,030)	814
Investing activities:
Purchases of available-for-sale securities	(5,000)
Proceeds from maturities and principal payments on available-for-sale securities	5,808	2,994
Loan purchases	(23,458)	(13,167)
Proceeds from sales of portfolio loans	6,154	793
Loan originations, principal collections, and purchased loan paydowns, net	5,712	(10,213)
Purchases and disposals of premises and equipment, net	(618)	(105)
Proceeds from sales of real estate owned and other repossessed collateral	642	88
Net cash used in investing activities	(10,760)	(19,610)
Financing activities:
Net increase in deposits	18,722	19,530
Net increase in short-term borrowings	130	820
Repurchase of common stock	(548)	(134)
Dividends paid on common stock	(95)	(102)
Repayment of wholesale repurchase agreements	(10,000)
Repayment of capital lease obligation	(56)	(47)
Net cash provided by financing activities	8,153	20,067
Net (decrease) increase in cash and cash equivalents	(3,637)	1,271
Cash and cash equivalents, beginning of period	89,850	82,259
Cash and cash equivalents, end of period	86,213	83,530
Supplemental schedule of noncash investing and financing activities:
Transfers from loans to real estate owned and other repossessed collateral	323	209
Loans Location [Member]
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Accretion of fair value adjustments	(2,248)	(3,097)
Deposits Location [Member]
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Accretion of fair value adjustments	(3)	(64)
Borrowing Location [Member]
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Accretion of fair value adjustments	$ (18)	$ (47)

Note 1 - Basis of Presentation

3 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Basis of Accounting [Text Block]

1. Basis of Presentation

The accompanying unaudited condensed and consolidated interim financial statements include the accounts of Northeast Bancorp (“Northeast” or the “Company”) and its wholly-owned subsidiary, Northeast Bank (the “Bank”).

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) considered necessary for a fair presentation of the Company's financial position, results of operations, and cash flows for the interim periods presented. These financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2015 (“Fiscal 2015”) included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Note 2 - Recent Accounting Pronouncements

3 Months Ended

Sep. 30, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

2. Recent Accounting Pronouncements

In January 2014, the FASB issued ASU No. 2014-01, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects ("ASU 2014-01"). The amendments in ASU 2014-01 provide guidance on accounting for investments by a reporting entity in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2014 and should be applied retrospectively to all periods presented. Early adoption is permitted. The Company adopted the standard in the current period. See Part I. Item I. “Notes to Unaudited Consolidated Financial Statements – Note 6: Investments in Qualified Affordable Housing Projects” for further discussion and related effect.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 is effective for annual periods beginning after December 15, 2016 and is not expected to have a significant impact on the Company’s financial statements.

In June 2014, the FASB issued ASU 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (“ASU 2014-11”). ASU 2014-11 requires that repurchase-to-maturity transactions be accounted for as secured borrowings consistent with the accounting for other repurchase agreements. In addition, ASU 2014-11 requires separate accounting for repurchase financings, which entails the transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty. ASU 2014-11 requires entities to disclose certain information about transfers accounted for as sales in transactions that are economically similar to repurchase agreements. In addition, ASU 2014-11 requires disclosures related to collateral, remaining contractual tenor and of the potential risks associated with repurchase agreements, securities lending transactions and repurchase-to-maturity transactions. ASU 2014-11 was effective July 1, 2015 and did not have a significant impact on the Company’s financial statements.

In August 2014, the FASB issued ASU 2014-14, Receivables - Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure (“ASU 2014-14”). ASU 2014-14 affects creditors that hold government-guaranteed mortgage loans, including those guaranteed by the Federal Housing Administration (FHA) of the U.S. Department of Housing and Urban Development (HUD), and the U.S. Department of Veterans Affairs (VA). The update requires that, upon foreclosure, a guaranteed mortgage loan be derecognized and a separate other receivable be recognized when specific criteria are met. ASU 2014-14 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. The adoption of this guidance did not have a significant impact on the Company’s financial statements.

In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (“ASU 2015-07”). The amendment affects reporting entities that elect to measure the fair value of an investment using the net asset value per share as a practical expedient. The Company adopted the standard in the current period. See Part I. Item I. “Notes to Unaudited Consolidated Financial Statements – Note 11: Fair Value Measurements” for further discussion and related effect.

- Definition

The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6507316

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Direct Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6510796

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=56949863&loc=d3e22583-107794

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Indirect Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6515603

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=56949863&loc=d3e22580-107794

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.10-01.(b)(6))
-URI http://asc.fasb.org/extlink&oid=27015980&loc=d3e46468-122699

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Accounting Change
-URI http://asc.fasb.org/extlink&oid=6503790

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=56949863&loc=d3e22499-107794

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Retrospective Application
-URI http://asc.fasb.org/extlink&oid=6523989

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section 45
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=51655806&loc=d3e765-108305

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section 45
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=51655806&loc=d3e725-108305

+ Details

Note 3 - Securities Available-for-Sale

3 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

3. Securities Available-for-Sale

The following presents a summary of the amortized cost, gross unrealized holding gains and losses, and fair value of securities available for sale.

	September 30, 2015
	Amortized		Gross Unrealized		Gross Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in thousands)
U.S. Government agency securities	$	45,134	$	34	$	(1	)	$	45,167
Agency mortgage-backed securities		51,562		21		(438	)		51,145
Other investments measured at net asset value		5,018		14		-			5,032
	$	101,714	$	69	$	(439	)	$	101,344

	June 30, 2015
	Amortized		Gross Unrealized		Gross Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in thousands)
U.S. Government agency securities	$	48,191	$	40	$	(1	)	$	48,230
Agency mortgage-backed securities		54,553		2		(877	)		53,678
Other investments measured at net asset value		-		-		-			-
	$	102,744	$	42	$	(878	)	$	101,908

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on sale. There were no securities sold during the three months ended September 30, 2015 or 2014. At September 30, 2015, investment securities with a fair value of approximately $3.0 million were pledged as collateral to secure outstanding borrowings.

The following summarizes the Company’s gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

	September 30, 2015
	Less than 12 Months					More than 12 Months					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
	(Dollars in thousands)
U.S. Government agency securities	$	2,997	$	(1	)	$	-	$	-		$	2,997	$	(1	)
Agency mortgage-backed securities		7,871		(34	)		39,617		(404	)		47,488		(438	)
	$	10,868	$	(35	)	$	39,617	$	(404	)	$	50,485	$	(439	)

	June 30, 2015
	Less than 12 Months					More than 12 Months					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
	(Dollars in thousands)
U.S. Government agency securities	$	2,999	$	(1	)	$	-	$	-		$	2,999	$	(1	)
Agency mortgage-backed securities		10,295		(106	)		41,349		(771	)		51,644		(877	)
	$	13,294	$	(107	)	$	41,349	$	(771	)	$	54,643	$	(878	)

There were no other-than-temporary impairment losses on securities during the three months ended September 30, 2015 or 2014.

At September 30, 2015, the Company had sixteen securities in a continuous loss position for greater than twelve months. At September 30, 2015, all of the Company’s available-for-sale securities were issued or guaranteed by either government agencies or government-sponsored enterprises. The decline in fair value of the Company’s available-for-sale securities at September 30, 2015 is attributable to changes in interest rates.

Management of the Company, in addition to considering current trends and economic conditions that may affect the quality of individual securities within the Company’s investment portfolio, also considers the Company’s ability and intent to hold such securities to maturity or recovery of cost. At September 30, 2015, it is more likely than not that the Company will not sell or be required to sell the investment securities before recovery of its amortized cost. As such, management does not believe any of the Company’s available-for-sale securities are other-than-temporarily impaired at September 30, 2015.

The investment measured at net asset value is a fund that seeks to invest in securities either issued or guaranteed by the U.S. government or its agencies. The underlying composition of the fund is primarily government agencies or other investment-grade investments. The effective duration of the investments is 4.32 years.

The amortized cost and fair values of available-for-sale debt securities by contractual maturity are shown below as of September 30, 2015. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Fair
	Cost		Value
	(Dollars in thousands)
Due within one year	$	33,077	$	33,095
Due after one year through five years		12,058		12,072
Due after five years through ten years		24,618		24,516
Due after ten years		26,943		26,629
Total	$	96,696	$	96,312

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References + Details

Note 4 - Loans, Allowance for Loan Losses and Credit Quality

3 Months Ended

Sep. 30, 2015

Receivables [Abstract]

Financing Receivables [Text Block]

4. Loans, Allowance for Loan Losses and Credit Quality

Loans are carried at the principal amounts outstanding, or amortized acquired fair value in the case of acquired loans, adjusted by partial charge-offs and net of deferred loan costs or fees. Loan fees and certain direct origination costs are deferred and amortized into interest income over the expected term of the loan using the level-yield method. When a loan is paid off, the unamortized portion is recognized in interest income. Interest income is accrued based upon the daily principal amount outstanding except for loans on nonaccrual status.

Loans purchased by the Company are accounted for under ASC 310-30, Receivables — Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC 310-30”). At acquisition, the effective interest rate is determined based on the discount rate that equates the present value of the Company’s estimate of cash flows with the purchase price of the loan. Prepayments are not assumed in determining a purchased loan’s effective interest rate and income accretion. The application of ASC 310-30 limits the yield that may be accreted on the purchased loan, or the “accretable yield,” to the excess of the Company’s estimate, at acquisition, of the expected undiscounted principal, interest, and other cash flows over the Company’s initial investment in the loan. The excess of contractually required payments receivable over the cash flows expected to be collected on the loan represents the purchased loan’s “nonaccretable difference.” Subsequent improvements in expected cash flows of loans with nonaccretable differences result in a prospective increase to the loan’s effective yield through a reclassification of some, or all, of the nonaccretable difference to accretable yield. The effect of subsequent credit-related declines in expected cash flows of purchased loans are recorded through a specific allocation in the allowance for loan losses.

Loans are generally placed on nonaccrual status when they are past due 90 days as to either principal or interest, or when in management’s judgment the collectability of interest or principal of the loan has been significantly impaired. Loans accounted for under ASC 310-30 are placed on nonaccrual when it is not possible to reach a reasonable expectation of the timing and amount of cash flows to be collected on the loan. When a loan has been placed on nonaccrual status, previously accrued and uncollected interest is reversed against interest on loans. Interest on nonaccrual loans is accounted for on a cash-basis or using the cost-recovery method when collectability is doubtful. A loan is returned to accrual status when collectability of principal is reasonably assured and the loan has performed for a reasonable period of time.

In cases where a borrower experiences financial difficulties and the Company makes certain concessionary modifications to contractual terms, the loan is classified as a troubled debt restructuring (“TDR”), and therefore by definition is an impaired loan. Concessionary modifications may include adjustments to interest rates, extensions of maturity, and other actions intended to minimize economic loss and avoid foreclosure or repossession of collateral. For loans accounted for under ASC 310-30, the Company evaluates whether it has granted a concession by comparing the restructured debt terms to the expected cash flows at acquisition plus any additional cash flows expected to be collected arising from changes in estimate after acquisition. As a result, if an ASC 310-30 loan is modified to be consistent with, or better than, the Company’s expectations at acquisition, the loan would not qualify as a TDR. Nonaccrual loans that are restructured generally remain on nonaccrual status for a minimum period of six months to demonstrate that the borrower can meet the restructured terms. If the restructured loan is on accrual status prior to being modified, it is reviewed to determine if the modified loan should remain on accrual status. If the borrower’s ability to meet the revised payment schedule is not reasonably assured, the loan is classified as a nonaccrual loan. With limited exceptions, loans classified as TDRs remain classified as such until the loan is paid off.

The composition of the Company’s loan portfolio is as follows on the dates indicated.

	September 30, 2015						June 30, 2015
	Originated		Purchased		Total		Originated		Purchased		Total
	(Dollars in thousands)
Residential real estate	$	102,570	$	3,214	$	105,784	$	106,275	$	2,068	$	108,343
Home equity		22,480		-		22,480		24,326		-		24,326
Commercial real estate		152,873		210,727		363,600		148,425		200,251		348,676
Commercial business		126,476		258		126,734		122,860		273		123,133
Consumer		7,244		-		7,244		7,659		-		7,659
Total loans	$	411,643	$	214,199	$	625,842	$	409,545	$	202,592	$	612,137

Past Due and Nonaccrual Loans

The following is a summary of past due and non-accrual loans:

	September 30, 2015
					Past Due		Past Due
					90 Days or		90 Days or		Total						Non-
	30-59		60-89		More-Still		More-		Past		Total		Total		Accrual
	Days		Days		Accruing		Nonaccrual		Due		Current		Loans		Loans
	(Dollars in thousands)
Originated portfolio:
Residential real estate	$	176	$	950	$	-	$	1,658	$	2,784	$	99,786	$	102,570	$	3,165
Home equity		-		-		-		20		20		22,460		22,480		20
Commercial real estate		219		173		-		402		794		152,079		152,873		529
Commercial business		22		-		-		2		24		126,452		126,476		2
Consumer		198		41		-		50		289		6,955		7,244		153
Total originated portfolio		615		1,164		-		2,132		3,911		407,732		411,643		3,869
Purchased portfolio:
Residential real estate		-		-		-		-		-		3,214		3,214		-
Commercial business		-		-		-		-		-		258		258		-
Commercial real estate		1,009		1,110		-		2,407		4,526		206,201		210,727		6,939
Total purchased portfolio		1,009		1,110		-		2,407		4,526		209,673		214,199		6,939
Total loans	$	1,624	$	2,274	$	-	$	4,539	$	8,437	$	617,405	$	625,842	$	10,808

	June 30, 2015
					Past Due		Past Due
					90 Days or		90 Days or		Total						Non-
	30-59		60-89		More-Still		More-		Past		Total		Total		Accrual
	Days		Days		Accruing		Nonaccrual		Due		Current		Loans		Loans
	(Dollars in thousands)
Originated portfolio:
Residential real estate	$	239	$	973	$	-	$	1,393	$	2,605	$	103,670	$	106,275	$	3,021
Home equity		9		-		-		11		20		24,306		24,326		11
Commercial real estate		300		-		-		704		1,004		147,421		148,425		994
Commercial business		-		-		-		2		2		122,858		122,860		2
Consumer		105		29		-		56		190		7,469		7,659		190
Total originated portfolio		653		1,002		-		2,166		3,821		405,724		409,545		4,218
Purchased portfolio:
Residential real estate		-		-		-		-		-		2,068		2,068		-
Commercial business		-		-		-		-		-		273		273		-
Commercial real estate		86		299		-		2,410		2,795		197,456		200,251		6,532
Total purchased portfolio		86		299		-		2,410		2,795		199,797		202,592		6,532
Total loans	$	739	$	1,301	$	-	$	4,576	$	6,616	$	605,521	$	612,137	$	10,750

Allowance for Loan Losses and Impaired Loans

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. For residential and consumer loans, a charge-off is recorded no later than the point at which a loan is 180 days past due if the loan balance exceeds the fair value of the collateral, less costs to sell. For commercial loans, a charge-off is recorded on a case-by-case basis when all or a portion of the loan is deemed to be uncollectible. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses consists of general, specific, and unallocated reserves and reflects management’s estimate of probable loan losses inherent in the loan portfolio at the balance sheet date. Management uses a consistent and systematic process and methodology to evaluate the appropriateness of the allowance for loan losses on a quarterly basis. The calculation of the allowance for loan losses is segregated by portfolio segments, which include: commercial real estate, commercial business, consumer, residential real estate, and purchased loans. Risk characteristics relevant to each portfolio segment are as follows:

Residential real estate: All loans in this segment are collateralized by residential real estate and repayment is primarily dependent on the credit quality, loan-to-value ratio and income of the individual borrower. The overall health of the economy, particularly unemployment rates and housing prices, has a significant effect on the credit quality in this segment. For purposes of the Company’s allowance for loan loss calculation, home equity loans and lines of credit are included in residential real estate.

Commercial real estate: Loans in this segment are primarily income-producing properties. For owner-occupied properties, the cash flows are derived from an operating business, and the underlying cash flows may be adversely affected by deterioration in the financial condition of the operating business. The underlying cash flows generated by non-owner occupied properties may be adversely affected by increased vacancy rates. Management periodically obtains rent rolls, with which it monitors the cash flows of these loans. Adverse developments in either of these areas will have an adverse effect on the credit quality of this segment. For purposes of the allowance for loan losses, this segment also includes construction loans.

Commercial business: Loans in this segment are made to businesses and are generally secured by the assets of the business. Repayment is expected from the cash flows of the business. Weakness in national or regional economic conditions, and a corresponding weakness in consumer or business spending, will have an adverse effect on the credit quality of this segment.

Consumer: Loans in this segment are generally secured, and repayment is dependent on the credit quality of the individual borrower. Repayment of consumer loans is generally based on the earnings of individual borrowers, which may be adversely impacted by regional labor market conditions.

Purchased: Loans in this segment are typically secured by commercial real estate, multi-family residential real estate, or business assets and have been acquired by the Bank’s Loan Acquisition and Servicing Group (“LASG”). Loans acquired by the LASG are, with limited exceptions, performing loans at the date of purchase. Loans in this segment acquired with specific material credit deterioration since origination are identified as purchased credit-impaired. Repayment of loans in this segment is largely dependent on cash flow from the successful operation of the property, in the case of non-owner occupied property, or operating business, in the case of owner-occupied property. Loan performance may be adversely affected by factors affecting the general economy or conditions specific to the real estate market, such as geographic location or property type. Loans in this segment are evaluated for impairment under ASC 310-30. The Company reviews expected cash flows from purchased loans on a quarterly basis. The effect of a decline in expected cash flows subsequent to the acquisition of the loan is recognized through a specific allocation in the allowance for loan losses.

The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by loan segment. The Company does not weight periods used in that analysis to determine the average loss rate in each portfolio segment. This historical loss factor is adjusted for the following qualitative factors:

●

Levels and trends in delinquencies and nonperforming loans

●

Trends in the volume and nature of loans

●

Trends in credit terms and policies, including underwriting standards, procedures and practices, and the experience and ability of lending management and staff

●

Trends in portfolio concentration

●

National and local economic trends and conditions

●

Effects of changes or trends in internal risk ratings

●

Other effects resulting from trends in the valuation of underlying collateral

The allocated component of the allowance for loan losses relates to loans that are classified as impaired. Impairment is measured on a loan-by-loan basis for commercial business and commercial real estate loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. An allowance is established when the discounted cash flows or collateral value of the impaired loan is lower than the carrying value of that loan. Large groups of smaller-balance homogeneous loans, such as consumer and residential real estate loans are collectively evaluated for impairment based on the group’s historical loss experience adjusted for qualitative factors. Accordingly, the Company does not separately identify individual consumer and residential loans for individual impairment and disclosure. However, all TDRs are individually reviewed for impairment.

For all portfolio segments, except loans accounted for under ASC 310-30, 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. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. For the purchased loan segment, a loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to realize cash flows as expected at acquisition. For loans accounted for under ASC 310-30 for which cash flows can reasonably be estimated, loan impairment is measured based on the decrease in expected cash flows from those estimated at acquisition, excluding changes due to changes in interest rate indices and other non-credit related factors, discounted at the loan’s effective rate assumed at acquisition. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting the scheduled principal and interest payments when due.

The following table sets forth activity in the Company’s allowance for loan losses.

	Three Months Ended September 30, 2015
	Residential			Commercial			Commercial
	Real Estate			Real Estate			Business		Consumer			Purchased		Unallocated		Total
	(Dollars in thousands)
Beginning balance	$	741		$	694		$	117	$	35		$	283	$	56	$	1,926
Provision		(21	)		62			16		31			81		-		169
Recoveries		12			5			1		2			-		-		20
Charge-offs		-			(28	)		-		(22	)		-		-		(50	)
Ending balance	$	732		$	733		$	134	$	46		$	364	$	56	$	2,065

	Three Months Ended September 30, 2014
	Residential			Commercial			Commercial
	Real Estate			Real Estate			Business		Consumer			Purchased		Unallocated		Total
	(Dollars in thousands)
Beginning balance	$	580		$	358		$	48	$	79		$	267	$	35	$	1,367
Provision		358			(18	)		1		(35	)		4		10		320
Recoveries		5			-			-		10			-		-		15
Charge-offs		(160	)		-			-		(3	)		-		-		(163	)
Ending balance	$	783		$	340		$	49	$	51		$	271	$	45	$	1,539

The following table sets forth information regarding the allowance for loan losses by portfolio segment and impairment methodology.

	September 30, 2015
	Residential		Commercial		Commercial
	Real Estate		Real Estate		Business		Consumer		Purchased		Unallocated		Total
	(Dollars in thousands)
Allowance for loan losses:
Individually evaluated	$	415	$	21	$	-	$	-	$	-	$	-	$	436
Collectively evaluated		317		712		134		46		-		56		1,265
ASC 310-30		-		-		-		-		364		-		364
Total	$	732	$	733	$	134	$	46	$	364	$	56	$	2,065

Loans:
Individually evaluated	$	5,071	$	1,866	$	2	$	375	$	-	$	-	$	7,314
Collectively evaluated		119,979		151,007		126,474