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Eureka Homestead Bancorp (ERKH)

Document and Entity Information

Document and Entity Information - USD ($) $ in Millions12 Months Ended
Dec. 31, 2019Mar. 30, 2020Jul. 10, 2019
Document and Entity Information [Abstract]
Entity Registrant NameEUREKA HOMESTEAD BANCORP, INC.
Entity Central Index Key0001769725
Document Type10-K
Document Period End DateDec. 31,
2019
Amendment Flagfalse
Current Fiscal Year End Date--12-31
Entity Well-known Seasoned IssuerNo
Entity Voluntary FilersNo
Entity Current Reporting StatusYes
Entity Filer CategoryNon-accelerated Filer
Entity Small Businesstrue
Entity Emerging Growth Companytrue
Entity Public Float $ 17.3
Entity Ex Transition Periodfalse
Entity Shell Companyfalse
Entity Common Stock, Shares Outstanding1,429,676
Document Fiscal Year Focus2019
Document Fiscal Period FocusFY

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)Dec. 31, 2019Dec. 31, 2018
ASSETS
Cash and Cash Equivalents $ 11,875,000 $ 3,090,000
Interest-Bearing Deposits1,740,000 750,000
Investment Securities5,320,000 5,781,000
Loans Receivable, Net78,785,000 81,072,000
Loans Held-for-Sale1,637,000 533,000
Accrued Interest Receivable321,000 337,000
Federal Home Loan Bank Stock1,418,000 1,376,000
Premises and Equipment, Net704,000 767,000
Cash Surrender Value of Life Insurance4,044,000 3,950,000
Deferred Tax Asset5,000 280,000
Prepaid Expenses and Other Assets155,000 134,000
Total Assets106,004,000 98,070,000
Liabilities:
Deposits58,045,000 56,183,000
Advances from Federal Home Loan Bank21,581,000 26,030,000
Advance Payments by Borrowers for Taxes and Insurance1,425,000 1,447,000
Accrued Expenses and Other Liabilities669,000 2,171,000
Total Liabilities81,720,000 85,831,000
Commitments and Contingencies (Note 15)
Shareholders' Equity:
Preferred Stock, $0.01 par value, 1,000,000 shares authorized, no shares issued
Common Stock, $0.01 par value, 9,000,000 shares authorized, 1,429,676 shares issued and outstanding on December 31, 201914,000
Additional Paid-in Capital13,112,000
Unallocated Common Stock Held by: Employee Stock Ownership Plan (ESOP)(1,098,000)
Retained Earnings12,274,000 12,335,000
Accumulated Other Comprehensive Loss(18,000)(96,000)
Total Shareholders' Equity24,284,000 12,239,000
Total Liabilities and Shareholders' Equity $ 106,004,000 $ 98,070,000

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / sharesDec. 31, 2019Dec. 31, 2018
CONSOLIDATED BALANCE SHEETS
Preferred Stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred Stock, shares authorized1,000,000 1,000,000
Preferred Stock, shares issued0 0
Common Stock, par value (in dollars per share) $ 0.01 $ 0.01
Common Stock, shares authorized9,000,000 9,000,000
Common Stock, shares issued1,429,676
Common Stock, shares outstanding1,429,676

CONSOLIDATED STATEMENTS OF (LOS

CONSOLIDATED STATEMENTS OF (LOSS) INCOME - USD ($)12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Interest Income:
Loans Receivable $ 3,484,000 $ 3,555,000
Investment Securities155,000 119,000
Interest-Bearing Deposits161,000 69,000
Total Interest Income3,800,000 3,743,000
Interest Expense:
Deposits1,261,000 928,000
Advances from Federal Home Loan Bank682,000 726,000
Total Interest Expense1,943,000 1,654,000
Net Interest Income1,857,000 2,089,000
Provision (Credit) for Loan Losses(9,000)(11,000)
Net Interest Income After Provision (Credit) for Loan Losses1,866,000 2,100,000
Non-Interest Income:
Service Charges and Other Income100,000 124,000
Fees on Loans Sold541,000 307,000
Gain (Loss) on Sales of Investment Securities6,000 (55,000)
Gain on Sales of Other Real Estate23,000
Income from Life Insurance94,000 106,000
Total Non-Interest Income741,000 505,000
Non-Interest Expenses:
Salaries and Employee Benefits1,507,000 1,412,000
Occupancy Expense256,000 196,000
FDIC Deposit Insurance Premium and Examination Fees54,000 80,000
Data Processing120,000 112,000
Accounting and Consulting158,000 132,000
Other Real Estate Expense1,000
Insurance78,000 71,000
Legal fees20,000 7,000
Other221,000 245,000
Total Non-Interest Expenses2,414,000 2,256,000
Income Before Income Tax Expense193,000 349,000
Income Tax Expense254,000 54,000
Net (Loss) Income $ (61,000) $ 295,000

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands12 Months Ended
Dec. 31, 2019Dec. 31, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net (Loss) Income $ (61) $ 295
Other Comprehensive Income (Loss):
Unrealized Gains (Losses) on Investment Securities105 (46)
Reclassification Adjustment for (Gains) Losses Realized(6)55
Other Comprehensive Income Before Income Taxes99 9
Income Tax Effect(21)(2)
Other Comprehensive Income, Net of Income Taxes78 7
Comprehensive Income $ 17 $ 302

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in ThousandsCommon StockAdditional Paid-in CapitalUnallocated ESOP SharesRetained EarningsAccumulated Other Comprehensive Income/(Loss)Total
Balance at Beginning of Year at Dec. 31, 2017 $ 12,040 $ (103) $ 11,937
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (Loss) Income295 295
Other Comprehensive Income7 7
Balance at End of Year at Dec. 31, 201812,335 (96)12,239
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Proceeds from Issuance of Common Stock $ 14 $ 13,102 $ (1,144)11,972
ESOP shares earned10 46 56
Net (Loss) Income(61)(61)
Other Comprehensive Income78 78
Balance at End of Year at Dec. 31, 2019 $ 14 $ 13,112 $ (1,098) $ 12,274 $ (18) $ 24,284

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Cash Flows from Operating Activities:
Net (Loss) Income $ (61) $ 295
Adjustments to Reconcile Net (Loss) Income to Net Cash (Used in) Provided by Operating Activities:
Provision (Credit) for Loan Losses(9)(11)
Depreciation Expense84 41
Amortization of FHLB Advance Prepayment Penalty71 72
Provision for Deferred Income Taxes254 54
Net Amortization of Premium/Discount on Mortgage-Backed Securities25 14
(Gain) Loss on Sale of Investment Securities(6)55
(Gain) on Sale of Premises and Equipment(32)
Stock Dividend on Federal Home Loan Bank Stock(42)(35)
(Gain) on Sale of Other Real Estate(23)
Non-cash Compensation for ESOP56
Net (Increase) Decrease in Loans Held-for-Sale(1,104)61
Changes in Assets and Liabilities:
Decrease in Accrued Interest Receivable16 43
(Increase) in CSV of Life Insurance(94)(94)
(Increase) Decrease in Prepaid Expenses and Other Assets(21)16
(Decrease) in Accrued Expenses and Other Liabilities(1,502)(111)
Net Cash (Used in) Provided by Operating Activities(2,333)345
Cash Flows from Investing Activities:
Net Decrease (Increase) in Loans2,287 (1,734)
Proceeds from Maturities of Interest-Bearing Deposits2,247 6,144
Purchases of Interest-Bearing Deposits(3,237)(5,947)
Purchases of Investment Securities(1,991)(1,964)
Proceeds from Sales, Calls and Principal Repayments of Investment Securities2,541 2,289
Purchases of Premises and Equipment(21)(105)
Proceeds from Sale of Premises and Equipment102
Proceeds from Sale of Other Real Estate77
Net Cash Provided by (Used in) Investing Activities1,826 (1,138)
Cash Flows from Financing Activities:
Net Increase in Deposits1,862 3,092
Proceeds from Stock Offering13,116
Loan to ESOP for Purchase of Stock(1,144)
Advances from Federal Home Loan Bank5,000 13,500
Payments on Advances from Federal Home Loan Bank(9,520)(13,559)
Net (Decrease) Increase in Advance Payments by Borrowers for Taxes and Insurance(22)137
Net Cash Provided by Financing Activities9,292 3,170
Net Increase in Cash and Cash Equivalents8,785 2,377
Cash and Cash Equivalents at Beginning of Period3,090 713
Cash and Cash Equivalents at End of Period11,875 3,090
Cash Paid (Refunded) for:
Interest1,942 1,603
Income Taxes(10)
Supplemental Schedule for Noncash Investing and Financing Activities:
Change in the Unrealized Gain/Loss on Investment Securities $ (99) $ 9

Nature of Operations, Principle

Nature of Operations, Principles of Consolidation, Use of Estimates and Summary of Significant Accounting Policies12 Months Ended
Dec. 31, 2019
Nature of Operations, Principles of Consolidation, Use of Estimates and Summary of Significant Accounting Policies
Nature of Operations, Principles of Consolidation, Use of Estimates and Summary of Significant Accounting PoliciesNote 1 - Nature of Operations, Principles of Consolidation, Use of Estimates and Summary of Significant Accounting Policies -
Nature of Operations
Eureka Homestead Bancorp, Inc. (the “Company”) (OTC Pink Marketplace – ERKH) was formed to serve as the stock holding company for Eureka Homestead (the “Bank”) upon completion of its mutual-to-stock conversion. The conversion was effective July 9, 2019. In connection with the conversion, the Company sold 1,429,676 shares of its common stock, including 114,374 shares purchased by the Bank’s employee stock ownership plan, at a price of $10.00 per share.
Unless otherwise indicated or the context otherwise requires, references in these financial statements to “we, “us”, “our”, “Company” and “Bank” refer collectively to Eureka Homestead Bancorp, Inc. and Eureka Homestead on a consolidated basis or to any of those entities, depending on the context.
The Bank is a federal stock savings association subject to regulation by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. The Company conducts lending and deposit-taking activities from two locations in the New Orleans, Louisiana area. The Company provides service to customers in the New Orleans and surrounding areas. The accounting and reporting policies of the Company are in accordance with generally accepted accounting principles and conform to general practices within the industry.
The Company’s loan portfolio consists mainly of loans to homeowners; however, the Company's loan portfolio does include loans secured by non-residential real estate. The majority of loans are secured by first mortgages on area real estate and are expected to be repaid from the cash flow of the borrower. Some of the activities upon which the economy of the New Orleans area is dependent include the petrochemical industry, the port of New Orleans and economic activity along that region of the Mississippi River, healthcare and tourism. Significant declines in these activities and the general economic conditions in the Company's market areas could affect the borrower’s ability to repay loans and cause a decline in value of the assets securing the loan portfolio.
The Company’s operations are subject to customary business risks associated with activities of a financial institution. Some of those risks include competition from other institutions and changes in local or national economic conditions, interest rates and regulatory requirements.
Principles of Consolidation
The consolidated financial statements as of and for the years ended December 31, 2019 and 2018 include the Company and the Bank, together referred to as the Company. Intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for losses on loans, the valuation of other real estate acquired, the valuation of deferred tax assets, other than temporary impairments of securities and the fair value of financial instruments.
The determination of the adequacy of the allowance for loan losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. In connection with the determination of the estimated losses on loans, management obtains independent appraisals for significant collateral.
While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans. Such agencies may have judgments different than management’s and we may determine to adjust our allowance as a result of these regulatory reviews. Because of these factors, it is reasonably possible that the estimated losses on loans may change in the near term. However, the amount of the change that is reasonably possible cannot be estimated.
Investment Securities
Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 320, Investments, requires the classification of securities as trading, available-for-sale, or held-to-maturity. Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates this classification periodically.
Securities classified as available-for-sale are equity securities with readily determinable fair values and those debt securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available-for-sale would be based on various factors, including significant movement in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. These securities are carried at estimated fair value based on information provided by a third party pricing service with any unrealized gains or losses excluded from net income and reported in accumulated other comprehensive income (loss), which is reported as a separate component of equity, net of the related deferred tax effect.
Investment securities and mortgage-backed securities that the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity and reported at amortized cost.
Investment securities and mortgage-backed securities that are bought and held by the Company primarily for the purpose of selling them in the near future are classified as trading securities and reported at fair value. Unrealized gains and losses are included in earnings.
Premiums and discounts are amortized or accreted over the life of the related security, adjusted for anticipated prepayments, as an adjustment to yield using the effective interest method. Mortgage-backed securities are subject to prepayment and, accordingly, actual maturities could differ from contractual maturities. Interest income is recognized when earned. Gains and losses from the sale of securities are included in earnings when realized and are determined using the specific identification method for determining the cost of securities sold.
Declines in the fair value of individual investment securities below their cost that are other than temporary result in write-downs of the individual securities to their fair value. The written down amount then becomes the security’s new cost basis. The related write-downs are included in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.
Loans Receivable
The Company grants real estate mortgage and consumer loans to customers. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding unpaid principal balances adjusted for unearned income, the allowance for loan losses, and any unamortized deferred fees or costs on originated loans, and premiums or discounts on purchased loans. When principal or interest is delinquent for 90 days or more, the Company evaluates the loan for nonaccrual status.
Uncollectible interest on loans that are contractually past due is charged-off, or an allowance is established based on management's periodic evaluation. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged off at an earlier date if collection of principal or interest is considered doubtful. The allowance is established by a charge to interest income equal to all interest previously accrued, and income is subsequently recognized only to the extent that cash payments are received until, in management's judgment, the borrower has the ability to make timely periodic interest and principal payments, in which case the loan is returned to accrual status.
Loan fees and certain direct loan origination costs are deferred and the net fee or cost is recognized as an adjustment to interest income using the interest method over the contractual life of the loans, adjusted for actual prepayments. Amortization of net deferred fees or costs is discontinued for the loans that are deemed to be non-performing. Additionally, the unamortized net fees or costs are recognized in income when loans are paid-off.
Loans Held-for-Sale
Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value. For these loans, gains and losses on loan sales are recorded in noninterest income, and direct loan origination costs and fees are deferred at origination of the loan and are recognized in noninterest income upon sale of the loan.
Impaired Loans
A loan is considered impaired, in accordance with the impairment accounting guidance of FASB ASC 310-10-35-16, Receivables , when based on current information and events it is probable that the Company will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. 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 delay, the reasons for the delay, the borrower's prior payment record, and the amount of shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by either the present value of expected cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan's effective interest rate or, as a practical expedient, at the loan's observable market price of the fair value of the collateral if the loan is collateral dependent. The portion of increase in present value of the expected future cash flows of impaired loans that is attributable to the passage of time is reported as interest income. A change in the present value of the expected future cash flows related to impaired loans is reported as an increase or decrease in provision for loan losses.
Allowance for Loan Losses
The allowance for loan losses is maintained at a level which is considered to be adequate to reflect estimated credit losses associated with specifically identified loans, as well as estimated probable credit losses inherent in the remainder of the loan portfolio at the balance sheet date. The allowance for loan losses is determined based on consideration and assessment of the various credit risk characteristics of the loans that comprise the loan portfolio in accordance with FASB ASC 450, Contingencies, for pools of loans and FASB ASC 310, Receivables, for individually impaired loans.
Management evaluates the allowance for loan losses to assess the risk of loss in the loan portfolio and to determine the adequacy of the allowance for loan losses. For purposes of this evaluation, loans are aggregated into pools based on various characteristics. Some of those characteristics include payment status, concentrations, and loan to collateral value and the financial status of borrowers. The allowance allocated to each of these pools is based on historical charge-off rates, adjusted for changes in the credit risk characteristics within these pools, as determined from current information and analyses. In determining the appropriate level of the allowance, management also ensures that the overall allowance appropriately reflects current macroeconomic conditions, industry exposure and a margin for the imprecision inherent in most estimates of expected credit losses. In addition to these factors, management also considers the following for each segment of the loan portfolio when determining the allowance:
• Residential mortgages - This category consists of loans secured by first and junior liens on residential real estate. The performance of these loans may be adversely affected by unemployment rates, local residential real estate market conditions and the interest rate environment.
• Commercial real estate - This category consists of loans primarily secured by office buildings, and retail shopping facilities. The performance of commercial real estate loans may be adversely affected by conditions specific to the relevant industry, the real estate market for the property type and geographic region where the property or borrower is located.
• Construction and land - This category consists of loans to finance the ground-up construction and/or improvement of construction of residential and commercial properties and loans secured by land. The performance of construction and land loans is generally dependent upon the successful completion of improvements and/or land development for the end user, the sale of the property to a third party, or a secondary source of cash flow from the owners. The successful completion of planned improvements and development maybe adversely affected by changes in the estimated property value upon completion of construction, projected costs and other conditions leading to project delays.
• Multi-family residential - This category consists of loans secured by apartment or residential buildings with five or more units used to accommodate households on a temporary or permanent basis. The performance of multi-family loans is generally dependent on the receipt of rental income from the tenants who occupy the subject property. The occupancy rate of the subject property and the ability of the tenants to pay rent may be adversely affected by the location of the subject property and local economic conditions.
• Consumer - This category consists of loans to individuals for household, family and other personal use. The performance of these loans may be adversely affected by national and local economic conditions, unemployment rates and other factors affecting the borrower's income available to service the debt. All of our consumer loans are secured by our customers’ savings accounts and/or certificates of deposit.
As a result of the uncertainties inherent in the estimation process, management’s estimate of loan losses and the related allowance could change in the near term.
Based on management’s periodic evaluation of the allowance for loan losses, a provision for loan losses is charged to operations if additions to the allowance are required. Actual loan charge-offs are deducted from the allowance and subsequent recoveries of previously charged-off loans are added to the allowance.
Other Real Estate
Real estate properties acquired through, or in lieu of, foreclosure are held for sale and are initially recorded at fair value on the date of acquisition. Any write-downs at the time of acquisition are charged to the allowance for loan losses. Costs relating to development and improvement of property are capitalized, whereas costs relating to holding property are expensed. Other real estate was $0 and $0 at December 31, 2019 and 2018, respectively, and is included in prepaid expenses and other assets.
Subsequent to acquisition, valuations are periodically performed by management to report these assets at the lower of fair value less costs to sell or cost. Any adjustments resulting from these periodic re-evaluations of property are reflected in a valuation allowance and charged to income.
Premises and Equipment
Land is carried at cost. Buildings, leasehold improvements and furniture, fixtures and equipment are carried at cost, less accumulated depreciation and amortization, respectively. Depreciation and amortization are calculated on the straight-line basis and accelerated methods over the estimated useful lives of the assets which range from 3 to 39 years. Expenditures for improvements, which extend the life of an asset, are capitalized and depreciated over the asset’s remaining useful life. Gains or losses realized on the disposition of properties and equipment are reflected in the statements of (loss) income. Expenditures for repairs and maintenance are charged to operating expenses as incurred.
Life Insurance
The Company purchased life insurance on certain employees and directors of the Company. Appreciation in value of the insurance policies is included in noninterest income.
Advertising
The Company follows the policy of charging the costs of advertising to expense as incurred. Advertising expense was approximately $17,000 and $27,000 for the years ended December 31, 2019 and 2018, respectively, and is included in other non-interest expenses.
Income Taxes
The Company accounts for income taxes in accordance with income tax guidance of FASB ASC 740, Income Taxes , and has adopted the recent accounting guidance related to accounting for uncertainty in income taxes, which sets forth a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions.
The income tax guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of enacted tax law to the taxable income or excess deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the difference between the book and tax bases of assets and liabilities. Enacted changes in tax rates and laws are recognized in the period in which they occur.
Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more likely than not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more likely than not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management's judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.
The Company evaluates all significant tax positions as required by accounting principles generally accepted in the United States of America. As of December 31, 2019 and 2018, the Company does not believe that it has taken any positions that would require the recording of any additional tax liability nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next year.
With few exceptions, the Company is no longer subject to federal tax examinations by tax authorities for years before 2015. Any interest and penalties assessed by income taxing authorities are not significant and are included in non-interest expense in these financial statements.
Comprehensive Income
The Company reports comprehensive income in accordance with the accounting guidance related to FASB ASC 220, Comprehensive Income . FASB ASC 220 establishes standards for reporting and presentation of comprehensive income and its components in a full set of financial statements. Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes net unrealized gains (losses) on securities and is presented, net of tax, in the statements of comprehensive income.
Statement of Cash Flows
For purposes of the statements of cash flows, cash and cash equivalents include cash on hand, due from banks and deposits with the FHLB. The Company considers all highly liquid debt instruments with original maturities of three months or less (excluding interest-bearing deposits in banks) to be cash equivalents.
Reclassifications
Certain reclassifications may have been made to the 2018 financial statements to conform with the 2019 financial statement presentation. Such reclassifications had no effect on net income or retained earnings as previously reported.
Recent Accounting Pronouncements
Emerging Growth Company Status
The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as the Company is an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to other public companies. An emerging growth company may elect to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the company is first required to file a registration statement. The Company has elected to use the extended transition period described above and intends to maintain its emerging growth company status as allowed under the JOBS Act.
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . The provisions of the update requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU replaced most existing revenue recognition guidance in U.S. GAAP. In March, 2016 the FASB issued ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarifies the guidance in determining revenue recognition as principal versus agent. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing , which provides guidance in accounting for immaterial performance obligations and shipping and handling. In May 2016, the FASB issued ASU 2016-12, Narrow-Scope Improvements and Practical Expedients , which provides clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for noncash consideration and completed contracts at transition. This ASU also provides a practical expedient for contract modifications. For an emerging growth company, the amendments in this update were effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The amendments did not have a material impact on the Company’s Consolidated Financial Statements.
In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825- 10), Recognition and Measurement of Financial Assets and Financial Liabilities. The provisions of the update require equity investments to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment. The update also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. It also eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet. ASU No. 2016-01 requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. It also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The update requires separate presentation of financial assets and financial liabilities by category and form on the balance sheet or the accompanying notes to the financial statements. In addition, the update clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. For an emerging growth company, the amendments in this update were effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The adoption of this ASU did not have a material impact on the Company’s Consolidated Financial Statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), Conforming Amendments Related to Leases . This ASU amends the codification regarding leases in order to increase transparency and comparability. The ASU requires companies to recognize lease assets and liabilities on the statement of condition and disclose key information about leasing arrangements. A lessee would recognize a liability to make lease payments and a right-of-use asset representing its right to use the leased asset for the lease term. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The adoption of this ASU is not expected to have a material effect on the Company’s Consolidated Financial Statements.
In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments . The amendments introduce an impairment model that is based on expected credit losses (“ECL”), rather than incurred losses, to estimate credit losses on certain types of financial instruments (eg. loans and held to maturity securities), including certain off-balance sheet financial instruments (eg. commitments to extend credit and standby letters of credit that are not unconditionally cancellable). The ECL should consider historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments, over the contractual term. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. Financial instruments with similar risk characteristics may be grouped together when estimating the ECL. The ASU also amends the current available for sale security impairment model for debt securities whereby credit losses relating to available for sale debt securities should be recorded through an allowance for credit losses. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within fiscal years beginning after December 15, 2023. The amendments will be applied through a modified retrospective approach, resulting in a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently planning for the implementation of this accounting standard. It is too early to assess the impact this ASU will have on the Company’s Consolidated Financial Statements.
In August 2016, FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The amendments in this ASU clarify the proper classification for certain cash receipts and cash payments, including clarification on debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, among others. For an emerging growth company, the amendments in this update were effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The amendment did not have a material impact on the Company’s Consolidated Financial Statements.
In June 2018, FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment . The amendments in this ASU expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company is currently assessing the amendment but does not anticipate it will have a material impact on the Company’s Consolidated Financial Statements.
In August 2018, FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement . The amendments in this ASU modify the disclosure requirements related to fair value. Certain provisions under ASU 2018-13 require prospective application, while other provisions require retrospective application to all period presented in the financial statements upon adoption. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing the amendment but does not anticipate it will have a material impact on the Company’s Consolidated Financial Statements.

Earnings Per Share

Earnings Per Share12 Months Ended
Dec. 31, 2019
Earnings Per Share
Earnings Per ShareNote 2 – Earnings Per Share
Basic earnings per share (“EPS”) represents income available to common shareholders divided by the weighted average number of common shares outstanding; no dilution for any potentially convertible shares is included in the calculation. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. The potential common shares that may be issued by the Company relate to outstanding stock options.
Earnings per common share were computed based on the following:
Year Ended
December 31,
(in thousands, except per share data)
2019
Numerator:
Net income available to common shareholders
$
(61)
Denominator:
Common shares outstanding (Total issued, less unallocated ESOP shares)
1,318
Basic earnings per common share
$
(0.05)

Investment Securities

Investment Securities12 Months Ended
Dec. 31, 2019
Investment Securities
Investment SecuritiesNote 3 - Investment Securities -
The amortized cost and fair values of investment securities available-for-sale were as follows:
Gross
Gross
December 31, 2019:
Amortized
Unrealized
Unrealized
Fair
(in thousands)
Cost
Gains
(Losses)
Value
Mortgage-Backed Securities:
FHLMC
$
2,664
$

$
(19)
$
2,645
SBA 7a Pools
2,678
5
(8)
2,675
Total Investment Securities Available-for-Sale
$
5,342
$
5
$
(27)
$
5,320
Gross
Gross
December 31, 2018:
Amortized
Unrealized
Unrealized
Fair
(in thousands)
Cost
Gains
(Losses)
Value
Mortgage-Backed Securities:
FHLMC
$
3,139
$

$
(117)
$
3,022
FNMA
232

(2)
230
GNMA
612
8

620
SBA 7a Pools
1,920

(11)
1,909
Total Investment Securities Available-for-Sale
$
5,903
$
8
$
(130)
$
5,781
All investment securities held on December 31, 2019 and 2018, were government-sponsored mortgage-backed or SBA pool securities.
The amortized cost and fair values of the investment securities available-for-sale at December 31, 2019, by contractual maturity, are shown below. For mortgage-backed securities and SBA 7a pools, expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Available-for-Sale
December 31, 2019
Amortized
Fair
(in thousands)
Cost
Value
Amounts Maturing:
After One Year through Five Years
$
123
$
123
After Five Years through Ten Years
1,716
1,708
After Ten Years
3,503
3,489
$
5,342
$
5,320
No investment securities were pledged to secure advances from the FHLB as of December 31, 2019 and 2018.
Proceeds from sales and calls of available-for-sale investment securities were approximately $ 683,000 for the year ended December 31, 2019 and $1,076,000 for the year ended December 31, 2018, resulting in approximately $6,000 realized gains for the year ended December 31, 2019 and $55,000 realized losses for the year ended December 31, 2018.
Gross unrealized losses in investment securities at December 31, 2019 and 2018, existing for continuous periods of less than 12 months and for continuous periods of 12 months or more, were as follows:
December 31, 2019
(in thousands)
Less Than 12 Months
12 Months or More
Totals
Security
Unrealized
Unrealized
Unrealized
Description
Fair Value
(Losses)
Fair Value
(Losses)
Fair Value
(Losses)
Mortgage-Backed
FHLMC
$
655
$
(4)
$
1,990
$
(15)
$
2,645
$
(19)
SBA 7a Pools


1,692
(8)
1,692
(8)
$
655
$
(4)
$
3,682
$
(23)
$
4,337
$
(27)
December 31, 2018
(in thousands)
Less Than 12 Months
12 Months or More
Totals
Security
Unrealized
Unrealized
Unrealized
Description
Fair Value
(Losses)
Fair Value
(Losses)
Fair Value
(Losses)
Mortgage-Backed
FHLMC
$

$

$
3,022
$
(117)
$
3,022
$
(117)
FNMA
230
(2)


230
(2)
SBA 7a Pools
1,909
(11)


1,909
(11)
$
2,139
$
(13)
$
3,022
$
(117)
$
5,161
$
(130)
Management evaluates securities for other-than temporary impairment on a periodic and regular basis, as well as when economic or market concerns warrant such evaluation as described in Note 1 to these financial statements. No declines at December 31, 2019 and 2018, were deemed to be other-than-temporary.
In analyzing an issuer’s financial condition, management considers whether the federal government or its agencies issued the securities, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer’s financial statements.

Investment in FHLB Stock

Investment in FHLB Stock12 Months Ended
Dec. 31, 2019
Investment in FHLB Stock
Investment in FHLB StockNote 4 - Investment in FHLB Stock -
The Company maintains an investment in the membership stock of the Federal Home Loan Bank of Dallas. The carrying amount of this investment is stated at cost which was $1,418,000 and $1,376,000 at December 31, 2019 and 2018, respectively. At December 31, 2019 and 2018, the Company meets the required level of FHLB stock. The stock is pledged as collateral against the advances from the FHLB.

Loans Receivable and the Allowa

Loans Receivable and the Allowance for Loan Losses12 Months Ended
Dec. 31, 2019
Loans Receivable and the Allowance for Loan Losses
Loans Receivable and the Allowance for Loan LossesNote 5 - Loans Receivable and the Allowance for Loan Losses -
Loans receivable at December 31, 2019 and December 31, 2018 are summarized as follows:
(in thousands)
2019
2018
Mortgage Loans
1-4 Family
$
73,591
$
75,185
Multifamily
3,567
4,117
Commercial real estate
1,117
1,175
Consumer Loans
209
211
78,484
80,688
Plus (Less):
Unamortized Loan Fees/Costs
1,151
1,234
Allowance for Loan Losses
(850)
(850)
Net Loans Receivable
$
78,785
$
81,072
The performing mortgage loans are pledged, under a blanket lien, as collateral securing advances from the FHLB at December 31, 2019 and 2018.
Management segregates the loan portfolio into portfolio segments which is defined as the level at which the Company develops and documents a systematic method for determining its allowance for loan losses. The portfolio segments are segregated based on loan types and the underlying risk factors present in each loan type. Such risk factors are periodically reviewed by management and revised as deemed appropriate. The following tables set forth, as of December 31, 2019 and 2018, the balance of the allowance for loan losses by portfolio segment, disaggregated by impairment methodology, which is then further segregated by amounts evaluated for impairment collectively and individually. The allowance for loan losses allocated to each portfolio segment is not necessarily indicative of future losses in any particular portfolio segment and does not restrict the use of the allowance to absorb losses in other portfolio segments.
Allowance for Loan Losses and Recorded Investment in Loans Receivable For the Year Ended December 31, 2019 (in thousands)
Mortgage-
Mortgage-
Mortgage-
Commercial
1-4 Family
Multifamily
Real Estate
Consumer
Total
Allowance for Loan Losses:
Beginning Balance
$
807
$
31
$
12
$

$
850
Charge-Offs





Recoveries
9



9
Provision
(4)
(4)
(1)

(9)
Ending Balance
$
812
$
27
$
11
$

$
850
Ending Balance:
Individually Evaluated for Impairment
$

$

$

$

$

Collectively Evaluated for Impairment
$
812
$
27
$
11
$

$
850
Loans Receivable:
Ending Balance
$
73,591
$
3,567
$
1,117
$
209
$
78,484
Ending Balance:
Individually Evaluated for Impairment
$

$

$

$

$

Collectively Evaluated for Impairment
$
73,591
$
3,567
$
1,117
$
209
$
78,484
The allowance for loan losses for Mortgage 1-4 Family Loans of $812,000 includes an unallocated portion of $437,000 as of December 31, 2019.
Allowance for Loan Losses and Recorded Investment in Loans Receivable For the Year Ended December 31, 2018 (in thousands)
Mortgage-
Mortgage-
Mortgage-
Commercial
1-4 Family
Multifamily
Real Estate
Consumer
Total
Allowance for Loan Losses:
Beginning Balance
$
813
$
20
$
17
$

$
850
Charge-Offs





Recoveries
11



11
Provision
(17)
11
(5)

(11)
Ending Balance
$
807
$
31
$
12
$

$
850
Ending Balance:
Individually Evaluated for Impairment
$

$

$

$

$

Collectively Evaluated for Impairment
$
807
$
31
$
12
$

$
850
Loans Receivable:
Ending Balance
$
75,185
$
4,117
$
1,175
$
211
$
80,688
Ending Balance:
Individually Evaluated for Impairment
$

$

$

$

$

Collectively Evaluated for Impairment
$
75,185
$
4,117
$
1,175
$
211
$
80,688
The allowance for loan losses for Mortgage 1-4 Family Loans of $807,000 includes an unallocated portion of $433,000 as of December 31, 2018.
Management further disaggregates the loan portfolio segments into classes of loans, which are based on the initial measurement of the loan, risk characteristics of the loan and the method for monitoring and assessing the credit risk of the loan.
Loan Grades / Classification
The primary purpose of grading loans is to assess credit quality and assist in identifying potential problem loans. Every loan in the portfolio is assigned a loan grade based on quality and level of risk. Loan grades are updated as events occur that bear on the collectability of the loan, such as change in payment flow or status of the obligor or collateral. Changes in loan grades are reported to the Board Loan Committee.
Each credit reviewed is assigned a loan grade based on the following system:
Loan Grade 1
Loans with no identified problems and do not require more than normal attention. The repayment source is well defined and the borrower/guarantor exhibits no inability of repaying the loan as agreed. The financial information is acceptable and the loan meets credit and policy requirements and exhibits no unusual elements of risk. The collateral is acceptable and adequate.
Loan Grade 2
These are performing owner-occupied loans that exhibit diminished borrower capacity, such as sufficiently-aged Troubled Debt Restructurings or loans that are frequently delinquent more than 30 days but less than 60 days. Also included are performing investor loans with a good payment record but lack updated financial information but are judged from alternate sources to have satisfactory cash flows and a sufficiently strong guarantor.
Loan Grade 3
Owner-occupied loans that are well-secured but are occasionally delinquent more than 60 days but less than 90. Also included are performing investor loans lacking required current financial information or that demonstrate diminished guarantor capacity and an estimated stressed debt service coverage ratio of less than 1.20.
Loan Grade 4
Investment loans that have potential or identified weaknesses that deserve management’s close attention. If left uncorrected, these may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. These loans are not adversely classified and do not expose the institution to sufficient risk to warrant adverse classification. Default is not imminent.
Adverse Classifications
Loan Grade 5
A loan that is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledge, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard.
Loan Grade 6
A loan that has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, based on existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors which may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined.
Credit Quality Indicators - Credit Risk Profile Based on Loan Grades at December 31, 2019 (in thousands)
Special
Pass
Watch
Mention
Substandard
Doubtful
Total
Mortgage Loans:
1 to 4 Family
$
72,937
$
87
$

$
567
$

$
73,591
Multifamily
3,567




3,567
Commercial real estate
1,117




1,117
Non-Mortgage Loans:
Consumer
209




209
Total
$
77,830
$
87
$

$
567
$

$
78,484
Credit Quality Indicators - Credit Risk Profile Based on Loan Grades at December 31, 2018 (in thousands)
Special
Pass
Watch
Mention
Substandard
Doubtful
Total
Mortgage Loans:
1 to 4 Family
$
74,514
$
91
$

$
580
$

$
75,185
Multifamily
4,117




4,117
Commercial real estate
1,175




1,175
Non-Mortgage Loans:
Consumer
211




211
Total
$
80,017
$
91
$

$
580
$

$
80,688
At December 31, 2019 and 2018 , loan balances outstanding on non-accrual status amounted to $0 and $0, respectively. The Company considers loans more than 90 days past due and on nonaccrual as nonperforming loans.
At December 31, 2019 and 2018, the credit quality indicators (performing and nonperforming loans), disaggregated by class of loan, are as follows:
Credit Quality Indicators - Credit Risk Profile Based on Payment Activity at December 31, 2019 (in thousands)
Non-
Performing
Performing
Total
Mortgage Loans:
1 to 4 Family
$
73,591
$

$
73,591
Multifamily
3,567

3,567
Commercial real estate
1,117

1,117
Non-Mortgage Loans:
Consumer
209

209
Total
$
78,484
$

$
78,484
Credit Quality Indicators - Credit Risk Profile Based on Payment Activity at December 31, 2018 (in thousands)
Non-
Performing
Performing
Total
Mortgage Loans:
1 to 4 Family
$
75,185
$

$
75,185
Multifamily
4,117

4,117
Commercial real estate
1,175

1,175
Non-Mortgage Loans:
Consumer
211

211
Total
$
80,688
$

$
80,688
The following tables reflect certain information with respect to the loan portfolio delinquencies by loan class and amount as of December 31, 2019 and 2018. There were no loans over 90 days past due and still accruing as of December 31, 2019 and 2018.
Aged Analysis of Past Due Loans Receivable at December 31 , 2019 (in thousands)
30-59
60-89
90 Days or
Total
Days
Days
Greater
Total
Loans
Past Due
Past Due
Past Due
Past Due
Current
Receivable
Mortgage Loans:
1 to 4 Family
$

$
89
$

$
89
$
73,502
$
73,591
Multifamily




3,567
3,567
Commercial real estate




1,117
1,117
Non-Mortgage Loans:
Consumer




209
209
Total
$

$
89
$

$
89
$
78,395
$
78,484
Aged Analysis of Past Due Loans Receivable at December 31, 2018 (in thousands)
30-59
60-89
90 Days or
Total
Days
Days
Greater
Total
Loans
Past Due
Past Due
Past Due
Past Due
Current
Receivable
Mortgage Loans:
1 to 4 Family
$
227
$
171
$

$
398
$
74,787
$
75,185
Multifamily




4,117
4,117
Commercial real estate




1,175
1,175
Non-Mortgage Loans:
Consumer




211
211
Total
$
227
$
171
$

$
398
$
80,290
$
80,688
Loans Receivable on Nonaccrual Status at December 31 (in thousands)
2019
2018
Mortgage Loans:
1 to 4 Family
$

$

The following is a summary of information pertaining to impaired loans as of December 31, 2019 and December 31, 2018.
Impaired Loans For the Year Ended December 31, 2019 (in thousands)
Unpaid
Average
Interest
Recorded
Principal
Related
Recorded
Income
Investment
Balance
Allowance
Investment
Recognized
Mortgage Loans
1-4 Family
$

$

$

$

$

Impaired Loans For the Year Ended December 31, 2018 (in thousands)
Unpaid
Average
Interest
Recorded
Principal
Related
Recorded
Income
Investment
Balance
Allowance
Investment
Recognized
Mortgage Loans
1-4 Family
$

$

$

$
197
$
98
The Company seeks to assist customers that are experiencing financial difficulty by renegotiating loans within lending regulations and guidelines. For the years ended December 31, 2019 and 2018, the concessions granted to certain borrowers included extending the payment due dates. Once modified in a trouble debt restructuring, a loan is generally considered impaired until its contractual maturity. At the time of the restructuring, the loan is evaluated for an asset-specific allowance for credit losses. The Company continues to specifically reevaluate the loan in subsequent periods, regardless of the borrower’s performance under the modified terms. If a borrower subsequently defaults on the loan after it is restructured, the Company provides an allowance for credit losses for the amount of the loan that exceeds the value of the related collateral.
The following tables summarize information relative to the loan modifications determined to be TDRs during the period:
Pre-
Post-
Modification
Modification
Outstanding
Outstanding
Number of
Recorded
Recorded
Contracts
Investment
Investment
Modifications as of December 31, 2019
(in thousands)
Troubled Debt Restructurings:
Mortgage Loans
1-4 Family

$

$

Total Loans

$

$

Modifications as of December 31, 2018
(in thousands)
Troubled Debt Restructurings:
Mortgage Loans
1-4 Family

$

$

Total Loans

$

$

The Company had no troubled debt restructurings that defaulted subsequent to the restructuring through the date the financial statements were issued.

Accrued Interest Receivable

Accrued Interest Receivable12 Months Ended
Dec. 31, 2019
Accrued Interest Receivable
Accrued Interest ReceivableNote 6 - Accrued Interest Receivable -
Accrued interest receivable at December 31 is summarized as follows:
(in thousands)
2019
2018
Loans Receivable
$
310
$
324
Mortgage-Backed Securities
10
12
Interest-Bearing Deposits
1
1
$
321
$
337

Premises and Equipment

Premises and Equipment12 Months Ended
Dec. 31, 2019
Premises and Equipment
Premises and EquipmentNote 7 - Premises and Equipment –
Major classes of premises and equipment at December 31 are summarized as follows:
(in thousands)
2019
2018
Land
$
166
$
166
Building
970
1,019
Furniture, Fixtures and Equipment
525
794
Automobiles
93
93
1,754
2,072
Less Accumulated Depreciation and Amortization
(1,050)
(1,305)
$
704
$
767
Depreciation and amortization of premises and equipment amounted to $84,000 and $41,000 in 2019 and 2018, respectively.

Income Taxes

Income Taxes12 Months Ended
Dec. 31, 2019
Income Taxes.
Income TaxesNote 8 - Income Taxes -
The total provision for income taxes charged to income amounted to approximately $254,000 and $54,000 for the years ended December 31, 2019 and 2018, respectively. The Tax Cuts and Jobs Act enacted December 22, 2017 reduced the federal corporate income tax rate from 34% to 21% effective January 1, 2018. As a result of the change in statutory rates, the Company recorded a $208,000 write-off of its net deferred tax asset, which was recorded as additional income tax expense during 2017.
Income tax expense for the years ended December 31 is summarized as follows:
(in thousands)
2019
2018
Income Taxes from Continuing Operations:
Current
$

$

Deferred
254
54
Income Tax Expense
$
254
$
54
The following is a reconciliation between income tax expense based on federal statutory tax rates and income taxes reported in the statements of (loss) income:
2019
2018
(in thousands)
Amount
%
Amount
%
Expected Income Tax Expense at Statutory Rate
$
41
21
%
$
73
%
Tax Exempt Income
(20)
(10)
%
(20)
(6)
%
Valuation Allowance for Deferred Tax Asset (Net Operating Loss)
222
87
%


%
Other Adjustments - Net
11
6
%
1
%
$
254
104
%
$
54
%
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and (liabilities) were computed using currently enacted corporate tax rates of 21% at December 31, 2019 and 2018. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2019 and 2018, were as follows:
(in thousands)
2019
2018
Deferred Loan Fees (Costs)
$
(241)
$
(259)
Allowance for Loan Losses
124
137
Federal Home Loan Bank Stock
(78)
(69)
Deferred Retirement Agreements
63
377
Tax Carryforward of Loss on Sale of Investment Securities
227
456
Tax Carryforwards of Net Operating Losses
324
15
All Other Temporary Differences
30
54
449
711
Valuation Allowance for Deferred Tax Asset (Loss on Sale of Investment Securities)
(227)
(456)
Valuation Allowance for Deferred Tax Asset (Net Operating Losses)
(222)


255
Unrealized Losses on Securities Available-for-Sale
5
25
Net Deferred Tax Asset
$
5
$
280
At December 31, 2019 we have a federal income tax Capital Loss carryforward of $1.1 million which expires in 2020. We believe that it is more likely than not that the benefit from the Capital Loss carryforward will not be realized. In recognition of this risk, we have provided a valuation adjustment of $227,000 on the deferred tax asset related to this Capital Loss carryforward. If or when recognized, the tax benefits related to any reversal of the valuation allowance on the deferred tax asset will be accounted for as a reduction of income tax expense and an increase in equity.
At December 31, 2019 we have federal income tax Net Operating Loss (“NOL”) carryforwards of $1.5 million. Although these NOL carryforwards have no expiration date, we believe that it is more likely than not that the benefit from a portion of the NOL carryforwards will not be realized within a reasonable time period. In recognition of this risk, we have provided a valuation adjustment of $222,000 on the deferred tax asset related to these NOL carryforwards. If or when recognized, the tax benefits related to any reversal of the valuation allowance on the deferred tax asset will be accounted for as a reduction of income tax expense and an increase in equity.
Retained earnings at December 31, 2019 and 2018, include approximately $3,986,000 for which no deferred income tax liability has been recognized. These amounts represent an allocation of income to bad debt deductions for tax purposes only. Reduction of amounts so allocated for purposes other than tax bad debt losses or adjustments arising from carry back of net operating losses would create income for tax purposes only, which would be subject to the then current corporate income tax rate. The unrecorded deferred income tax liability on the above amount was approximately $837,000 at December 31, 2019 and 2018.
The Small Business Protection Act of 1996 repealed Internal Revenue Code Section 593, which had allowed thrifts to use the percentage of income method as an alternative for computing their tax bad debt deductions. This act required small thrifts to change their method of computing reserves for bad debts to the experience method in accordance with the provisions of Internal Revenue Code Section 585. The repeal was effective for taxable years beginning after December 31, 1995. The Company implemented this change for the year ended December 31, 1996. As a result of the change, the Company is required to recapture the excess of the thrift’s qualifying and non-qualifying bad debt reserves as of December 31, 1995 over its contracted base year reserves. The Company had no excess amounts subject to recapture.
In management’s opinion, the reversal of temporary differences and the results of the future operations will generate sufficient earnings to realize the deferred tax assets.

Deposits

Deposits12 Months Ended
Dec. 31, 2019
Deposits
DepositsNote 9 - Deposits -
Deposits at December 31 are summarized below (in thousands):
2019
2018
Amount
%
Amount
%
Passbook Savings
$
2,691
4.6
$
3,085
5.5
Money Market Accounts
106
0.2
102
0.2
Certificates of Deposit
55,248
95.2
52,996
94.3
$
58,045
100.0
$
56,183
100.0
The weighted average interest rate on deposits at December 31, 2019 and 2018, was 1.91% and 1.97%, respectively.
Scheduled maturities and average interest rates of certificates of deposit at December 31, 2019 are summarized as follows (in thousands):
Average
Interest
Amount
Rate %
2020
$
25,983
2.104
%
2021
10,611
2.086
%
2022
8,892
2.016
%
2023
2,611
2.588
%
2024
5,058
2.605
%
Thereafter
2,093
2.686
%
$
55,248
2.177
%
The aggregate amount of time deposits with a denomination of greater than $250,000 was approximately $2,088,000 and $2,076,000 at December 31, 2019 and 2018 , respectively. Generally, deposits in excess of $250,000 are not federally insured.
Interest expense on deposits for the years ended December 31 is summarized as follows:
(in thousands)
2019
2018
Passbook Savings
$
6
$
6
Money Market Accounts

1
Certificates of Deposit
1,255
921
$
1,261
$
928

Advances from Federal Home Loan

Advances from Federal Home Loan Bank (FHLB)12 Months Ended
Dec. 31, 2019
Advances from Federal Home Loan Bank (FHLB)
Advances from Federal Home Loan Bank (FHLB)Note 10 - Advances from Federal Home Loan Bank (FHLB) -
The FHLB advances consist of the following obligations at December 31, 2019 and 2018 (in thousands):
Effective Interest Rate
2019
2018
Less than 1.00%
$

$

1.00% to 1.99%
3,500
5,500
2.00% to 2.99%
8,000
10,000
3.00% to 3.99%
8,134
8,063
4.00% to 4.99%

520
5.00% to 5.99%
1,947
1,947
$
21,581
$
26,030
The scheduled maturities of FHLB advances at December 31, 2019, are summarized as follows:
Due In
Amount
(in thousands)
2020
$
6,197
2021
3,250
2022

2023
500
Thereafter
11,634
$
21,581
These advances are collateralized by a blanket lien on all of the Company’s mortgage loans and the investment in FHLB stock.
The Company has unused advances available with the FHLB with an additional borrowing capacity at December 31, 2019, of approximately $ 16.3 million.
The Company also has an unsecured federal funds agreement with FNBB for $ 4.3 million at a rate to be determined by FNBB when borrowed. At December 31, 2019 and 2018, there were no federal funds purchased.

Employee Benefit Plans

Employee Benefit Plans12 Months Ended
Dec. 31, 2019
Employee Benefit Plans
Employee Benefit PlansNote 11 - Employee Benefit Plans -
401(k) Plan
The Company sponsors a 401(k) profit sharing plan. Substantially all employees 21 years of age or older who have at least six months of service and have worked 1,000 hours during the year may participate in the plan through salary deferral contributions subject to the plan provisions. The Company makes matching contributions based on a percentage of each participant’s contribution and may also make discretionary contributions to the plan. The Company matched 100% of the participant’s salary deferral contribution up to 3% and 50% of the participant’s salary deferral contribution of the next 2% of the participant’s annual compensation for 2019 and 2018. The Company’s contributions to the plan were approximately $44,000 and $41,000 for 2019 and 2018, respectively.
Pension Plan
The Company sponsors a defined contribution pension plan. Substantially all employees 21 years of age or older who have at least one year of service and are employed on the last day of the year may participate in the plan. The Company contributed 5.4% of the participant’s annual compensation to the plan for 2019 and 2018. The Company’s contributions to the plan were approximately $67,000 and $96,000 for 2019 and 2018, respectively.
The employees vest in the employer’s contributions 20% a year after the first year in the plans and are fully vested at the completion of six years of service. The maximum combined employer contribution to both the 401(k) plan and the pension plan is 25% of the total annual compensation paid to each participant.
Employee Stock Ownership Plan
As part of the Company's stock conversion in 2019, an employee stock ownership plan ("ESOP") for eligible employees was established. The leveraged ESOP is accounted for in accordance with the requirements of ASC 718, Compensation - Stock Compensation. All employees of the Bank meeting certain tenure requirements are entitled to participate in the ESOP.
Shares were purchased by the ESOP with a loan from Eureka Homestead Bancorp, Inc. The ESOP acquired 114,374 shares of the Company's common stock in the conversion. During the year ended December 31, 2019, 4,575 shares were allocated to ESOP plan participants, leaving 109,799 unallocated shares in the ESOP at December 31, 2019. Compensation expense related to the ESOP was $56,000 for the year ended December 31, 2019.
The stock price at the formation date was $10.00. The aggregate fair value of the 109,799 unallocated shares was $1,334,000 based on the $12.15 closing price of the common stock on December 31, 2019.
Under ASC 718, unearned ESOP shares are not considered outstanding and are shown as a reduction of shareholders' equity as unearned compensation. Dividends on unallocated ESOP shares are considered to be compensation expense. The Company recognizes compensation cost equal to the fair value of the ESOP shares during the periods in which they are committed to be released. To the extent that the fair value of the Company's ESOP shares differ from the cost of such shares, the differential is credited to shareholders' equity. The Company receives a tax deduction equal to the cost of the shares released. As the loan is internally leveraged, the loan receivable from the ESOP to the Company is not reported as an asset nor is the debt of the ESOP shown as a Company liability.
The compensation expense resulting from the release of the common stock from the suspense account and allocation to plan participants results in a corresponding reduction in the earnings of Eureka Homestead Bancorp.
Other Retirement Agreements
The Company has entered into retirement agreements with certain directors and several key management employees, all of whom are officers. Under the director agreements, after ten years in the plan and attaining the age of 75, the Company is to provide to each director the sum of $120,000 payable over a period of 10 years. (This benefit would be paid to the director’s beneficiaries in a lump sum upon the director’s death.) Under the employee agreements, the Company was to provide to each covered employee annual benefits for life beginning at age 65 ranging from $66,000 to $85,000. The employee agreements were terminated on June 30, 2018. In accordance with the terms of the agreements, the employees received the accrued balance at the termination date, paid one year from the termination date. The total accrued balance of this benefit was approximately $1.5 million at December 31, 2018 and was paid to the employees in July of 2019.
The estimated present value of future benefits to be paid is being accrued over the period from the effective date of the agreements until the dates payments are expected to expire. The expense incurred for this plan for the years ended December 31, 2019 and 2018, amounted to approximately $34,000 and $61,000, respectively. The accrued liability at December 31, 2019 and 2018, amounted to approximately $301,000 and $1,774,000, respectively.
The Company is the beneficiary of life insurance policies, with death benefits totaling approximately $7,174,000 and $7,157,000 at December 31, 2019 and 2018, respectively that have been purchased as a method of financing benefits under the agreements.
Deferred Compensation Agreement
The Company had a deferred compensation plan for the benefit of its former President who retired in 2018. The plan permitted a portion of the President's annual compensation to be deferred and required the Company to pay the President, upon his retirement, the balance of amounts deferred over a ten-year period. The plan contained a provision in the event of the President's death that any benefits payable would be paid to his beneficiaries in a lump sum. Annual amounts that were deferred were included in that year's operating results as compensation expense. Payments of the benefits were neither guaranteed by the Company nor secured by any of its assets.
The plan was irrevocably terminated in 2017 and the former President received a payment of approximately $187,000 in 2018 in connection with the termination and complete liquidation of the plan.
Neither the other retirement agreements nor the deferred compensation agreement are qualified plans as defined by the provisions of the Internal Revenue Code or the regulations of the Department of Labor.
Split Dollar Life Insurance
The Company entered into a split dollar life insurance agreement on March 1, 2019 with each of Messrs. Haskins and Heintzen to recognize the valuable services of the executives and to encourage them to continue in service with the Company. The split-dollar agreements divide the death proceeds of certain life insurance policies owned by the Company on the lives of the executives with their designated beneficiaries. The Company paid the life insurance premiums on the policies from its general assets. Under the agreements, Messrs. Haskins and Heintzen or their assignees have the right to designate the beneficiary an amount of death proceeds. Upon either executive’s death, his beneficiary will be entitled to a benefit equal to the lesser of $700,000 or the net death proceeds from the policies. The net death proceeds portion is the total death proceeds paid under the policy less the greater of the policy’s cash surrender value or the aggregate premiums paid by the Company on the policy. Each executive’s interest in the split-dollar agreement terminates under certain circumstances, including the executive’s cessation of all service with the Company.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income (Loss)12 Months Ended
Dec. 31, 2019
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)Note 12 - Accumulated Other Comprehensive Income (Loss) -
The following is a summary of the changes in the balances of each component of accumulated other comprehensive income (loss) for the years ended December 31, 2019 and 2018:
(in thousands)
2019
2018
Unrealized Gains (Losses) on Securities Available-for-Sale:
Balance at Beginning of Year
$
(96)
$
(103)
Other Comprehensive (Loss)
Before Reclassifications - Net of Tax
(79)
(36)
Reclassification Adjustments for Losses
Realized - Net of Tax
157
43
Balance at End of Year
$
(18)
$
(96)

Regulatory Matters

Regulatory Matters12 Months Ended
Dec. 31, 2019
Regulatory Matters
Regulatory MattersNote 13 - Regulatory Matters -
The Bank is subject to various regulatory capital requirements administered by its primary Federal regulator, the Office of the Comptroller of the Currency (OCC). Failure to meet the minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank and the financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities and certain off-balance sheet items as calculated under regulatory reporting requirements. The Bank’s capital amounts and classification under the prompt corrective action guidelines are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.
Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios as of January 1, 2015, of total capital, tier 1 capital, and common equity tier 1 capital to risk-weighted assets (as defined in the regulations), and leverage capital, which is tier 1 capital to adjusted average total assets (as defined). Management believes, as of December 31, 2019 and 2018, that the Bank meets all the capital adequacy requirements to which it is subject.
As of December 31, 2019 and 2018, the most recent notifications from the OCC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To remain categorized as well capitalized, the Bank will have to maintain minimum total capital, common equity tier 1 capital, tier 1 capital, and leveraged capital ratios as disclosed in the table below. There are no conditions or events since the most recent notification that management believes have changed the Bank’s category. The Bank’s actual and required capital amounts and ratios are as follows:
To be Well
Capitalized Under
For Capital
Prompt Corrective
December 31, 2019:
Actual
Adequacy Purposes
Action Provisions
(dollars in thousands)
Amount
Ratio
Amount
Ratio
Amount
Ratio
Total Risk Based Capital
(to Risk Weighted Assets)
$
19,568
38.94
%
$
4,020
8.00
%
$
5,026
10.00
%
Tier 1 Capital
(to Risk Weighted Assets)
$
18,938
37.68
%
$
3,015
6.00
%
$
4,020
8.00
%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)
$
18,938
37.68
%
$
2,262
4.50
%
$
3,267
6.50
%
Tier 1 Leverage Capital
(to Adjusted Total Assets)
$
18,938
17.47
%
$
4,336
4.00
%
$
5,420
5.00
%
To be Well
Capitalized Under
For Capital
Prompt Corrective
December 31, 2018:
Actual
Adequacy Purposes
Action Provisions
(dollars in thousands)
Amount
Ratio
Amount
Ratio
Amount
Ratio
Total Risk Based Capital
(to Risk Weighted Assets)
$
12,961
25.98
%
$
3,992
8.00
%
$
4,990
10.00
%
Tier 1 Capital
(to Risk Weighted Assets)
$
12,335
24.72
%
$
2,994
6.00
%
$
3,992
8.00
%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)
$
12,335
24.72
%
$
2,245
4.50
%
$
3,243
6.50
%
Tier 1 Leverage Capital
(to Adjusted Total Assets)
$
12,335
12.23
%
$
4,035
4.00
%
$
5,044
5.00
%
A reconciliation of the Bank’s capital determined under GAAP to Total Capital, Tier 1 Capital, Common Equity Tier 1 Capital and Tier 1 Leverage Capital for December 31, 2019 and 2018, was as follows:
(in thousands)
2019
2018
Total Equity (Bank Only)
$
18,920
$
12,239
Unrealized Losses on Securities
Available-for-Sale, Net
18
96
Tangible, Tier 1 Capital and Common Equity Tier 1
18,938
12,335
Allowance for Loan Losses Included in Capital
630
626
Total Capital
$
19,568
$
12,961
The specific reserves included in the Allowance for Loan Losses were not significant as of December 31, 2019 and 2018.

Related Party Transactions

Related Party Transactions12 Months Ended
Dec. 31, 2019
Related Party Transactions
Related Party TransactionsNote 14 - Related Party Transactions –
In the ordinary course of business, the Company has granted loans to directors, officers and employees. Such loans were made on substantially the same terms as those prevailing at the time for comparable transactions with other persons.
Activity in loans to directors, officers and employees is as follows:
(in thousands)
2019
2018
Balance at Beginning of Year
$
382
$
507
Add: New Loans or Advances


Less: Payments
(75)
(125)
Balance at End of Year
$
307
$
382
The Company also has accepted deposits from directors, officers and employees. Such deposits were accepted on substantially the same terms as those of other depositors and amounted to approximately $686,000 and $485,000 at December 31, 2019 and 2018 , respectively.

Commitments and Contingencies

Commitments and Contingencies12 Months Ended
Dec. 31, 2019
Commitments and Contingencies
Commitments and ContingenciesNote 15 – Commitments and Contingencies –
In the ordinary course of business, the Company has various outstanding commitments that are not reflected in the accompanying financial statements. The principal commitments of the Company are as follows:
Lease Commitments
In 2009, the Company entered into an operating lease pertaining to property used for a loan production office. The lease had an original term of three years, beginning April 15, 2009 and expiring March 31, 2012, with the option to extend the lease for six additional three-year periods. The Company exercised this option through March 31, 2021.
Total rental expense was approximately $48,000 and $47,000 for the years ended December 31, 2019 and 2018, respectively.
The future minimum rental commitments under the operating lease at December 31, 2019 relating to the loan production office are as follows:
Year Ended December 31,
Amount
(in thousands)
2020
$
48
2021
12
Total Minimum Payments Required
$
60

Financial Instruments with Off-

Financial Instruments with Off-Balance-Sheet Risk12 Months Ended
Dec. 31, 2019
Financial Instruments with Off-Balance-Sheet Risk
Financial Instruments with Off-Balance-Sheet RiskNote 16 - Financial Instruments with Off-Balance-Sheet Risk -
In the normal course of business, the Company has outstanding commitments, such as commitments to extend credit, which are not included in the accompanying financial statements. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making such commitments as it does for instruments that are included in the Balance Sheets.
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation.
At December 31, 2019 and December 31, 2018, the Company had $524,000 and $793,000 of outstanding commitments to originate loans, respectively, all of which represent the balance of remaining funds to be disbursed on construction loans in process. In recent years we have sold loans on an industry-standard, servicing-released basis. At December 31, 2019, there were mortgage loans sold to investors with limited recourse for certain periods after the date of sale totaling $ 9.3 million at the sale date. Recourse would apply if the borrower(s) default on any payment within the first four months of the mortgage loan and it remains in default for a period of 90 days, or if the mortgage loan prepays in full within 180 days of the sale date. Should an early payment default occur, the Company shall, at its sole discretion, repurchase such mortgage loan from the purchaser at its current amortized balance plus the service release premium received or indemnify the purchaser by paying the service release premium received plus $5,000. Should a mortgage loan prepay in full within 180 days of the sale date, the Company shall refund to the purchaser the servicing release premium paid. There have been no mortgage loans sold that had an early payment default or that prepaid in full during the recourse period.
In the normal course of business, the Company is involved in various legal proceedings. In the opinion of management and counsel, the disposition or ultimate resolution of such proceedings would not have a material adverse effect on the Company's financial statements.

Significant Concentration of Cr

Significant Concentration of Credit Risk12 Months Ended
Dec. 31, 2019
Significant Concentration of Credit Risk
Significant Concentration of Credit RiskNote 17 - Significant Concentration of Credit Risk –
The Federal Deposit Insurance Corporation (FDIC) provides insurance coverage under defined limits. The Company maintains cash balances at various financial institutions which may periodically exceed the federally insured amount.
Most of the Company’s lending activity is represented by loans receivable secured principally by first mortgages on real estate located within Louisiana. Additionally, the substantial portion of the real estate upon which the Company has extended credit is on residential properties; however, the Company has extended credit on non-residential properties.

Fair Values of Financial Instru

Fair Values of Financial Instruments12 Months Ended
Dec. 31, 2019
Fair Values of Financial Instruments
Fair Values of Financial InstrumentsNote 18 - Fair Values of Financial Instruments -
Fair Value Disclosures
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with FASB ASC 820, Fair Value Measurements , the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based on quoted market prices. However, in many instances, there are no quoted market prices for the Company's various financial instruments.
In cases where quoted market prices are not available, fair values are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, fair value estimates may not be realized in an immediate settlement of the instrument.
The fair value accounting guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under this guidance are described below.
Level 1 - Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2 - Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include the following:
a.
Quoted prices for similar assets or liabilities in active markets;
b.
Quoted prices for identical or similar assets or liabilities in markets that are not active, that is, markets in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers (for example, some brokered markets), or in which little information is released publicly (for example, a principal-to principal market);
c.
Inputs other than quoted prices that are observable for the asset or liability (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates); and
d.
Inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs).
Level 3 - Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.
Therefore, unobservable inputs shall reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs shall be developed based on the best information available in the circumstances, which might include the reporting entity's own data.
However, the reporting entity's own data used to develop unobservable inputs shall be adjusted if information is reasonably available without undue cost and effort that indicates that market participants would use different assumptions.
A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Recurring Basis
Fair values of investment securities and mortgage-backed securities were primarily measured using information from a third-party pricing service. This pricing service provides information by utilizing evaluated pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and reference data from market research publications.
The following tables present the balances of assets measured on a recurring basis as of December 31, 2019 and 2018. The Company did not record any liabilities at fair value for which measurement of the fair value was made on a recurring basis.
Fair Value at Reporting Date Using
Quoted Prices
in Active
Significant
Markets
Other
Significant
for Identical
Observable
Unobservable
December 31, 2019:
Fair
Assets
Inputs
Inputs
(in thousands)
Value
(Level 1)
(Level 2)
(Level 3)
Mortgage-Backed Securities
FHLMC
$
2,645
$

$
2,645
$

SBA 7a Pools
2,675

2,675

Total Investment Securities
$
5,320
$

$
5,320
$

Fair Value at Reporting Date Using
Quoted Prices
in Active
Significant
Markets
Other
Significant
for Identical
Observable
Unobservable
December 31, 2018:
Fair
Assets
Inputs
Inputs
(in thousands)
Value
(Level 1)
(Level 2)
(Level 3)
Mortgage-Backed Securities
FHLMC
$
3,022
$

$
3,022
$

FNMA
230

230

GNMA
620

620

SBA 7a Pools
1,909

1,909

Total Investment Securities
$
5,781
$

$
5,781
$

Non-recurring Basis
The Company has segregated all financial assets and liabilities that are measured at fair value on a non-recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below. The Company did not record any liabilities at fair value for which measurement of the fair value was made on a non-recurring basis.
The fair value of the impaired loans is measured at the fair value of the collateral for collateral-dependent loans. Impaired loans are Level 2 assets measured using appraisals from external parties of the collateral less any prior liens. Repossessed assets are initially recorded at fair value less estimated costs to sell. The fair value of repossessed assets is based on property appraisals and an analysis of similar properties available. As such, the Company records repossessed assets as Level 2.
Fair Value at Reporting Date Using
Quoted Prices
in Active
Significant
Markets
Other
Significant
for Identical
Observable
Unobservable
December 31, 2019:
Fair
Assets
Inputs
Inputs
(in thousands)
Value
(Level 1)
(Level 2)
(Level 3)
Assets:
Impaired Loans
$

$

$

$

Other Real Estate




Total
$

$

$

$

Fair Value at Reporting Date Using
Quoted Prices
in Active
Significant
Markets
Other
Significant
for Identical
Observable
Unobservable
December 31, 2018:
Fair
Assets
Inputs
Inputs
(in thousands)
Value
(Level 1)
(Level 2)
(Level 3)
Assets:
Impaired Loans
$

$

$

$

Other Real Estate




Total
$

$

$

$

FASB ASC 825, Financial Instruments , requires disclosure of fair value information about financial instruments for which it is practicable to estimate fair value, whether or not recognized in the balance sheet. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. The derived fair value estimates cannot be substantiated through comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. FASB ASC 825 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Further, the disclosures do not include estimated fair values for items which are not financial instruments but which represent significant value to the Company, including core deposit intangibles and other fee-generating operations of the business. Reasonable comparability of fair value estimates between financial institutions may not be possible due to the wide range of permitted valuation techniques and numerous assumptions involved. The aggregate fair value amounts presented do not, and are not intended to, represent an aggregate measure of the underlying fair value of the Company.
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
Cash and Cash Equivalents - For those short-term instruments, the carrying amount is a reasonable estimate of fair value.
Interest-Bearing Deposits - The carrying amount is a reasonable estimate of fair value.
Investment Securities (including mortgage-backed securities) - For investment securities, including mortgage-backed securities, fair value equals quoted market price, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.
Loans - The fair value of loans is estimated using discounted cash flow analyses, using the interest rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
Loans Held-for-Sale - The loans held-for sale are recorded at the lower of aggregate cost or market value which is a reasonable estimate of fair value.
FHLB Stock - The carrying amount is a reasonable estimate of fair value.
Cash Surrender Value of Life Insurance - The carrying amount is a reasonable estimate of fair value.
Accrued Interest Receivable and Accrued Interest Payable - The carrying amounts of accrued interest receivable and accrued interest payable approximate the fair values.
Deposits - The fair value of savings accounts and certain money market deposits is the amount payable on demand at the reporting date (carrying value). The fair value of fixed maturity certificates of deposit is estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities.
Advances from the FHLB - The fair values of the Advances from the FHLB are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.
Loan Commitments - For commitments to extend credit, fair value considers the difference between current levels of interest rates and the committed rates.
The estimated fair values of the Company’s financial instruments were as follows as of December 31, 2019 and 2018 (in thousands):
2019
2018
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
Financial Assets:
Cash and Cash Equivalents
$
11,875
$
11,875
$
3,090
$
3,090
Interest-Bearing Deposits
1,740
1,740
750
750
Investment Securities
5,320
5,320
5,781
5,781
Loans - Net
78,785
82,300
81,072
81,442
Loans Held-for-Sale
1,637
1,637
533
533
Accrued Interest Receivable
321
321
337
337
FHLB Stock
1,418
1,418
1,376
1,376
Cash Surrender Value of Life Insurance
4,044
4,044
3,950
3,950
Financial Liabilities:
Deposits
58,045
59,053
56,183
55,507
Advances from FHLB
21,581
22,007
26,030
25,907
Accrued Interest Payable
137
137
136
136
The carrying amounts in the preceding table are included in the balance sheet under the applicable captions; accrued interest payable is included in accrued expenses and other liabilities in the balance sheet. The contract or notional amounts of the Company’s financial instruments with off balance sheet risk are disclosed in Note 16.

Subsequent Events

Subsequent Events12 Months Ended
Dec. 31, 2019
Subsequent Events
Subsequent EventsNote 19 - Subsequent Events -
Management has evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through March 30, 2020, the date the financial statements were issued.
The outbreak of Coronavirus Disease 2019 (“COVID-19”) could adversely impact a broad range of industries in which the Company’s customers operate and impair their ability to fulfill their obligations to the Company. The World Health Organization has declared COVID-19 to be a global pandemic indicating that almost all public commerce and related business activities must be, to varying degrees, curtailed with the goal of decreasing the rate of new infections.
The spread of the outbreak will likely cause disruptions in the U.S. economy and is highly likely to disrupt banking and other financial activity in the areas in which the Company operates and could potentially create widespread business continuity issues for the Company.
The Company’s business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions. If the global response to contain COVID-19 escalates or is unsuccessful, the Company could experience a material adverse effect on its business, financial condition, results of operations and cash flows. Therefore, the extent to which COVID-19 may impact the Company’s financial condition or results of operations cannot be reasonably estimated at this time.

Change in Corporate Form

Change in Corporate Form12 Months Ended
Dec. 31, 2019
Change in Corporate Form
Change in Corporate FormNote 20 – Change in Corporate Form -
On July 9, 2019, Eureka Homestead (the “Bank”) converted to a federal stock savings and loan association and established a stock holding company, Eureka Homestead Bancorp, Inc. (the “Company”), as parent of the Bank.
The Bank converted to the stock form of ownership, followed by the issuance of all of the Bank’s outstanding stock to the Company. The Bank became the wholly owned subsidiary of the Company, and the Company issued and sold shares of its capital stock pursuant to an independent valuation appraisal of the Bank and the Company. The stock was priced at $10.00 per share. In addition, the Bank’s board of directors adopted an employee stock ownership plan (ESOP) which subscribed for 8% of the common stock sold in the offering. The Conversion was completed on July 9, 2019 and resulted in the issuance of 1,429,676 common shares by the Company. The cost of the Conversion and issuing the capital stock totaled $1.2 million and was deducted from the proceeds of the offering.
In accordance with OCC regulations, at the time of the Conversion, the Bank substantially restricted retained earnings by establishing a liquidation account. The liquidation account will be maintained for the benefit of eligible account holders who continue to maintain their accounts at the Bank after the Conversion. The liquidation account will be reduced annually to the extent that eligible holders have reduced their qualifying deposits. Subsequent increases will not restore an eligible account holder’s interest in the liquidation account. In the event of a complete liquidation by the Bank, and only in such event, each eligible account holder will be entitled to receive a distribution from the liquidation account in an amount proportionate to the adjusted qualifying account balances then held. The Bank may not pay dividends if those dividends would reduce equity capital below the required liquidation account amount.
The Conversion was accounted for as a change in corporate form with the historic basis of the Bank’s assets, liabilities and equity unchanged as a result.

Condensed Financial Information

Condensed Financial Information (Parent Company Only)12 Months Ended
Dec. 31, 2019
Condensed Financial Information (Parent Company Only)
Condensed Financial Information (Parent Company Only)Note 21 - Condensed Financial Information (Parent Company Only) -
Presented below is condensed financial information as to the financial position, results of operations and cash flows of the Parent Company:
CONDENSED BALANCE SHEET
DECEMBER 31, 2019
(in thousands)
Assets:
Cash in Bank
$
5,392
Due from Subsidiary
4
Investment in Subsidiary
18,920
Total Assets
$
24,316
Liabilities and Shareholders' Equity
Liabilities
$
32
Shareholders' Equity
24,284
Liabilities and Shareholders' Equity
$
24,316
CONDENSED STATEMENT OF LOSS
FOR THE YEAR ENDED DECEMBER 31, 2019
(in thousands)
Income:
Equity in Net Income of Subsidiary
$
(22)
Other Income
27
Total Income
5
Expenses:
Professional Fees
85
Other Expense
48
Total Expense
133
Loss Before Income Taxes
(128)
Income Taxes

Net Loss
$
(128)
CONDENSED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2019
(in thousands)
Cash Flows from Operating Activities:
Net Loss
$
(128)
Adjustments to Reconcile Net Loss to Net Cash (Used in) Operating Activities:
Cash (Used in) Operating Activities:
(Increase) in Due from Subsidiary
(4)
Non-cash Compensation for ESOP
56
Decrease in Equity in Net Income of Subsidiary
22
Increase in Liabilities
32
Net Cash (Used in) Operating Activities
(22)
Cash Flows from Investing Activities:
Investment in Subsidiary
(6,558)
Net Cash (Used in) Investing Activities
(6,558)
Cash Flows from Financing Activities:
Proceeds from Stock Offering
11,972
Net Cash Provided by Financing Activities
11,972
Net Increase in Cash and Cash Equivalents
5,392
Cash and Cash Equivalents at Beginning of Period

Cash and Cash Equivalents at End of Period
$
5,392

Nature of Operations, Princip_2

Nature of Operations, Principles of Consolidation, Use of Estimates and Summary of Significant Accounting Policies (Policies)12 Months Ended
Dec. 31, 2019
Nature of Operations, Principles of Consolidation, Use of Estimates and Summary of Significant Accounting Policies
Nature of OperationsNature of Operations
Eureka Homestead Bancorp, Inc. (the “Company”) (OTC Pink Marketplace – ERKH) was formed to serve as the stock holding company for Eureka Homestead (the “Bank”) upon completion of its mutual-to-stock conversion. The conversion was effective July 9, 2019. In connection with the conversion, the Company sold 1,429,676 shares of its common stock, including 114,374 shares purchased by the Bank’s employee stock ownership plan, at a price of $10.00 per share.
Unless otherwise indicated or the context otherwise requires, references in these financial statements to “we, “us”, “our”, “Company” and “Bank” refer collectively to Eureka Homestead Bancorp, Inc. and Eureka Homestead on a consolidated basis or to any of those entities, depending on the context.
The Bank is a federal stock savings association subject to regulation by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. The Company conducts lending and deposit-taking activities from two locations in the New Orleans, Louisiana area. The Company provides service to customers in the New Orleans and surrounding areas. The accounting and reporting policies of the Company are in accordance with generally accepted accounting principles and conform to general practices within the industry.
The Company’s loan portfolio consists mainly of loans to homeowners; however, the Company's loan portfolio does include loans secured by non-residential real estate. The majority of loans are secured by first mortgages on area real estate and are expected to be repaid from the cash flow of the borrower. Some of the activities upon which the economy of the New Orleans area is dependent include the petrochemical industry, the port of New Orleans and economic activity along that region of the Mississippi River, healthcare and tourism. Significant declines in these activities and the general economic conditions in the Company's market areas could affect the borrower’s ability to repay loans and cause a decline in value of the assets securing the loan portfolio.
The Company’s operations are subject to customary business risks associated with activities of a financial institution. Some of those risks include competition from other institutions and changes in local or national economic conditions, interest rates and regulatory requirements.
Principles of ConsolidationPrinciples of Consolidation
The consolidated financial statements as of and for the years ended December 31, 2019 and 2018 include the Company and the Bank, together referred to as the Company. Intercompany transactions and balances have been eliminated in consolidation.
Use of EstimatesUse of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for losses on loans, the valuation of other real estate acquired, the valuation of deferred tax assets, other than temporary impairments of securities and the fair value of financial instruments.
The determination of the adequacy of the allowance for loan losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. In connection with the determination of the estimated losses on loans, management obtains independent appraisals for significant collateral.
While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans. Such agencies may have judgments different than management’s and we may determine to adjust our allowance as a result of these regulatory reviews. Because of these factors, it is reasonably possible that the estimated losses on loans may change in the near term. However, the amount of the change that is reasonably possible cannot be estimated.
Investment SecuritiesInvestment Securities
Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 320, Investments, requires the classification of securities as trading, available-for-sale, or held-to-maturity. Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates this classification periodically.
Securities classified as available-for-sale are equity securities with readily determinable fair values and those debt securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available-for-sale would be based on various factors, including significant movement in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. These securities are carried at estimated fair value based on information provided by a third party pricing service with any unrealized gains or losses excluded from net income and reported in accumulated other comprehensive income (loss), which is reported as a separate component of equity, net of the related deferred tax effect.
Investment securities and mortgage-backed securities that the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity and reported at amortized cost.
Investment securities and mortgage-backed securities that are bought and held by the Company primarily for the purpose of selling them in the near future are classified as trading securities and reported at fair value. Unrealized gains and losses are included in earnings.
Premiums and discounts are amortized or accreted over the life of the related security, adjusted for anticipated prepayments, as an adjustment to yield using the effective interest method. Mortgage-backed securities are subject to prepayment and, accordingly, actual maturities could differ from contractual maturities. Interest income is recognized when earned. Gains and losses from the sale of securities are included in earnings when realized and are determined using the specific identification method for determining the cost of securities sold.
Declines in the fair value of individual investment securities below their cost that are other than temporary result in write-downs of the individual securities to their fair value. The written down amount then becomes the security’s new cost basis. The related write-downs are included in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.
Loans ReceivableLoans Receivable
The Company grants real estate mortgage and consumer loans to customers. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding unpaid principal balances adjusted for unearned income, the allowance for loan losses, and any unamortized deferred fees or costs on originated loans, and premiums or discounts on purchased loans. When principal or interest is delinquent for 90 days or more, the Company evaluates the loan for nonaccrual status.
Uncollectible interest on loans that are contractually past due is charged-off, or an allowance is established based on management's periodic evaluation. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged off at an earlier date if collection of principal or interest is considered doubtful. The allowance is established by a charge to interest income equal to all interest previously accrued, and income is subsequently recognized only to the extent that cash payments are received until, in management's judgment, the borrower has the ability to make timely periodic interest and principal payments, in which case the loan is returned to accrual status.
Loan fees and certain direct loan origination costs are deferred and the net fee or cost is recognized as an adjustment to interest income using the interest method over the contractual life of the loans, adjusted for actual prepayments. Amortization of net deferred fees or costs is discontinued for the loans that are deemed to be non-performing. Additionally, the unamortized net fees or costs are recognized in income when loans are paid-off.
Loans Held-for-SaleLoans Held-for-Sale
Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value. For these loans, gains and losses on loan sales are recorded in noninterest income, and direct loan origination costs and fees are deferred at origination of the loan and are recognized in noninterest income upon sale of the loan.
Impaired LoansImpaired Loans
A loan is considered impaired, in accordance with the impairment accounting guidance of FASB ASC 310-10-35-16, Receivables , when based on current information and events it is probable that the Company will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. 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 delay, the reasons for the delay, the borrower's prior payment record, and the amount of shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by either the present value of expected cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan's effective interest rate or, as a practical expedient, at the loan's observable market price of the fair value of the collateral if the loan is collateral dependent. The portion of increase in present value of the expected future cash flows of impaired loans that is attributable to the passage of time is reported as interest income. A change in the present value of the expected future cash flows related to impaired loans is reported as an increase or decrease in provision for loan losses.
Allowance for Loan LossesAllowance for Loan Losses
The allowance for loan losses is maintained at a level which is considered to be adequate to reflect estimated credit losses associated with specifically identified loans, as well as estimated probable credit losses inherent in the remainder of the loan portfolio at the balance sheet date. The allowance for loan losses is determined based on consideration and assessment of the various credit risk characteristics of the loans that comprise the loan portfolio in accordance with FASB ASC 450, Contingencies, for pools of loans and FASB ASC 310, Receivables, for individually impaired loans.
Management evaluates the allowance for loan losses to assess the risk of loss in the loan portfolio and to determine the adequacy of the allowance for loan losses. For purposes of this evaluation, loans are aggregated into pools based on various characteristics. Some of those characteristics include payment status, concentrations, and loan to collateral value and the financial status of borrowers. The allowance allocated to each of these pools is based on historical charge-off rates, adjusted for changes in the credit risk characteristics within these pools, as determined from current information and analyses. In determining the appropriate level of the allowance, management also ensures that the overall allowance appropriately reflects current macroeconomic conditions, industry exposure and a margin for the imprecision inherent in most estimates of expected credit losses. In addition to these factors, management also considers the following for each segment of the loan portfolio when determining the allowance:
• Residential mortgages - This category consists of loans secured by first and junior liens on residential real estate. The performance of these loans may be adversely affected by unemployment rates, local residential real estate market conditions and the interest rate environment.
• Commercial real estate - This category consists of loans primarily secured by office buildings, and retail shopping facilities. The performance of commercial real estate loans may be adversely affected by conditions specific to the relevant industry, the real estate market for the property type and geographic region where the property or borrower is located.
• Construction and land - This category consists of loans to finance the ground-up construction and/or improvement of construction of residential and commercial properties and loans secured by land. The performance of construction and land loans is generally dependent upon the successful completion of improvements and/or land development for the end user, the sale of the property to a third party, or a secondary source of cash flow from the owners. The successful completion of planned improvements and development maybe adversely affected by changes in the estimated property value upon completion of construction, projected costs and other conditions leading to project delays.
• Multi-family residential - This category consists of loans secured by apartment or residential buildings with five or more units used to accommodate households on a temporary or permanent basis. The performance of multi-family loans is generally dependent on the receipt of rental income from the tenants who occupy the subject property. The occupancy rate of the subject property and the ability of the tenants to pay rent may be adversely affected by the location of the subject property and local economic conditions.
• Consumer - This category consists of loans to individuals for household, family and other personal use. The performance of these loans may be adversely affected by national and local economic conditions, unemployment rates and other factors affecting the borrower's income available to service the debt. All of our consumer loans are secured by our customers’ savings accounts and/or certificates of deposit.
As a result of the uncertainties inherent in the estimation process, management’s estimate of loan losses and the related allowance could change in the near term.
Based on management’s periodic evaluation of the allowance for loan losses, a provision for loan losses is charged to operations if additions to the allowance are required. Actual loan charge-offs are deducted from the allowance and subsequent recoveries of previously charged-off loans are added to the allowance.
Other Real EstateOther Real Estate
Real estate properties acquired through, or in lieu of, foreclosure are held for sale and are initially recorded at fair value on the date of acquisition. Any write-downs at the time of acquisition are charged to the allowance for loan losses. Costs relating to development and improvement of property are capitalized, whereas costs relating to holding property are expensed. Other real estate was $0 and $0 at December 31, 2019 and 2018, respectively, and is included in prepaid expenses and other assets.
Subsequent to acquisition, valuations are periodically performed by management to report these assets at the lower of fair value less costs to sell or cost. Any adjustments resulting from these periodic re-evaluations of property are reflected in a valuation allowance and charged to income.
Premises and EquipmentPremises and Equipment
Land is carried at cost. Buildings, leasehold improvements and furniture, fixtures and equipment are carried at cost, less accumulated depreciation and amortization, respectively. Depreciation and amortization are calculated on the straight-line basis and accelerated methods over the estimated useful lives of the assets which range from 3 to 39 years. Expenditures for improvements, which extend the life of an asset, are capitalized and depreciated over the asset’s remaining useful life. Gains or losses realized on the disposition of properties and equipment are reflected in the statements of (loss) income. Expenditures for repairs and maintenance are charged to operating expenses as incurred.
Life InsuranceLife Insurance
The Company purchased life insurance on certain employees and directors of the Company. Appreciation in value of the insurance policies is included in noninterest income.
AdvertisingAdvertising
The Company follows the policy of charging the costs of advertising to expense as incurred. Advertising expense was approximately $17,000 and $27,000 for the years ended December 31, 2019 and 2018, respectively, and is included in other non-interest expenses.
Income TaxesIncome Taxes
The Company accounts for income taxes in accordance with income tax guidance of FASB ASC 740, Income Taxes , and has adopted the recent accounting guidance related to accounting for uncertainty in income taxes, which sets forth a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions.
The income tax guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of enacted tax law to the taxable income or excess deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the difference between the book and tax bases of assets and liabilities. Enacted changes in tax rates and laws are recognized in the period in which they occur.
Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more likely than not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more likely than not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management's judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.
The Company evaluates all significant tax positions as required by accounting principles generally accepted in the United States of America. As of December 31, 2019 and 2018, the Company does not believe that it has taken any positions that would require the recording of any additional tax liability nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next year.
With few exceptions, the Company is no longer subject to federal tax examinations by tax authorities for years before 2015. Any interest and penalties assessed by income taxing authorities are not significant and are included in non-interest expense in these financial statements.
Comprehensive IncomeComprehensive Income
The Company reports comprehensive income in accordance with the accounting guidance related to FASB ASC 220, Comprehensive Income . FASB ASC 220 establishes standards for reporting and presentation of comprehensive income and its components in a full set of financial statements. Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes net unrealized gains (losses) on securities and is presented, net of tax, in the statements of comprehensive income.
Statement of Cash FlowsStatement of Cash Flows
For purposes of the statements of cash flows, cash and cash equivalents include cash on hand, due from banks and deposits with the FHLB. The Company considers all highly liquid debt instruments with original maturities of three months or less (excluding interest-bearing deposits in banks) to be cash equivalents.
ReclassificationsReclassifications
Certain reclassifications may have been made to the 2018 financial statements to conform with the 2019 financial statement presentation. Such reclassifications had no effect on net income or retained earnings as previously reported.
Recent Accounting PronouncementsRecent Accounting Pronouncements
Emerging Growth Company Status
The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as the Company is an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to other public companies. An emerging growth company may elect to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the company is first required to file a registration statement. The Company has elected to use the extended transition period described above and intends to maintain its emerging growth company status as allowed under the JOBS Act.
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . The provisions of the update requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU replaced most existing revenue recognition guidance in U.S. GAAP. In March, 2016 the FASB issued ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarifies the guidance in determining revenue recognition as principal versus agent. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing , which provides guidance in accounting for immaterial performance obligations and shipping and handling. In May 2016, the FASB issued ASU 2016-12, Narrow-Scope Improvements and Practical Expedients , which provides clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for noncash consideration and completed contracts at transition. This ASU also provides a practical expedient for contract modifications. For an emerging growth company, the amendments in this update were effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The amendments did not have a material impact on the Company’s Consolidated Financial Statements.
In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825- 10), Recognition and Measurement of Financial Assets and Financial Liabilities. The provisions of the update require equity investments to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment. The update also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. It also eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet. ASU No. 2016-01 requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. It also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The update requires separate presentation of financial assets and financial liabilities by category and form on the balance sheet or the accompanying notes to the financial statements. In addition, the update clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. For an emerging growth company, the amendments in this update were effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The adoption of this ASU did not have a material impact on the Company’s Consolidated Financial Statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), Conforming Amendments Related to Leases . This ASU amends the codification regarding leases in order to increase transparency and comparability. The ASU requires companies to recognize lease assets and liabilities on the statement of condition and disclose key information about leasing arrangements. A lessee would recognize a liability to make lease payments and a right-of-use asset representing its right to use the leased asset for the lease term. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The adoption of this ASU is not expected to have a material effect on the Company’s Consolidated Financial Statements.
In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments . The amendments introduce an impairment model that is based on expected credit losses (“ECL”), rather than incurred losses, to estimate credit losses on certain types of financial instruments (eg. loans and held to maturity securities), including certain off-balance sheet financial instruments (eg. commitments to extend credit and standby letters of credit that are not unconditionally cancellable). The ECL should consider historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments, over the contractual term. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. Financial instruments with similar risk characteristics may be grouped together when estimating the ECL. The ASU also amends the current available for sale security impairment model for debt securities whereby credit losses relating to available for sale debt securities should be recorded through an allowance for credit losses. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within fiscal years beginning after December 15, 2023. The amendments will be applied through a modified retrospective approach, resulting in a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently planning for the implementation of this accounting standard. It is too early to assess the impact this ASU will have on the Company’s Consolidated Financial Statements.
In August 2016, FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The amendments in this ASU clarify the proper classification for certain cash receipts and cash payments, including clarification on debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, among others. For an emerging growth company, the amendments in this update were effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The amendment did not have a material impact on the Company’s Consolidated Financial Statements.
In June 2018, FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment . The amendments in this ASU expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company is currently assessing the amendment but does not anticipate it will have a material impact on the Company’s Consolidated Financial Statements.
In August 2018, FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement . The amendments in this ASU modify the disclosure requirements related to fair value. Certain provisions under ASU 2018-13 require prospective application, while other provisions require retrospective application to all period presented in the financial statements upon adoption. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing the amendment but does not anticipate it will have a material impact on the Company’s Consolidated Financial Statements.

Earnings Per Share (Tables)

Earnings Per Share (Tables)12 Months Ended
Dec. 31, 2019
Earnings Per Share
Schedule of Earnings per common shareYear Ended
December 31,
(in thousands, except per share data)
2019
Numerator:
Net income available to common shareholders
$
(61)
Denominator:
Common shares outstanding (Total issued, less unallocated ESOP shares)
1,318
Basic earnings per common share
$
(0.05)

Investment Securities (Tables)

Investment Securities (Tables)12 Months Ended
Dec. 31, 2019
Investment Securities
Summary of amortized cost and fair values of investment securities available-for-saleGross
Gross
December 31, 2019:
Amortized
Unrealized
Unrealized
Fair
(in thousands)
Cost
Gains
(Losses)
Value
Mortgage-Backed Securities:
FHLMC
$
2,664
$

$
(19)
$
2,645
SBA 7a Pools
2,678
5
(8)
2,675
Total Investment Securities Available-for-Sale
$
5,342
$
5
$
(27)
$
5,320
Gross
Gross
December 31, 2018:
Amortized
Unrealized
Unrealized
Fair
(in thousands)
Cost
Gains
(Losses)
Value
Mortgage-Backed Securities:
FHLMC
$
3,139
$

$
(117)
$
3,022
FNMA
232

(2)
230
GNMA
612
8

620
SBA 7a Pools
1,920

(11)
1,909
Total Investment Securities Available-for-Sale
$
5,903
$
8
$
(130)
$
5,781
Summary of amortized cost and fair values of the investment securities available-for-sale by contractual maturityAvailable-for-Sale
December 31, 2019
Amortized
Fair
(in thousands)
Cost
Value
Amounts Maturing:
After One Year through Five Years
$
123
$
123
After Five Years through Ten Years
1,716
1,708
After Ten Years
3,503
3,489
$
5,342
$
5,320
Summary of gross unrealized losses in investment securitiesDecember 31, 2019
(in thousands)
Less Than 12 Months
12 Months or More
Totals
Security
Unrealized
Unrealized
Unrealized
Description
Fair Value
(Losses)
Fair Value
(Losses)
Fair Value
(Losses)
Mortgage-Backed
FHLMC
$
655
$
(4)
$
1,990
$
(15)
$
2,645
$
(19)
SBA 7a Pools


1,692
(8)
1,692
(8)
$
655
$
(4)
$
3,682
$
(23)
$
4,337
$
(27)
December 31, 2018
(in thousands)
Less Than 12 Months
12 Months or More
Totals
Security
Unrealized
Unrealized
Unrealized
Description
Fair Value
(Losses)
Fair Value
(Losses)
Fair Value
(Losses)
Mortgage-Backed
FHLMC
$

$

$
3,022
$
(117)
$
3,022
$
(117)
FNMA
230
(2)


230
(2)
SBA 7a Pools
1,909
(11)


1,909
(11)
$
2,139
$
(13)
$
3,022
$
(117)
$
5,161
$
(130)

Loans Receivable and the Allo_2

Loans Receivable and the Allowance for Loan Losses (Tables)12 Months Ended
Dec. 31, 2019
Financing Receivable, Recorded Investment [Line Items]
Summary of loans receivable(in thousands)
2019
2018
Mortgage Loans
1-4 Family
$
73,591
$
75,185
Multifamily
3,567
4,117
Commercial real estate
1,117
1,175
Consumer Loans
209
211
78,484
80,688
Plus (Less):
Unamortized Loan Fees/Costs
1,151
1,234
Allowance for Loan Losses
(850)
(850)
Net Loans Receivable
$
78,785
$
81,072
Summary of allowance for loan losses and recorded investment in loans receivableAllowance for Loan Losses and Recorded Investment in Loans Receivable For the Year Ended December 31, 2019 (in thousands)
Mortgage-
Mortgage-
Mortgage-
Commercial
1-4 Family
Multifamily
Real Estate
Consumer
Total
Allowance for Loan Losses:
Beginning Balance
$
807
$
31
$
12
$

$
850
Charge-Offs





Recoveries
9



9
Provision
(4)
(4)
(1)

(9)
Ending Balance
$
812
$
27
$
11
$

$
850
Ending Balance:
Individually Evaluated for Impairment
$

$

$

$

$

Collectively Evaluated for Impairment
$
812
$
27
$
11
$

$
850
Loans Receivable:
Ending Balance
$
73,591
$
3,567
$
1,117
$
209
$
78,484
Ending Balance:
Individually Evaluated for Impairment
$

$

$

$

$

Collectively Evaluated for Impairment
$
73,591
$
3,567
$
1,117
$
209
$
78,484
The allowance for loan losses for Mortgage 1-4 Family Loans of $812,000 includes an unallocated portion of $437,000 as of December 31, 2019.
Allowance for Loan Losses and Recorded Investment in Loans Receivable For the Year Ended December 31, 2018 (in thousands)
Mortgage-
Mortgage-
Mortgage-
Commercial
1-4 Family
Multifamily
Real Estate
Consumer
Total
Allowance for Loan Losses:
Beginning Balance
$
813
$
20
$
17
$

$
850
Charge-Offs





Recoveries
11



11
Provision
(17)
11
(5)

(11)
Ending Balance
$
807
$
31
$
12
$

$
850
Ending Balance:
Individually Evaluated for Impairment
$

$

$

$

$

Collectively Evaluated for Impairment
$
807
$
31
$
12
$

$
850
Loans Receivable:
Ending Balance
$
75,185
$
4,117
$
1,175
$
211
$
80,688
Ending Balance:
Individually Evaluated for Impairment
$

$

$

$

$

Collectively Evaluated for Impairment
$
75,185
$
4,117
$
1,175
$
211
$
80,688
Summary of credit quality indicatorsCredit Quality Indicators - Credit Risk Profile Based on Payment Activity at December 31, 2019 (in thousands)
Non-
Performing
Performing
Total
Mortgage Loans:
1 to 4 Family
$
73,591
$

$
73,591
Multifamily
3,567

3,567
Commercial real estate
1,117

1,117
Non-Mortgage Loans:
Consumer
209

209
Total
$
78,484
$

$
78,484
Credit Quality Indicators - Credit Risk Profile Based on Payment Activity at December 31, 2018 (in thousands)
Non-
Performing
Performing
Total
Mortgage Loans:
1 to 4 Family
$
75,185
$

$
75,185
Multifamily
4,117

4,117
Commercial real estate
1,175

1,175
Non-Mortgage Loans:
Consumer
211

211
Total
$
80,688
$

$
80,688
Summary of aged analysis of past due loans receivableAged Analysis of Past Due Loans Receivable at December 31 , 2019 (in thousands)
30-59
60-89
90 Days or
Total
Days
Days
Greater
Total
Loans
Past Due
Past Due
Past Due
Past Due
Current
Receivable
Mortgage Loans:
1 to 4 Family
$

$
89
$

$
89
$
73,502
$
73,591
Multifamily




3,567
3,567
Commercial real estate




1,117
1,117
Non-Mortgage Loans:
Consumer




209
209
Total
$

$
89
$

$
89
$
78,395
$
78,484
Aged Analysis of Past Due Loans Receivable at December 31, 2018 (in thousands)
30-59
60-89
90 Days or
Total
Days
Days
Greater
Total
Loans
Past Due
Past Due
Past Due
Past Due
Current
Receivable
Mortgage Loans:
1 to 4 Family
$
227
$
171
$

$
398
$
74,787
$
75,185
Multifamily




4,117
4,117
Commercial real estate




1,175
1,175
Non-Mortgage Loans:
Consumer




211
211
Total
$
227
$
171
$

$
398
$
80,290
$
80,688
Summary of loans receivable on nonaccrual statusLoans Receivable on Nonaccrual Status at December 31 (in thousands)
2019
2018
Mortgage Loans:
1 to 4 Family
$

$
Summary of information pertaining to impaired loansImpaired Loans For the Year Ended December 31, 2019 (in thousands)
Unpaid
Average
Interest
Recorded
Principal
Related
Recorded
Income
Investment
Balance
Allowance
Investment
Recognized
Mortgage Loans
1-4 Family
$

$

$

$

$

Impaired Loans For the Year Ended December 31, 2018 (in thousands)
Unpaid
Average
Interest
Recorded
Principal
Related
Recorded
Income
Investment
Balance
Allowance
Investment
Recognized
Mortgage Loans
1-4 Family
$

$

$

$
197
$
98
Summary of loan modifications determined to be TDRsPre-
Post-
Modification
Modification
Outstanding
Outstanding
Number of
Recorded
Recorded
Contracts
Investment
Investment
Modifications as of December 31, 2019
(in thousands)
Troubled Debt Restructurings:
Mortgage Loans
1-4 Family

$

$

Total Loans

$

$

Modifications as of December 31, 2018
(in thousands)
Troubled Debt Restructurings:
Mortgage Loans
1-4 Family

$

$

Total Loans

$

$
Based on Loan Grades
Financing Receivable, Recorded Investment [Line Items]
Summary of credit quality indicatorsCredit Quality Indicators - Credit Risk Profile Based on Loan Grades at December 31, 2019 (in thousands)
Special
Pass
Watch
Mention
Substandard
Doubtful
Total
Mortgage Loans:
1 to 4 Family
$
72,937
$
87
$

$
567
$

$
73,591
Multifamily
3,567




3,567
Commercial real estate
1,117




1,117
Non-Mortgage Loans:
Consumer
209




209
Total
$
77,830
$
87
$

$
567
$

$
78,484
Credit Quality Indicators - Credit Risk Profile Based on Loan Grades at December 31, 2018 (in thousands)
Special
Pass
Watch
Mention
Substandard
Doubtful
Total
Mortgage Loans:
1 to 4 Family
$
74,514
$
91
$

$
580
$

$
75,185
Multifamily
4,117




4,117
Commercial real estate
1,175




1,175
Non-Mortgage Loans:
Consumer
211




211
Total
$
80,017
$
91
$

$
580
$

$
80,688

Accrued Interest Receivable (Ta

Accrued Interest Receivable (Tables)12 Months Ended
Dec. 31, 2019
Accrued Interest Receivable
Schedule of accrued interest receivable(in thousands)
2019
2018
Loans Receivable
$
310
$
324
Mortgage-Backed Securities
10
12
Interest-Bearing Deposits
1
1
$
321
$
337

Premises and Equipment (Tables)

Premises and Equipment (Tables)12 Months Ended
Dec. 31, 2019
Premises and Equipment
Schedule of major classes of premises and equipment(in thousands)
2019
2018
Land
$
166
$
166
Building
970
1,019
Furniture, Fixtures and Equipment
525
794
Automobiles
93
93
1,754
2,072
Less Accumulated Depreciation and Amortization
(1,050)
(1,305)
$
704
$
767

Income Taxes (Tables)

Income Taxes (Tables)12 Months Ended
Dec. 31, 2019
Income Taxes.
Schedule of income taxes from continuing operations(in thousands)
2019
2018
Income Taxes from Continuing Operations:
Current
$

$

Deferred
254
54
Income Tax Expense
$
254
$
54
Schedule of reconciliation of federal statutory rates and incomes tax rate and amount of income tax expense2019
2018
(in thousands)
Amount
%
Amount
%
Expected Income Tax Expense at Statutory Rate
$
41
21
%
$
73
%
Tax Exempt Income
(20)
(10)
%
(20)
(6)
%
Valuation Allowance for Deferred Tax Asset (Net Operating Loss)
222
87
%


%
Other Adjustments - Net
11
6
%
1
%
$
254
104
%
$
54
%
Schedule of components of deferred tax assets and liabilities(in thousands)
2019
2018
Deferred Loan Fees (Costs)
$
(241)
$
(259)
Allowance for Loan Losses
124
137
Federal Home Loan Bank Stock
(78)
(69)
Deferred Retirement Agreements
63
377
Tax Carryforward of Loss on Sale of Investment Securities
227
456
Tax Carryforwards of Net Operating Losses
324
15
All Other Temporary Differences
30
54
449
711
Valuation Allowance for Deferred Tax Asset (Loss on Sale of Investment Securities)
(227)
(456)
Valuation Allowance for Deferred Tax Asset (Net Operating Losses)
(222)


255
Unrealized Losses on Securities Available-for-Sale
5
25
Net Deferred Tax Asset
$
5
$
280

Deposits (Tables)

Deposits (Tables)12 Months Ended
Dec. 31, 2019
Deposits
Schedule of depositsDeposits at December 31 are summarized below (in thousands):
2019
2018
Amount
%
Amount
%
Passbook Savings
$
2,691
4.6
$
3,085
5.5
Money Market Accounts
106
0.2
102
0.2
Certificates of Deposit
55,248
95.2
52,996
94.3
$
58,045
100.0
$
56,183
100.0
Schedule of maturities and average interest rate of certificates of depositsScheduled maturities and average interest rates of certificates of deposit at December 31, 2019 are summarized as follows (in thousands):
Average
Interest
Amount
Rate %
2020
$
25,983
2.104
%
2021
10,611
2.086
%
2022
8,892
2.016
%
2023
2,611
2.588
%
2024
5,058
2.605
%
Thereafter
2,093
2.686
%
$
55,248
2.177
%
Schedule of interest expense on deposits(in thousands)
2019
2018
Passbook Savings
$
6
$
6
Money Market Accounts

1
Certificates of Deposit
1,255
921
$
1,261
$
928

Advances from Federal Home Lo_2

Advances from Federal Home Loan Bank (FHLB) (Tables)12 Months Ended
Dec. 31, 2019
Advances from Federal Home Loan Bank (FHLB)
Schedule of FHLB advancesThe FHLB advances consist of the following obligations at December 31, 2019 and 2018 (in thousands):
Effective Interest Rate
2019
2018
Less than 1.00%
$

$

1.00% to 1.99%
3,500
5,500
2.00% to 2.99%
8,000
10,000
3.00% to 3.99%
8,134
8,063
4.00% to 4.99%

520
5.00% to 5.99%
1,947
1,947
$
21,581
$
26,030
Schedule of maturities of FHLB advancesDue In
Amount
(in thousands)
2020
$
6,197
2021
3,250
2022

2023
500
Thereafter
11,634
$
21,581

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Income (Loss) (Tables)12 Months Ended
Dec. 31, 2019
Accumulated Other Comprehensive Income (Loss)
Summary of the changes in the balances of each component of accumulated other comprehensive income (loss)(in thousands)
2019
2018
Unrealized Gains (Losses) on Securities Available-for-Sale:
Balance at Beginning of Year
$
(96)
$
(103)
Other Comprehensive (Loss)
Before Reclassifications - Net of Tax
(79)
(36)
Reclassification Adjustments for Losses
Realized - Net of Tax
157
43
Balance at End of Year
$
(18)
$
(96)

Regulatory Matters (Tables)

Regulatory Matters (Tables)12 Months Ended
Dec. 31, 2019
Regulatory Matters
Schedule of actual and required capital amounts and ratiosTo be Well
Capitalized Under
For Capital
Prompt Corrective
December 31, 2019:
Actual
Adequacy Purposes
Action Provisions
(dollars in thousands)
Amount
Ratio
Amount
Ratio
Amount
Ratio
Total Risk Based Capital
(to Risk Weighted Assets)
$
19,568
38.94
%
$
4,020
8.00
%
$
5,026
10.00
%
Tier 1 Capital
(to Risk Weighted Assets)
$
18,938
37.68
%
$
3,015
6.00
%
$
4,020
8.00
%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)
$
18,938
37.68
%
$
2,262
4.50
%
$
3,267
6.50
%
Tier 1 Leverage Capital
(to Adjusted Total Assets)
$
18,938
17.47
%
$
4,336
4.00
%
$
5,420
5.00
%
To be Well
Capitalized Under
For Capital
Prompt Corrective
December 31, 2018:
Actual
Adequacy Purposes
Action Provisions
(dollars in thousands)
Amount
Ratio
Amount
Ratio
Amount
Ratio
Total Risk Based Capital
(to Risk Weighted Assets)
$
12,961
25.98
%
$
3,992
8.00
%
$
4,990
10.00
%
Tier 1 Capital
(to Risk Weighted Assets)
$
12,335
24.72
%
$
2,994
6.00
%
$
3,992
8.00
%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)
$
12,335
24.72
%
$
2,245
4.50
%
$
3,243
6.50
%
Tier 1 Leverage Capital
(to Adjusted Total Assets)
$
12,335
12.23
%
$
4,035
4.00
%
$
5,044
5.00
%
Schedule of reconciliation of capital(in thousands)
2019
2018
Total Equity (Bank Only)
$
18,920
$
12,239
Unrealized Losses on Securities
Available-for-Sale, Net
18
96
Tangible, Tier 1 Capital and Common Equity Tier 1
18,938
12,335
Allowance for Loan Losses Included in Capital
630
626
Total Capital
$
19,568
$
12,961

Related Party Transactions (Tab

Related Party Transactions (Tables)12 Months Ended
Dec. 31, 2019
Related Party Transactions
Schedule of activity in loans to directors, officers and employees(in thousands)
2019
2018
Balance at Beginning of Year
$
382
$
507
Add: New Loans or Advances


Less: Payments
(75)
(125)
Balance at End of Year
$
307
$
382

Commitments and Contingencies (

Commitments and Contingencies (Tables)12 Months Ended
Dec. 31, 2019
Commitments and Contingencies
Schedule of future minimum rental commitments under operating leaseYear Ended December 31,
Amount
(in thousands)
2020
$
48
2021
12
Total Minimum Payments Required
$
60

Fair Values of Financial Inst_2

Fair Values of Financial Instruments (Tables)12 Months Ended
Dec. 31, 2019
Fair Values of Financial Instruments
Summary of assets measured on a recurring basisFair Value at Reporting Date Using
Quoted Prices
in Active
Significant
Markets
Other
Significant
for Identical
Observable
Unobservable
December 31, 2019:
Fair
Assets
Inputs
Inputs
(in thousands)
Value
(Level 1)
(Level 2)
(Level 3)
Mortgage-Backed Securities
FHLMC
$
2,645
$

$
2,645
$

SBA 7a Pools
2,675

2,675

Total Investment Securities
$
5,320
$

$
5,320
$

Fair Value at Reporting Date Using
Quoted Prices
in Active
Significant
Markets
Other
Significant
for Identical
Observable
Unobservable
December 31, 2018:
Fair
Assets
Inputs
Inputs
(in thousands)
Value
(Level 1)
(Level 2)
(Level 3)
Mortgage-Backed Securities
FHLMC
$
3,022
$

$
3,022
$

FNMA
230

230

GNMA
620

620

SBA 7a Pools
1,909

1,909

Total Investment Securities
$
5,781
$

$
5,781
$
Summary of financial assets and liabilities that are measured at fair value on a non-recurring basisFair Value at Reporting Date Using
Quoted Prices
in Active
Significant
Markets
Other
Significant
for Identical
Observable
Unobservable
December 31, 2019:
Fair
Assets
Inputs
Inputs
(in thousands)
Value
(Level 1)
(Level 2)
(Level 3)
Assets:
Impaired Loans
$

$

$

$

Other Real Estate




Total
$

$

$

$

Fair Value at Reporting Date Using
Quoted Prices
in Active
Significant
Markets
Other
Significant
for Identical
Observable
Unobservable
December 31, 2018:
Fair
Assets
Inputs
Inputs
(in thousands)
Value
(Level 1)
(Level 2)
(Level 3)
Assets:
Impaired Loans
$

$

$

$

Other Real Estate




Total
$

$

$

$
Summary of estimated fair values of the Homestead’s financial instruments2019
2018
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
Financial Assets:
Cash and Cash Equivalents
$
11,875
$
11,875
$
3,090
$
3,090
Interest-Bearing Deposits
1,740
1,740
750
750
Investment Securities
5,320
5,320
5,781
5,781
Loans - Net
78,785
82,300
81,072
81,442
Loans Held-for-Sale
1,637
1,637
533
533
Accrued Interest Receivable
321
321
337
337
FHLB Stock
1,418
1,418
1,376
1,376
Cash Surrender Value of Life Insurance
4,044
4,044
3,950
3,950
Financial Liabilities:
Deposits
58,045
59,053
56,183
55,507
Advances from FHLB
21,581
22,007
26,030
25,907
Accrued Interest Payable
137
137
136
136

Condensed Financial Informati_2

Condensed Financial Information (Parent Company Only) (Tables)12 Months Ended
Dec. 31, 2019
Condensed Financial Information (Parent Company Only)
Schedule of Condensed Balance SheetCONDENSED BALANCE SHEET
DECEMBER 31, 2019
(in thousands)
Assets:
Cash in Bank
$
5,392
Due from Subsidiary
4
Investment in Subsidiary
18,920
Total Assets
$
24,316
Liabilities and Shareholders' Equity
Liabilities
$
32
Shareholders' Equity
24,284
Liabilities and Shareholders' Equity
$
24,316
Schedule of Condensed Statement of LossCONDENSED STATEMENT OF LOSS
FOR THE YEAR ENDED DECEMBER 31, 2019
(in thousands)
Income:
Equity in Net Income of Subsidiary
$
(22)
Other Income
27
Total Income
5
Expenses:
Professional Fees
85
Other Expense
48
Total Expense
133
Loss Before Income Taxes
(128)
Income Taxes

Net Loss
$
(128)
Schedule of Condensed Statement of Cash FlowCash Flows from Operating Activities:
Net Loss
$
(128)
Adjustments to Reconcile Net Loss to Net Cash (Used in) Operating Activities:
Cash (Used in) Operating Activities:
(Increase) in Due from Subsidiary
(4)
Non-cash Compensation for ESOP
56
Decrease in Equity in Net Income of Subsidiary
22
Increase in Liabilities
32
Net Cash (Used in) Operating Activities
(22)
Cash Flows from Investing Activities:
Investment in Subsidiary
(6,558)
Net Cash (Used in) Investing Activities
(6,558)
Cash Flows from Financing Activities:
Proceeds from Stock Offering
11,972
Net Cash Provided by Financing Activities
11,972
Net Increase in Cash and Cash Equivalents
5,392
Cash and Cash Equivalents at Beginning of Period

Cash and Cash Equivalents at End of Period
$
5,392

Nature of Operations, Princip_3

Nature of Operations, Principles of Consolidation, Use of Estimates and Summary of Significant Accounting Policies - Nature of Operations (Details)Jul. 09, 2019$ / sharessharesDec. 31, 2019location$ / sharesshares
Nature of Operations, Principles of Consolidation, Use of Estimates and Summary of Significant Accounting Policies
Common stock offering, shares issued1,429,676
ESOP, number of shares114,374 114,374
Stock price when issued | $ / shares $ 10 $ 10
Number of locations | location2

Nature of Operations, Princip_4

Nature of Operations, Principles of Consolidation, Use of Estimates and Summary of Significant Accounting Policies - Other Real Estate (Details) - USD ($)Dec. 31, 2019Dec. 31, 2018
Other Real Estate
Other Real Estate $ 0 $ 0

Nature of Operations, Princip_5

Nature of Operations, Principles of Consolidation, Use of Estimates and Summary of Significant Accounting Policies - Useful Lives (Details)12 Months Ended
Dec. 31, 2019
Minimum
Premises and Equipment
Estimated useful lives3 years
Maximum
Premises and Equipment
Estimated useful lives39 years

Nature of Operations, Princip_6

Nature of Operations, Principles of Consolidation, Use of Estimates and Summary of Significant Accounting Policies - Expenses (Details) - USD ($)12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Marketing and Advertising Expense [Abstract]
Advertising expense $ 17,000 $ 27,000

Earnings Per Share (Details)

Earnings Per Share (Details) $ / shares in Units, shares in Thousands, $ in Thousands12 Months Ended
Dec. 31, 2019USD ($)$ / sharesshares
Numerator:
Net income available to common shareholders | $ $ (61)
Denominator
Common shares outstanding (Total issued, less unallocated ESOP shares) | shares1,318
Basic earnings per common share | $ / shares $ (0.05)

Investment Securities - Amortiz

Investment Securities - Amortized cost and fair values (Details) - USD ($) $ in ThousandsDec. 31, 2019Dec. 31, 2018
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Amortized Cost $ 5,342 $ 5,903
Gross Unrealized Gains5 8
Gross Unrealized (Losses)(27)(130)
Fair Value5,320 5,781
SBA 7a Pools
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Amortized Cost2,678 1,920
Gross Unrealized Gains5
Gross Unrealized (Losses)(8)(11)
Fair Value2,675 1,909
FHLMC | Mortgage-Backed Securities
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Amortized Cost2,664 3,139
Gross Unrealized (Losses)(19)(117)
Fair Value $ 2,645 3,022
FNMA | Mortgage-Backed Securities
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Amortized Cost232
Gross Unrealized (Losses)(2)
Fair Value230
GNMA | Mortgage-Backed Securities
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Amortized Cost612
Gross Unrealized Gains8
Fair Value $ 620

Investment Securities - Contrac

Investment Securities - Contractual maturity (Details) - USD ($)12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Amortized Cost
After One Year through Five Years $ 123,000
After Five Years through Ten Years1,716,000
After Ten Years3,503,000
Amortized Cost5,342,000
Fair Value
After One Year through Five Years123,000
After Five Years through Ten Years1,708,000
After Ten Years3,489,000
Fair value5,320,000
Securities pledged to secure advances from the FHLB0 $ 0
Proceeds from sales and calls of available-for-sale investment securities683,000 1,076,000
Realized gains (losses) $ 6,000 $ (55,000)

Investment Securities - Gross u

Investment Securities - Gross unrealized losses (Details) - USD ($)12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Fair Value
Less Than 12 Months $ 655,000 $ 2,139,000
12 Months or More3,682,000 3,022,000
Total fair value4,337,000 5,161,000
Unrealized (Losses)
Less Than 12 Months(4,000)(13,000)
12 Months or More(23,000)(117,000)
Total unrealized (losses)(27,000)(130,000)
Declines deemed to be other-than-temporary0 0
SBA 7a Pools
Fair Value
Less Than 12 Months1,909,000
12 Months or More1,692,000
Total fair value1,692,000 1,909,000
Unrealized (Losses)
Less Than 12 Months(11,000)
12 Months or More(8,000)
Total unrealized (losses)(8,000)(11,000)
FHLMC | Mortgage-Backed Securities
Fair Value
Less Than 12 Months655,000
12 Months or More1,990,000 3,022,000
Total fair value2,645,000 3,022,000
Unrealized (Losses)
Less Than 12 Months(4,000)
12 Months or More(15,000)(117,000)
Total unrealized (losses) $ (19,000)(117,000)
FNMA | Mortgage-Backed Securities
Fair Value
Less Than 12 Months230,000
Total fair value230,000
Unrealized (Losses)
Less Than 12 Months(2,000)
Total unrealized (losses) $ (2,000)

Investment in FHLB Stock (Detai

Investment in FHLB Stock (Details) - USD ($)Dec. 31, 2019Dec. 31, 2018
Investment in FHLB Stock
Carrying amount of investment stated at cost $ 1,418,000 $ 1,376,000

Loans Receivable and the Allo_3

Loans Receivable and the Allowance for Loan Losses - Loans receivable (Details) - USD ($) $ in ThousandsDec. 31, 2019Dec. 31, 2018
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable $ 78,484 $ 80,688
Unamortized Loan Fees/Costs1,151 1,234
Allowance for Loan Losses(850)(850)
Net Loans Receivable78,785 81,072
Mortgage - 1-4 Family
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable73,591 75,185
Mortgage - Multifamily
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable3,567 4,117
Mortgage - Commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable1,117 1,175
Consumer Loans
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable $ 209 $ 211

Loans Receivable and the Allo_4

Loans Receivable and the Allowance for Loan Losses - Allowance (Details) - USD ($)12 Months Ended
Dec. 31, 2019Dec. 31, 2018Dec. 31, 2019Dec. 31, 2018
Allowance for Loan Losses:
Beginning Balance $ 850,000 $ 850,000
Recoveries9,000 11,000
Provision(9,000)(11,000)
Ending Balance850,000 850,000
Ending Balance: Collectively Evaluated for Impairment $ 850,000 $ 850,000
Loans Receivable: Ending Balance78,484,000 80,688,000
Ending Balance: Collectively Evaluated for Impairment78,484,000 80,688,000
Allowance for loan losses, unallocated portion850,000 850,000 850,000 850,000
Loan balances outstanding on non-accrual status0 0
Mortgage - 1-4 Family
Allowance for Loan Losses:
Beginning Balance807,000 813,000
Recoveries9,000 11,000
Provision(4,000)(17,000)
Ending Balance812,000 807,000
Ending Balance: Collectively Evaluated for Impairment812,000 807,000
Loans Receivable: Ending Balance73,591,000 75,185,000
Ending Balance: Collectively Evaluated for Impairment73,591,000 75,185,000
Allowance for loan losses, unallocated portion812,000 807,000 812,000 807,000
Mortgage - Multifamily
Allowance for Loan Losses:
Beginning Balance31,000 20,000
Provision(4,000)11,000
Ending Balance27,000 31,000
Ending Balance: Collectively Evaluated for Impairment27,000 31,000
Loans Receivable: Ending Balance3,567,000 4,117,000
Ending Balance: Collectively Evaluated for Impairment3,567,000 4,117,000
Allowance for loan losses, unallocated portion27,000 31,000 27,000 31,000
Mortgage - Commercial real estate
Allowance for Loan Losses:
Beginning Balance12,000 17,000
Provision(1,000)(5,000)
Ending Balance11,000 12,000
Ending Balance: Collectively Evaluated for Impairment11,000 12,000
Loans Receivable: Ending Balance1,117,000 1,175,000
Ending Balance: Collectively Evaluated for Impairment1,117,000 1,175,000
Allowance for loan losses, unallocated portion11,000 12,000 11,000 12,000
Consumer Loans
Allowance for Loan Losses:
Loans Receivable: Ending Balance209,000 211,000
Ending Balance: Collectively Evaluated for Impairment209,000 211,000
Unallocated finance receivable
Allowance for Loan Losses:
Beginning Balance433,000
Ending Balance437,000 433,000
Allowance for loan losses, unallocated portion $ 437,000 $ 433,000 $ 437,000 $ 433,000

Loans Receivable and the Allo_5

Loans Receivable and the Allowance for Loan Losses - Aged analysis (Details) - USD ($)Dec. 31, 2019Dec. 31, 2018
Financing Receivable, Recorded Investment [Line Items]
Loans receivable $ 78,484,000 $ 80,688,000
Loans over 90 days past due and still accruing0 0
Performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable78,484,000 80,688,000
Pass
Financing Receivable, Recorded Investment [Line Items]
Loans receivable77,830,000 80,017,000
Watch
Financing Receivable, Recorded Investment [Line Items]
Loans receivable87,000 91,000
Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans receivable567,000 580,000
Mortgage - 1-4 Family
Financing Receivable, Recorded Investment [Line Items]
Loans receivable73,591,000 75,185,000
Mortgage - 1-4 Family | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable73,591,000 75,185,000
Mortgage - 1-4 Family | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans receivable72,937,000 74,514,000
Mortgage - 1-4 Family | Watch
Financing Receivable, Recorded Investment [Line Items]
Loans receivable87,000 91,000
Mortgage - 1-4 Family | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans receivable567,000 580,000
Mortgage - Multifamily
Financing Receivable, Recorded Investment [Line Items]
Loans receivable3,567,000 4,117,000
Mortgage - Multifamily | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable3,567,000 4,117,000
Mortgage - Multifamily | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans receivable3,567,000 4,117,000
Mortgage - Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Loans receivable1,117,000 1,175,000
Mortgage - Commercial real estate | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable1,117,000 1,175,000
Mortgage - Commercial real estate | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans receivable1,117,000 1,175,000
Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Loans receivable209,000 211,000
Consumer Loans | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable209,000 211,000
Consumer Loans | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans receivable $ 209,000 $ 211,000

Loans Receivable and the Allo_6

Loans Receivable and the Allowance for Loan Losses - Nonaccrual status (Details) - USD ($)Dec. 31, 2019Dec. 31, 2018
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due $ 89,000 $ 398,000
Current78,395,000 80,290,000
Total Loans Receivable78,484,000 80,688,000
Loan balances outstanding on non-accrual status0 0
Mortgage - 1-4 Family
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due89,000 398,000
Current73,502,000 74,787,000
Total Loans Receivable73,591,000 75,185,000
Mortgage - Multifamily
Financing Receivable, Recorded Investment, Aging [Abstract]
Current3,567,000 4,117,000
Total Loans Receivable3,567,000 4,117,000
Mortgage - Commercial real estate
Financing Receivable, Recorded Investment, Aging [Abstract]
Current1,117,000 1,175,000
Total Loans Receivable1,117,000 1,175,000
Consumer Loans
Financing Receivable, Recorded Investment, Aging [Abstract]
Current209,000 211,000
Total Loans Receivable209,000 211,000
30-59 Days Past Due
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due227,000
30-59 Days Past Due | Mortgage - 1-4 Family
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due227,000
60-89 Days Past Due
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due89,000 171,000
60-89 Days Past Due | Mortgage - 1-4 Family
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due $ 89,000 $ 171,000

Loans Receivable and the Allo_7

Loans Receivable and the Allowance for Loan Losses - Impaired (Details) - Mortgage - 1-4 Family $ in Thousands12 Months Ended
Dec. 31, 2018USD ($)
Financing Receivable, Impaired [Line Items]
Average Recorded Investment $ 197
Interest Income Recognized $ 98

Loans Receivable and the Allo_8

Loans Receivable and the Allowance for Loan Losses - TDRs (Details) - USD ($)12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Loans Receivable and the Allowance for Loan Losses
Debt restructurings defaulted subsequent to the restructuring $ 0 $ 0

Accrued Interest Receivable (De

Accrued Interest Receivable (Details) - USD ($) $ in ThousandsDec. 31, 2019Dec. 31, 2018
Accrued Interest Receivable
Accrued Interest Receivable $ 321 $ 337
Loans Receivable
Accrued Interest Receivable
Accrued Interest Receivable310 324
Mortgage-Backed Securities.
Accrued Interest Receivable
Accrued Interest Receivable10 12
Interest-Bearing Deposits
Accrued Interest Receivable
Accrued Interest Receivable $ 1 $ 1

Premises and Equipment (Details

Premises and Equipment (Details) - USD ($)12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Premises and Equipment
Premises and equipment, gross $ 1,754,000 $ 2,072,000
Less Accumulated Depreciation and Amortization(1,050,000)(1,305,000)
Premises and equipment, net704,000 767,000
Depreciation and amortization84,000 41,000
Land
Premises and Equipment
Premises and equipment, gross166,000 166,000
Building
Premises and Equipment
Premises and equipment, gross970,000 1,019,000
Furniture, Fixtures and Equipment
Premises and Equipment
Premises and equipment, gross525,000 794,000
Automobiles
Premises and Equipment
Premises and equipment, gross $ 93,000 $ 93,000

Income Taxes - Income tax expen

Income Taxes - Income tax expense (Details) - USD ($)Jan. 01, 2018Dec. 31, 2019Dec. 31, 2018Dec. 31, 2017
Income Taxes.
Federal corporate income tax rate21.00%21.00%21.00%34.00%
Additional income tax expense due to write off of deferred tax asset $ 208,000
Income Taxes from Continuing Operations:
Deferred $ 254,000 $ 54,000
Income Tax Expense $ 254,000 $ 54,000

Income Taxes - Reconciliation (

Income Taxes - Reconciliation (Details) - USD ($)Jan. 01, 2018Dec. 31, 2019Dec. 31, 2018Dec. 31, 2017
Reconciliation of income tax expense based on statutory rates and effective income tax rate
Expected Income Tax Expense at Statutory Rate $ 41,000 $ 73,000
Tax Exempt Income(20,000)(20,000)
Valuation Allowance for Deferred Tax Asset (Net Operating Loss)222,000
Other Adjustments - Net11,000 1,000
Income Tax Expense $ 254,000 $ 54,000
Reconciliation of income tax expense rate to federal statutory rates
Expected Income Tax Expense at Statutory Rate21.00%21.00%21.00%34.00%
Tax Exempt Income(10.00%)(6.00%)
Valuation Allowance for Deferred Tax Asset (Net Operating Loss)87.00%
Other Adjustments - Net6.00%0.00%
Income Tax Expense104.00%15.00%

Income Taxes - Components of de

Income Taxes - Components of deferred tax assets and liabilities (Details) - USD ($)Dec. 31, 2019Dec. 31, 2018
Components of deferred tax assets and liabilities
Deferred Loan Fees (Costs) $ (241,000) $ (259,000)
Allowance for Loan Losses124,000 137,000
Federal Home Loan Bank Stock(78,000)(69,000)
Deferred Retirement Agreements63,000 377,000
Tax Carryforward of Loss on Sale of Investment Securities227,000 456,000
Tax Carryforwards of Net Operating Losses324,000 15,000
All Other Temporary Differences30,000 54,000
Deferred Tax Liabilities449,000 711,000
Valuation Allowance for Deferred Tax Asset (Loss on Sale of Investment Securities)(227,000)(456,000)
Valuation Allowance for Deferred Tax Asset (Net Operating Losses)(222,000)
Deferred Tax Asset Net of Valuation Allowance255,000
Unrealized Losses on Securities Available-for-Sale5,000 25,000
Net Deferred Tax Asset5,000 280,000
Amount of bad debts deductions for which no deferred tax liability recognized3,986,000 3,986,000
Deferred income tax liability0 0
Unrecorded deferred income tax liability on bad debts reserve $ 837,000 $ 837,000

Income Taxes - (Details)

Income Taxes - (Details)12 Months Ended
Dec. 31, 2019USD ($)
Tax Credit Carryforward [Line Items]
Income tax loss carryforward without expiration $ 1,500,000
Valuation adjustment222,000
Capital Loss carryforward
Tax Credit Carryforward [Line Items]
Income tax loss carryforward which expires in 20201,100,000
Valuation adjustment $ 227,000

Deposits (Details)

Deposits (Details) - USD ($) $ in ThousandsDec. 31, 2019Dec. 31, 2018
Deposits
Passbook Savings $ 2,691 $ 3,085
Money Market Accounts106 102
Certificates of Deposit55,248 52,996
Deposits $ 58,045 $ 56,183
Percentage of deposits
Passbook Savings (percentage)4.60%5.50%
Money Market Accounts (percentage)0.20%0.20%
Certificates of Deposit (percentage)95.20%94.30%
Deposits (percentage)100.00%100.00%
Weighted average interest rate on deposits1.91%1.97%

Deposits - Maturities and avera

Deposits - Maturities and average interest rates of COD (Details) - USD ($)Dec. 31, 2019Dec. 31, 2018
Schedule of maturities of certificates of deposits
2020 $ 25,983,000
202110,611,000
20228,892,000
20232,611,000
20245,058,000
Thereafter2,093,000
Certificates of Deposit $ 55,248,000 $ 52,996,000
Schedule of average interest rate of Certificates of deposits
20202.104%
20212.086%
20222.016%
20232.588%
20242.605%
Thereafter2.686%
Weighted average interest rate of certificates of deposit2.177%
Aggregate amount of time deposits with a denomination greater than $250,000 $ 2,088,000 $ 2,076,000

Deposits - Interest expense on

Deposits - Interest expense on deposits (Details) - USD ($) $ in Thousands12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Interest expense on deposits
Passbook Savings $ 6 $ 6
Money Market Accounts1
Certificates of Deposit1,255 921
Interest expense on deposits $ 1,261 $ 928

Advances from Federal Home Lo_3

Advances from Federal Home Loan Bank (FHLB) (Details) - USD ($) $ in ThousandsDec. 31, 2019Dec. 31, 2018
Advances from Federal Home Loan Bank (FHLB)
FHLB advances $ 21,581 $ 26,030
1.00% to 1.99%
Advances from Federal Home Loan Bank (FHLB)
FHLB advances3,500 5,500
2.00% to 2.99%
Advances from Federal Home Loan Bank (FHLB)
FHLB advances8,000 10,000
3.00% to 3.99%
Advances from Federal Home Loan Bank (FHLB)
FHLB advances8,134 8,063
4.00% to 4.99%
Advances from Federal Home Loan Bank (FHLB)
FHLB advances520
5.00% to 5.99%
Advances from Federal Home Loan Bank (FHLB)
FHLB advances $ 1,947 $ 1,947

Advances from Federal Home Lo_4

Advances from Federal Home Loan Bank (FHLB) - Maturities of FHLB (Details) - USD ($)Dec. 31, 2019Dec. 31, 2018
Scheduled maturities of FHLB
2020 $ 6,197,000
20213,250,000
2023500,000
Thereafter11,634,000
FHLB advances21,581,000 $ 26,030,000
Unused advances available with FHLB16,300,000
Unsecured federal funds agreement with FNBB4,300,000
Federal funds purchased $ 0 $ 0

Employee Benefit Plans - 401(k)

Employee Benefit Plans - 401(k) Plan and Pension Plan (Details)12 Months Ended
Dec. 31, 2019USD ($)Dec. 31, 2018USD ($)
401(k) Plan
401(k) Plan
Threshold age, employees eligible for plan21 years
Threshold period of service, employees eligible for plan6 months
Threshold hours of service, employees eligible for plan1,000
Employer's contributions to the plan $ 44,000 $ 41,000
401(k) Plan | First 3% of employees' salary deferral contribution
401(k) Plan
Employer's matching contribution percentage100.00%100.00%
Percentage of employee's gross pay for which employer contributes matching contribution3.00%3.00%
401(k) Plan | Next 2% of annual compensation
401(k) Plan
Employer's matching contribution percentage50.00%50.00%
Percentage of employee's gross pay for which employer contributes matching contribution2.00%2.00%
Pension Plan
401(k) Plan
Percentage of employee's gross pay for which employer contributes matching contribution25.00%
Threshold age, employees eligible for plan21 years
Threshold period of service, employees eligible for plan1 year
Employer's contributions to the plan $ 67,000 $ 96,000
Employer’s annual contributions to the plan5.40%5.40%
Employer’s contributions, percentage per year after first year in the plan20.00%
Employer’s contributions, vesting period6 years

Employee Benefit - Employee Sto

Employee Benefit - Employee Stock Ownership Plan (Details) - USD ($)12 Months Ended
Dec. 31, 2019Jul. 09, 2019
Employee Benefit Plans
ESOP, number of shares114,374 114,374
ESOP, number of shares allocated4,575
ESOP, number of shares unallocated109,799
ESOP, compensation expense $ 56,000
Stock price when issued $ 10 $ 10
ESOP, Aggregate fair value of unallocated shares $ 1,334,000
Closing price $ 12.15

Employee Benefit Plans - Other

Employee Benefit Plans - Other Retirement Agreements (Details) - USD ($)12 Months Ended
Dec. 31, 2019Dec. 31, 2018Jul. 01, 2019
Other Retirement Agreements
Employee Benefit Plans
Threshold period of service of employee to be eligible for plan10 years
Threshold age of employees eligible for plan75 years
Payments to be made to each director $ 120,000
Payments deferred (in years)10 years
Age at which the retirement benefits would begin65 years
Period in which the accrued balance at the termination date will be paid1 year
Total accrued balance of benefit $ 1,500,000
Expense incurred under the plan $ 34,000 $ 61,000
Accrued liability301,000 1,774,000
Other Retirement Agreements | Minimum
Employee Benefit Plans
Employee annual benefits for life66,000
Other Retirement Agreements | Maximum
Employee Benefit Plans
Employee annual benefits for life85,000
Life insurance policies
Employee Benefit Plans
Employee annual benefits for life $ 7,174,000 $ 7,157,000

Employee Benefit Plans - Deferr

Employee Benefit Plans - Deferred Compensation Agreement (Details) - USD ($)Mar. 01, 2019Dec. 31, 2019Dec. 31, 2018
Deferred Compensation Agreement
Deferred Compensation Arrangement with Individual, Compensation Expense $ 187,000
Deferred Compensation Agreement
Deferred Compensation Agreement
Payments deferred (in years)10 years
Split Dollar Life Insurance
Deferred Compensation Agreement
Beneficiary amount of death proceeds $ 700,000

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at Beginning of Year $ 12,239 $ 11,937
Balance at End of Year24,284 12,239
Unrealized Gain (Loss) on Securities Available for Sale
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at Beginning of Year(96)(103)
Other Comprehensive (Loss) Before Reclassification - Net of Tax(79)(36)
Reclassification Adjustments for Losses Realized - Net of Tax157 43
Balance at End of Year $ (18) $ (96)

Regulatory Matters - Capital am

Regulatory Matters - Capital amounts and ratios (Details) - USD ($) $ in ThousandsDec. 31, 2019Dec. 31, 2018
Total risk-based capital to risk-weighted assets
Actual amount $ 19,568 $ 12,961
Actual ratio38.94%25.98%
Capital Adequacy Purposes, amount $ 4,020 $ 3,992
Capital Adequacy Purposes, ratio8.00%8.00%
To be Well Capitalized Under Prompt Corrective Action Provisions, amount $ 5,026 $ 4,990
To be Well Capitalized Under Prompt Corrective Action Provisions, ratio10.00%10.00%
Tier I capital to risk- weighted assets
Actual amount $ 18,938 $ 12,335
Actual ratio37.68%24.72%
Capital Adequacy Purposes, amount $ 3,015 $ 2,994
Capital Adequacy Purposes, ratio6.00%6.00%
To be Well Capitalized Under Prompt Corrective Action Provisions, amount $ 4,020 $ 3,992
To be Well Capitalized Under Prompt Corrective Action Provisions, ratio8.00%8.00%
Common equity Tier 1 capital to risk-weighted assets
Actual amount $ 18,938 $ 12,335
Actual ratio37.68%24.72%
Capital Adequacy Purposes, amount $ 2,262 $ 2,245
Capital Adequacy Purposes, ratio4.50%4.50%
To be Well Capitalized Under Prompt Corrective Action Provisions, amount $ 3,267 $ 3,243
To be Well Capitalized Under Prompt Corrective Action Provisions, ratio6.50%6.50%
Tier I Leverage capital to adjusted total assets
Actual amount $ 18,938 $ 12,335
Actual ratio17.47%12.23%
Capital Adequacy Purposes, amount $ 4,336 $ 4,035
Capital Adequacy Purposes, ratio4.00%4.00%
To be Well Capitalized Under Prompt Corrective Action Provisions, amount $ 5,420 $ 5,044
To be Well Capitalized Under Prompt Corrective Action Provisions, ratio5.00%5.00%

Regulatory Matters - Reconcilia

Regulatory Matters - Reconciliation of capital (Details) - USD ($) $ in Thousands12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Regulatory Matters
Total Equity (Bank Only) $ 18,920 $ 12,239
Unrealized Losses On Securities Available For Sale, Net18 96
Tangible Tier 1 Capital and Common Equity Tier 118,938 12,335
Allowance for Loan Losses Included in Capital630 626
Total Capital $ 19,568 $ 12,961

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Loans to directors, officers and employees
Balance at Beginning of Year $ 382,000 $ 507,000
Less : Payments(75,000)(125,000)
Balance at End of Year307,000 382,000
Related parties deposits $ 686,000 $ 485,000

Commitments and Contingencies -

Commitments and Contingencies -Future Minimum Rental Commitments (Details)12 Months Ended
Dec. 31, 2019USD ($)leaseDec. 31, 2018USD ($)
Lease Commitments
Operating lease, term of lease3 years
Operating lease, number of options to extend | lease6
Operating lease, renewal term3 years
Operating lease, rental expense $ 48,000 $ 47,000
Operating lease
202048,000
202112,000
Total Minimum Payments Required $ 60,000

Financial Instruments with Of_2

Financial Instruments with Off-Balance-Sheet Risk - (Details) - USD ($)12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Financial Instruments with Off-Balance-Sheet Risk
Loans sold to investors $ 9,300,000
Mortgage loan sold, recourse period from date of sale4 months
Mortgage loan sold, continuous default period90 days
Mortgage loan sold, prepayment period180 days
Indemnification amount in addition to service lease premium $ 5,000
Recourse for number of days after date of sale180 days
Loan origination commitments
Financial Instruments with Off-Balance-Sheet Risk
Off-balance-sheet risk, amount, liability $ 524,000 $ 793,000

Fair Values of Financial Inst_3

Fair Values of Financial Instruments - Recurring (Details) - Recurring - USD ($) $ in ThousandsDec. 31, 2019Dec. 31, 2018
Assets measured on a recurring basis
Total Investment Securities $ 5,320 $ 5,781
Mortgage-Backed Securities | FHLMC
Assets measured on a recurring basis
Total Investment Securities2,645 3,022
Mortgage-Backed Securities | FNMA
Assets measured on a recurring basis
Total Investment Securities230
Mortgage-Backed Securities | GNMA
Assets measured on a recurring basis
Total Investment Securities620
SBA 7a Pools
Assets measured on a recurring basis
Total Investment Securities2,675 1,909
Level 2
Assets measured on a recurring basis
Total Investment Securities5,320 5,781
Level 2 | Mortgage-Backed Securities | FHLMC
Assets measured on a recurring basis
Total Investment Securities2,645 3,022
Level 2 | Mortgage-Backed Securities | FNMA
Assets measured on a recurring basis
Total Investment Securities230
Level 2 | Mortgage-Backed Securities | GNMA
Assets measured on a recurring basis
Total Investment Securities620
Level 2 | SBA 7a Pools
Assets measured on a recurring basis
Total Investment Securities $ 2,675 $ 1,909

Fair Values of Financial Inst_4

Fair Values of Financial Instruments - Estimated fair values (Details) - USD ($) $ in ThousandsDec. 31, 2019Dec. 31, 2018
Carrying Value
Financial Assets:
Cash and Cash Equivalents $ 11,875 $ 3,090
Interest-Bearing Deposits1,740 750
Investment Securities5,320 5,781
Loans - Net78,785 81,072
Loans Held-for-Sale1,637 533
Accrued Interest Receivable321 337
FHLB Stock1,418 1,376
Cash Surrender Value of Life Insurance4,044 3,950
Financial Liabilities:
Deposits58,045 56,183
Advances from FHLB21,581 26,030
Accrued Interest Payable137 136
Fair Value
Financial Assets:
Cash and Cash Equivalents11,875 3,090
Interest-Bearing Deposits1,740 750
Investment Securities5,320 5,781
Loans - Net82,300 81,442
Loans Held-for-Sale1,637 533
Accrued Interest Receivable321 337
FHLB Stock1,418 1,376
Cash Surrender Value of Life Insurance4,044 3,950
Financial Liabilities:
Deposits59,053 55,507
Advances from FHLB22,007 25,907
Accrued Interest Payable $ 137 $ 136

Change in Corporate Form (Detai

Change in Corporate Form (Details) $ / shares in Units, $ in MillionsJul. 09, 2019USD ($)$ / sharesshares
Change in Corporate Form
Share price | $ / shares $ 10
Percentage of common shares8.00%
Common stock offering, shares issued | shares1,429,676
Common stock offering | $ $ 1.2

Condensed Financial Informati_3

Condensed Financial Information - CONDENSED BALANCE SHEET (Parent Company Only) (Details) - USD ($) $ in ThousandsDec. 31, 2019Dec. 31, 2018Dec. 31, 2017
Assets:
Total Assets $ 106,004 $ 98,070
Liabilities and Shareholders' Equity
Liabilities81,720 85,831
Total Shareholders' Equity24,284 12,239 $ 11,937
Total Liabilities and Shareholders' Equity106,004 $ 98,070
Parent Company
Assets:
Cash in Bank5,392
Due from Subsidiary Bank4
Investment in Bank Subsidiary18,920
Total Assets24,316
Liabilities and Shareholders' Equity
Liabilities32
Total Shareholders' Equity24,284
Total Liabilities and Shareholders' Equity $ 24,316

Condensed Financial Informati_4

Condensed Financial Information - CONDENSED STATEMENT OF LOSS (Parent Company Only) (Details) - USD ($)12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Income:
Total Interest Income $ 3,800,000 $ 3,743,000
Expenses:
Professional Fees158,000 132,000
Other Expense221,000 245,000
Income Before Income Tax Expense193,000 349,000
Income Taxes254,000 54,000
Net (Loss) Income(61,000) $ 295,000
Parent Company
Income:
Equity In Net Income Of Bank Subsidiary(22,000)
Other income27,000
Total Interest Income5,000
Expenses:
Professional Fees85,000
Other Expense48,000
Total Expense133,000
Income Before Income Tax Expense(128,000)
Net (Loss) Income $ (128,000)

Condensed Financial Informati_5

Condensed Financial Information - CONDENSED STATEMENT OF CASH FLOWS (Parent Company Only) (Details) - USD ($) $ in Thousands12 Months Ended
Dec. 31, 2019Dec. 31, 2018
Cash Flows from Operating Activities:
Net Loss $ (61) $ 295
Adjustments to Reconcile Net Loss to Net Cash (Used in) Operating Activities:
Net Cash (Used in) Operating Activities(2,333)345
Cash Flows from Investing Activities:
Net Cash (Used in) Investing Activities1,826 (1,138)
Cash Flows from Financing Activities:
Proceeds from Stock Offering13,116
Net Cash Provided by Financing Activities9,292 3,170
Net Increase in Cash and Cash Equivalents8,785 2,377
Cash and Cash Equivalents at Beginning of Period3,090 713
Cash and Cash Equivalents at End of Period11,875 $ 3,090
Parent Company
Cash Flows from Operating Activities:
Net Loss(128)
Adjustments to Reconcile Net Loss to Net Cash (Used in) Operating Activities:
(Increase) in Due from Subsidiary(4)
Non-cash Compensation for ESOP56
Decrease in Equity in Net Income of Subsidiary22
Increase in Liabilities32
Net Cash (Used in) Operating Activities(22)
Cash Flows from Investing Activities:
Investment in Subsidiary(6,558)
Net Cash (Used in) Investing Activities(6,558)
Cash Flows from Financing Activities:
Proceeds from Stock Offering11,972
Net Cash Provided by Financing Activities11,972
Net Increase in Cash and Cash Equivalents5,392
Cash and Cash Equivalents at End of Period $ 5,392