Poage Bankshares, Inc. - FORM 10-Q

Attached files

file	filename
EX-32.1 - EXHIBIT 32.1 - Poage Bankshares, Inc.	tv491062_ex32-1.htm
EX-31.2 - EXHIBIT 31.2 - Poage Bankshares, Inc.	tv491062_ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - Poage Bankshares, Inc.	tv491062_ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended March 31, 2018

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from ______________________ to___________________

Commission File Number 001-35295

Poage Bankshares, Inc.

(Exact Name of Registrant as Specified in Charter)

Maryland		45-3204393
(State of Other Jurisdiction		(I.R.S Employer
of Incorporation)		Identification Number)

1500 Carter Avenue, Ashland, KY		41101
(Address of Principal Executive Officer)		(Zip Code)

606-324-7196

Registrant’s telephone number, including area code

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨

Non-accelerated filer	¨	Smaller reporting company	x

		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of May 14, 2018, the number of shares of the Registrant’s common stock, par value $.01 per share, was 3,497,243.

POAGE BANKSHARES, INC.

Form 10-Q Quarterly Report

Table of Contents

	PART I. FINANCIAL INFORMATION

ITEM 1.	CONSOLIDATED FINANCIAL STATEMENTS – POAGE BANKSHARES, INC.	3

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	34

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	42

ITEM 4.	CONTROLS AND PROCEDURES	42

	PART II. OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	43

ITEM 1A.	RISK FACTORS	43

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	43

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	44

ITEM 4.	MINE SAFETY DISCLOSURES	44

ITEM 5.	OTHER INFORMATION	44

ITEM 6.	EXHIBITS	44

SIGNATURES		45

PART I

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

POAGE BANKSHARES, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands except per share data)

	March 31,			December 31,
	2018			2017
ASSETS
Cash and due from financial institutions	$	23,320		$	20,499
Interest-bearing deposits in other financial institutions		3,237			2,988
Securities available for sale		66,892			64,130
Loans held for sale		291			256
Loans, net of allowance of $4,942 and $4,681		327,302			328,554
Restricted stock, at cost		3,276			3,276
Other real estate owned, net		428			1,462
Premises and equipment, net		10,397			10,500
Company owned life insurance		7,333			7,292
Accrued interest receivable		1,288			1,413
Goodwill		1,894			1,894
Other intangible assets, net		583			667
Deferred tax asset, net		2,274			2,128
Other assets		1,816			1,821
Total assets	$	450,331		$	446,880

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest bearing	$	54,845		$	52,577
Interest bearing		319,813			317,473
Total deposits		374,658			370,050
Federal Home Loan Bank advances		6,988			7,419
Subordinated debenture		2,906			2,890
Accrued interest payable		30			24
Other liabilities		4,812			4,782
Total liabilities		389,394			385,165

Commitments and contingent liabilities		-			-

Shareholders' equity
Common stock, $.01 par value, 30,000,000 shares authorized, 3,499,846 and 3,514,171 issued and outstanding at March 31, 2018 and December 31, 2017, respectively		35			35
Additional paid-in-capital		32,201			32,371
Retained earnings		31,440			31,423
Unearned Employee Stock Ownership Plan (ESOP) shares		(1,820	)		(1,854	)
Accumulated other comprehensive income (loss)		(919	)		(260	)
Total shareholders' equity		60,937			61,715
Total liabilities and shareholders' equity	$	450,331		$	446,880

See notes to unaudited consolidated financial statements.

POAGE BANKSHARES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(Dollar amounts in thousands except per share data)

	Three months ended
	March 31,
	2018			2017
Interest and dividend income
Loans, including fees	$	4,138		$	4,318
Taxable securities		252			224
Tax-exempt securities		119			116
Federal funds sold and other		117			90
		4,626			4,748
Interest expense
Deposits		650			582
Federal Home Loan Bank advances and other borrowings		87			84
		737			666
Net interest income		3,889			4,082

Provision for loan losses		497			353
Net interest income after provision for loan losses		3,392			3,729

Non-interest income
Service charges on deposits		484			476
Other service charges		12			15
Net gain (loss) on disposal of land and equipment		(1	)		16
Loan servicing fees		75			82
Gains on mortgage loans sold, net		13			17
Income from company owned life insurance		41			42
Other		2			5
		626			653
Non-interest expense
Salaries and employee benefits		1,758			1,825
Occupancy and equipment		439			474
Data processing		665			575
Federal deposit insurance		32			35
Loan processing and collection		118			86
Foreclosed assets, net		(8	)		93
Advertising		98			114
Professional fees		78			79
Other taxes		111			120
Director fees and expenses		39			40
Amortization of intangible assets		84			86
Conversion costs		99			-
Other		243			248
		3,756			3,775
Income before income taxes		262			607
Income tax expense		33			144
Net income	$	229		$	463
Earnings per common share:
Basic	$	0.07		$	0.13
Dilutive		0.07			0.13
Dividend per share	$	0.06		$	0.06

See notes to unaudited consolidated financial statements.

POAGE BANKSHARES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollar amounts in thousands except per share data)

	Three months ended
	March 31,
	2018			2017

Net income	$	229		$	463
Other comprehensive income (loss):
Unrealized holding gains (loss) on available for sale securities		(835	)		432
Tax effect		176			(147	)
Other comprehensive income (loss)		(659	)		285
Comprehensive income (loss)	$	(430	)	$	748

See notes to unaudited consolidated financial statements.

POAGE BANKSHARES, INC.

UNAUDITED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(Dollar amounts in thousands except per share data)

												Accumulated
			Additional						Unearned			Other			Total
	Common		Paid-In			Retained			ESOP			Comprehensive			Shareholders'
	Stock		Capital			Earnings			Shares			Loss			Equity
Balances, January 1, 2018	$	35	$	32,371		$	31,423		$	(1,854	)	$	(260	)	$	61,715
Net income		-		-			229			-			-			229
Stock repurchases, 14,325 shares repurchased		-		(277	)		-			-			-			(277	)
Dividends paid ($0.06/share)		-		-			(212	)		-			-			(212	)
ESOP compensation earned		-		31			-			34			-			65
Stock based compensation expense		-		76			-			-			-			76
Other comprehensive loss		-		-			-			-			(659	)		(659	)
Balances, March 31, 2018	$	35	$	32,201		$	31,440		$	(1,820	)	$	(919	)	$	60,937

See notes to unaudited consolidated financial statements.

POAGE BANKSHARES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands except per share data)

	Three months ended
	March 31,
	2018			2017
Operating activities:
Net income	$	229		$	463
Adjustments to reconcile net income to net cash from operating activities:
Depreciation		168			188
Provision for loan losses		497			353
ESOP compensation expense		65			66
Stock based compensation expense		76			76
Net gain on sale of premises and equipment		-			(16	)
(Gain) Loss on sale and write-downs of other real estate owned		(18	)		69
Loss on sale of repossessed assets		3			-
Amortization of core deposit intangible		84			86
Accretion of fair value adjustments related to loans		(69	)		(110	)
Accretion of fair value adjustments related to deposits		(16	)		(16	)
Amortization of fair value related to subordinated debenture		16			16
Net amortization on securities		108			85
Deferred income tax expense		30			1
Net gain on mortgage banking activities		(13	)		(17	)
Origination of loans held for sale		(436	)		(1,306	)
Proceeds from loans held for sale		414			1,493
Increase in cash value of life insurance		(41	)		(42	)
Change in asset and liabilities, net assets and liabilities acquired:
Accrued interest receivable		125			(3	)
Other assets		17			60
Accrued interest payable		6			18
Other liabilities		30			411
Net cash provided by operating activities		1,275			1,875

Investing activities:
Net increase in interest-bearing deposits with other institutions		(249	)		-
Securities available for sale:
Proceeds from maturities		380			140
Purchases		(6,193	)		(2,497	)
Principal payments received		2,109			1,757
Loan originations and principal payments on loans, net		676			5,056
Proceeds from the sale of other real estate owned		1,174			227
Proceeds from the sale of repossessed assets		10			-
Proceeds from the sale of premises and equipment		-			54
Purchase of premises and equipment		(65	)		(108	)
Net cash provided by (used in) investing activities		(2,158	)		4,629

Financing activities:
Net change in deposits		4,624			2,262
Proceeds from Federal Home Loan Bank borrowings		5,000			-
Payments on Federal Home Loan Bank borrowings		(5,431	)		(538	)
Cash dividend paid		(212	)		(222	)
Stock repurchases		(277	)		(528	)
Net cash provided by financing activities		3,704			974

Net increase in cash and cash equivalents		2,821			7,478

Cash and cash equivalents at beginning of period		20,499			24,389

Cash and cash equivalents at the end of the period	$	23,320		$	31,867

Additional cash flows and supplementary information:
Cash paid during the year for:
Interest on deposits and debt	$	731		$	648
Income taxes payment		-			-
Other real estate owned and other repossessed assets acquired in settlement of loans	$	148		$	442

See notes to unaudited consolidated financial statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements of Poage Bankshares, Inc. (the “Company” or “Poage”) and its wholly owned subsidiary Town Square Bank (which was formerly operated under the name “Home Federal Savings and Loan Association”) (the “Bank”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates used in the preparation of the financial statements are based on various factors including the current interest rate environment and the general strength of the local economy. Changes in the overall interest rate environment can significantly affect the Company’s net interest income and the value of its recorded assets and liabilities. Actual results could differ from those estimates used in the preparation of the financial statements.

In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the Company’s financial position as of March 31, 2018 and December 31, 2017 and the results of operations and cash flows for the interim periods ended March 31, 2018 and 2017. All interim amounts have not been audited, and the results of operations for the interim periods herein are not necessarily indicative of the results of operations to be expected for the year or any other period. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto filed as part of the Company’s 2017 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

NOTE 2 – REVENUE RECOGNITION

In May 2014, the FASB issued an update (ASU No. 2014-09, Revenue from Contracts with Customers) creating FASB Topic 606, Revenue from Contracts with Customers. The guidance in this update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides steps to follow to achieve the core principle. An entity should disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. We finalized our assessment and identified the revenue line items within the scope of this new guidance. Neither the new standard, nor any of the amendments detailed below, resulted in a material change from our current accounting for revenue because the majority of Poage’s financial instruments are not within the scope of Topic 606, and those that are require no change in the accounting.

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). The amendments relate to when another party, along with the entity, is involved in providing a good or service to a customer. Topic 606 requires an entity to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). This determination is based upon whether the entity controls the good or the service before it is transferred to the customer. Topic 606 includes indicators to assist in this evaluation. The amendments in this update affect the guidance in ASU No. 2014-09 above. The effective date is the same as the effective date of ASU No. 2014-09.

In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments clarify the following two aspects of Topic 606: identifying performance obligations, and the licensing implementation guidance. Before an entity can identify its performance obligations in a contract with a customer, the entity first identifies the promised goods or services in the contract. The amendments in this update are expected to reduce the cost and complexity of applying the guidance on identifying promised goods or services. To identify performance obligations in a contract, an entity evaluates whether promised goods and services are distinct. Topic 606 includes two criteria for assessing whether promises to transfer goods or services are distinct. One of those criteria is that the promises are separately identifiable. This update will improve the guidance on assessing that criterion. Topic 606 also includes implementation guidance on determining whether as entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property, which is satisfied at a point in time, or a right to access the entity’s intellectual property, which is satisfied over time. The amendments in this update are intended to improve the operability and understandability of the licensing implementation guidance. The amendments in this update affect the guidance in ASU No. 2014-09 above. The effective date is the same as the effective date of ASU No. 2014-09.

In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments do not change the core revenue recognition principle in Topic 606. The amendments provide clarifying guidance in certain narrow areas and add some practical expedients.

In December 2016, the FASB issued ASU No. 2016-20, Revenue from Contracts with Customers (Topic 606): Technical Corrections and Improvements. The FASB board decided to issue a separate update for technical corrections and improvements to Topic 606 and other Topics amended by ASU No. 2014-09 to increase awareness of the proposals and to expedite improvements to ASU No. 2014-09. The amendment affects narrow aspects of the guidance issued in ASU No. 2014-09.

On January 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “Topic 606”). We elected to implement using the modified retrospective application, with the cumulative effect recorded as an adjustment to opening retained earnings at January 1, 2018. Due to immateriality, we had no cumulative effect to record. Since interest income on loans and securities are both excluded from this topic, a significant majority of our revenues are not subject to the new guidance. Our services that fall within the scope of Topic 606 are presented within noninterest income and are recognized as revenue as we satisfy our obligation to the customer. A description of the Company’s revenue that falls within the scope of Topic 606 as well as an explanation of why they are not impacted are as follows:

Service charges on deposit accounts: We earn fees from our deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees and overdraft fees are recognized at a point in time, since the customer generally has a right to cancel the depository arrangement at any time. The arrangement is considered a day-to-day contract with ongoing renewals and optional purchases, so the duration of the contract does not extend beyond the services already performed. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which we satisfy our performance obligation. Service charges on deposit accounts includes approximately $224,000 and $227,000 of revenue for the three months ended March 31, 2018 and 2017, respectively, within the scope of Topic 606.

Debit card and ATM fees: Debit card and ATM fees include ATM usage fees and debit card interchange income. As with the transaction-based fees on deposit accounts, the ATM fees are recognized at the point in time that we fulfill the customer’s request. We earn interchange fees from cardholder transactions processed through card association networks. Interchange rates are generally set by the card associations based upon purchase volumes and other factors. Interchange fees represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Debit card and ATM fees includes approximately $235,000 and $232,000 of revenue for the three months ended March 31, 2018 and 2017, respectively, within the scope of Topic 606.

Gains/Losses on Sales of OREO - The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. ASC 606 does not significantly change the pattern of revenue recognition unless the Company finances the sale. There are no instances of the Company financing the sale of one of its OREO properties during the three months ended March 31, 2018. Sales of OREO includes approximately $21,000 in net gains and $60,000 in net losses for the three months ended March 31, 2018 and 2017, respectively, within the scope of Topic 606.

The adoption of Topic 606 did not have a material impact on our consolidated financial position, results of operations, equity, or cash flows as of the adoption date or for the three months ended March 31, 2018.

NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

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. This ASU addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments by making targeted improvements to GAAP as follows: (1) require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) 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, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer; (2) simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value; (3) eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (4) eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (5) require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (6) require 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; (7) require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (8) clarify 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. ASU No. 2016-01 is effective for interim and annual reporting periods beginning after December 15, 2017. Early application is permitted as of the beginning of the fiscal year of adoption only for provisions (3) and (6) above. Early adoption of the other provisions mentioned above is not permitted. Starting with the first quarter of 2018, the Company began using an exit price notion when measuring the fair value of its loan portfolio for disclosure purposes. The adoption of ASU No. 2016-01 on January 1, 2018 did not have a material effect on the Company’s consolidated operating results or financial condition.

In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting which amends the scope of modification accounting for share-based payment arrangements. The ASU provided guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718, Compensation-Stock Compensation. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The adoption of ASU No. 2017-09 on January 1, 2018 did not have a material effect on the Company’s consolidated operating results or financial condition.

Newly Issued Accounting Standards Not Yet Effective

In February 2016, the FASB issued Accounting Standards Update 2016-02 Leases guidance requiring the recognition in the statement of financial position of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The guidance requires that a lessee should recognize lease assets and lease liabilities as compared to previous GAAP that did not require lease assets and lease liabilities to be recognized for most leases. The guidance becomes effective for us on January 1, 2019. Poage is currently evaluating the impact on its leases to determine the impact on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (the ASU), which introduces the current expected credit losses methodology. This ASU significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren’t measured as fair value through net income. Among other things, the ASU requires the measurement of all expected credit losses for financial assets, including loans and available-for-sale debt securities, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In issuing the standard, the FASB is responding to criticism that today’s guidance delays recognition of credit losses. The new model, referred to as the current expected credit loss (“CECL”) model, will require institutions to calculate all probable and estimable losses that are expected to be incurred through the loan's entire life. ASU 2016-13 also requires the allowance for credit losses for purchased financial assets with credit deterioration since origination to be determined in a manner similar to that of other financial assets measured at amortized cost; however, the initial allowance will be added to the purchase price rather than recorded as credit loss expense. The disclosure of credit quality indicators related to the amortized cost of financing receivables will be further disaggregated by year of origination (or vintage). Institutions are to apply the changes through a cumulative-effect adjustment to their retained earnings as of the beginning of the first reporting period in which the standard is effective. The amendments are effective for fiscal years beginning after December 15, 2019. Early application will be permitted for fiscal years beginning after December 15, 2018. Management has formed a CECL committee that is evaluating the data gathering requirements, available economic forecasting and loss estimation models and potential software that would be employed by the Company to facilitate the adoption of this guidance and its required disclosures on the Company’s consolidated financial statements. Upon adoption, management anticipates an initial one-time increase in the allowance for loan losses along with a corresponding decrease in capital as permitted by the standard.

In January 2017, FASB issued ASU 2017-4, Intangible-Goodwill and Other (Topic 350), to simplify accounting for goodwill impairment. The new guidance will simplify financial reporting because it eliminates the need to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. The revised guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for any impairment tests performed after January 1, 2017. Poage is currently evaluating the impact of the new guidance on its consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-08, Receivables-Nonrefundable Fee and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities. The amendments affect all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer. The amendments require the premium for certain callable debt securities to be amortized to the earliest call date. The amendments are effective for public companies for annual periods beginning after December 15, 2019. The adoption of ASU No. 2017-08 is not expected to have a material effect on the Company’s consolidated operating results or financial condition.

NOTE 4 - SECURITIES AVAILABLE FOR SALE

The amortized cost and fair value of securities available for sale at March 31, 2018 and December 31, 2017 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows (in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
March 31, 2018
States and political subdivisions	$	18,629	$	127	$	(217	)	$	18,539
U.S. Government agencies and sponsored entities		3,500		-		(66	)		3,434
Mortgage-backed securities: residential		29,482		-		(619	)		28,863
Collateralized mortgage obligations		5,984		-		(168	)		5,816
SBA loan pools		10,460		-		(220	)		10,240
Total securities	$	68,055	$	127	$	(1,290	)	$	66,892

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
December 31, 2017
States and political subdivisions	$	19,082	$	190	$	(108	)	$	19,164
U.S. Government agencies and sponsored entities		3,500		-		(50	)		3,450
Mortgage-backed securities: residential		27,449		44		(226	)		27,267
Collateralized mortgage obligations		5,048		-		(93	)		4,955
SBA loan pools		9,379		-		(85	)		9,294
Total securities	$	64,458	$	234	$	(562	)	$	64,130

There were no sales of securities for the three months ended March 31, 2018 and 2017.

The amortized cost and fair value of the securities portfolio at March 31, 2018 are shown in the following table by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately (in thousands):

	March 31,
	2018
	Amortized		Fair
	Cost		Value

Within one year	$	925	$	926
One to five years		8,894		8,832
Five to ten years		8,691		8,683
Beyond ten years		3,619		3,532
Mortgage-backed securities and collateralized mortgage obligations		35,466		34,679
SBA loan pools		10,460		10,240
Total	$	68,055	$	66,892

The following table summarizes the securities with unrealized losses at March 31, 2018 and December 31, 2017, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

	Less Than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
March 31, 2018
States and political subdivisions	$	6,923	$	(143	)	$	1,001	$	(74	)	$	7,924	$	(217	)
U.S. Government agencies and sponsored entities		989		(11	)		2,445		(55	)		3,434		(66	)
Mortgage-backed securities: residential		26,625		(535	)		2,238		(84	)		28,863		(619	)
Collateralized mortgage obligations		3,184		(58	)		2,632		(110	)		5,816		(168	)
SBA loan Pools		7,525		(163	)		2,715		(57	)		10,240		(220	)
Total available-for-sale securities	$	45,246	$	(910	)	$	11,031	$	(380	)	$	56,277	$	(1,290	)

	Less Than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
December 31, 2017
States and political subdivisions	$	5,080	$	(56	)	$	1,024	$	(52	)	$	6,104	$	(108	)
U.S. Government agencies and sponsored entities		992		(8	)		2,458		(42	)		3,450		(50	)
Mortgage-backed securities: residential		19,256		(181	)		2,394		(45	)		21,650		(226	)
Collateralized mortgage obligations		1,954		(15	)		3,001		(78	)		4,955		(93	)
SBA loan Pools		6,565		(66	)		1,343		(19	)		7,908		(85	)
Total available-for-sale securities	$	33,847	$	(326	)	$	10,220	$	(236	)	$	44,067	$	(562	)

Unrealized losses on bonds have not been recognized into income because the issuers of the bonds are of high credit quality, management does not intend to sell, and it is not more likely than not that management would be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates. The fair value is expected to recover as the bonds approach maturity.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement, and 2) OTTI related to other factors, which is recognized in other comprehensive income. Credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.

NOTE 5 – LOANS

Loans at March 31, 2018 and December 31, 2017 were as follows (in thousands):

	March 31,		December 31,
	2018		2017
Real estate:
One to four family	$	165,253	$	170,754
Multi-family		9,009		6,505
Commercial real estate		85,215		84,312
Construction and land		9,131		10,004
		268,608		271,575

Commercial and industrial		35,850		33,664

Consumer
Home equity loans and lines of credit		10,732		10,707
Motor vehicle		10,259		10,368
Other		7,301		7,420
		28,292		28,495

Total		332,750		333,734
Less: Net deferred loan fees		506		499
Allowance for loan losses		4,942		4,681
	$	327,302	$	328,554

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment method as of March 31, 2018 and December 31, 2017. Accrued interest receivable and net deferred loan fees are not considered significant and therefore are not included in the loan balances presented in the table below (in thousands):

March 31, 2018
	Allowance for Loan Losses								Loan Balances
	Individually		Purchased		Collectively				Individually		Purchased		Collectively
	Evaluated for		Credit-Impaired		Evaluated for				Evaluated for		Credit-Impaired		Evaluated for
Loan Segment	Impairment		Loans		Impairment		Total		Impairment		Loans		Impairment		Total

Real estate	$	766	$	-	$	2,350	$	3,116	$	7,698	$	1,287	$	259,623	$	268,608
Commercial and industrial		1,369		-		218		1,587		4,857		-		30,993		35,850
Consumer		4		-		235		239		57		-		28,235		28,292
Total	$	2,139	$	-	$	2,803	$	4,942	$	12,612	$	1,287	$	318,851	$	332,750

December 31, 2017
	Allowance for Loan Losses								Loan Balances
	Individually		Purchased		Collectively				Individually		Purchased		Collectively
	Evaluated for		Credit-Impaired		Evaluated for				Evaluated for		Credit-Impaired		Evaluated for
Loan Segment	Impairment		Loans		Impairment		Total		Impairment		Loans		Impairment		Total
Real estate	$	624	$	-	$	2,232	$	2,856	$	5,523	$	1,305	$	264,747	$	271,575
Commercial and industrial		1,290		-		275		1,565		2,612		-		31,052		33,664
Consumer		5		-		255		260		60		-		28,435		28,495
Total	$	1,919	$	-	$	2,762	$	4,681	$	8,195	$	1,305	$	324,234	$	333,734

The following table presents information related to impaired loans by class of loans as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018						December 31, 2017
					Allowance						Allowance
	Unpaid				for Loan		Unpaid				for Loan
	Principal		Recorded		Losses		Principal		Recorded		Losses
	Balance		Investment		Allocated		Balance		Investment		Allocated
With no related allowance recorded:
Real Estate:
One to four family	$	603	$	559	$	-	$	699	$	655	$	-
Multi-family		-		-		-		-		-		-
Commercial real estate		2,463		2,322		-		2,593		2,452		-
Construction and land		176		176		-		179		179		-
Commercial and industrial		1,136		1,136		-		136		136		-
Consumer:
Home equity and lines of credit		28		28		-		31		31		-
Motor vehicle		-		-		-		-		-		-
Other		-		-		-		-		-		-
Subtotal	$	4,406	$	4,221	$	-	$	3,638	$	3,453	$	-

With a related allowance recorded:
Real Estate:
One to four family	$	3,276	$	3,276	$	512	$	1,091	$	988	$	367
Multi-family		-		-		-		-		-		-
Commercial real estate		1,365		1,365		254		1,249		1,249		257
Construction and land		-		-		-		-		-		-
Commercial and industrial		3,721		3,721		1,369		2,476		2,476		1,290
Consumer:
Home equity and lines of credit		29		29		4		29		29		5
Motor vehicle		-		-		-		-		-		-
Other		-		-		-		-		-		-
Subtotal		8,391		8,391		2,139		4,845		4,742		1,919
Total	$	12,797	$	12,612	$	2,139	$	8,483	$	8,195	$	1,919

The recorded investment in loans excludes accrued interest receivable and loan origination fees, net, due to immateriality. For purposes of this disclosure, the unpaid balance is not reduced for partial charge-offs.

The following tables present the average balance of loans individually evaluated for impairment and interest income recognized on these loans for the three months ended March 31, 2018 and 2017 (in thousands):

	Three months ended March 31, 2018						Three months ended March 31, 2017
	Average		Interest		Cash Basis		Average		Interest		Cash Basis
	Recorded		Income		Interest		Recorded		Income		Interest
	Investment		Recognized		Recognized		Investment		Recognized		Recognized
Real Estate:
One to four family	$	2,739	$	40	$	31	$	1,614	$	14	$	-
Multi-family		-		-		-		-		-		-
Commercial real estate		3,694		32		25		3,325		36		-
Construction and land		178		2		2		119		1		-
Commercial and industrial		3,735		-		-		219		-		-
Consumer:
Home equity and lines of credit		59		-		-		33		-		-
Motor vehicle		-		-		-		-		-		-
Other		-		-		-		-		-		-
Total	$	10,406	$	74	$	58	$	5,310	$	51	$	-

The following tables set forth an analysis of our allowance for loan losses for the three months ended March 31, 2018 and 2017 (in thousands):

Three months ended				Commercial
March 31, 2018	Real Estate			and Industrial		Consumer			Total

Allowance for loan losses:
Beginning balance	$	2,856		$	1,565	$	260		$	4,681
Provision for loan losses		507			14		(24	)		497
Loans charged-off		(252	)		-		(32	)		(284	)
Recoveries		5			8		35			48
Total ending allowance balance	$	3,116		$	1,587	$	239		$	4,942

Three months ended				Commercial
March 31, 2017	Real Estate			and Industrial			Consumer			Total

Allowance for loan losses:
Beginning balance	$	1,946		$	218		$	185		$	2,349
Provision for loan losses		284			20			49			353
Loans charged-off		(198	)		(21	)		(55	)		(274	)
Recoveries		3			14			18			35
Total ending allowance balance	$	2,035		$	231		$	197		$	2,463

Nonaccrual loans, and loans past due 90 days still on accrual status, consist of smaller balance homogeneous loans that are collectively evaluated for impairment.

The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual status, by class of loans, as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018				December 31, 2017
			Loans Past Due				Loans Past Due
			Over 90 Days				Over 90 Days
	Nonaccrual		Still Accruing		Nonaccrual		Still Accruing
Real estate:
One to four family	$	2,241	$	-	$	2,911	$	-
Multi-family		-		-		-		-
Commercial real estate		1,664		-		1,677		-
Construction and land		33		-		34		-
Commercial and industrial		3,637		-		1,638		-
Consumer:
Home equity loans and lines of credit		62		-		66		-
Motor vehicle		24		-		26		-
Other		4		-		6		-
Total	$	7,665	$	-	$	6,358	$	-

The following tables present the aging of the recorded investment in past due loans as of March 31, 2018 and December 31, 2017 by class of loans. Non-accrual loans of $7.7 million as of March 31, 2018 and $6.4 million at December 31, 2017 are included in the tables below and have been categorized based on their payment status (in thousands):

	30 - 59		60 - 89		Greater than				Purchased
	Days		Days		89 Days		Total		Credit-Impaired		Loans Not
	Past Due		Past Due		Past Due		Past Due		Loans		Past Due		Total
March 31, 2018
Real estate:
One to four family	$	839	$	493	$	760	$	2,092	$	578	$	162,583	$	165,253
Multi-family		-		-		-		-		-		9,009		9,009
Commercial real estate		361		-		1,365		1,726		709		82,780		85,215
Construction and land		-		-		-		-		-		9,131		9,131
Commercial and industrial		974		35		3,631		4,640		-		31,210		35,850
Consumer:
Home equity loans and lines of credit		-		-		29		29		-		10,703		10,732
Motor vehicle		3		4		21		28		-		10,231		10,259
Other		7		-		-		7		-		7,294		7,301
Total	$	2,184	$	532	$	5,806	$	8,522	$	1,287	$	322,941	$	332,750

	30 - 59		60 - 89		Greater than				Purchased
	Days		Days		89 Days		Total		Credit-Impaired		Loans Not
	Past Due		Past Due		Past Due		Past Due		Loans		Past Due		Total
December 31, 2017
Real estate:
One to four family	$	1,615	$	628	$	1,199	$	3,442	$	590	$	166,722	$	170,754
Multi-family		-		-		-		-		-		6,505		6,505
Commercial real estate		249		315		1,367		1,931		715		81,666		84,312
Construction and land		-		-		-		-		-		10,004		10,004
Commercial and industrial		1,133		4		1,631		2,768		-		30,896		33,664
Consumer:
Home equity loans and lines of credit		-		-		60		60		-		10,647		10,707
Motor vehicle		40		-		21		61		-		10,307		10,368
Other		3		6		-		9		-		7,411		7,420
Total	$	3,040	$	953	$	4,278	$	8,271	$	1,305	$	324,158	$	333,734

Troubled Debt Restructurings:

As of March 31, 2018, the Company had a recorded investment in six TDRs which totaled $3.4 million. There were five TDRs which totaled $3.2 million at December 31, 2017. A less than market rate and extended term was granted as concessions for TDRs. No additional charge-off has been made for the loan relationships. No additional commitments to lend have been made to the borrower. The Company has allocated $153,000 of specific allowance for the loan relationships at March 31, 2018 and December 31, 2017.

March 31, 2018	TDRs on
(in thousands)	Non-accrual		Other TDRs		Total TDRs
Real Estate:
One to four family	$	28	$	16	$	44
Multi-family		-		-		-
Commercial real estate		923		2,195		3,118
Construction and land		-		-		-
Commercial and industrial		-		246		246
Consumer:
Home equity loans and lines of credit		-		-		-
Motor vehicle		-		-		-
Other		-		-		-
Total	$	951	$	2,457	$	3,408

December 31, 2017	TDRs on
(in thousands)	Non-accrual		Other TDRs		Total TDRs
Real Estate:
One to four family	$	30	$	16	$	46
Multi-family		-		-		-
Commercial real estate		933		2,195		3,128
Construction and land		-		-		-
Commercial and industrial		-		-		-
Consumer:
Home equity loans and lines of credit		-		-		-
Motor vehicle		-		-		-
Other		-		-		-
Total	$	963	$	2,211	$	3,174

There were no TDRs considered to be in default within twelve months of modification as of March 31, 2018. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. The following table presents TDRs that occurred during the three months ended March 31, 2018 and 2017 (dollars in thousands):

	Three months ended March 31, 2018						Three months ended March 31, 2017
Loan Class	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Real Estate:
One to four family		-	$	-	$	-		1	$	114	$	114
Multi-family		-		-		-		-		-		-
Commercial real estate		-		-		-		-		-		-
Construction and land		-		-		-		-		-		-
Commercial and industrial		1		246		246		-		-		-
Consumer:
Home equity loans and lines of credit		-		-		-		-		-		-
Motor vehicle		-		-		-		-		-		-
Other		-		-		-		-		-		-
Total		1	$	246	$	246		1	$	114	$	114

CREDIT QUALITY INDICATORS:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes all non-homogeneous loans, such as commercial and commercial real estate loans. The analysis for residential real estate and consumer loans primarily includes review of past due status. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings:

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

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

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

Loss. Loans classified as loss are considered uncollectable and of such little value that continuing to carry them as an asset is not feasible. Loans will be classified as a loss when it is not practical or desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands):

			Special
March 31, 2018	Pass		Mention		Substandard		Doubtful		Loss		Total
One to four family	$	155,887	$	1,745	$	7,621	$	-	$	-	$	165,253
Multi-family		9,009		-		-		-		-		9,009
Commercial real estate		77,192		2,930		5,093		-		-		85,215
Construction and land		8,826		129		176		-		-		9,131
Commercial and industrial		27,514		1,403		6,933		-		-		35,850
Home equity loans and lines of credit		10,579		-		153		-		-		10,732
Motor vehicle		10,208		9		42		-		-		10,259
Other		7,297		-		4		-		-		7,301
Total	$	306,512	$	6,216	$	20,022	$	-	$	-	$	332,750

			Special
December 31, 2017	Pass		Mention		Substandard		Doubtful		Loss		Total
One to four family	$	163,709	$	1,673	$	5,372	$	-	$	-	$	170,754
Multi-family		6,505		-		-		-		-		6,505
Commercial real estate		76,226		2,957		5,129		-		-		84,312
Construction and land		9,825		-		179		-		-		10,004
Commercial and industrial		25,891		2,602		5,171		-		-		33,664
Home equity loans and lines of credit		10,549		0		158		-		-		10,707
Motor vehicle		10,291		9		68		-		-		10,368
Other		7,413		-		7		-		-		7,420
Total	$	310,409	$	7,241	$	16,084	$	-	$	-	$	333,734

There were $1.1 million and $1.1 million purchased credit impaired (“PCI”) loans included in substandard loans at March 31, 2018 and December 31, 2017, respectively.

The Company holds purchased loans without evidence of credit quality deterioration. In addition, the Company holds purchased loans for which there was, at their acquisition date, evidence of deterioration of credit quality since their origination and it was probable that all contractually required payments would not be collected. A summary of non-impaired purchased loans and credit-impaired purchased loans with the carrying amount of those loans is as follows at March 31, 2018 and December 31, 2017 (in thousands):

	Non-impaired		Credit-impaired
	Purchased		Purchased
Purchased Loans as of March 31, 2018	Loans		Loans
Real estate:
One to four family	$	24,701	$	578
Multi-family		1,808		-
Commercial real estate		14,259		709
Construction and land		496		-
Commercial and industrial		1,262		-
Consumer loans:
Home equity loans and lines of credit		926		-
Motor vehicle		27		-
Other		480		-
Total loans	$	43,959	$	1,287

	Non-impaired		Credit-impaired
	Purchased		Purchased
Purchased Loans as of December 31, 2017	Loans		Loans
Real estate:
One to four family	$	25,437	$	590
Multi-family		1,829		-
Commercial real estate		15,157		715
Construction and land		510		-
Commercial and industrial		1,359		-
Consumer loans:
Home equity loans and lines of credit		959		-
Motor vehicle		43		-
Other		521		-
Total loans	$	45,815	$	1,305

For the purchased loans disclosed above, the Company did not increase the allowance for loan losses for the three months ended March 31, 2018 and 2017.

The following table presents the composition of the acquired loans at March 31, 2018:

As of March 31, 2018
	Contractual		Remaining			Carrying
(in thousands)	Amount		Discount			Amount
Real estate:
One to four family	$	25,550	$	(271	)	$	25,279
Multi-family		1,809		(1	)		1,808
Commercial real estate		15,121		(153	)		14,968
Construction and land		497		(1	)		496
Commercial and industrial		1,262		-			1,262
Consumer loans:
Home equity loans and lines of credit		927		(1	)		926
Motor vehicle		27		-			27
Other		480		-			480
Total loans	$	45,673	$	(427	)	$	45,246

As of December 31, 2017
	Contractual		Remaining			Carrying
(in thousands)	Amount		Discount			Amount
Real estate:
One to four family	$	26,335	$	(308	)	$	26,027
Multi-family		1,832		(3	)		1,829
Commercial real estate		16,050		(178	)		15,872
Construction and land		511		(1	)		510
Commercial and industrial		1,360		(1	)		1,359
Consumer loans:
Home equity loans and lines of credit		962		(3	)		959
Motor vehicle		44		(1	)		43
Other		522		(1	)		521
Total loans	$	47,616	$	(496	)	$	47,120

The following tables presents the purchased loans that are included within the scope of ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, as of March 31, 2018 and December 31, 2017.

(in thousands)	March 31, 2018		December 31, 2017

Carrying amount	$	1,287	$	1,305
Non-accretable difference		210		214
Accretable yield		94		100
Contractually-required principal and interest payments	$	1,591	$	1,619

The Company adjusted interest income to recognize $6,000 and $12,000 of accretable yield on credit-impaired purchased loans for the three months ended March 31, 2018 and 2017, respectively.

Accretable yield, or income expected to be collected, is as follows for the three months ended March 31, 2018 and 2017 (in thousands):

	2018			2017

Balance at January 1	$	100		$	146
New Loans Purchased		-			-
Accretion of income		(6	)		(12	)
Reclassifications from nonaccretable difference		-			-
Disposals		-			-
Balance at March 31	$	94		$	134

NOTE 6 – FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS

Advances from the FHLB at March 31, 2018 and December 31, 2017 were as follows (dollars in thousands):

		March 31, 2018				December 31, 2017
Maturities July 2018 through January 2029, fixed rate at rates from 2.16% to 4.27%, weighted average rate of 2.44% at March 31, 2018 and 1.97% at December 31, 2017		$	6,988			$	7,419

Payments contractually required over the next five years are as follows as of March 31, 2018 (in thousands):

remainder for year ending 2018	$	6,324
2019		223
2020		88
2021		74
2022		63
Thereafter		216
Total	$	6,988

There were no other borrowings at March 31, 2018 and December 31, 2017. On June 16, 2016, Poage Bankshares, Inc. executed a $2.0 million commercial line of credit secured with Town Square Bank common stock, with an unaffiliated lender. The initial variable rate on the line of credit was 4.0% with an interest rate equal to the Wall Street Prime plus 0.50%. At March 31, 2018, the interest rate on the line of credit was 5.25%. The line of credit matures June 16, 2018.

NOTE 7 – FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair value:

Securities: The fair values for securities are determined by quoted market prices, if available (Level 1). If quoted market prices are not available, fair values are based on quoted market prices of similar securities (Level 2). This includes the use of “matrix pricing” used to value debt securities absent the exclusive use of quoted prices. For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows (Level 3).

Impaired Loans: The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available for similar loans and collateral underlying such loans. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted in accordance with the allowance policy.

Other Real Estate Owned: Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate owned (OREO) are measured at the lower of carrying amount or fair value, less estimated costs to sell. Fair values are generally based on third party appraisals of the property resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less estimated costs to sell, an impairment loss is recognized.

Assets and liabilities measured at fair value on a recurring basis, at March 31, 2018 and December 31, 2017, are as follows (in thousands):

	Fair Value Measurements at
	March 31, 2018 Using:
			Quoted Prices in		Significant		Significant
			Active Markets for		Other Observable		Unobservable
	Carrying		Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Securities:
States and political subdivisions	$	18,539	$	-	$	18,539	$	-
U.S. Government agencies and sponsored entities		3,434		-		3,434		-
Mortgage backed securities: residential		28,863		-		28,863		-
Collateralized mortgage obligations		5,816		-		5,816		-
SBA loan pools		10,240		-		10,240		-
Total securities	$	66,892	$	-	$	66,892	$	-

	Fair Value Measurements at
	December 31, 2017 Using:
			Quoted Prices in		Significant		Significant
			Active Markets for		Other Observable		Unobservable
	Carrying		Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Securities:
States and political subdivisions	$	19,164	$	-	$	19,164	$	-
U.S. Government agencies and sponsored entities		3,450		-		3,450		-
Mortgage backed securities: residential		27,267		-		27,267		-
Collateralized mortgage obligations		4,955		-		4,955		-
SBA loan pools		9,294		-		9,294		-
Total securities	$	64,130	$	-	$	64,130	$	-

There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2018.

Assets measured at fair value on a non-recurring basis at March 31, 2018 and December 31, 2017 are summarized below (in thousands):

	Fair Value Measurements at
	March 31, 2018 Using:
			Quoted Prices in		Significant		Significant
			Active Markets for		Other Observable		Unobservable
	Carrying		Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)

Impaired loans
Residential real estate, net	$	2,848	$	-	$	-	$	2,848
Commercial real estate, net		1,203		-		-		1,203
Commercial and industrial, net		2,106		-		-		2,106
Consumer loan HELOC, net		25		-		-		25

Other real estate owned
Residential real estate, net	$	142	$	-	$	-	$	142

	Fair Value Measurements at
	December 31, 2017 Using:
			Quoted Prices in		Significant		Significant
			Active Markets for		Other Observable		Unobservable
	Carrying		Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans
Residential real estate, net	$	621	$	-	$	-	$	621
Commercial real estate, net		992		-		-		992
Commercial and industrial, net		1,186		-		-		1,186
Consumer loan HELOC, net		24		-		-		24

Other real estate owned
Residential real estate, net	$	610	$	-	$	-	$	610

Commercial and residential real estate properties classified as OREO are measured at fair value, less estimated costs to sell. Fair values are based on recent real estate appraisals. These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Appraisals for real estate properties classified as other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Bank’s management. The appraisal values are discounted to allow for estimated selling expenses and fees, and the discounts range from 5% to 10%.

At March 31, 2018, impaired loans recorded at fair value had a net carrying amount of $6.1 million equal to the outstanding balance of $8.3 million, net of a valuation allowance of $2.2 million. At December 31, 2017, impaired loans recorded at fair value had a net carrying amount of $2.8 million equal to the outstanding balance of $4.7 million, net of a valuation allowance of $1.9 million. There were charge-offs of $0 and $13,000 for the three months ended March 31, 2018 and 2017, respectively. The change in specific reserve on impaired loans resulted in an increase to the provision for loan losses of $555,000 and $71,000 for the three months ended March 31, 2018 and 2017, respectively.

At March 31, 2018, OREO recorded at fair value had a net carrying amount of $142,000 equal to the outstanding balance of $237,000, net of a valuation allowance of $95,000. There were $3,000 in write-downs for the three months ended March 31, 2018. There were $10,000 in write-downs for the three months ended March 31, 2017. At December 31, 2017, other real estate owned recorded at fair value had a net carrying amount of $610,000, equal to the outstanding balance of $1.03 million, net of a valuation allowance of $420,000.

The carrying amounts and estimated fair values of financial instruments at March 31, 2018 and December 31, 2017 are as follows (in thousands):

			Fair Value Measurements
	Carrying
March 31, 2018	Value		Level 1		Level 2		Level 3		Total

Financial assets
Cash and cash equivalents	$	23,320	$	23,320	$	-	$	-	$	23,320
Interest bearing deposits		3,237		-		3,237		-		3,237
Securities		66,892		-		66,892		-		66,892
Restricted stock		3,276		N/A		N/A		N/A		N/A
Loans held for sale		291		-		291		-		291
Loans, net		327,302		-		-		327,975		327,975
Accrued interest receivable		1,288		-		337		951		1,288

Financial liabilities
Deposits	$	374,658	$	217,086	$	155,004	$	-	$	372,090
Federal Home Loan Bank advances		6,988		4,999		1,976		-		6,975
Subordinated debenture		2,906		-		2,873		-		2,873
Accrued interest payable		30		-		30		-		30

			Fair Value Measurements
	Carrying
December 31, 2017	Value		Level 1		Level 2		Level 3		Total

Financial assets
Cash and cash equivalents	$	20,499	$	20,499	$	-	$	-	$	20,499
Interest bearing deposits		2,988		-		2,988		-		2,988
Securities		64,130		-		64,130		-		64,130
Restricted stock		3,276		N/A		N/A		N/A		N/A
Loans held for sale		256		-		256		-		256
Loans, net		328,554		-		-		328,236		328,236
Accrued interest receivable		1,413		-		333		1,080		1,413

Financial liabilities
Deposits	$	370,050	$	212,625	$	154,859	$	-	$	367,484
Federal Home Loan Bank advances		7,419		4,999		2,404		-		7,403
Subordinated debenture		2,890		-		2,873		-		2,873
Accrued interest payable		24		-		24		-		24

The methods and assumptions, not previously presented, used to estimate fair values are described as follows:

Cash and Cash Equivalents:

The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

Restricted Stock:

It is not practical to determine the fair value of FHLB and Bankers Bank of Kentucky stock due to restrictions placed on their transferability.

Loans:

Fair values of loans, excluding loans held for sale, are estimated as follows: ASU 2016-1, "Recognition and Measurement of Financial Assets and Financial Liabilities," requires the Company to use the exit price notion when measuring fair value of financial instruments for disclosure purposes effective January 1, 2018, therefore the fair value presented in the following table may not be comparable to prior period. For performing loans, the fair value is determined based on a discounted cash flow analysis (income approach). The discounted cash flow was based on contractual maturity of the loan and market indications of rates, prepayment speeds, defaults and credit risk resulting in Level 3 classification. For non-performing loans, the fair value is determined based on the estimated values of the underlying collateral or individual analysis of receipts (asset approach) resulting in Level 3 classification. At December 31, 2017, the fair values of loans, excluding loans held for sale, were estimated as follows: for variable rate loans that reprice frequently and with no significant change in credit risk, fair values were based on carrying values resulting in a Level 3 classification. Fair values for other loans were estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans were valued as described previously.

The fair value of loans held for sale is based upon estimated values received from independent third party purchasers. These loans are intended for sale and the Company believes that the fair value is the best indicator of the resolution of these loans resulting in a Level 2 classification.

Deposits:

The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and certain types of money market accounts) are by definition equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 1 classification. The carrying amounts of variable rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date resulting in a Level 1 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

Other borrowings, Federal Home Loan Bank advances and Subordinate debenture:

The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

Accrued Interest Receivable/Payable:

The carrying amounts of accrued interest approximate fair value and are classified by level consistent with the level of the related assets or liabilities.

NOTE 8 - ESOP

Employees participate in an Employee Stock Ownership Plan (“ESOP”). The ESOP borrowed from the Company to purchase 269,790 shares of the Company’s common stock at $10 per share. The Company makes discretionary contributions to the ESOP, and pays dividends on unallocated shares to the ESOP, and the ESOP uses funds it receives to repay the loan. When loan payments are made, ESOP shares are allocated to participants based on relative compensation and expense is recorded. Dividends on allocated shares increase participant accounts. Participants receive the shares at the end of employment.

There were no contributions to the ESOP for the three months ended March 31, 2018 and 2017.

Shares held by the ESOP at March 31, 2018 and December 31, 2017 were as follows (dollars in thousands):

	March 31,		December 31,
	2018		2017
Allocated to participants		64,148		64,148
Committed to be released		16,907		13,538
Unearned		182,051		185,420
Total ESOP shares		263,106		263,106

Fair value of unearned shares	$	3,526	$	3,894

NOTE 9 – EARNINGS PER SHARE

The factors used in the earnings per share computation for the three months ended March 31, 2018 and 2017, were as follows (dollar amounts in thousands, except per share data):

	Three months ended
	March 31,
	2018		2017
Basic
Net income	$	229	$	463
Less: Earnings allocated to participating securities		2		4
Net income available to common shareholders	$	227	$	459

Weighted average common shares outstanding		3,509,880		3,697,374
Less: Average unallocated ESOP shares		184,253		197,792
Average participating shares		15,222		30,471
Average shares		3,310,405		3,469,111

Basic earnings per common share	$	0.07	$	0.13

Diluted
Net income available to common shareholders	$	227	$	459

Weighted average common shares outstanding for basic earnings per common share		3,310,405		3,469,111
Add: Dilutive effects of assumed exercises of stock options		31,192		31,657
Average shares and dilutive potential common shares		3,341,597		3,500,768

Diluted earnings per common share	$	0.07	$	0.13

There were no stock options considered antidilutive for the three months ended March 31, 2018 and 2017.

NOTE 10 – STOCK BASED COMPENSATION

On January 8, 2013, the shareholders of Poage Bankshares, Inc. approved the Poage Bankshares, Inc. 2013 Equity Incentive Plan (the “Plan”) for employees and directors of the Company. The Plan authorizes the issuance of up to 472,132 shares of the Company’s common stock, with no more than 134,895 of shares as restricted stock awards and 337,237 as stock options, either incentive stock options or non-qualified stock options. The exercise price of options granted under the Plan may not be less than the fair market value on the date the stock option is granted. The compensation committee of the board of directors has sole discretion to determine the amount and to whom equity incentive awards are granted.

The following table summarizes stock option activity for the three months ended March 31, 2018:

			Weighted Average
	Options		Exercise Price

Outstanding -December 31, 2017		141,850	$	14.99
Granted		-		-
Exercised and settled		-		-
Forfeited		-		-
Outstanding -March 31, 2018		141,850	$	14.99

Fully vested and exercisable at March 31, 2018		103,600
Fully vested and exercisable at December 31, 2017		99,600
Expected to vest in future periods		38,250

Stock options are assumed to be earned ratably over their respective vesting periods and charged to compensation expense based upon their grant date fair value and the number of options assumed to be earned. At March 31, 2018, 141,850 options were outstanding and 103,600 options were fully vested and exercisable with intrinsic value of $621,000 and $454,000, respectively. At December 31, 2017, 141,850 options were outstanding and 99,600 options were fully vested and exercisable with intrinsic value of $853,000 and $599,000, respectively.

During the three months ended March 31, 2018, 4,000 options vested. Stock-based compensation expense for stock options included in salaries and benefits for the three months ended March 31, 2018 and 2017 was $18,000 and $18,000, respectively. Total unrecognized compensation cost related to non-vested stock options was $21,000 at March 31, 2018 and is expected to be recognized over a period of 2.1 years.

The following table summarizes non-vested restricted stock activity for the three months ended March 31, 2018:

Balance -December 31, 2017			15,222
Granted			-
Forfeited			-
Vested			-
Balance -March 31, 2018			15,222

The fair value of the restricted stock awards is amortized to compensation expense over the vesting period (generally five years) and is based on the market price of the Company’s common stock at the date of the grant multiplied by the number of shares granted that are expected to vest. Stock-based compensation expense for the restricted stock included in salaries and benefits for the three months ended March 31, 2018 and 2017 was $58,000 and $58,000, respectively. Unrecognized compensation expense for non-vested restricted stock awards was $11,000 at March 31, 2018 and is expected to be recognized over a weighted-average period of 8 months.

NOTE 11 – ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table is changes in Accumulated Other Comprehensive Income by component, net of tax, for the three months ended March 31, 2018 and 2017 (in thousands):

	Unrealized Gains and Losses on Available-for-Sale Securities
	Three months ended
	March 31,
	2018			2017
Beginning balance	$	(260	)	$	(153	)

Other comprehensive income (loss), net of tax before reclassification		(659	)		285

Amounts reclassified from accumulated other comprehensive income for loss on call of securities, net of tax expense of $0, and $0 respectively		-			-

Net current period other comprehensive income (loss)		(659	)		285

Ending Balance	$	(919	)	$	132

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Critical Accounting Policies

There are no material changes to the critical accounting policies disclosed in the Annual Report on Form 10-K for Poage Bankshares, Inc. for the year ended December 31, 2017, as filed with the Securities and Exchange Commission.

Forward-Looking Statements

This Quarterly Report contains forward-looking statements, which can be identified by the use of such words as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “will,” “may,” and similar expressions. These forward-looking statements include, but are not limited to:

	>	statements of our goals, intentions and expectations;

	>	statements regarding our business plans and prospects and growth and operating strategies;

	>	statements regarding the credit quality of our loan and investment portfolios;

	>	estimates of our risks and future costs and benefits;

	>	non-historical statements about our financial condition, results of operations and business of Poage Bankshares.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Except as may be required by law, we do not take any obligation to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q. You should not place undue reliance on such forward-looking statements.

The following factors, among others, could cause the actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

our ability to manage our operations under the current adverse economic conditions (including real estate values, loan demand, inflation, commodity prices and unemployment levels) nationally and in our market area;

adverse changes in the financial industry, securities, credit and national local real estate markets (including real estate values);

significant increases in our loan losses, including as a result of our inability to resolve classified assets, and management’s assumptions in determining the adequacy of the allowance for loan losses;

credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and in our allowance for loan losses and provision for loan losses;

our ability to successfully enhance and maintain internal controls;

competition among depository and other financial institutions;

our success in increasing our commercial business and commercial real estate loans;

our ability to improve our asset quality even as we increase our commercial business, commercial real estate and multi-family lending;

our success in introducing new financial products;

our ability to attract and maintain deposits;

decreases in our asset quality;

changes in interest rates generally, including changes in the relative differences between short term and long term interest rates and in deposit interest rates, that may affect our net interest margin and funding sources;

fluctuations in the demand for loans, which may be affected by the number of unsold homes, land and other properties in our market areas and by declines in the value of real estate in our market area;

changes in consumer spending, borrowing and savings habits;

	>	declines in the yield on our assets resulting from the current interest rate environment;

	>	increases in the cost of funds resulting from the general economic conditions;

risks related to a high concentration of loans secured by real estate located in our market area;

the results of examinations by our regulators, including the possibility that our regulators may, among other things, require us to increase our reserve for loan losses, write down assets, change our regulatory capital position, limit our ability to borrow funds or maintain or increase deposits, or prohibit us from paying dividends, which could adversely affect our dividends and earnings;

changes in laws or government regulations or policies affecting financial institutions, including the Dodd-Frank Act, which could result in, among other things, increased deposit insurance premiums and assessments, capital requirements (particularly the new capital regulations), regulatory fees and compliance costs and the resources we have available to address such changes;

changes in the level of government support of housing finance;

our ability to enter new markets successfully and capitalize on growth opportunities

changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board;

changes in our organization, compensation and benefit plans and our ability to retain key members of our senior management team;

loan delinquencies and changes in the underlying cash flows of our borrowers;

the failure or security breaches of computer systems on which we depend;

the ability of key third-party providers to perform their obligations to us; and

changes in the financial condition or future prospects of issuers of securities that we own.

Comparison of Financial Condition at March 31, 2018 and December 31, 2017

Total assets at March 31, 2018 increased $3.4 million, or 0.8%, to $450.3 million from $446.9 million at December 31, 2017. The increase was attributed to an increase of $4.6 million in deposits.

Cash and Cash equivalents increased by $2.8 million, or 13.8%, to $23.3 million at March 31, 2018 from $20.5 million at December 31, 2017. The increase in cash was primarily attributable to an increase in deposits, offset by cash used to purchase securities available for sale.

Interest-bearing deposits in other financial institutions increased $249,000, or 8.3%, to $3.2 million at March 31, 2018 from $3.0 million at December 31, 2017 due to the purchase of a certificate of deposit.

Securities available for sale increased by $2.8 million, or 4.3%, to $66.9 million at March 31, 2018 from $64.1 million at December 31, 2017. This increase is primarily due to $6.2 million in purchases, offset by a decrease of $835,000 in fair value on securities available for sale and by maturities, calls and principal payments of $2.5 million.

Loans held for sale increased $35,000, or 13.7%, to $291,000 at March 31, 2018 from $256,000 at December 31, 2017 due to a slight increase in secondary market mortgage lending activity.

Loans, net, decreased $1.3 million, or 0.4%, to $327.3 million at March 31, 2018 from $328.6 million at December 31, 2017. The decrease was primarily attributable to a decrease in one to four family and construction and land loans, offset by an increase in commercial real estate and commercial and industrial loans. Non-performing loans increased $1.3 million, or 20.6%, to $7.7 million at March 31, 2018 from $6.4 million at December 31, 2017.

Deposits increased $4.5 million or 1.2%, to $374.7 million at March 31, 2018 from $370.1 million at December 31, 2017. The increase was attributable to an increase of $2.3 million in non-interest bearing demand deposits and an increase of $2.3 million in savings accounts and money market accounts.

Federal Home Loan Bank advances decreased $431,000, or 5.8%, to $7.0 million at March 31, 2018 from $7.4 million at December 31, 2017 attributable to $5.4 million in maturities and principal payments, offset by $5.0 million in advances.

Subordinated debenture increased by $16,000, or 0.6%, and remained unchanged at $2.9 million at March 31, 2018 and December 31, 2017 due to the amortization of the fair value related to the subordinated debenture assumed in conjunction with acquisition of Town Square Financial Corporation. In December 2006, Town Square Statutory Trust I, a trust formed by Town Square Financial Corporation, closed a pooled private offering of 4,124 trust preferred securities with a liquidation amount of $1,000 per security. The subordinated debt of $2.9 million is shown as a liability because the Company is not considered the primary beneficiary of the Trust. The investment in common stock of the trust is $124,000 and is included in other assets. The subordinated debt has a variable rate of interest equal to the three month London Interbank Offered Rate (LIBOR) plus 1.83%, which was 3.95% at March 31, 2018.

Total shareholders’ equity decreased by $778,000, or 1.3%, to $60.9 million at March 31, 2018 from $61.7 million at December 31, 2017. The decrease resulted from the repurchase of common stock totaling $277,000, the payment of cash dividends totaling $212,000 and a decrease in accumulated other comprehensive income of $659,000, offset by net income of $229,000 and the expense related to the stock based compensation plans of $141,000.

Average Balances and Yields

The following table sets forth average balances, average yields and costs, and certain other information at the dates and for the periods indicated. All average balances are daily average balances. Non-accrual loans are included in the computation of average balances but have been reflected in the tables as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income. Interest income and rates exclude the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis due to immateriality (dollars in thousands).

	For the Three Months Ended March 31,
	2018							2017
	Average		Interest and					Average		Interest and
	Balance		Dividends		Yield/ Cost			Balance		Dividends		Yield/ Cost
Assets:
Interest earning assets:
Loans	$	331,336	$	4,138		5.06	%	$	342,458	$	4,318		5.11	%
Investment securities		66,456		371		2.26	%		58,947		340		2.34	%
Restricted Stock		3,276		44		5.45	%		3,276		34		4.21	%
Other interest earning assets		30,872		73		0.96	%		29,152		56		0.78	%
Total interest earning assets		431,940		4,626		4.34	%		433,833		4,748		4.44	%

Non-interest earning assets		15,962							25,517
Total assets		447,902							459,350

Liabilities and equity:
Interest bearing liabilities:
Interest bearing deposits:
NOW, savings, money market, and other		160,693		122		0.31	%		146,888		90		0.25	%
Certificates of deposit		157,739		528		1.36	%		176,454		492		1.13	%
Total interest bearing deposits		318,432		650		0.83	%		323,342		582		0.73	%

FHLB advances		6,989		35		2.03	%		8,936		39		1.77	%
Subordinated debenture		2,903		52		7.26	%		2,832		45		6.44	%
Total borrowings		9,892		87		3.57	%		11,768		84		2.89	%

Total interest bearing liabilities		328,324		737		0.91	%		335,110		666		0.81	%

Non-interest bearing liabilities:
Non-interest bearing deposits		53,626							52,118
Accrued interest payable		102							130
Other liabilities		4,550							2,895
Total non-interest bearing liabilities		58,278							55,143
Total liabilities		386,602							390,253

Total equity		61,300							69,097
Total liabilities and equity		447,902							459,350

Net interest income				3,889							4,082
Interest rate spread						3.43	%						3.63	%
Net interest margin						3.65	%						3.82	%
Average interest-earning assets to average interest-bearing liabilities						131.56	%						129.46	%

Liquidity and Capital Resources

Our primary sources of funds are deposits and the proceeds from principal and interest payments on loans and investment securities. We also utilize Federal Home Loan Bank advances. While maturities and scheduled amortization of loans and securities are predicable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition. We generally manage the pricing of our deposits to be competitive within our market and to increase core deposit relationships.

Liquidity management is both a daily and long-term responsibility of management. We adjust our investments in liquid assets based upon management’s assessment of (i) expected loan demand, (ii) expected deposit flows, (iii) yields available on interest-earning deposits and investment securities, and (iv) the objectives of our asset/liability management program. Excess liquid assets are invested generally in interest-earning overnight deposits, federal funds sold, and short and intermediate-term investment securities. If we require funds beyond our ability to generate them internally we have additional borrowing capacity with the Federal Home Loan Bank of Cincinnati. At March 31, 2018, we had $7.0 million in advances from the Federal Home Loan Bank of Cincinnati and an additional borrowing capacity of $83.9 million.

Poage Bankshares, Inc. is a separate legal entity from Town Square Bank and must provide its own liquidity to pay dividends, repurchase stock and to fund other general corporate activities. Poage Bankshares, Inc.’s primary source of liquidity is dividend payments from Town Square Bank. The ability of Town Square Bank to pay dividends is subject to regulatory requirements. At March 31, 2018, Poage Bankshares, Inc. (on an unconsolidated basis) had liquid assets of $3.7 million.

On June 16, 2016, Poage Bankshares, Inc. executed a $2.0 million commercial line of credit secured with Town Square Bank common stock, with an unaffiliated lender. The variable interest rate on the line of credit is 4.50% with an interest rate equal to the Wall Street Prime plus 0.50% adjusting monthly. The line of credit matures June 16, 2018. The line of credit will be used for general working capital purposes. At March 31, 2018, we had $2.0 million available on the line of credit.

Federal regulations require FDIC-insured depository institutions to meet several minimum capital standards: a common equity Tier 1 capital to risk-based assets ratio of 4.5%, a Tier 1 capital to risk-based assets ratio of 6.0%, a total capital to risk-based assets of 8%, and a 4% Tier 1 capital to total assets leverage ratio. The existing capital requirements were effective January 1, 2015 and are the result of a final rule implementing regulatory amendments based on recommendations of the Basel Committee on Banking Supervision and certain requirements of the Dodd-Frank Act.

For purposes of the regulatory capital requirements, common equity Tier 1 capital is generally defined as common shareholders’ equity and retained earnings. Tier 1 capital is generally defined as common equity Tier 1 and additional Tier 1 capital. Additional Tier 1 capital includes certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries. Total capital includes Tier 1 capital (common equity Tier 1 capital plus additional Tier 1 capital) and Tier 2 capital. Tier 2 capital is comprised of capital instruments and related surplus, meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt. Also included in Tier 2 capital is the allowance for loan and lease losses limited to a maximum of 1.25% of risk-weighted assets and, for institutions that made such an election regarding the treatment of Accumulated Other Comprehensive Income (“AOCI”), up to 45% of net unrealized gains on available-for-sale equity securities with readily determinable fair market values. Institutions that have not exercised the AOCI opt-out have AOCI incorporated into common equity Tier 1 capital (including unrealized gains and losses on available-for-sale-securities). We have exercised the AOCI opt-out. Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations.

In determining the amount of risk-weighted assets for purposes of calculating risk-based capital ratios, all assets, including certain off-balance sheet assets (e.g., recourse obligations, direct credit substitutes, residual interests) are multiplied by a risk weight factor assigned by the regulations based on the risks believed inherent in the type of asset. Higher levels of capital are required for asset categories believed to present greater risk. For example, a risk weight of 0% is assigned to cash and U.S. government securities, a risk weight of 50% is generally assigned to prudently underwritten first lien one- to four-family residential mortgages, a risk weight of 100% is assigned to commercial and consumer loans, a risk weight of 150% is assigned to certain past due loans and a risk weight of between 0% to 600% is assigned to permissible equity interests, depending on certain specified factors.

In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements. The capital conservation buffer requirement is being phased in beginning January 1, 2016 at 0.625% of risk-weighted assets and increasing each year until fully implemented at 2.5% on January 1, 2019. When fully implemented, the capital conservation buffer will be 2.50% of risk weighted assets over and above the regulatory minimum capital ratios for Common Equity Tier 1 Capital (CET1) to risk weighted assets, Tier 1 Capital to risk weighted assets, and Total Capital to risk weighted assets. The consequences of not meeting the capital conservation buffer thresholds include restrictions on the payment of dividends, restrictions on the payment of discretionary bonuses, and restrictions on the repurchasing of common shares by the Company. At March 31, 2018, the actual capital conservation buffer for Town Square Bank was 11.10% compared to the capital conservation buffer requirement of 1.875%.

In assessing an institution’s capital adequacy, the OCC takes into consideration, not only these numeric factors, but qualitative factors as well, and has the authority to establish higher capital requirements for individual institutions when deemed necessary.

Management believes that as of March 31, 2018, the Bank met all capital adequacy requirements to which it was subject at that date.

The following table reflects the Bank’s current regulatory capital levels in more detail, including comparisons to the regulatory minimums at March 31, 2018 and December 31, 2017 (in thousands).

											To Be Well
											Capitalized Under
						For Capital Adequacy					Prompt Corrective
	Actual					Purposes					Action Regulations
As of March 31, 2018	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total Risk-Based Capital
(to Risk-weighted Assets)	$	57,982		19.10	%	$	24,286		8.00	%	$	30,357		10.00	%
Tier I Capital
(to Risk-weighted Assets)		54,173		17.85			18,214		6.00			24,286		8.00
Common Equity
(to Risk-weighted Assets)		54,173		17.85			13,661		4.50			19,732		6.50
Tier I Capital
(to Adjusted Total Assets)		54,173		12.29			17,629		4.00			22,036		5.00

											To Be Well
											Capitalized Under
						For Capital Adequacy					Prompt Corrective
	Actual					Purposes					Action Regulations
As of December 31, 2017	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total Risk-Based Capital
(to Risk-weighted Assets)	$	57,678		19.10	%	$	24,159		8.00	%	$	30,198		10.00	%
Tier I Capital
(to Risk-weighted Assets)		53,891		17.85			18,119		6.00			24,159		8.00
Common Equity
(to Risk-weighted Assets)		53,891		17.85			13,589		4.50			19,629		6.50
Tier I Capital
(to Adjusted Total Assets)		53,891		11.80			18,272		4.00			22,840		5.00

Off-Balance Sheet Arrangements. In the normal course of operations, we engage in a variety of financial transactions that, in accordance with U.S. generally accepted accounting principles, are not recorded in our financial statements. These transactions involve, to varying degrees, elements of credit, interest rate and liquidity risk. Such transactions are used primarily to manage customers’ requests for funding and take the form of loan commitments and lines of credit. These arrangements are not expected to have a material impact on the Company’s consolidated financial condition or results of operations.

Comparison of Operating Results for the Three Months Ended March 31, 2018 and March 31, 2017

General. Net income for the three months ended March 31, 2018 decreased $234,000, or 50.5%, to a $229,000 from net income of $463,000 for the three months ended March 31, 2017. The decrease in net income is attributable to a decrease in net interest income of $193,000 to $3.9 million for the three months ended March 31, 2018 from $4.1 million for the three months ended March 31, 2017, a decrease in non-interest income of $27,000 to $626,000 for the three months ended March 31, 2018 from $653,000 for the three months ended March 31, 2017 and an increase in the provision for loan losses of $144,000 to $497,000 for the three months ended March 31, 2018 from $353,000 for the three months ended March 31, 2017. The decreases in income are offset by a decrease in non-interest expense of $19,000 to remain unchanged at $3.8 million for the three months ended March 31, 2018 and 2017 and a decrease of $111,000 in income tax expense to $33,000 for the three months ended March 31, 2018 compared to a tax expense of $144,000 for the three months ended March 31, 2017. The reduction in tax expense is primarily attributable to the tax rate change enacted with the 2017 Tax Cuts & Job Act.

Interest Income. Interest income decreased $122,000, or 2.6%, to $4.6 million for the three months ended March 31, 2018 from $4.7 million for the three months ended March 31, 2017. The average balance of interest-earning assets decreased $1.9 million, or 0.4%, to $431.9 million for the three months ended March 31, 2018 from $433.8 million for the three months ended March 31, 2017.

Interest income on loans decreased $180,000, or 4.2%, to $4.1 million for the three months ended March 31, 2018 from $4.3 million for the three months ended March 31, 2017. The average yields on loans decreased 5 basis points to 5.06% for the three months ended March 31, 2018 compared to 5.11% for the three months ended March 31, 2017. The average balance of loans decreased $11.2 million, or 3.2%, to $331.3 million for the three months ended March 31, 2018 from $342.5 million for the three months ended March 31, 2017. Income recognized from purchase discounts attributable to the Town Square and Commonwealth acquisitions decreased $41,000, or 37.3%, to $69,000 for the three months ended March 31, 2018 from $110,000 for the three months ended March 31, 2017 and contributed to the decrease in the average yields on loans.

Interest income on investment securities increased $31,000, or 9.1%, to $371,000 for the three months ended March 31, 2018 from $340,000 for the three months ended March 31, 2017. The average yield on securities decreased 8 basis points to 2.26% for the three months ended March 31, 2018, compared to 2.34% for the three months ended March 31, 2017. The average balance of investment securities increased $7.6 million, or 12.7%, to $66.5 million for the three months ended March 31, 2018 from $58.9 million for the three months ended March 31, 2017.

Interest income on restricted stock increased $10,000, or 29.4%, to $44,000 for the three months ended March 31, 2018 from $34,000 for the three months ended March 31, 2017. The average yield on restricted stock increased 124 basis points to 5.45% for the three months ended March 31, 2018 compared to 4.21% for the three months ended March 31, 2017. The average balance of restricted stock remained constant at $3.3 million for the three months ended March 31, 2018 and 2017. Interest income on other interest-earning assets increased $17,000, or 30.4%, to $73,000 for the three months ended March 31, 2018 from $56,000 for the three months ended March 31, 2017. The average yield on other interest-earning assets increased 18 basis points to 0.96% for the three months ended March 31, 2018 compared to 0.78% for the three months ended March 31, 2017. The average balance of other interest earning assets increased $1.7 million, or 5.9%, to $30.9 million for the three months ended March 31, 2018 from $29.2 million for the three months ended March 31, 2017.

Interest Expense. Interest expense increased $71,000, or 10.7%, to $737,000 for the three months ended March 31, 2018 from $666,000 for the three months ended March 31, 2017. The average balance of interest bearing liabilities decreased $6.8 million, or 2.0%, to $328.3 million for the three months ended March 31, 2018 from $335.1 million for the three months ended March 31, 2017.

Interest expense on interest bearing deposits increased $68,000, or 11.7% to $650,000 for the three months ended March 31, 2018 from $582,000 for the three months ended March 31, 2017. The average balance of interest bearing deposits decreased $4.9 million, or 1.5%, to $318.4 million for the three months ended March 31, 2018 from $323.3 million for the three months ended March 31, 2017. The average interest rate paid on interest bearing deposits increased 10 basis points to 0.83% for the three months ended March 31, 2018 compared to 0.73% for the three months ended March 31, 2017. The decrease in average balance on interest bearing deposits is primarily attributable to a decrease in certificates of deposits which included $7.9 million in short-term non-brokered deposits acquired in the national market, offset by an increase in NOW and money market accounts.

Interest expense on FHLB advances, subordinated debentures and other borrowings increased $3,000, or 3.6%, to $87,000 for the three months ended March 31, 2018 from $84,000 for the three months ended March 31, 2017. The average balance on FHLB advances decreased $1.9 million, or 21.8%, to $7.0 million for the three months ended March 31, 2018 from $8.9 million for the three months ended March 31, 2017. The average interest rate paid on FHLB advances increased 26 basis points to 2.03% from 1.77%. The average balance on subordinated debentures increased $71,000, or 2.5%, to $2.9 million for the three months ended March 31, 2018 from $2.8 million for the three months ended March 31, 2017. The average interest rate paid on subordinated debentures increased 82 basis points to 7.26% for the three months ended March 31, 2018 from 6.44% for the three months ended March 31, 2017.

Net Interest Income. Net interest income decreased $193,000, or 4.7%, to $3.9 million for the three months ended March 31, 2018 from $4.1 million for the three months ended March 31, 2017. The ratio of average interest earning assets to average interest bearing liabilities increased to 131.56% for the three months ended March 31, 2018 from 129.46% for the three months ended March 31, 2017. The interest rate spread decreased 20 basis points to 3.43% for the three months ended March 31, 2018 from 3.63% for the three months ended March 31, 2017. Net interest margin decreased 17 basis points to 3.65% for the three months ended March 31, 2018 from 3.82% for the three months ended March 31, 2017.

Provision for Loan Losses. We recorded $497,000 in provision for loan losses for the three months ended March 31, 2018 compared to $353,000 in provision for loan losses for the three months ended March 31, 2017. The increase in the provision is primarily attributable to the establishment of an allowance of $478,000 on one residential loan relationship classified as substandard, which had an outstanding balance of $2.9 million at March 31, 2018.

Noninterest Income. Noninterest income decreased $27,000, or 4.1%, to $626,000 for the three months ended March 31, 2018 from $653,000 for the three months ended March 31, 2017. The decrease in noninterest income was primarily attributable to a decrease in net gain on disposal of land and equipment of $17,000, or 106.3%, to a net loss of $1,000 for the three months ended March 31, 2018 from a net gain of $16,000 for the three months ended March 31, 2017, a decrease in loan servicing fees of $7,000, or 8.5%, to $75,000 for the three months ended March 31, 2018 from $82,000 for the three months ended March 31, 2017, and a decrease in gains on mortgage loans sold of $4,000, or 23.5%, to $13,000 for the three months ended March 31, 2018 from $17,000 for the three months ended March 31, 2017, offset by an increase in service charges on deposits of $8,000, or 1.7%, to $484,000 for the three months ended March 31, 2018 from $476,000 for the three months ended March 31, 2017,.

Noninterest Expense. Noninterest expense decreased $19,000, or 0.5%, to remain unchanged at $3.8 million for the three months ended March 31, 2018 and 2017. This decrease was primarily attributable to the decrease in salaries and employee benefits of $67,000, or 3.7%, to remain unchanged at $1.8 million for the three months ended March 31, 2018 and 2017, a decrease in foreclosed assets expense of $101,000, or 108.6%, to a net gain of $8,000 for the three months ended March 31, 2018 from a net loss of $93,000 for the three months ended March 31, 2017, a decrease in advertising of $16,000, or 14.0% to $98,000 for the three months ended March 31, 2018 from $114,000 for the three months ended March 31, 2017 and a decrease in occupancy expense of $35,000, or 7.4%, to $439,000 for the three months ended March 31, 2018 from $474,000 for the three months ended March 31, 2017.

The decreases above are offset by an increase in data processing of $90,000, or 15.7%, to $665,000 for the three months ended March 31, 2018 from $575,000 for the three months ended March 31, 2017, an increase in loan processing and collection of $32,000, or 37.2%, to $118,000 for the three months ended March 31, 2018 from $86,000 for the three months ended March 31, 2017 and an increase in conversion expense of $99,000, or 100.0%, to $99,000 for the three months ended March 31, 2018 from $0 for the three months ended March 31, 2017. The increase in data processing is attributable to increased activity for internet banking and volume for data processing charges. Conversion expense is related to the contract signed in December 2017 with the new data processing provider. By converting to the new system, the Company expects to recognize significant cost savings.

Income Tax Expense. The provision for income tax expense was $33,000 for the three months ended March 31, 2018 compared to $144,000 for the three months ended March 31, 2017. Our effective tax rate for the three months ended March 31, 2018 was 12.6% compared to 23.7% for the three months ended March 31, 2017. The reduction in the effective tax rate is primarily attributable to the tax rate change enacted with the 2017 Tax Cuts & Job Act.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Disclosures of quantitative and qualitative market risk are not required by smaller reporting companies, such as the Company.

ITEM 4. CONTROLS AND PROCEDURES

Management is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As of March 31, 2018, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that, as of the evaluation date, our disclosure controls and procedures were not effective, because of the material weakness described below, to enable us to provide that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and to ensure that the information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosures.

During the three months ended September 30, 2017, the Company uncovered evidence of suspected fraud involving the origination of fictitious loans by an employee of the Bank. Management discovered that an employee had been using falsified brokerage statements, financial statements, tax returns, deeds and mortgages to make fictitious loans. The employee is no longer with the Company. The Company’s internal audit department has conducted an extensive internal review of our internal controls with the assistance of an outside independent professional firm, with specific focus on our loan underwriting, approval and administration procedures. As a result of the internal review, management discovered a material weakness in the operating effectiveness of procedures and documentation related to loan underwriting. Additionally, these processes lacked effective supervision and oversight by lending management personnel. Our management, overseen by the Audit Committee, is working to implement new procedures to improve this process and remediate this control weakness.

During the quarter ended March 31, 2018, the Company’s management made certain changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934, as amended) that have materially affected, or reasonably likely to materially effect, the Company’s internal control over financial reporting, which were identified during the year ended December 31, 2017 in connection with management’s and the Audit Committee’s evaluation of the effectiveness of the system of internal control over financial reporting.

To address the material weakness identified by management in the operating effectiveness of procedures and documentation related to loan underwriting and in the supervision and oversight of the lending management personnel, which weakness was related to the discovery of an employee originating fictitious loans, management implemented procedures to verify the authenticity of the information related to loan underwriting.

Although the Company’s remediation efforts are completed, the material weakness will not be considered remediated until the new internal controls are operational for a period of time and are tested and management concludes that these controls are operating effectively.

There was no other change in our internal control over financial reporting that occurred during the three months ended March 31, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company and its subsidiaries are subject to various legal actions that are considered ordinary routine litigation incidental to the business of the Company, and no claim for money damages exceeds ten percent of the Company’s consolidated assets. In the opinion of management, based on currently available information, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s consolidated financial condition and results of operations.

ITEM 1A. RISK FACTORS

Disclosures of risk factors are not required by smaller reporting companies, such as the Company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a)

None.

(b)

Not applicable.

(c)

Issuer repurchases. On June 2, 2016, Poage Bankshares, Inc. commenced a stock repurchase program. The Board of Directors of Poage Bankshares, Inc. authorized program to repurchase up to 150,000 shares, which represented approximately 3.9% of the Company’s then issued and outstanding shares of common stock through open-market purchases, block trades, negotiated private transactions and pursuant to a trading plan that was adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. The Company repurchased 3,325 shares at a weighted average price of $19.46 per share and there remained 17,720 shares to be repurchased under this plan at March 31, 2018.

On December 5, 2017, the Board of Directors of Poage Bankshares, Inc. authorized a new stock repurchase program for the repurchase of up to $180,000 shares of common stock, which represents approximately 5% of the Company’s issued and outstanding shares of common stock. The Company repurchased 10,000 shares at a weighted average price of $19.30 per share and there remained 163,500 shares to be repurchased under this plan at March 31, 2018.

The Company’s stock repurchases pursuant to the repurchase programs are dependent on certain factors, including but not limited to, market conditions and prices, available funds and alternative uses of capital. The repurchase program may be carried out through open-market purchases, block trades, negotiated private transactions and pursuant to a trading plan adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. Any repurchased shares will be treated by the Company as authorized but unissued shares.

The following table sets forth information in connection with repurchases of the Company’s common stock for the period January 1, 2018 through March 31, 2018.

					Total Number		Number of Shares
					of Shares		That May Yet
	Total				Purchased as		Be Purchased
	Number of		Average		Part of		Under Publicly
	Shares		Price Paid		Publicly		Announced
	Purchased		Per Share		Announced Plan		Plan
January 1 - January 31, 2018		1,000	$	19.05		1,000		194,545
February 1 - February 28, 2018		1,500		20.00		1,500		193,045
March 1 - March 31, 2018		11,825		19.49		11,825		181,220
Total		14,325	$	19.51		14,325

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit
number		Description

3.1		Articles of Incorporation of Poage Bankshares, Inc. ⁽¹⁾

3.2		Bylaws of Poage Bankshares, Inc. ⁽²⁾

31.1		Certification of President, and Chief Executive Officer, Pursuant to Rule 13a-14(a) and Rule 15-d-14(a).

31.2		Certification of Chief Financial Officer, Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

32.1		Certification of President and Chief Executive Officer, and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following material from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, formatted in XBRL (Extensible Business Reporting Language): (i) Unaudited Consolidated Balance Sheets, (ii) Unaudited Consolidated Statements of Income, (iii) Unaudited Consolidated Statements of Comprehensive Income (Loss), (iv) Unaudited Consolidated Statement of Shareholders’ Equity, (v) Unaudited Consolidated Statements of Cash Flows, and (vi) Notes to the Consolidated Financial Statements.

(1)

Incorporated by reference to the Registration Statement on Form S-1 (File No. 333-172192, originally filed on February 11, 2011, and as subsequently amended)

(2)

Incorporated by reference to the Current Report on Form 8-K (File No. 001-35295, filed on September 21, 2016)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Poage Bankshares, Inc.
Date: May 14, 2018

	/s/ Bruce VanHorn
	Bruce VanHorn
	President & Chief Executive Officer

	/s/ Jane Gilkerson
	Jane Gilkerson
	Chief Financial Officer

Poage Bankshares, Inc. - FORM 10-Q - May 14, 2018

Attached files

Poage Bankshares, Inc. Reports