☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
California | 77-0446957 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
445 Pine Avenue, Goleta, California | 93117 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered |
Common Stock, no par value | CWBC | The Nasdaq Stock Market, LLC |
Large accelerated filer ☐ | Accelerated filer ☐ | Non-accelerated filer ☒ | Smaller reporting company ☒ | Emerging growth company ☐ |
Index | Page | ||
Part I. Financial Information | |||
Item 1 – Financial Statements | |||
3 | |||
4 | |||
5 | |||
6 | |||
7 | |||
8 | |||
The financial statements included in this Form 10-Q should be read in conjunction with Community West Bancshares’ Annual Report on Form 10-K for the fiscal year ended December 31, | |||
Part II. Other Information | |||
Item 1. | Financial Statements |
September 30, 2022 | December 31, 2021 | September 30, 2023 | December 31, 2022 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
(in thousands, except share amounts) | (in thousands, except share amounts) | |||||||||||||||
Assets: | ||||||||||||||||
Cash and due from banks and federal funds sold | $ | 1,806 | $ | 1,621 | ||||||||||||
Cash and due from banks | $ | 1,855 | $ | 1,379 | ||||||||||||
Interest-earning demand deposits in other financial institutions | 49,489 | 206,754 | 138,764 | 63,311 | ||||||||||||
Cash and cash equivalents | 51,295 | 208,375 | 140,619 | 64,690 | ||||||||||||
Investment securities - available-for-sale, at fair value; amortized cost of $58,192 at September 30, 2022 and $19,588 at December 31, 2021 | 57,115 | 19,711 | ||||||||||||||
Investment securities - held-to-maturity, at amortized cost; fair value of $2,452 at September 30, 2022 and $2,974 at December 31, 2021 | 2,596 | 2,815 | ||||||||||||||
Investment securities - measured at fair value; amortized cost of $66 at September 30, 2022 and December 31, 2021 | 198 | 248 | ||||||||||||||
Investment securities - available-for-sale, at fair value, net of allowance for credit losses of $103 at September 30, 2023 and $0 at December 31, 2022; amortized cost of $16,924 at September 30, 2023 and $27,790 at December 31, 2022 | 15,124 | 26,688 | ||||||||||||||
Investment securities - held-to-maturity, at amortized cost; fair value of $1,987 at September 30, 2023 and $2,423 at December 31, 2022 | 2,158 | 2,557 | ||||||||||||||
Investment securities - measured at fair value; amortized cost of $66 at September 30, 2023 and December 31, 2022 | 309 | 225 | ||||||||||||||
Federal Home Loan Bank and Federal Reserve Bank stock, at cost | 4,533 | 4,441 | 4,865 | 4,533 | ||||||||||||
Loans held for sale, at lower of cost or fair value | 22,096 | 23,408 | 18,435 | 21,033 | ||||||||||||
Loans held for investment | 923,598 | 868,675 | 934,247 | 934,309 | ||||||||||||
Allowance for loan losses | (11,113 | ) | (10,404 | ) | ||||||||||||
Allowance for credit losses(1) | (12,135 | ) | (10,765 | ) | ||||||||||||
Total loans held for investment, net | 912,485 | 858,271 | 922,112 | 923,544 | ||||||||||||
Other assets acquired through foreclosure, net | 2,250 | 2,518 | 1,511 | 2,250 | ||||||||||||
Premises and equipment, net | 6,332 | 6,576 | 5,891 | 6,104 | ||||||||||||
Other assets | 29,378 | 30,689 | 29,275 | 39,878 | ||||||||||||
Total assets | $ | 1,088,278 | $ | 1,157,052 | $ | 1,140,299 | $ | 1,091,502 | ||||||||
Liabilities: | ||||||||||||||||
Deposits: | ||||||||||||||||
Non-interest bearing demand | $ | 243,100 | $ | 209,893 | ||||||||||||
Interest bearing demand | 439,455 | 537,508 | ||||||||||||||
Noninterest-bearing demand | $ | 190,817 | $ | 216,494 | ||||||||||||
Interest-bearing demand | 456,808 | 428,173 | ||||||||||||||
Savings | 23,865 | 23,675 | 16,905 | 23,490 | ||||||||||||
Certificates of deposit ($250,000 or more) | 9,909 | 17,612 | 14,911 | 6,693 | ||||||||||||
Other certificates of deposit | 135,860 | 161,443 | 236,652 | 200,234 | ||||||||||||
Total deposits | 852,189 | 950,131 | 916,093 | 875,084 | ||||||||||||
Federal Home Loan Bank advances | 110,000 | 90,000 | ||||||||||||||
Federal Home Loan Bank advances and other borrowings | 90,000 | 90,000 | ||||||||||||||
Other liabilities | 16,268 | 15,546 | 18,144 | 13,768 | ||||||||||||
Total liabilities | 978,457 | 1,055,677 | 1,024,237 | 978,852 | ||||||||||||
Stockholders’ equity: | ||||||||||||||||
Common stock — no par value, 60,000,000 shares authorized; 8,755,363 shares issued and outstanding at September 30, 2022 and 8,650,166 at December 31, 2021 | 45,566 | 44,431 | ||||||||||||||
Common stock — no par value, 60,000,000 shares authorized; 8,850,312 shares issued and outstanding at September 30, 2023 and 8,798,412 at December 31, 2022 | 46,381 | 45,694 | ||||||||||||||
Retained earnings | 65,009 | 56,852 | 70,872 | 67,727 | ||||||||||||
Accumulated other comprehensive (loss) income, net | (754 | ) | 92 | |||||||||||||
Accumulated other comprehensive loss, net | (1,191 | ) | (771 | ) | ||||||||||||
Total stockholders’ equity | 109,821 | 101,375 | 116,062 | 112,650 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 1,088,278 | $ | 1,157,052 | $ | 1,140,299 | $ | 1,091,502 |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
Interest and dividend income: | (in thousands, except per share amounts) | (in thousands, except per share amounts) | ||||||||||||||||||||||||||||||
Loans, including fees | $ | 11,867 | $ | 11,576 | $ | 34,190 | $ | 33,865 | $ | 13,331 | $ | 11,867 | $ | 38,981 | $ | 34,190 | ||||||||||||||||
Investment securities and other | 787 | 259 | 1,670 | 676 | 1,222 | 787 | 3,872 | 1,670 | ||||||||||||||||||||||||
Total interest and dividend income | 12,654 | 11,835 | 35,860 | 34,541 | 14,553 | 12,654 | 42,853 | 35,860 | ||||||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||||||
Deposits | 528 | 708 | 1,598 | 2,221 | 3,830 | 528 | 9,858 | 1,598 | ||||||||||||||||||||||||
Federal Home Loan Bank advances | 203 | 198 | 593 | 663 | ||||||||||||||||||||||||||||
FHLB advances and other borrowings | 204 | 203 | 729 | 593 | ||||||||||||||||||||||||||||
Total interest expense | 731 | 906 | 2,191 | 2,884 | 4,034 | 731 | 10,587 | 2,191 | ||||||||||||||||||||||||
Net interest income | 11,923 | 10,929 | 33,669 | 31,657 | 10,519 | 11,923 | 32,266 | 33,669 | ||||||||||||||||||||||||
Provision (credit) for loan losses | 298 | 7 | 266 | (207 | ) | |||||||||||||||||||||||||||
Net interest income after provision (credit) for loan losses | 11,625 | 10,922 | 33,403 | 31,864 | ||||||||||||||||||||||||||||
Provision (credit) for credit losses | 43 | 298 | (667 | ) | 266 | |||||||||||||||||||||||||||
Net interest income after provision (credit) for credit losses | 10,476 | 11,625 | 32,933 | 33,403 | ||||||||||||||||||||||||||||
Non-interest income: | ||||||||||||||||||||||||||||||||
Other loan fees | 292 | 383 | 915 | 1,006 | 248 | 292 | 703 | 915 | ||||||||||||||||||||||||
Gains from loan sales, net | 49 | 118 | 245 | 366 | 24 | 49 | 110 | 245 | ||||||||||||||||||||||||
Document processing fees | 114 | 145 | 337 | 389 | 88 | 114 | 268 | 337 | ||||||||||||||||||||||||
Service charges | 114 | 77 | 295 | 218 | 149 | 114 | 470 | 295 | ||||||||||||||||||||||||
Other | 303 | 317 | 1,422 | 830 | 572 | 303 | 1,438 | 1,422 | ||||||||||||||||||||||||
Total non-interest income | 872 | 1,040 | 3,214 | 2,809 | 1,081 | 872 | 2,989 | 3,214 | ||||||||||||||||||||||||
Non-interest expenses: | ||||||||||||||||||||||||||||||||
Salaries and employee benefits | 4,823 | 4,541 | 14,784 | 13,611 | 5,114 | 4,823 | 15,864 | 14,784 | ||||||||||||||||||||||||
Occupancy, net | 1,046 | 802 | 3,064 | 2,361 | 1,093 | 1,046 | 3,326 | 3,064 | ||||||||||||||||||||||||
Professional services | 653 | 434 | 1,687 | 1,204 | 672 | 653 | 2,442 | 1,687 | ||||||||||||||||||||||||
Data processing | 302 | 292 | 919 | 964 | 349 | 302 | 1,075 | 919 | ||||||||||||||||||||||||
Depreciation | 173 | 191 | 535 | 594 | 180 | 173 | 543 | 535 | ||||||||||||||||||||||||
FDIC assessment | 131 | 127 | 466 | 339 | 331 | 131 | 789 | 466 | ||||||||||||||||||||||||
Advertising and marketing | 196 | 189 | 687 | 536 | 179 | 196 | 671 | 687 | ||||||||||||||||||||||||
Other | 286 | 284 | 551 | 780 | 445 | 286 | 1,341 | 551 | ||||||||||||||||||||||||
Total non-interest expenses | 7,610 | 6,860 | 22,693 | 20,389 | 8,363 | 7,610 | 26,051 | 22,693 | ||||||||||||||||||||||||
Income before provision for income taxes | 4,887 | 5,102 | 13,924 | 14,284 | 3,194 | 4,887 | 9,871 | 13,924 | ||||||||||||||||||||||||
Provision for income taxes | 1,409 | 1,467 | 3,851 | 4,077 | 942 | 1,409 | 3,034 | 3,851 | ||||||||||||||||||||||||
Net income | $ | 3,478 | $ | 3,635 | $ | 10,073 | $ | 10,207 | $ | 2,252 | $ | 3,478 | $ | 6,837 | $ | 10,073 | ||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||||||||||
Basic | $ | 0.40 | $ | 0.42 | $ | 1.16 | $ | 1.19 | $ | 0.25 | $ | 0.40 | $ | 0.77 | $ | 1.16 | ||||||||||||||||
Diluted | $ | 0.39 | $ | 0.41 | $ | 1.13 | $ | 1.17 | $ | 0.25 | $ | 0.39 | $ | 0.76 | $ | 1.13 | ||||||||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||||||||||||||||||
Basic | 8,748 | 8,597 | 8,709 | 8,548 | 8,850 | 8,748 | 8,835 | 8,709 | ||||||||||||||||||||||||
Diluted | 8,915 | 8,777 | 8,883 | 8,699 | 8,981 | 8,915 | 8,968 | 8,883 | ||||||||||||||||||||||||
Dividends declared per common share | $ | 0.075 | $ | 0.070 | $ | 0.220 | $ | 0.200 | $ | 0.080 | $ | 0.075 | $ | 0.240 | $ | 0.220 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income | $ | 3,478 | $ | 3,635 | $ | 10,073 | $ | 10,207 | ||||||||
Other comprehensive (loss) income, net: | ||||||||||||||||
Unrealized (loss) income on securities available-for-sale (AFS), net (tax effect of $129, $5, $355 and $44 for each respective period presented) | (307 | ) | (12 | ) | (846 | ) | 103 | |||||||||
Net other comprehensive (loss) income | (307 | ) | (12 | ) | (846 | ) | 103 | |||||||||
Comprehensive income | $ | 3,171 | $ | 3,623 | $ | 9,227 | $ | 10,310 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income | $ | 2,252 | $ | 3,478 | $ | 6,837 | $ | 10,073 | ||||||||
Other comprehensive income (loss), net: | ||||||||||||||||
Unrealized gain (loss) on securities available-for-sale (“AFS”), net (tax effect of ($206), $121, $175 and $226 for each respective period presented) | 489 | (307 | ) | (420 | ) | (846 | ) | |||||||||
Net other comprehensive income (loss) | 489 | (307 | ) | (420 | ) | (846 | ) | |||||||||
Comprehensive income | $ | 2,741 | $ | 3,171 | $ | 6,417 | $ | 9,227 |
Three Months Ended September 30, 2022 | Common Stock | Accumulated Other Comprehensive | Retained | Total Stockholders’ | ||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2023 | Common Stock | Accumulated Other Comprehensive | Retained | Total Stockholders’ | ||||||||||||||||||||||||||||||||||||
Shares | Amount | (Loss) Income | Earnings | Equity | Shares | Amount | Loss | Earnings | Equity | |||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||
Balance, July 1, 2022 | 8,744 | $ | 45,402 | $ | (447 | ) | $ | 62,187 | $ | 107,142 | ||||||||||||||||||||||||||||||
Balance, July 1, 2023 | 8,849 | $ | 46,293 | $ | (1,680 | ) | $ | 69,328 | $ | 113,941 | ||||||||||||||||||||||||||||||
Net income | — | — | — | 3,478 | 3,478 | — | — | — | 2,252 | 2,252 | ||||||||||||||||||||||||||||||
Exercise of stock options | 11 | 93 | — | — | 93 | 3 | 13 | — | — | 13 | ||||||||||||||||||||||||||||||
Stock based compensation | — | 71 | — | — | 71 | — | 75 | — | — | 75 | ||||||||||||||||||||||||||||||
Dividends on common stock | — | — | — | (656 | ) | (656 | ) | — | — | — | (708 | ) | (708 | ) | ||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | (307 | ) | — | (307 | ) | |||||||||||||||||||||||||||||||||
Balance, September 30, 2022 | 8,755 | $ | 45,566 | $ | (754 | ) | $ | 65,009 | $ | 109,821 | ||||||||||||||||||||||||||||||
Other comprehensive income, net | — | — | 489 | — | 489 | |||||||||||||||||||||||||||||||||||
Balance, September 30, 2023 | 8,852 | $ | 46,381 | $ | (1,191 | ) | $ | 70,872 | $ | 116,062 |
Three Months Ended September 30, 2021 | Common Stock | Accumulated Other Comprehensive | Retained | Total Stockholders’ | ||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2022 | Common Stock | Accumulated Other Comprehensive | Retained | Total Stockholders’ | ||||||||||||||||||||||||||||||||||||
Shares | Amount | (Loss) Income | Earnings | Equity | Shares | Amount | Loss | Earnings | Equity | |||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||
Balance, July 1, 2021 | 8,589 | $ | 43,780 | $ | 150 | $ | 51,527 | $ | 95,457 | |||||||||||||||||||||||||||||||
Balance, July 1, 2022 | 8,744 | $ | 45,402 | $ | (447 | ) | $ | 62,187 | $ | 107,142 | ||||||||||||||||||||||||||||||
Net income | — | — | — | 3,635 | 3,635 | — | — | — | 3,478 | 3,478 | ||||||||||||||||||||||||||||||
Exercise of stock options | 27 | 225 | — | — | 225 | 11 | 93 | — | — | 93 | ||||||||||||||||||||||||||||||
Stock based compensation | — | 63 | — | — | 63 | — | 71 | — | — | 71 | ||||||||||||||||||||||||||||||
Dividends on common stock | — | — | — | (601 | ) | (601 | ) | — | — | — | (656 | ) | (656 | ) | ||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | (12 | ) | — | (12 | ) | — | — | (307 | ) | — | (307 | ) | ||||||||||||||||||||||||||
Balance, September 30, 2021 | 8,616 | $ | 44,068 | $ | 138 | $ | 54,561 | $ | 98,767 | |||||||||||||||||||||||||||||||
Balance, September 30, 2022 | 8,755 | $ | 45,566 | $ | (754 | ) | $ | 65,009 | $ | 109,821 |
Nine Months Ended September 30, 2023 | Common Stock | Accumulated Other Comprehensive | Retained | Total Stockholders’ | ||||||||||||||||
Shares | Amount | Loss | Earnings | Equity | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance, January 1, 2023 | 8,798 | $ | 45,694 | $ | (771 | ) | $ | 67,727 | $ | 112,650 | ||||||||||
Cumulative effect of change in accounting principle (net of taxes of $659) (1) | — | — | — | (1,573 | ) | (1,573 | ) | |||||||||||||
Net income | — | — | — | 6,837 | 6,837 | |||||||||||||||
Exercise of stock options | 54 | 292 | — | — | 292 | |||||||||||||||
Stock based compensation | — | 395 | — | — | 395 | |||||||||||||||
Dividends on common stock | — | — | — | (2,119 | ) | (2,119 | ) | |||||||||||||
Other comprehensive loss, net | — | — | (420 | ) | — | (420 | ) | |||||||||||||
Balance, September 30, 2023 | 8,852 | $ | 46,381 | $ | (1,191 | ) | $ | 70,872 | $ | 116,062 |
Nine Months Ended September 30, 2022 | Common Stock | Accumulated Other Comprehensive | Retained | Total Stockholders’ | ||||||||||||||||
Shares | Amount | (Loss) Income | Earnings | Equity | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance, January 1, 2022 | 8,650 | $ | 44,431 | $ | 92 | $ | 56,852 | $ | 101,375 | |||||||||||
Net income | — | — | — | 10,073 | 10,073 | |||||||||||||||
Exercise of stock options | 105 | 920 | — | — | 920 | |||||||||||||||
Stock based compensation | — | 215 | — | — | 215 | |||||||||||||||
Dividends on common stock | — | — | — | (1,916 | ) | (1,916 | ) | |||||||||||||
Other comprehensive loss, net | — | — | (846 | ) | — | (846 | ) | |||||||||||||
Balance, September 30, 2022 | 8,755 | $ | 45,566 | $ | (754 | ) | $ | 65,009 | $ | 109,821 |
Nine Months Ended September 30, 2021 | Common Stock | Accumulated Other Comprehensive | Retained | Total Stockholders’ | ||||||||||||||||
Shares | Amount | (Loss) Income | Earnings | Equity | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance, January 1, 2021 | 8,473 | $ | 42,909 | $ | 35 | $ | 46,063 | $ | 89,007 | |||||||||||
Net income | — | — | — | 10,207 | 10,207 | |||||||||||||||
Exercise of stock options | 143 | 970 | — | — | 970 | |||||||||||||||
Stock based compensation | — | 189 | — | — | 189 | |||||||||||||||
Dividends on common stock | — | — | — | (1,709 | ) | (1,709 | ) | |||||||||||||
Other comprehensive income, net | — | — | 103 | — | 103 | |||||||||||||||
Balance, September 30, 2021 | 8,616 | $ | 44,068 | $ | 138 | $ | 54,561 | $ | 98,767 |
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 10,073 | $ | 10,207 | $ | 6,837 | $ | 10,073 | ||||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||||
Provision (credit) for loan losses | 266 | (207 | ) | |||||||||||||
Provision (credit) for credit losses | (667 | ) | 266 | |||||||||||||
Depreciation | 535 | 594 | 543 | 535 | ||||||||||||
Stock based compensation | 215 | 189 | 395 | 215 | ||||||||||||
Deferred income taxes | 124 | (299 | ) | |||||||||||||
Deferred taxes | (906 | ) | 124 | |||||||||||||
Net (amortization) accretion of discounts and premiums for investment securities | (33 | ) | 54 | (33 | ) | (33 | ) | |||||||||
Gains on: | ||||||||||||||||
Sale of other assets acquired through foreclosure, net | (104 | ) | 178 | (236 | ) | (104 | ) | |||||||||
Sale of loans, net | (245 | ) | (366 | ) | (110 | ) | (245 | ) | ||||||||
Loans originated for sale, net of collections on loans held for sale | 1,312 | 6,829 | ||||||||||||||
Loans originated for sale | (7,620 | ) | (14,701 | ) | ||||||||||||
Proceeds from sales of loans held for sale | 7,717 | 14,629 | ||||||||||||||
Proceeds from principal paydowns on loans held for sale | 3,346 | 1,384 | ||||||||||||||
Changes in: | ||||||||||||||||
Investment securities measured at fair value | 50 | (68 | ) | (84 | ) | 50 | ||||||||||
Servicing assets, net | 45 | (110 | ) | 14 | 45 | |||||||||||
Other assets | 1,496 | (202 | ) | 12,329 | 1,496 | |||||||||||
Other liabilities | 722 | 209 | 4,045 | 722 | ||||||||||||
Net cash provided by operating activities | 14,456 | 17,008 | 25,570 | 14,456 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Principal pay downs and maturities of available-for-sale securities | 1,791 | 3,189 | 20,868 | 1,791 | ||||||||||||
Purchase of available-for-sale securities | (40,360 | ) | (6,250 | ) | (9,964 | ) | (40,360 | ) | ||||||||
Principal pay downs and maturities of held-to-maturity securities | 217 | 1,657 | 394 | 217 | ||||||||||||
Purchase of FHLB stock | (332 | ) | (92 | ) | ||||||||||||
Loan originations and principal collections, net | (54,235 | ) | (39,322 | ) | (2,010 | ) | (54,235 | ) | ||||||||
Purchase of FHLB stock | (92 | ) | — | |||||||||||||
Redemption of FHLB stock | — | 192 | ||||||||||||||
Purchase of premises and equipment, net | (291 | ) | (97 | ) | (330 | ) | (291 | ) | ||||||||
Proceeds from sale of other assets acquired through foreclosure, net | 372 | — | 2,551 | 372 | ||||||||||||
Net cash used in investing activities | (92,598 | ) | (40,631 | ) | ||||||||||||
Net cash provided by (used in) investing activities | 11,177 | (92,598 | ) | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Net (decrease) increase in deposits | (97,942 | ) | 165,757 | |||||||||||||
Net increase (decrease) in deposits | 41,009 | (97,942 | ) | |||||||||||||
Proceeds from FHLB advances | 20,000 | — | 20,000 | 20,000 | ||||||||||||
Repayment of FHLB advances | — | (15,000 | ) | |||||||||||||
Repayments of FHLB advances | (20,000 | ) | — | |||||||||||||
Proceeds from advances from line of credit | 10,000 | — | ||||||||||||||
Repayments of advances from line of credit | (10,000 | ) | — | |||||||||||||
Proceeds from exercise of stock options | 920 | 970 | 292 | 920 | ||||||||||||
Cash dividends paid on common stock | (1,916 | ) | (1,709 | ) | (2,119 | ) | (1,916 | ) | ||||||||
Net cash (used in) provided by financing activities | (78,938 | ) | 150,018 | |||||||||||||
Net (decrease) increase cash and cash equivalents | (157,080 | ) | 126,395 | |||||||||||||
Net cash provided by (used in) financing activities | 39,182 | (78,938 | ) | |||||||||||||
Net increase (decrease) in cash and cash equivalents | 75,929 | (157,080 | ) | |||||||||||||
Cash and cash equivalents at beginning of period | 208,375 | 60,540 | 64,690 | 208,375 | ||||||||||||
Cash and cash equivalents at end of period | $ | 51,295 | $ | 186,935 | $ | 140,619 | $ | 51,295 | ||||||||
Supplemental disclosure: | ||||||||||||||||
Cash paid during the period for: | ||||||||||||||||
Interest | $ | 2,204 | $ | 3,033 | $ | 8,212 | $ | 2,204 | ||||||||
Income taxes | 3,945 | 4,107 | 1,420 | 3,945 | ||||||||||||
Non-cash investing and financing activity: | ||||||||||||||||
Transfers of loans to other assets acquired through foreclosure, net | — | 136 | ||||||||||||||
Noncash items: | ||||||||||||||||
Transfers from loans to loans held for sale | 735 | — | ||||||||||||||
Transfers from loans to other assets acquired through foreclosure, net | 1,576 | — |
1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
• | Commercial real estate, commercial, commercial agriculture, SBA, HELOC, single family residential, and consumer: Migration analysis combined with risk rating of the loans was used to determine the required allowance for loan losses for all non-impaired loans. In addition, the migration results were adjusted based upon qualitative factors that affect the specific portfolio category. Reserves on impaired loans were determined based upon the individual characteristics of the loan. |
• | Manufactured housing: The allowance for loan losses was calculated on the basis of loss history and risk rating, which was primarily a function of delinquency. In addition, the loss results were adjusted based upon qualitative factors that affected this specific portfolio. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||||||
Net income available to common stockholders | $ | 2,252 | $ | 3,478 | $ | 6,837 | $ | 10,073 | ||||||||
Weighted average number of common shares outstanding - basic | 8,849,831 | 8,748,308 | 8,834,961 | 8,708,805 | ||||||||||||
Add: Dilutive effects of assumed exercises of stock options | 131,403 | 166,403 | 133,520 | 173,934 | ||||||||||||
Weighted average number of common shares outstanding - diluted | 8,981,234 | 8,914,711 | 8,968,481 | 8,882,739 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.25 | $ | 0.40 | $ | 0.77 | $ | 1.16 | ||||||||
Diluted | $ | 0.25 | $ | 0.39 | $ | 0.76 | $ | 1.13 |
Pre-CECL Adoption | Impact of CECL Adoption | As Reported Under CECL | ||||||||||
(in thousands) | ||||||||||||
Assets: | ||||||||||||
Allowance for credit losses on securities: | ||||||||||||
Available-for-sale | $ | — | $ | — | $ | — | ||||||
Held-to-maturity | — | — | — | |||||||||
Allowance for credit losses - loans | 10,765 | 1,811 | 12,576 | |||||||||
Deferred tax assets | 5,053 | 659 | 5,712 | |||||||||
Liabilities: | ||||||||||||
Allowance for credit losses for off-balance sheet commitments | 94 | 421 | 515 | |||||||||
Stockholders’ equity: | ||||||||||||
Retained earnings | 67,727 | (1,573 | ) | 66,154 |
2. | INVESTMENT SECURITIES |
September 30, 2022 | September 30, 2023 | |||||||||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value | Amortized Cost | Allowance for Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||||||||
Securities available-for-sale | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 4,445 | $ | 35 | $ | — | $ | 4,480 | $ | 3,478 | $ | — | $ | 15 | $ | — | $ | 3,493 | ||||||||||||||||||
U.S. government agency collateralized mortgage obligations (“CMO”) | 4,567 | 4 | (101 | ) | 4,470 | 4,196 | — | — | (218 | ) | 3,978 | |||||||||||||||||||||||||
U.S. Treasury securities | 39,930 | — | (135 | ) | 39,795 | |||||||||||||||||||||||||||||||
Corporate debt securities | 9,250 | — | (880 | ) | 8,370 | 9,250 | (103 | ) | — | (1,494 | ) | 7,653 | ||||||||||||||||||||||||
Total | $ | 58,192 | $ | 39 | $ | (1,116 | ) | $ | 57,115 | $ | 16,924 | $ | (103 | ) | $ | 15 | $ | (1,712 | ) | $ | 15,124 | |||||||||||||||
Securities held-to-maturity | ||||||||||||||||||||||||||||||||||||
U.S. government agency mortgage-backed securities (“MBS”) | $ | 2,596 | $ | 6 | $ | (150 | ) | $ | 2,452 | $ | 2,158 | — | $ | 2 | $ | (173 | ) | $ | 1,987 | |||||||||||||||||
Total | $ | 2,596 | $ | 6 | $ | (150 | ) | $ | 2,452 | $ | 2,158 | — | $ | 2 | $ | (173 | ) | $ | 1,987 | |||||||||||||||||
Securities measured at fair value | ||||||||||||||||||||||||||||||||||||
Equity securities: Farmer Mac class A stock | $ | 66 | $ | 132 | $ | — | $ | 198 | ||||||||||||||||||||||||||||
Total | $ | 66 | $ | 132 | $ | — | $ | 198 |
September 30, 2023 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value | |||||||||||||
Securities measured at fair value | (in thousands) | |||||||||||||||
Equity securities: Farmer Mac class A stock | $ | 66 | $ | 243 | $ | — | $ | 309 | ||||||||
Total | $ | 66 | $ | 243 | $ | — | $ | 309 |
December 31, 2021 | December 31, 2022 | |||||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value | |||||||||||||||||||||||||
Securities available-for-sale | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 5,476 | $ | 32 | $ | — | $ | 5,508 | $ | 4,081 | $ | 26 | $ | — | $ | 4,107 | ||||||||||||||||
U.S. government agency CMO | 4,862 | 31 | (10 | ) | 4,883 | 4,475 | — | (179 | ) | 4,296 | ||||||||||||||||||||||
U.S. Treasury securities | 9,984 | — | (14 | ) | 9,970 | |||||||||||||||||||||||||||
Corporate debt securities | 9,250 | 102 | (32 | ) | 9,320 | 9,250 | — | (935 | ) | 8,315 | ||||||||||||||||||||||
Total | $ | 19,588 | $ | 165 | $ | (42 | ) | $ | 19,711 | $ | 27,790 | $ | 26 | $ | (1,128 | ) | $ | 26,688 | ||||||||||||||
Securities held-to-maturity | ||||||||||||||||||||||||||||||||
U.S. government agency MBS | $ | 2,815 | $ | 159 | $ | — | $ | 2,974 | $ | 2,557 | $ | 3 | $ | (137 | ) | $ | 2,423 | |||||||||||||||
Total | $ | 2,815 | $ | 159 | $ | — | $ | 2,974 | $ | 2,557 | $ | 3 | $ | (137 | ) | $ | 2,423 | |||||||||||||||
Securities measured at fair value | ||||||||||||||||||||||||||||||||
Equity securities: Farmer Mac class A stock | $ | 66 | $ | 182 | $ | — | $ | 248 | $ | 66 | $ | 159 | $ | — | $ | 225 | ||||||||||||||||
Total | $ | 66 | $ | 182 | $ | — | $ | 248 | $ | 66 | $ | 159 | $ | — | $ | 225 |
September 30, 2022 | September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less than One Year | One to Five Years | Five to Ten Years | Over Ten Years | Total | Less than One Year | One to Five Years | Five to Ten Years | Over Ten Years | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities available-for-sale | (dollars in thousands) | (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | — | — | $ | — | — | $ | 533 | 2.09 | % | $ | 3,947 | 2.92 | % | $ | 4,480 | 2.82 | % | $ | — | — | $ | — | — | $ | 482 | 5.60 | % | $ | 3,011 | 6.35 | % | $ | 3,493 | 6.25 | % | ||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency CMO | — | — | — | — | — | — | 4,470 | 3.40 | % | 4,470 | 3.40 | % | — | — | — | — | 429 | 3.69 | % | 3,549 | 5.64 | % | 3,978 | 5.43 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | 39,795 | 1.61 | % | — | — | — | — | — | — | 39,795 | 1.61 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate debt securities | — | — | — | — | 8,370 | 3.74 | % | — | — | 8,370 | 3.74 | % | — | — | — | — | 7,653 | 3.74 | % | — | — | 7,653 | 3.74 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 39,795 | 1.61 | % | $ | — | — | $ | 8,903 | 3.64 | % | $ | 8,417 | 3.17 | % | $ | 57,115 | 2.16 | % | $ | — | — | $ | — | — | $ | 8,564 | 3.84 | % | $ | 6,560 | 5.97 | % | $ | 15,124 | 4.76 | % | |||||||||||||||||||||||||||||||||||||||||||
Securities held-to-maturity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS | $ | — | — | $ | — | — | $ | 751 | 3.60 | % | $ | 1,845 | 3.39 | % | $ | 2,596 | 3.45 | % | $ | — | — | $ | — | — | $ | 731 | 3.60 | % | $ | 1,427 | 4.28 | % | $ | 2,158 | 4.05 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | — | — | $ | — | — | $ | 751 | 3.60 | % | $ | 1,845 | 3.39 | % | $ | 2,596 | 3.45 | % | $ | — | — | $ | — | — | $ | 731 | 3.60 | % | $ | 1,427 | 4.28 | % | $ | 2,158 | 4.05 | % |
December 31, 2021 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less than One Year | One to Five Years | Five to Ten Years | Over Ten Years | Total | Less than One Year | One to Five Years | Five to Ten Years | Over Ten Years | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities available-for-sale | (dollars in thousands) | (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | — | — | $ | 661 | 0.59 | % | $ | 4,847 | 1.30 | % | $ | — | — | $ | 5,508 | 1.16 | % | $ | — | — | $ | — | — | $ | 519 | 3.59 | % | $ | 3,588 | 4.40 | % | $ | 4,107 | 4.30 | % | ||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency CMO | — | — | 3,905 | 0.50 | % | 978 | 0.83 | % | — | — | 4,883 | 0.60 | % | — | — | — | — | — | — | 4,296 | 4.63 | % | 4,296 | 4.63 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | 9,970 | 2.06 | % | — | — | — | — | — | — | 9,970 | 2.06 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate debt securities | — | — | 9,320 | 3.70 | % | — | — | — | — | 9,320 | 3.70 | % | — | — | — | — | 8,315 | 3.74 | % | — | — | 8,315 | 3.74 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | — | — | $ | 13,886 | 2.70 | % | $ | 5,825 | 1.20 | % | $ | — | — | $ | 19,711 | 2.20 | % | $ | 9,970 | 2.06 | % | $ | — | — | $ | 8,834 | 3.73 | % | $ | 7,884 | 4.53 | % | $ | 26,688 | 3.34 | % | |||||||||||||||||||||||||||||||||||||||||||
Securities held-to-maturity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS | $ | — | — | $ | 2,065 | 2.90 | % | $ | 750 | 3.58 | % | $ | — | — | $ | 2,815 | 3.06 | % | $ | — | — | $ | — | — | $ | 746 | 3.60 | % | $ | 1,811 | 3.68 | % | $ | 2,557 | 3.66 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | — | — | $ | 2,065 | 2.90 | % | $ | 750 | 3.58 | % | $ | — | — | $ | 2,815 | 3.06 | % | $ | — | — | $ | — | — | $ | 746 | 3.60 | % | $ | 1,811 | 3.68 | % | $ | 2,557 | 3.66 | % |
September 30, 2022 | December 31, 2021 | September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||||||||||||||||
Securities available-for-sale | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||
Due in less than one year | $ | 39,930 | $ | 39,795 | $ | — | $ | — | $ | — | $ | — | $ | 9,984 | $ | 9,970 | ||||||||||||||||
After one year through five years | — | — | 13,786 | 13,886 | — | — | — | — | ||||||||||||||||||||||||
After five years through ten years | 9,781 | 8,903 | 5,802 | 5,825 | 10,220 | 8,564 | 9,768 | 8,834 | ||||||||||||||||||||||||
After ten years | 8,481 | 8,417 | — | — | 6,704 | 6,560 | 8,038 | 7,884 | ||||||||||||||||||||||||
Total | $ | 58,192 | $ | 57,115 | $ | 19,588 | $ | 19,711 | $ | 16,924 | $ | 15,124 | $ | 27,790 | $ | 26,688 | ||||||||||||||||
Securities held-to-maturity | ||||||||||||||||||||||||||||||||
Due in less than one year | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
After one year through five years | — | — | 2,065 | 2,137 | — | — | — | — | ||||||||||||||||||||||||
After five years through ten years | 751 | 707 | 750 | 837 | 731 | 662 | 746 | 705 | ||||||||||||||||||||||||
After ten years | 1,845 | 1,745 | — | — | 1,427 | 1,325 | 1,811 | 1,718 | ||||||||||||||||||||||||
Total | $ | 2,596 | $ | 2,452 | $ | 2,815 | $ | 2,974 | $ | 2,158 | $ | 1,987 | $ | 2,557 | $ | 2,423 |
September 30, 2022 | September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
Less Than Twelve Months | More Than Twelve Months | Total | Less Than Twelve Months | More Than Twelve Months | Total | |||||||||||||||||||||||||||||||||||||||||||
Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||||||||||||||||
Securities available-for-sale | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency CMO | $ | (87 | ) | $ | 3,122 | $ | (14 | ) | $ | 640 | $ | (101 | ) | $ | 3,762 | $ | (23 | ) | $ | 607 | $ | (195 | ) | $ | 3,371 | $ | (218 | ) | $ | 3,978 | ||||||||||||||||||
U.S. Treasury securities | (135 | ) | 39,795 | — | — | (135 | ) | 39,795 | ||||||||||||||||||||||||||||||||||||||||
Corporate debt securities | (724 | ) | 7,026 | (156 | ) | 1,344 | (880 | ) | 8,370 | — | — | (1,494 | ) | 7,653 | (1,494 | ) | 7,653 | |||||||||||||||||||||||||||||||
Total | $ | (946 | ) | $ | 49,943 | $ | (170 | ) | $ | 1,984 | $ | (1,116 | ) | $ | 51,927 | $ | (23 | ) | $ | 607 | $ | (1,689 | ) | $ | 11,024 | $ | (1,712 | ) | $ | 11,631 | ||||||||||||||||||
Securities held-to-maturity | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS | $ | (150 | ) | $ | 2,116 | $ | — | $ | — | $ | (150 | ) | $ | 2,116 | $ | (2 | ) | $ | 134 | $ | (171 | ) | $ | 1,694 | $ | (173 | ) | $ | 1,828 | |||||||||||||||||||
Total | $ | (150 | ) | $ | 2,116 | $ | — | $ | — | $ | (150 | ) | $ | 2,116 | $ | (2 | ) | $ | 134 | $ | (171 | ) | $ | 1,694 | $ | (173 | ) | $ | 1,828 |
December 31, 2021 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Less Than Twelve Months | More Than Twelve Months | Total | Less Than Twelve Months | More Than Twelve Months | Total | |||||||||||||||||||||||||||||||||||||||||||
Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||||||||||||||||
Securities available-for-sale | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency CMO | $ | — | $ | — | $ | (10 | ) | $ | 977 | $ | (10 | ) | $ | 977 | $ | (130 | ) | $ | 3,690 | $ | (49 | ) | $ | 606 | $ | (179 | ) | $ | 4,296 | |||||||||||||||||||
U.S. Treasury securities | (14 | ) | 9,970 | — | — | (14 | ) | 9,970 | ||||||||||||||||||||||||||||||||||||||||
Corporate debt securities | (32 | ) | 2,968 | — | — | (32 | ) | 2,968 | (764 | ) | 6,986 | (171 | ) | 1,329 | (935 | ) | 8,315 | |||||||||||||||||||||||||||||||
Total | $ | (32 | ) | $ | 2,968 | $ | (10 | ) | $ | 977 | $ | (42 | ) | $ | 3,945 | $ | (908 | ) | $ | 20,646 | $ | (220 | ) | $ | 1,935 | $ | (1,128 | ) | $ | 22,581 | ||||||||||||||||||
Securities held-to-maturity | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS | $ | (137 | ) | $ | 2,115 | $ | — | $ | — | $ | (137 | ) | $ | 2,115 | ||||||||||||||||||||||||||||||||||
Total | $ | (137 | ) | $ | 2,115 | $ | — | $ | — | $ | (137 | ) | $ | 2,115 |
3. | LOANS HELD FOR SALE AND LOANS SERVICED FOR OTHERS |
September 30, 2022 | December 31, 2021 | September 30, 2023 | December 31, 2022 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
SBA | $ | 2,112 | $ | 2,709 | $ | 1,438 | $ | 1,926 | ||||||||
USDA, FSA, and USDA Business and Industry | 735 | 745 | — | 735 | ||||||||||||
Farmer Mac | 154,006 | 142,677 | 159,450 | 155,522 | ||||||||||||
Total loans serviced for others | $ | 156,853 | $ | 146,131 | $ | 160,888 | $ | 158,183 |
4. | LOANS HELD FOR INVESTMENT |
September 30, | December 31, | September 30, | December 31, | |||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Manufactured housing | $ | 309,989 | $ | 297,363 | $ | 325,068 | $ | 315,825 | ||||||||
Commercial real estate | 544,373 | 480,801 | 556,945 | 545,317 | ||||||||||||
Commercial | 54,042 | 55,287 | 38,232 | 59,070 | ||||||||||||
SBA | 3,468 | 23,659 | 1,687 | 3,482 | ||||||||||||
HELOC | 3,373 | 3,579 | 2,556 | 2,613 | ||||||||||||
Single family real estate | 8,981 | 8,749 | 10,615 | 8,709 | ||||||||||||
Consumer | 323 | 109 | 52 | 107 | ||||||||||||
Gross loans held for investment | 924,549 | 869,547 | 935,155 | 935,123 | ||||||||||||
Deferred fees, net | (920 | ) | (838 | ) | (883 | ) | (787 | ) | ||||||||
Discount on SBA loans | (31 | ) | (34 | ) | (25 | ) | (27 | ) | ||||||||
Loans held for investment | 923,598 | 868,675 | 934,247 | 934,309 | ||||||||||||
Allowance for loan losses | (11,113 | ) | (10,404 | ) | ||||||||||||
Allowance for credit losses | (12,135 | ) | (10,765 | ) | ||||||||||||
Loans held for investment, net | $ | 912,485 | $ | 858,271 | $ | 922,112 | $ | 923,544 |
September 30, 2022 | September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current | 30-59 Days Past Due | 60-89 Days Past Due | Over 90 Days Past Due | Total Past Due | Nonaccrual | Total | Recorded Investment Over 90 Days and Accruing | Current | 30-59 Days Past Due | 60-89 Days Past Due | Over 90 Days Past Due | Total Past Due | Total | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Manufactured housing | $ | 309,468 | $ | 389 | $ | 47 | $ | — | $ | 436 | $ | 85 | $ | 309,989 | $ | — | $ | 324,276 | $ | 615 | $ | — | $ | 177 | $ | 792 | $ | 325,068 | ||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | 486,802 | 1,173 | — | — | 1,173 | — | 487,975 | — | 484,172 | — | 1,576 | — | 1,576 | 485,748 | ||||||||||||||||||||||||||||||||||||||||||
SBA 504 1st trust deed | 13,107 | — | — | — | — | — | 13,107 | — | 12,335 | — | — | — | — | 12,335 | ||||||||||||||||||||||||||||||||||||||||||
Land | 12,433 | — | — | — | — | — | 12,433 | — | 8,025 | — | — | — | — | 8,025 | ||||||||||||||||||||||||||||||||||||||||||
Construction | 30,858 | — | — | — | — | — | 30,858 | — | 48,887 | — | 1,950 | — | 1,950 | 50,837 | ||||||||||||||||||||||||||||||||||||||||||
Commercial | 53,960 | 82 | — | �� | — | 82 | — | 54,042 | — | 37,985 | — | 247 | — | 247 | 38,232 | |||||||||||||||||||||||||||||||||||||||||
SBA | 2,703 | — | 765 | — | 765 | — | 3,468 | — | 1,613 | 73 | — | 1 | 74 | 1,687 | ||||||||||||||||||||||||||||||||||||||||||
HELOC | 3,373 | — | — | — | — | — | 3,373 | — | 2,556 | — | — | — | — | 2,556 | ||||||||||||||||||||||||||||||||||||||||||
Single family real estate | 8,827 | — | — | — | — | 154 | 8,981 | — | 10,615 | — | — | — | — | 10,615 | ||||||||||||||||||||||||||||||||||||||||||
Consumer | 323 | — | — | — | — | — | 323 | — | 52 | — | — | — | — | 52 | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 921,854 | $ | 1,644 | $ | 812 | $ | — | $ | 2,456 | $ | 239 | $ | 924,549 | $ | — | $ | 930,516 | $ | 688 | $ | 3,773 | $ | 178 | $ | 4,639 | $ | 935,155 |
December 31, 2021 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current | 30-59 Days Past Due | 60-89 Days Past Due | Over 90 Days Past Due | Total Past Due | Nonaccrual | Total | Recorded Investment Over 90 Days and Accruing | Current | 30-59 Days Past Due | 60-89 Days Past Due | Over 90 Days Past Due | Total Past Due | Total | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Manufactured housing | $ | 296,715 | $ | 342 | $ | — | $ | — | $ | 342 | $ | 306 | $ | 297,363 | $ | — | $ | 315,058 | $ | 665 | $ | 102 | $ | — | $ | 767 | $ | 315,825 | ||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | 431,062 | — | — | — | — | — | 431,062 | — | 481,599 | 1,160 | — | — | 1,160 | 482,759 | ||||||||||||||||||||||||||||||||||||||||||
SBA 504 1st trust deed | 16,961 | — | — | — | — | — | 16,961 | — | 12,947 | — | — | — | — | 12,947 | ||||||||||||||||||||||||||||||||||||||||||
Land | 7,185 | — | — | — | — | — | 7,185 | — | 11,237 | — | — | — | — | 11,237 | ||||||||||||||||||||||||||||||||||||||||||
Construction | 25,593 | — | — | — | — | — | 25,593 | — | 38,374 | — | — | — | — | 38,374 | ||||||||||||||||||||||||||||||||||||||||||
Commercial | 55,287 | — | — | — | — | — | 55,287 | — | 59,070 | — | — | — | — | 59,070 | ||||||||||||||||||||||||||||||||||||||||||
SBA | 23,296 | 223 | 139 | — | 362 | 1 | 23,659 | — | 2,529 | 953 | — | — | 953 | 3,482 | ||||||||||||||||||||||||||||||||||||||||||
HELOC | 3,579 | — | — | — | — | — | 3,579 | — | 2,613 | — | — | — | — | 2,613 | ||||||||||||||||||||||||||||||||||||||||||
Single family real estate | 8,491 | — | — | — | — | 258 | 8,749 | — | 8,709 | — | — | — | — | 8,709 | ||||||||||||||||||||||||||||||||||||||||||
Consumer | 109 | — | — | — | — | — | 109 | — | 107 | — | — | — | — | 107 | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 868,278 | $ | 565 | $ | 139 | $ | — | $ | 704 | $ | 565 | $ | 869,547 | $ | — | $ | 932,243 | $ | 2,778 | $ | 102 | $ | — | $ | 2,880 | $ | 935,123 |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||
With an ACL | Without an ACL | Total Nonaccrual | With an Allowance | Without an Allowance | Total Nonaccrual | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Manufactured housing | $ | 100 | $ | 627 | $ | 727 | $ | — | $ | 61 | $ | 61 | ||||||||||||
Commercial real estate | — | 327 | 327 | — | — | — | ||||||||||||||||||
Construction | — | 1,950 | 1,950 | — | — | — | ||||||||||||||||||
Commercial | — | 50 | 50 | — | — | — | ||||||||||||||||||
HELOC | — | 141 | 141 | — | — | — | ||||||||||||||||||
Single family real estate | — | — | — | — | 150 | 150 | ||||||||||||||||||
Total | $ | 100 | $ | 3,095 | $ | 3,195 | $ | — | $ | 211 | $ | 211 |
For the Three Months Ended September 30, | ||||||||||||||||||||||||||||||||
Manufactured Housing | Commercial Real Estate | Commercial | SBA | HELOC | Single Family Real Estate | Consumer | Total | |||||||||||||||||||||||||
2023 | (in thousands) | |||||||||||||||||||||||||||||||
Beginning balance | $ | 5,519 | $ | 5,896 | $ | 515 | $ | 5 | $ | 41 | $ | 171 | $ | 1 | $ | 12,148 | ||||||||||||||||
Charge-offs | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Recoveries | 8 | 20 | 13 | 4 | — | — | — | 45 | ||||||||||||||||||||||||
Net recoveries | 8 | 20 | 13 | 4 | — | — | — | 45 | ||||||||||||||||||||||||
Provision (credit) for credit losses | (54 | ) | 44 | (46 | ) | (4 | ) | 1 | 1 | — | (58 | ) | ||||||||||||||||||||
Ending balance | $ | 5,473 | $ | 5,960 | $ | 482 | $ | 5 | $ | 42 | $ | 172 | $ | 1 | $ | 12,135 | ||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 3,976 | $ | 6,120 | $ | 594 | $ | 23 | $ | 37 | $ | 115 | $ | 1 | $ | 10,866 | ||||||||||||||||
Charge-offs | — | — | — | (182 | ) | — | — | — | (182 | ) | ||||||||||||||||||||||
Recoveries | 88 | 20 | 13 | 4 | 6 | — | — | 131 | ||||||||||||||||||||||||
Net recoveries (charge-offs) | 88 | 20 | 13 | (178 | ) | 6 | — | — | (51 | ) | ||||||||||||||||||||||
Provision (credit) for credit losses | (77 | ) | 182 | 24 | 174 | (6 | ) | — | 1 | 298 | ||||||||||||||||||||||
Ending balance | $ | 3,987 | $ | 6,322 | $ | 631 | $ | 19 | $ | 37 | $ | 115 | $ | 2 | $ | 11,113 |
For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||
Manufactured Housing | Commercial Real Estate | Commercial | SBA | HELOC | Single Family Real Estate | Consumer | Total | |||||||||||||||||||||||||
2023 | (in thousands) | |||||||||||||||||||||||||||||||
Beginning balance, prior to adoption of ASC 326 | $ | 3,879 | $ | 5,980 | $ | 747 | $ | 21 | $ | 27 | $ | 107 | $ | 4 | $ | 10,765 | ||||||||||||||||
Impact of adoption of ASC 326 | 1,671 | 31 | 70 | (15 | ) | 17 | 39 | (2 | ) | 1,811 | ||||||||||||||||||||||
Charge-offs | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Recoveries | 74 | 59 | 37 | 69 | — | — | — | 239 | ||||||||||||||||||||||||
Net recoveries | 74 | 59 | 37 | 69 | — | — | — | 239 | ||||||||||||||||||||||||
Provision (credit) for credit losses | (151 | ) | (110 | ) | (372 | ) | (70 | ) | (2 | ) | 26 | (1 | ) | (680 | ) | |||||||||||||||||
Ending balance | $ | 5,473 | $ | 5,960 | $ | 482 | $ | 5 | $ | 42 | $ | 172 | $ | 1 | $ | 12,135 | ||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 2,606 | $ | 6,729 | $ | 923 | $ | 22 | $ | 18 | $ | 105 | $ | 1 | $ | 10,404 | ||||||||||||||||
Charge-offs | — | — | — | (182 | ) | — | — | — | (182 | ) | ||||||||||||||||||||||
Recoveries | 123 | 60 | 183 | 246 | 12 | — | 1 | 625 | ||||||||||||||||||||||||
Net recoveries | 123 | 60 | 183 | 64 | 12 | — | 1 | 443 | ||||||||||||||||||||||||
Provision (credit) for credit losses | 1,258 | (467 | ) | (475 | ) | (67 | ) | 7 | 10 | — | 266 | |||||||||||||||||||||
Ending balance | $ | 3,987 | $ | 6,322 | $ | 631 | $ | 19 | $ | 37 | $ | 115 | $ | 2 | $ | 11,113 |
For the Three Months Ended September 30, | ||||||||||||||||||||||||||||||||
Manufactured Housing | Commercial Real Estate | Commercial | SBA | HELOC | Single Family Real Estate | Consumer | Total | |||||||||||||||||||||||||
2022 | (in thousands) | |||||||||||||||||||||||||||||||
Beginning balance | $ | 3,976 | $ | 6,120 | $ | 594 | $ | 23 | $ | 37 | $ | 115 | $ | 1 | $ | 10,866 | ||||||||||||||||
Charge-offs | — | — | — | (182 | ) | — | — | — | (182 | ) | ||||||||||||||||||||||
Recoveries | 88 | 20 | 13 | 4 | 6 | — | — | 131 | ||||||||||||||||||||||||
Net (charge-offs) recoveries | 88 | 20 | 13 | (178 | ) | 6 | — | — | (51 | ) | ||||||||||||||||||||||
Provision (credit) for loan losses | (77 | ) | 182 | 24 | 174 | (6 | ) | — | 1 | 298 | ||||||||||||||||||||||
Ending balance | $ | 3,987 | $ | 6,322 | $ | 631 | $ | 19 | $ | 37 | $ | 115 | $ | 2 | $ | 11,113 | ||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 2,630 | $ | 6,328 | $ | 1,020 | $ | 114 | $ | 25 | $ | 122 | $ | 1 | $ | 10,240 | ||||||||||||||||
Charge-offs | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Recoveries | 4 | 20 | 10 | 1 | 1 | — | — | 36 | ||||||||||||||||||||||||
Net recoveries | 4 | 20 | 10 | 1 | 1 | — | — | 36 | ||||||||||||||||||||||||
Provision (credit) for loan losses | (25 | ) | 149 | (15 | ) | (87 | ) | (2 | ) | (13 | ) | — | 7 | |||||||||||||||||||
Ending balance | $ | 2,609 | $ | 6,497 | $ | 1,015 | $ | 28 | $ | 24 | $ | 109 | $ | 1 | $ | 10,283 |
For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||
Manufactured Housing | Commercial Real Estate | Commercial | SBA | HELOC | Single Family Real Estate | Consumer | Total | |||||||||||||||||||||||||
2022 | (in thousands) | |||||||||||||||||||||||||||||||
Beginning balance | $ | 2,606 | $ | 6,729 | $ | 923 | $ | 22 | $ | 18 | $ | 105 | $ | 1 | $ | 10,404 | ||||||||||||||||
Charge-offs | — | — | — | (182 | ) | — | — | — | (182 | ) | ||||||||||||||||||||||
Recoveries | 123 | 60 | 183 | 246 | 12 | — | 1 | 625 | ||||||||||||||||||||||||
Net recoveries | 123 | 60 | 183 | 64 | 12 | — | 1 | 443 | ||||||||||||||||||||||||
Provision (credit) for loan losses | 1,258 | (467 | ) | (475 | ) | (67 | ) | 7 | 10 | — | 266 | |||||||||||||||||||||
Ending balance | $ | 3,987 | $ | 6,322 | $ | 631 | $ | 19 | $ | 37 | $ | 115 | $ | 2 | $ | 11,113 | ||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 2,612 | $ | 5,950 | $ | 1,379 | $ | 118 | $ | 25 | $ | 108 | $ | 2 | $ | 10,194 | ||||||||||||||||
Charge-offs | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Recoveries | 155 | 60 | 30 | 46 | 4 | 1 | — | 296 | ||||||||||||||||||||||||
Net recoveries | 155 | 60 | 30 | 46 | 4 | 1 | — | 296 | ||||||||||||||||||||||||
Provision (credit) for loan losses | (158 | ) | 487 | (394 | ) | (136 | ) | (5 | ) | — | (1 | ) | (207 | ) | ||||||||||||||||||
Ending balance | $ | 2,609 | $ | 6,497 | $ | 1,015 | $ | 28 | $ | 24 | $ | 109 | $ | 1 | $ | 10,283 |
Manufactured Housing | Commercial Real Estate | Commercial | SBA | HELOC | Single Family Real Estate | Consumer | Total Loans | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Amortized Cost Basis: | ||||||||||||||||||||||||||||||||
Individually evaluated loans with an allowance for credit losses recorded | $ | 853 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 853 | ||||||||||||||||
Individually evaluated loans with no allowance for credit losses recorded | 1,359 | 2,277 | 1,210 | — | — | 141 | — | 4,987 | ||||||||||||||||||||||||
Total individually evaluated loans | 2,212 | 2,277 | 1,210 | — | — | 141 | — | 5,840 | ||||||||||||||||||||||||
Collectively evaluated loans | 322,856 | 554,668 | 37,022 | 1,687 | 2,556 | 10,474 | 52 | 929,315 | ||||||||||||||||||||||||
Total loans held for investment | $ | 325,068 | $ | 556,945 | $ | 38,232 | $ | 1,687 | $ | 2,556 | $ | 10,615 | $ | 52 | $ | 935,155 | ||||||||||||||||
Allowance for Credit Losses: | ||||||||||||||||||||||||||||||||
Individually evaluated loans | $ | 16 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 16 | ||||||||||||||||
Collectively evaluated loans | 5,457 | 5,960 | 482 | 5 | 42 | 172 | 1 | 12,119 | ||||||||||||||||||||||||
Total allowance for credit losses | $ | 5,473 | $ | 5,960 | $ | 482 | $ | 5 | $ | 42 | $ | 172 | $ | 1 | $ | 12,135 |
Manufactured Housing | Commercial Real Estate | Commercial | SBA | HELOC | Single Family Real Estate | Consumer | Total Loans | |||||||||||||||||||||||||
Loans Held for Investment as of September 30, 2022: | (in thousands) | |||||||||||||||||||||||||||||||
Recorded Investment: | ||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 3,058 | $ | 212 | $ | 72 | $ | 43 | $ | — | $ | 213 | $ | — | $ | 3,598 | ||||||||||||||||
Impaired loans with no allowance recorded | 1,120 | — | 1,331 | 18 | — | 153 | — | 2,622 | ||||||||||||||||||||||||
Total loans individually evaluated for impairment | 4,178 | 212 | 1,403 | 61 | — | 366 | — | 6,220 | ||||||||||||||||||||||||
Loans collectively evaluated for impairment | 305,811 | 544,161 | 52,639 | 3,407 | 3,373 | 8,615 | 323 | 918,329 | ||||||||||||||||||||||||
Total loans held for investment | $ | 309,989 | $ | 544,373 | $ | 54,042 | $ | 3,468 | $ | 3,373 | $ | 8,981 | $ | 323 | $ | 924,549 | ||||||||||||||||
Unpaid Principal Balance | ||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 3,058 | $ | 212 | $ | 72 | $ | 43 | $ | — | $ | 213 | $ | — | $ | 3,598 | ||||||||||||||||
Impaired loans with no allowance recorded | 1,120 | — | 1,331 | 18 | — | 153 | — | 2,622 | ||||||||||||||||||||||||
Total loans individually evaluated for impairment | 4,178 | 212 | 1,403 | 61 | — | 366 | — | 6,220 | ||||||||||||||||||||||||
Loans collectively evaluated for impairment | 305,811 | 544,161 | 52,639 | 3,407 | 3,373 | 8,615 | 323 | 918,329 | ||||||||||||||||||||||||
Total loans held for investment | $ | 309,989 | $ | 544,373 | $ | 54,042 | $ | 3,468 | $ | 3,373 | $ | 8,981 | $ | 323 | $ | 924,549 | ||||||||||||||||
Related Allowance for Loan Losses | ||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment | 166 | 17 | 1 | 1 | — | 9 | — | 194 | ||||||||||||||||||||||||
Loans collectively evaluated for impairment | 3,821 | 6,305 | 630 | 18 | 37 | 106 | 2 | 10,919 | ||||||||||||||||||||||||
Total allowance for loan losses | $ | 3,987 | $ | 6,322 | $ | 631 | $ | 19 | $ | 37 | $ | 115 | $ | 2 | $ | 11,113 |
Manufactured Housing | Commercial Real Estate | Commercial | SBA | HELOC | Single Family Real Estate | Consumer | Total Loans | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Recorded Investment: | ||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 2,918 | $ | 209 | $ | 67 | $ | 41 | $ | — | $ | 208 | $ | — | $ | 3,443 | ||||||||||||||||
Impaired loans with no allowance recorded | 1,166 | — | 1,297 | — | — | 151 | — | 2,614 | ||||||||||||||||||||||||
Total loans individually evaluated for impairment | 4,084 | 209 | 1,364 | 41 | — | 359 | — | 6,057 | ||||||||||||||||||||||||
Loans collectively evaluated for impairment | 311,741 | 545,108 | 57,706 | 3,441 | 2,613 | 8,350 | 107 | 929,066 | ||||||||||||||||||||||||
Total loans held for investment | $ | 315,825 | $ | 545,317 | $ | 59,070 | $ | 3,482 | $ | 2,613 | $ | 8,709 | $ | 107 | $ | 935,123 | ||||||||||||||||
Related Allowance for Loan Losses | ||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment | 157 | 18 | — | 1 | — | 8 | — | 184 | ||||||||||||||||||||||||
Loans collectively evaluated for impairment | 3,722 | 5,962 | 747 | 20 | 27 | 99 | 4 | 10,581 | ||||||||||||||||||||||||
Total allowance for loan losses | $ | 3,879 | $ | 5,980 | $ | 747 | $ | 21 | $ | 27 | $ | 107 | $ | 4 | $ | 10,765 |
Manufactured Housing | Commercial Real Estate | Commercial | SBA | HELOC | Single Family Real Estate | Consumer | Total Loans | |||||||||||||||||||||||||
Loans Held for Investment as of December 31, 2021: | (in thousands) | |||||||||||||||||||||||||||||||
Recorded Investment: | ||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 3,563 | $ | 220 | $ | 85 | $ | 194 | $ | — | $ | 425 | $ | — | $ | 4,487 | ||||||||||||||||
Impaired loans with no allowance recorded | 1,358 | 1,402 | 1,505 | 226 | — | 258 | — | 4,749 | ||||||||||||||||||||||||
Total loans individually evaluated for impairment | 4,921 | 1,622 | 1,590 | 420 | — | 683 | — | 9,236 | ||||||||||||||||||||||||
Loans collectively evaluated for impairment | 292,442 | 479,179 | 53,697 | 23,239 | 3,579 | 8,066 | 109 | 860,311 | ||||||||||||||||||||||||
Total loans held for investment | $ | 297,363 | $ | 480,801 | $ | 55,287 | $ | 23,659 | $ | 3,579 | $ | 8,749 | $ | 109 | $ | 869,547 | ||||||||||||||||
Unpaid Principal Balance | ||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 3,563 | $ | 220 | $ | 85 | $ | 194 | $ | — | $ | 683 | $ | — | $ | 4,745 | ||||||||||||||||
Impaired loans with no allowance recorded | 1,358 | 1,402 | 1,505 | 226 | — | — | — | 4,491 | ||||||||||||||||||||||||
Total loans individually evaluated for impairment | 4,921 | 1,622 | 1,590 | 420 | — | 683 | — | 9,236 | ||||||||||||||||||||||||
Loans collectively evaluated for impairment | 292,442 | 479,179 | 53,697 | 23,239 | 3,579 | 8,066 | 109 | 860,311 | ||||||||||||||||||||||||
Total loans held for investment | $ | 297,363 | $ | 480,801 | $ | 55,287 | $ | 23,659 | $ | 3,579 | $ | 8,749 | $ | 109 | $ | 869,547 | ||||||||||||||||
Related Allowance for Loan Losses | ||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment | 210 | 17 | — | 1 | — | 12 | — | 240 | ||||||||||||||||||||||||
Loans collectively evaluated for impairment | 2,396 | 6,712 | 923 | 21 | 18 | 93 | 1 | 10,164 | ||||||||||||||||||||||||
Total allowance for loan losses | $ | 2,606 | $ | 6,729 | $ | 923 | $ | 22 | $ | 18 | $ | 105 | $ | 1 | $ | 10,404 |
Three Months Ended September 30, | ||||||||||||||||
2022 | 2021 | |||||||||||||||
Average Investment in Impaired Loans | Interest Income | Average Investment in Impaired Loans | Interest Income | |||||||||||||
(in thousands) | ||||||||||||||||
Manufactured housing | $ | 4,198 | $ | 88 | $ | 4,961 | $ | 95 | ||||||||
Commercial real estate: SBA 504 1st trust deed | 213 | 4 | 1,533 | 4 | ||||||||||||
Commercial | 1,423 | 24 | 1,622 | 24 | ||||||||||||
SBA | 85 | 7 | 593 | 4 | ||||||||||||
Single family real estate | 488 | 6 | 1,512 | 10 | ||||||||||||
Total | $ | 6,407 | $ | 129 | $ | 10,221 | $ | 137 |
Nine Months Ended September 30, | Manufactured Homes | Single Family Residence | Machinery & Equipment | Total | ||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||
Average Investment in Impaired Loans | Interest Income | Average Investment in Impaired Loans | Interest Income | |||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
September 30, 2023 | (in thousands) | |||||||||||||||||||||||||||||||
Manufactured housing | $ | 4,503 | $ | 261 | $ | 5,683 | $ | 277 | $ | 1,014 | $ | — | $ | — | $ | 1,014 | ||||||||||||||||
Commercial real estate: SBA 504 1st trust deed | 525 | 12 | 1,615 | 48 | ||||||||||||||||||||||||||||
Commercial real estate | 2,277 | — | — | 2,277 | ||||||||||||||||||||||||||||
Commercial | 1,489 | 67 | 1,645 | 78 | — | — | 1,210 | 1,210 | ||||||||||||||||||||||||
SBA | 164 | 19 | 480 | 11 | ||||||||||||||||||||||||||||
Single family real estate | 577 | 19 | 1,913 | 91 | — | 141 | — | 141 | ||||||||||||||||||||||||
Total | $ | 7,258 | $ | 378 | $ | 11,336 | $ | 505 | $ | 3,291 | $ | 141 | $ | 1,210 | $ | 4,642 |
Manufactured Homes | Single Family Residence | Machinery & Equipment | Total | |||||||||||||
December 31, 2022 | (in thousands) | |||||||||||||||
Manufactured housing | $ | 574 | $ | — | $ | — | $ | 574 | ||||||||
Commercial | — | — | 1,297 | 1,297 | ||||||||||||
Single family real estate | — | 150 | — | 150 | ||||||||||||
Total | $ | 574 | $ | 150 | $ | 1,297 | $ | 2,021 |
September 30, 2022 | ||||||||||||||||||||
Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Manufactured housing | $ | 308,897 | $ | — | $ | 1,092 | $ | — | $ | 309,989 | ||||||||||
Commercial real estate: | ||||||||||||||||||||
Commercial real estate | 478,397 | 225 | 8,084 | — | 486,706 | |||||||||||||||
SBA 504 1st trust deed | 12,632 | — | 475 | — | 13,107 | |||||||||||||||
Land | 12,433 | — | — | — | 12,433 | |||||||||||||||
Construction | 30,858 | — | — | — | 30,858 | |||||||||||||||
Commercial | 47,439 | 2,787 | 2,670 | — | 52,896 | |||||||||||||||
SBA | 839 | — | — | — | 839 | |||||||||||||||
HELOC | 3,373 | — | — | — | 3,373 | |||||||||||||||
Single family real estate | 8,823 | — | 158 | — | 8,981 | |||||||||||||||
Consumer | 323 | — | — | — | 323 | |||||||||||||||
Total, net | 904,014 | 3,012 | 12,479 | — | 919,505 | |||||||||||||||
Government guaranteed loans | 4,384 | — | 660 | — | 5,044 | |||||||||||||||
Total | $ | 908,398 | $ | 3,012 | $ | 13,139 | $ | — | $ | 924,549 |
December 31, 2021 | ||||||||||||||||||||
Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Manufactured housing | $ | 295,810 | $ | — | $ | 1,553 | $ | — | $ | 297,363 | ||||||||||
Commercial real estate: | ||||||||||||||||||||
Commercial real estate | 415,471 | 3,043 | 11,255 | — | 429,769 | |||||||||||||||
SBA 504 1st trust deed | 14,646 | — | 2,315 | — | 16,961 | |||||||||||||||
Land | 7,185 | — | — | — | 7,185 | |||||||||||||||
Construction | 25,593 | — | — | — | 25,593 | |||||||||||||||
Commercial | 50,372 | 26 | 2,265 | — | 52,663 | |||||||||||||||
SBA | 1,891 | — | 114 | — | 2,005 | |||||||||||||||
HELOC | 3,579 | — | — | — | 3,579 | |||||||||||||||
Single family real estate | 8,487 | — | 262 | — | 8,749 | |||||||||||||||
Consumer | 109 | — | — | — | 109 | |||||||||||||||
Total, net | 823,143 | 3,069 | 17,764 | $ | — | 843,976 | ||||||||||||||
Government guaranteed loans | 23,610 | — | 1,961 | — | 25,571 | |||||||||||||||
Total | $ | 846,753 | $ | 3,069 | $ | 19,725 | $ | — | $ | 869,547 |
Term Loans Amortized Cost Basis by Origination Year | ||||||||||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving | Total | |||||||||||||||||||||||||
September 30, 2023 | (in thousands) | |||||||||||||||||||||||||||||||
Manufactured housing: | ||||||||||||||||||||||||||||||||
Pass | $ | 38,199 | $ | 57,135 | $ | 49,553 | $ | 46,564 | $ | 24,731 | $ | 106,655 | $ | — | $ | 322,837 | ||||||||||||||||
Substandard | — | — | 101 | 219 | — | 1,911 | — | 2,231 | ||||||||||||||||||||||||
Total | 38,199 | 57,135 | 49,654 | 46,783 | 24,731 | 108,566 | — | 325,068 | ||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||
Pass | 34,298 | 152,500 | 122,794 | 58,350 | 49,489 | 121,401 | — | 538,832 | ||||||||||||||||||||||||
Special mention | — | — | 464 | 211 | 4,145 | 1,014 | — | 5,834 | ||||||||||||||||||||||||
Substandard | — | — | 500 | 2,993 | — | 8,786 | — | 12,279 | ||||||||||||||||||||||||
Total | 34,298 | 152,500 | 123,758 | 61,554 | 53,634 | 131,201 | — | 556,945 | ||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||
Pass | 1,589 | 5,497 | 2,663 | 1,094 | 738 | 13,418 | 8,176 | 33,175 | ||||||||||||||||||||||||
Special mention | — | — | 1,996 | 407 | — | — | — | 2,403 | ||||||||||||||||||||||||
Substandard | — | — | — | — | — | 2,654 | — | 2,654 | ||||||||||||||||||||||||
Total | 1,589 | 5,497 | 4,659 | 1,501 | 738 | 16,072 | 8,176 | 38,232 | ||||||||||||||||||||||||
SBA: | ||||||||||||||||||||||||||||||||
Pass | — | — | — | 192 | — | 1,454 | — | 1,646 | ||||||||||||||||||||||||
Special mention | — | — | — | — | — | 40 | — | 40 | ||||||||||||||||||||||||
Loss | — | — | — | — | — | 1 | — | 1 | ||||||||||||||||||||||||
Total | — | — | — | 192 | — | 1,495 | — | 1,687 | ||||||||||||||||||||||||
HELOC: | ||||||||||||||||||||||||||||||||
Pass | — | — | — | — | — | 2,556 | — | 2,556 | ||||||||||||||||||||||||
Total | — | — | — | — | — | 2,556 | — | 2,556 | ||||||||||||||||||||||||
Single family real estate: | ||||||||||||||||||||||||||||||||
Pass | 2,242 | 826 | 1,997 | 1,989 | 748 | 2,667 | — | 10,469 | ||||||||||||||||||||||||
Substandard | — | — | — | — | — | 146 | — | 146 | ||||||||||||||||||||||||
Total | 2,242 | 826 | 1,997 | 1,989 | 748 | 2,813 | — | 10,615 | ||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||
Pass | 52 | — | — | — | — | — | — | 52 | ||||||||||||||||||||||||
Total | 52 | — | — | — | — | — | — | 52 | ||||||||||||||||||||||||
Total loans | $ | 76,380 | $ | 215,958 | $ | 180,068 | $ | 112,019 | $ | 79,851 | $ | 262,703 | $ | 8,176 | $ | 935,155 |
Term Loans Amortized Cost Basis by Origination Year | ||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | Prior | Revolving | Total | |||||||||||||||||||||||||
December 31, 2022 | (in thousands) | |||||||||||||||||||||||||||||||
(Manufactured housing: | ||||||||||||||||||||||||||||||||
Pass | $ | 62,591 | $ | 54,403 | $ | 51,158 | $ | 26,745 | $ | 25,768 | $ | 94,106 | $ | — | $ | 314,771 | ||||||||||||||||
Substandard | — | — | — | — | 121 | 933 | — | 1,054 | ||||||||||||||||||||||||
Total | 62,591 | 54,403 | 51,158 | 26,745 | 25,889 | 95,039 | — | 315,825 | ||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||
Pass | 161,023 | 125,074 | 57,441 | 50,134 | 32,662 | 95,174 | — | 521,508 | ||||||||||||||||||||||||
Special mention | — | — | 10,092 | 4,206 | 1,033 | — | — | 15,331 | ||||||||||||||||||||||||
Substandard | — | — | 1,056 | — | — | 7,422 | — | 8,478 | ||||||||||||||||||||||||
Total | 161,023 | 125,074 | 68,589 | 54,340 | 33,695 | 102,596 | — | 545,317 | ||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||
Pass | 8,804 | 2,924 | 1,505 | 1,107 | 6,956 | 10,889 | 20,699 | 52,884 | ||||||||||||||||||||||||
Special mention | — | 2,723 | — | — | — | — | — | 2,723 | ||||||||||||||||||||||||
Substandard | — | — | — | — | — | 3,463 | — | 3,463 | ||||||||||||||||||||||||
Total | 8,804 | 5,647 | 1,505 | 1,107 | 6,956 | 14,352 | 20,699 | 59,070 | ||||||||||||||||||||||||
SBA: | ||||||||||||||||||||||||||||||||
Pass | — | 690 | 1,083 | — | — | 1,709 | — | 3,482 | ||||||||||||||||||||||||
Total | — | 690 | 1,083 | — | — | 1,709 | — | 3,482 | ||||||||||||||||||||||||
HELOC: | ||||||||||||||||||||||||||||||||
Pass | — | — | — | — | — | — | 2,613 | 2,613 | ||||||||||||||||||||||||
Total | — | — | — | — | — | — | 2,613 | 2,613 | ||||||||||||||||||||||||
Single family real estate: | ||||||||||||||||||||||||||||||||
Pass | 817 | 2,187 | 2,028 | 761 | 364 | 2,398 | — | 8,555 | ||||||||||||||||||||||||
Substandard | — | — | — | — | 150 | 4 | — | 154 | ||||||||||||||||||||||||
Total | 817 | 2,187 | 2,028 | 761 | 514 | 2,402 | — | 8,709 | ||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||
Pass | 13 | — | — | — | — | 94 | — | 107 | ||||||||||||||||||||||||
Total | 13 | — | — | — | — | 94 | — | 107 | ||||||||||||||||||||||||
Total loans | $ | 233,248 | $ | 188,001 | $ | 124,363 | $ | 82,953 | $ | 67,054 | $ | 216,192 | $ | 23,312 | $ | 935,123 |
For the Nine Months Ended September 30, 2023 | ||||||||||||
Amortized Cost of Modified Loans | % of Total Class of Loans | Term Extension (Weighted Average years) | ||||||||||
(dollars in thousands) | ||||||||||||
Commercial real estate | $ | 500 | 0.09 | % | 5.00 | |||||||
Commercial | 1,417 | 2.40 | % | 60.00 | ||||||||
Total | $ | 1,917 | 0.20 | % | 45.65 |
5. | OTHER ASSETS ACQUIRED THROUGH FORECLOSURE |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 2,250 | $ | 2,572 | $ | 2,518 | $ | 2,614 | $ | 65 | $ | 2,250 | $ | 2,250 | $ | 2,518 | ||||||||||||||||
Additions | — | — | — | 136 | 1,511 | — | 1,576 | — | ||||||||||||||||||||||||
Proceeds from dispositions | — | — | (372 | ) | — | (46 | ) | — | (2,551 | ) | (372 | ) | ||||||||||||||||||||
Gain (loss) on sales, net | — | — | 104 | (178 | ) | |||||||||||||||||||||||||||
(Loss)/gain on sales, net | (19 | ) | — | 236 | 104 | |||||||||||||||||||||||||||
Balance, end of period | $ | 2,250 | $ | 2,572 | $ | 2,250 | $ | 2,572 | $ | 1,511 | $ | 2,250 | $ | 1,511 | $ | 2,250 |
6. | FAIR VALUE MEASUREMENT |
• | Level 1— Observable quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
• | Level 2— Observable quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, matrix pricing, or model-based valuation techniques where all significant assumptions are observable, either directly or indirectly in the market. |
• | Level 3— Model-based techniques where significant assumptions are not observable, either directly or indirectly, in the market. These unobservable assumptions reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques may include use of discounted cash flow models and similar techniques. |
Fair Value Measurements at the End of the Reporting Period Using: | Fair Value Measurements at the End of the Reporting Period Using: | |||||||||||||||||||||||||||||||
September 30, 2022 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value | ||||||||||||||||||||||||||||
September 30, 2023 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value | ||||||||||||||||||||||||||||
Assets: | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||
Investment securities measured at fair value | $ | 198 | $ | — | $ | — | $ | 198 | ||||||||||||||||||||||||
Investment securities available-for-sale | ||||||||||||||||||||||||||||||||
Investment securities - measured at fair value | $ | 309 | $ | — | $ | — | $ | 309 | ||||||||||||||||||||||||
Investment securities - available-for-sale: | ||||||||||||||||||||||||||||||||
U.S. government agency notes | — | 4,480 | — | 4,480 | — | 3,493 | — | 3,493 | ||||||||||||||||||||||||
U.S. government agency collateralized mortgage obligations | — | 4,470 | — | 4,470 | ||||||||||||||||||||||||||||
U.S. Treasury securities | — | 39,795 | — | 39,795 | ||||||||||||||||||||||||||||
U.S. government agency CMO | — | 3,978 | — | 3,978 | ||||||||||||||||||||||||||||
Corporate debt securities | — | 8,370 | — | 8,370 | — | 7,653 | — | 7,653 | ||||||||||||||||||||||||
Interest only strips | — | — | 9 | 9 | — | — | 5 | 5 | ||||||||||||||||||||||||
Servicing assets | — | — | 34 | 34 | — | — | 40 | 40 | ||||||||||||||||||||||||
Total | $ | 198 | $ | 57,115 | $ | 43 | $ | 57,356 | $ | 309 | $ | 15,124 | $ | 45 | $ | 15,478 |
Fair Value Measurements at the End of the Reporting Period Using: | Fair Value Measurements at the End of the Reporting Period Using: | |||||||||||||||||||||||||||||||
December 31, 2021 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value | ||||||||||||||||||||||||||||
December 31, 2022 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value | ||||||||||||||||||||||||||||
Assets: | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||
Investment securities measured at fair value | $ | 248 | $ | — | $ | — | $ | 248 | ||||||||||||||||||||||||
Investment securities available-for-sale | ||||||||||||||||||||||||||||||||
Investment securities - measured at fair value | $ | 225 | $ | — | $ | — | $ | 225 | ||||||||||||||||||||||||
Investment securities - available-for-sale: | ||||||||||||||||||||||||||||||||
U.S. government agency notes | — | 5,508 | — | 5,508 | — | 4,107 | — | 4,107 | ||||||||||||||||||||||||
U.S. government agency collateralized mortgage obligations | — | 4,883 | — | 4,883 | ||||||||||||||||||||||||||||
U.S. government agency CMO | — | 4,296 | — | 4,296 | ||||||||||||||||||||||||||||
U.S. Treasury securities | — | 9,970 | — | 9,970 | ||||||||||||||||||||||||||||
Corporate debt securities | — | 9,320 | — | 9,320 | — | 8,315 | — | 8,315 | ||||||||||||||||||||||||
Interest only strips | — | — | 15 | 15 | — | — | 7 | 7 | ||||||||||||||||||||||||
Servicing assets | — | — | 1,600 | 1,600 | — | — | 26 | 26 | ||||||||||||||||||||||||
Total | $ | 248 | $ | 19,711 | $ | 1,615 | $ | 21,574 | $ | 225 | $ | 26,688 | $ | 33 | $ | 26,946 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | (in thousands) | ||||||||||||||||||||||||||||
Servicing Assets: | (in thousands) | |||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 36 | 35 | $ | 44 | $ | 43 | $ | 3 | $ | 36 | $ | 26 | $ | 44 | |||||||||||||||||
Additions | — | — | — | — | ||||||||||||||||||||||||||||
Amortization | — | — | — | — | ||||||||||||||||||||||||||||
Valuation adjustments | (2 | ) | 9 | (10 | ) | 1 | 37 | (2 | ) | 14 | (10 | ) | ||||||||||||||||||||
Balance, end of period | $ | 34 | 44 | $ | 34 | $ | 44 | $ | 40 | $ | 34 | $ | 40 | $ | 34 |
Fair Value Measurements at the End of the Reporting Period Using: | Fair Value Measurements at the End of the Reporting Period Using: | |||||||||||||||||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Active Markets for Similar Assets (Level 2) | Unobservable Inputs (Level 3) | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Active Markets for Similar Assets (Level 2) | Unobservable Inputs (Level 3) | |||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
September 30, 2022: | ||||||||||||||||||||||||||||||||
Impaired loans | $ | 3,404 | $ | — | $ | 3,404 | $ | — | ||||||||||||||||||||||||
September 30, 2023: | ||||||||||||||||||||||||||||||||
Other assets acquired through foreclosure | 2,250 | — | 2,250 | — | $ | 1,511 | $ | — | $ | 1,511 | $ | — | ||||||||||||||||||||
Total | $ | 5,654 | $ | — | $ | 5,654 | $ | — | $ | 1,511 | $ | — | $ | 1,511 | $ | — |
Fair Value Measurements at the End of the Reporting Period Using: | Fair Value Measurements at the End of the Reporting Period Using: | |||||||||||||||||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Active Markets for Similar Assets (Level 2) | Unobservable Inputs (Level 3) | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Active Markets for Similar Assets (Level 2) | Unobservable Inputs (Level 3) | |||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
December 31, 2021: | ||||||||||||||||||||||||||||||||
December 31, 2022: | ||||||||||||||||||||||||||||||||
Impaired loans | $ | 3,785 | $ | — | $ | 3,785 | $ | — | $ | 3,805 | $ | — | $ | 3,805 | $ | — | ||||||||||||||||
Other assets acquired through foreclosure | 2,518 | — | 2,518 | — | 2,250 | — | 2,250 | — | ||||||||||||||||||||||||
Total | $ | 6,303 | $ | — | $ | 6,303 | $ | — | $ | 6,055 | $ | — | $ | 6,055 | $ | — |
September 30, 2022 | September 30, 2023 | |||||||||||||||||||||||||||||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||||||||||||||||||||||||||||
Amount | Level 1 | Level 2 | Level 3 | Total | Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||
Financial assets: | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 51,295 | $ | 51,295 | $ | — | $ | — | $ | 51,295 | $ | 140,619 | $ | 140,619 | $ | — | $ | — | $ | 140,619 | ||||||||||||||||||||
FHLB and FRB stock | 4,533 | — | 4,533 | — | 4,533 | 4,865 | — | 4,865 | — | 4,865 | ||||||||||||||||||||||||||||||
Investment securities - available-for-sale | 57,115 | — | 57,115 | — | 57,115 | 15,124 | — | 15,124 | — | 15,124 | ||||||||||||||||||||||||||||||
Investment securities - held-to-maturity | 2,596 | — | 2,452 | — | 2,452 | 2,158 | — | 1,987 | — | 1,987 | ||||||||||||||||||||||||||||||
Investment securities - measured at fair value | 198 | 198 | — | — | 198 | 309 | 309 | — | — | 309 | ||||||||||||||||||||||||||||||
Loans, net and loans held for sale | 934,581 | — | 894,582 | 3,404 | 897,986 | 940,547 | — | 884,199 | — | 884,199 | ||||||||||||||||||||||||||||||
Accrued interest receivable | 5,328 | — | 5,328 | — | 5,328 | 5,626 | — | 5,626 | — | 5,626 | ||||||||||||||||||||||||||||||
Servicing assets | 1,555 | — | — | 2,635 | 2,635 | 1,323 | — | — | 2,439 | 2,439 | ||||||||||||||||||||||||||||||
Interest only strips | 9 | — | — | 9 | 9 | 5 | — | — | 5 | 5 | ||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||||||||||
Deposits | 852,189 | — | 847,583 | — | 847,583 | 916,093 | — | 912,521 | — | 912,521 | ||||||||||||||||||||||||||||||
FHLB advances | 110,000 | — | 102,609 | — | 102,609 | 90,000 | — | 83,876 | — | 83,876 | ||||||||||||||||||||||||||||||
Accrued interest payable | 45 | — | 45 | — | 45 | 2,501 | — | 2,501 | — | 2,501 |
December 31, 2021 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||||||||||||||||||||||||||||
Amount | Level 1 | Level 2 | Level 3 | Total | Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||
Financial assets: | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 208,375 | $ | 208,375 | $ | — | $ | — | $ | 208,375 | $ | 64,690 | $ | 64,690 | $ | — | $ | — | $ | 64,690 | ||||||||||||||||||||
FHLB and FRB stock | 4,441 | — | 4,441 | — | 4,441 | 4,533 | — | 4,533 | — | 4,533 | ||||||||||||||||||||||||||||||
Investment securities - available-for-sale | 19,711 | — | 19,711 | — | 19,711 | 26,688 | — | 26,688 | — | 26,688 | ||||||||||||||||||||||||||||||
Investment securities - held-to-maturity | 2,815 | — | 2,974 | — | 2,974 | 2,557 | — | 2,423 | — | 2,423 | ||||||||||||||||||||||||||||||
Investment securities - measured at fair value | 248 | 248 | — | — | 248 | 225 | 225 | — | — | 225 | ||||||||||||||||||||||||||||||
Loans, net and loans held for sale | 881,679 | — | 870,868 | 5,452 | 876,320 | 944,577 | — | 892,134 | 3,805 | 895,939 | ||||||||||||||||||||||||||||||
Accrued interest receivable | 5,841 | — | 5,841 | — | 5,841 | 5,295 | — | 5,295 | — | 5,295 | ||||||||||||||||||||||||||||||
Servicing assets | 1,600 | — | — | 2,254 | 2,254 | 1,480 | — | — | 2,646 | 2,646 | ||||||||||||||||||||||||||||||
Interest only strips | 15 | — | — | 15 | 15 | 7 | — | — | 7 | 7 | ||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||||||||||
Deposits | 950,131 | — | 948,648 | — | 948,648 | 875,084 | — | 867,697 | — | 867,697 | ||||||||||||||||||||||||||||||
FHLB advances | 90,000 | — | 88,409 | — | 88,409 | 90,000 | — | 83,322 | — | 83,322 | ||||||||||||||||||||||||||||||
Accrued interest payable | 58 | — | 58 | — | 58 | 126 | — | 126 | — | 126 |
7. | BORROWINGS |
Within one year | $ | 20,000 | ||
After one through two years | — | |||
After two through three years | 90,000 | |||
Total | $ | 110,000 |
8. | STOCKHOLDERS’ EQUITY |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Unrealized holding gains (losses) on AFS | Unrealized holding gains (losses) on AFS | |||||||||||||||
(in thousands) | ||||||||||||||||
Beginning balance | $ | (447 | ) | $ | 150 | $ | 92 | $ | 35 | |||||||
Other comprehensive (loss) income before reclassifications | (307 | ) | (12 | ) | (846 | ) | 103 | |||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | — | — | ||||||||||||
Net current-period other comprehensive (loss) income | (307 | ) | (12 | ) | (846 | ) | 103 | |||||||||
Ending Balance | $ | (754 | ) | $ | 138 | $ | (754 | ) | $ | 138 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Unrealized holding gains (losses) on AFS | Unrealized holding gains (losses) on AFS | |||||||||||||||
(in thousands) | ||||||||||||||||
Beginning balance | $ | (1,680 | ) | $ | (447 | ) | $ | (771 | ) | $ | 92 | |||||
Other comprehensive income (loss) before reclassifications | 489 | (307 | ) | (420 | ) | (846 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | — | — | ||||||||||||
Net current-period other comprehensive income (loss) | 489 | (307 | ) | (420 | ) | (846 | ) | |||||||||
Ending balance | $ | (1,191 | ) | $ | (754 | ) | $ | (1,191 | ) | $ | (754 | ) |
9. | CAPITAL |
Total Capital (To Risk- Weighted Assets) | Tier 1 Capital (To Risk- Weighted Assets) | Common Equity Tier 1 (To Risk- Weighted Assets) | Leverage Ratio/Tier 1 Capital (To Average Assets) | Total Capital (To Risk- Weighted Assets) | Tier 1 Capital (To Risk- Weighted Assets) | Common Equity Tier 1 (To Risk- Weighted Assets) | Leverage Ratio/Tier 1 Capital (To Average Assets) | |||||||||||||||||||||||||
September 30, 2022 | ||||||||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||
CWB’s actual regulatory ratios | 12.46 | % | 11.30 | % | 11.30 | % | 9.83 | % | 13.27 | % | 12.09 | % | 12.09 | % | 10.84 | % | ||||||||||||||||
Minimum capital requirements | 8.00 | % | 6.00 | % | 4.50 | % | 4.00 | % | 8.00 | % | 6.00 | % | 4.50 | % | 4.00 | % | ||||||||||||||||
Well-capitalized requirements | 10.00 | % | 8.00 | % | 6.50 | % | N/A | 10.00 | % | 8.00 | % | 6.50 | % | 5.00 | % |
Total Capital (To Risk- Weighted Assets) | Tier 1 Capital (To Risk- Weighted Assets) | Common Equity Tier 1 (To Risk- Weighted Assets) | Leverage Ratio/Tier 1 Capital (To Average Assets) | Total Capital (To Risk- Weighted Assets) | Tier 1 Capital (To Risk- Weighted Assets) | Common Equity Tier 1 (To Risk- Weighted Assets) | Leverage Ratio/Tier 1 Capital (To Average Assets) | |||||||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
CWB’s actual regulatory ratios | 12.19 | % | 11.02 | % | 11.02 | % | 8.56 | % | 12.56 | % | 11.44 | % | 11.44 | % | 10.34 | % | ||||||||||||||||
Minimum capital requirements | 8.00 | % | 6.00 | % | 4.50 | % | 4.00 | % | 8.00 | % | 6.00 | % | 4.50 | % | 4.00 | % | ||||||||||||||||
Well-capitalized requirements | 10.00 | % | 8.00 | % | 6.50 | % | N/A | 10.00 | % | 8.00 | % | 6.50 | % | 5.00 | % |
10. | REVENUE RECOGNITION |
Non-interest income | Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
In-scope of Topic 606: | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||
Service charges on deposit accounts | $ | 87 | $ | 59 | $ | 225 | $ | 171 | $ | 275 | $ | 87 | $ | 408 | $ | 225 | ||||||||||||||||
Exchange fees and other service charges | 129 | 125 | 379 | 345 | 231 | 129 | 337 | 379 | ||||||||||||||||||||||||
Non-interest income (in-scope of ASC 606) | 216 | 184 | 604 | 516 | 506 | 216 | 745 | 604 | ||||||||||||||||||||||||
Non-interest income (out-of-scope of ASC 606) | 656 | 856 | 2,610 | 2,293 | 575 | 656 | 2,244 | 2,610 | ||||||||||||||||||||||||
Total | $ | 872 | $ | 1,040 | $ | 3,214 | $ | 2,809 | $ | 1,081 | $ | 872 | $ | 2,989 | $ | 3,214 |
11. | LEASES |
Nine Months Ended September 30, | ||||||||||||||||
Nine Months Ended September 30, | 2023 | 2022 | ||||||||||||||
2022 | 2021 | (in thousands) | ||||||||||||||
Lease cost: | (in thousands) | |||||||||||||||
Operating lease cost | $ | 1,008 | $ | 1,000 | $ | 765 | $ | 1,008 | ||||||||
Sublease income | — | — | — | — | ||||||||||||
Total lease cost | $ | 1,008 | $ | 1,000 | $ | 765 | $ | 1,008 | ||||||||
Other information: | ||||||||||||||||
Operating cash flows from operating leases | $ | 999 | $ | 1,068 | $ | 762 | $ | 999 | ||||||||
Weighted average remaining lease term - operating leases | 7.21 years | 8.93 years | 6.49 | 7.21 | ||||||||||||
Weighted average discount rate - operating leases | 3.25 | % | 3.22 | % | 3.66 | % | 3.25 | % |
2022 | $ | 252 | ||||||
2023 | 1,014 | $ | 260 | |||||
2024 | 1,026 | 1,041 | ||||||
2025 | 976 | 991 | ||||||
2026 | 876 | 891 | ||||||
2027 | 488 | |||||||
Thereafter | 2,011 | 1,554 | ||||||
Total future minimum lease payments | $ | 6,155 | 5,225 | |||||
Less remaining imputed interest | 685 | 606 | ||||||
Total lease liabilities | $ | 5,470 | $ | 4,619 |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | risks related to natural disasters, earthquakes, wildfires, terrorist attacks, threats of war or actual war, including the current military actions involving the Russian Federation and Ukraine and the recent conflict in the Middle East, supply chain interruptions, and health epidemics may impact our operations, revenues, costs, and stock price; and |
• | risks related to the transaction that is the subject of the Agreement of Reorganization and Merger dated October 10, 2023, by and among Central Valley Community Bancorp and Community West Bancshares (the “Reorganization Agreement”) pursuant to which the companies will combine in an all-stock merger transaction not satisfying the conditions to closing the transaction, including the companies not receiving the regulatory approvals and the shareholder approvals of the transaction and as a result not completing the transaction in accordance with the terms of the Reorganization Agreement. |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
(in thousands, except per share amounts) | (in thousands, except per share amounts) | |||||||||||||||||||||||||||||||
Net income | $ | 3,478 | $ | 3,635 | $ | 10,073 | $ | 10,207 | $ | 2,252 | $ | 3,478 | $ | 6,837 | $ | 10,073 | ||||||||||||||||
Basic earnings per share | $ | 0.40 | $ | 0.42 | $ | 1.16 | $ | 1.19 | $ | 0.25 | $ | 0.40 | $ | 0.77 | $ | 1.16 | ||||||||||||||||
Diluted earnings per share | $ | 0.39 | $ | 0.41 | $ | 1.13 | $ | 1.17 | $ | 0.25 | $ | 0.39 | $ | 0.76 | $ | 1.13 | ||||||||||||||||
Net interest margin | 4.39 | % | 3.97 | % | 4.09 | % | 4.13 | % | 3.98 | % | 4.39 | % | 4.07 | % | 4.09 | % | ||||||||||||||||
Return on average assets | 1.25 | % | 1.28 | % | 1.19 | % | 1.29 | % | 0.83 | % | 1.25 | % | 0.84 | % | 1.19 | % | ||||||||||||||||
Return on average stockholders' equity | 12.65 | % | 14.77 | % | 12.66 | % | 14.49 | % | ||||||||||||||||||||||||
Return on average common equity | 7.72 | % | 12.65 | % | 8.01 | % | 12.66 | % |
Three Months Ended September 30, | Increase | Nine Months Ended September 30, | Increase | Three Months Ended September 30, | Increase | Nine Months Ended September 30, | Increase | |||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | (Decrease) | 2022 | 2021 | (Decrease) | 2023 | 2022 | (Decrease) | 2023 | 2022 | (Decrease) | |||||||||||||||||||||||||||||||||||||
(in thousands, except per share amounts) | (in thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Income Statement Data: | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest and dividend income | $ | 12,654 | $ | 11,835 | $ | 819 | $ | 35,860 | $ | 34,541 | $ | 1,319 | $ | 14,553 | $ | 12,654 | $ | 1,899 | $ | 42,853 | $ | 35,860 | $ | 6,993 | ||||||||||||||||||||||||
Interest expense | 731 | 906 | (175 | ) | 2,191 | 2,884 | (693 | ) | 4,034 | 731 | 3,303 | 10,587 | 2,191 | 8,396 | ||||||||||||||||||||||||||||||||||
Net interest income | 11,923 | 10,929 | 994 | 33,669 | 31,657 | 2,012 | 10,519 | 11,923 | (1,404 | ) | 32,266 | 33,669 | (1,403 | ) | ||||||||||||||||||||||||||||||||||
Provision (credit) for loan losses | 298 | 7 | 291 | 266 | (207 | ) | 473 | |||||||||||||||||||||||||||||||||||||||||
Net interest income after provision (credit) for loan losses | 11,625 | 10,922 | 703 | 33,403 | 31,864 | 1,539 | ||||||||||||||||||||||||||||||||||||||||||
Provision (credit) for credit losses | 43 | 298 | (255 | ) | (667 | ) | 266 | (933 | ) | |||||||||||||||||||||||||||||||||||||||
Net interest income after provision (credit) for credit losses | 10,476 | 11,625 | (1,149 | ) | 32,933 | 33,403 | (470 | ) | ||||||||||||||||||||||||||||||||||||||||
Non-interest income | 872 | 1,040 | (168 | ) | 3,214 | 2,809 | 405 | 1,081 | 872 | 209 | 2,989 | 3,214 | (225 | ) | ||||||||||||||||||||||||||||||||||
Non-interest expenses | 7,610 | 6,860 | 750 | 22,693 | 20,389 | 2,304 | 8,363 | 7,610 | 753 | 26,051 | 22,693 | 3,358 | ||||||||||||||||||||||||||||||||||||
Income before provision for income taxes | 4,887 | 5,102 | (215 | ) | 13,924 | 14,284 | (360 | ) | 3,194 | 4,887 | (1,693 | ) | 9,871 | 13,924 | (4,053 | ) | ||||||||||||||||||||||||||||||||
Provision for income taxes | 1,409 | 1,467 | (58 | ) | 3,851 | 4,077 | (226 | ) | 942 | 1,409 | (467 | ) | 3,034 | 3,851 | (817 | ) | ||||||||||||||||||||||||||||||||
Net income | $ | 3,478 | $ | 3,635 | $ | (157 | ) | $ | 10,073 | $ | 10,207 | $ | (134 | ) | $ | 2,252 | $ | 3,478 | $ | (1,226 | ) | $ | 6,837 | $ | 10,073 | $ | (3,236 | ) | ||||||||||||||||||||
Earnings per share - basic | $ | 0.40 | $ | 0.42 | $ | (0.02 | ) | $ | 1.16 | $ | 1.19 | $ | (0.03 | ) | $ | 0.25 | $ | 0.40 | $ | (0.15 | ) | $ | 0.77 | $ | 1.16 | $ | (0.39 | ) | ||||||||||||||||||||
Earnings per share - diluted | $ | 0.39 | $ | 0.41 | $ | (0.02 | ) | $ | 1.13 | $ | 1.17 | $ | (0.04 | ) | $ | 0.25 | $ | 0.39 | $ | (0.14 | ) | $ | 0.76 | $ | 1.13 | $ | (0.37 | ) |
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||
Average Balance | Interest | Average Yield/Cost(2) | Average Balance | Interest | Average Yield/Cost(2) | Average Balance | Interest | Average Yield/Cost(1) | Average Balance | Interest | Average Yield/Cost(1) | |||||||||||||||||||||||||||||||||||||
Interest Earning Assets | (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Federal funds sold and interest earning deposits | $ | 76,265 | $ | 401 | 2.09 | % | $ | 182,182 | $ | 73 | 0.16 | % | ||||||||||||||||||||||||||||||||||||
Interest-Earning Assets | (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Federal funds sold and interest-earning deposits | $ | 70,564 | $ | 903 | 5.08 | % | $ | 76,265 | $ | 401 | 2.09 | % | ||||||||||||||||||||||||||||||||||||
Investment securities | 65,148 | 386 | 2.35 | % | 27,552 | 186 | 2.68 | % | 22,568 | 319 | 5.61 | % | 65,148 | 386 | 2.35 | % | ||||||||||||||||||||||||||||||||
Loans | 935,169 | 11,867 | 5.03 | % | 882,058 | 11,576 | 5.21 | % | 955,609 | 13,331 | 5.53 | % | 935,169 | 11,867 | 5.03 | % | ||||||||||||||||||||||||||||||||
Total interest earning assets | 1,076,582 | 12,654 | 4.66 | % | 1,091,792 | 11,835 | 4.30 | % | ||||||||||||||||||||||||||||||||||||||||
Total interest-earning assets | 1,048,741 | 14,553 | 5.51 | % | 1,076,582 | 12,654 | 4.66 | % | ||||||||||||||||||||||||||||||||||||||||
Nonearning Assets | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash and due from banks | 2,177 | 2,162 | 2,114 | 2,177 | ||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | (11,031 | ) | (10,174 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses | (12,107 | ) | (11,031 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Other assets | 38,022 | 39,818 | 35,121 | 38,022 | ||||||||||||||||||||||||||||||||||||||||||||
Total Assets | $ | 1,105,750 | $ | 1,123,598 | $ | 1,073,869 | $ | 1,105,750 | ||||||||||||||||||||||||||||||||||||||||
Interest Bearing Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest bearing demand deposits | 465,317 | 325 | 0.28 | % | 499,301 | 411 | 0.33 | % | ||||||||||||||||||||||||||||||||||||||||
Interest-Bearing Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing demand deposits | 388,385 | 1,908 | 1.95 | % | 465,317 | 325 | 0.28 | % | ||||||||||||||||||||||||||||||||||||||||
Savings deposits | 25,133 | 14 | 0.22 | % | 21,335 | 18 | 0.33 | % | 17,797 | 13 | 0.29 | % | 25,133 | 14 | 0.22 | % | ||||||||||||||||||||||||||||||||
Time deposits | 151,130 | 189 | 0.50 | % | 188,512 | 279 | 0.59 | % | 242,794 | 1,909 | 3.12 | % | 151,130 | 189 | 0.50 | % | ||||||||||||||||||||||||||||||||
Total interest bearing deposits | 641,580 | 528 | 0.33 | % | 709,148 | 708 | 0.40 | % | ||||||||||||||||||||||||||||||||||||||||
FHLB advances | 90,764 | 203 | 0.89 | % | 90,000 | 198 | 0.87 | % | ||||||||||||||||||||||||||||||||||||||||
Total interest bearing liabilities | 732,344 | 731 | 0.40 | % | 799,148 | 906 | 0.45 | % | ||||||||||||||||||||||||||||||||||||||||
Non-interest Bearing Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||
Non-interest bearing demand deposits | 248,538 | 211,017 | ||||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 648,976 | 3,830 | 2.34 | % | 641,580 | 528 | 0.33 | % | ||||||||||||||||||||||||||||||||||||||||
FHLB advances and other borrowings | 90,217 | 204 | 0.90 | % | 90,764 | 203 | 0.89 | % | ||||||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 739,193 | 4,034 | 2.17 | % | 732,344 | 731 | 0.40 | % | ||||||||||||||||||||||||||||||||||||||||
Noninterest-Bearing Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits | 200,804 | 248,538 | ||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 15,789 | 15,797 | 18,209 | 15,789 | ||||||||||||||||||||||||||||||||||||||||||||
Stockholders' equity | 109,079 | 97,636 | 115,663 | 109,079 | ||||||||||||||||||||||||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,105,750 | $ | 1,123,598 | $ | 1,073,869 | $ | 1,105,750 | ||||||||||||||||||||||||||||||||||||||||
Net interest income and margin (3) | $ | 11,923 | 4.39 | % | $ | 10,929 | 3.97 | % | $ | 10,519 | 3.98 | % | $ | 11,923 | 4.39 | % | ||||||||||||||||||||||||||||||||
Net interest spread (4) | 4.26 | % | 3.85 | % | 3.34 | % | 4.26 | % | ||||||||||||||||||||||||||||||||||||||||
Total cost of funds (including the effect of non-interest bearing demand deposits) (5) | 0.30 | % | 0.36 | % | 1.70 | % | 0.30 | % |
(1) | Annualized. |
(2) | Includes nonaccrual loans and loans held for |
(3) | Net interest margin is computed by dividing net interest income by total average interest earning assets. |
(4) | Net interest spread represents the average yield earned on |
(5) | Total cost of funds (including the effect of |
Nine Months Ended September 30, | ||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||
Average Balance | Interest | Average Yield/Cost(2) | Average Balance | Interest | Average Yield/Cost(2) | |||||||||||||||||||
Interest Earning Assets | (in thousands) | |||||||||||||||||||||||
Federal funds sold and interest earning deposits | $ | 143,455 | $ | 812 | 0.76 | % | $ | 115,265 | $ | 146 | 0.17 | % | ||||||||||||
Investment securities | 45,903 | 858 | 2.50 | % | 26,792 | 530 | 2.64 | % | ||||||||||||||||
Loans (1) | 912,414 | 34,190 | 5.01 | % | 883,280 | 33,865 | 5.13 | % | ||||||||||||||||
Total interest earning assets | 1,101,772 | 35,860 | 4.35 | % | 1,025,337 | 34,541 | 4.50 | % | ||||||||||||||||
Nonearning Assets | ||||||||||||||||||||||||
Cash and due from banks | 2,177 | 2,148 | ||||||||||||||||||||||
Allowance for loan losses | (10,805 | ) | (10,221 | ) | ||||||||||||||||||||
Other assets | 38,195 | 39,904 | ||||||||||||||||||||||
Total Assets | $ | 1,131,339 | $ | 1,057,168 | ||||||||||||||||||||
Interest Bearing Liabilities | ||||||||||||||||||||||||
Interest bearing demand deposits | 493,332 | 917 | 0.25 | % | 449,019 | 1,359 | 0.40 | % | ||||||||||||||||
Savings deposits | 24,827 | 47 | 0.25 | % | 20,244 | 58 | 0.38 | % | ||||||||||||||||
Time deposits | 163,666 | 634 | 0.52 | % | 182,267 | 804 | 0.59 | % | ||||||||||||||||
Total interest bearing deposits | 681,825 | 1,598 | 0.31 | % | 651,530 | 2,221 | 0.46 | % | ||||||||||||||||
FHLB advances | 90,257 | 593 | 0.88 | % | 95,806 | 663 | 0.93 | % | ||||||||||||||||
Total interest bearing liabilities | 772,082 | 2,191 | 0.38 | % | 747,336 | 2,884 | 0.52 | % | ||||||||||||||||
Non-interest Bearing Liabilities | ||||||||||||||||||||||||
Non-interest bearing demand deposits | 236,531 | 199,861 | ||||||||||||||||||||||
Other liabilities | 16,352 | 15,822 | ||||||||||||||||||||||
Stockholders' equity | 106,374 | 94,149 | ||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,131,339 | $ | 1,057,168 | ||||||||||||||||||||
Net interest income and margin (3) | $ | 33,669 | 4.09 | % | $ | 31,657 | 4.13 | % | ||||||||||||||||
Net interest spread (4) | 3.97 | % | 3.98 | % | ||||||||||||||||||||
Total cost of funds (including the effect of non-interest bearing demand deposits) (5) | 0.29 | % | 0.41 | % |
Nine Months Ended September 30, | ||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||
Average Balance | Interest | Average Yield/Cost(1) | Average Balance | Interest | Average Yield/Cost(1) | |||||||||||||||||||
Interest-Earning Assets | (in thousands) | |||||||||||||||||||||||
Federal funds sold and interest-earning deposits | $ | 81,525 | $ | 2,924 | 4.80 | % | $ | 143,455 | $ | 812 | 0.76 | % | ||||||||||||
Investment securities | 24,911 | 948 | 5.09 | % | 45,903 | 858 | 2.50 | % | ||||||||||||||||
Loans (2) | 953,511 | 38,981 | 5.47 | % | 912,414 | 34,190 | 5.01 | % | ||||||||||||||||
Total interest-earning assets | 1,059,947 | 42,853 | 5.41 | % | 1,101,772 | 35,860 | 4.35 | % | ||||||||||||||||
Nonearning Assets | ||||||||||||||||||||||||
Cash and due from banks | 2,037 | 2,177 | ||||||||||||||||||||||
Allowance for credit losses | (12,199 | ) | (10,805 | ) | ||||||||||||||||||||
Other assets | 36,848 | 38,195 | ||||||||||||||||||||||
Total Assets | $ | 1,086,633 | $ | 1,131,339 | ||||||||||||||||||||
Interest-Bearing Liabilities | ||||||||||||||||||||||||
Interest-bearing demand deposits | 401,262 | 5,032 | 1.68 | % | 493,332 | 917 | 0.25 | % | ||||||||||||||||
Savings deposits | 20,148 | 38 | 0.25 | % | 24,827 | 47 | 0.25 | % | ||||||||||||||||
Time deposits | 235,437 | 4,788 | 2.72 | % | 163,666 | 634 | 0.52 | % | ||||||||||||||||
Total interest-bearing deposits | 656,847 | 9,858 | 2.01 | % | 681,825 | 1,598 | 0.31 | % | ||||||||||||||||
FHLB advances and other borrowings | 93,352 | 729 | 1.04 | % | 90,257 | 593 | 0.88 | % | ||||||||||||||||
Total interest-bearing liabilities | 750,199 | 10,587 | 1.89 | % | 772,082 | 2,191 | 0.38 | % | ||||||||||||||||
Noninterest-Bearing Liabilities | ||||||||||||||||||||||||
Noninterest-bearing demand deposits | 204,719 | 236,531 | ||||||||||||||||||||||
Other liabilities | 17,535 | 16,352 | ||||||||||||||||||||||
Stockholders' equity | 114,180 | 106,374 | ||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,086,633 | $ | 1,131,339 | ||||||||||||||||||||
Net interest income and margin (3) | $ | 32,266 | 4.07 | % | $ | 33,669 | 4.09 | % | ||||||||||||||||
Net interest spread (4) | 3.52 | % | 3.97 | % | ||||||||||||||||||||
Total cost of funds (including the effect of non-interest bearing demand deposits) (5) | 1.48 | % | 0.29 | % |
(1) | Annualized. |
(2) | Includes nonaccrual loans and loans held for |
(3) | Net interest margin is computed by dividing net interest income by total average interest earning assets. |
(4) | Net interest spread represents the average yield earned on |
(5) | Total cost of funds (including the effect of |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2023 versus 2022 | 2023 versus 2022 | |||||||||||||||||||||||
Increase (Decrease) Due to Changes in (1) | Increase (Decrease) Due to Changes in (1) | |||||||||||||||||||||||
Volume | Rate | Total | Volume | Rate | Total | |||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||
Federal funds sold and interest-earning deposits | $ | (30 | ) | $ | 532 | $ | 502 | $ | (352 | ) | $ | 2,464 | $ | 2,112 | ||||||||||
Investment securities | (252 | ) | 185 | (67 | ) | (393 | ) | 483 | 90 | |||||||||||||||
Loans, net | 259 | 1,205 | 1,464 | 1,530 | 3,261 | 4,791 | ||||||||||||||||||
Total interest income | (23 | ) | 1,922 | 1,899 | 785 | 6,208 | 6,993 | |||||||||||||||||
Interest expense: | ||||||||||||||||||||||||
Interest-bearing demand deposits | (54 | ) | 1,637 | 1,583 | (172 | ) | 4,287 | 4,115 | ||||||||||||||||
Savings deposits | (4 | ) | 3 | (1 | ) | (9 | ) | — | (9 | ) | ||||||||||||||
Time deposits | 116 | 1,604 | 1,720 | 279 | 3,875 | 4,154 | ||||||||||||||||||
FHLB advances and other borrowings | (1 | ) | 2 | 1 | 21 | 115 | 136 | |||||||||||||||||
Total interest expense | 57 | 3,246 | 3,303 | 119 | 8,277 | 8,396 | ||||||||||||||||||
Net increase | $ | (80 | ) | $ | (1,324 | ) | $ | (1,404 | ) | $ | 666 | $ | (2,069 | ) | $ | (1,403 | ) |
Three Months Ended September 30, 2022 versus 2021 | Nine Months Ended September 30, 2022 versus 2021 | |||||||||||||||||||||||
Increase (Decrease) Due to Changes in (1) | Increase (Decrease) Due to Changes in (1) | |||||||||||||||||||||||
Volume | Rate | Total | Volume | Rate | Total | |||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||
Federal funds sold and interest earning deposits | $ | (249 | ) | $ | 577 | $ | 328 | $ | 134 | $ | 532 | $ | 666 | |||||||||||
Investment securities | 248 | (48 | ) | 200 | 374 | (46 | ) | 328 | ||||||||||||||||
Loans, net | 699 | (408 | ) | 291 | 1,122 | (797 | ) | 325 | ||||||||||||||||
Total interest income | 698 | 121 | 819 | 1,630 | (311 | ) | 1,319 | |||||||||||||||||
Interest expense: | ||||||||||||||||||||||||
Interest bearing demand deposits | (25 | ) | (61 | ) | (86 | ) | 87 | (529 | ) | (442 | ) | |||||||||||||
Savings deposits | 2 | (6 | ) | (4 | ) | 10 | (21 | ) | (11 | ) | ||||||||||||||
Time deposits | (52 | ) | (38 | ) | (90 | ) | (77 | ) | (93 | ) | (170 | ) | ||||||||||||
FHLB advances | 1 | 4 | 5 | (36 | ) | (34 | ) | (70 | ) | |||||||||||||||
Total interest expense | (74 | ) | (101 | ) | (175 | ) | (16 | ) | (677 | ) | (693 | ) | ||||||||||||
Net increase | $ | 772 | $ | 222 | $ | 994 | $ | 1,646 | $ | 366 | $ | 2,012 |
(1) | Changes due to both volume and rate have been allocated proportionately between changes in volume and rate. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Provision (credit) for credit losses for: | ||||||||||||||||
Loans | $ | (58 | ) | $ | 298 | $ | (680 | ) | $ | 266 | ||||||
Available-for-sale securities | 103 | - | 103 | - | ||||||||||||
Off-balance sheet commitments | (2 | ) | 2 | (90 | ) | 2 | ||||||||||
Total provision (credit) for credit losses(1) | $ | 43 | $ | 300 | $ | (667 | ) | $ | 268 |
For the Three Months Ended September 30, | ||||||||||||||||||||||||||||||||
Manufactured Housing | Commercial Real Estate | Commercial | SBA | HELOC | Single Family Real Estate | Consumer | Total | |||||||||||||||||||||||||
2022 | (in thousands) | |||||||||||||||||||||||||||||||
Beginning balance | $ | 3,976 | $ | 6,120 | $ | 594 | $ | 23 | $ | 37 | $ | 115 | $ | 1 | $ | 10,866 | ||||||||||||||||
Charge-offs | — | — | — | (182 | ) | — | — | — | (182 | ) | ||||||||||||||||||||||
Recoveries | 88 | 20 | 13 | 4 | 6 | — | — | 131 | ||||||||||||||||||||||||
Net recoveries | 88 | 20 | 13 | (178 | ) | 6 | — | — | (51 | ) | ||||||||||||||||||||||
Provision (credit) | (77 | ) | 182 | 24 | 174 | (6 | ) | — | 1 | 298 | ||||||||||||||||||||||
Ending balance | $ | 3,987 | $ | 6,322 | $ | 631 | $ | 19 | $ | 37 | $ | 115 | $ | 2 | $ | 11,113 | ||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 2,630 | $ | 6,328 | $ | 1,020 | $ | 114 | $ | 25 | $ | 122 | $ | 1 | $ | 10,240 | ||||||||||||||||
Charge-offs | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Recoveries | 4 | 20 | 10 | 1 | 1 | — | — | 36 | ||||||||||||||||||||||||
Net recoveries | 4 | 20 | 10 | 1 | 1 | — | — | 36 | ||||||||||||||||||||||||
Provision (credit) | (25 | ) | 149 | (15 | ) | (87 | ) | (2 | ) | (13 | ) | — | 7 | |||||||||||||||||||
Ending balance | $ | 2,609 | $ | 6,497 | $ | 1,015 | $ | 28 | $ | 24 | $ | 109 | $ | 1 | $ | 10,283 |
For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||
Manufactured Housing | Commercial Real Estate | Commercial | SBA | HELOC | Single Family Real Estate | Consumer | Total | |||||||||||||||||||||||||
2022 | (in thousands) | |||||||||||||||||||||||||||||||
Beginning balance | $ | 2,606 | $ | 6,729 | $ | 923 | $ | 22 | $ | 18 | $ | 105 | $ | 1 | $ | 10,404 | ||||||||||||||||
Charge-offs | — | — | — | (182 | ) | — | — | — | (182 | ) | ||||||||||||||||||||||
Recoveries | 123 | 60 | 183 | 246 | 12 | — | 1 | 625 | ||||||||||||||||||||||||
Net recoveries | 123 | 60 | 183 | 64 | 12 | — | 1 | 443 | ||||||||||||||||||||||||
Provision (credit) | 1,258 | (467 | ) | (475 | ) | (67 | ) | 7 | 10 | — | 266 | |||||||||||||||||||||
Ending balance | $ | 3,987 | $ | 6,322 | $ | 631 | $ | 19 | $ | 37 | $ | 115 | $ | 2 | $ | 11,113 | ||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 2,612 | $ | 5,950 | $ | 1,379 | $ | 118 | $ | 25 | $ | 108 | $ | 2 | $ | 10,194 | ||||||||||||||||
Charge-offs | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Recoveries | 155 | 60 | 30 | 46 | 4 | 1 | — | 296 | ||||||||||||||||||||||||
Net recoveries | 155 | 60 | 30 | 46 | 4 | 1 | — | 296 | ||||||||||||||||||||||||
Provision (credit) | (158 | ) | 487 | (394 | ) | (136 | ) | (5 | ) | — | (1 | ) | (207 | ) | ||||||||||||||||||
Ending balance | $ | 2,609 | $ | 6,497 | $ | 1,015 | $ | 28 | $ | 24 | $ | 109 | $ | 1 | $ | 10,283 |
Three Months Ended September 30, | Increase | Nine Months Ended September 30, | Increase | Three Months Ended September 30, | Increase | Nine Months Ended September 30, | Increase | |||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | (Decrease) | 2022 | 2021 | (Decrease) | 2023 | 2022 | (Decrease) | 2023 | 2022 | (Decrease) | |||||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Other loan fees | $ | 292 | $ | 383 | $ | (91 | ) | $ | 915 | $ | 1,006 | $ | (91 | ) | $ | 248 | $ | 292 | $ | (44 | ) | $ | 703 | $ | 915 | $ | (212 | ) | ||||||||||||||||||||
Gains from loan sales, net | 49 | 118 | (69 | ) | 245 | 366 | (121 | ) | 24 | 49 | (25 | ) | 110 | 245 | (135 | ) | ||||||||||||||||||||||||||||||||
Document processing fees | 114 | 145 | (31 | ) | 337 | 389 | (52 | ) | 88 | 114 | (26 | ) | 268 | 337 | (69 | ) | ||||||||||||||||||||||||||||||||
Service charges | 114 | 77 | 37 | 295 | 218 | 77 | 149 | 114 | 35 | 470 | 295 | 175 | ||||||||||||||||||||||||||||||||||||
Other | 303 | 317 | (14 | ) | 1,422 | 830 | 592 | 572 | 303 | 269 | 1,438 | 1,422 | 16 | |||||||||||||||||||||||||||||||||||
Total non-interest income | $ | 872 | $ | 1,040 | $ | (168 | ) | $ | 3,214 | $ | 2,809 | $ | 405 | $ | 1,081 | $ | 872 | $ | 209 | $ | 2,989 | $ | 3,214 | $ | (225 | ) |
Three Months Ended September 30, | Increase | Nine Months Ended September 30, | Increase | Three Months Ended September 30, | Increase | Nine Months Ended September 30, | Increase | |||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | (Decrease) | 2022 | 2021 | (Decrease) | 2023 | 2022 | (Decrease) | 2023 | 2022 | (Decrease) | |||||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Salaries and employee benefits | $ | 4,823 | $ | 4,541 | $ | 282 | $ | 14,784 | $ | 13,611 | $ | 1,173 | $ | 5,114 | $ | 4,823 | $ | 291 | $ | 15,864 | $ | 14,784 | $ | 1,080 | ||||||||||||||||||||||||
Occupancy, net | 1,046 | 802 | 244 | 3,064 | 2,361 | 703 | 1,093 | 1,046 | 47 | 3,326 | 3,064 | 262 | ||||||||||||||||||||||||||||||||||||
Professional services | 653 | 434 | 219 | 1,687 | 1,204 | 483 | 672 | 653 | 19 | 2,442 | 1,687 | 755 | ||||||||||||||||||||||||||||||||||||
Data processing | 302 | 292 | 10 | 919 | 964 | (45 | ) | 349 | 302 | 47 | 1,075 | 919 | 156 | |||||||||||||||||||||||||||||||||||
Depreciation | 173 | 191 | (18 | ) | 535 | 594 | (59 | ) | 180 | 173 | 7 | 543 | 535 | 8 | ||||||||||||||||||||||||||||||||||
FDIC assessment | 131 | 127 | 4 | 466 | 339 | 127 | 331 | 131 | 200 | 789 | 466 | 323 | ||||||||||||||||||||||||||||||||||||
Advertising and marketing | 196 | 189 | 7 | 687 | 536 | 151 | 179 | 196 | (17 | ) | 671 | 687 | (16 | ) | ||||||||||||||||||||||||||||||||||
Other | 286 | 284 | 2 | 551 | 780 | (229 | ) | 445 | 286 | 159 | 1,341 | 551 | 790 | |||||||||||||||||||||||||||||||||||
Total non-interest expenses | $ | 7,610 | $ | 6,860 | $ | 750 | $ | 22,693 | $ | 20,389 | $ | 2,304 | $ | 8,363 | $ | 7,610 | $ | 753 | $ | 26,051 | $ | 22,693 | $ | 3,358 |
September 30, 2023 | December 31, 2022 | Increase (Decrease) | Percent Increase (Decrease) | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Cash and cash equivalents | $ | 140,619 | $ | 64,690 | $ | 75,929 | 117.4 | % | ||||||||
Investment securities available-for-sale | 15,124 | 26,688 | (11,564 | ) | (43.3 | )% | ||||||||||
Investment securities held-to-maturity | 2,158 | 2,557 | (399 | ) | (15.6 | )% | ||||||||||
Loans held for sale | 18,435 | 21,033 | (2,598 | ) | (12.4 | )% | ||||||||||
Loans held for investment, net | 922,112 | 923,544 | (1,432 | ) | (0.2 | )% | ||||||||||
Total assets | 1,140,299 | 1,091,502 | 48,797 | 4.5 | % | |||||||||||
Total deposits | 916,093 | 875,084 | 41,009 | 4.7 | % | |||||||||||
FHLB advances and other borrowings | 90,000 | 90,000 | — | 0.0 | % | |||||||||||
Total stockholder's equity | 116,062 | 112,650 | 3,412 | 3.0 | % |
September 30, 2022 | December 31, 2021 | Increase (Decrease) | Percent Increase (Decrease) | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Cash and cash equivalents | $ | 51,295 | $ | 208,375 | $ | (157,080 | ) | (75.4 | )% | |||||||
Investment securities available-for-sale | 57,115 | 19,711 | 37,404 | 189.8 | % | |||||||||||
Investment securities held-to-maturity | 2,596 | 2,815 | (219 | ) | (7.8 | )% | ||||||||||
Loans held for sale | 22,096 | 23,408 | (1,312 | ) | (5.6 | )% | ||||||||||
Loans held for investment, net | 912,485 | 858,271 | 54,214 | 6.3 | % | |||||||||||
Total assets | 1,088,278 | 1,157,052 | (68,774 | ) | (5.9 | )% | ||||||||||
Total deposits | 852,189 | 950,131 | (97,942 | ) | (10.3 | )% | ||||||||||
FHLB advances | 110,000 | 90,000 | 20,000 | 22.2 | % | |||||||||||
Total stockholder's equity | 109,821 | 101,375 | 8,446 | 8.3 | % |
September 30, 2022 | December 31, 2021 | September 30, 2023 | December 31, 2022 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Manufactured housing | $ | 309,989 | $ | 297,363 | $ | 325,068 | $ | 315,825 | ||||||||
Commercial real estate | 544,373 | 480,801 | 556,945 | 545,317 | ||||||||||||
Commercial | 54,042 | 55,287 | 38,232 | 59,070 | ||||||||||||
SBA | 3,468 | 23,659 | 1,687 | 3,482 | ||||||||||||
HELOC | 3,373 | 3,579 | 2,556 | 2,613 | ||||||||||||
Single family real estate | 8,981 | 8,749 | 10,615 | 8,709 | ||||||||||||
Consumer | 323 | 109 | 52 | 107 | ||||||||||||
Gross loans held for investment | 924,549 | 869,547 | 935,155 | 935,123 | ||||||||||||
Deferred costs, net | (920 | ) | (838 | ) | (883 | ) | (787 | ) | ||||||||
Discount on SBA loans | (31 | ) | (34 | ) | (25 | ) | (27 | ) | ||||||||
Loans held for investment | 923,598 | 868,675 | 934,247 | 934,309 | ||||||||||||
Allowance for loan losses | (11,113 | ) | (10,404 | ) | ||||||||||||
Allowance for credit losses | (12,135 | ) | (10,765 | ) | ||||||||||||
Loans held for investment, net | $ | 912,485 | $ | 858,271 | $ | 922,112 | $ | 923,544 |
September 30, 2023 | December 31, 2022 | |||||||
(in thousands) | ||||||||
Nonaccrual loans | $ | 3,195 | $ | 211 | ||||
Nonaccrual loans to gross loans | 0.34 | % | 0.02 | % | ||||
Net charge-offs (recoveries) (annualized) to average loans | (0.03 | )% | (0.06 | )% | ||||
Allowance for credit losses to nonaccrual loans (net of government guaranteed portion) | 380 | % | 5,102 | % | ||||
Allowance for credit losses to gross loans | 1.30 | % | 1.15 | % |
September 30, 2022 | December 31, 2021 | |||||||
(in thousands) | ||||||||
Nonaccrual loans (net of government guaranteed portion) | $ | 239 | $ | 565 | ||||
Troubled debt restructured loans, gross | 6,317 | 8,565 | ||||||
Nonaccrual loans (net of government guaranteed portion) to gross loans | 0.03 | % | 0.06 | % | ||||
Net charge-offs (recoveries) (annualized) to average loans | (0.06 | )% | (0.04 | )% | ||||
Allowance for loan losses to nonaccrual loans (net of government guaranteed portion) | 4,650 | % | 1,841 | % | ||||
Allowance for loan losses to gross loans | 1.20 | % | 1.20 | % |
At September 30, 2023 | At December 31, 2022 | |||||||||||||||||||||||
Nonaccrual Balance | % of Total Nonaccrual | % of Total Loans | Nonaccrual Balance | % of Total Nonaccrual | % of Total Loans | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Manufactured housing | $ | 727 | 22.76 | % | 0.08 | % | $ | 61 | 28.91 | % | 0.01 | % | ||||||||||||
Commercial real estate | 2,277 | 71.27 | % | 0.24 | % | — | 0.00 | % | 0.00 | % | ||||||||||||||
Commercial | 50 | 1.56 | % | 0.01 | % | — | 0.00 | % | 0.00 | % | ||||||||||||||
HELOC | 141 | 4.41 | % | 0.02 | % | — | 0.00 | % | 0.00 | % | ||||||||||||||
Single family real estate | — | 0.00 | % | 0.00 | % | 150 | 71.09 | % | 0.01 | % | ||||||||||||||
Total nonaccrual loans | $ | 3,195 | 100.00 | % | 0.35 | % | $ | 211 | 100.00 | % | 0.02 | % |
September 30, 2022 | December 31, 2021 | |||||||
(in thousands) | ||||||||
Loans 30 through 89 days past due with interest accruing | $ | 2,456 | $ | 704 | ||||
Loans 90 days or more past due with interest accruing | $ | — | $ | — |
September 30, 2023 | December 31, 2022 | |||||||
(in thousands) | ||||||||
Loans 30 through 89 days past due | $ | 4,461 | $ | 2,880 | ||||
Loans 90 days or more past due | 178 | — | ||||||
Total past due loans | $ | 4,639 | $ | 2,880 |
Manufactured Homes | Single Family Residence | Machinery & Equipment | Total | |||||||||||||
Manufactured housing | $ | 1,014 | $ | — | $ | — | $ | 1,014 | ||||||||
Commercial real estate | 2,277 | — | — | 2,277 | ||||||||||||
Commercial | — | — | 1,210 | 1,210 | ||||||||||||
Single family real estate | — | 141 | — | 141 | ||||||||||||
Total | $ | 3,291 | $ | 141 | $ | 1,210 | $ | 4,642 |
Manufactured Housing | Commercial Real Estate | Commercial | SBA | HELOC | Single Family Real Estate | Consumer | Total Loans | |||||||||||||||||||||||||
Recorded Investment: | (in thousands) | |||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 2,918 | $ | 209 | $ | 67 | $ | 41 | $ | — | $ | 208 | $ | — | $ | 3,443 | ||||||||||||||||
Impaired loans with no allowance recorded | 1,166 | — | 1,297 | — | — | 151 | — | 2,614 | ||||||||||||||||||||||||
Total loans individually evaluated for impairment | 4,084 | 209 | 1,364 | 41 | — | 359 | — | 6,057 | ||||||||||||||||||||||||
Related allowance for impaired loans | 157 | 18 | — | 1 | — | 8 | — | 184 | ||||||||||||||||||||||||
Total impaired loans, net | $ | 3,927 | $ | 191 | $ | 1,364 | $ | 40 | $ | — | $ | 351 | $ | — | $ | 5,873 |
Manufactured Housing | Commercial Real Estate | Commercial | SBA | HELOC | Single Family Real Estate | Consumer | Total Loans | |||||||||||||||||||||||||
Impaired Loans as of September 30, 2022: | (in thousands) | |||||||||||||||||||||||||||||||
Recorded Investment: | ||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 3,058 | $ | 212 | $ | 72 | $ | 43 | $ | — | $ | 213 | $ | — | $ | 3,598 | ||||||||||||||||
Impaired loans with no allowance recorded | 1,120 | — | 1,331 | 18 | — | 153 | — | 2,622 | ||||||||||||||||||||||||
Total loans individually evaluated for impairment | 4,178 | 212 | 1,403 | 61 | — | 366 | — | 6,220 | ||||||||||||||||||||||||
Related allowance for impaired loans | 166 | 17 | 1 | 1 | — | 9 | — | 194 | ||||||||||||||||||||||||
Total impaired loans, net | $ | 4,012 | $ | 195 | $ | 1,402 | $ | 60 | $ | — | $ | 357 | $ | — | $ | 6,026 |
Manufactured Housing | Commercial Real Estate | Commercial | SBA | HELOC | Single Family Real Estate | Consumer | Total Loans | |||||||||||||||||||||||||
Impaired Loans as of December 31, 2021: | (in thousands) | |||||||||||||||||||||||||||||||
Recorded Investment: | ||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 3,563 | $ | 220 | $ | 85 | $ | 194 | $ | — | $ | 425 | $ | — | $ | 4,487 | ||||||||||||||||
Impaired loans with no allowance recorded | 1,358 | 1,402 | 1,505 | 226 | — | 258 | — | 4,749 | ||||||||||||||||||||||||
Total loans individually evaluated for impairment | 4,921 | 1,622 | 1,590 | 420 | — | 683 | — | 9,236 | ||||||||||||||||||||||||
Related allowance for impaired loans | 210 | 17 | — | 1 | — | 12 | — | 240 | ||||||||||||||||||||||||
Total impaired loans, net | $ | 4,711 | $ | 1,605 | $ | 1,590 | $ | 419 | $ | — | $ | 671 | $ | — | $ | 8,996 |
At September 30, 2022 | At December 31, 2021 | |||||||||||||||||||||||
Nonaccrual Balance | % | Percent of Total Loans | Nonaccrual Balance | % | Percent of Total Loans | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Manufactured housing | $ | 85 | 35.56 | % | 0.01 | % | $ | 306 | 54.16 | % | 0.03 | % | ||||||||||||
SBA | — | 0.00 | % | 0.00 | % | 1 | 0.18 | % | 0.00 | % | ||||||||||||||
Single family real estate | 154 | 64.44 | % | 0.02 | % | 258 | 45.66 | % | 0.03 | % | ||||||||||||||
Total nonaccrual loans | $ | 239 | 100.00 | % | 0.03 | % | $ | 565 | 100.00 | % | 0.06 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
Allowance for loan losses: | (in thousands) | |||||||||||||||||||||||||||||||
Allowance for credit losses: | (in thousands) | |||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 10,866 | $ | 10,240 | $ | 10,404 | $ | 10,194 | $ | 12,148 | $ | 10,866 | $ | 10,765 | $ | 10,404 | ||||||||||||||||
Provision (credit) charged to operating expenses: | ||||||||||||||||||||||||||||||||
Impact of adoption of ASC 326 | — | — | 1,811 | — | ||||||||||||||||||||||||||||
Provision (credit) for credit losses: | ||||||||||||||||||||||||||||||||
Manufactured housing | (77 | ) | (25 | ) | 1,258 | (158 | ) | (54 | ) | (77 | ) | (151 | ) | 1,258 | ||||||||||||||||||
Commercial real estate | 182 | 149 | (467 | ) | 487 | 44 | 182 | (110 | ) | (467 | ) | |||||||||||||||||||||
Commercial | 24 | (15 | ) | (475 | ) | (394 | ) | (46 | ) | 24 | (372 | ) | (475 | ) | ||||||||||||||||||
SBA | 174 | (87 | ) | (67 | ) | (136 | ) | (4 | ) | 174 | (70 | ) | (67 | ) | ||||||||||||||||||
HELOC | (6 | ) | (2 | ) | 7 | (5 | ) | 1 | (6 | ) | (2 | ) | 7 | |||||||||||||||||||
Single family real estate | — | (13 | ) | 10 | — | 1 | — | 26 | 10 | |||||||||||||||||||||||
Consumer | 1 | — | — | (1 | ) | — | 1 | (1 | ) | — | ||||||||||||||||||||||
Total Provision (credit) | 298 | 7 | 266 | (207 | ) | |||||||||||||||||||||||||||
Total provision (credit) for credit losses | (58 | ) | 298 | (680 | ) | 266 | ||||||||||||||||||||||||||
Recoveries of loans previously charged-off: | ||||||||||||||||||||||||||||||||
Manufactured housing | 88 | 4 | 123 | 155 | 8 | 88 | 74 | 123 | ||||||||||||||||||||||||
Commercial real estate | 20 | 20 | 60 | 60 | 20 | 20 | 59 | 60 | ||||||||||||||||||||||||
Commercial | 13 | 10 | 183 | 30 | 13 | 13 | 37 | 183 | ||||||||||||||||||||||||
SBA | 4 | 1 | 246 | 46 | 4 | 4 | 69 | 246 | ||||||||||||||||||||||||
HELOC | 6 | 1 | 12 | 4 | — | 6 | — | 12 | ||||||||||||||||||||||||
Single family real estate | — | — | — | 1 | — | — | — | — | ||||||||||||||||||||||||
Consumer | — | — | 1 | — | — | — | — | 1 | ||||||||||||||||||||||||
Total recoveries | 131 | 36 | 625 | 296 | 45 | 131 | 239 | 625 | ||||||||||||||||||||||||
Loans charged-off: | ||||||||||||||||||||||||||||||||
Manufactured housing | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Commercial real estate | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Commercial | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
SBA | 182 | — | 182 | — | — | 182 | — | 182 | ||||||||||||||||||||||||
HELOC | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Single family real estate | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Consumer | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total charged-off | 182 | — | 182 | — | — | 182 | — | 182 | ||||||||||||||||||||||||
Net charge-offs (recoveries) | 51 | (36 | ) | (443 | ) | (296 | ) | (45 | ) | 51 | (239 | ) | (443 | ) | ||||||||||||||||||
Balance at end of period | $ | 11,113 | $ | 10,283 | $ | 11,113 | $ | 10,283 | $ | 12,135 | $ | 11,113 | $ | 12,135 | $ | 11,113 |
September 30, 2022 | December 31, 2021 | September 30, 2023 | December 31, 2022 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Securities available for sale (at fair value) | ||||||||||||||||
Securities available-for-sale (at fair value) | ||||||||||||||||
U.S. government agency notes | $ | 4,480 | $ | 5,508 | $ | 3,493 | $ | 4,107 | ||||||||
U.S. government agency CMO | 4,470 | 4,883 | 3,978 | 4,296 | ||||||||||||
U.S. Treasury securities | 39,795 | - | — | 9,970 | ||||||||||||
Corporate debt securities | 8,370 | 9,320 | 7,653 | 8,315 | ||||||||||||
Total securities available for sale | 57,115 | 19,711 | 15,124 | 26,688 | ||||||||||||
Securities held to maturity (at amortized cost): US government agency MBS | 2,596 | 2,815 | ||||||||||||||
Securities held-to-maturity (at amortized cost): US government agency MBS | 2,158 | 2,557 | ||||||||||||||
Equity securities (at fair value): Farmer Mac class A stock | 198 | 248 | 309 | 225 | ||||||||||||
Total investment securities | $ | 59,909 | $ | 22,774 | $ | 17,591 | $ | 29,470 |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 2,250 | $ | 2,572 | $ | 2,518 | $ | 2,614 | $ | 65 | $ | 2,250 | $ | 2,250 | $ | 2,518 | ||||||||||||||||
Additions | — | — | — | 136 | 1,511 | — | 1,576 | — | ||||||||||||||||||||||||
Proceeds from dispositions | — | — | (372 | ) | — | (46 | ) | — | (2,551 | ) | (372 | ) | ||||||||||||||||||||
Gain (loss) on sales, net | — | — | 104 | (178 | ) | |||||||||||||||||||||||||||
(Loss)/gain on sales, net | (19 | ) | — | 236 | 104 | |||||||||||||||||||||||||||
Balance, end of period | $ | 2,250 | $ | 2,572 | $ | 2,250 | $ | 2,572 | $ | 1,511 | $ | 2,250 | $ | 1,511 | $ | 2,250 |
September 30, 2022 | December 31, 2021 | Increase (Decrease) | Percent Increase (Decrease) | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Non-interest bearing demand deposits | $ | 243,100 | $ | 209,893 | $ | 33,207 | 15.8 | % | ||||||||
Interest bearing demand deposits | 439,455 | 537,508 | (98,053 | ) | (18.2 | )% | ||||||||||
Savings | 23,865 | 23,675 | 190 | 0.8 | % | |||||||||||
Certificates of deposit ($250,000 or more) | 9,909 | 17,612 | (7,703 | ) | (43.7 | )% | ||||||||||
Other certificates of deposit | 135,860 | 161,443 | (25,583 | ) | (15.8 | )% | ||||||||||
Total deposits | $ | 852,189 | $ | 950,131 | $ | (97,942 | ) | (10.3 | )% |
September 30, 2023 | December 31, 2022 | Increase (Decrease) | Percent Increase (Decrease) | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Noninterest-bearing demand deposits | $ | 190,817 | $ | 216,494 | $ | (25,677 | ) | (11.9 | )% | |||||||
Interest-bearing demand deposits | 456,808 | 428,173 | 28,635 | 6.7 | % | |||||||||||
Savings | 16,905 | 23,490 | (6,585 | ) | (28.0 | )% | ||||||||||
Certificates of deposit ($250,000 or more) | 14,911 | 6,693 | 8,218 | 122.8 | % | |||||||||||
Other certificates of deposit | 236,652 | 200,234 | 36,418 | 18.2 | % | |||||||||||
Total deposits | $ | 916,093 | $ | 875,084 | $ | 41,009 | 4.7 | % |
At September 30, 2022 | At September 30, 2023 | |||||||||||||||||||||||
Less than 1 year | More than 1 year | Total | Less than 1 year | More than 1 year | Total | |||||||||||||||||||
(dollars in thousands) | (dollars in thousands) | |||||||||||||||||||||||
Time deposits | $ | 19,812 | $ | 125,957 | $ | 145,769 | $ | 183,127 | $ | 68,436 | $ | 251,563 | ||||||||||||
FHLB advances | 20,000 | 90,000 | 110,000 | |||||||||||||||||||||
FHLB advances and other borrowings | — | 90,000 | 90,000 | |||||||||||||||||||||
Operating lease obligations | 1,013 | 5,143 | 6,155 | 1,040 | 4,185 | 5,225 | ||||||||||||||||||
Total | $ | 40,825 | $ | 221,100 | $ | 261,924 | $ | 184,167 | $ | 162,621 | $ | 346,788 |
At September 30, 2022 | At September 30, 2023 | |||||||||||||||||||||||
Less than 1 year | More than 1 year | Total | Less than 1 year | More than 1 year | Total | |||||||||||||||||||
(dollars in thousands) | (dollars in thousands) | |||||||||||||||||||||||
Loan commitments to extend credit | $ | 49,720 | 54,364 | $ | 104,084 | $ | 59,960 | $ | 37,112 | $ | 97,072 | |||||||||||||
Standby letters of credit | - | - | - | — | — | — | ||||||||||||||||||
Total | $ | 49,720 | 54,364 | $ | 104,084 | $ | 59,960 | $ | 37,112 | $ | 97,072 |
Total Capital (To Risk-Weighted Assets) | Tier 1 Capital (To Risk- Weighted Assets) | Common Equity Tier 1 (To Risk- Weighted Assets) | Leverage Ratio/Tier 1 Capital (To Average Assets) | Total Capital (To Risk- Weighted Assets) | Tier 1 Capital (To Risk- Weighted Assets) | Common Equity Tier 1 (To Risk- Weighted Assets) | Leverage Ratio/Tier 1 Capital (To Average Assets) | |||||||||||||||||||||||||
September 30, 2022 | ||||||||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||
CWB's actual regulatory ratios | 12.46 | % | 11.30 | % | 11.30 | % | 9.83 | % | 13.27 | % | 12.09 | % | 12.09 | % | 10.84 | % | ||||||||||||||||
Minimum capital requirements | 8.00 | % | 6.00 | % | 4.50 | % | 4.00 | % | 8.00 | % | 6.00 | % | 4.50 | % | 4.00 | % | ||||||||||||||||
Well-capitalized requirements | 10.00 | % | 8.00 | % | 6.50 | % | N/A | 10.00 | % | 8.00 | % | 6.50 | % | 5.00 | % | |||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
CWB's actual regulatory ratios | 12.19 | % | 11.02 | % | 11.02 | % | 8.56 | % | 12.56 | % | 11.44 | % | 11.44 | % | 10.34 | % | ||||||||||||||||
Minimum capital requirements | 8.00 | % | 6.00 | % | 4.50 | % | 4.00 | % | 8.00 | % | 6.00 | % | 4.50 | % | 4.00 | % | ||||||||||||||||
Well-capitalized requirements | 10.00 | % | 8.00 | % | 6.50 | % | N/A | 10.00 | % | 8.00 | % | 6.50 | % | 5.00 | % |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
Exhibit Number | |
Certification of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(a) or Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended. | |
Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(a) or Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended. | |
Certification of Chief Executive Officer and Chief Financial Officer of the Registrant pursuant to Rule 13a-14(b) or Rule 15d-14(b), promulgated under the Securities Exchange Act of 1934, as Amended, and 18 U.S.C. 1350. | |
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
101.SCH | Inline XBRL Taxonomy Extension Schema |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase |
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
* | This certification is furnished to, but shall not be deemed filed, with the Commission. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates it by reference. |
Date: November | BY: | /s/ Richard Pimentel |
Richard Pimentel | ||
Executive Vice President and Chief Financial Officer | ||
On Behalf of Registrant and as a Duly Authorized Officer | ||
and as Principal Financial and Accounting Officer |