☒ | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
2021
☐ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
incorporation)333-201017
(oror for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulationand post such files. or a smaller reporting company, as definedor an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in RuleLarge accelerated filer ☐ Accelerated filer ☐ ☐☒ Smaller reporting company ☒ Emerging growth company ☐
APPLICABLE ONLY TO CORPORATE ISSUERS:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock | RIVE | Nasdaq Global Market |
29, 2021.
Contents | Page No. | |||||
PART I. | FINANCIAL INFORMATION: | |||||
Item 1. | Financial Statements (Unaudited) | 3 | ||||
Consolidated Balance Sheets at September 30, | 3 | |||||
4 | ||||||
5 | ||||||
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, | 6 | |||||
Notes to Consolidated Financial Statements | 7 | |||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | |||||
Item 4. | Controls and Procedures | |||||
PART II | OTHER | |||||
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 | |||||
Signatures |
(Dollars in thousands, except share data)
September 30, 2017 | December 31, 2016 | |||||||
Assets: | ||||||||
Cash and due from banks | $ | 8,425 | $ | 7,783 | ||||
Interest-bearing deposits in other banks | 10,741 | 11,337 | ||||||
Investment securitiesavailable-for-sale | 56,874 | 73,113 | ||||||
Loans held for sale | 519 | 652 | ||||||
Loans, net | 560,187 | 409,343 | ||||||
Less: allowance for loan losses | 5,404 | 3,732 | ||||||
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Net loans | 554,783 | 405,611 | ||||||
Premises and equipment, net | 12,163 | 12,201 | ||||||
Accrued interest receivable | 1,995 | 1,726 | ||||||
Goodwill | 5,079 | 5,408 | ||||||
Intangible assets | 1,099 | 1,405 | ||||||
Other assets | 29,701 | 23,812 | ||||||
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Total assets | $ | 681,379 | $ | 543,048 | ||||
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Liabilities: | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 76,214 | $ | 73,932 | ||||
Interest-bearing | 498,736 | 378,628 | ||||||
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Total deposits | 574,950 | 452,560 | ||||||
Short-term borrowings | 37,250 | 31,500 | ||||||
Long-term debt | 6,503 | 11,154 | ||||||
Accrued interest payable | 213 | 192 | ||||||
Other liabilities | 5,084 | 5,722 | ||||||
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Total liabilities | 624,000 | 501,128 | ||||||
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Stockholders’ equity: | ||||||||
Preferred stock: no par value, authorized 3,000,000 shares; Series A convertible perpetual preferred stock | ||||||||
Common stock: no par value, authorized 20,000,000 shares; September 30, 2017, issued and outstanding 4,892,143 shares; December 31, 2016, issued and outstanding 3,237,859 shares | 45,427 | 29,052 | ||||||
Capital surplus | 243 | 220 | ||||||
Retained earnings | 12,848 | 14,845 | ||||||
Accumulated other comprehensive loss | (1,139 | ) | (2,197 | ) | ||||
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Total stockholders’ equity | 57,379 | 41,920 | ||||||
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Total liabilities and stockholders’ equity | $ | 681,379 | $ | 543,048 | ||||
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See notes to consolidated financial statements.
Riverview Financial Corporation
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Interest income: | ||||||||||||||||
Interest and fees on loans: | ||||||||||||||||
Taxable | $ | 5,717 | $ | 4,598 | $ | 14,991 | $ | 13,362 | ||||||||
Tax-exempt | 146 | 87 | 361 | 261 | ||||||||||||
Interest and dividends on investment securitiesavailable-for-sale: | ||||||||||||||||
Taxable | 477 | 539 | 1,607 | 1,375 | ||||||||||||
Tax-exempt | 47 | 53 | 140 | 280 | ||||||||||||
Dividends | 1 | 3 | 8 | |||||||||||||
Interest on interest-bearing deposits in other banks | 31 | 13 | 78 | 41 | ||||||||||||
Interest on federal funds sold | 2 | 12 | 2 | |||||||||||||
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Total interest income | 6,420 | 5,291 | 17,192 | 15,329 | ||||||||||||
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Interest expense: | ||||||||||||||||
Interest on deposits | 821 | 447 | 2,021 | 1,375 | ||||||||||||
Interest on short-term borrowings | 112 | 3 | 197 | 59 | ||||||||||||
Interest on long-term debt | 75 | 77 | 228 | 214 | ||||||||||||
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Total interest expense | 1,008 | 527 | 2,446 | 1,648 | ||||||||||||
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Net interest income | 5,412 | 4,764 | 14,746 | 13,681 | ||||||||||||
Provision for loan losses | 610 | 29 | 1,734 | 284 | ||||||||||||
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Net interest income after provision for loan losses | 4,802 | 4,735 | 13,012 | 13,397 | ||||||||||||
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Noninterest income: | ||||||||||||||||
Service charges, fees and commissions | 270 | 315 | 899 | 933 | ||||||||||||
Commission and fees on fiduciary activities | 31 | 34 | 92 | 88 | ||||||||||||
Wealth management income | 179 | 194 | 631 | 531 | ||||||||||||
Mortgage banking income | 205 | 210 | 434 | 401 | ||||||||||||
Bank owned life insurance investment income | 107 | 118 | 254 | 276 | ||||||||||||
Net gain on sale of investment securitiesavailable-for-sale | 43 | 152 | 106 | 484 | ||||||||||||
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Total noninterest income | 835 | 1,023 | 2,416 | 2,713 | ||||||||||||
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Noninterest expense: | ||||||||||||||||
Salaries and employee benefits expense | 2,928 | 2,334 | 8,521 | 6,611 | ||||||||||||
Net occupancy and equipment expense | 615 | 538 | 1,895 | 1,617 | ||||||||||||
Amortization of intangible assets | 71 | 95 | 306 | 247 | ||||||||||||
Net cost of operation of other real estate owned | (13 | ) | 83 | 161 | 214 | |||||||||||
Other expenses | 1,566 | 1,283 | 4,488 | 4,004 | ||||||||||||
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Total noninterest expense | 5,167 | 4,333 | 15,371 | 12,693 | ||||||||||||
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Income (loss) before income taxes | 470 | 1,425 | 57 | 3,417 | ||||||||||||
Income tax expense (benefit) | 69 | 454 | 44 | 838 | ||||||||||||
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Net income (loss) | 401 | 971 | 13 | 2,579 | ||||||||||||
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Other comprehensive income: | ||||||||||||||||
Unrealized gain (loss) on investment securitiesavailable-for-sale | (50 | ) | (148 | ) | 1,708 | 940 | ||||||||||
Reclassification adjustment for net (gain) loss on sale of investment securitiesavailable-for-sale included in net income (loss) | (43 | ) | (152 | ) | (106 | ) | (484 | ) | ||||||||
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Other comprehensive income (loss) | (93 | ) | (300 | ) | 1,602 | 456 | ||||||||||
Income tax expense (benefit) related to other comprehensive income | (32 | ) | (102 | ) | 544 | 155 | ||||||||||
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Other comprehensive income (loss), net of income taxes | (61 | ) | (198 | ) | 1,058 | 301 | ||||||||||
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Comprehensive income | $ | 340 | $ | 773 | $ | 1,071 | $ | 2,880 | ||||||||
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Per share data: | ||||||||||||||||
Net income: | ||||||||||||||||
Basic | $ | 0.08 | $ | 0.30 | $ | 0.03 | $ | 0.80 | ||||||||
Diluted | $ | 0.08 | $ | 0.30 | $ | 0.03 | $ | 0.80 | ||||||||
Average common shares outstanding: | ||||||||||||||||
Basic | 4,880,676 | 3,224,053 | 4,002,165 | 3,214,967 | ||||||||||||
Diluted | 4,945,456 | 3,244,688 | 4,060,813 | 3,237,553 | ||||||||||||
Dividends declared | $ | 0.14 | $ | 0.14 | $ | 0.41 | $ | 0.41 |
September 30, 2021 | December 31, 2020 | |||||||
Assets: | ||||||||
Cash and due from banks | $ | 10,842 | $ | 13,511 | ||||
Interest-bearing deposits in other banks | 175,236 | 36,270 | ||||||
Investment securities available-for-sale | 131,705 | 103,695 | ||||||
Loans held for sale | 443 | 4,338 | ||||||
Loans, net | 866,140 | 1,139,239 | ||||||
Less: allowance for loan losses | 10,834 | 12,200 | ||||||
Net loans | 855,306 | 1,127,039 | ||||||
Premises and equipment, net | 16,983 | 18,147 | ||||||
Accrued interest receivable | 2,604 | 4,216 | ||||||
Intangible assets | 1,522 | 1,918 | ||||||
Other assets | 48,152 | 48,420 | ||||||
Total assets | $ | 1,242,793 | $ | 1,357,554 | ||||
Liabilities: | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 192,556 | $ | 173,600 | ||||
Interest-bearing | 877,018 | 841,860 | ||||||
Total deposits | 1,069,574 | 1,015,460 | ||||||
Short-term borrowings | ||||||||
Long-term debt | 52,004 | 228,765 | ||||||
Accrued interest payable | 847 | 1,038 | ||||||
Other liabilities | 12,792 | 14,859 | ||||||
Total liabilities | 1,135,217 | 1,260,122 | ||||||
Stockholders’ equity: | ||||||||
Common stock: 0 par value, authorized 20,000,000 shares; September 30, 2021, issued and outstanding 9,361,967 shares; December 31, 2020, issued and outstanding 9,306,442 shares | 103,127 | 102,662 | ||||||
Capital surplus | 292 | 292 | ||||||
Retained earnings (accumulated deficit) | 4,498 | (6,457 | ) | |||||
Accumulated other comprehensive income (loss) | (341 | ) | 935 | |||||
Total stockholders’ equity | 107,576 | 97,432 | ||||||
Total liabilities and stockholders’ equity | $ | 1,242,793 | $ | 1,357,554 | ||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Interest income: | ||||||||||||||||
Interest and fees on loans: | ||||||||||||||||
Taxable | $ | 10,738 | $ | 11,265 | $ | 32,615 | $ | 31,649 | ||||||||
Tax-exempt | 180 | 223 | 538 | 704 | ||||||||||||
Interest and dividends on investment securities available-for-sale: | ||||||||||||||||
Taxable | 490 | 360 | 1,537 | 1,291 | ||||||||||||
Tax-exempt | 144 | 71 | 440 | 176 | ||||||||||||
Interest on interest-bearing deposits in other banks | 40 | 11 | 64 | 112 | ||||||||||||
Total interest income | 11,592 | 11,930 | 35,194 | 33,932 | ||||||||||||
Interest expense: | ||||||||||||||||
Interest on deposits | 746 | 1,200 | 2,491 | 4,384 | ||||||||||||
Interest on short-term borrowings | 28 | |||||||||||||||
Interest on long-term debt | 521 | 304 | 1,752 | 652 | ||||||||||||
Total interest expense | 1,267 | 1,504 | 4,243 | 5,064 | ||||||||||||
Net interest income | 10,325 | 10,426 | 30,951 | 28,868 | ||||||||||||
(Recovery of) provision for loan losses | 1,844 | (735 | ) | 5,656 | ||||||||||||
Net interest income after (recovery of) provision for loan losses | 10,325 | 8,582 | 31,686 | 23,212 | ||||||||||||
Noninterest income: | ||||||||||||||||
Service charges, fees and commissions | 1,248 | 1,099 | 5,477 | 3,491 | ||||||||||||
Commission and fees on fiduciary activities | 250 | 246 | 804 | 669 | ||||||||||||
Wealth management income | 264 | 220 | 716 | 636 | ||||||||||||
Mortgage banking income | 104 | 401 | 440 | 900 | ||||||||||||
Bank owned life insurance investment income | 178 | 192 | 552 | 578 | ||||||||||||
Net gain on sale of investment securities available-for-sale | 44 | 317 | 815 | |||||||||||||
Total noninterest income | 2,088 | 2,158 | 8,306 | 7,089 | ||||||||||||
Noninterest expense: | ||||||||||||||||
Salaries and employee benefits expense | 4,511 | 5,411 | 14,472 | 15,452 | ||||||||||||
Net occupancy and equipment expense | 1,040 | 1,428 | 3,084 | 3,676 | ||||||||||||
Amortization of intangible assets | 132 | 170 | 396 | 509 | ||||||||||||
Goodwill impairment | 24,754 | |||||||||||||||
Net cost (benefit) of operation of other real estate owned | (22 | ) | 51 | (44 | ) | 40 | ||||||||||
Other expenses | 2,933 | 2,918 | 8,597 | 8,713 | ||||||||||||
Total noninterest expense | 8,594 | 9,978 | 26,505 | 53,144 | ||||||||||||
Income (loss) before income taxes | 3,819 | 762 | 13,487 | (22,843 | ) | |||||||||||
Income tax expense (benefit) | 704 | 67 | 2,532 | (49 | ) | |||||||||||
Net income (loss) | 3,115 | 695 | 10,955 | (22,794 | ) | |||||||||||
Other comprehensive income: | ||||||||||||||||
Unrealized gain (loss) on investment securities available-for-sale | 25 | 114 | (1,725 | ) | 2,007 | |||||||||||
Reclassification adjustment for net gain on sale of investment securities available-for-sale | (44 | ) | (317 | ) | (815 | ) | ||||||||||
Net change in cash flow hedge | 54 | 49 | 427 | 11 | ||||||||||||
Other comprehensive income (loss) | 35 | 163 | (1,615 | ) | 1,203 | |||||||||||
Income tax expense (benefit) related to other comprehensive income | 8 | 35 | (339 | ) | 253 | |||||||||||
Other comprehensive income (loss), net of income taxes | 27 | 128 | (1,276 | ) | 950 | |||||||||||
Comprehensive income (loss) | $ | 3,142 | $ | 823 | $ | 9,679 | $ | (21,844 | ) | |||||||
Per share data: | ||||||||||||||||
Net income (loss): | ||||||||||||||||
Basic | $ | 0.33 | $ | 0.08 | $ | 1.17 | $ | (2.46 | ) | |||||||
Diluted | $ | 0.33 | $ | 0.08 | $ | 1.17 | $ | (2.46 | ) | |||||||
Average common shares outstanding: | ||||||||||||||||
Basic | 9,361,967 | 9,273,666 | 9,353,546 | 9,248,856 | ||||||||||||
Diluted | 9,390,160 | 9,273,666 | 9,366,293 | 9,248,856 |
Preferred Stock | Common Stock | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||||
Balance, January 1, 2016 | $ | 28,681 | $ | 180 | $ | 13,550 | $ | (108 | ) | $ | 42,303 | |||||||||||||
Net income | 2,579 | 2,579 | ||||||||||||||||||||||
Other comprehensive income, net of income taxes | 301 | 301 | ||||||||||||||||||||||
Compensation cost of option grants | 31 | 31 | ||||||||||||||||||||||
Issuance under ESPP, 401k and Dividend Reinvestment plans: 23,923 shares | 274 | 274 | ||||||||||||||||||||||
Dividends declared, $0.41 per share | (1,327 | ) | (1,327 | ) | ||||||||||||||||||||
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Balance, September 30, 2016 | $ | 28,955 | $ | 211 | $ | 14,802 | $ | 193 | $ | 44,161 | ||||||||||||||
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Balance, January 1, 2017 | $ | 29,052 | $ | 220 | $ | 14,845 | $ | (2,197 | ) | $ | 41,920 | |||||||||||||
Net income | 13 | 13 | ||||||||||||||||||||||
Other comprehensive income, net of income taxes | 1,058 | 1,058 | ||||||||||||||||||||||
Compensation cost of option grants | 23 | 23 | ||||||||||||||||||||||
Issuance of 269,885 common shares | 2,658 | 2,658 | ||||||||||||||||||||||
Issuance of 1,348,809 preferred shares | $ | 13,283 | 13,283 | |||||||||||||||||||||
Preferred shares converted into common shares | (13,283 | ) | 13,283 | |||||||||||||||||||||
Issuance under ESPP, 401k and Dividend Reinvestment plans: 29,840 shares | 373 | 373 | ||||||||||||||||||||||
Exercise of stock options: 5,750 shares | 61 | 61 | ||||||||||||||||||||||
Dividends declared: $0.41 per share | (2,010 | ) | (2,010 | ) | ||||||||||||||||||||
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Balance, September 30, 2017 | $ | $ | 45,427 | $ | 243 | $ | 12,848 | $ | (1,139 | ) | $ | 57,379 | ||||||||||||
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For the nine months ended September 30, | Common Stock | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||
Balance, January 1, 2021 | $ | 102,662 | $ | 292 | $ | (6,457 | ) | $ | 935 | $ | 97,432 | |||||||||
Net income | 10,955 | 10,955 | ||||||||||||||||||
Other comprehensive income, net of income taxes | (1,276 | ) | (1,276 | ) | ||||||||||||||||
Issuance under ESPP, 401k and Dividend Reinvestment plans | 266 | 266 | ||||||||||||||||||
Stock based compensation | 199 | 199 | ||||||||||||||||||
Balance, September 30, 2021 | $ | 103,127 | $ | 292 | $ | 4,498 | $ | (341 | ) | $ | 107,576 | |||||||||
Balance, January 1, 2020 | $ | 102,206 | $ | 112 | $ | 16,140 | $ | (348 | ) | $ | 118,110 | |||||||||
Net income (loss) | (22,794 | ) | (22,794 | ) | ||||||||||||||||
Other comprehensive income, net of income taxes | 950 | 950 | ||||||||||||||||||
Issuance under ESPP, 401k and Dividend Reinvestment plans | 466 | 466 | ||||||||||||||||||
Stock based compensation | 78 | 78 | ||||||||||||||||||
Dividends declared, $0.15 per share | (1,386 | ) | (1,386 | ) | ||||||||||||||||
Balance, September 30, 2020 | $ | 102,672 | $ | 190 | $ | (8,040 | ) | $ | 602 | $ | 95,424 | |||||||||
For the three months ended September 30, | Common Stock | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||
Balance, July 1, 2021 | $ | 103,058 | $ | 292 | $ | 1,383 | $ | (368 | ) | $ | 104,365 | |||||||||
Net income | 3,115 | 3,115 | ||||||||||||||||||
Other comprehensive income, net of income taxes | 27 | 27 | ||||||||||||||||||
Issuance under ESPP, 401k and Dividend Reinvestment plans | ||||||||||||||||||||
Stock based compensation | 69 | 69 | ||||||||||||||||||
Balance, September 30, 2021 | $ | 103,127 | $ | 292 | $ | 4,498 | $ | (341 | ) | $ | 107,576 | |||||||||
Balance, July 1, 2020 | $ | 102,552 | $ | 161 | $ | (8,735 | ) | $ | 474 | $ | 94,452 | |||||||||
Net income | 695 | 695 | ||||||||||||||||||
Other comprehensive income, net of income taxes | 128 | 128 | ||||||||||||||||||
Issuance under ESPP, 401k and Dividend Reinvestment plans | 120 | 120 | ||||||||||||||||||
Stock based compensation | 29 | 29 | ||||||||||||||||||
Balance, September 30, 2020 | $ | 102,672 | $ | 190 | $ | (8,040) | $ | 602 | $ | 95,424 | ||||||||||
For the Nine Months Ended September 30, | 2017 | 2016 | ||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 13 | $ | 2,579 | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation of premises and equipment | 586 | 533 | ||||||
Provision for loan losses | 1,734 | 284 | ||||||
Stock based compensation | 23 | 31 | ||||||
Net amortization of investment securitiesavailable-for-sale | 315 | 389 | ||||||
Net cost of operation of other real estate owned | 161 | 214 | ||||||
Net gain on sale of investment securitiesavailable-for-sale | (106 | ) | (484 | ) | ||||
Amortization of purchase adjustment on loans | (127 | ) | (704 | ) | ||||
Amortization of intangible assets | 306 | 247 | ||||||
Deferred income taxes | (47 | ) | 384 | |||||
Proceeds from sale of loans originated for sale | 20,733 | 18,329 | ||||||
Net gain on sale of loans originated for sale | (434 | ) | (401 | ) | ||||
Loans originated for sale | (20,166 | ) | (17,654 | ) | ||||
Bank owned life insurance investment income | (254 | ) | (276 | ) | ||||
Net change in: | ||||||||
Accrued interest receivable | (269 | ) | (107 | ) | ||||
Other assets | (1,255 | ) | (208 | ) | ||||
Accrued interest payable | 21 | (16 | ) | |||||
Other liabilities | (638 | ) | (196 | ) | ||||
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Net cash provided by (used in) operating activities | 596 | 2,944 | ||||||
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Cash flows from investing activities: | ||||||||
Investment securitiesavailable-for-sale: | ||||||||
Purchases | (40,916 | ) | ||||||
Proceeds from repayments | 1,805 | 7,420 | ||||||
Proceeds from sales | 15,827 | 37,526 | ||||||
Proceeds from the sale of other real estate owned | 613 | 1,129 | ||||||
Net decrease in restricted equity securities | (341 | ) | 1,489 | |||||
Net (increase) decrease in loans | (151,072 | ) | 9,996 | |||||
Business disposition (acquisition), net of cash | 329 | (894 | ) | |||||
Purchases of premises and equipment | (548 | ) | (447 | ) | ||||
Purchases of bank owned life insurance | (5,017 | ) | (27 | ) | ||||
Proceeds from bank owned life insurance | 279 | |||||||
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Net cash provided by (used in) investing activities | (138,404 | ) | 15,555 | |||||
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Cash flows from financing activities: | ||||||||
Net increase in deposits | 122,390 | 10,651 | ||||||
Net increase (decrease) in short-term borrowings | 5,750 | (36,575 | ) | |||||
Repayment of long-term debt | (5,251 | ) | (143 | ) | ||||
Proceeds from long-term debt | 600 | 2,050 | ||||||
Issuance under ESPP, 401k and DRP plans | 373 | 274 | ||||||
Issuance of common stock | 15,941 | |||||||
Proceeds from exercise of stock options | 61 | |||||||
Cash dividends paid | (2,010 | ) | (1,327 | ) | ||||
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Net cash provided by (used in) financing activities | 137,854 | (25,070 | ) | |||||
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Net increase (decrease) in cash and cash equivalents | 46 | (6,571 | ) | |||||
Cash and cash equivalents - beginning | 19,120 | 22,688 | ||||||
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Cash and cash equivalents - ending | $ | 19,166 | $ | 16,117 | ||||
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Supplemental disclosures: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 2,425 | $ | 1,664 | ||||
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Income taxes | $ | $ | ||||||
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|
| |||||
Noncash items from investing activities: | ||||||||
Other real estate acquired in settlement of loans | $ | 293 | $ | 1,348 | ||||
|
|
|
|
For the Nine Months Ended September 30, | 2021 | 2020 | ||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 10,955 | $ | (22,794 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization of premises and equipment | 1,021 | 952 | ||||||
(Recovery of) provision for loan losses | (735 | ) | 5,656 | |||||
Stock based compensation | 199 | 78 | ||||||
Net amortization of investment securities available-for-sale | 1,253 | 559 | ||||||
Net cost (benefit) of operation of other real estate owned | (44 | ) | 40 | |||||
Net gain on sale of investment securities available-for-sale | (317 | ) | (815 | ) | ||||
Premium on sale of deposits | (1,602 | ) | ||||||
Amortization of purchase adjustment on loans | (174 | ) | (592 | ) | ||||
Amortization of intangible assets | 396 | 509 | ||||||
Amortization of assumed discount on long-term debt | 66 | 63 | ||||||
Amortization of long-term debt insurance costs | 77 | |||||||
Impairment of goodwill | 24,754 | |||||||
Deferred income taxes | 421 | (779 | ) | |||||
Proceeds from sale of loans originated for sale | 17,301 | 26,921 | ||||||
Net gain on sale of loans originated for sale | (440 | ) | (900 | ) | ||||
Loans originated for sale | (12,966 | ) | (30,487 | ) | ||||
Bank owned life insurance investment income | (552 | ) | (578 | ) | ||||
Net change in: | ||||||||
Accrued interest receivable | 1,612 | (804 | ) | |||||
Other assets | 1,177 | 2,107 | ||||||
Accrued interest payable | (191 | ) | 156 | |||||
Other liabilities | (2,067 | ) | (1,545 | ) | ||||
Net cash provided by operating activities | 15,390 | 2,501 | ||||||
Cash flows from investing activities: | ||||||||
Investment securities available-for-sale: | ||||||||
Purchases | (74,503 | ) | (42,151 | ) | ||||
Proceeds from repayments | 13,073 | 8,832 | ||||||
Proceeds from sales | 30,442 | 27,168 | ||||||
Proceeds from the sale of other real estate owned | 466 | 355 | ||||||
Net increase in restricted equity securities | (412 | ) | (837 | ) | ||||
Net (increase) decrease in loans | 272,642 | (312,627 | ) | |||||
Purchases of premises and equipment | (19 | ) | (1,519 | ) | ||||
Proceeds from sale of premises and equipment | 162 | |||||||
Premium paid on bank owned life insurance | (22 | ) | (22 | ) | ||||
Net cash provided by (used in) investing activities | 241,829 | (320,801 | ) | |||||
Cash flows from financing activities: | ||||||||
Net increase in deposits | 55,716 | 90,833 | ||||||
Repayment of long-term debt | (176,904 | ) | ||||||
Proceeds from long-term debt | 209,997 | |||||||
Issuance under ESPP, 401k and DRP plans | 266 | 466 | ||||||
Cash dividends paid | (1,386 | ) | ||||||
Net cash provided by (used in) financing activities | (120,922 | ) | 299,910 | |||||
Net increase (decrease) in cash and cash equivalents | 136,297 | (18,390 | ) | |||||
Cash and cash equivalents—beginning | 49,781 | 50,348 | ||||||
Cash and cash equivalents—ending | $ | 186,078 | $ | 31,958 | ||||
Supplemental disclosures: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 4,434 | $ | 4,908 | ||||
Federal income taxes | $ | 1,700 | $ | |||||
Supplemental schedule of noncash investing and financing activities: | ||||||||
Other real estate acquired in settlement of loans | $ | $ | 338 | |||||
Transfer of deposits in sale | $ | 42,191 | $ | |||||
Trust Management divisions of the Bank provide trust and investment advisory services to the general public and businesses.
11, 2021.
Recent
Adopted in 2021
In February 2016, the FASB issued ASUNo. 2016-02, “Leases (Topic 842)”. Among other things, in the amendments in ASU2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and aright-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018,2020, including interim periods within those fiscal years. Early application is permitted upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any
transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is currently assessing the impact that ASU2016-02 will have on its consolidated financial statements.
In March 2016, the FASB issued ASUNo. 2016-07, “Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting”. The amendments in this ASU eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on astep-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. In addition, the amendments in this ASU require that an entity that has anavailable-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments were effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Early adoption is permitted. The adoption of ASUNo. 2016-07the guidance did not have a material effect on our consolidatedthe Company’s financial statements.
position, results of operations or disclosures.
position, results of operations or disclosures.
In August 2016, the FASB issued ASUNo. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. The update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This new accounting guidance will be effective for interim and annual reporting periods beginning after December 15, 2019. The Company does not expect the adoption of the new accounting guidanceexpected to have a material effect on the statement of cash flow.
In December 2016, the FASB issued ASUNo. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers”.ASU 2016-20 updates the new revenue standard by clarifying issues that have arisen fromASU 2014-09, but does not change the core principle of the new standard. The issues addressed in this ASU include: (i) Loan guarantee fees; (ii) Impairment testing of contract costs; (iii) Interaction of impairment testing with guidance in other topics; (iv) Provisions for losses on construction-type and production-type contracts; (v) Scope of Topic 606; (vi) Disclosure of remaining performance obligations; (vii) Disclosure of prior-period performance obligations; (viii) Contract modifications; (ix) Contract asset vs. receivable; (x) Refund liability; (xi) Advertising costs; (xii) Fixed-odds wagering contracts in the casino industry; and (xiii) Cost capitalization for advisors to private funds and public funds. The updated guidance is effective for interim and annual reporting periods beginning after December 15, 2017. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this new guidance recognized at the date of initial application. Our revenue is comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope ofASU 2014-09, andnon-interest income.ASU 2016-20 and2014-09 could require us to change how we recognize certain revenue streams withinnon-interest income, however, we do not expect these changes to have a significant impact on our financial statements. We continue to evaluate the impact ofASU 2016-20 and2014-09 on our Company and expect to adopt the standard in the first quarter of 2018 with a cumulative effect adjustment to opening retained earnings, if such adjustment is deemed to be significant.
In January 2017, FASB issued ASUNo. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The ASU clarifies the definition of a business to assist with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The guidance is not expected to have a significant impact on the Company’s financial positions,position, results of operations or disclosures.
In January 2017, the FASB issued ASUNo. 2017-03, “Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the 2015 22, 2016 and November 17, 2016 EITF Meetings”. The ASU adds an SEC paragraph to ASUs2014-09,2016-02 and2016-13 which specifies the SEC staff view that a registrant should evaluate ASUs that have not yet been adopted to determine the appropriate disclosure about the potential material effects
September 30, 2017 | December 31, 2016 | |||||||
Net unrealized loss on investment securitiesavailable-for-sale | $ | (911 | ) | $ | (2,513 | ) | ||
Related income taxes | (310 | ) | (854 | ) | ||||
|
|
|
| |||||
Net of income taxes | (601 | ) | (1,659 | ) | ||||
|
|
|
| |||||
Benefit plan adjustments | (815 | ) | (815 | ) | ||||
Related income taxes | (277 | ) | (277 | ) | ||||
|
|
|
| |||||
Net of income taxes | (538 | ) | (538 | ) | ||||
|
|
|
| |||||
Accumulated other comprehensive income (loss) | $ | (1,139 | ) | $ | (2,197 | ) | ||
|
|
|
|
September 30, 2021 | December 31, 2020 | |||||||
Net unrealized gain (loss) on investment securities available-for-sale | $ | (80 | ) | $ | 1,962 | |||
Income tax expense (benefit) | (17 | ) | 412 | |||||
Net of income (loss) taxes | (63 | ) | 1,550 | |||||
Benefit plan adjustments | (951 | ) | (951 | ) | ||||
Income tax benefit | (200 | ) | (200 | ) | ||||
Net of income taxes | (751 | ) | (751 | ) | ||||
Derivative fair value adjustment | 599 | 172 | ||||||
Income tax benefit | 126 | 36 | ||||||
Net of income taxes | 473 | 136 | ||||||
Accumulated other comprehensive income (loss) | $ | (341 | ) | $ | 935 | |||
Three months ended September 30, | 2017 | 2016 | ||||||
Unrealized loss on investment securitiesavailable-for-sale | $ | (50 | ) | $ | (148 | ) | ||
Net gain on the sale of investment securitiesavailable-for-sale (1) | (43 | ) | (152 | ) | ||||
|
|
|
| |||||
Other comprehensive loss before taxes | (93 | ) | (300 | ) | ||||
Income tax expense (benefit) | (32 | ) | (102 | ) | ||||
|
|
|
| |||||
Other comprehensive loss | $ | (61 | ) | $ | (198 | ) | ||
|
|
|
| |||||
Nine months ended September 30, | 2017 | 2016 | ||||||
Unrealized gain on investment securitiesavailable-for-sale | $ | 1,708 | $ | 940 | ||||
Net gain on the sale of investment securitiesavailable-for-sale (1) | (106 | ) | (484 | ) | ||||
|
|
|
| |||||
Other comprehensive income before taxes | 1,602 | 456 | ||||||
Income tax expense (benefit) | 544 | 155 | ||||||
|
|
|
| |||||
Other comprehensive income | $ | 1,058 | $ | 301 | ||||
|
|
|
|
Three months ended September 30, | 2021 | 2020 | ||||||
Unrealized gain on investment securities available-for-sale | $ | 25 | $ | 114 | ||||
Net gain on the sale of investment securities available-for-sale (1) | (44 | ) | ||||||
Net change in derivative fair value | 54 | 49 | ||||||
Other comprehensive income before taxes | 35 | 163 | ||||||
Income tax expense | 8 | 35 | ||||||
Other comprehensive income | $ | 27 | $ | 128 | ||||
Nine months ended September 30, | 2021 | 2020 | ||||||
Unrealized gain (loss) on investment securities available-for-sale | $ | (1,725 | ) | $ | 2,007 | |||
Net gain on the sale of investment securities available-for-sale (1) | (317 | ) | (815 | ) | ||||
Net change in derivative fair value | 427 | 11 | ||||||
Other comprehensive income (loss) before taxes | (1,615 | ) | 1,203 | |||||
Income tax expense (benefit) | $ | (339 | ) | 253 | ||||
Other comprehensive income (loss) | $ | (1,276 | ) | $ | 950 | |||
(1) | Represents amounts reclassified out of accumulated other comprehensive income and included in gains on sale of investment securities on the consolidated statements of income and comprehensive income. |
The following table provides a reconciliation between the computation of basic earnings per share and diluted earnings per share for the three and nine months ended September 30, 20172021 and 2016:
Three months ended September 30, | 2017 | 2016 | ||||||
Numerator: | ||||||||
Net income (loss) | $ | 401 | $ | 971 | ||||
Dividends on preferred stock | ||||||||
|
|
|
| |||||
Net income (loss) available to common stockholders | $ | 401 | $ | 971 | ||||
Undistributed loss allocated to preferred stockholders | ||||||||
|
|
|
| |||||
Income (loss) allocated to common stockholders | $ | 401 | $ | 971 | ||||
|
|
|
| |||||
Denominator: | ||||||||
Basic | 4,880,676 | 3,224,053 | ||||||
Dilutive options | 64,780 | 20,635 | ||||||
|
|
|
| |||||
Diluted | 4,945,456 | 3,244,688 | ||||||
|
|
|
| |||||
Earnings per share: | ||||||||
Basic | $ | 0.08 | $ | 0.30 | ||||
Diluted | $ | 0.08 | $ | 0.30 | ||||
Nine months ended September 30, | 2017 | 2016 | ||||||
Numerator: | ||||||||
Net income (loss) | $ | 13 | $ | 2,579 | ||||
Dividends on preferred stock | (371 | ) | ||||||
|
|
|
| |||||
Net income (loss) available to common stockholders | $ | (358 | ) | $ | 2,579 | |||
Undistributed loss allocated to preferred stockholders | 475 | |||||||
|
|
|
| |||||
Income (loss) allocated to common stockholders | $ | 117 | $ | 2,579 | ||||
|
|
|
| |||||
Denominator: | ||||||||
Basic | 4,002,165 | 3,214,967 | ||||||
Dilutive options | 58,648 | 22,586 | ||||||
|
|
|
| |||||
Diluted | 4,060,813 | 3,237,553 | ||||||
|
|
|
| |||||
Earnings per share: | ||||||||
Basic | $ | 0.03 | $ | 0.80 | ||||
Diluted | $ | 0.03 | $ | 0.80 |
There were 25,300 outstanding stock options for2020:
Three months ended September 30, | 2021 | 2020 | ||||||
Numerator: | ||||||||
Net income (loss) | $ | 3,115 | $ | 695 | ||||
Denominator: | ||||||||
Basic | 9,361,967 | 9,273,666 | ||||||
Dilutive options | 28,193 | |||||||
Diluted | 9,390,160 | 9,273,666 | ||||||
Earnings per share: | ||||||||
Basic | $ | 0.33 | $ | 0.08 | ||||
Diluted | $ | 0.33 | $ | 0.08 |
Nine months ended September 30, | 2021 | 2020 | ||||||
Numerator: | ||||||||
Net income (loss) | $ | 10,955 | $ | (22,794 | ) | |||
Denominator: | ||||||||
Basic | 9,353,546 | 9,248,856 | ||||||
Dilutive options | 12,747 | |||||||
Diluted | 9,366,293 | 9,248,856 | ||||||
Earnings per share: | ||||||||
Basic | $ | 1.17 | $ | (2.46 | ) | |||
Diluted | $ | 1.17 | $ | (2.46 | ) |
On January 20, 2017, Riverview announcedeffect was antidilutive. For the three and nine months ended September 30, 2020 there were 172,964 outstanding stock options that it entered into agreements with accredited investors and qualified institutional buyers to raise approximately $17.0 million in common and preferred equity, before expenses, throughwere excluded from the private placement of 269,885 shares of its no par value common stock at a price of $10.50dilutive earnings per share and 1,348,809 shares of a newly created Series A convertible, perpetual preferred stock (the “Series A preferred stock”) at a price of $10.50 per share.
Effective as of the close of business on June 22, 2017, the Company filed an amendment to the Articles of Incorporation to authorize a class ofnon-voting common stock after obtaining shareholder approval on June 21, 2017. As a result, each share of Series A preferred stockcalculation because their effect was automatically converted into one share ofnon-voting common stock as of the effective date. Thenon-voting common stock has the same relative rights as, and is identical in all respects with, each other share of common stock of the Company, except that holders ofnon-voting common stock do not have voting rights.
The additional capital allowed Riverview to acquire CBT Financial Corp, Clearfield, Pennsylvania, in a stock transaction valued at approximately $54.6 million effective October 1, 2017. This merger created a community banking franchise with approximately $1.2 billion of assets and provides enhanced products and services through 33 banking locations covering 12 Pennsylvania counties.
antidilutive.
September 30, 2017 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
State and municipals: | ||||||||||||||||
Taxable | $ | 35,424 | $ | 392 | $ | 684 | $ | 35,132 | ||||||||
Tax-exempt | 5,746 | 55 | 5,801 | |||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 1,567 | 31 | 1,536 | |||||||||||||
U.S. Government-sponsored enterprises | 5,516 | 12 | 105 | 5,423 | ||||||||||||
Corporate debt obligations | 9,532 | 550 | 8,982 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 57,785 | $ | 459 | $ | 1,370 | $ | 56,874 | ||||||||
|
|
|
|
|
|
|
| |||||||||
December 31, 2016 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
U.S. Treasury securities | $ | 5,088 | $ | 67 | $ | 5,021 | ||||||||||
State and municipals: | ||||||||||||||||
Taxable | 44,045 | $ | 234 | 1,885 | 42,394 | |||||||||||
Tax-exempt | 5,748 | 3 | 77 | 5,674 | ||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 1,905 | 15 | 1,890 | |||||||||||||
U.S. Government-sponsored enterprises | 9,115 | 28 | 247 | 8,896 | ||||||||||||
Corporate debt obligations | 9,542 | 492 | 9,050 | |||||||||||||
Equity securities, financial services | 183 | 5 | 188 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 75,626 | $ | 270 | $ | 2,783 | $ | 73,113 | ||||||||
|
|
|
|
|
|
|
|
September 30, 2021 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
State and municipals: | ||||||||||||||||
Taxable | $ | 22,133 | $ | 301 | $ | 258 | $ | 22,176 | ||||||||
Tax-exempt | 44,196 | 89 | 743 | 43,542 | ||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 35,029 | 680 | 98 | 35,611 | ||||||||||||
U.S. Government-sponsored enterprises | 15,177 | 186 | 24 | 15,339 | ||||||||||||
Corporate debt obligations | 15,250 | 64 | 277 | 15,037 | ||||||||||||
Total | $ | 131,785 | $ | 1,320 | $ | 1,400 | $ | 131,705 | ||||||||
December 31, 2020 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
State and municipals: | ||||||||||||||||
Taxable | $ | 22,317 | $ | 400 | $ | 143 | $ | 22,574 | ||||||||
Tax-exempt | 17,988 | 423 | 16 | 18,395 | ||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 26,051 | 940 | 26,991 | |||||||||||||
U.S. Government-sponsored enterprises | 24,627 | 442 | 17 | 25,052 | ||||||||||||
Corporate debt obligations | 10,750 | 56 | 123 | 10,683 | ||||||||||||
Total | $ | 101,733 | $ | 2,261 | $ | 299 | $ | 103,695 | ||||||||
September 30, 2017 | Fair Value | |||
Within one year | $ | 173 | ||
After one but within five years | 2,281 | |||
After five but within ten years | 9,316 | |||
After ten years | 38,146 | |||
|
| |||
49,916 | ||||
Mortgage-backed securities | 6,958 | |||
|
| |||
Total | $ | 56,874 | ||
|
|
September 30, 2021 | Fair Value | |||
Within one year | $ | 770 | ||
After one but within five years | 929 | |||
After five but within ten years | 22,955 | |||
After ten years | 56,101 | |||
80,755 | ||||
Mortgage-backed securities | 50,950 | |||
Total | $ | 131,705 | ||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
September 30, 2017 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
State and municipals: | ||||||||||||||||||||||||
Taxable | $ | 10,533 | $ | 227 | $ | 13,463 | $ | 457 | $ | 23,996 | $ | 684 | ||||||||||||
Tax-exempt | ||||||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||
U.S. Government agencies | 1,536 | 31 | 1,536 | 31 | ||||||||||||||||||||
U.S. Government-sponsored enterprises | 3,317 | 58 | 1,757 | 47 | 5,074 | 105 | ||||||||||||||||||
Corporate debt obligation | 3,761 | 239 | 5,221 | 311 | 8,982 | 550 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 19,147 | $ | 555 | $ | 20,441 | $ | 815 | $ | 39,588 | $ | 1,370 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
December 31, 2016 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
U.S. Treasury securities | $ | 5,021 | $ | 67 | $ | 5,021 | $ | 67 | ||||||||||||||||
U.S. Government-sponsored enterprises | ||||||||||||||||||||||||
State and municipals: | ||||||||||||||||||||||||
Taxable | 30,895 | 1,876 | $ | 282 | $ | 9 | 31,177 | 1,885 | ||||||||||||||||
Tax-exempt | 3,998 | 77 | 3,998 | 77 | ||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||
U.S. Government agencies | 1,891 | 15 | 1,891 | 15 | ||||||||||||||||||||
U.S. Government-sponsored enterprises | 7,412 | 247 | 7,412 | 247 | ||||||||||||||||||||
Corporate debt obligation | 9,050 | 492 | 9,050 | 492 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 58,267 | $ | 2,774 | $ | 282 | $ | 9 | $ | 58,549 | $ | 2,783 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
September 30, 2021 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
State and municipals: | ||||||||||||||||||||||||
Taxable | $ | 3,453 | $ | 60 | 7,625 | $ | 198 | $ | 11,078 | $ | 258 | |||||||||||||
Tax-exempt | 33,175 | 740 | 631 | 3 | 33,806 | 743 | ||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||
U.S. Government agencies | 13,716 | 98 | 13,716 | 98 | ||||||||||||||||||||
U.S. Government-sponsored enterprises | 4,650 | 16 | 1,013 | 8 | 5,663 | 24 | ||||||||||||||||||
Corporate debt obligations | 9,473 | 277 | 9,473 | 277 | ||||||||||||||||||||
Total | $ | 64,467 | $ | 1,191 | $ | 9,269 | $ | 209 | $ | 73,736 | $ | 1,400 | ||||||||||||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
December 31, 2020 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
State and municipals: | ||||||||||||||||||||||||
Taxable | $ | 11,586 | $ | 143 | $ | $ | $ | 11,586 | $ | 143 | ||||||||||||||
Tax-exempt | 1,737 | 16 | 1,737 | 16 | ||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||
U.S. Government agencies | 5,960 | 17 | 5,960 | 17 | ||||||||||||||||||||
U.S. Government-sponsored enterprises | ||||||||||||||||||||||||
Corporate debt obligations | 3,378 | 123 | 3,378 | 123 | ||||||||||||||||||||
Total | $ | 19,283 | $ | 176 | $ | 3,378 | $ | 123 | $ | 22,661 | $ | 299 | ||||||||||||
2020.
September 30, 2017 | December 31, 2016 | |||||||
Commercial | $ | 74,389 | $ | 51,166 | ||||
Real estate: | ||||||||
Construction | 9,754 | 8,605 | ||||||
Commercial | 337,688 | 212,550 | ||||||
Residential | 131,741 | 130,874 | ||||||
Consumer | 6,615 | 6,148 | ||||||
|
|
|
| |||||
Total | $ | 560,187 | $ | 409,343 | ||||
|
|
|
|
2020.
September 30, 2021 | December 31, 2020 | |||||||
Commercial | $ | 139,375 | $ | 359,080 | ||||
Real estate: | ||||||||
Construction | 41,772 | 73,402 | ||||||
Commercial | 497,203 | 502,495 | ||||||
Residential | 181,870 | 197,596 | ||||||
Consumer | 5,920 | 6,666 | ||||||
Total | $ | 866,140 | $ | 1,139,239 | ||||
Real Estate | ||||||||||||||||||||||||||||
September 30, 2017 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance July 1, 2017 | $ | 757 | $ | 192 | $ | 2,965 | $ | 828 | $ | 49 | $ | 43 | $ | 4,834 | ||||||||||||||
Charge-offs | (24 | ) | (18 | ) | (42 | ) | ||||||||||||||||||||||
Recoveries | 1 | 1 | 2 | |||||||||||||||||||||||||
Provisions | 421 | (3 | ) | (56 | ) | 127 | (4 | ) | 125 | 610 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance | $ | 1,155 | $ | 189 | $ | 2,909 | $ | 937 | $ | 46 | $ | 168 | $ | 5,404 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
September 30, 2017 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance January 1, 2017 | $ | 629 | $ | 160 | $ | 2,110 | $ | 789 | $ | 44 | $ | 3,732 | ||||||||||||||||
Charge-offs | (34 | ) | (34 | ) | (7 | ) | (75 | ) | ||||||||||||||||||||
Recoveries | 1 | 3 | 7 | 2 | 13 | |||||||||||||||||||||||
Provisions | 559 | 29 | 796 | 175 | 7 | $ | 168 | 1,734 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance | $ | 1,155 | $ | 189 | $ | 2,909 | $ | 937 | $ | 46 | $ | 168 | $ | 5,404 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
September 30, 2016 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance July 1, 2016 | $ | 558 | $ | 170 | $ | 2,100 | $ | 745 | $ | 36 | $ | 3,609 | ||||||||||||||||
Charge-offs | (1 | ) | (1 | ) | (25 | ) | (8 | ) | (35 | ) | ||||||||||||||||||
Recoveries | 25 | 1 | 1 | 7 | 34 | |||||||||||||||||||||||
Provisions | (72 | ) | (13 | ) | 38 | 69 | 5 | $ | 2 | 29 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance | $ | 510 | $ | 157 | $ | 2,138 | $ | 790 | $ | 40 | $ | 2 | $ | 3,637 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016 Allowance for loan losses: Beginning Balance January 1, 2016 Charge-offs Recoveries Provisions Ending balance Real Estate Commercial Construction Commercial Residential Consumer Unallocated Total $ 1,298 $ 202 $ 2,227 $ 613 $ 25 $ 4,365 (724 ) (250 ) (65 ) (33 ) (24 ) (1,096 ) 70 1 3 10 84 (134 ) 204 (24 ) 207 29 $ 2 284 $ 510 $ 157 $ 2,138 $ 790 $ 40 $ 2 $ 3,637
Real Estate | ||||||||||||||||||||||||||||
September 30, 2021 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance, July 1, 2021 | $ | 1,416 | $ | 753 | $ | 6,365 | $ | 1,858 | $ | 111 | $ | 364 | $ | 10,867 | ||||||||||||||
Charge-offs | (15 | ) | (9 | ) | (33 | ) | (57 | ) | ||||||||||||||||||||
Recoveries | 3 | 5 | 16 | 24 | ||||||||||||||||||||||||
Provisions | (202 | ) | (143 | ) | 186 | 131 | 1 | 27 | ||||||||||||||||||||
Ending balance | $ | 1,202 | $ | 610 | $ | 6,556 | $ | 1,980 | $ | 95 | $ | 391 | $ | 10,834 | ||||||||||||||
Real Estate | Real Estate | |||||||||||||||||||||||||||
September 30, 2021 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance, January 1, 2021 | $ | 1,705 | $ | 1,117 | $ | 6,494 | $ | 2,427 | $ | 142 | $ | 315 | $ | 12,200 | ||||||||||||||
Charge-offs | (225 | ) | (37 | ) | (373 | ) | (9 | ) | (118 | ) | (762 | ) | ||||||||||||||||
Recoveries | 60 | 8 | 2 | 61 | 131 | |||||||||||||||||||||||
Provisions | (338 | ) | (470 | ) | 427 | (440 | ) | 10 | 76 | (735 | ) | |||||||||||||||||
Ending balance | $ | 1,202 | $ | 610 | $ | 6,556 | $ | 1,980 | $ | 95 | $ | 391 | $ | 10,834 | ||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
September 30, 2020 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance, July 1, 2020 | $ | 1,685 | $ | 741 | $ | 5,078 | $ | 2,070 | $ | 162 | $ | $ | 9,736 | |||||||||||||||
Charge-offs | (42 | ) | (42 | ) | ||||||||||||||||||||||||
Recoveries | 2 | 57 | 27 | 86 | ||||||||||||||||||||||||
Provisions | 173 | 145 | 1,015 | 490 | 21 | 1,844 | ||||||||||||||||||||||
Ending balance | $ | 1,860 | $ | 886 | $ | 6,150 | $ | 2,560 | $ | 168 | $ | $ | 11,624 | |||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
September 30, 2020 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance, January 1, 2020 | $ | 1,953 | $ | 473 | $ | 3,115 | $ | 1,820 | $ | 155 | $ | $ | 7,516 | |||||||||||||||
Charge-offs | (899 | ) | (595 | ) | (2 | ) | (243 | ) | (1,739 | ) | ||||||||||||||||||
Recoveries | 11 | 59 | 1 | 120 | 191 | |||||||||||||||||||||||
Provisions | 795 | 413 | 3,571 | 741 | 136 | 5,656 | ||||||||||||||||||||||
Ending balance | $ | 1,860 | $ | 886 | $ | 6,150 | $ | 2,560 | $ | 168 | $ | $ | 11,624 | |||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
September 30, 2017 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Ending balance | $ | 1,155 | $ | 189 | $ | 2,909 | $ | 937 | $ | 46 | $ | 168 | $ | 5,404 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: individually evaluated for impairment | 25 | 194 | 54 | 273 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 1,130 | $ | 189 | $ | 2,715 | $ | 884 | $ | 45 | $ | 168 | $ | 5,131 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Loans receivable: | ||||||||||||||||||||||||||||
Ending balance | $ | 74,389 | $ | 9,754 | $ | 337,688 | $ | 131,741 | $ | 6,615 | $ | 560,187 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: individually evaluated for impairment | 799 | 3,671 | 2,462 | 6,932 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 73,590 | $ | 9,754 | $ | 334,017 | $ | 129,279 | $ | 6,615 | $ | 553,255 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
December 31, 2016 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Ending balance | $ | 629 | $ | 160 | $ | 2,110 | $ | 789 | $ | 44 | $ | 3,732 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: individually evaluated for impairment | 8 | 140 | 148 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 621 | $ | 160 | $ | 1,970 | $ | 789 | $ | 44 | $ | 3,584 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Loans receivable: | ||||||||||||||||||||||||||||
Ending balance | $ | 51,166 | $ | 8,605 | $ | 212,550 | $ | 130,874 | $ | 6,148 | $ | 409,343 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: individually evaluated for impairment | 966 | 3,924 | 2,515 | 7,405 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 50,200 | $ | 8,605 | $ | 208,626 | $ | 128,359 | $ | 6,148 | $ | 401,938 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate | ||||||||||||||||||||||||||||
September 30, 2021 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Ending balance | $ | 1,202 | $ | 610 | $ | 6,556 | $ | 1,980 | $ | 95 | $ | 391 | $ | 10,834 | ||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
individually evaluated for impairment | 48 | 48 | ||||||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
collectively evaluated for impairment | 1,202 | 610 | 6,508 | 1,980 | 95 | 391 | 10,786 | |||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
purchased credit impaired loans | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Loans receivable: | ||||||||||||||||||||||||||||
Ending balance | $ | 139,375 | $ | 41,772 | $ | 497,203 | $ | 181,870 | $ | 5,920 | $ | $ | 866,140 | |||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
individually evaluated for impairment | 608 | 7,447 | 2,522 | 10,577 | ||||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
collectively evaluated for impairment | 138,767 | 41,772 | 489,563 | 179,210 | 5,920 | 855,232 | ||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
purchased credit impaired loans | $ | $ | $ | 193 | $ | 138 | $ | $ | $ | 331 | ||||||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
December 31, 2020 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Ending balance | $ | 1,705 | $ | 1,117 | $ | 6,494 | $ | 2,427 | $ | 142 | $ | 315 | $ | 12,200 | ||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
individually evaluated for impairment | ||||||||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
collectively evaluated for impairment | 1,705 | 1,117 | 6,494 | 2,427 | 142 | 315 | 12,200 | |||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
purchased credit impaired loans | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Loan’s receivable: | ||||||||||||||||||||||||||||
Ending balance | $ | 359,080 | $ | 73,402 | $ | 502,495 | $ | 197,596 | $ | 6,666 | $ | $ | 1,139,239 | |||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
individually evaluated for impairment | 1,565 | 6,444 | 2,494 | 10,503 | ||||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
collectively evaluated for impairment | 357,515 | 73,402 | 495,674 | 194,939 | 6,666 | 1,128,196 | ||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
purchased credit impaired loans | $ | $ | $ | 377 | $ | 163 | $ | $ | $ | 540 | ||||||||||||||||||
September 30, 2017 | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Commercial | $ | 70,549 | $ | 2,277 | $ | 1,563 | $ | 74,389 | ||||||||||||
Real estate: | ||||||||||||||||||||
Construction | 9,344 | 410 | 9,754 | |||||||||||||||||
Commercial | 326,203 | 7,753 | 3,732 | 337,688 | ||||||||||||||||
Residential | 130,001 | 28 | 1,712 | 131,741 | ||||||||||||||||
Consumer | 6,615 | 6,615 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 542,712 | $ | 10,468 | $ | 7,007 | $ | 560,187 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
December 31, 2016: | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Commercial | $ | 47,765 | $ | 1,604 | $ | 1,797 | $ | 51,166 | ||||||||||||
Real estate: | ||||||||||||||||||||
Construction | 8,605 | 8,605 | ||||||||||||||||||
Commercial | 200,636 | 8,063 | 3,851 | 212,550 | ||||||||||||||||
Residential | 129,320 | 28 | 1,526 | 130,874 | ||||||||||||||||
Consumer | 6,148 | 6,148 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 392,474 | $ | 9,695 | $ | 7,174 | $ | 409,343 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
Information concerning2020:
September 30, 2021 | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Commercial | $ | 138,433 | $ | $ | 942 | $ | $ | 139,375 | ||||||||||||
Real estate: | ||||||||||||||||||||
Construction | 40,092 | 1,680 | 41,772 | |||||||||||||||||
Commercial | 450,401 | 29,197 | 17,605 | 497,203 | ||||||||||||||||
Residential | 178,210 | 1,109 | 2,551 | 181,870 | ||||||||||||||||
Consumer | 5,920 | 5,920 | ||||||||||||||||||
Total | $ | 813,056 | $ | 30,306 | $ | 22,778 | $ | $ | 866,140 | |||||||||||
December 31, 2020 | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Commercial | $ | 353,758 | $ | 3,147 | $ | 2,175 | $ | $ | 359,080 | |||||||||||
Real estate: | ||||||||||||||||||||
Construction | 63,838 | 1,817 | 7,747 | 73,402 | ||||||||||||||||
Commercial | 451,190 | 29,180 | 22,125 | 502,495 | ||||||||||||||||
Residential | 191,775 | 2,670 | 3,151 | 197,596 | ||||||||||||||||
Consumer | 6,666 | 6,666 | ||||||||||||||||||
Total | $ | 1,067,227 | $ | 36,814 | $ | 35,198 | $ | $ | 1,139,239 | |||||||||||
September 30, 2017 | December 31, 2016 | |||||||
Commercial | $ | 199 | $ | 356 | ||||
Real estate: | ||||||||
Construction | ||||||||
Commercial | 704 | 359 | ||||||
Residential | 862 | 671 | ||||||
Consumer | ||||||||
|
|
|
| |||||
Total | $ | 1,765 | $ | 1,386 | ||||
|
|
|
|
The major classifications2020. Purchase credit impaired (“PCI”) loans are excluded from the aging and nonaccrual loan schedules.
Accrual Loans | ||||||||||||||||||||||||||||
September 30, 2021 | 30-59 Days Past Due | 60-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Nonaccrual Loans | Total Loans | |||||||||||||||||||||
Commercial | $ | 531 | $ | $ | $ | 531 | $ | 138,835 | $ | 9 | $ | 139,375 | ||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | 185 | 1,703 | 1,888 | 39,884 | 41,772 | |||||||||||||||||||||||
Commercial | 63 | 63 | 495,552 | 1,395 | 497,010 | |||||||||||||||||||||||
Residential | 629 | 252 | 177 | 1,058 | 179,785 | 889 | 181,732 | |||||||||||||||||||||
Consumer | 6 | 9 | 15 | 5,905 | 5,920 | |||||||||||||||||||||||
Total | $ | 1,351 | $ | 324 | $ | 1,880 | $ | 3,555 | $ | 859,961 | $ | 2,293 | $ | 865,809 | ||||||||||||||
Purchased credit impaired loans | 331 | |||||||||||||||||||||||||||
Total Loans | $ | 866,140 | ||||||||||||||||||||||||||
Accrual Loans | ||||||||||||||||||||||||||||
December 31, 2020 | 30-59 Days Past Due | 60-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Nonaccrual Loans | Total Loans | |||||||||||||||||||||
Commercial | $ | 64 | $ | 1 | $ | $ | 65 | $ | 358,496 | $ | 519 | $ | 359,080 | |||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | 73,402 | 73,402 | ||||||||||||||||||||||||||
Commercial | 1,238 | 4,063 | 5,301 | 496,785 | 32 | 502,118 | ||||||||||||||||||||||
Residential | 2,125 | 2,993 | 146 | 5,264 | 191,299 | 870 | 197,433 | |||||||||||||||||||||
Consumer | 22 | 20 | 10 | 52 | 6,614 | 6,666 | ||||||||||||||||||||||
Total | $ | 3,449 | $ | 7,077 | $ | 156 | $ | 10,682 | $ | 1,126,596 | $ | 1,421 | $ | 1,138,699 | ||||||||||||||
Purchased credit impaired loans | 540 | |||||||||||||||||||||||||||
Total Loans | $ | 1,139,239 | ||||||||||||||||||||||||||
This Quarter | Year-to-Date | |||||||||||||||||||||||||||
September 30, 2017 | Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||
With no related allowance: | ||||||||||||||||||||||||||||
Commercial | $ | 724 | $ | 724 | $ | 798 | $ | 8 | $ | 803 | $ | 23 | ||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 2,753 | 2,753 | 2,760 | 32 | 2,992 | 90 | ||||||||||||||||||||||
Residential | 2,274 | 2,292 | 2,304 | 28 | 2,408 | 87 | ||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 5,751 | 5,769 | 5,862 | 68 | 6,203 | 200 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||||
Commercial | 75 | 75 | $ | 25 | 78 | 76 | 1 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 918 | 918 | 194 | 820 | 8 | 798 | 20 | |||||||||||||||||||||
Residential | 188 | 326 | 54 | 189 | 2 | 126 | 6 | |||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 1,181 | 1,319 | 273 | 1,087 | 10 | 1,000 | 27 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Commercial | 799 | 799 | 25 | 876 | 8 | 879 | 24 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 3,671 | 3,671 | 194 | 3,580 | 40 | 3,790 | 110 | |||||||||||||||||||||
Residential | 2,462 | 2,618 | 54 | 2,493 | 30 | 2,534 | 93 | |||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | $ | 6,932 | $ | 7,088 | $ | 273 | $ | 6,949 | $ | 78 | $ | 7,203 | $ | 227 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended | ||||||||||||||||||||
December 31, 2016 | Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | |||||||||||||||
With no related allowance: | ||||||||||||||||||||
Commercial | $ | 225 | $ | 225 | $ | 225 | ||||||||||||||
Real estate: | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Commercial | 3,094 | 3,094 | 3,168 | 147 | ||||||||||||||||
Residential | 2,515 | 2,652 | 2,747 | 130 | ||||||||||||||||
Consumer | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 5,834 | 5,971 | 6,140 | 277 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
With an allowance recorded: | ||||||||||||||||||||
Commercial | 741 | 741 | $ | 8 | 761 | 30 | ||||||||||||||
Real estate: | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Commercial | 830 | 830 | 140 | 840 | ||||||||||||||||
Residential | ||||||||||||||||||||
Consumer | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 1,571 | 1,571 | 148 | 1,601 | 30 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Commercial | 966 | 966 | 8 | 986 | 30 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Commercial | 3,924 | 3,924 | 140 | 4,008 | 147 | |||||||||||||||
Residential | 2,515 | 2,652 | 2,747 | 130 | ||||||||||||||||
Consumer | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 7,405 | $ | 7,542 | $ | 148 | $ | 7,741 | $ | 307 | ||||||||||
|
|
|
|
|
|
|
|
|
|
September 30, 2016 With no related allowance: Commercial Real estate: Construction Commercial Residential Consumer Total With an allowance recorded: Commercial Real estate: Construction Commercial Residential Consumer Total Commercial Real estate: Construction Commercial Residential Consumer Total This Quarter Year-to-Date Recorded
Investment Unpaid
Principal
Balance Related
Allowance Average
Recorded
Investment Interest
Income
Recognized Average
Recorded
Investment Interest
Income
Recognized $ 838 $ 838 $ 843 $ 8 $ 849 $ 22 3,438 3,438 3,455 20 3,823 110 2,709 2,846 2,907 34 2,942 102 6,985 7,122 7,205 62 7,614 234 126 126 $ 2 128 132 298 298 55 269 231 119 119 33 119 2 120 4 543 543 90 516 2 483 4 964 964 2 971 8 981 22 3,736 3,736 55 3,724 20 4,054 110 2,828 2,965 33 3,026 36 3,062 106 $ 7,528 $ 7,665 $ 90 $ 7,721 $ 64 $ 8,097 $ 238
classification, excluding purchased credit impaired loans:
This Quarter | Year-to-Date | |||||||||||||||||||||||||||
September 30, 2021 | Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||
With no related allowance: | ||||||||||||||||||||||||||||
Commercial | $ | 608 | $ | 608 | $ | 791 | $ | 8 | $ | 1,243 | $ | 58 | ||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | 479 | 643 | ||||||||||||||||||||||||||
Commercial | 1,757 | 1,757 | 1,214 | 16 | 1,949 | 58 | ||||||||||||||||||||||
Residential | 2,660 | 2,790 | 2,581 | 27 | 2,567 | 89 | ||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
Total | 5,025 | 5,155 | 5,065 | 51 | 6,402 | 205 | ||||||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 5,883 | 5,883 | 48 | 5,907 | 110 | 4,958 | 253 | |||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
Total | 5,883 | 5,883 | 48 | 5,907 | 110 | 4,958 | 253 | |||||||||||||||||||||
Commercial | 608 | 608 | 791 | 8 | 1,243 | 58 | ||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | 479 | 643 | ||||||||||||||||||||||||||
Commercial | 7,640 | 7,640 | 48 | 7,121 | 126 | 6,907 | 311 | |||||||||||||||||||||
Residential | 2,660 | 2,790 | 2,581 | 27 | 2,567 | 89 | ||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
Total | $ | 10,908 | $ | 11,038 | $ | 48 | $ | 10,972 | $ | 161 | $ | 11,360 | $ | 458 | ||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | For the Year Ended | |||||||||||||||||
December 31, 2020 | Average Recorded Investment | Interest Income Recognized | ||||||||||||||||||
With no related allowance: | ||||||||||||||||||||
Commercial | $ | 1,565 | $ | 1,675 | $ | 1,356 | $ | 416 | ||||||||||||
Real estate: | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Commercial | 6,821 | 6,821 | 4,392 | 311 | ||||||||||||||||
Residential | 2,657 | 2,787 | 2,493 | 146 | ||||||||||||||||
Consumer | ||||||||||||||||||||
Total | 11,043 | 11,283 | 8,241 | 873 | ||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||
Commercial | 561 | |||||||||||||||||||
Real estate: | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Commercial | 391 | 65 | ||||||||||||||||||
Residential | ||||||||||||||||||||
Consumer | ||||||||||||||||||||
Total | 952 | 65 | ||||||||||||||||||
Commercial | 1,565 | 1,675 | 1,917 | 416 | ||||||||||||||||
Real estate: | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Commercial | 6,821 | 6,821 | 4,783 | 376 | ||||||||||||||||
Residential | 2,657 | 2,787 | 2,493 | 146 | ||||||||||||||||
Consumer | ||||||||||||||||||||
Total | $ | 11,043 | $ | 11,283 | $ | 9,193 | $ | 938 | ||||||||||||
This Quarter | Year-to-Date | |||||||||||||||||||||||||||
September 30, 2020 | Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||
With no related allowance: | ||||||||||||||||||||||||||||
Commercial | $ | 1,732 | $ | 1,842 | $ | 1,896 | $ | 154 | $ | 1,630 | $ | 354 | ||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 3,124 | 3,510 | 6,141 | 10 | 4,944 | 76 | ||||||||||||||||||||||
Residential | 2,652 | 2,782 | 2,700 | 12 | 2,564 | 118 | ||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
Total | 7,508 | 8,134 | 10,737 | 176 | 9,138 | 548 | ||||||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||||
Commercial | 121 | 121 | $ | 32 | 121 | 121 | ||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 5,769 | 5,759 | 1 | 2,885 | 61 | 2,045 | 65 | |||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
Total | 5,890 | 5,890 | 33 | 3,006 | 61 | 2,166 | 65 | |||||||||||||||||||||
Commercial | 1,853 | 1,963 | 32 | 2,017 | 154 | 1,751 | 354 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 8,893 | 9,279 | 1 | 9,026 | 71 | 6,989 | 141 | |||||||||||||||||||||
Residential | 2,652 | 2,782 | 2,700 | 12 | 2,564 | 118 | ||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
Total | $ | 13,398 | $ | 14,024 | $ | 33 | $ | 13,743 | $ | 237 | $ | 11,304 | $ | 613 | ||||||||||||||
Included in the commercial loan and commercial and residential real estate categories are troubled debt restructurings that are classified as impaired. Troubled debt restructurings totaled $5,593 at September 30, 2017, $6,208 at December 31, 2016 and $6,342 at September 30, 2016.
having loans considered troubled debt restructurings at September 30, 2017. There were two residential real estate properties held in other real estate owned totaling $144 at September 30, 2017. There were 12 residential real estate properties in the process of foreclosure totaling $682 at September 30, 2017.
During the three months ending September 30, 2017, there was one default on loans restructured within the last 12 months. During the nine months ending September 30, 2017, there were five defaults on loans restructured within the last twelve months totaling $1,374. These loans were comprised of four residential real estate loans and one commercial real estate loan. As of September 30, 2017, the defaults were cured on three of the four residential real estate loans with one residential real estate loan remaining past due in the30-69 day category. During the three months and nine months ended September 30, 2016, there were no defaults on loans restructured within the last 12 months.
Purchased loans are initially recorded at their acquisition date fair values. The carryover of the allowance for loan losses is prohibited as any credit losses in the loans are included in the determination of the fair value of the loans at the acquisition date. Fair values for purchased loans are based on a cash flow methodology that involves assumptions and judgments as to credit risk, default rates, loss severity, collateral values, discount rates, payment speeds, and prepayment risk.
As part of its acquisition due diligence process, the Bank reviews the acquired institution’s loan grading system and the associated risk rating for loans. In performing this review, the Bank considers cash flows, debt service coverage, delinquency status, accrual status, and collateral for the loan. This process allows the Bank to clearly identify the population of acquired loans that had evidence of deterioration in credit quality since origination and for which it was probable, at acquisition, that the Bank would be unable to collect all contractually required payments. All such loans identified by the Bank are considered to be within the scope of ASC310-30, “Loan and Debt Securities Acquired with Deteriorated Credit Quality” and are identified as “Purchased Credit Impaired Loans”.
As a result of the merger with Citizens, effective December 31, 2015, the Bank identified ten purchased credit impaired (“PCI”) loans. As part of the consolidation with Union, effective November 1, 2013, the Bank identified fourteen PCI loans. For all PCI loans, the excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized into interest income over the remaining life of the loan. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as thenon-accretable discount. Thenon-accretable discount represents estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreases to the expected cash flows require the Bank to evaluate the need for an allowance for loan losses on these loans. Subsequent improvements in expected cash flows result in the reversal of a corresponding amount of thenon-accretable discount which the Bank then reclassifies as an accretable discount that is recognized into interest income over the remaining life of the loan. The Bank’s evaluation of the amount of future cash flows that it expects to collect is based on a cash flow methodology that involves assumptions and judgments as to credit risk, collateral values, discount rates, payment speeds, and prepayment risk. Charge-offs of the principal amount on purchased impaired loans are first applied to thenon-accretable discount.
For purchased loans that are not deemed impaired at acquisition, credit discounts representing principal losses expected over the life of the loans are a component of the initial fair value, and the discount is accreted to interest income over the life of the asset. Subsequent to the purchase date, the method used to evaluate the sufficiency of the credit discount is similar to originated loans, and if necessary, additional reserves are recognized in the allowance for loan losses.
The following is a summary of the loans acquired in the Union and Citizens mergers, as of the dates of the consolidation:
Purchased Credit Impaired Loans | Purchased Non- Impaired Loans | Total Purchased Loans | ||||||||||
Contractually required principal and interest at acquisition | $ | 11,184 | $ | 174,484 | $ | 185,668 | ||||||
Contractual cash flows not expected to be collected | (5,724 | ) | (23,009 | ) | (28,733 | ) | ||||||
|
|
|
|
|
| |||||||
Expected cash flows at acquisition | 5,460 | 151,475 | 156,935 | |||||||||
Interest component of expected cash flows | (603 | ) | (23,119 | ) | (23,722 | ) | ||||||
|
|
|
|
|
| |||||||
Basis in acquired loans at acquisition - estimated fair value | $ | 4,857 | $ | 128,356 | $ | 133,213 | ||||||
|
|
|
|
|
|
The unpaid principal balances and the related carrying amount of Union and Citizens acquired loans as of September 30, 2017 and December 31, 2016 were as follows:
September 30, 2017 | December 31, 2016 | |||||||
Credit impaired purchased loans evaluated individually for incurred credit losses | ||||||||
Outstanding balance | $ | 1,216 | $ | 1,401 | ||||
Carrying Amount | 730 | 887 | ||||||
Other purchased loans evaluated collectively for incurred credit losses | ||||||||
Outstanding balance | 72,449 | 84,743 | ||||||
Carrying Amount | 71,864 | 83,670 | ||||||
Total Purchased Loans | ||||||||
Outstanding balance | 73,665 | 86,144 | ||||||
Carrying Amount | $ | 72,594 | $ | 84,557 |
As of the indicated dates, the changes in the accretable discount related to the purchased credit impaired loans were as follows:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Balance - beginning of period | $ | 313 | $ | 457 | $ | 370 | $ | 524 | ||||||||
Accretion recognized during the period | (32 | ) | (410 | ) | (76 | ) | (539 | ) | ||||||||
Net reclassification fromnon-accretable to accretable | (2 | ) | 326 | (15 | ) | 388 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Balance - end of period | $ | 279 | $ | 373 | $ | 279 | $ | 373 | ||||||||
|
|
|
|
|
|
|
|
The Company is a party to financial instruments withoff-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, unused portions of lines of credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets.
Unused commitments at September 30, 2017, totaled $86,876, consisting of $48,695 in commitments to extend credit, $34,521 in unused portions of lines of credit and $3,660 in standby letters of credit. Due to fixed maturity dates, specified conditions within these instruments, and the ultimate needs of our customers, many will expire without being drawn upon. We believe that amounts actually drawn upon can be funded in the normal course of operations and therefore, do not represent a significant liquidity risk to us. In comparison, unused commitments, at December 31, 2016, totaled $58,475, consisting of $27,829 in commitments to extend credit, $26,729 in unused portions of lines of credit and $3,917 in standby letters of credit.
2020.
September 30, 2017 | December 31, 2016 | |||||||
Other real estate owned | $ | 144 | $ | 625 | ||||
Bank owned life insurance | 17,128 | 11,857 | ||||||
Restricted equity securities | 2,186 | 1,845 | ||||||
Deferred tax assets | 6,904 | 7,402 | ||||||
Other assets | 3,339 | 2,083 | ||||||
|
|
|
| |||||
Total | $ | 29,701 | $ | 23,812 | ||||
|
|
|
|
September 30, 2021 | December 31, 2020 | |||||||
Other real estate owned | $ | $ | 422 | |||||
Bank owned life insurance | 31,999 | 31,425 | ||||||
Restricted equity securities | 2,171 | 1,759 | ||||||
Deferred tax assets | 3,825 | 3,907 | ||||||
Lease right-of-use | 1,516 | 2,278 | ||||||
Other assets | 8,641 | 8,629 | ||||||
Total | $ | 48,152 | $ | 48,420 | ||||
Current fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction that is not a forced
Cashassets and cash equivalents: The carrying values of cash and cash equivalents as reportedliabilities measured at fair value on the balance sheet approximate fair value.
a recurring basis:
Loans held for sale: The carrying value of loans held for sale as reported on the balance sheet approximate fair value.
Net loans: For adjustable-rate loans thatre-price frequently and with no significant credit risk, fair values are based on carrying values. The fair values of othernon-impaired loans are estimated using discounted cash flow analysis, using interest rates currently offered in the market for loans with similar terms to borrowers of similar credit risk. Fair values for impaired loans are estimated using discounted cash flow analysis determined by the loan review function or underlying collateral values, where applicable.
Accrued interest receivable: The carrying value of accrued interest receivable as reported on the balance sheet approximates fair value.
Restricted equity securities:The carrying values of restricted equity securities approximate fair value, due to the lack of marketability for these securities.
Deposits: The fair values of noninterest-bearing deposits and savings, NOW and money market accounts are the amounts payable on demand at the reporting date. The fair value estimates do not include the benefit that results from suchlow-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market. For fixed-rate time deposits, the present value of future cash flows is used to estimate fair values. The discount rates used are the current rates offered for time deposits with similar maturities.
Short-term borrowings: The carrying values of short-term borrowings approximate fair value.
Long-term debt:
Accrued interest payable: The carrying value of accrued interest payable as reported on the balance sheet approximates fair value.
Off-balance sheet financial instruments:
The majority of commitments to extend credit, unused portions of lines of credit and standby letters of credit carry current market interest rates if converted to loans. Because such commitments are generally unassignable by either the Company or the borrower, they only have value to the Company and the borrower. Nonean external derivative model using input data of the commitments are subject to undue credit risk. The estimated fair values ofoff-balance sheet financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value ofoff-balance sheet financial instruments was not material at September 30, 2017 and December 31, 2016.
valuation date.
Fair Value Measurement Using | ||||||||||||||||
September 30, 2017 | Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
State and Municipals: | ||||||||||||||||
Taxable | $ | 35,132 | $ | 35,132 | ||||||||||||
Tax-exempt | 5,801 | 5,801 | ||||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 1,536 | 1,536 | ||||||||||||||
U.S. Government-sponsored enterprises | 5,423 | 5,423 | ||||||||||||||
Corporate debt obligations | 8,982 | 8,982 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 56,874 | $ | $ | 56,874 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Fair Value Measurement Using | ||||||||||||||||
December 31, 2016 | Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
U.S. Treasury securities | $ | 5,021 | $ | 5,021 | ||||||||||||
State and municipals: | ||||||||||||||||
Taxable | 42,394 | 42,394 | ||||||||||||||
Tax-exempt | 5,674 | 5,674 | ||||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 1,890 | 1,890 | ||||||||||||||
U.S. Government-sponsored enterprises | 8,896 | 8,896 | ||||||||||||||
Corporate debt obligations | 9,050 | 9,050 | ||||||||||||||
Equity securities, financial services | 188 | $ | 188 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 73,113 | $ | 188 | $ | 72,925 | ||||||||||
|
|
|
|
|
|
|
|
Fair Value Measurement Using | ||||||||||||||||
September 30, 2021 | Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
State and Municipals: | ||||||||||||||||
Taxable | $ | 22,176 | $ | 22,176 | ||||||||||||
Tax-exempt | 43,542 | 43,542 | ||||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 35,611 | 35,611 | ||||||||||||||
U.S. Government-sponsored enterprises | 15,339 | 15,339 | ||||||||||||||
Corporate debt obligations | 15,037 | 15,037 | ||||||||||||||
Total | $ | 131,705 | $ | 131,705 | ||||||||||||
Interest rate swap hedge | $ | 599 | $ | 599 | ||||||||||||
December 31, 2020 | Fair Value Measurement Using | |||||||||||||||
Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
State and municipals: | ||||||||||||||||
Taxable | $ | 22,574 | $ | 22,574 | ||||||||||||
Tax-exempt | 18,395 | 18,395 | ||||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 26,991 | 26,991 | ||||||||||||||
U.S. Government-sponsored enterprises | 25,052 | 25,052 | ||||||||||||||
Corporate debt obligations | 10,683 | 10,683 | ||||||||||||||
Total | $ | 103,695 | $ | 103,695 | ||||||||||||
Interest rate swap hedge | $ | 172 | $ | 172 | ||||||||||||
Fair Value Measurement Using | ||||||||||||||||
September 30, 2017 | Amount | (Level 1) Quoted Prices in Active Markets for Identical Assets | (Level 2) Significant Other Observable Inputs | (Level 3) Significant Unobservable Inputs | ||||||||||||
Loans held for sale | $ | 519 | $ | 519 | ||||||||||||
Other real estate owned | 144 | $ | 144 | |||||||||||||
Impaired loans, net of related allowance | 908 | 908 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,571 | $ | 519 | $ | 1,052 | ||||||||||
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|
|
|
|
|
| |||||||||
Fair Value Measurement Using | ||||||||||||||||
December 31, 2016 | Amount | (Level 1) Quoted Prices in Active Markets for Identical Assets | (Level 2) Significant Other Observable Inputs | (Level 3) Significant Unobservable Inputs | ||||||||||||
Loans held for sale | $ | 652 | $ | 652 | ||||||||||||
Other real estate owned | 625 | $ | 625 | |||||||||||||
Impaired loans, net of related allowance | 1,424 | 1,424 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 2,701 | $ | 652 | $ | 2,049 | ||||||||||
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|
|
|
|
|
|
Fair values
Fair Value Measurement Using | ||||||||||||||||
September 30, 2021 | Amount | (Level 1) Quoted Prices in Active Markets for Identical Assets | (Level 2) Significant Other Observable Inputs | (Level 3) Significant Unobservable Inputs | ||||||||||||
Impaired loans, net of related allowance | $ | 5,835 | $ | 5,835 | ||||||||||||
Total | $ | 5,835 | $ | 5,835 | ||||||||||||
December 31, 2020 | Fair Value Measurement Using | |||||||||||||||
Amount | (Level 1) Quoted Prices in Active Markets for Identical Assets | (Level 2) Significant Other Observable Inputs | (Level 3) Significant Unobservable Inputs | |||||||||||||
Other real estate owned | $ | 422 | $ | 422 | ||||||||||||
Total | $ | 422 | $ | 422 | ||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||
September 30, | Fair Value Estimate | Valuation Techniques | Unobservable Input | Range (Weighted Average) | ||||||||||||
| $ | Appraisal of collateral | Appraisal adjustments | 0.0% to | ||||||||||||
Liquidation expenses | 7.0% to 7.0% | |||||||||||||||
| ||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||
December 31, 2020 | Fair Value Estimate | Valuation Techniques | Unobservable Input | Range (Weighted Average) | ||||||||||||
Other real estate owned | $ | Appraisal of collateral | Appraisal adjustments | 20.0% to | ||||||||||||
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Liquidation expenses | 10.0% to |
Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 Inputs which are not identifiable.
Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.
Fair Value Hierarchy | ||||||||||||||||||||
September 30, 2017 | Carrying Amount | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 8,425 | $ | 8,425 | $ | 8,425 | ||||||||||||||
Investment securities | 56,874 | 56,874 | $ | 56,874 | ||||||||||||||||
Loans held for sale | 519 | 519 | 519 | |||||||||||||||||
Net loans | 554,783 | 553,818 | $ | 553,818 | ||||||||||||||||
Accrued interest receivable | 1,995 | 1,995 | 1,995 | |||||||||||||||||
Restricted equity securities | 2,186 | 2,186 | 2,186 | |||||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Deposits | $ | 574,950 | $ | 562,256 | $ | 562,256 | ||||||||||||||
Short-term borrowings | 37,250 | 37,250 | 37,250 | |||||||||||||||||
Long-term debt | 6,503 | 6,503 | 6,503 | |||||||||||||||||
Accrued interest payable | 213 | 213 | 213 | |||||||||||||||||
Fair Value Hierarchy | ||||||||||||||||||||
December 31, 2016 | Carrying Amount | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 19,120 | $ | 19,120 | $ | 19,120 | ||||||||||||||
Investment securitiesavailable-for-sale | 73,113 | 73,113 | 188 | $ | 72,925 | |||||||||||||||
Loans held for sale | 652 | 652 | 652 | |||||||||||||||||
Net loans | 405,611 | 407,561 | $ | 407,561 | ||||||||||||||||
Accrued interest receivable | 1,726 | 1,726 | 1,726 | |||||||||||||||||
Restricted equity securities | 1,845 | 1,845 | 1,845 | |||||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Deposits | $ | 452,560 | $ | 438,744 | $ | 438,744 | ||||||||||||||
Short-term borrowings | 31,500 | 31,500 | 31,500 | |||||||||||||||||
Long-term debt | 11,154 | 11,148 | 11,148 | |||||||||||||||||
Accrued interest payable | 192 | 192 | 192 |
Carrying Amount | Fair Value Hierarchy | |||||||||||||||||||
September 30, 2021 | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 186,078 | $ | 186,078 | $ | 186,078 | ||||||||||||||
Investment securities | 131,705 | 131,705 | $ | 131,705 | ||||||||||||||||
Loans held for sale | 443 | 443 | 443 | |||||||||||||||||
Net loans | 855,306 | 840,466 | $ | 840,466 | ||||||||||||||||
Accrued interest receivable | 2,604 | 2,604 | 715 | 1,889 | ||||||||||||||||
Restricted equity securities | 2,171 | 2,171 | ||||||||||||||||||
Interest rate swap hedges | 599 | 599 | 599 | |||||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Deposits | $ | 1,069,574 | $ | 1,070,933 | $ | 1,070,933 | ||||||||||||||
Long-term debt | 52,004 | 54,920 | 54,920 | |||||||||||||||||
Accrued interest payable | 847 | 847 | 847 | |||||||||||||||||
Carrying Amount | Fair Value Hierarchy | |||||||||||||||||||
December 31, 2020 | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 49,781 | $ | 49,781 | $ | 49,781 | ||||||||||||||
Investment securities available-for-sale | 103,695 | 103,695 | $ | 103,695 | ||||||||||||||||
Loans held for sale | 4,338 | 4,338 | 4,338 | |||||||||||||||||
Net loans | 1,127,039 | 1,116,618 | $ | 1,116,618 | ||||||||||||||||
Accrued interest receivable | 4,216 | 4,216 | 578 | 3,638 | ||||||||||||||||
Restricted equity securities | 1,759 | 1,759 | ||||||||||||||||||
Interest rate swap hedges | 172 | 172 | 172 | |||||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Deposits | $ | 1,015,460 | $ | 1,018,529 | $ | 1,018,529 | ||||||||||||||
Long-term debt | 228,765 | 231,748 | 231,748 | |||||||||||||||||
Accrued interest payable | 1,038 | 1,038 | 1,038 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
2020.
Most recently, the risk factors associated with the onset of
Operating Environment:
The United States economy grew at a stronger pace in the third quarter of 2017 compared to the same period last year but declined slightly from the second quarter of 2017. The gross domestic product (“GDP”), the value of all goods and services produced in the United States, increased at an annualized rate of 3.0% in the third quarter of 2017 compared to 2.8% in the third quarter of 2016 and 3.1% in the second quarter of 2017. The consumer price index for the last 12 months rose 2.2% ending September, 2017. This inflation measure has been accelerating since June, 2017 when it was 1.6%. The Federal Open Market Committee (“FOMC”) last changed rates on June 14, 2017 where it increased the federal funds target rate for the second time in 2017 to a range of 1.00% to 1.25%. The FOMC has continued to take the stance that the current target range is accommodative and it may take additional monetary policy actions in the near term to increase general market rates. Accordingly, these interest rate increases may have an adverse impact on our loan growth, asset quality and fund costs.
11, 2021.
2020.
2020. Activity in the investment portfolio during the nine months of 2021, included purchases of $74,503, sales of $30,442 and repayments of $13,073.
2020.
2020, a decrease of $273,099, or 24.0%. The Asset/Liability Committee (“ALCO”) reviewsdecrease in the performanceloan portfolio was attributable to forgiveness payments on PPP loans totaling $247,625 and risk elementsa decrease in organic loan growth of $44,868, offset partially by the investment portfolio quarterly. Through active balance sheet management and analysisorigination of the securities portfolio, we endeavor to maintain sufficient liquidity to satisfy depositor requirements and meet the credit needsPPP loans of our customers.
Loan Portfolio:
Loan growth increased significantly in 2017. Loans, net, increased to $560,187 at September 30, 2017 from $409,343 at December 31, 2016, an increase of $150,844, or 36.9%. We experienced growth in all major sectors of loans.$19,394. Business loans, including commercial construction and commercial real estate loans, increased $149,510,decreased $224,997, or 54.9%26.1%, to $421,831$636,576 at September 30, 20172021 from $272,321$861,575 at December 31, 2016.2020. Retail loans, including residential real estate and consumer loans, increased $1,334,decreased $16,472, or 1.0%8.1%, to $138,356$187,790 at September 30, 20172021 from $137,022$204,262 atyear-end 2016.
For the third quarter of 2017, December 31, 2020. Construction lending decreased $31,630, or 43.1%, to $41,772 at September 30, 2021 from $73,402 at December 31, 2020. PPP loans, net grew $55,438, or 11.0%. Business loans increased $50,191, while retail loans increased $5,247 during the third quarter of 2017.
unearned loan fees, totaled $23,579 at September 30, 2021 and $251,810 at December 31, 2020.
2020.
Off-balance sheet commitments at September 30, 2017, totaled $86,876, consisting With the onset of $48,695 in commitments to extend credit, $34,521 inthe
Asset Quality:
National, Pennsylvania and market area unemployment rates at September 30, 2017 and 20162020 are summarized as follows:
September 30, 2017 | September 30, 2016 | |||
United States | 4.2% | 4.9% | ||
Pennsylvania (statewide) | 4.8% | 5.5% | ||
Berks County | 4.8% | 5.0% | ||
Dauphin County | 4.7% | 4.8% | ||
Lebanon | 4.4% | 4.4% | ||
Lycoming | 5.5% | 6.3% | ||
Northumberland County | 5.3% | 5.9% | ||
Perry County | 4.4% | 4.6% | ||
Schuylkill County | 5.9% | 6.1% | ||
Somerset County | 5.8% | 6.3% |
Employment conditions in 2017 improved for the United States, Commonwealth
September 30, 2021 | December 31, 2020 | |||||||
Unused portions of lines of credit | $ | 104,774 | $ | 92,848 | ||||
Construction loans | 19,111 | 24,751 | ||||||
Commitments to extend credit | 30,104 | 10,275 | ||||||
Deposit overdraft protection | 17,039 | 18,117 | ||||||
Standby and performance letters of credit | 9,512 | 6,577 | ||||||
Total | $ | 180,540 | $ | 152,568 | ||||
Loans on nonaccrual status2020. Nonperforming assets increased $379 to $1,765 at September 30, 2017 from $1,386 at December 31, 2016. The increase$1,380 in nonaccrual loans wasthe third quarter of 2021 due to increasesan increase of $345$1,789 in commercial real estate loans and $191 in residential real estate loans partially offset by a $157 decrease in commercial loans. Accruing troubled debt restructured loans declined $637, or 11.0%, to $5,168 at September 30, 2017 from $5,805 at December 31, 2016. Accruing loans past due 90 days or more declined $359, while other real estate owned decreased $481 during the nine months ended September 30, 2017.
For the three months ended September 30, 2017, nonperforming assets improved to $7,077, a decrease of $64 from $7,141 at September 30, 2016. There were decreases in accruing troubled debt restructured loans, accruing loans past due 90 days or more, with reductions of $103 in nonaccrual loans, $87 in accruing restructured loans and other$219 in foreclosed assets. The increase in accruing loans past due 90 days or more in the third quarter of 2021 was due to one commercial real estate owned, partially offset by an increase in nonaccrual loans.
Generally, maintaining a high loan to deposit ratio is our primary goal in order to maximize profitability. However, this objective is superseded by our attempts to ensure that asset quality remains strong. We continue to focus our efforts on maintaining sound underwriting standards for both commercial and consumer credit.
relationship.
in 2020.
Corresponding2020. Consistent with recent FOMC actions interestto keep short-term rates have increased from historic lows that existed for an extended period. Allat a historically low level due to the onset of
Somerset, Pennsylvania. The transferred deposits totaled $42,191 and were acquired for a 3.71% deposit premium amounting to $1,602.
increase the amount of repricing assets.
December 31, 2020.
loans.
noncash item.
income.
Actual | Minimum Regulatory Capital Ratios under Basel III | Well Capitalized under Basel III | ||||||||||||||||||||||
September 30, 2021: | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||
CBLR Framework | ||||||||||||||||||||||||
Tier 1 capital (to average total assets): (i.e., leverage ratio) | $ | 127,526 | 10.4 | % | (1) | (1) | $ | 104,141 | ³ | 8.5 | % | |||||||||||||
Actual | Minimum Regulatory Capital Ratios under Basel III | Well Capitalized under Basel III | ||||||||||||||||||||||
December 31, 2020: | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||
Total risk-based capital (to risk-weighted assets) | $ | 126,108 | 14.2 | % | $ | 93,462 | ³ | 10.5 | % | $ | 89,011 | ³ | 10.0 | % | ||||||||||
Tier 1 capital (to risk-weighted assets) | 114,967 | 12.9 | % | 75,659 | ³ | 8.5 | % | 71,209 | ³ | 8.0 | % | |||||||||||||
Common equity tier 1 risk-based capital (to risk-weighted assets) | 114,967 | 12.9 | % | 62,308 | ³ | 7.0 | % | 57,857 | ³ | 6.5 | % | |||||||||||||
Tier 1 capital (to average total assets) | 114,967 | 9.8 | % | 47,102 | ³ | 4.0 | % | 58,877 | ³ | 5.0 | % |
(1) | Under the CBLR Framework, capital adequacy amounts and ratios are not applicable as qualifying depositary institutions are evaluated solely on whether or not they are well capitalized. |
well capitalized status.
The Company
2020 were a
bearinginterest-bearing liabilities.34.0%21% in 20172021 and 2016.
For the three months ended September 30,tax-equivalent net interest income increased $675 to $5,511 in 2017 from $4,836 in 2016. The net interest spread decreased to 3.46% for the three months ended September 30, 2017 from 3.92% for the three months ended September 30, 2016. Thetax-equivalent net interest margin decreased to 3.57% for the third quarter of 2017 from 3.99% for the comparable period of 2016. Thetax-equivalent net interest margin for the second quarter of 2017 was 3.58%.
For the three months ended September 30,tax-equivalent interest income on earning assets increased $1,156 to $6,519 in 2017 from $5,363 in 2016. The yield on earning assets, on a fullytax-equivalent basis, declined 21 basis points for the three months ended September 30, 2017 at 4.22% as compared to 4.43% for the three months ended September 30, 2016. Thetax-equivalent yield on loans decreased 32 basis points for the third quarter of 2017 to 4.38% from 4.70% for the third quarter of 2016. Average loans increased to $537,740 for the quarter ended September 30, 2017 compared to $400,427 for the same period in 2016. Thetax-equivalent interest earned on loans was $5,938 for the three month period ended September 30, 2017 compared to $4,730 for the same period in 2016, an increase of $1,208. Comparing the third quarters of 2017 and 2016, tax equivalent interest income on investments decreased $72 as average volumes declined $6,292 andtax-equivalent yield decreased 11 basis points.
Total interest expense increased $481 to $1,008 for the three months ended September 30, 2017 from $527 for the three months ended September 30, 2016. Deposit costs increased to 0.67% in the third quarter of 2017 from 0.45% in the third quarter of 2016. The average volume of interest bearing liabilities increased to $524,506 for the three months ended September 30, 2017 as compared to $408,670 for the three months ended September 30, 2016. The cost of funds increased to 0.76% for the third quarter of 2017 as compared to 0.51% for the same period in 2016.
2020, respectively.
For the nine months ended September 30, 2017,tax-equivalent2020. The net interest incomespread increased $1,843 to $17,450 as compared to $15,6073.28% for the nine months ended September 30, 2016. A2021 from 3.25% for the nine months ended September 30, 2020. Adding to the positive volume variance in interest incomeimpact of $2,673 attributable to changesthe improvement in the net interest margin was a net increase in the volume of average balance of earning assets was offset by a negative rate variance of $830 dueas compared to a reductionthe increase in the yield on earning assets. Average volumes ofaverage interest-bearing liabilities. Overall, average earning assets increased $76,137$76,425 while average interest-bearing liabilities increased $41,841 comparing the nine months ended September 30, 20172021 and 2016. The2020.
Total$123,363 while average earning liabilities decreased $152,747 comparing the third quarters of 2021 and 2020. The
Nine months ended | ||||||||||||||||||||||||
September 30, 2021 | September 30, 2020 | |||||||||||||||||||||||
Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Earning assets: | ||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||
Taxable | $ | 987,840 | $ | 32,615 | 4.41 | % | $ | 1,005,344 | $ | 31,649 | 4.21 | % | ||||||||||||
Tax exempt | 29,550 | 681 | 3.08 | % | 33,914 | 891 | 3.51 | % | ||||||||||||||||
Investments: | ||||||||||||||||||||||||
Taxable | 96,062 | 1,537 | 2.14 | % | 67,222 | 1,291 | 2.57 | % | ||||||||||||||||
Tax exempt | 43,442 | 557 | 1.71 | % | 7,971 | 223 | 3.74 | % | ||||||||||||||||
Interest bearing deposits | 72,979 | 64 | 0.12 | % | 38,997 | 112 | 0.38 | % | ||||||||||||||||
Federal funds sold | ||||||||||||||||||||||||
Total earning assets | 1,229,873 | 35,454 | 3.85 | % | 1,153,448 | 34,166 | 3.96 | % | ||||||||||||||||
Less: allowance for loan losses | 11,708 | 8,431 | ||||||||||||||||||||||
Other assets | 83,249 | 99,559 | ||||||||||||||||||||||
Total assets | $ | 1,301,414 | $ | 1,244,576 | ||||||||||||||||||||
Liabilities and Stockholders’ Equity: | ||||||||||||||||||||||||
Interest bearing liabilities: | ||||||||||||||||||||||||
Money market accounts | $ | 152,423 | $ | 122 | 0.11 | % | $ | 116,504 | $ | 288 | 0.33 | % | ||||||||||||
NOW accounts | 327,154 | 259 | 0.11 | % | 291,182 | 574 | 0.26 | % | ||||||||||||||||
Savings accounts | 170,855 | 87 | 0.07 | % | 142,385 | 117 | 0.11 | % | ||||||||||||||||
Time deposits | 219,171 | 2,023 | 1.23 | % | 278,813 | 3,405 | 1.63 | % | ||||||||||||||||
Short term borrowings | 9,766 | 28 | 0.38 | % | ||||||||||||||||||||
Long-term debt | 128,490 | 1,752 | 1.82 | % | 117,602 | 652 | 0.74 | % | ||||||||||||||||
Total interest-bearing liabilities | 998,093 | 4,243 | 0.57 | % | 956,252 | 5,064 | 0.71 | % | ||||||||||||||||
Non-interest-bearing demand deposits | 187,167 | 163,886 | ||||||||||||||||||||||
Other liabilities | 13,818 | 12,952 | ||||||||||||||||||||||
Stockholders’ equity | 102,336 | 111,486 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,301,414 | $ | 1,244,576 | ||||||||||||||||||||
Net interest income/spread | $ | 31,211 | 3.28 | % | $ | 29,102 | 3.25 | % | ||||||||||||||||
Net interest margin | 3.39 | % | 3.37 | % | ||||||||||||||||||||
Tax-equivalent adjustments: | ||||||||||||||||||||||||
Loans | $ | 143 | $ | 187 | ||||||||||||||||||||
Investments | 117 | 47 | ||||||||||||||||||||||
Total adjustments | $ | 260 | $ | 234 | ||||||||||||||||||||
For2021.
delinquencies and charge-offs resulting from
Noninterest income for the third quarter decreased $188, or 18.4%, to $835 in 2017 from $1,023 in 2016. The primary cause of the decrease was a $109 reduction in net gains from the sale of investment securitiesavailable-for-sale to $43 in the third quarter of 2017 from $152 in the third quarter of 2016.
income offset partially by a $149 increase in service charges, fees and commissions.
Noninterest expense increased $2,678, or 21.1%, to $15,371$2,532 for the nine months ended September 30, 2017, from $12,6932021 compared to a tax benefit of $49 for the same period last year. The majority of the increase in salaries and employee benefit expense was a result of implementing the lending team lift out initiative and related costs, as well as staffing two full service offices in Berks and Lycoming Counties, respectively. Additions to leased facilities for this newly opened community banking office along with offices to support the lending teams were primarily responsible for the $278, or 17.2% increase in occupancy and equipment costs. The majority of the increase in other expenses comparing the nine months ended September 30, 2017 and 2016 was a result of incurring merger related expenses related to the business combination with CBT Financial Corp.
Income Taxes:
We recorded income tax expense of $69 for2020. For the three months ended September 30, 2017, andwe recorded income tax expense of $454$704 in 2021 compared to $67 in 2020. The effective tax rates were 18.8% and 18.4% for the same period last year. For the nine and three months ended September 30, income tax expense2021.
Riverview Financial Corporation
ContentsITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISK
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 |
31.1 | Section 302 Certification of the Chief Executive Officer (Pursuant to Rule13a-14(a)/15d-14(a)). | |
31.2 | Section 302 Certification of the Chief Financial Officer (Pursuant to Rule13a-14(a)/15d-14(a)). | |
32.1 | Chief Executive Officer’s | |
32.2 | Chief Financial Officer’s | |
101 | Interactive Data File (XBRL). | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
By: | /s/ | |||
President and Chief Executive Officer | ||||
(Principal Executive Officer) | ||||
Date: | November |
By: | /s/ Scott A. Seasock | |||
Scott A. Seasock | ||||
Chief Financial Officer | ||||
(Principal Financial Officer) | ||||
Date: | November |
37