| Wisconsin | |||||||
(State or other jurisdiction of incorporation or organization) | | | (I.R.S. Employer Identification No.) | |
| Copies to: | | |||
| Robert D. Klingler, Esq. Bryan Cave Leighton Paisner LLP 1201 West Peachtree Street, NW Atlanta, Georgia 30309-3488 (404) 572-6600 | | | |
| Large accelerated filer ☐ | | | Accelerated filer | ☒ | | |||||
| Non-accelerated filer ☐ | | | Smaller reporting company | ☐ | | |||||
| | | | Emerging growth company | ☐ | |
CALCULATION OF REGISTRATION FEE | | ||||||||||||||||||||||||||||
Title of each class of securities to be registered | | | | Amount to be registered(1) | | | | Proposed maximum offering price per unit | | | | Proposed maximum aggregate offering price(2) | | | | Amount of registration fee(3) | | ||||||||||||
Common Stock, $0.01 par value | | | | | | 1,825,830 | | | | | | | Not applicable | | | | | | $ | 68,857,595 | | | | | | $ | 8,938.03 | | |
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| PROXY STATEMENT AND PROSPECTUS OF NICOLET BANKSHARES, INC. | | | PROXY STATEMENT OF | |
| For shareholders of Nicolet: Nicolet Bankshares, Inc. 111 North Washington St., Green Bay, WI 54301 Tuesday, October 5, 2021, 9:45 a.m., Central Time | | | For shareholders of County: www.virtualshareholdermeeting.com/ICBK2021SM Tuesday, October 5, 2021, 2:00 p.m., Central Time | |
| Michael E. Daniels President and Chief Executive Officer Nicolet Bankshares, Inc. | | | Timothy J. Schneider President County Bancorp, Inc. | |
| If you are a Nicolet shareholder: | | | If you are a County shareholder: | |
| Nicolet Bankshares, Inc. | | | County Bancorp, Inc. | |
| 111 North Washington Street | | | 2400 South 44th Street | |
| Green Bay, Wisconsin 54301 | | | Manitowoc, WI 54221 | |
| (920) 430-1400 | | | (920) 686-5692 | |
| ir@nicoletbank.com | | | mmiller@icbk.com | |
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SUMMARY | | | | | | | |
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EXPERTS | | | | | | | |
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| For Nicolet shareholders: | | | For County shareholders: | |
| Michael E. Daniels Nicolet Bankshares, Inc. 111 North Washington Street Green Bay, Wisconsin 54301 Telephone: (920) 430-1400 | | | Timothy J. Schneider County Bancorp, Inc. 2400 South 44th Street Manitowoc, Wisconsin 54221 Telephone: (920) 686-5604 | |
Comparative per share data | | | Six Months Ended June 30, 2021 | | | Year Ended December 31, 2020 | | ||||||
Earnings per diluted common share | | | | | | | | | | | | | |
Nicolet | | | | $ | 3.52 | | | | | $ | 5.70 | | |
County | | | | $ | 1.69 | | | | | $ | 0.79 | | |
Pro forma combined | | | | $ | 4.05 | | | | | $ | 4.10 | | |
County merger equivalent * | | | | $ | 1.56 | | | | | $ | 1.57 | | |
Mackinac | | | | $ | 0.65 | | | | | $ | 1.27 | | |
Pro forma fully combined | | | | $ | 3.93 | | | | | $ | 2.77 | | |
Book value per common share: | | | | | | | | | | | | | |
Nicolet | | | | $ | 56.83 | | | | | | N/A | | |
County | | | | $ | 27.68 | | | | | | N/A | | |
Pro forma combined | | | | $ | 59.17 | | | | | | N/A | | |
County merger equivalent * | | | | $ | 22.72 | | | | | | N/A | | |
Mackinac | | | | $ | 16.30 | | | | | | N/A | | |
Pro forma fully combined | | | | $ | 62.53 | | | | | | N/A | | |
(In thousands) | | | Historical | | | Pro Forma Adjustments | | | | | | | | | Nicolet and County Pro Forma Combined | | | Historical Mackinac | | | Pro Forma Adjustments | | | | | | | | | Nicolet, County and Mackinac Pro Forma Fully Combined | | ||||||||||||||||||||||||
| | | Nicolet | | | County | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Cash and cash equivalents, including certificates of deposits in other banks | | | | $ | 815,793 | | | | | $ | 72,745 | | | | | $ | 45,374 | | | | | | A,B | | | | | $ | 933,912 | | | | | $ | 353,904 | | | | | $ | (49,692) | | | | | | N | | | | | $ | 1,238,124 | | |
Investment securities, including equity securities | | | | | 571,144 | | | | | | 349,334 | | | | | | — | | | | | | | | | | | | 920,478 | | | | | | 101,955 | | | | | | (593) | | | | | | O | | | | | | 1,021,840 | | |
Loans held for sale | | | | | 11,235 | | | | | | 15,805 | | | | | | — | | | | | | | | | | | | 27,040 | | | | | | 1,535 | | | | | | — | | | | | | | | | | | | 28,575 | | |
Loans | | | | | 2,820,331 | | | | | | 1,001,890 | | | | | | (400) | | | | | | C | | | | | | 3,821,821 | | | | | | 976,520 | | | | | | (7,387) | | | | | | P | | | | | | 4,790,954 | | |
Allowance for credit losses | | | | | (32,561) | | | | | | (11,466) | | | | | | (4,734) | | | | | | D | | | | | | (48,761) | | | | | | (5,651) | | | | | | (14,146) | | | | | | Q | | | | | | (68,558) | | |
Other real estate owned, net | | | | | 2,895 | | | | | | 914 | | | | | | (100) | | | | | | E | | | | | | 3,709 | | | | | | 1,343 | | | | | | (664) | | | | | | R | | | | | | 4,388 | | |
Bank owned life insurance | | | | | 84,347 | | | | | | 31,678 | | | | | | — | | | | | | | | | | | | 116,025 | | | | | | 15,658 | | | | | | — | | | | | | | | | | | | 131,683 | | |
Goodwill | | | | | 163,151 | | | | | | — | | | | | | 68,556 | | | | | | F | | | | | | 231,707 | | | | | | 19,574 | | | | | | 98,170 | | | | | | S | | | | | | 349,450 | | |
Core deposit intangible | | | | | 10,560 | | | | | | 12 | | | | | | 3,188 | | | | | | G | | | | | | 13,760 | | | | | | 4,031 | | | | | | 769 | | | | | | T | | | | | | 18,560 | | |
Other assets | | | | | 140,452 | | | | | | 56,160 | | | | | | 3,220 | | | | | | H | | | | | | 199,832 | | | | | | 50,083 | | | | | | 5,019 | | | | | | O,U | | | | | | 254,934 | | |
Total Assets | | | | $ | 4,587,347 | | | | | $ | 1,517,072 | | | | | $ | 115,104 | | | | | | | | | | | $ | 6,219,523 | | | | | $ | 1,518,952 | | | | | $ | 31,476 | | | | | | | | | | | $ | 7,769,951 | | |
Deposits | | | | $ | 3,939,022 | | | | | $ | 1,135,726 | | | | | $ | 3,500 | | | | | | I | | | | | $ | 5,078,248 | | | | | $ | 1,307,154 | | | | | $ | 500 | | | | | | V | | | | | $ | 6,385,902 | | |
Short-term borrowings | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Long-term borrowings | | | | | 45,108 | | | | | | 191,076 | | | | | | 110,503 | | | | | | J | | | | | | 346,687 | | | | | | 28,441 | | | | | | 100 | | | | | | V | | | | | | 375,228 | | |
Other liabilities | | | | | 43,822 | | | | | | 15,458 | | | | | | 13,870 | | | | | | K | | | | | | 73,150 | | | | | | 11,438 | | | | | | 14,600 | | | �� | | | W | | | | | | 99,188 | | |
Total Liabilities | | | | | 4,027,952 | | | | | | 1,342,260 | | | | | | 127,873 | | | | | | | | | | | | 5,498,085 | | | | | | 1,347,033 | | | | | | 15,200 | | | | | | | | | | | | 6,860,318 | | |
Preferred equity | | | | | — | | | | | | 8,000 | | | | | | (8,000) | | | | | | L | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Common stock & Additional paid-in capital | | | | | 261,194 | | | | | | 33,955 | | | | | | 134,585 | | | | | | A,M | | | | | | 429,734 | | | | | | 127,624 | | | | | | 71,145 | | | | | | N,X | | | | | | 628,503 | | |
Retained earnings | | | | | 289,475 | | | | | | 127,992 | | | | | | (134,489) | | | | | | A,M | | | | | | 282,978 | | | | | | 43,189 | | | | | | (53,763) | | | | | | N,X | | | | | | 272,404 | | |
Accumulated other comprehensive income | | | | | 8,726 | | | | | | 4,865 | | | | | | (4,865) | | | | | | M | | | | | | 8,726 | | | | | | 1,106 | | | | | | (1,106) | | | | | | X | | | | | | 8,726 | | |
Total Stockholders’ Equity (Common) | | | | | 559,395 | | | | | | 166,812 | | | | | | (4,769) | | | | | | | | | | | | 721,438 | | | | | | 171,919 | | | | | | 16,276 | | | | | | | | | | | | 909,633 | | |
Total Liabilities and Stockholders’ Equity | | | | $ | 4,587,347 | | | | | $ | 1,517,072 | | | | | $ | 115,104 | | | | | | | | | | | $ | 6,219,523 | | | | | $ | 1,518,952 | | | | | $ | 31,476 | | | | | | | | | | | $ | 7,769,951 | | |
Outstanding shares | | | | | 9,843 | | | | | | 6,027 | | | | | | 2,349 | | | | | | A | | | | | | 12,192 | | | | | | 10,550 | | | | | | 2,355 | | | | | | | | | | | | 14,547 | | |
(In thousands, except per share data) | | | Six Months Ended June 30, 2021 | | | Pro Forma Adjustments | | | | | | | | | Nicolet and County Pro Forma Combined | | | Mackinac Six Months Ended June 30, 2021 | | | Pro Forma Adjustments | | | | | | | | | Nicolet, County and Mackinac Pro Forma Fully Combined | | ||||||||||||||||||||||||
| | | Nicolet | | | County | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Interest income | | | | $ | 75,183 | | | | | $ | 28,252 | | | | | $ | 2,514 | | | | | | A | | | | | $ | 105,949 | | | | | $ | 29,081 | | | | | $ | 1,230 | | | | | | H | | | | | $ | 136,260 | | |
Interest expense | | | | | 5,971 | | | | | | 6,596 | | | | | | (3,830) | | | | | | B | | | | | | 8,737 | | | | | | 2,037 | | | | | | (100) | | | | | | I | | | | | | 10,674 | | |
Net interest income | | | | | 69,212 | | | | | | 21,656 | | | | | | 6,344 | | | | | | | | | | | | 97,212 | | | | | | 27,044 | | | | | | 1,330 | | | | | | | | | | | | 125,586 | | |
Provision for credit losses | | | | | 500 | | | | | | (4,036) | | | | | | — | | | | | | | | | | | | (3,536) | | | | | | 100 | | | | | | — | | | | | | | | | | | | (3,436) | | |
Noninterest income | | | | | 37,304 | | | | | | 5,964 | | | | | | — | | | | | | | | | | | | 43,268 | | | | | | 4,822 | | | | | | — | | | | | | | | | | | | 48,090 | | |
Noninterest expense | | | | | 56,828 | | | | | | 17,530 | | | | | | 390 | | | | | | D | | | | | | 74,748 | | | | | | 23,760 | | | | | | 56 | | | | | | K | | | | | | 98,564 | | |
Income before income tax expense | | | | | 49,188 | | | | | | 14,126 | | | | | | 5,953 | | | | | | | | | | | | 69,267 | | | | | | 8,006 | | | | | | 1,275 | | | | | | | | | | | | 78,548 | | |
Income tax expense | | | | | 12,665 | | | | | | 3,455 | | | | | | 1,488 | | | | | | F | | | | | | 17,608 | | | | | | 1,181 | | | | | | 319 | | | | | | M | | | | | | 19,108 | | |
Net income | | | | | 36,523 | | | | | | 10,671 | | | | | | 4,465 | | | | | | | | | | | | 51,659 | | | | | | 6,825 | | | | | | 956 | | | | | | | | | | | | 59,440 | | |
Less: dividends on preferred stock | | | | | — | | | | | | 160 | | | | | | — | | | | | | | | | | | | 160 | | | | | | — | | | | | | — | | | | | | | | | | | | 160 | | |
Net income to common | | | | $ | 36,523 | | | | | $ | 10,511 | | | | | $ | 4,465 | | | | | | | | | | | $ | 51,499 | | | | | $ | 6,825 | | | | | $ | 956 | | | | | | | | | | | $ | 59,280 | | |
Weighted average common shares outstanding | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | | | 9,949 | | | | | | 6,182 | | | | | | 2,349 | | | | | | G | | | | | | 12,298 | | | | | | 10,537 | | | | | | 2,355 | | | | | | N | | | | | | 14,653 | | |
Diluted | | | | | 10,365 | | | | | | 6,224 | | | | | | 2,349 | | | | | | G | | | | | | 12,714 | | | | | | 10,583 | | | | | | 2,355 | | | | | | N | | | | | | 15,069 | | |
Earnings per common share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | | $ | 3.67 | | | | | $ | 1.70 | | | | | | | | | | | | | | | | | $ | 4.19 | | | | | $ | 0.65 | | | | | | | | | | | | | | | | | $ | 4.05 | | |
Diluted | | | | $ | 3.52 | | | | | $ | 1.69 | | | | | | | | | | | | | | | | | $ | 4.05 | | | | | $ | 0.65 | | | | | | | | | | | | | | | | | $ | 3.93 | | |
(In thousands, except per share data) | | | Year Ended December 31, 2020 | | | Pro Forma Adjustments | | | | | | | | | Nicolet and County Pro Forma Combined | | | Mackinac Year Ended December 31, 2020 | | | Pro Forma Adjustments | | | | | | | | | Nicolet, County and Mackinac Pro Forma Fully Combined | | ||||||||||||||||||||||||
| | | Nicolet | | | County | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Interest income | | | | $ | 149,202 | | | | | $ | 55,475 | | | | | $ | 4,442 | | | | | | A | | | | | $ | 209,119 | | | | | $ | 62,029 | | | | | $ | 1,876 | | | | | | H | | | | | $ | 273,024 | | |
Interest expense | | | | | 19,864 | | | | | | 18,499 | | | | | | (7,660) | | | | | | B | | | | | | 30,703 | | | | | | 7,223 | | | | | | (200) | | | | | | I | | | | | | 37,726 | | |
Net interest income | | | | | 129,338 | | | | | | 36,976 | | | | | | 12,102 | | | | | | | | | | | | 178,416 | | | | | | 54,806 | | | | | | 2,076 | | | | | | | | | | | | 235,298 | | |
Provision for credit losses | | | | | 10,300 | | | | | | 2,984 | | | | | | 8,900 | | | | | | C | | | | | | 22,184 | | | | | | 1,000 | | | | | | 13,892 | | | | | | J | | | | | | 37,076 | | |
Noninterest income | | | | | 62,626 | | | | | | 14,250 | | | | | | — | | | | | | | | | | | | 76,876 | | | | | | 10,199 | | | | | | — | | | | | | | | | | | | 87,075 | | |
Noninterest expense | | | | | 100,719 | | | | | | 39,645 | | | | | | 19,780 | | | | | | D,E | | | | | | 160,144 | | | | | | 46,949 | | | | | | 20,198 | | | | | | K,L | | | | | | 227,290 | | |
Income before income tax expense | | | | | 80,945 | | | | | | 8,597 | | | | | | (16,577) | | | | | | | | | | | | 72,965 | | | | | | 17,056 | | | | | | (32,014) | | | | | | | | | | | | 58,007 | | |
Income tax expense | | | | | 20,476 | | | | | | 3,118 | | | | | | (4,144) | | | | | | F | | | | | | 19,450 | | | | | | 3,583 | | | | | | (8,004) | | | | | | M | | | | | | 15,029 | | |
Net income | | | | | 60,469 | | | | | | 5,479 | | | | | | (12,433) | | | | | | | | | | | | 53,515 | | | | | | 13,473 | | | | | | (24,011) | | | | | | | | | | | | 42,978 | | |
Less: Net income attributable to noncontrolling interest | | | | | 347 | | | | | | — | | | | | | — | | | | | | | | | | | | 347 | | | | | | — | | | | | | — | | | | | | | | | | | | 347 | | |
Net income attributable to Nicolet | | | | | 60,122 | | | | | | 5,479 | | | | | | (12,433) | | | | | | | | | | | | 53,168 | | | | | | 13,473 | | | | | | (24,011) | | | | | | | | | | | | 42,631 | | |
Less: dividends on preferred stock | | | | | — | | | | | | 368 | | | | | | — | | | | | | | | | | | | 368 | | | | | | — | | | | | | — | | | | | | | | | | | | 368 | | |
Net income to common | | | | $ | 60,122 | | | | | $ | 5,111 | | | | | $ | (12,433) | | | | | | | | | | | $ | 52,800 | | | | | $ | 13,473 | | | | | $ | (24,011) | | | | | | | | | | | $ | 42,263 | | |
Weighted average common shares outstanding | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | | | 10,337 | | | | | | 6,477 | | | | | | 2,349 | | | | | | G | | | | | | 12,686 | | | | | | 10,580 | | | | | | 2,355 | | | | | | N | | | | | | 15,041 | | |
Diluted | | | | | 10,541 | | | | | | 6,505 | | | | | | 2,349 | | | | | | G | | | | | | 12,890 | | | | | | 10,580 | | | | | | 2,355 | | | | | | N | | | | | | 15,245 | | |
Earnings per common share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | | $ | 5.82 | | | | | $ | 0.79 | | | | | | | | | | | | | | | | | $ | 4.16 | | | | | $ | 1.27 | | | | | | | | | | | | | | | | | $ | 2.81 | | |
Diluted | | | | $ | 5.70 | | | | | $ | 0.79 | | | | | | | | | | | | | | | | | $ | 4.10 | | | | | $ | 1.27 | | | | | | | | | | | | | | | | | $ | 2.77 | | |
(In thousands, except per share data) | | | County Net Assets at Fair Value | | |||
Cash and cash equivalents | | | | $ | 64,745 | | |
Investment securities | | | | | 349,334 | | |
Loans held for sale | | | | | 15,805 | | |
Loans | | | | | 1,001,490 | | |
Allowance for credit losses | | | | | (7,300) | | |
Other real estate owned, net | | | | | 814 | | |
Bank owned life insurance | | | | | 31,378 | | |
Core deposit intangible | | | | | 3,200 | | |
Other assets | | | | | 56,977 | | |
Total Assets | | | | $ | 1,516,743 | | |
Deposits | | | | $ | 1,139,226 | | |
Short-term borrowings | | | | | — | | |
Holding company borrowings | | | | | 79,319 | | |
Other long-term borrowings | | | | | 123,557 | | |
Other liabilities | | | | | 29,328 | | |
Total Liabilities | | | | $ | 1,371,430 | | |
Net assets acquired | | | | $ | 145,313 | | |
Purchase price: | | | | | | | |
Shares of County outstanding | | | | | 6,117 | | |
Exchange ratio | | | | | 0.384 | | |
Pro Forma Nicolet shares to be issued | | | | | 2,349 | | |
Nicolet closing stock price on June 21 2021 | | | | $ | 71.75 | | |
Pro Forma stock consideration | | | | $ | 168,540 | | |
Pro Forma cash consideration (including $3.4 million to cash out stock options) | | | | | 45,329 | | |
Total Pro Forma purchase price | | | | $ | 213,869 | | |
Preliminary goodwill | | | | $ | 68,556 | | |
(In thousands, except per share data) | | | Mackinac Net Assets at Fair Value | | |||
Cash and cash equivalents | | | | $ | 353,904 | | |
Investment securities | | | | | 101,955 | | |
Loans held for sale | | | | | 1,535 | | |
Loans | | | | | 969,133 | | |
Allowance for credit losses | | | | | (5,905) | | |
Other real estate owned, net | | | | | 679 | | |
Bank owned life insurance | | | | | 15,658 | | |
Core deposit intangible | | | | | 4,800 | | |
Other assets | | | | | 51,191 | | |
Total Assets | | | | $ | 1,492,950 | | |
Deposits | | | | $ | 1,307,654 | | |
Short-term borrowings | | | | | — | | |
Holding company borrowings | | | | | — | | |
Other long-term borrowings | | | | | 28,541 | | |
Other liabilities | | | | | 26,038 | | |
Total Liabilities | | | | $ | 1,362,233 | | |
Net assets acquired | | | | $ | 130,717 | | |
Purchase price: | | | | | | | |
Shares of Mackinac outstanding | | | | | 10,705 | | |
Exchange ratio | | | | | 0.22 | | |
Pro Forma Nicolet shares to be issued | | | | | 2,355 | | |
Nicolet closing stock price on April 9, 2021 | | | | $ | 84.40 | | |
Pro Forma stock consideration | | | | $ | 198,769 | | |
Pro Forma cash consideration | | | | | 49,692 | | |
Total Pro Forma purchase price | | | | $ | 248,461 | | |
Preliminary goodwill | | | | $ | 117,744 | | |
(In thousands) | | | June 30, 2021 | | |||
Pro forma cash consideration (as noted in A above) | | | | $ | (45,329) | | |
Redemption of County preferred equity (as noted in L below) | | | | | (8,000) | | |
Net proceeds from new issuance of subordinated notes by Nicolet on July 7, 2021 | | | | | 98,703 | | |
Cumulative pro forma adjustments to cash | | | | $ | 45,374 | | |
(In thousands) | | | June 30, 2021 | | |||
Estimate of loan fair value adjustments | | | | $ | (7,700) | | |
Gross up of PCD loans for credit mark (see also D below) | | | | | 7,300 | | |
Cumulative pro forma adjustments to loans | | | | $ | (400) | | |
(In thousands) | | | June 30, 2021 | | |||
Reversal of historical County allowance for credit losses | | | | $ | 11,466 | | |
Estimate of lifetime credit losses for PCD loans (see also C above) | | | | | (7,300) | | |
Estimate of lifetime credit losses for non-PCD loans | | | | | (8,900) | | |
Cumulative pro forma adjustments to the allowance for credit losses | | | | $ | (4,734) | | |
(In thousands) | | | June 30, 2021 | | |||
Estimated fair value mark on long-term borrowings | | | | $ | 11,800 | | |
Net proceeds from new issuance of subordinated notes by Nicolet on July 7, 2021 | | | | | 98,703 | | |
Cumulative pro forma adjustments to long-term borrowings | | | | $ | 110,503 | | |
(In thousands) | | | June 30, 2021 | | |||
Reversal of historic Mackinac loan fair value adjustments | | | | $ | 1,391 | | |
Estimate of loan fair value adjustments | | | | | (14,683) | | |
Net pro forma fair value adjustments | | | | | (13,292) | | |
Gross up of PCD loans for credit mark (see also Q below) | | | | | 5,905 | | |
Cumulative pro forma adjustments to loans | | | | $ | (7,387) | | |
(In thousands) | | | June 30, 2021 | | |||
Reversal of historical Mackinac allowance for credit losses | | | | $ | 5,651 | | |
Estimate of lifetime credit losses for PCD loans (see also P above) | | | | | (5,905) | | |
Estimate of lifetime credit losses for non-PCD loans | | | | | (13,892) | | |
Cumulative pro forma adjustments to the allowance for credit losses | | | | $ | (14,146) | | |
| Transaction Value / Tangible Book Value: | | | | | 1.47x | | |
| Transaction Value / Last Twelve Months (“LTM”) Earnings: | | | | | 16.4x | | |
| Transaction Value / 2022 Estimated Net Income: | | | | | 13.5x | | |
| Core Deposit Premium: | | | | | 11.2% | | |
| | | County | | | 25th Percentile | | | Median | | | 75th Percentile | | ||||||||||||
LTM Core Return on Average Assets | | | | | 0.96% | | | | | | 0.93% | | | | | | 1.13% | | | | | | 1.70% | | |
LTM Core Return on Average Tangible Common Equity | | | | | 8.8% | | | | | | 10.1% | | | | | | 12.4% | | | | | | 18.9% | | |
Tangible Common Equity (excl. PPP)(1) / Tangible Assets | | | | | 11.0% | | | | | | 8.1% | | | | | | 9.5% | | | | | | 10.3% | | |
Non-Performing Assets (excl. PPP)(1)(2) / Assets | | | | | 3.09% | | | | | | 0.91% | | | | | | 0.47% | | | | | | 0.25% | | |
Loan Loss Reserves / Loans (excl. PPP)(1) | | | | | 1.55% | | | | | | 1.18% | | | | | | 1.43% | | | | | | 1.51% | | |
Price / Tangible Book Value | | | | | 0.96x | | | | | | 1.13x | | | | | | 1.20x | | | | | | 1.23x | | |
Price / LTM Earnings Per Share | | | | | 11.2x | | | | | | 6.6x | | | | | | 10.0x | | | | | | 12.3x | | |
Price / 2021 Estimated Earnings Per Share | | | | | 11.3x | | | | | | 8.3x | | | | | | 10.3x | | | | | | 13.7x | | |
| | | County | | | 25th Percentile | | | Median | | | 75th Percentile | | ||||||||||||
Target Total Assets ($000s) | | | | $ | 1,491 | | | | | $ | 948 | | | | | $ | 1,201 | | | | | $ | 1,502 | | |
Target Tangible Common Equity / Tangible Assets | | | | | 10.6% | | | | | | 9.7% | | | | | | 10.3% | | | | | | 12.0% | | |
Target LTM Return on Average Assets | | | | | 0.99% | | | | | | 0.59% | | | | | | 0.92% | | | | | | 1.09% | | |
Target Non-Performing Assets / Assets | | | | | 3.90% | | | | | | 0.97% | | | | | | 0.87% | | | | | | 0.51% | | |
Transaction Value / Tangible Book Value | | | | | 1.47x | | | | | | 1.13x | | | | | | 1.60x | | | | | | 1.69x | | |
Transaction Value / LTM Earnings | | | | | 16.4x | | | | | | 16.0x | | | | | | 18.3x | | | | | | 21.6x | | |
Core Deposit Premium | | | | | 11.2% | | | | | | 1.5% | | | | | | 8.9% | | | | | | 9.8% | | |
| | | County | | | 25th Percentile | | | Median | | | 75th Percentile | | ||||||||||||
Target Total Assets ($000s) | | | | $ | 1,491 | | | | | $ | 1,266 | | | | | $ | 1,571 | | | | | $ | 1,853 | | |
Target Tangible Common Equity / Tangible Assets | | | | | 10.6% | | | | | | 8.7% | | | | | | 9.6% | | | | | | 10.6% | | |
Target LTM Return on Average Assets | | | | | 0.99% | | | | | | 0.64% | | | | | | 0.89% | | | | | | 1.20% | | |
Target Non-Performing Assets / Assets | | | | | 3.90% | | | | | | 1.04% | | | | | | 0.56% | | | | | | 0.37% | | |
Transaction Value / Tangible Book Value | | | | | 1.47x | | | | | | 1.28x | | | | | | 1.56x | | | | | | 1.80x | | |
Transaction Value / LTM Earnings | | | | | 16.4x | | | | | | 12.7x | | | | | | 14.2x | | | | | | 17.7x | | |
Core Deposit Premium | | | | | 11.2% | | | | | | 4.9% | | | | | | 7.4% | | | | | | 9.6% | | |
| | | | | | | | | Selected Companies | | |||||||||||||||||||||
| | | Nicolet | | | 25th Percentile | | | Median | | | Average | | | 75th Percentile | | |||||||||||||||
MRQ Pre-tax Pre-provision Return on Average Assets(1) | | | | | 2.19% | | | | | | 1.61% | | | | | | 1.87% | | | | | | 1.90% | | | | | | 2.06% | | |
MRQ Core Return on Average Assets(1) | | | | | 1.68% | | | | | | 1.32% | | | | | | 1.46% | | | | | | 1.44% | | | | | | 1.65% | | |
MRQ Core Return on Average Tangible Common Equity(1) | | | | | 20.47% | | | | | | 13.28% | | | | | | 14.45% | | | | | | 15.21% | | | | | | 17.51% | | |
MRQ Net Interest Margin | | | | | 3.32% | | | | | | 3.14% | | | | | | 3.31% | | | | | | 3.37% | | | | | | 3.40% | | |
MRQ Fee Income / Revenue Ratio(2) | | | | | 33.7% | | | | | | 21.6% | | | | | | 26.5% | | | | | | 25.7% | | | | | | 31.2% | | |
MRQ Efficiency Ratio | | | | | 49.5% | | | | | | 55.5% | | | | | | 52.7% | | | | | | 53.2% | | | | | | 49.7% | | |
| | | | | | Selected Companies | | |||||||||||||||||||||
| | | Nicolet | | | 25th Percentile | | | Median | | | Average | | | 75th Percentile | | ||||||||||||
Tangible Common Equity / Tangible Assets | | | 8.60%/7.75%(1) | | | | | 8.46% | | | | | | 9.42% | | | | | | 9.55% | | | | | | 10.78% | | |
Total Capital Ratio | | | 13.43%/12.00%(1) | | | | | 13.75% | | | | | | 15.15% | | | | | | 15.64% | | | | | | 16.67% | | |
Loans / Deposits | | | 73.0%/75.4%(1) | | | | | 81.2% | | | | | | 86.0% | | | | | | 84.9% | | | | | | 89.7% | | |
Loan Loss Reserve / Loans | | | 1.14%/1.17%(1) | | | | | 1.36% | | | | | | 1.48% | | | | | | 1.55% | | | | | | 1.59% | | |
Nonperforming Assets / Loans + OREO | | | 0.52% | | | | | 1.27% | | | | | | 0.98% | | | | | | 1.01% | | | | | | 0.70% | | |
MRQ Net Charge-offs / Average Loans | | | 0.01% | | | | | 0.13% | | | | | | 0.04% | | | | | | 0.13% | | | | | | 0.02% | | |
| | | | | | Selected Companies | | |||||||||||||||||||||
| | | Nicolet | | | 25th Percentile | | | Median | | | Average | | | 75th Percentile | | ||||||||||||
One-Year Stock Price Change | | | 27.8% | | | | | 34.8% | | | | | | 44.0% | | | | | | 47.2% | | | | | | 55.6% | | |
One-Year Total Return | | | 27.8% | | | | | 38.6% | | | | | | 49.4% | | | | | | 51.7% | | | | | | 60.1% | | |
Year-To-Date Stock Price Change | | | 5.5% | | | | | 10.3% | | | | | | 16.4% | | | | | | 19.7% | | | | | | 23.5% | | |
Price / Tangible Book Value per Share | | | 1.86x/1.92x(1) | | | | | 1.21x | | | | | | 1.40x | | | | | | 1.46x | | | | | | 1.52x | | |
Price / 2021 EPS Estimate | | | 11.1x(2) | | | | | 9.1x | | | | | | 10.5x | | | | | | 11.1x | | | | | | 12.8x | | |
Price / 2022 EPS Estimate | | | 11.3x(2) | | | | | 9.8x | | | | | | 11.5x | | | | | | 12.0x | | | | | | 13.5x | | |
Dividend Yield | | | 0.0% | | | | | 2.1% | | | | | | 2.6% | | | | | | 2.6% | | | | | | 3.4% | | |
LTM Dividend Payout Ratio | | | 0.0% | | | | | 29.9% | | | | | | 32.1% | | | | | | 32.5% | | | | | | 37.1% | | |
Assumed Value for Commerce Based On: | | | Price-to-Tangible Common Book Value Multiple | | | Price-to-LTM Earnings Multiple | | | Premium-to-Core Deposits Multiple | | |||||||||
Deal Value | | | | | 198% | | | | | | 18.0x | | | | | | 16.1% | | |
Precedent Transactions Regional Group: | | | | | | | | | | | | | | | | | | | |
Median | | | | | 173% | | | | | | 18.3x | | | | | | 12.7% | | |
Minimum | | | | | 127% | | | | | | 12.9x | | | | | | 4.1% | | |
Maximum | | | | | 265% | | | | | | 27.8x | | | | | | 22.6% | | |
Precedent Transactions Nationwide Group: | | | | | | | | | | | | | | | | | | | |
Median | | | | | 180% | | | | | | 18.3x | | | | | | 13.1% | | |
Minimum | | | | | 127% | | | | | | 11.9x | | | | | | 4.1% | | |
Maximum | | | | | 259% | | | | | | 35.8x | | | | | | 18.8% | | |
| | | Tangible Equity/ Tangible Assets | | | Core Deposits | | | LTM ROAA(1) | | | LTM ROAE(2) | | | Efficiency Ratio | | | NPAs/ Assets(3) | | | ALLL/ NPLs (4) | | |||||||||||||||||||||
Commerce | | | | | 9.23% | | | | | | 65.4% | | | | | | 1.06% | | | | | | 11.85% | | | | | | 52.9% | | | | | | 0.37% | | | | | | 180.4% | | |
Precedent Transactions Regional Group: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Median | | | | | 9.97% | | | | | | 83.9% | | | | | | 1.01% | | | | | | 10.12% | | | | | | 65.4% | | | | | | 0.52% | | | | | | 144.5% | | |
Precedent Transactions Nationwide Group: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Median | | | | | 9.27% | | | | | | 83.7% | | | | | | 1.01% | | | | | | 10.75% | | | | | | 61.9% | | | | | | 0.47% | | | | | | 185.0% | | |
| | | | | | | | | Selected Companies | | |||||||||||||||||||||
| | | County | | | 25th Percentile | | | Median | | | Average | | | 75th Percentile | | |||||||||||||||
MRQ Pre-tax Pre-provision Return on Average Assets(1) | | | | | 1.40% | | | | | | 1.39% | | | | | | 1.56% | | | | | | 1.84% | | | | | | 2.00% | | |
MRQ Core Return on Average Assets(1) | | | | | 1.07% | | | | | | 1.05% | | | | | | 1.21% | | | | | | 1.42% | | | | | | 1.55% | | |
MRQ Core Return on Average Tangible Common Equity(1) | | | | | 9.81% | | | | | | 10.85% | | | | | | 12.97% | | | | | | 14.74% | | | | | | 19.20% | | |
MRQ Net Interest Margin | | | | | 2.91% | | | | | | 2.90% | | | | | | 3.32% | | | | | | 3.28% | | | | | | 3.60% | | |
MRQ Fee Income / Revenue Ratio(2) | | | | | 26.6% | | | | | | 17.8% | | | | | | 23.9% | | | | | | 30.8% | | | | | | 38.5% | | |
MRQ Efficiency Ratio | | | | | 62.4% | | | | | | 64.7% | | | | | | 61.2% | | | | | | 62.7% | | | | | | 58.2% | | |
| | | | | | | | | Selected Companies | | |||||||||||||||||||||
| | | County | | | 25th Percentile | | | Median | | | Average | | | 75th Percentile | | |||||||||||||||
Tangible Common Equity / Tangible Assets | | | | | 10.62% | | | | | | 7.94% | | | | | | 9.30% | | | | | | 9.83% | | | | | | 10.11% | | |
Total Capital Ratio | | | | | 19.11% | | | | | | 13.46% | | | | | | 14.61% | | | | | | 16.02% | | | | | | 16.96% | | |
Loans / Deposits | | | | | 92.1% | | | | | | 72.2% | | | | | | 79.7% | | | | | | 80.1% | | | | | | 88.5% | | |
Loan Loss Reserve / Loans | | | | | 1.48% | | | | | | 1.06% | | | | | | 1.29% | | | | | | 1.19% | | | | | | 1.41% | | |
Nonperforming Assets / Loans + OREO | | | | | 5.72% | | | | | | 1.54% | | | | | | 0.90% | | | | | | 1.17% | | | | | | 0.64% | | |
MRQ Net Charge-offs / Average Loans | | | | | (0.01%) | | | | | | 0.05% | | | | | | 0.01% | | | | | | 0.03% | | | | | | (0.00%) | | |
Implied Value for Commerce Based On: | | | Price-to-Tangible Book Value Multiple | | | Price-to-LTM Earnings Multiple | | | Premium-to-Core Deposits Multiple | | |||||||||
Deal Value | | | | | 198% | | | | | | 18.0x | | | | | | 16.1% | | |
DCF Analysis — Perpetuity Model | | | | | | | | | | | | | | | | | | | |
Midpoint | | | | | 188% | | | | | | 17.1x | | | | | | 14.6% | | |
DCF Analysis — Terminal P/E Multiple | | | | | | | | | | | | | | | | | | | |
Midpoint | | | | | 207% | | | | | | 16.9x | | | | | | 14.2% | | |
DCF Analysis — Terminal P/TBV Multiple | | | | | | | | | | | | | | | | | | | |
Midpoint | | | | | 186% | | | | | | 18.8x | | | | | | 17.6% | | |
| | | | | | | | | Selected Companies | | |||||||||||||||||||||
| | | County(1) | | | 25th Percentile | | | Median | | | Average | | | 75th Percentile | | |||||||||||||||
One-Year Stock Price Change | | | | | 8.5% | | | | | | 10.9% | | | | | | 24.0% | | | | | | 28.4% | | | | | | 43.6% | | |
One-Year Total Return | | | | | 10.3% | | | | | | 14.0% | | | | | | 30.0% | | | | | | 32.4% | | | | | | 50.6% | | |
Year-To-Date Stock Price Change | | | | | 6.4% | | | | | | 2.7% | | | | | | 4.3% | | | | | | 8.6% | | | | | | 20.9% | | |
Price / Tangible Book Value per Share | | | | | 0.90x | | | | | | 1.08x | | | | | | 1.16x | | | | | | 1.14x | | | | | | 1.22x | | |
Price / 2021 EPS Estimate | | | | | 10.8x | | | | | | 8.3x | | | | | | 10.2x | | | | | | 10.3x | | | | | | 11.2x | | |
Price / 2022 EPS Estimate | | | | | 11.4x | | | | | | 10.8x | | | | | | 11.1x | | | | | | 11.8x | | | | | | 12.1x | | |
Dividend Yield | | | | | 1.7% | | | | | | 2.0% | | | | | | 2.7% | | | | | | 2.6% | | | | | | 3.6% | | |
LTM Dividend Payout Ratio | | | | | 17.9% | | | | | | 15.9% | | | | | | 31.5% | | | | | | 27.1% | | | | | | 36.4% | | |
| | | Market Cap ($M) | | | Price/ Tangible Book Value | | | Price/ LTM EPS | | | Price/ 2020E EPS | | | Dividend Yield | | | YTD/Price Change | | | One Year Total Return | | |||||||||||||||||||||
Nicolet | | | | $ | 766 | | | | | | 219% | | | | | | 13.1x | | | | | | 15.1x | | | | | | 0.00% | | | | | | (2.1)% | | | | | | 28.8% | | |
Comparable Companies: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Median | | | | $ | 513 | | | | | | 165% | | | | | | 12.0x | | | | | | 12.5x | | | | | | 2.28% | | | | | | (5.3)% | | | | | | 6.5% | | |
Minimum | | | | $ | 306 | | | | | | 105% | | | | | | 5.3x | | | | | | 8.2x | | | | | | 0.00% | | | | | | (11.2)% | | | | | | (26.1)% | | |
Maximum | | | | $ | 1,206 | | | | | | 255% | | | | | | 17.9x | | | | | | 18.7x | | | | | | 4.46% | | | | | | 8.7% | | | | | | 35.9% | | |
| | | |||
| | | |||
First Foundation Inc. | | | TGR Financial, Inc. | | |
First Bancorp | | | Select Bancorp, Inc. | | |
| | | |||
Nicolet Bankshares, Inc. | | | Mackinac Financial Corporation | | |
VyStar Credit Union | | | Heritage Southeast Bancorporation Inc. | | |
Peoples Bancorp Inc. | | | Premier Financial Bancorp, Inc. | | |
Banc of California, Inc. | | Pacific Mercantile Bancorp | | ||
Stock Yards Bancorp, Inc. | | | Kentucky Bancshares, Inc. | | |
Dollar Mutual Bancorp | | | Standard AVB Financial Corp. | | |
Enterprise Financial Services Corp | | | Seacoast Commerce Banc Holdings | | |
Provident Financial Services, Inc. | | | SB | | |
United Community Banks, Inc. | | | Three Shores Bancorporation, Inc. | | |
LendingClub Corporation | | Radius Bancorp, Inc. | | ||
Heartland Financial USA, Inc. | | | | ||
Business First Bancshares, Inc. | | | Pedestal Bancshares, Inc. | |
| | | Market Cap ($M) | | | Price/ Tangible Book Value | | | Price/ LTM EPS | | | Price/ 2020E EPS | | | Dividend Yield | | | YTD/Price Change | | | One Year Total Return | | |||||||||||||||||||||
Deal Value | | | | $ | 130 | | | | | | 198% | | | | | | 18.0x | | | | | | NA | | | | | | NA | | | | | | NA | | | | | | NA | | |
Comparable Companies: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Median | | | | $ | 172 | | | | | | 131% | | | | | | 12.0x | | | | | | NA | | | | | | 2.15% | | | | | | (3.1)% | | | | | | 10.2% | | |
Minimum | | | | $ | 76 | | | | | | 100% | | | | | | 7.2x | | | | | | NA | | | | | | 0.00% | | | | | | (12.6)% | | | | | | (16.7)% | | |
Maximum | | | | $ | 250 | | | | | | 255% | | | | | | 22.0x | | | | | | NA | | | | | | 4.27% | | | | | | 7.3% | | | | | | 28.9% | | |
| | | | | | | | | Selected Companies | | |||||||||||||||||||||
| | | Nicolet / County | | | 25th Percentile | | | Median | | | Average | | | 75th Percentile | | |||||||||||||||
Price / Tangible Book Value per Share | | | | | 1.36x | | | | | | 1.45x | | | | | | 1.62x | | | | | | 1.59x | | | | | | 1.80x | | |
Price / LTM EPS | | | | | 15.0x | | | | | | 12.5x | | | | | | 14.2x | | | | | | 16.3x | | | | | | 18.3x | | |
Core Deposit Premium | | | | | 6.2% | | | | | | 6.7% | | | | | | 8.5% | | | | | | 9.2% | | | | | | 10.0% | | |
One-Day Market Premium | | | | | 46.1% | | | | | | 23.4% | | | | | | 31.1% | | | | | | 39.3% | | | | | | 68.8% | | |
| | | Commerce as a % of Total | | | Nicolet as a % of Total | | ||||||
Pro Forma Common Stock Ownership | | | | | 14.3% | | | | | | 85.7% | | |
Financial Characteristics: | | | | | | | | | | | | | |
Total Assets | | | | | 16.6% | | | | | | 83.4% | | |
Net Loans & Leases | | | | | 18.8% | | | | | | 81.2% | | |
Core Deposits | | | | | 12.1% | | | | | | 87.9% | | |
Tangible Equity | | | | | 16.2% | | | | | | 83.8% | | |
LTM Net Income | | | | | 11.6% | | | | | | 88.4% | | |
Est. 2020 Net Income | | | | | 13.5% | | | | | | 86.5% | | |
Est. 2021 Net Income | | | | | 14.8% | | | | | | 85.2% | | |
| | | Nicolet | | | County | | ||||||
| | | % of Total | | | % of Total | | ||||||
Ownership at Merger: | | | | | 84% | | | | | | 16% | | |
Ownership at 100% stock: | | | | | 80% | | | | | | 20% | | |
Market Information: | | | | | | | | | | | | | |
Pre-Merger Market Capitalization | | | | | 86% | | | | | | 14% | | |
Balance Sheet: | | | | | | | | | | | | | |
Assets | | | | | 80% | | | | | | 20% | | |
Gross Loans Held for Investment | | | | | 79% | | | | | | 21% | | |
Deposits | | | | | 82% | | | | | | 18% | | |
Tangible Common Equity | | | | | 74% | | | | | | 26% | | |
Income Statement: | | | | | | | | | | | | | |
2021 Earnings | | | | | 84% | | | | | | 16% | | |
2022 Earnings | | | | | 87% | | | | | | 13% | | |
2023 Earnings | | | | | 87% | | | | | | 13% | | |
Executive Officer | | | Severance Payment | | |||
Joseph Fazio III | | | | $ | 898,409 | | |
David Borchardt | | | | $ | 847,799 | | |
Thomas Hopp | | | | $ | 858,703 | | |
Kevin Volm | | | | $ | 580,109 | | |
| | | Cash(1) | | | Equity(2) | | | Pension/ NQDC(3) | | | Perquisites/ Benefits | | | Tax Reimbursements | | | Other | | | Total | | |||||||||||||||||||||
Tim J. Schneider | | | | $ | 2,498,724 | | | | | $ | 153,154 | | | | | $ | — | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 3,101,878 | | |
Mark R. Binversie | | | | $ | 1,501,580 | | | | | $ | 508,316 | | | | | $ | — | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 2,729,896 | | |
Glen L. Stiteley | | | | $ | 967,802 | | | | | $ | 363,452 | | | | | $ | 50,152 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 1,393,050 | | |
| | | At and for the years ended December 31, | | |||||||||||||||||||||||||||
(in thousands, except per share data) | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | |||||||||||||||
Results of operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income | | | | $ | 138,588 | | | | | $ | 125,537 | | | | | $ | 109,253 | | | | | $ | 75,467 | | | | | $ | 48,597 | | |
Interest expense | | | | | 22,510 | | | | | | 18,889 | | | | | | 10,511 | | | | | | 7,334 | | | | | | 7,213 | | |
Net interest income | | | | | 116,078 | | | | | | 106,648 | | | | | | 98,742 | | | | | | 68,133 | | | | | | 41,384 | | |
Provision for loan losses | | | | | 1,200 | | | | | | 1,600 | | | | | | 2,325 | | | | | | 1,800 | | | | | | 1,800 | | |
Net interest income after provision for loan losses | | | | | 114,878 | | | | | | 105,048 | | | | | | 96,417 | | | | | | 66,333 | | | | | | 39,584 | | |
Noninterest income | | | | | 53,367 | | | | | | 39,509 | | | | | | 34,639 | | | | | | 26,674 | | | | | | 17,708 | | |
Noninterest expense | | | | | 96,799 | | | | | | 89,758 | | | | | | 81,356 | | | | | | 64,942 | | | | | | 39,648 | | |
Income before income tax expense | | | | | 71,446 | | | | | | 54,799 | | | | | | 49,700 | | | | | | 28,065 | | | | | | 17,644 | | |
Income tax expense | | | | | 16,458 | | | | | | 13,446 | | | | | | 16,267 | | | | | | 9,371 | | | | | | 6,089 | | |
Net income | | | | | 54,988 | | | | | | 41,353 | | | | | | 33,433 | | | | | | 18,694 | | | | | | 11,555 | | |
Net income attributable to noncontrolling interest | | | | | 347 | | | | | | 317 | | | | | | 283 | | | | | | 232 | | | | | | 127 | | |
Net income attributable to Nicolet Bankshares, Inc. | | | | | 54,641 | | | | | | 41,036 | | | | | | 33,150 | | | | | | 18,462 | | | | | | 11,428 | | |
Preferred stock dividends | | | | | — | | | | | | — | | | | | | — | | | | | | 633 | | | | | | 212 | | |
Net income available to common shareholders | | | | $ | 54,641 | | | | | $ | 41,036 | | | | | $ | 33,150 | | | | | $ | 17,829 | | | | | $ | 11,216 | | |
Earnings per common share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | | $ | 5.71 | | | | | $ | 4.26 | | | | | $ | 3.51 | | | | | $ | 2.49 | | | | | $ | 2.80 | | |
Diluted | | | | $ | 5.52 | | | | | $ | 4.12 | | | | | $ | 3.33 | | | | | $ | 2.37 | | | | | $ | 2.57 | | |
Common shares: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic weighted average | | | | | 9,562 | | | | | | 9,640 | | | | | | 9,440 | | | | | | 7,158 | | | | | | 4,004 | | |
Diluted weighted average | | | | | 9,900 | | | | | | 9,956 | | | | | | 9,958 | | | | | | 7,514 | | | | | | 4,362 | | |
Outstanding | | | | | 10,588 | | | | | | 9,495 | | | | | | 9,818 | | | | | | 8,553 | | | | | | 4,154 | | |
Year-End Balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | | | $ | 2,573,751 | | | | | $ | 2,166,181 | | | | | $ | 2,087,925 | | | | | $ | 1,568,907 | | | | | $ | 877,061 | | |
Allowance for loan losses (“ALLL”) | | | | | 13,972 | | | | | | 13,153 | | | | | | 12,653 | | | | | | 11,820 | | | | | | 10,307 | | |
Securities available for sale, at fair value | | | | | 449,302 | | | | | | 400,144 | | | | | | 405,153 | | | | | | 365,287 | | | | | | 172,596 | | |
Goodwill and other intangibles, net | | | | | 165,967 | | | | | | 124,307 | | | | | | 128,406 | | | | | | 87,938 | | | | | | 3,793 | | |
Total assets | | | | | 3,577,260 | | | | | | 3,096,535 | | | | | | 2,932,433 | | | | | | 2,300,879 | | | | | | 1,214,439 | | |
Deposits | | | | | 2,954,453 | | | | | | 2,614,138 | | | | | | 2,471,064 | | | | | | 1,969,986 | | | | | | 1,056,417 | | |
Short-term and long-term borrowings | | | | | 67,629 | | | | | | 77,305 | | | | | | 78,046 | | | | | | 37,617 | | | | | | 39,788 | | |
Common equity | | | | | 516,262 | | | | | | 386,609 | | | | | | 364,178 | | | | | | 275,947 | | | | | | 97,301 | | |
| | | At and for the years ended December 31, | | |||||||||||||||||||||||||||
(in thousands, except per share data) | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | |||||||||||||||
Stockholders’ equity | | | | | 516,262 | | | | | | 386,609 | | | | | | 364,178 | | | | | | 275,947 | | | | | | 109,501 | | |
Book value per common share | | | | $ | 48.76 | | | | | $ | 40.72 | | | | | $ | 37.09 | | | | | $ | 32.26 | | | | | $ | 23.42 | | |
Tangible book value per common share* | | | | $ | 33.08 | | | | | $ | 27.62 | | | | | $ | 24.01 | | | | | $ | 21.98 | | | | | $ | 22.51 | | |
Financial Ratios: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets | | | | | 1.75% | | | | | | 1.38% | | | | | | 1.25% | | | | | | 0.95% | | | | | | 0.96% | | |
Return on average equity | | | | | 12.89 | | | | | | 11.04 | | | | | | 9.96 | | | | | | 8.16 | | | | | | 10.20 | | |
Return on average common equity | | | | | 12.89 | | | | | | 11.04 | | | | | | 9.96 | | | | | | 8.20 | | | | | | 12.35 | | |
Average equity to average assets | | | | | 13.56 | | | | | | 12.48 | | | | | | 12.57 | | | | | | 11.69 | | | | | | 9.45 | | |
Net interest margin | | | | | 4.19 | | | | | | 4.04 | | | | | | 4.30 | | | | | | 4.01 | | | | | | 3.88 | | |
Stockholders’ equity to assets | | | | | 14.43 | | | | | | 12.49 | | | | | | 12.42 | | | | | | 11.99 | | | | | | 9.02 | | |
Tangible common equity to tangible assets* | | | | | 10.27 | | | | | | 8.83 | | | | | | 8.41 | | | | | | 8.50 | | | | | | 7.72 | | |
Net loan charge-offs to average loans | | | | | 0.02 | | | | | | 0.05 | | | | | | 0.08 | | | | | | 0.02 | | | | | | 0.09 | | |
Nonperforming loans to total loans | | | | | 0.55 | | | | | | 0.25 | | | | | | 0.63 | | | | | | 1.29 | | | | | | 0.40 | | |
Nonperforming assets to total assets | | | | | 0.42 | | | | | | 0.19 | | | | | | 0.49 | | | | | | 0.97 | | | | | | 0.32 | | |
Allowance for loan losses to loans | | | | | 0.54 | | | | | | 0.61 | | | | | | 0.61 | | | | | | 0.75 | | | | | | 1.18 | | |
| | | High | | | Low | | ||||||
2020 | | | | | | | | | | | | | |
First Quarter | | | | $ | 49.00 | | | | | $ | 48.50 | | |
2019 | | | | | | | | | | | | | |
Fourth Quarter | | | | $ | N/A | | | | | $ | N/A | | |
Third Quarter | | | | | 47.00 | | | | | | 45.00 | | |
Second Quarter | | | | | 40.00 | | | | | | 40.00 | | |
First Quarter | | | | | 47.00 | | | | | | 47.00 | | |
2018 | | | | | | | | | | | | | |
Fourth Quarter | | | | $ | 46.50 | | | | | $ | 40.00 | | |
Third Quarter | | | | | 42.00 | | | | | | 42.00 | | |
Second Quarter | | | | | 41.50 | | | | | | 41.50 | | |
First Quarter | | | | | 40.00 | | | | | | 40.00 | | |
Name | | | Title | | | Common Stock Beneficially Owned(1) | | | Percentage Beneficially Owned(2) | | ||||||
Kevin Allis | | | Director | | | | | 480 | | | | | | * | | |
David Borchardt | | | Director, CFO & COO | | | | | 72,081(3) | | | | | | 4.71% | | |
Cory Davis | | | Director | | | | | 14,168(3) | | | | | | * | | |
Brian Dix | | | Director | | | | | 2,583(3) | | | | | | * | | |
Jack Enea | | | Director | | | | | 8,688(4) | | | | | | * | | |
Joseph Fazio | | | Chairman of the Board, CEO | | | | | 111,245(3) | | | | | | 7.27% | | |
Thomas Hopp | | | Director, President | | | | | 73,809(3) | | | | | | 4.82% | | |
Lori Stortz | | | Director | | | | | 47 | | | | | | * | | |
David Stroik | | | Director | | | | | 6,868 | | | | | | * | | |
Scott Tennies | | | Director | | | | | 14,768(3) | | | | | | * | | |
James Testwuide | | | Director | | | | | 94 | | | | | | * | | |
Kevin Volm | | | Director, CCO & Secretary | | | | | 52,560(3) | | | | | | 3.43% | | |
All Directors and executive officers as a group, consisting of 12 persons: | | | | | | | | 357,391 | | | | | | 23.35% | | |
Forest County Potawatomi Community | | | Greater than 5% owner | | | | | 132,000 | | | | | | 8.50% | | |
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| Exhibits | |||||||
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| Form of | | | | | A-59 | | |
| | | | | A-61 | | |
| Acquisition Proposal | | | | | | | |
| Adverse Recommendation | | | | | | | |
| Affiliate | | | | | | | |
| Agreement | | | | | 1 | | |
| Articles of Merger | | | | | 2 | | |
| Bank | | | | | | | |
| Bank Merger | | | | | | | |
| Bank Plan of Merger | | | | | 2 | | |
| ||||||||
Business Day | | | | | | | ||
| Cash Election | | | | | 5 | | |
| Cash Election Shares | | | | | 5 | | |
| Cash Election Threshold | | | | | 5 | | |
| CIC Payment | | | | | 41 | | |
| Closing | | | | | 1 | | |
| Closing Date | | | | | | | |
| Code | | | | | 1 | | |
| Company | | | | | 1 | | |
| Company | |||||||
| | | | | | |||
| Company Benefit Plan | | | | | | | |
| Company Board | | | | | | | |
| Company Bylaws | | | | | | | |
| Company Capital Stock | | | | | | | |
| Company Capitalization Date | | | | | | | |
| Company Common Stock | | | | | | | |
| Company | | | | | | | |
| Company Director | | | | | 2 | | |
| Company Disclosure Schedules | | | | | | | |
| Company Employees | | | | | | | |
| Company ERISA Affiliate | | | | | | | |
| Company Evaluation Date | | | | | 11 | | |
| Company Financial Statements | | | | | | | |
| Company Investment Securities | | | | | | | |
| Company Loans | | | | | | | |
| Company Material Contract | | | | | | | |
| Company Permitted Exceptions | | | | | | | |
| Company Preferred Stock | | | | | | | |
| Company Regulatory Reports | | | | | | | |
| Company Restricted Stock Award | | | | | 7 | | |
| Company Restricted Stock Unit | | | | | 7 | | |
| Company SEC Reports | | | | | 51 | | |
| Company Shareholder Approval | | | | | | | |
| Company Shareholders Meeting | | | | | | |
| Company Stock Certificates | | | | | | | |
| Company Stock Option | | | | | | | |
| Company Stock Plans | | | | | | | |
| Company Subordinated Note Indentures | | | | | 51 | | |
| Company Trust Debentures | | | | | 1 | | |
| Company Trust Preferred Securities | | | | | 1 | | |
| Company Trusts | | | | | 51 | | |
| Confidentiality Agreement | | | | | | | |
| Contemplated Transactions | | | | | | | |
| Contract | | | | | | | |
| Control, Controlling or Controlled | | | | | | | |
| Conversion Fund | | | | | 3 | | |
| Covered Employees | | | | | | |
| CRA | | | | | | | |
| Deposit Insurance Fund | | | | | | | |
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| | | | | 46 | | | |
| DOL | | | | | | | |
| Effective Time | | | | | 2 | | |
| Election Deadline | | | | | 5 | | |
| Election Form | | | | | 5 | | |
| Environment | | | | | | | |
| Environmental Laws | | | | | | | |
| ERISA | | | | | | | |
| Exchange Act | | | | | | | |
| Exchange Agent | | | | | 3 | | |
| Exchange Ratio | | | | | 3 | | |
| Expenses | | | | | | | |
| FDIC | | | | | | | |
| Federal Reserve | | | | | 52 | | |
| Fill Option | | | | | 45 | | |
| Final Index Price | | | | | 46 | | |
| Final Price | | | | | 46 | | |
| GAAP | | | | | | | |
| Hazardous Materials | | | | | | | |
| IIS | | | | | 22 | | |
| Indemnification Proceeding | | | | | | | |
| Indemnified Employee | | | | | | | |
| Indemnified Party | | | | | | | |
| Index | | | | | 46 | | |
| Index Ratio | | | | | 46 | | |
| Initial Index Price | | | | | 46 | | |
| Initial Price | | | | | 46 | | |
| Intangible Assets | | | | | | |
| Internal Control Over Financial Reporting | | | | | | | |
| IRS | | | | | | | |
| IRS Guidelines | | | | | | | |
| Joint Proxy Statement | | | | | 52 | | |
| Knowledge | | | | | | | |
| Legal Requirement | | | | | | | |
| Letter of Transmittal | | | | | | | |
| Material Adverse Effect | | | | | | | |
| Merger | | | | | 1 | | |
| Merger Consideration | | | | | 3 | | |
| Mixed Election | | | | | 5 | | |
| Nasdaq Rules | | | | | | | |
| New Plans | | | | | | | |
| Nicolet | | | | | 1 | | |
| Nicolet Articles of Incorporation | | | | | | | |
| Nicolet Bank | | | | | | | |
| Nicolet Benefit Plan | | | | | | | |
| Nicolet Board | | | | | | | |
| Nicolet Bylaws | | | | | | | |
| Nicolet Capital Stock | | | | | | | |
| Nicolet Capitalization Date | | | | | | | |
| Nicolet Common Stock | | | | | | | |
| Nicolet Common Stock Price | | | | | | | |
| Nicolet Disclosure Schedules | | | | | | | |
| Nicolet Equity Award | | | | | | | |
| Nicolet ERISA Affiliate | | | | | | | |
| Nicolet Evaluation Date | | | | | | | |
| Nicolet Financial Statements | | | | | | |
| Nicolet Loans | | | | | | | |
| Nicolet Market Value | | | | | 46 | | |
| Nicolet Material Contract | | | | | | | |
| Nicolet Preferred Stock | | | | | | | |
| Nicolet SEC Reports | | | | | | | |
| Nicolet Shareholder Approval | | | | | 53 | | |
| Nicolet Shareholders Meeting | | | | | 35 | | |
| Nicolet Stock Plans | | | | | | | |
| No-Election Shares | | | | | 5 | | |
| Non-Election | | | | | 5 | | |
| Old Plans | | | | | | | |
| Order | | | | | | | |
| Ordinary Course of Business | | | | | | | |
| OREO | | | | | | | |
| Outstanding Company Shares | | | | | | | |
| PATRIOT Act | | | | | | |
| PBGC | | | | | | | |
| Per Share Cash Consideration | | | | | 3 | | |
| Per Share Stock Consideration | | | | | 3 | | |
| Person | | | | | | | |
| Previously Disclosed | | | | | | | |
| Proceeding | | | | | | | |
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| Reallocated Stock Election Shares | | | | | 6 | | |
| Registration Statement | | | | | | | |
| Regulatory Authority | | | | | | | |
| Representative | | | | | | | |
| Required Licenses | | | | | 22 | | |
| Requisite Regulatory Approvals | | | | | | | |
| Schedules | | | | | | | |
| SEC | | | | | | | |
| Securities Act | | | | | | | |
| Severance Costs | | | | | | | |
| Stock Election | | | | | 5 | | |
| Stock Election Shares | | | | | 5 | | |
| Subordinated Notes Assumption | | | | | 2 | | |
| Subsidiary | | | | | | | |
| Superior Proposal | | | | | | | |
| Supplemental | | | | | | | |
| Surviving Entity | | | | | 1 | | |
| Takeover Statutes | | | | | | | |
| Tangible Assets | | | | | |||
| | |||||||
| Tax | | | | | | | |
| Tax Return | | | | | | | |
| Termination Date | | | | | | | |
| Termination Fee | | | | | | | |
| Transaction Costs | | | | | | | |
| Transition Date | | | | | | | |
| TRUPS Assumption | | | | | 2 | | |
| U.S. | | | | | | | |
| WBCL | | | | | | |
| Nicolet: | | | Company: | |
| Nicolet Bankshares, Inc. | | | C | |
| By: /s/ Michael E. Daniels | | | By: /s/ Timothy J. Schneider | |
| Name: Michael E. Daniels | | | Name: Timothy J. Schneider | |
| Title: President and Chief Executive Officer | | | Title: President | |
| | | NICOLET NATIONAL BANK | | ||
| | | By: | | ||
| | | | Name: Michael E. Daniels | | |
| | | | Title: President and Chief Executive Officer | | |
| ATTEST: | | | |||
| | | | |||
| Eric J. Witczak | | | |||
| Secretary | | |
| | | | INVESTORS COMMUNITY BANK | |
| [BANK SEAL] | | | By: | |
| | | | Name: Timothy J. Schneider | |
| | | | Title: Chief Executive Officer | |
| ATTEST: | | | ||
| | | | ||
| Mark A. Miller | | | ||
| Secretary | | |
E-mail address | |
| By: | | | | |
| Name: | | | | |
| Its: | | | | |
| 111 N. Washington Street Green Bay, WI 54301 | | | | |
| E-mail address | | | | |
| By: | | | |
| | | June 30, 2021 | | | December 31, 2020 | | ||||||
| | | (Unaudited) | | |||||||||
ASSETS | | | | | | | | | | | | | |
Cash and due from banks | | | | $ | 341,436 | | | | | $ | 218,901 | | |
Federal funds sold | | | | | 10,041 | | | | | | 76 | | |
Cash and cash equivalents | | | | | 351,477 | | | | | | 218,977 | | |
Interest-bearing deposits in other financial institutions | | | | | 2,427 | | | | | | 2,917 | | |
Securities available for sale | | | | | 101,955 | | | | | | 111,836 | | |
Federal Home Loan Bank stock | | | | | 4,473 | | | | | | 4,924 | | |
Loans: | | | | | | | | | | | | | |
Commercial | | | | | 738,429 | | | | | | 819,907 | | |
Mortgage | | | | | 221,388 | | | | | | 238,705 | | |
Consumer | | | | | 18,238 | | | | | | 18,980 | | |
Total Loans | | | | | 978,055 | | | | | | 1,077,592 | | |
Allowance for loan losses | | | | | (5,651) | | | | | | (5,816) | | |
Net loans | | | | | 972,404 | | | | | | 1,071,776 | | |
Premises and equipment | | | | | 24,533 | | | | | | 25,518 | | |
Other real estate held for sale | | | | | 1,343 | | | | | | 1,752 | | |
Deferred tax asset | | | | | 2,496 | | | | | | 3,303 | | |
Deposit based intangibles | | | | | 4,031 | | | | | | 4,368 | | |
Goodwill | | | | | 19,574 | | | | | | 19,574 | | |
Other assets | | | | | 34,239 | | | | | | 36,785 | | |
TOTAL ASSETS | | | | $ | 1,518,952 | | | | | $ | 1,501,730 | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | �� | | | | | | | | | | | | |
LIABILITIES: | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | |
Noninterest bearing deposits | | | | $ | 459,716 | | | | | $ | 414,804 | | |
NOW, money market, interest checking | | | | | 501,251 | | | | | | 450,556 | | |
Savings | | | | | 141,729 | | | | | | 130,755 | | |
CDs<$250,000 | | | | | 178,723 | | | | | | 202,266 | | |
CDs>$250,000 | | | | | 12,384 | | | | | | 15,224 | | |
Brokered | | | | | 13,351 | | | | | | 45,171 | | |
Total deposits | | | | | 1,307,154 | | | | | | 1,258,776 | | |
Borrowings | | | | | 28,441 | | | | | | 63,479 | | |
Other liabilities | | | | | 11,438 | | | | | | 11,611 | | |
Total liabilities | | | | | 1,347,033 | | | | | | 1,333,866 | | |
| | | June 30, 2021 | | | December 31, 2020 | | ||||||
| | | (Unaudited) | | |||||||||
SHAREHOLDERS’ EQUITY: | | | | | | | | | | | | | |
Common stock and additional paid in capital – No par value Authorized – 18,000,000 shares Issued and outstanding – 10,550,393 and 10,500,758 respectively | | | | | 127,624 | | | | | | 127,164 | | |
Retained earnings | | | | | 43,189 | | | | | | 39,318 | | |
Accumulated other comprehensive income | | | | | | | | | | | | | |
Unrealized gains on available for sale securities | | | | | 1,689 | | | | | | 1,965 | | |
Minimum pension liability | | | | | (583) | | | | | | (583) | | |
Total shareholders’ equity | | | | | 171,919 | | | | | | 167,864 | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | $ | 1,518,952 | | | | | $ | 1,501,730 | | |
|
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | | ||||||||||||||||||
| | | 2021 | | | 2020 | | | 2021 | | | 2020 | | ||||||||||||
INTEREST INCOME: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest and fees on loans: | | | | | | | | | | | | | | | | | | | | | | | | | |
Taxable | | | | $ | 13,414 | | | | | $ | 15,549 | | | | | $ | 27,535 | | | | | $ | 30,162 | | |
Tax-exempt | | | | | 20 | | | | | | 55 | | | | | | 40 | | | | | | 129 | | |
Interest on securities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Taxable | | | | | 503 | | | | | | 560 | | | | | | 1,028 | | | | | | 1,181 | | |
Tax-exempt | | | | | 132 | | | | | | 152 | | | | | | 274 | | | | | | 239 | | |
Other interest income | | | | | 120 | | | | | | 125 | | | | | | 204 | | | | | | 395 | | |
Total interest income | | | | | 14,189 | | | | | | 16,441 | | | | | | 29,081 | | | | | | 32,106 | | |
INTEREST EXPENSE: | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | | | | 723 | | | | | | 1,707 | | | | | | 1,612 | | | | | | 3,634 | | |
Borrowings | | | | | 200 | | | | | | 276 | | | | | | 425 | | | | | | 617 | | |
Total interest expense | | | | | 923 | | | | | | 1,983 | | | | | | 2,037 | | | | | | 4,251 | | |
Net interest income | | | | | 13,266 | | | | | | 14,458 | | | | | | 27,044 | | | | | | 27,855 | | |
Provision for loan losses | | | | | 50 | | | | | | 100 | | | | | | 100 | | | | | | 200 | | |
Net interest income after provision for loan losses | | | | | 13,216 | | | | | | 14,358 | | | | | | 26,944 | | | | | | 27,655 | | |
OTHER INCOME: | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposit service fees | | | | | 265 | | | | | | 237 | | | | | | 522 | | | | | | 640 | | |
Income from mortgage loans sold on the secondary market | | | | | 982 | | | | | | 1,512 | | | | | | 2,284 | | | | | | 2,050 | | |
SBA/USDA loan sale gains | | | | | 869 | | | | | | 274 | | | | | | 1,302 | | | | | | 984 | | |
Net mortgage servicing fees | | | | | 154 | | | | | | 204 | | | | | | 395 | | | | | | 393 | | |
Realized security gains | | | | | — | | | | | | — | | | | | | 36 | | | | | | — | | |
Other | | | | | 154 | | | | | | 140 | | | | | | 283 | | | | | | 237 | | |
Total other income | | | | | 2,424 | | | | | | 2,367 | | | | | | 4,822 | | | | | | 4,304 | | |
OTHER EXPENSE: | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | | | 6,306 | | | | | | 7,009 | | | | | | 13,130 | | | | | | 13,060 | | |
Occupancy | | | | | 1,092 | | | | | | 1,008 | | | | | | 2,275 | | | | | | 2,132 | | |
Furniture and equipment | | | | | 818 | | | | | | 804 | | | | | | 1,660 | | | | | | 1,606 | | |
Data processing | | | | | 707 | | | | | | 852 | | | | | | 1,477 | | | | | | 1,677 | | |
Advertising | | | | | 176 | | | | | | 312 | | | | | | 289 | | | | | | 524 | | |
Professional service fees | | | | | 515 | | | | | | 574 | | | | | | 1,013 | | | | | | 1,072 | | |
Loan origination expenses and deposit and card related fees | | | | | 419 | | | | | | 406 | | | | | | 869 | | | | | | 787 | | |
Writedowns and losses on other real estate held for sale | | | | | 84 | | | | | | 31 | | | | | | 32 | | | | | | 34 | | |
FDIC insurance assessment | | | | | 150 | | | | | | 165 | | | | | | 290 | | | | | | 315 | | |
Communications | | | | | 259 | | | | | | 224 | | | | | | 500 | | | | | | 437 | | |
Transaction related expenses | | | | | 495 | | | | | | — | | | | | | 495 | | | | | | — | | |
Other | | | | | 891 | | | | | | 967 | | | | | | 1,730 | | | | | | 2,080 | | |
Total other expenses | | | | | 11,912 | | | | | | 12,352 | | | | | | 23,760 | | | | | | 23,724 | | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | | ||||||||||||||||||
| | | 2021 | | | 2020 | | | 2021 | | | 2020 | | ||||||||||||
Income before provision for income taxes | | | | | 3,728 | | | | | | 4,373 | | | | | | 8,006 | | | | | | 8,235 | | |
Provision for income taxes | | | | | 783 | | | | | | 919 | | | | | | 1,181 | | | | | | 1,730 | | |
NET INCOME | | | | $ | 2,945 | | | | | $ | 3,454 | | | | | $ | 6,825 | | | | | $ | 6,505 | | |
INCOME PER COMMON SHARE: | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | | $ | 0.28 | | | | | $ | 0.33 | | | | | $ | 0.65 | | | | | $ | 0.61 | | |
Diluted | | | | $ | 0.28 | | | | | $ | 0.33 | | | | | $ | 0.65 | | | | | $ | 0.61 | | |
|
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | | ||||||||||||||||||
| | | 2021 | | | 2020 | | | 2021 | | | 2020 | | ||||||||||||
Net income | | | | $ | 2,945 | | | | | $ | 3,454 | | | | | $ | 6,825 | | | | | $ | 6,505 | | |
Other comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | |
Change in securities available for sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
Unrealized gains (losses) arising during the period | | | | | 61 | | | | | | 2,415 | | | | | | (349) | | | | | | 1,309 | | |
Tax effect | | | | | (13) | | | | | | (507) | | | | | | 73 | | | | | | (275) | | |
Net change in unrealized gains on available for sale securities | | | | | 48 | | | | | | 1,908 | | | | | | (276) | | | | | | 1,034 | | |
Total comprehensive income | | | | $ | 2,993 | | | | | $ | 5,362 | | | | | $ | 6,549 | | | | | $ | 7,539 | | |
| | | Six Months Ended June 30, 2021 | | |||||||||||||||||||||||||||
| | | Shares of Common Stock | | | Common Stock and Additional Paid in Capital | | | Retained Earnings | | | Accumulated Other Comprehensive Income (loss) | | | Total | | |||||||||||||||
Balance, beginning of period | | | | | 10,500,758 | | | | | $ | 127,164 | | | | | $ | 39,318 | | | | | $ | 1,382 | | | | | $ | 167,864 | | |
Net income for period | | | | | — | | | | | | — | | | | | | 6,825 | | | | | | — | | | | | | 6,825 | | |
Other comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized gain on securities available for sale | | | | | — | | | | | | — | | | | | | — | | | | | | (276) | | | | | | (276) | | |
Total comprehensive income | | | | | — | | | | | | — | | | | | | 6,825 | | | | | | (276) | | | | | | 6,549 | | |
Stock compensation | | | | | — | | | | | | 460 | | | | | | — | | | | | | — | | | | | | 460 | | |
Issuance of common stock: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Restricted stock award vesting | | | | | 49,635 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Dividend on common stock | | | | | — | | | | | | — | | | | | | (2,954) | | | | | | — | | | | | | (2,954) | | |
Balance, end of period | | | | | 10,550,393 | | | | | $ | 127,624 | | | | | $ | 43,189 | | | | | $ | 1,106 | | | | | $ | 171,919 | | |
| | | Six Months Ended June 30, 2020 | | |||||||||||||||||||||||||||
| | | Shares of Common Stock | | | Common Stock and Additional Paid in Capital | | | Retained Earnings | | | Accumulated Other Comprehensive Income (Loss) | | | Total | | |||||||||||||||
Balance, beginning of period | | | | | 10,748,712 | | | | | $ | 129,564 | | | | | $ | 31,740 | | | | | $ | 615 | | | | | $ | 161,919 | | |
Net income for period | | | | | — | | | | | | — | | | | | | 6,505 | | | | | | — | | | | | | 6,505 | | |
Other comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized gain on securities available for sale | | | | | — | | | | | | — | | | | | | — | | | | | | 1,034 | | | | | | 1,034 | | |
Total comprehensive income | | | | | — | | | | | | — | | | | | | 6,505 | | | | | | 1,034 | | | | | | 7,539 | | |
Stock compensation | | | | | — | | | | | | 378 | | | | | | — | | | | | | — | | | | | | 378 | | |
Issuance of common stock: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Restricted stock award vesting | | | | | 25,521 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Repurchase of common stock | | | | | (240,644) | | | | | | (2,729) | | | | | | — | | | | | | — | | | | | | (2,729) | | |
Dividend on common stock | | | | | — | | | | | | — | | | | | | (2,950) | | | | | | — | | | | | | (2,950) | | |
Balance, end of period | | | | | 10,533,589 | | | | | $ | 127,213 | | | | | $ | 35,295 | | | | | $ | 1,649 | | | | | $ | 164,157 | | |
| | | Three Months Ended June 30, 2021 | | |||||||||||||||||||||||||||
| | | Shares of Common Stock | | | Common Stock and Additional Paid in Capital | | | Retained Earnings | | | Accumulated Other Comprehensive Income | | | Total | | |||||||||||||||
Balance, beginning of period | | | | | 10,550,393 | | | | | $ | 127,397 | | | | | $ | 41,721 | | | | | $ | 1,058 | | | | | $ | 170,176 | | |
Net income for period | | | | | — | | | | | | — | | | | | | 2,945 | | | | | | — | | | | | | 2,945 | | |
Other comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized gain on securities available for sale | | | | | — | | | | | | — | | | | | | — | | | | | | 48 | | | | | | 48 | | |
Total comprehensive income | | | | | — | | | | | | — | | | | | | 2,945 | | | | | | 48 | | | | | | 2,993 | | |
Stock compensation | | | | | — | | | | | | 227 | | | | | | — | | | | | | — | | | | | | 227 | | |
Dividend on common stock | | | | | — | | | | | | — | | | | | | (1,477) | | | | | | — | | | | | | (1,477) | | |
Balance, end of period | | | | | 10,550,393 | | | | | $ | 127,624 | | | | | $ | 43,189 | | | | | $ | 1,106 | | | | | $ | 171,919 | | |
| | | Three Months Ended June 30, 2020 | | |||||||||||||||||||||||||||
| | | Shares of Common Stock | | | Common Stock and Additional Paid in Capital | | | Retained Earnings | | | Accumulated Other Comprehensive Income | | | Total | | |||||||||||||||
Balance, beginning of period | | | | | 10,533,589 | | | | | $ | 127,003 | | | | | $ | 33,316 | | | | | $ | (259) | | | | | $ | 160,060 | | |
Net income for period | | | | | — | | | | | | — | | | | | | 3,454 | | | | | | — | | | | | | 3,454 | | |
Other comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized gain on securities available for sale | | | | | — | | | | | | — | | | | | | — | | | | | | 1,908 | | | | | | 1,908 | | |
Total comprehensive income | | | | | — | | | | | | — | | | | | | 3,454 | | | | | | 1,908 | | | | | | 5,362 | | |
Stock compensation | | | | | — | | | | | | 210 | | | | | | — | | | | | | — | | | | | | 210 | | |
Dividend on common stock | | | | | — | | | | | | — | | | | | | (1,475) | | | | | | — | | | | | | (1,475) | | |
Balance, end of period | | | | | 10,533,589 | | | | | $ | 127,213 | | | | | $ | 35,295 | | | | | $ | 1,649 | | | | | $ | 164,157 | | |
| | | Six Months Ended June 30, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Cash Flows from Operating Activities: | | | | | | | | | | | | | |
Net income | | | | $ | 6,825 | | | | | $ | 6,505 | | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | | |
Depreciation and amortization | | | | | 1,311 | | | | | | 1,407 | | |
Provision for loan losses | | | | | 100 | | | | | | 200 | | |
Deferred tax expense, net | | | | | 1,330 | | | | | | 866 | | |
Gain on sale of loans sold in the secondary market | | | | | (2,021) | | | | | | (1,744) | | |
Origination of loans held for sale in the secondary market | | | | | (66,069) | | | | | | (86,389) | | |
Proceeds from sale of loans in the secondary market | | | | | 67,986 | | | | | | 87,517 | | |
Loss on sale other real estate held for sale and fixed assets | | | | | 235 | | | | | | — | | |
Writedown of other real estate held for sale | | | | | 83 | | | | | | 30 | | |
Stock compensation | | | | | 460 | | | | | | 378 | | |
Change in other assets | | | | | 2,434 | | | | | | (319) | | |
Change in other liabilities | | | | | (173) | | | | | | 601 | | |
Net cash provided by operating activities | | | | | 12,501 | | | | | | 9,052 | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | | |
Net decrease (increase) in loans | | | | | 98,776 | | | | | | (94,217) | | |
Net decrease in interest bearing deposits in other financial institutions | | | | | 490 | | | | | | 2,464 | | |
Purchase of securities available for sale | | | | | (4,338) | | | | | | (19,224) | | |
Proceeds from maturities, sales, calls or paydowns of securities available for sale | | | | | 13,720 | | | | | | 19,733 | | |
Redemption of FHLBI stock | | | | | 451 | | | | | | — | | |
Capital expenditures | | | | | (463) | | | | | | (3,344) | | |
Proceeds from sale of other real estate, premises and fixed assets | | | | | 977 | | | | | | 332 | | |
Net cash provided by (used in) investing activities | | | | | 109,613 | | | | | | (94,256) | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | |
Net increase in deposits | | | | | 48,378 | | | | | | 151,875 | | |
Net decrease in fed funds purchased | | | | | — | | | | | | (6,225) | | |
New term debt issuance | | | | | — | | | | | | 100,281 | | |
Principal payments on borrowings | | | | | (35,038) | | | | | | (50,366) | | |
Repurchase of common stock | | | | | — | | | | | | (2,729) | | |
Dividend on common stock | | | | | (2,954) | | | | | | (2,950) | | |
Net cash provided by financing activities | | | | | 10,386 | | | | | | 189,886 | | |
Net increase in cash and cash equivalents | | | | | 132,500 | | | | | | 104,682 | | |
Cash and cash equivalents at beginning of period | | | | | 218,977 | | | | | | 49,826 | | |
Cash and cash equivalents at end of period | | | | $ | 351,477 | | | | | $ | 154,508 | | |
Supplemental Cash Flow Information: | | | | | | | | | | | | | |
Cash paid during the six months for: | | | | | | | | | | | | | |
Interest | | | | $ | 2,333 | | | | | $ | 4,361 | | |
Noncash Investing and Financing Activities: | | | | | | | | | | | | | |
Transfers of Foreclosures from Loans to Other Real Estate Held for Sale | | | | | 600 | | | | | | 333 | | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | | ||||||||||||||||||
| 2021 | | | 2020 | | | 2021 | | | 2020 | | ||||||||||||||
(Numerator): | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | | | $ | 2,945 | | | | | $ | 3,454 | | | | | $ | 6,825 | | | | | $ | 6,505 | | |
(Denominator): | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding | | | | | 10,550,393 | | | | | | 10,533,589 | | | | | | 10,536,722 | | | | | | 10,625,778 | | |
Effect of restricted stock awards | | | | | 67,029 | | | | | | — | | | | | | 45,875 | | | | | | — | | |
Diluted weighted average shares outstanding | | | | | 10,617,422 | | | | | | 10,533,589 | | | | | | 10,582,597 | | | | | | 10,625,778 | | |
Income per common share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | | $ | 0.28 | | | | | $ | 0.33 | | | | | $ | 0.65 | | | | | $ | 0.61 | | |
Diluted | | | | $ | 0.28 | | | | | $ | 0.33 | | | | | $ | 0.65 | | | | | $ | 0.61 | | |
| | | Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Estimated Fair Value | | ||||||||||||
June 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | |
US Treasury | | | | $ | 1,064 | | | | | $ | 2 | | | | | $ | — | | | | | $ | 1,066 | | |
Corporate | | | | | 29,006 | | | | | | 497 | | | | | | (63) | | | | | | 29,440 | | |
US Agencies | | | | | 6,492 | | | | | | 46 | | | | | | — | | | | | | 6,538 | | |
US Agencies – MBS | | | | | 27,924 | | | | | | 789 | | | | | | (2) | | | | | | 28,711 | | |
Obligations of states and political subdivisions | | | | | 35,331 | | | | | | 903 | | | | | | (34) | | | | | | 36,200 | | |
Total securities available for sale | | | | $ | 99,817 | | | | | $ | 2,237 | | | | | $ | (99) | | | | | $ | 101,955 | | |
December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | |
US Treasury | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Corporate | | | | | 27,815 | | | | | | 247 | | | | | | (19) | | | | | | 28,043 | | |
US Agencies | | | | | 6,480 | | | | | | 109 | | | | | | — | | | | | | 6,589 | | |
US Agencies – MBS | | | | | 33,372 | | | | | | 914 | | | | | | (6) | | | | | | 34,280 | | |
Obligations of states and political subdivisions | | | | | 41,682 | | | | | | 1,242 | | | | | | — | | | | | | 42,924 | | |
Total securities available for sale | | | | $ | 109,349 | | | | | $ | 2,512 | | | | | $ | (25) | | | | | $ | 111,836 | | |
| | | June 30, 2021 | | | December 31, 2020 | | ||||||||||||||||||
| | | Amortized Cost | | | Estimated Fair Value | | | Amortized Cost | | | Estimated Fair Value | | ||||||||||||
Available -for-sale securities | | | | | | | | | | | | | | | | | | | | | | | | | |
Under 1 year | | | | $ | 17,326 | | | | | $ | 17,549 | | | | | $ | 15,645 | | | | | $ | 15,820 | | |
After 1 year through 5 years | | | | | 18,937 | | | | | | 19,252 | | | | | | 22,554 | | | | | | 23,201 | | |
After 5 years through 10 years | | | | | 21,849 | | | | | | 22,282 | | | | | | 24,965 | | | | | | 25,261 | | |
After 10 years | | | | | 13,781 | | | | | | 14,161 | | | | | | 12,813 | | | | | | 13,274 | | |
Subtotal | | | | | 71,893 | | | | | | 73,244 | | | | | | 75,977 | | | | | | 77,556 | | |
US Agencies – MBS | | | | | 27,924 | | | | | | 28,711 | | | | | | 33,372 | | | | | | 34,280 | | |
Total available -for-sale securities | | | | $ | 99,817 | | | | | $ | 101,955 | | | | | $ | 109,349 | | | | | $ | 111,836 | | |
June 30, 2021 | | | Less Than Twelve Months | | | Over Twelve Months | | | Total | | |||||||||||||||||||||||||||||||||||||||||||||
| Number of Securities | | | Fair Value | | | Gross Unrealized Loss | | | Number of Securities | | | Fair Value | | | Gross Unrealized Loss | | | Number of Securities | | | Fair Value | | | Gross Unrealized Loss | | |||||||||||||||||||||||||||||
Corporate | | | | | 3 | | | | | | 7,870 | | | | | $ | (63) | | | | | | — | | | | | | — | | | | | $ | — | | | | | | 3 | | | | | $ | 7,870 | | | | | $ | (63) | | |
US Agencies | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
US Agencies – MBS | | | | | — | | | | | | — | | | | | | — | | | | | | 3 | | | | | | 138 | | | | | | (2) | | | | | | 3 | | | | | | 138 | | | | | | (2) | | |
Obligations of states and political subdivisions | | | | | 2 | | | | | | 1,387 | | | | | | (34) | | | | | | — | | | | | | — | | | | | | — | | | | | | 2 | | | | | | 1,387 | | | | | | (34) | | |
Total | | | | | 5 | | | | | $ | 9,257 | | | | | $ | (97) | | | | | | 3 | | | | | $ | 138 | | | | | $ | (2) | | | | | | 8 | | | | | $ | 9,395 | | | | | $ | (99) | | |
December 31, 2020 | | | Less Than Twelve Months | | | Over Twelve Months | | | Total | | |||||||||||||||||||||||||||||||||||||||||||||
| Number of Securities | | | Fair Value | | | Gross Unrealized Loss | | | Number of Securities | | | Fair Value | | | Gross Unrealized Loss | | | Number of Securities | | | Fair Value | | | Gross Unrealized Loss | | |||||||||||||||||||||||||||||
Corporate | | | | | 4 | | | | | $ | 9,293 | | | | | $ | (19) | | | | | | — | | | | | $ | — | | | | | $ | — | | | | | | 4 | | | | | $ | 9,293 | | | | | $ | (19) | | |
US Agencies | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
US Agencies – MBS | | | | | 4 | | | | | | 83 | | | | | | (2) | | | | | | 2 | | | | | | 123 | | | | | | (4) | | | | | | 6 | | | | | | 206 | | | | | | (6) | | |
Obligations of states and political subdivisions | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | | 8 | | | | | $ | 9,376 | | | | | $ | (21) | | | | | | 2 | | | | | $ | 123 | | | | | $ | (4) | | | | | | 10 | | | | | $ | 9,499 | | | | | $ | (25) | | |
| | | June 30, 2021 | | | December 31, 2020 | | ||||||
Commercial real estate | | | | $ | 480,477 | | | | | $ | 498,450 | | |
Commercial, financial, and agricultural | | | | | 209,747 | | | | | | 273,759 | | |
Commercial construction | | | | | 48,205 | | | | | | 47,698 | | |
One to four family residential real estate | | | | | 210,364 | | | | | | 227,044 | | |
Consumer | | | | | 18,238 | | | | | | 18,980 | | |
Consumer construction | | | | | 11,024 | | | | | | 11,661 | | |
Total loans | | | | $ | 978,055 | | | | | $ | 1,077,592 | | |
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | |||||||||
Loans acquired – contractual payments | | | | $ | 13,290 | | | | | $ | 53,849 | | | | | $ | 67,139 | | |
Nonaccretable difference | | | | | (2,234) | | | | | | — | | | | | | (2,234) | | |
Expected cash flows | | | | | 11,056 | | | | | | 53,849 | | | | | | 64,905 | | |
Accretable yield | | | | | (744) | | | | | | (2,100) | | | | | | (2,844) | | |
Carrying balance at acquisition date | | | | $ | 10,312 | | | | | $ | 51,749 | | | | | $ | 62,061 | | |
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | |||||||||
Loans acquired – contractual payments | | | | $ | 3,401 | | | | | $ | 80,737 | | | | | $ | 84,138 | | |
Nonaccretable difference | | | | | (1,172) | | | | | | — | | | | | | (1,172) | | |
Expected cash flows | | | | | 2,229 | | | | | | 80,737 | | | | | | 82,966 | | |
Accretable yield | | | | | (391) | | | | | | (1,700) | | | | | | (2,091) | | |
Carrying balance at acquisition date | | | | $ | 1,838 | | | | | $ | 79,037 | | | | | $ | 80,875 | | |
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | |||||||||
Loans acquired – contractual payments | | | | $ | 2,105 | | | | | $ | 30,555 | | | | | $ | 32,660 | | |
Nonaccretable difference | | | | | (265) | | | | | | — | | | | | | (265) | | |
Expected cash flows | | | | | 1,840 | | | | | | 30,555 | | | | | | 32,395 | | |
Accretable yield | | | | | (88) | | | | | | (600) | | | | | | (688) | | |
Carrying balance at acquisition date | | | | $ | 1,752 | | | | | $ | 29,955 | | | | | $ | 31,707 | | |
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | |||||||||
Loans acquired – contractual payments | | | | $ | 5,440 | | | | | $ | 187,302 | | | | | $ | 192,742 | | |
Nonaccretable difference | | | | | (2,100) | | | | | | — | | | | | | (2,100) | | |
Expected cash flows | | | | | 3,340 | | | | | | 187,302 | | | | | | 190,642 | | |
Accretable yield | | | | | (700) | | | | | | (4,498) | | | | | | (5,198) | | |
Carrying balance at acquisition date | | | | $ | 2,640 | | | | | $ | 182,804 | | | | | $ | 185,444 | | |
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | |||||||||
Loans acquired – contractual payments | | | | $ | 1,901 | | | | | $ | 37,700 | | | | | $ | 39,601 | | |
Nonaccretable difference | | | | | (421) | | | | | | — | | | | | | (421) | | |
Expected cash flows | | | | | 1,480 | | | | | | 37,700 | | | | | | 39,180 | | |
Accretable yield | | | | | (140) | | | | | | (493) | | | | | | (633) | | |
Carrying balance at acquisition date | | | | $ | 1,340 | | | | | $ | 37,207 | | | | | $ | 38,547 | | |
| | | PFC | | | Eagle River | | ||||||||||||||||||||||||||||||
| Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | ||||||||||||||||||||
Balance, December 31, 2020 | | | | $ | 53 | | | | | $ | — | | | | | $ | 53 | | | | | $ | 183 | | | | | $ | — | | | | | $ | 183 | | |
Accretion | | | | | (12) | | | | | | — | | | | | | (12) | | | | | | (153) | | | | | | — | | | | | | (153) | | |
Reclassification from nonaccretable difference | | | | | 9 | | | | | | — | | | | | | 9 | | | | | | 114 | | | | | | — | | | | | | 114 | | |
Balance, June 30, 2021 | | | | $ | 50 | | | | | $ | — | | | | | $ | 50 | | | | | $ | 144 | | | | | $ | — | | | | | $ | 144 | | |
| | | Niagara | | | First Federal Northern Michigan | | ||||||||||||||||||||||||||||||
| Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | ||||||||||||||||||||
Balance, December 31, 2020 | | | | $ | 12 | | | | | $ | — | | | | | $ | 12 | | | | | $ | 292 | | | | | $ | 869 | | | | | $ | 1,161 | | |
Accretion | | | | | (1) | | | | | | — | | | | | | (1) | | | | | | (276) | | | | | | (384) | | | | | | (660) | | |
Reclassification from nonaccretable difference | | | | | 1 | | | | | | — | | | | | | 1 | | | | | | 207 | | | | | | — | | | | | | 207 | | |
Balance, June 30, 2021 | | | | $ | 12 | | | | | $ | — | | | | | $ | 12 | | | | | $ | 223 | | | | | $ | 485 | | | | | $ | 708 | | |
| | | Lincoln Community Bank | | | Total | | ||||||||||||||||||||||||||||||
| Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | ||||||||||||||||||||
Balance, December 31, 2020 | | | | $ | 85 | | | | | $ | 130 | | | | | $ | 215 | | | | | $ | 625 | | | | | $ | 999 | | | | | $ | 1,624 | | |
Accretion | | | | | (109) | | | | | | (50) | | | | | | (159) | | | | | | (551) | | | | | | (434) | | | | | | (985) | | |
Reclassification from nonaccretable difference | | | | | 81 | | | | | | — | | | | | | 81 | | | | | | 412 | | | | | | — | | | | | | 412 | | |
Balance, June 30, 2021 | | | | $ | 57 | | | | | $ | 80 | | | | | $ | 137 | | | | | $ | 486 | | | | | $ | 565 | | | | | $ | 1,051 | | |
| | | PFC | | | Eagle River | | ||||||||||||||||||||||||||||||
| Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | ||||||||||||||||||||
Balance, December 31, 2019 | | | | $ | 105 | | | | | $ | — | | | | | $ | 105 | | | | | $ | 209 | | | | | $ | — | | | | | $ | 209 | | |
Accretion | | | | | (150) | | | | | | — | | | | | | (150) | | | | | | (77) | | | | | | — | | | | | | (77) | | |
Reclassification from nonaccretable difference | | | | | 113 | | | | | | — | | | | | | 113 | | | | | | 58 | | | | | | — | | | | | | 58 | | |
Balance, June 30, 2020 | | | | $ | 68 | | | | | $ | — | | | | | $ | 68 | | | | | $ | 190 | | | | | $ | — | | | | | $ | 190 | | |
| | | Niagara | | | First Federal Northern Michigan | | ||||||||||||||||||||||||||||||
| Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | ||||||||||||||||||||
Balance, December 31, 2019 | | | | $ | 19 | | | | | $ | — | | | | | $ | 19 | | | | | $ | 518 | | | | | $ | 1,953 | | | | | $ | 2,471 | | |
Accretion | | | | | (4) | | | | | | — | | | | | | (4) | | | | | | (237) | | | | | | (595) | | | | | | (832) | | |
Reclassification from nonaccretable difference | | | | | 3 | | | | | | — | | | | | | 3 | | | | | | 177 | | | | | | 1 | | | | | | 178 | | |
Balance, June 30, 2020 | | | | $ | 18 | | | | | $ | — | | | | | $ | 18 | | | | | $ | 458 | | | | | $ | 1,359 | | | | | $ | 1,817 | | |
| | | Lincoln Community Bank | | | Total | | ||||||||||||||||||||||||||||||
| Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | ||||||||||||||||||||
Balance, December 31, 2019 | | | | $ | 108 | | | | | $ | 264 | | | | | $ | 372 | | | | | $ | 959 | | | | | $ | 2,217 | | | | | $ | 3,176 | | |
Accretion | | | | | (3) | | | | | | (73) | | | | | | (76) | | | | | | (471) | | | | | | (668) | | | | | | (1,139) | | |
Reclassification from nonaccretable difference | | | | | 3 | | | | | | — | | | | | | 3 | | | | | | 354 | | | | | | 1 | | | | | | 355 | | |
Balance, June 30, 2020 | | | | $ | 108 | | | | | $ | 191 | | | | | $ | 299 | | | | | $ | 842 | | | | | $ | 1,550 | | | | | $ | 2,392 | | |
| | | June 30, 2021 | | | June 30, 2020 | | ||||||
Balance, January 1 | | | | $ | 5,816 | | | | | $ | 5,308 | | |
Recoveries on loans previously charged off | | | | | 45 | | | | | | 139 | | |
Loans charged off | | | | | (310) | | | | | | (292) | | |
Provision | | | | | 100 | | | | | | 200 | | |
Balance at end of period | | | | $ | 5,651 | | | | | $ | 5,355 | | |
| | | Commercial real estate | | | Commercial, financial and agricultural | | | Commercial construction | | | One to four family residential real estate | | | Consumer construction | | | Consumer | | | Unallocated | | | Total | | | | ||||||||||||||||||||||||||||
Three Months Ended June 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Allowance for loan loss reserve: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Beginning balance ALLR | | | | $ | 2,738 | | | | | $ | 2,076 | | | | | $ | 209 | | | | | $ | 560 | | | | | $ | 8 | | | | | $ | 6 | | | | | $ | 245 | | | | | $ | 5,842 | | | | | ||||
Charge-offs | | | | | — | | | | | | (46) | | | | | | — | | | | | | (185) | | | | | | — | | | | | | (24) | | | | | | — | | | | | | (255) | | | | | | | ||
Recoveries | | | | | 4 | | | | | | 3 | | | | | | — | | | | | | 4 | | | | | | — | | | | | | 3 | | | | | | — | | | | | | 14 | | | | | ||||
Provision | | | | | (9) | | | | | | (559) | | | | | | (2) | | | | | | 202 | | | | | | (3) | | | | | | 23 | | | | | | 398 | | | | | | 50 | | | | | | | | |
Ending balance ALLR | | | | $ | 2,733 | | | | | $ | 1,474 | | | | | $ | 207 | | | | | $ | 581 | | | | | $ | 5 | | | | | $ | 8 | | | | | $ | 643 | | | | | $ | 5,651 | | | | | ||||
Six Months Ended June 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Allowance for loan loss reserve: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Beginning balance ALLR | | | | $ | 2,983 | | | | | $ | 1,734 | | | | | $ | 209 | | | | | $ | 605 | | | | | $ | 5 | | | | | $ | 8 | | | | | $ | 272 | | | | | $ | 5,816 | | | | | ||||
Charge-offs | | | | | (8) | | | | | | (46) | | | | | | — | | | | | | (203) | | | | | | — | | | | | | (53) | | | | | | — | | | | | | (310) | | | | | ||||
Recoveries | | | | | 7 | | | | | | 14 | | | | | | — | | | | | | 9 | | | | | | — | | | | | | 15 | | | | | | — | | | | | | 45 | | | | | ||||
Provision | | | | | (249) | | | | | | (228) | | | | | | (2) | | | | | | 170 | | | | | | — | | | | | | 38 | | | | | | 371 | | | | | | 100 | | | | | | | ||
Ending balance ALLR | | | | $ | 2,733 | | | | | $ | 1,474 | | | | | $ | 207 | | | | | $ | 581 | | | | | $ | 5 | | | | | $ | 8 | | | | | $ | 643 | | | | | $ | 5,651 | | | | | ||||
At June 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Ending balance | | | | $ | 480,477 | | | | | $ | 209,747 | | | | | $ | 48,205 | | | | | $ | 210,364 | | | | | $ | 11,024 | | | | | $ | 18,238 | | | | | $ | — | | | | | $ | 978,055 | | | | | ||||
Ending balance ALLR | | | | | (2,733) | | | | | | (1,474) | | | | | | (207) | | | | | | (581) | | | | | | (5) | | | | | | (8) | | | | | | (643) | | | | | | (5,651) | | | | | | | ||
Net loans | | | | $ | 477,744 | | | | | $ | 208,273 | | | | | $ | 47,998 | | | | | $ | 209,783 | | | | | $ | 11,019 | | | | | $ | 18,230 | | | | | $ | (643) | | | | | $ | 972,404 | | | | | ||||
Ending balance ALLR: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Individually evaluated | | | | $ | 258 | | | | | $ | 302 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 560 | | | | | ||||
Collectively evaluated | | | | | 2,475 | | | | | | 1,172 | | | | | | 207 | | | | | | 581 | | | | | | 5 | | | | | | 8 | | | | | | 643 | | | | | | 5,091 | | | | | ||||
Total | | | | $ | 2,733 | | | | | $ | 1,474 | | | | | $ | 207 | | | | | $ | 581 | | | | | $ | 5 | | | | | $ | 8 | | | | | $ | 643 | | | | | $ | 5,651 | | | | | ||||
Ending balance Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Individually evaluated | | | | $ | 1,957 | | | | | $ | 3,421 | | | | | $ | 359 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 5,737 | | | | | ||||
Collectively evaluated | | | | | 477,550 | | | | | | 206,198 | | | | | | 47,761 | | | | | | 209,667 | | | | | | 11,024 | | | | | | 18,223 | | | | | | — | | | | | | 970,423 | | | | | ||||
Acquired with deteriorated credit quality | | | | | 970 | | | | | | 128 | | | | | | 85 | | | | | | 697 | | | | | | — | | | | | | 15 | | | | | | — | | | | | | 1,895 | | | | | ||||
Total | | | | $ | 480,477 | | | | | $ | 209,747 | | | | | $ | 48,205 | | | | | $ | 210,364 | | | | | $ | 11,024 | | | | | $ | 18,238 | | | | | $ | — | | | | | $ | 978,055 | | | | |
| | | Commercial real estate | | | Commercial, financial and agricultural | | | Commercial construction | | | One to four family residential real estate | | | Consumer construction | | | Consumer | | | Unallocated | | | Total | | | | ||||||||||||||||||||||||||||
Three Months Ended June 30, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Allowance for loan loss reserve: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Beginning balance ALLR | | | | $ | 1,818 | | | | | $ | 1,633 | | | | | $ | 98 | | | | | $ | 427 | | | | | $ | 10 | | | | | $ | 10 | | | | | $ | 1,296 | | | | | $ | 5,292 | | | | | ||||
Charge-offs | | | | | — | | | | | | (121) | | | | | | — | | | | | | (10) | | | | | | — | | | | | | (16) | | | | | | — | | | | | | (147) | | | | | | | | |
Recoveries | | | | | 85 | | | | | | — | | | | | | 1 | | | | | | 1 | | | | | | — | | | | | | 23 | | | | | | — | | | | | | 110 | | | | | ||||
Provision | | | | | (65) | | | | | | 347 | | | | | | 21 | | | | | | (18) | | | | | | — | | | | | | (8) | | | | | | (177) | | | | | | 100 | | | | | | | | |
Ending balance ALLR | | | | $ | 1,838 | | | | | $ | 1,859 | | | | | $ | 120 | | | | | $ | 400 | | | | | $ | 10 | | | | | $ | 9 | | | | | $ | 1,119 | | | | | $ | 5,355 | | | | | ||||
Six Months Ended June 30, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Allowance for loan loss reserve: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Beginning balance ALLR | | | | $ | 1,189 | | | | | $ | 1,197 | | | | | $ | 71 | | | | | $ | 148 | | | | | $ | 11 | | | | | $ | 13 | | | | | $ | 2,679 | | | | | $ | 5,308 | | | | | ||||
Charge-offs | | | | | — | | | | | | (187) | | | | | | — | | | | | | (32) | | | | | | (8) | | | | | | (65) | | | | | | — | | | | | | (292) | | | | | | | ||
Recoveries | | | | | 91 | | | | | | — | | | | | | 1 | | | | | | 11 | | | | | | — | | | | | | 36 | | | | | | — | | | | | | 139 | | | | | ||||
Provision | | | | | 558 | | | | | | 849 | | | | | | 48 | | | | | | 273 | | | | | | 7 | | | | | | 25 | | | | | | (1,560) | | | | | | 200 | | | | | ||||
Ending balance ALLR | | | | $ | 1,838 | | | | | $ | 1,859 | | | | | $ | 120 | | | | | $ | 400 | | | | | $ | 10 | | | | | $ | 9 | | | | | $ | 1,119 | | | | | $ | 5,355 | | | | | ||||
At June 30, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Ending balance | | | | $ | 507,530 | | | | | $ | 332,279 | | | | | $ | 38,712 | | | | | $ | 235,467 | | | | | $ | 20,057 | | | | | $ | 19,745 | | | | | $ | — | | | | | $ | 1,153,790 | | | | | ||||
Ending balance ALLR | | | | | (1,838) | | | | | | (1,859) | | | | | | (120) | | | | | | (400) | | | | | | (10) | | | | | | (9) | | | | | | (1,119) | | | | | | (5,355) | | | | | | | ||
Net loans | | | | $ | 505,692 | | | | | $ | 330,420 | | | | | $ | 38,592 | | | | | $ | 235,067 | | | | | $ | 20,047 | | | | | $ | 19,736 | | | | | $ | (1,119) | | | | | $ | 1,148,435 | | | | | ||||
Ending balance ALLR: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Individually evaluated | | | | $ | 914 | | | | | $ | 527 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 1,441 | | | | | ||||
Collectively evaluated | | | | | 924 | | | | | | 1,332 | | | | | | 120 | | | | | | 400 | | | | | | 10 | | | | | | 9 | | | | | | 1,119 | | | | | | 3,914 | | | | | ||||
Total | | | | $ | 1,838 | | | | | $ | 1,859 | | | | | $ | 120 | | | | | $ | 400 | | | | | $ | 10 | | | | | $ | 9 | | | | | $ | 1,119 | | | | | $ | 5,355 | | | | | ||||
Ending balance Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Individually evaluated | | | | $ | 2,436 | | | | | $ | 1,589 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 4,025 | | | | | ||||
Collectively evaluated | | | | | 503,233 | | | | | | 330,433 | | | | | | 38,531 | | | | | | 234,576 | | | | | | 20,057 | | | | | | 19,723 | | | | | | — | | | | | | 1,146,553 | | | | | ||||
Acquired with deteriorated credit quality | | | | | 1,861 | | | | | | 257 | | | | | | 181 | | | | | | 891 | | | | | | — | | | | | | 22 | | | | | | — | | | | | | 3,212 | | | | | ||||
Total | | | | $ | 507,530 | | | | | $ | 332,279 | | | | | $ | 38,712 | | | | | $ | 235,467 | | | | | $ | 20,057 | | | | | $ | 19,745 | | | | | $ | — | | | | | $ | 1,153,790 | | | | |
| | | ( 1) Strong | | | (2) Good | | | (3) Average | | | (4) Acceptable | | | (44) Acceptable Watch | | | (6) Substandard | | | (7) Doubtful | | | Rating Unassigned | | | Total | | |||||||||||||||||||||||||||
Commercial real estate | | | | $ | 9,378 | | | | | $ | 9,386 | | | | | $ | 216,690 | | | | | $ | 236,767 | | | | | $ | 4,308 | | | | | $ | 3,948 | | | | | $ | — | | | | | $ | — | | | | | $ | 480,477 | | |
Commercial, financial and agricultural | | | | | 66,446 | | | | | | 9,341 | | | | | | 38,192 | | | | | | 91,672 | | | | | | 580 | | | | | | 3,516 | | | | | | — | | | | | | — | | | | | | 209,747 | | |
Commercial construction | | | | | — | | | | | | 36 | | | | | | 20,550 | | | | | | 15,868 | | | | | | 482 | | | | | | 378 | | | | | | — | | | | | | 10,891 | | | | | | 48,205 | | |
One-to-four family residential real estate | | | | | — | | | | | | 607 | | | | | | 4,783 | | | | | | 19,124 | | | | | | 361 | | | | | | 1,607 | | | | | | — | | | | | | 183,882 | | | | | | 210,364 | | |
Consumer construction | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,024 | | | | | | 11,024 | | |
Consumer | | | | | — | | | | | | 49 | | | | | | 100 | | | | | | 1,548 | | | | | | — | | | | | | 30 | | | | | | — | | | | | | 16,511 | | | | | | 18,238 | | |
Total loans | | | | $ | 75,824 | | | | | $ | 19,419 | | | | | $ | 280,315 | | | | | $ | 364,979 | | | | | $ | 5,731 | | | | | $ | 9,479 | | | | | $ | — | | | | | $ | 222,308 | | | | | $ | 978,055 | | |
| | | ( 1) Strong | | | (2) Good | | | (3) Average | | | (4) Acceptable | | | (44) Acceptable Watch | | | (6) Substandard | | | (7) Doubtful | | | Rating Unassigned | | | Total | | |||||||||||||||||||||||||||
Commercial real estate | | | | $ | 7,425 | | | | | $ | 10,521 | | | | | $ | 223,875 | | | | | $ | 249,159 | | | | | $ | 3,352 | | | | | $ | 4,118 | | | | | $ | — | | | | | $ | — | | | | | $ | 498,450 | | |
Commercial, financial and agricultural | | | | | 116,107 | | | | | | 6,760 | | | | | | 51,150 | | | | | | 94,743 | | | | | | 656 | | | | | | 4,343 | | | | | | — | | | | | | — | | | | | | 273,759 | | |
Commercial construction | | | | | — | | | | | | 40 | | | | | | 19,063 | | | | | | 16,671 | | | | | | 600 | | | | | | 385 | | | | | | — | | | | | | 10,939 | | | | | | 47,698 | | |
One-to-four family residential real estate | | | | | — | | | | | | 3,139 | | | | | | 5,614 | | | | | | 18,864 | | | | | | 369 | | | | | | 1,814 | | | | | | — | | | | | | 197,244 | | | | | | 227,044 | | |
Consumer construction | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,661 | | | | | | 11,661 | | |
Consumer | | | | | — | | | | | | 79 | | | | | | 128 | | | | | | 1,141 | | | | | | — | | | | | | 67 | | | | | | — | | | | | | 17,565 | | | | | | 18,980 | | |
Total loans | | | | $ | 123,532 | | | | | $ | 20,539 | | | | | $ | 299,830 | | | | | $ | 380,578 | | | | | $ | 4,977 | | | | | $ | 10,727 | | | | | $ | — | | | | | $ | 237,409 | | | | | $ | 1,077,592 | | |
| | | Impaired Loans with No Related Allowance | | | Impaired Loans with Related Allowance | | | Total Impaired Loans | | | Unpaid Principal Balance | | | Related Allowance for Loan Losses | | |||||||||||||||
June 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | | $ | 2,159 | | | | | $ | 768 | | | | | $ | 2,927 | | | | | $ | 4,776 | | | | | $ | 258 | | |
Commercial, financial and agricultural | | | | | 2,023 | | | | | | 1,526 | | | | | | 3,549 | | | | | | 3,658 | | | | | | 302 | | |
Commercial construction | | | | | 444 | | | | | | — | | | | | | 444 | | | | | | 578 | | | | | | — | | |
One to four family residential real estate | | | | | 697 | | | | | | — | | | | | | 697 | | | | | | 1,903 | | | | | | — | | |
Consumer construction | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer | | | | | 15 | | | | | | — | | | | | | 15 | | | | | | 15 | | | | | | — | | |
Total | | | | $ | 5,338 | | | | | $ | 2,294 | | | | | $ | 7,632 | | | | | $ | 10,930 | | | | | $ | 560 | | |
December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | | $ | 1,251 | | | | | $ | 2,309 | | | | | $ | 3,560 | | | | | $ | 5,786 | | | | | $ | 476 | | |
Commercial, financial and agricultural | | | | | 2,423 | | | | | | 1,445 | | | | | | 3,868 | | | | | | 3,946 | | | | | | 679 | | |
Commercial construction | | | | | 537 | | | | | | — | | | | | | 537 | | | | | | 678 | | | | | | — | | |
One to four family residential real estate | | | | | 869 | | | | | | — | | | | | | 869 | | | | | | 1,993 | | | | | | — | | |
Consumer construction | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer | | | | | 16 | | | | | | — | | | | | | 16 | | | | | | 19 | | | | | | — | | |
Total | | | | $ | 5,096 | | | | | $ | 3,754 | | | | | $ | 8,850 | | | | | $ | 12,422 | | | | | $ | 1,155 | | |
| | | Individually Evaluated Impaired Loans | | |||||||||||||||||||||
| June 30, 2021 | | | December 31, 2020 | | ||||||||||||||||||||
| Average Balance for the Period | | | Interest Income Recognized for the Period | | | Average Balance for the Period | | | Interest Income Recognized for the Period | | ||||||||||||||
Commercial real estate | | | | $ | 5,022 | | | | | $ | 111 | | | | | $ | 6,860 | | | | | $ | 270 | | |
Commercial, financial and agricultural | | | | | 944 | | | | | | 7 | | | | | | 1,204 | | | | | | 13 | | |
Commercial construction | | | | | 168 | | | | | | 9 | | | | | | 541 | | | | | | 27 | | |
One to four family residential real estate | | | | | 2,237 | | | | | | 58 | | | | | | 3,064 | | | | | | 135 | | |
Consumer construction | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer | | | | | 22 | | | | | | 1 | | | | | | 37 | | | | | | 1 | | |
Total | | | | $ | 8,393 | | | | | $ | 186 | | | | | $ | 11,706 | | | | | $ | 446 | | |
| | | June 30, 2021 | | | December 31, 2020 | | ||||||||||||||||||||||||||||||||||||||||||
| | | 30-89 days Past Due (accruing) | | | 90+ days Past Due (accruing) | | | Nonaccrual | | | Total | | | 30-89 days Past Due (accruing) | | | 90+ days Past Due (accruing) | | | Nonaccrual | | | Total | | ||||||||||||||||||||||||
Commercial real estate | | | | $ | 147 | | | | | $ | — | | | | | $ | 1,530 | | | | | $ | 1,677 | | | | | $ | 24 | | | | | $ | — | | | | | $ | 1,481 | | | | | $ | 1,505 | | |
Commercial, financial and agricultural | | | | | 33 | | | | | | — | | | | | | 359 | | | | | | 392 | | | | | | 42 | | | | | | — | | | | | | 478 | | | | | | 520 | | |
Commercial construction | | | | | — | | | | | | — | | | | | | 59 | | | | | | 59 | | | | | | — | | | | | | — | | | | | | 79 | | | | | | 79 | | |
One to four family residential real estate | | | | | 742 | | | | | | 6 | | | | | | 2,964 | | | | | | 3,712 | | | | | | 1,925 | | | | | | 3,371 | | | | | | 5,296 | | | | | | | | |
Consumer construction | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer | | | | | 44 | | | | | | — | | | | | | 15 | | | | | | 59 | | | | | | 78 | | | | | | — | | | | | | 49 | | | | | | 127 | | |
Total past due loans | | | | $ | 966 | | | | | $ | 6 | | | | | $ | 4,927 | | | | | $ | 5,899 | | | | | $ | 2,069 | | | | | $ | — | | | | | $ | 5,458 | | | | | $ | 7,527 | | |
| | | Six Months Ended June 30, 2021 | | | Six Months Ended June 30, 2020 | | ||||||
Loans outstanding, January 1 | | | | $ | 11,778 | | | | | $ | 12,196 | | |
New loans | | | | | — | | | | | | — | | |
Net activity on revolving lines of credit | | | | | 1,464 | | | | | | (354) | | |
Change in status of insiders | | | | | (9,869) | | | | | | — | | |
Repayment | | | | | (15) | | | | | | (100) | | |
Loans outstanding at end of period | | | | $ | 3,358 | | | | | $ | 11,742 | | |
| | | Deposit Based Intangible June 30, 2021 Balance | | | Amortization Expense for the period end June 30, 2021 | | | Future Annual Amortization Expense | | |||||||||
Peninsula | | | | $ | 413 | | | | | $ | 60 | | | | | $ | 121 | | |
Eagle River | | | | | 480 | | | | | | 49 | | | | | | 99 | | |
Niagara | | | | | 155 | | | | | | 15 | | | | | | 30 | | |
FFNM | | | | | 2,002 | | | | | | 145 | | | | | | 290 | | |
Lincoln | | | | | 981 | | | | | | 68 | | | | | | 135 | | |
Total | | | | $ | 4,031 | | | | | $ | 337 | | | | | $ | 675 | | |
| | | Deposit Based Intangible December 31, 2020 Balance | | | 2020 Amortization Expense | | ||||||
Peninsula | | | | $ | 473 | | | | | $ | 121 | | |
Eagle River | | | | | 529 | | | | | | 99 | | |
Niagara | | | | | 170 | | | | | | 30 | | |
FFNM | | | | | 2,147 | | | | | | 290 | | |
Lincoln | | | | | 1,049 | | | | | | 135 | | |
Total | | | | $ | 4,368 | | | | | $ | 675 | | |
| | | June 30, 2021 | | | June 30, 2020 | | ||||||
Balance at beginning of period | | | | $ | 1,359 | | | | | $ | 1,499 | | |
Amortization | | | | | (7) | | | | | | (70) | | |
Balance at end of period | | | | $ | 1,352 | | | | | $ | 1,429 | | |
Balance of loan servicing portfolio | | | | $ | 179,491 | | | | | $ | 232,345 | | |
Mortgage servicing rights as % of portfolio | | | | | .75% | | | | | | .62% | | |
Fair value of servicing rights | | | | | 1,436 | | | | | | 1,746 | | |
| | | June 30, 2021 | | | December 31, 2020 | | ||||||
Federal Home Loan Bank fixed rate advances | | | | $ | 28,117 | | | | | $ | 63,155 | | |
USDA Rural Development note | | | | | 324 | | | | | | 324 | | |
| | | | $ | 28,441 | | | | | $ | 63,479 | | |
| 2021 | | | | $ | 133 | | |
| 2022 | | | | | 140 | | |
| 2023 | | | | | 144 | | |
| 2024 | | | | | 142 | | |
| 2025 | | | | | 157 | | |
| 2026-2030 | | | | | 901 | | |
| Total | | | | $ | 1,617 | | |
| | | 2021 | | | 2020 | | ||||||
Weighted average discount rate | | | | | 2.45% | | | | | | 2.45% | | |
Rate of increase in future compensation levels | | | | | N/A | | | | | | N/A | | |
Expected long-term rate of return on plan assets | | | | | 2.00% | | | | | | 2.00% | | |
| | | Target Allocation | | | Actual Allocation | | |||
Equity securities | | | 50% to 70% | | | | | 36% | | |
Fixed income securities | | | 30% to 50% | | | | | 64% | | |
Date of Award | | | Units Granted | | | Market Value at grant date | | | Vesting Term | | ||||||
February, 2018 | | | | | 18,643 | | | | | | 16.30 | | | | 4 years | |
April, 2018 | | | | | 8,000 | | | | | | 16.00 | | | | Immediate | |
February, 2019 | | | | | 27,790 | | | | | | 15.70 | | | | 4 years | |
October, 2019 | | | | | 8,000 | | | | | | 15.40 | | | | Immediate | |
February, 2020 | | | | | 132,000 | | | | | | 15.46 | | | | 4 years | |
October, 2020 | | | | | 8,000 | | | | | | 9.46 | | | | Immediate | |
January, 2021 | | | | | 64,000 | | | | | | 13.43 | | | | 4 years | |
| | | Number Outstanding | | | Weighted Average Grant Date Fair Value | | ||||||
Nonvested balance at January 1, 2021 | | | | | 170,153 | | | | | $ | 14.90 | | |
Granted during the period | | | | | 64,000 | | | | | | 13.43 | | |
Vested during the period | | | | | (49,635) | | | | | | 12.91 | | |
Nonvested balance at June 30, 2021 | | | | | 184,518 | | | | | $ | 14.94 | | |
| | | | | | June 30, 2021 | | | December 31, 2020 | | ||||||||||||||||||
| Level in Fair Value Hierarchy | | | Carrying Amount | | | Estimated Fair Value | | | Carrying Amount | | | Estimated Fair Value | | ||||||||||||||
Financial assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | | Level 1 | | | | $ | 351,477 | | | | | $ | 351,477 | | | | | $ | 218,977 | | | | | $ | 218,977 | | |
Interest-bearing deposits | | | Level 2 | | | | | 2,427 | | | | | | 2,427 | | | | | | 2,917 | | | | | | 2,917 | | |
Securities available for sale | | | Level 2 | | | | | 100,686 | | | | | | 100,686 | | | | | | 110,505 | | | | | | 110,505 | | |
Securities available for sale | | | Level 3 | | | | | 1,269 | | | | | | 1,269 | | | | | | 1,331 | | | | | | 1,331 | | |
Federal Home Loan Bank stock | | | Level 2 | | | | | 4,473 | | | | | | 4,473 | | | | | | 4,924 | | | | | | 4,924 | | |
Net loans | | | Level 3 | | | | | 972,404 | | | | | | 969,195 | | | | | | 1,071,776 | | | | | | 1,072,770 | | |
Accrued interest receivable | | | Level 3 | | | | | 3,635 | | | | | | 3,635 | | | | | | 4,310 | | | | | | 4,310 | | |
Total financial assets | | | | | | | $ | 1,436,371 | | | | | $ | 1,433,162 | | | | | $ | 1,414,740 | | | | | $ | 1,415,734 | | |
Financial liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | | Level 2 | | | | $ | 1,307,154 | | | | | $ | 1,329,943 | | | | | $ | 1,258,776 | | | | | $ | 1,262,930 | | |
Borrowings | | | Level 2 | | | | | 28,441 | | | | | | 27,605 | | | | | | 63,479 | | | | | | 61,975 | | |
Accrued interest payable | | | Level 3 | | | | | 157 | | | | | | 157 | | | | | | 453 | | | | | | 453 | | |
Total financial liabilities | | | | | | | $ | 1,335,752 | | | | | $ | 1,357,705 | | | | | $ | 1,322,708 | | | | | $ | 1,325,358 | | |
(dollars in thousands) | | | Balance at June 30, 2021 | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | | Total (Gains) Losses for Three Months Ended June 30, 2021 | | | Total (Gains) Losses for Six Months Ended June 30, 2021 | | ||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Corporate | | | | $ | 29,440 | | | | | $ | — | | | | | $ | 28,940 | | | | | $ | 500 | | | | | $ | — | | | | | $ | — | | |
US Treasury | | | | | 1,066 | | | | | | — | | | | | | 1,066 | | | | | | — | | | | | | — | | | | | | — | | |
US Agencies | | | | | 6,538 | | | | | | — | | | | | | 6,538 | | | | | | — | | | | | | — | | | | | | — | | |
US Agencies – MBS | | | | | 28,711 | | | | | | — | | | | | | 28,711 | | | | | | — | | | | | | — | | | | | | — | | |
Obligations of state and political subdivisions | | | | | 36,200 | | | | | | — | | | | | | 35,431 | | | | | | 769 | | | | | | — | | | | | | — | | |
| | | | $ | 101,955 | | | | | | | | | | | | | | | | | | | | | | | $ | — | | | | | | — | | |
(dollars in thousands) | | | Balance at December 31, 2020 | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | | Total (Gains) Losses for Twelve Months Ended December 31, 2020 | | |||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Corporate | | | | $ | 28,043 | | | | | $ | — | | | | | $ | 27,543 | | | | | $ | 500 | | | | | $ | — | | |
US Agencies | | | | | 6,589 | | | | | | — | | | | | | 6,589 | | | | | | — | | | | | | — | | |
US Agencies – MBS | | | | | 34,280 | | | | | | — | | | | | | 34,280 | | | | | | — | | | | | | — | | |
Obligations of state and political subdivisions | | | | | 42,924 | | | | | | — | | | | | | 42,093 | | | | | | 831 | | | | | | 2 | | |
| | | | $ | 111,836 | | | | | | | | | | | | | | | | | | | | | | | $ | 2 | | |
(dollars in thousands) | | | Balance at June 30, 2021 | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | | Total (Gains) Losses for Three Months Ended June 30, 2021 | | | Total (Gains) Losses for Six Months Ended June 30, 2021 | | ||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans | | | | $ | 7,632 | | | | | $ | — | | | | | $ | — | | | | | $ | 7,632 | | | | | $ | — | | | | | $ | — | | |
Other real estate owned | | | | | 1,343 | | | | | | — | | | | | | — | | | | | | 1,343 | | | | | | 84 | | | | | | 32 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 84 | | | | | | 32 | | |
(dollars in thousands) | | | Balance at December 31, 2020 | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | | Total (Gains) Losses for Year Ended December 31, 2020 | | |||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans | | | | $ | 8,850 | | | | | $ | — | | | | | $ | — | | | | | $ | 8,850 | | | | | $ | 186 | | |
Other real estate held for sale | | | | | 1,752 | | | | | | — | | | | | | — | | | | | | 1,752 | | | | | | (22) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 164 | | |
| | | June 30, 2021 | | | December 31, 2020 | | ||||||
Commitments to extend credit: | | | | | | | | | | | | | |
Variable rate | | | | $ | 108,865 | | | | | $ | 114,458 | | |
Fixed rate | | | | | 49,881 | | | | | | 58,175 | | |
Standby letters of credit – Variable rate | | | | | 7,896 | | | | | | 8,781 | | |
Credit card commitments – Fixed rate | | | | | 7,798 | | | | | | 7,136 | | |
| | | | $ | 174,440 | | | | | $ | 188,550 | | |
| | | December 31, 2020 | | | December 31, 2019 | | ||||||
ASSETS | | | | | | | | | | | | | |
Cash and due from banks | | | | $ | 218,901 | | | | | $ | 49,794 | | |
Federal funds sold | | | | | 76 | | | | | | 32 | | |
Cash and cash equivalents | | | | | 218,977 | | | | | | 49,826 | | |
Interest-bearing deposits in other financial institutions | | | | | 2,917 | | | | | | 10,295 | | |
Securities available for sale | | | | | 111,836 | | | | | | 107,972 | | |
Federal Home Loan Bank stock | | | | | 4,924 | | | | | | 4,924 | | |
Loans: | | | | | | | | | | | | | |
Commercial | | | | | 819,907 | | | | | | 765,524 | | |
Mortgage | | | | | 238,705 | | | | | | 272,014 | | |
Consumer | | | | | 18,980 | | | | | | 21,238 | | |
Total Loans | | | | | 1,077,592 | | | | | | 1,058,776 | | |
Allowance for loan losses | | | | | (5,816) | | | | | | (5,308) | | |
Net loans | | | | | 1,071,776 | | | | | | 1,053,468 | | |
Premises and equipment | | | | | 25,518 | | | | | | 23,608 | | |
Other real estate held for sale | | | | | 1,752 | | | | | | 2,194 | | |
Deferred tax asset | | | | | 3,303 | | | | | | 3,732 | | |
Deposit based intangibles | | | | | 4,368 | | | | | | 5,043 | | |
Goodwill | | | | | 19,574 | | | | | | 19,574 | | |
Other assets | | | | | 36,785 | | | | | | 39,433 | | |
TOTAL ASSETS | | | | $ | 1,501,730 | | | | | $ | 1,320,069 | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | |
LIABILITIES: | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | |
Noninterest bearing deposits | | | | $ | 414,804 | | | | | $ | 287,611 | | |
NOW, money market, interest checking | | | | | 450,556 | | | | | | 373,165 | | |
Savings | | | | | 130,755 | | | | | | 109,548 | | |
CDs<$250,000 | | | | | 202,266 | | | | | | 233,956 | | |
CDs>$250,000 | | | | | 15,224 | | | | | | 12,775 | | |
Brokered | | | | | 45,171 | | | | | | 58,622 | | |
Total deposits | | | | | 1,258,776 | | | | | | 1,075,677 | | |
Federal funds purchased | | | | | — | | | | | | 6,225 | | |
Borrowings | | | | | 63,479 | | | | | | 64,551 | | |
Other liabilities | | | | | 11,611 | | | | | | 11,697 | | |
Total liabilities | | | | | 1,333,866 | | | | | | 1,158,150 | | |
SHAREHOLDERS’ EQUITY: | | | | | | | | | | | | | |
Common stock and additional paid in capital — No par value Authorized — 18,000,000 shares Issued and outstanding — 10,500,758 and 10,748,712 respectively | | | | | 127,164 | | | | | | 129,564 | | |
Retained earnings | | | | | 39,318 | | | | | | 31,740 | | |
Accumulated other comprehensive income | | | | | | | | | | | | | |
Unrealized gains on available for sale securities | | | | | 1,965 | | | | | | 1,025 | | |
Minimum pension liability | | | | | (583) | | | | | | (410) | | |
Total shareholders’ equity | | | | | 167,864 | | | | | | 161,919 | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | $ | 1,501,730 | | | | | $ | 1,320,069 | | |
| | | Year Ended December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
INTEREST INCOME: | | | | | | | | | | | | | |
Interest and fees on loans: | | | | | | | | | | | | | |
Taxable | | | | $ | 58,412 | | | | | $ | 59,673 | | |
Tax-exempt | | | | | 201 | | | | | | 187 | | |
Interest on securities: | | | | | | | | | | | | | |
Taxable | | | | | 2,255 | | | | | | 2,708 | | |
Tax-exempt | | | | | 535 | | | | | | 343 | | |
Other interest income | | | | | 626 | | | | | | 1,473 | | |
Total interest income | | | | | 62,029 | | | | | | 64,384 | | |
INTEREST EXPENSE: | | | | | | | | | | | | | |
Deposits | | | | | 6,052 | | | | | | 9,436 | | |
Borrowings | | | | | 1,171 | | | | | | 1,041 | | |
Total interest expense | | | | | 7,223 | | | | | | 10,477 | | |
Net interest income | | | | | 54,806 | | | | | | 53,907 | | |
Provision for loan losses | | | | | 1,000 | | | | | | 385 | | |
Net interest income after provision for loan losses | | | | | 53,806 | | | | | | 53,522 | | |
OTHER INCOME: | | | | | | | | | | | | | |
Deposit service fees | | | | | 1,133 | | | | | | 1,586 | | |
Income from mortgage loans sold on the secondary market | | | | | 5,935 | | | | | | 1,889 | | |
SBA/USDA loan sale gains | | | | | 1,729 | | | | | | 908 | | |
Net mortgage servicing fees | | | | | 838 | | | | | | 693 | | |
Realized security gains | | | | | 2 | | | | | | 208 | | |
Other | | | | | 562 | | | | | | 669 | | |
Total other income | | | | | 10,199 | | | | | | 5,953 | | |
OTHER EXPENSE: | | | | | | | | | | | | | |
Salaries and employee benefits | | | | | 26,081 | | | | | | 22,743 | | |
Occupancy | | | | | 4,370 | | | | | | 4,069 | | |
Furniture and equipment | | | | | 3,347 | | | | | | 3,000 | | |
Data processing | | | | | 3,093 | | | | | | 2,717 | | |
Advertising | | | | | 912 | | | | | | 889 | | |
Professional service fees | | | | | 1,842 | | | | | | 2,100 | | |
Loan origination expenses and deposit and card related fees | | | | | 1,965 | | | | | | 1,546 | | |
Writedowns and (gains) losses on other real exstate held for sale | | | | | (22) | | | | | | 212 | | |
FDIC insurance assessment | | | | | 578 | | | | | | 70 | | |
Communications | | | | | 935 | | | | | | 885 | | |
Other | | | | | 3,848 | | | | | | 3,534 | | |
Total other expenses | | | | | 46,949 | | | | | | 41,765 | | |
Income before provision for income taxes | | | | | 17,056 | | | | | | 17,710 | | |
Provision for income taxes | | | | | 3,583 | | | | | | 3,860 | | |
NET INCOME | | | | $ | 13,473 | | | | | $ | 13,850 | | |
INCOME PER COMMON SHARE: | | | | | | | | | | | | | |
Basic | | | | $ | 1.27 | | | | | $ | 1.29 | | |
Diluted | | | | $ | 1.27 | | | | | $ | 1.29 | | |
| | | Year Ended December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Net income | | | | $ | 13,473 | | | | | $ | 13,850 | | |
Other comprehensive income | | | | | | | | | | | | | |
Change in securities available for sale: | | | | | | | | | | | | | |
Unrealized gains arising during the period | | | | | 1,192 | | | | | | 1,816 | | |
Reclassification adjustment for securities gains included in net income | | | | | (2) | | | | | | (208) | | |
Tax effect | | | | | (250) | | | | | | (338) | | |
Net change in unrealized gains on available for sale securities | | | | | 940 | | | | | | 1,270 | | |
Defined benefit pension plan: | | | | | | | | | | | | | |
Net unrealized actuarial gain (loss) on defined benefit pension obligation | | | | | (219) | | | | | | (243) | | |
Tax effect | | | | | 46 | | | | | | 51 | | |
Changes from defined benefit pension plan | | | | | (173) | | | | | | (192) | | |
Other comprehensive loss, net of tax | | | | | 767 | | | | | | 1,078 | | |
Total comprehensive income | | | | $ | 14,240 | | | | | $ | 14,928 | | |
| | | Shares of Common Stock | | | Common Stock and Additional Paid in Capital | | | Retained Earnings | | | Accumulated Other Comprehensive Income (Loss) | | | Total | | |||||||||||||||
Balance, December 31, 2018 | | | | | 10,712,745 | | | | | $ | 129,066 | | | | | $ | 23,466 | | | | | $ | (463) | | | | | $ | 152,069 | | |
Net income | | | | | — | | | | | | — | | | | | | 13,850 | | | | | | — | | | | | | 13,850 | | |
Other comprehensive income (loss): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net change in unrealized gain on securities available for sale | | | | | — | | | | | | — | | | | | | — | | | | | | 1,270 | | | | | | 1,270 | | |
Actuarial loss on defined benefit pension obligation | | | | | — | | | | | | — | | | | | | — | | | | | | (192) | | | | | | (192) | | |
Total comprehensive income | | | | | 1,078 | | | | | | 14,928 | | | | | | | | | | | | | | | | | | | | |
Stock compensation | | | | | — | | | | | | 498 | | | | | | — | | | | | | — | | | | | | 498 | | |
Restricted stock award vesting | | | | | 35,967 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Dividend on common stock | | | | | — | | | | | | — | | | | | | (5,576) | | | | | | — | | | | | | (5,576) | | |
Balance, December 31, 2019 | | | | | 10,748,712 | | | | | $ | 129,564 | | | | | $ | 31,740 | | | | | $ | 615 | | | | | $ | 161,919 | | |
Net income | | | | | — | | | | | | — | | | | | | 13,473 | | | | | | — | | | | | | 13,473 | | |
Other comprehensive income (loss): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net change in unrealized gain on securities available for sale | | | | | — | | | | | | — | | | | | | — | | | | | | 940 | | | | | | 940 | | |
Actuarial loss on defined benefit pension obligation | | | | | — | | | | | | — | | | | | | — | | | | | | (173) | | | | | | (173) | | |
Total comprehensive income | | | | | 767 | | | | | | 14,240 | | | | | | | | | | | | | | | | | | | | |
Stock compensation | | | | | — | | | | | | 878 | | | | | | — | | | | | | — | | | | | | 878 | | |
Restricted stock award vesting | | | | | 35,825 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Repurchase of common stock | | | | | (283,779) | | | | | | (3,278) | | | | | | (3,278) | | | | | | | | | | | | | | |
Dividend on common stock | | | | | — | | | | | | — | | | | | | (5,895) | | | | | | — | | | | | | (5,895) | | |
Balance, December 31, 2020 | | | | | 10,500,758 | | | | | $ | 127,164 | | | | | $ | 39,318 | | | | | $ | 1,382 | | | | | $ | 167,864 | | |
| | | For the year ended December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Cash Flows from Operating Activities: | | | | | | | | | | | | | |
Net income | | | | $ | 13,473 | | | | | $ | 13,850 | | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | | |
Depreciation and amortization | | | | | 2,897 | | | | | | 2,880 | | |
Provision for loan losses | | | | | 1,000 | | | | | | 385 | | |
Deferred tax expense | | | | | 629 | | | | | | 1,347 | | |
Net realized security gains | | | | | (2) | | | | | | (208) | | |
Gain on sale of loans sold in the secondary market | | | | | (5,205) | | | | | | (1,544) | | |
Origination of loans held for sale in secondary market | | | | | (205,398) | | | | | | (89,546) | | |
Proceeds from sale of loans in the secondary market | | | | | 208,677 | | | | | | 86,926 | | |
(Gain) loss on sale other real estate held for sale and fixed assets | | | | | (161) | | | | | | 31 | | |
Writedown of other real estate held for sale | | | | | 65 | | | | | | 181 | | |
Stock compensation | | | | | 878 | | | | | | 498 | | |
Change in other assets | | | | | 1,575 | | | | | | (10,907) | | |
Change in other liabilities | | | | | (86) | | | | | | 3,704 | | |
Net cash provided by operating activities | | | | | 18,342 | | | | | | 7,597 | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | | |
Net increase in loans | | | | | (16,508) | | | | | | (17,649) | | |
Net decrease in interest-bearing deposits in other financial institutions | | | | | 7,378 | | | | | | 3,157 | | |
Purchase of securities available for sale | | | | | (40,180) | | | | | | (18,839) | | |
Proceeds from maturities, sales, calls or paydowns of securities available for sale | | | | | 37,391 | | | | | | 29,374 | | |
Capital expenditures | | | | | (5,063) | | | | | | (2,737) | | |
Proceeds from sale of premises, equipment, and other real estate | | | | | 1,162 | | | | | | 1,867 | | |
Net cash used in investing activities | | | | | (15,820) | | | | | | (4,827) | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | |
Net increase (decrease) increase in deposits | | | | | 183,099 | | | | | | (21,860) | | |
(Decrease) increase in fed funds purchased | | | | | (6,225) | | | | | | 3,320 | | |
Repurchase of common stock | | | | | (3,278) | | | | | | — | | |
Dividend on common stock | | | | | (5,895) | | | | | | (5,576) | | |
Proceeds from FHLB borrowing | | | | | — | | | | | | 25,000 | | |
Proceeds from term borrowing | | | | | 100,281 | | | | | | — | | |
Principal payments on borrowings | | | | | (101,353) | | | | | | (17,985) | | |
Net cash provided by (used in) financing activities | | | | | 166,629 | | | | | | (17,101) | | |
Net (decrease) increase in cash and cash equivalents | | | | | 169,151 | | | | | | (14,331) | | |
Cash and cash equivalents at beginning of period | | | | | 49,826 | | | | | | 64,157 | | |
Cash and cash equivalents at end of period | | | | $ | 218,977 | | | | | $ | 49,826 | | |
Supplemental Cash Flow Information: | | | | | | | | | | | | | |
Cash paid during the year for: | | | | | | | | | | | | | |
Interest | | | | $ | 7,329 | | | | | $ | 10,320 | | |
Income taxes | | | | | 1,700 | | | | | | 1,500 | | |
Noncash Investing and Financing Activities: | | | | | | | | | | | | | |
Transfers of Foreclosures from Loans to Other Real Estate Held for Sale | | | | $ | 874 | | | | | $ | 1,629 | | |
Transfers of Other Real Estate Held for Sale to Fixed Assets | | | | $ | — | | | | | $ | 1,013 | | |
| | | Year Ended December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
(Numerator): | | | | | | | | | | | | | |
Net income | | | | $ | 13,473 | | | | | $ | 13,850 | | |
(Denominator): | | | | | | | | | | | | | |
Weighted average shares outstanding | | | | | 10,580,044 | | | | | | 10,737,653 | | |
Effect of restricted stock awards | | | | | — | | | | | | 19,854 | | |
Diluted weighted average shares outstanding | | | | | 10,580,044 | | | | | | 10,757,507 | | |
Income per common share: | | | | | | | | | | | | | |
Basic | | | | $ | 1.27 | | | | | $ | 1.29 | | |
Diluted | | | | $ | 1.27 | | | | | $ | 1.29 | | |
| | | Amortized Cost | | | Unrealized Gains | | | Unrealized Losses | | | Estimated Fair Value | | ||||||||||||
December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | |
Corporate | | | | $ | 27,815 | | | | | $ | 247 | | | | | $ | (19) | | | | | $ | 28,043 | | |
US Agencies | | | | | 6,480 | | | | | | 109 | | | | | | — | | | | | | 6,589 | | |
US Agencies – MBS | | | | | 33,372 | | | | | | 914 | | | | | | (6) | | | | | | 34,280 | | |
Obligations of states and political subdivisions | | | | | 41,682 | | | | | | 1,242 | | | | | | — | | | | | | 42,924 | | |
Total securities available for sale | | | | $ | 109,349 | | | | | $ | 2,512 | | | | | $ | (25) | | | | | $ | 111,836 | | |
December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | |
Corporate | | | | $ | 20,779 | | | | | $ | 160 | | | | | $ | (1) | | | | | $ | 20,938 | | |
US Agencies | | | | | 14,450 | | | | | | 47 | | | | | | (1) | | | | | | 14,496 | | |
US Agencies – MBS | | | | | 34,063 | | | | | | 492 | | | | | | (29) | | | | | | 34,526 | | |
Obligations of states and political subdivisions | | | | | 37,382 | | | | | | 630 | | | | | | — | | | | | | 38,012 | | |
Total securities available for sale | | | | $ | 106,674 | | | | | $ | 1,329 | | | | | $ | (31) | | | | | $ | 107,972 | | |
| | | Less Than Twelve Months | | | Over Twelve Months | | | ||||||||||||||||||||
| | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | ||||||||||||||
December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Corporate | | | | $ | (19) | | | | | $ | 9,293 | | | | | $ | — | | | | | $ | — | | | | ||
US Agencies | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
US Agencies – MBS | | | | | (2) | | | | | | 83 | | | | | | (4) | | | | | | 123 | | | | | |
Obligations of states and political subdivisions | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Total securities available for sale | | | | $ | (21) | | | | | $ | 9,376 | | | | | $ | (4) | | | | | $ | 123 | | | | ||
December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Corporate | | | | | (1) | | | | | | 2,502 | | | | | | — | | | | | | — | | | | ||
US Agencies | | | | | — | | | | | | — | | | | | | (1) | | | | | | 500 | | | | ||
US Agencies – MBS | | | | | (9) | | | | | | 6,966 | | | | | | (20) | | | | | | 1,233 | | | | ||
Obligations of states and political subdivisions | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Total securities available for sale | | | | $ | (10) | | | | | $ | 9,468 | | | | | $ | (21) | | | | | $ | 1,733 | | | |
| | | 2020 | | | 2019 | | ||||||
Proceeds from sales and calls | | | | $ | 9,560 | | | | | $ | 5,805 | | |
Gross gains on sales and calls | | | | | 2 | | | | | | 208 | | |
| | | Amortized Cost | | | Estimated Fair Value | | ||||||
Due in one year or less | | | | $ | 15,645 | | | | | $ | 15,820 | | |
Due after one year through five years | | | | | 22,554 | | | | | | 23,201 | | |
Due after five years through ten years | | | | | 24,965 | | | | | | 25,261 | | |
Due after ten years | | | | | 12,813 | | | | | | 13,274 | | |
Subtotal | | | | | 75,977 | | | | | | 77,556 | | |
US Agencies — MBS | | | | | 33,372 | | | | | | 34,280 | | |
Total | | | | $ | 109,349 | | | | | $ | 111,836 | | |
| | | Less Than Twelve Months | | | Over Twelve Months | | | Total | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2020 | | | Number of Securities | | | Fair Value | | | Gross Unrealized Loss | | | Number of Securities | | | Fair Value | | | Gross Unrealized Loss | | | Number of Securities | | | Fair Value | | | Gross Unrealized Loss | | | | | |||||||||||||||||||||||||||||||||
Corporate | | | | | 4 | | | | | $ | 9,293 | | | | | $ | (19) | | | | | | — | | | | | $ | — | | | | | $ | — | | | | | | 4 | | | | | $ | 9,293 | | | | | $ | (19) | | | | | | ||||||
US Agencies | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | ||||||
US Agencies – MBS | | | | | 4 | | | | | | 83 | | | | | | (2) | | | | | | 2 | | | | | | 123 | | | | | | (4) | | | | | | 6 | | | | | | 206 | | | | | | (6) | | | | | | | | | | | |
Obligations of states and political subdivisions | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | ||||||
Total | | | | | 8 | | | | | $ | 9,376 | | | | | $ | (21) | | | | | | 2 | | | | | $ | 123 | | | | | $ | (4) | | | | | | 10 | | | | | $ | 9,499 | | | | | $ | (25) | | | | | |
| | | Less Than Twelve Months | | | Over Twelve Months | | | Total | | |||||||||||||||||||||||||||||||||||||||||||||
December 31, 2019 | | | Number of Securities | | | Fair Value | | | Gross Unrealized Loss | | | Number of Securities | | | Gross Fair Value | | | Number Unrealized Loss | | | Gross of Securities | | | Fair Value | | | Unrealized Loss | | |||||||||||||||||||||||||||
Corporate | | | | | 1 | | | | | $ | 2,502 | | | | | $ | (1) | | | | | | — | | | | | $ | — | | | | | $ | — | | | | | | 1 | | | | | $ | 2,502 | | | | | $ | (1) | | |
US Agencies | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | | | | | 500 | | | | | | (1) | | | | | | 1 | | | | | | 500 | | | | | | (1) | | |
US Agencies – MBS | | | | | 10 | | | | | | 6,966 | | | | | | (9) | | | | | | 13 | | | | | | 1,233 | | | | | | (20) | | | | | | 23 | | | | | | 8,199 | | | | | | (29) | | |
Obligations of states and political subdivisions | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | | | | | 115 | | | | | | — | | | | | | 1 | | | | | | 115 | | | | | | — | | |
Total | | | | | 11 | | | | | $ | 9,468 | | | | | $ | (10) | | | | | | 15 | | | | | $ | 1,848 | | | | | $ | (21) | | | | | | 26 | | | | | $ | 11,316 | | | | | $ | (31) | | |
| | | December 31, 2020 | | | December 31, 2019 | | ||||||
Commercial real estate | | | | $ | 498,450 | | | | | $ | 514,394 | | |
Commercial, financial, and agricultural | | | | | 273,759 | | | | | | 211,023 | | |
Commercial construction | | | | | 47,698 | | | | | | 40,107 | | |
One to four family residential real estate | | | | | 227,044 | | | | | | 253,918 | | |
Consumer | | | | | 18,980 | | | | | | 21,238 | | |
Consumer construction | | | | | 11,661 | | | | | | 18,096 | | |
Total loans | | | | $ | 1,077,592 | | | | | $ | 1,058,776 | | |
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | |||||||||
| | | | | |||||||||||||||
Loans acquired — contractual payments | | | | $ | 13,290 | | | | | $ | 53,849 | | | | | $ | 67,139 | | |
Nonaccretable difference | | | | | (2,234) | | | | | | — | | | | | | (2,234) | | |
Expected cash flows | | | | | 11,056 | | | | | | 53,849 | | | | | | 64,905 | | |
Accretable yield | | | | | (744) | | | | | | (2,100) | | | | | | (2,844) | | |
Carrying balance at acquisition date | | | | $ | 10,312 | | | | | $ | 51,749 | | | | | $ | 62,061 | | |
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | |||||||||
Loans acquired — contractual payments | | | | $ | 3,401 | | | | | $ | 80,737 | | | | | $ | 84,138 | | |
Nonaccretable difference | | | | | (1,172) | | | | | | — | | | | | | (1,172) | | |
Expected cash flows | | | | | 2,229 | | | | | | 80,737 | | | | | | 82,966 | | |
Accretable yield | | | | | (391) | | | | | | (1,700) | | | | | | (2,091) | | |
Carrying balance at acquisition date | | | | $ | 1,838 | | | | | $ | 79,037 | | | | | $ | 80,875 | | |
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | |||||||||
Loans acquired — contractual payments | | | | $ | 2,105 | | | | | $ | 30,555 | | | | | $ | 32,660 | | |
Nonaccretable difference | | | | | (265) | | | | | | — | | | | | | (265) | | |
Expected cash flows | | | | | 1,840 | | | | | | 30,555 | | | | | | 32,395 | | |
Accretable yield | | | | | (88) | | | | | | (600) | | | | | | (688) | | |
Carrying balance at acquisition date | | | | $ | 1,752 | | | | | $ | 29,955 | | | | | $ | 31,707 | | |
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | |||||||||
Loans acquired — contractual payments | | | | $ | 5,440 | | | | | $ | 187,302 | | | | | $ | 192,742 | | |
Nonaccretable difference | | | | | (2,100) | | | | | | — | | | | | | (2,100) | | |
Expected cash flows | | | | | 3,340 | | | | | | 187,302 | | | | | | 190,642 | | |
Accretable yield | | | | | (700) | | | | | | (4,498) | | | | | | (5,198) | | |
Carrying balance at acquisition date | | | | $ | 2,640 | | | | | $ | 182,804 | | | | | $ | 185,444 | | |
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | |||||||||
Loans acquired — contractual payments | | | | $ | 1,901 | | | | | $ | 37,700 | | | | | $ | 39,601 | | |
Nonaccretable difference | | | | | (421) | | | | | | — | | | | | | (421) | | |
Expected cash flows | | | | | 1,480 | | | | | | 37,700 | | | | | | 39,180 | | |
Accretable yield | | | | | (140) | | | | | | (493) | | | | | | (633) | | |
Carrying balance at acquisition date | | | | $ | 1,340 | | | | | $ | 37,207 | | | | | $ | 38,547 | | |
| | | PFC | | | Eagle River | | ||||||||||||||||||||||||||||||
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | ||||||||||||||||||
Balance, December 31, 2019 | | | | $ | 105 | | | | | $ | — | | | | | $ | 105 | | | | | $ | 209 | | | | | $ | — | | | | | $ | 209 | | |
Accretion | | | | | (207) | | | | | | — | | | | | | (207) | | | | | | (104) | | | | | | — | | | | | | (104) | | |
Reclassification from nonaccretable difference | | | | | 155 | | | | | | — | | | | | | 155 | | | | | | 78 | | | | | | — | | | | | | 78 | | |
Balance, December 31, 2020 | | | | $ | 53 | | | | | $ | — | | | | | $ | 53 | | | | | $ | 183 | | | | | $ | — | | | | | $ | 183 | | |
| | | Niagara | | | First Federal Northern Michigan | | ||||||||||||||||||||||||||||||
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | ||||||||||||||||||
Balance, December 31, 2019 | | | | $ | 19 | | | | | $ | — | | | | | $ | 19 | | | | | $ | 518 | | | | | $ | 1,953 | | | | | $ | 2,471 | | |
Accretion | | | | | (27) | | | | | | — | | | | | | (27) | | | | | | (903) | | | | | | (1,085) | | | | | | (1,988) | | |
Reclassification from nonaccretable difference | | | | | 20 | | | | | | — | | | | | | 20 | | | | | | 677 | | | | | | 1 | | | | | | 678 | | |
Balance, December 31, 2020 | | | | $ | 12 | | | | | $ | — | | | | | $ | 12 | | | | | $ | 292 | | | | | $ | 869 | | | | | $ | 1,161 | | |
| | | Lincoln Community Bank | | | Total | | ||||||||||||||||||||||||||||||
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | ||||||||||||||||||
Balance, December 31, 2019 | | | | $ | 108 | | | | | $ | 264 | | | | | $ | 372 | | | | | $ | 959 | | | | | $ | 2,217 | | | | | $ | 3,176 | | |
Accretion | | | | | (95) | | | | | | (134) | | | | | | (229) | | | | | | (1,336) | | | | | | (1,219) | | | | | | (2,555) | | |
Reclassification from nonaccretable difference | | | | | 72 | | | | | | — | | | | | | 72 | | | | | | 1,002 | | | | | | 1 | | | | | | 1,003 | | |
Balance, December 31, 2020 | | | | $ | 85 | | | | | $ | 130 | | | | | $ | 215 | | | | | $ | 625 | | | | | $ | 999 | | | | | $ | 1,624 | | |
| | | PFC | | | Eagle River | | ||||||||||||||||||||||||||||||
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | ||||||||||||||||||
Balance, December 31, 2018 | | | | $ | 128 | | | | | $ | — | | | | | $ | 128 | | | | | $ | 213 | | | | | $ | 16 | | | | | $ | 229 | | |
Accretion | | | | | (90) | | | | | | — | | | | | | (90)(17) | | | | | | (16) | | | | | | (33) | | | | | | | | |
Reclassification from nonaccretable difference | | | | | 67 | | | | | | — | | | | | | 67 | | | | | | 13 | | | | | | — | | | | | | 13 | | |
Balance, December 31, 2019 | | | | $ | 105 | | | | | $ | — | | | | | $ | 105 | | | | | $ | 209 | | | | | $ | — | | | | | $ | 209 | | |
| | | Niagara | | | First Federal Northern Michigan | | ||||||||||||||||||||||||||||||
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | ||||||||||||||||||
Balance, December 31, 2018 | | | | $ | 26 | | | | | $ | 69 | | | | | $ | 95 | | | | | $ | 571 | | | | | $ | 3,446 | | | | | $ | 4,017 | | |
Accretion | | | | | (30) | | | | | | (69) | | | | | | (99) | | | | | | (214) | | | | | | (1,493) | | | | | | (1,707) | | |
Reclassification from nonaccretable difference | | | | | 23 | | | | | | — | | | | | | 23 | | | | | | 161 | | | | | | — | | | | | | 161 | | |
Balance, December 31, 2019 | | | | $ | 19 | | | | | $ | — | | | | | $ | 19 | | | | | $ | 518 | | | | | $ | 1,953 | | | | | $ | 2,471 | | |
| | | Lincoln Community Bank | | | Total | | ||||||||||||||||||||||||||||||
| | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | | Acquired Impaired | | | Acquired Non-impaired | | | Acquired Total | | ||||||||||||||||||
Balance, December 31, 2018 | | | | $ | 140 | | | | | $ | 442 | | | | | $ | 582 | | | | | $ | 1,078 | | | | | $ | 3,973 | | | | | $ | 5,051 | | |
Accretion | | | | | (128) | | | | | | (178) | | | | | | (306) | | | | | | (479) | | | | | | (1,756) | | | | | | (2,235) | | |
Reclassification from nonaccretable difference | | | | | 96 | | | | | | — | | | | | | 96 | | | | | | 360 | | | | | | — | | | | | | 360 | | |
Balance, December 31, 2019 | | | | $ | 108 | | | | | $ | 264 | | | | | $ | 372 | | | | | $ | 959 | | | | | $ | 2,217 | | | | | $ | 3,176 | | |
| | | Commercial real estate | | | Commercial, financial and agricultural | | | Commercial construction | | | One to four family residential real estate | | | Consumer construction | | | Consumer | | | Unallocated | | | Total | | | ||||||||||||||||||||||||||
Allowance for loan loss reserve: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Beginning balance ALLR | | | | $ | 1,189 | | | | | $ | 1,197 | | | | | $ | 71 | | | | | $ | 148 | | | | | $ | 11 | | | | | $ | 13 | | | | | $ | 2,679 | | | | | $ | 5,308 | | | | ||
Charge-offs | | | | | (17) | | | | | | (500) | | | | | | (8) | | | | | | (117) | | | | | | — | | | | | | (117) | | | | | | — | | | | | | (759) | | | | ||
Recoveries | | | | | 105 | | | | | | 1 | | ��� | | | | 81 | | | | | | 19 | | | | | | — | | | | | | 61 | | | | | | — | | | | | | 267 | | | | ||
Provision | | | | | 1,706 | | | | | | 1,036 | | | | | | 65 | | | | | | 555 | | | | | | (6) | | | | | | 51 | | | | | | (2,407) | | | | | | 1,000 | | | | ||
Ending balance ALLR | | | | $ | 2,983 | | | | | $ | 1,734 | | | | | $ | 209 | | | | | $ | 605 | | | | | $ | 5 | | | | | $ | 8 | | | | | $ | 272 | | | | | $ | 5,816 | | | | ||
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Ending balance | | | | $ | 498,450 | | | | | $ | 273,759 | | | | | $ | 47,698 | | | | | $ | 227,044 | | | | | $ | 11,661 | | | | | $ | 18,980 | | | | | $ | — | | | | | $ | 1,077,592 | | | | ||
Ending balance ALLR | | | | | (2,983) | | | | | | (1,734) | | | | | | (209) | | | | | | (605) | | | | | | (5) | | | | | | (8) | | | | | | (272) | | | | | | (5,816) | | | | | |
Net loans | | | | $ | 495,467 | | | | | $ | 272,025 | | | | | $ | 47,489 | | | | | $ | 226,439 | | | | | $ | 11,656 | | | | | $ | 18,972 | | | | | $ | (272) | | | | | $ | 1,071,776 | | | | ||
Ending balance ALLR: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Individually evaluated | | | | $ | 476 | | | | | $ | 703 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 1,179 | | | | ||
Collectively evaluated | | | | | 2,507 | | | | | | 1,031 | | | | | | 209 | | | | | | 605 | | | | | | 5 | | | | | | 8 | | | | | | 272 | | | | | | 4,637 | | | | ||
Total | | | | $ | 2,983 | | | | | $ | 1,734 | | | | | $ | 209 | | | | | $ | 605 | | | | | $ | 5 | | | | | $ | 8 | | | | | $ | 272 | | | | | $ | 5,816 | | | | ||
Ending balance Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Individually evaluated | | | | $ | 2,396 | | | | | $ | 3,633 | | | | | $ | 362 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 6,391 | | | | ||
Collectively evaluated | | | | | 494,890 | | | | | | 269,891 | | | | | | 47,161 | | | | | | 226,175 | | | | | | 11,661 | | | | | | 18,964 | | | | | | — | | | | | | 1,068,742 | | | | ||
Acquired with deteriorated credit quality | | | | | 1,164 | | | | | | 235 | | | | | | 175 | | | | | | 869 | | | | | | — | | | | | | 16 | | | | | | — | | | | | | 2,459 | | | | ||
Total | | | | $ | 498,450 | | | | | $ | 273,759 | | | | | $ | 47,698 | | | | | $ | 227,044 | | | | | $ | 11,661 | | | | | $ | 18,980 | | | | | $ | — | | | | | $ | 1,077,592 | | | |
| | | Commercial real estate | | | Commercial, financial and agricultural | | | Commercial construction | | | One to four family residential real estate | | | Consumer construction | | | Consumer | | | Unallocated | | | Total | | ||||||||||||||||||||||||
Allowance for loan loss reserve: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance ALLR | | | | $ | 1,682 | | | | | $ | 648 | | | | | $ | 101 | | | | | $ | 199 | | | | | $ | 6 | | | | | $ | 8 | | | | | $ | 2,539 | | | | | $ | 5,183 | | |
Charge-offs | | | | | (27) | | | | | | (103) | | | | | | — | | | | | | (152) | | | | | | — | | | | | | (228) | | | | | | — | | | | | | (510) | | |
Recoveries | | | | | 159 | | | | | | 4 | | | | | | 2 | | | | | | 49 | | | | | | — | | | | | | 36 | | | | | | — | | | | | | 250 | | |
Provision | | | | | (625) | | | | | | 648 | | | | | | (32) | | | | | | 52 | | | | | | 5 | | | | | | 197 | | | | | | 140 | | | | | | 385 | | |
Ending balance ALLR | | | | $ | 1,189 | | | | | $ | 1,197 | | | | | $ | 71 | | | | | $ | 148 | | | | | $ | 11 | | | | | $ | 13 | | | | | $ | 2,679 | | | | | $ | 5,308 | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | | | | $ | 514,394 | | | | | $ | 211,023 | | | | | $ | 40,107 | | | | | $ | 253,918 | | | | | $ | 18,096 | | | | | $ | 21,238 | | | | | $ | — | | | | | $ | 1,058,776 | | |
Ending balance ALLR | | | | | (1,189) | | | | | | (1,197) | | | | | | (71) | | | | | | (148) | | | | | | (11) | | | | | | (13) | | | | | | (2,679) | | | | | | (5,308) | | |
Net loans | | | | $ | 513,205 | | | | | $ | 209,826 | | | | | $ | 40,036 | | | | | $ | 253,770 | | | | | $ | 18,085 | | | | | $ | 21,225 | | | | | $ | (2,679) | | | | | $ | 1,053,468 | | |
Ending balance ALLR: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated | | | | $ | 497 | | | | | $ | 770 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 1,267 | | |
Collectively evaluated | | | | | 692 | | | | | | 427 | | | | | | 71 | | | | | | 148 | | | | | | 11 | | | | | | 13 | | | | | | 2,679 | | | | | | 4,041 | | |
Total | | | | $ | 1,189 | | | | | $ | 1,197 | | | | | $ | 71 | | | | | $ | 148 | | | | | $ | 11 | | | | | $ | 13 | | | | | $ | 2,679 | | | | | $ | 5,308 | | |
Ending balance Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated | | | | $ | 2,374 | | | | | $ | 1,475 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 3,849 | | |
Collectively evaluated | | | | | 507,702 | | | | | | 207,194 | | | | | | 39,734 | | | | | | 251,998 | | | | | | 18,096 | | | | | | 21,229 | | | | | | — | | | | | | 1,045,953 | | |
Acquired with deteriorated credit quality | | | | | 4,318 | | | | | | 2,354 | | | | | | 373 | | | | | | 1,920 | | | | | | — | | | | | | 9 | | | | | | — | | | | | | 8,974 | | |
Total | | | | $ | 514,394 | | | | | $ | 211,023 | | | | | $ | 40,107 | | | | | $ | 253,918 | | | | | $ | 18,096 | | | | | $ | 21,238 | | | | | $ | — | | | | | $ | 1,058,776 | | |
| | | (1) Strong | | | (2) Good | | | (3) Average | | | (4) Acceptable | | | (44) Acceptable Watch | | | (6) Substandard | | | (7) Doubtful | | | Rating Unassigned | | | Total | | |||||||||||||||||||||||||||
Commercial real estate | | | | $ | 7,425 | | | | | $ | 10,521 | | | | | $ | 223,875 | | | | | $ | 249,159 | | | | | $ | 3,352 | | | | | $ | 4,118 | | | | | $ | — | | | | | $ | — | | | | | $ | 498,450 | | |
Commercial, financial and agricultural | | | | | 116,107 | | | | | | 6,760 | | | | | | 51,150 | | | | | | 94,743 | | | | | | 656 | | | | | | 4,343 | | | | | | — | | | | | | — | | | | | | 273,759 | | |
Commercial construction | | | | | — | | | | | | 40 | | | | | | 19,063 | | | | | | 16,671 | | | | | | 600 | | | | | | 385 | | | | | | — | | | | | | 10,939 | | | | | | 47,698 | | |
One-to-four family residential real estate | | | | | — | | | | | | 3,139 | | | | | | 5,614 | | | | | | 18,864 | | | | | | 369 | | | | | | 1,814 | | | | | | — | | | | | | 197,244 | | | | | | 227,044 | | |
Consumer construction | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,661 | | | | | | 11,661 | | |
Consumer | | | | | — | | | | | | 79 | | | | | | 128 | | | | | | 1,141 | | | | | | — | | | | | | 67 | | | | | | — | | | | | | 17,565 | | | | | | 18,980 | | |
Total loans | | | | $ | 123,532 | | | | | $ | 20,539 | | | | | $ | 299,830 | | | | | $ | 380,578 | | | | | $ | 4,977 | | | | | $ | 10,727 | | | | | $ | — | | | | | $ | 237,409 | | | | | $ | 1,077,592 | | |
| | | (1) Strong | | | (2) Good | | | (3) Average | | | (4) Acceptable | | | (44) Acceptable Watch | | | (6) Substandard | | | (7) Doubtful | | | Rating Unassigned | | | Total | | |||||||||||||||||||||||||||
Commercial real estate | | | | $ | 9,979 | | | | | $ | 17,516 | | | | | $ | 228,962 | | | | | $ | 248,177 | | | | | $ | 4,468 | | | | | $ | 5,292 | | | | | $ | — | | | | | $ | — | | | | | $ | 514,394 | | |
| | | (1) Strong | | | (2) Good | | | (3) Average | | | (4) Acceptable | | | (44) Acceptable Watch | | | (6) Substandard | | | (7) Doubtful | | | Rating Unassigned | | | Total | | |||||||||||||||||||||||||||
Commercial, financial and agricultural | | | | | 15,126 | | | | | | 4,510 | | | | | | 70,748 | | | | | | 115,229 | | | | | | 930 | | | | | | 4,480 | | | | | | — | | | | | | — | | | | | | 211,023 | | |
Commercial construction | | | | | — | | | | | | 292 | | | | | | 6,390 | | | | | | 28,893 | | | | | | 400 | | | | | | 607 | | | | | | — | | | | | | 3,525 | | | | | | 40,107 | | |
One-to-four family residential real estate | | | | | 40 | | | | | | 2,145 | | | | | | 4,937 | | | | | | 15,168 | | | | | | 634 | | | | | | 2,632 | | | | | | — | | | | | | 228,362 | | | | | | 253,918 | | |
Consumer construction | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 18,096 | | | | | | 18,096 | | |
Consumer | | | | | — | | | | | | 158 | | | | | | 250 | | | | | | 640 | | | | | | — | | | | | | 41 | | | | | | — | | | | | | 20,149 | | | | | | 21,238 | | |
Total loans | | | | $ | 25,145 | | | | | $ | 24,621 | | | | | $ | 311,287 | | | | | $ | 408,107 | | | | | $ | 6,432 | | | | | $ | 13,052 | | | | | $ | — | | | | | $ | 270,132 | | | | | $ | 1,058,776 | | |
|
| | | Impaired Loans with No Related Allowance | | | Impaired Loans with Related Allowance | | | Total Impaired Loans | | | Unpaid Principal Balance | | | Related Allowance for Loan Losses | | |||||||||||||||
December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | | $ | 1,251 | | | | | $ | 2,309 | | | | | $ | 3,560 | | | | | $ | 5,786 | | | | | $ | 476 | | |
Commercial, financial and agricultural | | | | | 2,423 | | | | | | 1,445 | | | | | | 3,868 | | | | | | 3,946 | | | | | | 679 | | |
Commercial construction | | | | | 537 | | | | | | — | | | | | | 537 | | | | | | 678 | | | | | | — | | |
One to four family residential real estate | | | | | 869 | | | | | | — | | | | | | 869 | | | | | | 1,993 | | | | | | — | | |
Consumer construction | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer | | | | | 16 | | | | | | — | | | | | | 16 | | | | | | 19 | | | | | | — | | |
Total | | | | $ | 5,096 | | | | | $ | 3,754 | | | | | $ | 8,850 | | | | | $ | 12,422 | | | | | $ | 1,155 | | |
December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | | $ | 4,318 | | | | | $ | 2,374 | | | | | $ | 6,692 | | | | | $ | 7,937 | | | | | $ | 497 | | |
Commercial, financial and agricultural | | | | | 2,354 | | | | | | 1,475 | | | | | | 3,829 | | | | | | 4,892 | | | | | | 770 | | |
Commercial construction | | | | | 373 | | | | | | — | | | | | | 373 | | | | | | 386 | | | | | | — | | |
One to four family residential real estate | | | | | 1,920 | | | | | | — | | | | | | 1,920 | | | | | | 2,881 | | | | | | — | | |
Consumer construction | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer | | | | | 9 | | | | | | — | | | | | | 9 | | | | | | 33 | | | | | | — | | |
Total | | | | $ | 8,974 | | | | | $ | 3,849 | | | | | $ | 12,823 | | | | | $ | 16,129 | | | | | $ | 1,267 | | |
| | | Individually Evaluated Impaired Loans | | |||||||||||||||||||||
| | | December 31, 2020 | | | December 31, 2019 | | ||||||||||||||||||
| | | Average Balance for the Period | | | Interest Income Recognized for the Period | | | Average Balance for the Period | | | Interest Income Recognized for the Period | | ||||||||||||
Commercial real estate | | | | $ | 6,860 | | | | | $ | 270 | | | | | $ | 8,374 | | | | | $ | 301 | | |
Commercial, financial and agricultural | | | | | 1,204 | | | | | | 13 | | | | | | 1,144 | | | | | | 2 | | |
Commercial construction | | | | | 541 | | | | | | 27 | | | | | | 396 | | | | | | — | | |
One to four family residential real estate | | | | | 3,064 | | | | | | 135 | | | | | | 3,508 | | | | | | 219 | | |
Consumer construction | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer | | | | | 37 | | | | | | 1 | | | | | | 44 | | | | | | 2 | | |
Total | | | | $ | 11,706 | | | | | $ | 446 | | | | | $ | 13,466 | | | | | $ | 524 | | |
| | | December 31, | | | December 31, | | ||||||||||||||||||||||||||||||||||||||||||
| | | 2020 | | | 2019 | | ||||||||||||||||||||||||||||||||||||||||||
| | | 30-89 days Past Due (accruing) | | | 90+ days Past Due (accruing) | | | Nonaccrual | | | Total | | | 30-89 days Past Due (accruing) | | | 90+ days Past Due (accruing) | | | Nonaccrual | | | Total | | ||||||||||||||||||||||||
Commercial real estate | | | | $ | 24 | | | | | $ | — | | | | | $ | 1,481 | | | | | $ | 1,505 | | | | | $ | 1,055 | | | | | $ | — | | | | | $ | 671 | | | | | $ | 1,726 | | |
Commercial, financial and agricultural | | | | | 42 | | | | | | — | | | | | | 478 | | | | | | 520 | | | | | | 829 | | | | | | — | | | | | | 527 | | | | | | 1,356 | | |
Commercial construction | | | | | — | | | | | | — | | | | | | 79 | | | | | | 79 | | | | | | 59 | | | | | | — | | | | | | 105 | | | | | | 164 | | |
One to four family residential real estate | | | | | 1,925 | | | | | | — | | | | | | 3,371 | | | | | | 5,296 | | | | | | 4,357 | | | | | | 11 | | | | | | 3,850 | | | | | | 8,218 | | |
Consumer construction | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer | | | | | 78 | | | | | | — | | | | | | 49 | | | | | | 127 | | | | | | 83 | | | | | | — | | | | | | 19 | | | | | | 102 | | |
Total past due loans | | | | $ | 2,069 | | | | | $ | — | | | | | $ | 5,458 | | | | | $ | 7,527 | | | | | $ | 6,383 | | | | | $ | 11 | | | | | $ | 5,172 | | | | | $ | 11,566 | | |
| | | Year Ended December 31, 2020 | | | Year Ended December 31, 2019 | | ||||||
Loans outstanding, January 1 | | | | $ | 12,196 | | | | | $ | 9,817 | | |
New loans | | | | | 500 | | | | | | 1,872 | | |
Net activity on revolving lines of credit | | | | | (764) | | | | | | 1,200 | | |
Change in status of insiders | | | | | — | | | | | | (289) | | |
Repayment | | | | | (154) | | | | | | (404) | | |
Loans outstanding at end of period | | | | $ | 11,778 | | | | | $ | 12,196 | | |
| | | 2020 | | | 2019 | | ||||||
Land | | | | $ | 4,286 | | | | | $ | 4,349 | | |
Buildings and improvements | | | | | 30,637 | | | | | | 26,711 | | |
Furniture, fixtures, and equipment | | | | | 17,230 | | | | | | 15,483 | | |
Construction in progress | | | | | 186 | | | | | | 1,555 | | |
Total cost basis | | | | | 52,339 | | | | | | 48,098 | | |
Less — accumulated depreciation | | | | | 26,821 | | | | | | 24,490 | | |
Net book value | | | | $ | 25,518 | | | | | $ | 23,608 | | |
| | | 2020 | | | 2019 | | ||||||
Balance, January 1 | | | | $ | 2,194 | | | | | $ | 3,119 | | |
Other real estate transferred from loans due to foreclosure | | | | | 874 | | | | | | 1,629 | | |
Proceeds from other real estate sold | | | | | (1,338) | | | | | | (1,329) | | |
Transfer to premise and equipment | | | | | — | | | | | | (1,013) | | |
Writedowns of other real estate held for sale | | | | | (65) | | | | | | (347) | | |
Gain on sale of other real estate held for sale | | | | | 87 | | | | | | 135 | | |
Total other real estate held for sale | | | | $ | 1,752 | | | | | $ | 2,194 | | |
| | | 2020 | | | 2019 | | ||||||
Noninterest bearing deposits | | | | $ | 414,804 | | | | | $ | 287,611 | | |
NOW, money market, interest checking | | | | | 450,556 | | | | | | 373,165 | | |
Savings | | | | | 130,755 | | | | | | 109,548 | | |
CDs <$250,000 | | | | | 202,266 | | | | | | 233,956 | | |
CDs >$250,000 | | | | | 15,224 | | | | | | 12,775 | | |
Brokered | | | | | 45,171 | | | | | | 58,622 | | |
Total deposits | | | | $ | 1,258,776 | | | | | $ | 1,075,677 | | |
| 2021 | | | | $ | 137,497 | | |
| 2022 | | | | | 48,023 | | |
| 2023 | | | | | 14,759 | | |
| 2024 | | | | | 11,260 | | |
| 2025 | | | | | 5,251 | | |
| Thereafter | | | | | 700 | | |
| Total | | | | $ | 217,490 | | |
| | | Deposit Based Intangible December 31, 2020 Balance | | | Amortization Expense for the year ended December 31, 2020 | | | Future Annual Amortization Expense | | |||||||||
Peninsula | | | | $ | 473 | | | | | $ | 121 | | | | | $ | 121 | | |
Eagle River | | | | | 529 | | | | | | 99 | | | | | | 99 | | |
Niagara | | | | | 170 | | | | | | 30 | | | | | | 30 | | |
FFNM | | | | | 2,147 | | | | | | 290 | | | | | | 290 | | |
Lincoln | | | | | 1,049 | | | | | | 135 | | | | | | 135 | | |
Total | | | | $ | 4,368 | | | | | $ | 675 | | | | | $ | 675 | | |
| | | Deposit Based Intangible December 31, 2019 Balance | | | 2019 Amortization Expense | | ||||||
Peninsula | | | | $ | 594 | | | | | $ | 121 | | |
Eagle River | | | | | 629 | | | | | | 99 | | |
Niagara | | | | | 200 | | | | | | 30 | | |
FFNM | | | | | 2,436 | | | | | | 299 | | |
Lincoln | | | | | 1,184 | | | | | | 128 | | |
Total | | | | $ | 5,043 | | | | | $ | 677 | | |
| | | December 31, 2020 | | | December 31, 2019 | | ||||||
Balance at beginning of period | | | | $ | 1,499 | | | | | $ | 1,144 | | |
Final purchase accounting entry for FFNM | | | | | — | | | | | | 500 | | |
Additions from loans sold with servicing retained | | | | | — | | | | | | 95 | | |
Amortization | | | | | (140) | | | | | | (240) | | |
Balance at end of period | | | | $ | 1,359 | | | | | $ | 1,499 | | |
Balance of loan servicing portfolio | | | | $ | 204,548 | | | | | $ | 255,757 | | |
Mortgage servicing rights as % of portfolio | | | | | .66% | | | | | | .59% | | |
Fair value of servicing rights | | | | | 1,436 | | | | | | 2,159 | | |
| | | December 31, 2020 | | | December 31, 2019 | | ||||||
Federal Home Loan Bank fixed rate advances | | | | $ | 63,155 | | | | | $ | 64,148 | | |
USDA Rural Development note | | | | | 324 | | | | | | 403 | | |
| | | | $ | 63,479 | | | | | $ | 64,551 | | |
| 2021 | | | | $ | 35,082 | | |
| 2022 | | | | | 80 | | |
| 2023 | | | | | 236 | | |
| 2024 | | | | | 25,081 | | |
| 2025 | | | | | — | | |
| Thereafter | | | | | 3,000 | | |
| Total | | | | $ | 63,479 | | |
| | | 2020 | | | 2019 | | ||||||
Current tax expense | | | | $ | 2,954 | | | | | $ | 2,513 | | |
Deferred tax expense | | | | | 629 | | | | | | 1,347 | | |
Provision for income taxes | | | | $ | 3,583 | | | | | $ | 3,860 | | |
| | | 2020 | | | 2019 | | ||||||
Tax expense at statutory rate | | | | $ | 3,357 | | | | | $ | 3,719 | | |
Increase (decrease) in taxes resulting from: | | | | | | | | | | | | | |
Tax-exempt interest | | | | | (154) | | | | | | (110) | | |
Nondeductible expenses | | | | | 249 | | | | | | 251 | | |
Wisconsin income tax expense, net of federal impact | | | | | 131 | | | | | | — | | |
Provision for income taxes, as reported | | | | $ | 3,583 | | | | | $ | 3,860 | | |
| | | 2020 | | | 2019 | | ||||||
Deferred tax assets: | | | | | | | | | | | | | |
NOL carryforward | | | | $ | 1,671 | | | | | $ | 2,147 | | |
Allowance for loan losses | | | | | 1,277 | | | | | | 1,144 | | |
OREO | | | | | 157 | | | | | | 177 | | |
Deferred compensation | | | | | 198 | | | | | | 253 | | |
Pension liability | | | | | 139 | | | | | | 147 | | |
Stock compensation | | | | | 159 | | | | | | 75 | | |
Purchase accounting adjustments | | | | | 832 | | | | | | 1,507 | | |
Lease liability | | | | | 928 | | | | | | 980 | | |
Other | | | | | 785 | | | | | | 442 | | |
Total deferred tax assets | | | | | 6,146 | | | | | | 6,872 | | |
Deferred tax liabilities: | | | | | | | | | | | | | |
Core deposit premium | | | | | (959) | | | | | | (1,108) | | |
FHLB stock dividend | | | | | (73) | | | | | | (73) | | |
Right of use asset | | | | | (928) | | | | | | (980) | | |
Unrealized gain on securities | | | | | (522) | | | | | | (273) | | |
Other | | | | | (361) | | | | | | (706) | | |
Total deferred tax liabilities | | | | | (2,843) | | | | | | (3,140) | | |
Net deferred tax asset | | | | $ | 3,303 | | | | | $ | 3,732 | | |
Years Ending December 31 | | | Related Party Amount | | | Unrelated Party Amount | | ||||||
2021 | | | | $ | 477 | | | | | $ | 359 | | |
2022 | | | | | 486 | | | | | | 202 | | |
2023 | | | | | 496 | | | | | | — | | |
2024 | | | | | 506 | | | | | | — | | |
2025 | | | | | 516 | | | | | | — | | |
Thereafter | | | | | 1,564 | | | | | | — | | |
Subtotal | | | | $ | 4,045 | | | | | $ | 561 | | |
Less: imputed interest | | | | | (374) | | | | | | (7) | | |
Net lease liabilities | | | | $ | 3,671 | | | | | $ | 554 | | |
| 2021 | | | | $ | 133 | | |
| 2022 | | | | | 140 | | |
| 2023 | | | | | 144 | | |
| 2024 | | | | | 142 | | |
| 2025 | | | | | 157 | | |
| 2026-2030 | | | | | 901 | | |
| Total | | | | $ | 1,617 | | |
| | | 2020 | | | 2019 | | ||||||
Change in benefit obligation: | | | | | | | | | | | | | |
Benefit obligation, beginning of year | | | | $ | 3,447 | | | | | $ | 2,991 | | |
Interest cost | | | | | 99 | | | | | | 117 | | |
Actuarial (gain) loss | | | | | 220 | | | | | | 469 | | |
Benefits paid | | | | | (132) | | | | | | (130) | | |
Benefit obligation at end of year | | | | | 3,634 | | | | | | 3,447 | | |
Change in plan assets: | | | | | | | | | | | | | |
Fair value of plan assets, beginning of year | | | | | 2,259 | | | | | | 1,987 | | |
Actual return on plan assets | | | | | 29 | | | | | | 381 | | |
Employer contributions | | | | | 108 | | | | | | 22 | | |
Benefits paid | | | | | (132) | | | | | | (131) | | |
Fair value of plan assets at end of year | | | | | 2,264 | | | | | | 2,259 | | |
Funded status, included with other liabilities | | | | $ | (1,370) | | | | | $ | (1,188) | | |
| | | 2020 | | | 2019 | | ||||||
Weighted average discount rate | | | | | 2.45% | | | | | | 2.92% | | |
Rate of increase in future compensation levels | | | | | N/A | | | | | | N/A | | |
Expected long-term rate of return on plan assets | | | | | 2.00% | | | | | | 8.00% | | |
| | | Target Allocation | | | Actual Allocation | | |||
Equity securities | | | 50% to 70% | | | | | 0% | | |
Fixed income securities | | | 30% to 50% | | | | | 100% | | |
| | | Actual | | | | | | | | | Adequacy Purposes | | | | | | | | | Well-Capitalized | | |||||||||||||||||||||||||||||||||
| | | Amount | | | Ratio | | | | | | | | | Amount | | | | | | | | | Ratio | | | | | | | | | Amount | | | Ratio | | ||||||||||||||||||
Total capital to risk weighted assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | | | $ | 145,054 | | | | | | 14.8% | | | | | | ≥ | | | | | $ | 78,577 | | | | | | ≥ | | | | | | 8.0% | | | | | | ≥ | | | | | | N/A | | | | | | N/A | | |
mBank | | | | $ | 139,844 | | | | | | 14.2% | | | | | | ≥ | | | | | $ | 78,530 | | | | | | | | | | | | 8.0% | | | | | | ≥ | | | | | $ | 98,163 | | | | | | 10.0% | | |
Tier 1 capital to risk weighted assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | | | $ | 139,238 | | | | | | 14.2% | | | | | | ≥ | | | | | $ | 58,933 | | | | | | ≥ | | | | | | 6.0% | | | | | | ≥ | | | | | | N/A | | | | | | N/A | | |
mBank | | | | $ | 134,069 | | | | | | 13.7% | | | | | | ≥ | | | | | $ | 58,898 | | | | | | ≥ | | | | | | 6.0% | | | | | | ≥ | | | | | $ | 78,530 | | | | | | 8.0% | | |
Common equity Tier 1 capital to risk weighted assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | | | $ | 139,238 | | | | | | 14.2% | | | | | | ≥ | | | | | $ | 44,199 | | | | | | ≥ | | | | | | 4.5% | | | | | | ≥ | | | | | | N/A | | | | | | N/A | | |
mBank | | | | $ | 134,069 | | | | | | 13.7% | | | | | | ≥ | | | | | $ | 44,173 | | | | | | ≥ | | | | | | 4.5% | | | | | | ≥ | | | | | $ | 63,806 | | | | | | 6.5% | | |
Tier 1 capital to average assets: | | | | | | | | | | | | | | | | | | | | | ��� | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | | | $ | 139,238 | | | | | | 9.4% | | | | | | ≥ | | | | | $ | 59,048 | | | | | | ≥ | | | | | | 4.0% | | | | | | ≥ | | | | | | N/A | | | | | | N/A | | |
mBank | | | | $ | 134,069 | | | | | | 9.1% | | | | | | ≥ | | | | | $ | 58,787 | | | | | | ≥ | | | | | | 4.0% | | | | | | ≥ | | | | | $ | 73,483 | | | | | | 5.0% | | |
| | | Actual | | | | | | | | | Adequacy Purposes | | | | | | | | | Well-Capitalized | | |||||||||||||||||||||||||||||||||
| | | Amount | | | Ratio | | | | | | | | | Amount | | | | | | | | | Ratio | | | | | | | | | Amount | | | Ratio | | ||||||||||||||||||
Total capital to risk weighted assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | | | $ | 138,263 | | | | | | 13.2% | | | | | | ≥ | | | | | $ | 83,696 | | | | | | ≥ | | | | | | 8.0% | | | | | | ≥ | | | | | | N/A | | | | | | N/A | | |
mBank | | | | $ | 136,578 | | | | | | 13.1% | | | | | | ≥ | | | | | $ | 83,681 | | | | | | ≥ | | | | | | 8.0% | | | | | | ≥ | | | | | $ | 104,601 | | | | | | 10.0% | | |
Tier 1 capital to risk weighted assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | | | $ | 132,955 | | | | | | 12.7% | | | | | | ≥ | | | | | $ | 62,772 | | | | | | ≥ | | | | | | 6.0% | | | | | | ≥ | | | | | | N/A | | | | | | N/A | | |
mBank | | | | $ | 131,311 | | | | | | 12.6% | | | | | | ≥ | | | | | $ | 62,761 | | | | | | ≥ | | | | | | 6.0% | | | | | | ≥ | | | | | $ | 83,681 | | | | | | 8.0% | | |
Common equity Tier 1 capital to risk weighted assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | | | $ | 132,955 | | | | | | 12.7% | | | | | | ≥ | | | | | $ | 47,079 | | | | | | ≥ | | | | | | 4.5% | | | | | | ≥ | | | | | | N/A | | | | | | N/A | | |
mBank | | | | $ | 131,311 | | | | | | 12.6% | | | | | | ≥ | | | | | $ | 47,071 | | | | | | ≥ | | | | | | 4.5% | | | | | | ≥ | | | | | $ | 67,991 | | | | | | 6.5% | | |
Tier 1 capital to average assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | | | $ | 132,955 | | | | | | 10.1% | | | | | | ≥ | | | | | $ | 52,724 | | | | | | ≥ | | | | | | 4.0% | | | | | | ≥ | | | | | | N/A | | | | | | N/A | | |
mBank | | | | $ | 131,311 | | | | | | 10.0% | | | | | | ≥ | | | | | $ | 52,728 | | | | | | ≥ | | | | | | 4.0% | | | | | | ≥ | | | | | $ | 65,910 | | | | | | 5.0% | | |
Date of Award | | | Units Granted | | | Market Value at grant date | | | Vesting Term | | ||||||
February, 2017 | | | | | 28,427 | | | | | | 13.39 | | | | 4 years | |
February, 2018 | | | | | 18,643 | | | | | | 16.30 | | | | 4 years | |
April, 2018 | | | | | 8,000 | | | | | | 16.00 | | | | Immediate | |
February, 2019 | | | | | 27,790 | | | | | | 15.70 | | | | 4 years | |
October, 2019 | | | | | 8,000 | | | | | | 15.40 | | | | Immediate | |
February, 2020 | | | | | 132,000 | | | | | | 15.46 | | | | 4 years | |
October, 2020 | | | | | 8,000 | | | | | | 9.46 | | | | Immediate | |
| | | Number Outstanding | | | Weighted Average Grant Date Fair Value | | ||||||
Nonvested balance at January 1, 2020 | | | | | 69,145 | | | | | $ | 14.52 | | |
Granted during the period | | | | | 140,000 | | | | | | 15.12 | | |
Forfeited during the period | | | | | (3,167) | | | | | | 15.46 | | |
Vested during the period | | | | | (35,825) | | | | | | 14.99 | | |
Nonvested balance at December 31, 2020 | | | | | 170,153 | | | | | $ | 14.90 | | |
| | | December 31, 2020 | | | December 31, 2019 | | ||||||
Commitments to extend credit: | | | | | | | | | | | | | |
Variable rate | | | | $ | 114,458 | | | | | $ | 106,278 | | |
Fixed rate | | | | | 58,175 | | | | | | 50,796 | | |
Standby letters of credit – Variable rate | | | | | 8,781 | | | | | | 5,441 | | |
Credit card commitments – Fixed rate | | | | | 7,136 | | | | | | 5,841 | | |
| | | | $ | 188,550 | | | | | $ | 168,356 | | |
| | | | | | December 31, 2020 | | | December 31, 2019 | | ||||||||||||||||||
| | | Level in Fair Value Hierarchy | | | Carrying Amount | | | Estimated Fair Value | | | Carrying Amount | | | Estimated Fair Value | | ||||||||||||
Financial assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | | Level 1 | | | | $ | 218,977 | | | | | $ | 218,977 | | | | | $ | 49,826 | | | | | $ | 49,826 | | |
Interest-bearing deposits | | | Level 2 | | | | | 2,917 | | | | | | 2,917 | | | | | | 10,295 | | | | | | 10,295 | | |
Securities available for sale | | | Level 2 | | | | | 110,505 | | | | | | 110,505 | | | | | | 106,569 | | | | | | 106,569 | | |
Securities available for sale | | | Level 3 | | | | | 1,331 | | | | | | 1,331 | | | | | | 1,403 | | | | | | 1,403 | | |
Federal Home Loan Bank stock | | | Level 2 | | | | | 4,924 | | | | | | 4,924 | | | | | | 4,924 | | | | | | 4,924 | | |
Net loans | | | Level 3 | | | | | 1,071,776 | | | | | | 1,072,770 | | | | | | 1,053,468 | | | | | | 1,055,985 | | |
Accrued interest receivable | | | Level 3 | | | | | 4,310 | | | | | | 4,310 | | | | | | 3,751 | | | | | | 3,751 | | |
Total financial assets | | | | | | | $ | 1,414,740 | | | | | $ | 1,415,734 | | | | | $ | 1,230,236 | | | | | $ | 1,232,753 | | |
Financial liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | | Level 2 | | | | $ | 1,258,776 | | | | | $ | 1,262,930 | | | | | $ | 1,075,677 | | | | | $ | 1,044,267 | | |
Borrowings | | | Level 2 | | | | | 63,479 | | | | | | 61,975 | | | | | | 64,551 | | | | | | 64,403 | | |
Accrued interest payable | | | Level 3 | | | | | 453 | | | | | | 453 | | | | | | 569 | | | | | | 569 | | |
Total financial liabilities | | | | | | | $ | 1,322,708 | | | | | $ | 1,325,358 | | | | | $ | 1,140,797 | | | | | $ | 1,109,239 | | |
(dollars in thousands) | | | Balance at December 31, 2020 | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | | Total (Gains) Losses for Year Ended December 31, 2020 | | |||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Corporate | | | | $ | 28,043 | | | | | $ | — | | | | | $ | 27,543 | | | | | $ | 500 | | | | | $ | — | | |
US Agencies | | | | | 6,589 | | | | | | — | | | | | | 6,589 | | | | | | — | | | | | | — | | |
US Agencies – MBS | | | | | 34,280 | | | | | | — | | | | | | 34,280 | | | | | | — | | | | | | — | | |
Obligations of state and political subdivisions | | | | | 42,924 | | | | | | — | | | | | | 42,093 | | | | | | 831 | | | | | | 2 | | |
| | | | $ | 111,836 | | | | | | | | | | | | | | | | | | | | | | | $ | 2 | | |
(dollars in thousands) | | | Balance at December 31, 2019 | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | | Total Losses for Year Ended December 31, 2019 | | |||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Corporate | | | | $ | 20,938 | | | | | $ | — | | | | | $ | 20,438 | | | | | $ | 500 | | | | | $ | 35 | | |
US Agencies | | | | | 14,496 | | | | | | — | | | | | | 14,496 | | | | | | — | | | | | | 9 | | |
US Agencies – MBS | | | | | 34,526 | | | | | | — | | | | | | 34,526 | | | | | | — | | | | | | — | | |
Obligations of state and political subdivisions | | | | | 38,012 | | | | | | — | | | | | | 37,109 | | | | | | 903 | | | | | | 164 | | |
| | | | $ | 107,972 | | | | | | | | | | | | | | | | | | | | | | | $ | 208 | | |
| | | Balance at Beginning of Period | | | | | | | | | | | | | | | Transfers in (out) of Level 3 | | | | | | | | | | | | | | | Balance at end of Period | | |||||||||
| | | Net Gains (losses) | | | | | | | | | | | | | | |||||||||||||||||||||||||||
| | | Realized | | | Unrealized | | | Purchases | | | Sales | | ||||||||||||||||||||||||||||||
Year Ended December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Corporate | | | | $ | 500 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 500 | | |
Obligations of state and political subdivisions | | | | | 903 | | | | | | — | | | | | | — | | | | | | (72) | | | | | | — | | | | | | — | | | | | | 831 | | |
| | | Balance at Beginning of Period | | | | | | | | | | | | | | | Transfers in (out) of Level 3 | | | | | | | | | | | | | | | Balance at end of Period | | |||||||||
| | | Net Gains (losses) | | | | | | | | | | | | | | |||||||||||||||||||||||||||
| | | Realized | | | Unrealized | | | Purchases | | | Sales | | ||||||||||||||||||||||||||||||
Year Ended December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Corporate | | | | $ | 500 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 500 | | |
Obligations of state and political subdivisions | | | | | 988 | | | | | | — | | | | | | — | | | | | | (85) | | | | | | — | | | | | | — | | | | | | 903 | | |
(dollars in thousands) | | | Balance at December 31, 2020 | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | | Total (Gains) Losses for Year Ended December 31, 2020 | | |||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans | | | | $ | 8,850 | | | | | $ | — | | | | | $ | — | | | | | $ | 8,850 | | | | | $ | 186 | | |
Other real estate held for sale | | | | | 1,752 | | | | | | — | | | | | | — | | | | | | 1,752 | | | | | | (22) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 164 | | |
(dollars in thousands) | | | Balance at December 31, 2019 | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | | Total Losses for Year Ended December 31, 2019 | | |||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans | | | | $ | 12,823 | | | | | $ | — | | | | | $ | — | | | | | $ | 12,823 | | | | | $ | 280 | | |
Other real estate held for sale | | | | | 2,194 | | | | | | — | | | | | | — | | | | | | 2,194 | | | | | | 212 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 492 | | |
| | | 2020 | | | 2019 | | ||||||
ASSETS | | | | | | | | | | | | | |
Cash and cash equivalents | | | | $ | 4,226 | | | | | $ | 490 | | |
Investment in subsidiaries | | | | | 161,438 | | | | | | 157,156 | | |
Other assets | | | | | 3,727 | | | | | | 5,764 | | |
TOTAL ASSETS | | | | $ | 169,391 | | | | | $ | 163,410 | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | |
Other liabilities | | | | | 1,527 | | | | | | 1,491 | | |
Total liabilities | | | | | 1,527 | | | | | | 1,491 | | |
Shareholders’ equity: | | | | | | | | | | | | | |
Common stock and additional paid in capital – no par value | | | | | | | | | | | | | |
Authorized 18,000,000 shares | | | | | | | | | | | | | |
Issued and outstanding – 10,500,758 and 10,748,712 shares respectively | | | | | 127,164 | | | | | | 129,564 | | |
Retained earnings | | | | | 39,318 | | | | | | 31,740 | | |
Accumulated other comprehensive income | | | | | 1,382 | | | | | | 615 | | |
Total shareholders’ equity | | | | | 167,864 | | | | | | 161,919 | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | $ | 169,391 | | | | | $ | 163,410 | | |
| | | 2020 | | | 2019 | | ||||||
INCOME: | | | | | | | | | | | | | |
Interest income | | | | $ | — | | | | | $ | — | | |
Miscellaneous income | | | | | 1 | | | | | | 1 | | |
Total income | | | | $ | 1 | | | | | $ | 1 | | |
EXPENSES: | | | | | | | | | | | | | |
Interest expense on borrowings | | | | | 7 | | | | | | — | | |
Salaries and benefits | | | | | 1,298 | | | | | | 858 | | |
Professional service fees | | | | | 289 | | | | | | 301 | | |
Other | | | | | 355 | | | | | | 376 | | |
Total expenses | | | | | 1,949 | | | | | | 1,535 | | |
Loss before income taxes and equity in net income of subsidiaries | | | | | (1,948) | | | | | | (1,534) | | |
Provision for (benefit of) income taxes | | | | | (409) | | | | | | (322) | | |
Loss before equity in net income of subsidiaries | | | | | (1,539) | | | | | | (1,212) | | |
Equity in net income of subsidiaries | | | | | 15,012 | | | | | | 15,062 | | |
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | | | | $ | 13,473 | | | | | $ | 13,850 | | |
| | | 2020 | | | 2019 | | ||||||
Cash Flows from Operating Activities: | | | | | | | | | | | | | |
Net income | | | | $ | 13,473 | | | | | $ | 13,850 | | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | | |
Equity in net (income) of subsidiaries | | | | | (15,012) | | | | | | (15,062) | | |
Increase in capital from stock based compensation | | | | | 878 | | | | | | 498 | | |
Change in other assets | | | | | 2,035 | | | | | | (1,458) | | |
Change in other liabilities | | | | | 36 | | | | | | 268 | | |
Net cash provided by (used in) operating activities | | | | | 1,410 | | | | | | (1,904) | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | | |
Investments in subsidiaries | | | | | 11,500 | | | | | | 5,500 | | |
Net cash provided by used in investing activities | | | | | 11,500 | | | | | | 5,500 | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | |
Repurchase of common stock | | | | | (3,279) | | | | | | — | | |
Dividend on common stock | | | | | (5,895) | | | | | | (5,576) | | |
Net cash (used in) financing activities | | | | | (9,174) | | | | | | (5,576) | | |
Net increase (decrease) in cash and cash equivalents | | | | | 3,736 | | | | | | (1,980) | | |
Cash and cash equivalents at beginning of period | | | | | 490 | | | | | | 2,470 | | |
Cash and cash equivalents at end of period | | | | $ | 4,226 | | | | | $ | 490 | | |
| Exhibit No. | | | Description | |
| 23.6 | | | | |
| 24.1 | | | | |
| 99.1 | | | Consent of Stephens, Inc. (included as part of Appendix Battached to the joint proxy statement-prospectus, which is part of this registration statement and incorporated herein by reference). | |
| 99.2 | | | | |
| 99.3 | | | Lynn D. Davis — Consent to be Named as a Director Nominee. | |
| 99.4 | | | | |
| 99.5 | | | Form of Proxy Card of County. | |
| 99.6 | | | |
| /s/ (Principal Executive Officer) | | | Executive Chairman, Director | |
| /s/ (Principal Financial and Accounting Officer) | | | Donald J. Long, Jr. Director | |
| | | | Dustin J. McClone Director | |
| * Rachel Campos-Duffy Director | | | Susan L. Merkatoris Director | |
| John N. Dykema Director | | |
Terrence R. Fulwiler Director | | ||||
| /s/ Oliver Pierce Smith Oliver Pierce Smith Director | | |||
| /s/ Christopher Ghidorzi Christopher Ghidorzi Director | | |||
| Robert J. Weyers Director | | | * Ann K. Lawson Director | |
| * Héctor Colón Director | | | | |
| *By: | | | /s/ Michael E. Daniels | | | | |
| Name: | | | Michael E. Daniels | | | | |
| Title: | | | Attorney-In-Fact | | | | |