Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 31, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | PEOPLES BANCORP OF NORTH CAROLINA, INC. | |
Entity Central Index Key | 0001093672 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 5,661,569 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-27205 | |
Entity Incorporation State Country Code | NC | |
Entity Tax Identification Number | 56-2132396 | |
Entity Address Address Line 1 | 518 West C Street | |
Entity Address City Or Town | Newton | |
Entity Address State Or Province | NC | |
Entity Address Postal Zip Code | 28658 | |
City Area Code | 828 | |
Local Phone Number | 464-5620 | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and due from banks, including reserve requirements of $0 at both September 30, 2021 and December 31, 2020 | $ 42,098,000 | $ 42,737,000 |
Interest-bearing deposits | 221,210,000 | 118,843,000 |
Cash and cash equivalents | 263,308,000 | 161,580,000 |
Investment securities available for sale | 402,905,000 | 245,249,000 |
Other investments | 3,725,000 | 4,155,000 |
Total securities | 406,630,000 | 249,404,000 |
Mortgage loans held for sale | 9,086,000 | 9,139,000 |
Loans | 891,005,000 | 948,639,000 |
Less allowance for loan losses | (8,963,000) | (9,908,000) |
Net loans | 882,042,000 | 938,731,000 |
Premises and equipment, net | 16,625,000 | 18,600,000 |
Cash surrender value of life insurance | 17,265,000 | 16,968,000 |
Other real estate | 0 | 128,000 |
Right of use lease asset | 2,861,000 | 3,423,000 |
Accrued interest receivable and other assets | 18,434,000 | 18,202,000 |
Total assets | 1,616,251,000 | 1,416,175,000 |
Liabilities and Shareholders' Equity | ||
Noninterest-bearing demand | 529,118,000 | 456,980,000 |
Interest-bearing demand, MMDA & savings | 777,721,000 | 657,834,000 |
Time, $250,000 or more | 26,357,000 | 25,771,000 |
Other time | 76,769,000 | 80,501,000 |
Total deposits | 1,409,965,000 | 1,221,086,000 |
Securities sold under agreements to repurchase | 32,332,000 | 26,201,000 |
Junior subordinated debentures | 15,464,000 | 15,464,000 |
Lease liability | 2,922,000 | 3,471,000 |
Accrued interest payable and other liabilities | 12,026,000 | 10,054,000 |
Total liabilities | 1,472,709,000 | 1,276,276,000 |
Shareholders' equity: | ||
Preferred stock, no par value; authorized 5,000,000 shares; no shares issued and outstanding | 0 | 0 |
Common stock, no par value; authorized 20,000,000 shares; issued and outstanding 5,661,569 shares at September 30, 2021 and 5,787,504 shares at December 31, 2020 | 53,305,000 | 56,871,000 |
Common stock held by deferred compensation trust, at cost; 160,611 shares at September 30, 2021 and 155,469 shares at December 31, 2020 | (1,946,000) | (1,796,000) |
Deferred compensation | 1,946,000 | 1,796,000 |
Retained earnings | 86,927,000 | 77,628,000 |
Accumulated other comprehensive income | 3,310,000 | 5,400,000 |
Total shareholders' equity | 143,542,000 | 139,899,000 |
Total liabilities and shareholders' equity | $ 1,616,251,000 | $ 1,416,175,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and due from banks, reserve requirements | $ 0 | $ 0 |
Time | $ 250,000 | $ 250,000 |
Shareholders' equity: | ||
Preferred stock, stated value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 5,661,569 | 5,787,504 |
Common stock, shares outstanding (in shares) | 5,661,569 | 5,787,504 |
Common stock held by deferred compensation trust, shares | 160,611 | 155,469 |
Consolidated Statements of Earn
Consolidated Statements of Earnings (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Interest income: | ||||
Interest and fees on loans | $ 9,807,000 | $ 10,507,000 | $ 31,474,000 | $ 31,367,000 |
Interest on due from banks | 89,000 | 19,000 | 172,000 | 103,000 |
Interest on federal funds sold | 0 | 33,000 | 0 | 178,000 |
Interest on investment securities: | ||||
U.S. Government sponsored enterprises | 679,000 | 528,000 | 1,899,000 | 1,864,000 |
State and political subdivisions | 825,000 | 717,000 | 2,222,000 | 2,042,000 |
Other | 21,000 | 64,000 | 93,000 | 202,000 |
Total interest income | 11,421,000 | 11,868,000 | 35,860,000 | 35,756,000 |
Interest expense: | ||||
Interest-bearing demand, MMDA & savings | 577,000 | 482,000 | 1,617,000 | 1,455,000 |
Time deposits | 181,000 | 224,000 | 584,000 | 725,000 |
FHLB borrowings | 0 | 103,000 | 0 | 269,000 |
Junior subordinated debentures | 69,000 | 76,000 | 211,000 | 296,000 |
Other | 34,000 | 57,000 | 106,000 | 150,000 |
Total interest expense | 861,000 | 942,000 | 2,518,000 | 2,895,000 |
Net interest income | 10,560,000 | 10,926,000 | 33,342,000 | 32,861,000 |
Provision for (recovery of) loan losses | (182,000) | 522,000 | (863,000) | 3,460,000 |
Net interest income after provision for loan losses | 10,742,000 | 10,404,000 | 34,205,000 | 29,401,000 |
Non-interest income: | ||||
Service charges | 1,023,000 | 809,000 | 2,859,000 | 2,635,000 |
Other service charges and fees | 187,000 | 188,000 | 570,000 | 543,000 |
Gain on sale of investment securities | 0 | 1,688,000 | 0 | 2,145,000 |
Mortgage banking income | 516,000 | 750,000 | 2,109,000 | 1,635,000 |
Insurance and brokerage commissions | 266,000 | 200,000 | 764,000 | 647,000 |
Appraisal management fee income | 1,954,000 | 1,871,000 | 5,775,000 | 4,955,000 |
Gain on sale of other assets | 104,000 | 0 | 104,000 | 0 |
Gain (loss) on sale of other real estate | 0 | (47,000) | 21,000 | (47,000) |
Miscellaneous | 1,990,000 | 1,673,000 | 5,855,000 | 4,453,000 |
Total non-interest income | 6,040,000 | 7,132,000 | 17,953,000 | 16,966,000 |
Non-interest expense: | ||||
Salaries and employee benefits | 6,054,000 | 5,737,000 | 17,903,000 | 16,996,000 |
Occupancy | 1,999,000 | 1,943,000 | 5,891,000 | 5,725,000 |
Professional fees | 582,000 | 374,000 | 1,354,000 | 1,121,000 |
Advertising | 91,000 | 152,000 | 388,000 | 566,000 |
Debit card expense | 244,000 | 278,000 | 740,000 | 766,000 |
FDIC Insurance | 108,000 | 81,000 | 304,000 | 169,000 |
Appraisal management fee expense | 1,556,000 | 1,478,000 | 4,646,000 | 3,845,000 |
Other expense | 1,934,000 | 1,871,000 | 5,742,000 | 5,627,000 |
Total non-interest expense | 12,568,000 | 11,914,000 | 36,968,000 | 34,815,000 |
Earnings before income taxes | 4,214,000 | 5,622,000 | 15,190,000 | 11,552,000 |
Income tax expense | 824,000 | 1,113,000 | 3,064,000 | 2,115,000 |
Net earnings | $ 3,390,000 | $ 4,509,000 | $ 12,126,000 | $ 9,437,000 |
Basic net earnings per share | $ 0.61 | $ 0.80 | $ 2.16 | $ 1.67 |
Diluted net earnings per share | 0.59 | 0.78 | 2.10 | 1.62 |
Cash dividends declared per share | $ 0.17 | $ 0.15 | $ 0.49 | $ 0.60 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Consolidated Statements of Comprehensive Income (Unaudited) | ||||
Net earnings | $ 3,390,000 | $ 4,509,000 | $ 12,126,000 | $ 9,437,000 |
Other comprehensive income (loss): | ||||
Unrealized holding gains (losses) on securities available for sale | (844,000) | 93,000 | (2,714,000) | 5,204,000 |
Reclassification adjustment for gains on securities available for sale included in net earnings | 0 | (1,688,000) | 0 | (2,145,000) |
Total other comprehensive income (loss), before income taxes | (844,000) | (1,595,000) | (2,714,000) | 3,059,000 |
comprehensive income: | ||||
Unrealized holding gains (losses) on securities available for sale | (194,000) | 21,000 | (624,000) | 1,196,000 |
Reclassification adjustment for gains on securities available for sale included in net earnings | 0 | (388,000) | 0 | (493,000) |
Total income tax expense (benefit) related to other comprehensive income | (194,000) | (367,000) | (624,000) | 703,000 |
Total other comprehensive income (loss), net of tax | (650,000) | (1,228,000) | (2,090,000) | 2,356,000 |
Total comprehensive income | $ 2,740,000 | $ 3,281,000 | $ 10,036,000 | $ 11,793,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) shares in Thousands | Total | Common Stock | Retained Earnings (Accumulated Deficit) | Deferred Compensation | Common Stock Held By Deferred Compensation Trust | Accumulated other comprehensive loss |
Balance, shares at Dec. 31, 2019 | 5,912,300 | |||||
Balance, amount at Dec. 31, 2019 | $ 134,120,000 | $ 59,813,000 | $ 70,663,000 | $ 1,588,000 | $ (1,588,000) | $ 3,644,000 |
Common stock repurchase, shares | (126,800) | |||||
Common stock repurchase, amount | (2,999,000) | $ (2,999,000) | 0 | 0 | 0 | 0 |
Cash dividends declared on common stock | (1,779,000) | $ 0 | (1,779,000) | 0 | 0 | 0 |
Restricted stock units exercised, shares | 2,004 | |||||
Restricted stock units exercised, amount | 57,000 | $ 57,000 | 0 | 0 | 0 | 0 |
Equity incentive plan, net | 0 | 0 | 0 | 64,000 | (64,000) | 0 |
Net earnings | 2,367,000 | 0 | 2,367,000 | 0 | 0 | 0 |
Change in accumulated other comprehensive income, net of tax | 2,090,000 | $ 0 | 0 | 0 | 0 | 2,090,000 |
Balance, shares at Mar. 31, 2020 | 5,787,504 | |||||
Balance, amount at Mar. 31, 2020 | 133,856,000 | $ 56,871,000 | 71,251,000 | 1,652,000 | (1,652,000) | 5,734,000 |
Balance, shares at Dec. 31, 2019 | 5,912,300 | |||||
Balance, amount at Dec. 31, 2019 | 134,120,000 | $ 59,813,000 | 70,663,000 | 1,588,000 | (1,588,000) | 3,644,000 |
Net earnings | 9,437,000 | |||||
Balance, shares at Sep. 30, 2020 | 5,787,504 | |||||
Balance, amount at Sep. 30, 2020 | 139,451,000 | $ 56,871,000 | 76,580,000 | 1,747,000 | (1,747,000) | 6,000,000 |
Balance, shares at Mar. 31, 2020 | 5,787,504 | |||||
Balance, amount at Mar. 31, 2020 | 133,856,000 | $ 56,871,000 | 71,251,000 | 1,652,000 | (1,652,000) | 5,734,000 |
Cash dividends declared on common stock | (870,000) | 0 | (870,000) | 0 | 0 | 0 |
Equity incentive plan, net | 0 | 0 | 0 | 48,000 | (48,000) | 0 |
Net earnings | 2,561,000 | 0 | 2,561,000 | 0 | 0 | 0 |
Change in accumulated other comprehensive income, net of tax | 1,494,000 | $ 0 | 0 | 0 | 0 | 1,494,000 |
Balance, shares at Jun. 30, 2020 | 5,787,504 | |||||
Balance, amount at Jun. 30, 2020 | 137,041,000 | $ 56,871,000 | 72,942,000 | 1,700,000 | (1,700,000) | 7,228,000 |
Cash dividends declared on common stock | (871,000) | 0 | (871,000) | 0 | 0 | 0 |
Equity incentive plan, net | 0 | 0 | 0 | 47,000 | (47,000) | 0 |
Net earnings | 4,509,000 | 0 | 4,509,000 | 0 | 0 | 0 |
Change in accumulated other comprehensive income, net of tax | (1,228,000) | $ 0 | 0 | 0 | 0 | (1,228,000) |
Balance, shares at Sep. 30, 2020 | 5,787,504 | |||||
Balance, amount at Sep. 30, 2020 | 139,451,000 | $ 56,871,000 | 76,580,000 | 1,747,000 | (1,747,000) | 6,000,000 |
Balance, shares at Dec. 31, 2020 | 5,787,504 | |||||
Balance, amount at Dec. 31, 2020 | 139,899,000 | $ 56,871,000 | 77,628,000 | 1,796,000 | (1,796,000) | 5,400,000 |
Cash dividends declared on common stock | (930,000) | $ 0 | (930,000) | 0 | 0 | 0 |
Restricted stock units exercised, shares | 1,662 | |||||
Restricted stock units exercised, amount | 39,000 | $ 39,000 | 0 | 0 | 0 | 0 |
Equity incentive plan, net | 0 | 0 | 0 | 53,000 | (53,000) | 0 |
Net earnings | 4,121,000 | 0 | 4,121,000 | 0 | 0 | 0 |
Change in accumulated other comprehensive income, net of tax | (3,100,000) | $ 0 | 0 | 0 | 0 | (3,100,000) |
Balance, shares at Mar. 31, 2021 | 5,789,166 | |||||
Balance, amount at Mar. 31, 2021 | 140,029,000 | $ 56,910,000 | 80,819,000 | 1,849,000 | (1,849,000) | 2,300,000 |
Balance, shares at Dec. 31, 2020 | 5,787,504 | |||||
Balance, amount at Dec. 31, 2020 | 139,899,000 | $ 56,871,000 | 77,628,000 | 1,796,000 | (1,796,000) | 5,400,000 |
Net earnings | 12,126,000 | |||||
Balance, shares at Sep. 30, 2021 | 5,661,569 | |||||
Balance, amount at Sep. 30, 2021 | 143,542,000 | $ 53,305,000 | 86,927,000 | 1,946,000 | (1,946,000) | 3,310,000 |
Balance, shares at Mar. 31, 2021 | 5,789,166 | |||||
Balance, amount at Mar. 31, 2021 | 140,029,000 | $ 56,910,000 | 80,819,000 | 1,849,000 | (1,849,000) | 2,300,000 |
Cash dividends declared on common stock | (930,000) | 0 | (930,000) | 0 | 0 | 0 |
Equity incentive plan, net | 0 | 0 | 0 | 52,000 | (52,000) | 0 |
Net earnings | 4,615,000 | 0 | 4,615,000 | 0 | 0 | 0 |
Change in accumulated other comprehensive income, net of tax | 1,660,000 | $ 0 | 0 | 0 | 0 | 1,660,000 |
Balance, shares at Jun. 30, 2021 | 5,789,166 | |||||
Balance, amount at Jun. 30, 2021 | 145,374,000 | $ 56,910,000 | 84,504,000 | 1,901,000 | (1,901,000) | 3,960,000 |
Common stock repurchase, shares | (127,597) | |||||
Common stock repurchase, amount | (3,605,000) | $ (3,605,000) | 0 | 0 | 0 | 0 |
Cash dividends declared on common stock | (967,000) | 0 | (967,000) | 0 | 0 | 0 |
Equity incentive plan, net | 0 | 0 | 0 | 45,000 | (45,000) | 0 |
Net earnings | 3,390,000 | 0 | 3,390,000 | 0 | 0 | 0 |
Change in accumulated other comprehensive income, net of tax | (650,000) | $ 0 | 0 | 0 | 0 | (650,000) |
Balance, shares at Sep. 30, 2021 | 5,661,569 | |||||
Balance, amount at Sep. 30, 2021 | $ 143,542,000 | $ 53,305,000 | $ 86,927,000 | $ 1,946,000 | $ (1,946,000) | $ 3,310,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net earnings | $ 12,126,000 | $ 9,437,000 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation, amortization and accretion | 3,991,000 | 3,080,000 |
Provision for (recovery of) loan losses | (863,000) | 3,460,000 |
Deferred income taxes | (27,000) | (25,000) |
Gain on sale of investment securities | 0 | (2,145,000) |
Gain on sale of other real estate | (21,000) | 0 |
Write-down of other real estate | 0 | 47,000 |
Gain on sale of other assets | (104,000) | 0 |
Restricted stock expense | (166,000) | (73,000) |
Proceeds from sales of mortgage loans held for sale | 76,086,000 | 78,526,000 |
Origination of mortgage loans held for sale | (76,033,000) | (83,069,000) |
Change in: | ||
Cash surrender value of life insurance | (297,000) | (283,000) |
Right of use lease asset | 562,000 | 525,000 |
Other assets | 416,000 | (219,000) |
Lease liability | (549,000) | (508,000) |
Other liabilities | 2,138,000 | (677,000) |
Net cash provided by operating activities | 17,259,000 | 8,076,000 |
Cash flows from investing activities: | ||
Purchases of investment securities available for sale | (186,793,000) | (90,233,000) |
Proceeds from sales, calls and maturities of investment securities available for sale | 6,010,000 | 52,289,000 |
Proceeds from paydowns of investment securities available for sale | 18,335,000 | 14,635,000 |
Proceeds from paydowns on other investments | 132,000 | 132,000 |
Redemptions (purchases) of FHLB stock | 331,000 | (3,031,000) |
Net change in loans | 57,552,000 | (120,781,000) |
Purchases of premises and equipment | (379,000) | (2,298,000) |
Purchases of bank owned life insurance | 0 | (140,000) |
Proceeds from sale of other assets | 515,000 | 0 |
Proceeds from sale of other real estate and repossessions | 149,000 | 0 |
Net cash used by investing activities | (104,148,000) | (149,427,000) |
Cash flows from financing activities: | ||
Net change in deposits | 188,879,000 | 219,879,000 |
Net change in securities sold under agreement to repurchase | 6,131,000 | 9,930,000 |
Proceeds from FHLB borrowings | 0 | 70,000,000 |
Repayment of Junior Subordinated Debt | 0 | (155,000) |
Proceeds from Fed Funds purchased | 0 | (6,935,000) |
Repayments of Fed Funds purchased | 0 | 6,935,000 |
Restricted stock units exercised | 39,000 | 57,000 |
Common stock repurchased | (3,605,000) | (2,999,000) |
Cash dividends paid on common stock | (2,827,000) | (3,520,000) |
Net cash provided by financing activities | 188,617,000 | 293,192,000 |
Net change in cash and cash equivalents | 101,728,000 | 151,841,000 |
Cash and cash equivalents at beginning of period | 161,580,000 | 52,387,000 |
Cash and cash equivalents at end of period | 263,308,000 | 204,228,000 |
Cash paid during the period for: | ||
Interest | 1,658,000 | 1,908,000 |
Income taxes | 3,221,000 | 1,651,000 |
Noncash investing and financing activities: | ||
Change in unrealized gain on investment securities available for sale, net | (2,090,000) | 2,356,000 |
Issuance of accrued restricted stock units | 39,000 | 57,000 |
Transfers of loans to other real estate and repossessions | 0 | 175,000 |
Transfers of premises and equipment to other assets held for sale | $ 408,000 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
1. Summary of Significant Accounting Policies | (1) Summary of Significant Accounting Policies The consolidated financial statements include the financial statements of Peoples Bancorp of North Carolina, Inc. and its wholly owned subsidiary, Peoples Bank (the “Bank”), along with the Bank’s wholly owned subsidiaries, Peoples Investment Services, Inc. (“PIS”), Real Estate Advisory Services, Inc. (“REAS”), Community Bank Real Estate Solutions, LLC (“CBRES”) and PB Real Estate Holdings, LLC (collectively called the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. The Bank formerly operated three banking offices focused on the Latino population that were operated as a division of the Bank under the name Banco de la Gente (“Banco”). Two of these offices remain open as Bank branches that offer the same banking services offered in the Bank’s other branches such as the taking of deposits and the making of loans. The consolidated financial statements in this report (other than the Consolidated Balance Sheet at December 31, 2020) are unaudited. In the opinion of management, all adjustments (none of which were other than normal accruals other than Correction of an Error noted below) necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”). Actual results could differ from those estimates. The Company’s accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition. Many of the Company’s accounting policies require significant judgment regarding valuation of assets and liabilities and/or significant interpretation of the specific accounting guidance. A description of the Company’s significant accounting policies can be found in Note 1 of the Notes to Consolidated Financial Statements in the Company’s 2020 Annual Report to Shareholders which is Appendix A to the Proxy Statement for the May 6, 2021 Annual Meeting of Shareholders. Correction of an Error Subsequent to issuance of the Company’s December 31, 2020 Form 10-K, it was identified that the Company’s non-qualified deferred compensation plan had not been properly recorded on the Consolidated Balance Sheets. The deferred compensation plan requires all deferral amounts and contributions to be held in a rabbi trust, and the assets held by the trust should be recorded on the Company’s financial statements along with a corresponding liability. For balances related to mutual fund investments held in the rabbi trust, the accrued interest receivable and other assets, accrued interest payable and other liabilities, total assets, and total liabilities line items on the Consolidated Balance Sheets were adjusted as of December 31, 2020 to reflect the asset and corresponding liability associated with the portion of the rabbi trust held in mutual fund investments. This resulted in an increase to these line items of $1.3 million. Additionally, an adjustment to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets has been made to disclose the number of shares of Company stock held by the rabbi trust and the cost basis for those shares, as well as a corresponding liability for the deferred compensation as of December 31, 2020. On the Consolidated Statements of Earnings, basic earnings per share has been adjusted from $0.78 to $0.80 for the three months ended September 30, 2020 and from $1.62 to $1.67 for the nine months ended September 30, 2020. The impact of the changes in the fair value of the mutual funds held in the rabbi trust and the changes in the deferred compensation liability that were not previously recorded were not considered material to the financial statements. These changes to basic earnings per share are also reflected within Note 4 to the financial statements below. In addition to the adjustments to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets, the Company adjusted the presentation of the Consolidated Statements of Changes in Shareholders’ Equity for all periods presented to reflect the Company shares held within the rabbi trust, as well as the corresponding deferred compensation associated with these shares. The Company’s Consolidated Statements of Cash Flows were adjusted for the nine months ended September 30, 2020 in order to reflect the changes to other assets and other liabilities made on the Consolidated Balance Sheets. These unaudited interim financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results of the periods presented. The adjustments to correct the error noted above were not considered material to the financial statements. Recent Accounting Pronouncements The following table provides a summary of ASUs issued by the Financial Accounting Standards Board (“FASB”) that the Company has recently adopted. Recently Adopted Accounting Guidance ASU Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2019-07: Codification Updates to SEC Sections Guidance updated for various Topics of the ASC to align the guidance in various SEC sections of the ASC with the requirements of certain SEC final rules. Effective upon issuance The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2018-13: Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820) Updates the disclosure requirements on fair value measurements in ASC 820, Fair Value Measurement. January 1, 2020 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2018-18: Clarifying the Interaction between Topic 808 and Topic 606 Clarifies the interaction between the guidance for certain collaborative arrangements and the new revenue recognition financial accounting and reporting standard. January 1, 2020 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2018-19: Leases (Topic 842): Codification Improvements Provides guidance to address concerns companies had raised about an accounting exception they would lose when assessing the fair value of underlying assets under the leases standard and clarify that lessees and lessors are exempt from a certain interim disclosure requirement associated with adopting the new standard. January 1, 2020 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2018-14: Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (Subtopic 715-20) Updates disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. January 1, 2021 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2019-12: Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Guidance to simplify accounting for income taxes by removing specific technical exceptions that often produce information investors have a hard time understanding. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. January 1, 2021 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2020-01: Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force) Guidance to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. January 1, 2021 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2021-06: Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946) Amends SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Release No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. Effective upon issuance The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2020-02: Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842)—Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update) Guidance to add and amend SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Staff Accounting Bulletin No. 119 related to the new credit losses standard and comments by the SEC staff related to the revised effective date of the new leases standard. Effective upon issuance The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. The following table provides a summary of ASU’s issued by the FASB that the Company has not adopted as of September 30, 2021, which may impact the Company’s financial statements. Recently Issued Accounting Guidance Not Yet Adopted ASU Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2016-13: Measurement of Credit Losses on Financial Instruments Provides guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. See ASU 2019-10 below. The Company will apply this guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. The Company is still evaluating the impact of this guidance on its consolidated financial statements. The Company has formed a Current Expected Credit Losses (“CECL”) committee and implemented a model from a third-party vendor for running CECL calculations. The Company is currently developing CECL model assumptions and comparing results to current allowance for loan loss calculations. The Company plans to run parallel calculations leading up to the effective date of this guidance to ensure it is prepared for implementation by the effective date. In addition to the Company’s allowance for loan losses, it will also record an allowance for credit losses on debt securities instead of applying the impairment model currently utilized. The amount of the adjustments will be impacted by each portfolio’s composition and credit quality at the adoption date as well as economic conditions and forecasts at that time. ASU 2018-19: Codification Improvements to Topic 326, Financial Instruments—Credit Losses Aligns the implementation date of the topic for annual financial statements of nonpublic companies with the implementation date for their interim financial statements. The guidance also clarifies that receivables arising from operating leases are not within the scope of the topic, but rather, should be accounted for in accordance with the leases topic. See ASU 2019-10 below. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. See ASU 2016-13 above. ASU 2019-04: Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Addresses unintended issues accountants flagged when implementing ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2016-13, Measurement of Credit Losses on Financial Instruments, and ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities. See ASU 2019-10 below. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. See ASU 2016-13 above. ASU 2019-05: Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief Guidance to provide entities with an option to irrevocably elect the fair value option, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments. See ASU 2019-10 below. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. See ASU 2016-13 above. ASU 2019-10: Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates Guidance to defer the effective dates for private companies, not-for-profit organizations, and certain smaller reporting companies applying standards on current expected credit losses (CECL), leases and hedging. January 1, 2023 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2019-11: Codification Improvements to Topic 326, Financial Instruments—Credit Losses Guidance that addresses issues raised by stakeholders during the implementation of ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments affect a variety of Topics in the ASC. January 1, 2023 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2020-03: Codification Improvements to Financial Instruments Guidance to clarify that the contractual term of a net investment in a lease, determined in accordance with the leases standard, should be the contractual term used to measure expected credit losses under ASC 326. January 1, 2023 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2020-04: Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Guidance that provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period. Therefore, it will be in effect for a limited time through December 31, 2022. March 12, 2020 through December 31, 2022 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2020-06: Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Guidance to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. January 1, 2022 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2021-05: Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments, which requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate Updated guidance that requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate as an operating lease at lease commencement if certain conditions are met January 1, 2022 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. Other accounting standards that have been issued or proposed by FASB or other standards-setting bodies are not expected to have a material impact on the Company’s results of operations, financial position or disclosures. Reclassification Certain amounts in the 2020 consolidated financial statements have been reclassified to conform to the 2021 presentation. These reclassifications did not have any impact on shareholders’ equity or net earnings. |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2021 | |
Investment Securities | |
2. Investment Securities | (2) Investment Securities Investment securities available for sale at September 30, 2021 and December 31, 2020 are as follows: (Dollars in thousands) September 30, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S Treasuries $ 7,963 39 12 7,990 U.S. Government sponsored enterprises 14,566 289 178 14,677 Mortgage-backed securities 222,526 2,427 1,648 223,305 State and political subdivisions 153,551 4,327 945 156,933 Total $ 398,606 7,082 2,783 402,905 (Dollars in thousands) December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Government sponsored enterprises $ 7,384 331 208 7,507 Mortgage-backed securities 143,095 2,812 593 145,314 State and political subdivisions 87,757 4,758 87 92,428 Total $ 238,236 7,901 888 245,249 The current fair value and associated unrealized losses on investments in securities with unrealized losses at September 30, 2021 and December 31, 2020 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position. (Dollars in thousands) September 30, 2021 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasuries $ 4,994 12 - - 4,994 12 U.S. Government sponsored enterprises 5,386 5 3,442 173 8,828 178 Mortgage-backed securities 114,889 1,505 5,897 143 120,786 1,648 State and political subdivisions 37,729 800 3,757 145 41,486 945 Total $ 162,998 2,322 13,096 461 176,094 2,783 (Dollars in thousands) December 31, 2020 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Government sponsored enterprises $ - - 4,193 208 4,193 208 Mortgage-backed securities 80,827 565 4,762 28 85,589 593 State and political subdivisions 7,126 87 - - 7,126 87 Total $ 87,953 652 8,955 236 96,908 888 At September 30, 2021, unrealized losses in the investment securities portfolio relating to debt securities totaled $2.8 million. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the September 30, 2021 tables above, one out of two U.S. Treasury securities, 35 out of 145 securities issued by state and political subdivisions and 43 out of 97 securities issued by U.S. Government sponsored enterprises contained unrealized losses. These unrealized losses are considered temporary because of acceptable financial condition and results of operations of entities that issued each security and the repayment sources of principal and interest on U.S. Government sponsored enterprises, including mortgage-backed securities, are government backed. The amortized cost and estimated fair value of investment securities available for sale at September 30, 2021, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. September 30, 2021 (Dollars in thousands) Amortized Cost Fair Value Due within one year $ 11,591 11,689 Due from one to five years 10,143 10,763 Due from five to ten years 136,387 139,315 Due after ten years 17,959 17,833 Mortgage-backed securities 222,526 223,305 Total $ 398,606 402,905 No securities available for sale were sold during the three and nine months ended September 30, 2021. Proceeds from sales of securities available for sale during the three months ended September 30, 2020 were $29.2 million and resulted in net gains of $1.7 million. Proceeds from sales of securities available for sale during the nine months ended September 30, 2020 were $46.1 million and resulted in net gains of $2.1 million. Securities with a fair value of approximately $90.6 million and $77.3 million at September 30, 2021 and December 31, 2020, respectively, were pledged to secure public deposits and for other purposes as required by law. |
Loans
Loans | 9 Months Ended |
Sep. 30, 2021 | |
Loans | |
3. Loans | (3) Loans Major classifications of loans at September 30, 2021 and December 31, 2020 are summarized as follows: (Dollars in thousands) September 30, 2021 December 31, 2020 Real estate loans: Construction and land development $ 80,009 94,124 Single-family residential 258,403 272,325 Single-family residential - Banco de la Gente non-traditional 24,043 26,883 Commercial 363,174 332,971 Multifamily and farmland 58,856 48,880 Total real estate loans 784,485 775,183 Loans not secured by real estate: Commercial loans 94,376 161,740 Farm loans 633 855 Consumer loans 6,321 7,113 All other loans 5,190 3,748 Total loans 891,005 948,639 Less allowance for loan losses (8,963 ) (9,908 ) Total net loans $ 882,042 938,731 The Bank grants loans and extensions of credit primarily within the Catawba Valley region of North Carolina, which encompasses Catawba, Alexander, Iredell and Lincoln counties, and also in Mecklenburg, Wake, Durham and Rowan counties of North Carolina. Although the Bank has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate, the value of which is dependent upon the real estate market. Risk characteristics of the major components of the Bank’s loan portfolio are discussed below: · Construction and land development loans – The risk of loss is largely dependent on the initial estimate of whether the property’s value at completion equals or exceeds the cost of property construction and the availability of take-out financing. During the construction phase, a number of factors can result in delays or cost overruns. If the estimate is inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed through a permanent loan, sale of the property, or by seizure of collateral. As of September 30, 2021, construction and land development loans comprised approximately9% of the Bank’s total loan portfolio. · Single-family residential loans – Declining home sales volumes, decreased real estate values and higher than normal levels of unemployment could contribute to losses on these loans. As of September 30, 2021, single-family residential loans comprised approximately 32% of the Bank’s total loan portfolio, and include Banco’s non-traditional single-family residential loans, which were approximately 3% of the Bank’s total loan portfolio. · Commercial real estate loans – Repayment is dependent on income being generated in amounts sufficient to cover operating expenses and debt service. These loans also involve greater risk because they are generally not fully amortizing over a loan period, but rather have a balloon payment due at maturity. A borrower’s ability to make a balloon payment typically will depend on being able to either refinance the loan or timely sell the underlying property. As of September 30, 2021, commercial real estate loans comprised approximately 41% of the Bank’s total loan portfolio. · Commercial loans – Repayment is generally dependent upon the successful operation of the borrower’s business. In addition, the collateral securing the loans may depreciate over time, be difficult to appraise, be illiquid or fluctuate in value based on the success of the business. As of September 30, 2021, commercial loans comprised approximately 11% of the Bank’s total loan portfolio, including $25.6 million in Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans. The Company had $75.8 million in PPP loans at December 31, 2020. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The following tables present an age analysis of past due loans, by loan type, as of September 30, 2021 and December 31, 2020: September 30, 2021 (Dollars in thousands) Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Total Current Loans Total Loans Accruing Loans 90 or More Days Past Due Real estate loans: Construction and land development $ 6 - 6 80,003 80,009 - Single-family residential 850 230 1,080 257,323 258,403 - Single-family residential - Banco de la Gente non-traditional 450 39 489 23,554 24,043 - Commercial 28 37 65 363,109 363,174 - Multifamily and farmland - - - 58,856 58,856 - Total real estate loans 1,334 306 1,640 782,845 784,485 - Loans not secured by real estate: Commercial loans 176 - 176 94,200 94,376 - Farm loans - - - 633 633 - Consumer loans 66 1 67 6,254 6,321 - All other loans 8 - 8 5,182 5,190 - Total loans $ 1,584 307 1,891 889,114 891,005 - December 31, 2020 (Dollars in thousands) Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Total Current Loans Total Loans Accruing Loans 90 or More Days Past Due Real estate loans: Construction and land development $ 298 - 298 93,826 94,124 - Single-family residential 3,660 270 3,930 268,395 272,325 - Single-family residential - Banco de la Gente non-traditional 3,566 105 3,671 23,212 26,883 - Commercial 36 - 36 332,935 332,971 - Multifamily and farmland - - - 48,880 48,880 - Total real estate loans 7,560 375 7,935 767,248 775,183 - Loans not secured by real estate: Commercial loans - - - 161,740 161,740 - Farm loans - - - 855 855 - Consumer loans 45 2 47 7,066 7,113 - All other loans - - - 3,748 3,748 - Total loans $ 7,605 377 7,982 940,657 948,639 - The following table presents non-accrual loans as of September 30, 2021 and December 31, 2020: (Dollars in thousands) September 30, 2021 December 31, 2020 Real estate loans: Single-family residential $ 1,020 1,266 Single-family residential - Banco de la Gente non-traditional 1,244 1,709 Commercial 271 440 Multifamily and farmland 109 117 Total real estate loans 2,644 3,532 Loans not secured by real estate: Commercial loans 54 212 Consumer loans 6 14 Total $ 2,704 3,758 At each reporting period, the Bank determines which loans are impaired. Accordingly, the Bank’s impaired loans are reported at their estimated fair value on a non-recurring basis. An allowance for each impaired loan that is collateral-dependent is calculated based on the fair value of its collateral. The fair value of the collateral is based on appraisals performed by REAS, a subsidiary of the Bank. REAS is staffed by certified appraisers that also perform appraisals for other companies. Factors, including the assumptions and techniques utilized by the appraiser, are considered by management. If the recorded investment in the impaired loan exceeds the measure of fair value of the collateral, a valuation allowance is recorded as a component of the allowance for loan losses. An allowance for each impaired loan that is not collateral dependent is calculated based on the present value of projected cash flows. If the recorded investment in the impaired loan exceeds the present value of projected cash flows, a valuation allowance is recorded as a component of the allowance for loan losses. Impaired loans under $250,000 are not individually evaluated for impairment with the exception of the Bank’s troubled debt restructured (“TDR”) loans in the residential mortgage loan portfolio, which are individually evaluated for impairment. Accruing impaired loans were $18.2 million, $21.3 million and $21.0 million at September 30, 2021, December 31, 2020 and September 30, 2020, respectively. Interest income recognized on accruing impaired loans was $754,000, $1.2 million, and $934,000 for the nine months ended September 30, 2021, the year ended December 31, 2020 and the nine months ended September 30, 2020, respectively. Interest income recognized on accruing impaired loans was $217,000 and $299,000 for the three months ended September 30, 2021 and 2020, respectively. No interest income is recognized on non-accrual impaired loans subsequent to their classification as non-accrual. The following table presents impaired loans as of September 30, 2021: September 30, 2021 (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Real estate loans: Construction and land development $ 75 - 75 75 3 Single-family residential 4,506 275 4,021 4,296 80 Single-family residential - Banco de la Gente non-traditional 12,269 - 11,383 11,383 724 Commercial 2,229 439 1,692 2,131 12 Multifamily and farmland 115 - 109 109 - Total impaired real estate loans 19,194 714 17,280 17,994 819 Loans not secured by real estate: Commercial loans 299 54 183 237 3 Consumer loans 12 - 8 8 - Total impaired loans $ 19,505 768 17,471 18,239 822 The following table presents the average impaired loan balance and the interest income recognized by loan class for the three and nine months ended September 30, 2021 and 2020. (Dollars in thousands) Three months ended Nine months ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Average Balance Interest Income Recognized Average Balance Interest Income Recognized Average Balance Interest Income Recognized Average Balance Interest Income Recognized Real estate loans: Construction and land development $ 76 1 153 - 91 5 123 7 Single-family residential 5,875 49 5,107 63 5,683 166 4,451 181 Single-family residential - Banco de la Gente stated income 10,349 140 13,402 197 11,090 477 13,785 617 Commercial 2,280 20 2,665 31 2,617 85 2,772 103 Multifamily and farmland 110 2 - - 113 4 - - Total impaired real estate loans 18,690 212 21,327 291 19,594 737 21,131 908 Loans not secured by real estate: Commercial loans 248 5 494 7 330 16 553 22 Consumer loans 9 - 74 1 19 1 57 4 Total impaired loans $ 18,947 217 21,895 299 19,943 754 21,741 934 The following table presents impaired loans as of and for the year ended December 31, 2020: December 31, 2020 (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Average Outstanding Impaired Loans Interest Income Recognized Real estate loans: Construction and land development $ 108 - 108 108 4 134 8 Single-family residential 5,302 379 4,466 4,845 33 4,741 262 Single-family residential - Banco de la Gente non-traditional 13,417 - 12,753 12,753 862 13,380 798 Commercial 2,999 1,082 1,891 2,973 14 2,940 139 Multifamily and farmland 119 - 117 117 - 29 6 Total impaired real estate loans 21,945 1,461 19,335 20,796 913 21,224 1,213 Loans not secured by real estate: Commercial loans 515 211 244 455 5 564 32 Consumer loans 41 - 37 37 1 60 5 Total impaired loans $ 22,501 1,672 19,616 21,288 919 21,848 1,250 Impaired loans collectively evaluated for impairment totaled $5.1 million and $5.8 million at September 30, 2021 and December 31, 2020, respectively and are included in the tables above. Allowance on impaired loans collectively evaluated for impairment totaled $45,000 and $61,000 at September 30, 2021 and December 31, 2020, respectively. The following tables present changes in the allowance for loan losses for the three and nine months ended September 30, 2021 and 2020. Unallocated balances in the following tables include allowance for loan losses based on qualitative factors such as economic outlook, concentrations of credit, interest rate risk and loan volume trends. PPP loans are excluded from the allowance for loan losses as PPP loans are 100 percent guaranteed by the SBA. PPP loans are classified as risk grade 3. (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Nine months ended September 30, 2021: Allowance for loan losses: Beginning balance $ 1,196 1,843 1,052 2,212 122 1,345 - 128 2,010 9,908 Charge-offs - - - - - (293 ) - (249 ) - (542 ) Recoveries 121 165 - 50 3 7 - 114 - 460 Provision (421 ) (306 ) (162 ) 46 22 (153 ) - 98 13 (863 ) Ending balance $ 896 1,702 890 2,308 147 906 - 91 2,023 8,963 Three months ended September 30, 2021: Allowance for loan losses: Beginning balance $ 1,038 1,723 980 2,180 148 996 - 89 2,133 9,287 Charge-offs - - - - - (215 ) - (91 ) - (306 ) Recoveries 31 86 - 2 4 1 - 40 - 164 Provision (173 ) (107 ) (90 ) 126 (5 ) 124 - 53 (110 ) (182 ) Ending balance $ 896 1,702 890 2,308 147 906 - 91 2,023 8,963 Allowance for loan losses at September 30, 2021: Ending balance: individually evaluated for impairment $ 1 58 710 7 - - - - - 776 Ending balance: collectively evaluated for impairment 895 1,644 180 2,301 147 906 - 91 2,023 8,187 Ending balance $ 896 1,702 890 2,308 147 906 - 91 2,023 8,963 Loans at September 30, 2021: Ending balance $ 80,009 258,403 24,043 363,174 58,856 94,376 633 11,511 - 891,005 Ending balance: individually evaluated for impairment $ 6 1,398 10,236 1,450 - 54 - - - 13,144 Ending balance: collectively evaluated for impairment $ 80,003 257,005 13,807 361,724 58,856 94,322 633 11,511 - 877,861 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Nine months ended September 30, 2020: Allowance for loan losses: Beginning balance $ 694 1,274 1,073 1,305 120 688 - 138 1,388 6,680 Charge-offs (5 ) (65 ) - (7 ) - (109 ) - (343 ) - (529 ) Recoveries 2 59 - 45 - 27 - 148 - 281 Provision 573 482 (11 ) 751 (4 ) 355 - 254 1,060 3,460 Ending balance $ 1,264 1,750 1,062 2,094 116 961 - 197 2,448 9,892 Three months ended September 30, 2020: Allowance for loan losses: Beginning balance $ 1,531 1,813 1,114 2,051 115 980 - 162 1,667 9,433 Charge-offs - (65 ) - - - - - (87 ) - (152 ) Recoveries - 34 - 11 - 2 - 42 - 89 Provision (267 ) (32 ) (52 ) 32 1 (21 ) - 80 781 522 Ending balance $ 1,264 1,750 1,062 2,094 116 961 - 197 2,448 9,892 Allowance for loan losses at September 30, 2020: Ending balance: individually evaluated for impairment $ 2 4 859 11 - - - - - 876 Ending balance: collectively evaluated for impairment 1,262 1,746 203 2,083 116 961 - 197 2,448 9,016 Ending balance $ 1,264 1,750 1,062 2,094 116 961 - 197 2,448 9,892 Loans at September 30, 2020: Ending balance $ 96,866 272,246 28,099 318,596 49,584 182,862 851 21,128 - 970,232 Ending balance: individually evaluated for impairment $ 8 1,582 11,630 1,685 - 255 - - - 15,160 Ending balance: collectively evaluated for impairment $ 96,858 270,664 16,469 316,911 49,584 182,607 851 21,128 - 955,072 The provision for loan losses for the three months ended September 30, 2021 was a recovery of $182,000, compared to a provision of $522,000 for the three months ended September 30, 2020. The decrease in the provision for loan losses is primarily attributable to a decrease in reserves on loans with payment modifications made as a result of the COVID-19 pandemic and a decrease in reserves in the general reserve pool. At September 30, 2021, there were no loans with existing modifications as a result of the COVID-19 pandemic. At December 31, 2020, the balance of loans with existing modifications as a result of the COVID-19 pandemic was $18.3 million. The Company continues to track all loans that are currently modified or have been modified as a result of the COVID-19 pandemic. The loan balances associated with COVID-19 pandemic related modifications have been grouped into their own pool within the Company’s Allowance for Loan and Lease Losses (“ALLL”) model as they have a higher likelihood of risk, and a higher reserve rate has been applied to that pool. All loans modified as a result of the COVID-19 pandemic, totaling $100.9 million at September 30, 2021, have returned to their original terms; however, the effects of stimulus in the current environment are still unknown, and additional losses may be present in loans that were once modified. At December 31, 2020, the balance for all loans that were then currently modified or previously modified but returned to their original terms was $119.6 million. The $18.7 million decrease from December 31, 2020 to September 30, 2021 in the balance of currently or previously modified loans that had returned to their original terms is primarily due to loans paid off during the nine months ended September 30, 2021. Loan payment modifications associated with the COVID-19 pandemic are not classified as TDR due to Section 4013 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which provides that a qualified loan modification is exempt by law from classification as a TDR pursuant to GAAP. The provision for loan losses for the nine months ended September 30, 2021 was a recovery of $863,000, compared to a provision of $3.5 million for the nine months ended September 30, 2020. The decrease in the provision for loan losses is primarily attributable to a decrease in reserves on loans with payment modifications made as a result of the COVID-19 pandemic and a decrease in reserves due to a net decrease in the volume of loans in the general reserve pool. The Company utilizes an internal risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 8. These risk grades are evaluated on an ongoing basis. A description of the general characteristics of the eight risk grades is as follows: · Risk Grade 1 – Excellent Quality: Loans are well above average quality and a minimal amount of credit risk exists. Certificates of deposit or cash secured loans or properly margined actively traded stock or bond secured loans would fall in this grade. · Risk Grade 2 – High Quality: Loans are of good quality with risk levels well within the Company’s range of acceptability. The organization or individual is established with a history of successful performance though somewhat susceptible to economic changes. · Risk Grade 3 – Good Quality: Loans of average quality with risk levels within the Company’s range of acceptability but higher than normal. This may be a new organization or an existing organization in a transitional phase (e.g. expansion, acquisition, market change). · Risk Grade 4 – Management Attention: These loans have higher risk and servicing needs but still are acceptable. Evidence of marginal performance or deteriorating trends is observed. These are not problem credits presently, but may be in the future if the borrower is unable to change its present course. · Risk Grade 5 – Watch: These loans are currently performing satisfactorily, but there has been some recent past due history on repayment and there are potential weaknesses that may, if not corrected, weaken the asset or inadequately protect the Company’s position at some future date. · Risk Grade 6 – Substandard: A Substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged (if there is any). There is a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. There is a distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. · Risk Grade 7 – Doubtful: Loans classified as Doubtful have all the weaknesses inherent in loans classified as Substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. Doubtful is a temporary grade where a loss is expected but is presently not quantified with any degree of accuracy. Once the loss position is determined, the amount is charged off. · Risk Grade 8 – Loss: Loans classified as Loss are considered uncollectable and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this worthless loan even though partial recovery may be realized in the future. Loss is a temporary grade until the appropriate authority is obtained to charge the loan off. The following tables present the credit risk profile of each loan type based on internally assigned risk grades as of September 30, 2021 and December 31, 2020: September 30, 2021 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer All Other Total 1- Excellent Quality $ - 7,380 - - - 382 - 613 - 8,375 2- High Quality 8,982 104,288 - 35,384 19 17,846 - 1,979 1,413 169,911 3- Good Quality 67,245 124,534 9,028 283,657 55,335 69,324 621 3,415 3,777 616,936 4- Management Attention 3,626 16,239 10,878 33,620 2,841 5,122 12 290 - 72,628 5- Watch 82 2,904 1,722 9,802 552 1,644 - 1 - 16,707 6- Substandard 74 3,058 2,415 711 109 58 - 23 - 6,448 7- Doubtful - - - - - - - - - - 8- Loss - - - - - - - - - - Total $ 80,009 258,403 24,043 363,174 58,856 94,376 633 6,321 5,190 891,005 December 31, 2020 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer All Other Total 1- Excellent Quality $ 228 9,867 - - - 406 - 678 - 11,179 2- High Quality 9,092 121,331 - 40,569 22 19,187 - 2,237 1,563 194,001 3- Good Quality 76,897 115,109 10,170 241,273 44,890 128,727 832 3,826 1,477 623,201 4- Management Attention 4,917 20,012 12,312 39,370 3,274 11,571 23 336 708 92,523 5- Watch 2,906 2,947 1,901 10,871 694 1,583 - 6 - 20,908 6- Substandard 84 3,059 2,500 888 - 266 - 30 - 6,827 7- Doubtful - - - - - - - - - - 8- Loss - - - - - - - - - - Total $ 94,124 272,325 26,883 332,971 48,880 161,740 855 7,113 3,748 948,639 Past due TDR loans and non-accrual TDR loans totaled $1.6 million and $3.8 million at September 30, 2021 and December 31, 2020, respectively. The terms of these loans have been renegotiated to provide a concession to original terms, including a reduction in principal or interest as a result of the deteriorating financial position of the borrower. There were no performing loans classified as TDR loans at September 30, 2021 and December 31, 2020. There were no new TDR modifications during the three and nine months ended September 30, 2021 and 2020. There were no loans modified as TDR that defaulted during the nine months ended September 30, 2021 and 2020, which were within 12 months of their modification date. Generally, a TDR loan is considered to be in default once it becomes 90 days or more past due following a modification. On March 27, 2020, President Trump signed the CARES Act, which established a $2 trillion economic stimulus package, including cash payments to individuals, supplemental unemployment insurance benefits and a $349 billion loan program administered through the PPP. Under the PPP, small businesses, sole proprietorships, independent contractors and self-employed individuals may apply for loans from existing SBA lenders and other approved regulated lenders that enroll in the program, subject to numerous limitations and eligibility criteria. A second round of PPP funding, signed into law by President Trump on April 24, 2020, provided $320 billion additional funding for the PPP. The Bank is participating as a lender in the PPP. Total PPP loans originated as of September 30, 2021 amounted to $128.1 million. The outstanding balance of PPP loans was $25.6 million and $75.8 million at September 30, 2021 and December 31, 2020, respectively. The Bank has received $5.7 million in fees from the SBA for PPP loans originated as of September 30, 2021. The Bank recognized $3.0 million and $1.4 million PPP loan fee income for the nine months ended September 30, 2021 and the year ended December 31, 2020 respectively. PPP loan fee income recognized for the three months ended September 30, 2021 was $489,000. PPP loan fee income recognized for the three and nine months ended September 30, 2020 was $361,000. |
Net Earnings Per Share
Net Earnings Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Net Earnings Per Share | |
4. Net Earnings Per Share | (4) Net Earnings Per Share Net earnings per share is based on the weighted average number of shares outstanding during the period while the effects of potential shares outstanding during the period are included in diluted earnings per share. The average market price during the applicable period is used to compute equivalent shares. The reconciliation of the amounts used in the computation of both “basic earnings per share” and “diluted earnings per share” for the three and nine months ended September 30, 2021 and 2020 is as follows: For the three months ended September 30, 2021 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 3,390 5,544,596 $ 0.61 Effect of dilutive securities: Restricted stock units - 14,690 Shares held in deferred comp plan 159,797 Diluted earnings per share $ 3,390 5,719,083 $ 0.59 For the nine months ended September 30, 2021 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 12,126 5,601,879 $ 2.16 Effect of dilutive securities: Restricted stock units - 13,190 Shares held in deferred comp plan 158,039 Diluted earnings per share $ 12,126 5,773,108 $ 2.10 For the three months ended September 30, 2020 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 4,509 5,634,964 $ 0.80 Effect of dilutive securities: Restricted stock units - 15,299 Shares held in deferred comp plan - 151,658 Diluted earnings per share $ 4,509 5,801,921 $ 0.78 For the nine months ended September 30, 2020 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 9,437 5,665,294 $ 1.67 Effect of dilutive securities: Restricted stock units - 13,960 Shares held in deferred comp plan - 149,163 Diluted earnings per share $ 9,437 5,828,417 $ 1.62 |
StockBased Compensation
StockBased Compensation | 9 Months Ended |
Sep. 30, 2021 | |
StockBased Compensation | |
5. Stock-Based Compensation | (5) Stock-Based Compensation The Company has an Omnibus Stock Ownership and Long Term Incentive Plan that was approved by shareholders on May 7, 2009 (the “2009 Plan”) whereby certain stock-based rights, such as stock options, restricted stock, restricted stock units, performance units, stock appreciation rights or book value shares, may be granted to eligible directors and employees. The 2009 Plan expired on May 7, 2019 but still governs the rights and obligations of the parties for grants made thereunder. As of September 30, 2021, there were no outstanding shares reserved for possible issuance under the 2009 Plan. The Company granted 16,583 restricted stock units under the 2009 Plan at a grant date fair value of $16.34 per share during the first quarter of 2015. The Company granted 5,544 restricted stock units under the 2009 Plan at a grant date fair value of $16.91 per share during the first quarter of 2016. The Company granted 4,114 restricted stock units under the 2009 Plan at a grant date fair value of $25.00 per share during the first quarter of 2017. The Company granted 3,725 restricted stock units under the 2009 Plan at a grant date fair value of $31.43 per share during the first quarter of 2018. The Company granted 5,290 restricted stock units under the 2009 Plan at a grant date fair value of $28.43 per share during the first quarter of 2019. The number of restricted stock units granted and grant date fair values for the restricted stock units granted in 2015 through 2017 have been restated to reflect the 10% stock dividend that was paid in the fourth quarter of 2017. The Company recognizes compensation expense on the restricted stock units over the period of time the restrictions are in place (four years from the grant date for the 2015, 2016, 2017, 2018 and 2019 grants). The amount of expense recorded each period reflects the changes in the Company’s stock price during such period. As of September 30, 2021, the total unrecognized compensation expense related to the restricted stock unit grants under the 2009 Plan was $57,000. The Company also has an Omnibus Stock Ownership and Long Term Incentive Plan that was approved by shareholders on May 7, 2020 (the “2020 Plan”) whereby certain stock-based rights, such as stock options, restricted stock, restricted stock units, performance units, stock appreciation rights or book value shares, may be granted to eligible directors and employees. A total of 300,000 shares were reserved for possible issuance under the 2020 Plan when it was adopted. As of September 30, 2021, a total of 285,075 shares out of the initial 300,000 shares reserved remain available for future issuance under the 2020 Plan. All stock-based rights under the 2020 Plan must be granted or awarded by May 7, 2030 (or ten years from the 2020 Plan effective date). The Company granted 7,635 restricted stock units under the 2020 Plan at a grant date fair value of $17.08 per share during the second quarter of 2020. The Company granted 7,290 restricted stock units under the 2020 Plan at a grant date fair value of $22.04 per share during the first quarter of 2021. The Company recognizes compensation expense on the restricted stock units over the period of time the restrictions are in place (four years from the grant date for 2020 and 2021 grants). As of September 30, 2021, the total unrecognized compensation expense related to the restricted stock unit grants under the 2020 Plan was $312,000. The Company recognized compensation expense for restricted stock unit awards granted under the 2009 Plan and 2020 Plan of $166,000 for the nine months ended September 30, 2021. The Company recognized a $73,000 credit to compensation expense for restricted stock unit awards granted under the 2009 Plan and 2020 Plan for the nine months ended September 30, 2020 due to a reduction in the Company’s stock price from $32.85 per share at December 31, 2019, compared to $15.43 per share at September 30, 2020. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value | |
6. Fair Value | (6) Fair Value The Company is required to disclose fair value information about financial instruments, whether or not recognized on the face of the balance sheet, for which it is practicable to estimate that value. The assumptions used in the estimation of the fair value of the Company’s financial instruments are detailed below. Where quoted prices are not available, fair values are based on estimates using discounted cash flows and other valuation techniques. The use of discounted cash flows can be significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. The following disclosures should not be considered a surrogate of the liquidation value of the Company, but rather a good faith estimate of the increase or decrease in the value of financial instruments held by the Company since purchase, origination or issuance. The methods of determining the fair value of assets and liabilities presented in this note are consistent with methodologies disclosed in Note 16 of the Company’s 2020 Form 10-K, except for the valuation of loans which was impacted by the adoption of ASU No. 2016-01. The Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: · Level 1 – Valuation is based upon quoted prices for identical instruments traded in active markets. · Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. · Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques. Cash and Cash Equivalents For cash, due from banks and interest-bearing deposits, the carrying amount is a reasonable estimate of fair value. Cash and cash equivalents are reported in the Level 1 fair value category. Investment Securities Available for Sale Fair values of investment securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges when available. If quoted prices are not available, fair value is determined using matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. Fair values for investment securities with quoted market prices are reported in the Level 1 fair value category. Fair value measurements obtained from independent pricing services are reported in the Level 2 fair value category. All other fair value measurements are reported in the Level 3 fair value category. Other Investments For other investments, the carrying value is a reasonable estimate of fair value. Other investments are reported in the Level 3 fair value category. Mortgage Loans Held for Sale Mortgage loans held for sale are carried at the lower of aggregate cost or market value. The cost of mortgage loans held for sale approximates the market value. Mortgage loans held for sale are reported in the Level 3 fair value category. Loans In accordance with ASU No. 2016-01, the fair value of loans, excluding previously presented impaired loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses. The discount rates used to determine fair value use interest rate spreads that reflect factors such as liquidity, credit, and nonperformance risk of the loans. Loans are reported in the Level 3 fair value category, as the pricing of loans is more subjective than the pricing of other financial instruments. Mutual Funds For mutual funds held in the deferred compensation trust, the carrying value is a reasonable estimate of fair value. Mutual funds held in the deferred compensation trust are included in other assets on the balance sheet and reported in the Level 2 fair value category. Deposits The fair value of demand deposits, interest-bearing demand deposits and savings is the amount payable on demand at the reporting date. The fair value of certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities. Deposits are reported in the Level 3 fair value category. Securities Sold Under Agreements to Repurchase For securities sold under agreements to repurchase, the carrying value is a reasonable estimate of fair value. Securities sold under agreements to repurchase are reported in the Level 2 fair value category. FHLB Borrowings The fair value of FHLB borrowings is estimated based upon discounted future cash flows using a discount rate comparable to the current market rate for such borrowings. FHLB borrowings are reported in the Level 3 fair value category. Junior Subordinated Debentures Because the Company’s junior subordinated debentures were issued at a floating rate, the carrying amount is a reasonable estimate of fair value. Junior subordinated debentures are reported in the Level 2 fair value category. Commitments to Extend Credit and Standby Letters of Credit Commitments to extend credit and standby letters of credit are generally short-term and at variable interest rates. Therefore, both the carrying value and estimated fair value associated with these instruments are immaterial. Limitations Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on many judgments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial instruments include deferred income taxes and premises and equipment. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates. The tables below present the balance of securities available for sale, which are measured at fair value on a recurring basis by level within the fair value hierarchy, as of September 30, 2021 and December 31, 2020. (Dollars in thousands) September 30, 2021 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation U. S Treasuries $ 7,990 - $ 7,990 - U.S. Government sponsored enterprises 14,677 - 14,677 - Mortgage-backed securities 223,305 - 223,305 - State and political subdivisions 156,933 - 156,933 - (Dollars in thousands) December 31, 2020 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation U.S. Government sponsored enterprises $ 7,507 - 7,507 - Mortgage-backed securities 145,314 - 145,314 - State and political subdivisions 92,428 - 92,428 - The tables below present the balance of mutual funds held in the deferred compensation trust, which are measured at fair value on a recurring basis by level within the fair value hierarchy, as of September 30, 2021 and December 31, 2020. (Dollars in thousands) September 30, 2021 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation Mutual funds held in deferred compensation trust $ 1,514 - 1,514 - (Dollars in thousands) December 31, 2020 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation Mutual funds held in deferred compensation trust $ 1,320 - 1,320 - The fair value measurements for mortgage loans held for sale, impaired loans and other real estate on a non-recurring basis at September 30, 2021 and December 31, 2020 are presented below. The fair value measurement process uses certified appraisals and other market-based information; however, in many cases, it also requires significant input based on management’s knowledge of, and judgment about, current market conditions, specific issues relating to the collateral and other matters. As a result, all fair value measurements for impaired loans and other real estate are considered Level 3. (Dollars in thousands) Fair Value Measurements September 30, 2021 Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage loans held for sale $ 9,086 - - 9,086 Impaired loans 17,417 - - 17,417 (Dollars in thousands) Fair Value Measurements December 31, 2020 Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage loans held for sale $ 9,139 - - 9,139 Impaired loans 20,369 - - 20,369 Other real estate 128 - - 128 (Dollars in thousands) Fair Value September 30, 2021 Fair Value December 31, 2020 Valuation Technique Significant Unobservable Inputs General Range of Significant Unobservable Input Values Mortgage loans held for sale $ 9,086 9,139 Rate lock commitment N/A N/A Impaired loans 17,417 20,369 Appraised value and discounted cash flows Discounts to reflect current market conditions and ultimate collectability 0-25 % Other real estate - 128 Appraised value Discounts to reflect current market conditions and estimated costs to sell 0-25 % The carrying amount and estimated fair value of financial instruments at September 30, 2021 and December 31, 2020 are as follows: (Dollars in thousands) Fair Value Measurements at September 30, 2021 Carrying Amount Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 263,308 263,308 - - 263,308 Investment securities available for sale 402,905 - 402,905 - 402,905 Other investments 3,725 - - 3,725 3,725 Mortgage loans held for sale 9,086 - - 9,086 9,086 Loans, net 882,042 - - 862,462 862,462 Mutual funds held in deferred compensation trust 1,514 - 1,514 - 1,514 Liabilities: Deposits $ 1,409,965 - - 1,407,770 1,407,770 Securities sold under agreements to repurchase 32,332 - 32,332 - 32,332 Junior subordinated debentures 15,464 - 15,464 - 15,464 (Dollars in thousands) Fair Value Measurements at December 31, 2020 Carrying Amount Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 161,580 161,580 - - 161,580 Investment securities available for sale 245,249 - 245,249 - 245,249 Other investments 4,155 - - 4,155 4,155 Mortgage loans held for sale 9,139 - - 9,139 9,139 Loans, net 938,731 - - 924,845 924,845 Mutual funds held in deferred compensation trust 1,320 - 1,320 - 1,320 Liabilities: Deposits $ 1,221,086 - - 1,216,503 1,216,503 Securities sold under agreements to repurchase 26,201 - 26,201 - 26,201 Junior subordinated debentures 15,464 - 15,464 - 15,464 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
7. Leases | (7) Leases As of September 30, 2021, the Company had operating right of use assets and operating lease liabilities of $2.9 million. The Company maintains operating leases on land and buildings for some of the Bank’s branch facilities and loan production offices. Most leases include one option to renew, with renewal terms extending up to 15 years. The exercise of renewal options is based on the judgment of management as to whether or not the renewal option is reasonably certain to be exercised. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised. As allowed by ASU 2016-02, leases with a term of 12 months or less are not recorded on the balance sheet and instead are recognized in lease expense on a straight-line basis over the lease term. The following table presents lease cost and other lease information as of September 30, 2021 and 2020. (Dollars in thousands) September 30, 2021 September 30, 2020 Operating lease cost $ 538 $ 675 Other information: Cash paid for amounts included in the measurement of lease liabilities 520 659 Operating cash flows from operating leases - - Right-of-use assets obtained in exchange for new lease liabilities - operating leases 952 450 Weighted-average remaining lease term - operating leases 6.72 7.36 Weighted-average discount rate - operating leases 2.71 % 2.97 % The following table presents lease maturities as of September 30, 2021 and December 31, 2020. (Dollars in thousands) Maturity Analysis of Operating Lease Liabilities: September 30, 2021 December 31, 2020 2021 $ 181 $ 754 2022 555 588 2023 544 567 2024 489 489 2025 433 433 Thereafter 1,041 1,041 Total 3,243 3,872 Less: Imputed Interest (321 ) (401 ) Operating Lease Liability $ 2,922 $ 3,471 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events | |
8. Subsequent Events | (8) Subsequent Events The Company has reviewed and evaluated subsequent events and transactions for material subsequent events through the date the financial statements are issued. Management has concluded that there were no material subsequent events. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
Correction of an Error | Subsequent to issuance of the Company’s December 31, 2020 Form 10-K, it was identified that the Company’s non-qualified deferred compensation plan had not been properly recorded on the Consolidated Balance Sheets. The deferred compensation plan requires all deferral amounts and contributions to be held in a rabbi trust, and the assets held by the trust should be recorded on the Company’s financial statements along with a corresponding liability. For balances related to mutual fund investments held in the rabbi trust, the accrued interest receivable and other assets, accrued interest payable and other liabilities, total assets, and total liabilities line items on the Consolidated Balance Sheets were adjusted as of December 31, 2020 to reflect the asset and corresponding liability associated with the portion of the rabbi trust held in mutual fund investments. This resulted in an increase to these line items of $1.3 million. Additionally, an adjustment to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets has been made to disclose the number of shares of Company stock held by the rabbi trust and the cost basis for those shares, as well as a corresponding liability for the deferred compensation as of December 31, 2020. On the Consolidated Statements of Earnings, basic earnings per share has been adjusted from $0.78 to $0.80 for the three months ended September 30, 2020 and from $1.62 to $1.67 for the nine months ended September 30, 2020. The impact of the changes in the fair value of the mutual funds held in the rabbi trust and the changes in the deferred compensation liability that were not previously recorded were not considered material to the financial statements. These changes to basic earnings per share are also reflected within Note 4 to the financial statements below. In addition to the adjustments to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets, the Company adjusted the presentation of the Consolidated Statements of Changes in Shareholders’ Equity for all periods presented to reflect the Company shares held within the rabbi trust, as well as the corresponding deferred compensation associated with these shares. The Company’s Consolidated Statements of Cash Flows were adjusted for the nine months ended September 30, 2020 in order to reflect the changes to other assets and other liabilities made on the Consolidated Balance Sheets. These unaudited interim financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results of the periods presented. The adjustments to correct the error noted above were not considered material to the financial statements. |
Recent Accounting Pronouncements | The Company’s Consolidated Statements of Cash Flows were adjusted for the nine months ended September 30, 2020 in order to reflect the changes to other assets and other liabilities made on the Consolidated Balance Sheets. These unaudited interim financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results of the periods presented. The adjustments to correct the error noted above were not considered material to the financial statements. Recent Accounting Pronouncements The following table provides a summary of ASUs issued by the Financial Accounting Standards Board (“FASB”) that the Company has recently adopted. Recently Adopted Accounting Guidance ASU Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2019-07: Codification Updates to SEC Sections Guidance updated for various Topics of the ASC to align the guidance in various SEC sections of the ASC with the requirements of certain SEC final rules. Effective upon issuance The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2018-13: Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820) Updates the disclosure requirements on fair value measurements in ASC 820, Fair Value Measurement. January 1, 2020 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2018-18: Clarifying the Interaction between Topic 808 and Topic 606 Clarifies the interaction between the guidance for certain collaborative arrangements and the new revenue recognition financial accounting and reporting standard. January 1, 2020 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2018-19: Leases (Topic 842): Codification Improvements Provides guidance to address concerns companies had raised about an accounting exception they would lose when assessing the fair value of underlying assets under the leases standard and clarify that lessees and lessors are exempt from a certain interim disclosure requirement associated with adopting the new standard. January 1, 2020 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2018-14: Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (Subtopic 715-20) Updates disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. January 1, 2021 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2019-12: Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Guidance to simplify accounting for income taxes by removing specific technical exceptions that often produce information investors have a hard time understanding. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. January 1, 2021 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2020-01: Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force) Guidance to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. January 1, 2021 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2021-06: Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946) Amends SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Release No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. Effective upon issuance The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2020-02: Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842)—Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update) Guidance to add and amend SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Staff Accounting Bulletin No. 119 related to the new credit losses standard and comments by the SEC staff related to the revised effective date of the new leases standard. Effective upon issuance The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. The following table provides a summary of ASU’s issued by the FASB that the Company has not adopted as of September 30, 2021, which may impact the Company’s financial statements. Recently Issued Accounting Guidance Not Yet Adopted ASU Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2016-13: Measurement of Credit Losses on Financial Instruments Provides guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. See ASU 2019-10 below. The Company will apply this guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. The Company is still evaluating the impact of this guidance on its consolidated financial statements. The Company has formed a Current Expected Credit Losses (“CECL”) committee and implemented a model from a third-party vendor for running CECL calculations. The Company is currently developing CECL model assumptions and comparing results to current allowance for loan loss calculations. The Company plans to run parallel calculations leading up to the effective date of this guidance to ensure it is prepared for implementation by the effective date. In addition to the Company’s allowance for loan losses, it will also record an allowance for credit losses on debt securities instead of applying the impairment model currently utilized. The amount of the adjustments will be impacted by each portfolio’s composition and credit quality at the adoption date as well as economic conditions and forecasts at that time. ASU 2018-19: Codification Improvements to Topic 326, Financial Instruments—Credit Losses Aligns the implementation date of the topic for annual financial statements of nonpublic companies with the implementation date for their interim financial statements. The guidance also clarifies that receivables arising from operating leases are not within the scope of the topic, but rather, should be accounted for in accordance with the leases topic. See ASU 2019-10 below. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. See ASU 2016-13 above. ASU 2019-04: Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Addresses unintended issues accountants flagged when implementing ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2016-13, Measurement of Credit Losses on Financial Instruments, and ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities. See ASU 2019-10 below. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. See ASU 2016-13 above. ASU 2019-05: Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief Guidance to provide entities with an option to irrevocably elect the fair value option, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments. See ASU 2019-10 below. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. See ASU 2016-13 above. ASU 2019-10: Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates Guidance to defer the effective dates for private companies, not-for-profit organizations, and certain smaller reporting companies applying standards on current expected credit losses (CECL), leases and hedging. January 1, 2023 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2019-11: Codification Improvements to Topic 326, Financial Instruments—Credit Losses Guidance that addresses issues raised by stakeholders during the implementation of ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments affect a variety of Topics in the ASC. January 1, 2023 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2020-03: Codification Improvements to Financial Instruments Guidance to clarify that the contractual term of a net investment in a lease, determined in accordance with the leases standard, should be the contractual term used to measure expected credit losses under ASC 326. January 1, 2023 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2020-04: Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Guidance that provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period. Therefore, it will be in effect for a limited time through December 31, 2022. March 12, 2020 through December 31, 2022 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2020-06: Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Guidance to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. January 1, 2022 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2021-05: Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments, which requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate Updated guidance that requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate as an operating lease at lease commencement if certain conditions are met January 1, 2022 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. Other accounting standards that have been issued or proposed by FASB or other standards-setting bodies are not expected to have a material impact on the Company’s results of operations, financial position or disclosures. Reclassification Certain amounts in the 2020 consolidated financial statements have been reclassified to conform to the 2021 presentation. These reclassifications did not have any impact on shareholders’ equity or net earnings. |
Reclassification | Certain amounts in the 2020 consolidated financial statements have been reclassified to conform to the 2021 presentation. These reclassifications did not have any impact on shareholders’ equity or net earnings. |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investment Securities | |
Investment securities available for sale | (Dollars in thousands) September 30, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S Treasuries $ 7,963 39 12 7,990 U.S. Government sponsored enterprises 14,566 289 178 14,677 Mortgage-backed securities 222,526 2,427 1,648 223,305 State and political subdivisions 153,551 4,327 945 156,933 Total $ 398,606 7,082 2,783 402,905 (Dollars in thousands) December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Government sponsored enterprises $ 7,384 331 208 7,507 Mortgage-backed securities 143,095 2,812 593 145,314 State and political subdivisions 87,757 4,758 87 92,428 Total $ 238,236 7,901 888 245,249 |
Current fair value and associated unrealized losses on investments in securities with unrealized losses | (Dollars in thousands) September 30, 2021 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasuries $ 4,994 12 - - 4,994 12 U.S. Government sponsored enterprises 5,386 5 3,442 173 8,828 178 Mortgage-backed securities 114,889 1,505 5,897 143 120,786 1,648 State and political subdivisions 37,729 800 3,757 145 41,486 945 Total $ 162,998 2,322 13,096 461 176,094 2,783 (Dollars in thousands) December 31, 2020 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Government sponsored enterprises $ - - 4,193 208 4,193 208 Mortgage-backed securities 80,827 565 4,762 28 85,589 593 State and political subdivisions 7,126 87 - - 7,126 87 Total $ 87,953 652 8,955 236 96,908 888 |
Amortized cost and estimated fair value of investment securities available for sale by contractual maturity | September 30, 2021 (Dollars in thousands) Amortized Cost Fair Value Due within one year $ 11,591 11,689 Due from one to five years 10,143 10,763 Due from five to ten years 136,387 139,315 Due after ten years 17,959 17,833 Mortgage-backed securities 222,526 223,305 Total $ 398,606 402,905 |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Loans | |
Major classifications of loans | (Dollars in thousands) September 30, 2021 December 31, 2020 Real estate loans: Construction and land development $ 80,009 94,124 Single-family residential 258,403 272,325 Single-family residential - Banco de la Gente non-traditional 24,043 26,883 Commercial 363,174 332,971 Multifamily and farmland 58,856 48,880 Total real estate loans 784,485 775,183 Loans not secured by real estate: Commercial loans 94,376 161,740 Farm loans 633 855 Consumer loans 6,321 7,113 All other loans 5,190 3,748 Total loans 891,005 948,639 Less allowance for loan losses (8,963 ) (9,908 ) Total net loans $ 882,042 938,731 |
Summary of Age analysis of past due loans | September 30, 2021 (Dollars in thousands) Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Total Current Loans Total Loans Accruing Loans 90 or More Days Past Due Real estate loans: Construction and land development $ 6 - 6 80,003 80,009 - Single-family residential 850 230 1,080 257,323 258,403 - Single-family residential - Banco de la Gente non-traditional 450 39 489 23,554 24,043 - Commercial 28 37 65 363,109 363,174 - Multifamily and farmland - - - 58,856 58,856 - Total real estate loans 1,334 306 1,640 782,845 784,485 - Loans not secured by real estate: Commercial loans 176 - 176 94,200 94,376 - Farm loans - - - 633 633 - Consumer loans 66 1 67 6,254 6,321 - All other loans 8 - 8 5,182 5,190 - Total loans $ 1,584 307 1,891 889,114 891,005 - December 31, 2020 (Dollars in thousands) Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Total Current Loans Total Loans Accruing Loans 90 or More Days Past Due Real estate loans: Construction and land development $ 298 - 298 93,826 94,124 - Single-family residential 3,660 270 3,930 268,395 272,325 - Single-family residential - Banco de la Gente non-traditional 3,566 105 3,671 23,212 26,883 - Commercial 36 - 36 332,935 332,971 - Multifamily and farmland - - - 48,880 48,880 - Total real estate loans 7,560 375 7,935 767,248 775,183 - Loans not secured by real estate: Commercial loans - - - 161,740 161,740 - Farm loans - - - 855 855 - Consumer loans 45 2 47 7,066 7,113 - All other loans - - - 3,748 3,748 - Total loans $ 7,605 377 7,982 940,657 948,639 - |
Non-accrual loans | (Dollars in thousands) September 30, 2021 December 31, 2020 Real estate loans: Single-family residential $ 1,020 1,266 Single-family residential - Banco de la Gente non-traditional 1,244 1,709 Commercial 271 440 Multifamily and farmland 109 117 Total real estate loans 2,644 3,532 Loans not secured by real estate: Commercial loans 54 212 Consumer loans 6 14 Total $ 2,704 3,758 |
Impaired loans | September 30, 2021 (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Real estate loans: Construction and land development $ 75 - 75 75 3 Single-family residential 4,506 275 4,021 4,296 80 Single-family residential - Banco de la Gente non-traditional 12,269 - 11,383 11,383 724 Commercial 2,229 439 1,692 2,131 12 Multifamily and farmland 115 - 109 109 - Total impaired real estate loans 19,194 714 17,280 17,994 819 Loans not secured by real estate: Commercial loans 299 54 183 237 3 Consumer loans 12 - 8 8 - Total impaired loans $ 19,505 768 17,471 18,239 822 |
Schedule of average impaired loan losses | (Dollars in thousands) Three months ended Nine months ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Average Balance Interest Income Recognized Average Balance Interest Income Recognized Average Balance Interest Income Recognized Average Balance Interest Income Recognized Real estate loans: Construction and land development $ 76 1 153 - 91 5 123 7 Single-family residential 5,875 49 5,107 63 5,683 166 4,451 181 Single-family residential - Banco de la Gente stated income 10,349 140 13,402 197 11,090 477 13,785 617 Commercial 2,280 20 2,665 31 2,617 85 2,772 103 Multifamily and farmland 110 2 - - 113 4 - - Total impaired real estate loans 18,690 212 21,327 291 19,594 737 21,131 908 Loans not secured by real estate: Commercial loans 248 5 494 7 330 16 553 22 Consumer loans 9 - 74 1 19 1 57 4 Total impaired loans $ 18,947 217 21,895 299 19,943 754 21,741 934 December 31, 2020 (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Average Outstanding Impaired Loans Interest Income Recognized Real estate loans: Construction and land development $ 108 - 108 108 4 134 8 Single-family residential 5,302 379 4,466 4,845 33 4,741 262 Single-family residential - Banco de la Gente non-traditional 13,417 - 12,753 12,753 862 13,380 798 Commercial 2,999 1,082 1,891 2,973 14 2,940 139 Multifamily and farmland 119 - 117 117 - 29 6 Total impaired real estate loans 21,945 1,461 19,335 20,796 913 21,224 1,213 Loans not secured by real estate: Commercial loans 515 211 244 455 5 564 32 Consumer loans 41 - 37 37 1 60 5 Total impaired loans $ 22,501 1,672 19,616 21,288 919 21,848 1,250 |
Changes in the allowance for loan losses | (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Nine months ended September 30, 2021: Allowance for loan losses: Beginning balance $ 1,196 1,843 1,052 2,212 122 1,345 - 128 2,010 9,908 Charge-offs - - - - - (293 ) - (249 ) - (542 ) Recoveries 121 165 - 50 3 7 - 114 - 460 Provision (421 ) (306 ) (162 ) 46 22 (153 ) - 98 13 (863 ) Ending balance $ 896 1,702 890 2,308 147 906 - 91 2,023 8,963 Three months ended September 30, 2021: Allowance for loan losses: Beginning balance $ 1,038 1,723 980 2,180 148 996 - 89 2,133 9,287 Charge-offs - - - - - (215 ) - (91 ) - (306 ) Recoveries 31 86 - 2 4 1 - 40 - 164 Provision (173 ) (107 ) (90 ) 126 (5 ) 124 - 53 (110 ) (182 ) Ending balance $ 896 1,702 890 2,308 147 906 - 91 2,023 8,963 Allowance for loan losses at September 30, 2021: Ending balance: individually evaluated for impairment $ 1 58 710 7 - - - - - 776 Ending balance: collectively evaluated for impairment 895 1,644 180 2,301 147 906 - 91 2,023 8,187 Ending balance $ 896 1,702 890 2,308 147 906 - 91 2,023 8,963 Loans at September 30, 2021: Ending balance $ 80,009 258,403 24,043 363,174 58,856 94,376 633 11,511 - 891,005 Ending balance: individually evaluated for impairment $ 6 1,398 10,236 1,450 - 54 - - - 13,144 Ending balance: collectively evaluated for impairment $ 80,003 257,005 13,807 361,724 58,856 94,322 633 11,511 - 877,861 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Nine months ended September 30, 2020: Allowance for loan losses: Beginning balance $ 694 1,274 1,073 1,305 120 688 - 138 1,388 6,680 Charge-offs (5 ) (65 ) - (7 ) - (109 ) - (343 ) - (529 ) Recoveries 2 59 - 45 - 27 - 148 - 281 Provision 573 482 (11 ) 751 (4 ) 355 - 254 1,060 3,460 Ending balance $ 1,264 1,750 1,062 2,094 116 961 - 197 2,448 9,892 Three months ended September 30, 2020: Allowance for loan losses: Beginning balance $ 1,531 1,813 1,114 2,051 115 980 - 162 1,667 9,433 Charge-offs - (65 ) - - - - - (87 ) - (152 ) Recoveries - 34 - 11 - 2 - 42 - 89 Provision (267 ) (32 ) (52 ) 32 1 (21 ) - 80 781 522 Ending balance $ 1,264 1,750 1,062 2,094 116 961 - 197 2,448 9,892 Allowance for loan losses at September 30, 2020: Ending balance: individually evaluated for impairment $ 2 4 859 11 - - - - - 876 Ending balance: collectively evaluated for impairment 1,262 1,746 203 2,083 116 961 - 197 2,448 9,016 Ending balance $ 1,264 1,750 1,062 2,094 116 961 - 197 2,448 9,892 Loans at September 30, 2020: Ending balance $ 96,866 272,246 28,099 318,596 49,584 182,862 851 21,128 - 970,232 Ending balance: individually evaluated for impairment $ 8 1,582 11,630 1,685 - 255 - - - 15,160 Ending balance: collectively evaluated for impairment $ 96,858 270,664 16,469 316,911 49,584 182,607 851 21,128 - 955,072 |
Credit risk profile of each loan type based on internally assigned risk grade | September 30, 2021 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer All Other Total 1- Excellent Quality $ - 7,380 - - - 382 - 613 - 8,375 2- High Quality 8,982 104,288 - 35,384 19 17,846 - 1,979 1,413 169,911 3- Good Quality 67,245 124,534 9,028 283,657 55,335 69,324 621 3,415 3,777 616,936 4- Management Attention 3,626 16,239 10,878 33,620 2,841 5,122 12 290 - 72,628 5- Watch 82 2,904 1,722 9,802 552 1,644 - 1 - 16,707 6- Substandard 74 3,058 2,415 711 109 58 - 23 - 6,448 7- Doubtful - - - - - - - - - - 8- Loss - - - - - - - - - - Total $ 80,009 258,403 24,043 363,174 58,856 94,376 633 6,321 5,190 891,005 December 31, 2020 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer All Other Total 1- Excellent Quality $ 228 9,867 - - - 406 - 678 - 11,179 2- High Quality 9,092 121,331 - 40,569 22 19,187 - 2,237 1,563 194,001 3- Good Quality 76,897 115,109 10,170 241,273 44,890 128,727 832 3,826 1,477 623,201 4- Management Attention 4,917 20,012 12,312 39,370 3,274 11,571 23 336 708 92,523 5- Watch 2,906 2,947 1,901 10,871 694 1,583 - 6 - 20,908 6- Substandard 84 3,059 2,500 888 - 266 - 30 - 6,827 7- Doubtful - - - - - - - - - - 8- Loss - - - - - - - - - - Total $ 94,124 272,325 26,883 332,971 48,880 161,740 855 7,113 3,748 948,639 |
Net Earnings Per Share (Tables)
Net Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Net Earnings Per Share | |
Reconciliations of the amounts used in the computation of both basic earnings per common share and diluted earnings per common share | For the three months ended September 30, 2021 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 3,390 5,544,596 $ 0.61 Effect of dilutive securities: Restricted stock units - 14,690 Shares held in deferred comp plan 159,797 Diluted earnings per share $ 3,390 5,719,083 $ 0.59 For the nine months ended September 30, 2021 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 12,126 5,601,879 $ 2.16 Effect of dilutive securities: Restricted stock units - 13,190 Shares held in deferred comp plan 158,039 Diluted earnings per share $ 12,126 5,773,108 $ 2.10 For the three months ended September 30, 2020 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 4,509 5,634,964 $ 0.80 Effect of dilutive securities: Restricted stock units - 15,299 Shares held in deferred comp plan - 151,658 Diluted earnings per share $ 4,509 5,801,921 $ 0.78 For the nine months ended September 30, 2020 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 9,437 5,665,294 $ 1.67 Effect of dilutive securities: Restricted stock units - 13,960 Shares held in deferred comp plan - 149,163 Diluted earnings per share $ 9,437 5,828,417 $ 1.62 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value | |
Available for sale securities measured at fair value on a recurring basis | (Dollars in thousands) September 30, 2021 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation U. S Treasuries $ 7,990 - $ 7,990 - U.S. Government sponsored enterprises 14,677 - 14,677 - Mortgage-backed securities 223,305 - 223,305 - State and political subdivisions 156,933 - 156,933 - (Dollars in thousands) December 31, 2020 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation U.S. Government sponsored enterprises $ 7,507 - 7,507 - Mortgage-backed securities 145,314 - 145,314 - State and political subdivisions 92,428 - 92,428 - |
Fair value measurements of investment securities available for sale using Level 3 significant unobservable inputs | (Dollars in thousands) September 30, 2021 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation Mutual funds held in deferred compensation trust $ 1,514 - 1,514 - (Dollars in thousands) December 31, 2020 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation Mutual funds held in deferred compensation trust $ 1,320 - 1,320 - (Dollars in thousands) Fair Value Measurements September 30, 2021 Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage loans held for sale $ 9,086 - - 9,086 Impaired loans 17,417 - - 17,417 (Dollars in thousands) Fair Value Measurements December 31, 2020 Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage loans held for sale $ 9,139 - - 9,139 Impaired loans 20,369 - - 20,369 Other real estate 128 - - 128 (Dollars in thousands) Fair Value September 30, 2021 Fair Value December 31, 2020 Valuation Technique Significant Unobservable Inputs General Range of Significant Unobservable Input Values Mortgage loans held for sale $ 9,086 9,139 Rate lock commitment N/A N/A Impaired loans 17,417 20,369 Appraised value and discounted cash flows Discounts to reflect current market conditions and ultimate collectability 0-25 % Other real estate - 128 Appraised value Discounts to reflect current market conditions and estimated costs to sell 0-25 % |
Carrying amount and estimated fair value of the Company's financial instruments | (Dollars in thousands) Fair Value Measurements at September 30, 2021 Carrying Amount Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 263,308 263,308 - - 263,308 Investment securities available for sale 402,905 - 402,905 - 402,905 Other investments 3,725 - - 3,725 3,725 Mortgage loans held for sale 9,086 - - 9,086 9,086 Loans, net 882,042 - - 862,462 862,462 Mutual funds held in deferred compensation trust 1,514 - 1,514 - 1,514 Liabilities: Deposits $ 1,409,965 - - 1,407,770 1,407,770 Securities sold under agreements to repurchase 32,332 - 32,332 - 32,332 Junior subordinated debentures 15,464 - 15,464 - 15,464 (Dollars in thousands) Fair Value Measurements at December 31, 2020 Carrying Amount Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 161,580 161,580 - - 161,580 Investment securities available for sale 245,249 - 245,249 - 245,249 Other investments 4,155 - - 4,155 4,155 Mortgage loans held for sale 9,139 - - 9,139 9,139 Loans, net 938,731 - - 924,845 924,845 Mutual funds held in deferred compensation trust 1,320 - 1,320 - 1,320 Liabilities: Deposits $ 1,221,086 - - 1,216,503 1,216,503 Securities sold under agreements to repurchase 26,201 - 26,201 - 26,201 Junior subordinated debentures 15,464 - 15,464 - 15,464 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
Lease expense | (Dollars in thousands) September 30, 2021 September 30, 2020 Operating lease cost $ 538 $ 675 Other information: Cash paid for amounts included in the measurement of lease liabilities 520 659 Operating cash flows from operating leases - - Right-of-use assets obtained in exchange for new lease liabilities - operating leases 952 450 Weighted-average remaining lease term - operating leases 6.72 7.36 Weighted-average discount rate - operating leases 2.71 % 2.97 % |
Maturity analysis of operating lease liabilities | (Dollars in thousands) Maturity Analysis of Operating Lease Liabilities: September 30, 2021 December 31, 2020 2021 $ 181 $ 754 2022 555 588 2023 544 567 2024 489 489 2025 433 433 Thereafter 1,041 1,041 Total 3,243 3,872 Less: Imputed Interest (321 ) (401 ) Operating Lease Liability $ 2,922 $ 3,471 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Summary of Significant Accounting Policies | ||||
Mutual fund investments | $ 1,300 | $ 1,300 | ||
Earnings, basic earnings per share | $ 0.61 | $ 0.80 | $ 2.16 | $ 1.67 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Investment Securities Available for Sale | ||
Amortized cost | $ 398,606 | |
Estimated fair value | 402,905 | $ 245,249 |
Total [Member] | ||
Investment Securities Available for Sale | ||
Amortized cost | 398,606 | 238,236 |
Gross unrealized gains | 7,082 | 7,901 |
Gross unrealized losses | 2,783 | 888 |
Estimated fair value | 402,905 | 245,249 |
U.S. Government Sponsored Enterprises [Member] | ||
Investment Securities Available for Sale | ||
Amortized cost | 14,566 | 7,384 |
Gross unrealized gains | 289 | 331 |
Gross unrealized losses | 178 | 208 |
Estimated fair value | 14,677 | 7,507 |
Mortgage-Backed Securities [Member] | ||
Investment Securities Available for Sale | ||
Amortized cost | 222,526 | 143,095 |
Gross unrealized gains | 2,427 | 2,812 |
Gross unrealized losses | 1,648 | 593 |
Estimated fair value | 223,305 | 145,314 |
State and Political Subdivisions [Member] | ||
Investment Securities Available for Sale | ||
Amortized cost | 153,551 | 87,757 |
Gross unrealized gains | 4,327 | 4,758 |
Gross unrealized losses | 945 | 87 |
Estimated fair value | 156,933 | $ 92,428 |
U S Treasuries [Member] | ||
Investment Securities Available for Sale | ||
Amortized cost | 7,963 | |
Gross unrealized gains | 39 | |
Gross unrealized losses | 12 | |
Estimated fair value | $ 7,990 |
Investment securities (Details
Investment securities (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Less than 12 months, fair value | $ 162,998,000 | $ 87,953,000 |
Less than 12 months, unrealized losses | 2,322,000 | 652,000 |
12 months or more, fair value | 13,096,000 | 8,955,000 |
12 months or more, unrealized losses | 461,000 | 236,000 |
Total, fair value | 176,094,000 | 96,908,000 |
Total, unrealized losses | 2,783,000 | 888,000 |
U.S. Government Sponsored Enterprises [Member] | ||
Less than 12 months, fair value | 5,386,000 | 0 |
Less than 12 months, unrealized losses | 5,000 | 0 |
12 months or more, fair value | 3,442,000 | 4,193,000 |
12 months or more, unrealized losses | 173,000 | 208,000 |
Total, fair value | 8,828,000 | 4,193,000 |
Total, unrealized losses | 178,000 | 208,000 |
Mortgage-Backed Securities [Member] | ||
Less than 12 months, fair value | 114,889,000 | 80,827,000 |
Less than 12 months, unrealized losses | 1,505,000 | 565,000 |
12 months or more, fair value | 5,897,000 | 4,762,000 |
12 months or more, unrealized losses | 143,000 | 28,000 |
Total, fair value | 120,786,000 | 85,589,000 |
Total, unrealized losses | 1,648,000 | 593,000 |
State and Political Subdivisions [Member] | ||
Less than 12 months, fair value | 37,729,000 | 7,126,000 |
Less than 12 months, unrealized losses | 800,000 | 87,000 |
12 months or more, fair value | 3,757,000 | 0 |
12 months or more, unrealized losses | 145,000 | 0 |
Total, fair value | 41,486,000 | 7,126,000 |
Total, unrealized losses | 945,000 | $ 87,000 |
U.S. Treasuries [Member] | ||
Less than 12 months, fair value | 4,994,000 | |
Less than 12 months, unrealized losses | 12,000 | |
12 months or more, fair value | 0 | |
12 months or more, unrealized losses | 0 | |
Total, fair value | 4,994,000 | |
Total, unrealized losses | $ 12,000 |
Investment securities (Detail_2
Investment securities (Details 2) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Amortized Cost | ||
Due within one year | $ 11,591,000 | |
Due from one to five years | 10,143,000 | |
Due from five to ten years | 136,387,000 | |
Due after ten years | 17,959,000 | |
Mortgage-backed securities | 222,526,000 | |
Total | 398,606,000 | |
Estimated Fair Value | ||
Due within one year | 11,689,000 | |
Due from one to five years | 10,763,000 | |
Due from five to ten years | 139,315,000 | |
Due after ten years | 17,833,000 | |
Mortgage-backed securities | 223,305,000 | |
Total | $ 406,630,000 | $ 249,404,000 |
Investment Securities (Detail_3
Investment Securities (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Investment Securities | ||||
Gain on sale | $ 1.7 | $ 2.1 | ||
Proceeds from sales of securities | $ 29.2 | $ 46.1 | ||
Securities pledged to secure public deposits | $ 90.6 | $ 77.3 | ||
Debt securities total | $ 2.8 |
Loans (Details)
Loans (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Major Classifications | ||
Total loans | $ 891,005,000 | $ 948,639,000 |
Less allowance for loan losses | (8,963,000) | (9,908,000) |
Net loans | 882,042,000 | 938,731,000 |
Total Real Estate Loans | ||
Major Classifications | ||
Total loans | 784,485,000 | 775,183,000 |
Construction and Land Development | ||
Major Classifications | ||
Total loans | 80,009,000 | 94,124,000 |
Single-Family Residential | ||
Major Classifications | ||
Total loans | 258,403,000 | 272,325,000 |
Single-Family Residential - Banco de la Gente Non-Tradtional | ||
Major Classifications | ||
Total loans | 24,043,000 | 26,883,000 |
Commercial | ||
Major Classifications | ||
Total loans | 363,174,000 | 332,971,000 |
Multifamily and Farmland | ||
Major Classifications | ||
Total loans | 58,856,000 | 48,880,000 |
Commercial Loans (Not Secured by Real Estate) | ||
Major Classifications | ||
Total loans | 94,376,000 | 161,740,000 |
Farm Loans (Not Secured by Real Estate) | ||
Major Classifications | ||
Total loans | 633,000 | 855,000 |
Consumer Loans (Not Secured by Real Estate) | ||
Major Classifications | ||
Total loans | 6,321,000 | 7,113,000 |
All Other Loans (Not Secured by Real Estate) | ||
Major Classifications | ||
Total loans | $ 5,190,000 | $ 3,748,000 |
Loans (Details 1)
Loans (Details 1) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Total loans | $ 891,005,000 | $ 948,639,000 |
Construction and Land Development | ||
Loans 30-89 days past due | 6,000 | 298,000 |
Loans 90 or more days past due | 0 | 0 |
Total past due loans | 6,000 | 298,000 |
Total current loans | 80,003 | 93,826 |
Total loans | 80,009,000 | 94,124,000 |
Accruing loans 90 or more days past due | 0 | 0 |
Single-Family Residential | ||
Loans 30-89 days past due | 850,000 | 3,660,000 |
Loans 90 or more days past due | 230,000 | 270,000 |
Total past due loans | 1,080,000 | 3,930,000 |
Total current loans | 257,323 | 268,395 |
Total loans | 258,403,000 | 272,325,000 |
Accruing loans 90 or more days past due | 0 | 0 |
Single-Family Residential - Banco de la Gente Non-Tradtional | ||
Loans 30-89 days past due | 450,000 | 3,566,000 |
Loans 90 or more days past due | 39,000 | 105,000 |
Total past due loans | 489,000 | 3,671,000 |
Total current loans | 23,554 | 23,212 |
Total loans | 24,043,000 | 26,883,000 |
Accruing loans 90 or more days past due | 0 | 0 |
Commercial | ||
Loans 30-89 days past due | 28,000 | 36,000 |
Loans 90 or more days past due | 37,000 | 0 |
Total past due loans | 65,000 | 36,000 |
Total current loans | 363,109 | 332,935 |
Total loans | 363,174,000 | 332,971,000 |
Accruing loans 90 or more days past due | 0 | 0 |
Multifamily and Farmland | ||
Loans 30-89 days past due | 0 | 0 |
Loans 90 or more days past due | 0 | 0 |
Total past due loans | 0 | 0 |
Total current loans | 58,856 | 48,880 |
Total loans | 58,856,000 | 48,880,000 |
Accruing loans 90 or more days past due | 0 | 0 |
Commercial Loans (Not Secured by Real Estate) | ||
Loans 30-89 days past due | 176,000 | 0 |
Loans 90 or more days past due | 0 | 0 |
Total past due loans | 176,000 | 0 |
Total current loans | 94,200 | 161,740 |
Total loans | 94,376,000 | 161,740,000 |
Accruing loans 90 or more days past due | 0 | 0 |
Farm Loans (Not Secured by Real Estate) | ||
Loans 30-89 days past due | 0 | 0 |
Loans 90 or more days past due | 0 | 0 |
Total past due loans | 0 | 0 |
Total current loans | 633 | 855 |
Total loans | 633,000 | 855,000 |
Accruing loans 90 or more days past due | 0 | 0 |
Consumer Loans (Not Secured by Real Estate) | ||
Loans 30-89 days past due | 66,000 | 45,000 |
Loans 90 or more days past due | 1,000 | 2,000 |
Total past due loans | 67,000 | 47,000 |
Total current loans | 6,254 | 7,066 |
Total loans | 6,321,000 | 7,113,000 |
Accruing loans 90 or more days past due | 0 | 0 |
All Other Loans (Not Secured by Real Estate) | ||
Loans 30-89 days past due | 8,000 | 0 |
Loans 90 or more days past due | 0 | 0 |
Total past due loans | 8,000 | 0 |
Total current loans | 5,182 | 3,748 |
Total loans | 5,190,000 | 3,748,000 |
Accruing loans 90 or more days past due | 0 | 0 |
Past Due Loans [Member] | ||
Loans 30-89 days past due | 1,584,000 | 7,605,000 |
Loans 90 or more days past due | 307,000 | 377,000 |
Total past due loans | 1,891,000 | 7,982,000 |
Total current loans | 889,114 | 940,657 |
Total loans | 891,005,000 | 948,639,000 |
Accruing loans 90 or more days past due | 0 | 0 |
Total Real Estate Loans | ||
Loans 30-89 days past due | 1,334,000 | 7,560,000 |
Loans 90 or more days past due | 306,000 | 375,000 |
Total past due loans | 1,640,000 | 7,935,000 |
Total current loans | 782,845 | 767,248 |
Total loans | 784,485,000 | 775,183,000 |
Accruing loans 90 or more days past due | $ 0 | $ 0 |
Loans (Details 2)
Loans (Details 2) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Non-Accrual Loans | ||
Non-accrual loans | $ 2,704 | $ 3,758 |
Total Real Estate Loans | ||
Non-Accrual Loans | ||
Non-accrual loans | 2,644 | 3,532 |
Single-Family Residential | ||
Non-Accrual Loans | ||
Non-accrual loans | 1,020 | 1,266 |
Single-Family Residential - Banco de la Gente Non-Tradtional | ||
Non-Accrual Loans | ||
Non-accrual loans | 1,244 | 1,709 |
Commercial | ||
Non-Accrual Loans | ||
Non-accrual loans | 271 | 440 |
Multifamily and Farmland | ||
Non-Accrual Loans | ||
Non-accrual loans | 109 | 117 |
Commercial Loans (Not Secured by Real Estate) | ||
Non-Accrual Loans | ||
Non-accrual loans | 54 | 212 |
Consumer Loans (Not Secured by Real Estate) | ||
Non-Accrual Loans | ||
Non-accrual loans | $ 6 | $ 14 |
Loans (Details 3)
Loans (Details 3) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Impaired Loans | |||||
Unpaid contractual principal balance | $ 19,505,000 | $ 19,505,000 | $ 22,501,000 | ||
Recorded investment with no allowance | 768,000 | 768,000 | 1,672,000 | ||
Recorded investment with allowance | 17,471,000 | 17,471,000 | 19,616,000 | ||
Recorded investment in impaired loans | 18,239,000 | 18,239,000 | 21,288,000 | ||
Related allowance | 8,963,000 | 8,963,000 | 9,908,000 | ||
Average outstanding impaired loans | 18,947,000 | $ 21,895,000 | 19,943,000 | $ 21,741,000 | 21,848,000 |
Interest income recognized | 217,000 | 299,000 | 754,000 | 934,000 | 1,250,000 |
Total Real Estate Loans | |||||
Impaired Loans | |||||
Unpaid contractual principal balance | 19,194,000 | 19,194,000 | 21,945,000 | ||
Recorded investment with no allowance | 714,000 | 714,000 | 1,461,000 | ||
Recorded investment with allowance | 17,280,000 | 17,280,000 | 19,335,000 | ||
Recorded investment in impaired loans | 17,994,000 | 17,994,000 | 20,796,000 | ||
Related allowance | 819,000 | 819,000 | 913,000 | ||
Average outstanding impaired loans | 18,690,000 | 21,327,000 | 19,594,000 | 21,131,000 | 21,224,000 |
Interest income recognized | 212,000 | 291,000 | 737,000 | 908,000 | 1,213,000 |
Construction and Land Development | |||||
Impaired Loans | |||||
Unpaid contractual principal balance | 75,000 | 75,000 | 108,000 | ||
Recorded investment with no allowance | 0 | 0 | 0 | ||
Recorded investment with allowance | 75,000 | 75,000 | 108,000 | ||
Recorded investment in impaired loans | 75,000 | 75,000 | 108,000 | ||
Related allowance | 3,000 | 3,000 | 4,000 | ||
Average outstanding impaired loans | 76,000 | 153,000 | 91,000 | 123,000 | 134,000 |
Interest income recognized | 1,000 | 0 | 5,000 | 7,000 | 8,000 |
Single-Family Residential | |||||
Impaired Loans | |||||
Unpaid contractual principal balance | 4,506,000 | 4,506,000 | 5,302,000 | ||
Recorded investment with no allowance | 275,000 | 275,000 | 379,000 | ||
Recorded investment with allowance | 4,021,000 | 4,021,000 | 4,466,000 | ||
Recorded investment in impaired loans | 4,296,000 | 4,296,000 | 4,845,000 | ||
Related allowance | 80,000 | 80,000 | 33,000 | ||
Average outstanding impaired loans | 5,875,000 | 5,107,000 | 5,683,000 | 4,451,000 | 4,741,000 |
Interest income recognized | 49,000 | 63,000 | 166,000 | 181,000 | 262,000 |
Single-Family Residential - Banco de la Gente Non-Tradtional | |||||
Impaired Loans | |||||
Unpaid contractual principal balance | 12,269,000 | 12,269,000 | 13,417,000 | ||
Recorded investment with no allowance | 0 | 0 | 0 | ||
Recorded investment with allowance | 11,383,000 | 11,383,000 | 12,753,000 | ||
Recorded investment in impaired loans | 11,383,000 | 11,383,000 | 12,753,000 | ||
Related allowance | 724,000 | 724,000 | 862,000 | ||
Average outstanding impaired loans | 10,349,000 | 13,402,000 | 11,090,000 | 13,785,000 | 13,380,000 |
Interest income recognized | 140,000 | 197,000 | 477,000 | 617,000 | 798,000 |
Commercial | |||||
Impaired Loans | |||||
Unpaid contractual principal balance | 2,229,000 | 2,229,000 | 2,999,000 | ||
Recorded investment with no allowance | 439,000 | 439,000 | 1,082,000 | ||
Recorded investment with allowance | 1,692,000 | 1,692,000 | 1,891,000 | ||
Recorded investment in impaired loans | 2,131,000 | 2,131,000 | 2,973,000 | ||
Related allowance | 12,000 | 12,000 | 14,000 | ||
Average outstanding impaired loans | 2,280,000 | 2,665,000 | 2,617,000 | 2,772,000 | 2,940,000 |
Interest income recognized | 20,000 | 31,000 | 85,000 | 103,000 | 139,000 |
Multifamily and Farmland | |||||
Impaired Loans | |||||
Unpaid contractual principal balance | 115,000 | 115,000 | 119,000 | ||
Recorded investment with no allowance | 0 | 0 | 0 | ||
Recorded investment with allowance | 109,000 | 109,000 | 117,000 | ||
Recorded investment in impaired loans | 109,000 | 109,000 | 117,000 | ||
Related allowance | 0 | 0 | 0 | ||
Average outstanding impaired loans | 110,000 | 0 | 113,000 | 0 | 29,000 |
Interest income recognized | 2,000 | 0 | 4,000 | 0 | 6,000 |
Commercial Loans (Not Secured by Real Estate) | |||||
Impaired Loans | |||||
Unpaid contractual principal balance | 299,000 | 299,000 | 515,000 | ||
Recorded investment with no allowance | 54,000 | 54,000 | 211,000 | ||
Recorded investment with allowance | 183,000 | 183,000 | 244,000 | ||
Recorded investment in impaired loans | 237,000 | 237,000 | 455,000 | ||
Related allowance | 3,000 | 3,000 | 5,000 | ||
Average outstanding impaired loans | 248,000 | 494,000 | 330,000 | 553,000 | 564,000 |
Interest income recognized | 5,000 | 7,000 | 16,000 | 22,000 | 32,000 |
Consumer Loans (Not Secured by Real Estate) | |||||
Impaired Loans | |||||
Unpaid contractual principal balance | 12,000 | 12,000 | 41,000 | ||
Recorded investment with no allowance | 0 | 0 | 0 | ||
Recorded investment with allowance | 8,000 | 8,000 | 37,000 | ||
Recorded investment in impaired loans | 8,000 | 8,000 | 37,000 | ||
Related allowance | 0 | 0 | 1,000 | ||
Average outstanding impaired loans | 9,000 | 74,000 | 19,000 | 57,000 | 60,000 |
Interest income recognized | $ 0 | $ 1,000 | $ 1,000 | $ 4,000 | $ 5,000 |
Loans (Details 4)
Loans (Details 4) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Allowance for Loan Losses | ||||
Beginning balance | $ 9,287,000 | $ 9,433,000 | $ 9,908,000 | $ 6,680,000 |
Charge-offs | (306,000) | (152,000) | (542,000) | (529,000) |
Recoveries | 164,000 | 89,000 | 460,000 | 281,000 |
Provision | (182,000) | 522,000 | (863,000) | 3,460,000 |
Ending balance | 8,963,000 | 9,892,000 | 8,963,000 | 9,892,000 |
Allowance for loan losses, Ending balance: individually evaluated for impairments | 776,000 | 876,000 | 776,000 | 876,000 |
Allowance for loan losses, Ending balance: collectively evaluated for impairments | 8,187,000 | 9,016,000 | 8,187,000 | 9,016,000 |
Allowance for loan losses, Ending balance | 8,963,000 | 9,892,000 | 8,963,000 | 9,892,000 |
Loans, Ending balance: individually evaluated for impairments | 891,005,000 | 15,160,000 | 891,005,000 | 15,160,000 |
Loans, Ending balance: collectively evaluated for impairments | 13,144,000 | 970,232,000 | 13,144,000 | 970,232,000 |
Loans, Ending balance | 877,861,000 | 955,072,000 | 877,861,000 | 955,072,000 |
Consumer And All Other Loans | ||||
Allowance for Loan Losses | ||||
Beginning balance | 89,000 | 162,000 | 128,000 | 138,000 |
Charge-offs | (91,000) | (87,000) | (249,000) | (343,000) |
Recoveries | 40,000 | 42,000 | 114,000 | 148,000 |
Provision | 53,000 | 80,000 | 98,000 | 254,000 |
Ending balance | 91,000 | 197,000 | 91,000 | 197,000 |
Allowance for loan losses, Ending balance: individually evaluated for impairments | 0 | 0 | 0 | 0 |
Allowance for loan losses, Ending balance: collectively evaluated for impairments | 91,000 | 197,000 | 91,000 | 197,000 |
Allowance for loan losses, Ending balance | 91,000 | 197,000 | 91,000 | 197,000 |
Loans, Ending balance: individually evaluated for impairments | 0 | 0 | 0 | 0 |
Loans, Ending balance: collectively evaluated for impairments | 11,511,000 | 21,128,000 | 11,511,000 | 21,128,000 |
Loans, Ending balance | 11,511,000 | 21,128,000 | 11,511,000 | 21,128,000 |
Unallocated | ||||
Allowance for Loan Losses | ||||
Beginning balance | 2,133,000 | 1,667,000 | 2,010,000 | 1,388,000 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision | (110,000) | 781,000 | 13,000 | 1,060,000 |
Ending balance | 2,023,000 | 2,448,000 | 2,023,000 | 2,448,000 |
Allowance for loan losses, Ending balance: individually evaluated for impairments | 0 | 0 | 0 | 0 |
Allowance for loan losses, Ending balance: collectively evaluated for impairments | 2,023,000 | 2,448,000 | 2,023,000 | 2,448,000 |
Allowance for loan losses, Ending balance | 2,023,000 | 2,448,000 | 2,023,000 | 2,448,000 |
Loans, Ending balance: individually evaluated for impairments | 0 | 0 | 0 | 0 |
Loans, Ending balance: collectively evaluated for impairments | 0 | 0 | 0 | 0 |
Loans, Ending balance | 0 | 0 | 0 | 0 |
Construction and Land Development | ||||
Allowance for Loan Losses | ||||
Beginning balance | 1,038,000 | 1,531,000 | 1,196,000 | 694,000 |
Charge-offs | 0 | 0 | 0 | (5,000) |
Recoveries | 31,000 | 121,000 | 2,000 | |
Provision | (173,000) | (267,000) | (421,000) | 573,000 |
Ending balance | 896,000 | 1,264,000 | 896,000 | 1,264,000 |
Allowance for loan losses, Ending balance: individually evaluated for impairments | 1,000 | 2,000 | 1,000 | 2,000 |
Allowance for loan losses, Ending balance: collectively evaluated for impairments | 895,000 | 1,262,000 | 895,000 | 1,262,000 |
Allowance for loan losses, Ending balance | 80,003,000 | 8,000 | 80,003,000 | 8,000 |
Loans, Ending balance: individually evaluated for impairments | 896,000 | 1,264,000 | 896,000 | 1,264,000 |
Loans, Ending balance: collectively evaluated for impairments | 80,009,000 | 96,866,000 | 80,009,000 | 96,866,000 |
Loans, Ending balance | 6,000 | 96,858,000 | 6,000 | 96,858,000 |
Single-Family Residential [Member] | ||||
Allowance for Loan Losses | ||||
Beginning balance | 1,723,000 | 1,813,000 | 1,843,000 | 1,274,000 |
Charge-offs | 0 | (65,000) | 0 | (65,000) |
Recoveries | 86,000 | 34,000 | 165,000 | 59,000 |
Provision | (107,000) | (32,000) | (306,000) | 482,000 |
Ending balance | 1,702,000 | 1,750,000 | 1,702,000 | 1,750,000 |
Allowance for loan losses, Ending balance: individually evaluated for impairments | 58,000 | 4,000 | 58,000 | 4,000 |
Allowance for loan losses, Ending balance: collectively evaluated for impairments | 1,644,000 | 1,746,000 | 1,644,000 | 1,746,000 |
Allowance for loan losses, Ending balance | 1,702,000 | 1,750,000 | 1,702,000 | 1,750,000 |
Loans, Ending balance: individually evaluated for impairments | 258,403,000 | 1,582,000 | 258,403,000 | 1,582,000 |
Loans, Ending balance: collectively evaluated for impairments | 1,398,000 | 272,246,000 | 1,398,000 | 272,246,000 |
Loans, Ending balance | 257,005,000 | 270,664,000 | 257,005,000 | 270,664,000 |
Commercial Loans (Not Secured by Real Estate) | ||||
Allowance for Loan Losses | ||||
Beginning balance | 996,000 | 980,000 | 1,345,000 | 688,000 |
Charge-offs | (215,000) | 0 | (293,000) | (109,000) |
Recoveries | 1,000 | 2,000 | 7,000 | 27,000 |
Provision | 124,000 | (21,000) | (153,000) | 355,000 |
Ending balance | 906,000 | 961,000 | 906,000 | 961,000 |
Allowance for loan losses, Ending balance: individually evaluated for impairments | 0 | 0 | 0 | 0 |
Allowance for loan losses, Ending balance: collectively evaluated for impairments | 906,000 | 961,000 | 906,000 | 961,000 |
Allowance for loan losses, Ending balance | 906,000 | 961,000 | 906,000 | 961,000 |
Loans, Ending balance: individually evaluated for impairments | 94,376,000 | 255,000 | 94,376,000 | 255,000 |
Loans, Ending balance: collectively evaluated for impairments | 54,000 | 182,607,000 | 54,000 | 182,607,000 |
Loans, Ending balance | 94,322,000 | 182,862,000 | 94,322,000 | 182,862,000 |
Farm Loans (Not Secured by Real Estate) | ||||
Allowance for Loan Losses | ||||
Beginning balance | 0 | 0 | 0 | 0 |
Charge-offs | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 |
Provision | 0 | 0 | 0 | 0 |
Ending balance | 0 | 0 | 0 | 0 |
Allowance for loan losses, Ending balance: individually evaluated for impairments | 0 | 0 | 0 | 0 |
Allowance for loan losses, Ending balance: collectively evaluated for impairments | 0 | 0 | 0 | 0 |
Allowance for loan losses, Ending balance | 0 | 0 | 0 | 0 |
Loans, Ending balance: individually evaluated for impairments | 633,000 | 851,000 | 633,000 | 851,000 |
Loans, Ending balance: collectively evaluated for impairments | 0 | 0 | 0 | 0 |
Loans, Ending balance | 633,000 | 851,000 | 633,000 | 851,000 |
Single-Family Residential - Banco de la Gente Non-Tradtional | ||||
Allowance for Loan Losses | ||||
Beginning balance | 980,000 | 1,114,000 | 1,052,000 | 1,073,000 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision | (90,000) | (52,000) | (162,000) | (11,000) |
Ending balance | 890,000 | 1,062,000 | 890,000 | 1,062,000 |
Allowance for loan losses, Ending balance: individually evaluated for impairments | 710,000 | 859,000 | 710,000 | 859,000 |
Allowance for loan losses, Ending balance: collectively evaluated for impairments | 180,000 | 203,000 | 180,000 | 203,000 |
Allowance for loan losses, Ending balance | 890,000 | 1,062,000 | 890,000 | 1,062,000 |
Loans, Ending balance: individually evaluated for impairments | 24,043,000 | 11,630,000 | 24,043,000 | 11,630,000 |
Loans, Ending balance: collectively evaluated for impairments | 10,236,000 | 16,469,000 | 10,236,000 | 16,469,000 |
Loans, Ending balance | 13,807,000 | 28,099,000 | 13,807,000 | 28,099,000 |
Commercial | ||||
Allowance for Loan Losses | ||||
Beginning balance | 2,180,000 | 2,051,000 | 2,212,000 | 1,305,000 |
Charge-offs | 0 | 0 | 0 | (7,000) |
Recoveries | 2,000 | 11,000 | 50,000 | 45,000 |
Provision | 126,000 | 32,000 | 46,000 | 751,000 |
Ending balance | 2,308,000 | 2,094,000 | 2,308,000 | 2,094,000 |
Allowance for loan losses, Ending balance: individually evaluated for impairments | 7,000 | 11,000 | 7,000 | 11,000 |
Allowance for loan losses, Ending balance: collectively evaluated for impairments | 2,301,000 | 2,083,000 | 2,301,000 | 2,083,000 |
Allowance for loan losses, Ending balance | 2,308,000 | 2,094,000 | 2,308,000 | 2,094,000 |
Loans, Ending balance: individually evaluated for impairments | 1,450,000 | 1,685,000 | 1,450,000 | 1,685,000 |
Loans, Ending balance: collectively evaluated for impairments | 363,174,000 | 316,911,000 | 363,174,000 | 316,911,000 |
Loans, Ending balance | 361,724,000 | 318,596,000 | 361,724,000 | 318,596,000 |
Multifamily and Farmland | ||||
Allowance for Loan Losses | ||||
Beginning balance | 148,000 | 115,000 | 122,000 | 120,000 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 4,000 | 0 | 3,000 | 0 |
Provision | (5,000) | 1,000 | 22,000 | (4,000) |
Ending balance | 147,000 | 116,000 | 147,000 | 116,000 |
Allowance for loan losses, Ending balance: individually evaluated for impairments | 0 | 0 | 0 | 0 |
Allowance for loan losses, Ending balance: collectively evaluated for impairments | 147,000 | 116,000 | 147,000 | 116,000 |
Allowance for loan losses, Ending balance | 147,000 | 116,000 | 147,000 | 116,000 |
Loans, Ending balance: individually evaluated for impairments | 0 | 0 | 0 | 0 |
Loans, Ending balance: collectively evaluated for impairments | 58,856,000 | 49,584,000 | 58,856,000 | 49,584,000 |
Loans, Ending balance | $ 58,856,000 | $ 49,584,000 | $ 58,856,000 | $ 49,584,000 |
Loans (Details 5)
Loans (Details 5) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Credit Risk Profile | ||
Total loans | $ 891,005,000 | $ 948,639,000 |
Excellent Quality | ||
Credit Risk Profile | ||
Total loans | 8,375,000 | 11,179,000 |
Excellent Quality | Construction and Land Development [Member] | ||
Credit Risk Profile | ||
Total loans | 0 | 228,000 |
High Quality | ||
Credit Risk Profile | ||
Total loans | 169,911,000 | 194,001,000 |
Good Quality | ||
Credit Risk Profile | ||
Total loans | 616,936,000 | 623,201,000 |
Management Attention | ||
Credit Risk Profile | ||
Total loans | 72,628,000 | 92,523,000 |
Watch | ||
Credit Risk Profile | ||
Total loans | 16,707,000 | 20,908,000 |
Substandard | ||
Credit Risk Profile | ||
Total loans | 6,448,000 | 6,827,000 |
Doubtful | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Loss | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Construction and Land Development | ||
Credit Risk Profile | ||
Total loans | 80,009,000 | 94,124,000 |
Construction and Land Development | High Quality | ||
Credit Risk Profile | ||
Total loans | 8,982,000 | 9,092,000 |
Construction and Land Development | Good Quality | ||
Credit Risk Profile | ||
Total loans | 67,245,000 | 76,897,000 |
Construction and Land Development | Management Attention | ||
Credit Risk Profile | ||
Total loans | 3,626,000 | 4,917,000 |
Construction and Land Development | Watch | ||
Credit Risk Profile | ||
Total loans | 82,000 | 2,906,000 |
Construction and Land Development | Substandard | ||
Credit Risk Profile | ||
Total loans | 74,000 | 84,000 |
Construction and Land Development | Doubtful | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Construction and Land Development | Loss | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Single-Family Residential | ||
Credit Risk Profile | ||
Total loans | 258,403,000 | 272,325,000 |
Single-Family Residential | High Quality | ||
Credit Risk Profile | ||
Total loans | 104,288,000 | 121,331,000 |
Single-Family Residential | Watch | ||
Credit Risk Profile | ||
Total loans | 2,904,000 | 2,947,000 |
Single-Family Residential | Substandard | ||
Credit Risk Profile | ||
Total loans | 3,058,000 | 3,059,000 |
Single-Family Residential | Doubtful | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Single-Family Residential | Loss | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Single-Family Residential - Banco de la Gente Non-Tradtional | ||
Credit Risk Profile | ||
Total loans | 24,043,000 | 26,883,000 |
Single-Family Residential - Banco de la Gente Non-Tradtional | Excellent Quality | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Single-Family Residential - Banco de la Gente Non-Tradtional | High Quality | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Single-Family Residential - Banco de la Gente Non-Tradtional | Good Quality | ||
Credit Risk Profile | ||
Total loans | 9,028,000 | 10,170,000 |
Single-Family Residential - Banco de la Gente Non-Tradtional | Management Attention | ||
Credit Risk Profile | ||
Total loans | 10,878,000 | 12,312,000 |
Single-Family Residential - Banco de la Gente Non-Tradtional | Watch | ||
Credit Risk Profile | ||
Total loans | 1,722,000 | 1,901,000 |
Single-Family Residential - Banco de la Gente Non-Tradtional | Substandard | ||
Credit Risk Profile | ||
Total loans | 2,415,000 | 2,500,000 |
Single-Family Residential - Banco de la Gente Non-Tradtional | Doubtful | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Single-Family Residential - Banco de la Gente Non-Tradtional | Loss | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Commercial | ||
Credit Risk Profile | ||
Total loans | 363,174,000 | 332,971,000 |
Commercial | Excellent Quality | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Commercial | High Quality | ||
Credit Risk Profile | ||
Total loans | 35,384,000 | 40,569,000 |
Commercial | Good Quality | ||
Credit Risk Profile | ||
Total loans | 283,657,000 | 241,273,000 |
Commercial | Substandard | ||
Credit Risk Profile | ||
Total loans | 711,000 | 888,000 |
Commercial | Doubtful | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Commercial | Loss | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Multifamily and Farmland | ||
Credit Risk Profile | ||
Total loans | 58,856,000 | 48,880,000 |
Multifamily and Farmland | Excellent Quality | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Multifamily and Farmland | High Quality | ||
Credit Risk Profile | ||
Total loans | 19,000 | 22,000 |
Multifamily and Farmland | Good Quality | ||
Credit Risk Profile | ||
Total loans | 55,535,000 | 44,890,000 |
Multifamily and Farmland | Management Attention | ||
Credit Risk Profile | ||
Total loans | 2,841,000 | 3,274,000 |
Multifamily and Farmland | Watch | ||
Credit Risk Profile | ||
Total loans | 552,000 | 694,000 |
Multifamily and Farmland | Substandard | ||
Credit Risk Profile | ||
Total loans | 109,000 | 0 |
Multifamily and Farmland | Doubtful | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Multifamily and Farmland | Loss | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Commercial Loans (Not Secured by Real Estate) | ||
Credit Risk Profile | ||
Total loans | 94,376,000 | 161,740,000 |
Commercial Loans (Not Secured by Real Estate) | Excellent Quality | ||
Credit Risk Profile | ||
Total loans | 382,000 | 406,000 |
Commercial Loans (Not Secured by Real Estate) | Good Quality | ||
Credit Risk Profile | ||
Total loans | 69,324,000 | 128,727,000 |
Commercial Loans (Not Secured by Real Estate) | Watch | ||
Credit Risk Profile | ||
Total loans | 1,644,000 | 1,583,000 |
Commercial Loans (Not Secured by Real Estate) | Substandard | ||
Credit Risk Profile | ||
Total loans | 58,000 | 266,000 |
Commercial Loans (Not Secured by Real Estate) | Doubtful | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Commercial Loans (Not Secured by Real Estate) | Loss | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Farm Loans (Not Secured by Real Estate) | ||
Credit Risk Profile | ||
Total loans | 633,000 | 855,000 |
Farm Loans (Not Secured by Real Estate) | Excellent Quality | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Farm Loans (Not Secured by Real Estate) | High Quality | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Farm Loans (Not Secured by Real Estate) | Good Quality | ||
Credit Risk Profile | ||
Total loans | 621,000 | 832,000 |
Farm Loans (Not Secured by Real Estate) | Management Attention | ||
Credit Risk Profile | ||
Total loans | 12,000 | 23,000 |
Farm Loans (Not Secured by Real Estate) | Watch | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Farm Loans (Not Secured by Real Estate) | Substandard | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Farm Loans (Not Secured by Real Estate) | Doubtful | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Farm Loans (Not Secured by Real Estate) | Loss | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Consumer Loans (Not Secured by Real Estate) | ||
Credit Risk Profile | ||
Total loans | 6,321,000 | 7,113,000 |
Consumer Loans (Not Secured by Real Estate) | Excellent Quality | ||
Credit Risk Profile | ||
Total loans | 613,000 | 678,000 |
Consumer Loans (Not Secured by Real Estate) | Watch | ||
Credit Risk Profile | ||
Total loans | 1,000 | 6,000 |
Consumer Loans (Not Secured by Real Estate) | Substandard | ||
Credit Risk Profile | ||
Total loans | 23,000 | 30,000 |
Consumer Loans (Not Secured by Real Estate) | Doubtful | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Consumer Loans (Not Secured by Real Estate) | Loss | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
All Other Loans (Not Secured by Real Estate) | ||
Credit Risk Profile | ||
Total loans | 5,190,000 | 3,748,000 |
All Other Loans (Not Secured by Real Estate) | Excellent Quality | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
All Other Loans (Not Secured by Real Estate) | High Quality | ||
Credit Risk Profile | ||
Total loans | 1,413,000 | 1,563,000 |
All Other Loans (Not Secured by Real Estate) | Good Quality | ||
Credit Risk Profile | ||
Total loans | 3,777,000 | 1,477,000 |
All Other Loans (Not Secured by Real Estate) | Watch | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
All Other Loans (Not Secured by Real Estate) | Substandard | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
All Other Loans (Not Secured by Real Estate) | Doubtful | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
All Other Loans (Not Secured by Real Estate) | Loss | ||
Credit Risk Profile | ||
Total loans | 0 | 0 |
Single-Family Residential [Member] | Excellent Quality | ||
Credit Risk Profile | ||
Total loans | 7,380,000 | 9,867,000 |
Single-Family Residential [Member] | Good Quality | ||
Credit Risk Profile | ||
Total loans | 124,534,000 | 115,109,000 |
Single-Family Residential [Member] | Management Attention | ||
Credit Risk Profile | ||
Total loans | 16,239,000 | 20,012,000 |
Commercial Loans (Not Secured by Real Estate) | High Quality | ||
Credit Risk Profile | ||
Total loans | 17,846,000 | 19,187,000 |
Consumer Loans (Not Secured by Real Estate) | High Quality | ||
Credit Risk Profile | ||
Total loans | 1,979,000 | 2,237,000 |
Consumer Loans (Not Secured by Real Estate) | Good Quality | ||
Credit Risk Profile | ||
Total loans | 3,415,000 | 3,826,000 |
Consumer Loans (Not Secured by Real Estate) | Management Attention | ||
Credit Risk Profile | ||
Total loans | 290,000 | 336,000 |
Commercial | Management Attention | ||
Credit Risk Profile | ||
Total loans | 33,620,000 | 39,370,000 |
Commercial | Watch | ||
Credit Risk Profile | ||
Total loans | 9,802,000 | 10,871,000 |
Commercial Loans (Not Secured by Real Estate) | Management Attention | ||
Credit Risk Profile | ||
Total loans | 5,122,000 | 11,571,000 |
All Other Loans (Not Secured by Real Estate) [Member] | Management Attention | ||
Credit Risk Profile | ||
Total loans | $ 0 | $ 708,000 |
Loans (Details Narrative)
Loans (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Apr. 24, 2020 | Mar. 27, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Impaired loan | $ 5,800,000 | |||||||
Allowance for loan and leases losses | $ 45,000 | 61,000 | ||||||
Interest income recognized on accruing impaired loans | $ 217,000 | $ 299,000 | 754,000 | $ 934,000 | 1,250,000 | |||
Paycheck Protection Program [Member] | ||||||||
Small Business Administration | 25,600,000 | 25,600,000 | ||||||
PPP loan Amount | 128,100,000 | 128,100,000 | 75,800,000 | |||||
PPP loan program description | On March 27, 2020, President Trump signed the CARES Act, which established a $2 trillion economic stimulus package, including cash payments to individuals, supplemental unemployment insurance benefits and a $349 billion loan program administered through the PPP | |||||||
Additional funding loan, description | on April 24, 2020, provided $320 billion additional funding for the PPP. The Bank is participating as a lender in the PPP | |||||||
PPP loan outstanding amount | 25,600,000 | 25,600,000 | 75,800,000 | |||||
Fees paid under ppp loan | 5,700,000 | 5,700,000 | 4,000,000 | |||||
Recognized ppp loan fee income | $ 489,000,000,000 | 361,000,000,000 | $ 3,000,000 | 361,000,000,000 | 1,400,000 | |||
Allowance for Loan and Lease Losses [Member] | ||||||||
Percentage of construction and land development loans in Bank's loan portfolio | 9.00% | 9.00% | ||||||
Percentage of single-family residential loans in Bank's loan portfolio | 32.00% | 32.00% | ||||||
Percentage of single-family residential - Banco de la Gente stated income loans in Bank's loan portfolio | 3.00% | 3.00% | ||||||
Percentage of commercial real estate loans in Bank's loan portfolio | 41.00% | 41.00% | ||||||
Percentage of commercial loans in Bank's loan portfolio | 11.00% | 11.00% | ||||||
Accruing impaired loans | $ 18,200,000 | 21,000,000 | $ 18,200,000 | 21,000,000 | 21,300,000 | |||
Interest income recognized on accruing impaired loans | 217,000 | 299,000 | 754,000 | 934,000 | 1,200,000 | |||
Total current loans | 18,700,000 | 18,700,000 | 119,600,000 | |||||
Loan amount decrease | 18,300,000 | |||||||
TDR residential mortage portfolio loan amount | 250,000 | |||||||
Provision for loan losses | $ 182,000 | $ 522,000 | 863,000 | $ 3,500,000 | ||||
TDR loans modified, past-due TDR loans and non-accrual TDR Loans | $ 1,600,000 | $ 1,600,000 | $ 3,800,000 |
Net Earnings Per Share (Details
Net Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Earnings | ||||
Basic earnings per share | $ 3,390,000 | $ 4,509,000 | $ 12,126,000 | $ 9,437,000 |
Effect of dilutive securities: restricted stock units | 0 | 0 | 0 | 0 |
Effect of dilutive securities: shares held in deferred comp plan | 0 | 0 | 0 | 0 |
Diluted earnings per share | $ 3,390,000 | $ 4,509,000 | $ 12,126,000 | $ 9,437,000 |
Weighted Average Number of Shares | ||||
Basic earnings per share (in shares) | 5,544,596 | 5,634,964 | 5,601,879 | 5,665,294 |
Effect of dilutive securities: restricted stock units (in shares) | 14,690 | 15,299 | 13,190 | 13,960 |
Effect of dilutive securities: shares held in deferred comp plan | 159,797 | 151,658 | 158,039 | 149,163 |
Diluted earnings per share (in shares) | 5,719,083 | 5,801,921 | 5,773,108 | 5,828,417 |
Per Share Amount | ||||
Basic earnings per share | $ 0.61 | $ 0.80 | $ 2.16 | $ 1.67 |
Diluted earnings per share | $ 0.59 | $ 0.78 | $ 2.10 | $ 1.62 |
StockBased Compensation (Detail
StockBased Compensation (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||
Mar. 31, 2021 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2019 | |
2009 Plan | ||||||||||
Unrecognized compensation cost | $ 57,000,000 | |||||||||
Recognized compensation expense | $ 166,000,000 | $ 73,000,000 | ||||||||
Restricted stock units, granted | 5,290 | 3,725 | 4,114 | 5,544 | 16,583 | |||||
Restricted stock units, fair value per share | $ 28.43 | $ 31.43 | $ 25 | $ 16.91 | $ 16.34 | |||||
Stock price | $ 15.43 | $ 32.85 | ||||||||
2020 Plan | ||||||||||
Unrecognized compensation cost | $ 312,000,000 | |||||||||
Recognized compensation expense | $ 166,000,000 | $ 73,000,000 | ||||||||
Restricted stock units, granted | 7,290 | 7,635 | ||||||||
Restricted stock units, fair value per share | $ 22.04 | $ 17.08 | ||||||||
Stock price | $ 1,543 | $ 32.85 | ||||||||
Common stock capital shares reserved for future issuance | 300,000 | |||||||||
Initial shares reserved remain available for future issuance | 285,075 |
Fair Value (Details)
Fair Value (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Estimated fair value | $ 402,905,000 | $ 245,249,000 |
Mutual funds held in deferred compensation trust | ||
Mutual funds held in deferred compensation trust | 1,514,000 | 1,320,000 |
Mortgage-Backed Securities | ||
Estimated fair value | 223,305,000 | 145,314,000 |
U.S. Government Sponsored Enterprises [Member] | ||
Estimated fair value | 14,677,000 | 7,507,000 |
State and Political Subdivisions | ||
Estimated fair value | 156,933,000 | 92,428,000 |
Level 1 | Mortgage-Backed Securities | ||
Estimated fair value | 0 | 0 |
Level 1 | U.S. Government Sponsored Enterprises [Member] | ||
Estimated fair value | 0 | 0 |
Level 1 | State and Political Subdivisions | ||
Estimated fair value | 0 | 0 |
Level 2 | State and Political Subdivisions | ||
Estimated fair value | 156,933,000 | 92,428,000 |
Level 2 | Mortgage-Backed Securities | ||
Estimated fair value | 223,305,000 | 145,314,000 |
Level 2 | U.S. Government Sponsored Enterprises | ||
Estimated fair value | 14,677,000 | 7,507,000 |
Level 3 | Mortgage-Backed Securities | ||
Estimated fair value | 0 | 0 |
Level 3 | U.S. Treasuries | ||
Estimated fair value | 0 | |
Level 3 | State and Political Subdivisions | ||
Estimated fair value | 0 | 0 |
Level 3 | U.S. Government Sponsored Enterprises | ||
Estimated fair value | 0 | 0 |
Level 1 | ||
Estimated fair value | 0 | 0 |
Level 1 | Mutual funds held in deferred compensation trust | ||
Mutual funds held in deferred compensation trust | 0 | 0 |
Level 2 | ||
Estimated fair value | 402,905,000 | 245,249,000 |
Level 2 | Mutual funds held in deferred compensation trust | ||
Mutual funds held in deferred compensation trust | 1,514,000 | 1,320,000 |
Level 3 | ||
Estimated fair value | 0 | 0 |
Level 3 | Mutual funds held in deferred compensation trust | ||
Mutual funds held in deferred compensation trust | 0 | $ 0 |
U.S. Treasuries [Member] | Level 1 | ||
Estimated fair value | 0 | |
U.S. Treasuries [Member] | Level 2 | ||
Estimated fair value | 7,990,000 | |
U.S. Treasuries [Member] | ||
Estimated fair value | $ 7,990,000 |
Fair Value (Details 1)
Fair Value (Details 1) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Mortgage loans held for sale | $ 9,086,000 | $ 9,139,000 |
Impaired loans | 17,417,000 | 5,800 |
Other real estate | 0 | 128,000 |
Mortgage Loans Held For Sale | ||
Mortgage loans held for sale | $ 9,086,000 | 9,139,000 |
Valuation technique | Rate lock commitment | |
Significant unobservable inputs | N/A | |
General range of significant unobservable input values | N/A | |
Impaired Loans | ||
Impaired loans | $ 17,417,000 | 20,369,000 |
Valuation technique | Appraised value and discounted cash flows | |
Significant unobservable inputs | Discounts to reflect current market conditions and ultimate collectability | |
General range of significant unobservable input values | 0-25 | |
Other Real Estate | ||
Other real estate | $ 0 | 128,000 |
Valuation technique | Appraised value | |
Significant unobservable inputs | Discounts to reflect current market conditions and estimated costs to sell | |
General range of significant unobservable input values | 0-25 | |
Level 3 | ||
Mortgage loans held for sale | $ 9,086,000 | 9,139,000 |
Impaired loans | 17,417,000 | 20,369,000 |
Other real estate | 128,000 | |
Level 1 | ||
Mortgage loans held for sale | 0 | 0 |
Impaired loans | 0 | 0 |
Other real estate | 0 | |
Level 2 | ||
Mortgage loans held for sale | 0 | 0 |
Impaired loans | $ 0 | 0 |
Other real estate | $ 0 |
Fair Value (Details 2)
Fair Value (Details 2) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Cash and cash equivalents | $ 263,308,000 | $ 161,580,000 |
Estimated fair value | 402,905,000 | 245,249,000 |
Other investments | 3,725,000 | 4,155,000 |
Mortgage loans held for sale | 9,086,000 | 9,139,000 |
Loans, net | 882,042,000 | 924,845,000 |
Mutual funds held in deferred compensation trust | 1,514,000 | 1,320,000 |
Liabilities: | ||
Deposits | 1,407,770,000 | 1,221,086,000 |
Securities sold under agreements to repurchase | 32,332,000 | 26,201,000 |
Junior subordinated debentures | 15,464,000 | 15,464,000 |
Level 3 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Estimated fair value | 0 | 0 |
Other investments | 3,725,000 | 4,155,000 |
Mortgage loans held for sale | 9,086,000 | 9,139,000 |
Loans, net | 862,462,000 | 924,845,000 |
Mutual funds held in deferred compensation trust | 0 | 0 |
Liabilities: | ||
Deposits | 1,407,770,000 | 1,216,503,000 |
Securities sold under agreements to repurchase | 0 | 0 |
Junior subordinated debentures | 0 | 0 |
Level 1 | ||
Assets: | ||
Cash and cash equivalents | 263,308,000 | 161,580,000 |
Estimated fair value | 0 | 0 |
Other investments | 0 | 0 |
Mortgage loans held for sale | 0 | 0 |
Loans, net | 0 | 0 |
Mutual funds held in deferred compensation trust | 0 | 0 |
Liabilities: | ||
Deposits | 0 | 0 |
Securities sold under agreements to repurchase | 0 | 0 |
Junior subordinated debentures | 0 | 0 |
Level 2 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Estimated fair value | 402,905,000 | 245,249,000 |
Other investments | 0 | 0 |
Mortgage loans held for sale | 0 | 0 |
Loans, net | 0 | 0 |
Mutual funds held in deferred compensation trust | 1,514,000 | 1,320,000 |
Liabilities: | ||
Deposits | 0 | 0 |
Securities sold under agreements to repurchase | 32,332,000 | 26,201,000 |
Junior subordinated debentures | 15,464,000 | 15,464,000 |
Estimated Fair Value | ||
Assets: | ||
Cash and cash equivalents | 263,308,000 | 161,580,000 |
Estimated fair value | 402,905,000 | 245,249,000 |
Other investments | 3,725,000 | 4,155,000 |
Mortgage loans held for sale | 9,086,000 | 9,139,000 |
Loans, net | 862,462,000 | 938,731,000 |
Mutual funds held in deferred compensation trust | 1,514,000 | 1,320,000 |
Liabilities: | ||
Deposits | 1,409,965,000 | 1,216,503,000 |
Securities sold under agreements to repurchase | 32,332,000 | 26,201,000 |
Junior subordinated debentures | $ 15,464,000 | $ 15,464,000 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Leases | ||
Operating lease cost | $ 538 | $ 675 |
Cash paid for amounts included in the measurement of lease liabilities | 520 | 659 |
Operating cash flows from operating leases | 0 | 0 |
Right-of-use assets obtained in exchange for new lease liabilities - operating leases | $ 952 | $ 450 |
Weighted-average remaining lease term - operating leases | 6 years 8 months 19 days | 7 years 4 months 9 days |
Weighted-average discount rate - operating leases | 2.71% | 2.97% |
Leases (Details 1)
Leases (Details 1) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Leases | ||
2021 | $ 181,000 | $ 754,000 |
2022 | 555,000 | 588,000 |
2023 | 544,000 | 567,000 |
2024 | 489,000 | 489,000 |
2025 | 433,000 | 433,000 |
Thereafter | 1,041,000 | 1,041,000 |
Total | 3,243,000 | 3,872,000 |
Less: imputed interest | (321,000) | (401,000) |
Operating lease liability | $ 2,922,000 | $ 3,471,000 |
Leases (Details Narrative)
Leases (Details Narrative) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Leases | |
Extended renewal terms | 15 years |
Operating right of use assets and operating lease liabilities | $ 2.9 |