Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 05, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-41068 | |
Entity Registrant Name | BAYFIRST FINANCIAL CORP. | |
Entity Incorporation, State or Country Code | FL | |
Entity Tax Identification Number | 59-3665079 | |
Entity Address, Address Line One | 700 Central Avenue | |
Entity Address, City or Town | St. Petersburg | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33701 | |
City Area Code | 727 | |
Local Phone Number | 440-6848 | |
Title of 12(b) Security | Common stock | |
Trading Symbol | BAFN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 4,134,219 | |
Entity Central Index Key | 0001649739 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | [1] |
ASSETS | |||
Cash and due from banks | $ 4,226 | $ 4,099 | |
Interest-bearing deposits in banks | 56,546 | 54,286 | |
Cash and cash equivalents | 60,772 | 58,385 | |
Time deposits in banks | 2,261 | 4,646 | |
Investment securities available for sale, at fair value (amortized cost: $42,885 and $43,597 at June 30, 2024 and December 31, 2023, respectively) | 38,685 | 39,575 | |
Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $14 and $17 (fair value: $2,273 and $2,263 at June 30, 2024 and December 31, 2023, respectively) | 2,486 | 2,484 | |
Nonmarketable equity securities | 7,132 | 4,770 | |
Loans HFI, at amortized cost, net of allowance for credit losses of $13,843 and $13,497 at June 30, 2024 and December 31, 2023, respectively | 908,329 | 810,721 | |
Accrued interest receivable | 8,000 | 7,130 | |
Premises and equipment, net | 39,088 | 38,874 | |
Loan servicing rights | 15,770 | 14,959 | |
Right-of-use operating lease assets | 2,305 | 2,416 | |
Bank owned life insurance | 26,150 | 25,800 | |
Other real estate owned | 1,633 | 0 | |
Other assets | 19,080 | 16,150 | |
Assets from discontinued operations | 36 | 348 | |
Total assets | 1,217,869 | 1,117,766 | |
Liabilities: | |||
Noninterest-bearing deposits | 94,040 | 93,708 | |
Interest-bearing transaction accounts | 236,447 | 259,422 | |
Savings and money market deposits | 420,271 | 373,000 | |
Time deposits | 291,630 | 259,008 | |
Total deposits | 1,042,388 | 985,138 | |
FHLB borrowings | 55,000 | 10,000 | |
Subordinated debentures | 5,952 | 5,949 | |
Notes payable | 2,162 | 2,389 | |
Accrued interest payable | 1,172 | 882 | |
Operating lease liabilities | 2,497 | 2,619 | |
Deferred income tax liabilities | 1,000 | 482 | |
Accrued expenses and other liabilities | 6,565 | 8,980 | |
Liabilities from discontinued operations | 171 | 620 | |
Total liabilities | 1,116,907 | 1,017,059 | |
Shareholders’ equity: | |||
Common stock and additional paid-in capital; no par value, 15,000,000 shares authorized, 4,134,219 and 4,110,470 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively | 54,773 | 54,521 | |
Accumulated other comprehensive loss, net | (3,113) | (2,981) | |
Unearned compensation | (1,081) | (958) | |
Retained earnings | 34,653 | 34,395 | |
Total shareholders’ equity | 100,962 | 100,707 | |
Total liabilities and shareholders’ equity | 1,217,869 | 1,117,766 | |
Preferred Stock, Series A | |||
Shareholders’ equity: | |||
Preferred stock | 6,161 | 6,161 | |
Preferred Stock, Series B | |||
Shareholders’ equity: | |||
Preferred stock | 3,123 | 3,123 | |
Preferred Stock, Series C | |||
Shareholders’ equity: | |||
Preferred stock | 6,446 | 6,446 | |
Government guaranteed loans HFI, at fair value | |||
ASSETS | |||
Government guaranteed loans HFI, at fair value | $ 86,142 | $ 91,508 | |
[1]Derived from audited consolidated financial statements |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
ASSETS | ||
Amortized cost | $ 42,885 | $ 43,597 |
Allowance for credit loss for HTM securities | 14 | 17 |
Fair Value | 2,273 | 2,263 |
Allowance for credit loss | $ 13,843 | $ 13,497 |
Shareholders’ equity: | ||
Common stock and additional paid-in capital, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock and additional paid-in capital, shares issued (in shares) | 4,134,219 | 4,110,470 |
Common stock and additional paid-in capital, shares outstanding (in shares) | 4,134,219 | 4,110,470 |
Preferred Stock, Series A | ||
Shareholders’ equity: | ||
Preferred stock, shares authorized (in shares) | 10,000 | 10,000 |
Preferred stock, shares issued (in shares) | 6,395 | 6,395 |
Preferred stock, shares outstanding (in shares) | 6,395 | 6,395 |
Preferred stock, aggregate liquidation preference | $ 6,395 | $ 6,395 |
Preferred Stock, Series B | ||
Shareholders’ equity: | ||
Preferred stock, shares authorized (in shares) | 20,000 | 20,000 |
Preferred stock, shares issued (in shares) | 3,210 | 3,210 |
Preferred stock, shares outstanding (in shares) | 3,210 | 3,210 |
Preferred stock, aggregate liquidation preference | $ 3,210 | $ 3,210 |
Preferred Stock, Series C | ||
Shareholders’ equity: | ||
Preferred stock, shares authorized (in shares) | 10,000 | 10,000 |
Preferred stock, shares issued (in shares) | 6,446 | 6,446 |
Preferred stock, shares outstanding (in shares) | 6,446 | 6,446 |
Preferred stock, aggregate liquidation preference | $ 6,446 | $ 6,446 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Interest income: | ||||
Loans, including fees | $ 19,414 | $ 16,372 | $ 37,642 | $ 29,443 |
Interest-bearing deposits in banks and other | 1,013 | 1,420 | 1,972 | 2,600 |
Total interest income | 20,427 | 17,792 | 39,614 | 32,043 |
Interest expense: | ||||
Deposits | 10,448 | 7,098 | 20,663 | 12,021 |
Borrowings | 797 | 586 | 1,027 | 861 |
Total interest expense | 11,245 | 7,684 | 21,690 | 12,882 |
Net interest income | 9,182 | 10,108 | 17,924 | 19,161 |
Provision for credit losses | 3,000 | 2,765 | 7,058 | 4,707 |
Net interest income after provision for credit losses | 6,182 | 7,343 | 10,866 | 14,454 |
Noninterest income: | ||||
Loan servicing income, net | 805 | 649 | 1,600 | 1,389 |
Gain on sale of government guaranteed loans, net | 5,595 | 6,028 | 13,684 | 10,437 |
Service charges and fees | 452 | 379 | 896 | 758 |
Government guaranteed loans fair value gain | 3,202 | 2,904 | 6,507 | 6,478 |
Government guaranteed loan packaging fees | 1,022 | 797 | 2,429 | 918 |
Other noninterest income | 577 | 180 | 805 | 405 |
Total noninterest income | 11,653 | 10,937 | 25,921 | 20,385 |
Noninterest expense: | ||||
Salaries and benefits | 7,829 | 7,780 | 15,834 | 15,615 |
Bonus, commissions, and incentives | 659 | 1,305 | 2,230 | 2,109 |
Occupancy and equipment | 1,273 | 1,183 | 2,383 | 2,346 |
Data processing | 1,647 | 1,316 | 3,207 | 2,663 |
Marketing and business development | 540 | 1,102 | 1,128 | 1,767 |
Professional services | 877 | 874 | 2,226 | 1,771 |
Loan origination and collection | 1,958 | 1,221 | 3,677 | 2,716 |
Employee recruiting and development | 549 | 556 | 1,146 | 1,124 |
Regulatory assessments | 279 | 232 | 561 | 331 |
Other noninterest expense | 999 | 833 | 1,991 | 1,372 |
Total noninterest expense | 16,610 | 16,402 | 34,383 | 31,814 |
Income from continuing operations before income taxes | 1,225 | 1,878 | 2,404 | 3,025 |
Income tax expense from continuing operations | 349 | 461 | 645 | 741 |
Net income from continuing operations | 876 | 1,417 | 1,759 | 2,284 |
Loss from discontinued operations before income taxes | (14) | (43) | (92) | (213) |
Income tax benefit from discontinued operations | (4) | (11) | (23) | (53) |
Net loss from discontinued operations | (10) | (32) | (69) | (160) |
Net income | 866 | 1,385 | 1,690 | 2,124 |
Preferred stock dividends | 386 | 208 | 771 | 416 |
Net income available to common shareholders | $ 480 | $ 1,177 | $ 919 | $ 1,708 |
Basic earnings (loss) per common share: | ||||
Continuing operations (in dollars per share) | $ 0.12 | $ 0.30 | $ 0.24 | $ 0.46 |
Discontinued operations (in dollars per share) | 0 | (0.01) | (0.02) | (0.04) |
Total basic earnings per common share (in dollars per share) | 0.12 | 0.29 | 0.22 | 0.42 |
Diluted earnings (loss) per common share: | ||||
Continuing operations (in dollars per share) | 0.12 | 0.30 | 0.24 | 0.46 |
Discontinued operations (in dollars per share) | 0 | (0.01) | (0.02) | (0.04) |
Total diluted earnings per common share (in dollars per share) | $ 0.12 | $ 0.29 | $ 0.22 | $ 0.42 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 866 | $ 1,385 | $ 1,690 | $ 2,124 |
Net unrealized gains (losses) on investment securities available for sale | 102 | (77) | (172) | 655 |
Deferred income tax (expense) benefit | (27) | 20 | 40 | (170) |
Other comprehensive income (loss), net | 75 | (57) | (132) | 485 |
Comprehensive income | $ 941 | $ 1,328 | $ 1,558 | $ 2,609 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Impact of adopting ASC 326 | Preferred Stock Preferred Stock, Series A | Preferred Stock Preferred Stock, Series B | Preferred Stock Preferred Stock, Series C | Common Stock, Additional Paid-in Capital, and Unearned Compensation | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Retained Earnings Impact of adopting ASC 326 | |
Beginning balance at Dec. 31, 2022 | $ 91,884 | $ (2,508) | $ 6,161 | $ 3,123 | $ 0 | $ 52,845 | $ (3,724) | $ 33,479 | $ (2,508) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 2,124 | 2,124 | ||||||||
Issuance of common stock under: | ||||||||||
Non-qualified stock purchase plan | 185 | 185 | ||||||||
Dividend reinvestment plan | 84 | 84 | ||||||||
Repurchase of common stock | (10) | (10) | ||||||||
Unearned ESOP shares allocation | (329) | (329) | ||||||||
Stock-based awards - common stock: | ||||||||||
Restricted stock expense, net of tax impact | 165 | 165 | ||||||||
Stock option expense | 58 | 58 | ||||||||
Other comprehensive income (loss), net | 485 | 485 | ||||||||
Dividends declared on: | ||||||||||
Preferred stock | (416) | (416) | ||||||||
Common stock | (657) | (657) | ||||||||
Ending balance at Jun. 30, 2023 | 91,065 | 6,161 | 3,123 | 0 | 52,998 | (3,239) | 32,022 | |||
Beginning balance at Mar. 31, 2023 | 90,339 | 6,161 | 3,123 | 0 | 53,063 | (3,182) | 31,174 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 1,385 | 1,385 | ||||||||
Issuance of common stock under: | ||||||||||
Non-qualified stock purchase plan | 102 | 102 | ||||||||
Repurchase of common stock | (10) | (10) | ||||||||
Unearned ESOP shares allocation | (329) | (329) | ||||||||
Stock-based awards - common stock: | ||||||||||
Restricted stock expense, net of tax impact | 148 | 148 | ||||||||
Stock option expense | 24 | 24 | ||||||||
Other comprehensive income (loss), net | (57) | (57) | ||||||||
Dividends declared on: | ||||||||||
Preferred stock | (208) | (208) | ||||||||
Common stock | (329) | (329) | ||||||||
Ending balance at Jun. 30, 2023 | 91,065 | 6,161 | 3,123 | 0 | 52,998 | (3,239) | 32,022 | |||
Beginning balance at Dec. 31, 2023 | 100,707 | [1] | 6,161 | 3,123 | 6,446 | 53,563 | (2,981) | 34,395 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 1,690 | 1,690 | ||||||||
Issuance of common stock under: | ||||||||||
Unearned ESOP shares allocation | (44) | (44) | ||||||||
Stock-based awards - common stock: | ||||||||||
Restricted stock expense, net of tax impact | 151 | 151 | ||||||||
Stock option expense | 22 | 22 | ||||||||
Other comprehensive income (loss), net | (132) | (132) | ||||||||
Dividends declared on: | ||||||||||
Preferred stock | (771) | (771) | ||||||||
Common stock | (661) | (661) | ||||||||
Ending balance at Jun. 30, 2024 | 100,962 | 6,161 | 3,123 | 6,446 | 53,692 | (3,113) | 34,653 | |||
Beginning balance at Mar. 31, 2024 | 100,629 | 6,161 | 3,123 | 6,446 | 53,584 | (3,188) | 34,503 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 866 | 866 | ||||||||
Stock-based awards - common stock: | ||||||||||
Restricted stock expense, net of tax impact | 99 | 99 | ||||||||
Stock option expense | 9 | 9 | ||||||||
Other comprehensive income (loss), net | 75 | 75 | ||||||||
Dividends declared on: | ||||||||||
Preferred stock | (386) | (386) | ||||||||
Common stock | (330) | (330) | ||||||||
Ending balance at Jun. 30, 2024 | $ 100,962 | $ 6,161 | $ 3,123 | $ 6,446 | $ 53,692 | $ (3,113) | $ 34,653 | |||
[1]Derived from audited consolidated financial statements |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividend declared on common stock (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.16 | $ 0.16 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Net income from continuing operations | $ 1,759 | $ 2,284 |
Net loss from discontinued operations | (69) | (160) |
Net income | 1,690 | 2,124 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation of fixed assets | 1,180 | 1,127 |
Net securities premium amortization | 56 | 41 |
Amortization of debt issuance costs | 3 | 3 |
Amortization of premium on loans purchased, net | 301 | 107 |
Provision for credit losses | 7,058 | 4,707 |
Accretion of discount on unguaranteed loans | (1,429) | (1,794) |
Deferred tax expense | 563 | 717 |
Origination of government guaranteed loans held for sale | (2,226) | (2,421) |
Proceeds from sales of government guaranteed loans held for sale | 218,446 | 208,921 |
Net gains on sales of government guaranteed loans | (13,684) | (10,437) |
Change in fair value of government guaranteed loans HFI, at fair value | (6,507) | (6,478) |
Amortization of loan servicing rights | 2,881 | 1,933 |
Non-qualified stock purchase plan expense | 13 | 14 |
Stock based compensation expense | 173 | 223 |
Income from bank owned life insurance | (350) | (310) |
Changes in: | ||
Accrued interest receivable | (870) | (1,477) |
Other assets | (2,824) | 170 |
Accrued interest payable | 290 | (132) |
Other liabilities | (2,339) | (4,598) |
Net cash provided by operating activities of continuing operations | 202,494 | 192,600 |
Net cash used in operating activities of discontinued operations | (206) | (119) |
Net cash provided by operating activities | 202,288 | 192,481 |
Cash flows from investing activities: | ||
Purchase of investment securities available for sale | (4,458) | 0 |
Principal payments on investment securities available for sale | 5,120 | 1,620 |
Principal payments on investment securities held to maturity | 1 | 2,500 |
Net purchase of nonmarketable equity securities | (2,362) | (1,295) |
Purchase of time deposits in banks | (11) | 0 |
Maturity of time deposits in banks | 2,396 | 0 |
Purchase of government guaranteed and consumer loans | (812) | (99,551) |
Loan (originations) and payments, net | (297,686) | (205,633) |
Purchase related to other real estate owned | (1,229) | 0 |
Purchase of premises and equipment | (1,394) | (5,739) |
Net cash used in investing activities | (300,435) | (308,098) |
Cash flows from financing activities: | ||
Net change in deposits | 57,250 | 149,712 |
Net increase in short-term borrowings | 45,000 | 5,000 |
Payments on notes payable | (227) | (227) |
Repayment of subordinated debt | 0 | (50) |
Proceeds from issuance of common stock for benefit plans, net | (13) | 255 |
Common share buyback - redeemed stock | 0 | (10) |
Unearned ESOP shares | (44) | (329) |
Dividends paid on common stock | (661) | (657) |
Dividends paid on preferred stock | (771) | (416) |
Net cash provided by financing activities | 100,534 | 153,278 |
Net change in cash and cash equivalents | 2,387 | 37,661 |
Cash and cash equivalents, beginning of period | 58,385 | 66,046 |
Cash and cash equivalents, end of period | 60,772 | 103,707 |
Supplemental cash flow information | ||
Interest paid | 21,400 | 13,014 |
Income taxes paid | 8 | 2 |
Supplemental noncash disclosures | ||
Impact to retained earnings from adoption of ASC 326, net of tax | 0 | 2,508 |
Net change in unrealized holding gains (losses) on investment securities available for sale, net of tax effect | (132) | 485 |
Transfer of government guaranteed loans HFI to loans HFS | 206,228 | 201,157 |
Transfer of loans HFI to OREO | 404 | 0 |
Recognition of right of use asset and operating lease liability | $ 263 | $ 0 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements include BayFirst Financial Corp. and its wholly owned subsidiary, BayFirst National Bank, together referred to as “the Company”. These unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles followed within the financial services industry for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information or notes required for complete financial statements. The consolidated balance sheet as of December 31, 2023 has been derived from the audited consolidated financial statements of BayFirst Financial Corp. for that period. The Company currently operates one business segment. In the third quarter of 2022, the Company discontinued the Bank’s nationwide residential mortgage loan segment. The operations of this segment are reported as discontinued operations. In the opinion of management, all adjustments, consisting of normal and recurring items, considered necessary for a fair presentation of the consolidated financial statements for the interim periods have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain amounts reported in prior periods have been reclassified to conform to current year presentation. These reclassifications did not have a material effect on previously reported net income, shareholders’ equity, or cash flows. Operating results for the six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2023. The Company’s significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements for the year ended December 31, 2023 in the Company’s Annual Report filed on Form 10-K. For interim reporting purposes, the Company follows the same basic accounting policies and considers each interim period as an integral part of an annual period. Use of Estimates : To prepare financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. The most significant estimates relate to the ACL, government guaranteed loan servicing rights, and fair value of government guaranteed loans HFI. Emerging Growth Company Status: The Company is expected to remain an "emerging growth company," as defined in the JOBS Act, through December 31, 2026. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period when complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of this extended transition period, which means these financial statements, as well as financial statements they file in the future for as long as the Company remains an emerging growth company, will be subject to all new or revised accounting standards generally applicable to private companies. Contingencies : Due to the nature of their activities, the Company and its subsidiary are at times engaged in various legal proceedings that arise in the course of normal business, some of which were outstanding as of June 30, 2024. Although the ultimate outcome of all claims and lawsuits outstanding as of June 30, 2024 cannot be ascertained at this time, it is the opinion of management that these matters, when resolved, will not have a material adverse effect on the Company’s results of operations or financial condition. New Accounting Standards Not Yet Adopted : In October 2023, the FASB issued ASU No. 2023-06 “Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”). ASU 2023-06 amends the ASC to incorporate certain disclosure requirements from SEC Release No. 33-10532 - Disclosure Update and Simplification that was issued in 2018. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company does not believe this standard will have a material impact on its Consolidated Financial Statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures ("ASU 2023-07"). This ASU was issued to improve segment reporting disclosures. The amendments in this ASU improve financial reporting by requiring disclosure of incremental segment information including significant segment expenses regularly provided to the chief operating decision maker as well as the amount and composition of other segment items on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. Retrospective application is required in all prior periods unless impracticable to do so. The amendments in this standard will be effective for the Company for the fiscal year ended December 31, 2024 and subsequent interim periods. The Company is evaluating the impact of this standard and does not expect it to have a material impact on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures ("ASU 2023-09"). This ASU was issued to enhance the transparency and decision usefulness of income tax disclosures. The ASU addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. Retrospective application in all prior periods is permitted. The amendments in this standard will be effective for the Company on January 1, 2025. The Company is currently assessing the impact of this standard and does not expect it to have a material impact on the Company’s consolidated financial statements. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 30, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS During the third quarter of 2022, the Company discontinued the Bank’s nationwide residential mortgage loan production operations. The decision was based on a number of strategic priorities and other factors, including the precipitous decline in mortgage volumes and the uncertain outlook for mortgage lending over future periods. As a result of these actions, the Company classified the operations of the residential mortgage lending division as discontinued under ASC 205-20. The Consolidated Balance Sheets, Consolidated Statements of Income, and Consolidated Statements of Cash Flows present discontinued operations for the current periods and retrospectively for prior periods. The following is a summary of the assets and liabilities of the discontinued operations of the residential mortgage lending division at June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Assets Right-of-use operating lease asset $ 36 $ 348 Total assets $ 36 $ 348 Liabilities Operating lease liability $ 171 $ 620 Total liabilities $ 171 $ 620 The following presents operating results of the discontinued operations of the residential mortgage lending division for the three and six months ended June 30, 2024 and June 30, 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Interest income $ — $ — $ — $ 1 Noninterest income 51 (2) 51 (2) Total net revenue 51 (2) 51 (1) Noninterest expense 65 41 143 212 Loss from discontinued operations before income taxes (14) (43) (92) (213) Income tax benefit (4) (11) (23) (53) Net loss from discontinued operations $ (10) $ (32) $ (69) $ (160) |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 6 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | INVESTMENT SECURITIES The amortized costs, gross unrealized gains and losses, and estimated fair values of investment securities available for sale and investment securities held to maturity at June 30, 2024 and December 31, 2023 as well as the ACL for investment securities held to maturity at June 30, 2024 and December 31, 2023 are summarized as follows: June 30, 2024 Amortized Gross Gross Fair Investment securities available for sale: Asset-backed securities $ 6,351 $ — $ (45) $ 6,306 Mortgage-backed securities: U.S. Government-sponsored enterprises 8,065 — (705) 7,360 Collateralized mortgage obligations: U.S. Government-sponsored enterprises 19,638 — (3,520) 16,118 Corporate bonds 8,831 70 — 8,901 Total investment securities available for sale $ 42,885 $ 70 $ (4,270) $ 38,685 June 30, 2024 Amortized Gross Gross Fair ACL Investment securities held to maturity: Corporate bonds $ 2,500 $ — $ (227) $ 2,273 $ 14 Total investment securities held to maturity $ 2,500 $ — $ (227) $ 2,273 $ 14 December 31, 2023 Amortized Gross Gross Fair Investment securities available for sale: Asset-backed securities $ 8,041 $ 6 $ (114) $ 7,933 Mortgage-backed securities: U.S. Government-sponsored enterprises 3,842 — (606) 3,236 Collateralized mortgage obligations: U.S. Government-sponsored enterprises 20,382 — (3,284) 17,098 Corporate bonds 11,332 — (24) 11,308 Total investment securities available for sale $ 43,597 $ 6 $ (4,028) $ 39,575 December 31, 2023 Amortized Gross Gross Fair ACL Investment securities held to maturity: Mortgage-backed securities: U.S. Government-sponsored enterprises $ 1 $ — $ — $ 1 $ — Corporate bonds 2,500 — (238) 2,262 17 Total investment securities held to maturity $ 2,501 $ — $ (238) $ 2,263 $ 17 ` The amortized cost and fair value of investment securities as of June 30, 2024 are shown in the table below by contractual maturity. Actual timing may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Available for Sale Held to Maturity Amortized Fair Amortized Fair One to five years $ 8,831 $ 8,901 $ 1,500 $ 1,445 Five to ten years 7,217 7,160 1,000 828 Beyond ten years 26,837 22,624 — — Total $ 42,885 $ 38,685 $ 2,500 $ 2,273 No ACL for investment securities AFS was needed at June 30, 2024 or December 31, 2023. Declines in the fair value of the AFS investment portfolio are believed by management to be temporary in nature. When evaluating an investment for credit loss, management considers, among other things, the extent to which the fair value has been in a loss position; the financial condition of the issuer through the review of credit ratings and, if necessary, corporate financial statements; adverse conditions specifically related to the security such as past due principal or interest; underlying assets that collateralize the debt security; other economic conditions and demographics; and the intent and ability of the Company to hold the investment until the loss position is recovered. Any unrealized losses were largely due to increases in market interest rates over the yields available at the time of purchase. The fair value is expected to recover as the bonds approach their maturity date or market yields for the investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. At June 30, 2024 , the Company did not intend to sell and believed it was not likely to be required to sell the available for sale securities that were in a loss position prior to full recovery. As of June 30, 2024, there were no past due principal and interest payments associated with the HTM securities. The Company monitors the credit quality of debt securities held to maturity quarterly through the use of credit ratings. However, the corporate bonds that are held to maturity have no credit rating and the corporate bonds in an unrealized loss position at June 30, 2024 are not material to the financial statements. There was an ACL of $14 and $17 on corporate bonds HTM at June 30, 2024 and December 31, 2023, respectively, which was calculated based on applying the long-term historical credit loss rate for similarly rated securities. The following table presents the activity in the ACL for investment securities HTM by major security type for the three and six months ended June 30, 2024 and June 30, 2023: For the Three Months Ended For the Six Months Ended For the Three Months Ended For the Six Months Ended Corporate Bonds June 30, 2024 June 30, 2023 Balance at beginning of period $ 14 $ 17 $ 18 $ — Impact of adopting ASC 326 — — — 18 Provision for credit losses on HTM investment securities — (3) 1 1 Investment securities charge-offs — — — — Investment securities recoveries — — — — Balance at end of period $ 14 $ 14 $ 19 $ 19 The following table summarizes investment securities with unrealized losses at June 30, 2024 aggregated by security type and length of time in a continuous unrealized loss position: Less than 12 Months 12 Months or Longer Total June 30, 2024 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Number of Securities Investment securities available for sale: Asset-backed securities $ 1,710 $ (5) $ 4,596 $ (40) $ 6,306 $ (45) 3 Mortgage-backed securities: U.S. Government-sponsored enterprises 4,416 (43) 2,944 (662) 7,360 (705) 3 Collateralized mortgage obligations: U.S. Government-sponsored enterprises — — 16,118 (3,520) 16,118 (3,520) 7 Total investment securities available for sale $ 6,126 $ (48) $ 23,658 $ (4,222) $ 29,784 $ (4,270) 13 Investment securities held to maturity: Corporate bonds $ 416 $ (83) $ 1,857 $ (144) $ 2,273 $ (227) 3 Total investment securities held to maturity $ 416 $ (83) $ 1,857 $ (144) $ 2,273 $ (227) 3 The following table summarizes investment securities with unrealized losses at December 31, 2023 aggregated by security type and length of time in a continuous unrealized loss position: Less than 12 Months 12 Months or Longer Total December 31, 2023 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Number of Securities Investment securities available for sale: Asset-backed securities $ — $ — $ 5,967 $ (114) $ 5,967 $ (114) 2 Mortgage-backed securities: U.S. Government-sponsored enterprises — — 3,236 (606) 3,236 (606) 2 Collateralized mortgage obligations: U.S. Government-sponsored enterprises — — 17,098 (3,284) 17,098 (3,284) 7 Corporate bonds 11,308 (24) — — 11,308 (24) 5 Total investment securities available for sale $ 11,308 $ (24) $ 26,301 $ (4,004) $ 37,609 $ (4,028) 16 Investment securities held to maturity: Corporate bonds $ — $ — $ 2,262 $ (238) $ 2,262 $ (238) 3 Total investment securities held to maturity $ — $ — $ 2,262 $ (238) $ 2,262 $ (238) 3 No investment securities were pledged as of June 30, 2024 or December 31, 2023, and there were no sales of investment securities during the three or six months ended June 30, 2024 and the year ended December 31, 2023. |
LOANS
LOANS | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
LOANS | LOANS Loans HFI, at amortized cost, at June 30, 2024 and December 31, 2023 were as follows: June 30, December 31, Real estate: Residential $ 304,234 $ 264,126 Commercial 288,185 293,595 Construction and land 35,759 26,272 Commercial and industrial 192,140 177,566 Commercial and industrial - PPP 2,324 3,202 Consumer and other 85,789 47,287 Loans HFI, at amortized cost, gross 908,431 812,048 Deferred loan costs, net 17,299 14,707 Discount on government guaranteed loans sold (1) (7,731) (7,040) Premium on loans purchased, net 4,173 4,503 Allowance for credit losses (13,843) (13,497) Loans HFI, at amortized cost $ 908,329 $ 810,721 (1) The Company allocates the retained portion of loans sold based on relative fair value of the retained portion and the sold portion, which results in a discount on the retained portion. |
ALLOWANCE FOR CREDIT LOSSES
ALLOWANCE FOR CREDIT LOSSES | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
ALLOWANCE FOR CREDIT LOSSES | ALLOWANCE FOR CREDIT LOSSES The following schedules present the activity in the ACL by loan segment for the three and six months ended June 30, 2024 and June 30, 2023: Three Months Ended Real Estate - Residential Real Estate - Commercial Real Estate - Construction and Land Commercial and Industrial Consumer and Other Total June 30, 2024 Beginning Balance $ 2,186 $ 1,758 $ 663 $ 6,840 $ 2,459 $ 13,906 Charge-offs — (60) — (2,599) (771) (3,430) Recoveries — 2 — 111 56 169 Provision (952) 164 (108) 3,362 732 3,198 Ending Balance $ 1,234 $ 1,864 $ 555 $ 7,714 $ 2,476 $ 13,843 June 30, 2023 Beginning Balance $ 2,358 $ 1,695 $ 254 $ 7,216 $ 685 $ 12,208 Charge-offs — — — (1,710) (674) (2,384) Recoveries — — — 72 59 131 Provision 184 194 105 1,433 727 2,643 Ending Balance $ 2,542 $ 1,889 $ 359 $ 7,011 $ 797 $ 12,598 Real Estate - Residential Real Estate - Commercial Real Estate - Construction and Land Commercial and Industrial Consumer and Other Unallocated Total Six Months Ended June 30, 2024 Beginning Balance $ 1,987 $ 1,818 $ 519 $ 6,579 $ 2,594 $ — $ 13,497 Charge-offs — (60) — (5,523) (1,749) — (7,332) Recoveries — 4 — 241 174 — 419 Provision (753) 102 36 6,417 1,457 — 7,259 Ending Balance $ 1,234 $ 1,864 $ 555 $ 7,714 $ 2,476 $ — $ 13,843 June 30, 2023 Beginning Balance $ 731 $ 956 $ 28 $ 6,182 $ 1,090 $ 59 $ 9,046 Impact of adopting ASC 326 1,479 613 281 1,116 (323) (59) 3,107 Charge-offs — — — (3,118) (1,339) — (4,457) Recoveries — 2 — 189 126 — 317 Provision 332 318 50 2,642 1,243 — 4,585 Ending Balance $ 2,542 $ 1,889 $ 359 $ 7,011 $ 797 $ — $ 12,598 CECL significantly changed the credit losses estimation model for loans. The ACL represents management’s best estimate of future lifetime expected losses on its HFI loan portfolio. The Company calculates its ACL by estimating expected credit losses on a collective basis for loans that share similar risk characteristics. Loans that do not share similar risk characteristics with other loans are evaluated for credit losses on an individual basis. The Company uses a combination of modeled and non-modeled approaches that incorporates current and future economic conditions to estimate lifetime expected losses on a collective basis. Individually evaluated loans are evaluated for impairment and a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the rate implicit in the original loan agreement or at the fair value of collateral adjusted for selling costs as appropriate if repayment is expected solely from the collateral. The Company uses reasonable and supportable forecasts that are developed with internal and external data. These are updated quarterly by management and utilize data from the FOMC’s median forecasts of change in national GDP and of national unemployment. The FOMC’s forecast of GDP and unemployment for the next calendar year is used in conjunction with the most recent 4 quarters of historical data from FRED (Federal Reserve Economic Data) to determine changes in certain qualitative factors used in calculating loss rates. See Note 1 and Note 5 of the Notes to Consolidated Financial Statements for further discussion of the Company’s ACL methodology in the December 31, 2023 Form 10-K. The Company maintains a separate ACL for its off-balance sheet unfunded loan commitments. The ACL on unfunded loan commitments is based on estimates of probability that these commitments will be drawn upon according to historical utilization experience, expected loss severity and loss rates as determined for pooled funded loans. As of June 30, 2024 and December 31, 2023, the ACL for unfunded commitments recorded in other liabilities was $641 and $839, respectively. The following table presents the activity in the ACL for unfunded commitments for the three and six months ended June 30, 2024 and June 30, 2023: For the Three Months Ended For the Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Balance at beginning of period $ 839 $ 798 $ 839 $ 511 Impact of adopting ASC 326 — — — 213 Provision for credit losses on unfunded commitments (198) 46 (198) 120 Unfunded commitments charge-offs — — — — Unfunded commitments recoveries — — — — Balance at end of period $ 641 $ 844 $ 641 $ 844 The following tables present the principal balance of nonaccrual loans and loans past due over 89 days still on accrual by loan segment at June 30, 2024 and December 31, 2023. In the following tables, the principal balance does not include the government guaranteed balance or loans measured at fair value. June 30, 2024 Nonaccrual with no ACL (1) Nonaccrual with ACL (1) Loans Past Due Over 89 Days Still Accruing (1) Real estate - residential $ — $ 4,881 $ 250 Real estate - commercial — 1,249 — Commercial and industrial — 1,471 66 Consumer and other — — 137 Total $ — $ 7,601 $ 453 December 31, 2023 Nonaccrual with no ACL (1) Nonaccrual with ACL (1) Loans Past Due Over 89 Days Still Accruing (1) Real estate - residential $ — $ 4,654 $ 583 Real estate - commercial — $ 1,159 $ — Commercial and industrial — 1,587 — Consumer and other — — 282 Total $ — $ 7,400 $ 865 (1) Excludes loans measured at fair value. See Note 6. Fair Value for additional information . A financial asset is considered collateral dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. Expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraised value. As of June 30, 2024 there were no loans individually evaluated. The following table presents the principal balance of individually analyzed collateral dependent loans by loan portfolio segment as of December 31, 2023: December 31, 2023 Type of Collateral ACL Business Assets Commercial and industrial $ 390 $ 255 The following table presents the aging of the principal balance of past due loans HFI at amortized cost at June 30, 2024 by loan segment: 30-89 Days Greater Than Total Past Due Loans Not Past Due (1) Total Loans Real estate - residential $ 2,548 $ 5,079 $ 7,627 $ 296,607 $ 304,234 Real estate - commercial 1,870 894 2,764 285,421 288,185 Real estate - construction and land — — — 35,759 35,759 Commercial and industrial 3,756 1,385 5,141 186,999 192,140 Commercial and industrial - PPP — — — 2,324 2,324 Consumer and other 655 137 792 84,997 85,789 Total $ 8,829 $ 7,495 $ 16,324 $ 892,107 $ 908,431 (1) $3,647 of balances 30-89 days past due and $4,007 of balances greater than 89 days past due are reported as Loans Not Past Due as a result of the government guarantee. Of those loans, $1,478 of commercial and industrial PPP loans were delinquent as of June 30, 2024. The following table presents the aging of the principal balance of past due loans HFI at amortized cost at December 31, 2023 by loan segment: 30-89 Days Greater Than Total Past Due Loans Not Past Due (1) Total Loans Real estate - residential $ 1,840 $ 5,184 $ 7,024 $ 257,102 $ 264,126 Real estate - commercial 2,870 791 3,661 289,934 293,595 Real estate - construction and land — — — 26,272 26,272 Commercial and industrial 3,970 603 4,573 172,993 177,566 Commercial and industrial - PPP — — — 3,202 3,202 Consumer and other 1,221 282 1,503 45,784 47,287 Total $ 9,901 $ 6,860 $ 16,761 $ 795,287 $ 812,048 (1) $1,469 of balances 30-89 days past due and $638 of balances greater than 89 days past due are reported as Loans Not Past Due as a result of the government guarantee. Of those loans $261 of commercial and industrial PPP loans were delinquent as of December 31, 2023. Modifications to Borrowers Experiencing Financial Difficulty For the three and six months ended June 30, 2024 and the year ended December 31, 2023 , there were no loan modifications to borrowers experiencing financial difficulty and no loan modifications that subsequently defaulted during the period. Credit Quality Indicators Internal risk-rating grades are assigned to loans by lending, credit administration or loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Management analyzes the resulting ratings, as well as other statistics and factors such as delinquency, to track the migration performance of the portfolio balances. This analysis is performed at least annually. The Bank uses the following definitions for its risk ratings: Pass – Loans properly approved, documented, collateralized, and performing which do not reflect an abnormal credit risk. Special Mention – These credits have potential weaknesses that may, if not checked or corrected, weaken the asset, or inadequately protect the Company’s position at some future date. These assets pose elevated risk, but their weakness does not yet justify a “Substandard” classification. Substandard – These loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Doubtful – These loans have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable. The table below sets forth principal balance for the commercial loan portfolio disaggregated by loan segment based on internally assigned risk ratings at June 30, 2024 and gross write offs for the six months ended June 30, 2024: Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted 2024 2023 2022 2021 Prior Cost Basis to Term Total Real estate - commercial Risk Rating Pass $ 27,372 $ 74,897 $ 74,772 $ 48,859 $ 55,074 $ 2,538 $ — $ 283,512 Special mention 72 801 2,202 118 230 — — 3,423 Substandard — — 291 103 856 — — 1,250 Doubtful — — — — — — — — Total real estate - commercial loans, at amortized cost, gross 27,444 75,698 77,265 49,080 56,160 2,538 — 288,185 Gross write offs — — 60 — — — — 60 Real estate - construction and land Risk Rating Pass 1,144 22,366 9,382 2,867 — — — 35,759 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total real estate - construction and land loans, at amortized cost, gross 1,144 22,366 9,382 2,867 — — — 35,759 Gross write offs — — — — — — — — Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted 2024 2023 2022 2021 Prior Cost Basis to Term Total Commercial and industrial Risk Rating Pass 33,865 46,875 39,025 12,587 45,755 8,293 — 186,400 Special mention 22 749 902 296 2,263 — — 4,232 Substandard — 23 572 11 902 — — 1,508 Doubtful — — — — — — — — Total commercial and industrial loans, at amortized cost, gross 33,887 47,647 40,499 12,894 48,920 8,293 — 192,140 Gross write offs — 1,449 1,884 282 1,908 — — 5,523 Commercial and industrial - PPP Risk Rating Pass — — — 223 1,102 — — 1,325 Special mention — — — — 999 — — 999 Substandard — — — — — — — — Doubtful — — — — — — — — Total commercial and industrial - PPP loans, at amortized cost, gross — — — 223 2,101 — — 2,324 Gross write offs — — — — — — — — The table below sets forth principal balance for the commercial loan portfolio disaggregated by loan segment based on internally assigned risk ratings at December 31, 2023 and gross write offs for the year ended December 31, 2023 : Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted 2023 2022 2021 Prior Cost Basis to Term Total Real estate - commercial Risk Rating Pass $ 94,092 $ 79,712 $ 50,985 $ 64,648 $ 2,439 $ — $ 291,876 Special mention — 482 78 — — — 560 Substandard — 195 31 933 — — 1,159 Doubtful — — — — — — — Total real estate - commercial loans, at amortized cost, gross 94,092 80,389 51,094 65,581 2,439 — 293,595 Gross write offs — 101 — 7 — — 108 Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted 2023 2022 2021 Prior Cost Basis to Term Total Real estate - construction and land Risk Rating Pass 11,366 12,755 2,151 — — — 26,272 Special mention — — — — — — — Substandard — — — — — — — Doubtful — — — — — — — Total real estate - construction and land loans, at amortized cost, gross 11,366 12,755 2,151 — — — 26,272 Gross write offs — — — — — — — Commercial and industrial Risk Rating Pass 51,212 45,325 13,807 54,003 10,750 — 175,097 Special mention — 150 43 671 — — 864 Substandard — 1,004 14 587 — — 1,605 Doubtful — — — — — — — Total commercial and industrial loans, at amortized cost, gross 51,212 46,479 13,864 55,261 10,750 — 177,566 Gross write offs 325 1,543 259 4,113 — — 6,240 Commercial and industrial - PPP Risk Rating Pass — — 135 3,067 — — 3,202 Special mention — — — — — — — Substandard — — — — — — — Doubtful — — — — — — — Total commercial and industrial - PPP loans, at amortized cost, gross — — 135 3,067 — — 3,202 Gross write offs — — — 223 — — 223 The Company considers the performance of the loan portfolio to determine its impact on the ACL. For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan by payment activity. The following table presents the principal balance at June 30, 2024 in residential and consumer loans based on payment activity as well as gross write offs for the six months ended June 30, 2024. Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted 2024 2023 2022 2021 Prior Cost Basis to Term Total Real estate - residential Payment Performance Performing $ 21,205 $ 29,246 $ 84,473 $ 23,559 $ 18,924 $ 121,696 $ — $ 299,103 Nonperforming — — 972 286 2,949 924 — 5,131 Total real estate - residential loans, at amortized cost, gross 21,205 29,246 85,445 23,845 21,873 122,620 — 304,234 Gross write offs — — — — — — — — Consumer and other Payment Performance Performing 46,327 23,318 13,849 774 163 1,221 — 85,652 Nonperforming — — 137 — — — — 137 Total consumer and other loans, at amortized cost, gross 46,327 23,318 13,986 774 163 1,221 — 85,789 Gross write offs — 168 1,513 32 36 — — 1,749 The following table presents the principal balance at December 31, 2023 in residential and consumer loans based on payment activity as well as gross write offs for the year ended December 31, 2023. Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted 2023 2022 2021 Prior Cost Basis to Term Total Real estate - residential Payment Performance Performing $ 31,377 $ 83,951 $ 24,524 $ 19,709 $ 99,328 $ — $ 258,889 Nonperforming — 1,197 286 2,951 803 — 5,237 Total real estate - residential loans, at amortized cost, gross 31,377 85,148 24,810 22,660 100,131 — 264,126 Gross write offs — — — — — — — Consumer and other Payment Performance Performing 25,491 19,390 930 204 990 — 47,005 Nonperforming — 258 24 — — — 282 Total consumer and other loans, at amortized cost, gross 25,491 19,648 954 204 990 — 47,287 Gross write offs 79 3,182 11 8 — — 3,280 |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access at the measurement date. Level 2 – Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data. Level 3 – Significant unobservable inputs that reflect a Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following is a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy. Investment Securities Available for Sale : The fair values of investment securities available for sale are determined by matrix pricing, which is a mathematical technique used to value debt securities without relying exclusively on quoted prices for the specific investment securities, but rather by relying on the investment securities’ relationship to other benchmark quoted investment securities (Level 2). Management obtains the fair values of investment securities available for sale on a monthly basis from a third party pricing service. Government Guaranteed Loans HFI, at Fair Value : The Company has elected to account for certain government guaranteed loans HFI at fair value. Fair value is calculated based on the present value of estimated future payments (Level 3). The valuation model uses interest rate, prepayment speed, and default rate assumptions that market participants would use in estimating future payments. Whenever available, the present value is validated against available market data. Individually Evaluated Loans : Periodically, the Company records nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Nonrecurring adjustments can also include certain impairment amounts for collateral-dependent loans calculated when establishing the ACL. Loans are considered collateral dependent when the Company has determined that foreclosure of the collateral is probable or when a borrower is experiencing financial difficulty and the loan is expected to be repaid substantially through the operation or sale of collateral. A collateral dependent loan’s ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. Fair value of the loan’s collateral is determined by appraisals, independent valuation, or management’s estimation of fair value which is then adjusted for the cost related to liquidation of the collateral. Collateral dependent loans are generally classified as Level 3 based on management’s judgment and estimation. Other Real Estate Owned : Other real estate owned assets are recorded at the lower of cost or fair value upon the transfer of a loan to other real estate owned and, subsequently, continue to be measured and carried at the lower of cost or fair value. The fair value of other real estate owned is based on recent real estate appraisals which are generally updated annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales, cost, and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Other real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly. Appraisals for both collateral dependent impaired loans and real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by either the Company or the Company's appraisal services vendor. Once received, management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Management compares the best-efforts price of collateral that has been sold to the most recent appraised value to determine what additional adjustment should be made to the appraisal value to arrive at fair value. Government Guaranteed Loan Servicing Rights : The fair value of government guaranteed loan servicing rights is based on a valuation model that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income. There were no government guaranteed loan servicing rights carried at fair value at June 30, 2024 and December 31, 2023. On a quarterly basis, government guaranteed loan servicing rights are evaluated for impairment based upon the fair value of the rights as compared to the cost. If the carrying amount exceeds fair value, impairment is recorded. Assets measured at fair value on a recurring basis at June 30, 2024 are summarized below. There were no liabilities carried at fair value on a recurring basis at June 30, 2024. Quoted Prices in Significant Significant Unobservable Inputs (Level 3) Total Financial assets Investment securities available for sale $ — $ 38,685 $ — $ 38,685 Government guaranteed loans HFI, at fair value — — 86,142 86,142 Assets measured at fair value on a recurring basis at December 31, 2023 are summarized below. There were no liabilities carried at fair value on a recurring basis at December 31, 2023. Quoted Prices in Significant Significant Unobservable Inputs (Level 3) Total Financial assets Investment securities available for sale $ — $ 39,575 $ — $ 39,575 Government guaranteed loans HFI, at fair value — — 91,508 91,508 There were no transfers between levels for assets and liabilities recorded at fair value on a recurring basis during the reported periods. Financial Instruments Recorded Using Fair Value Option The Company also elected the fair value option for certain of its government guaranteed loans HFI as the Company believed that fair value was the best indicator of the resolution of those loans at that time. Depending on market conditions and liquidity needs of the Company, management determines whether it is advantageous to hold or sell government guaranteed loans on a loan-by-loan basis. The portion of these loans guaranteed by the government are generally readily marketable in the secondary market and the portion of the loans that are not guaranteed may be sold periodically to other third party financial institutions. Interest income on these loans is recorded based on the contractual term of the loan and in accordance with the Company’s policy on other loans HFI. The following tables provide more information about the fair value carrying amount and the unpaid principal outstanding of HFI government guaranteed loans measured at fair value at June 30, 2024 and December 31, 2023. June 30, 2024 Total Loans Nonaccrual (1) 90 Days or More Past Due (1) Fair Value Carrying Amount Unpaid Principal Balance Fair Value Gain (Loss) Fair Value Carrying Amount Unpaid Principal Balance Fair Value Gain (Loss) Fair Value Carrying Amount Unpaid Principal Balance Fair Value Gain (Loss) Real estate - commercial $ 16,881 $ 17,098 $ (217) $ — $ — $ — $ — $ — $ — Commercial and industrial 69,261 67,732 1,529 1,625 1,809 (184) — — — Total loans HFI, at fair value $ 86,142 $ 84,830 $ 1,312 $ 1,625 $ 1,809 $ (184) $ — $ — $ — December 31, 2023 Total Loans Nonaccrual (1) 90 Days or More Past Due (1) Fair Value Carrying Amount Unpaid Principal Balance Fair Value Gain (Loss) Fair Value Carrying Amount Unpaid Principal Balance Fair Value Gain (Loss) Fair Value Carrying Amount Unpaid Principal Balance Fair Value Gain (Loss) Real estate - commercial $ 19,219 $ 19,156 $ 63 $ — $ — $ — $ — $ — $ — Commercial and industrial 72,289 68,777 3,512 485 585 (100) 162 182 (20) Total loans HFI, at fair value $ 91,508 $ 87,933 $ 3,575 $ 485 $ 585 $ (100) $ 162 $ 182 $ (20) (1) The nonaccrual and 90 days or more past due loan balances do not include the portion of government guaranteed loan balances. The total amount of net gains and losses from changes in fair value and interest income included in earnings for the six months ended June 30, 2024 and June 30, 2023 for government guaranteed loans HFI, at fair value, were as follows: Six Months Ended June 30, 2024 2023 Interest income $ 4,623 $ 2,071 Change in fair value 6,507 6,478 Total gain, net $ 11,130 $ 8,549 Changes in fair value for government guaranteed loans HFI, at fair value, were included in Government guaranteed loans fair value gain on the Consolidated Statements of Income. The table below presents a reconciliation of government guaranteed loans HFI, at fair value, which were valued on a recurring basis and used significant unobservable inputs (Level 3) for the six months ended June 30, 2024 and June 30, 2023: Six Months Ended June 30, 2024 2023 Balance of government guaranteed loans HFI at fair value, beginning of period $ 91,508 $ 27,078 New government guaranteed originations at fair value 74,210 84,151 Loans sold (84,279) (59,694) Principal payments (1,804) (5,695) Charge-offs — (153) Total gains during the period 6,507 6,478 Balance of government guaranteed loans HFI at fair value, end of period $ 86,142 $ 52,165 The Company’s valuation of government guaranteed loans HFI, at fair value, was supported by an analysis prepared by an independent third party and approved by management. The approach to determine fair value involved several steps: 1) identifying each loan’s unique characteristics, including balance, payment type, term, coupon, age, and principal and interest payment; 2) projecting these loan level characteristics for the life of each loan; and 3) performing discounted cash flow modeling. The following table provides information about the valuation techniques and unobservable inputs used in the valuation of government guaranteed loans HFI that fall within Level 3 of the fair value hierarchy at June 30, 2024 and December 31, 2023: Fair Value Valuation Unobservable Inputs Range (Weighted Average) June 30, 2024 Government guaranteed loans HFI, at fair value $ 86,142 Discounted Discount rate 7.36%-10.86% (9.18%) cash flow Conditional prepayment rate 10.50%-14.75% (13.89%) December 31, 2023 Government guaranteed loans HFI, at fair value $ 91,508 Discounted Discount rate 7.36%-10.86% (8.74%) cash flow Conditional prepayment rate 10.38%-15.69% (13.91%) The significant unobservable inputs impacting the fair value measurement of government guaranteed loans HFI, at fair value, include discount rates and conditional prepayment rates. Increases in discount rates or prepayment rates would result in a lower fair value measurement. Although the prepayment rate and discount rate are not directly interrelated, they generally move in opposite directions. The discount rates and conditional prepayment rates were weighted by the relative principal balance outstanding of these loans. Assets measured at fair value on a nonrecurring basis (Level 3) at June 30, 2024 are summarized below: Fair Value Valuation Technique(s) Significant Discount % Amount Other real estate owned $ 1,633 Discounted appraisals, estimated net realizable value of collateral Collateral discounts 10% Assets measured at fair value on a nonrecurring basis (Level 3) at December 31, 2023 are summarized below: Fair Value Valuation Technique(s) Significant Discount % Amount Individually evaluated loans $ 135 Discounted appraisals, estimated net realizable value of collateral Collateral discounts 10% Fair Value of Financial Instruments The carrying values and estimated fair values of financial instruments not carried at fair value, at June 30, 2024 and December 31, 2023 are as follows: June 30, 2024 December 31, 2023 Level Carrying Value Fair Value Carrying Value Fair Value Assets: Cash and cash equivalents 1 $ 60,772 $ 60,772 $ 58,385 $ 58,385 Time deposits in banks 2 2,261 2,201 4,646 4,561 Investment securities held to maturity 2 2,486 2,273 2,484 2,263 Nonmarketable equity securities, at cost 2 7,132 7,132 4,770 4,770 Loans HFI, at amortized cost 3 908,329 896,591 810,721 786,350 Accrued interest receivable 2 8,000 8,000 7,130 7,130 Government guaranteed loan servicing rights 3 15,770 17,480 14,959 16,318 Liabilities: Noninterest-bearing deposits 2 $ 94,040 $ 94,040 $ 93,708 $ 93,708 Interest-bearing transaction accounts 2 236,447 236,447 259,422 259,422 Savings and money market deposits 2 420,271 420,271 373,000 373,000 Time deposits 2 291,630 286,927 259,008 255,372 FHLB borrowings 2 55,000 55,000 10,000 10,000 Subordinated debentures 2 5,952 5,393 5,949 5,215 Notes payable 2 2,162 2,143 2,389 2,369 Accrued interest payable 2 1,172 1,172 882 882 |
GOVERNMENT GUARANTEED LOAN SERV
GOVERNMENT GUARANTEED LOAN SERVICING ACTIVITIES | 6 Months Ended |
Jun. 30, 2024 | |
Transfers and Servicing [Abstract] | |
GOVERNMENT GUARANTEED LOAN SERVICING ACTIVITIES | GOVERNMENT GUARANTEED LOAN SERVICING ACTIVITIES At June 30, 2024 and December 31, 2023, the principal balance of government guaranteed loans, excluding PPP loans, retained by the Company was $391,907 and $395,877, respectively, of which $161,331 and $181,459 represented the guaranteed portion of the loans. Loans serviced for others are not included in the accompanying Consolidated Balance Sheets. The unpaid principal balances of government guaranteed loans serviced for others requiring recognition of a servicing asset were $966,212 and $855,756 at June 30, 2024 and December 31, 2023, respectively. Activity for government guaranteed loan servicing rights for the three and six months ended June 30, 2024 and June 30, 2023 follows: Three Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Beginning of period $ 15,742 $ 11,625 $ 14,959 $ 10,906 Additions 1,514 2,250 3,692 3,847 Amortization (1,486) (1,055) (2,881) (1,933) End of period $ 15,770 $ 12,820 $ 15,770 $ 12,820 The fair value of government guaranteed loan servicing rights was $17,480 and $16,318 at June 30, 2024 and December 31, 2023, respectively. Fair value was determined using a weighted average discount rate of 14.62% and a weighted average prepayment speed of 12.72% at June 30, 2024. Fair value was determined using a weighted average discount rate of 14.50% and a weighted average prepayment speed of 11.42% at December 31, 2023. The government guaranteed loan servicing rights are amortized over the life of a loan on a loan-by-loan basis. The following table presents the components of net gain on sale of government guaranteed loans for the three and six months ended June 30, 2024 and June 30, 2023: Three Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Gain on sale of guaranteed portion of government guaranteed loans $ 4,081 $ 4,590 $ 9,992 $ 7,402 Loss on sale of unguaranteed portion of government guaranteed loans — (797) — (797) Costs recognized on sale of government guaranteed loans — (15) — (15) Fair value of loan servicing rights created 1,514 2,250 3,692 3,847 Gain on sale of government guaranteed loans, net $ 5,595 $ 6,028 $ 13,684 $ 10,437 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
LEASES | LEASES For the three and six months ended June 30, 2024 and June 30, 2023, the components of total lease cost and supplemental information related to operating leases were as follows: Three Months Ended Six Months Ended 2024 2023 2024 2023 Operating lease cost $ 238 $ 246 $ 497 $ 588 Short-term lease cost 63 20 72 20 Total lease cost, net (1) $ 301 $ 266 $ 569 $ 608 (1) Includes lease costs reported as discontinued operations of $60 and $27 for the three months ended June 30, 2024 and June 30, 2023, respectively, and $131 and $87 for the six months ended June 30, 2024 and June 30, 2023, respectively. Three Months Ended Six Months Ended 2024 2023 2024 2023 Cash flows related to operating lease liabilities $ 206 $ 303 $ 449 $ 684 Right-of-use assets obtained in exchange for new operating lease liabilities — — 263 — At June 30, 2024, the weighted average discount rate of operating leases was 2.79% and the weighted average remaining life of operating leases was 2.90 years. The future minimum lease payments for operating leases, subsequent to June 30, 2024, as recorded on the balance sheet, are summarized as follows: 2024 $ 448 2025 946 2026 908 2027 467 2028 — Thereafter — Total undiscounted lease payments $ 2,769 Less: imputed interest (101) Net lease liabilities $ 2,668 Impairment of ROU Assets ROU assets from operating leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, and are reviewed for impairment when indicators of impairment are present. ASC 360 requires three steps to identify, recognize and measure impairment. If indicators of impairment are present (Step 1), the Company performs a recoverability test (Step 2) comparing the sum of the estimated undiscounted cash flows attributable to the ROU asset in question to the carrying amount. The Company estimates the fair value of the ROU asset and recognizes an impairment loss when the carrying amount exceeds the estimated fair value (Step 3). During 2022, the Company closed leased mortgage lending offices as part of its discontinuance of the nationwide residential lending operation. The mortgage lending offices were evaluated as outlined above to determine whether the operating leases were impaired. As part of the recoverability test, the Company elected to exclude operating lease liabilities from the carrying amount of the asset group. The undiscounted future cash flows used in the recoverability test were based on assumptions made by the Company rather than market participant assumptions. Since an election was made to exclude operating lease liabilities from the asset or asset group, all future cash lease payments for the lease were also excluded. In addition, the Company elected to exclude operating lease liabilities from the estimated fair value, consistent with the recoverability test. When determining the fair value of the ROU asset, the Company estimated what market participants would pay to lease the assets assuming the highest and best use in the assets’ current forms. |
OTHER BORROWINGS
OTHER BORROWINGS | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
OTHER BORROWINGS | OTHER BORROWINGS At June 30, 2024, the Company had $55,000 of borrowings at 5.57% from the FHLB and no borrowings from the FRB. There were $10,000 of borrowings at 5.57% from the FHLB and no borrowings from the FRB at December 31, 2023. The Bank is a member of the FHLB of Atlanta, which provides short- and long-term funding collateralized by mortgage-related assets to its members. FHLB short-term borrowings be ar interest at variable rates set by the FHLB. Any a dvances that the bank were to obtain would be secured by a blanket lien on $326,530 of real estate-related loans as of June 30, 2024. Based on this collateral and the Company's holdings of FHLB stock, the Company was eligible to borrow up to $132,809 from the FHLB at June 30, 2024. In addition, the Bank has a secured line of credit with the Federal Reserve Bank of Atlanta which was secured by $61,753 of commercial loans as of June 30, 2024. FRB short-term borrowings bear interest at variable rates based on the FOMC's target range for the federal funds rate. Based on this collateral, the Company was eligible to borrow up to $44,028 from the FRB at June 30, 2024. The Company has $6,000 of Subordinated Debentures (the “Debentures”) that mature June 30, 2031 and are redeemable after 5 years which is June 30, 2026. The Debentures carry interest at a fixed rate of 4.50% per annum for the initial 5 years of term and carry interest at a floating rate for the final 5 years of term after June 30, 2026. Under the debt agreements, the floating rates are based on a SOFR benchmark plus 3.78% per annum. The balance of Subordinated Debentures outstanding at the Company, net of offering costs, amounted to $5,952 and $5,949 at June 30, 2024 and December 31, 2023, respectively. The Company has a term note with quarterly principal and interest payments with interest at Prime (8.50% at June 30, 2024). The note matures on March 10, 2029 and the balance of the note was $2,162 and $2,389 at June 30, 2024 and December 31, 2023, respectively. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Equity Plan governs the Company’s restricted stock grants and stock options. Total compensation cost charged against income related to the Equity Plan was $110 and $172 for the three months ended June 30, 2024 and June 30, 2023, respectively, and $172 and $319 for the six months ended June 30, 2024 and June 30, 2023, respectively. Restricted Stock The Company awarded shares of restricted common stock to certain employees and non-employee directors for which compensation expense is recognized ratably over the vesting period of the awards based on the fair value of the stock at issue date. A summary of changes in the Company’s nonvested restricted shares for the six months ended June 30, 2024 and June 30, 2023 follows: Shares Weighted-Average Nonvested at January 1, 2024 52,195 $ 18.75 Granted 30,650 11.70 Vested (28,710) (18.50) Forfeited (1,025) (16.48) Nonvested at June 30, 2024 53,110 $ 14.86 Shares Weighted-Average Nonvested at January 1, 2023 22,000 $ 21.52 Granted 46,175 18.30 Vested (13,935) 20.01 Forfeited (1,705) (19.37) Nonvested at June 30, 2023 52,535 $ 18.75 At June 30, 2024, there was $578 of total unrecognized compensation cost related to nonvested restricted shares granted under the Equity Plan that is expected to be recognized over a weighted average period of 2.9 years. The total fair value of shares vested during the six months ended June 30, 2024 and June 30, 2023 was $359 and $252, respectively. Stock Options The Equity Plan permits the grant of stock options to the Company’s employees and non-employee directors for up to 15% of the total number of shares of Company common stock issued and outstanding, up to 1,500,000 shares. Option awards are granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. The market price of the Company’s common stock is the closing sales price of the Common Stock on Nasdaq on the date of the grant. Those option awards generally have a vesting period of 5 years for employees and 3 years for non-employee directors and have 10-year contractual terms. The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatility is based on an average of historical volatility of peer financial institutions. The expected term of options granted represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. A summary of the activity in the Equity Plan for the six months ended June 30, 2024 and June 30, 2023 follows: Shares Weighted Weighted Aggregate Outstanding at January 1, 2024 367,033 $ 15.68 Forfeited (1,575) (15.41) Outstanding at June 30, 2024 365,458 $ 15.68 5.16 $ — Vested and exercisable at June 30, 2024 350,660 $ 15.71 5.12 $ — Shares Weighted Weighted Aggregate Outstanding at January 1, 2023 405,688 $ 15.67 Exercised (30,375) 15.71 Forfeited (7,575) 15.52 Outstanding at June 30, 2023 367,738 $ 15.67 6.20 $ — Vested and exercisable at June 30, 2023 323,037 $ 15.78 6.06 $ — There were no options granted during the three and six months ended June 30, 2024 or June 30, 2023. Total unrecognized compensation cost related to nonvested stock options granted under the Equity Plan was $32 at June 30, 2024. This cost is expected to be recognized over a weighted average period of 1.3 years. |
OTHER BENEFIT PLANS
OTHER BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2024 | |
Postemployment Benefits [Abstract] | |
OTHER BENEFIT PLANS | OTHER BENEFIT PLANS The Company has established a stock dividend reinvestment and stock purchase plan. Under the DRIP, eligible shareholders can voluntarily purchase stock with their dividend or can make additional stock purchases. During the six months ended June 30, 2024, there were no shares issued. During the six months ended June 30, 2023, 4,953 shares were issued at an average of $17.01 per share. All employees and Directors are eligible to participate in the NSPP. Expense recognized in relation to the NSPP for the six months ended June 30, 2024 and June 30, 2023 was $13 and $14, respectively. The Company has a Salary Continuation Agreement (the “Agreement”) with the Company’s retired CEO. In accordance with the Agreement, the executive will receive an annual benefit of $25 for twenty years following separation of service. The liability recorded for the Agreement was $359 and $351 at June 30, 2024 and December 31, 2023, respectively, and the related expense for the six months ended June 30, 2024 and June 30, 2023 was $8 for both periods. Payments began in July 2024 from the retirement of the CEO on December 31, 2023. The Company has a 401(k) plan that covers all employees subject to certain age and service requirements. The Company contributes 3% of each employee’s salary each pay period as a safe harbor contribution. The Company may also match employee contributions each year at the discretion of the Board of Directors. There was no match of contributions in 2023. Expense recognized in relation to the 401(k) plan was $533 and $457 for the six months ended June 30, 2024 and June 30, 2023, respectively. The Company has an ESOP for eligible employees. Each year, the Company’s Board of Directors may approve a discretionary percentage of employees’ salaries to be contributed to the ESOP for eligible employees. In 2021, the ESOP trust acquired 14,154 shares of the Company’s stock. As this is a leveraged plan, unallocated shares are distributed to employees annually. There were 8,493 unallocated shares with a fair value of $99 and 11,323 unallocated shares with a fair value of $153 remaining as of June 30, 2024 and June 30, 2023, respectively . The ESOP trust’s outstanding loan, which is secured by the unallocated shares, bears a fixed interest rate equal to the Prime Rate as of the note date, which was 3.25%. The note requires an annual payment of principal and interest through December 2026. The Company’s ESOP, which is internally leveraged, does not report the loan receivable extended to the ESOP as an asset and does not report the ESOP debt due to the Company. The discontinuation of the nationwide residential lending division during 2022 triggered a partial plan termination and all affected employees were 100% vested in the Company’s contributions into the ESOP. As a result of the exit of affected participants from the plan, the plan acquired 23,383 shares of the Company’s stock. As this is a leveraged plan, unallocated shares are distributed to employees annually. There were 18,706 unallocated shares with a fair value of $217 and 23,383 unallocated shares with a fair value of $316 remaining as of June 30, 2024 and June 30, 2023, respectively . The ESOP trust was issued a five year loan bearing an interest rate equal to the Prime Rate as of the note date, which was 8.25% and adjusts annually as of the first day of each succeeding calendar year to reflect the Prime Rate as of the first business day of the calendar year. The note requires an annual payment of principal and interest through December 2027. The Company’s ESOP, which is internally leveraged, does not report the loan receivable extended to the ESOP as an asset and does not report the ESOP debt due to the Company. |
REGULATORY MATTERS
REGULATORY MATTERS | 6 Months Ended |
Jun. 30, 2024 | |
Banking And Thrift Disclsoure [Abstract] | |
REGULATORY MATTERS | REGULATORY MATTERS Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believes that the Bank met all capital adequacy requirements to which it was subject at June 30, 2024 and December 31, 2023. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At June 30, 2024 and December 31, 2023, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s classification. In February 2019, the federal bank regulatory agencies issued a final rule that revised certain capital regulations under ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and included a transition option that allows banking organizations to phase in, over a three year period, the day one adverse effects of adoption on their regulatory capital ratios (three year transition option). In connection with the adoption of ASC 326 on January 1, 2023, the Company recognized an after-tax cumulative effect reduction to retained earnings. The Company elected to adopt the three year transition option and the deferral has been applied in capital ratios presented below. Actual and required capital amounts and ratios for the Bank are presented below at June 30, 2024: Actual Required for Capital Adequacy Purposes To be Well Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets) $ 114,204 11.79 % $ 77,500 8.00 % $ 96,875 10.00 % Tier 1 Capital (to Risk Weighted Assets) $ 102,081 10.54 % $ 58,125 6.00 % $ 77,500 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) $ 102,081 10.54 % $ 43,594 4.50 % $ 62,969 6.50 % Tier 1 Capital (to Average Assets) $ 102,081 8.73 % $ 46,792 4.00 % $ 58,490 5.00 % Actual and required capital amounts and ratios for the Bank are presented below at December 31, 2023: Actual Required for Capital Adequacy Purposes To be Well Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets) $ 114,256 13.03 % $ 70,169 8.00 % $ 87,711 10.00 % Tier 1 Capital (to Risk Weighted Assets) $ 103,274 11.77 % $ 52,627 6.00 % $ 70,169 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) $ 103,274 11.77 % $ 39,470 4.50 % $ 57,012 6.50 % Tier 1 Capital (to Average Assets) $ 103,274 9.38 % $ 44,024 4.00 % $ 55,030 5.00 % Dividend Restrictions |
LOAN COMMITMENTS AND OTHER RELA
LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES | LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES Some financial instruments, such as loan commitments, credit lines, and letters of credit, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies that are used for loans are used to make such commitments, including obtaining collateral at exercise of the commitment. The contractual amounts of financial instruments with off-balance sheet risk at June 30, 2024 and December 31, 2023 were as follows: June 30, 2024 December 31, 2023 Unfunded loan commitments $ 59,649 $ 7,392 Unused lines of credit 183,740 178,440 Standby letters of credit 211 186 All unused lines of credit at June 30, 2024 and December 31, 2023 were variable rate lines of credit and the majority of unfunded loan commitments at June 30, 2024 and December 31, 2023 were commitments to fund variable rate loans. Unfunded loan commitments are generally entered into for periods of 90 days or less. The Company maintains an ACL for its off-balance sheet loan commitments which is calculated by loan type using estimated line utilization rates based on historical usage. Loss rates for outstanding loans is applied to the estimated utilization rates to calculate the ACL for off-balance sheet loan commitments. At June 30, 2024 and December 31, 2023, ACL for off-balance sheet loan commitments totaled $641 and $839 , |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2024 and June 30, 2023: Three Months Ended Six Months Ended 2024 2023 2024 2023 Basic: Income from continuing operations $ 876 $ 1,417 $ 1,759 $ 2,284 Loss from discontinued operations (10) (32) (69) (160) Net income 866 1,385 1,690 2,124 Less: Preferred stock dividends 386 208 771 416 Net income available to common shareholders $ 480 $ 1,177 $ 919 $ 1,708 Weighted average common shares outstanding 4,134,581 4,103,788 4,132,533 4,092,299 Basic earnings (loss) per common share: Continuing operations $ 0.12 $ 0.30 $ 0.24 $ 0.46 Discontinued operations — (0.01) (0.02) (0.04) Total $ 0.12 $ 0.29 $ 0.22 $ 0.42 Diluted: Income from continuing operations $ 876 $ 1,417 $ 1,759 $ 2,284 Loss from discontinued operations (10) (32) (69) (160) Net income 866 1,385 1,690 2,124 Less: Preferred stock dividends 386 208 771 416 Add: Series B preferred stock and preferred C stock dividends — 64 — — Net income available to common shareholders $ 480 $ 1,241 $ 919 $ 1,708 Weighted average common shares outstanding for basic earnings per common share 4,134,581 4,103,788 4,132,533 4,092,299 Add: Dilutive effects of conversion of Series B preferred stock and Preferred C to common stock — 161,713 — — Add: Dilutive effects of assumed exercises of stock options and warrants — — — — Average shares and dilutive potential common shares 4,134,581 4,265,501 4,132,533 4,092,299 Diluted earnings (loss) per common share: Continuing operations $ 0.12 $ 0.30 $ 0.24 $ 0.46 Discontinued operations — (0.01) (0.02) (0.04) Total $ 0.12 $ 0.29 $ 0.22 $ 0.42 The following securities outstanding at June 30, 2024 and June 30, 2023 have been excluded from the calculation of weighted average shares outstanding as their effect on the calculation of earnings (loss) per share are antidilutive: Three Months Ended Six Months Ended 2024 2023 2024 2023 Common stock options 365,700 368,955 366,238 378,534 Convertible Series B preferred stock 3,210 0 3,210 3,123 Convertible Series C preferred stock 6,446 0 6,446 0 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements include BayFirst Financial Corp. and its wholly owned subsidiary, BayFirst National Bank, together referred to as “the Company”. These unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles followed within the financial services industry for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information or notes required for complete financial statements. The consolidated balance sheet as of December 31, 2023 has been derived from the audited consolidated financial statements of BayFirst Financial Corp. for that period. |
Segment Reporting | The Company currently operates one business segment. In the third quarter of 2022, the Company discontinued the Bank’s nationwide residential mortgage loan segment. The operations of this segment are reported as discontinued operations. |
Use of Estimates | Use of Estimates : To prepare financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. The most significant estimates relate to the ACL, government guaranteed loan servicing rights, and fair value of government guaranteed loans HFI. |
Contingencies | Contingencies : |
Fair Value | Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access at the measurement date. Level 2 – Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data. Level 3 – Significant unobservable inputs that reflect a Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following is a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy. Investment Securities Available for Sale : The fair values of investment securities available for sale are determined by matrix pricing, which is a mathematical technique used to value debt securities without relying exclusively on quoted prices for the specific investment securities, but rather by relying on the investment securities’ relationship to other benchmark quoted investment securities (Level 2). Management obtains the fair values of investment securities available for sale on a monthly basis from a third party pricing service. Government Guaranteed Loans HFI, at Fair Value : The Company has elected to account for certain government guaranteed loans HFI at fair value. Fair value is calculated based on the present value of estimated future payments (Level 3). The valuation model uses interest rate, prepayment speed, and default rate assumptions that market participants would use in estimating future payments. Whenever available, the present value is validated against available market data. Individually Evaluated Loans : Periodically, the Company records nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Nonrecurring adjustments can also include certain impairment amounts for collateral-dependent loans calculated when establishing the ACL. Loans are considered collateral dependent when the Company has determined that foreclosure of the collateral is probable or when a borrower is experiencing financial difficulty and the loan is expected to be repaid substantially through the operation or sale of collateral. A collateral dependent loan’s ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. Fair value of the loan’s collateral is determined by appraisals, independent valuation, or management’s estimation of fair value which is then adjusted for the cost related to liquidation of the collateral. Collateral dependent loans are generally classified as Level 3 based on management’s judgment and estimation. Other Real Estate Owned : Other real estate owned assets are recorded at the lower of cost or fair value upon the transfer of a loan to other real estate owned and, subsequently, continue to be measured and carried at the lower of cost or fair value. The fair value of other real estate owned is based on recent real estate appraisals which are generally updated annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales, cost, and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Other real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly. Appraisals for both collateral dependent impaired loans and real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by either the Company or the Company's appraisal services vendor. Once received, management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Management compares the best-efforts price of collateral that has been sold to the most recent appraised value to determine what additional adjustment should be made to the appraisal value to arrive at fair value. Government Guaranteed Loan Servicing Rights |
New Accounting Standards Not Yet Adopted | New Accounting Standards Not Yet Adopted : In October 2023, the FASB issued ASU No. 2023-06 “Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”). ASU 2023-06 amends the ASC to incorporate certain disclosure requirements from SEC Release No. 33-10532 - Disclosure Update and Simplification that was issued in 2018. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company does not believe this standard will have a material impact on its Consolidated Financial Statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures ("ASU 2023-07"). This ASU was issued to improve segment reporting disclosures. The amendments in this ASU improve financial reporting by requiring disclosure of incremental segment information including significant segment expenses regularly provided to the chief operating decision maker as well as the amount and composition of other segment items on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. Retrospective application is required in all prior periods unless impracticable to do so. The amendments in this standard will be effective for the Company for the fiscal year ended December 31, 2024 and subsequent interim periods. The Company is evaluating the impact of this standard and does not expect it to have a material impact on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures ("ASU 2023-09"). This ASU was issued to enhance the transparency and decision usefulness of income tax disclosures. The ASU addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. Retrospective application in all prior periods is permitted. The amendments in this standard will be effective for the Company on January 1, 2025. The Company is currently assessing the impact of this standard and does not expect it to have a material impact on the Company’s consolidated financial statements. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations of the Residential Mortgage Lending Division | The following is a summary of the assets and liabilities of the discontinued operations of the residential mortgage lending division at June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Assets Right-of-use operating lease asset $ 36 $ 348 Total assets $ 36 $ 348 Liabilities Operating lease liability $ 171 $ 620 Total liabilities $ 171 $ 620 The following presents operating results of the discontinued operations of the residential mortgage lending division for the three and six months ended June 30, 2024 and June 30, 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Interest income $ — $ — $ — $ 1 Noninterest income 51 (2) 51 (2) Total net revenue 51 (2) 51 (1) Noninterest expense 65 41 143 212 Loss from discontinued operations before income taxes (14) (43) (92) (213) Income tax benefit (4) (11) (23) (53) Net loss from discontinued operations $ (10) $ (32) $ (69) $ (160) |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Securities Available for Sale | The amortized costs, gross unrealized gains and losses, and estimated fair values of investment securities available for sale and investment securities held to maturity at June 30, 2024 and December 31, 2023 as well as the ACL for investment securities held to maturity at June 30, 2024 and December 31, 2023 are summarized as follows: June 30, 2024 Amortized Gross Gross Fair Investment securities available for sale: Asset-backed securities $ 6,351 $ — $ (45) $ 6,306 Mortgage-backed securities: U.S. Government-sponsored enterprises 8,065 — (705) 7,360 Collateralized mortgage obligations: U.S. Government-sponsored enterprises 19,638 — (3,520) 16,118 Corporate bonds 8,831 70 — 8,901 Total investment securities available for sale $ 42,885 $ 70 $ (4,270) $ 38,685 June 30, 2024 Amortized Gross Gross Fair ACL Investment securities held to maturity: Corporate bonds $ 2,500 $ — $ (227) $ 2,273 $ 14 Total investment securities held to maturity $ 2,500 $ — $ (227) $ 2,273 $ 14 December 31, 2023 Amortized Gross Gross Fair Investment securities available for sale: Asset-backed securities $ 8,041 $ 6 $ (114) $ 7,933 Mortgage-backed securities: U.S. Government-sponsored enterprises 3,842 — (606) 3,236 Collateralized mortgage obligations: U.S. Government-sponsored enterprises 20,382 — (3,284) 17,098 Corporate bonds 11,332 — (24) 11,308 Total investment securities available for sale $ 43,597 $ 6 $ (4,028) $ 39,575 December 31, 2023 Amortized Gross Gross Fair ACL Investment securities held to maturity: Mortgage-backed securities: U.S. Government-sponsored enterprises $ 1 $ — $ — $ 1 $ — Corporate bonds 2,500 — (238) 2,262 17 Total investment securities held to maturity $ 2,501 $ — $ (238) $ 2,263 $ 17 ` |
Schedule of Securities Held to Maturity | The amortized costs, gross unrealized gains and losses, and estimated fair values of investment securities available for sale and investment securities held to maturity at June 30, 2024 and December 31, 2023 as well as the ACL for investment securities held to maturity at June 30, 2024 and December 31, 2023 are summarized as follows: June 30, 2024 Amortized Gross Gross Fair Investment securities available for sale: Asset-backed securities $ 6,351 $ — $ (45) $ 6,306 Mortgage-backed securities: U.S. Government-sponsored enterprises 8,065 — (705) 7,360 Collateralized mortgage obligations: U.S. Government-sponsored enterprises 19,638 — (3,520) 16,118 Corporate bonds 8,831 70 — 8,901 Total investment securities available for sale $ 42,885 $ 70 $ (4,270) $ 38,685 June 30, 2024 Amortized Gross Gross Fair ACL Investment securities held to maturity: Corporate bonds $ 2,500 $ — $ (227) $ 2,273 $ 14 Total investment securities held to maturity $ 2,500 $ — $ (227) $ 2,273 $ 14 December 31, 2023 Amortized Gross Gross Fair Investment securities available for sale: Asset-backed securities $ 8,041 $ 6 $ (114) $ 7,933 Mortgage-backed securities: U.S. Government-sponsored enterprises 3,842 — (606) 3,236 Collateralized mortgage obligations: U.S. Government-sponsored enterprises 20,382 — (3,284) 17,098 Corporate bonds 11,332 — (24) 11,308 Total investment securities available for sale $ 43,597 $ 6 $ (4,028) $ 39,575 December 31, 2023 Amortized Gross Gross Fair ACL Investment securities held to maturity: Mortgage-backed securities: U.S. Government-sponsored enterprises $ 1 $ — $ — $ 1 $ — Corporate bonds 2,500 — (238) 2,262 17 Total investment securities held to maturity $ 2,501 $ — $ (238) $ 2,263 $ 17 ` The following table summarizes investment securities with unrealized losses at June 30, 2024 aggregated by security type and length of time in a continuous unrealized loss position: Less than 12 Months 12 Months or Longer Total June 30, 2024 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Number of Securities Investment securities available for sale: Asset-backed securities $ 1,710 $ (5) $ 4,596 $ (40) $ 6,306 $ (45) 3 Mortgage-backed securities: U.S. Government-sponsored enterprises 4,416 (43) 2,944 (662) 7,360 (705) 3 Collateralized mortgage obligations: U.S. Government-sponsored enterprises — — 16,118 (3,520) 16,118 (3,520) 7 Total investment securities available for sale $ 6,126 $ (48) $ 23,658 $ (4,222) $ 29,784 $ (4,270) 13 Investment securities held to maturity: Corporate bonds $ 416 $ (83) $ 1,857 $ (144) $ 2,273 $ (227) 3 Total investment securities held to maturity $ 416 $ (83) $ 1,857 $ (144) $ 2,273 $ (227) 3 The following table summarizes investment securities with unrealized losses at December 31, 2023 aggregated by security type and length of time in a continuous unrealized loss position: Less than 12 Months 12 Months or Longer Total December 31, 2023 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Number of Securities Investment securities available for sale: Asset-backed securities $ — $ — $ 5,967 $ (114) $ 5,967 $ (114) 2 Mortgage-backed securities: U.S. Government-sponsored enterprises — — 3,236 (606) 3,236 (606) 2 Collateralized mortgage obligations: U.S. Government-sponsored enterprises — — 17,098 (3,284) 17,098 (3,284) 7 Corporate bonds 11,308 (24) — — 11,308 (24) 5 Total investment securities available for sale $ 11,308 $ (24) $ 26,301 $ (4,004) $ 37,609 $ (4,028) 16 Investment securities held to maturity: Corporate bonds $ — $ — $ 2,262 $ (238) $ 2,262 $ (238) 3 Total investment securities held to maturity $ — $ — $ 2,262 $ (238) $ 2,262 $ (238) 3 |
Schedule of Investments Classified by Contractual Maturity | The amortized cost and fair value of investment securities as of June 30, 2024 are shown in the table below by contractual maturity. Actual timing may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Available for Sale Held to Maturity Amortized Fair Amortized Fair One to five years $ 8,831 $ 8,901 $ 1,500 $ 1,445 Five to ten years 7,217 7,160 1,000 828 Beyond ten years 26,837 22,624 — — Total $ 42,885 $ 38,685 $ 2,500 $ 2,273 |
Schedule of Allowance for Credit Losses for Investment Securities | The following table presents the activity in the ACL for investment securities HTM by major security type for the three and six months ended June 30, 2024 and June 30, 2023: For the Three Months Ended For the Six Months Ended For the Three Months Ended For the Six Months Ended Corporate Bonds June 30, 2024 June 30, 2023 Balance at beginning of period $ 14 $ 17 $ 18 $ — Impact of adopting ASC 326 — — — 18 Provision for credit losses on HTM investment securities — (3) 1 1 Investment securities charge-offs — — — — Investment securities recoveries — — — — Balance at end of period $ 14 $ 14 $ 19 $ 19 |
Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value | The following table summarizes investment securities with unrealized losses at June 30, 2024 aggregated by security type and length of time in a continuous unrealized loss position: Less than 12 Months 12 Months or Longer Total June 30, 2024 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Number of Securities Investment securities available for sale: Asset-backed securities $ 1,710 $ (5) $ 4,596 $ (40) $ 6,306 $ (45) 3 Mortgage-backed securities: U.S. Government-sponsored enterprises 4,416 (43) 2,944 (662) 7,360 (705) 3 Collateralized mortgage obligations: U.S. Government-sponsored enterprises — — 16,118 (3,520) 16,118 (3,520) 7 Total investment securities available for sale $ 6,126 $ (48) $ 23,658 $ (4,222) $ 29,784 $ (4,270) 13 Investment securities held to maturity: Corporate bonds $ 416 $ (83) $ 1,857 $ (144) $ 2,273 $ (227) 3 Total investment securities held to maturity $ 416 $ (83) $ 1,857 $ (144) $ 2,273 $ (227) 3 The following table summarizes investment securities with unrealized losses at December 31, 2023 aggregated by security type and length of time in a continuous unrealized loss position: Less than 12 Months 12 Months or Longer Total December 31, 2023 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Number of Securities Investment securities available for sale: Asset-backed securities $ — $ — $ 5,967 $ (114) $ 5,967 $ (114) 2 Mortgage-backed securities: U.S. Government-sponsored enterprises — — 3,236 (606) 3,236 (606) 2 Collateralized mortgage obligations: U.S. Government-sponsored enterprises — — 17,098 (3,284) 17,098 (3,284) 7 Corporate bonds 11,308 (24) — — 11,308 (24) 5 Total investment securities available for sale $ 11,308 $ (24) $ 26,301 $ (4,004) $ 37,609 $ (4,028) 16 Investment securities held to maturity: Corporate bonds $ — $ — $ 2,262 $ (238) $ 2,262 $ (238) 3 Total investment securities held to maturity $ — $ — $ 2,262 $ (238) $ 2,262 $ (238) 3 |
LOANS (Tables)
LOANS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
Schedule of Loans HFI at Amortized Cost | Loans HFI, at amortized cost, at June 30, 2024 and December 31, 2023 were as follows: June 30, December 31, Real estate: Residential $ 304,234 $ 264,126 Commercial 288,185 293,595 Construction and land 35,759 26,272 Commercial and industrial 192,140 177,566 Commercial and industrial - PPP 2,324 3,202 Consumer and other 85,789 47,287 Loans HFI, at amortized cost, gross 908,431 812,048 Deferred loan costs, net 17,299 14,707 Discount on government guaranteed loans sold (1) (7,731) (7,040) Premium on loans purchased, net 4,173 4,503 Allowance for credit losses (13,843) (13,497) Loans HFI, at amortized cost $ 908,329 $ 810,721 (1) The Company allocates the retained portion of loans sold based on relative fair value of the retained portion and the sold portion, which results in a discount on the retained portion. |
ALLOWANCE FOR CREDIT LOSSES (Ta
ALLOWANCE FOR CREDIT LOSSES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
Schedule of Allowance for Credit Losses by Loan Segment, for Unfunded Commitments and Recorded Investment in Loans by Loan Segment | The following schedules present the activity in the ACL by loan segment for the three and six months ended June 30, 2024 and June 30, 2023: Three Months Ended Real Estate - Residential Real Estate - Commercial Real Estate - Construction and Land Commercial and Industrial Consumer and Other Total June 30, 2024 Beginning Balance $ 2,186 $ 1,758 $ 663 $ 6,840 $ 2,459 $ 13,906 Charge-offs — (60) — (2,599) (771) (3,430) Recoveries — 2 — 111 56 169 Provision (952) 164 (108) 3,362 732 3,198 Ending Balance $ 1,234 $ 1,864 $ 555 $ 7,714 $ 2,476 $ 13,843 June 30, 2023 Beginning Balance $ 2,358 $ 1,695 $ 254 $ 7,216 $ 685 $ 12,208 Charge-offs — — — (1,710) (674) (2,384) Recoveries — — — 72 59 131 Provision 184 194 105 1,433 727 2,643 Ending Balance $ 2,542 $ 1,889 $ 359 $ 7,011 $ 797 $ 12,598 Real Estate - Residential Real Estate - Commercial Real Estate - Construction and Land Commercial and Industrial Consumer and Other Unallocated Total Six Months Ended June 30, 2024 Beginning Balance $ 1,987 $ 1,818 $ 519 $ 6,579 $ 2,594 $ — $ 13,497 Charge-offs — (60) — (5,523) (1,749) — (7,332) Recoveries — 4 — 241 174 — 419 Provision (753) 102 36 6,417 1,457 — 7,259 Ending Balance $ 1,234 $ 1,864 $ 555 $ 7,714 $ 2,476 $ — $ 13,843 June 30, 2023 Beginning Balance $ 731 $ 956 $ 28 $ 6,182 $ 1,090 $ 59 $ 9,046 Impact of adopting ASC 326 1,479 613 281 1,116 (323) (59) 3,107 Charge-offs — — — (3,118) (1,339) — (4,457) Recoveries — 2 — 189 126 — 317 Provision 332 318 50 2,642 1,243 — 4,585 Ending Balance $ 2,542 $ 1,889 $ 359 $ 7,011 $ 797 $ — $ 12,598 |
Schedule of Allowance for Credit Loss on Unfunded Commitments | The following table presents the activity in the ACL for unfunded commitments for the three and six months ended June 30, 2024 and June 30, 2023: For the Three Months Ended For the Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Balance at beginning of period $ 839 $ 798 $ 839 $ 511 Impact of adopting ASC 326 — — — 213 Provision for credit losses on unfunded commitments (198) 46 (198) 120 Unfunded commitments charge-offs — — — — Unfunded commitments recoveries — — — — Balance at end of period $ 641 $ 844 $ 641 $ 844 |
Schedule of Recorded Investment in Nonaccrual and Loans Past Due over 89 Days Still on Accrual by Loan Segment | The following tables present the principal balance of nonaccrual loans and loans past due over 89 days still on accrual by loan segment at June 30, 2024 and December 31, 2023. In the following tables, the principal balance does not include the government guaranteed balance or loans measured at fair value. June 30, 2024 Nonaccrual with no ACL (1) Nonaccrual with ACL (1) Loans Past Due Over 89 Days Still Accruing (1) Real estate - residential $ — $ 4,881 $ 250 Real estate - commercial — 1,249 — Commercial and industrial — 1,471 66 Consumer and other — — 137 Total $ — $ 7,601 $ 453 December 31, 2023 Nonaccrual with no ACL (1) Nonaccrual with ACL (1) Loans Past Due Over 89 Days Still Accruing (1) Real estate - residential $ — $ 4,654 $ 583 Real estate - commercial — $ 1,159 $ — Commercial and industrial — 1,587 — Consumer and other — — 282 Total $ — $ 7,400 $ 865 (1) Excludes loans measured at fair value. See Note 6. Fair Value for additional information . |
Schedule of Credit Exposure for the Loan Portfolio Disaggregated by Loan Segment | The following table presents the principal balance of individually analyzed collateral dependent loans by loan portfolio segment as of December 31, 2023: December 31, 2023 Type of Collateral ACL Business Assets Commercial and industrial $ 390 $ 255 The table below sets forth principal balance for the commercial loan portfolio disaggregated by loan segment based on internally assigned risk ratings at June 30, 2024 and gross write offs for the six months ended June 30, 2024: Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted 2024 2023 2022 2021 Prior Cost Basis to Term Total Real estate - commercial Risk Rating Pass $ 27,372 $ 74,897 $ 74,772 $ 48,859 $ 55,074 $ 2,538 $ — $ 283,512 Special mention 72 801 2,202 118 230 — — 3,423 Substandard — — 291 103 856 — — 1,250 Doubtful — — — — — — — — Total real estate - commercial loans, at amortized cost, gross 27,444 75,698 77,265 49,080 56,160 2,538 — 288,185 Gross write offs — — 60 — — — — 60 Real estate - construction and land Risk Rating Pass 1,144 22,366 9,382 2,867 — — — 35,759 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total real estate - construction and land loans, at amortized cost, gross 1,144 22,366 9,382 2,867 — — — 35,759 Gross write offs — — — — — — — — Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted 2024 2023 2022 2021 Prior Cost Basis to Term Total Commercial and industrial Risk Rating Pass 33,865 46,875 39,025 12,587 45,755 8,293 — 186,400 Special mention 22 749 902 296 2,263 — — 4,232 Substandard — 23 572 11 902 — — 1,508 Doubtful — — — — — — — — Total commercial and industrial loans, at amortized cost, gross 33,887 47,647 40,499 12,894 48,920 8,293 — 192,140 Gross write offs — 1,449 1,884 282 1,908 — — 5,523 Commercial and industrial - PPP Risk Rating Pass — — — 223 1,102 — — 1,325 Special mention — — — — 999 — — 999 Substandard — — — — — — — — Doubtful — — — — — — — — Total commercial and industrial - PPP loans, at amortized cost, gross — — — 223 2,101 — — 2,324 Gross write offs — — — — — — — — The table below sets forth principal balance for the commercial loan portfolio disaggregated by loan segment based on internally assigned risk ratings at December 31, 2023 and gross write offs for the year ended December 31, 2023 : Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted 2023 2022 2021 Prior Cost Basis to Term Total Real estate - commercial Risk Rating Pass $ 94,092 $ 79,712 $ 50,985 $ 64,648 $ 2,439 $ — $ 291,876 Special mention — 482 78 — — — 560 Substandard — 195 31 933 — — 1,159 Doubtful — — — — — — — Total real estate - commercial loans, at amortized cost, gross 94,092 80,389 51,094 65,581 2,439 — 293,595 Gross write offs — 101 — 7 — — 108 Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted 2023 2022 2021 Prior Cost Basis to Term Total Real estate - construction and land Risk Rating Pass 11,366 12,755 2,151 — — — 26,272 Special mention — — — — — — — Substandard — — — — — — — Doubtful — — — — — — — Total real estate - construction and land loans, at amortized cost, gross 11,366 12,755 2,151 — — — 26,272 Gross write offs — — — — — — — Commercial and industrial Risk Rating Pass 51,212 45,325 13,807 54,003 10,750 — 175,097 Special mention — 150 43 671 — — 864 Substandard — 1,004 14 587 — — 1,605 Doubtful — — — — — — — Total commercial and industrial loans, at amortized cost, gross 51,212 46,479 13,864 55,261 10,750 — 177,566 Gross write offs 325 1,543 259 4,113 — — 6,240 Commercial and industrial - PPP Risk Rating Pass — — 135 3,067 — — 3,202 Special mention — — — — — — — Substandard — — — — — — — Doubtful — — — — — — — Total commercial and industrial - PPP loans, at amortized cost, gross — — 135 3,067 — — 3,202 Gross write offs — — — 223 — — 223 Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted 2024 2023 2022 2021 Prior Cost Basis to Term Total Real estate - residential Payment Performance Performing $ 21,205 $ 29,246 $ 84,473 $ 23,559 $ 18,924 $ 121,696 $ — $ 299,103 Nonperforming — — 972 286 2,949 924 — 5,131 Total real estate - residential loans, at amortized cost, gross 21,205 29,246 85,445 23,845 21,873 122,620 — 304,234 Gross write offs — — — — — — — — Consumer and other Payment Performance Performing 46,327 23,318 13,849 774 163 1,221 — 85,652 Nonperforming — — 137 — — — — 137 Total consumer and other loans, at amortized cost, gross 46,327 23,318 13,986 774 163 1,221 — 85,789 Gross write offs — 168 1,513 32 36 — — 1,749 The following table presents the principal balance at December 31, 2023 in residential and consumer loans based on payment activity as well as gross write offs for the year ended December 31, 2023. Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted 2023 2022 2021 Prior Cost Basis to Term Total Real estate - residential Payment Performance Performing $ 31,377 $ 83,951 $ 24,524 $ 19,709 $ 99,328 $ — $ 258,889 Nonperforming — 1,197 286 2,951 803 — 5,237 Total real estate - residential loans, at amortized cost, gross 31,377 85,148 24,810 22,660 100,131 — 264,126 Gross write offs — — — — — — — Consumer and other Payment Performance Performing 25,491 19,390 930 204 990 — 47,005 Nonperforming — 258 24 — — — 282 Total consumer and other loans, at amortized cost, gross 25,491 19,648 954 204 990 — 47,287 Gross write offs 79 3,182 11 8 — — 3,280 |
Schedule of Aging of Recorded Investment in Past Due Gross Loans at Amortized Cost | The following table presents the aging of the principal balance of past due loans HFI at amortized cost at June 30, 2024 by loan segment: 30-89 Days Greater Than Total Past Due Loans Not Past Due (1) Total Loans Real estate - residential $ 2,548 $ 5,079 $ 7,627 $ 296,607 $ 304,234 Real estate - commercial 1,870 894 2,764 285,421 288,185 Real estate - construction and land — — — 35,759 35,759 Commercial and industrial 3,756 1,385 5,141 186,999 192,140 Commercial and industrial - PPP — — — 2,324 2,324 Consumer and other 655 137 792 84,997 85,789 Total $ 8,829 $ 7,495 $ 16,324 $ 892,107 $ 908,431 (1) $3,647 of balances 30-89 days past due and $4,007 of balances greater than 89 days past due are reported as Loans Not Past Due as a result of the government guarantee. Of those loans, $1,478 of commercial and industrial PPP loans were delinquent as of June 30, 2024. The following table presents the aging of the principal balance of past due loans HFI at amortized cost at December 31, 2023 by loan segment: 30-89 Days Greater Than Total Past Due Loans Not Past Due (1) Total Loans Real estate - residential $ 1,840 $ 5,184 $ 7,024 $ 257,102 $ 264,126 Real estate - commercial 2,870 791 3,661 289,934 293,595 Real estate - construction and land — — — 26,272 26,272 Commercial and industrial 3,970 603 4,573 172,993 177,566 Commercial and industrial - PPP — — — 3,202 3,202 Consumer and other 1,221 282 1,503 45,784 47,287 Total $ 9,901 $ 6,860 $ 16,761 $ 795,287 $ 812,048 (1) $1,469 of balances 30-89 days past due and $638 of balances greater than 89 days past due are reported as Loans Not Past Due as a result of the government guarantee. Of those loans $261 of commercial and industrial PPP loans were delinquent as of December 31, 2023. |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets measured at fair value on a recurring basis at June 30, 2024 are summarized below. There were no liabilities carried at fair value on a recurring basis at June 30, 2024. Quoted Prices in Significant Significant Unobservable Inputs (Level 3) Total Financial assets Investment securities available for sale $ — $ 38,685 $ — $ 38,685 Government guaranteed loans HFI, at fair value — — 86,142 86,142 Assets measured at fair value on a recurring basis at December 31, 2023 are summarized below. There were no liabilities carried at fair value on a recurring basis at December 31, 2023. Quoted Prices in Significant Significant Unobservable Inputs (Level 3) Total Financial assets Investment securities available for sale $ — $ 39,575 $ — $ 39,575 Government guaranteed loans HFI, at fair value — — 91,508 91,508 |
Schedule of Fair Value for Loans | The following tables provide more information about the fair value carrying amount and the unpaid principal outstanding of HFI government guaranteed loans measured at fair value at June 30, 2024 and December 31, 2023. June 30, 2024 Total Loans Nonaccrual (1) 90 Days or More Past Due (1) Fair Value Carrying Amount Unpaid Principal Balance Fair Value Gain (Loss) Fair Value Carrying Amount Unpaid Principal Balance Fair Value Gain (Loss) Fair Value Carrying Amount Unpaid Principal Balance Fair Value Gain (Loss) Real estate - commercial $ 16,881 $ 17,098 $ (217) $ — $ — $ — $ — $ — $ — Commercial and industrial 69,261 67,732 1,529 1,625 1,809 (184) — — — Total loans HFI, at fair value $ 86,142 $ 84,830 $ 1,312 $ 1,625 $ 1,809 $ (184) $ — $ — $ — December 31, 2023 Total Loans Nonaccrual (1) 90 Days or More Past Due (1) Fair Value Carrying Amount Unpaid Principal Balance Fair Value Gain (Loss) Fair Value Carrying Amount Unpaid Principal Balance Fair Value Gain (Loss) Fair Value Carrying Amount Unpaid Principal Balance Fair Value Gain (Loss) Real estate - commercial $ 19,219 $ 19,156 $ 63 $ — $ — $ — $ — $ — $ — Commercial and industrial 72,289 68,777 3,512 485 585 (100) 162 182 (20) Total loans HFI, at fair value $ 91,508 $ 87,933 $ 3,575 $ 485 $ 585 $ (100) $ 162 $ 182 $ (20) (1) The nonaccrual and 90 days or more past due loan balances do not include the portion of government guaranteed loan balances. The total amount of net gains and losses from changes in fair value and interest income included in earnings for the six months ended June 30, 2024 and June 30, 2023 for government guaranteed loans HFI, at fair value, were as follows: Six Months Ended June 30, 2024 2023 Interest income $ 4,623 $ 2,071 Change in fair value 6,507 6,478 Total gain, net $ 11,130 $ 8,549 |
Schedule of Valuation Technique and Unobservable Inputs Used in the Valuation of Government Guaranteed Loans HFI, at Fair Value | The table below presents a reconciliation of government guaranteed loans HFI, at fair value, which were valued on a recurring basis and used significant unobservable inputs (Level 3) for the six months ended June 30, 2024 and June 30, 2023: Six Months Ended June 30, 2024 2023 Balance of government guaranteed loans HFI at fair value, beginning of period $ 91,508 $ 27,078 New government guaranteed originations at fair value 74,210 84,151 Loans sold (84,279) (59,694) Principal payments (1,804) (5,695) Charge-offs — (153) Total gains during the period 6,507 6,478 Balance of government guaranteed loans HFI at fair value, end of period $ 86,142 $ 52,165 The following table provides information about the valuation techniques and unobservable inputs used in the valuation of government guaranteed loans HFI that fall within Level 3 of the fair value hierarchy at June 30, 2024 and December 31, 2023: Fair Value Valuation Unobservable Inputs Range (Weighted Average) June 30, 2024 Government guaranteed loans HFI, at fair value $ 86,142 Discounted Discount rate 7.36%-10.86% (9.18%) cash flow Conditional prepayment rate 10.50%-14.75% (13.89%) December 31, 2023 Government guaranteed loans HFI, at fair value $ 91,508 Discounted Discount rate 7.36%-10.86% (8.74%) cash flow Conditional prepayment rate 10.38%-15.69% (13.91%) |
Schedule of Assets Measured at Fair Value on a Nonrecurring Basis | Assets measured at fair value on a nonrecurring basis (Level 3) at June 30, 2024 are summarized below: Fair Value Valuation Technique(s) Significant Discount % Amount Other real estate owned $ 1,633 Discounted appraisals, estimated net realizable value of collateral Collateral discounts 10% Assets measured at fair value on a nonrecurring basis (Level 3) at December 31, 2023 are summarized below: Fair Value Valuation Technique(s) Significant Discount % Amount Individually evaluated loans $ 135 Discounted appraisals, estimated net realizable value of collateral Collateral discounts 10% |
Schedule of the Carrying Values and Estimated Values of Financial Instruments Not Carried at Fair Value | The carrying values and estimated fair values of financial instruments not carried at fair value, at June 30, 2024 and December 31, 2023 are as follows: June 30, 2024 December 31, 2023 Level Carrying Value Fair Value Carrying Value Fair Value Assets: Cash and cash equivalents 1 $ 60,772 $ 60,772 $ 58,385 $ 58,385 Time deposits in banks 2 2,261 2,201 4,646 4,561 Investment securities held to maturity 2 2,486 2,273 2,484 2,263 Nonmarketable equity securities, at cost 2 7,132 7,132 4,770 4,770 Loans HFI, at amortized cost 3 908,329 896,591 810,721 786,350 Accrued interest receivable 2 8,000 8,000 7,130 7,130 Government guaranteed loan servicing rights 3 15,770 17,480 14,959 16,318 Liabilities: Noninterest-bearing deposits 2 $ 94,040 $ 94,040 $ 93,708 $ 93,708 Interest-bearing transaction accounts 2 236,447 236,447 259,422 259,422 Savings and money market deposits 2 420,271 420,271 373,000 373,000 Time deposits 2 291,630 286,927 259,008 255,372 FHLB borrowings 2 55,000 55,000 10,000 10,000 Subordinated debentures 2 5,952 5,393 5,949 5,215 Notes payable 2 2,162 2,143 2,389 2,369 Accrued interest payable 2 1,172 1,172 882 882 |
GOVERNMENT GUARANTEED LOAN SE_2
GOVERNMENT GUARANTEED LOAN SERVICING ACTIVITIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Transfers and Servicing [Abstract] | |
Schedule of Activity for Government Guaranteed Loan Servicing Rights | Activity for government guaranteed loan servicing rights for the three and six months ended June 30, 2024 and June 30, 2023 follows: Three Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Beginning of period $ 15,742 $ 11,625 $ 14,959 $ 10,906 Additions 1,514 2,250 3,692 3,847 Amortization (1,486) (1,055) (2,881) (1,933) End of period $ 15,770 $ 12,820 $ 15,770 $ 12,820 |
Schedule of Net Gain on Sale of Government Guaranteed Loans | The following table presents the components of net gain on sale of government guaranteed loans for the three and six months ended June 30, 2024 and June 30, 2023: Three Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Gain on sale of guaranteed portion of government guaranteed loans $ 4,081 $ 4,590 $ 9,992 $ 7,402 Loss on sale of unguaranteed portion of government guaranteed loans — (797) — (797) Costs recognized on sale of government guaranteed loans — (15) — (15) Fair value of loan servicing rights created 1,514 2,250 3,692 3,847 Gain on sale of government guaranteed loans, net $ 5,595 $ 6,028 $ 13,684 $ 10,437 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Schedule of Total Lease Cost and Supplemental Information | For the three and six months ended June 30, 2024 and June 30, 2023, the components of total lease cost and supplemental information related to operating leases were as follows: Three Months Ended Six Months Ended 2024 2023 2024 2023 Operating lease cost $ 238 $ 246 $ 497 $ 588 Short-term lease cost 63 20 72 20 Total lease cost, net (1) $ 301 $ 266 $ 569 $ 608 (1) Includes lease costs reported as discontinued operations of $60 and $27 for the three months ended June 30, 2024 and June 30, 2023, respectively, and $131 and $87 for the six months ended June 30, 2024 and June 30, 2023, respectively. Three Months Ended Six Months Ended 2024 2023 2024 2023 Cash flows related to operating lease liabilities $ 206 $ 303 $ 449 $ 684 Right-of-use assets obtained in exchange for new operating lease liabilities — — 263 — |
Schedule of Future Minimum Lease Payments | The future minimum lease payments for operating leases, subsequent to June 30, 2024, as recorded on the balance sheet, are summarized as follows: 2024 $ 448 2025 946 2026 908 2027 467 2028 — Thereafter — Total undiscounted lease payments $ 2,769 Less: imputed interest (101) Net lease liabilities $ 2,668 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Nonvested Restricted Shares | A summary of changes in the Company’s nonvested restricted shares for the six months ended June 30, 2024 and June 30, 2023 follows: Shares Weighted-Average Nonvested at January 1, 2024 52,195 $ 18.75 Granted 30,650 11.70 Vested (28,710) (18.50) Forfeited (1,025) (16.48) Nonvested at June 30, 2024 53,110 $ 14.86 Shares Weighted-Average Nonvested at January 1, 2023 22,000 $ 21.52 Granted 46,175 18.30 Vested (13,935) 20.01 Forfeited (1,705) (19.37) Nonvested at June 30, 2023 52,535 $ 18.75 |
Schedule of Activity in the Equity Plan | A summary of the activity in the Equity Plan for the six months ended June 30, 2024 and June 30, 2023 follows: Shares Weighted Weighted Aggregate Outstanding at January 1, 2024 367,033 $ 15.68 Forfeited (1,575) (15.41) Outstanding at June 30, 2024 365,458 $ 15.68 5.16 $ — Vested and exercisable at June 30, 2024 350,660 $ 15.71 5.12 $ — Shares Weighted Weighted Aggregate Outstanding at January 1, 2023 405,688 $ 15.67 Exercised (30,375) 15.71 Forfeited (7,575) 15.52 Outstanding at June 30, 2023 367,738 $ 15.67 6.20 $ — Vested and exercisable at June 30, 2023 323,037 $ 15.78 6.06 $ — |
REGULATORY MATTERS (Tables)
REGULATORY MATTERS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Banking And Thrift Disclsoure [Abstract] | |
Schedule of Actual and Required Capital Amounts and Ratios for the Bank | Actual and required capital amounts and ratios for the Bank are presented below at June 30, 2024: Actual Required for Capital Adequacy Purposes To be Well Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets) $ 114,204 11.79 % $ 77,500 8.00 % $ 96,875 10.00 % Tier 1 Capital (to Risk Weighted Assets) $ 102,081 10.54 % $ 58,125 6.00 % $ 77,500 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) $ 102,081 10.54 % $ 43,594 4.50 % $ 62,969 6.50 % Tier 1 Capital (to Average Assets) $ 102,081 8.73 % $ 46,792 4.00 % $ 58,490 5.00 % Actual and required capital amounts and ratios for the Bank are presented below at December 31, 2023: Actual Required for Capital Adequacy Purposes To be Well Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets) $ 114,256 13.03 % $ 70,169 8.00 % $ 87,711 10.00 % Tier 1 Capital (to Risk Weighted Assets) $ 103,274 11.77 % $ 52,627 6.00 % $ 70,169 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) $ 103,274 11.77 % $ 39,470 4.50 % $ 57,012 6.50 % Tier 1 Capital (to Average Assets) $ 103,274 9.38 % $ 44,024 4.00 % $ 55,030 5.00 % |
LOAN COMMITMENTS AND OTHER RE_2
LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Financial Instruments With Off-Balance Sheet Risk | The contractual amounts of financial instruments with off-balance sheet risk at June 30, 2024 and December 31, 2023 were as follows: June 30, 2024 December 31, 2023 Unfunded loan commitments $ 59,649 $ 7,392 Unused lines of credit 183,740 178,440 Standby letters of credit 211 186 |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2024 and June 30, 2023: Three Months Ended Six Months Ended 2024 2023 2024 2023 Basic: Income from continuing operations $ 876 $ 1,417 $ 1,759 $ 2,284 Loss from discontinued operations (10) (32) (69) (160) Net income 866 1,385 1,690 2,124 Less: Preferred stock dividends 386 208 771 416 Net income available to common shareholders $ 480 $ 1,177 $ 919 $ 1,708 Weighted average common shares outstanding 4,134,581 4,103,788 4,132,533 4,092,299 Basic earnings (loss) per common share: Continuing operations $ 0.12 $ 0.30 $ 0.24 $ 0.46 Discontinued operations — (0.01) (0.02) (0.04) Total $ 0.12 $ 0.29 $ 0.22 $ 0.42 Diluted: Income from continuing operations $ 876 $ 1,417 $ 1,759 $ 2,284 Loss from discontinued operations (10) (32) (69) (160) Net income 866 1,385 1,690 2,124 Less: Preferred stock dividends 386 208 771 416 Add: Series B preferred stock and preferred C stock dividends — 64 — — Net income available to common shareholders $ 480 $ 1,241 $ 919 $ 1,708 Weighted average common shares outstanding for basic earnings per common share 4,134,581 4,103,788 4,132,533 4,092,299 Add: Dilutive effects of conversion of Series B preferred stock and Preferred C to common stock — 161,713 — — Add: Dilutive effects of assumed exercises of stock options and warrants — — — — Average shares and dilutive potential common shares 4,134,581 4,265,501 4,132,533 4,092,299 Diluted earnings (loss) per common share: Continuing operations $ 0.12 $ 0.30 $ 0.24 $ 0.46 Discontinued operations — (0.01) (0.02) (0.04) Total $ 0.12 $ 0.29 $ 0.22 $ 0.42 |
Schedule of Antidilutive Securities Excluded from Calculation of Weighted Average Shares Outstanding | The following securities outstanding at June 30, 2024 and June 30, 2023 have been excluded from the calculation of weighted average shares outstanding as their effect on the calculation of earnings (loss) per share are antidilutive: Three Months Ended Six Months Ended 2024 2023 2024 2023 Common stock options 365,700 368,955 366,238 378,534 Convertible Series B preferred stock 3,210 0 3,210 3,123 Convertible Series C preferred stock 6,446 0 6,446 0 |
BASIS OF PRESENTATION - Narrati
BASIS OF PRESENTATION - Narrative (Details) | 6 Months Ended |
Jun. 30, 2024 segment | |
Accounting Policies [Abstract] | |
Number of business segments | 1 |
DISCONTINUED OPERATIONS - Asset
DISCONTINUED OPERATIONS - Assets and Liabilities of the Residential Mortgage Lending Division (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | |
Assets | |||
Total assets | $ 36 | $ 348 | [1] |
Liabilities | |||
Total liabilities | 171 | 620 | [1] |
Discontinued Operations, Held-for-sale | Nationwide Residential Mortgage Loan Production Operations | |||
Assets | |||
Right-of-use operating lease asset | 36 | 348 | |
Total assets | 36 | 348 | |
Liabilities | |||
Operating lease liability | 171 | 620 | |
Total liabilities | $ 171 | $ 620 | |
[1]Derived from audited consolidated financial statements |
DISCONTINUED OPERATIONS - Opera
DISCONTINUED OPERATIONS - Operating Results of the Residential Mortgage Lending Division (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss from discontinued operations before income taxes | $ (14) | $ (43) | $ (92) | $ (213) |
Income tax benefit | (4) | (11) | (23) | (53) |
Net loss from discontinued operations | (10) | (32) | (69) | (160) |
Discontinued Operations, Held-for-sale | Nationwide Residential Mortgage Loan Production Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Interest income | 0 | 0 | 0 | 1 |
Noninterest income | 51 | (2) | 51 | (2) |
Total net revenue | 51 | (2) | 51 | (1) |
Noninterest expense | 65 | 41 | 143 | 212 |
Loss from discontinued operations before income taxes | (14) | (43) | (92) | (213) |
Income tax benefit | (4) | (11) | (23) | (53) |
Net loss from discontinued operations | $ (10) | $ (32) | $ (69) | $ (160) |
INVESTMENT SECURITIES - Debt Se
INVESTMENT SECURITIES - Debt Securities Available for Sale and Held to Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Securities, Available-for-Sale [Line Items] | |||||||
Amortized Cost | $ 42,885 | $ 43,597 | |||||
Gross Unrealized Gains | 70 | 6 | |||||
Gross Unrealized Losses | (4,270) | (4,028) | |||||
Fair Value | 38,685 | 39,575 | [1] | ||||
Schedule of Held-to-Maturity Securities [Line Items] | |||||||
Amortized Cost | 2,500 | 2,501 | |||||
Gross Unrealized Gains | 0 | 0 | |||||
Gross Unrealized Losses | (227) | (238) | |||||
Fair Value | 2,273 | 2,263 | |||||
ACL | 14 | $ 14 | 17 | $ 19 | $ 18 | $ 0 | |
Asset-backed securities | |||||||
Debt Securities, Available-for-Sale [Line Items] | |||||||
Amortized Cost | 6,351 | 8,041 | |||||
Gross Unrealized Gains | 0 | 6 | |||||
Gross Unrealized Losses | (45) | (114) | |||||
Fair Value | 6,306 | 7,933 | |||||
Mortgage-backed securities: U.S. Government-sponsored enterprises | |||||||
Debt Securities, Available-for-Sale [Line Items] | |||||||
Amortized Cost | 8,065 | 3,842 | |||||
Gross Unrealized Gains | 0 | 0 | |||||
Gross Unrealized Losses | (705) | (606) | |||||
Fair Value | 7,360 | 3,236 | |||||
Schedule of Held-to-Maturity Securities [Line Items] | |||||||
Amortized Cost | 1 | ||||||
Gross Unrealized Gains | 0 | ||||||
Gross Unrealized Losses | 0 | ||||||
Fair Value | 1 | ||||||
ACL | 0 | ||||||
Collateralized mortgage obligations: U.S. Government-sponsored enterprises | |||||||
Debt Securities, Available-for-Sale [Line Items] | |||||||
Amortized Cost | 19,638 | 20,382 | |||||
Gross Unrealized Gains | 0 | 0 | |||||
Gross Unrealized Losses | (3,520) | (3,284) | |||||
Fair Value | 16,118 | 17,098 | |||||
Corporate bonds | |||||||
Debt Securities, Available-for-Sale [Line Items] | |||||||
Amortized Cost | 8,831 | 11,332 | |||||
Gross Unrealized Gains | 70 | 0 | |||||
Gross Unrealized Losses | 0 | (24) | |||||
Fair Value | 8,901 | 11,308 | |||||
Schedule of Held-to-Maturity Securities [Line Items] | |||||||
Amortized Cost | 2,500 | 2,500 | |||||
Gross Unrealized Gains | 0 | 0 | |||||
Gross Unrealized Losses | (227) | (238) | |||||
Fair Value | 2,273 | 2,262 | |||||
ACL | $ 14 | $ 17 | |||||
[1]Derived from audited consolidated financial statements |
INVESTMENT SECURITIES - Investm
INVESTMENT SECURITIES - Investments Classified by Contractual Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | |
Amortized Cost | |||
One to five years | $ 8,831 | ||
Five to ten years | 7,217 | ||
Beyond ten years | 26,837 | ||
Amortized Cost | 42,885 | $ 43,597 | |
Fair Value | |||
One to five years | 8,901 | ||
Five to ten years | 7,160 | ||
Beyond ten years | 22,624 | ||
Total | 38,685 | 39,575 | [1] |
Amortized Cost | |||
One to five years | 1,500 | ||
Five to ten years | 1,000 | ||
Beyond ten years | 0 | ||
Amortized Cost | 2,500 | 2,501 | |
Fair Value | |||
One to five years | 1,445 | ||
Five to ten years | 828 | ||
Beyond ten years | 0 | ||
Total | $ 2,273 | $ 2,263 | |
[1]Derived from audited consolidated financial statements |
INVESTMENT SECURITIES - Narrati
INVESTMENT SECURITIES - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Investments, Debt and Equity Securities [Abstract] | ||||||
Allowance for credit loss for HTM securities | $ 14 | $ 14 | $ 17 | $ 19 | $ 18 | $ 0 |
INVESTMENT SECURITIES - Allowan
INVESTMENT SECURITIES - Allowance for Credit Losses for Investment Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Debt Securities, Held-to-Maturity, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | $ 14 | $ 18 | $ 17 | $ 0 |
Provision for credit losses on HTM investment securities | 0 | 1 | (3) | 1 |
Investment securities charge-offs | 0 | 0 | 0 | 0 |
Investment securities recoveries | 0 | 0 | 0 | 0 |
Ending Balance | 14 | 19 | 14 | 19 |
Impact of adopting ASC 326 | ||||
Debt Securities, Held-to-Maturity, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | $ 0 | $ 0 | $ 0 | $ 18 |
INVESTMENT SECURITIES - Inves_2
INVESTMENT SECURITIES - Investment Securities With Unrealized Losses (Details) $ in Thousands | Jun. 30, 2024 USD ($) security | Dec. 31, 2023 USD ($) security |
Investment securities available for sale: | ||
Less than 12 months, Fair Value | $ 6,126 | $ 11,308 |
Less than 12 months, Unrealized Losses | (48) | (24) |
12 months or longer, Fair Value | 23,658 | 26,301 |
12 months or longer, Unrealized Losses | (4,222) | (4,004) |
Total Fair Value | 29,784 | 37,609 |
Total Unrealized Losses | $ (4,270) | $ (4,028) |
Number of Securities | security | 13 | 16 |
Investment securities held to maturity: | ||
Less than 12 months, Fair Value | $ 416 | $ 0 |
Less than 12 months, Unrealized Losses | (83) | 0 |
12 months or longer, Fair Value | 1,857 | 2,262 |
12 months or longer, Unrealized Losses | (144) | (238) |
Total Fair Value | 2,273 | 2,262 |
Total Unrealized Losses | $ (227) | $ (238) |
Number of Securities | security | 3 | 3 |
Asset-backed securities | ||
Investment securities available for sale: | ||
Less than 12 months, Fair Value | $ 1,710 | $ 0 |
Less than 12 months, Unrealized Losses | (5) | 0 |
12 months or longer, Fair Value | 4,596 | 5,967 |
12 months or longer, Unrealized Losses | (40) | (114) |
Total Fair Value | 6,306 | 5,967 |
Total Unrealized Losses | $ (45) | $ (114) |
Number of Securities | security | 3 | 2 |
Mortgage-backed securities: U.S. Government-sponsored enterprises | ||
Investment securities available for sale: | ||
Less than 12 months, Fair Value | $ 4,416 | $ 0 |
Less than 12 months, Unrealized Losses | (43) | 0 |
12 months or longer, Fair Value | 2,944 | 3,236 |
12 months or longer, Unrealized Losses | (662) | (606) |
Total Fair Value | 7,360 | 3,236 |
Total Unrealized Losses | $ (705) | $ (606) |
Number of Securities | security | 3 | 2 |
Collateralized mortgage obligations: U.S. Government-sponsored enterprises | ||
Investment securities available for sale: | ||
Less than 12 months, Fair Value | $ 0 | $ 0 |
Less than 12 months, Unrealized Losses | 0 | 0 |
12 months or longer, Fair Value | 16,118 | 17,098 |
12 months or longer, Unrealized Losses | (3,520) | (3,284) |
Total Fair Value | 16,118 | 17,098 |
Total Unrealized Losses | $ (3,520) | $ (3,284) |
Number of Securities | security | 7 | 7 |
Corporate bonds | ||
Investment securities available for sale: | ||
Less than 12 months, Fair Value | $ 11,308 | |
Less than 12 months, Unrealized Losses | (24) | |
12 months or longer, Fair Value | 0 | |
12 months or longer, Unrealized Losses | 0 | |
Total Fair Value | 11,308 | |
Total Unrealized Losses | $ (24) | |
Number of Securities | security | 5 | |
Investment securities held to maturity: | ||
Less than 12 months, Fair Value | $ 416 | $ 0 |
Less than 12 months, Unrealized Losses | (83) | 0 |
12 months or longer, Fair Value | 1,857 | 2,262 |
12 months or longer, Unrealized Losses | (144) | (238) |
Total Fair Value | 2,273 | 2,262 |
Total Unrealized Losses | $ (227) | $ (238) |
Number of Securities | security | 3 | 3 |
LOANS (Details)
LOANS (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans HFI, at amortized cost, gross | $ 908,431 | $ 812,048 | |||||
Deferred loan costs, net | 17,299 | 14,707 | |||||
Discount on government guaranteed loans sold | (7,731) | (7,040) | |||||
Premium on loans purchased, net | 4,173 | 4,503 | |||||
Allowance for credit losses | (13,843) | $ (13,906) | (13,497) | $ (12,598) | $ (12,208) | $ (9,046) | |
Loans HFI, at amortized cost | 908,329 | 810,721 | [1] | ||||
Residential | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans HFI, at amortized cost, gross | 304,234 | 264,126 | |||||
Allowance for credit losses | (1,234) | (2,186) | (1,987) | (2,542) | (2,358) | (731) | |
Commercial | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans HFI, at amortized cost, gross | 288,185 | 293,595 | |||||
Allowance for credit losses | (1,864) | (1,758) | (1,818) | (1,889) | (1,695) | (956) | |
Construction and land | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans HFI, at amortized cost, gross | 35,759 | 26,272 | |||||
Allowance for credit losses | (555) | (663) | (519) | (359) | (254) | (28) | |
Commercial and Industrial | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans HFI, at amortized cost, gross | 192,140 | 177,566 | |||||
Allowance for credit losses | (7,714) | (6,840) | (6,579) | (7,011) | (7,216) | (6,182) | |
Commercial and industrial - PPP | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans HFI, at amortized cost, gross | 2,324 | 3,202 | |||||
Consumer and other | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans HFI, at amortized cost, gross | 85,789 | 47,287 | |||||
Allowance for credit losses | $ (2,476) | $ (2,459) | $ (2,594) | $ (797) | $ (685) | $ (1,090) | |
[1]Derived from audited consolidated financial statements |
ALLOWANCE FOR CREDIT LOSSES - A
ALLOWANCE FOR CREDIT LOSSES - Allowance for Credit Losses by Loan Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | $ 13,906 | $ 12,208 | $ 13,497 | $ 9,046 |
Charge-offs | (3,430) | (2,384) | (7,332) | (4,457) |
Recoveries | 169 | 131 | 419 | 317 |
Provision | 3,198 | 2,643 | 7,259 | 4,585 |
Ending Balance | 13,843 | 12,598 | 13,843 | 12,598 |
Impact of adopting ASC 326 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 3,107 | |||
Real Estate - Residential | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 2,186 | 2,358 | 1,987 | 731 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision | (952) | 184 | (753) | 332 |
Ending Balance | 1,234 | 2,542 | 1,234 | 2,542 |
Real Estate - Residential | Impact of adopting ASC 326 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 1,479 | |||
Real Estate - Commercial | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 1,758 | 1,695 | 1,818 | 956 |
Charge-offs | (60) | 0 | (60) | 0 |
Recoveries | 2 | 0 | 4 | 2 |
Provision | 164 | 194 | 102 | 318 |
Ending Balance | 1,864 | 1,889 | 1,864 | 1,889 |
Real Estate - Commercial | Impact of adopting ASC 326 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 613 | |||
Real Estate - Construction and Land | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 663 | 254 | 519 | 28 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision | (108) | 105 | 36 | 50 |
Ending Balance | 555 | 359 | 555 | 359 |
Real Estate - Construction and Land | Impact of adopting ASC 326 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 281 | |||
Commercial and Industrial | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 6,840 | 7,216 | 6,579 | 6,182 |
Charge-offs | (2,599) | (1,710) | (5,523) | (3,118) |
Recoveries | 111 | 72 | 241 | 189 |
Provision | 3,362 | 1,433 | 6,417 | 2,642 |
Ending Balance | 7,714 | 7,011 | 7,714 | 7,011 |
Commercial and Industrial | Impact of adopting ASC 326 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 1,116 | |||
Consumer and Other | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 2,459 | 685 | 2,594 | 1,090 |
Charge-offs | (771) | (674) | (1,749) | (1,339) |
Recoveries | 56 | 59 | 174 | 126 |
Provision | 732 | 727 | 1,457 | 1,243 |
Ending Balance | 2,476 | 797 | 2,476 | 797 |
Consumer and Other | Impact of adopting ASC 326 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | (323) | |||
Unallocated | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 0 | 59 | ||
Charge-offs | 0 | 0 | ||
Recoveries | 0 | 0 | ||
Provision | 0 | 0 | ||
Ending Balance | $ 0 | $ 0 | $ 0 | 0 |
Unallocated | Impact of adopting ASC 326 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | $ (59) |
ALLOWANCE FOR CREDIT LOSSES - N
ALLOWANCE FOR CREDIT LOSSES - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||||||
Allowance for credit loss for unfunded commitments | $ 641 | $ 839 | $ 839 | $ 844 | $ 798 | $ 511 |
ALLOWANCE FOR CREDIT LOSSES -_2
ALLOWANCE FOR CREDIT LOSSES - Allowance for Credit Losses for Unfunded Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | ||||
Balance at beginning of period | $ 839 | $ 798 | $ 839 | $ 511 |
Provision for credit losses | (198) | 46 | (198) | 120 |
Unfunded commitments charge-offs | 0 | 0 | 0 | 0 |
Unfunded commitments recoveries | 0 | 0 | 0 | 0 |
Balance at end of period | 641 | 844 | 641 | 844 |
Impact of adopting ASC 326 | ||||
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | ||||
Balance at beginning of period | $ 0 | $ 0 | $ 0 | $ 213 |
ALLOWANCE FOR CREDIT LOSSES - R
ALLOWANCE FOR CREDIT LOSSES - Recorded Investment in Nonaccrual and Loans Past Due over 89 Days Still on Accrual by Loan Segment (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual with no ACL | $ 0 | $ 0 |
Nonaccrual with ACL | 7,601 | 7,400 |
Loans Past Due Over 89 Days Still Accruing | 453 | 865 |
Real estate - residential | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual with no ACL | 0 | 0 |
Nonaccrual with ACL | 4,881 | 4,654 |
Loans Past Due Over 89 Days Still Accruing | 250 | 583 |
Real Estate - Commercial | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual with no ACL | 0 | 0 |
Nonaccrual with ACL | 1,249 | 1,159 |
Loans Past Due Over 89 Days Still Accruing | 0 | 0 |
Commercial and industrial | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual with no ACL | 0 | 0 |
Nonaccrual with ACL | 1,471 | 1,587 |
Loans Past Due Over 89 Days Still Accruing | 66 | 0 |
Consumer and other | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual with no ACL | 0 | 0 |
Nonaccrual with ACL | 0 | 0 |
Loans Past Due Over 89 Days Still Accruing | $ 137 | $ 282 |
ALLOWANCE FOR CREDIT LOSSES -_3
ALLOWANCE FOR CREDIT LOSSES - Amortized Cost Basis of Individually Analyzed Collateral Dependent Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||
Loans HFI, at amortized cost, gross | $ 908,431 | $ 812,048 | ||||
Allowance for credit loss | $ 13,843 | $ 13,906 | 13,497 | $ 12,598 | $ 12,208 | $ 9,046 |
Commercial and industrial | Business Assets | ||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||
Loans HFI, at amortized cost, gross | 390 | |||||
Allowance for credit loss | $ 255 |
ALLOWANCE FOR CREDIT LOSSES -_4
ALLOWANCE FOR CREDIT LOSSES - Aging of Recorded Investment in Past Due Gross Loans at Amortized Cost (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | $ 908,431 | $ 812,048 |
Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 16,324 | 16,761 |
30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 8,829 | 9,901 |
Government guaranteed loan balance | 3,647 | 1,469 |
Greater Than 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 7,495 | 6,860 |
Government guaranteed loan balance | 4,007 | 638 |
Loans Not Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 892,107 | 795,287 |
Real estate - residential | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 304,234 | 264,126 |
Real estate - residential | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 7,627 | 7,024 |
Real estate - residential | 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 2,548 | 1,840 |
Real estate - residential | Greater Than 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 5,079 | 5,184 |
Real estate - residential | Loans Not Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 296,607 | 257,102 |
Real estate - commercial | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 288,185 | 293,595 |
Real estate - commercial | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 2,764 | 3,661 |
Real estate - commercial | 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 1,870 | 2,870 |
Real estate - commercial | Greater Than 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 894 | 791 |
Real estate - commercial | Loans Not Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 285,421 | 289,934 |
Real estate - construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 35,759 | 26,272 |
Real estate - construction and land | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 0 | 0 |
Real estate - construction and land | 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 0 | 0 |
Real estate - construction and land | Greater Than 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 0 | 0 |
Real estate - construction and land | Loans Not Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 35,759 | 26,272 |
Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 192,140 | 177,566 |
Commercial and industrial | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 5,141 | 4,573 |
Commercial and industrial | 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 3,756 | 3,970 |
Commercial and industrial | Greater Than 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 1,385 | 603 |
Commercial and industrial | Loans Not Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 186,999 | 172,993 |
Commercial and industrial - PPP | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 2,324 | 3,202 |
Commercial and industrial - PPP | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 0 | 0 |
Commercial and industrial - PPP | 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 0 | 0 |
Commercial and industrial - PPP | Greater Than 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 0 | 0 |
Commercial and industrial - PPP | Loans Not Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 2,324 | 3,202 |
Consumer and other | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 85,789 | 47,287 |
Consumer and other | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 792 | 1,503 |
Consumer and other | 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 655 | 1,221 |
Consumer and other | Greater Than 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 137 | 282 |
Consumer and other | Loans Not Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans HFI, at amortized cost, gross | 84,997 | 45,784 |
PPP Loan Delinquencies | ||
Financing Receivable, Past Due [Line Items] | ||
Delinquent loans | $ 1,478 | $ 261 |
ALLOWANCE FOR CREDIT LOSSES - C
ALLOWANCE FOR CREDIT LOSSES - Credit Exposure for the Loan Portfolio Disaggregated by Loan Segment (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Risk Rating | ||
Total | $ 908,431 | $ 812,048 |
Real estate - commercial | ||
Risk Rating | ||
Year one | 27,444 | 94,092 |
Year two | 75,698 | 80,389 |
Year three | 77,265 | 51,094 |
Year four | 49,080 | 65,581 |
Prior | 56,160 | |
Revolving Loans Amortized Cost Basis | 2,538 | 2,439 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 288,185 | 293,595 |
Gross write offs | ||
Year one | 0 | 0 |
Year two | 0 | 101 |
Year three | 60 | 0 |
Year four | 0 | |
Prior | 0 | |
Prior | 7 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 60 | 108 |
Real estate - commercial | Pass | ||
Risk Rating | ||
Year one | 27,372 | 94,092 |
Year two | 74,897 | 79,712 |
Year three | 74,772 | 50,985 |
Year four | 48,859 | 64,648 |
Prior | 55,074 | |
Revolving Loans Amortized Cost Basis | 2,538 | 2,439 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 283,512 | 291,876 |
Real estate - commercial | Special mention | ||
Risk Rating | ||
Year one | 72 | 0 |
Year two | 801 | 482 |
Year three | 2,202 | 78 |
Year four | 118 | 0 |
Prior | 230 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 3,423 | 560 |
Real estate - commercial | Substandard | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 0 | 195 |
Year three | 291 | 31 |
Year four | 103 | 933 |
Prior | 856 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 1,250 | 1,159 |
Real estate - commercial | Doubtful | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Real estate - construction and land | ||
Risk Rating | ||
Year one | 1,144 | 11,366 |
Year two | 22,366 | 12,755 |
Year three | 9,382 | 2,151 |
Year four | 2,867 | 0 |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 35,759 | 26,272 |
Gross write offs | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | |
Prior | 0 | |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Real estate - construction and land | Pass | ||
Risk Rating | ||
Year one | 1,144 | 11,366 |
Year two | 22,366 | 12,755 |
Year three | 9,382 | 2,151 |
Year four | 2,867 | 0 |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 35,759 | 26,272 |
Real estate - construction and land | Special mention | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Real estate - construction and land | Substandard | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Real estate - construction and land | Doubtful | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Commercial and industrial | ||
Risk Rating | ||
Year one | 33,887 | 51,212 |
Year two | 47,647 | 46,479 |
Year three | 40,499 | 13,864 |
Year four | 12,894 | 55,261 |
Prior | 48,920 | |
Revolving Loans Amortized Cost Basis | 8,293 | 10,750 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 192,140 | 177,566 |
Gross write offs | ||
Year one | 0 | 325 |
Year two | 1,449 | 1,543 |
Year three | 1,884 | 259 |
Year four | 282 | |
Prior | 1,908 | |
Prior | 4,113 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 5,523 | 6,240 |
Commercial and industrial | Pass | ||
Risk Rating | ||
Year one | 33,865 | 51,212 |
Year two | 46,875 | 45,325 |
Year three | 39,025 | 13,807 |
Year four | 12,587 | 54,003 |
Prior | 45,755 | |
Revolving Loans Amortized Cost Basis | 8,293 | 10,750 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 186,400 | 175,097 |
Commercial and industrial | Special mention | ||
Risk Rating | ||
Year one | 22 | 0 |
Year two | 749 | 150 |
Year three | 902 | 43 |
Year four | 296 | 671 |
Prior | 2,263 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 4,232 | 864 |
Commercial and industrial | Substandard | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 23 | 1,004 |
Year three | 572 | 14 |
Year four | 11 | 587 |
Prior | 902 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 1,508 | 1,605 |
Commercial and industrial | Doubtful | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Commercial and industrial - PPP | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 135 |
Year four | 223 | 3,067 |
Prior | 2,101 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 2,324 | 3,202 |
Gross write offs | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | |
Prior | 0 | |
Prior | 223 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 223 |
Commercial and industrial - PPP | Pass | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 135 |
Year four | 223 | 3,067 |
Prior | 1,102 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 1,325 | 3,202 |
Commercial and industrial - PPP | Special mention | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Prior | 999 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 999 | 0 |
Commercial and industrial - PPP | Substandard | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Commercial and industrial - PPP | Doubtful | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | 0 |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Real Estate - Residential | ||
Risk Rating | ||
Year one | 21,205 | 31,377 |
Year two | 29,246 | 85,148 |
Year three | 85,445 | 24,810 |
Year four | 23,845 | 22,660 |
Prior | 21,873 | |
Revolving Loans Amortized Cost Basis | 122,620 | 100,131 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 304,234 | 264,126 |
Gross write offs | ||
Year one | 0 | 0 |
Year two | 0 | 0 |
Year three | 0 | 0 |
Year four | 0 | |
Prior | 0 | |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 0 | 0 |
Real Estate - Residential | Pass | ||
Risk Rating | ||
Year one | 21,205 | 31,377 |
Year two | 29,246 | 83,951 |
Year three | 84,473 | 24,524 |
Year four | 23,559 | 19,709 |
Prior | 18,924 | |
Revolving Loans Amortized Cost Basis | 121,696 | 99,328 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 299,103 | 258,889 |
Real Estate - Residential | Doubtful | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 0 | 1,197 |
Year three | 972 | 286 |
Year four | 286 | 2,951 |
Prior | 2,949 | |
Revolving Loans Amortized Cost Basis | 924 | 803 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 5,131 | 5,237 |
Consumer and Other | ||
Risk Rating | ||
Year one | 46,327 | 25,491 |
Year two | 23,318 | 19,648 |
Year three | 13,986 | 954 |
Year four | 774 | 204 |
Prior | 163 | |
Revolving Loans Amortized Cost Basis | 1,221 | 990 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 85,789 | 47,287 |
Gross write offs | ||
Year one | 0 | 79 |
Year two | 168 | 3,182 |
Year three | 1,513 | 11 |
Year four | 32 | |
Prior | 36 | |
Prior | 8 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 1,749 | 3,280 |
Consumer and Other | Pass | ||
Risk Rating | ||
Year one | 46,327 | 25,491 |
Year two | 23,318 | 19,390 |
Year three | 13,849 | 930 |
Year four | 774 | 204 |
Prior | 163 | |
Revolving Loans Amortized Cost Basis | 1,221 | 990 |
Revolving Loans Converted to Term | 0 | 0 |
Total | 85,652 | 47,005 |
Consumer and Other | Doubtful | ||
Risk Rating | ||
Year one | 0 | 0 |
Year two | 0 | 258 |
Year three | 137 | 24 |
Year four | 0 | 0 |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total | $ 137 | $ 282 |
FAIR VALUE - Assets and Liabili
FAIR VALUE - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Financial assets | ||
Investment securities available for sale | $ 38,685 | $ 39,575 |
Government guaranteed loans HFI, at fair value | 86,142 | 91,508 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets | ||
Investment securities available for sale | 0 | 0 |
Government guaranteed loans HFI, at fair value | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Financial assets | ||
Investment securities available for sale | 38,685 | 39,575 |
Government guaranteed loans HFI, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Financial assets | ||
Investment securities available for sale | 0 | 0 |
Government guaranteed loans HFI, at fair value | $ 86,142 | $ 91,508 |
FAIR VALUE - Fair Value Carryin
FAIR VALUE - Fair Value Carrying Amount and the Unpaid Principal Outstanding of HFI Government Guaranteed Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Total Loans, Fair Value Carrying Amount | $ 86,142 | $ 91,508 |
Total Loans, Unpaid Principal Balance | 84,830 | 87,933 |
Total Loans, Fair Value Gain (Loss) | 1,312 | 3,575 |
Nonaccrual, Fair Value Carrying Amount | 1,625 | 485 |
Nonaccrual, Unpaid Principal Balance | 1,809 | 585 |
Nonaccrual, Fair Value Gain (Loss) | (184) | (100) |
90 Days or More Past Due, Fair Value Carrying Amount | 0 | 162 |
90 Days or More Past Due, Unpaid Principal Balance | 0 | 182 |
90 Days or More Past Due, Fair Value Gain (Loss) | 0 | (20) |
Real Estate - Commercial | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Total Loans, Fair Value Carrying Amount | 16,881 | 19,219 |
Total Loans, Unpaid Principal Balance | 17,098 | 19,156 |
Total Loans, Fair Value Gain (Loss) | (217) | 63 |
Nonaccrual, Fair Value Carrying Amount | 0 | 0 |
Nonaccrual, Unpaid Principal Balance | 0 | 0 |
Nonaccrual, Fair Value Gain (Loss) | 0 | 0 |
90 Days or More Past Due, Fair Value Carrying Amount | 0 | 0 |
90 Days or More Past Due, Unpaid Principal Balance | 0 | 0 |
90 Days or More Past Due, Fair Value Gain (Loss) | 0 | 0 |
Commercial and Industrial | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Total Loans, Fair Value Carrying Amount | 69,261 | 72,289 |
Total Loans, Unpaid Principal Balance | 67,732 | 68,777 |
Total Loans, Fair Value Gain (Loss) | 1,529 | 3,512 |
Nonaccrual, Fair Value Carrying Amount | 1,625 | 485 |
Nonaccrual, Unpaid Principal Balance | 1,809 | 585 |
Nonaccrual, Fair Value Gain (Loss) | (184) | (100) |
90 Days or More Past Due, Fair Value Carrying Amount | 0 | 162 |
90 Days or More Past Due, Unpaid Principal Balance | 0 | 182 |
90 Days or More Past Due, Fair Value Gain (Loss) | $ 0 | $ (20) |
FAIR VALUE - Gains and Losses f
FAIR VALUE - Gains and Losses from Changes in Fair Value and Interest Income Included in Earnings (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Change in fair value | $ 3,202 | $ 2,904 | $ 6,507 | $ 6,478 |
Government guaranteed loan servicing rights | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Interest income | 4,623 | 2,071 | ||
Change in fair value | 6,507 | 6,478 | ||
Total gain (loss) from discontinued operations | $ 11,130 | $ 8,549 |
FAIR VALUE - Government Guarant
FAIR VALUE - Government Guaranteed Loans HFI, at Fair Value, Which Were Valued on a Recurring Basis and Used Significant Unobservable Inputs (Details) - Loans Receivable - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance of government guaranteed loans HFI at fair value, beginning of period | $ 91,508 | $ 27,078 |
New government guaranteed originations at fair value | 74,210 | 84,151 |
Loans sold | (84,279) | (59,694) |
Principal payments | (1,804) | (5,695) |
Charge-offs | 0 | (153) |
Total gains during the period | 6,507 | 6,478 |
Balance of government guaranteed loans HFI at fair value, end of period | $ 86,142 | $ 52,165 |
FAIR VALUE - Valuation Techniqu
FAIR VALUE - Valuation Technique and Unobservable Inputs Used in the Valuation of Government Guaranteed HFI, at Fair Value (Details) $ in Thousands | Jun. 30, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Government guaranteed loans HFI, at fair value | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Government guaranteed loans HFI, at fair value | $ 86,142 | $ 91,508 | [1] |
Fair Value, Recurring | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Government guaranteed loans HFI, at fair value | 86,142 | 91,508 | |
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Government guaranteed loans HFI, at fair value | 86,142 | 91,508 | |
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Government guaranteed loans HFI, at fair value | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Government guaranteed loans HFI, at fair value | $ 86,142 | $ 91,508 | |
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Minimum | Discount rate | Government guaranteed loans HFI, at fair value | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Loans receivable, measurement input (as a percent) | 0.0736 | 0.0736 | |
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Minimum | Conditional prepayment rate | Government guaranteed loans HFI, at fair value | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Loans receivable, measurement input (as a percent) | 0.1050 | 0.1038 | |
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Maximum | Discount rate | Government guaranteed loans HFI, at fair value | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Loans receivable, measurement input (as a percent) | 0.1086 | 0.1086 | |
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Maximum | Conditional prepayment rate | Government guaranteed loans HFI, at fair value | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Loans receivable, measurement input (as a percent) | 0.1475 | 0.1569 | |
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Weighted Average | Discount rate | Government guaranteed loans HFI, at fair value | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Loans receivable, measurement input (as a percent) | 0.0918 | 0.0874 | |
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Weighted Average | Conditional prepayment rate | Government guaranteed loans HFI, at fair value | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Loans receivable, measurement input (as a percent) | 0.1389 | 0.1391 | |
[1]Derived from audited consolidated financial statements |
FAIR VALUE - Assets Measured at
FAIR VALUE - Assets Measured at Fair Value on a Nonrecurring Basis (Details) - Fair Value, Nonrecurring $ in Thousands | Jun. 30, 2024 USD ($) | Dec. 31, 2023 USD ($) |
Fair Value, Nonrecurring [Line Items] | ||
Other real estate owned, fair value disclosure | $ 1,633 | |
Loans receivable, fair value disclosure, individually evaluated | $ 135 | |
Discount rate | ||
Fair Value, Nonrecurring [Line Items] | ||
Other real estate owned, measurement input (as a percent) | 0.10 | |
Loans receivable, individually evaluated, measurement input (as a percent) | 10% |
FAIR VALUE - Assets and Liabi_2
FAIR VALUE - Assets and Liabilities Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Assets: | ||
Investment securities held to maturity | $ 2,273 | $ 2,263 |
1 | Carrying Value | Cash and cash equivalents | ||
Assets: | ||
Cash and cash equivalents | 60,772 | 58,385 |
1 | Fair Value | Cash and cash equivalents | ||
Assets: | ||
Cash and cash equivalents | 60,772 | 58,385 |
2 | Carrying Value | ||
Assets: | ||
Investment securities held to maturity | 2,486 | 2,484 |
Nonmarketable equity securities, at cost | 7,132 | 4,770 |
Accrued interest receivable | 8,000 | 7,130 |
Liabilities: | ||
FHLB borrowings | 55,000 | 10,000 |
Subordinated debentures | 5,952 | 5,949 |
Notes payable | 2,162 | 2,389 |
Accrued interest payable | 1,172 | 882 |
2 | Carrying Value | Time deposits in banks | ||
Assets: | ||
Cash and cash equivalents | 2,261 | 4,646 |
Liabilities: | ||
Deposits, liabilities | 291,630 | 259,008 |
2 | Carrying Value | Noninterest-bearing deposits | ||
Liabilities: | ||
Deposits, liabilities | 94,040 | 93,708 |
2 | Carrying Value | Interest-bearing transaction accounts | ||
Liabilities: | ||
Deposits, liabilities | 236,447 | 259,422 |
2 | Carrying Value | Savings and money market deposits | ||
Liabilities: | ||
Deposits, liabilities | 420,271 | 373,000 |
2 | Fair Value | ||
Assets: | ||
Investment securities held to maturity | 2,273 | 2,263 |
Nonmarketable equity securities, at cost | 7,132 | 4,770 |
Accrued interest receivable | 8,000 | 7,130 |
Liabilities: | ||
FHLB borrowings | 55,000 | 10,000 |
Subordinated debentures | 5,393 | 5,215 |
Notes payable | 2,143 | 2,369 |
Accrued interest payable | 1,172 | 882 |
2 | Fair Value | Time deposits in banks | ||
Assets: | ||
Cash and cash equivalents | 2,201 | 4,561 |
Liabilities: | ||
Deposits, liabilities | 286,927 | 255,372 |
2 | Fair Value | Noninterest-bearing deposits | ||
Liabilities: | ||
Deposits, liabilities | 94,040 | 93,708 |
2 | Fair Value | Interest-bearing transaction accounts | ||
Liabilities: | ||
Deposits, liabilities | 236,447 | 259,422 |
2 | Fair Value | Savings and money market deposits | ||
Liabilities: | ||
Deposits, liabilities | 420,271 | 373,000 |
3 | Carrying Value | ||
Assets: | ||
Loans HFI, at amortized cost | 908,329 | 810,721 |
3 | Carrying Value | Government guaranteed loan servicing rights | ||
Assets: | ||
Government guaranteed loan servicing rights | 15,770 | 14,959 |
3 | Fair Value | ||
Assets: | ||
Loans HFI, at amortized cost | 896,591 | 786,350 |
3 | Fair Value | Government guaranteed loan servicing rights | ||
Assets: | ||
Government guaranteed loan servicing rights | $ 17,480 | $ 16,318 |
GOVERNMENT GUARANTEED LOAN SE_3
GOVERNMENT GUARANTEED LOAN SERVICING ACTIVITIES - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Servicing Asset at Amortized Cost [Line Items] | ||
Principal balance of government guaranteed loans, excluding PPP loans | $ 391,907 | $ 395,877 |
Principal balance of government guaranteed loans, excluding PPP loans, guaranteed portion | 161,331 | 181,459 |
Unpaid principal balances of government guaranteed loans serviced for others | $ 966,212 | $ 855,756 |
Servicing assets, weighted average discount rate | 14.62% | 14.50% |
Servicing assets, weighted average prepayment speed (as a percent) | 12.72% | 11.42% |
Government guaranteed loan servicing rights | Significant Unobservable Inputs (Level 3) | Fair Value | ||
Servicing Asset at Amortized Cost [Line Items] | ||
Servicing asset rights at fair value | $ 17,480 | $ 16,318 |
GOVERNMENT GUARANTEED LOAN SE_4
GOVERNMENT GUARANTEED LOAN SERVICING ACTIVITIES - Activity for Government Guaranteed Loan Servicing Rights (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | ||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||||
Beginning of period | [1] | $ 14,959 | |||
End of period | $ 15,770 | 15,770 | |||
Government guaranteed loan servicing rights | |||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||||
Beginning of period | 15,742 | $ 11,625 | 14,959 | $ 10,906 | |
Additions | 1,514 | 2,250 | 3,692 | 3,847 | |
Amortization | (1,486) | (1,055) | (2,881) | (1,933) | |
End of period | $ 15,770 | $ 12,820 | $ 15,770 | $ 12,820 | |
[1]Derived from audited consolidated financial statements |
GOVERNMENT GUARANTEED LOAN SE_5
GOVERNMENT GUARANTEED LOAN SERVICING ACTIVITIES - Net Gain on Sale of Government Guaranteed Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Servicing Asset at Amortized Cost [Line Items] | ||||
Gain on sale of government guaranteed loans, net | $ 5,595 | $ 6,028 | $ 13,684 | $ 10,437 |
Government guaranteed loan servicing rights | ||||
Servicing Asset at Amortized Cost [Line Items] | ||||
Gain on sale of guaranteed portion of government guaranteed loans | 4,081 | 4,590 | 9,992 | 7,402 |
Loss on sale of unguaranteed portion of government guaranteed loans | 0 | (797) | 0 | (797) |
Costs recognized on sale of government guaranteed loans | 0 | (15) | 0 | (15) |
Fair value of loan servicing rights created | 1,514 | 2,250 | 3,692 | 3,847 |
Gain on sale of government guaranteed loans, net | $ 5,595 | $ 6,028 | $ 13,684 | $ 10,437 |
LEASES - Total Lease Cost and S
LEASES - Total Lease Cost and Supplemental Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Leases [Abstract] | ||||
Operating lease cost | $ 238 | $ 246 | $ 497 | $ 588 |
Short-term lease cost | 63 | 20 | 72 | 20 |
Total lease cost, net | 301 | 266 | 569 | 608 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Lease cost | 301 | 266 | 569 | 608 |
Cash flows related to operating lease liabilities | 206 | 303 | 449 | 684 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 0 | 0 | 263 | 0 |
Discontinued Operations, Held-for-sale | Nationwide Residential Mortgage Loan Production Operations | ||||
Leases [Abstract] | ||||
Total lease cost, net | 60 | 27 | 131 | 87 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Lease cost | $ 60 | $ 27 | $ 131 | $ 87 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | [1] |
Lessee, Lease, Description [Line Items] | |||
Weighted average discount rate | 2.79% | ||
Weighted average remaining life | 2 years 10 months 24 days | ||
Right-of-use operating lease assets | $ 2,305 | $ 2,416 | |
Discontinued Operations, Held-for-sale | Nationwide Residential Mortgage Loan Production Operations | |||
Lessee, Lease, Description [Line Items] | |||
Right-of-use operating lease assets | $ 36 | ||
[1]Derived from audited consolidated financial statements |
LEASES - Future Minimum Lease P
LEASES - Future Minimum Lease Payments (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Leases [Abstract] | |
2024 | $ 448 |
2025 | 946 |
2026 | 908 |
2027 | 467 |
2028 | 0 |
Thereafter | 0 |
Total undiscounted lease payments | 2,769 |
Less: imputed interest | (101) |
Net lease liabilities | $ 2,668 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Operating lease liabilities, Liabilities from discontinued operations |
OTHER BORROWINGS (Details)
OTHER BORROWINGS (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2024 | Dec. 31, 2023 | ||
Debt Instrument [Line Items] | |||
Blanket lien | $ 326,530,000 | ||
Additional FHLB borrowings | 132,809,000 | ||
Subordinated debentures | 5,952,000 | $ 5,949,000 | [1] |
Notes payable | 2,162,000 | 2,389,000 | [1] |
Federal Home Loan Bank Advances | |||
Debt Instrument [Line Items] | |||
Short term borrowings | $ 55,000,000 | $ 10,000,000 | |
Debt instrument, fixed interest rate | 5.57% | 5.57% | |
Federal Reserve Bank Advances | |||
Debt Instrument [Line Items] | |||
Short term borrowings | $ 0 | $ 0 | |
Federal Reserve Bank Advances | Secured Debt | |||
Debt Instrument [Line Items] | |||
Line of credit, capacity | 44,028,000 | ||
Federal Reserve Bank Advances | Secured Debt | SBA Loan | |||
Debt Instrument [Line Items] | |||
Line of credit, capacity | $ 61,753,000 | ||
Subordinated Debt | June 2021 Subordinated Debentures | |||
Debt Instrument [Line Items] | |||
Debt instrument, fixed interest rate | 4.50% | ||
Debt instrument, face amount | $ 6,000,000 | ||
Debt instrument, redemption period | 5 years | ||
Debt instrument, initial term | 5 years | ||
Subordinated Debt | June 2021 Subordinated Debentures | Secured Overnight Financing Rate (SOFR) | |||
Debt Instrument [Line Items] | |||
Debt Instrument, final term | 5 years | ||
Debt instrument, floating rate | 3.78% | ||
Notes Payable, Other Payables | Amortizing Note Payable | |||
Debt Instrument [Line Items] | |||
Debt instrument, collateral, percentage of bank's stock | 100% | ||
Notes Payable, Other Payables | Amortizing Note Payable | Prime Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, floating rate | 8.50% | ||
[1]Derived from audited consolidated financial statements |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 0 | 0 | 0 | 0 |
Unrecognized compensation cost related to nonvested stock options granted | $ 32 | $ 32 | ||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense | 578 | $ 578 | ||
Expected period for recognition | 2 years 10 months 24 days | |||
Fair value of shares vested | $ 359 | $ 252 | ||
Common stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected period for recognition | 1 year 3 months 18 days | |||
Maximum percentage of stock granted | 15% | |||
Maximum number of shares issued and outstanding (in shares) | 1,500,000 | |||
Contractual term | 10 years | |||
Common stock options | Share-based Payment Arrangement, Employee | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 5 years | |||
Common stock options | Share-based Payment Arrangement, Nonemployee | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Equity Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost charged against income | $ 110 | $ 172 | $ 172 | $ 319 |
STOCK-BASED COMPENSATION - Nonv
STOCK-BASED COMPENSATION - Nonvested Restricted Shares (Details) - Restricted Stock - $ / shares | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Shares | ||
Nonvested beginning balance (in shares) | 52,195 | 22,000 |
Granted (in shares) | 30,650 | 46,175 |
Vested (in shares) | (28,710) | (13,935) |
Forfeited (in shares) | (1,025) | (1,705) |
Nonvested ending balance (in shares) | 53,110 | 52,535 |
Weighted-Average Grant-Date Fair Value, per share | ||
Nonvested beginning balance (in dollars per share) | $ 18.75 | $ 21.52 |
Granted (in dollars per share) | 11.70 | 18.30 |
Vested (in dollars per share) | (18.50) | (20.01) |
Forfeited (in dollars per share) | (16.48) | (19.37) |
Nonvested ending balance (in dollars per share) | $ 14.86 | $ 18.75 |
STOCK-BASED COMPENSATION - Acti
STOCK-BASED COMPENSATION - Activity in the Equity Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Shares | ||
Outstanding beginning balance (in shares) | 367,033 | 405,688 |
Exercised (in shares) | (30,375) | |
Forfeited (in shares) | (1,575) | (7,575) |
Outstanding ending balance (in shares) | 365,458 | 367,738 |
Vested at ending balance (in shares) | 350,660 | 323,037 |
Exercisable at ending balance (in shares) | 350,660 | 323,037 |
Weighted Average Exercise Price | ||
Outstanding beginning balance (in dollars per share) | $ 15.68 | $ 15.67 |
Exercised (in dollars per share) | (15.71) | |
Forfeited (in dollars per share) | (15.41) | (15.52) |
Outstanding ending balance (in dollars per share) | 15.68 | 15.67 |
Vested at ending balance (in dollars per share) | 15.71 | 15.78 |
Exercisable at ending balance (in dollars per share) | $ 15.71 | $ 15.78 |
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value | ||
Weighted Average Remaining Contractual Term, Outstanding | 5 years 1 month 28 days | 6 years 2 months 12 days |
Weighted Average Remaining Contractual Term, Vested | 5 years 1 month 13 days | 6 years 21 days |
Weighted Average Remaining Contractual Term, Exercisable | 5 years 1 month 13 days | 6 years 21 days |
Aggregate Intrinsic Value, Outstanding | $ 0 | $ 0 |
Aggregate Intrinsic Value, Vested | 0 | 0 |
Aggregate Intrinsic Value, Exercisable | $ 0 | $ 0 |
OTHER BENEFIT PLANS (Details)
OTHER BENEFIT PLANS (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock purchased in DRIP (in shares) | 0 | 4,953 | |||
Issue of common stock under dividend reinvestment plan, price per share (in dollars per share) | $ 17.01 | ||||
Salary continuation agreement, annual benefit | $ 25,000 | ||||
Salary continuation agreement, annual benefit, duration | 20 years | ||||
Salary continuation agreement, liability | $ 359,000 | $ 351,000 | |||
Salary continuation agreement, period expense | $ 8,000 | $ 8,000 | |||
Employer contribution over employees' gross pay | 3% | ||||
Expense recognized in relation of plan, amount | $ 533,000 | $ 457,000 | |||
Employee stock ownership plan (in shares) | 14,154 | ||||
ESOP, number of unallocated shares (in shares) | 8,493 | 11,323 | |||
Fair value of unallocated shares | $ 99,000 | $ 153,000 | |||
ESOP, fixed interest rate | 3.25% | ||||
ESOP, vesting percentage in contribution of employees laid off | 100% | ||||
Stock based compensation expense | $ 108,000 | $ 0 | |||
Employee Stock Ownership Plan Termination | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Employee stock ownership plan (in shares) | 23,383 | ||||
ESOP, number of unallocated shares (in shares) | 18,706 | 23,383 | |||
Fair value of unallocated shares | $ 217,000 | $ 316,000 | |||
ESOP, fixed interest rate | 8.25% | ||||
Term of loan | 5 years | ||||
Employee Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expense recognized in relation to the non-qualified stock purchase plan | $ 13,000 | $ 14,000 |
REGULATORY MATTERS (Details)
REGULATORY MATTERS (Details) $ in Thousands | Jun. 30, 2024 USD ($) | Dec. 31, 2023 USD ($) |
Total Capital | ||
Total Capital, Actual | $ 114,204 | $ 114,256 |
Total Capital, Actual, Ratio | 0.1179 | 0.1303 |
Total Capital, Required for Capital Adequacy Purposes | $ 77,500 | $ 70,169 |
Total Capital, Required for Capital Adequacy Purposes, Ratio | 0.0800 | 0.0800 |
Total Capital, To be Well Capitalized Under Prompt Corrective Action Regulations | $ 96,875 | $ 87,711 |
Total Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.1000 | 0.1000 |
Tier 1 Capital | ||
Tier One Risk-Based Capital, Actual | $ 102,081 | $ 103,274 |
Tier One Risk-Based Capital, Actual, Ratio | 0.1054 | 0.1177 |
Tier One Risk-Based Capital, Required for Capital Adequacy Purposes | $ 58,125 | $ 52,627 |
Tier One Risk-Based Capital, Required for Capital Adequacy Purposes, Ratio | 0.0600 | 0.0600 |
Tier One Risk-Based Capital, To be Well Capitalized Under Prompt Corrective Action Regulations | $ 77,500 | $ 70,169 |
Tier One Risk-Based Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.0800 | 0.0800 |
Common Equity Tier 1 Capital | ||
Common Equity Tier One Risk-Based Capital, Actual | $ 102,081 | $ 103,274 |
Common Equity Tier One Risk-Based Capital, Actual, Ratio | 0.1054 | 0.1177 |
Common Equity Tier One Risk-Based Capital, Required for Capital Adequacy Purposes | $ 43,594 | $ 39,470 |
Common Equity Tier One Risk-Based Capital, Required for Capital Adequacy Purposes, Ratio | 0.0450 | 0.0450 |
Common Equity Tier One Risk-Based Capital, To be Well Capitalized Under Prompt Corrective Action Regulations | $ 62,969 | $ 57,012 |
Common Equity Tier One Risk-Based Capital To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.0650 | 0.0650 |
Tier 1 Capital | ||
Tier One Leverage Capital, Actual | $ 102,081 | $ 103,274 |
Tier One Leverage Capital, Actual, Ratio | 0.0873 | 0.0938 |
Tier One Leverage Capital, Required for Capital Adequacy Purposes | $ 46,792 | $ 44,024 |
Tier One Leverage Capital, Required for Capital Adequacy Purposes, Ratio | 0.0400 | 0.0400 |
Tier One Leverage Capital, To be Well Capitalized Under Prompt Corrective Action Regulations | $ 58,490 | $ 55,030 |
Tier One Leverage Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.0500 | 0.0500 |
LOAN COMMITMENTS AND OTHER RE_3
LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES - Financial Instruments With Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Unfunded loan commitments | ||
Other Commitments [Line Items] | ||
Financial commitments, contractual amount | $ 59,649 | $ 7,392 |
Unused lines of credit | ||
Other Commitments [Line Items] | ||
Financial commitments, contractual amount | 183,740 | 178,440 |
Standby letters of credit | ||
Other Commitments [Line Items] | ||
Financial commitments, contractual amount | $ 211 | $ 186 |
LOAN COMMITMENTS AND OTHER RE_4
LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2024 | Dec. 31, 2023 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Other Commitments [Line Items] | ||||||
Total ACL for off-balance sheet loan commitments | $ 641 | $ 839 | $ 839 | $ 844 | $ 798 | $ 511 |
Unfunded loan commitments | ||||||
Other Commitments [Line Items] | ||||||
Total ACL for off-balance sheet loan commitments | $ 641 | $ 839 | ||||
Unfunded loan commitments | ||||||
Other Commitments [Line Items] | ||||||
Unfunded loan commitment period | 90 days | 90 days |
EARNINGS PER COMMON SHARE - Bas
EARNINGS PER COMMON SHARE - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Basic: | ||||
Income from continuing operations | $ 876 | $ 1,417 | $ 1,759 | $ 2,284 |
Loss from discontinued operations | (10) | (32) | (69) | (160) |
Net income | 866 | 1,385 | 1,690 | 2,124 |
Less: Preferred stock dividends | 386 | 208 | 771 | 416 |
Net income available to common shareholders | $ 480 | $ 1,177 | $ 919 | $ 1,708 |
Weighted average common shares outstanding (in shares) | 4,134,581 | 4,103,788 | 4,132,533 | 4,092,299 |
Basic earnings (loss) per common share, Continuing operations (in dollars per share) | $ 0.12 | $ 0.30 | $ 0.24 | $ 0.46 |
Basic earnings (loss) per common share, Discontinued operations (in dollars per share) | 0 | (0.01) | (0.02) | (0.04) |
Total basic earnings per common share (in dollars per share) | $ 0.12 | $ 0.29 | $ 0.22 | $ 0.42 |
Diluted: | ||||
Income from continuing operations | $ 876 | $ 1,417 | $ 1,759 | $ 2,284 |
Loss from discontinued operations | (10) | (32) | (69) | (160) |
Net income | 866 | 1,385 | 1,690 | 2,124 |
Less: Preferred stock dividends | 386 | 208 | 771 | 416 |
Add: Series B preferred stock and preferred C stock dividends | 0 | 64 | 0 | 0 |
Net income available to (loss attributable to) common shareholders, diluted | $ 480 | $ 1,241 | $ 919 | $ 1,708 |
Weighted average common shares outstanding for basic earnings per common share (in shares) | 4,134,581 | 4,103,788 | 4,132,533 | 4,092,299 |
Add: Dilutive effects of conversion of Series B preferred stock to common stock (in shares) | 0 | 161,713 | 0 | 0 |
Add: Dilutive effects of assumed exercises of stock options and warrants (in shares) | 0 | 0 | 0 | 0 |
Average shares and dilutive potential common shares (in shares) | 4,134,581 | 4,265,501 | 4,132,533 | 4,092,299 |
Diluted earnings (loss) per common share: | ||||
Continuing operations (in dollars per share) | $ 0.12 | $ 0.30 | $ 0.24 | $ 0.46 |
Discontinued operations (in dollars per share) | 0 | (0.01) | (0.02) | (0.04) |
Total diluted earnings per common share (in dollars per share) | $ 0.12 | $ 0.29 | $ 0.22 | $ 0.42 |
EARNINGS PER COMMON SHARE - Ant
EARNINGS PER COMMON SHARE - Antidilutive Securities Excluded from Calculation of Weighted Average Shares Outstanding (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Common stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from calculation of weighted average shares outstanding (in shares) | 365,700 | 368,955 | 366,238 | 378,534 |
Convertible Series B preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from calculation of weighted average shares outstanding (in shares) | 3,210 | 0 | 3,210 | 3,123 |
Convertible Series C preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from calculation of weighted average shares outstanding (in shares) | 6,446 | 0 | 6,446 | 0 |
Uncategorized Items - bafn-2024
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |