Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 05, 2022 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Entity File Number | 001-41315 | |
Entity Registrant Name | John Marshall Bancorp, Inc. | |
Entity Incorporation, State or Country Code | VA | |
Entity Tax Identification Number | 81-5424879 | |
Entity Address State Or Province | VA | |
Entity Address, Address Line One | 1943 Isaac Newton Square | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Reston | |
Entity Address, Postal Zip Code | 20190 | |
City Area Code | 703 | |
Local Phone Number | 584-0840 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | JMSB | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,031,089 | |
Entity Central Index Key | 0001710482 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and due from banks | $ 12,915 | $ 2,920 |
Interest-bearing deposits in banks | 107,972 | 102,879 |
Total cash and cash equivalents | 120,887 | 105,799 |
Securities available-for-sale, at fair value | 365,134 | 239,300 |
Securities held-to-maturity, fair value of $88,862 and $103,258 as of June 30, 2022 and December 31, 2021, respectively | 102,265 | 105,509 |
Restricted securities, at cost | 4,417 | 4,951 |
Equity securities, at fair value | 2,098 | 1,869 |
Loans, net of unearned income | 1,692,652 | 1,666,469 |
Allowance for loan losses | (20,031) | (20,032) |
Net loans | 1,672,621 | 1,646,437 |
Bank premises and equipment, net | 1,443 | 1,620 |
Accrued interest receivable | 4,451 | 4,943 |
Bank owned life insurance | 21,188 | 20,998 |
Right of use assets | 4,281 | 4,913 |
Other assets | 17,589 | 12,970 |
Total assets | 2,316,374 | 2,149,309 |
Deposits: | ||
Non-interest bearing demand deposits | 512,284 | 488,838 |
Interest-bearing demand deposits | 738,666 | 633,901 |
Savings deposits | 112,276 | 101,376 |
Time deposits | 680,515 | 657,438 |
Total deposits | 2,043,741 | 1,881,553 |
Federal Home Loan Bank advances | 18,000 | |
Subordinated debt | 49,560 | 24,728 |
Accrued interest payable | 896 | 843 |
Lease liabilities | 4,538 | 5,182 |
Other liabilities | 10,109 | 10,533 |
Total liabilities | 2,108,844 | 1,940,839 |
Commitments and contingencies | ||
Shareholders' Equity | ||
Preferred stock, par value $0.01 per share; authorized 1,000,000 shares; none issued | ||
Additional paid-in capital | 93,935 | 91,107 |
Retained earnings | 130,383 | 117,626 |
Accumulated other comprehensive loss | (16,928) | (400) |
Total shareholders' equity | 207,530 | 208,470 |
Total liabilities and shareholders' equity | 2,316,374 | 2,149,309 |
Common stock, voting | ||
Shareholders' Equity | ||
Common stock | $ 140 | $ 137 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Securities held-to-maturity, fair value | $ 88,862 | $ 103,258 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, voting | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, issued (in shares) | 14,026,589 | 13,745,598 |
Common stock, outstanding (in shares) | 14,026,589 | 13,745,598 |
Common stock, voting | Unvested shares | ||
Common stock, issued (in shares) | 58,536 | 75,826 |
Common stock, non voting | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, issued (in shares) | 0 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Interest and Dividend Income | ||||
Interest and fees on loans | $ 17,334 | $ 17,499 | $ 35,518 | $ 35,338 |
Interest on investment securities, taxable | 1,893 | 993 | 3,273 | 1,762 |
Interest on investment securities, tax-exempt | 30 | 30 | 60 | 60 |
Dividends | 64 | 66 | 124 | 131 |
Interest on deposits in banks | 234 | 39 | 325 | 83 |
Total interest and dividend income | 19,555 | 18,627 | 39,300 | 37,374 |
Interest Expense | ||||
Deposits | 1,698 | 1,735 | 3,021 | 3,795 |
Federal Home Loan Bank advances | 12 | 30 | 42 | 63 |
Subordinated debt | 537 | 371 | 1,013 | 743 |
Total interest expense | 2,247 | 2,136 | 4,076 | 4,601 |
Net interest income | 17,308 | 16,491 | 35,224 | 32,773 |
Provision for loan losses | 90 | 2,455 | ||
Net interest income after provision for loan losses | 17,308 | 16,401 | 35,224 | 30,318 |
Non-interest Income | ||||
Service charges on deposit accounts | 84 | 60 | 161 | 118 |
Bank owned life insurance | 95 | 100 | 190 | 207 |
Other service charges and fees | 157 | 116 | 294 | 220 |
Gains on securities | 10 | |||
Insurance commissions | 44 | 22 | 265 | 177 |
Other operating income (loss) | (271) | 119 | (387) | 149 |
Total non-interest income | 109 | 417 | 523 | 881 |
Non-interest Expenses | ||||
Salaries and employee benefits | 4,655 | 5,680 | 10,682 | 10,669 |
Occupancy expense of premises | 482 | 514 | 975 | 1,021 |
Furniture and equipment expenses | 341 | 378 | 666 | 700 |
Other operating expenses | 2,203 | 2,495 | 4,144 | 4,570 |
Total non-interest expenses | 7,681 | 9,067 | 16,467 | 16,960 |
Income before income taxes | 9,736 | 7,751 | 19,280 | 14,239 |
Income tax expense | 1,854 | 1,672 | 3,724 | 3,086 |
Net income | $ 7,882 | $ 6,079 | $ 15,556 | $ 11,153 |
Earnings per share, basic | $ 0.56 | $ 0.45 | $ 1.11 | $ 0.82 |
Earnings per share, diluted | $ 0.56 | $ 0.44 | $ 1.10 | $ 0.80 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||
Net Income | $ 7,882 | $ 6,079 | $ 15,556 | $ 11,153 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on available-for-sale securities, net of tax of $(1,582) and $29 for the three months ended June 30, 2022 and June 30, 2021, respectively net of tax of $(4,370) and $(647) for the six months ended June 30, 2022 and June 30, 2021, respectively | (5,961) | 110 | (16,449) | (2,434) |
Reclassification adjustment for gains on available-for-sale securities included in net income, net of tax of $(2) for the six months ended June 30, 2021 | (8) | |||
Amortization of unrealized gains on securities transferred to held-to-maturity, net of tax of $(10) and $(21) for the three and six months ended June 30, 2022, respectively | (38) | (79) | ||
Total other comprehensive income (loss) | (5,999) | 110 | (16,528) | (2,442) |
Total comprehensive income (loss) | $ 1,883 | $ 6,189 | $ (972) | $ 8,711 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||
Unrealized gain (loss) on available-for-sale securities, tax | $ (1,582) | $ 29 | $ (4,370) | $ (647) |
Reclassification adjustment for gains on available-for-sale securities included in net income, tax | $ (2) | |||
Amortization of unrealized gains on securities transferred to held-to-maturity, tax | $ (10) | $ (21) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance at Dec. 31, 2020 | $ 135 | $ 89,995 | $ 92,165 | $ 3,786 | $ 186,081 |
Beginning balance (in shares) at Dec. 31, 2020 | 13,532,558 | ||||
Net Income | 11,153 | 11,153 | |||
Other comprehensive income (loss) | (2,442) | (2,442) | |||
Exercise of stock options | $ 1 | 176 | 177 | ||
Exercise of stock options (in shares) | 24,687 | ||||
Restricted stock vesting (in shares) | 20,933 | ||||
Share-based compensation | 277 | 277 | |||
Ending balance at Jun. 30, 2021 | $ 136 | 90,448 | 103,318 | 1,344 | 195,246 |
Ending balance (in shares) at Jun. 30, 2021 | 13,578,178 | ||||
Beginning balance at Mar. 31, 2021 | $ 136 | 90,295 | 97,239 | 1,234 | 188,904 |
Beginning balance (in shares) at Mar. 31, 2021 | 13,566,379 | ||||
Net Income | 6,079 | 6,079 | |||
Other comprehensive income (loss) | 110 | 110 | |||
Exercise of stock options | 25 | 25 | |||
Exercise of stock options (in shares) | 3,437 | ||||
Restricted stock vesting (in shares) | 8,362 | ||||
Share-based compensation | 128 | 128 | |||
Ending balance at Jun. 30, 2021 | $ 136 | 90,448 | 103,318 | 1,344 | 195,246 |
Ending balance (in shares) at Jun. 30, 2021 | 13,578,178 | ||||
Beginning balance at Dec. 31, 2021 | $ 137 | 91,107 | 117,626 | (400) | 208,470 |
Beginning balance (in shares) at Dec. 31, 2021 | 13,669,772 | ||||
Net Income | 15,556 | 15,556 | |||
Other comprehensive income (loss) | (16,528) | (16,528) | |||
Dividend declared on common stock ($0.20 per share) | (2,799) | (2,799) | |||
Exercise of stock options | $ 3 | 2,559 | 2,562 | ||
Exercise of stock options (in shares) | 282,034 | ||||
Restricted stock vesting (in shares) | 16,247 | ||||
Share-based compensation | 269 | 269 | |||
Ending balance at Jun. 30, 2022 | $ 140 | 93,935 | 130,383 | (16,928) | 207,530 |
Ending balance (in shares) at Jun. 30, 2022 | 13,968,053 | ||||
Beginning balance at Mar. 31, 2022 | $ 139 | 93,135 | 122,510 | (10,929) | 204,855 |
Beginning balance (in shares) at Mar. 31, 2022 | 13,890,204 | ||||
Net Income | 7,882 | 7,882 | |||
Other comprehensive income (loss) | (5,999) | (5,999) | |||
Cash dividends attributable to changes in common shares through the record date | (9) | (9) | |||
Exercise of stock options | $ 1 | 670 | 671 | ||
Exercise of stock options (in shares) | 75,562 | ||||
Restricted stock vesting (in shares) | 2,287 | ||||
Share-based compensation | 130 | 130 | |||
Ending balance at Jun. 30, 2022 | $ 140 | $ 93,935 | $ 130,383 | $ (16,928) | $ 207,530 |
Ending balance (in shares) at Jun. 30, 2022 | 13,968,053 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Condensed Consolidated Statements of Shareholders' Equity | ||||
Dividend paid per share | $ 0.20 | |||
Restricted stock vesting, shares surrendered | 43 | 18 | 43 | 18 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash Flows from Operating Activities | ||
Net income | $ 15,556 | $ 11,153 |
Adjustment to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 298 | 423 |
Right of use asset amortization | 688 | 721 |
Provision for loan losses | 2,455 | |
Share-based compensation expense | 269 | 277 |
Net amortization of securities | 146 | 200 |
Fair value adjustment on equity securities | 391 | (99) |
Amortization of debt issuance costs | 236 | 25 |
Gains on sales and calls of available-for-sale securities | (10) | |
Deferred tax expense (benefit) | 375 | (1,375) |
Increase in cash surrender value of life insurance | (190) | (207) |
Changes in assets and liabilities: | ||
Decrease in accrued interest receivable | 492 | 795 |
Increase in other assets | (603) | (195) |
Increase in accrued interest payable | 53 | 7 |
Decrease in other liabilities | (1,124) | (95) |
Net cash provided by operating activities | 16,587 | 14,075 |
Cash Flows from Investing Activities | ||
Net increase in loans | (26,184) | (4,679) |
Purchase of available-for-sale securities | (173,362) | (167,907) |
Purchase of held-to-maturity securities | (1,003) | |
Proceeds from maturities, calls and principal repayments of available-for-sale securities | 26,601 | 17,041 |
Proceeds from maturities, calls and principal repayments of held-to-maturity securities | 4,109 | |
Net redemption of restricted securities | 534 | 737 |
Purchase of equity securities | (620) | (540) |
Purchases of bank premises and equipment | (121) | (269) |
Net cash (used in) investing activities | (170,046) | (155,617) |
Cash Flows from Financing Activities | ||
Net increase in deposits | 162,188 | 174,912 |
Net repayment of Federal Home Loan Bank advances | (18,000) | (4,000) |
Issuance of subordinated debt | 24,596 | |
Cash dividends paid | (2,799) | |
Issuance of common stock for share options exercised | 2,562 | 177 |
Net cash provided by investing activities | 168,547 | 171,089 |
Net increase in cash and cash equivalents | 15,088 | 29,547 |
Cash and cash equivalents, beginning of period | 105,799 | 138,457 |
Cash and cash equivalents, end of period | 120,887 | 168,004 |
Supplemental Disclosures of Cash Flow Information | ||
Interest | 3,787 | 4,569 |
Income taxes | 2,360 | 3,867 |
Supplemental Disclosures of Noncash Transactions | ||
Unrealized loss on securities available-for-sale | (20,819) | (3,091) |
Right of use asset obtained in exchange for new operating lease liability | $ 56 | $ 385 |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Nature of Business and Summary of Significant Accounting Policies | |
Nature of Business and Summary of Significant Accounting Policies | Note 1— Nature of Business and Summary of Significant Accounting Policies Nature of Banking Activities John Marshall Bancorp, Inc. (the “Company”), headquartered in Reston, Virginia, became the registered bank holding company under the Bank Holding Company Act of 1956 for its wholly-owned subsidiary, John Marshall Bank (the “Bank”), on March 1, 2017. This reorganization was completed through a one-for-one share exchange in which the Bank’s shareholders received one share of voting common stock of the Company in exchange for each share of the Bank’s voting common stock. The Company was formed on April 21, 2016 under the laws of the Commonwealth Virginia. The Bank was formed on April 5, 2005 under the laws of the Commonwealth of Virginia and was chartered as a bank on February 9, 2006, by the Virginia Bureau of Financial Institutions. The Bank is a member of the Federal Reserve System and is subject to the rules and regulations of the Virginia Bureau of Financial Institutions, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) and the Federal Deposit Insurance Corporation (“FDIC”). The Bank opened for business on April 17, 2006 and provides banking services to its customers primarily in the Washington, D.C. metropolitan area. Basis of Presentation The accounting and reporting policies of John Marshall Bancorp, Inc. conform to generally accepted accounting principles in the United States of America (“GAAP”) and reflect practices of the banking industry. The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial reporting and with applicable quarterly reporting regulations of the U.S. Securities and Exchange Commission (“SEC”). They do not include all of the information and notes required by GAAP for complete financial statements. As such, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ending December 31, 2021, included in the Company’s Registration Statement on Form 10 as amended, filed with the SEC on April 18, 2022. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions between the Company and the Bank have been eliminated. In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the results of operations in these financial statements, have been made. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for any other interim period or for the full year. All amounts and disclosures included in this quarterly report as of December 31, 2021, were derived from the Company’s audited consolidated financial statements. Certain items in the prior period financial statements have been reclassified to conform to the current presentation. These reclassifications had no effect on prior year net income or shareholders’ equity. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASUs 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASUs have provided for various minor technical corrections and improvements to the codification as well as other transition matters. Smaller reporting companies who file with the U.S. Securities and Exchange Commission (“SEC”) and all other entities who do not file with the SEC are required to apply the guidance for fiscal years, and interim periods within those years, beginning after December 15, 2022. As part of the Company’s implementation efforts, we have reconciled and validated historical loan, charge-off and recovery data, determined segmentation of the loan portfolio for application of the current expected credit losses (“CECL”) calculation, determined the key assumptions to be utilized in the calculation, selected lifetime loss reserve calculation methods and established a methodology framework, updated our qualitative factor framework, performed parallel runs of the CECL calculation, and engaged an external vendor to assist with model validation commencing in the third quarter of 2022. The ultimate impact of CECL on the allowance for credit losses will depend on the size and composition of the loan portfolio, the portfolio’s credit quality and economic conditions at the time of adoption, as well as any refinements to the CECL model, methodology and key assumptions. At adoption, the Company will record a cumulative effect adjustment to retained earnings for incremental change in the allowance for credit losses. In March 2022, the FASB issued ASU No. 2022-02, “Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings (“TDRs”) and Vintage Disclosures.” ASU 2022-02 addresses areas identified by the FASB as part of its post-implementation review of the credit losses standard (ASU 2016-13) that introduced the CECL model. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the amendments require a public business entity to disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. The amendments in this ASU should be applied prospectively, except for the transition method related to the recognition and measurement of TDRs, where an entity has the option to apply a modified retrospective transition method resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. For entities that have not yet adopted ASU 2016-13 (such as the Company), the effective dates for the provisions of ASU 2022-02 are the same as the effective dates in ASU 2016-13. Early adoption is permitted if an entity has adopted ASU 2016-13; however, the Company does not expect to adopt ASU 2016-13 in advance of the required implementation date. The Company is currently assessing the impact that ASU 2022-02 will have on its consolidated financial statements. |
Investment Securities
Investment Securities | 6 Months Ended |
Jun. 30, 2022 | |
Investment Securities | |
Investment Securities | Note 2— Investment Securities The following table summarizes the amortized cost and fair value of securities held-to-maturity and available-for-sale and the corresponding amounts of gross unrealized gains and losses at June 30, 2022 and December 31, 2021. June 30, 2022 Gross Gross Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains (Losses) Value Held-to-maturity U.S Treasuries $ 6,001 $ — $ (651) $ 5,350 U.S. government and federal agencies 35,630 — (4,245) 31,385 Collateralized mortgage obligations 22,930 — (3,020) 19,910 Taxable municipal 6,081 — (1,010) 5,071 Mortgage-backed 31,623 — (4,477) 27,146 Total Held-to-maturity Securities $ 102,265 $ — $ (13,403) $ 88,862 Available-for-sale U.S Treasuries $ 63,331 $ 22 $ (2,890) $ 60,463 U.S. government and federal agencies 37,685 2 (2,611) 35,076 Corporate bonds 3,000 — (132) 2,868 Collateralized mortgage obligations 45,425 21 (4,143) 41,303 Tax-exempt municipal 5,000 — (405) 4,595 Taxable municipal 1,650 6 (21) 1,635 Mortgage-backed 230,862 99 (11,767) 219,194 Total Available-for-sale Securities $ 386,953 $ 150 $ (21,969) $ 365,134 December 31, 2021 Gross Gross Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains (Losses) Value Held-to-maturity U.S Treasuries $ 6,000 $ — $ (150) $ 5,850 U.S. government and federal agencies 35,720 — (726) 34,994 Collateralized mortgage obligations 25,606 — (534) 25,072 Taxable municipal 6,089 — (194) 5,895 Mortgage-backed 32,094 — (647) 31,447 Total Held-to-maturity Securities $ 105,509 $ — $ (2,251) $ 103,258 Available-for-sale U.S Treasuries $ 30,954 $ — $ (411) $ 30,543 U.S. government and federal agencies 34,803 258 (524) 34,537 Corporate bonds 1,000 31 — 1,031 Collateralized mortgage obligations 39,596 179 (726) 39,049 Tax-exempt municipal 5,007 255 — 5,262 Taxable municipal 1,653 37 (5) 1,685 Mortgage-backed 127,287 1,232 (1,326) 127,193 Total Available-for-sale Securities $ 240,300 $ 1,992 $ (2,992) $ 239,300 During 2021, the Company transferred investment securities with a carrying value of $99.0 million, including an unrealized gain of $593 thousand from available-for-sale to held-to-maturity and began classifying certain newly purchased debt securities as held-to-maturity, as it has the intent and ability to hold these securities to maturity. The unrealized gain at the time of transfer is being amortized over the remaining lives of the securities. The Company did not sell nor recognize any gain or loss for any debt securities for the three or six months ended June 30, 2022. The Company did not sell any debt securities for the three or six months ended June 30, 2021. A gross gain of $10 thousand was recognized on the call of a security during the six months ended June 30, 2021. Securities having a market value of $96.6 million and $78.6 million at June 30, 2022 and December 31, 2021, respectively, were pledged to secure public deposits and for other purposes required by law. These securities had an amortized cost of $106.3 million and $78.8 million at June 30, 2022 and December 31, 2021, respectively. The following tables summarize the fair value of securities held-to-maturity and securities available-for-sale at June 30, 2022 and December 31, 2021 and the corresponding amounts of gross unrealized losses. Management uses the valuations as of month-end in determining when securities are in an unrealized loss position. Therefore, a security’s market value could have exceeded its amortized cost on other days during the prior twelve-month period. June 30, 2022 Less than 12 Months 12 Months or Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses Value Losses Held-to-maturity U.S Treasuries $ 5,350 $ (651) $ — $ — $ 5,350 $ (651) U.S. government and federal agencies 18,901 (2,655) 12,484 (1,590) 31,385 (4,245) Collateralized mortgage obligations 15,160 (2,253) 4,750 (767) 19,910 (3,020) Taxable municipal 1,281 (269) 3,790 (741) 5,071 (1,010) Mortgage-backed 15,992 (2,445) 11,154 (2,032) 27,146 (4,477) Total Held-to-maturity Securities $ 56,684 $ (8,273) $ 32,178 $ (5,130) $ 88,862 $ (13,403) Available-for-sale U.S Treasuries $ 54,766 $ (2,890) $ — $ — $ 54,766 $ (2,890) U.S. government and federal agencies 20,139 (1,069) 13,051 (1,542) 33,190 (2,611) Corporate bonds 2,868 (132) — — 2,868 (132) Collateralized mortgage obligations 28,456 (2,426) 10,855 (1,717) 39,311 (4,143) Tax-exempt municipal 4,596 (405) — — 4,596 (405) Taxable municipal — — 249 (21) 249 (21) Mortgage-backed 192,498 (9,975) 12,626 (1,792) 205,124 (11,767) Total Available-for-sale Securities $ 303,323 $ (16,897) $ 36,781 $ (5,072) $ 340,104 $ (21,969) December 31, 2021 Less than 12 Months 12 Months or Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses Value Losses Held-to-maturity U.S Treasuries $ 5,851 $ (150) $ — $ — $ 5,851 $ (150) U.S. government and federal agencies 31,617 (645) 3,376 (81) 34,993 (726) Collateralized mortgage obligations 25,072 (534) — — 25,072 (534) Taxable municipal 3,971 (133) 1,923 (61) 5,894 (194) Mortgage-backed 27,995 (573) 3,452 (74) 31,447 (647) Total Held-to-maturity Securities $ 94,506 $ (2,035) $ 8,751 $ (216) $ 103,257 $ (2,251) Available-for-sale U.S Treasuries $ 30,543 $ (411) $ — $ — $ 30,543 $ (411) U.S. government and federal agencies 14,154 (301) 6,877 (223) 21,031 (524) Collateralized mortgage obligations 30,352 (726) — — 30,352 (726) Taxable municipal 265 (5) — — 265 (5) Mortgage-backed 93,129 (1,280) 918 (46) 94,047 (1,326) Total Available-for-sale Securities $ 168,443 $ (2,723) $ 7,795 $ (269) $ 176,238 $ (2,992) U.S. Treasuries maturity, the Company did not consider those investments to be other-than-temporarily impaired at June 30, 2022 or December 31, 2021. U.S. Government and Federal Agencies Collateralized Mortgage Obligation Securities Municipal Securities Corporate Securities Mortgage-Backed Securities The Company reviews each debt security for other-than-temporary impairment on at least a quarterly basis based on criteria that include the extent to which cost exceeds market price, the duration of that market decline, the financial health of and specific prospects for the issuer, the security’s ratings, the Company’s best estimate of the present value of cash flows expected to be collected from debt securities, the intention with regards to holding the security to maturity and the likelihood that the Company would be required to sell the security before recovery. The Company did not consider those investments to be other-than-temporary impaired at June 30, 2022 or December 31, 2021. Additionally, the Company has not recognized any other-than-temporary impairment on any of the investments owned as of June 30, 2022. The table below summarizes, by major security type, the contractual maturities of our investment securities as of June 30, 2022. Borrowers may have the right to call or prepay certain obligations and as such, the expected maturities of our securities are likely to differ from the scheduled contractual maturities presented below. June 30, 2022 Amortized Fair (Dollars in thousands) Cost Value Held-to-maturity Due in one year or less $ — $ — Due after one year through five years — — Due after five years through ten years 43,292 38,219 Due after ten years 58,973 50,643 Total Held-to-maturity Securities $ 102,265 $ 88,862 Available-for-sale Due in one year or less $ 1,062 $ 1,062 Due after one year through five years 93,701 89,714 Due after five years through ten years 154,748 148,717 Due after ten years 137,442 125,641 Total Available-for-sale Securities $ 386,953 $ 365,134 In the prevailing rate environments as of June 30, 2022 and December 31, 2021, the Company’s investment portfolio had an estimated weighted average remaining life of approximately 4.8 years and 4.5 years, respectively. The table below summarizes the carrying amount of restricted securities as of June 30, 2022 and December 31, 2021. (Dollars in thousands) June 30, 2022 December 31, 2021 Federal Reserve Bank Stock $ 3,284 $ 3,275 Federal Home Loan Bank Stock 1,073 1,616 Community Bankers’ Bank Stock 60 60 Total Restricted Securities $ 4,417 $ 4,951 The Company held equity securities with readily determinable fair values totaling $2.1 million and $1.9 million at June 30, 2022 and December 31, 2021, respectively. Changes in the fair value of these securities are reflected in earnings. A loss of $273 thousand and a gain of $66 thousand was recorded in other non-interest income in the Consolidated Statements of Income for the three months ended June 30, 2022 and June 30, 2021, respectively. A loss of $391 thousand and a gain of $99 thousand was recorded in other non-interest income in the Consolidated Statements of Income for the six months ended June 30, 2022 and June 30, 2021, respectively. These securities consist of mutual funds held in a trust and were obtained for the purpose of economically hedging changes in the Company’s nonqualified deferred compensation liability. |
Loans
Loans | 6 Months Ended |
Jun. 30, 2022 | |
Allowance for Loan Losses | |
Loans | Note 3— Loans The following table presents the composition of the Company’s loan portfolio as of June 30, 2022 and December 31, 2021. (Dollars in thousands) June 30, 2022 December 31, 2021 Real Estate Loans: Commercial $ 1,083,194 $ 968,442 Construction and land development 189,644 231,090 Residential 368,370 342,491 Commercial - Non-Real Estate: Commercial loans 47,878 122,945 Consumer - Non-Real Estate: Consumer loans 651 586 Total Gross Loans $ 1,689,737 $ 1,665,554 Allowance for loan losses (20,031) (20,032) Net deferred loan costs 2,915 915 Total net loans $ 1,672,621 $ 1,646,437 |
Allowance for Loan Losses
Allowance for Loan Losses | 6 Months Ended |
Jun. 30, 2022 | |
Allowance for Loan Losses | |
Allowance for Loan Losses | Note 4— Allowance for Loan Losses The following tables present the activity in the allowance for loan losses for the six months ended June 30, 2022 and June 30, 2021. June 30, 2022 Real Estate Construction & Land Dollars in thousands Commercial Development Residential Commercial Consumer Unallocated Total Allowance for loan losses: Beginning Balance, December 31, 2021 $ 13,091 $ 2,824 $ 2,769 $ 711 $ 5 $ 632 $ 20,032 Charge-offs (1) — — — — — (1) Recoveries — — — — — — — Provision 581 (23) (109) (72) 2 (379) — Ending Balance, June 30, 2022 $ 13,671 $ 2,801 $ 2,660 $ 639 $ 7 $ 253 $ 20,031 June 30, 2021 Real Estate Construction & Land Dollars in thousands Commercial Development Residential Commercial Consumer Unallocated Total Allowance for loan losses: Beginning Balance, December 31, 2020 $ 10,602 $ 2,617 $ 2,430 $ 1,007 $ 11 $ 350 $ 17,017 Charge-offs (90) — — (1) — — (91) Recoveries — — — — — — — Provision 2,234 94 (10) (268) (2) 407 2,455 Ending Balance, June 30, 2021 $ 12,746 $ 2,711 $ 2,420 $ 738 $ 9 $ 757 $ 19,381 The following tables present the balance of the allowance for loan losses, the allowance by impairment methodology, total loans, and loans by impairment methodology as of June 30, 2022 and December 31, 2021. June 30, 2022 Real Estate Construction & Land Dollars in thousands Commercial Development Residential Commercial Consumer Unallocated Total Allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Collectively evaluated for impairment 13,671 2,801 2,660 639 7 253 20,031 Total allowance $ 13,671 $ 2,801 $ 2,660 $ 639 $ 7 $ 253 $ 20,031 Loans: Individually evaluated for impairment $ — $ — $ 536 $ — $ — $ — $ 536 Collectively evaluated for impairment 1,083,194 189,644 367,834 47,878 651 — 1,689,201 Total loans $ 1,083,194 $ 189,644 $ 368,370 $ 47,878 $ 651 $ — $ 1,689,737 December 31, 2021 Real Estate Construction & Land Dollars in thousands Commercial Development Residential Commercial Consumer Unallocated Total Allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Collectively evaluated for impairment 13,091 2,824 2,769 711 5 632 20,032 Total allowance $ 13,091 $ 2,824 $ 2,769 $ 711 $ 5 $ 632 $ 20,032 Loans: Individually evaluated for impairment $ — $ — $ 549 $ — $ — $ — $ 549 Collectively evaluated for impairment 968,442 231,090 341,942 122,945 586 — 1,665,005 Total loans $ 968,442 $ 231,090 $ 342,491 $ 122,945 $ 586 $ — $ 1,665,554 Gross commercial loans included $224 thousand and $69.6 million of Paycheck Protection Program (“PPP”) loans as of June 30, 2022 and December 31, 2021, respectively. The Company does not maintain an allowance on these loan balances, as they are 100% guaranteed by the SBA. Management believes the ending allowances at each of the dates indicated were sufficient to absorb the probable losses inherent in the loan portfolio at those dates. The following tables present a summary of impaired loans and the related allowance as of June 30, 2022 and December 31, 2021. June 30, 2022 Recorded Recorded Unpaid Investment Investment Total Average Interest Principal with with Recorded Related Recorded Income (Dollars in thousands) Balance No Allowance Allowance Investment Allowance Investment Recognized Real Estate Loans Commercial $ — $ — $ — $ — $ — $ — $ — Construction and land development — — — — — — — Residential 536 536 — 536 — 541 9 Commercial — — — — — — — Consumer — — — — — — — Total Impaired Loans $ 536 $ 536 $ — $ 536 $ — $ 541 $ 9 December 31, 2021 Recorded Recorded Unpaid Investment Investment Total Average Interest Principal with with Recorded Related Recorded Income (Dollars in thousands) Balance No Allowance Allowance Investment Allowance Investment (1) Recognized (1) Real Estate Loans Commercial $ — $ — $ — $ — $ — $ — $ — Construction and land development — — — — — — — Residential 549 549 — 549 — 569 24 Commercial — — — — — — — Consumer — — — — — — — Total Impaired Loans $ 549 $ 549 $ — $ 549 $ — $ 569 $ 24 (1) Amounts shown for the twelve month period ended December 31, 2021. The following tables present a summary of past due and non-accrual loans by class as of June 30, 2022 and December 31, 2021. June 30, 2022 30-59 Days 60-89 Days 90 Days or 90 Days or More Past Past More Total Past Total Past Due and Nonaccrual (Dollars in thousands) Due Due Past Due Due Current Loans Still Accruing Loans Real Estate Loans Commercial $ — $ — $ — $ — $ 1,083,194 $ 1,083,194 $ — $ — Construction and land development — — — — 189,644 189,644 — — Residential — — — — 368,370 368,370 — — Commercial — — — — 47,878 47,878 — — Consumer — — — — 651 651 — — Total Loans $ — $ — $ — $ — $ 1,689,737 $ 1,689,737 $ — $ — December 31, 2021 30-59 Days 60-89 Days 90 Days or 90 Days or More Past Past More Total Past Total Past Due and Nonaccrual (Dollars in thousands) Due Due Past Due Due Current Loans Still Accruing Loans Real Estate Loans Commercial $ — $ — $ — $ — $ 968,442 $ 968,442 $ — $ — Construction and land development — — — — 231,090 231,090 — — Residential — — — — 342,491 342,491 — — Commercial — — — — 122,945 122,945 — — Consumer — — — — 586 586 — — Total Loans $ — $ — $ — $ — $ 1,665,554 $ 1,665,554 $ — $ — The following tables present a summary of credit quality information for loans by class as of June 30, 2022 and December 31, 2021. June 30, 2022 Special Total (Dollars in thousands) Pass Mention Substandard Doubtful Loss Loans Real Estate Loans Commercial $ 1,076,274 $ 6,920 $ — $ — $ — $ 1,083,194 Construction and land development 189,644 — — — — 189,644 Residential 368,260 — 110 — — 368,370 Commercial 47,878 — — — — 47,878 Consumer 651 — — — — 651 Total Loans $ 1,682,707 $ 6,920 $ 110 $ — $ — $ 1,689,737 December 31, 2021 Special Total (Dollars in thousands) Pass Mention Substandard Doubtful Loss Loans Real Estate Loans Commercial $ 961,177 $ 7,029 $ 236 $ — $ — $ 968,442 Construction and land development 230,704 — 386 — — 231,090 Residential 342,377 — 114 — — 342,491 Commercial 122,945 — — — — 122,945 Consumer 586 — — — — 586 Total Loans $ 1,657,789 $ 7,029 $ 736 $ — $ — $ 1,665,554 The Company assesses credit quality based on internal risk rating of loans. Internal risk rating definitions are: Pass Special Mention Substandard Doubtful Loss As part of the Company’s loan modification program to borrowers experiencing financial difficulty, the Company may provide concessions to minimize the economic loss and improve long-term loan performance and collectability. The Company had a recorded investment in TDRs of $536 thousand and $549 thousand as of June 30, 2022 and December 31, 2021, respectively. The Company did not have any loans that were determined to be new TDRs during the three or six months ended June 30, 2022 or during the three or six months ended June 30, 2021. As of June 30, 2022 and 2021, all loans in TDR status were in compliance with their modified terms. There were no loans modified in TDRs that subsequently defaulted within 12 months of their modification date during the three or six months ended June 30, 2022 and 2021. All TDRs are considered impaired and impairment is determined on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. As of June 30, 2022 and December 31, 2021, none of the Bank’s TDRs required the recordation of a specific reserve. As of June 30, 2022 and December 31, 2021, there were no additional commitments to disburse funds on loans classified as TDRs. |
Deposits and Borrowings
Deposits and Borrowings | 6 Months Ended |
Jun. 30, 2022 | |
Deposits and Borrowings | |
Deposits and Borrowings | Note 5— Deposits and Borrowings The following tables show the components of the Company’s funding sources. (Dollars in thousands) June 30, 2022 December 31, 2021 Deposits: Non-interest bearing demand deposits (1) $ 512,284 $ 488,838 Interest-bearing demand deposits (1) 738,666 633,901 Savings deposits 112,276 101,376 Time deposits (2) 680,515 657,438 Total Deposits $ 2,043,741 $ 1,881,553 June 30, 2022 December 31, 2021 (Dollars in thousands) Stated Interest Rates Weighted-Average Interest Rate Carrying Value Carrying Value Long-term Debt: Subordinated debt 5.25 - 5.75 % 5.50 % $ 49,560 $ 24,728 FHLB advances (3) — 18,000 Total Long-term Debt: $ 49,560 $ 42,728 (1) Overdraft demand deposits reclassified to loans totaled $8 thousand and $2 thousand at June 30, 2022 and December 31, 2021, respectively. (2) The aggregate amount of certificates of deposit with a minimum denomination of $250,000 was $258.7 million and $255.0 million at June 30, 2022 and December 31, 2021, respectively. (3) The Company’s Federal Home Loan Bank (“FHLB”) advances were called by the FHLB during the second quarter of 2022. The Company obtains certain deposits through the efforts of third-party brokers. Brokered deposits totaled $266.1 million and $217.7 million at June 30, 2022 and December 31, 2021, respectively, and were included primarily in time deposits on the Company’s Consolidated Balance Sheets. Reciprocal IntraFi certificates of deposit totaled $51.3 million and $61.3 million at June 30, 2022 and December 31, 2021, respectively. Reciprocal IntraFi demand and money market deposits totaled $277.0 million and $209.6 million at June 30, 2022 and December 31, 2021, respectively. At June 30, 2022, there were no depositors that represented 5% or more of the Company’s total deposits. The Company completed a private placement of a $25.0 million fixed-to-floating subordinated note on June 15, 2022 (“2022 note”). Subject to limited exceptions permitting earlier redemption, the note is callable, in whole or in part, commencing July 1, 2027. Unless redeemed earlier, the note will mature on July 1, 2032. The note bears interest at a fixed rate of 5.25% to but excluding July 1, 2027, and will bear interest at a floating rate equal to three-month SOFR plus 245 basis points thereafter. The note qualifies as Tier 2 capital for regulatory purposes. The note is carried at its principal amount, less unamortized issuance costs. On July 15, 2022, the earliest available call date, the Company utilized the proceeds from the 2022 note issuance to redeem its $25.0 million fixed-to-floating 5.75% subordinated notes that were issued on July 6, 2017 (“2017 notes”). The Company from time to time uses FHLB advances as a source of funding. These FHLB advances are secured by a blanket floating lien on all real estate mortgage loans secured by 1-to-4 family residential, multi-family and commercial real estate properties. At June 30, 2022, the Company did not have any outstanding FHLB advances. Available borrowing capacity based on collateral value amounted to approximately $373.9 million as of June 30, 2022. The Company also has federal funds lines of credit with correspondent banks available for overnight borrowing of $105 million of which $0 had been drawn upon at June 30, 2022. The Company also has the capacity to borrow up to $28.9 million at the Federal Reserve discount window of which $0 had been drawn upon at June 30, 2022. The Bank had loans pledged at the Federal Reserve discount window totaling $34.9 million as of June 30, 2022. The following table shows the carrying amount of the Company’s time deposits by contractual maturity as of June 30, 2022. (Dollars in thousands) June 30, 2022 2022 $ 227,481 2023 384,886 2024 62,747 2025 2,967 2026 2,364 Thereafter 70 Total $ 680,515 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Income Taxes | Note 6— Income Taxes The Company files income tax returns in the U.S. federal jurisdiction, the Commonwealth of Virginia, the District of Columbia, the State of Maryland, the State of North Carolina and the State of West Virginia. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2018. The following table summarizes the Company’s provision for income taxes charged to operations for the six months ended June 30, 2022 and June 30, 2021, respectively. (Dollars in thousands) June 30, 2022 June 30, 2021 Current tax expense $ 3,349 $ 4,461 Deferred tax expense (benefit) 375 (1,375) Total Income Tax Expense $ 3,724 $ 3,086 The following table presents the factors driving the difference between the amount of income tax determined by applying the statutory federal income tax rate to income before income taxes and the amount of income tax expense reflected in the Consolidated Statements of Income for the six months ended June 30, 2022 and June 30, 2021, respectively. (Dollars in thousands) June 30, 2022 June 30, 2021 Computed “expected” tax expense $ 4,049 $ 2,990 Increase (decrease) in income taxes resulting from: Bank-owned life insurance (40) (43) Tax-exempt interest income (70) (74) State income taxes, net of federal benefit 180 121 Excess tax benefit on share-based compensation (369) (7) Other, net (26) 99 Total $ 3,724 $ 3,086 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 7— Commitments and Contingencies The Company is party to financial instruments with off balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit and financial guarantees. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit and financial guarantees written is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on balance sheet instruments. The Company does not anticipate any material losses as a result of these transactions. The following table summarizes the contract or notional amount of the Company’s exposure to off-balance sheet risk as of June 30, 2022 and December 31, 2021. (Dollars in thousands) June 30, 2022 December 31, 2021 Commitments to extend credit $ 263,686 $ 272,701 Standby letters of credit $ 17,340 $ 14,485 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property and equipment, income-producing commercial properties, and other real estate properties. Unfunded commitments under lines of credit are commitments for possible future extensions of credit to existing customers. Those lines of credit may not be drawn upon to the total extent to which the Company is committed. Standby letters of credit written are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | Note 8— Fair Value Measurements Determination of Fair Value The Company determines the fair values of its financial instruments based on the fair value hierarchy established by ASC Topic 820 – Fair Value Measurement The fair value measurements and disclosures topic specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. Fair Value Hierarchy In accordance with this guidance, the Company groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1 - Valuation is based on quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2 - Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3 - Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation. 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. Assets Measured at Fair Value on a Recurring Basis In accordance with ASC Topic 820, the following describes the valuation techniques used by the Company to measure certain financial assets recorded at fair value on a recurring basis in the financial statements. Securities Available-for-sale and Equity Securities Securities available-for-sale and equity securities with readily determinable fair values are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data (Level 2). If the inputs used to provide the evaluation for certain securities are unobservable and/or there is little, if any, market activity then the security would fall to the lowest level of the hierarchy (Level 3). The Company’s investment portfolio is primarily valued using fair value measurements that are considered to be Level 2. The Company has contracted with a third party portfolio accounting service vendor for valuation of its portfolio of debt securities. The vendor’s primary source for security valuation is ICE Data Services, which evaluates securities based on market data. ICE Data Services utilizes evaluated pricing models that vary by asset class and include available trade, bid, and other market information. Generally, the methodology includes broker quotes, proprietary models, vast descriptive terms and conditions databases, as well as extensive quality control programs. The vendor utilizes proprietary valuation matrices for valuing all municipals securities. The initial curves for determining the price, movement, and yield relationships within the municipal matrices are derived from industry benchmark curves or sourced from a municipal trading desk. The securities are further broken down according to issuer, credit support, state of issuance and rating to incorporate additional spreads to the industry benchmark curves. The following tables summarize the fair value of assets measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021. Fair Value Measurements at June 30, 2022 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Balance as of Identical Assets Observable Inputs Inputs (Dollars in thousands) June 30, 2022 (Level 1) (Level 2) (Level 3) Assets: Securities available-for-sale: U.S. Treasuries $ 60,463 $ — $ 60,463 $ — U.S. government and federal agencies 35,076 — 35,076 — Corporate bonds 2,868 — 2,868 — Collateralized mortgage obligations 41,303 — 41,303 — Tax-exempt municipal 4,595 — 4,595 — Taxable municipal 1,635 — 1,635 — Mortgage-backed 219,194 — 219,194 — Equity securities, at fair value 2,098 2,098 — — Total assets at fair value $ 367,232 $ 2,098 $ 365,134 $ — Fair Value Measurements at December 31, 2021 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Balance as of Identical Assets Observable Inputs Inputs (Dollars in thousands) December 31, 2021 (Level 1) (Level 2) (Level 3) Assets: Securities available-for-sale: U.S. Treasuries $ 30,543 $ — $ 30,543 $ — U.S. government and federal agencies 34,537 — 34,537 — Corporate bonds 1,031 — 1,031 — Collateralized mortgage obligations 39,049 — 39,049 — Tax-exempt municipal 5,262 — 5,262 — Taxable municipal 1,685 — 1,685 — Mortgage-backed 127,193 — 127,193 — Equity securities, at fair value 1,869 1,869 — — Total assets at fair value $ 241,169 $ 1,869 $ 239,300 $ — Assets Measured at Fair Value on a Nonrecurring Basis Under certain circumstances, the Company makes adjustments to fair value for assets and liabilities although they are not measured at fair value on an ongoing basis. The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the financial statements: Impaired Loans Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreements will not be collected when due. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan or the fair value of the collateral. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the Company’s collateral is real estate. The value of real estate collateral is determined utilizing a market valuation approach based on an appraisal, of one year or less, conducted by an independent, licensed appraiser using observable market data (Level 2). However, if the collateral is a house or building in the process of construction or if an appraisal of the property is more than one-year-old and not solely based on observable market comparables or management determines the fair value of the collateral is further impaired below the appraised value, then a Level 3 valuation is considered to measure the fair value. The value of business equipment is based upon an outside appraisal, of one year or less, if deemed significant, or the net book value on the applicable business’s financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Any fair value adjustments are recorded in the period incurred as provision for loan losses on the Consolidated Statements of Income. The Company had no impaired loans with a recorded reserve as of June 30, 2022 or December 31, 2021. Other Real Estate Owned OREO is carried at the lower of cost or fair value less selling costs. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value using observable market data, the Company records the property as Level 2. When an appraised value using observable market data is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the property as Level 3 valuation. Any fair value adjustments are recorded in the period incurred and expensed against current earnings. The Company had no OREO as of June 30, 2022 or December 31, 2021. The following tables present the carrying value and estimated fair value, including the level within the fair value hierarchy, of the Company’s financial instruments as of June 30, 2022 and December 31, 2021. Fair Value Measurements at June 30, 2022 Using Quoted Prices in Active Markets Significant Carrying Value for Identical Significant Other Unobservable Fair Value as of as of June 30, Assets Observable Inputs Inputs June 30, (Dollars in thousands) 2022 (Level 1) (Level 2) (Level 3) 2022 Assets: Cash and cash equivalents $ 120,887 $ 120,887 $ — $ — $ 120,887 Securities: Available-for-sale 365,134 — 365,134 — 365,134 Held-to-maturity 102,265 — 88,862 — 88,862 Equity securities, at fair value 2,098 2,098 — — 2,098 Restricted securities, at cost 4,417 — 4,417 — 4,417 Loans, net of unearned income 1,672,621 — — 1,618,806 1,618,806 Bank owned life insurance 21,188 — 21,188 — 21,188 Accrued interest receivable 4,451 — 4,451 — 4,451 Liabilities: Deposits $ 2,043,741 $ — $ 2,040,017 $ — $ 2,040,017 Subordinated debt 49,560 — — 49,540 49,540 Accrued interest payable 896 — 896 — 896 Fair Value Measurements at December 31, 2021 Using Quoted Prices in Active Markets Significant Carrying Value for Identical Significant Other Unobservable Fair Value as of as of December Assets Observable Inputs Inputs December 31, (Dollars in thousands) 31, 2021 (Level 1) (Level 2) (Level 3) 2021 Assets: Cash and cash equivalents $ 105,799 $ 105,799 $ — $ — $ 105,799 Securities: Available-for-sale 239,300 — 239,300 — 239,300 Held-to-maturity 105,509 — 103,258 — 103,258 Equity securities, at fair value 1,869 1,869 — — 1,869 Restricted securities, at cost 4,951 — 4,951 — 4,951 Loans, net of unearned income 1,646,437 — — 1,659,396 1,659,396 Bank owned life insurance 20,998 — 20,998 — 20,998 Accrued interest receivable 4,943 — 4,943 — 4,943 Liabilities: Deposits $ 1,881,553 $ — $ 1,882,132 $ — $ 1,882,132 FHLB advances 18,000 — 17,837 — 17,837 Subordinated debt 24,728 — — 25,325 25,325 Accrued interest payable 843 — 843 — 843 |
Earnings per Common Share
Earnings per Common Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings per Common Share | |
Earnings per Common Share | Note 9— Earnings per Common Share Earnings per common share is calculated in accordance with ASC 260 - Earnings Per Share Under the two-class method, basic earnings per common share is computed by dividing net earnings allocated to common stock by the weighted-average number of voting common shares outstanding during the applicable period, excluding outstanding participating securities. Diluted earnings per common share is computed using the weighted-average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method. The following table summarizes the computation of earnings per share for the three and six months ended June 30, 2022 and June 30, 2021. Three months ended Six months ended June 30, June 30, 2022 2021 2022 2021 Earnings per common share - basic: Income available to common shareholders (in thousands): Net income $ 7,882 $ 6,079 $ 15,556 $ 11,153 Less: Income attributable to unvested restricted stock awards (34) (29) (70) (55) Net income available to common shareholders $ 7,848 $ 6,050 $ 15,486 $ 11,098 Weighted average shares outstanding: Common shares outstanding, including unvested restricted stock 13,992,414 13,637,112 13,920,387 13,632,393 Less: Unvested restricted stock (60,158) (64,333) (62,330) (67,073) Weighted-average common shares outstanding - basic 13,932,256 13,572,779 13,858,057 13,565,320 Earnings per common share - basic $ 0.56 $ 0.45 $ 1.11 $ 0.82 Earnings per common share - diluted: Income available to common shareholders (in thousands): Net income $ 7,882 $ 6,079 $ 15,556 $ 11,153 Less: Income attributable to unvested restricted stock awards (34) (28) (69) (54) Net income available to common shareholders $ 7,848 $ 6,051 $ 15,487 $ 11,099 Weighted average shares outstanding: Common shares outstanding, including unvested restricted stock 13,992,414 13,637,112 13,920,387 13,632,393 Less: Unvested restricted stock (60,158) (64,333) (62,330) (67,073) Plus: Effect of dilutive options 152,904 295,368 184,148 287,616 Weighted-average common shares outstanding - diluted 14,085,160 13,868,147 14,042,205 13,852,936 Earnings per common share - diluted $ 0.56 $ 0.44 $ 1.10 $ 0.80 Outstanding options to purchase common stock were considered in the computation of diluted earnings per share for the periods presented. All stock options outstanding as of June 30, 2022 were included in computing diluted earnings per share for the three and six month periods ended June 30, 2022, as none had anti-dilutive effects. All stock options outstanding as of June 30, 2021 were included in computing diluted earnings per share for the three month period ended June 30, 2021, as none had anti-dilutive effects. Stock options representing 15,000 weighted average shares were not included in computing diluted earnings per share for the six months June 30, 2021 because their effects were anti-dilutive. |
Stock Based Compensation Plan
Stock Based Compensation Plan | 6 Months Ended |
Jun. 30, 2022 | |
Stock Based Compensation Plan | |
Stock Based Compensation Plan | Note 10— Stock Based Compensation Plan The Company’s share-based compensation plan, approved by stockholders and effective April 28, 2015 (the “2015 Plan”), provides for the grant of share-based awards in the form of incentive stock options, non-incentive stock options, restricted stock and restricted stock units to directors and employees. The Company has reserved 976,211 shares of voting common stock for issuance under the 2015 Plan, which will remain in effect until April 28, 2025. The Company’s Compensation Committee administers the 2015 Plan and has the authority to determine the terms and conditions of each award thereunder. As of June 30, 2022, 323,185 shares are available to grant in future periods under the 2015 Plan. The Company’s previous share-based compensation plan, the 2006 Stock Option Plan (the “2006 Plan”), provided for the grant of share-based awards in the form of incentive stock options and non-incentive stock options to directors and employees. As amended, the 2006 Plan provided for awards of up to 1,490,700 shares. In April 2015, the 2006 Plan was terminated and replaced with the 2015 Plan. Options outstanding prior to April 28, 2015 were granted under the 2006 Plan and shall be subject to the provisions of the 2006 Plan. To date, options granted under the 2015 Plan typically vest over five years and expire 10 years from the grant date. Under the 2015 Plan, the exercise price of options may not be less than 100% of fair market value at the grant date with a maximum term for an option award of 10 years from the date of grant. The table below provides a summary of the stock options activity for the six months ended June 30, 2022. June 30, 2022 Weighted Average Aggregate Intrinsic Shares Exercise Price Value Outstanding at January 1, 2022 534,236 $ 10.45 Granted — — Exercised (282,034) 9.09 Forfeited or expired (3,278) 8.45 Outstanding at June 30, 2022 248,924 12.03 $ 2,617,384 Exercisable at June 30, 2022 248,924 $ 12.03 $ 2,617,384 The aggregate intrinsic value of stock options in the table above represents the total amount by which the current market value of the underlying stock exceeds the exercise price of the option that would have been received by the Company had all option holders exercised their options on June 30, 2022. The intrinsic value of options exercised was $1.2 million and $3.7 million for the three and six months ended June 30, 2022, respectively, and $37 thousand and $203 thousand for the three and six months ended June 30, 2021. These amounts and the intrinsic values noted in the table above change based on changes in the market value of the Company’s voting common stock. The table below provides a summary of the stock options outstanding and exercisable as of June 30, 2022. June 30, 2022 Options Outstanding Options Exercisable Weighted Average Weighted Average Remaining Remaining Number Contractual Life Number Contractual Life Exercise Prices Outstanding in Years Exercisable in Years $0.00 - $11.00 3,937 0.20 3,937 0.20 $11.01 - $12.00 228,925 2.40 228,925 2.40 $12.01 - $16.00 1,062 2.49 1,062 2.49 $16.01 - $18.16 15,000 5.83 15,000 5.83 Total 248,924 2.58 248,924 2.58 There were no options granted during the three or six month periods ended June 30, 2022 or 2021. Share-based compensation expense applicable to the Company’s share-based compensation plans for stock options was $3 thousand and $10 thousand for the three and six months ended June 30, 2021, respectively. The Company did not record any share-based compensation expense applicable to the Company’s share-based compensation plans for stock options during the three or six months ended June 30, 2022. The Company does not have any unrecognized share-based compensation expense related to nonvested options as of June 30, 2022. The table below provides a summary of the restricted stock awards granted under the 2015 plan for the six months ended June 30, 2022. June 30, 2022 Weighted Average Shares Grant Date Fair Value Nonvested at January 1, 2022 75,826 $ 17.25 Granted 500 22.10 Vested (16,290) 17.01 Forfeited (1,500) 16.45 Nonvested at June 30, 2022 58,536 17.38 Compensation expense for restricted stock grants is recognized over the vesting period of the awards based on the fair value of the Company’s voting common stock at issue date. The fair value of the stock was determined using the closing stock price on the day of grant. The restricted stock grants vest over two Share-based compensation expense applicable to the Company’s share-based compensation plans for restricted stock grants was $130 thousand and $125 thousand for the three months ended June 30, 2022 and June 30, 2021, respectively. The total fair value of the shares, which vested during the three months ended June 30, 2022 and 2021, was $65 thousand and $149 thousand, respectively. Share-based compensation expense applicable to the Company’s share-based compensation plans for restricted stock grants was $269 thousand and $267 thousand for the six months ended June 30, 2022 and June 30, 2021, respectively. The total fair value of the shares, which vested during the six months ended June 30, 2022 and 2021, was $371 thousand and $353 thousand, respectively. Unrecognized share-based compensation expense related to nonvested restricted stock grants amounted to $761 thousand as of June 30, 2022. This amount is expected to be recognized over a weighted-average period of 1.5 years. |
Regulatory Capital
Regulatory Capital | 6 Months Ended |
Jun. 30, 2022 | |
Regulatory Capital | |
Regulatory Capital | Note 11— Regulatory Capital The Company is a bank holding company with less than $3 billion in assets and does not (i) have significant off balance sheet exposure, (ii) engage in significant non-banking activities, or (iii) have a material amount of securities registered under the Securities Exchange Act of 1934, as amended. As a result, the Company qualifies as a small bank holding company under the Federal Reserve’s Small Bank Holding Company Policy Statement and is currently not subject to consolidated regulatory capital requirements. The Bank is subject to capital adequacy standards adopted by the Federal Reserve, including the capital rules that implemented the Basel III regulatory capital reforms developed by the Basel Committee on Banking Supervision. Failure to meet minimum capital requirements can initiate certain mandatory – possibly additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on the financial statements. Under capital adequacy guidelines, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Management believes that the Bank met all capital adequacy requirements to which it was subject as of June 30, 2022 and December 31, 2021. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital to risk-weighted assets, common equity Tier 1 to risk-weighted assets, and Tier 1 capital to average assets. In addition to the minimum regulatory capital required for capital adequacy purposes, the Bank is required to maintain a minimum capital conservation buffer above those minimums in the form of common equity. The capital conservation buffer, which was phased in ratably over a four year period beginning January 1, 2016, is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of common equity Tier 1 to risk-weighted assets above the minimum but below the conservation buffer will face constraints on dividends, equity repurchases, and discretionary compensation paid to certain officers, based on the amount of the shortfall. The capital conservation buffer was 2.5% at June 30, 2022, and is applicable for the common equity Tier 1, Tier 1, and total capital ratios. The Bank’s institution specific capital conservation buffer above the required minimums was 7.1% at June 30, 2022. As of June 30, 2022, the most recent notification from the Federal Reserve Bank of Richmond categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the institution must maintain minimum total risk-based, common equity Tier 1, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since the notification that management believes have changed the Bank’s category. The table below provides a summary of the Company’s capital ratios as of June 30, 2022 and December 31, 2021. Minimum To Be Well Capitalized Actual Minimum Capital Requirement (1) Under Prompt Corrective Action (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of June 30, 2022 Total capital (to risk weighted assets) $ 265,874 15.1 % $ 184,570 10.5 % $ 175,781 10.0 % Tier 1 capital (to risk weighted assets) 245,489 14.0 % 149,413 8.5 % 140,624 8.0 % Common equity tier 1 capital (to risk weighted assets) 245,489 14.0 % 123,046 7.0 % 114,257 6.5 % Tier 1 capital (to average assets) 245,489 11.0 % 89,506 4.0 % 111,882 5.0 % As of December 31, 2021 Total capital (to risk weighted assets) $ 252,843 15.3 % $ 173,923 10.5 % $ 165,641 10.0 % Tier 1 capital (to risk weighted assets) 232,458 14.0 % 140,795 8.5 % 132,513 8.0 % Common equity tier 1 capital (to risk weighted assets) 232,458 14.0 % 115,948 7.0 % 107,666 6.5 % Tier 1 capital (to average assets) 232,458 11.0 % 84,799 4.0 % 105,999 5.0 % (1) |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2022 | |
Revenue | |
Revenue | Note 12— Revenue Certain of the Company’s non-interest revenue streams are derived from short-term contacts associated with services provided to deposit account holders as well as other ancillary services, which are accounted for in accordance with ASC 606 – Revenue Recognition The following table shows the components of non-interest income for the three and six months ended June 30, 2022 and June 30, 2021. Three months ended Six months ended June 30, June 30, (Dollars in thousands) 2022 2021 2022 2021 Service charges on deposit accounts (1) Overdrawn account fees $ 22 $ 16 $ 41 $ 31 Account service fees 62 44 120 87 Other service charges and fees (1) Interchange income 105 94 198 178 Other charges and fees 52 22 96 42 Bank owned life insurance 95 100 190 207 Gains on securities — — — 10 Net gains (losses) on premises and equipment (1) — — (1) — Insurance commissions (1) 44 22 265 177 Other operating income (loss) (2) (271) 119 (386) 149 Total non-interest income $ 109 $ 417 $ 523 $ 881 (1) Income within the scope of ASC 606 – Revenue Recognition (2) Includes other operating income (loss) within the scope of ASC 606 – Revenue Recognition amounting to $2 thousand and $6 thousand and a loss of $(273) thousand and $(391) thousand related to the fair value adjustment on equity securities carried at fair value for the three and six months ended June 30, 2022, respectively, which is outside the scope of ASC 606. These securities consist of mutual funds held in a trust and were obtained for the purpose of economically hedging changes in the Company’s nonqualified deferred compensation liability. Includes other operating income (loss) within the scope of ASC 606 – Revenue Recognition amounting to $53 thousand and $51 thousand and a fair value adjustment gain of $66 thousand and $99 thousand outside the scope of ASC 606 for the three and six months ended June 30, 2021, respectively. A description of the Company’s revenue streams accounted for under ASC 606 follows: Service charges on deposit accounts Service charges on deposit accounts consist of overdrawn account fees and account service fees. Overdrawn account fees are recognized at the point in time that the overdraft occurs. Account service fees consist primarily of account analysis and other maintenance fees and are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Payment for service charges on deposit accounts is received immediately or in the following month through a direct charge to customers’ accounts. Other service charges and fees Other service charges and fees are primarily comprised of interchange income and other charges and fees. Interchange income is earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. Other charges and fees include revenue from processing wire transfers, cashier’s checks, and other transaction based services. The Company’s performance obligation for these charges and fees are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. Net gains (losses) on premises and equipment The Company records a gain or loss on the disposition of premises and equipment when control of the property transfers or is involuntarily converted to a monetary asset (e.g., insurance proceeds). This income is reflected in other operating income on the Company’s Consolidated Statements of Income. Insurance commissions The Company performs the function of an insurance intermediary by introducing the policyholder and insurer and is compensated in the form of a commission for placement of an insurance policy based on a percentage of premiums issued and maintained during the period. Revenue is recognized when received. |
Other Operating Expenses
Other Operating Expenses | 6 Months Ended |
Jun. 30, 2022 | |
Other Operating Expenses | |
Other Operating Expenses | Note 13— Other Operating Expenses The following table shows the components of other operating expenses for the three and six months ended June 30, 2022 and June 30, 2021. Three months ended Six months ended June 30, June 30, (Dollars in thousands) 2022 2021 2022 2021 Advertising expense $ 61 $ 110 $ 100 $ 210 Data processing 490 344 928 751 FDIC insurance 140 263 270 487 Professional fees 297 661 571 898 State franchise tax 523 462 1,047 926 Director costs 203 202 415 390 Other operating expenses 489 453 813 908 Total other operating expenses $ 2,203 $ 2,495 $ 4,144 $ 4,570 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | Note 14— Accumulated Other Comprehensive Income (Loss) The following table presents the changes in accumulated other comprehensive income (loss), by category, net of tax for the six months ended June 30, 2022 and June 30, 2021. June 30, 2022 Unrealized Gains on Securities Transferred from Unrealized Gain (Loss) on Available-for-sale to Accumulated Other (Dollars in thousands) Available-for-sale Securities Held-to-maturity Comprehensive Income (Loss) Beginning balance, January 1, 2022 $ (789) $ 389 $ (400) Net change during the period (16,449) (79) (16,528) Ending balance, June 30, 2022 $ (17,238) $ 310 $ (16,928) June 30, 2021 Unrealized Gains on Securities Transferred from Unrealized Gain (Loss) on Available-for-sale to Accumulated Other (Dollars in thousands) Available-for-sale Securities Held-to-maturity Comprehensive Income (Loss) Beginning balance, January 1, 2021 $ 3,786 $ — $ 3,786 Net change during the period (2,442) — (2,442) Ending balance, June 30, 2021 $ 1,344 $ — $ 1,344 The Company did not have any items reclassified out of accumulated other comprehensive income (loss) to net income during the six months ended June 30, 2022 or the three months ended June 30, 2021. Items reclassified out of accumulated other comprehensive income (loss) to net income during the six months ended June 30, 2021 consisted of a net gain on the call of a security classified as available-for-sale. The gain on this transaction totaled $10 thousand and their related tax was $2 thousand. Gains are included in the “Gains on securities” line item and the related tax is presented in the “Income tax expense” line item in the Consolidated Statements of Income. |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Nature of Business and Summary of Significant Accounting Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASUs 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASUs have provided for various minor technical corrections and improvements to the codification as well as other transition matters. Smaller reporting companies who file with the U.S. Securities and Exchange Commission (“SEC”) and all other entities who do not file with the SEC are required to apply the guidance for fiscal years, and interim periods within those years, beginning after December 15, 2022. As part of the Company’s implementation efforts, we have reconciled and validated historical loan, charge-off and recovery data, determined segmentation of the loan portfolio for application of the current expected credit losses (“CECL”) calculation, determined the key assumptions to be utilized in the calculation, selected lifetime loss reserve calculation methods and established a methodology framework, updated our qualitative factor framework, performed parallel runs of the CECL calculation, and engaged an external vendor to assist with model validation commencing in the third quarter of 2022. The ultimate impact of CECL on the allowance for credit losses will depend on the size and composition of the loan portfolio, the portfolio’s credit quality and economic conditions at the time of adoption, as well as any refinements to the CECL model, methodology and key assumptions. At adoption, the Company will record a cumulative effect adjustment to retained earnings for incremental change in the allowance for credit losses. In March 2022, the FASB issued ASU No. 2022-02, “Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings (“TDRs”) and Vintage Disclosures.” ASU 2022-02 addresses areas identified by the FASB as part of its post-implementation review of the credit losses standard (ASU 2016-13) that introduced the CECL model. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the amendments require a public business entity to disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. The amendments in this ASU should be applied prospectively, except for the transition method related to the recognition and measurement of TDRs, where an entity has the option to apply a modified retrospective transition method resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. For entities that have not yet adopted ASU 2016-13 (such as the Company), the effective dates for the provisions of ASU 2022-02 are the same as the effective dates in ASU 2016-13. Early adoption is permitted if an entity has adopted ASU 2016-13; however, the Company does not expect to adopt ASU 2016-13 in advance of the required implementation date. The Company is currently assessing the impact that ASU 2022-02 will have on its consolidated financial statements. |
Investment Securities (Tables)
Investment Securities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Investment Securities | |
Summary of amortized cost and fair value of securities held-to-maturity and available-for-sale | The following table summarizes the amortized cost and fair value of securities held-to-maturity and available-for-sale and the corresponding amounts of gross unrealized gains and losses at June 30, 2022 and December 31, 2021. June 30, 2022 Gross Gross Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains (Losses) Value Held-to-maturity U.S Treasuries $ 6,001 $ — $ (651) $ 5,350 U.S. government and federal agencies 35,630 — (4,245) 31,385 Collateralized mortgage obligations 22,930 — (3,020) 19,910 Taxable municipal 6,081 — (1,010) 5,071 Mortgage-backed 31,623 — (4,477) 27,146 Total Held-to-maturity Securities $ 102,265 $ — $ (13,403) $ 88,862 Available-for-sale U.S Treasuries $ 63,331 $ 22 $ (2,890) $ 60,463 U.S. government and federal agencies 37,685 2 (2,611) 35,076 Corporate bonds 3,000 — (132) 2,868 Collateralized mortgage obligations 45,425 21 (4,143) 41,303 Tax-exempt municipal 5,000 — (405) 4,595 Taxable municipal 1,650 6 (21) 1,635 Mortgage-backed 230,862 99 (11,767) 219,194 Total Available-for-sale Securities $ 386,953 $ 150 $ (21,969) $ 365,134 December 31, 2021 Gross Gross Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains (Losses) Value Held-to-maturity U.S Treasuries $ 6,000 $ — $ (150) $ 5,850 U.S. government and federal agencies 35,720 — (726) 34,994 Collateralized mortgage obligations 25,606 — (534) 25,072 Taxable municipal 6,089 — (194) 5,895 Mortgage-backed 32,094 — (647) 31,447 Total Held-to-maturity Securities $ 105,509 $ — $ (2,251) $ 103,258 Available-for-sale U.S Treasuries $ 30,954 $ — $ (411) $ 30,543 U.S. government and federal agencies 34,803 258 (524) 34,537 Corporate bonds 1,000 31 — 1,031 Collateralized mortgage obligations 39,596 179 (726) 39,049 Tax-exempt municipal 5,007 255 — 5,262 Taxable municipal 1,653 37 (5) 1,685 Mortgage-backed 127,287 1,232 (1,326) 127,193 Total Available-for-sale Securities $ 240,300 $ 1,992 $ (2,992) $ 239,300 |
Schedule of gross unrealized loss position of investments | The following tables summarize the fair value of securities held-to-maturity and securities available-for-sale at June 30, 2022 and December 31, 2021 and the corresponding amounts of gross unrealized losses. Management uses the valuations as of month-end in determining when securities are in an unrealized loss position. Therefore, a security’s market value could have exceeded its amortized cost on other days during the prior twelve-month period. June 30, 2022 Less than 12 Months 12 Months or Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses Value Losses Held-to-maturity U.S Treasuries $ 5,350 $ (651) $ — $ — $ 5,350 $ (651) U.S. government and federal agencies 18,901 (2,655) 12,484 (1,590) 31,385 (4,245) Collateralized mortgage obligations 15,160 (2,253) 4,750 (767) 19,910 (3,020) Taxable municipal 1,281 (269) 3,790 (741) 5,071 (1,010) Mortgage-backed 15,992 (2,445) 11,154 (2,032) 27,146 (4,477) Total Held-to-maturity Securities $ 56,684 $ (8,273) $ 32,178 $ (5,130) $ 88,862 $ (13,403) Available-for-sale U.S Treasuries $ 54,766 $ (2,890) $ — $ — $ 54,766 $ (2,890) U.S. government and federal agencies 20,139 (1,069) 13,051 (1,542) 33,190 (2,611) Corporate bonds 2,868 (132) — — 2,868 (132) Collateralized mortgage obligations 28,456 (2,426) 10,855 (1,717) 39,311 (4,143) Tax-exempt municipal 4,596 (405) — — 4,596 (405) Taxable municipal — — 249 (21) 249 (21) Mortgage-backed 192,498 (9,975) 12,626 (1,792) 205,124 (11,767) Total Available-for-sale Securities $ 303,323 $ (16,897) $ 36,781 $ (5,072) $ 340,104 $ (21,969) December 31, 2021 Less than 12 Months 12 Months or Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses Value Losses Held-to-maturity U.S Treasuries $ 5,851 $ (150) $ — $ — $ 5,851 $ (150) U.S. government and federal agencies 31,617 (645) 3,376 (81) 34,993 (726) Collateralized mortgage obligations 25,072 (534) — — 25,072 (534) Taxable municipal 3,971 (133) 1,923 (61) 5,894 (194) Mortgage-backed 27,995 (573) 3,452 (74) 31,447 (647) Total Held-to-maturity Securities $ 94,506 $ (2,035) $ 8,751 $ (216) $ 103,257 $ (2,251) Available-for-sale U.S Treasuries $ 30,543 $ (411) $ — $ — $ 30,543 $ (411) U.S. government and federal agencies 14,154 (301) 6,877 (223) 21,031 (524) Collateralized mortgage obligations 30,352 (726) — — 30,352 (726) Taxable municipal 265 (5) — — 265 (5) Mortgage-backed 93,129 (1,280) 918 (46) 94,047 (1,326) Total Available-for-sale Securities $ 168,443 $ (2,723) $ 7,795 $ (269) $ 176,238 $ (2,992) |
Contractual maturities of investment securities | The table below summarizes, by major security type, the contractual maturities of our investment securities as of June 30, 2022. Borrowers may have the right to call or prepay certain obligations and as such, the expected maturities of our securities are likely to differ from the scheduled contractual maturities presented below. June 30, 2022 Amortized Fair (Dollars in thousands) Cost Value Held-to-maturity Due in one year or less $ — $ — Due after one year through five years — — Due after five years through ten years 43,292 38,219 Due after ten years 58,973 50,643 Total Held-to-maturity Securities $ 102,265 $ 88,862 Available-for-sale Due in one year or less $ 1,062 $ 1,062 Due after one year through five years 93,701 89,714 Due after five years through ten years 154,748 148,717 Due after ten years 137,442 125,641 Total Available-for-sale Securities $ 386,953 $ 365,134 |
Summary of restricted securities | The table below summarizes the carrying amount of restricted securities as of June 30, 2022 and December 31, 2021. (Dollars in thousands) June 30, 2022 December 31, 2021 Federal Reserve Bank Stock $ 3,284 $ 3,275 Federal Home Loan Bank Stock 1,073 1,616 Community Bankers’ Bank Stock 60 60 Total Restricted Securities $ 4,417 $ 4,951 |
Loans (Tables)
Loans (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Allowance for Loan Losses | |
Schedule of composition of the loan portfolio | (Dollars in thousands) June 30, 2022 December 31, 2021 Real Estate Loans: Commercial $ 1,083,194 $ 968,442 Construction and land development 189,644 231,090 Residential 368,370 342,491 Commercial - Non-Real Estate: Commercial loans 47,878 122,945 Consumer - Non-Real Estate: Consumer loans 651 586 Total Gross Loans $ 1,689,737 $ 1,665,554 Allowance for loan losses (20,031) (20,032) Net deferred loan costs 2,915 915 Total net loans $ 1,672,621 $ 1,646,437 |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Allowance for Loan Losses | |
Schedule of allowance for loan losses activity and balance | The following tables present the activity in the allowance for loan losses for the six months ended June 30, 2022 and June 30, 2021. June 30, 2022 Real Estate Construction & Land Dollars in thousands Commercial Development Residential Commercial Consumer Unallocated Total Allowance for loan losses: Beginning Balance, December 31, 2021 $ 13,091 $ 2,824 $ 2,769 $ 711 $ 5 $ 632 $ 20,032 Charge-offs (1) — — — — — (1) Recoveries — — — — — — — Provision 581 (23) (109) (72) 2 (379) — Ending Balance, June 30, 2022 $ 13,671 $ 2,801 $ 2,660 $ 639 $ 7 $ 253 $ 20,031 June 30, 2021 Real Estate Construction & Land Dollars in thousands Commercial Development Residential Commercial Consumer Unallocated Total Allowance for loan losses: Beginning Balance, December 31, 2020 $ 10,602 $ 2,617 $ 2,430 $ 1,007 $ 11 $ 350 $ 17,017 Charge-offs (90) — — (1) — — (91) Recoveries — — — — — — — Provision 2,234 94 (10) (268) (2) 407 2,455 Ending Balance, June 30, 2021 $ 12,746 $ 2,711 $ 2,420 $ 738 $ 9 $ 757 $ 19,381 The following tables present the balance of the allowance for loan losses, the allowance by impairment methodology, total loans, and loans by impairment methodology as of June 30, 2022 and December 31, 2021. June 30, 2022 Real Estate Construction & Land Dollars in thousands Commercial Development Residential Commercial Consumer Unallocated Total Allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Collectively evaluated for impairment 13,671 2,801 2,660 639 7 253 20,031 Total allowance $ 13,671 $ 2,801 $ 2,660 $ 639 $ 7 $ 253 $ 20,031 Loans: Individually evaluated for impairment $ — $ — $ 536 $ — $ — $ — $ 536 Collectively evaluated for impairment 1,083,194 189,644 367,834 47,878 651 — 1,689,201 Total loans $ 1,083,194 $ 189,644 $ 368,370 $ 47,878 $ 651 $ — $ 1,689,737 December 31, 2021 Real Estate Construction & Land Dollars in thousands Commercial Development Residential Commercial Consumer Unallocated Total Allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Collectively evaluated for impairment 13,091 2,824 2,769 711 5 632 20,032 Total allowance $ 13,091 $ 2,824 $ 2,769 $ 711 $ 5 $ 632 $ 20,032 Loans: Individually evaluated for impairment $ — $ — $ 549 $ — $ — $ — $ 549 Collectively evaluated for impairment 968,442 231,090 341,942 122,945 586 — 1,665,005 Total loans $ 968,442 $ 231,090 $ 342,491 $ 122,945 $ 586 $ — $ 1,665,554 |
Schedule of impaired loans | The following tables present a summary of impaired loans and the related allowance as of June 30, 2022 and December 31, 2021. June 30, 2022 Recorded Recorded Unpaid Investment Investment Total Average Interest Principal with with Recorded Related Recorded Income (Dollars in thousands) Balance No Allowance Allowance Investment Allowance Investment Recognized Real Estate Loans Commercial $ — $ — $ — $ — $ — $ — $ — Construction and land development — — — — — — — Residential 536 536 — 536 — 541 9 Commercial — — — — — — — Consumer — — — — — — — Total Impaired Loans $ 536 $ 536 $ — $ 536 $ — $ 541 $ 9 December 31, 2021 Recorded Recorded Unpaid Investment Investment Total Average Interest Principal with with Recorded Related Recorded Income (Dollars in thousands) Balance No Allowance Allowance Investment Allowance Investment (1) Recognized (1) Real Estate Loans Commercial $ — $ — $ — $ — $ — $ — $ — Construction and land development — — — — — — — Residential 549 549 — 549 — 569 24 Commercial — — — — — — — Consumer — — — — — — — Total Impaired Loans $ 549 $ 549 $ — $ 549 $ — $ 569 $ 24 (1) Amounts shown for the twelve month period ended December 31, 2021. |
Schedule of past due and non-accrual loans | The following tables present a summary of past due and non-accrual loans by class as of June 30, 2022 and December 31, 2021. June 30, 2022 30-59 Days 60-89 Days 90 Days or 90 Days or More Past Past More Total Past Total Past Due and Nonaccrual (Dollars in thousands) Due Due Past Due Due Current Loans Still Accruing Loans Real Estate Loans Commercial $ — $ — $ — $ — $ 1,083,194 $ 1,083,194 $ — $ — Construction and land development — — — — 189,644 189,644 — — Residential — — — — 368,370 368,370 — — Commercial — — — — 47,878 47,878 — — Consumer — — — — 651 651 — — Total Loans $ — $ — $ — $ — $ 1,689,737 $ 1,689,737 $ — $ — December 31, 2021 30-59 Days 60-89 Days 90 Days or 90 Days or More Past Past More Total Past Total Past Due and Nonaccrual (Dollars in thousands) Due Due Past Due Due Current Loans Still Accruing Loans Real Estate Loans Commercial $ — $ — $ — $ — $ 968,442 $ 968,442 $ — $ — Construction and land development — — — — 231,090 231,090 — — Residential — — — — 342,491 342,491 — — Commercial — — — — 122,945 122,945 — — Consumer — — — — 586 586 — — Total Loans $ — $ — $ — $ — $ 1,665,554 $ 1,665,554 $ — $ — |
Schedule of credit quality information | The following tables present a summary of credit quality information for loans by class as of June 30, 2022 and December 31, 2021. June 30, 2022 Special Total (Dollars in thousands) Pass Mention Substandard Doubtful Loss Loans Real Estate Loans Commercial $ 1,076,274 $ 6,920 $ — $ — $ — $ 1,083,194 Construction and land development 189,644 — — — — 189,644 Residential 368,260 — 110 — — 368,370 Commercial 47,878 — — — — 47,878 Consumer 651 — — — — 651 Total Loans $ 1,682,707 $ 6,920 $ 110 $ — $ — $ 1,689,737 December 31, 2021 Special Total (Dollars in thousands) Pass Mention Substandard Doubtful Loss Loans Real Estate Loans Commercial $ 961,177 $ 7,029 $ 236 $ — $ — $ 968,442 Construction and land development 230,704 — 386 — — 231,090 Residential 342,377 — 114 — — 342,491 Commercial 122,945 — — — — 122,945 Consumer 586 — — — — 586 Total Loans $ 1,657,789 $ 7,029 $ 736 $ — $ — $ 1,665,554 |
Deposits and Borrowings (Tables
Deposits and Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Deposits and Borrowings | |
Schedule of deposits | The following tables show the components of the Company’s funding sources. (Dollars in thousands) June 30, 2022 December 31, 2021 Deposits: Non-interest bearing demand deposits (1) $ 512,284 $ 488,838 Interest-bearing demand deposits (1) 738,666 633,901 Savings deposits 112,276 101,376 Time deposits (2) 680,515 657,438 Total Deposits $ 2,043,741 $ 1,881,553 |
Schedule of long-term debt | June 30, 2022 December 31, 2021 (Dollars in thousands) Stated Interest Rates Weighted-Average Interest Rate Carrying Value Carrying Value Long-term Debt: Subordinated debt 5.25 - 5.75 % 5.50 % $ 49,560 $ 24,728 FHLB advances (3) — 18,000 Total Long-term Debt: $ 49,560 $ 42,728 (1) Overdraft demand deposits reclassified to loans totaled $8 thousand and $2 thousand at June 30, 2022 and December 31, 2021, respectively. (2) The aggregate amount of certificates of deposit with a minimum denomination of $250,000 was $258.7 million and $255.0 million at June 30, 2022 and December 31, 2021, respectively. (3) The Company’s Federal Home Loan Bank (“FHLB”) advances were called by the FHLB during the second quarter of 2022. |
Schedule of carrying amount of the time deposits by contractual maturity | (Dollars in thousands) June 30, 2022 2022 $ 227,481 2023 384,886 2024 62,747 2025 2,967 2026 2,364 Thereafter 70 Total $ 680,515 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Schedule of provision for income taxes | (Dollars in thousands) June 30, 2022 June 30, 2021 Current tax expense $ 3,349 $ 4,461 Deferred tax expense (benefit) 375 (1,375) Total Income Tax Expense $ 3,724 $ 3,086 |
Schedule of income tax rate reconciliation | (Dollars in thousands) June 30, 2022 June 30, 2021 Computed “expected” tax expense $ 4,049 $ 2,990 Increase (decrease) in income taxes resulting from: Bank-owned life insurance (40) (43) Tax-exempt interest income (70) (74) State income taxes, net of federal benefit 180 121 Excess tax benefit on share-based compensation (369) (7) Other, net (26) 99 Total $ 3,724 $ 3,086 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies | |
Summary of the contract or notional amount of the Company's exposure to off-balance sheet risk | (Dollars in thousands) June 30, 2022 December 31, 2021 Commitments to extend credit $ 263,686 $ 272,701 Standby letters of credit $ 17,340 $ 14,485 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Measurements | |
Summary of fair value of assets measured at fair value on a recurring basis | Fair Value Measurements at June 30, 2022 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Balance as of Identical Assets Observable Inputs Inputs (Dollars in thousands) June 30, 2022 (Level 1) (Level 2) (Level 3) Assets: Securities available-for-sale: U.S. Treasuries $ 60,463 $ — $ 60,463 $ — U.S. government and federal agencies 35,076 — 35,076 — Corporate bonds 2,868 — 2,868 — Collateralized mortgage obligations 41,303 — 41,303 — Tax-exempt municipal 4,595 — 4,595 — Taxable municipal 1,635 — 1,635 — Mortgage-backed 219,194 — 219,194 — Equity securities, at fair value 2,098 2,098 — — Total assets at fair value $ 367,232 $ 2,098 $ 365,134 $ — Fair Value Measurements at December 31, 2021 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Balance as of Identical Assets Observable Inputs Inputs (Dollars in thousands) December 31, 2021 (Level 1) (Level 2) (Level 3) Assets: Securities available-for-sale: U.S. Treasuries $ 30,543 $ — $ 30,543 $ — U.S. government and federal agencies 34,537 — 34,537 — Corporate bonds 1,031 — 1,031 — Collateralized mortgage obligations 39,049 — 39,049 — Tax-exempt municipal 5,262 — 5,262 — Taxable municipal 1,685 — 1,685 — Mortgage-backed 127,193 — 127,193 — Equity securities, at fair value 1,869 1,869 — — Total assets at fair value $ 241,169 $ 1,869 $ 239,300 $ — |
Summary of carrying value and estimated fair value of financial instruments | The following tables present the carrying value and estimated fair value, including the level within the fair value hierarchy, of the Company’s financial instruments as of June 30, 2022 and December 31, 2021. Fair Value Measurements at June 30, 2022 Using Quoted Prices in Active Markets Significant Carrying Value for Identical Significant Other Unobservable Fair Value as of as of June 30, Assets Observable Inputs Inputs June 30, (Dollars in thousands) 2022 (Level 1) (Level 2) (Level 3) 2022 Assets: Cash and cash equivalents $ 120,887 $ 120,887 $ — $ — $ 120,887 Securities: Available-for-sale 365,134 — 365,134 — 365,134 Held-to-maturity 102,265 — 88,862 — 88,862 Equity securities, at fair value 2,098 2,098 — — 2,098 Restricted securities, at cost 4,417 — 4,417 — 4,417 Loans, net of unearned income 1,672,621 — — 1,618,806 1,618,806 Bank owned life insurance 21,188 — 21,188 — 21,188 Accrued interest receivable 4,451 — 4,451 — 4,451 Liabilities: Deposits $ 2,043,741 $ — $ 2,040,017 $ — $ 2,040,017 Subordinated debt 49,560 — — 49,540 49,540 Accrued interest payable 896 — 896 — 896 Fair Value Measurements at December 31, 2021 Using Quoted Prices in Active Markets Significant Carrying Value for Identical Significant Other Unobservable Fair Value as of as of December Assets Observable Inputs Inputs December 31, (Dollars in thousands) 31, 2021 (Level 1) (Level 2) (Level 3) 2021 Assets: Cash and cash equivalents $ 105,799 $ 105,799 $ — $ — $ 105,799 Securities: Available-for-sale 239,300 — 239,300 — 239,300 Held-to-maturity 105,509 — 103,258 — 103,258 Equity securities, at fair value 1,869 1,869 — — 1,869 Restricted securities, at cost 4,951 — 4,951 — 4,951 Loans, net of unearned income 1,646,437 — — 1,659,396 1,659,396 Bank owned life insurance 20,998 — 20,998 — 20,998 Accrued interest receivable 4,943 — 4,943 — 4,943 Liabilities: Deposits $ 1,881,553 $ — $ 1,882,132 $ — $ 1,882,132 FHLB advances 18,000 — 17,837 — 17,837 Subordinated debt 24,728 — — 25,325 25,325 Accrued interest payable 843 — 843 — 843 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings per Common Share | |
Schedule of computation of earnings per share | The following table summarizes the computation of earnings per share for the three and six months ended June 30, 2022 and June 30, 2021. Three months ended Six months ended June 30, June 30, 2022 2021 2022 2021 Earnings per common share - basic: Income available to common shareholders (in thousands): Net income $ 7,882 $ 6,079 $ 15,556 $ 11,153 Less: Income attributable to unvested restricted stock awards (34) (29) (70) (55) Net income available to common shareholders $ 7,848 $ 6,050 $ 15,486 $ 11,098 Weighted average shares outstanding: Common shares outstanding, including unvested restricted stock 13,992,414 13,637,112 13,920,387 13,632,393 Less: Unvested restricted stock (60,158) (64,333) (62,330) (67,073) Weighted-average common shares outstanding - basic 13,932,256 13,572,779 13,858,057 13,565,320 Earnings per common share - basic $ 0.56 $ 0.45 $ 1.11 $ 0.82 Earnings per common share - diluted: Income available to common shareholders (in thousands): Net income $ 7,882 $ 6,079 $ 15,556 $ 11,153 Less: Income attributable to unvested restricted stock awards (34) (28) (69) (54) Net income available to common shareholders $ 7,848 $ 6,051 $ 15,487 $ 11,099 Weighted average shares outstanding: Common shares outstanding, including unvested restricted stock 13,992,414 13,637,112 13,920,387 13,632,393 Less: Unvested restricted stock (60,158) (64,333) (62,330) (67,073) Plus: Effect of dilutive options 152,904 295,368 184,148 287,616 Weighted-average common shares outstanding - diluted 14,085,160 13,868,147 14,042,205 13,852,936 Earnings per common share - diluted $ 0.56 $ 0.44 $ 1.10 $ 0.80 |
Stock Based Compensation Plan (
Stock Based Compensation Plan (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Stock Based Compensation Plan | |
Summary of stock options activity | June 30, 2022 Weighted Average Aggregate Intrinsic Shares Exercise Price Value Outstanding at January 1, 2022 534,236 $ 10.45 Granted — — Exercised (282,034) 9.09 Forfeited or expired (3,278) 8.45 Outstanding at June 30, 2022 248,924 12.03 $ 2,617,384 Exercisable at June 30, 2022 248,924 $ 12.03 $ 2,617,384 |
Summary of stock options outstanding and exercisable | June 30, 2022 Options Outstanding Options Exercisable Weighted Average Weighted Average Remaining Remaining Number Contractual Life Number Contractual Life Exercise Prices Outstanding in Years Exercisable in Years $0.00 - $11.00 3,937 0.20 3,937 0.20 $11.01 - $12.00 228,925 2.40 228,925 2.40 $12.01 - $16.00 1,062 2.49 1,062 2.49 $16.01 - $18.16 15,000 5.83 15,000 5.83 Total 248,924 2.58 248,924 2.58 |
Summary of restricted stock awards | The table below provides a summary of the restricted stock awards granted under the 2015 plan for the six months ended June 30, 2022. June 30, 2022 Weighted Average Shares Grant Date Fair Value Nonvested at January 1, 2022 75,826 $ 17.25 Granted 500 22.10 Vested (16,290) 17.01 Forfeited (1,500) 16.45 Nonvested at June 30, 2022 58,536 17.38 |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Regulatory Capital | |
Schedule of compliance with regulatory capital requirements under banking regulations | Minimum To Be Well Capitalized Actual Minimum Capital Requirement (1) Under Prompt Corrective Action (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of June 30, 2022 Total capital (to risk weighted assets) $ 265,874 15.1 % $ 184,570 10.5 % $ 175,781 10.0 % Tier 1 capital (to risk weighted assets) 245,489 14.0 % 149,413 8.5 % 140,624 8.0 % Common equity tier 1 capital (to risk weighted assets) 245,489 14.0 % 123,046 7.0 % 114,257 6.5 % Tier 1 capital (to average assets) 245,489 11.0 % 89,506 4.0 % 111,882 5.0 % As of December 31, 2021 Total capital (to risk weighted assets) $ 252,843 15.3 % $ 173,923 10.5 % $ 165,641 10.0 % Tier 1 capital (to risk weighted assets) 232,458 14.0 % 140,795 8.5 % 132,513 8.0 % Common equity tier 1 capital (to risk weighted assets) 232,458 14.0 % 115,948 7.0 % 107,666 6.5 % Tier 1 capital (to average assets) 232,458 11.0 % 84,799 4.0 % 105,999 5.0 % (1) |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue | |
Schedule of components of non-interest income | The following table shows the components of non-interest income for the three and six months ended June 30, 2022 and June 30, 2021. Three months ended Six months ended June 30, June 30, (Dollars in thousands) 2022 2021 2022 2021 Service charges on deposit accounts (1) Overdrawn account fees $ 22 $ 16 $ 41 $ 31 Account service fees 62 44 120 87 Other service charges and fees (1) Interchange income 105 94 198 178 Other charges and fees 52 22 96 42 Bank owned life insurance 95 100 190 207 Gains on securities — — — 10 Net gains (losses) on premises and equipment (1) — — (1) — Insurance commissions (1) 44 22 265 177 Other operating income (loss) (2) (271) 119 (386) 149 Total non-interest income $ 109 $ 417 $ 523 $ 881 (1) Income within the scope of ASC 606 – Revenue Recognition (2) Includes other operating income (loss) within the scope of ASC 606 – Revenue Recognition amounting to $2 thousand and $6 thousand and a loss of $(273) thousand and $(391) thousand related to the fair value adjustment on equity securities carried at fair value for the three and six months ended June 30, 2022, respectively, which is outside the scope of ASC 606. These securities consist of mutual funds held in a trust and were obtained for the purpose of economically hedging changes in the Company’s nonqualified deferred compensation liability. Includes other operating income (loss) within the scope of ASC 606 – Revenue Recognition amounting to $53 thousand and $51 thousand and a fair value adjustment gain of $66 thousand and $99 thousand outside the scope of ASC 606 for the three and six months ended June 30, 2021, respectively. |
Other Operating Expenses (Table
Other Operating Expenses (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Other Operating Expenses | |
Schedule of components of other operating expenses | The following table shows the components of other operating expenses for the three and six months ended June 30, 2022 and June 30, 2021. Three months ended Six months ended June 30, June 30, (Dollars in thousands) 2022 2021 2022 2021 Advertising expense $ 61 $ 110 $ 100 $ 210 Data processing 490 344 928 751 FDIC insurance 140 263 270 487 Professional fees 297 661 571 898 State franchise tax 523 462 1,047 926 Director costs 203 202 415 390 Other operating expenses 489 453 813 908 Total other operating expenses $ 2,203 $ 2,495 $ 4,144 $ 4,570 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss) | |
Schedule of changes in other comprehensive income (loss) | June 30, 2022 Unrealized Gains on Securities Transferred from Unrealized Gain (Loss) on Available-for-sale to Accumulated Other (Dollars in thousands) Available-for-sale Securities Held-to-maturity Comprehensive Income (Loss) Beginning balance, January 1, 2022 $ (789) $ 389 $ (400) Net change during the period (16,449) (79) (16,528) Ending balance, June 30, 2022 $ (17,238) $ 310 $ (16,928) June 30, 2021 Unrealized Gains on Securities Transferred from Unrealized Gain (Loss) on Available-for-sale to Accumulated Other (Dollars in thousands) Available-for-sale Securities Held-to-maturity Comprehensive Income (Loss) Beginning balance, January 1, 2021 $ 3,786 $ — $ 3,786 Net change during the period (2,442) — (2,442) Ending balance, June 30, 2021 $ 1,344 $ — $ 1,344 |
Investment Securities - Amortiz
Investment Securities - Amortized cost and fair value of securities held-to-maturity and available-for-sale (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Held-to-maturity | ||
Amortized Cost | $ 102,265 | $ 105,509 |
Gross Unrealized (Losses) | (13,403) | (2,251) |
Held-to-maturity Securities | 88,862 | 103,258 |
Available-for-sale | ||
Amortized Cost | 386,953 | 240,300 |
Gross Unrealized Gains | 150 | 1,992 |
Gross Unrealized (Losses) | (21,969) | (2,992) |
Available-for-sale Securities | 365,134 | 239,300 |
U.S Treasuries | ||
Held-to-maturity | ||
Amortized Cost | 6,001 | 6,000 |
Gross Unrealized (Losses) | (651) | (150) |
Held-to-maturity Securities | 5,350 | 5,850 |
Available-for-sale | ||
Amortized Cost | 63,331 | 30,954 |
Gross Unrealized Gains | 22 | |
Gross Unrealized (Losses) | (2,890) | (411) |
Available-for-sale Securities | 60,463 | 30,543 |
U.S. government and federal agencies | ||
Held-to-maturity | ||
Amortized Cost | 35,630 | 35,720 |
Gross Unrealized (Losses) | (4,245) | (726) |
Held-to-maturity Securities | 31,385 | 34,994 |
Available-for-sale | ||
Amortized Cost | 37,685 | 34,803 |
Gross Unrealized Gains | 2 | 258 |
Gross Unrealized (Losses) | (2,611) | (524) |
Available-for-sale Securities | 35,076 | 34,537 |
Collateralized mortgage obligations | ||
Held-to-maturity | ||
Amortized Cost | 22,930 | 25,606 |
Gross Unrealized (Losses) | (3,020) | (534) |
Held-to-maturity Securities | 19,910 | 25,072 |
Available-for-sale | ||
Amortized Cost | 45,425 | 39,596 |
Gross Unrealized Gains | 21 | 179 |
Gross Unrealized (Losses) | (4,143) | (726) |
Available-for-sale Securities | 41,303 | 39,049 |
Taxable municipal | ||
Held-to-maturity | ||
Amortized Cost | 6,081 | 6,089 |
Gross Unrealized (Losses) | (1,010) | (194) |
Held-to-maturity Securities | 5,071 | 5,895 |
Available-for-sale | ||
Amortized Cost | 1,650 | 1,653 |
Gross Unrealized Gains | 6 | 37 |
Gross Unrealized (Losses) | (21) | (5) |
Available-for-sale Securities | 1,635 | 1,685 |
Mortgage-backed | ||
Held-to-maturity | ||
Amortized Cost | 31,623 | 32,094 |
Gross Unrealized (Losses) | (4,477) | (647) |
Held-to-maturity Securities | 27,146 | 31,447 |
Available-for-sale | ||
Amortized Cost | 230,862 | 127,287 |
Gross Unrealized Gains | 99 | 1,232 |
Gross Unrealized (Losses) | (11,767) | (1,326) |
Available-for-sale Securities | 219,194 | 127,193 |
Corporate bonds | ||
Available-for-sale | ||
Amortized Cost | 3,000 | 1,000 |
Gross Unrealized Gains | 31 | |
Gross Unrealized (Losses) | (132) | |
Available-for-sale Securities | 2,868 | 1,031 |
Tax-exempt municipal | ||
Available-for-sale | ||
Amortized Cost | 5,000 | 5,007 |
Gross Unrealized Gains | 255 | |
Gross Unrealized (Losses) | (405) | |
Available-for-sale Securities | $ 4,595 | $ 5,262 |
Investment Securities - Fair va
Investment Securities - Fair value of securities held-to-maturity and available-for-sale (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Held-to-maturity, Fair Value | ||
Fair Value, Less than 12 Months | $ 56,684 | $ 94,506 |
Fair Value, 12 Months or Longer | 32,178 | 8,751 |
Fair Value | 88,862 | 103,257 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (8,273) | (2,035) |
Gross Unrealized Losses, 12 Months or Longer | (5,130) | (216) |
Gross Unrealized Losses | (13,403) | (2,251) |
Available-for-sale, Fair Value | ||
Fair Value, Less than 12 Months | 303,323 | 168,443 |
Fair Value, 12 Months or Longer | 36,781 | 7,795 |
Fair Value | 340,104 | 176,238 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (16,897) | (2,723) |
Gross Unrealized Losses, 12 Months or Longer | (5,072) | (269) |
Gross Unrealized Losses | (21,969) | (2,992) |
U.S Treasuries | ||
Held-to-maturity, Fair Value | ||
Fair Value, Less than 12 Months | 5,350 | 5,851 |
Fair Value | 5,350 | 5,851 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (651) | (150) |
Gross Unrealized Losses | (651) | (150) |
Available-for-sale, Fair Value | ||
Fair Value, Less than 12 Months | 54,766 | 30,543 |
Fair Value | 54,766 | 30,543 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (2,890) | (411) |
Gross Unrealized Losses | (2,890) | (411) |
U.S. government and federal agencies | ||
Held-to-maturity, Fair Value | ||
Fair Value, Less than 12 Months | 18,901 | 31,617 |
Fair Value, 12 Months or Longer | 12,484 | 3,376 |
Fair Value | 31,385 | 34,993 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (2,655) | (645) |
Gross Unrealized Losses, 12 Months or Longer | (1,590) | (81) |
Gross Unrealized Losses | (4,245) | (726) |
Available-for-sale, Fair Value | ||
Fair Value, Less than 12 Months | 20,139 | 14,154 |
Fair Value, 12 Months or Longer | 13,051 | 6,877 |
Fair Value | 33,190 | 21,031 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (1,069) | (301) |
Gross Unrealized Losses, 12 Months or Longer | (1,542) | (223) |
Gross Unrealized Losses | (2,611) | (524) |
Collateralized mortgage obligations | ||
Held-to-maturity, Fair Value | ||
Fair Value, Less than 12 Months | 15,160 | 25,072 |
Fair Value, 12 Months or Longer | 4,750 | |
Fair Value | 19,910 | 25,072 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (2,253) | (534) |
Gross Unrealized Losses, 12 Months or Longer | (767) | |
Gross Unrealized Losses | (3,020) | (534) |
Available-for-sale, Fair Value | ||
Fair Value, Less than 12 Months | 28,456 | 30,352 |
Fair Value, 12 Months or Longer | 10,855 | |
Fair Value | 39,311 | 30,352 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (2,426) | (726) |
Gross Unrealized Losses, 12 Months or Longer | (1,717) | |
Gross Unrealized Losses | (4,143) | (726) |
Taxable municipal | ||
Held-to-maturity, Fair Value | ||
Fair Value, Less than 12 Months | 1,281 | 3,971 |
Fair Value, 12 Months or Longer | 3,790 | 1,923 |
Fair Value | 5,071 | 5,894 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (269) | (133) |
Gross Unrealized Losses, 12 Months or Longer | (741) | (61) |
Gross Unrealized Losses | (1,010) | (194) |
Available-for-sale, Fair Value | ||
Fair Value, Less than 12 Months | 265 | |
Fair Value, 12 Months or Longer | 249 | |
Fair Value | 249 | 265 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (5) | |
Gross Unrealized Losses, 12 Months or Longer | (21) | |
Gross Unrealized Losses | (21) | (5) |
Mortgage-backed | ||
Held-to-maturity, Fair Value | ||
Fair Value, Less than 12 Months | 15,992 | 27,995 |
Fair Value, 12 Months or Longer | 11,154 | 3,452 |
Fair Value | 27,146 | 31,447 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (2,445) | (573) |
Gross Unrealized Losses, 12 Months or Longer | (2,032) | (74) |
Gross Unrealized Losses | (4,477) | (647) |
Available-for-sale, Fair Value | ||
Fair Value, Less than 12 Months | 192,498 | 93,129 |
Fair Value, 12 Months or Longer | 12,626 | 918 |
Fair Value | 205,124 | 94,047 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (9,975) | (1,280) |
Gross Unrealized Losses, 12 Months or Longer | (1,792) | (46) |
Gross Unrealized Losses | (11,767) | $ (1,326) |
Corporate bonds | ||
Available-for-sale, Fair Value | ||
Fair Value, Less than 12 Months | 2,868 | |
Fair Value | 2,868 | |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (132) | |
Gross Unrealized Losses | (132) | |
Tax-exempt municipal | ||
Available-for-sale, Fair Value | ||
Fair Value, Less than 12 Months | 4,596 | |
Fair Value | 4,596 | |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (405) | |
Gross Unrealized Losses | $ (405) |
Investment Securities - Contrac
Investment Securities - Contractual maturities of investment securities (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Held-to-maturity, Amortized Cost | |
Due after five years through ten years | $ 43,292 |
Due after ten years | 58,973 |
Total Held-to-maturity Securities | 102,265 |
Held-to-maturity, Fair Value | |
Due after five years through ten years | 38,219 |
Due after ten years | 50,643 |
Total Held-to-maturity Securities | 88,862 |
Available-for-sale, Amortized Cost | |
Due in one year or less | 1,062 |
Due after one year through five years | 93,701 |
Due after five years through ten years | 154,748 |
Due after ten years | 137,442 |
Total Available-for-sale Securities | 386,953 |
Available-for-sale, Fair Value | |
Due in one year or less | 1,062 |
Due after one year through five years | 89,714 |
Due after five years through ten years | 148,717 |
Due after ten years | 125,641 |
Total Available-for-sale Securities | $ 365,134 |
Investment Securities - Carryin
Investment Securities - Carrying amount of restricted securities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Investment Securities | ||
Federal Reserve Bank Stock | $ 3,284 | $ 3,275 |
Federal Home Loan Bank Stock | 1,073 | 1,616 |
Community Bankers' Bank Stock | 60 | 60 |
Total Restricted Securities | $ 4,417 | $ 4,951 |
Investment Securities - Additio
Investment Securities - Additional information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) item loan | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) item | |
Marketable Securities [Line Items] | |||||
Transferred investment securities, carrying value | $ 99,000 | ||||
Transferred investment securities, unrealized gain | 593 | ||||
Proceeds from sales of available-for-sale securities | $ 0 | $ 0 | $ 0 | $ 0 | |
Gross gains of available-for-sale debt securities | 0 | 0 | 10 | ||
Pledged securities, market value | 96,600 | 96,600 | 78,600 | ||
Pledged securities, amortized cost | 106,300 | $ 106,300 | $ 78,800 | ||
Estimated weighted average remaining life | 4 years 9 months 18 days | 4 years 6 months | |||
Equity securities with readily determinable fair values | 2,098 | $ 2,098 | $ 1,869 | ||
Non-interest income | |||||
Marketable Securities [Line Items] | |||||
Loss on investment | $ 273 | $ 391 | |||
Gain on investments | $ 66 | $ 99 | |||
U.S Treasuries | |||||
Marketable Securities [Line Items] | |||||
Number of positions | item | 31 | 15 | |||
U.S. government and federal agencies | |||||
Marketable Securities [Line Items] | |||||
Number of positions | item | 49 | 40 | |||
Collateralized mortgage obligations | |||||
Marketable Securities [Line Items] | |||||
Number of positions | item | 52 | 35 | |||
Corporate bonds | |||||
Marketable Securities [Line Items] | |||||
Number of positions | loan | 3 | ||||
Municipal Securities | |||||
Marketable Securities [Line Items] | |||||
Number of positions | item | 15 | 8 | |||
Mortgage-backed | |||||
Marketable Securities [Line Items] | |||||
Number of positions | item | 207 | 75 |
Loans (Details)
Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total Gross Loans | $ 1,689,737 | $ 1,665,554 | ||
Allowance for loan losses | (20,031) | (20,032) | $ (19,381) | $ (17,017) |
Net deferred loan costs | 2,915 | 915 | ||
Net loans | 1,672,621 | 1,646,437 | ||
Real Estate Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Allowance for loan losses | (12,746) | (10,602) | ||
Real Estate Loans | Commercial Real Estate | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total Gross Loans | 1,083,194 | 968,442 | ||
Allowance for loan losses | (13,671) | (13,091) | ||
Real Estate Loans | Construction and land development | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total Gross Loans | 189,644 | 231,090 | ||
Allowance for loan losses | (2,801) | (2,824) | (2,711) | (2,617) |
Real Estate Loans | Residential Real Estate | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total Gross Loans | 368,370 | 342,491 | ||
Allowance for loan losses | (2,660) | (2,769) | (2,420) | (2,430) |
Commercial - Non-Real Estate | Commercial | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total Gross Loans | 47,878 | 122,945 | ||
Allowance for loan losses | (639) | (711) | (738) | (1,007) |
Consumer - Non-Real Estate | Consumer | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total Gross Loans | 651 | 586 | ||
Allowance for loan losses | $ (7) | $ (5) | $ (9) | $ (11) |
Allowance for Loan Losses - Add
Allowance for Loan Losses - Additional information (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 USD ($) loan | Jun. 30, 2021 loan | Jun. 30, 2022 USD ($) loan | Jun. 30, 2021 loan | Dec. 31, 2021 USD ($) loan | |
Financing receivable, allowance for credit loss | |||||
Impaired loan balance | $ 536,000 | $ 536,000 | $ 549,000 | ||
Recorded investment in TDR's | $ 536,000 | $ 536,000 | $ 549,000 | ||
Financing Receivable, Troubled Debt Restructuring, Subsequent Default, Number of Contracts | loan | 0 | 0 | 0 | 0 | |
Financing Receivable, Troubled Debt Restructuring, Number Of Contracts That Require Special Reserve | loan | 0 | 0 | |||
Financing Receivable, Troubled Debt Restructuring, Additional Commitment To Disburse Funds | $ 0 | $ 0 | $ 0 | ||
PPP loans | PPP Loan | |||||
Financing receivable, allowance for credit loss | |||||
Impaired loan balance | $ 224,000 | $ 224,000 | $ 69,600,000 |
Allowance for Loan Losses - All
Allowance for Loan Losses - Allowance for loan losses activity (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | $ 20,032 | $ 17,017 |
Charge-offs | (1) | (91) |
Provision | 2,455 | |
Ending Balance | 20,031 | 19,381 |
Unallocated | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | 632 | 350 |
Provision | (379) | 407 |
Ending Balance | 253 | 757 |
Real Estate Loans | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | 10,602 | |
Charge-offs | (90) | |
Provision | 2,234 | |
Ending Balance | 12,746 | |
Real Estate Loans | Residential Real Estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | 2,769 | 2,430 |
Provision | (109) | (10) |
Ending Balance | 2,660 | 2,420 |
Real Estate Loans | Commercial Real Estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | 13,091 | |
Charge-offs | (1) | |
Provision | 581 | |
Ending Balance | 13,671 | |
Real Estate Loans | Construction and land development | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | 2,824 | 2,617 |
Provision | (23) | 94 |
Ending Balance | 2,801 | 2,711 |
Commercial - Non-Real Estate | Commercial | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | 711 | 1,007 |
Charge-offs | (1) | |
Provision | (72) | (268) |
Ending Balance | 639 | 738 |
Consumer - Non-Real Estate | Consumer | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | 5 | 11 |
Provision | 2 | (2) |
Ending Balance | $ 7 | $ 9 |
Allowance for Loan Losses - Bal
Allowance for Loan Losses - Balance of allowance for loan losses (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Collectively evaluated for impairment | $ 20,031 | $ 20,032 | ||
Total allowance | 20,031 | 20,032 | $ 19,381 | $ 17,017 |
Individually evaluated for impairment | 536 | 549 | ||
Collectively evaluated for impairment | 1,689,201 | 1,665,005 | ||
Total loans | 1,689,737 | 1,665,554 | ||
Unallocated | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Collectively evaluated for impairment | 253 | 632 | ||
Total allowance | 253 | 632 | 757 | 350 |
Real Estate Loans | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Total allowance | 12,746 | 10,602 | ||
Real Estate Loans | Residential Real Estate | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Collectively evaluated for impairment | 2,660 | 2,769 | ||
Total allowance | 2,660 | 2,769 | 2,420 | 2,430 |
Individually evaluated for impairment | 536 | 549 | ||
Collectively evaluated for impairment | 367,834 | 341,942 | ||
Total loans | 368,370 | 342,491 | ||
Real Estate Loans | Commercial Real Estate | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Collectively evaluated for impairment | 13,671 | 13,091 | ||
Total allowance | 13,671 | 13,091 | ||
Collectively evaluated for impairment | 1,083,194 | 968,442 | ||
Total loans | 1,083,194 | 968,442 | ||
Real Estate Loans | Construction and land development | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Collectively evaluated for impairment | 2,801 | 2,824 | ||
Total allowance | 2,801 | 2,824 | 2,711 | 2,617 |
Collectively evaluated for impairment | 189,644 | 231,090 | ||
Total loans | 189,644 | 231,090 | ||
Commercial - Non-Real Estate | Commercial | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Collectively evaluated for impairment | 639 | 711 | ||
Total allowance | 639 | 711 | 738 | 1,007 |
Collectively evaluated for impairment | 47,878 | 122,945 | ||
Total loans | 47,878 | 122,945 | ||
Consumer - Non-Real Estate | Consumer | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Collectively evaluated for impairment | 7 | 5 | ||
Total allowance | 7 | 5 | $ 9 | $ 11 |
Collectively evaluated for impairment | 651 | 586 | ||
Total loans | $ 651 | $ 586 |
Allowance for Loan Losses - Imp
Allowance for Loan Losses - Impaired loans (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Financing Receivable, Impaired [Line Items] | ||
Unpaid Principal Balance | $ 536 | $ 549 |
Recorded Investment with No Allowances | 536 | 549 |
Total Recorded Investment | 536 | 549 |
Average Recorded Investment | 541 | 569 |
Interest Income Recognized | 9 | 24 |
Real Estate Loans | Residential Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid Principal Balance | 536 | 549 |
Recorded Investment with No Allowances | 536 | 549 |
Total Recorded Investment | 536 | 549 |
Average Recorded Investment | 541 | 569 |
Interest Income Recognized | $ 9 | $ 24 |
Allowance for Loan Losses - Pas
Allowance for Loan Losses - Past due and non-accrual loans (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Financing receivable, past due | ||
Current | $ 1,689,737 | $ 1,665,554 |
Total loans | 1,689,737 | 1,665,554 |
Residential Real Estate | Real Estate Loans | ||
Financing receivable, past due | ||
Current | 368,370 | 342,491 |
Total loans | 368,370 | 342,491 |
Commercial Real Estate | Real Estate Loans | ||
Financing receivable, past due | ||
Current | 1,083,194 | 968,442 |
Total loans | 1,083,194 | 968,442 |
Construction and land development | Real Estate Loans | ||
Financing receivable, past due | ||
Current | 189,644 | 231,090 |
Total loans | 189,644 | 231,090 |
Commercial | Commercial - Non-Real Estate | ||
Financing receivable, past due | ||
Current | 47,878 | 122,945 |
Total loans | 47,878 | 122,945 |
Consumer | Consumer - Non-Real Estate | ||
Financing receivable, past due | ||
Current | 651 | 586 |
Total loans | $ 651 | $ 586 |
Allowance for Loan Losses - Sch
Allowance for Loan Losses - Schedule of credit quality information (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Financing receivable, credit quality indicator | ||
Total loans | $ 1,689,737 | $ 1,665,554 |
Residential Real Estate | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans | 368,370 | 342,491 |
Commercial Real Estate | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans | 1,083,194 | 968,442 |
Construction and land development | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans | 189,644 | 231,090 |
Commercial | Commercial - Non-Real Estate | ||
Financing receivable, credit quality indicator | ||
Total loans | 47,878 | 122,945 |
Consumer | Consumer - Non-Real Estate | ||
Financing receivable, credit quality indicator | ||
Total loans | 651 | 586 |
Pass | ||
Financing receivable, credit quality indicator | ||
Total loans | 1,682,707 | 1,657,789 |
Pass | Residential Real Estate | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans | 368,260 | 342,377 |
Pass | Commercial Real Estate | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans | 1,076,274 | 961,177 |
Pass | Construction and land development | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans | 189,644 | 230,704 |
Pass | Commercial | Commercial - Non-Real Estate | ||
Financing receivable, credit quality indicator | ||
Total loans | 47,878 | 122,945 |
Pass | Consumer | Consumer - Non-Real Estate | ||
Financing receivable, credit quality indicator | ||
Total loans | 651 | 586 |
Special Mention | ||
Financing receivable, credit quality indicator | ||
Total loans | 6,920 | 7,029 |
Special Mention | Commercial Real Estate | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans | 6,920 | 7,029 |
Substandard | ||
Financing receivable, credit quality indicator | ||
Total loans | 110 | 736 |
Substandard | Residential Real Estate | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans | $ 110 | 114 |
Substandard | Commercial Real Estate | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans | 236 | |
Substandard | Construction and land development | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans | $ 386 |
Deposits and Borrowings - Depos
Deposits and Borrowings - Deposits (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Deposits: | ||
Non-interest bearing demand deposits | $ 512,284 | $ 488,838 |
Interest-bearing demand deposits | 738,666 | 633,901 |
Savings deposits | 112,276 | 101,376 |
Time deposits | 680,515 | 657,438 |
Total deposits | $ 2,043,741 | $ 1,881,553 |
Deposits and Borrowings - Long-
Deposits and Borrowings - Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Carrying Value | $ 49,560 | $ 42,728 |
Subordinated debt | ||
Debt Instrument [Line Items] | ||
Weighted-Average Interest Rate | 5.50% | |
Carrying Value | $ 49,560 | 24,728 |
Subordinated debt | Minimum | ||
Debt Instrument [Line Items] | ||
Stated Interest Rates | 5.25% | |
Subordinated debt | Maximum | ||
Debt Instrument [Line Items] | ||
Stated Interest Rates | 5.75% | |
FHLB advances | ||
Debt Instrument [Line Items] | ||
Carrying Value | $ 18,000 |
Deposits and Borrowings - Addit
Deposits and Borrowings - Additional Information (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 USD ($) customer | Dec. 31, 2021 USD ($) | Jun. 15, 2022 USD ($) | Jul. 06, 2017 USD ($) | |
Debt instrument | ||||
Overdraft demand deposits reclassified to loans | $ 8 | $ 2 | ||
Certificate of deposits | 258,700 | 255,000 | ||
Brokered deposits | 266,100 | 217,700 | ||
Reciprocal certificates of deposits | 51,300 | 61,300 | ||
Reciprocal demand and money market deposit | $ 277,000 | $ 209,600 | ||
Number of depositors representing five percent or more of total deposits | customer | 0 | |||
Percentage of deposits exceed five or more | 5% | |||
Total collateral under the blanket lien | $ 373,900 | |||
Minimum | ||||
Debt instrument | ||||
Certificate of deposits | $ 250 | |||
Subordinated debt | ||||
Debt instrument | ||||
Face amount or Principal amount | $ 25,000 | $ 25,000 | ||
Subordinated notes interest rate | 5.75% | |||
Subordinated debt | Minimum | ||||
Debt instrument | ||||
Stated Interest Rates | 5.25% | |||
Federal Funds | ||||
Debt instrument | ||||
Federal home loan, advances, general debt obligations, unused funds | $ 105,000 | |||
Line of credit | 0 | |||
Federal reserve bank advances | ||||
Debt instrument | ||||
Maximum borrowing capacity | 28,900 | |||
Line of credit | 0 | |||
Loans pledged | $ 34,900 | |||
Secured Overnight Financing Rate (SOFR) | Subordinated debt | ||||
Debt instrument | ||||
Stated Interest Rates | 5.25% | |||
Basis points | 2.45% |
Deposits and Borrowings - Time
Deposits and Borrowings - Time deposits and FHLB advances by contractual maturity (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Contractual maturity | |
2022 | $ 227,481 |
2023 | 384,886 |
2024 | 62,747 |
2025 | 2,967 |
2026 | 2,364 |
Thereafter | 70 |
Total | $ 680,515 |
Income Taxes - Provision for in
Income Taxes - Provision for income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Taxes | ||||
Current tax expense | $ 3,349 | $ 4,461 | ||
Deferred tax expense (benefit) | 375 | (1,375) | ||
Total Income Tax Expense | $ 1,854 | $ 1,672 | $ 3,724 | $ 3,086 |
Income Taxes - Income tax rate
Income Taxes - Income tax rate reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Effective income tax rate reconciliation, amount | ||||
Computed "expected" tax expense | $ 4,049 | $ 2,990 | ||
Bank-owned life insurance | (40) | (43) | ||
Tax-exempt interest income | (70) | (74) | ||
State income taxes, net of federal benefit | 180 | 121 | ||
Excess tax benefit on share-based compensation | (369) | (7) | ||
Other, net | (26) | 99 | ||
Total | $ 1,854 | $ 1,672 | $ 3,724 | $ 3,086 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Commitments to extend credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risks, face amount | $ 263,686 | $ 272,701 |
Standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risks, face amount | $ 17,340 | $ 14,485 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair value of assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | $ 365,134 | $ 239,300 |
Equity securities, at fair value | 2,098 | 1,869 |
U.S Treasuries | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 60,463 | 30,543 |
U.S. government and federal agencies | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 35,076 | 34,537 |
Corporate bonds | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 2,868 | 1,031 |
Collateralized mortgage obligations | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 41,303 | 39,049 |
Tax-exempt municipal | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 4,595 | 5,262 |
Taxable municipal | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 1,635 | 1,685 |
Mortgage-backed | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 219,194 | 127,193 |
Fair Value, Recurring | ||
Securities available-for-sale: | ||
Equity securities, at fair value | 2,098 | 1,869 |
Total assets at fair value | 367,232 | 241,169 |
Fair Value, Recurring | U.S Treasuries | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 60,463 | 30,543 |
Fair Value, Recurring | U.S. government and federal agencies | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 35,076 | 34,537 |
Fair Value, Recurring | Corporate bonds | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 2,868 | 1,031 |
Fair Value, Recurring | Collateralized mortgage obligations | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 41,303 | 39,049 |
Fair Value, Recurring | Tax-exempt municipal | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 4,595 | 5,262 |
Fair Value, Recurring | Taxable municipal | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 1,635 | 1,685 |
Fair Value, Recurring | Mortgage-backed | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 219,194 | 127,193 |
Fair Value, Recurring | Fair Value, Inputs, Level 1 | ||
Securities available-for-sale: | ||
Equity securities, at fair value | 2,098 | 1,869 |
Total assets at fair value | 2,098 | 1,869 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | ||
Securities available-for-sale: | ||
Total assets at fair value | 365,134 | 239,300 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | U.S Treasuries | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 60,463 | 30,543 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | U.S. government and federal agencies | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 35,076 | 34,537 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | Corporate bonds | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 2,868 | 1,031 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | Collateralized mortgage obligations | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 41,303 | 39,049 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | Tax-exempt municipal | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 4,595 | 5,262 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | Taxable municipal | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 1,635 | 1,685 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | Mortgage-backed | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | $ 219,194 | $ 127,193 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying value and estimated fair value of financial instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Securities: | ||
Available-for-sale | $ 365,134 | $ 239,300 |
Equity securities, at fair value | 2,098 | 1,869 |
Restricted securities, at cost | 4,417 | 4,951 |
Carrying Value | ||
Assets: | ||
Cash and cash equivalents | 120,887 | 105,799 |
Securities: | ||
Available-for-sale | 365,134 | 239,300 |
Held-to-maturity | 102,265 | 105,509 |
Equity securities, at fair value | 2,098 | 1,869 |
Restricted securities, at cost | 4,417 | 4,951 |
Loans, net of unearned income | 1,672,621 | 1,646,437 |
Bank owned life insurance | 21,188 | 20,998 |
Accrued interest receivable | 4,451 | 4,943 |
Liabilities: | ||
Deposits | 2,043,741 | 1,881,553 |
FHLB advances | 18,000 | |
Subordinated debt | 49,560 | 24,728 |
Accrued interest payable | 896 | 843 |
Fair Value | ||
Assets: | ||
Cash and cash equivalents | 120,887 | 105,799 |
Securities: | ||
Available-for-sale | 365,134 | 239,300 |
Held-to-maturity | 88,862 | 103,258 |
Equity securities, at fair value | 2,098 | 1,869 |
Restricted securities, at cost | 4,417 | 4,951 |
Loans, net of unearned income | 1,618,806 | 1,659,396 |
Bank owned life insurance | 21,188 | 20,998 |
Accrued interest receivable | 4,451 | 4,943 |
Liabilities: | ||
Deposits | 2,040,017 | 1,882,132 |
FHLB advances | 17,837 | |
Subordinated debt | 49,540 | 25,325 |
Accrued interest payable | 896 | 843 |
Fair Value, Inputs, Level 1 | Fair Value | ||
Assets: | ||
Cash and cash equivalents | 120,887 | 105,799 |
Securities: | ||
Equity securities, at fair value | 2,098 | 1,869 |
Fair Value, Inputs, Level 2 | Fair Value | ||
Securities: | ||
Available-for-sale | 365,134 | 239,300 |
Held-to-maturity | 88,862 | 103,258 |
Restricted securities, at cost | 4,417 | 4,951 |
Bank owned life insurance | 21,188 | 20,998 |
Accrued interest receivable | 4,451 | 4,943 |
Liabilities: | ||
Deposits | 2,040,017 | 1,882,132 |
FHLB advances | 17,837 | |
Accrued interest payable | 896 | 843 |
Fair Value, Inputs, Level 3 | Fair Value | ||
Securities: | ||
Loans, net of unearned income | 1,618,806 | 1,659,396 |
Liabilities: | ||
Subordinated debt | $ 49,540 | $ 25,325 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional information (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Fair Value Measurements | ||
Impaired loans with recorded reserve | $ 0 | $ 0 |
Other real estate owned | $ 0 | $ 0 |
Earnings per Common Share - Com
Earnings per Common Share - Computation of earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income available to common shareholders (in thousands): | ||||
Net income | $ 7,882 | $ 6,079 | $ 15,556 | $ 11,153 |
Less: Income attributable to unvested restricted stock awards | (34) | (29) | (70) | (55) |
Net income available to common shareholders | $ 7,848 | $ 6,050 | $ 15,486 | $ 11,098 |
Weighted average shares outstanding: | ||||
Common shares outstanding, including unvested restricted stock | 13,992,414 | 13,637,112 | 13,920,387 | 13,632,393 |
Less: Unvested restricted stock | (60,158) | (64,333) | (62,330) | (67,073) |
Weighted-average common shares outstanding - basic | 13,932,256 | 13,572,779 | 13,858,057 | 13,565,320 |
Earnings per common share - basic | $ 0.56 | $ 0.45 | $ 1.11 | $ 0.82 |
Income available to common shareholders (in thousands): | ||||
Net income | $ 7,882 | $ 6,079 | $ 15,556 | $ 11,153 |
Less: Income attributable to unvested restricted stock awards | (34) | (28) | (69) | (54) |
Net income available to common shareholders | $ 7,848 | $ 6,051 | $ 15,487 | $ 11,099 |
Weighted average shares outstanding: | ||||
Common shares outstanding, including unvested restricted stock | 13,992,414 | 13,637,112 | 13,920,387 | 13,632,393 |
Less: Unvested restricted stock | (60,158) | (64,333) | (62,330) | (67,073) |
Plus: Effect of dilutive options | 152,904 | 295,368 | 184,148 | 287,616 |
Weighted-average common shares outstanding - diluted | 14,085,160 | 13,868,147 | 14,042,205 | 13,852,936 |
Earnings per common share - diluted | $ 0.56 | $ 0.44 | $ 1.10 | $ 0.80 |
Earnings per Common Share - Add
Earnings per Common Share - Additional information (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Stock options | ||||
Antidilutive securities excluded from computation of earnings per share | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 0 | 0 | 0 | 15,000 |
Stock Based Compensation Plan_2
Stock Based Compensation Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Apr. 28, 2015 | |
Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Intrinsic value of options exercised | $ 1,200 | $ 37 | $ 3,700 | $ 203 | |
Share-based compensation expense | 0 | 3 | 0 | $ 10 | |
Unrecognized share-based compensation expense | 0 | $ 0 | |||
Restricted Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock grants | 500 | 7,946 | |||
Share-based compensation expense | 130 | 125 | $ 269 | $ 267 | |
Weighted average grant date fair value, granted | $ 22.10 | ||||
Fair value of vested shares | 65 | $ 149 | $ 371 | $ 353 | |
Unrecognized share-based compensation expense | $ 761 | $ 761 | |||
Recognition period | 1 year 6 months | ||||
Restricted Stock Awards | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting term | 2 years | ||||
Restricted Stock Awards | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting term | 5 years | ||||
2015 Plan | Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares reserved for issuance | 976,211 | ||||
Number of shares available for grant | 323,185 | 323,185 | |||
Vesting term | 5 years | ||||
Expiration term | 10 years | ||||
2015 Plan | Stock options | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Price of stock expressed in fair value percentage | 100% | ||||
2015 Plan | Stock options | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Term of award | 10 years | ||||
2006 Plan | Stock options | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized | 1,490,700 | 1,490,700 |
Stock Based Compensation Plan -
Stock Based Compensation Plan - Summary of Stock Options Activity (Details) - Stock options - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options outstanding, beginning balance | 534,236 | |||
Options granted | 0 | 0 | 0 | 0 |
Options exercised | (282,034) | |||
Options forfeited or expired | (3,278) | |||
Options outstanding, ending balance | 248,924 | 248,924 | ||
Options exercisable | 248,924 | 248,924 | ||
Weighted average exercise price, beginning balance | $ 10.45 | |||
Weighted average exercise price, exercised | 9.09 | |||
Weighted average exercise price, forfeited or expired | 8.45 | |||
Weighted average exercise price, ending balance | $ 12.03 | 12.03 | ||
Weighted average exercise price, exercisable | $ 12.03 | $ 12.03 | ||
Aggregate intrinsic value outstanding | $ 2,617,384 | $ 2,617,384 | ||
Aggregate intrinsic value exercisable | $ 2,617,384 | $ 2,617,384 |
Stock Based Compensation Plan_3
Stock Based Compensation Plan - Summary of Stock Options Outstanding and Exercisable (Details) - Stock options - $ / shares | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Options outstanding | 248,924 | 534,236 |
Options outstanding, weighted average remaining contractual life (in years) | 2 years 6 months 29 days | |
Options exercisable | 248,924 | |
Options exercisable, weighted average remaining contractual life (in years) | 2 years 6 months 29 days | |
$0.00 - $11.00 | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price range minimum rate | $ 0 | |
Exercise price range maximum rate | $ 11 | |
Options outstanding | 3,937 | |
Options outstanding, weighted average remaining contractual life (in years) | 2 months 12 days | |
Options exercisable | 3,937 | |
Options exercisable, weighted average remaining contractual life (in years) | 2 months 12 days | |
$11.01 - $12.00 | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price range minimum rate | $ 11.01 | |
Exercise price range maximum rate | $ 12 | |
Options outstanding | 228,925 | |
Options outstanding, weighted average remaining contractual life (in years) | 2 years 4 months 24 days | |
Options exercisable | 228,925 | |
Options exercisable, weighted average remaining contractual life (in years) | 2 years 4 months 24 days | |
12.01 - $16.00 | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price range minimum rate | $ 12.01 | |
Exercise price range maximum rate | $ 16 | |
Options outstanding | 1,062 | |
Options outstanding, weighted average remaining contractual life (in years) | 2 years 5 months 26 days | |
Options exercisable | 1,062 | |
Options exercisable, weighted average remaining contractual life (in years) | 2 years 5 months 26 days | |
$16.01 - $18.16 | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price range minimum rate | $ 16.01 | |
Exercise price range maximum rate | $ 18.16 | |
Options outstanding | 15,000 | |
Options outstanding, weighted average remaining contractual life (in years) | 5 years 9 months 29 days | |
Options exercisable | 15,000 | |
Options exercisable, weighted average remaining contractual life (in years) | 5 years 9 months 29 days |
Stock Based Compensation Plan_4
Stock Based Compensation Plan - Summary of Restricted Stock Awards (Details) - Restricted Stock Awards - $ / shares | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Nonvested shares outstanding, beginning balance | 75,826 | |
Nonvested shares, granted | 500 | 7,946 |
Nonvested shares, vested | (16,290) | |
Nonvested shares, forfeited | (1,500) | |
Nonvested shares outstanding, ending balance | 58,536 | |
Weighted average grant date fair value outstanding, beginning balance | $ 17.25 | |
Weighted average grant date fair value, granted | 22.10 | |
Weighted average grant date fair value, vested | 17.01 | |
Weighted average grant date fair value, forfeited | 16.45 | |
Weighted average grant date fair value, ending balance | $ 17.38 |
Regulatory Capital (Details)
Regulatory Capital (Details) | Jun. 30, 2022 |
Regulatory Capital | |
Capital conservation buffer ratio | 2.5 |
Capital conservation buffer ratio above minimum requirement | 7.1 |
Regulatory Capital - Schedule o
Regulatory Capital - Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations (Details) $ in Thousands | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Total capital (to risk weighted assets) | ||
Actual, Amount | $ 265,874 | $ 252,843 |
Actual, Ratio | 15.1 | 15.3 |
Minimum Capital Requirements, Amount | $ 184,570 | $ 173,923 |
Minimum Capital Requirements, Ratio | 10.5 | 10.5 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 175,781 | $ 165,641 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 10 | 10 |
Tier 1 capital (to risk weighted assets) | ||
Actual, Amount | $ 245,489 | $ 232,458 |
Actual, Ratio | 14 | 14 |
Minimum Capital Requirements, Amount | $ 149,413 | $ 140,795 |
Minimum Capital Requirements, Ratio | 8.5 | 8.5 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 140,624 | $ 132,513 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 8 | 8 |
Common equity tier 1 capital (to risk weighted assets) | ||
Actual, Amount | $ 245,489 | $ 232,458 |
Actual, Ratio | 14 | 14 |
Minimum Capital Requirements, Amount | $ 123,046 | $ 115,948 |
Minimum Capital Requirements, Ratio | 7 | 7 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 114,257 | $ 107,666 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 6.5 | 6.5 |
Tier 1 capital (to average assets) | ||
Actual, Amount | $ 245,489 | $ 232,458 |
Actual, Ratio | 11 | 11 |
Minimum Capital Requirements, Amount | $ 89,506 | $ 84,799 |
Minimum Capital Requirements, Ratio | 4 | 4 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 111,882 | $ 105,999 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 5 | 5 |
Revenue - Components of Non-int
Revenue - Components of Non-interest Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Service charges on deposit accounts and Other service charges and fees | ||||
Bank owned life insurance | $ 95 | $ 100 | $ 190 | $ 207 |
Gains on securities | 10 | |||
Insurance commissions | 44 | 22 | 265 | 177 |
Other operating income (loss) | (271) | 119 | (386) | 149 |
Total non-interest income | 109 | 417 | 523 | 881 |
Overdrawn account fees | ||||
Service charges on deposit accounts and Other service charges and fees | ||||
Non-interest income | 22 | 16 | 41 | 31 |
Account service fees | ||||
Service charges on deposit accounts and Other service charges and fees | ||||
Non-interest income | 62 | 44 | 120 | 87 |
Interchange income | ||||
Service charges on deposit accounts and Other service charges and fees | ||||
Non-interest income | 105 | 94 | 198 | 178 |
Other Charges and Fees | ||||
Service charges on deposit accounts and Other service charges and fees | ||||
Non-interest income | 52 | 22 | 96 | 42 |
Premises And Equipment | ||||
Service charges on deposit accounts and Other service charges and fees | ||||
Non-interest income | (1) | |||
Insurance Commissions | ||||
Service charges on deposit accounts and Other service charges and fees | ||||
Non-interest income | $ 44 | $ 22 | $ 265 | $ 177 |
Revenue - Additional informatio
Revenue - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue | ||||
Other operating income (loss) | $ 2 | $ 53 | $ 6 | $ 51 |
Gain (loss) on fair value of adjustment on equity securities | $ (273) | $ 66 | $ (391) | $ 99 |
Other Operating Expenses (Detai
Other Operating Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Other Operating Expenses | ||||
Advertising expense | $ 61 | $ 110 | $ 100 | $ 210 |
Data processing | 490 | 344 | 928 | 751 |
FDIC insurance | 140 | 263 | 270 | 487 |
Professional fees | 297 | 661 | 571 | 898 |
State franchise tax | 523 | 462 | 1,047 | 926 |
Director costs | 203 | 202 | 415 | 390 |
Other operating expenses | 489 | 453 | 813 | 908 |
Total other operating expenses | $ 2,203 | $ 2,495 | $ 4,144 | $ 4,570 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ 204,855 | $ 188,904 | $ 208,470 | $ 186,081 |
Net change during the period | (5,999) | 110 | (16,528) | (2,442) |
Ending balance | 207,530 | 195,246 | 207,530 | 195,246 |
Gain on sales and calls of securities | 10 | |||
Gain (loss) on available-for-sale securities, related tax | 2 | |||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (10,929) | 1,234 | (400) | 3,786 |
Net change during the period | (5,999) | 110 | (16,528) | (2,442) |
Ending balance | (16,928) | 1,344 | (16,928) | 1,344 |
Unrealized Gain (Loss) on Available-for-sale Securities | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (789) | 3,786 | ||
Net change during the period | (16,449) | (2,442) | ||
Ending balance | (17,238) | $ 1,344 | (17,238) | $ 1,344 |
Unrealized Gains on Securities Transferred from Available-for-sale to Held-to-maturity | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | 389 | |||
Net change during the period | (79) | |||
Ending balance | $ 310 | $ 310 |