Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 29, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
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, Address Line One | 1943 Isaac Newton Square | ||
Entity Address, Address Line Two | Suite 100 | ||
Entity Address, City or Town | Reston | ||
Entity Address State Or Province | VA | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 247.9 | ||
Entity Common Stock, Shares Outstanding | 14,171,106 | ||
Entity Central Index Key | 0001710482 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | Yount, Hyde & Barbour, P.C. | ||
Auditor Location | Richmond, Virginia | ||
Auditor Firm ID | 613 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and due from banks | $ 7,424 | $ 6,583 |
Interest-bearing deposits in other banks | 91,581 | 55,016 |
Total cash and cash equivalents | 99,005 | 61,599 |
Securities available-for-sale, at fair value | 169,993 | |
Securities available-for-sale, at fair value | 357,576 | |
Securities held-to-maturity at amortized cost, fair value of $79,532 and $81,161 as of December 31, 2023 and December 31, 2022, respectively | 95,505 | 99,415 |
Securities held-to-maturity, net | 95,505 | 99,415 |
Restricted securities, at cost | 5,012 | 4,425 |
Equity securities, at fair value | 2,792 | 2,115 |
Loans, net of unearned income | 1,789,508 | |
Less: Allowance for loan credit losses | (20,208) | |
Loans, net | 1,769,300 | |
Loans, net of unearned income | 1,859,967 | |
Less: Allowance for loan credit losses | (19,543) | |
Loans, net | 1,840,424 | |
Bank premises and equipment, net | 1,281 | 1,219 |
Accrued interest receivable | 6,110 | 5,531 |
Bank owned life insurance | 21,170 | |
Right of use assets | 4,176 | 4,611 |
Other assets | 18,251 | 21,274 |
Total assets | 2,242,549 | 2,348,235 |
Deposits: | ||
Non-interest bearing demand deposits | 411,374 | 476,697 |
Interest-bearing demand deposits | 607,971 | 691,945 |
Savings deposits | 52,061 | 95,241 |
Time deposits | 835,194 | 803,857 |
Total deposits | 1,906,600 | 2,067,740 |
Federal funds purchased | 10,000 | 25,500 |
Federal Reserve Bank borrowings | 54,000 | |
Subordinated debt | 24,708 | 24,624 |
Accrued interest payable | 4,559 | 1,035 |
Lease liabilities | 4,446 | 4,858 |
Other liabilities | 8,322 | 11,678 |
Total liabilities | 2,012,635 | 2,135,435 |
Commitments and contingencies | ||
Shareholders' Equity | ||
Preferred stock, par value $0.01 per share; authorized 1,000,000 shares; none issued | ||
Additional paid-in capital | 95,636 | 94,726 |
Retained earnings | 146,388 | 146,630 |
Accumulated other comprehensive loss | (12,251) | (28,697) |
Total shareholders' equity | 229,914 | 212,800 |
Total liabilities and shareholders' equity | 2,242,549 | 2,348,235 |
Common stock, voting | ||
Shareholders' Equity | ||
Common stock | 141 | 141 |
Common stock, non voting | ||
Shareholders' Equity | ||
Common stock |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
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) | 14,148,533 | 14,098,986 |
Common stock, outstanding (in shares) | 14,148,533 | 14,098,986 |
Common stock, voting | Unvested shares | ||
Common stock, issued (in shares) | 47,318 | 55,185 |
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 | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Interest and Dividend Income | ||
Interest and fees on loans | $ 86,435 | $ 74,281 |
Interest on investment securities, taxable | 7,206 | 7,934 |
Interest on investment securities, tax-exempt | 53 | 120 |
Dividends | 300 | 249 |
Interest on deposits in banks | 6,776 | 1,482 |
Total interest and dividend income | 100,770 | 84,066 |
Interest Expense | ||
Deposits | 47,168 | 11,778 |
Federal funds purchased | 15 | 15 |
Federal Home Loan Bank advances | 67 | 42 |
Federal Reserve Bank borrowings | 1,640 | |
Subordinated debt | 1,396 | 1,810 |
Total interest expense | 50,286 | 13,645 |
Net interest income | 50,484 | 70,421 |
Provision for (recovery of) credit losses | (3,252) | 175 |
Net interest income after provision for (recovery of) credit losses | 53,736 | 70,246 |
Non-interest Income | ||
Service charges on deposit accounts | 330 | 324 |
Bank owned life insurance | 224 | 544 |
Other service charges and fees | 838 | 656 |
Losses on sale of available-for-sale securities | (17,316) | |
Insurance commissions | 386 | 382 |
Gain on sale of government guaranteed loans | 131 | |
Non-qualified deferred compensation plan asset gains (losses), net | 317 | (354) |
Other income | 150 | 139 |
Total non-interest income (loss) | (14,940) | 1,691 |
Non-interest Expenses | ||
Salaries and employee benefits | 19,436 | 20,190 |
Occupancy expense of premises | 1,811 | 1,893 |
Furniture and equipment expenses | 1,178 | 1,325 |
Other operating expenses | 8,390 | 8,466 |
Total non-interest expenses | 30,815 | 31,874 |
Income before income taxes | 7,981 | 40,063 |
Income tax expense | 2,823 | 8,260 |
Net income | $ 5,158 | $ 31,803 |
Earnings per share, basic | $ 0.37 | $ 2.27 |
Earnings per share, diluted | $ 0.36 | $ 2.25 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Consolidated Statements of Comprehensive Income | ||
Net Income (Loss) | $ 5,158 | $ 31,803 |
Other comprehensive income: | ||
Unrealized gain/ (loss) on available-for-sale securities, net of tax of $(761) and $(7,484) for the twelve months ended December 31, 2023 and December 31, 2022, respectively. | 2,862 | (28,153) |
Reclassification adjustment for losses on available-for-sale securities included in net income, net of tax of $(3,636) for the twelve months ended December 31, 2023. | 13,680 | |
Amortization of unrealized gains on securities transferred to held-to-maturity, net of tax of $(26) and $(38) for the twelve months ended December 31, 2023 and December 31, 2022, respectively. | (96) | (144) |
Total other comprehensive income (loss) | 16,446 | (28,297) |
Total comprehensive income | $ 21,604 | $ 3,506 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Consolidated Statements of Comprehensive Income | ||
Unrealized (loss) on available-for-sale securities, net of tax | $ (761) | $ (7,484) |
Reclassification adjustment for losses on available-for-sale securities included in net income, net of tax | (3,636) | |
Amortization of unrealized gains on securities transferred to held-to-maturity, net of tax | $ (26) | $ (38) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Accumulated Other Comprehensive (Loss) | Cumulative Effect, Period of Adoption, Adjustment | Total |
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 (Loss) | 31,803 | 31,803 | |||||
Other comprehensive income (loss) | (28,297) | (28,297) | |||||
Exercise of stock options, net of shares surrendered | $ 4 | 3,054 | 3,058 | ||||
Exercise of stock options, net of shares surrendered (in shares) | 331,719 | ||||||
Dividend declared on common stock | (2,799) | (2,799) | |||||
Restricted stock vesting | (8) | (8) | |||||
Restricted stock vesting (in shares) | 42,310 | ||||||
Share-based compensation | 573 | 573 | |||||
Ending balance at Dec. 31, 2022 | $ 141 | 94,726 | 146,630 | (28,697) | 212,800 | ||
Ending balance (in shares) at Dec. 31, 2022 | 14,043,801 | ||||||
Net Income (Loss) | 5,158 | 5,158 | |||||
Other comprehensive income (loss) | 16,446 | 16,446 | |||||
Dividend declared on common stock | (3,108) | (3,108) | |||||
Exercise of stock options | 320 | 320 | |||||
Exercise of stock options (in shares) | 27,375 | ||||||
Restricted stock vesting | (6) | (6) | |||||
Restricted stock vesting (in shares) | 30,039 | ||||||
Share-based compensation | 596 | 596 | |||||
Ending balance at Dec. 31, 2023 | $ 141 | $ 95,636 | $ (2,292) | $ 146,388 | $ (12,251) | $ (2,292) | $ 229,914 |
Ending balance (in shares) at Dec. 31, 2023 | 14,101,215 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Consolidated Statements of Changes in Shareholders' Equity | ||
Dividend paid per share | $ 0.0022 | $ 0.0020 |
Exercise of stock options, shares surrendered | 8,930 | |
Restricted stock vesting, shares surrendered | 351 | 251 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash Flows from Operating Activities | ||
Net income | $ 5,158 | $ 31,803 |
Adjustment to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 484 | 557 |
Right of use asset amortization | 1,231 | 1,360 |
Provision for (recovery of) credit losses | 175 | |
Provision for (recovery of) credit losses | (3,252) | |
Share-based compensation expense | 596 | 573 |
Net (accretion)/amortization of securities | (270) | (25) |
Fair value adjustment on equity securities | (317) | 354 |
Amortization of debt issuance costs | 84 | 317 |
Net gains on premises and equipment | (16) | |
Losses on available-for-sale securities | 17,316 | |
Deferred tax (benefit) | 921 | 594 |
Net increase in cash surrender value of life insurance | (224) | (544) |
Gain on sale of government guaranteed loans | (131) | |
Changes in assets and liabilities: | ||
(Increase) Decrease in accrued interest receivable | (579) | (588) |
Increase in other assets | (1,659) | (1,376) |
Increase (decrease) in accrued interest payable | 3,524 | 192 |
(Decrease) in other liabilities | (4,862) | (237) |
Net cash provided by operating activities | 18,004 | 33,155 |
Cash Flows from Investing Activities | ||
Net (increase) in loans | (71,860) | (123,038) |
Proceeds from sale of government guaranteed loans originally classified as held for investment | 1,515 | |
Purchase of available-for-sale securities | (206,890) | |
Purchase of held-to-maturity securities | (1,003) | |
Proceeds from sale of available-for-sale securities | 156,011 | |
Proceeds from maturities, calls and principal repayments of available-for-sale securities | 35,538 | 53,077 |
Proceeds from maturities, calls and principal repayments of held-to-maturity securities | 3,715 | 6,841 |
Net (purchases) redemptions of restricted securities | (587) | 526 |
Net purchases of equity securities | (360) | (600) |
Proceeds from bank owned life insurance contracts | 21,394 | 371 |
Proceeds from sale of premises and equipment | 82 | |
Purchases of bank premises and equipment | (612) | (156) |
Net cash provided by (used in) investing activities | 144,836 | (270,872) |
Cash Flows from Financing Activities | ||
Net (decrease) increase in deposits | (161,140) | 186,187 |
Net repayment of Federal Home Loan Bank advances | (18,000) | |
Proceeds from Federal Reserve Bank borrowings | 54,000 | |
Issuance of subordinated debt | 24,579 | |
Repayment of subordinated debt | (25,000) | |
Cash dividends paid | (3,108) | (2,799) |
Net proceeds (repayment) of federal funds purchased | (15,500) | 25,500 |
Issuance of common stock for share options exercised | 320 | 3,058 |
Repurchase of shares for tax withholding on share-based compensation | (6) | (8) |
Net cash (used in) provided by financing activities | (125,434) | 193,517 |
Net increase in cash and cash equivalents | 37,406 | (44,200) |
Cash and cash equivalents, beginning of period | 61,599 | 105,799 |
Cash and cash equivalents, end of period | 99,005 | 61,599 |
Supplemental Disclosures of Cash Flow Information | ||
Interest | 46,678 | 13,136 |
Income taxes | 4,110 | 6,583 |
Supplemental Disclosures of Noncash Transactions | ||
Unrealized gain (loss) on securities available-for-sale | 20,939 | (35,637) |
Right of use asset obtained in exchange for new operating lease liability | $ 1,009 | $ 1,058 |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policy | 12 Months Ended |
Dec. 31, 2023 | |
Nature of Business and Summary of Significant Accounting Policy | |
Nature of Business and Summary of Significant Accounting Policy | Note 1— Nature of Business and Summary of Significant Accounting Policy 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 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. The accounting and reporting policies of John Marshall Bancorp, Inc. conform to generally accepted accounting principles in the United States of America and reflect practices of the banking industry. The significant accounting policies are summarized below. Principles of Consolidation 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. Restriction on Dividends The Bank is subject to certain restrictions on the amount of dividends that it may pay to the Company without prior regulatory approval. At December 31, 2023, the Bank had $58.1 million available to distribute in the form of dividends to the Company. Significant Accounting Policies Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America (“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 credit losses. Reclassifications Certain items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders’ equity. Concentration of Credit Risk Most of the Company’s activities are with customers located in the Washington, D.C. metropolitan area. Real estate loans, including commercial, construction and land development, and residential loans, represented 98% of the total loan portfolio at December 31, 2023 and 97% of the total loan portfolio at December 31, 2022. The Company does not have any significant concentrations to any one industry or customer. Cash and Cash Equivalents For the purposes of the statements of cash flows, cash and cash equivalents include cash and balances due from banks and interest-bearing deposits in banks (items with an original maturity of three months or less). Securities Certain debt securities that management has the positive intent and ability to hold-to-maturity are classified as “held-to-maturity” and recorded at amortized cost. Debt securities not classified as held-to-maturity or trading, are classified as “available-for-sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported net of deferred tax in accumulated other comprehensive income (loss) within shareholders’ equity. Purchase premiums and discounts on debt securities are recognized in interest income using the interest method over the terms of the securities. Transfers of debt securities into the held-to-maturity classification from the available-for-sale classification are made at fair value on the date of transfer. The unrealized holding gain or loss on the date of the transfer is reported in accumulated other comprehensive income (loss) and in the carrying value of the held-to-maturity securities. Such amounts are amortized over the remaining contractual lives of the securities. Equity securities with readily determinable fair values are carried at fair value, with changes in fair value reported in net income. Any equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. Restricted equity securities are carried at cost and are periodically evaluated for impairment based on the ultimate recovery of par value. The entirety of any impairment on the equity securities is recognized in earnings. Gains and losses on sales of securities are recorded on the trade date and determined using the specific identification method. Allowance for Credit Losses - Held-to-Maturity Securities The Company estimates expected credit losses on held-to-maturity securities on an individual basis based on a Probability of Default/Loss Given Default (“PD/LGD”) methodology primarily using security-level credit ratings. The primary indicators of credit quality for the Company’s held-to-maturity portfolio are security type and credit rating, which are influenced by a number of factors including obligor cash flow, geography, seniority, among other factors. The Company’s held-to-maturity securities with credit risk are municipal bonds, which had a credit rating of AA or better as of December 31, 2023. All other held-to-maturity securities are covered by the explicit or implied guarantee of the United States government or one of its agencies. Changes in the allowance for credit loss are recorded as provision for (or recovery of) credit losses in the Consolidated Statements of Income. Allowance for Credit Losses - Available-for-Sale Securities Management evaluates all available-for-sale securities in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings. If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specific to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any deficiency is recorded as an allowance for credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any amount of unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income (loss). Changes in the allowance for credit loss are recorded as a provision for (or recovery of) credit losses in the Consolidated Statements of Income. Losses are charged against the allowance for credit loss when management believes an available-for-sale security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale securities totaled $518 thousand at December 31, 2023 Loans The Company grants real estate, commercial and consumer loans to customers (representing the Company’s loan segments). A substantial portion of the loan portfolio is represented by commercial real estate loans in the Washington, D.C. metropolitan area. Within the real estate segment, the Company has also identified the residential, commercial and construction classes. The ability of the Company’s debtors to honor their real estate loan contracts is dependent upon the real estate market and general economic conditions in this area, among other factors. Underwriting and risk characteristics of each loan class are summarized as follows: ● Real estate residential mortgage loans carry risks associated with the continued creditworthiness of the borrower and changes in the value of the collateral. ● Real estate commercial mortgage loans carry risks associated with the successful operation of a business, the continued creditworthiness of the borrower and any related guarantors and changes in the value of the collateral. In the case of investor-owned commercial real estate, risks are expanded to include the financial strength of the tenants occupying the property and the stability of occupancy and lease rates. ● Real estate construction and land development loans carry risks that the project will not be finished according to schedule, the project will not be finished according to budget and the value of the collateral may, at any point in time, be less than the principal amount of the loan. Construction loans also bear the risk that the general contractor, who may or may not be a customer of the Company, may be unable to finish the construction project as planned because of financial pressure unrelated to the project. ● Commercial loans carry risks associated with the successful operation of a business and the financial strength of any related guarantors. In addition, there is risk associated with the value of collateral other than real estate which may depreciate over time and cannot be appraised with as much precision. ● Consumer loans carry the risks associated with the continued creditworthiness of the borrower and the value of any collateral. Consumer loans are more likely than real estate loans to be immediately adversely affected by job loss, divorce, illness or personal bankruptcy. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for the allowance for loan credit losses and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. The accrual of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well secured and in the process of collection. Other personal loans are typically charged off no later than 180 days past due. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful. The determination of days past due or delinquency status uses the first contractual payment date that has not been paid-in-full by the borrower. All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Allowance for Credit Losses - Loans The allowance for loan credit losses represents an amount which, in management's judgment, is adequate to absorb the lifetime expected losses that may be sustained on outstanding loans at the balance sheet date based on the evaluation of the size and current risk characteristics of the loan portfolio, past events, current conditions, reasonable and supportable forecasts of future economic conditions, and prepayment experience. The allowance for loan credit losses is measured and recorded upon the initial recognition of a financial asset. The allowance for loan credit losses is reduced by charge-offs, net of recoveries of previous losses, and is increased or decreased by a provision for (or recovery of) credit losses, which is recorded in the Consolidated Statements of Income. The Company is utilizing a discounted cash flow model to estimate its current expected credit losses. For the purposes of calculating its quantitative reserves, the Company has segmented its loan portfolio based on loans which share similar risk characteristics. Within the quantitative portion of the calculation, the Company utilizes at least one or a combination of loss drivers, which may include unemployment rates, home price indices, and/or gross domestic product, to adjust its loss rates over a reasonable and supportable forecast period of one year. A straight-line reversion technique is used for the following four quarters, at which time the Company reverts to historical averages. To further adjust the allowance for credit losses for expected losses not already included within the quantitative component of the calculation, the Company may consider qualitative factors, including but not limited to: variability in the economic forecast, changes in volume and severity of adversely classified loans, changes in concentrations of credit, changes in the nature and volume of the loan segments, factors related to credit administration, and other Loans that do not share risk characteristics are evaluated on an individual basis. The Company designates individually evaluated loans on nonaccrual status as collateral dependent loans, as well as other loans that management of the Company designates as having higher risk and loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. The Company has adopted the practical expedient to measure the allowance for credit losses for collateral dependent loans based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required. Allowance for Credit Losses – Unfunded Commitments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for (or recovery of) credit losses in the Consolidated Statements of Income. The allowance for credit losses on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date using the same methodology as the loan portfolio, taking into consideration the likelihood that funding will occur as well as any third-party guarantees. The allowance for unfunded commitments is included in other liabilities on the Company’s consolidated balance sheets. Accrued Interest Receivable The Company has elected to exclude accrued interest from the amortized cost basis in its determination of the allowance for credit losses for both loans and held-to-maturity securities, as well as elected the policy to write-off accrued interest receivable directly through the reversal of interest income. Accrued interest receivable totaled $5.3 million on loans and $255 thousand on held-to-maturity securities at December 31, 2023, and is included Accrued Interest Receivable Bank Premises and Equipment Bank premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is computed on the straight-line method over the useful lives of the assets, ranging from three Bank Owned Life Insurance The Company has purchased life insurance on certain key executives and officers. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or amounts due that are probable at settlement. Changes in cash surrender value are reflected in non-interest income in the Consolidated Statements of Income. During the third quarter of 2023, the Company surrendered all outstanding Bank Owned Life Insurance policies. Other Real Estate Owned Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Operating costs after acquisition are expensed as incurred. The Company had no other real estate owned as of December 31, 2023 and 2022. At December 31, 2023 and 2022, there were no consumer mortgage loans secured by residential real estate for which formal foreclosure proceedings were in progress. Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (a) the assets have been isolated from the Company – put presumptively beyond the reach of the transferor and its creditors, even in the event of bankruptcy or other receivership, (b) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (c) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. Loan Servicing Rights The Company holds rights to service the guaranteed portion of U.S. Small Business Administration loans sold in the secondary market. Loan servicing rights are capitalized at estimated fair value when acquired through the origination of loans that are subsequently sold with the servicing rights retained. Loan servicing rights are amortized to servicing income on loans sold approximately in proportion to and over the period of estimated net servicing income. The value of loan servicing rights at the date of the sale of loans is estimated based on the discounted present value of expected future cash flows using key assumptions for servicing income and costs and expected prepayment rates on the underlying loans. The estimated fair value is periodically evaluated for impairment by comparing actual cash flows and estimated future cash flows from the loan servicing assets to those estimated at the time that the loan servicing assets were originated. Fair values are estimated using expected future discounted cash flows based on current market rates of interest. For purposes of measuring impairment, the loan servicing rights must be stratified by one or more predominant risk characteristics of the underlying loans. The Company stratifies its capitalized loan servicing rights based on product type and term of the underlying loans. The amount of impairment recognized is the amount, if any, by which the amortized cost of the loan servicing rights exceeds their fair value. Impairment, if deemed temporary, is recognized through a valuation allowance to the extent that fair value is less than the recorded amount. The Company had $22 thousand in loan servicing rights recorded within Other Assets on the Consolidated Balance Sheets as of December 31, 2023. The Company did not have any loan servicing rights as of December 31, 2022. Income Taxes Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences, operating loss carryforwards, and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company recorded no liability for unrecognized tax benefits at December 31, 2023 or 2022. Earnings Per Common Share Earnings per common share is calculated in accordance with Accounting Standard Codification (“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 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. Earnings per share are restated for all stock splits and dividends through the date the financial statements are issued. Advertising Costs The Company follows the policy of charging the production costs of advertising to expense as incurred. Advertising expense was $288 thousand and $193 thousand for the years ended December 31, 2023 and 2022, respectively. Share-Based Compensation The Company recognizes the compensation cost relating to share-based payment transactions based on the grant date fair value of the equity instruments issued. The share compensation accounting guidance requires that compensation cost for all share-based awards be calculated and recognized over the vesting period. A Black-Scholes model is used to estimate the fair value of stock options. Restricted stock awards are valued using the closing stock price on the date of grant. The Company’s accounting policy is to recognize forfeitures as they occur. Comprehensive Income (Loss) Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains (losses) on securities available-for-sale and the amortization of unrealized losses or accretion of unrealized gains on securities transferred from available-for-sale to held-to-maturity, which are also recognized as a separate component of equity. Items reclassified out of accumulated other comprehensive income (loss) to net income relate solely to realized gains (losses) on sales of securities available-for-sale and appear under the caption “Losses on sale of available for sale securities” in the Company’s Consolidated Statements of Income. Derivatives The Company enters into interest rate swaps (“swaps”) with commercial loan customers to provide a facility to mitigate the fluctuations in the variable rate on the respective loans. These swaps are matched in exact offsetting terms to swaps that the Company enters into with an outside third party. The swaps are reported at fair value in other assets or other liabilities in the Consolidated Balance Sheets. The Company's swaps qualify as derivatives, but are not designated as hedging instruments. As such, any net gain or loss resulting from changes in the fair value is recognized in other operating (loss) income in the Consolidated Statements of Income. Refer to Note 5 for further discussion regarding the Company’s swaps. Fair Value of Financial Instruments Fair values of various assets and liabilities are estimated using relevant market information, valuation techniques and other assumptions, as more fully disclosed in Note 12. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates. Accounting Standards Adopted in 2023 ASU 2016-13 In addition, CECL made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities if management does not intend to sell and does not believe that it is more likely than not they will be required to sell. The Company adopted ASC 326 and all related subsequent amendments thereto effective January 1, 2023 using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. At adoption, the after tax impact to retained earnings was a reduction of $(2.3) million based on our evaluation as of that date. This adjustment consisted of increases to the allowance for credit losses on loans, as well as the Company's allowance for unfunded loan commitments. The Company adopted ASC 326 using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2023. As of December 31, 2022, the Company did not have any other-than-temporarily impaired investment securities. The Company did not record an allowance for credit losses for securities classified as available-for-sale or held-to-maturity upon adoption. The Company elected not to measure an allowance for credit losses for accrued interest receivable and instead elected to reverse interest income on loans or securities that are placed on nonaccrual status, which is generally when the instrument is 90 days past due, or earlier if the Company believes the collection of interest is doubtful. The Company has concluded that this policy results in the timely reversal of uncollectible interest. The adoption of CECL did not result in a significant change to any other credit risk management and monitoring processes, including identification of past due or delinquent borrowers, nonaccrual practices or charge-off policy. ASU 2022-02 refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the amendments require that the Company disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. The Company adopted the standard prospectively and it did not have a material impact on the financial statements. |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2023 | |
Investment Securities | |
Investment Securities | Note 2— Investment Securities Available-for-Sale Each of the securities in the Company’s available-for-sale investment portfolio is either covered by the explicit or implied guarantee of the United States government or one of its agencies or rated investment grade or higher. All available-for-sale securities were current with no securities past due or on nonaccrual as of December 31, 2023 or December 31, 2022. The following tables summarize the amortized cost and fair value of securities available-for-sale and the corresponding amounts of gross unrealized gains and losses at December 31, 2023 and December 31, 2022, respectively. December 31, 2023 Gross Gross Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains (Losses) Value Available-for-sale U.S. Treasuries $ 44,793 $ — $ (1,816) $ 42,977 U.S. government and federal agencies 13,850 — (575) 13,275 Corporate bonds 3,000 — (477) 2,523 Collateralized mortgage obligations 40,806 — (6,496) 34,310 Tax-exempt municipal 1,380 — (149) 1,231 Taxable municipal 606 — (19) 587 Mortgage-backed 81,255 — (6,165) 75,090 Total Available-for-sale Securities $ 185,690 $ — $ (15,697) $ 169,993 December 31, 2022 Gross Gross Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains (Losses) Value Available-for-sale U.S. Treasuries $ 63,480 $ — $ (4,270) $ 59,210 U.S. government and federal agencies 38,748 — (3,988) 34,760 Corporate bonds 3,000 — (386) 2,614 Collateralized mortgage obligations 44,732 — (6,258) 38,474 Tax-exempt municipal 4,993 — (348) 4,645 Taxable municipal 608 — (29) 579 Mortgage-backed 238,652 — (21,358) 217,294 Total Available-for-sale Securities $ 394,213 $ — $ (36,637) $ 357,576 During 2023, the Company sold available-for-sale securities with a total par value of $173.2 million resulting in a gross pre-tax loss of $17.3 million. The Company did not sell or recognize any gain or loss for any securities in 2022. Available-for-sale securities having a market value of $90.3 million and $83.4 million at December 31, 2023 and December 31, 2022, respectively, were pledged to secure public deposits and for other purposes required by law. These securities had an amortized cost of $95.8 million and $91.0 million at December 31, 2023 and December 31, 2022, respectively. The following tables summarize the fair value of securities available-for-sale at December 31, 2023 and December 31, 2022 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. December 31, 2023 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 Available-for-sale U.S. Treasuries $ — $ — $ 42,977 $ (1,816) $ 42,977 $ (1,816) U.S. government and federal agencies — — 13,275 (575) 13,275 (575) Corporate bonds — — 2,523 (477) 2,523 (477) Collateralized mortgage obligations — — 34,310 (6,496) 34,310 (6,496) Tax-exempt municipal — — 1,231 (149) 1,231 (149) Taxable municipal — — 587 (19) 587 (19) Mortgage-backed — — 75,090 (6,165) 75,090 (6,165) Total Available-for-sale Securities $ — $ — $ 169,993 $ (15,697) $ 169,993 $ (15,697) December 31, 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 Available-for-sale U.S. Treasuries $ 31,261 $ (1,194) $ 27,949 $ (3,076) $ 59,210 $ (4,270) U.S. government and federal agencies 16,107 (1,078) 18,653 (2,910) 34,760 (3,988) Corporate bonds 2,614 (386) — — 2,614 (386) Collateralized mortgage obligations 16,746 (1,143) 21,728 (5,115) 38,474 (6,258) Tax-exempt municipal 4,645 (348) — — 4,645 (348) Taxable municipal 337 (2) 242 (27) 579 (29) Mortgage-backed 145,795 (9,612) 71,499 (11,746) 217,294 (21,358) Total Available-for-sale Securities $ 217,505 $ (13,763) $ 140,071 $ (22,874) $ 357,576 $ (36,637) The Company had 158 and 98 securities in an unrealized loss position as of December 31, 2023 and December 31, 2022, respectively. The Company has evaluated available-for-sale securities in an unrealized loss position for credit related impairment at December 31, 2023 and December 31, 2022 and concluded no impairment existed based on a combination of factors, which included: (1) the securities are of high credit quality, (2) unrealized losses are primarily the result of market volatility and increases in market interest rates, (3) the contractual terms of the investments do not permit the issuer(s) to settle the securities at a price less than the par value of each investment, (4) issuers continue to make timely principal and interest payments, and (5) the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis. As such, there was no allowance for credit losses on available-for-sale securities at December 31, 2023. The table below summarizes the contractual maturities of our available-for-sale investment securities as of December 31, 2023. Issuers may have the right to call or prepay certain obligations and as such, the expected maturities of our securities may differ from the scheduled contractual maturities presented below. December 31, 2023 Amortized Fair (Dollars in thousands) Cost Value Available-for-sale Due in one year or less $ 22,248 $ 21,933 Due after one year through five years 46,393 44,271 Due after five years through ten years 53,890 50,962 Due after ten years 63,159 52,827 Total Available-for-sale Securities $ 185,690 $ 169,993 In the prevailing rate environments as of December 31, 2023 and December 31, 2022, the Company’s available-for-sale investment portfolio had an estimated weighted average remaining life of approximately 3.0 years and 3.8 years, respectively. Held-to-Maturity Each of the securities in the Company’s held-to-maturity investment portfolio is either rated investment grade or higher or covered by the explicit or implied guarantee of the United States government or one of its agencies. All held-to-maturity securities were current with no securities past due or on nonaccrual as of December 31, 2023 or December 31, 2022. The following tables summarize the amortized cost and fair value of securities held-to-maturity and the corresponding amounts of gross unrealized losses at December 31, 2023 and December 31, 2022, respectively. December 31, 2023 Gross Gross Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains (Losses) Value Held-to-maturity U.S. Treasuries $ 6,001 $ — $ (667) $ 5,334 U.S. government and federal agencies 35,434 — (5,100) 30,334 Collateralized mortgage obligations 19,395 — (4,095) 15,300 Taxable municipal 6,057 — (1,101) 4,956 Mortgage-backed 28,618 — (5,010) 23,608 Total Held-to-maturity Securities $ 95,505 $ — $ (15,973) $ 79,532 December 31, 2022 Gross Gross Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains (Losses) Value Held-to-maturity U.S. Treasuries $ 6,000 $ — $ (840) $ 5,160 U.S. government and federal agencies 35,551 — (6,135) 29,416 Collateralized mortgage obligations 21,275 — (4,227) 17,048 Taxable municipal 6,073 — (1,364) 4,709 Mortgage-backed 30,516 — (5,688) 24,828 Total Held-to-maturity Securities $ 99,415 $ — $ (18,254) $ 81,161 Held-to-maturity securities having a market value of $36.1 million and $31.0 million at December 31, 2023 and December 31, 2022, respectively, were pledged to secure public deposits and for other purposes required by law. These securities had an amortized cost of $42.3 million and $37.7 million at December 31, 2023 and December 31, 2022, respectively. The following table summarizes the fair value of securities held-to-maturity at December 31, 2022 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. December 31, 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 $ — $ — $ 5,160 $ (840) $ 5,160 $ (840) U.S. government and federal agencies — — 29,416 (6,135) 29,416 (6,135) Collateralized mortgage obligations — — 17,048 (4,227) 17,048 (4,227) Taxable municipal — — 4,709 (1,364) 4,709 (1,364) Mortgage-backed 825 (159) 24,003 (5,529) 24,828 (5,688) Total Held-to-maturity Securities $ 825 $ (159) $ 80,336 $ (18,095) $ 81,161 $ (18,254) The Company evaluates the credit risk of its held-to-maturity securities on at least a quarterly basis. The Company estimates expected credit losses on held-to-maturity securities on an individual basis based on a PD/LGD methodology primarily using security-level credit ratings. The primary indicators of credit quality for the Company’s held-to-maturity portfolio are security type and credit rating, which is influenced by a number of factors including obligor cash flow, geography, seniority, and others. The Company’s held-to-maturity securities with credit risk were comprised of municipal bonds and had a credit rating of AA or better as of December 31, 2023. All other held-to-maturity securities are covered by the explicit or implied guarantee of the United States government or one of its agencies. The Company did not have an allowance for credit losses on held-to-maturity securities as of December 31, 2023 or upon adoption of ASC 326. The table below summarizes the contractual maturities of our held-to-maturity investment securities as of December 31, 2023. Issuers 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. December 31, 2023 Amortized Fair (Dollars in thousands) Cost Value Held-to-maturity Due in one year or less $ — $ — Due after one year through five years 22,153 19,600 Due after five years through ten years 23,492 19,766 Due after ten years 49,860 40,166 Total Held-to-maturity Securities $ 95,505 $ 79,532 In the prevailing rate environments as of December 31, 2023 and December 31, 2022, the Company’s held-to-maturity investment portfolio had an estimated weighted average remaining life of approximately 6.7 years and 7.3 years, respectively. Restricted Securities The table below summarizes the carrying amount of restricted securities as of December 31, 2023 and December 31, 2022. (Dollars in thousands) December 31, 2023 December 31, 2022 Federal Reserve Bank Stock $ 3,310 $ 3,292 Federal Home Loan Bank Stock 1,642 1,073 Community Bankers’ Bank Stock 60 60 Total Restricted Securities $ 5,012 $ 4,425 Equity Securities The Company held equity securities with readily determinable fair values totaling $2.8 million and $2.1 million at December 31, 2023 and December 31, 2022, 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. Changes in the fair value of these securities are reflected in earnings. A gain of $317 thousand and a loss of $(354) thousand were recorded in non-interest income in the Consolidated Statements of Income as of December 31, 2023 and December 31, 2022, respectively. |
Loans
Loans | 12 Months Ended |
Dec. 31, 2023 | |
Allowance for Loan Credit Losses | |
Loans | Note 3— Loans The following table presents the composition of the Company’s loan portfolio as of December 31, 2023 and December 31, 2022. Table 3.1: Loan Portfolio Composition (Dollars in thousands) December 31, 2023 December 31, 2022 Real Estate Loans: Commercial $ 1,146,116 $ 1,118,127 Construction and land development 180,922 195,027 Residential 482,182 426,841 Commercial - Non-Real Estate: Commercial loans 45,204 44,924 Consumer - Non-Real Estate: Consumer loans 560 529 Total Gross Loans $ 1,854,984 $ 1,785,448 Allowance for loan credit losses (19,543) (20,208) Net deferred loan costs 4,983 4,060 Total net loans $ 1,840,424 $ 1,769,300 Portfolio Segments The Company currently manages its loan products and the respective exposure to credit losses by the following specific portfolio segments which are levels at which the Company develops and documents its systematic methodology to determine the allowance for loan credit losses attributable to each respective portfolio segment. These segments are: ● Real estate - commercial loans – The real estate commercial loans category contains commercial mortgage loans secured by owner occupied, non-owner occupied, and multifamily real estate. ● Real estate - construction and land development loans – The real estate construction and land development loans category contains residential and commercial construction loan financing to builders and developers and to consumers building their own homes. ● Real estate - residential loans – The real estate residential mortgage loans category contains permanent mortgage loans principally to consumers secured by residential real estate. ● Commercial loans – The commercial loans category contains business purpose loans made to provide funds for the financing of equipment, receivables, contract administration expenses, and other general corporate needs of commercial businesses. ● Consumer loans – The consumer loans category contains personal loans such as installment loans and lines of credit. |
Allowance for Loan Credit Losse
Allowance for Loan Credit Losses | 12 Months Ended |
Dec. 31, 2023 | |
Allowance for Loan Credit Losses | |
Allowance for Loan Credit Losses | Note 4— Allowance for Loan Credit Losses On January 1, 2023, the Company adopted the CECL methodology as required under ASC 326. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables. For further discussion on the Company’s accounting policies and policy elections related to the accounting standard update refer to Note 1 of this Form 10-K. All loan information presented as of December 31, 2023 is in accordance with ASC 326. All loan information presented prior to December 31, 2023 is in accordance with previous applicable GAAP. The following table presents the activity in the allowance for loan credit losses for the twelve months ended December 31, 2023. Table 4.1: Allowance for Loan Credit Losses December 31, 2023 Real Estate Construction & Land Dollars in thousands Commercial Development Residential Commercial Consumer Unallocated Total Beginning balance, December 31, 2022 $ 13,205 $ 2,860 $ 3,044 $ 456 $ 5 $ 638 $ 20,208 Adjustment to allowance for adoption of ASC 326 (2,649) 476 4,552 367 57 (638) 2,165 Charge-offs — — — — — — — Recoveries — — — 2 — — 2 Provision for (recovery of) credit losses 2,285 (1,549) (3,273) (330) 35 — (2,832) Ending balance, December 31, 2023 $ 12,841 $ 1,787 $ 4,323 $ 495 $ 97 $ — $ 19,543 The following table presents the activity for the allowance for loan losses for the twelve months ended December 31, 2022. Table 4.2: Allowance for Loan Losses December 31, 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 — — — 2 — — 2 Provision for (recovery of) loan losses 115 36 275 (257) — 6 175 Ending Balance, December 31, 2022 $ 13,205 $ 2,860 $ 3,044 $ 456 $ 5 $ 638 $ 20,208 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 December 31, 2022. There were no collateral dependent or individually evaluated loans as of December 31, 2023. Table 4.3: Allowance for Loan Losses and Loans by Impairment Methodology December 31, 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 13,205 2,860 3,044 456 5 638 20,208 Total allowance $ 13,205 $ 2,860 $ 3,044 $ 456 $ 5 $ 638 $ 20,208 Loans: Individually evaluated for impairment $ — $ — $ 418 $ — $ — $ — $ 418 Collectively evaluated for impairment 1,118,127 195,027 426,423 44,924 529 — 1,785,030 Total loans $ 1,118,127 $ 195,027 $ 426,841 $ 44,924 $ 529 $ — $ 1,785,448 Impaired loans Prior to the adoption of ASC 326, loans were considered impaired when, based on current information and events, it was probable the Company would be unable to collect all amounts due in accordance with the original contractual terms of the loan agreements. Impaired loans include loans on nonaccrual status and accruing TDRs. When determining if the Company would be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement, the Company considered the borrower’s capacity to pay, which included such factors as the borrower’s current financial statements, an analysis of global cash flow sufficient to pay all debt obligations and an evaluation of secondary sources of repayment, such as guarantor support and collateral value. The following tables present a summary of impaired loans and the related allowance as of December 31, 2022. Table 4.4: Impaired Loans by Class December 31, 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 418 418 — 418 — 427 15 Commercial — — — — — — — Consumer — — — — — — — Total Impaired Loans $ 418 $ 418 $ — $ 418 $ — $ 427 $ 15 Delinquency Information The following tables present a summary of past due and non-accrual loans by class as of December 31, 2023 and December 31, 2022. Table 4.5: Past Due and Non-Accrual Loans December 31, 2023 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 $ — $ — $ — $ — $ 1,146,116 $ 1,146,116 $ — $ — Construction and land development — — — — 180,922 180,922 — — Residential — — — — 482,182 482,182 — — Commercial — — — — 45,204 45,204 — — Consumer — — — — 560 560 — — Total Loans $ — $ — $ — $ — $ 1,854,984 $ 1,854,984 $ — $ — December 31, 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 $ — $ — $ — $ — $ 1,118,127 $ 1,118,127 $ — $ — Construction and land development — — — — 195,027 195,027 — — Residential — — — — 426,841 426,841 — — Commercial — — — — 44,924 44,924 — — Consumer — — — — 529 529 — — Total Loans $ — $ — $ — $ — $ 1,785,448 $ 1,785,448 $ — $ — Credit Quality Indicators The Company assesses credit quality indicators based on internal risk rating of loans. Each loan is evaluated at least annually with more frequent evaluation of more severely criticized loans. The indicators represent the rating for loans as of the date presented is based on the most recent credit review performed. Internal risk rating definitions are: Pass Special Mention Substandard Doubtful Loss The Company has a portfolio of smaller homogenous loans that are not individually risk rated and include residential permanent and construction mortgages, home equity lines of credit, and consumer installment loans. For these loans, management uses payment status as the primary credit quality indicator. The payment status of these loans is then translated into an internal risk rating. The following table summarizes the translation of past due status to risk rating for loans that are not individually risk rated. Internal Days Past Due Risk Rating 0 - 29 days Pass 30-59 days Special Mention 60-89 days Substandard 90-119 days Doubtful 120+ days Loss The following table presents the Company’s recorded investment in loans by credit quality indicator by year of origination as of December 31, 2023. Table 4.6: Credit Quality Information by Loan Class Term Loans by Year of Origination (Dollars in thousands) 2023 2022 2021 2020 2019 Prior Revolving Total Real Estate Loans - Commercial Pass $ 67,675 $ 302,342 $ 201,801 $ 125,828 $ 96,424 $ 334,132 $ 3,575 $ 1,131,777 Special mention — 13,102 — 1,237 — — — 14,339 Substandard — — — — — — — — Doubtful — — — — — — — — Loss — — — — — — — — Total Real Estate Loans - Commercial $ 67,675 $ 315,444 $ 201,801 $ 127,065 $ 96,424 $ 334,132 $ 3,575 $ 1,146,116 Current period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — Real Estate Loans - Construction and land development Pass $ 47,253 $ 56,408 $ 33,827 $ 9,360 $ 8 $ 7,046 $ 24,891 $ 178,793 Special mention — — — — 2,129 — — 2,129 Substandard — — — — — — — — Doubtful — — — — — — — — Loss — — — — — — — — Total Real Estate Loans - Construction and land development $ 47,253 $ 56,408 $ 33,827 $ 9,360 $ 2,137 $ 7,046 $ 24,891 $ 180,922 Current period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — Real Estate Loans - Residential Pass $ 83,060 $ 114,865 $ 133,188 $ 87,275 $ 24,883 $ 21,380 $ 17,531 $ 482,182 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Loss — — — — — — — — Total Real Estate Loans - Residential $ 83,060 $ 114,865 $ 133,188 $ 87,275 $ 24,883 $ 21,380 $ 17,531 $ 482,182 Current period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial Loans Pass $ 7,564 $ 6,838 $ 1,959 $ 3,207 $ 4,482 $ 4,787 $ 16,367 $ 45,204 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Loss — — — — — — — — Total Commercial Loans $ 7,564 $ 6,838 $ 1,959 $ 3,207 $ 4,482 $ 4,787 $ 16,367 $ 45,204 Current period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — Consumer Loans Pass $ 485 $ 6 $ 26 $ — $ — $ 10 $ 33 $ 560 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Loss — — — — — — — — Total Consumer Loans $ 485 $ 6 $ 26 $ — $ — $ 10 $ 33 $ 560 Current period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — December 31, 2022 Special Total (Dollars in thousands) Pass Mention Substandard Doubtful Loss Loans Real Estate Loans Commercial $ 1,116,890 $ 1,237 $ — $ — $ — $ 1,118,127 Construction and land development 192,877 2,150 — — — 195,027 Residential 426,841 — — — — 426,841 Commercial 44,924 — — — — 44,924 Consumer 529 — — — — 529 Total Loans $ 1,782,061 $ 3,387 $ — $ — $ — $ 1,785,448 The allowance for loan credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination. The starting point for the estimate of the allowance for loan credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. 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 did not make any loan modifications to borrowers experiencing financial difficulty during the twelve months ended December 31, 2023. The Company had a recorded investment in TDRs of $418 thousand as of December 31, 2022, all of which were in compliance with their modified terms at December 31, 2022. There were no loans modified in TDRs that subsequently defaulted within 12 months of their modification date during the twelve months ended December 31, 2023 or twelve months ended December 31, 2022. As of December 31, 2022, none of the Bank’s TDRs required a specific reserve. As of December 31, 2022, there were no additional commitments to disburse funds on loans classified TDRs. The Company adopted ASU 2022-02 on January 1, 2023, which eliminated the accounting guidance for TDRs. Unfunded Commitments The Company maintains an allowance for off-balance sheet credit exposures such as unfunded balances for existing lines of credit, commitments to extend future credit, as well as both standby and commercial letters of credit when there is a contractual obligation to extend credit and when this extension of credit is not unconditionally cancellable by the Company. The allowance for off-balance sheet credit exposures is adjusted as a provision for (or recovery of) credit losses in the Consolidated Statements of Income. The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the allowance for loan credit losses. The allowance for credit losses for unfunded loan commitments of $620 thousand and $303 thousand at December 31, 2023 and December 31, 2022, respectively, is separately classified within Other Liabilities on the Consolidated Balance Sheets. The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the twelve months ended December 31, 2023. Table 4.7: Allowance for Credit Losses – Unfunded Commitments Allowance for Credit Losses (Dollars in thousands) Unfunded Commitments Beginning balance, December 31, 2022 $ 303 Adjustment to allowance for unfunded commitments for adoption of ASC 326 737 Recovery of credit losses (420) Ending balance, December 31, 2023 $ 620 |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2023 | |
Derivatives | |
Derivatives | Note 5— Derivatives The Company enters into interest rate swap agreements (“swaps”) with commercial loan customers to provide a facility for customers to mitigate the fluctuations in the variable rate on the respective loans. These swaps are matched in exact offsetting terms to swaps that the Company enters into with an outside third party. These swaps qualify as derivatives, but are not designated as hedging instruments. The following table summarizes the Company’s swaps at December 31, 2023 and December 31, 2022. Table 5.1: Derivatives December 31, 2023 Estimated Weighted Average Notional Fair Years to Receive Pay (Dollars in thousands) Amount Value Maturity Rate Rate Interest rate swap agreements: Pay fixed/receive variable swaps $ 19,444 $ 846 3.2 years 5.87 % 3.39 % Pay variable/receive fixed swaps 19,444 (846) 3.2 years 3.39 % 5.87 % Total interest rate swap agreements $ 38,888 $ — 3.2 years 4.63 % 4.63 % December 31, 2022 Estimated Weighted Average Notional Fair Years to Receive Pay (Dollars in thousands) Amount Value Maturity Rate Rate Interest rate swap agreements: Pay fixed/receive variable swaps $ 13,767 $ 1,217 2.8 years 6.02 % 2.59 % Pay variable/receive fixed swaps 13,767 (1,217) 2.8 years 2.59 % 6.02 % Total interest rate swap agreements $ 27,534 $ — 2.8 years 4.31 % 4.31 % The |
Bank Premises and Equipment, Ne
Bank Premises and Equipment, Net | 12 Months Ended |
Dec. 31, 2023 | |
Bank Premises and Equipment, Net | |
Bank Premises and Equipment, Net | Note 6— Bank Premises and Equipment, Net The following table summarizes major classes of bank premises and equipment and the total accumulated depreciation as of December 31, 2023 and December 31, 2022. Table 6.1: Components of Bank Premises and Equipment, Net (Dollars in thousands) December 31, 2023 December 31, 2022 Leasehold improvements $ 2,910 $ 2,873 Furniture and equipment 6,721 6,268 Total Bank Premises and Equipment $ 9,631 $ 9,141 Less: Accumulated depreciation (8,350) (7,922) Total Bank Premises and Equipment, Net $ 1,281 $ 1,219 Depreciation expense was $484 thousand and $557 thousand for the years ended December 31, 2023 and December 31, 2022, respectively. |
Deposits and Borrowings
Deposits and Borrowings | 12 Months Ended |
Dec. 31, 2023 | |
Deposits and Borrowings | |
Deposits and Borrowings | Note 7— Deposits and Borrowings The following table shows the components of the Company’s funding sources. Table 7.1: Composition of Deposits, Short-Term Borrowings and Long-Term Debt (Dollars in thousands) December 31, 2023 December 31, 2022 Deposits: Non-interest bearing demand deposits (1) $ 411,374 $ 476,697 Interest-bearing demand deposits (1) 607,971 691,945 Savings deposits 52,061 95,241 Time deposits (2) 835,194 803,857 Total Deposits $ 1,906,600 $ 2,067,740 (1) Overdraft demand deposits reclassified to loans totaled $1 thousand at both December 31, 2023 and December 31, 2022. (2) The aggregate amount of certificates of deposit with a minimum denomination of $250,000 was $359.3 million and $318.7 million at December 31, 2023 and December 31, 2022, respectively. December 31, 2023 December 31, 2022 (Dollars in thousands) Stated Interest Rate Weighted-Average Interest Rate Carrying Value Carrying Value Short-term Debt: Federal Reserve Bank borrowings 4.80 % 4.80 % $ 54,000 — Total Short-term Debt $ 54,000 — Long-term Debt: Subordinated debt 5.25 % 5.25 % $ 24,708 $ 24,624 Total Long-term Debt $ 24,708 $ 24,624 The Company obtains certain deposits through the efforts of third-party brokers. Brokered deposits totaled $320.6 million and $352.0 million at December 31, 2023 and December 31, 2022, respectively, and were included primarily in time deposits on the Company’s Consolidated Balance Sheets. Reciprocal IntraFi certificates of deposit totaled $45.6 million and $25.7 million at December 31, 2023 and December 31, 2022, respectively. Reciprocal IntraFi demand and money market deposits totaled $234.9 million and $197.3 million at December 31, 2023 and December 31, 2022, respectively. At December 31, 2023, 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 the three-month Secured Overnight Financing Rate 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. The Company from time to time uses Federal Home Loan Bank of Atlanta (“FHLB”) advances as a source of funding and interest rate risk management tool. 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 December 31, 2023, the Company did not have any outstanding FHLB advances. Available borrowing capacity based on collateral value amounted to approximately $436.9 million at December 31, 2023. The Company also has the capacity to borrow up to $22.8 million at the Federal Reserve discount window of which $0 had been drawn upon at December 31, 2023. The Bank had loans pledged at the Federal Reserve discount window totaling $30.9 million as of December 31, 2023. On March 12, 2023, the Reserve Bank made available the Bank Term Funding Program (“BTFP”), which enhances the ability of banks to borrow against the par value of certain high-quality, unencumbered investments. On May 15, 2023, the Company obtained a $54.0 million BTFP advance to secure lower funding costs relative to wholesale deposits. The BTFP advance has a term of one year, bears interest at a fixed rate of 4.80% and can be prepaid at any time without penalty prior to maturity. At December 31, 2023, the Company had pledged as collateral for the BTFP advance investment securities with an amortized cost and fair value of $54.6 million and $44.6 million, respectively. The Company also has unsecured federal funds lines of credit with correspondent banks available for overnight borrowing of $110.0 million of which $10 million had been drawn upon at December 31, 2023. The following table shows the carrying amount of the Company’s time deposits by contractual maturity as of December 31, 2023. Table 7.2: Scheduled Maturities of Time Deposits (Dollars in thousands) December 31, 2023 2024 $ 574,056 2025 181,797 2026 68,629 2027 10,165 2028 547 Thereafter — Total $ 835,194 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Leases | Note 8— Leases Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor. The Company’s long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably certain of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations. The following table presents an overview of the Company’s leases as of December 31, 2023 and December 31, 2022. Table 8.1: Leases Overview (Dollars in thousands) December 31, 2023 December 31, 2022 Lease liabilities $ 4,446 $ 4,858 Right-of-use assets 4,176 4,611 Weighted average remaining lease term (Years) 3.89 years 4.08 years Weighted average discount rate 3.00 % 2.62 % The following table presents a composition of the Company’s lease costs for the years ended December 31, 2023 and December 31, 2022. Table 8.2: Cost of Leases (Dollars in thousands) December 31, 2023 December 31, 2022 Operating lease cost $ 1,392 $ 1,469 Variable lease cost — — Short-term lease cost — — Total Lease Cost $ 1,392 $ 1,469 The total cash paid for amounts included in the measurement of lease liabilities totaled $1.4 million and $1.5 million for the years ended December 31, 2023 and December 31, 2022, respectively. The following table is a maturity schedule of the Company’s future lease payments and reconciles the undiscounted total obligation to the total recorded lease liabilities as of December 31, 2023. Table 8.3: Lease Maturity Schedule (Dollars in thousands) December 31, 2023 2024 $ 1,322 2025 1,319 2026 1,121 2027 429 2028 291 Thereafter 276 Total Undiscounted Cash Flows $ 4,758 Discount (312) Lease Liabilities $ 4,446 Total rent expense, including building expenses and real estate taxes for certain locations, amounted to $1.5 million and $1.6 million for the years ended December 31, 2023 and 2022, respectively. Rental expenses are classified as a component of the occupancy expense of premises line item in the Consolidated Statements of Income. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | Note 9— 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 2020. The following table presents the significant components of the Company’s deferred tax assets and deferred tax liabilities as of December 31, 2023 and December 31, 2022. Table 9.1: Significant Components of Deferred Tax Assets and Liabilities (Dollars in thousands) December 31, 2023 December 31, 2022 Deferred Tax Assets: Allowance for loan credit losses $ 4,477 $ 4,581 Lease liabilities 987 1,101 Share-based compensation expense 45 91 Unrealized losses on debt securities 3,257 7,628 Other 453 416 Total Deferred Tax Assets $ 9,219 $ 13,817 Deferred Tax Liabilities: Right-of-use assets 927 1,045 Depreciation 53 49 Net deferred loan costs 1,106 920 Other 76 62 Total Deferred Tax Liabilities $ 2,162 $ 2,076 Net Deferred Tax Assets $ 7,057 $ 11,741 The following table summarizes the Company’s provision for income taxes charged to operations for the years ended December 31, 2023 and December 31, 2022, respectively. Table 9.2: Provision for Income Taxes (Dollars in thousands) December 31, 2023 December 31, 2022 Current tax expense $ 1,902 $ 7,666 Deferred tax expense 921 594 Total Income Tax Expense $ 2,823 $ 8,260 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 years ended December 31, 2023 and December 31, 2022, respectively. Table 9.3: Effective Income Tax Reconciliation (Dollars in thousands) December 31, 2023 December 31, 2022 Computed “expected” tax expense $ 1,676 $ 8,413 Increase (decrease) in income taxes resulting from: Bank-owned life insurance policy surrender 1,101 — State income taxes, net of federal benefit 180 516 Bank-owned life insurance (47) (114) Tax-exempt interest income (69) (158) Excess tax benefit on share-based compensation (19) (427) Other, net 1 30 Total $ 2,823 $ 8,260 |
Restriction on Cash
Restriction on Cash | 12 Months Ended |
Dec. 31, 2023 | |
Restriction on Cash | |
Restriction on Cash | Note 10— Restriction on Cash Prior to March 2020, the Company was required to maintain a reserve against its deposits in accordance with Regulation D of the Federal Reserve Act. In March 2020, the Federal Reserve reduced the reserve requirement to zero percent effective March 26, 2020. Prior to the change effective March 26, 2020, reserve requirement ratios on net transactions accounts differed based on the amount of net transaction accounts at the depository institution. As a result, the Company was not required to maintain a cash reserve requirement as of December 31, 2023 and December 31, 2022. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 11— 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 December 31, 2023 and December 31, 2022. Table 11.1: Unfunded Lending Commitments (Dollars in thousands) December 31, 2023 December 31, 2022 Commitments to extend credit $ 235,560 $ 240,084 Standby letters of credit $ 16,329 $ 14,677 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 | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | Note 12— 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 and Liabilities 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 and liabilities 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. Interest Rate Swap Agreements Interest rate swap agreements are measured by alternative pricing sources using a discounted cash flow method that incorporates current market interest rates. Based on the complex nature of interest rate swap agreements, the markets these instruments trade in are not as efficient and are less liquid than that of the more mature Level 1 markets. These characteristics classify interest rate swap agreements as Level 2 in the fair value hierarchy. The following table summarizes the fair value of assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 and December 31, 2022. Table 12.1: Assets and Liabilities Measured at Fair Value on a Recurring Basis Fair Value Measurements at December 31, 2023 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Balance as of Identical Assets Observable Inputs Inputs (Dollars in thousands) December 31, 2023 (Level 1) (Level 2) (Level 3) Assets: Securities available-for-sale: U.S. Treasuries $ 42,977 $ — $ 42,977 $ — U.S. government and federal agencies 13,275 — 13,275 — Corporate bonds 2,523 — 2,523 — Collateralized mortgage obligations 34,310 — 34,310 — Tax-exempt municipal 1,231 — 1,231 — Taxable municipal 587 — 587 — Mortgage-backed 75,090 — 75,090 — Equity securities, at fair value 2,792 2,792 — — Interest rate swap agreements 846 — 846 — Loan servicing rights 22 — — 22 Total assets at fair value $ 173,653 $ 2,792 $ 170,839 $ 22 Liabilities: Interest rate swap agreements $ 846 $ — $ 846 $ — Total liabilities at fair value $ 846 $ — $ 846 $ — Fair Value Measurements at December 31, 2022 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Balance as of Identical Assets Observable Inputs Inputs (Dollars in thousands) December 31, 2022 (Level 1) (Level 2) (Level 3) Assets: Securities available-for-sale: U.S. Treasuries $ 59,210 $ — $ 59,210 $ — U.S. government and federal agencies 34,760 — 34,760 — Corporate bonds 2,614 — 2,614 — Collateralized mortgage obligations 38,474 — 38,474 — Tax-exempt municipal 4,645 — 4,645 — Taxable municipal 579 — 579 — Mortgage-backed 217,294 — 217,294 — Equity securities, at fair value 2,115 2,115 — — Interest rate swap agreement 1,217 — 1,217 — Total assets at fair value $ 360,908 $ 2,115 $ 358,793 $ — Liabilities: Interest rate swap agreement $ 1,217 $ — $ 1,217 $ — Total liabilities at fair value $ 1,217 $ — $ 1,217 $ — 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: Collateral Dependent Loans In accordance with ASC 326, loans that do not share risk characteristics are evaluated on an individual basis. The Company designates individually evaluated loans on nonaccrual status as collateral dependent loans, as well as other loans that management of the Company designates as having higher risk and loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral. The measurement of loss associated with collateral dependent 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 credit losses on the Consolidated Statements of Income. The Company had no collateral dependent loans with a recorded reserve as of December 31, 2023 or December 31, 2022. 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 December 31, 2023 and 2022. 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 December 31, 2023 and December 31, 2022. Table 12.2: Fair Value of Financial Instruments Fair Value Measurements at December 31, 2023 Using Quoted Prices in Active Markets Significant for Identical Significant Other Unobservable Carrying Value as of Assets Observable Inputs Inputs Fair Value as of (Dollars in thousands) December 31, 2023 (Level 1) (Level 2) (Level 3) December 31, 2023 Assets: Cash and cash equivalents $ 99,005 $ 99,005 $ — $ — $ 99,005 Securities: Available-for-sale 169,993 — 169,993 — 169,993 Held-to-maturity 95,505 — 79,532 — 79,532 Equity securities, at fair value 2,792 2,792 — — 2,792 Restricted securities, at cost 5,012 — 5,012 — 5,012 Loans, net 1,840,424 — — 1,730,205 1,730,205 Interest rate swap agreements 846 — 846 — 846 Loan servicing rights 22 — — 22 22 Accrued interest receivable 6,110 — 6,110 — 6,110 Liabilities: Deposits $ 1,906,600 $ — $ 1,906,835 $ — $ 1,906,835 Federal Reserve Bank borrowings 54,000 — 54,000 — 54,000 Federal funds purchased 10,000 — 10,000 — 10,000 Subordinated debt 24,708 — — 21,873 21,873 Interest rate swap agreements 846 — 846 — 846 Accrued interest payable 4,559 — 4,559 — 4,559 Fair Value Measurements at December 31, 2022 Using Quoted Prices in Active Markets Significant for Identical Significant Other Unobservable Carrying Value as of Assets Observable Inputs Inputs Fair Value as of (Dollars in thousands) December 31, 2022 (Level 1) (Level 2) (Level 3) December 31, 2022 Assets: Cash and cash equivalents $ 61,599 $ 61,599 $ — $ — $ 61,599 Securities: Available-for-sale 357,576 — 357,576 — 357,576 Held-to-maturity 99,415 — 81,161 — 81,161 Equity securities, at fair value 2,115 2,115 — — 2,115 Restricted securities, at cost 4,425 — 4,425 — 4,425 Loans, net 1,769,300 — — 1,676,887 1,676,887 Interest rate swap agreement 1,217 — 1,217 — 1,217 Bank owned life insurance 21,170 — 21,170 — 21,170 Accrued interest receivable 5,531 — 5,531 — 5,531 Liabilities: Deposits $ 2,067,740 $ — $ 2,065,248 $ — $ 2,065,248 Subordinated debt 24,624 — — 22,457 22,457 Federal funds purchased 25,500 — 25,500 — 25,500 Interest rate swap agreement 1,217 — 1,217 — 1,217 Accrued interest payable 1,035 — 1,035 — 1,035 |
Earnings per Common Share
Earnings per Common Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings per Common Share | |
Earnings per Common Share | Note 13— 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 years December 31, 2023 and December 31, 2022. Table 13.1: Computation of Basic and Diluted Earnings per Common Share Year ended December 31, 2023 2022 Earnings per common share - basic: Income available to common shareholders (in thousands): Net income $ 5,158 $ 31,803 Less: Income attributable to unvested restricted stock awards (17) (136) Net income available to common shareholders $ 5,141 $ 31,667 Weighted average shares outstanding: Common shares outstanding, including unvested restricted stock 14,124,696 13,991,875 Less: Unvested restricted stock (47,771) (60,034) Weighted-average common shares outstanding - basic 14,076,925 13,931,841 Earnings per common share - basic $ 0.37 $ 2.27 Earnings per common share - diluted: Income available to common shareholders (in thousands): Net income $ 5,158 $ 31,803 Less: Income attributable to unvested restricted stock awards (17) (135) Net income available to common shareholders $ 5,141 $ 31,668 Weighted average shares outstanding: Common shares outstanding, including unvested restricted stock 14,124,696 13,991,875 Less: Unvested restricted stock (47,771) (60,034) Plus: Effect of dilutive options 70,268 152,586 Weighted-average common shares outstanding - diluted 14,147,193 14,084,427 Earnings per common share - diluted $ 0.36 $ 2.25 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 December 31, 2023 and December 31, 2022 were included as none had anti-dilutive effects. |
Stock Based Compensation Plan
Stock Based Compensation Plan | 12 Months Ended |
Dec. 31, 2023 | |
Stock Based Compensation Plan | |
Stock Based Compensation Plan | Note 14— 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 December 31, 2023, 278,529 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 2006 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 year ended December 31, 2023. Table 14.1: Summary of Stock Options Activity December 31, 2023 Weighted Average Aggregate Intrinsic Shares Exercise Price Value Outstanding at January 1, 2023 189,934 $ 11.76 Granted — — Exercised (27,375) 11.75 Forfeited or expired (412) 9.44 Outstanding at December 31, 2023 162,147 11.77 $ 1,749,454 Exercisable December 31, 2023 162,147 $ 11.77 $ 1,749,454 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 December 31, 2023. The intrinsic value of options exercised was $370 thousand for the year ended December 31, 2023 and $4.6 million for the year ended December 31, 2022. 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 December 31, 2023. Table 14.2: Summary of Stock Options Outstanding and Exercisable December 31, 2023 Options Outstanding Options Exercisable Weighted Average Weighted Average Remaining Remaining Number Contractual Life Number Contractual Life Exercise Prices Outstanding in Years Exercisable in Years $11.01 - $12.00 161,085 0.92 161,085 0.92 $12.01 - $13.00 1,062 0.98 1,062 0.98 Total 162,147 0.93 162,147 0.93 There were no options granted during the years ended December 31, 2023 or December 31, 2022. The Company did not have share-based compensation expense applicable to the Company’s share-based compensation plans for stock options for the year ended December 31, 2023 or December 31, 2022. The Company does not have any unrecognized share-based compensation expense related to nonvested options as of December 31, 2023. The table below provides a summary of the restricted stock awards granted under the 2015 plan. Table 14.3: Summary of Restricted Stock Awards December 31, 2023 Weighted Average Shares Grant Date Fair Value Nonvested at January 1, 2023 55,185 $ 21.80 Granted 22,893 23.65 Vested (30,390) 21.21 Forfeited (370) 15.50 Nonvested at December 31, 2023 47,318 23.12 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 $596 thousand and $573 thousand for the years ended December 31, 2023 and December 31, 2022, respectively. The total fair value of the shares, which vested during 2023 and 2022, was $717 thousand and $1.1 million, respectively. Unrecognized share-based compensation expense related to nonvested restricted stock grants amounted to $1.0 million as of December 31, 2023. This amount is expected to be recognized over a weighted-average period of 1.9 years. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2023 | |
Employee Benefit Plans | |
Employee Benefit Plans | Note 15— Employee Benefit Plans Effective August 1, 2006, the Company adopted a contributory 401(k) savings plan (the “401(k) Plan”) covering substantially all employees. Eligible employees may elect to defer a portion of their compensation to the 401(k) Plan. The Board of Directors may elect to match a portion of each employee’s contribution. The Company made contributions of $502 thousand and $474 thousand during the years ended December 31, 2023 and December 31, 2022, respectively. The costs associated with the Company’s 401(k) Plan are included in the salaries and employee benefits line item in the Consolidated Statements of Income. The Company approved a deferred compensation plan in 2017 that provides key employees an additional way to defer their salary on a pre-tax basis. Key employees are highly compensated employees as defined by the Internal Revenue Service (“IRS”). Board members may also participate in the plan to defer their board fees. The plan is voluntary and not subject to IRS/Department of Labor discrimination testing. The deferred compensation liability was $2.3 million and $1.9 million at December 31, 2023 and December 31, 2022, respectively, and was included in other liabilities on the Consolidated Balance Sheets. The Company incurred expenses for discretionary contributions of $297 thousand and $192 thousand for the years ended December 31, 2023 and December 31, 2022, respectively. These discretionary contributions vest for the participants over a period of three years unless years of service and age criteria are met . |
Regulatory Capital
Regulatory Capital | 12 Months Ended |
Dec. 31, 2023 | |
Regulatory Capital | |
Regulatory Capital | Note 16— 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 (the “Exchange Act”). 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 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 December 31, 2023 and December 31, 2022. 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 December 31, 2023, and is applicable for the common equity Tier 1, Tier 1, and total capital ratios. On January 1, 2023, the Company adopted ASC 326, which replaced the incurred loss methodology with the CECL methodology for estimating credit losses and generally applies to financial assets measured at amortized cost. The Federal Reserve and FDIC have adopted rules to identify which credit loss allowances under the CECL model are eligible for inclusion in regulatory capital and to provide banking organizations the option to phase in over a three-year transition period ending January 1, 2026 the day-one impact on regulatory capital that may result from the adoption of the CECL model. The Company implemented the CECL model on January 1, 2023 and elected to apply the provisions of the CECL deferral transition in the determination of its risk based capital ratios. The impact of the application of this deferral transition on the ratios was not significant. As of December 31, 2023, 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 Bank’s capital ratios as of December 31, 2023 and December 31, 2022. Table 16.1: Capital Ratios 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 December 31, 2023 Total capital (to risk weighted assets) $ 282,082 15.7 % $ 188,448 10.5 % $ 179,475 10.0 % Tier 1 capital (to risk weighted assets) 263,637 14.7 % 152,553 8.5 % 143,580 8.0 % Common equity tier 1 capital (to risk weighted assets) 263,637 14.7 % 125,632 7.0 % 116,658 6.5 % Tier 1 capital (to average assets) 263,637 11.6 % 91,163 4.0 % 113,954 5.0 % As of December 31, 2022 Total capital (to risk weighted assets) $ 283,471 15.6 % $ 190,798 10.5 % $ 181,712 10.0 % Tier 1 capital (to risk weighted assets) 262,960 14.4 % 155,219 8.5 % 146,089 8.0 % Common equity tier 1 capital (to risk weighted assets) 262,960 14.4 % 127,828 7.0 % 118,697 6.5 % Tier 1 capital (to average assets) 262,960 11.3 % 93,083 4.0 % 116,354 5.0 % (1) Including Capital Conservation Buffer |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
Revenue | |
Revenue | Note 17— 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 years ended December 31, 2023 and December 31, 2022. Table 17.1: Components of Non-Interest Income Year ended December 31, (Dollars in thousands) 2023 2022 Service charges on deposit accounts (1) Overdrawn account fees $ 82 $ 88 Account service fees 248 236 Other service charges and fees (1) Interchange income 403 409 Other charges and fees 435 247 Bank owned life insurance 224 544 Losses on sale of available-for-sale securities (17,316) — Insurance commissions (1) 386 382 Gain on sale of government guaranteed loans 131 — Non-qualified deferred compensation plan asset gains (losses), net 317 (354) Other income (2) 150 139 Total non-interest income (loss) $ (14,940) $ 1,691 (1) Income within the scope of ASC 606 – Revenue Recognition . (2) Includes other operating income within the scope of ASC 606 amounting to $59 thousand for the year ended December 31, 2023. Includes other operating income of $91 thousand related to swap fee income on a back-to-back loan swaps for the year ended December 31, 2023, which is outside the scope of ASC 606. Includes other operating income within the scope of ASC 606 amounting to $12 thousand for the year ended December 31, 2022. Includes other operating income of $127 thousand related to swap fee income on a back-to-back loan swaps for the year ended December 31, 2022, which is outside the scope of ASC 606. 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 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 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 | 12 Months Ended |
Dec. 31, 2023 | |
Other Operating Expenses | |
Other Operating Expenses | Note 18— Other Operating Expenses The following table shows the components of other operating expenses for the years ended December 31, 2023 and December 31, 2022. Table 18.1: Components of Other Operating Expenses Year ended December 31, (Dollars in thousands) 2023 2022 Advertising expense $ 288 $ 193 Data processing 1,936 1,940 FDIC insurance 1,041 605 Professional fees 329 1,231 State franchise tax 2,389 2,092 Director costs 876 810 Other operating expenses 1,531 1,595 Total other operating expenses $ 8,390 $ 8,466 |
Low Income Housing Tax Credit I
Low Income Housing Tax Credit Investments | 12 Months Ended |
Dec. 31, 2023 | |
Low Income Housing Tax Credit Investments | |
Low Income Housing Tax Credit Investments | Note 19— Low Income Housing Tax Credit Investments The Company has invested in seven separate housing equity funds as of December 31, 2023. The general purpose of these funds is to encourage and assist with participation in investing in low-income residential rental properties primarily located in the Commonwealth of Virginia, develop and implement strategies to maintain projects as low-income housing, deliver Federal Low Income Housing Credits to investors, allocate tax losses and other possible tax benefits to investors, and to preserve and protect project assets. The investments in these funds were recorded as other assets on the Company’s Consolidated Balance Sheets and were $4.7 million and $5.2 million at December 31, 2023 and December 31, 2022, respectively. The expected terms of these investments and the related tax benefits run through 2038. The net impact of amortization of the investments, tax credits and other tax benefits recognized as a component of income tax expense in the Consolidated Statements of Income during the years ended December 31, 2023 and December 31, 2022 was a benefit of $113 thousand and $94 thousand, respectively. Additional capital calls expected for the funds totaled $2.5 million at December 31, 2023 and $3.0 million at December 31, 2022 and are included in other liabilities on the Company’s Consolidated Balance Sheets. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | Note 20— Accumulated Other Comprehensive Income (Loss) The following table presents the changes in accumulated other comprehensive income (loss), by category, net of tax for the years ended December 31, 2023 and December 31, 2022. Table 20.1: Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax December 31, 2023 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, 2023 $ (28,942) $ 245 $ (28,697) Net change during the period 16,542 (96) 16,446 Ending balance, December 31, 2023 $ (12,400) $ 149 $ (12,251) December 31, 2022 Unrealized Gains on Securities Transferred from Unrealized Loss on Available-for-sale to Accumulated Other (Dollars in thousands) Available-for-sale Securities Held-to-maturity Comprehensive Loss Beginning balance, January 1, 2022 $ (789) $ 389 $ (400) Net change during the period (28,153) (144) (28,297) Ending Balance, December 31, 2022 $ (28,942) $ 245 $ (28,697) Items reclassified out of accumulated other comprehensive income (loss) to net income during the year ended December 31, 2023 consisted of losses on securities classified as available-for-sale. The losses on these transactions totaled $17.3 million and the related tax benefit was $3.6 million. Losses are included in the “Losses on sale of available-for-sale securities” line item and the related tax is presented in the “Income tax expense” line item in the Consolidated Statements of Income. The Company did not have any items reclassified out of accumulated other comprehensive income (loss) to net income during the year ended December 31, 2022. |
Parent Company Financials
Parent Company Financials | 12 Months Ended |
Dec. 31, 2023 | |
Parent Company Financials | |
Parent Company Financials | Note 21— Parent Company Financials The following tables summarize John Marshall Bancorp Inc.’s (Parent Company only) condensed financial statements as of and for the years ended December 31, 2023 and December 31, 2022. Table 21.1: Condensed Parent Company Financials Parent Company Only Condensed Balance Sheets (Dollars in thousands) December 31, 2023 December 31, 2022 Assets Cash and due from banks $ 4,874 $ 3,588 Equity securities, at fair value 2,792 2,115 Investment in subsidiary 249,666 234,263 Other assets 448 366 Total assets $ 257,780 $ 240,332 Liabilities and Shareholders’ Equity Subordinated debt, net of unamortized issuance costs $ 24,708 $ 24,624 Accrued interest payable 656 715 Other liabilities 2,502 2,193 Total liabilities $ 27,866 $ 27,532 Total shareholders’ equity $ 229,914 $ 212,800 Total liabilities and shareholders’ equity $ 257,780 $ 240,332 Parent Company Only Condensed Statements of Income Years Ended December 31, 2023 and 2022 (Dollars in thousands) 2023 2022 Income: Other income $ 317 $ (354) Dividends from subsidiary 6,108 4,150 Total income 6,425 3,796 Expense: Subordinated debt interest expense 1,396 1,810 Salaries and employee benefits 589 292 Other operating expenses 360 425 Total expense 2,345 2,527 Net income before income tax benefit and equity in undistributed earnings of subsidiary 4,080 1,269 Income tax benefit 425 605 Equity in undistributed earnings of subsidiary 653 29,929 Net income $ 5,158 $ 31,803 Parent Company Only Statements of Cash Flows Years Ended December 31, 2023 and 2022 (Dollars in thousands) 2023 2022 Cash Flows from Operating Activities Net income $ 5,158 $ 31,803 Adjustment to reconcile net income to net cash provided by (used in) operating activities: Equity in undistributed earnings of subsidiary (653) (29,929) Fair value adjustment on equity securities (317) 354 Amortization of debt issuance costs 84 317 Deferred tax (benefit) (82) (54) Changes in assets and liabilities: Increase in other assets — (2) Increase in other liabilities 250 278 Net cash provided by operating activities $ 4,440 $ 2,767 Cash Flows from Investing Activities Purchase of equity securities (360) (600) Net cash (used in) investing activities $ (360) $ (600) Cash Flows from Financing Activities Issuance of common stock for share options exercised 320 3,058 Repurchase of shares for tax withholding on share-based compensation (6) (8) Issuance of subordinated debt — 24,579 Repayment of subordinated debt — (25,000) Cash dividends paid (3,108) (2,799) Net cash used in financing activities $ (2,794) $ (170) Net increase in cash and cash equivalents $ 1,286 $ 1,997 Cash and cash equivalents, beginning of year 3,588 1,591 Cash and cash equivalents, end of year $ 4,874 $ 3,588 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions | |
Related Party Transactions | Note 22— Related Party Transactions The Company has had, and may be expected to have in the future, banking transactions in the ordinary course of business with directors, principal shareholders, executive officers, their immediate families and affiliated companies in which they are principal owners (commonly referred to as related parties), on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with parties not related to the Company. These loans totaled $12.9 million and $15.4 million as of December 31, 2023 and December 31, 2022, respectively. During 2023, there were total principal additions of $447 thousand and total principal payments of $2.9 million with respect to such loans. Deposits of directors, executive officers and other related parties totaled $24.1 million and $28.7 million at December 31, 2023 and December 31, 2022, respectively. |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policy (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Nature of Business and Summary of Significant Accounting Policy | |
Principles of Consolidation | Principles of Consolidation 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. |
Restriction on Dividends | Restriction on Dividends The Bank is subject to certain restrictions on the amount of dividends that it may pay to the Company without prior regulatory approval. At December 31, 2023, the Bank had $58.1 million available to distribute in the form of dividends to the Company. |
Use of Estimates | Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America (“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 credit losses. |
Reclassifications | Reclassifications Certain items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders’ equity. |
Concentration of Credit Risk | Concentration of Credit Risk Most of the Company’s activities are with customers located in the Washington, D.C. metropolitan area. Real estate loans, including commercial, construction and land development, and residential loans, represented 98% of the total loan portfolio at December 31, 2023 and 97% of the total loan portfolio at December 31, 2022. The Company does not have any significant concentrations to any one industry or customer. |
Cash and Cash Equivalents | Cash and Cash Equivalents For the purposes of the statements of cash flows, cash and cash equivalents include cash and balances due from banks and interest-bearing deposits in banks (items with an original maturity of three months or less). |
Securities | Securities Certain debt securities that management has the positive intent and ability to hold-to-maturity are classified as “held-to-maturity” and recorded at amortized cost. Debt securities not classified as held-to-maturity or trading, are classified as “available-for-sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported net of deferred tax in accumulated other comprehensive income (loss) within shareholders’ equity. Purchase premiums and discounts on debt securities are recognized in interest income using the interest method over the terms of the securities. Transfers of debt securities into the held-to-maturity classification from the available-for-sale classification are made at fair value on the date of transfer. The unrealized holding gain or loss on the date of the transfer is reported in accumulated other comprehensive income (loss) and in the carrying value of the held-to-maturity securities. Such amounts are amortized over the remaining contractual lives of the securities. Equity securities with readily determinable fair values are carried at fair value, with changes in fair value reported in net income. Any equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. Restricted equity securities are carried at cost and are periodically evaluated for impairment based on the ultimate recovery of par value. The entirety of any impairment on the equity securities is recognized in earnings. Gains and losses on sales of securities are recorded on the trade date and determined using the specific identification method. |
Allowance for credit losses | Allowance for Credit Losses - Held-to-Maturity Securities The Company estimates expected credit losses on held-to-maturity securities on an individual basis based on a Probability of Default/Loss Given Default (“PD/LGD”) methodology primarily using security-level credit ratings. The primary indicators of credit quality for the Company’s held-to-maturity portfolio are security type and credit rating, which are influenced by a number of factors including obligor cash flow, geography, seniority, among other factors. The Company’s held-to-maturity securities with credit risk are municipal bonds, which had a credit rating of AA or better as of December 31, 2023. All other held-to-maturity securities are covered by the explicit or implied guarantee of the United States government or one of its agencies. Changes in the allowance for credit loss are recorded as provision for (or recovery of) credit losses in the Consolidated Statements of Income. Allowance for Credit Losses - Available-for-Sale Securities Management evaluates all available-for-sale securities in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings. If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specific to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any deficiency is recorded as an allowance for credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any amount of unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income (loss). Changes in the allowance for credit loss are recorded as a provision for (or recovery of) credit losses in the Consolidated Statements of Income. Losses are charged against the allowance for credit loss when management believes an available-for-sale security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale securities totaled $518 thousand at December 31, 2023 Allowance for Credit Losses - Loans The allowance for loan credit losses represents an amount which, in management's judgment, is adequate to absorb the lifetime expected losses that may be sustained on outstanding loans at the balance sheet date based on the evaluation of the size and current risk characteristics of the loan portfolio, past events, current conditions, reasonable and supportable forecasts of future economic conditions, and prepayment experience. The allowance for loan credit losses is measured and recorded upon the initial recognition of a financial asset. The allowance for loan credit losses is reduced by charge-offs, net of recoveries of previous losses, and is increased or decreased by a provision for (or recovery of) credit losses, which is recorded in the Consolidated Statements of Income. The Company is utilizing a discounted cash flow model to estimate its current expected credit losses. For the purposes of calculating its quantitative reserves, the Company has segmented its loan portfolio based on loans which share similar risk characteristics. Within the quantitative portion of the calculation, the Company utilizes at least one or a combination of loss drivers, which may include unemployment rates, home price indices, and/or gross domestic product, to adjust its loss rates over a reasonable and supportable forecast period of one year. A straight-line reversion technique is used for the following four quarters, at which time the Company reverts to historical averages. To further adjust the allowance for credit losses for expected losses not already included within the quantitative component of the calculation, the Company may consider qualitative factors, including but not limited to: variability in the economic forecast, changes in volume and severity of adversely classified loans, changes in concentrations of credit, changes in the nature and volume of the loan segments, factors related to credit administration, and other Loans that do not share risk characteristics are evaluated on an individual basis. The Company designates individually evaluated loans on nonaccrual status as collateral dependent loans, as well as other loans that management of the Company designates as having higher risk and loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. The Company has adopted the practical expedient to measure the allowance for credit losses for collateral dependent loans based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required. Allowance for Credit Losses – Unfunded Commitments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for (or recovery of) credit losses in the Consolidated Statements of Income. The allowance for credit losses on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date using the same methodology as the loan portfolio, taking into consideration the likelihood that funding will occur as well as any third-party guarantees. The allowance for unfunded commitments is included in other liabilities on the Company’s consolidated balance sheets. |
Loans | Loans The Company grants real estate, commercial and consumer loans to customers (representing the Company’s loan segments). A substantial portion of the loan portfolio is represented by commercial real estate loans in the Washington, D.C. metropolitan area. Within the real estate segment, the Company has also identified the residential, commercial and construction classes. The ability of the Company’s debtors to honor their real estate loan contracts is dependent upon the real estate market and general economic conditions in this area, among other factors. Underwriting and risk characteristics of each loan class are summarized as follows: ● Real estate residential mortgage loans carry risks associated with the continued creditworthiness of the borrower and changes in the value of the collateral. ● Real estate commercial mortgage loans carry risks associated with the successful operation of a business, the continued creditworthiness of the borrower and any related guarantors and changes in the value of the collateral. In the case of investor-owned commercial real estate, risks are expanded to include the financial strength of the tenants occupying the property and the stability of occupancy and lease rates. ● Real estate construction and land development loans carry risks that the project will not be finished according to schedule, the project will not be finished according to budget and the value of the collateral may, at any point in time, be less than the principal amount of the loan. Construction loans also bear the risk that the general contractor, who may or may not be a customer of the Company, may be unable to finish the construction project as planned because of financial pressure unrelated to the project. ● Commercial loans carry risks associated with the successful operation of a business and the financial strength of any related guarantors. In addition, there is risk associated with the value of collateral other than real estate which may depreciate over time and cannot be appraised with as much precision. ● Consumer loans carry the risks associated with the continued creditworthiness of the borrower and the value of any collateral. Consumer loans are more likely than real estate loans to be immediately adversely affected by job loss, divorce, illness or personal bankruptcy. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for the allowance for loan credit losses and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. The accrual of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well secured and in the process of collection. Other personal loans are typically charged off no later than 180 days past due. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful. The determination of days past due or delinquency status uses the first contractual payment date that has not been paid-in-full by the borrower. All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. |
Accrued Interest Receivable | Accrued Interest Receivable The Company has elected to exclude accrued interest from the amortized cost basis in its determination of the allowance for credit losses for both loans and held-to-maturity securities, as well as elected the policy to write-off accrued interest receivable directly through the reversal of interest income. Accrued interest receivable totaled $5.3 million on loans and $255 thousand on held-to-maturity securities at December 31, 2023, and is included Accrued Interest Receivable |
Bank Premises and Equipment | Bank Premises and Equipment Bank premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is computed on the straight-line method over the useful lives of the assets, ranging from three |
Bank Owned Life Insurance | Bank Owned Life Insurance The Company has purchased life insurance on certain key executives and officers. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or amounts due that are probable at settlement. Changes in cash surrender value are reflected in non-interest income in the Consolidated Statements of Income. During the third quarter of 2023, the Company surrendered all outstanding Bank Owned Life Insurance policies. |
Other Real Estate Owned | Other Real Estate Owned Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Operating costs after acquisition are expensed as incurred. The Company had no other real estate owned as of December 31, 2023 and 2022. At December 31, 2023 and 2022, there were no consumer mortgage loans secured by residential real estate for which formal foreclosure proceedings were in progress. |
Transfers of Financial Assets | Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (a) the assets have been isolated from the Company – put presumptively beyond the reach of the transferor and its creditors, even in the event of bankruptcy or other receivership, (b) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (c) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. |
Loan Servicing Rights | Loan Servicing Rights The Company holds rights to service the guaranteed portion of U.S. Small Business Administration loans sold in the secondary market. Loan servicing rights are capitalized at estimated fair value when acquired through the origination of loans that are subsequently sold with the servicing rights retained. Loan servicing rights are amortized to servicing income on loans sold approximately in proportion to and over the period of estimated net servicing income. The value of loan servicing rights at the date of the sale of loans is estimated based on the discounted present value of expected future cash flows using key assumptions for servicing income and costs and expected prepayment rates on the underlying loans. The estimated fair value is periodically evaluated for impairment by comparing actual cash flows and estimated future cash flows from the loan servicing assets to those estimated at the time that the loan servicing assets were originated. Fair values are estimated using expected future discounted cash flows based on current market rates of interest. For purposes of measuring impairment, the loan servicing rights must be stratified by one or more predominant risk characteristics of the underlying loans. The Company stratifies its capitalized loan servicing rights based on product type and term of the underlying loans. The amount of impairment recognized is the amount, if any, by which the amortized cost of the loan servicing rights exceeds their fair value. Impairment, if deemed temporary, is recognized through a valuation allowance to the extent that fair value is less than the recorded amount. The Company had $22 thousand in loan servicing rights recorded within Other Assets on the Consolidated Balance Sheets as of December 31, 2023. The Company did not have any loan servicing rights as of December 31, 2022. |
Income Taxes | Income Taxes Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences, operating loss carryforwards, and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company recorded no liability for unrecognized tax benefits at December 31, 2023 or 2022. |
Earnings Per Common Share | Earnings Per Common Share Earnings per common share is calculated in accordance with Accounting Standard Codification (“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 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. Earnings per share are restated for all stock splits and dividends through the date the financial statements are issued. |
Advertising Costs | Advertising Costs The Company follows the policy of charging the production costs of advertising to expense as incurred. Advertising expense was $288 thousand and $193 thousand for the years ended December 31, 2023 and 2022, respectively. |
Share-Based Compensation | Share-Based Compensation The Company recognizes the compensation cost relating to share-based payment transactions based on the grant date fair value of the equity instruments issued. The share compensation accounting guidance requires that compensation cost for all share-based awards be calculated and recognized over the vesting period. A Black-Scholes model is used to estimate the fair value of stock options. Restricted stock awards are valued using the closing stock price on the date of grant. The Company’s accounting policy is to recognize forfeitures as they occur. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains (losses) on securities available-for-sale and the amortization of unrealized losses or accretion of unrealized gains on securities transferred from available-for-sale to held-to-maturity, which are also recognized as a separate component of equity. Items reclassified out of accumulated other comprehensive income (loss) to net income relate solely to realized gains (losses) on sales of securities available-for-sale and appear under the caption “Losses on sale of available for sale securities” in the Company’s Consolidated Statements of Income. |
Derivatives | Derivatives The Company enters into interest rate swaps (“swaps”) with commercial loan customers to provide a facility to mitigate the fluctuations in the variable rate on the respective loans. These swaps are matched in exact offsetting terms to swaps that the Company enters into with an outside third party. The swaps are reported at fair value in other assets or other liabilities in the Consolidated Balance Sheets. The Company's swaps qualify as derivatives, but are not designated as hedging instruments. As such, any net gain or loss resulting from changes in the fair value is recognized in other operating (loss) income in the Consolidated Statements of Income. Refer to Note 5 for further discussion regarding the Company’s swaps. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair values of various assets and liabilities are estimated using relevant market information, valuation techniques and other assumptions, as more fully disclosed in Note 12. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates. |
Recent Accounting Pronouncements | Accounting Standards Adopted in 2023 ASU 2016-13 In addition, CECL made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities if management does not intend to sell and does not believe that it is more likely than not they will be required to sell. The Company adopted ASC 326 and all related subsequent amendments thereto effective January 1, 2023 using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. At adoption, the after tax impact to retained earnings was a reduction of $(2.3) million based on our evaluation as of that date. This adjustment consisted of increases to the allowance for credit losses on loans, as well as the Company's allowance for unfunded loan commitments. The Company adopted ASC 326 using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2023. As of December 31, 2022, the Company did not have any other-than-temporarily impaired investment securities. The Company did not record an allowance for credit losses for securities classified as available-for-sale or held-to-maturity upon adoption. The Company elected not to measure an allowance for credit losses for accrued interest receivable and instead elected to reverse interest income on loans or securities that are placed on nonaccrual status, which is generally when the instrument is 90 days past due, or earlier if the Company believes the collection of interest is doubtful. The Company has concluded that this policy results in the timely reversal of uncollectible interest. The adoption of CECL did not result in a significant change to any other credit risk management and monitoring processes, including identification of past due or delinquent borrowers, nonaccrual practices or charge-off policy. ASU 2022-02 refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the amendments require that the Company disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. The Company adopted the standard prospectively and it did not have a material impact on the financial statements. |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investment Securities | |
Summary of amortized cost and fair value of securities available-for-sale | December 31, 2023 Gross Gross Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains (Losses) Value Available-for-sale U.S. Treasuries $ 44,793 $ — $ (1,816) $ 42,977 U.S. government and federal agencies 13,850 — (575) 13,275 Corporate bonds 3,000 — (477) 2,523 Collateralized mortgage obligations 40,806 — (6,496) 34,310 Tax-exempt municipal 1,380 — (149) 1,231 Taxable municipal 606 — (19) 587 Mortgage-backed 81,255 — (6,165) 75,090 Total Available-for-sale Securities $ 185,690 $ — $ (15,697) $ 169,993 December 31, 2022 Gross Gross Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains (Losses) Value Available-for-sale U.S. Treasuries $ 63,480 $ — $ (4,270) $ 59,210 U.S. government and federal agencies 38,748 — (3,988) 34,760 Corporate bonds 3,000 — (386) 2,614 Collateralized mortgage obligations 44,732 — (6,258) 38,474 Tax-exempt municipal 4,993 — (348) 4,645 Taxable municipal 608 — (29) 579 Mortgage-backed 238,652 — (21,358) 217,294 Total Available-for-sale Securities $ 394,213 $ — $ (36,637) $ 357,576 |
Summary of amortized cost and fair value of securities held-to-maturity | December 31, 2023 Gross Gross Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains (Losses) Value Held-to-maturity U.S. Treasuries $ 6,001 $ — $ (667) $ 5,334 U.S. government and federal agencies 35,434 — (5,100) 30,334 Collateralized mortgage obligations 19,395 — (4,095) 15,300 Taxable municipal 6,057 — (1,101) 4,956 Mortgage-backed 28,618 — (5,010) 23,608 Total Held-to-maturity Securities $ 95,505 $ — $ (15,973) $ 79,532 December 31, 2022 Gross Gross Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains (Losses) Value Held-to-maturity U.S. Treasuries $ 6,000 $ — $ (840) $ 5,160 U.S. government and federal agencies 35,551 — (6,135) 29,416 Collateralized mortgage obligations 21,275 — (4,227) 17,048 Taxable municipal 6,073 — (1,364) 4,709 Mortgage-backed 30,516 — (5,688) 24,828 Total Held-to-maturity Securities $ 99,415 $ — $ (18,254) $ 81,161 |
Schedule of gross unrealized loss position of investments | December 31, 2023 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 Available-for-sale U.S. Treasuries $ — $ — $ 42,977 $ (1,816) $ 42,977 $ (1,816) U.S. government and federal agencies — — 13,275 (575) 13,275 (575) Corporate bonds — — 2,523 (477) 2,523 (477) Collateralized mortgage obligations — — 34,310 (6,496) 34,310 (6,496) Tax-exempt municipal — — 1,231 (149) 1,231 (149) Taxable municipal — — 587 (19) 587 (19) Mortgage-backed — — 75,090 (6,165) 75,090 (6,165) Total Available-for-sale Securities $ — $ — $ 169,993 $ (15,697) $ 169,993 $ (15,697) December 31, 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 Available-for-sale U.S. Treasuries $ 31,261 $ (1,194) $ 27,949 $ (3,076) $ 59,210 $ (4,270) U.S. government and federal agencies 16,107 (1,078) 18,653 (2,910) 34,760 (3,988) Corporate bonds 2,614 (386) — — 2,614 (386) Collateralized mortgage obligations 16,746 (1,143) 21,728 (5,115) 38,474 (6,258) Tax-exempt municipal 4,645 (348) — — 4,645 (348) Taxable municipal 337 (2) 242 (27) 579 (29) Mortgage-backed 145,795 (9,612) 71,499 (11,746) 217,294 (21,358) Total Available-for-sale Securities $ 217,505 $ (13,763) $ 140,071 $ (22,874) $ 357,576 $ (36,637) December 31, 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 $ — $ — $ 5,160 $ (840) $ 5,160 $ (840) U.S. government and federal agencies — — 29,416 (6,135) 29,416 (6,135) Collateralized mortgage obligations — — 17,048 (4,227) 17,048 (4,227) Taxable municipal — — 4,709 (1,364) 4,709 (1,364) Mortgage-backed 825 (159) 24,003 (5,529) 24,828 (5,688) Total Held-to-maturity Securities $ 825 $ (159) $ 80,336 $ (18,095) $ 81,161 $ (18,254) |
Contractual maturities of investment securities | December 31, 2023 Amortized Fair (Dollars in thousands) Cost Value Available-for-sale Due in one year or less $ 22,248 $ 21,933 Due after one year through five years 46,393 44,271 Due after five years through ten years 53,890 50,962 Due after ten years 63,159 52,827 Total Available-for-sale Securities $ 185,690 $ 169,993 December 31, 2023 Amortized Fair (Dollars in thousands) Cost Value Held-to-maturity Due in one year or less $ — $ — Due after one year through five years 22,153 19,600 Due after five years through ten years 23,492 19,766 Due after ten years 49,860 40,166 Total Held-to-maturity Securities $ 95,505 $ 79,532 |
Summary of restricted securities | (Dollars in thousands) December 31, 2023 December 31, 2022 Federal Reserve Bank Stock $ 3,310 $ 3,292 Federal Home Loan Bank Stock 1,642 1,073 Community Bankers’ Bank Stock 60 60 Total Restricted Securities $ 5,012 $ 4,425 |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Allowance for Loan Credit Losses | |
Schedule of composition of the loan portfolio | (Dollars in thousands) December 31, 2023 December 31, 2022 Real Estate Loans: Commercial $ 1,146,116 $ 1,118,127 Construction and land development 180,922 195,027 Residential 482,182 426,841 Commercial - Non-Real Estate: Commercial loans 45,204 44,924 Consumer - Non-Real Estate: Consumer loans 560 529 Total Gross Loans $ 1,854,984 $ 1,785,448 Allowance for loan credit losses (19,543) (20,208) Net deferred loan costs 4,983 4,060 Total net loans $ 1,840,424 $ 1,769,300 |
Allowance for Loan Credit Los_2
Allowance for Loan Credit Losses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Allowance for Loan Credit Losses | |
Schedule of allowance for loan losses activity and balance | December 31, 2023 Real Estate Construction & Land Dollars in thousands Commercial Development Residential Commercial Consumer Unallocated Total Beginning balance, December 31, 2022 $ 13,205 $ 2,860 $ 3,044 $ 456 $ 5 $ 638 $ 20,208 Adjustment to allowance for adoption of ASC 326 (2,649) 476 4,552 367 57 (638) 2,165 Charge-offs — — — — — — — Recoveries — — — 2 — — 2 Provision for (recovery of) credit losses 2,285 (1,549) (3,273) (330) 35 — (2,832) Ending balance, December 31, 2023 $ 12,841 $ 1,787 $ 4,323 $ 495 $ 97 $ — $ 19,543 December 31, 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 — — — 2 — — 2 Provision for (recovery of) loan losses 115 36 275 (257) — 6 175 Ending Balance, December 31, 2022 $ 13,205 $ 2,860 $ 3,044 $ 456 $ 5 $ 638 $ 20,208 December 31, 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 13,205 2,860 3,044 456 5 638 20,208 Total allowance $ 13,205 $ 2,860 $ 3,044 $ 456 $ 5 $ 638 $ 20,208 Loans: Individually evaluated for impairment $ — $ — $ 418 $ — $ — $ — $ 418 Collectively evaluated for impairment 1,118,127 195,027 426,423 44,924 529 — 1,785,030 Total loans $ 1,118,127 $ 195,027 $ 426,841 $ 44,924 $ 529 $ — $ 1,785,448 |
Schedule of impaired loans | December 31, 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 418 418 — 418 — 427 15 Commercial — — — — — — — Consumer — — — — — — — Total Impaired Loans $ 418 $ 418 $ — $ 418 $ — $ 427 $ 15 |
Schedule of past due and non-accrual loans | December 31, 2023 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 $ — $ — $ — $ — $ 1,146,116 $ 1,146,116 $ — $ — Construction and land development — — — — 180,922 180,922 — — Residential — — — — 482,182 482,182 — — Commercial — — — — 45,204 45,204 — — Consumer — — — — 560 560 — — Total Loans $ — $ — $ — $ — $ 1,854,984 $ 1,854,984 $ — $ — December 31, 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 $ — $ — $ — $ — $ 1,118,127 $ 1,118,127 $ — $ — Construction and land development — — — — 195,027 195,027 — — Residential — — — — 426,841 426,841 — — Commercial — — — — 44,924 44,924 — — Consumer — — — — 529 529 — — Total Loans $ — $ — $ — $ — $ 1,785,448 $ 1,785,448 $ — $ — |
Schedule of credit quality indicators | Internal Days Past Due Risk Rating 0 - 29 days Pass 30-59 days Special Mention 60-89 days Substandard 90-119 days Doubtful 120+ days Loss |
Schedule of credit quality information | Term Loans by Year of Origination (Dollars in thousands) 2023 2022 2021 2020 2019 Prior Revolving Total Real Estate Loans - Commercial Pass $ 67,675 $ 302,342 $ 201,801 $ 125,828 $ 96,424 $ 334,132 $ 3,575 $ 1,131,777 Special mention — 13,102 — 1,237 — — — 14,339 Substandard — — — — — — — — Doubtful — — — — — — — — Loss — — — — — — — — Total Real Estate Loans - Commercial $ 67,675 $ 315,444 $ 201,801 $ 127,065 $ 96,424 $ 334,132 $ 3,575 $ 1,146,116 Current period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — Real Estate Loans - Construction and land development Pass $ 47,253 $ 56,408 $ 33,827 $ 9,360 $ 8 $ 7,046 $ 24,891 $ 178,793 Special mention — — — — 2,129 — — 2,129 Substandard — — — — — — — — Doubtful — — — — — — — — Loss — — — — — — — — Total Real Estate Loans - Construction and land development $ 47,253 $ 56,408 $ 33,827 $ 9,360 $ 2,137 $ 7,046 $ 24,891 $ 180,922 Current period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — Real Estate Loans - Residential Pass $ 83,060 $ 114,865 $ 133,188 $ 87,275 $ 24,883 $ 21,380 $ 17,531 $ 482,182 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Loss — — — — — — — — Total Real Estate Loans - Residential $ 83,060 $ 114,865 $ 133,188 $ 87,275 $ 24,883 $ 21,380 $ 17,531 $ 482,182 Current period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial Loans Pass $ 7,564 $ 6,838 $ 1,959 $ 3,207 $ 4,482 $ 4,787 $ 16,367 $ 45,204 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Loss — — — — — — — — Total Commercial Loans $ 7,564 $ 6,838 $ 1,959 $ 3,207 $ 4,482 $ 4,787 $ 16,367 $ 45,204 Current period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — Consumer Loans Pass $ 485 $ 6 $ 26 $ — $ — $ 10 $ 33 $ 560 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Loss — — — — — — — — Total Consumer Loans $ 485 $ 6 $ 26 $ — $ — $ 10 $ 33 $ 560 Current period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — December 31, 2022 Special Total (Dollars in thousands) Pass Mention Substandard Doubtful Loss Loans Real Estate Loans Commercial $ 1,116,890 $ 1,237 $ — $ — $ — $ 1,118,127 Construction and land development 192,877 2,150 — — — 195,027 Residential 426,841 — — — — 426,841 Commercial 44,924 — — — — 44,924 Consumer 529 — — — — 529 Total Loans $ 1,782,061 $ 3,387 $ — $ — $ — $ 1,785,448 |
Schedule of unfunded commitments | Allowance for Credit Losses (Dollars in thousands) Unfunded Commitments Beginning balance, December 31, 2022 $ 303 Adjustment to allowance for unfunded commitments for adoption of ASC 326 737 Recovery of credit losses (420) Ending balance, December 31, 2023 $ 620 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivatives | |
Schedule of Company's swaps | December 31, 2023 Estimated Weighted Average Notional Fair Years to Receive Pay (Dollars in thousands) Amount Value Maturity Rate Rate Interest rate swap agreements: Pay fixed/receive variable swaps $ 19,444 $ 846 3.2 years 5.87 % 3.39 % Pay variable/receive fixed swaps 19,444 (846) 3.2 years 3.39 % 5.87 % Total interest rate swap agreements $ 38,888 $ — 3.2 years 4.63 % 4.63 % December 31, 2022 Estimated Weighted Average Notional Fair Years to Receive Pay (Dollars in thousands) Amount Value Maturity Rate Rate Interest rate swap agreements: Pay fixed/receive variable swaps $ 13,767 $ 1,217 2.8 years 6.02 % 2.59 % Pay variable/receive fixed swaps 13,767 (1,217) 2.8 years 2.59 % 6.02 % Total interest rate swap agreements $ 27,534 $ — 2.8 years 4.31 % 4.31 % |
Bank Premises and Equipment, _2
Bank Premises and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Bank Premises and Equipment, Net | |
Summary of components of bank premises and equipment, net | (Dollars in thousands) December 31, 2023 December 31, 2022 Leasehold improvements $ 2,910 $ 2,873 Furniture and equipment 6,721 6,268 Total Bank Premises and Equipment $ 9,631 $ 9,141 Less: Accumulated depreciation (8,350) (7,922) Total Bank Premises and Equipment, Net $ 1,281 $ 1,219 |
Deposits and Borrowings (Tables
Deposits and Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deposits and Borrowings | |
Schedule of deposits | (Dollars in thousands) December 31, 2023 December 31, 2022 Deposits: Non-interest bearing demand deposits (1) $ 411,374 $ 476,697 Interest-bearing demand deposits (1) 607,971 691,945 Savings deposits 52,061 95,241 Time deposits (2) 835,194 803,857 Total Deposits $ 1,906,600 $ 2,067,740 (1) Overdraft demand deposits reclassified to loans totaled $1 thousand at both December 31, 2023 and December 31, 2022. (2) The aggregate amount of certificates of deposit with a minimum denomination of $250,000 was $359.3 million and $318.7 million at December 31, 2023 and December 31, 2022, respectively. |
Schedule of short-term debt and long-term debt | December 31, 2023 December 31, 2022 (Dollars in thousands) Stated Interest Rate Weighted-Average Interest Rate Carrying Value Carrying Value Short-term Debt: Federal Reserve Bank borrowings 4.80 % 4.80 % $ 54,000 — Total Short-term Debt $ 54,000 — Long-term Debt: Subordinated debt 5.25 % 5.25 % $ 24,708 $ 24,624 Total Long-term Debt $ 24,708 $ 24,624 |
Schedule of carrying amount of the time deposits by contractual maturity | (Dollars in thousands) December 31, 2023 2024 $ 574,056 2025 181,797 2026 68,629 2027 10,165 2028 547 Thereafter — Total $ 835,194 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Summary of overview of leases | (Dollars in thousands) December 31, 2023 December 31, 2022 Lease liabilities $ 4,446 $ 4,858 Right-of-use assets 4,176 4,611 Weighted average remaining lease term (Years) 3.89 years 4.08 years Weighted average discount rate 3.00 % 2.62 % |
Schedule of lease cost | (Dollars in thousands) December 31, 2023 December 31, 2022 Operating lease cost $ 1,392 $ 1,469 Variable lease cost — — Short-term lease cost — — Total Lease Cost $ 1,392 $ 1,469 |
Schedule of lease liability maturity | (Dollars in thousands) December 31, 2023 2024 $ 1,322 2025 1,319 2026 1,121 2027 429 2028 291 Thereafter 276 Total Undiscounted Cash Flows $ 4,758 Discount (312) Lease Liabilities $ 4,446 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Schedule of deferred tax assets and liabilities | (Dollars in thousands) December 31, 2023 December 31, 2022 Deferred Tax Assets: Allowance for loan credit losses $ 4,477 $ 4,581 Lease liabilities 987 1,101 Share-based compensation expense 45 91 Unrealized losses on debt securities 3,257 7,628 Other 453 416 Total Deferred Tax Assets $ 9,219 $ 13,817 Deferred Tax Liabilities: Right-of-use assets 927 1,045 Depreciation 53 49 Net deferred loan costs 1,106 920 Other 76 62 Total Deferred Tax Liabilities $ 2,162 $ 2,076 Net Deferred Tax Assets $ 7,057 $ 11,741 |
Schedule of provision for income taxes | (Dollars in thousands) December 31, 2023 December 31, 2022 Current tax expense $ 1,902 $ 7,666 Deferred tax expense 921 594 Total Income Tax Expense $ 2,823 $ 8,260 |
Schedule of income tax rate reconciliation | (Dollars in thousands) December 31, 2023 December 31, 2022 Computed “expected” tax expense $ 1,676 $ 8,413 Increase (decrease) in income taxes resulting from: Bank-owned life insurance policy surrender 1,101 — State income taxes, net of federal benefit 180 516 Bank-owned life insurance (47) (114) Tax-exempt interest income (69) (158) Excess tax benefit on share-based compensation (19) (427) Other, net 1 30 Total $ 2,823 $ 8,260 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies | |
Summary of the contract or notional amount of the Company's exposure to off-balance sheet risk | (Dollars in thousands) December 31, 2023 December 31, 2022 Commitments to extend credit $ 235,560 $ 240,084 Standby letters of credit $ 16,329 $ 14,677 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements | |
Summary of fair value of assets measured at fair value on a recurring basis | Fair Value Measurements at December 31, 2023 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Balance as of Identical Assets Observable Inputs Inputs (Dollars in thousands) December 31, 2023 (Level 1) (Level 2) (Level 3) Assets: Securities available-for-sale: U.S. Treasuries $ 42,977 $ — $ 42,977 $ — U.S. government and federal agencies 13,275 — 13,275 — Corporate bonds 2,523 — 2,523 — Collateralized mortgage obligations 34,310 — 34,310 — Tax-exempt municipal 1,231 — 1,231 — Taxable municipal 587 — 587 — Mortgage-backed 75,090 — 75,090 — Equity securities, at fair value 2,792 2,792 — — Interest rate swap agreements 846 — 846 — Loan servicing rights 22 — — 22 Total assets at fair value $ 173,653 $ 2,792 $ 170,839 $ 22 Liabilities: Interest rate swap agreements $ 846 $ — $ 846 $ — Total liabilities at fair value $ 846 $ — $ 846 $ — Fair Value Measurements at December 31, 2022 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Balance as of Identical Assets Observable Inputs Inputs (Dollars in thousands) December 31, 2022 (Level 1) (Level 2) (Level 3) Assets: Securities available-for-sale: U.S. Treasuries $ 59,210 $ — $ 59,210 $ — U.S. government and federal agencies 34,760 — 34,760 — Corporate bonds 2,614 — 2,614 — Collateralized mortgage obligations 38,474 — 38,474 — Tax-exempt municipal 4,645 — 4,645 — Taxable municipal 579 — 579 — Mortgage-backed 217,294 — 217,294 — Equity securities, at fair value 2,115 2,115 — — Interest rate swap agreement 1,217 — 1,217 — Total assets at fair value $ 360,908 $ 2,115 $ 358,793 $ — Liabilities: Interest rate swap agreement $ 1,217 $ — $ 1,217 $ — Total liabilities at fair value $ 1,217 $ — $ 1,217 $ — |
Summary of carrying value and estimated fair value of financial instruments | Fair Value Measurements at December 31, 2023 Using Quoted Prices in Active Markets Significant for Identical Significant Other Unobservable Carrying Value as of Assets Observable Inputs Inputs Fair Value as of (Dollars in thousands) December 31, 2023 (Level 1) (Level 2) (Level 3) December 31, 2023 Assets: Cash and cash equivalents $ 99,005 $ 99,005 $ — $ — $ 99,005 Securities: Available-for-sale 169,993 — 169,993 — 169,993 Held-to-maturity 95,505 — 79,532 — 79,532 Equity securities, at fair value 2,792 2,792 — — 2,792 Restricted securities, at cost 5,012 — 5,012 — 5,012 Loans, net 1,840,424 — — 1,730,205 1,730,205 Interest rate swap agreements 846 — 846 — 846 Loan servicing rights 22 — — 22 22 Accrued interest receivable 6,110 — 6,110 — 6,110 Liabilities: Deposits $ 1,906,600 $ — $ 1,906,835 $ — $ 1,906,835 Federal Reserve Bank borrowings 54,000 — 54,000 — 54,000 Federal funds purchased 10,000 — 10,000 — 10,000 Subordinated debt 24,708 — — 21,873 21,873 Interest rate swap agreements 846 — 846 — 846 Accrued interest payable 4,559 — 4,559 — 4,559 Fair Value Measurements at December 31, 2022 Using Quoted Prices in Active Markets Significant for Identical Significant Other Unobservable Carrying Value as of Assets Observable Inputs Inputs Fair Value as of (Dollars in thousands) December 31, 2022 (Level 1) (Level 2) (Level 3) December 31, 2022 Assets: Cash and cash equivalents $ 61,599 $ 61,599 $ — $ — $ 61,599 Securities: Available-for-sale 357,576 — 357,576 — 357,576 Held-to-maturity 99,415 — 81,161 — 81,161 Equity securities, at fair value 2,115 2,115 — — 2,115 Restricted securities, at cost 4,425 — 4,425 — 4,425 Loans, net 1,769,300 — — 1,676,887 1,676,887 Interest rate swap agreement 1,217 — 1,217 — 1,217 Bank owned life insurance 21,170 — 21,170 — 21,170 Accrued interest receivable 5,531 — 5,531 — 5,531 Liabilities: Deposits $ 2,067,740 $ — $ 2,065,248 $ — $ 2,065,248 Subordinated debt 24,624 — — 22,457 22,457 Federal funds purchased 25,500 — 25,500 — 25,500 Interest rate swap agreement 1,217 — 1,217 — 1,217 Accrued interest payable 1,035 — 1,035 — 1,035 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings per Common Share | |
Schedule of computation of earnings per share | Year ended December 31, 2023 2022 Earnings per common share - basic: Income available to common shareholders (in thousands): Net income $ 5,158 $ 31,803 Less: Income attributable to unvested restricted stock awards (17) (136) Net income available to common shareholders $ 5,141 $ 31,667 Weighted average shares outstanding: Common shares outstanding, including unvested restricted stock 14,124,696 13,991,875 Less: Unvested restricted stock (47,771) (60,034) Weighted-average common shares outstanding - basic 14,076,925 13,931,841 Earnings per common share - basic $ 0.37 $ 2.27 Earnings per common share - diluted: Income available to common shareholders (in thousands): Net income $ 5,158 $ 31,803 Less: Income attributable to unvested restricted stock awards (17) (135) Net income available to common shareholders $ 5,141 $ 31,668 Weighted average shares outstanding: Common shares outstanding, including unvested restricted stock 14,124,696 13,991,875 Less: Unvested restricted stock (47,771) (60,034) Plus: Effect of dilutive options 70,268 152,586 Weighted-average common shares outstanding - diluted 14,147,193 14,084,427 Earnings per common share - diluted $ 0.36 $ 2.25 |
Stock Based Compensation Plan (
Stock Based Compensation Plan (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stock Based Compensation Plan | |
Summary of stock options activity | December 31, 2023 Weighted Average Aggregate Intrinsic Shares Exercise Price Value Outstanding at January 1, 2023 189,934 $ 11.76 Granted — — Exercised (27,375) 11.75 Forfeited or expired (412) 9.44 Outstanding at December 31, 2023 162,147 11.77 $ 1,749,454 Exercisable December 31, 2023 162,147 $ 11.77 $ 1,749,454 |
Summary of stock options outstanding and exercisable | December 31, 2023 Options Outstanding Options Exercisable Weighted Average Weighted Average Remaining Remaining Number Contractual Life Number Contractual Life Exercise Prices Outstanding in Years Exercisable in Years $11.01 - $12.00 161,085 0.92 161,085 0.92 $12.01 - $13.00 1,062 0.98 1,062 0.98 Total 162,147 0.93 162,147 0.93 |
Summary of restricted stock awards | December 31, 2023 Weighted Average Shares Grant Date Fair Value Nonvested at January 1, 2023 55,185 $ 21.80 Granted 22,893 23.65 Vested (30,390) 21.21 Forfeited (370) 15.50 Nonvested at December 31, 2023 47,318 23.12 |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 December 31, 2023 Total capital (to risk weighted assets) $ 282,082 15.7 % $ 188,448 10.5 % $ 179,475 10.0 % Tier 1 capital (to risk weighted assets) 263,637 14.7 % 152,553 8.5 % 143,580 8.0 % Common equity tier 1 capital (to risk weighted assets) 263,637 14.7 % 125,632 7.0 % 116,658 6.5 % Tier 1 capital (to average assets) 263,637 11.6 % 91,163 4.0 % 113,954 5.0 % As of December 31, 2022 Total capital (to risk weighted assets) $ 283,471 15.6 % $ 190,798 10.5 % $ 181,712 10.0 % Tier 1 capital (to risk weighted assets) 262,960 14.4 % 155,219 8.5 % 146,089 8.0 % Common equity tier 1 capital (to risk weighted assets) 262,960 14.4 % 127,828 7.0 % 118,697 6.5 % Tier 1 capital (to average assets) 262,960 11.3 % 93,083 4.0 % 116,354 5.0 % (1) Including Capital Conservation Buffer |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue | |
Schedule of components of non-interest income | Year ended December 31, (Dollars in thousands) 2023 2022 Service charges on deposit accounts (1) Overdrawn account fees $ 82 $ 88 Account service fees 248 236 Other service charges and fees (1) Interchange income 403 409 Other charges and fees 435 247 Bank owned life insurance 224 544 Losses on sale of available-for-sale securities (17,316) — Insurance commissions (1) 386 382 Gain on sale of government guaranteed loans 131 — Non-qualified deferred compensation plan asset gains (losses), net 317 (354) Other income (2) 150 139 Total non-interest income (loss) $ (14,940) $ 1,691 (1) Income within the scope of ASC 606 – Revenue Recognition . (2) Includes other operating income within the scope of ASC 606 amounting to $59 thousand for the year ended December 31, 2023. Includes other operating income of $91 thousand related to swap fee income on a back-to-back loan swaps for the year ended December 31, 2023, which is outside the scope of ASC 606. Includes other operating income within the scope of ASC 606 amounting to $12 thousand for the year ended December 31, 2022. Includes other operating income of $127 thousand related to swap fee income on a back-to-back loan swaps for the year ended December 31, 2022, which is outside the scope of ASC 606. |
Other Operating Expenses (Table
Other Operating Expenses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Operating Expenses | |
Schedule of components of other operating expenses | Year ended December 31, (Dollars in thousands) 2023 2022 Advertising expense $ 288 $ 193 Data processing 1,936 1,940 FDIC insurance 1,041 605 Professional fees 329 1,231 State franchise tax 2,389 2,092 Director costs 876 810 Other operating expenses 1,531 1,595 Total other operating expenses $ 8,390 $ 8,466 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss) | |
Schedule of changes in accumulated other comprehensive income (loss) | December 31, 2023 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, 2023 $ (28,942) $ 245 $ (28,697) Net change during the period 16,542 (96) 16,446 Ending balance, December 31, 2023 $ (12,400) $ 149 $ (12,251) December 31, 2022 Unrealized Gains on Securities Transferred from Unrealized Loss on Available-for-sale to Accumulated Other (Dollars in thousands) Available-for-sale Securities Held-to-maturity Comprehensive Loss Beginning balance, January 1, 2022 $ (789) $ 389 $ (400) Net change during the period (28,153) (144) (28,297) Ending Balance, December 31, 2022 $ (28,942) $ 245 $ (28,697) |
Parent Company Financials (Tabl
Parent Company Financials (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Parent Company Financials | |
Summary of condensed balance sheets | (Dollars in thousands) December 31, 2023 December 31, 2022 Assets Cash and due from banks $ 4,874 $ 3,588 Equity securities, at fair value 2,792 2,115 Investment in subsidiary 249,666 234,263 Other assets 448 366 Total assets $ 257,780 $ 240,332 Liabilities and Shareholders’ Equity Subordinated debt, net of unamortized issuance costs $ 24,708 $ 24,624 Accrued interest payable 656 715 Other liabilities 2,502 2,193 Total liabilities $ 27,866 $ 27,532 Total shareholders’ equity $ 229,914 $ 212,800 Total liabilities and shareholders’ equity $ 257,780 $ 240,332 |
Summary of condensed statements of income | Years Ended December 31, 2023 and 2022 (Dollars in thousands) 2023 2022 Income: Other income $ 317 $ (354) Dividends from subsidiary 6,108 4,150 Total income 6,425 3,796 Expense: Subordinated debt interest expense 1,396 1,810 Salaries and employee benefits 589 292 Other operating expenses 360 425 Total expense 2,345 2,527 Net income before income tax benefit and equity in undistributed earnings of subsidiary 4,080 1,269 Income tax benefit 425 605 Equity in undistributed earnings of subsidiary 653 29,929 Net income $ 5,158 $ 31,803 |
Summary of statements of cash flows | Years Ended December 31, 2023 and 2022 (Dollars in thousands) 2023 2022 Cash Flows from Operating Activities Net income $ 5,158 $ 31,803 Adjustment to reconcile net income to net cash provided by (used in) operating activities: Equity in undistributed earnings of subsidiary (653) (29,929) Fair value adjustment on equity securities (317) 354 Amortization of debt issuance costs 84 317 Deferred tax (benefit) (82) (54) Changes in assets and liabilities: Increase in other assets — (2) Increase in other liabilities 250 278 Net cash provided by operating activities $ 4,440 $ 2,767 Cash Flows from Investing Activities Purchase of equity securities (360) (600) Net cash (used in) investing activities $ (360) $ (600) Cash Flows from Financing Activities Issuance of common stock for share options exercised 320 3,058 Repurchase of shares for tax withholding on share-based compensation (6) (8) Issuance of subordinated debt — 24,579 Repayment of subordinated debt — (25,000) Cash dividends paid (3,108) (2,799) Net cash used in financing activities $ (2,794) $ (170) Net increase in cash and cash equivalents $ 1,286 $ 1,997 Cash and cash equivalents, beginning of year 3,588 1,591 Cash and cash equivalents, end of year $ 4,874 $ 3,588 |
Nature of Business and Summar_3
Nature of Business and Summary of Significant Accounting Policy - Restriction on Dividends (Details) $ in Millions | Mar. 01, 2017 | Dec. 31, 2023 USD ($) |
Disclosure of Restrictions on Dividends, Loans and Advances Disclosure [Abstract] | ||
Number of share exchange | 1 | |
Restriction on Dividends | ||
Statutory accounting practices, statutory amount available for dividend payments without regulatory approval | $ 58.1 |
Nature of Business and Summar_4
Nature of Business and Summary of Significant Accounting Policy - Concentration of Credit Risk (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Loans and Finance Receivables | Credit Concentration Risk | Commercial real estate portfolio segment | Real estate loans | ||
Concentration of Credit Risk | ||
Concentration risk, percentage (as a percent) | 98% | 97% |
Nature of Business and Summar_5
Nature of Business and Summary of Significant Accounting Policy - Allowance for Credit Losses and Accrued Interest Receivable (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Nature of Business and Summary of Significant Accounting Policy | |
Accrued interest receivable | $ 518 |
Debt Securities, Available-for-Sale, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Interest Receivable |
Debt Securities Available For Sale Accrued Interest After Allowance For Credit Loss Statement Of Financial Position Extensible List Not Disclosed [Flag] | true |
Accrued interest receivable on loans | $ 5,300 |
Financing Receivable, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Interest Receivable |
Held-to-maturity securities | $ 255 |
Debt Securities, Held-to-Maturity, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Interest Receivable |
Nature of Business and Summar_6
Nature of Business and Summary of Significant Accounting Policy - Bank Premises and Equipment (Details) | Dec. 31, 2023 |
Minimum | |
Bank Premises and Equipment | |
Property, plant and equipment, useful life | 3 years |
Maximum | |
Bank Premises and Equipment | |
Property, plant and equipment, useful life | 15 years |
Nature of Business and Summar_7
Nature of Business and Summary of Significant Accounting Policy - Other Real Estate Owned (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Other Real Estate | ||
Other real estate owned | $ 0 | $ 0 |
Banking and Thrift, Other Disclosure | ||
Mortgage loans in process of foreclosure, amount | $ 0 | $ 0 |
Nature of Business and Summar_8
Nature of Business and Summary of Significant Accounting Policy - Loan Servicing Rights (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Nature of Business and Summary of Significant Accounting Policy | ||
Loan servicing rights | $ 22 | $ 0 |
Nature of Business and Summar_9
Nature of Business and Summary of Significant Accounting Policy - Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Income Taxes | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Nature of Business and Summa_10
Nature of Business and Summary of Significant Accounting Policy - Advertising Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Advertising Costs | ||
Advertising expense | $ 288 | $ 193 |
Nature of Business and Summa_11
Nature of Business and Summary of Significant Accounting Policy (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Recent Accounting Pronouncements | ||
Retained earnings | $ 146,388 | $ 146,630 |
Allowance for credit loss | $ 0 | |
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | ||
Recent Accounting Pronouncements | ||
Retained earnings | $ (2,300) |
Investment Securities - Amortiz
Investment Securities - Amortized Cost and Fair Value - Available-for-sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Securities Available-for-Sale | ||
Amortized cost | $ 394,213 | |
Amortized cost. | $ 185,690 | |
Gross unrealized (losses) | (15,697) | (36,637) |
Available-for-sale, at fair value | 357,576 | |
Available-for-sale | 0 | 0 |
Available-for-sale, fair value | 169,993 | |
U.S. Treasuries | ||
Securities Available-for-Sale | ||
Amortized cost | 63,480 | |
Amortized cost. | 44,793 | |
Gross unrealized (losses) | (1,816) | (4,270) |
Available-for-sale, at fair value | 59,210 | |
Available-for-sale, fair value | 42,977 | |
U.S. government and federal agencies | ||
Securities Available-for-Sale | ||
Amortized cost | 38,748 | |
Amortized cost. | 13,850 | |
Gross unrealized (losses) | (575) | (3,988) |
Available-for-sale, at fair value | 34,760 | |
Available-for-sale, fair value | 13,275 | |
Corporate bonds | ||
Securities Available-for-Sale | ||
Amortized cost | 3,000 | |
Amortized cost. | 3,000 | |
Gross unrealized (losses) | (477) | (386) |
Available-for-sale, at fair value | 2,614 | |
Available-for-sale, fair value | 2,523 | |
Collateralized mortgage obligations | ||
Securities Available-for-Sale | ||
Amortized cost | 44,732 | |
Amortized cost. | 40,806 | |
Gross unrealized (losses) | (6,496) | (6,258) |
Available-for-sale, at fair value | 38,474 | |
Available-for-sale, fair value | 34,310 | |
Tax-exempt municipal | ||
Securities Available-for-Sale | ||
Amortized cost | 4,993 | |
Amortized cost. | 1,380 | |
Gross unrealized (losses) | (149) | (348) |
Available-for-sale, at fair value | 4,645 | |
Available-for-sale, fair value | 1,231 | |
Taxable municipal | ||
Securities Available-for-Sale | ||
Amortized cost | 608 | |
Amortized cost. | 606 | |
Gross unrealized (losses) | (19) | (29) |
Available-for-sale, at fair value | 579 | |
Available-for-sale, fair value | 587 | |
Mortgage-backed | ||
Securities Available-for-Sale | ||
Amortized cost | 238,652 | |
Amortized cost. | 81,255 | |
Gross unrealized (losses) | (6,165) | (21,358) |
Available-for-sale, at fair value | $ 217,294 | |
Available-for-sale, fair value | $ 75,090 |
Investment Securities - Securit
Investment Securities - Securities in a Gross Unrealized Loss Position - Available-for-sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Available-for-Sale, Fair Value | ||
Fair Value, Less than 12 Months | $ 217,505 | |
Fair Value, 12 Months or Longer | $ 169,993 | 140,071 |
Fair Value | 169,993 | 357,576 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (13,763) | |
Gross Unrealized Losses, 12 Months or Longer | (15,697) | (22,874) |
Gross Unrealized Losses | (15,697) | (36,637) |
U.S. Treasuries | ||
Available-for-Sale, Fair Value | ||
Fair Value, Less than 12 Months | 31,261 | |
Fair Value, 12 Months or Longer | 42,977 | 27,949 |
Fair Value | 42,977 | 59,210 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (1,194) | |
Gross Unrealized Losses, 12 Months or Longer | (1,816) | (3,076) |
Gross Unrealized Losses | (1,816) | (4,270) |
U.S. government and federal agencies | ||
Available-for-Sale, Fair Value | ||
Fair Value, Less than 12 Months | 16,107 | |
Fair Value, 12 Months or Longer | 13,275 | 18,653 |
Fair Value | 13,275 | 34,760 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (1,078) | |
Gross Unrealized Losses, 12 Months or Longer | (575) | (2,910) |
Gross Unrealized Losses | (575) | (3,988) |
Corporate bonds | ||
Available-for-Sale, Fair Value | ||
Fair Value, Less than 12 Months | 2,614 | |
Fair Value, 12 Months or Longer | 2,523 | |
Fair Value | 2,523 | |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (386) | |
Gross Unrealized Losses, 12 Months or Longer | (477) | |
Gross Unrealized Losses | (477) | (386) |
Collateralized mortgage obligations | ||
Available-for-Sale, Fair Value | ||
Fair Value, Less than 12 Months | 16,746 | |
Fair Value, 12 Months or Longer | 34,310 | 21,728 |
Fair Value | 34,310 | 38,474 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (1,143) | |
Gross Unrealized Losses, 12 Months or Longer | (6,496) | (5,115) |
Gross Unrealized Losses | (6,496) | (6,258) |
Tax-exempt municipal | ||
Available-for-Sale, Fair Value | ||
Fair Value, Less than 12 Months | 4,645 | |
Fair Value, 12 Months or Longer | 1,231 | |
Fair Value | 1,231 | |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (348) | |
Gross Unrealized Losses, 12 Months or Longer | (149) | |
Gross Unrealized Losses | (149) | (348) |
Taxable municipal | ||
Available-for-Sale, Fair Value | ||
Fair Value, Less than 12 Months | 337 | |
Fair Value, 12 Months or Longer | 587 | 242 |
Fair Value | 587 | 579 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (2) | |
Gross Unrealized Losses, 12 Months or Longer | (19) | (27) |
Gross Unrealized Losses | (19) | (29) |
Mortgage-backed | ||
Available-for-Sale, Fair Value | ||
Fair Value, Less than 12 Months | 145,795 | |
Fair Value, 12 Months or Longer | 75,090 | 71,499 |
Fair Value | 75,090 | 217,294 |
Gross Unrealized Losses | ||
Gross Unrealized Losses, Less than 12 Months | (9,612) | |
Gross Unrealized Losses, 12 Months or Longer | (6,165) | (11,746) |
Gross Unrealized Losses | $ (6,165) | $ (21,358) |
Investment Securities - Contrac
Investment Securities - Contractual Maturities of Investment Securities - Available-for-sale Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Available-for-sale, Amortized Cost | ||
Due in one year or less | $ 22,248 | |
Due after one year through five years | 46,393 | |
Due after five years through ten years | 53,890 | |
Due after ten years | 63,159 | |
Total Available-for-sale Securities | 185,690 | |
Available-for-sale, Fair Value | ||
Due in one year or less | 21,933 | |
Due after one year through five years | 44,271 | |
Due after five years through ten years | 50,962 | |
Due after ten years | 52,827 | |
Total Available-for-sale Securities | $ 169,993 | |
Weighted average remaining life | 3 years | 3 years 9 months 18 days |
Investment Securities - Amort_2
Investment Securities - Amortized Cost and Fair Value - Held-to-maturity Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Securities Held-to-Maturity | ||
Amortized cost | $ 95,505 | $ 99,415 |
Gross unrealized (losses) | (15,973) | (18,254) |
Securities held-to-maturity, fair value | 79,532 | 81,161 |
Securities held-to-maturity, fair value. | 79,532 | |
U.S. Treasuries | ||
Securities Held-to-Maturity | ||
Amortized cost | 6,001 | 6,000 |
Gross unrealized (losses) | (667) | (840) |
Securities held-to-maturity, fair value | 5,160 | |
Securities held-to-maturity, fair value. | 5,334 | |
U.S. government and federal agencies | ||
Securities Held-to-Maturity | ||
Amortized cost | 35,434 | 35,551 |
Gross unrealized (losses) | (5,100) | (6,135) |
Securities held-to-maturity, fair value | 29,416 | |
Securities held-to-maturity, fair value. | 30,334 | |
Collateralized mortgage obligations | ||
Securities Held-to-Maturity | ||
Amortized cost | 19,395 | 21,275 |
Gross unrealized (losses) | (4,095) | (4,227) |
Securities held-to-maturity, fair value | 17,048 | |
Securities held-to-maturity, fair value. | 15,300 | |
Taxable municipal | ||
Securities Held-to-Maturity | ||
Amortized cost | 6,057 | 6,073 |
Gross unrealized (losses) | (1,101) | (1,364) |
Securities held-to-maturity, fair value | 4,709 | |
Securities held-to-maturity, fair value. | 4,956 | |
Mortgage-backed | ||
Securities Held-to-Maturity | ||
Amortized cost | 28,618 | 30,516 |
Gross unrealized (losses) | (5,010) | (5,688) |
Securities held-to-maturity, fair value | $ 24,828 | |
Securities held-to-maturity, fair value. | $ 23,608 |
Investment Securities - Secur_2
Investment Securities - Securities in a Gross Unrealized Loss Position - Held-to-maturity Securities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Schedule of Held-to-Maturity Securities [Line Items] | |
Fair value, less than 12 months | $ 825 |
Fair value, 12 months or longer | 80,336 |
Fair value | 81,161 |
Gross unrealized losses, less than 12 months | (159) |
Gross unrealized losses, 12 months or longer | (18,095) |
Gross unrealized losses | (18,254) |
U.S. Treasuries | |
Schedule of Held-to-Maturity Securities [Line Items] | |
Fair value | 5,160 |
Gross unrealized losses, less than 12 months | (840) |
Gross unrealized losses, 12 months or longer | 5,160 |
Gross unrealized losses | (840) |
U.S. government and federal agencies | |
Schedule of Held-to-Maturity Securities [Line Items] | |
Fair value | 29,416 |
Gross unrealized losses, less than 12 months | (6,135) |
Gross unrealized losses, 12 months or longer | 29,416 |
Gross unrealized losses | (6,135) |
Corporate bonds | |
Schedule of Held-to-Maturity Securities [Line Items] | |
Fair value | 2,614 |
Collateralized mortgage obligations | |
Schedule of Held-to-Maturity Securities [Line Items] | |
Fair value | 17,048 |
Gross unrealized losses, less than 12 months | (4,227) |
Gross unrealized losses, 12 months or longer | 17,048 |
Gross unrealized losses | (4,227) |
Tax-exempt municipal | |
Schedule of Held-to-Maturity Securities [Line Items] | |
Fair value | 4,645 |
Taxable municipal | |
Schedule of Held-to-Maturity Securities [Line Items] | |
Fair value | 4,709 |
Gross unrealized losses, less than 12 months | (1,364) |
Gross unrealized losses, 12 months or longer | 4,709 |
Gross unrealized losses | (1,364) |
Mortgage-backed | |
Schedule of Held-to-Maturity Securities [Line Items] | |
Fair value, less than 12 months | 825 |
Fair value, 12 months or longer | (159) |
Fair value | 24,003 |
Gross unrealized losses, less than 12 months | (5,529) |
Gross unrealized losses, 12 months or longer | 24,828 |
Gross unrealized losses | $ (5,688) |
Investment Securities - Contr_2
Investment Securities - Contractual Maturities of Investment Securities - Held-to-maturity Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Held-to-maturity, Amortized Cost | ||
Due after one year through five years | $ 22,153 | |
Due after five years through ten years | 23,492 | |
Due after ten years | 49,860 | |
Total Held-to-maturity Securities | 95,505 | |
Held-to-maturity, Fair Value | ||
Due after one year through five years | 19,600 | |
Due after five years through ten years | 19,766 | |
Due after ten years | 40,166 | |
Total Held-to-maturity Securities | $ 79,532 | |
Weighted average remaining life | 6 years 8 months 12 days | 7 years 3 months 18 days |
Investment Securities - Additio
Investment Securities - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) security | Dec. 31, 2022 USD ($) security | Dec. 31, 2021 USD ($) | |
Proceeds from Sale and Maturity of Debt Securities, Available-for-Sale | |||
Available-for-sale securities sold at par value | $ 173,200 | ||
Debt Securities, Available-for-Sale, Realized Gain (Loss) | |||
Debt securities, available-for-sale, realized gain (loss) | $ (17,300) | ||
Number of securities in unrealized loss position | security | 158 | 98 | |
Allowance for credit loss | $ 0 | ||
Allowance for loan losses | $ 20,208 | $ 20,032 |
Investment Securities - Pledged
Investment Securities - Pledged Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Investment Securities | ||
Available-for-sale, at fair value | $ 357,576 | |
Securities held-to-maturity, fair value | $ 79,532 | 81,161 |
Amortized cost | 394,213 | |
Amortized cost | 95,505 | 99,415 |
Asset Pledged as Collateral without Right | Deposits | ||
Investment Securities | ||
Available-for-sale, at fair value | 90,300 | 83,400 |
Securities held-to-maturity, fair value | 36,100 | 31,000 |
Amortized cost | 95,800 | 91,000 |
Amortized cost | $ 42,300 | $ 37,700 |
Investment Securities - Restric
Investment Securities - Restricted Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Investment Securities | ||
Federal Reserve Bank Stock | $ 3,310 | $ 3,292 |
Federal Home Loan Bank Stock | 1,642 | 1,073 |
Community Bankers' Bank Stock | 60 | 60 |
Total Restricted Securities | $ 5,012 | $ 4,425 |
Investment Securities - Equity
Investment Securities - Equity Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity Securities | ||
Equity securities with readily determinable fair values | $ 2,792 | $ 2,115 |
Equity Securities, Realized Gain (Loss) | ||
Gain (loss) on investments | $ 317 | $ (354) |
Loans (Details)
Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total Gross Loans | $ 1,785,448 | ||
Total Gross Loans. | $ 1,854,984 | ||
Less: Allowance for loan credit losses | (20,208) | $ (20,032) | |
Less: Allowance for loan credit losses | (19,543) | ||
Net deferred loan costs | 4,060 | ||
Net deferred loan costs. | 4,983 | ||
Total net loans | 1,769,300 | ||
Total net loans | 1,840,424 | ||
Real Estate Loans | Commercial Real Estate | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total Gross Loans | 1,118,127 | ||
Total Gross Loans. | 1,146,116 | ||
Less: Allowance for loan credit losses | (13,205) | (13,091) | |
Real Estate Loans | Construction and land development | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total Gross Loans | 195,027 | ||
Total Gross Loans. | 180,922 | ||
Less: Allowance for loan credit losses | (2,860) | (2,824) | |
Real Estate Loans | Residential Real Estate | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total Gross Loans | 426,841 | ||
Total Gross Loans. | 482,182 | ||
Less: Allowance for loan credit losses | (3,044) | (2,769) | |
Commercial - Non-Real Estate | Commercial | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total Gross Loans | 44,924 | ||
Total Gross Loans. | 45,204 | ||
Less: Allowance for loan credit losses | (456) | (711) | |
Consumer - Non-Real Estate | Consumer | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total Gross Loans | 529 | ||
Total Gross Loans. | $ 560 | ||
Less: Allowance for loan credit losses | $ (5) | $ (5) |
Allowance for Loan Credit Los_3
Allowance for Loan Credit Losses - Allowance for loan losses activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance (prior to adoption) | $ 20,208 | $ 20,032 |
Charge-offs | (1) | |
Recoveries | 2 | |
Provision for (recovery of) credit losses | 175 | |
Ending Balance (prior to adoption) | 20,208 | |
Beginning Balance | 20,208 | |
Recoveries | 2 | |
Provision for (recovery of) credit losses | (2,832) | |
Ending balance | 19,543 | 20,208 |
Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | 2,165 | |
Ending balance | 2,165 | |
Real Estate Loans | Commercial Real Estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance (prior to adoption) | 13,205 | 13,091 |
Charge-offs | (1) | |
Provision for (recovery of) credit losses | 115 | |
Ending Balance (prior to adoption) | 13,205 | |
Beginning Balance | 13,205 | |
Provision for (recovery of) credit losses | 2,285 | |
Ending balance | 12,841 | 13,205 |
Real Estate Loans | Commercial Real Estate | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | (2,649) | |
Ending balance | (2,649) | |
Real Estate Loans | Construction and land development | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance (prior to adoption) | 2,860 | 2,824 |
Provision for (recovery of) credit losses | 36 | |
Ending Balance (prior to adoption) | 2,860 | |
Beginning Balance | 2,860 | |
Provision for (recovery of) credit losses | (1,549) | |
Ending balance | 1,787 | 2,860 |
Real Estate Loans | Construction and land development | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | 476 | |
Ending balance | 476 | |
Real Estate Loans | Residential Real Estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance (prior to adoption) | 3,044 | 2,769 |
Provision for (recovery of) credit losses | 275 | |
Ending Balance (prior to adoption) | 3,044 | |
Beginning Balance | 3,044 | |
Provision for (recovery of) credit losses | (3,273) | |
Ending balance | 4,323 | 3,044 |
Real Estate Loans | Residential Real Estate | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | 4,552 | |
Ending balance | 4,552 | |
Commercial - Non-Real Estate | Commercial | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance (prior to adoption) | 456 | 711 |
Recoveries | 2 | |
Provision for (recovery of) credit losses | (257) | |
Ending Balance (prior to adoption) | 456 | |
Beginning Balance | 456 | |
Recoveries | 2 | |
Provision for (recovery of) credit losses | (330) | |
Ending balance | 495 | 456 |
Commercial - Non-Real Estate | Commercial | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | 367 | |
Ending balance | 367 | |
Consumer - Non-Real Estate | Consumer | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance (prior to adoption) | 5 | 5 |
Ending Balance (prior to adoption) | 5 | |
Beginning Balance | 5 | |
Provision for (recovery of) credit losses | 35 | |
Ending balance | 97 | 5 |
Consumer - Non-Real Estate | Consumer | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | 57 | |
Ending balance | 57 | |
Unallocated | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance (prior to adoption) | 638 | 632 |
Provision for (recovery of) credit losses | 6 | |
Ending Balance (prior to adoption) | 638 | |
Beginning Balance | 638 | |
Ending balance | 638 | |
Unallocated | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Beginning Balance | $ (638) | |
Ending balance | $ (638) |
Allowance for Loan Credit Los_4
Allowance for Loan Credit Losses - Allowance and loans by impairment methodology (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | $ 0 | ||
Collectively evaluated for impairment | $ 20,208 | ||
Total allowance | 20,208 | $ 20,032 | |
Individually evaluated for impairment | 418 | ||
Collectively evaluated for impairment | 1,785,030 | ||
Total loans | 1,785,448 | ||
Real Estate Loans | Commercial Real Estate | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Collectively evaluated for impairment | 13,205 | ||
Total allowance | 13,205 | 13,091 | |
Collectively evaluated for impairment | 1,118,127 | ||
Total loans | 1,118,127 | ||
Real Estate Loans | Construction and land development | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Collectively evaluated for impairment | 2,860 | ||
Total allowance | 2,860 | 2,824 | |
Collectively evaluated for impairment | 195,027 | ||
Total loans | 195,027 | ||
Real Estate Loans | Residential Real Estate | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Collectively evaluated for impairment | 3,044 | ||
Total allowance | 3,044 | 2,769 | |
Individually evaluated for impairment | 418 | ||
Collectively evaluated for impairment | 426,423 | ||
Total loans | 426,841 | ||
Commercial - Non-Real Estate | Commercial | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Collectively evaluated for impairment | 456 | ||
Total allowance | 456 | 711 | |
Collectively evaluated for impairment | 44,924 | ||
Total loans | 44,924 | ||
Consumer - Non-Real Estate | Consumer | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Collectively evaluated for impairment | 5 | ||
Total allowance | 5 | 5 | |
Collectively evaluated for impairment | 529 | ||
Total loans | 529 | ||
Unallocated | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Collectively evaluated for impairment | 638 | ||
Total allowance | $ 638 | $ 632 |
Allowance for Loan Credit Los_5
Allowance for Loan Credit Losses - Impaired loans (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Financing Receivable, Impaired [Line Items] | |
Unpaid Principal Balance | $ 418 |
Recorded Investment with No Allowances | 418 |
Total Recorded Investment | 418 |
Average Recorded Investment | 427 |
Interest Income Recognized | 15 |
Real Estate Loans | Residential Real Estate | |
Financing Receivable, Impaired [Line Items] | |
Unpaid Principal Balance | 418 |
Recorded Investment with No Allowances | 418 |
Total Recorded Investment | 418 |
Average Recorded Investment | 427 |
Interest Income Recognized | $ 15 |
Allowance for Loan Credit Los_6
Allowance for Loan Credit Losses - Past due and non-accrual loans (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Financing receivable, past due | ||
Current | $ 1,854,984 | $ 1,785,448 |
Total loans | 1,854,984 | |
Total loans (prior to adoption) | 1,785,448 | |
Commercial Real Estate | Real Estate Loans | ||
Financing receivable, past due | ||
Current | 1,146,116 | 1,118,127 |
Total loans | 1,146,116 | |
Total loans (prior to adoption) | 1,118,127 | |
Construction and land development | Real Estate Loans | ||
Financing receivable, past due | ||
Current | 180,922 | 195,027 |
Total loans | 180,922 | |
Total loans (prior to adoption) | 195,027 | |
Residential Real Estate | Real Estate Loans | ||
Financing receivable, past due | ||
Current | 482,182 | 426,841 |
Total loans | 482,182 | |
Total loans (prior to adoption) | 426,841 | |
Commercial | Commercial - Non-Real Estate | ||
Financing receivable, past due | ||
Current | 45,204 | 44,924 |
Total loans | 45,204 | |
Total loans (prior to adoption) | 44,924 | |
Consumer | Consumer - Non-Real Estate | ||
Financing receivable, past due | ||
Current | 560 | 529 |
Total loans | $ 560 | |
Total loans (prior to adoption) | $ 529 |
Allowance for Loan Credit Los_7
Allowance for Loan Credit Losses - Credit quality indicators (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | $ 1,785,448 | |
Total | $ 1,859,967 | |
Commercial Real Estate | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | 1,118,127 | |
2023 | 67,675 | |
2022 | 315,444 | |
2021 | 201,801 | |
2020 | 127,065 | |
2019 | 96,424 | |
Prior | 334,132 | |
Revolving | 3,575 | |
Total | 1,146,116 | |
Construction and land development | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | 195,027 | |
2023 | 47,253 | |
2022 | 56,408 | |
2021 | 33,827 | |
2020 | 9,360 | |
2019 | 2,137 | |
Prior | 7,046 | |
Revolving | 24,891 | |
Total | 180,922 | |
Residential Real Estate | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | 426,841 | |
2023 | 83,060 | |
2022 | 114,865 | |
2021 | 133,188 | |
2020 | 87,275 | |
2019 | 24,883 | |
Prior | 21,380 | |
Revolving | 17,531 | |
Total | 482,182 | |
Commercial | Commercial - Non-Real Estate | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | 44,924 | |
2023 | 7,564 | |
2022 | 6,838 | |
2021 | 1,959 | |
2020 | 3,207 | |
2019 | 4,482 | |
Prior | 4,787 | |
Revolving | 16,367 | |
Total | 45,204 | |
Consumer | Consumer - Non-Real Estate | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | 529 | |
2023 | 485 | |
2022 | 6 | |
2021 | 26 | |
Prior | 10 | |
Revolving | 33 | |
Total | 560 | |
Pass | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | 1,782,061 | |
Pass | Commercial Real Estate | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | 1,116,890 | |
2023 | 67,675 | |
2022 | 302,342 | |
2021 | 201,801 | |
2020 | 125,828 | |
2019 | 96,424 | |
Prior | 334,132 | |
Revolving | 3,575 | |
Total | 1,131,777 | |
Pass | Construction and land development | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | 192,877 | |
2023 | 47,253 | |
2022 | 56,408 | |
2021 | 33,827 | |
2020 | 9,360 | |
2019 | 8 | |
Prior | 7,046 | |
Revolving | 24,891 | |
Total | 178,793 | |
Pass | Residential Real Estate | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | 426,841 | |
2023 | 83,060 | |
2022 | 114,865 | |
2021 | 133,188 | |
2020 | 87,275 | |
2019 | 24,883 | |
Prior | 21,380 | |
Revolving | 17,531 | |
Total | 482,182 | |
Pass | Commercial | Commercial - Non-Real Estate | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | 44,924 | |
2023 | 7,564 | |
2022 | 6,838 | |
2021 | 1,959 | |
2020 | 3,207 | |
2019 | 4,482 | |
Prior | 4,787 | |
Revolving | 16,367 | |
Total | 45,204 | |
Pass | Consumer | Consumer - Non-Real Estate | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | 529 | |
2023 | 485 | |
2022 | 6 | |
2021 | 26 | |
Prior | 10 | |
Revolving | 33 | |
Total | 560 | |
Special Mention | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | 3,387 | |
Special Mention | Commercial Real Estate | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | 1,237 | |
2022 | 13,102 | |
2020 | 1,237 | |
Total | 14,339 | |
Special Mention | Construction and land development | Real Estate Loans | ||
Financing receivable, credit quality indicator | ||
Total loans (prior to adoption) | $ 2,150 | |
2019 | 2,129 | |
Total | $ 2,129 |
Allowance for Loan Credit Los_8
Allowance for Loan Credit Losses - TDRs, prior to adoption (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 loan | Dec. 31, 2022 USD ($) loan | |
Allowance for Loan Credit Losses | ||
Recorded investment in TDR's | $ 418 | |
Number of loans modified in TDRs | loan | 0 | 0 |
Number of financing receivable contracts | loan | 0 | |
Additional commitments funds | $ 0 | |
Total Recorded Investment | $ 418 |
Allowance for Loan Credit Los_9
Allowance for Loan Credit Losses - Unfunded Commitments (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Beginning Balance | $ 20,208 |
Recovery of credit losses | 3,252 |
Ending balance | 19,543 |
Cumulative Effect, Period of Adoption, Adjustment | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Beginning Balance | 2,165 |
Unfunded loan commitments | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Beginning Balance | 303 |
Recovery of credit losses | (420) |
Ending balance | 620 |
Unfunded loan commitments | Cumulative Effect, Period of Adoption, Adjustment | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Beginning Balance | $ 737 |
Derivatives (Details)
Derivatives (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Interest Rate Swap | ||
Derivatives | ||
Notional amount | $ 38,888 | $ 27,534 |
Years to maturity | 3 years 2 months 12 days | 2 years 9 months 18 days |
Derivative, average variable interest rate (as a percent) | 4.63% | 4.31% |
Derivative, average fixed interest rate (as a percent) | 4.63% | 4.31% |
Pay fixed/receive variable swaps | ||
Derivatives | ||
Notional amount | $ 19,444 | $ 13,767 |
Estimated fair value, assets | $ 846 | |
Estimated fair value, (liabilities) | $ 1,217 | |
Years to maturity | 3 years 2 months 12 days | 2 years 9 months 18 days |
Derivative, average variable interest rate (as a percent) | 5.87% | 6.02% |
Derivative, average fixed interest rate (as a percent) | 3.39% | 2.59% |
Pay variable/receive fixed swaps | ||
Derivatives | ||
Notional amount | $ 19,444 | $ 13,767 |
Estimated fair value, assets | $ (846) | |
Estimated fair value, (liabilities) | $ (1,217) | |
Years to maturity | 3 years 2 months 12 days | 2 years 9 months 18 days |
Derivative, average variable interest rate (as a percent) | 3.39% | 2.59% |
Derivative, average fixed interest rate (as a percent) | 5.87% | 6.02% |
Bank Premises and Equipment, _3
Bank Premises and Equipment, Net - Tabular Disclosure (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Bank Premises and Equipment, Net | ||
Total Bank Premises and Equipment | $ 9,631 | $ 9,141 |
Less: Accumulated depreciation | (8,350) | (7,922) |
Total Bank Premises and Equipment, Net | 1,281 | 1,219 |
Leasehold improvements | ||
Bank Premises and Equipment, Net | ||
Total Bank Premises and Equipment | 2,910 | 2,873 |
Furniture and equipment | ||
Bank Premises and Equipment, Net | ||
Total Bank Premises and Equipment | $ 6,721 | $ 6,268 |
Bank Premises and Equipment, _4
Bank Premises and Equipment, Net - Depreciation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Depreciation | ||
Depreciation | $ 484 | $ 557 |
Deposits and Borrowings - Depos
Deposits and Borrowings - Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deposits: | ||
Non-interest bearing demand deposits | $ 411,374 | $ 476,697 |
Interest-bearing demand deposits | 607,971 | 691,945 |
Savings deposits | 52,061 | 95,241 |
Time deposits | 835,194 | 803,857 |
Total deposits | $ 1,906,600 | $ 2,067,740 |
Deposits and Borrowings - Short
Deposits and Borrowings - Short- term Debt and Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Carrying Value - Short-term Debt | $ 54,000 | |
Carrying Value - Long-term Debt | $ 24,708 | $ 24,624 |
Federal Reserve Bank borrowings | ||
Debt Instrument [Line Items] | ||
Stated Interest Rates | 4.80% | |
Weighted-Average Interest Rate | 4.80% | |
Carrying Value - Short-term Debt | $ 54,000 | |
Subordinated debt | ||
Debt Instrument [Line Items] | ||
Stated Interest Rates | 5.25% | |
Weighted-Average Interest Rate | 5.25% | |
Carrying Value - Long-term Debt | $ 24,708 | $ 24,624 |
Deposits and Borrowings - Addit
Deposits and Borrowings - Additional Information (Details) $ in Thousands | 12 Months Ended | ||||
Mar. 15, 2023 USD ($) | Jul. 15, 2022 USD ($) | Dec. 31, 2023 USD ($) customer | Dec. 31, 2022 USD ($) | Jun. 15, 2022 USD ($) | |
Debt instrument | |||||
Overdraft demand deposits reclassified to loans | $ 1 | $ 1 | |||
Certificate of deposits | 359,300 | 318,700 | |||
Brokered deposits | 320,600 | 352,000 | |||
Reciprocal certificates of deposits | 45,600 | 25,700 | |||
Reciprocal demand and money market deposit | $ 234,900 | 197,300 | |||
Number of depositors representing five percent or more of total deposits | customer | 0 | ||||
Percentage of deposits exceed five or more | 5% | ||||
Repayment of subordinated debt | 25,000 | ||||
Total collateral under the blanket lien | $ 436,900 | ||||
Loans, net of unearned income | 1,859,967 | ||||
Proceeds from Federal Reserve Bank borrowings | 54,000 | ||||
Fair value of held-to-maturity Securities | 79,532 | $ 81,161 | |||
Federal Reserve Bank borrowings | |||||
Debt instrument | |||||
Stated Interest Rates | 4.80% | ||||
Proceeds from Federal Reserve Bank borrowings | $ 54,000 | ||||
Term of advance | 1 year | ||||
Asset Pledged as Collateral without Right [Member] | Federal Reserve Bank borrowings | |||||
Debt instrument | |||||
Held-to-maturity securities at amortized cost | 54,600 | ||||
Fair value of held-to-maturity Securities | 44,600 | ||||
Minimum | |||||
Debt instrument | |||||
Certificate of deposits | $ 250 | ||||
Subordinated debt | |||||
Debt instrument | |||||
Face amount or Principal amount | $ 25,000 | ||||
Stated Interest Rates | 5.25% | ||||
2017 Notes | |||||
Debt instrument | |||||
Repayment of subordinated debt | $ 25,000 | ||||
Stated Interest Rates | 5.75% | ||||
Federal Funds | |||||
Debt instrument | |||||
Federal home loan, advances, general debt obligations, unused funds | $ 110,000 | ||||
Line of credit | $ 10,000 | ||||
Federal Reserve Bank borrowings | |||||
Debt instrument | |||||
Stated Interest Rates | 4.80% | ||||
Maximum borrowing capacity | $ 22,800 | ||||
Line of credit | 0 | ||||
Federal Reserve Bank borrowings | Asset Pledged as Collateral without Right [Member] | |||||
Debt instrument | |||||
Loans, net of unearned income | $ 30,900 | ||||
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 | Dec. 31, 2023 USD ($) |
Contractual maturity | |
2024 | $ 574,056 |
2025 | 181,797 |
2026 | 68,629 |
2027 | 10,165 |
2028 | 547 |
Total | $ 835,194 |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases | ||
Operating Lease, Liability | $ 4,446 | $ 4,858 |
Operating Lease, Right-of-Use Asset | $ 4,176 | $ 4,611 |
Weighted average remaining lease term | 3 years 10 months 20 days | 4 years 29 days |
Weighted average discount rate (as a percent) | 3% | 2.62% |
Leases - Cost of Leases (Detail
Leases - Cost of Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lease, Cost | ||
Operating lease cost | $ 1,392 | $ 1,469 |
Total Lease Cost | $ 1,392 | $ 1,469 |
Leases - Lease Maturity Schedul
Leases - Lease Maturity Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee, Operating Lease, Liability, to be Paid | ||
2024 | $ 1,322 | |
2025 | 1,319 | |
2026 | 1,121 | |
2027 | 429 | |
2028 | 291 | |
Thereafter | 276 | |
Total Undiscounted Cash Flows | 4,758 | |
Discount | (312) | |
Lease Liabilities | $ 4,446 | $ 4,858 |
Leases - Leases (Details)
Leases - Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases | ||
Cash paid for amounts included in measurement of lease liabilities | $ 1.4 | $ 1.5 |
Rent expense | $ 1.5 | $ 1.6 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Tax Assets: | ||
Allowance for loan credit losses | $ 4,477 | $ 4,581 |
Lease liabilities | 987 | 1,101 |
Share-based compensation expense | 45 | 91 |
Unrealized losses on debt securities | 3,257 | 7,628 |
Other | 453 | 416 |
Total Deferred Tax Assets | 9,219 | 13,817 |
Deferred Tax Liabilities: | ||
Right-of-use assets | 927 | 1,045 |
Depreciation | 53 | 49 |
Net deferred loan costs | 1,106 | 920 |
Other | 76 | 62 |
Total Deferred Tax Liabilities | 2,162 | 2,076 |
Net Deferred Tax Assets | $ 7,057 | $ 11,741 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current Income Tax Expense (Benefit), Continuing Operations | ||
Current tax expense | $ 1,902 | $ 7,666 |
Deferred Income Tax Expense (Benefit), Continuing Operations | ||
Deferred tax expense | 921 | 594 |
Total Income Tax Expense | $ 2,823 | $ 8,260 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Effective Income Tax Reconciliation | ||
Computed "expected" tax expense | $ 1,676 | $ 8,413 |
Bank-owned life insurance policy surrender | 1,101 | |
State income taxes, net of federal benefit | 180 | 516 |
Bank-owned life insurance | (47) | (114) |
Tax-exempt interest income | (69) | (158) |
Excess tax benefit on share-based compensation | (19) | (427) |
Other, net | 1 | 30 |
Total Income Tax Expense | $ 2,823 | $ 8,260 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Commitments to extend credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risks, face amount | $ 235,560 | $ 240,084 |
Standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risks, face amount | $ 16,329 | $ 14,677 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair value of assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | $ 357,576 | |
Equity securities, at fair value | $ 2,792 | 2,115 |
U.S. Treasuries | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 59,210 | |
U.S. government and federal agencies | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 34,760 | |
Corporate bonds | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 2,614 | |
Collateralized mortgage obligations | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 38,474 | |
Tax-exempt municipal | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 4,645 | |
Taxable municipal | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 579 | |
Mortgage-backed | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 217,294 | |
Fair Value, Recurring | ||
Securities available-for-sale: | ||
Equity securities, at fair value | 2,792 | 2,115 |
Loan servicing rights | 22 | |
Total assets at fair value | 173,653 | 360,908 |
Liabilities: | ||
Total liabilities at fair value | 846 | 1,217 |
Fair Value, Recurring | Interest Rate Swap [Member] | ||
Securities available-for-sale: | ||
Interest rate swap agreements | 846 | 1,217 |
Liabilities: | ||
Interest rate swap agreements | 846 | 1,217 |
Fair Value, Recurring | U.S. Treasuries | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 42,977 | 59,210 |
Fair Value, Recurring | U.S. government and federal agencies | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 13,275 | 34,760 |
Fair Value, Recurring | Corporate bonds | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 2,523 | 2,614 |
Fair Value, Recurring | Collateralized mortgage obligations | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 34,310 | 38,474 |
Fair Value, Recurring | Tax-exempt municipal | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 1,231 | 4,645 |
Fair Value, Recurring | Taxable municipal | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 587 | 579 |
Fair Value, Recurring | Mortgage-backed | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 75,090 | 217,294 |
Fair Value, Recurring | Fair Value, Inputs, Level 1 | ||
Securities available-for-sale: | ||
Equity securities, at fair value | 2,792 | 2,115 |
Total assets at fair value | 2,792 | 2,115 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | ||
Securities available-for-sale: | ||
Total assets at fair value | 170,839 | 358,793 |
Liabilities: | ||
Total liabilities at fair value | 846 | 1,217 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | Interest Rate Swap [Member] | ||
Securities available-for-sale: | ||
Interest rate swap agreements | 846 | 1,217 |
Liabilities: | ||
Interest rate swap agreements | 846 | 1,217 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | U.S. Treasuries | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 42,977 | 59,210 |
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 | 13,275 | 34,760 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | Corporate bonds | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 2,523 | 2,614 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | Collateralized mortgage obligations | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 34,310 | 38,474 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | Tax-exempt municipal | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 1,231 | 4,645 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | Taxable municipal | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 587 | 579 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | Mortgage-backed | ||
Securities available-for-sale: | ||
Securities available-for-sale, at fair value | 75,090 | $ 217,294 |
Fair Value, Recurring | Fair Value, Inputs, Level 3 | ||
Securities available-for-sale: | ||
Loan servicing rights | 22 | |
Total assets at fair value | $ 22 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying value and estimated fair value of financial instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Securities: | ||
Available-for-sale | $ 357,576 | |
Equity securities, at fair value | $ 2,792 | 2,115 |
Restricted securities, at cost | 5,012 | 4,425 |
Carrying Value | ||
Assets: | ||
Cash and cash equivalents | 99,005 | 61,599 |
Securities: | ||
Available-for-sale | 169,993 | 357,576 |
Held-to-maturity | 95,505 | 99,415 |
Equity securities, at fair value | 2,792 | 2,115 |
Restricted securities, at cost | 5,012 | 4,425 |
Loans, net | 1,840,424 | 1,769,300 |
Loan servicing rights | 22 | |
Bank owned life insurance | 21,170 | |
Accrued interest receivable | 6,110 | 5,531 |
Liabilities: | ||
Deposits | 1,906,600 | 2,067,740 |
Federal Reserve Bank borrowings | 54,000 | |
Federal funds purchased | 10,000 | |
Subordinated debt | 24,708 | 24,624 |
Federal funds purchased | 25,500 | |
Accrued interest payable | 4,559 | 1,035 |
Carrying Value | Interest Rate Swap [Member] | ||
Securities: | ||
Interest rate swap agreements | 846 | 1,217 |
Liabilities: | ||
Interest rate swap agreements | 846 | 1,217 |
Fair Value | ||
Assets: | ||
Cash and cash equivalents | 99,005 | 61,599 |
Securities: | ||
Available-for-sale | 169,993 | 357,576 |
Held-to-maturity | 79,532 | 81,161 |
Equity securities, at fair value | 2,792 | 2,115 |
Restricted securities, at cost | 5,012 | 4,425 |
Loans, net | 1,730,205 | 1,676,887 |
Loan servicing rights | 22 | |
Bank owned life insurance | 21,170 | |
Accrued interest receivable | 6,110 | 5,531 |
Liabilities: | ||
Deposits | 1,906,835 | 2,065,248 |
Federal Reserve Bank borrowings | 54,000 | |
Federal funds purchased | 10,000 | |
Subordinated debt | 21,873 | 22,457 |
Federal funds purchased | 25,500 | |
Accrued interest payable | 4,559 | 1,035 |
Fair Value | Interest Rate Swap [Member] | ||
Securities: | ||
Interest rate swap agreements | 846 | 1,217 |
Liabilities: | ||
Interest rate swap agreements | 846 | 1,217 |
Fair Value, Inputs, Level 1 | Fair Value | ||
Assets: | ||
Cash and cash equivalents | 99,005 | 61,599 |
Securities: | ||
Equity securities, at fair value | 2,792 | 2,115 |
Fair Value, Inputs, Level 2 | Fair Value | ||
Securities: | ||
Available-for-sale | 169,993 | 357,576 |
Held-to-maturity | 79,532 | 81,161 |
Restricted securities, at cost | 5,012 | 4,425 |
Bank owned life insurance | 21,170 | |
Accrued interest receivable | 6,110 | 5,531 |
Liabilities: | ||
Deposits | 1,906,835 | 2,065,248 |
Federal Reserve Bank borrowings | 54,000 | |
Federal funds purchased | 10,000 | |
Federal funds purchased | 25,500 | |
Accrued interest payable | 4,559 | 1,035 |
Fair Value, Inputs, Level 2 | Fair Value | Interest Rate Swap [Member] | ||
Securities: | ||
Interest rate swap agreements | 846 | 1,217 |
Liabilities: | ||
Interest rate swap agreements | 846 | 1,217 |
Fair Value, Inputs, Level 3 | Fair Value | ||
Securities: | ||
Loans, net | 1,730,205 | 1,676,887 |
Loan servicing rights | 22 | |
Liabilities: | ||
Subordinated debt | $ 21,873 | $ 22,457 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional information (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value Measurements | ||
Collateral dependent loans | $ 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 | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income available to common shareholders (in thousands): | ||
Net Income (Loss) | $ 5,158 | $ 31,803 |
Less: Income attributable to unvested restricted stock awards | (17) | (136) |
Net income available to common shareholders | $ 5,141 | $ 31,667 |
Weighted average shares outstanding: | ||
Common shares outstanding, including unvested restricted stock | 14,124,696 | 13,991,875 |
Less: Unvested restricted stock | (47,771) | (60,034) |
Weighted-average common shares outstanding - basic | 14,076,925 | 13,931,841 |
Earnings per common share - basic | $ 0.37 | $ 2.27 |
Income available to common shareholders (in thousands): | ||
Net Income (Loss) | $ 5,158 | $ 31,803 |
Less: Income attributable to unvested restricted stock awards | (17) | (135) |
Net income available to common shareholders | $ 5,141 | $ 31,668 |
Weighted average shares outstanding: | ||
Common shares outstanding, including unvested restricted stock | 14,124,696 | 13,991,875 |
Less: Unvested restricted stock | (47,771) | (60,034) |
Plus: Effect of dilutive options | 70,268 | 152,586 |
Weighted-average common shares outstanding - diluted | 14,147,193 | 14,084,427 |
Earnings per common share - diluted | $ 0.36 | $ 2.25 |
Earnings per Common Share - Add
Earnings per Common Share - Additional information (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Employee Stock Option | ||
Antidilutive securities excluded from computation of earnings per share | ||
Antidilutive securities excluded from computation of earnings per share, amount | 0 | 0 |
Stock Based Compensation Plan_2
Stock Based Compensation Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Apr. 28, 2015 | |
Employee Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of options exercised | $ 370 | $ 4,600 | |
Share-based compensation expense | 0 | $ 0 | |
Unrecognized share-based compensation expense | $ 0 | ||
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock grants | 22,893 | 24,423 | |
Weighted average grant date fair value, granted | $ 23.65 | $ 27.44 | |
Share-based compensation expense | $ 596 | $ 573 | |
Fair value of vested shares | 717 | $ 1,100 | |
Unrecognized share-based compensation expense | $ 1,000 | ||
Recognition period | 1 year 10 months 24 days | ||
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 | Employee Stock Option | |||
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 | 278,529 | ||
Vesting term | 5 years | ||
Expiration term | 10 years | ||
2015 Plan | Employee Stock Option | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Price of stock expressed in fair value percentage | 100% | ||
2015 Plan | Employee Stock Option | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Term of award | 10 years | ||
2006 Plan | Employee Stock Option | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of additional shares authorized | 1,490,700 |
Stock Based Compensation Plan -
Stock Based Compensation Plan - Summary of Stock Options Activity (Details) - Employee Stock Option - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding, beginning balance | 189,934 | |
Options granted | 0 | 0 |
Options exercised | (27,375) | |
Options forfeited or expired | (412) | |
Options outstanding, ending balance | 162,147 | 189,934 |
Options exercisable | 162,147 | |
Weighted average exercise price, beginning balance | $ 11.76 | |
Weighted average exercise price, exercised | 11.75 | |
Weighted average exercise price, forfeited or expired | 9.44 | |
Weighted average exercise price, ending balance | 11.77 | $ 11.76 |
Weighted average exercise price, exercisable | $ 11.77 | |
Aggregate intrinsic value outstanding | $ 1,749,454 | |
Aggregate intrinsic value exercisable | $ 1,749,454 |
Stock Based Compensation Plan_3
Stock Based Compensation Plan - Summary of Stock Options Outstanding and Exercisable (Details) - Employee Stock Option - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Options outstanding | 162,147 | 189,934 |
Options outstanding, weighted average remaining contractual life (in years) | 11 months 4 days | |
Options exercisable | 162,147 | |
Options exercisable, weighted average remaining contractual life (in years) | 11 months 4 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 | 161,085 | |
Options outstanding, weighted average remaining contractual life (in years) | 11 months 1 day | |
Options exercisable | 161,085 | |
Options exercisable, weighted average remaining contractual life (in years) | 11 months 1 day | |
$12.01 - $13.00 | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price range minimum rate | $ 12.01 | |
Exercise price range maximum rate | $ 13 | |
Options outstanding | 1,062 | |
Options outstanding, weighted average remaining contractual life (in years) | 11 months 23 days | |
Options exercisable | 1,062 | |
Options exercisable, weighted average remaining contractual life (in years) | 11 months 23 days |
Stock Based Compensation Plan_4
Stock Based Compensation Plan - Summary of Restricted Stock Awards (Details) - Restricted Stock Awards - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Nonvested shares outstanding, beginning balance | 55,185 | |
Nonvested shares, granted | 22,893 | 24,423 |
Nonvested shares, vested | (30,390) | |
Nonvested shares, forfeited | (370) | |
Nonvested shares outstanding, ending balance | 47,318 | 55,185 |
Weighted average grant date fair value outstanding, beginning balance | $ 21.80 | |
Weighted average grant date fair value, granted | 23.65 | $ 27.44 |
Weighted average grant date fair value, vested | 21.21 | |
Weighted average grant date fair value, forfeited | 15.50 | |
Weighted average grant date fair value, ending balance | $ 23.12 | $ 21.80 |
Employee Benefit Plans - Define
Employee Benefit Plans - Defined Contribution Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Defined Contribution Plan | ||
Discretionary contributions | $ 502 | $ 474 |
Employee Benefit Plans - Deferr
Employee Benefit Plans - Deferred Compensation Arrangement (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Deferred Compensation Arrangements | ||
Deferred compensation liability | $ 2,300 | $ 1,900 |
Expenses for discretionary contributions | $ 297 | $ 192 |
Vesting term | 3 years |
Regulatory Capital (Details)
Regulatory Capital (Details) | Dec. 31, 2023 |
Regulatory Capital | |
Capital conservation buffer ratio | 0.025 |
Regulatory Capital - Schedule o
Regulatory Capital - Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations (Details) $ in Thousands | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Total capital (to risk weighted assets) | ||
Actual, Amount | $ 282,082 | $ 283,471 |
Actual, Ratio | 0.157 | 0.156 |
Minimum Capital Requirements, Amount | $ 188,448 | $ 190,798 |
Minimum Capital Requirements, Ratio | 0.105 | 0.105 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 179,475 | $ 181,712 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.100 | 0.100 |
Tier 1 capital (to risk weighted assets) | ||
Actual, Amount | $ 263,637 | $ 262,960 |
Actual, Ratio | 0.147 | 0.144 |
Minimum Capital Requirements, Amount | $ 152,553 | $ 155,219 |
Minimum Capital Requirements, Ratio | 0.085 | 0.085 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 143,580 | $ 146,089 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.080 | 0.080 |
Common equity tier 1 capital (to risk weighted assets) | ||
Actual, Amount | $ 263,637 | $ 262,960 |
Actual, Ratio | 0.147 | 0.144 |
Minimum Capital Requirements, Amount | $ 125,632 | $ 127,828 |
Minimum Capital Requirements, Ratio | 0.070 | 0.070 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 116,658 | $ 118,697 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.065 | 0.065 |
Tier 1 capital (to average assets) | ||
Actual, Amount | $ 263,637 | $ 262,960 |
Actual, Ratio | 0.116 | 0.113 |
Minimum Capital Requirements, Amount | $ 91,163 | $ 93,083 |
Minimum Capital Requirements, Ratio | 0.040 | 0.040 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 113,954 | $ 116,354 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.050 | 0.050 |
Revenue - Components of Non-int
Revenue - Components of Non-interest Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Service charges on deposit accounts and Other service charges and fees | ||
Bank owned life insurance | $ 224 | $ 544 |
Losses on sale of available-for-sale securities | (17,316) | |
Gain on sale of government guaranteed loans | 131 | |
Non-qualified deferred compensation plan asset gains (losses), net | 317 | (354) |
Other income | 150 | 139 |
Total non-interest income (loss) | (14,940) | 1,691 |
Overdrawn account fees | ||
Service charges on deposit accounts and Other service charges and fees | ||
Non-interest income | 82 | 88 |
Account service fees | ||
Service charges on deposit accounts and Other service charges and fees | ||
Non-interest income | 248 | 236 |
Interchange income | ||
Service charges on deposit accounts and Other service charges and fees | ||
Non-interest income | 403 | 409 |
Other Charges and Fees | ||
Service charges on deposit accounts and Other service charges and fees | ||
Non-interest income | 435 | 247 |
Insurance Commissions | ||
Service charges on deposit accounts and Other service charges and fees | ||
Non-interest income | $ 386 | $ 382 |
Revenue - Additional informatio
Revenue - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue | ||
Other operating income (loss) | $ 59 | $ 12 |
Gain (loss) on fair value of adjustment on equity securities | $ 91 | $ 127 |
Other Operating Expenses (Detai
Other Operating Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Other Operating Expenses | ||
Advertising expense | $ 288 | $ 193 |
Data processing | 1,936 | 1,940 |
FDIC insurance | 1,041 | 605 |
Professional fees | 329 | 1,231 |
State franchise tax | 2,389 | 2,092 |
Director costs | 876 | 810 |
Other operating expenses | 1,531 | 1,595 |
Total other operating expenses | $ 8,390 | $ 8,466 |
Low Income Housing Tax Credit_2
Low Income Housing Tax Credit Investments (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) fund | Dec. 31, 2022 USD ($) | |
Low Income Housing Tax Credit Investments | ||
Number of housing equity funds | fund | 7 | |
Investments in funds recorded as other assets | $ 4,700 | $ 5,200 |
Tax credits and other tax benefits recognized | 113 | 94 |
Additional capital calls expected for funds included in other liabilities | $ 2,500 | $ 3,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | $ 212,800 | $ 208,470 |
Net change during the period | 16,446 | (28,297) |
Ending balance | 229,914 | 212,800 |
Debt securities, available-for-sale, realized gain (loss) | (17,300) | |
Gain (loss) on available-for-sale securities, related tax | 3,600 | |
Accumulated Other Comprehensive (Loss) | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (28,697) | (400) |
Net change during the period | 16,446 | (28,297) |
Ending balance | (12,251) | (28,697) |
Unrealized Gain (Loss) on Available-for-sale Securities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (28,942) | (789) |
Net change during the period | 16,542 | (28,153) |
Ending balance | (12,400) | (28,942) |
Unrealized Gains on Securities Transferred from Available-for-sale to Held-to-maturity | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | 245 | 389 |
Net change during the period | (96) | (144) |
Ending balance | $ 149 | $ 245 |
Parent Company Financials - Con
Parent Company Financials - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | |||
Cash and due from banks | $ 7,424 | $ 6,583 | |
Equity securities, at fair value | 2,792 | 2,115 | |
Other assets | 18,251 | 21,274 | |
Total assets | 2,242,549 | 2,348,235 | |
Liabilities and Shareholders' Equity | |||
Subordinated debt, net of unamortized issuance costs | 24,708 | 24,624 | |
Accrued interest payable | 4,559 | 1,035 | |
Other liabilities | 8,322 | 11,678 | |
Total liabilities | 2,012,635 | 2,135,435 | |
Total shareholders' equity | 229,914 | 212,800 | $ 208,470 |
Total liabilities and shareholders' equity | 2,242,549 | 2,348,235 | |
Parent Company | |||
Assets | |||
Cash and due from banks | 4,874 | 3,588 | |
Equity securities, at fair value | 2,792 | 2,115 | |
Investment in subsidiary | 249,666 | 234,263 | |
Other assets | 448 | 366 | |
Total assets | 257,780 | 240,332 | |
Liabilities and Shareholders' Equity | |||
Subordinated debt, net of unamortized issuance costs | 24,708 | 24,624 | |
Accrued interest payable | 656 | 715 | |
Other liabilities | 2,502 | 2,193 | |
Total liabilities | 27,866 | 27,532 | |
Total shareholders' equity | 229,914 | 212,800 | |
Total liabilities and shareholders' equity | $ 257,780 | $ 240,332 |
Parent Company Financials - C_2
Parent Company Financials - Condensed Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income: | ||
Other income | $ 150 | $ 139 |
Total income | (14,940) | 1,691 |
Expense: | ||
Subordinated debt interest expense | 1,396 | 1,810 |
Salaries and employee benefits | 19,436 | 20,190 |
Other operating expenses | 8,390 | 8,466 |
Total expense | 30,815 | 31,874 |
Income tax benefit | 2,823 | 8,260 |
Net income | 5,158 | 31,803 |
Parent Company | ||
Income: | ||
Other income | 317 | (354) |
Dividends from subsidiary | 6,108 | 4,150 |
Total income | 6,425 | 3,796 |
Expense: | ||
Subordinated debt interest expense | 1,396 | 1,810 |
Salaries and employee benefits | 589 | 292 |
Other operating expenses | 360 | 425 |
Total expense | 2,345 | 2,527 |
Net income before income tax benefit and equity in undistributed earnings of subsidiary | 4,080 | 1,269 |
Income tax benefit | 425 | 605 |
Equity in undistributed earnings of subsidiary | 653 | 29,929 |
Net income | $ 5,158 | $ 31,803 |
Parent Company Financials - Sta
Parent Company Financials - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash Flows from Operating Activities | ||
Net income | $ 5,158 | $ 31,803 |
Adjustment to reconcile net income to net cash provided by (used in) operating activities: | ||
Fair value adjustment on equity securities | (317) | 354 |
Amortization of debt issuance costs | 84 | 317 |
Deferred tax (benefit) | 921 | 594 |
Changes in assets and liabilities: | ||
Increase in other assets | (1,659) | (1,376) |
Increase in other liabilities | (4,862) | (237) |
Net cash provided by operating activities | 18,004 | 33,155 |
Cash Flows from Investing Activities | ||
Purchases of equity securities | (360) | (600) |
Net cash (used in) investing activities | 144,836 | (270,872) |
Cash Flows from Financing Activities | ||
Issuance of common stock for share options exercised | 320 | 3,058 |
Repurchase of shares for tax withholding on share-based compensation | (6) | (8) |
Issuance of subordinated debt | 24,579 | |
Repayment of subordinated debt | 25,000 | |
Cash dividends paid | (3,108) | (2,799) |
Net cash used in financing activities | (125,434) | 193,517 |
Net increase in cash and cash equivalents | 37,406 | (44,200) |
Cash and cash equivalents, beginning of period | 61,599 | 105,799 |
Cash and cash equivalents, end of period | 99,005 | 61,599 |
Parent Company [Member] | ||
Cash Flows from Operating Activities | ||
Net income | 5,158 | 31,803 |
Adjustment to reconcile net income to net cash provided by (used in) operating activities: | ||
Equity in undistributed earnings of subsidiary | (653) | (29,929) |
Fair value adjustment on equity securities | (317) | 354 |
Amortization of debt issuance costs | 84 | 317 |
Deferred tax (benefit) | (82) | (54) |
Changes in assets and liabilities: | ||
Increase in other assets | (2) | |
Increase in other liabilities | 250 | 278 |
Net cash provided by operating activities | 4,440 | 2,767 |
Cash Flows from Investing Activities | ||
Purchases of equity securities | (360) | (600) |
Net cash (used in) investing activities | (360) | (600) |
Cash Flows from Financing Activities | ||
Issuance of common stock for share options exercised | 320 | 3,058 |
Repurchase of shares for tax withholding on share-based compensation | (6) | (8) |
Issuance of subordinated debt | 24,579 | |
Repayment of subordinated debt | (25,000) | |
Cash dividends paid | (3,108) | (2,799) |
Net cash used in financing activities | (2,794) | (170) |
Net increase in cash and cash equivalents | 1,286 | 1,997 |
Cash and cash equivalents, beginning of period | 3,588 | 1,591 |
Cash and cash equivalents, end of period | $ 4,874 | $ 3,588 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transactions | ||
Loans | $ 12,900 | $ 15,400 |
Principal additions | 447 | |
Principal payments | 2,900 | |
Deposits | $ 24,100 | $ 28,700 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 5,158 | $ 31,803 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |