Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Entity File Number | 001-39182 | |
Entity Registrant Name | FFBW, Inc. /MD/ | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 37-1962248 | |
Entity Address, Address Line One | 1360 South Moorland Road | |
Entity Address, City or Town | Brookfield | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 53005 | |
City Area Code | 262 | |
Local Phone Number | 542-4448 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | FFBW | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 5,554,311 | |
Entity Central Index Key | 0001787384 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and due from banks | $ 15,722 | $ 52,483 |
Fed funds sold | 327 | 14,519 |
Cash and cash equivalents | 16,049 | 67,002 |
Available for sale securities, stated at fair value | 47,472 | 48,398 |
Loans held for sale | 0 | 500 |
Loans, net of allowance for loan and lease losses of $2,530 and $2,430, respectively | 228,300 | 222,104 |
Premises and equipment, net | 6,684 | 5,506 |
Other equity investments | 1,463 | 1,353 |
Accrued interest receivable | 901 | 813 |
Cash value of life insurance | 10,238 | 10,029 |
Other assets | 2,676 | 1,372 |
TOTAL ASSETS | 313,783 | 357,077 |
Liabilities and Equity | ||
Deposits | 233,954 | 255,250 |
Advance payments by borrowers for taxes and insurance | 1,313 | 102 |
FHLB advances | 0 | 6,500 |
Accrued interest payable | 139 | 7 |
Other liabilities | 917 | 1,246 |
Total liabilities | 236,323 | 263,105 |
Preferred stock ($0.01 par value, 50,000,000 authorized, no shares issued or outstanding as of September 30, 2022 and December 31, 2021, respectively) | ||
Common stock ($0.01 par value, 100,000,000 authorized, 5,565,823 and 6,734,970 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively) | 55 | 67 |
Additional paid in capital | 44,075 | 58,273 |
Unallocated common stock of Employee Stock Ownership Plan ("ESOP") (527,568 and 550,509 shares at September 30, 2022 and December 31, 2021, respectively) | (5,276) | (5,506) |
Retained earnings | 42,081 | 40,365 |
Accumulated other comprehensive income (loss), net of income taxes | (3,475) | 773 |
Total equity | 77,460 | 93,972 |
TOTAL LIABILITIES AND EQUITY | $ 313,783 | $ 357,077 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Balance Sheets | ||
Allowance for loan and lease losses | $ 2,530 | $ 2,430 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 5,565,823 | 6,734,970 |
Common stock, outstanding (in shares) | 5,565,823 | 6,734,970 |
Unallocated common stock of Employee Stock Ownership Plan, shares (in shares) | 527,568 | 550,509 |
Statements of Income
Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Interest and dividend income: | ||||
Loans, including fees | $ 2,734 | $ 2,392 | $ 7,932 | $ 7,862 |
Securities | ||||
Taxable | 282 | 204 | 737 | 617 |
Tax-exempt | 48 | 46 | 142 | 140 |
Other | 103 | 32 | 207 | 64 |
Total interest and dividend income | 3,167 | 2,674 | 9,018 | 8,683 |
Interest expense: | ||||
Interest-bearing deposits | 247 | 236 | 629 | 733 |
Borrowed funds | 3 | 10 | 16 | 44 |
Total interest expense | 250 | 246 | 645 | 777 |
Interest Income (Expense), Net, Total | 2,917 | 2,428 | 8,373 | 7,906 |
Provision for loan losses | 93 | 0 | 93 | 0 |
Net interest income after provision for loan losses | 2,824 | 2,428 | 8,280 | 7,906 |
Noninterest income: | ||||
Service charges and other fees | 148 | 127 | 439 | 354 |
Net gain on sale of loans | 0 | 12 | 31 | 232 |
Increase in cash surrender value of insurance | 73 | 70 | 209 | 188 |
Other noninterest income | 27 | 117 | 81 | 167 |
Total noninterest income | 248 | 326 | 760 | 941 |
Noninterest expense: | ||||
Salaries and employee benefits | 1,383 | 1,209 | 3,942 | 3,957 |
Occupancy and equipment | 315 | 269 | 874 | 795 |
Data processing | 240 | 258 | 626 | 853 |
Technology | 77 | 84 | 200 | 203 |
Foreclosed assets | 0 | (1) | 0 | 0 |
Professional fees | 124 | 110 | 404 | 325 |
Other noninterest expense | 255 | 247 | 705 | 728 |
Total noninterest expense | 2,394 | 2,176 | 6,751 | 6,861 |
Income before income taxes | 678 | 578 | 2,289 | 1,986 |
Provision for income taxes | 168 | 119 | 573 | 405 |
Net income | $ 510 | $ 459 | $ 1,716 | $ 1,581 |
Earnings per share | ||||
Basic (in dollars per share) | $ 0.10 | $ 0.07 | $ 0.31 | $ 0.24 |
Diluted (in dollars per share) | $ 0.10 | $ 0.07 | $ 0.30 | $ 0.24 |
Statements of Comprehensive Inc
Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statements of Comprehensive Income (Loss) | ||||
Net income | $ 510 | $ 459 | $ 1,716 | $ 1,581 |
Other comprehensive income (loss): | ||||
Unrealized holding gains (losses) arising during the period | (2,247) | (188) | (5,821) | (704) |
Reclassification adjustment for (gains) losses realized in net income | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) before tax effect | (2,247) | (188) | (5,821) | (704) |
Tax effect of other comprehensive income (loss) items | 608 | 50 | 1,573 | 203 |
Other comprehensive income (loss), net of tax | (1,639) | (138) | (4,248) | (501) |
Comprehensive income (loss) | $ (1,129) | $ 321 | $ (2,532) | $ 1,080 |
Statements of Changes in Equity
Statements of Changes in Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Unallocated Common Stock of ESOP | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Dec. 31, 2020 | $ 77 | $ 69,090 | $ (5,811) | $ 38,382 | $ 1,527 | $ 103,265 |
Balance (in shares) at Dec. 31, 2020 | 7,695,214 | |||||
Net Income | 670 | 670 | ||||
ESOP shares committed to be released | 6 | 76 | 82 | |||
Stock based compensation expense | 81 | 81 | ||||
Repurchase of common stock | $ (4) | (4,614) | (4,618) | |||
Repurchase of common stock (in shares) | (408,753) | |||||
Other comprehensive income (loss) | (404) | (404) | ||||
Balance at Mar. 31, 2021 | $ 73 | 64,563 | (5,735) | 39,052 | 1,123 | 99,076 |
Balance (in shares) at Mar. 31, 2021 | 7,286,461 | |||||
Balance at Dec. 31, 2020 | $ 77 | 69,090 | (5,811) | 38,382 | 1,527 | 103,265 |
Balance (in shares) at Dec. 31, 2020 | 7,695,214 | |||||
Net Income | 1,581 | |||||
Other comprehensive income (loss) | (501) | |||||
Balance at Sep. 30, 2021 | $ 69 | 60,350 | (5,582) | 39,963 | 1,026 | 95,826 |
Balance (in shares) at Sep. 30, 2021 | 6,915,539 | |||||
Balance at Mar. 31, 2021 | $ 73 | 64,563 | (5,735) | 39,052 | 1,123 | 99,076 |
Balance (in shares) at Mar. 31, 2021 | 7,286,461 | |||||
Net Income | 452 | 452 | ||||
ESOP shares committed to be released | 9 | 76 | 85 | |||
Stock based compensation expense | 101 | 101 | ||||
Stock based compensation expense (shares) | 10,712 | |||||
Repurchase of common stock | $ (3) | (2,983) | (2,986) | |||
Repurchase of common stock (in shares) | (263,140) | |||||
Other comprehensive income (loss) | 41 | 41 | ||||
Balance at Jun. 30, 2021 | $ 70 | 61,690 | (5,659) | 39,504 | 1,164 | 96,769 |
Balance (in shares) at Jun. 30, 2021 | 7,034,033 | |||||
Net Income | 459 | 459 | ||||
ESOP shares committed to be released | 13 | 77 | 90 | |||
Stock based compensation expense | 118 | 118 | ||||
Stock based compensation expense (shares) | 7,296 | |||||
Repurchase of common stock | $ (1) | (1,471) | (1,472) | |||
Repurchase of common stock (in shares) | (125,790) | |||||
Other comprehensive income (loss) | (138) | (138) | ||||
Balance at Sep. 30, 2021 | $ 69 | 60,350 | (5,582) | 39,963 | 1,026 | 95,826 |
Balance (in shares) at Sep. 30, 2021 | 6,915,539 | |||||
Balance at Dec. 31, 2021 | $ 67 | 58,273 | (5,506) | 40,365 | 773 | 93,972 |
Balance (in shares) at Dec. 31, 2021 | 6,734,970 | |||||
Net Income | 567 | 567 | ||||
ESOP shares committed to be released | 15 | 77 | 92 | |||
Stock based compensation expense | 108 | 108 | ||||
Repurchase of common stock | $ (5) | (5,878) | (5,883) | |||
Repurchase of common stock (in shares) | (480,769) | |||||
Other comprehensive income (loss) | (1,670) | (1,670) | ||||
Balance at Mar. 31, 2022 | $ 62 | 52,518 | (5,429) | 40,932 | (897) | 87,186 |
Balance (in shares) at Mar. 31, 2022 | 6,254,201 | |||||
Balance at Dec. 31, 2021 | $ 67 | 58,273 | (5,506) | 40,365 | 773 | 93,972 |
Balance (in shares) at Dec. 31, 2021 | 6,734,970 | |||||
Net Income | 1,716 | |||||
Other comprehensive income (loss) | (4,248) | |||||
Balance at Sep. 30, 2022 | $ 55 | 44,075 | (5,276) | 42,081 | (3,475) | 77,460 |
Balance (in shares) at Sep. 30, 2022 | 5,565,823 | |||||
Balance at Mar. 31, 2022 | $ 62 | 52,518 | (5,429) | 40,932 | (897) | 87,186 |
Balance (in shares) at Mar. 31, 2022 | 6,254,201 | |||||
Net Income | 639 | 639 | ||||
ESOP shares committed to be released | 15 | 76 | 91 | |||
Stock based compensation expense | 120 | 120 | ||||
Stock based compensation expense (shares) | 17,500 | |||||
Repurchase of common stock | $ (2) | (3,239) | (3,241) | |||
Repurchase of common stock (in shares) | (265,769) | |||||
Other comprehensive income (loss) | (939) | (939) | ||||
Balance at Jun. 30, 2022 | $ 60 | 49,414 | (5,353) | 41,571 | (1,836) | 83,856 |
Balance (in shares) at Jun. 30, 2022 | 6,005,932 | |||||
Net Income | 510 | 510 | ||||
ESOP shares committed to be released | 17 | 77 | 94 | |||
Stock based compensation expense | 137 | 137 | ||||
Repurchase of common stock | $ (5) | (5,493) | (5,498) | |||
Repurchase of common stock (in shares) | (440,109) | |||||
Other comprehensive income (loss) | (1,639) | (1,639) | ||||
Balance at Sep. 30, 2022 | $ 55 | $ 44,075 | $ (5,276) | $ 42,081 | $ (3,475) | $ 77,460 |
Balance (in shares) at Sep. 30, 2022 | 5,565,823 |
Statements of Changes in Equi_2
Statements of Changes in Equity (Parenthetical) - shares | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 |
Statements of Changes in Equity | ||||||
ESOP shares committed to be released | 22,941 | 15,294 | 7,647 | 22,941 | 15,294 | 7,647 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 1,716 | $ 1,581 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 93 | 0 |
Depreciation | 244 | 220 |
Net accretion of loan portfolio discount and amortization of deposit premium | 24 | 183 |
Net amortization on securities available for sale | 247 | 405 |
Loss on sales and impairments of foreclosed assets | 0 | 2 |
Increase in cash surrender value of life insurance | (209) | (188) |
ESOP compensation | 277 | 257 |
Stock based compensation | 365 | 300 |
Changes in operating assets and liabilities: | ||
Accrued interest receivable | (88) | 152 |
Loans held for sale | 500 | 1,708 |
Other assets | 197 | 246 |
Accrued interest payable | 132 | 195 |
Other liabilities | (329) | (424) |
Net cash provided by operating activities | 3,169 | 4,637 |
Cash flows from investing activities: | ||
Proceeds from sales of available for sale securities | 0 | 3 |
Maturities, calls, paydowns on available for sale securities | 5,018 | 15,917 |
Purchases of available for sale securities | (10,269) | (2,655) |
Net change in loans | (6,242) | 8,307 |
Purchases of premises and equipment | (1,422) | (107) |
Purchase of life insurance | 0 | (2,500) |
Proceeds from sale of foreclosed assets | 0 | 122 |
Net cash provided by (used in) investing activities | (12,915) | 19,087 |
Cash flows from financing activities: | ||
Net change in deposits and advance payments | (20,085) | 24,975 |
Repayments of FHLB advances | (6,500) | (6,000) |
Proceeds from FHLB advances | 0 | 5,000 |
Repurchase of common stock | (14,622) | (9,076) |
Net cash (used in) provided by financing activities | (41,207) | 14,899 |
Net change in cash and cash equivalents | (50,953) | 38,623 |
Cash and cash equivalents at beginning | 67,002 | 41,479 |
Cash and cash equivalents at end | 16,049 | 80,102 |
Supplemental Cash Flow Disclosures: | ||
Cash paid for interest | 513 | 581 |
Cash paid for income taxes | $ 507 | $ 890 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation | |
Basis of Presentation | NOTE 1 – Basis of Presentation The accompanying unaudited consolidated financial statements of FFBW, Inc. and its wholly-owned subsidiary, First Federal Bank of Wisconsin, (collectively the “Company”) were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments necessary for a fair presentation of the financial statements have been included. The results of operations for the three and nine month period ended September 30, 2022 are not necessarily indicative of the results which may be expected for the entire year. These statements should be read in conjunction with the Financial Statements and notes thereto for the year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (“SEC”) as part of FFBW, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2021. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s financial condition, results of operations, comprehensive income, changes in shareholders’ equity and cash flows for the interim periods presented. These adjustments are of a normal recurring nature and include appropriate estimated provisions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | NOTE 2 - Summary of Significant Accounting Policies Organization FFBW, Inc. (the “Company”), a Maryland corporation, is a publicly traded stock holding company. The Company provides a variety of financial services to individual and corporate customers through its wholly owned subsidiary, First Federal Bank of Wisconsin (the “Bank”). The Bank is a community bank headquartered in Waukesha, Wisconsin, with offices in Waukesha, Brookfield and Milwaukee. Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the fair values of securities, fair value of financial instruments, the valuation of other real estate owned and the valuation of deferred income tax assets. Revenue Recognition Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of the Company's revenue-generating transactions are not subject to ASC 606, including all interest and dividend income generated from financial instruments. Certain noninterest income items, including loan servicing income, gain on sales of loans, gain on sales of securities, and other noninterest income have been evaluated and were determined to not fall within the scope of ASC 606. Elements of noninterest income that are within the scope of ASC 606, are as follows: Service charges and other fees - The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Management reviewed the deposit account agreements and determined that the agreements can be terminated at any time by either the Company or the account holder. Transaction fees, such as balance transfers, wires and overdraft charges are settled the day the performance obligation is satisfied. The Company's monthly service charges and maintenance fees are for services provided to the customer on a monthly basis and are considered a series of services that have the same pattern of transfer each month. The review of service charges assessed on deposit accounts included the amount of variable consideration that is a part of the monthly charges. It was found that the waiver of service charges due to insufficient funds and dormant account fees is immaterial and would not require a change in the accounting treatment for these fees under the new revenue standards. Interchange fees - Customers use a Bank-issued debit card to purchase goods and services, and the Company earns interchange fees on those transactions, typically a percentage of the sale amount of the transaction. The Company records the amount due when it receives the settlement from the payment network. Payments from the payment network are received and recorded into income on a daily basis. These fees are included in “service charges and other fees” on the Statements of Income. There are no contingent debit card interchange fees recorded by the Company that could be subject to a clawback in future periods. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash and balances due from banks, non-maturity deposits in the Federal Home Loan Bank of Chicago (FHLB), and fed funds sold. The Company has not experienced any losses in such accounts. Available for Sale Securities Securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital requirements, and other similar factors. Securities classified as available for sale are carried at fair value. Unrealized gains or losses are reported as increases or decreases in other comprehensive income, net of the related deferred tax effect. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Gains and losses on the sale of securities are recorded on the trade date and determined using the specific-identification method. Declines in fair value of securities that are deemed to be other than temporary, if applicable, are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers the length of time and the extent to which fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient enough to allow for any anticipated recovery in fair value. Loans Acquired in a Transfer The Company acquires loans (including debt securities) individually and in groups or portfolios. These loans are initially measured at fair value with no allowance for loan losses. The Company’s allowance for loan losses on all acquired loans reflect only those losses incurred subsequent to acquisition. Certain acquired loans may have experienced deterioration of credit quality between origination and the Company’s acquisition of the loans. At acquisition, the Company reviews each loan to determine whether there is evidence of deterioration of credit quality since origination and if it is probable that the Company will be unable to collect all amounts due according to the loan’s contractual terms. If both conditions exist, the Company determines whether each such loan is to be accounted for individually or whether such loans will be assembled into pools of loans based on common risk characteristics (for example, credit score, loan type, and date of origination). The Company considers expected prepayments and estimates the amount and timing of undiscounted principal, interest, and other cash flows expected at acquisition for each loan and aggregated pool of loans. The excess of the loan’s or pool’s scheduled contractual principal and interest payments over all cash flows expected at acquisition is calculated as the nonaccretable difference. The excess of cash flows expected to be collected over the fair value of each loan or pool (accretable yield) is accreted into interest income over the remaining life of the loan or pool. At each reporting date, the Company continues to estimate cash flows expected to be collected for each loan or pool. If expected cash flows have decreased from the acquisition date estimate, the Company recognizes an allowance for loan losses. If expected cash flows have increased from the acquisition date estimate, the Company increases the amount of accretable yield to be recognized as interest income over the remaining life of the loan or pool. Loans Held for Sale Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. Mortgage loans held for sale are sold with the mortgage servicing rights released by the Company. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loan sold. Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff generally are reported at their outstanding unpaid principal balances adjusted for deferred loan fees and costs, charge-offs, and an allowance for loan losses. Interest on loans is accrued and credited to income based 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 loans is discontinued when, in the opinion of management, there is an indication that the borrower may be unable to make payments as they become due. When loans are placed on nonaccrual status or charged off, all unpaid accrued interest is reversed against interest income. The interest on these loans is subsequently accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual status. 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 Loan Losses The allowance for loan losses is maintained at the level considered adequate by management to provide for losses that are probable as of the balance sheet date. The allowance for loan losses is established through a provision for loan losses charged to expense as losses are estimated to have occurred. Loan losses are charged against the allowance when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance. In determining the adequacy of the allowance balance, the Company makes evaluations of the loan portfolio and related off-balance sheet commitments, considers current economic conditions and historical loss experience, and reviews specific problem loans and other factors. When establishing the allowance for loan losses, management categorizes loans into risk categories generally based on the nature of the collateral and the basis of repayment. These risk categories and their relevant risk characteristics are as follows: Commercial development: Commercial real estate: Commercial and industrial: One-to-four family owner-occupied: One-to-four family investor-owned: Multifamily real estate: Consumer: Management regularly evaluates the allowance for loan losses using the Company’s past loan loss experience, known and inherent risks in the loan portfolio, composition of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, current economic conditions, and other relevant factors. This evaluation is inherently subjective since it requires material estimates that may be susceptible to significant change. A loan is impaired when, based on current information, it is probable that the Company will not collect all amounts due in accordance with the contractual terms of the loan agreement. Management determines whether a loan is impaired on a case-by-case basis, taking into consideration the payment status, collateral value, length and reason of any payment delays, the borrower’s prior payment record, and any other relevant factors. Large groups of smaller-balance homogeneous loans, such as residential mortgage and consumer loans, are collectively evaluated in the allowance for loan losses analysis and are not subject to impairment analysis unless such loans have been subject to a restructuring agreement. Specific allowances for impaired loans are based on discounted cash flows of expected future payments using the loan’s initial effective interest rate or the fair value of the collateral if the loan is collateral dependent. In addition, various regulatory agencies periodically review the allowance for loan losses. These agencies may require the Company to make additions to the allowance for loan losses based on their judgments of collectability based on information available to them at the time of their examination. Troubled Debt Restructurings Loans are accounted for as troubled debt restructurings when a borrower is experiencing financial difficulties that lead to a restructuring of the loan and the Company grants a “concession” to the borrower that they would not otherwise consider. These concessions include a modification of terms, such as a reduction of the stated interest rate or loan balance, a reduction of accrued interest, an extension of the maturity date at an interest rate lower than a current market rate for a new loan with similar risk, or some combination thereof to facilitate repayment. Troubled debt restructurings are considered impaired loans. Foreclosed Assets Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value, less costs to sell, at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less costs to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed assets. Premises and Equipment Depreciable assets are stated at cost less accumulated depreciation. Provisions for depreciation are computed on straight-line and accelerated methods over the estimated useful lives of the assets. Other Equity Investments Other Equity Investments consist of Federal Home Loan Bank of Chicago (“FHLB”) stock and Bankers’ Bank stock. The value. The Company is required to hold the stock as a member of the FHLB and transfer of the stock is substantially restricted. The stock is evaluated for impairment on an annual basis. The Company is required to Income Taxes Amounts provided for income tax expense are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable under tax laws. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and income tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. As changes in tax laws or rates are enacted, deferred income tax assets and liabilities are adjusted through the provision for income taxes. The differences relate principally to the allowances for loan losses, deferred compensation, depreciation, FHLB stock dividends and non-accrual interest. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Based on its evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The Company’s policy is to recognize interest and penalties related to income tax issues as components of income tax expense. During the periods shown, the Company did not recognize any interest or penalties related to income tax expense in its statements of operations. 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 (1) the assets have been isolated from the Company, (2) 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 (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Advertising Advertising costs are expensed as incurred. Other Comprehensive Income (Loss) Other comprehensive income (loss) is shown on the statements of comprehensive income (loss). The Company’s accumulated other comprehensive income (loss) is composed of the unrealized gains (losses) on securities available for sale, net of tax and is shown on the statements of changes in equity. Reclassification adjustments out of other comprehensive income (loss) for gains/losses realized on sales of securities available for sale comprise the entire balance of “net gain/loss on sale of securities” on the statements of income. Off-Balance Sheet Financial Instruments In the ordinary course of business, the Company has entered into off-balance-sheet financial instruments consisting of commitments to extend credit, unfunded commitments under lines of credit, and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable. Life Insurance The Company has purchased life insurance policies on certain key members of the management team. Life insurance is measured at the amount that could be realized under the insurance contract as of the balance sheet date, which is generally the cash surrender value of the policy. Recent Accounting Pronouncements The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as the Company is an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to other public companies. An emerging growth company may elect to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the Company is first required to file a registration statement. The Company has elected to use the extended transition period described above and intends to maintain its emerging growth company status as allowed under the JOBS Act. The following ASUs have been issued by the FASB and may impact the Company's financial statements in future reporting periods: ASU No. 2016-13, “Credit Losses (Topic 326).” ASU No. 2019-04, “Codification Improvements to Topic 326.” ASU No. 2019-05, “Financial Instruments-Credit Losses.” ASU 2016-13 requires organizations to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption will be permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is expecting to see an increase in its allowance for loan losses upon adoption but is still assessing the final impact of adopting ASU 2016-13 on its financial statements. ASU No. 2016-02, “Leases (Topic 842): Amendments to the Leases Analysis.” ASU No. 2018-10, "Codification Improvements to Topic 842." ASU No. 2018-11, "Targeted Improvements" For lessees, Topic 842 requires leases to be recognized on the balance sheet, along with disclosure of key information about leasing arrangements. Topic 842 was subsequently amended by ASU 2018-01, 2018-10 and 2018-11. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification expense recognition in the income statement. For lessors, Topic 842 requires lessors to classify leases as sales-type, direct financing or operating leases. A lease is a sales-type lease if any one of five criteria are met, each of which indicate that the lease, in effect, transfers control of the underlying asset to the lessee. If none of those five criteria are met, but two additional criteria are both met, indicating the lessor has transferred substantially all the risks and benefits of the underlying asset to the lessee and a third party, the lease is a direct financing lease. All leases that are not sales-type or direct financing leases are operating leases. The new standard is effective for fiscal years beginning after December 15, 2021, and for interim periods beginning after December 15, 2022, with early adoption permitted. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) the new standard's effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company expects to adopt the new standard during the fourth quarter of 2022, with an effective date of January 1, 2022. The Company is expecting to record a right of use asset and corresponding lease obligation for its outstanding leases. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings per share | |
Earnings Per Share | NOTE 3 – Earnings Per Share Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding, adjusted for weighted average unallocated ESOP shares, during the applicable period, excluding outstanding participating securities. Participating securities include non-vested restricted stock awards and restricted stock units, though no actual shares of common stock related to restricted stock units are issued until the settlement of such units, to the extent holders of these securities receive non-forfeitable dividends or dividend equivalents at the same rate as holders of the Company’s common stock. Diluted earnings per 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. Antidilutive options are disregarded in earnings per share calculations. The following table presents the earnings per share calculations for the three and nine months ended September 30: Three months ended Nine months ended September 30, September 30, 2022 2021 2022 2021 Net income $ 510 $ 459 $ 1,716 $ 1,581 Basic potential common shares Weighted average shares outstanding 5,728,305 6,912,234 6,153,345 7,182,778 Weighted average unallocated Employee Stock Ownership Plan Shares (530,179) (560,767) (539,101) (569,689) Basic weighted average shares outstanding 5,198,126 6,351,467 5,614,244 6,613,089 Dilutive potential common shares 36,120 22,535 25,368 15,713 Dilutive weighted average shares outstanding 5,234,246 6,374,002 5,639,612 6,628,802 Basic earnings per share $ 0.10 $ 0.07 $ 0.31 $ 0.24 Diluted earnings per share $ 0.10 $ 0.07 $ 0.30 $ 0.24 |
Available for Sale Securities
Available for Sale Securities | 9 Months Ended |
Sep. 30, 2022 | |
Available for Sale Securities | |
Available for Sale Securities | NOTE 4 – Available for Sale Securities Amortized costs and fair values of available for sale securities are summarized as follows: Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value September 30, 2022 Obligations of the US government and US government sponsored agencies $ 1,823 $ - $ (170) $ 1,653 Obligations of states and political subdivisions 14,163 - (1,847) 12,316 Mortgage-backed securities 25,442 - (2,076) 23,366 Certificates of deposit 500 3 (12) 491 Corporate debt securities 10,307 - (661) 9,646 Total available for sale securities $ 52,235 $ 3 $ (4,766) $ 47,472 December 31, 2021 Obligations of the US government and US government sponsored agencies $ 1,028 $ 19 $ (7) $ 1,040 Obligations of states and political subdivisions 14,289 376 (41) 14,624 Mortgage-backed securities 25,452 658 (54) 26,056 Certificates of deposit 750 22 - 772 Corporate debt securities 5,821 111 (26) 5,906 Total available for sale securities $ 47,340 $ 1,186 $ (128) $ 48,398 Fair values of securities are estimated based on financial models or prices paid for similar securities. It is possible interest rates could change considerably, resulting in a material change in estimated fair value. The following table presents the portion of the Company’s portfolio which has gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position: Less Than 12 Months 12 Months or More Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses September 30, 2022 Obligations of the US government and US government sponsored agencies $ 1,207 $ (98) $ 431 $ (72) $ 1,638 $ (170) Obligations of states and political subdivisions 9,146 (1,166) 2,881 (681) 12,027 (1,847) Mortgage-backed securities 20,484 (1,741) 2,881 (335) 23,365 (2,076) Certificates of deposit 238 (12) — — 238 (12) Corporate debt securities 7,752 (531) 1,270 (130) 9,022 (661) Total $ 38,827 $ (3,548) $ 7,463 $ (1,218) $ 46,290 $ (4,766) December 31, 2021 Obligations of the US government and US government sponsored agencies $ 497 $ (7) $ — $ — $ 497 $ (7) Obligations of states and political subdivisions 3,129 (10) 937 (31) $ 4,066 (41) Mortgage-backed securities 4,116 (24) 1,881 (30) 5,997 (54) Corporate debt securities 2,874 (26) — — 2,874 (26) Total $ 10,616 $ (67) $ 2,818 $ (61) $ 13,434 $ (128) At September 30, 2022, the investment portfolio included 19 securities available for sale, which had been in an unrealized loss position for greater than twelve months, and 111 securities available for sale, which had been in an unrealized loss position for less than twelve months. At December 31, 2021, the investment portfolio included 5 securities available for sale, which had been in an unrealized loss position for greater than twelve months, and 15 securities available for sale, which had been in an unrealized loss position for less than twelve months. Because these securities have a fixed interest rate, their fair value is sensitive to movements in market interest rates. These unrealized losses are considered temporary because the Company does not currently have the intent to sell the securities before recovery of the losses; therefore we expect to collect all contractually due amounts from these securities. Accordingly, these investments were reduced to their fair values through accumulated other comprehensive income, not through earnings. We regularly assess our securities portfolio for other than temporary impairment (“OTTI”). These assessments are based on the nature of the securities, the underlying collateral, the financial condition of the issuer, the extent and duration of the loss, our intent related to the individual securities, and the likelihood that we will have to sell securities prior to expected recovery. We did not have any impairment losses recognized in earnings for the three and nine months ended September 30, 2022 or September 30, 2021. The amortized cost and fair value of available for sale securities by contractual maturity are shown below. Expected maturities will differ from contractual maturities in mortgage-backed securities since the anticipated maturities are not readily determinable. Therefore, these securities are not included in the maturity categories in the following maturity summary listed below: September 30, 2022 Amortized Cost Fair Value Due in one year or less $ 292 $ 295 Due after one year through 5 years 9,667 9,179 Due after 5 years through 10 years 11,751 10,502 Due after 10 years 5,083 4,130 Subtotal $ 26,793 $ 24,106 Mortgage-backed securities 25,442 23,366 Total $ 52,235 $ 47,472 There were no sales of available for sale securities during the nine months ended September 30, 2022 and 2021. Available for sale securities with a carrying value of $936 and $1,038 were pledged at September 30, 2022 and December 31, 2021, respectively. |
Loans
Loans | 9 Months Ended |
Sep. 30, 2022 | |
Loans | |
Loans | NOTE 5 - Loans Major classifications of loans are as follows: September 30, December 31, 2022 2021 Commercial Development $ 15,841 $ 21,396 Real estate 99,374 94,830 Commercial and industrial 24,801 18,387 Residential real estate and consumer One-to-four family owner-occupied 18,754 18,158 One-to-four family investor-owned 27,737 26,234 Multifamily 41,602 42,511 Consumer 3,085 3,312 Subtotal $ 231,194 $ 224,828 Deferred loan fees (364) (294) Allowance for loan losses (2,530) (2,430) Net loans $ 228,300 $ 222,104 Deposit accounts in an overdraft position and reclassified as loans approximated $9 and $23 at September 30, 2022 and December 31, 2021, respectively. A summary of the activity in the allowance for loan losses by portfolio segment is as follows: Residential real estate Three Months Ended Commercial and consumer Total Balance at June 30, 2022 $ 1,375 $ 1,058 $ 2,433 Provision for loan losses 204 (111) 93 Loans charged off — — — Recoveries of loans previously charged off — 4 4 Balance at September 30, 2022 $ 1,579 $ 951 $ 2,530 Balance at June 30, 2021 $ 1,590 $ 834 $ 2,424 Provision for loan losses (31) 31 — Loans charged off (1) — (1) Recoveries of loans previously charged off 1 2 3 Balance at September 30, 2021 $ 1,559 $ 867 $ 2,426 Residential real estate Nine Months Ended Commercial and consumer Total September 30, 2022 Balance at December 31, 2021 $ 1,516 $ 914 $ 2,430 Provision for loan losses 63 30 93 Loans charged off — (3) (3) Recoveries of loans previously charged off — 10 10 Total ending allowance balance $ 1,579 $ 951 $ 2,530 September 30, 2021 Balance at December 31, 2020 $ 1,834 $ 977 $ 2,811 Provision for loan losses 116 (116) — Loans charged off (393) — (393) Recoveries of loans previously charged off 2 6 8 Total ending allowance balance $ 1,559 $ 867 $ 2,426 Information about how loans were evaluated for impairment and the related allowance for loan losses follows: Residential Real Estate and September 30, 2022 Commercial Consumer Total Loans: Individually evaluated for impairment $ — $ 495 $ 495 Collectively evaluated for impairment 140,016 90,683 230,699 Total loans $ 140,016 $ 91,178 $ 231,194 Allowance for loan losses: Individually evaluated for impairment $ — $ — $ — Collectively evaluated for impairment 1,579 951 2,530 Total allowance for loan losses $ 1,579 $ 951 $ 2,530 Residential Real Estate and December 31, 2021 Commercial Consumer Total Loans: Individually evaluated for impairment $ 112 $ 817 $ 929 Collectively evaluated for impairment 134,501 89,398 223,899 Total loans $ 134,613 $ 90,215 $ 224,828 Allowance for loan losses: Individually evaluated for impairment $ — $ — $ — Collectively evaluated for impairment 1,516 914 2,430 Total allowance for loan losses $ 1,516 $ 914 $ 2,430 Information regarding impaired loans follows: Principal Recorded Related Average Interest As of September 30, 2022 Balance Investment Allowance Investment Recognized Loans with no related allowance for loan losses: Residential real estate and consumer One-to-four family owner-occupied 460 451 — 460 3 Consumer 45 44 — 44 — Total loans with no related allowance for loan losses 505 495 — 504 3 Total impaired loans $ 505 $ 495 $ — $ 504 $ 3 Principal Recorded Related Average Interest As of December 31, 2021 Balance Investment Allowance Investment Recognized Loans with no related allowance for loan losses: Commercial Commercial and industrial 116 112 — 77 — Residential real estate and consumer One-to-four family owner-occupied 819 770 — 831 7 Consumer 47 47 — 49 — Total loans with no related allowance for loan losses 982 929 — 957 7 Total impaired loans $ 982 $ 929 $ — $ 957 $ 7 There were no additional funds committed to impaired loans as of September 30, 2022 and December 31, 2021, respectively. The Company regularly evaluates various attributes of loans to determine the appropriateness of the allowance for loan losses. The credit quality indicators monitored differ depending on the class of loan. Commercial loans and one-to-four family investor-owned and multifamily loans are generally evaluated using the following internally prepared ratings: “Pass” ratings are assigned to loans with adequate collateral and debt service ability such that collectability of the contractual loan payments is highly probable. “Special mention” ratings are assigned to loans where management has some concern that the collateral or debt service ability may not be adequate, though the collectability of the contractual loan payments is still probable. “Substandard” ratings are assigned to loans that do not have adequate collateral and/or debt service ability such that collectability of the contractual loan payments is no longer probable. “Doubtful” ratings are assigned to loans that do not have adequate collateral and/or debt service ability, and collectability of the contractual loan payments is unlikely. Information regarding the credit quality indicators most closely monitored for commercial loans by class follows: Special Pass Mention Substandard Doubtful Totals September 30, 2022 Development $ 15,841 $ — $ — $ — $ 15,841 Real estate 96,897 2,321 156 — 99,374 Commercial and industrial 19,763 — 5,038 — 24,801 One-to-four family investor-owned 27,691 — 46 — 27,737 Multifamily 41,602 — — — 41,602 Totals $ 201,794 $ 2,321 $ 5,240 $ — $ 209,355 December 31, 2021 Development $ 21,396 $ — $ — $ — $ 21,396 Real estate 93,653 843 334 — 94,830 Commercial and industrial 18,387 — — — 18,387 One-to-four family investor-owned 26,234 — — — 26,234 Multifamily 42,511 — — — 42,511 Totals $ 202,181 $ 843 $ 334 $ — $ 203,358 Residential real estate and consumer loans are generally evaluated based on whether or not the loan is performing according to the contractual terms of the loan. Information regarding the credit quality indicators most closely monitored for residential real estate and consumer loans by class follows: Performing Non-performing Totals September 30, 2022 One-to-four family owner-occupied $ 18,605 $ 149 $ 18,754 Consumer 3,085 — 3,085 $ 21,690 $ 149 $ 21,839 December 31, 2021 One-to-four family owner-occupied $ 17,986 $ 172 $ 18,158 Consumer 3,312 — 3,312 $ 21,298 $ 172 $ 21,470 Loan aging information follows: Loans Past Due Loans Past Due Nonaccrual Current Loans 30-89 Days 90+ Days Total Loans Loans September 30, 2022 Commercial Development $ 15,841 $ — $ — $ 15,841 $ — Real estate 99,374 — — 99,374 — Commercial and industrial 24,801 — — 24,801 — Residential real estate and consumer One-to-four family owner-occupied 18,754 — — 18,754 149 One-to-four family investor-owned 27,548 189 — 27,737 — Multifamily 41,602 — — 41,602 — Consumer 3,085 — — 3,085 — Total $ 231,005 $ 189 $ — $ 231,194 $ 149 Loans Past Due Loans Past Due Nonaccrual Current Loans 30-89 Days 90+ Days Total Loans Loans December 31, 2021 Commercial Development $ 21,396 $ — $ — $ 21,396 $ — Real estate 94,830 — — 94,830 112 Commercial and industrial 18,387 — — 18,387 — Residential real estate and consumer One-to-four family owner-occupied 18,044 114 — 18,158 172 One-to-four family investor-owned 26,234 — — 26,234 — Multifamily 42,511 — — 42,511 — Consumer 3,312 — — 3,312 — Total $ 224,714 $ 114 $ — $ 224,828 $ 284 There are no loans 90 or more days past due and accruing interest as of September 30, 2022 or December 31, 2021. When, for economic or legal reasons related to the borrower’s financial difficulties, the Company grants a concession to the borrower that the Company would not otherwise consider, the modified loan is classified as a troubled debt restructuring. Loan modifications may consist of forgiveness of interest and/or principal, a reduction of the interest rate, allowing interest-only payments for a period of time, and/or extending amortization terms. During the nine months ended and as of September 30, 2022, there were no new troubled debt restructurings. No troubled debt restructurings defaulted within 12 months of their modification date during the nine months ended September 30, 2022. During the year ended and as of December 31, 2021, there was one commercial real estate loan totaling $116 and one 1-4 family owner-occupied loan totaling $115 that were new troubled debt restructurings. During April 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law which provides optional, temporary relief from accounting for certain pandemic-related loan modifications as a TDR. During 2020, the Bank offered payment deferrals to loan customers that were excluded from TDR classification based on the CARES Act. There were no loans remaining on a modified status as of September 30, 2022. Management regularly monitors impaired loan relationships. In the event facts and circumstances change, an additional provision for loan losses may be necessary. |
Deposits
Deposits | 9 Months Ended |
Sep. 30, 2022 | |
Deposits | |
Deposits | NOTE 6 - Deposits The composition of deposits are as follows: September 30, December 31, 2022 2021 Non interest-bearing checking $ 52,044 $ 54,243 Interest-bearing checking 12,401 12,864 Money market 77,858 87,585 Statement savings accounts 34,121 33,968 Health savings accounts 10,519 10,608 Certificates of deposit 47,011 55,982 Total $ 233,954 $ 255,250 Certificates of deposit that meet or exceed the FDIC insurance limit of $250 totaled $7,925 and $10,894 at September 30, 2022 and December 31, 2021, respectively. The scheduled maturities of certificates of deposit are as follows as of September 30, 2022: 2022 $ 11,174 2023 26,335 2024 8,409 2025 532 2026 394 2027 167 Total $ 47,011 The core deposit premium intangible had a net carrying value of $244 at September 30, 2022 and $316 at December 31, 2021. |
FHLB Advances
FHLB Advances | 9 Months Ended |
Sep. 30, 2022 | |
FHLB Advances | |
FHLB Advances | NOTE 7– FHLB Advances At September 30, 2022 there were no outstanding FHLB advances. At December 31, 2021, the Company had The Company has a master contract agreement with the FHLB that provides for a borrowing up to the lesser of a determined multiple of FHLB stock owned or a determined percentage of the book value of the Company’s qualifying one-to-four family, multifamily, commercial real estate and commercial business loans. The Company pledged approximately $160,026 and $154,649 of one-to-four family, multifamily, commercial real estate and commercial business loans to secure FHLB advances at September 30, 2022 and December 31, 2021, respectively. FHLB provides both fixed and floating rate advances. Floating rates are tied to short-term market rates of interest, such as Federal funds, FHLB discount note or prime rates. Fixed rate advances are priced in reference to market rates of interest at the time of the advance, namely the rates that FHLB pays to borrowers at various maturities. Certain FHLB advances are subject to a prepayment penalty if they are repaid prior to maturity. FHLB advances are also secured by $851 of FHLB stock owned by the Company at both September 30, 2022 and December 31, 2021. At September 30, 2022, the Company’s available and unused portion of this borrowing agreement based on the amount of FHLB stock was $18,903. In addition, the Company has a $7,000 federal funds line of credit through Bankers’ Bank of Wisconsin, which was not drawn on as of September 30, 2022. The Company also has the authority to borrow through the Federal Reserve’s Discount Window |
Employee Stock Ownership Plan
Employee Stock Ownership Plan | 9 Months Ended |
Sep. 30, 2022 | |
Employee Stock Ownership Plan | |
Employee Stock Ownership Plan | NOTE 8 – Employee Stock Ownership Plan The Company maintains a leveraged employee stock ownership plan (“ESOP”) that covers substantially all employees. The Bank makes annual contributions to the ESOP equal to the ESOP’s debt service. The ESOP shares initially were pledged as collateral for this debt. As the debt is repaid, shares are released from collateral and allocated to active participants, based on the proportion of debt service paid in the year. Because the debt is intercompany, it is eliminated in consolidation for presentation in these financial statements. The shares pledged as collateral are reported as unearned ESOP shares in the balance sheet. As shares are committed to be released from collateral and allocated to active participants, the Company reports compensation expense equal to the current market price of the shares and the shares will become outstanding for earnings-per-shares (EPS) computations. During the nine months ended September 30, 2022 and 2021, 22,941 and 22,941 shares were committed to be released, respectively. During the nine months ended September 30, 2022 the average fair value per share of stock was $12.19 resulting in total ESOP compensation expense of $277 for the nine months ended September 30, 2022. During the nine months ended September 30, 2021 the average fair value per share of stock was $11.20 resulting in total ESOP compensation expense of $257 for the nine months ended September 30, 2021. The ESOP shares as of September 30, 2022 and December 31, 2021 were as follows: September 30, 2022 December 31, 2021 Shares allocated to active participants 92,889 62,305 Shares committed to be released and allocated to participants 22,941 30,584 Shares distributed (4,414) — Total unallocated shares 527,568 550,509 Total ESOP shares 638,984 643,398 Fair value of unallocated shares (based on $11.90 and $11.80 share price at September 30, 2022 and December 31, 2021, respectively) $ 6,278 $ 6,496 |
Share-based Compensation Plans
Share-based Compensation Plans | 9 Months Ended |
Sep. 30, 2022 | |
Share-based Compensation Plans | |
Share-based Compensation Plans | NOTE 9 - Share-based Compensation Plans The Company adopted the FFBW, Inc. 2018 Equity Incentive Plan in 2018. In May 2021, the Company adopted the FFBW, Inc. 2021 Equity Incentive Plan. ASC Topic 718 requires that the grant date fair value of equity awards to employees and directors be recognized as compensation expense over the period during which they are required to provide service in exchange for such awards. The following table summarizes the impact of the Company’s share-based payment plans in the financial statements for the period shown: Nine Months Ended September 30, 2022 2021 Total cost of stock grant plan during the year $ 219 $ 173 Total cost of stock option plan during the year 146 127 Total cost of share-based payment plans during the year $ 365 $ 300 Amount of related income tax benefit recognized in income $ 90 $ 71 Options are granted with an exercise price equal to no less than the market price of the Company’s shares at the date of grant: those option awards generally vest pro-rata over five years of service and have 10-year Share amounts related to periods prior to the date of the closing of the Offering on January 16, 2020 have been restated to give retroactive recognition to the 1.1730 exchange ratio applied in the offering. The following tables summarize stock options activity for the nine months ended September 30, 2022 and 2021: Outstanding Weighted Weighted Average Aggregate Average Remaining Intrinsic Stock Option Exercise Contractual Value Awards Price Term (years) (in dollars) Options outstanding as of December 31, 2021 316,875 $ 10.73 Granted 27,000 12.16 Exercised — — Expired or cancelled (400) 11.25 Forfeited — — Options outstanding as of September 30, 2022 343,475 $ 10.84 6.93 $ 367,450 Options exercisable as of September 30, 2022 152,482 $ 10.69 6.61 $ 184,271 Weighted Weighted Average Aggregate Average Remaining Intrinsic Stock Option Exercise Contractual Value Awards Price Term (years) (in dollars) Options outstanding as of December 31, 2020 269,220 $ 10.51 Granted 76,000 11.27 Exercised — — Expired or canceled — — Forfeited (19,057) 10.01 Options outstanding as of September 30, 2021 326,163 $ 10.72 8.00 $ 207,476 Options exercisable as of September 30, 2021 134,066 $ 10.80 7.50 $ 63,140 The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model based on certain assumptions. Since the Company does not have sufficient historical fair value estimates of its stock, the Company calculates expected volatility using the historical volatility of the Dow Jones U.S. Financial Services Index. The risk-free interest rate for periods within the contractual term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life of options is estimated based on the assumption that options will be exercised evenly throughout their life after vesting and represents the period of time that options granted are expected to remain outstanding. There were no options granted during the three months ended September 30, 2022. The following is a summary of changes in restricted shares for the nine months ended September 30, 2022 and 2021: Weighted Average Number of Grant Date Fair Shares Value Nonvested stock awards as of December 31, 2021 59,737 $ 11.02 Granted 17,500 11.25 Vested (8,923) 11.22 Forfeited (200) 11.25 Nonvested stock awards as of September 30, 2022 68,114 $ 11.05 Nonvested stock awards as of December 31, 2020 62,060 $ 10.73 Granted 22,750 11.35 Vested (19,561) 10.77 Forfeited (5,519) 10.08 Nonvested stock awards as of September 30, 2021 59,730 $ 11.02 As of September 30, 2022, there was $1.0 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements (including share option and non-vested share awards) granted under the Company’s equity incentive plans. At September 30, 2022, the weighted-average period over which the unrecognized compensation expense is expected to be recognized was approximately 3.0 years. |
Equity and Regulatory Matters
Equity and Regulatory Matters | 9 Months Ended |
Sep. 30, 2022 | |
Equity and Regulatory Matters | |
Equity and Regulatory Matters | NOTE 10 – Equity and Regulatory Matters The Bank is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, 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. 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 Common Equity Tier 1, Tier 1, and Total capital to risk-weighted assets and of Tier 1 capital to average assets. It is management’s opinion, as of September 30, 2022, that the Bank met all applicable capital adequacy requirements. As of September 30, 2022, the Bank is categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum regulatory capital ratios as set forth in the table. There are no conditions or events since September 30, 2022 that management believes have changed the category. The Bank’s actual capital amounts and ratios are presented in the following tables: To Be Well Capitalized Under Prompt For Capital Adequacy Corrective Actual Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio September 30, 2022 Common Equity Tier 1 capital (to risk‑weighted assets) $ 70,487 26.6 % $ ≥ 11,942 ≥ 4.5 % $ ≥ 17,249 ≥ 6.5 % Tier 1 capital (to risk‑weighted assets) 70,487 26.6 ≥ 15,922 ≥ 6.0 ≥ 21,230 ≥ 8.0 Total capital (to risk‑weighted assets) 73,017 27.5 ≥ 21,230 ≥ 8.0 ≥ 26,537 ≥ 10.0 Tier 1 capital (to average assets) 70,487 21.8 ≥ 12,949 ≥ 4.0 ≥ 16,186 ≥ 5.0 December 31, 2021 Common Equity Tier 1 capital (to risk‑weighted assets) $ 75,554 29.6 % $ ≥ 11,467 ≥ 4.5 % $ ≥ 16,564 ≥ 6.5 % Tier 1 capital (to risk‑weighted assets) 75,554 29.6 ≥ 15,290 ≥ 6.0 ≥ 20,386 ≥ 8.0 Total capital (to risk‑weighted assets) 77,984 30.6 ≥ 20,386 ≥ 8.0 ≥ 25,483 ≥ 10.0 Tier 1 capital (to average assets) 75,554 21.4 ≥ 14,137 ≥ 4.0 ≥ 17,671 ≥ 5.0 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value | |
Fair Value | NOTE 11 – Fair Value Accounting standards describe three levels of inputs that may be used to measure fair value (the fair value hierarchy). The level of an asset or liability within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement of that asset or liability. Following is a brief description of each level of the fair value hierarchy: Level 1 - Fair value measurement is based on quoted prices for identical assets or liabilities in active markets. Level 2 - Fair value measurement is based on: (1) quoted prices for similar assets or liabilities in active markets; (2) quoted prices for identical or similar assets or liabilities in markets that are not active; or (3) valuation models and methodologies for which all significant assumptions are or can be corroborated by observable market data. Level 3 - Fair value measurement is based on valuation models and methodologies that incorporate at least one significant assumption that cannot be corroborated by observable market data. Level 3 measurements reflect the Company’s estimates about assumptions market participants would use in measuring fair value of the asset or liability. Some assets and liabilities, such as securities available for sale, are measured at fair value on a recurring basis under accounting principles generally accepted in the United States. Other assets and liabilities, such as impaired loans, may be measured at fair value on a nonrecurring basis. Following is a description of the Company’s valuation methodology and significant inputs used for each asset and liability measured at fair value on a recurring or nonrecurring basis, as well as the classification of the asset or liability within the fair value hierarchy. Available for sale securities Loans Foreclosed assets Other equity investments Assets measured at fair value on a recurring basis are summarized below: Recurring Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Instruments Inputs Inputs (Level 1) (Level 2) (Level 3) Total As of September 30, 2022 Assets: Available for sale securities: Obligations of the US government and US government sponsored agencies $ — $ 1,653 $ — $ 1,653 Obligations of states and political subdivisions — 12,316 — 12,316 Mortgage-backed securities — 23,366 — 23,366 Certificates of deposit — 491 — 491 Corporate debt securities — 9,646 — 9,646 Total available for sale securities $ — $ 47,472 $ — $ 47,472 As of December 31, 2021 Assets: Available for sale securities: Obligations of the US government and US government sponsored agencies $ — $ 1,040 $ — $ 1,040 Obligations of states and political subdivisions — 14,624 — 14,624 Mortgage-backed securities — 26,056 — 26,056 Certificates of deposit — 772 — 772 Corporate debt securities — 5,906 — 5,906 Total available for sale securities $ — $ 48,398 $ — $ 48,398 Information regarding the fair value of assets measured at fair value on a nonrecurring basis follows: Nonrecurring Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Assets Identical Observable Unobservable Measured at Instruments Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) As of September 30, 2022 Assets: Other equity investments $ 503 $ — $ 503 $ — As of December 31, 2021 Assets: Other equity investments $ 503 — $ 503 — As of September 30, 2022 and December 31, 2021, there were no impaired loans requiring a write down to their estimated fair value. There were no foreclosed assets as of September 30, 2022 or December 31, 2021. The carrying value and estimated fair value of financial instruments as of September 30, 2022 and December 31, 2021 follow: September 30, 2022 Carrying Fair Value Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 16,049 $ 16,049 $ — $ — Available for sale securities 47,472 — 47,472 — Loans 228,300 — — 221,743 Accrued interest receivable 901 901 — — Cash value of life insurance 10,238 10,238 — — Other equity investments 1,463 — 503 960 Financial liabilities: Deposits 233,954 194,253 — 46,179 Advance payments by borrowers for taxes and insurance 1,313 1,313 — — Accrued interest payable 139 139 — — December 31, 2021 Carrying Fair Value Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 67,002 $ 67,002 $ — $ — Available for sale securities 48,398 — 48,398 — Loans held for sale 500 — 500 — Loans 222,104 — — 224,612 Accrued interest receivable 813 813 — — Cash value of life insurance 10,029 10,029 — — Other equity investments 1,353 — 503 850 Financial liabilities: Deposits 255,250 199,238 — 55,970 Advance payments by borrowers for taxes and insurance 102 102 — — FHLB advances 6,500 — — 6,489 Accrued interest payable 7 7 — — Limitations - |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Organization | Organization FFBW, Inc. (the “Company”), a Maryland corporation, is a publicly traded stock holding company. The Company provides a variety of financial services to individual and corporate customers through its wholly owned subsidiary, First Federal Bank of Wisconsin (the “Bank”). The Bank is a community bank headquartered in Waukesha, Wisconsin, with offices in Waukesha, Brookfield and Milwaukee. |
Use of Estimates | Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the fair values of securities, fair value of financial instruments, the valuation of other real estate owned and the valuation of deferred income tax assets. |
Revenue Recognition | Revenue Recognition Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of the Company's revenue-generating transactions are not subject to ASC 606, including all interest and dividend income generated from financial instruments. Certain noninterest income items, including loan servicing income, gain on sales of loans, gain on sales of securities, and other noninterest income have been evaluated and were determined to not fall within the scope of ASC 606. Elements of noninterest income that are within the scope of ASC 606, are as follows: Service charges and other fees - The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Management reviewed the deposit account agreements and determined that the agreements can be terminated at any time by either the Company or the account holder. Transaction fees, such as balance transfers, wires and overdraft charges are settled the day the performance obligation is satisfied. The Company's monthly service charges and maintenance fees are for services provided to the customer on a monthly basis and are considered a series of services that have the same pattern of transfer each month. The review of service charges assessed on deposit accounts included the amount of variable consideration that is a part of the monthly charges. It was found that the waiver of service charges due to insufficient funds and dormant account fees is immaterial and would not require a change in the accounting treatment for these fees under the new revenue standards. Interchange fees - Customers use a Bank-issued debit card to purchase goods and services, and the Company earns interchange fees on those transactions, typically a percentage of the sale amount of the transaction. The Company records the amount due when it receives the settlement from the payment network. Payments from the payment network are received and recorded into income on a daily basis. These fees are included in “service charges and other fees” on the Statements of Income. There are no contingent debit card interchange fees recorded by the Company that could be subject to a clawback in future periods. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash and balances due from banks, non-maturity deposits in the Federal Home Loan Bank of Chicago (FHLB), and fed funds sold. The Company has not experienced any losses in such accounts. |
Available for Sale Securities | Available for Sale Securities Securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital requirements, and other similar factors. Securities classified as available for sale are carried at fair value. Unrealized gains or losses are reported as increases or decreases in other comprehensive income, net of the related deferred tax effect. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Gains and losses on the sale of securities are recorded on the trade date and determined using the specific-identification method. Declines in fair value of securities that are deemed to be other than temporary, if applicable, are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers the length of time and the extent to which fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient enough to allow for any anticipated recovery in fair value. |
Loans Acquired in a Transfer | Loans Acquired in a Transfer The Company acquires loans (including debt securities) individually and in groups or portfolios. These loans are initially measured at fair value with no allowance for loan losses. The Company’s allowance for loan losses on all acquired loans reflect only those losses incurred subsequent to acquisition. Certain acquired loans may have experienced deterioration of credit quality between origination and the Company’s acquisition of the loans. At acquisition, the Company reviews each loan to determine whether there is evidence of deterioration of credit quality since origination and if it is probable that the Company will be unable to collect all amounts due according to the loan’s contractual terms. If both conditions exist, the Company determines whether each such loan is to be accounted for individually or whether such loans will be assembled into pools of loans based on common risk characteristics (for example, credit score, loan type, and date of origination). The Company considers expected prepayments and estimates the amount and timing of undiscounted principal, interest, and other cash flows expected at acquisition for each loan and aggregated pool of loans. The excess of the loan’s or pool’s scheduled contractual principal and interest payments over all cash flows expected at acquisition is calculated as the nonaccretable difference. The excess of cash flows expected to be collected over the fair value of each loan or pool (accretable yield) is accreted into interest income over the remaining life of the loan or pool. At each reporting date, the Company continues to estimate cash flows expected to be collected for each loan or pool. If expected cash flows have decreased from the acquisition date estimate, the Company recognizes an allowance for loan losses. If expected cash flows have increased from the acquisition date estimate, the Company increases the amount of accretable yield to be recognized as interest income over the remaining life of the loan or pool. |
Loans Held for Sale | Loans Held for Sale Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. Mortgage loans held for sale are sold with the mortgage servicing rights released by the Company. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loan sold. |
Loans | Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff generally are reported at their outstanding unpaid principal balances adjusted for deferred loan fees and costs, charge-offs, and an allowance for loan losses. Interest on loans is accrued and credited to income based 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 loans is discontinued when, in the opinion of management, there is an indication that the borrower may be unable to make payments as they become due. When loans are placed on nonaccrual status or charged off, all unpaid accrued interest is reversed against interest income. The interest on these loans is subsequently accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual status. 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 Loan Losses | Allowance for Loan Losses The allowance for loan losses is maintained at the level considered adequate by management to provide for losses that are probable as of the balance sheet date. The allowance for loan losses is established through a provision for loan losses charged to expense as losses are estimated to have occurred. Loan losses are charged against the allowance when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance. In determining the adequacy of the allowance balance, the Company makes evaluations of the loan portfolio and related off-balance sheet commitments, considers current economic conditions and historical loss experience, and reviews specific problem loans and other factors. When establishing the allowance for loan losses, management categorizes loans into risk categories generally based on the nature of the collateral and the basis of repayment. These risk categories and their relevant risk characteristics are as follows: Commercial development: Commercial real estate: Commercial and industrial: One-to-four family owner-occupied: One-to-four family investor-owned: Multifamily real estate: Consumer: Management regularly evaluates the allowance for loan losses using the Company’s past loan loss experience, known and inherent risks in the loan portfolio, composition of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, current economic conditions, and other relevant factors. This evaluation is inherently subjective since it requires material estimates that may be susceptible to significant change. A loan is impaired when, based on current information, it is probable that the Company will not collect all amounts due in accordance with the contractual terms of the loan agreement. Management determines whether a loan is impaired on a case-by-case basis, taking into consideration the payment status, collateral value, length and reason of any payment delays, the borrower’s prior payment record, and any other relevant factors. Large groups of smaller-balance homogeneous loans, such as residential mortgage and consumer loans, are collectively evaluated in the allowance for loan losses analysis and are not subject to impairment analysis unless such loans have been subject to a restructuring agreement. Specific allowances for impaired loans are based on discounted cash flows of expected future payments using the loan’s initial effective interest rate or the fair value of the collateral if the loan is collateral dependent. In addition, various regulatory agencies periodically review the allowance for loan losses. These agencies may require the Company to make additions to the allowance for loan losses based on their judgments of collectability based on information available to them at the time of their examination. |
Troubled Debt Restructurings | Troubled Debt Restructurings Loans are accounted for as troubled debt restructurings when a borrower is experiencing financial difficulties that lead to a restructuring of the loan and the Company grants a “concession” to the borrower that they would not otherwise consider. These concessions include a modification of terms, such as a reduction of the stated interest rate or loan balance, a reduction of accrued interest, an extension of the maturity date at an interest rate lower than a current market rate for a new loan with similar risk, or some combination thereof to facilitate repayment. Troubled debt restructurings are considered impaired loans. |
Foreclosed Assets | Foreclosed Assets Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value, less costs to sell, at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less costs to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed assets. |
Premises and Equipment | Premises and Equipment Depreciable assets are stated at cost less accumulated depreciation. Provisions for depreciation are computed on straight-line and accelerated methods over the estimated useful lives of the assets. |
Other Equity Investments | Other Equity Investments Other Equity Investments consist of Federal Home Loan Bank of Chicago (“FHLB”) stock and Bankers’ Bank stock. The value. The Company is required to hold the stock as a member of the FHLB and transfer of the stock is substantially restricted. The stock is evaluated for impairment on an annual basis. The Company is required to |
Income Taxes | Income Taxes Amounts provided for income tax expense are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable under tax laws. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and income tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. As changes in tax laws or rates are enacted, deferred income tax assets and liabilities are adjusted through the provision for income taxes. The differences relate principally to the allowances for loan losses, deferred compensation, depreciation, FHLB stock dividends and non-accrual interest. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Based on its evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The Company’s policy is to recognize interest and penalties related to income tax issues as components of income tax expense. During the periods shown, the Company did not recognize any interest or penalties related to income tax expense in its statements of operations. |
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 (1) the assets have been isolated from the Company, (2) 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 (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Advertising | Advertising Advertising costs are expensed as incurred. |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Other comprehensive income (loss) is shown on the statements of comprehensive income (loss). The Company’s accumulated other comprehensive income (loss) is composed of the unrealized gains (losses) on securities available for sale, net of tax and is shown on the statements of changes in equity. Reclassification adjustments out of other comprehensive income (loss) for gains/losses realized on sales of securities available for sale comprise the entire balance of “net gain/loss on sale of securities” on the statements of income. |
Off-Balance Sheet Financial Instruments | Off-Balance Sheet Financial Instruments In the ordinary course of business, the Company has entered into off-balance-sheet financial instruments consisting of commitments to extend credit, unfunded commitments under lines of credit, and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable. |
Life Insurance | Life Insurance The Company has purchased life insurance policies on certain key members of the management team. Life insurance is measured at the amount that could be realized under the insurance contract as of the balance sheet date, which is generally the cash surrender value of the policy. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as the Company is an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to other public companies. An emerging growth company may elect to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the Company is first required to file a registration statement. The Company has elected to use the extended transition period described above and intends to maintain its emerging growth company status as allowed under the JOBS Act. The following ASUs have been issued by the FASB and may impact the Company's financial statements in future reporting periods: ASU No. 2016-13, “Credit Losses (Topic 326).” ASU No. 2019-04, “Codification Improvements to Topic 326.” ASU No. 2019-05, “Financial Instruments-Credit Losses.” ASU 2016-13 requires organizations to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption will be permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is expecting to see an increase in its allowance for loan losses upon adoption but is still assessing the final impact of adopting ASU 2016-13 on its financial statements. ASU No. 2016-02, “Leases (Topic 842): Amendments to the Leases Analysis.” ASU No. 2018-10, "Codification Improvements to Topic 842." ASU No. 2018-11, "Targeted Improvements" For lessees, Topic 842 requires leases to be recognized on the balance sheet, along with disclosure of key information about leasing arrangements. Topic 842 was subsequently amended by ASU 2018-01, 2018-10 and 2018-11. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification expense recognition in the income statement. For lessors, Topic 842 requires lessors to classify leases as sales-type, direct financing or operating leases. A lease is a sales-type lease if any one of five criteria are met, each of which indicate that the lease, in effect, transfers control of the underlying asset to the lessee. If none of those five criteria are met, but two additional criteria are both met, indicating the lessor has transferred substantially all the risks and benefits of the underlying asset to the lessee and a third party, the lease is a direct financing lease. All leases that are not sales-type or direct financing leases are operating leases. The new standard is effective for fiscal years beginning after December 15, 2021, and for interim periods beginning after December 15, 2022, with early adoption permitted. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) the new standard's effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company expects to adopt the new standard during the fourth quarter of 2022, with an effective date of January 1, 2022. The Company is expecting to record a right of use asset and corresponding lease obligation for its outstanding leases. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings per share | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the earnings per share calculations for the three and nine months ended September 30: Three months ended Nine months ended September 30, September 30, 2022 2021 2022 2021 Net income $ 510 $ 459 $ 1,716 $ 1,581 Basic potential common shares Weighted average shares outstanding 5,728,305 6,912,234 6,153,345 7,182,778 Weighted average unallocated Employee Stock Ownership Plan Shares (530,179) (560,767) (539,101) (569,689) Basic weighted average shares outstanding 5,198,126 6,351,467 5,614,244 6,613,089 Dilutive potential common shares 36,120 22,535 25,368 15,713 Dilutive weighted average shares outstanding 5,234,246 6,374,002 5,639,612 6,628,802 Basic earnings per share $ 0.10 $ 0.07 $ 0.31 $ 0.24 Diluted earnings per share $ 0.10 $ 0.07 $ 0.30 $ 0.24 |
Available for Sale Securities (
Available for Sale Securities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Available for Sale Securities | |
Schedule of Amortized Costs and Fair Values of Available for Sale Securities | Amortized costs and fair values of available for sale securities are summarized as follows: Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value September 30, 2022 Obligations of the US government and US government sponsored agencies $ 1,823 $ - $ (170) $ 1,653 Obligations of states and political subdivisions 14,163 - (1,847) 12,316 Mortgage-backed securities 25,442 - (2,076) 23,366 Certificates of deposit 500 3 (12) 491 Corporate debt securities 10,307 - (661) 9,646 Total available for sale securities $ 52,235 $ 3 $ (4,766) $ 47,472 December 31, 2021 Obligations of the US government and US government sponsored agencies $ 1,028 $ 19 $ (7) $ 1,040 Obligations of states and political subdivisions 14,289 376 (41) 14,624 Mortgage-backed securities 25,452 658 (54) 26,056 Certificates of deposit 750 22 - 772 Corporate debt securities 5,821 111 (26) 5,906 Total available for sale securities $ 47,340 $ 1,186 $ (128) $ 48,398 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The following table presents the portion of the Company’s portfolio which has gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position: Less Than 12 Months 12 Months or More Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses September 30, 2022 Obligations of the US government and US government sponsored agencies $ 1,207 $ (98) $ 431 $ (72) $ 1,638 $ (170) Obligations of states and political subdivisions 9,146 (1,166) 2,881 (681) 12,027 (1,847) Mortgage-backed securities 20,484 (1,741) 2,881 (335) 23,365 (2,076) Certificates of deposit 238 (12) — — 238 (12) Corporate debt securities 7,752 (531) 1,270 (130) 9,022 (661) Total $ 38,827 $ (3,548) $ 7,463 $ (1,218) $ 46,290 $ (4,766) December 31, 2021 Obligations of the US government and US government sponsored agencies $ 497 $ (7) $ — $ — $ 497 $ (7) Obligations of states and political subdivisions 3,129 (10) 937 (31) $ 4,066 (41) Mortgage-backed securities 4,116 (24) 1,881 (30) 5,997 (54) Corporate debt securities 2,874 (26) — — 2,874 (26) Total $ 10,616 $ (67) $ 2,818 $ (61) $ 13,434 $ (128) |
Investments Classified by Contractual Maturity Date | The amortized cost and fair value of available for sale securities by contractual maturity are shown below. Expected maturities will differ from contractual maturities in mortgage-backed securities since the anticipated maturities are not readily determinable. Therefore, these securities are not included in the maturity categories in the following maturity summary listed below: September 30, 2022 Amortized Cost Fair Value Due in one year or less $ 292 $ 295 Due after one year through 5 years 9,667 9,179 Due after 5 years through 10 years 11,751 10,502 Due after 10 years 5,083 4,130 Subtotal $ 26,793 $ 24,106 Mortgage-backed securities 25,442 23,366 Total $ 52,235 $ 47,472 |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Loans | |
Schedule of loans by major classification | Major classifications of loans are as follows: September 30, December 31, 2022 2021 Commercial Development $ 15,841 $ 21,396 Real estate 99,374 94,830 Commercial and industrial 24,801 18,387 Residential real estate and consumer One-to-four family owner-occupied 18,754 18,158 One-to-four family investor-owned 27,737 26,234 Multifamily 41,602 42,511 Consumer 3,085 3,312 Subtotal $ 231,194 $ 224,828 Deferred loan fees (364) (294) Allowance for loan losses (2,530) (2,430) Net loans $ 228,300 $ 222,104 |
Summary of the activity in the allowance for loan losses by portfolio segment | A summary of the activity in the allowance for loan losses by portfolio segment is as follows: Residential real estate Three Months Ended Commercial and consumer Total Balance at June 30, 2022 $ 1,375 $ 1,058 $ 2,433 Provision for loan losses 204 (111) 93 Loans charged off — — — Recoveries of loans previously charged off — 4 4 Balance at September 30, 2022 $ 1,579 $ 951 $ 2,530 Balance at June 30, 2021 $ 1,590 $ 834 $ 2,424 Provision for loan losses (31) 31 — Loans charged off (1) — (1) Recoveries of loans previously charged off 1 2 3 Balance at September 30, 2021 $ 1,559 $ 867 $ 2,426 Residential real estate Nine Months Ended Commercial and consumer Total September 30, 2022 Balance at December 31, 2021 $ 1,516 $ 914 $ 2,430 Provision for loan losses 63 30 93 Loans charged off — (3) (3) Recoveries of loans previously charged off — 10 10 Total ending allowance balance $ 1,579 $ 951 $ 2,530 September 30, 2021 Balance at December 31, 2020 $ 1,834 $ 977 $ 2,811 Provision for loan losses 116 (116) — Loans charged off (393) — (393) Recoveries of loans previously charged off 2 6 8 Total ending allowance balance $ 1,559 $ 867 $ 2,426 Information about how loans were evaluated for impairment and the related allowance for loan losses follows: Residential Real Estate and September 30, 2022 Commercial Consumer Total Loans: Individually evaluated for impairment $ — $ 495 $ 495 Collectively evaluated for impairment 140,016 90,683 230,699 Total loans $ 140,016 $ 91,178 $ 231,194 Allowance for loan losses: Individually evaluated for impairment $ — $ — $ — Collectively evaluated for impairment 1,579 951 2,530 Total allowance for loan losses $ 1,579 $ 951 $ 2,530 Residential Real Estate and December 31, 2021 Commercial Consumer Total Loans: Individually evaluated for impairment $ 112 $ 817 $ 929 Collectively evaluated for impairment 134,501 89,398 223,899 Total loans $ 134,613 $ 90,215 $ 224,828 Allowance for loan losses: Individually evaluated for impairment $ — $ — $ — Collectively evaluated for impairment 1,516 914 2,430 Total allowance for loan losses $ 1,516 $ 914 $ 2,430 |
Schedule of impaired loans with no related allowance for loan losses | Information regarding impaired loans follows: Principal Recorded Related Average Interest As of September 30, 2022 Balance Investment Allowance Investment Recognized Loans with no related allowance for loan losses: Residential real estate and consumer One-to-four family owner-occupied 460 451 — 460 3 Consumer 45 44 — 44 — Total loans with no related allowance for loan losses 505 495 — 504 3 Total impaired loans $ 505 $ 495 $ — $ 504 $ 3 Principal Recorded Related Average Interest As of December 31, 2021 Balance Investment Allowance Investment Recognized Loans with no related allowance for loan losses: Commercial Commercial and industrial 116 112 — 77 — Residential real estate and consumer One-to-four family owner-occupied 819 770 — 831 7 Consumer 47 47 — 49 — Total loans with no related allowance for loan losses 982 929 — 957 7 Total impaired loans $ 982 $ 929 $ — $ 957 $ 7 |
Information regarding the credit quality indicators | Information regarding the credit quality indicators most closely monitored for commercial loans by class follows: Special Pass Mention Substandard Doubtful Totals September 30, 2022 Development $ 15,841 $ — $ — $ — $ 15,841 Real estate 96,897 2,321 156 — 99,374 Commercial and industrial 19,763 — 5,038 — 24,801 One-to-four family investor-owned 27,691 — 46 — 27,737 Multifamily 41,602 — — — 41,602 Totals $ 201,794 $ 2,321 $ 5,240 $ — $ 209,355 December 31, 2021 Development $ 21,396 $ — $ — $ — $ 21,396 Real estate 93,653 843 334 — 94,830 Commercial and industrial 18,387 — — — 18,387 One-to-four family investor-owned 26,234 — — — 26,234 Multifamily 42,511 — — — 42,511 Totals $ 202,181 $ 843 $ 334 $ — $ 203,358 Information regarding the credit quality indicators most closely monitored for residential real estate and consumer loans by class follows: Performing Non-performing Totals September 30, 2022 One-to-four family owner-occupied $ 18,605 $ 149 $ 18,754 Consumer 3,085 — 3,085 $ 21,690 $ 149 $ 21,839 December 31, 2021 One-to-four family owner-occupied $ 17,986 $ 172 $ 18,158 Consumer 3,312 — 3,312 $ 21,298 $ 172 $ 21,470 |
Schedule of loans by aging | Loan aging information follows: Loans Past Due Loans Past Due Nonaccrual Current Loans 30-89 Days 90+ Days Total Loans Loans September 30, 2022 Commercial Development $ 15,841 $ — $ — $ 15,841 $ — Real estate 99,374 — — 99,374 — Commercial and industrial 24,801 — — 24,801 — Residential real estate and consumer One-to-four family owner-occupied 18,754 — — 18,754 149 One-to-four family investor-owned 27,548 189 — 27,737 — Multifamily 41,602 — — 41,602 — Consumer 3,085 — — 3,085 — Total $ 231,005 $ 189 $ — $ 231,194 $ 149 Loans Past Due Loans Past Due Nonaccrual Current Loans 30-89 Days 90+ Days Total Loans Loans December 31, 2021 Commercial Development $ 21,396 $ — $ — $ 21,396 $ — Real estate 94,830 — — 94,830 112 Commercial and industrial 18,387 — — 18,387 — Residential real estate and consumer One-to-four family owner-occupied 18,044 114 — 18,158 172 One-to-four family investor-owned 26,234 — — 26,234 — Multifamily 42,511 — — 42,511 — Consumer 3,312 — — 3,312 — Total $ 224,714 $ 114 $ — $ 224,828 $ 284 |
Deposits (Tables)
Deposits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deposits | |
Schedule of deposits by composition | The composition of deposits are as follows: September 30, December 31, 2022 2021 Non interest-bearing checking $ 52,044 $ 54,243 Interest-bearing checking 12,401 12,864 Money market 77,858 87,585 Statement savings accounts 34,121 33,968 Health savings accounts 10,519 10,608 Certificates of deposit 47,011 55,982 Total $ 233,954 $ 255,250 |
Scheduled maturities of certificates of deposit | The scheduled maturities of certificates of deposit are as follows as of September 30, 2022: 2022 $ 11,174 2023 26,335 2024 8,409 2025 532 2026 394 2027 167 Total $ 47,011 |
Employee Stock Ownership Plan (
Employee Stock Ownership Plan (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Employee Stock Ownership Plan | |
Schedule of ESOP shares | The ESOP shares as of September 30, 2022 and December 31, 2021 were as follows: September 30, 2022 December 31, 2021 Shares allocated to active participants 92,889 62,305 Shares committed to be released and allocated to participants 22,941 30,584 Shares distributed (4,414) — Total unallocated shares 527,568 550,509 Total ESOP shares 638,984 643,398 Fair value of unallocated shares (based on $11.90 and $11.80 share price at September 30, 2022 and December 31, 2021, respectively) $ 6,278 $ 6,496 |
Share-based Compensation Plans
Share-based Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-based Compensation Plans | |
Schedule of share based compensation expense recognized in the financial statements | The following table summarizes the impact of the Company’s share-based payment plans in the financial statements for the period shown: Nine Months Ended September 30, 2022 2021 Total cost of stock grant plan during the year $ 219 $ 173 Total cost of stock option plan during the year 146 127 Total cost of share-based payment plans during the year $ 365 $ 300 Amount of related income tax benefit recognized in income $ 90 $ 71 |
Summary of stock options activity | The following tables summarize stock options activity for the nine months ended September 30, 2022 and 2021: Outstanding Weighted Weighted Average Aggregate Average Remaining Intrinsic Stock Option Exercise Contractual Value Awards Price Term (years) (in dollars) Options outstanding as of December 31, 2021 316,875 $ 10.73 Granted 27,000 12.16 Exercised — — Expired or cancelled (400) 11.25 Forfeited — — Options outstanding as of September 30, 2022 343,475 $ 10.84 6.93 $ 367,450 Options exercisable as of September 30, 2022 152,482 $ 10.69 6.61 $ 184,271 Weighted Weighted Average Aggregate Average Remaining Intrinsic Stock Option Exercise Contractual Value Awards Price Term (years) (in dollars) Options outstanding as of December 31, 2020 269,220 $ 10.51 Granted 76,000 11.27 Exercised — — Expired or canceled — — Forfeited (19,057) 10.01 Options outstanding as of September 30, 2021 326,163 $ 10.72 8.00 $ 207,476 Options exercisable as of September 30, 2021 134,066 $ 10.80 7.50 $ 63,140 |
Summary of changes in restricted shares | The following is a summary of changes in restricted shares for the nine months ended September 30, 2022 and 2021: Weighted Average Number of Grant Date Fair Shares Value Nonvested stock awards as of December 31, 2021 59,737 $ 11.02 Granted 17,500 11.25 Vested (8,923) 11.22 Forfeited (200) 11.25 Nonvested stock awards as of September 30, 2022 68,114 $ 11.05 Nonvested stock awards as of December 31, 2020 62,060 $ 10.73 Granted 22,750 11.35 Vested (19,561) 10.77 Forfeited (5,519) 10.08 Nonvested stock awards as of September 30, 2021 59,730 $ 11.02 |
Equity and Regulatory Matters (
Equity and Regulatory Matters (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity and Regulatory Matters | |
Schedule of the Bank's actual Capital amounts and ratios | The Bank’s actual capital amounts and ratios are presented in the following tables: To Be Well Capitalized Under Prompt For Capital Adequacy Corrective Actual Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio September 30, 2022 Common Equity Tier 1 capital (to risk‑weighted assets) $ 70,487 26.6 % $ ≥ 11,942 ≥ 4.5 % $ ≥ 17,249 ≥ 6.5 % Tier 1 capital (to risk‑weighted assets) 70,487 26.6 ≥ 15,922 ≥ 6.0 ≥ 21,230 ≥ 8.0 Total capital (to risk‑weighted assets) 73,017 27.5 ≥ 21,230 ≥ 8.0 ≥ 26,537 ≥ 10.0 Tier 1 capital (to average assets) 70,487 21.8 ≥ 12,949 ≥ 4.0 ≥ 16,186 ≥ 5.0 December 31, 2021 Common Equity Tier 1 capital (to risk‑weighted assets) $ 75,554 29.6 % $ ≥ 11,467 ≥ 4.5 % $ ≥ 16,564 ≥ 6.5 % Tier 1 capital (to risk‑weighted assets) 75,554 29.6 ≥ 15,290 ≥ 6.0 ≥ 20,386 ≥ 8.0 Total capital (to risk‑weighted assets) 77,984 30.6 ≥ 20,386 ≥ 8.0 ≥ 25,483 ≥ 10.0 Tier 1 capital (to average assets) 75,554 21.4 ≥ 14,137 ≥ 4.0 ≥ 17,671 ≥ 5.0 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value | |
Schedule of assets measured at fair value on a recurring basis | Assets measured at fair value on a recurring basis are summarized below: Recurring Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Instruments Inputs Inputs (Level 1) (Level 2) (Level 3) Total As of September 30, 2022 Assets: Available for sale securities: Obligations of the US government and US government sponsored agencies $ — $ 1,653 $ — $ 1,653 Obligations of states and political subdivisions — 12,316 — 12,316 Mortgage-backed securities — 23,366 — 23,366 Certificates of deposit — 491 — 491 Corporate debt securities — 9,646 — 9,646 Total available for sale securities $ — $ 47,472 $ — $ 47,472 As of December 31, 2021 Assets: Available for sale securities: Obligations of the US government and US government sponsored agencies $ — $ 1,040 $ — $ 1,040 Obligations of states and political subdivisions — 14,624 — 14,624 Mortgage-backed securities — 26,056 — 26,056 Certificates of deposit — 772 — 772 Corporate debt securities — 5,906 — 5,906 Total available for sale securities $ — $ 48,398 $ — $ 48,398 |
Schedule of assets measured at fair value on a nonrecurring basis | Information regarding the fair value of assets measured at fair value on a nonrecurring basis follows: Nonrecurring Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Assets Identical Observable Unobservable Measured at Instruments Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) As of September 30, 2022 Assets: Other equity investments $ 503 $ — $ 503 $ — As of December 31, 2021 Assets: Other equity investments $ 503 — $ 503 — |
Schedule of carrying value and estimated fair value of financial instruments | The carrying value and estimated fair value of financial instruments as of September 30, 2022 and December 31, 2021 follow: September 30, 2022 Carrying Fair Value Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 16,049 $ 16,049 $ — $ — Available for sale securities 47,472 — 47,472 — Loans 228,300 — — 221,743 Accrued interest receivable 901 901 — — Cash value of life insurance 10,238 10,238 — — Other equity investments 1,463 — 503 960 Financial liabilities: Deposits 233,954 194,253 — 46,179 Advance payments by borrowers for taxes and insurance 1,313 1,313 — — Accrued interest payable 139 139 — — December 31, 2021 Carrying Fair Value Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 67,002 $ 67,002 $ — $ — Available for sale securities 48,398 — 48,398 — Loans held for sale 500 — 500 — Loans 222,104 — — 224,612 Accrued interest receivable 813 813 — — Cash value of life insurance 10,029 10,029 — — Other equity investments 1,353 — 503 850 Financial liabilities: Deposits 255,250 199,238 — 55,970 Advance payments by borrowers for taxes and insurance 102 102 — — FHLB advances 6,500 — — 6,489 Accrued interest payable 7 7 — — |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings per share | ||||||||
Net income | $ 510 | $ 639 | $ 567 | $ 459 | $ 452 | $ 670 | $ 1,716 | $ 1,581 |
Basic potential common shares | ||||||||
Weighted average shares outstanding | 5,728,305 | 6,912,234 | 6,153,345 | 7,182,778 | ||||
Weighted average unallocated Employee Stock Ownership Plan Shares | (530,179) | (560,767) | (539,101) | (569,689) | ||||
Basic weighted average shares outstanding | 5,198,126 | 6,351,467 | 5,614,244 | 6,613,089 | ||||
Dilutive potential common shares | 36,120 | 22,535 | 25,368 | 15,713 | ||||
Dilutive weighted average shares outstanding | 5,234,246 | 6,374,002 | 5,639,612 | 6,628,802 | ||||
Basic earnings per share (in dollars per share) | $ 0.10 | $ 0.07 | $ 0.31 | $ 0.24 | ||||
Diluted earnings per share (in dollars per share) | $ 0.10 | $ 0.07 | $ 0.30 | $ 0.24 |
Available for Sale Securities -
Available for Sale Securities - Amortized cost and fair value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Available for Sale Securities | ||
Total Amortized Cost | $ 52,235 | $ 47,340 |
Gross Unrealized Gains | 3 | 1,186 |
Gross Unrealized Losses | (4,766) | (128) |
Estimated Fair Value | 47,472 | 48,398 |
Obligations of the US government and US government sponsored agencies | ||
Available for Sale Securities | ||
Total Amortized Cost | 1,823 | 1,028 |
Gross Unrealized Gains | 19 | |
Gross Unrealized Losses | (170) | (7) |
Estimated Fair Value | 1,653 | 1,040 |
Obligations of states and political subdivisions | ||
Available for Sale Securities | ||
Total Amortized Cost | 14,163 | 14,289 |
Gross Unrealized Gains | 376 | |
Gross Unrealized Losses | (1,847) | (41) |
Estimated Fair Value | 12,316 | 14,624 |
Mortgage-backed securities | ||
Available for Sale Securities | ||
Total Amortized Cost | 25,442 | 25,452 |
Gross Unrealized Gains | 658 | |
Gross Unrealized Losses | (2,076) | (54) |
Estimated Fair Value | 23,366 | 26,056 |
Certificates of deposit | ||
Available for Sale Securities | ||
Total Amortized Cost | 500 | 750 |
Gross Unrealized Gains | 3 | 22 |
Gross Unrealized Losses | (12) | |
Estimated Fair Value | 491 | 772 |
Corporate debt securities | ||
Available for Sale Securities | ||
Total Amortized Cost | 10,307 | 5,821 |
Gross Unrealized Gains | 111 | |
Gross Unrealized Losses | (661) | (26) |
Estimated Fair Value | $ 9,646 | $ 5,906 |
Available for Sale Securities_2
Available for Sale Securities - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Available for Sale Securities | |||
Less Than 12 Months Fair Value | $ 38,827 | $ 10,616 | |
Less Than 12 Months Unrealized Losses | (3,548) | (67) | |
12 Months or More Fair Value | 7,463 | 2,818 | |
12 Months or More Unrealized Losses | (1,218) | (61) | |
Total Fair Value | 46,290 | 13,434 | |
Total Unrealized Losses | $ (4,766) | (128) | |
Obligations of the US government and US government sponsored agencies | |||
Available for Sale Securities | |||
Less Than 12 Months Fair Value | $ 1,207 | 497 | |
Less Than 12 Months Unrealized Losses | (98) | (7) | |
12 Months or More Fair Value | 431 | ||
12 Months or More Unrealized Losses | (72) | ||
Total Fair Value | 1,638 | 497 | |
Total Unrealized Losses | (170) | (7) | |
Obligations of states and political subdivisions | |||
Available for Sale Securities | |||
Less Than 12 Months Fair Value | 9,146 | 3,129 | |
Less Than 12 Months Unrealized Losses | (1,166) | (10) | |
12 Months or More Fair Value | 2,881 | 937 | |
12 Months or More Unrealized Losses | (681) | (31) | |
Total Fair Value | 12,027 | 4,066 | |
Total Unrealized Losses | (1,847) | (41) | |
Mortgage-backed securities | |||
Available for Sale Securities | |||
Less Than 12 Months Fair Value | 20,484 | 4,116 | |
Less Than 12 Months Unrealized Losses | (1,741) | (24) | |
12 Months or More Fair Value | 2,881 | 1,881 | |
12 Months or More Unrealized Losses | (335) | (30) | |
Total Fair Value | 23,365 | 5,997 | |
Total Unrealized Losses | (2,076) | (54) | |
Certificates of deposit | |||
Available for Sale Securities | |||
Less Than 12 Months Fair Value | 238 | ||
Less Than 12 Months Unrealized Losses | (12) | ||
Total Fair Value | 238 | ||
Total Unrealized Losses | (12) | ||
Corporate debt securities | |||
Available for Sale Securities | |||
Less Than 12 Months Fair Value | 7,752 | 2,874 | |
Less Than 12 Months Unrealized Losses | (531) | (26) | |
12 Months or More Fair Value | 1,270 | ||
12 Months or More Unrealized Losses | (130) | ||
Total Fair Value | 9,022 | 2,874 | |
Total Unrealized Losses | $ (661) | $ (26) |
Available for Sale Securities_3
Available for Sale Securities - Contractual Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Due in one year or less | $ 292 | |
Due after one year through 5 years | 9,667 | |
Due after 5 years through 10 years | 11,751 | |
Due after 10 years | 5,083 | |
Subtotal | 26,793 | |
Mortgage-backed securities | 25,442 | |
Total Amortized Cost | 52,235 | $ 47,340 |
Fair Value | ||
Due in one year or less | 295 | |
Due after one year through 5 years | 9,179 | |
Due after 5 years through 10 years | 10,502 | |
Due after 10 years | 4,130 | |
Subtotal | 24,106 | |
Mortgage-backed securities | 23,366 | |
Total Fair Value | $ 47,472 | $ 48,398 |
Available for Sale Securities_4
Available for Sale Securities - Additional disclosures (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 USD ($) security | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) security | |
Available for Sale Securities | |||
Number of available for sale securities in a continuous unrealized loss position greater than 12 months | security | 5 | ||
Number of available for sale securities in a continuous unrealized loss position less than 12 months | security | 111 | 15 | |
Proceeds from sales of available for sale securities | $ | $ 0 | $ 3 | |
Asset Pledged as Collateral | |||
Available for Sale Securities | |||
Securities pledged as collateral | $ | $ 936 | $ 1,038 |
Loans - Major classifications o
Loans - Major classifications of loans (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Loans | ||||||
Subtotal loans | $ 231,194 | $ 224,828 | ||||
Deferred loan fees | (364) | (294) | ||||
Allowance for loan losses | (2,530) | $ (2,433) | (2,430) | $ (2,426) | $ (2,424) | $ (2,811) |
Net loans | 228,300 | 222,104 | ||||
Deposit accounts in an overdraft position and reclassified as loans | 9 | 23 | ||||
Commercial | ||||||
Loans | ||||||
Subtotal loans | 140,016 | 134,613 | ||||
Allowance for loan losses | (1,579) | (1,375) | (1,516) | (1,559) | (1,590) | (1,834) |
Commercial | Development | ||||||
Loans | ||||||
Subtotal loans | 15,841 | 21,396 | ||||
Commercial | Real estate | ||||||
Loans | ||||||
Subtotal loans | 99,374 | 94,830 | ||||
Commercial | Commercial and industrial | ||||||
Loans | ||||||
Subtotal loans | 24,801 | 18,387 | ||||
Residential real estate and consumer | ||||||
Loans | ||||||
Subtotal loans | 91,178 | 90,215 | ||||
Allowance for loan losses | (951) | $ (1,058) | (914) | $ (867) | $ (834) | $ (977) |
Residential real estate and consumer | One-to-four family owner-occupied | ||||||
Loans | ||||||
Subtotal loans | 18,754 | 18,158 | ||||
Residential real estate and consumer | One-to-four family investor-owned | ||||||
Loans | ||||||
Subtotal loans | 27,737 | 26,234 | ||||
Residential real estate and consumer | Multifamily | ||||||
Loans | ||||||
Subtotal loans | 41,602 | 42,511 | ||||
Residential real estate and consumer | Consumer | ||||||
Loans | ||||||
Subtotal loans | $ 3,085 | $ 3,312 |
Loans - Changes in allowance fo
Loans - Changes in allowance for loan losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Summary of the activity in the allowance for loan losses by portfolio segment | ||||
Beginning balance | $ 2,433 | $ 2,424 | $ 2,430 | $ 2,811 |
Provision for loan losses | 93 | 0 | 93 | 0 |
Loans charged off | (1) | (3) | (393) | |
Recoveries of loans previously charged off | 4 | 3 | 10 | 8 |
Ending balance | 2,530 | 2,426 | 2,530 | 2,426 |
Commercial | ||||
Summary of the activity in the allowance for loan losses by portfolio segment | ||||
Beginning balance | 1,375 | 1,590 | 1,516 | 1,834 |
Provision for loan losses | 204 | (31) | 63 | 116 |
Loans charged off | (1) | 0 | (393) | |
Recoveries of loans previously charged off | 1 | 2 | ||
Ending balance | 1,579 | 1,559 | 1,579 | 1,559 |
Residential real estate and consumer | ||||
Summary of the activity in the allowance for loan losses by portfolio segment | ||||
Beginning balance | 1,058 | 834 | 914 | 977 |
Provision for loan losses | (111) | 31 | 30 | (116) |
Loans charged off | (3) | 0 | ||
Recoveries of loans previously charged off | 4 | 2 | 10 | 6 |
Ending balance | $ 951 | $ 867 | $ 951 | $ 867 |
Loans - Gross loans by method o
Loans - Gross loans by method of evaluation and related allowance for loan losses (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Loans | ||||||
Loans, individually evaluated for impairment | $ 495 | $ 929 | ||||
Loans, collectively evaluated for impairment | 230,699 | 223,899 | ||||
Total loans | 231,194 | 224,828 | ||||
Allowance for loan losses, individually evaluated for impairment | 0 | 0 | ||||
Allowance for loan losses, collectively evaluated for impairment | 2,530 | 2,430 | ||||
Total allowance for loan losses | 2,530 | $ 2,433 | 2,430 | $ 2,426 | $ 2,424 | $ 2,811 |
Commercial | ||||||
Loans | ||||||
Loans, individually evaluated for impairment | 112 | |||||
Loans, collectively evaluated for impairment | 140,016 | 134,501 | ||||
Total loans | 140,016 | 134,613 | ||||
Allowance for loan losses, individually evaluated for impairment | 0 | 0 | ||||
Allowance for loan losses, collectively evaluated for impairment | 1,579 | 1,516 | ||||
Total allowance for loan losses | 1,579 | 1,375 | 1,516 | 1,559 | 1,590 | 1,834 |
Residential real estate and consumer | ||||||
Loans | ||||||
Loans, individually evaluated for impairment | 495 | 817 | ||||
Loans, collectively evaluated for impairment | 90,683 | 89,398 | ||||
Total loans | 91,178 | 90,215 | ||||
Allowance for loan losses, individually evaluated for impairment | 0 | 0 | ||||
Allowance for loan losses, collectively evaluated for impairment | 951 | 914 | ||||
Total allowance for loan losses | $ 951 | $ 1,058 | $ 914 | $ 867 | $ 834 | $ 977 |
Loans - Impaired Loans (Details
Loans - Impaired Loans (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Loans with no related allowance for loan losses | ||
Principal Balance | $ 505 | |
Recorded Investment | 495 | |
Related Allowance | 0 | |
Average Investment | 504 | |
Interest Recognized | 3 | |
Total impaired loans | ||
Principal Balance | 505 | $ 982 |
Recorded Investment | 495 | 929 |
Average Investment | 504 | 957 |
Interest Recognized | 3 | 7 |
Commercial | Commercial and industrial | ||
Loans with no related allowance for loan losses | ||
Principal Balance | 116 | |
Recorded Investment | 112 | |
Average Investment | 77 | |
Residential real estate and consumer | ||
Loans with no related allowance for loan losses | ||
Principal Balance | 982 | |
Recorded Investment | 929 | |
Average Investment | 957 | |
Interest Recognized | 7 | |
Residential real estate and consumer | One-to-four family owner-occupied | ||
Loans with no related allowance for loan losses | ||
Principal Balance | 460 | 819 |
Recorded Investment | 451 | 770 |
Related Allowance | 0 | |
Average Investment | 460 | 831 |
Interest Recognized | 3 | 7 |
Residential real estate and consumer | Consumer | ||
Loans with no related allowance for loan losses | ||
Principal Balance | 45 | 47 |
Recorded Investment | 44 | 47 |
Related Allowance | 0 | |
Average Investment | 44 | $ 49 |
Interest Recognized | $ 0 |
Loans - Credit Quality Indicato
Loans - Credit Quality Indicators - Commercial (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Loans | ||
Total loans | $ 231,194 | $ 224,828 |
Commercial | ||
Loans | ||
Total loans | 209,355 | 203,358 |
Commercial | Pass | ||
Loans | ||
Total loans | 201,794 | 202,181 |
Commercial | Special Mention | ||
Loans | ||
Total loans | 2,321 | 843 |
Commercial | Substandard | ||
Loans | ||
Total loans | 5,240 | 334 |
Commercial | Doubtful | ||
Loans | ||
Total loans | 0 | 0 |
Commercial | Development | ||
Loans | ||
Total loans | 15,841 | 21,396 |
Commercial | Development | Pass | ||
Loans | ||
Total loans | 15,841 | 21,396 |
Commercial | Development | Special Mention | ||
Loans | ||
Total loans | 0 | 0 |
Commercial | Development | Substandard | ||
Loans | ||
Total loans | 0 | 0 |
Commercial | Development | Doubtful | ||
Loans | ||
Total loans | 0 | 0 |
Commercial | Real estate | ||
Loans | ||
Total loans | 99,374 | 94,830 |
Commercial | Real estate | Pass | ||
Loans | ||
Total loans | 96,897 | 93,653 |
Commercial | Real estate | Special Mention | ||
Loans | ||
Total loans | 2,321 | 843 |
Commercial | Real estate | Substandard | ||
Loans | ||
Total loans | 156 | 334 |
Commercial | Real estate | Doubtful | ||
Loans | ||
Total loans | 0 | 0 |
Commercial | Commercial and industrial | ||
Loans | ||
Total loans | 24,801 | 18,387 |
Commercial | Commercial and industrial | Pass | ||
Loans | ||
Total loans | 19,763 | 18,387 |
Commercial | Commercial and industrial | Special Mention | ||
Loans | ||
Total loans | 0 | 0 |
Commercial | Commercial and industrial | Substandard | ||
Loans | ||
Total loans | 5,038 | 0 |
Commercial | Commercial and industrial | Doubtful | ||
Loans | ||
Total loans | 0 | 0 |
Commercial | One-to-four family investor-owned | ||
Loans | ||
Total loans | 27,737 | 26,234 |
Commercial | One-to-four family investor-owned | Pass | ||
Loans | ||
Total loans | 27,691 | 26,234 |
Commercial | One-to-four family investor-owned | Special Mention | ||
Loans | ||
Total loans | 0 | 0 |
Commercial | One-to-four family investor-owned | Substandard | ||
Loans | ||
Total loans | 46 | 0 |
Commercial | One-to-four family investor-owned | Doubtful | ||
Loans | ||
Total loans | 0 | 0 |
Commercial | Multifamily | ||
Loans | ||
Total loans | 41,602 | 42,511 |
Commercial | Multifamily | Pass | ||
Loans | ||
Total loans | 41,602 | 42,511 |
Commercial | Multifamily | Special Mention | ||
Loans | ||
Total loans | 0 | 0 |
Commercial | Multifamily | Substandard | ||
Loans | ||
Total loans | 0 | 0 |
Commercial | Multifamily | Doubtful | ||
Loans | ||
Total loans | $ 0 | $ 0 |
Loans - Credit Quality Indica_2
Loans - Credit Quality Indicators - Residential real estate and consumer (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Loans | ||
Total loans | $ 231,194 | $ 224,828 |
Residential real estate and consumer | ||
Loans | ||
Total loans | 21,839 | 21,470 |
Residential real estate and consumer | Performing | ||
Loans | ||
Total loans | 21,690 | 21,298 |
Residential real estate and consumer | Non-performing | ||
Loans | ||
Total loans | 149 | 172 |
Residential real estate and consumer | One-to-four family owner-occupied | ||
Loans | ||
Total loans | 18,754 | 18,158 |
Residential real estate and consumer | One-to-four family owner-occupied | Performing | ||
Loans | ||
Total loans | 18,605 | 17,986 |
Residential real estate and consumer | One-to-four family owner-occupied | Non-performing | ||
Loans | ||
Total loans | 149 | 172 |
Residential real estate and consumer | Consumer | ||
Loans | ||
Total loans | 3,085 | 3,312 |
Residential real estate and consumer | Consumer | Performing | ||
Loans | ||
Total loans | 3,085 | 3,312 |
Residential real estate and consumer | Consumer | Non-performing | ||
Loans | ||
Total loans | $ 0 | $ 0 |
Loans - Aging (Details)
Loans - Aging (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Loans | ||
Total Loans | $ 231,194 | $ 224,828 |
Nonaccrual Loans | 149 | 284 |
Current Loans | ||
Loans | ||
Total Loans | 231,005 | 224,714 |
Loans Past Due 30-89 Days | ||
Loans | ||
Total Loans | 189 | 114 |
Loans Past Due 90+ Days | ||
Loans | ||
Total Loans | 0 | 0 |
Commercial | Development | ||
Loans | ||
Total Loans | 15,841 | 21,396 |
Nonaccrual Loans | 0 | 0 |
Commercial | Development | Current Loans | ||
Loans | ||
Total Loans | 15,841 | 21,396 |
Commercial | Development | Loans Past Due 30-89 Days | ||
Loans | ||
Total Loans | 0 | 0 |
Commercial | Development | Loans Past Due 90+ Days | ||
Loans | ||
Total Loans | 0 | 0 |
Commercial | Real estate | ||
Loans | ||
Total Loans | 99,374 | 94,830 |
Nonaccrual Loans | 0 | 112 |
Commercial | Real estate | Current Loans | ||
Loans | ||
Total Loans | 99,374 | 94,830 |
Commercial | Real estate | Loans Past Due 30-89 Days | ||
Loans | ||
Total Loans | 0 | 0 |
Commercial | Real estate | Loans Past Due 90+ Days | ||
Loans | ||
Total Loans | 0 | 0 |
Commercial | Commercial and industrial | ||
Loans | ||
Total Loans | 24,801 | 18,387 |
Nonaccrual Loans | 0 | 0 |
Commercial | Commercial and industrial | Current Loans | ||
Loans | ||
Total Loans | 24,801 | 18,387 |
Commercial | Commercial and industrial | Loans Past Due 30-89 Days | ||
Loans | ||
Total Loans | 0 | 0 |
Commercial | Commercial and industrial | Loans Past Due 90+ Days | ||
Loans | ||
Total Loans | 0 | 0 |
Residential real estate and consumer | One-to-four family owner-occupied | ||
Loans | ||
Total Loans | 18,754 | 18,158 |
Nonaccrual Loans | 149 | 172 |
Residential real estate and consumer | One-to-four family owner-occupied | Current Loans | ||
Loans | ||
Total Loans | 18,754 | 18,044 |
Residential real estate and consumer | One-to-four family owner-occupied | Loans Past Due 30-89 Days | ||
Loans | ||
Total Loans | 0 | 114 |
Residential real estate and consumer | One-to-four family owner-occupied | Loans Past Due 90+ Days | ||
Loans | ||
Total Loans | 0 | 0 |
Residential real estate and consumer | One-to-four family investor-owned | ||
Loans | ||
Total Loans | 27,737 | 26,234 |
Nonaccrual Loans | 0 | 0 |
Residential real estate and consumer | One-to-four family investor-owned | Current Loans | ||
Loans | ||
Total Loans | 27,548 | 26,234 |
Residential real estate and consumer | One-to-four family investor-owned | Loans Past Due 30-89 Days | ||
Loans | ||
Total Loans | 189 | 0 |
Residential real estate and consumer | One-to-four family investor-owned | Loans Past Due 90+ Days | ||
Loans | ||
Total Loans | 0 | 0 |
Residential real estate and consumer | Multifamily | ||
Loans | ||
Total Loans | 41,602 | 42,511 |
Nonaccrual Loans | 0 | 0 |
Residential real estate and consumer | Multifamily | Current Loans | ||
Loans | ||
Total Loans | 41,602 | 42,511 |
Residential real estate and consumer | Multifamily | Loans Past Due 30-89 Days | ||
Loans | ||
Total Loans | 0 | 0 |
Residential real estate and consumer | Multifamily | Loans Past Due 90+ Days | ||
Loans | ||
Total Loans | 0 | 0 |
Residential real estate and consumer | Consumer | ||
Loans | ||
Total Loans | 3,085 | 3,312 |
Nonaccrual Loans | 0 | 0 |
Residential real estate and consumer | Consumer | Current Loans | ||
Loans | ||
Total Loans | 3,085 | 3,312 |
Residential real estate and consumer | Consumer | Loans Past Due 30-89 Days | ||
Loans | ||
Total Loans | 0 | 0 |
Residential real estate and consumer | Consumer | Loans Past Due 90+ Days | ||
Loans | ||
Total Loans | $ 0 | $ 0 |
Loans - Additional Disclosures
Loans - Additional Disclosures (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 USD ($) item | Dec. 31, 2021 USD ($) item | |
Loans | ||
Loans 90 days or more past due and accruing interest | $ | $ 0 | $ 0 |
Number of new troubled debt restructurings | 0 | |
Number of troubled debt restructurings defaulted within 12 months of modification | 0 | 0 |
Number of loans remaining on a modified status, CARES Act | 0 | |
Commercial | Real estate | ||
Loans | ||
Number of new troubled debt restructurings | 1 | |
Amount of new troubled debt restructurings | $ | $ 116 | |
Residential real estate and consumer | One-to-four family owner-occupied | ||
Loans | ||
Number of new troubled debt restructurings | 1 | |
Amount of new troubled debt restructurings | $ | $ 115 |
Deposits - Composition of Depos
Deposits - Composition of Deposits (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Deposits | ||
Non-interest bearing checking | $ 52,044 | $ 54,243 |
Interest bearing checking | 12,401 | 12,864 |
Money market | 77,858 | 87,585 |
Statement savings accounts | 34,121 | 33,968 |
Health savings accounts | 10,519 | 10,608 |
Certificates of deposits | 47,011 | 55,982 |
Total | 233,954 | 255,250 |
Certificate of deposits at or above FDIC insurance limit | $ 7,925 | $ 10,894 |
Deposits - Maturities of Certif
Deposits - Maturities of Certificates of Deposit (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Deposits | ||
2022 | $ 11,174 | |
2023 | 26,335 | |
2024 | 8,409 | |
2025 | 532 | |
2026 | 394 | |
2027 | 167 | |
Total | 47,011 | |
Core deposit intangibles | $ 244 | $ 316 |
FHLB Advances (Details)
FHLB Advances (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
FHLB Advances | ||
FHLB advances outstanding | $ 0 | $ 6,500,000 |
FHLB advances, collateral pledged | 160,026,000 | 154,649,000 |
Amount secured by FHLB stock | 851,000 | 851,000 |
FHLB advances, amount of available unused funds | 18,903,000 | |
Federal funds line of credit not withdrawn | $ 7,000,000 | |
Minimum | ||
FHLB Advances | ||
FHLB fixed rate | 0 | |
Maximum | ||
FHLB Advances | ||
FHLB fixed rate | $ 1.7 |
Employee Stock Ownership Plan_2
Employee Stock Ownership Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||||||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Employee Stock Ownership Plan | |||||||
ESOP shares committed to be released | 22,941 | 22,941 | 15,294 | 7,647 | 15,294 | 7,647 | |
Average fair value of per share | $ 12.19 | $ 11.20 | |||||
ESOP compensation expense | $ 277 | $ 257 | |||||
ESOP shares | |||||||
Shares allocated to active participants | 92,889 | 62,305 | |||||
Shares committed to be released and allocated to participants | 22,941 | 30,584 | |||||
Shares distributed | (4,414) | ||||||
Total unallocated shares | 527,568 | 550,509 | |||||
Total ESOP shares | 638,984 | 643,398 | |||||
Fair value of unallocated shares (based on $12.14 and $11.80 share price at June 30, 2022 and December 31, 2021, respectively) | $ 6,278 | $ 6,496 | |||||
Share price (in dollars per share) | $ 11.90 | $ 11.80 |
Share-based Compensation Plan_2
Share-based Compensation Plans - Share-based compensation expense (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Plans | ||
Total cost of share-based payment plans during the year | $ 365 | $ 300 |
Amount of related income tax benefit recognized in income | 90 | 71 |
Restricted Stock | ||
Share-based Compensation Plans | ||
Total cost of share-based payment plans during the year | 219 | 173 |
Stock Options | ||
Share-based Compensation Plans | ||
Total cost of share-based payment plans during the year | $ 146 | $ 127 |
Share-based Compensation Plan_3
Share-based Compensation Plans - Stock Options (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Plans | ||
Exchange ratio applied in the offering | 1.1730 | |
Stock Options | 2018 Equity Incentive Plan | ||
Share-based Compensation Plans | ||
Vesting period | 5 years | |
Expiration period | 10 years | |
Restricted Stock | ||
Share-based Compensation Plans | ||
Granted (in shares) | 17,500 | 22,750 |
Restricted Stock | 2018 Equity Incentive Plan | ||
Share-based Compensation Plans | ||
Vesting period | 5 years | |
Vesting percentage | 20% | |
Restricted Stock | 2021 Equity Incentive Plan | Director | ||
Share-based Compensation Plans | ||
Vesting period | 1 year |
Share-based Compensation Plan_4
Share-based Compensation Plans - Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock Option Awards | |||
Outstanding, beginning balance (in shares) | 316,875 | 269,220 | |
Granted (in shares) | 0 | 27,000 | 76,000 |
Exercised (in shares) | 0 | 0 | |
Expired or canceled, (in shares) | (400) | 0 | |
Forfeited, (in shares) | 0 | (19,057) | |
Outstanding, ending balance (in shares) | 343,475 | 343,475 | 326,163 |
Exercisable (in shares) | 152,482 | 152,482 | 134,066 |
Weighted Average Exercise Price | |||
Outstanding, beginning balance (in dollars per share) | $ 10.73 | $ 10.51 | |
Granted, (in dollars per share) | 12.16 | 11.27 | |
Exercised, (in dollars per share) | 0 | 0 | |
Expired or canceled, (in dollars per share) | 11.25 | 0 | |
Forfeited, (in dollars per share) | 0 | 10.01 | |
Outstanding, beginning balance (in dollars per share) | $ 10.84 | 10.84 | 10.72 |
Exercisable (in dollars per share) | $ 10.69 | $ 10.69 | $ 10.80 |
Stock Option Awards, Additional Disclosures | |||
Weighted Average Remaining Contractual Term, Options outstanding (years) | 6 years 11 months 4 days | 8 years | |
Weighted Average Remaining Contractual Term, Options exercisable (years) | 6 years 7 months 9 days | 7 years 6 months | |
Aggregate Intrinsic Value, Options outstanding | $ 367,450 | $ 367,450 | $ 207,476 |
Aggregate Intrinsic Value, Options exercisable | $ 184,271 | $ 184,271 | $ 63,140 |
Share-based Compensation Plan_5
Share-based Compensation Plans - Changes in restricted shares (Details) - Restricted Stock - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Number of shares | ||
Nonvested stock awards, beginning balance (in shares) | 59,737 | 62,060 |
Granted (in shares) | 17,500 | 22,750 |
Vested (in shares) | (8,923) | (19,561) |
Forfeited (in shares) | (200) | (5,519) |
Nonvested stock awards, ending balance (in shares) | 68,114 | 59,730 |
Weighted Average Grant Date Fair Value | ||
Nonvested stock awards, beginning balance (in dollars per share) | $ 11.02 | $ 10.73 |
Granted (in dollars per share) | 11.25 | 11.35 |
Vested (in dollars per share) | 11.22 | 10.77 |
Forfeitures (in dollars per share) | 11.25 | 10.08 |
Nonvested stock awards, ending balance (in dollars per share) | $ 11.05 | $ 11.02 |
Share-based Compensation Plan_6
Share-based Compensation Plans - Unrecognized compensation cost (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Share-based Compensation Plans | |
Total unrecognized compensation expense | $ 1 |
Unrecognized compensation expense, expected period of recognition | 3 years |
Equity and Regulatory Matters_2
Equity and Regulatory Matters (Capital Amounts and Ratios) (Details) $ in Thousands | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Equity and Regulatory Matters | ||
Common Equity Tier 1 capital (to risk-weighted assets) | $ 70,487 | $ 75,554 |
Common Equity Tier 1 capital (to risk-weighted assets), ratio | 0.266 | 0.296 |
Common Equity Tier 1 capital (to risk-weighted assets), for capital adequacy | $ 11,942 | $ 11,467 |
Common Equity Tier 1 capital (to risk-weighted assets), for capital adequacy, ratio | 0.045% | 0.045% |
Common Equity Tier 1 capital (to risk-weighted assets), to be capitalized | $ 17,249 | $ 16,564 |
Common Equity Tier 1 capital (to risk-weighted assets), to be capitalized, ratio | 0.065% | 0.065% |
Tier 1 capital (to risk-weighted assets) | $ 70,487 | $ 75,554 |
Tier 1 capital (to risk-weighted assets), ratio | 0.266 | 0.296 |
Tier 1 capital (to risk-weighted assets), for capital adequacy | $ 15,922 | $ 15,290 |
Tier 1 capital (to risk-weighted assets), for capital adequacy, ratio | 0.060 | 0.060 |
Tier 1 capital (to risk-weighted assets), to be capitalized | $ 21,230 | $ 20,386 |
Tier 1 capital (to risk-weighted assets), to be capitalized, ratio | 0.080 | 0.080 |
Total capital (to risk-weighted assets) | $ 73,017 | $ 77,984 |
Total capital (to risk-weighted assets), ratio | 0.275 | 0.306 |
Total capital (to risk-weighted assets), for capital adequacy | $ 21,230 | $ 20,386 |
Total capital (to risk-weighted assets), for capital adequacy, ratio | 0.080 | 0.080 |
Total capital (to risk-weighted assets), to be capitalized | $ 26,537 | $ 25,483 |
Total capital (to risk-weighted assets), to be capitalized, ratio | 0.100 | 0.100 |
Tier 1 capital (to average assets) | $ 70,487 | $ 75,554 |
Tier 1 capital (to average assets), ratio | 0.218 | 0.214 |
Tier 1 capital (to average assets), for capital adequacy | $ 12,949 | $ 14,137 |
Tier 1 capital (to average assets), for capital adequacy, ratio | 0.040 | 0.040 |
Tier 1 capital (to average assets), to be capitalized | $ 16,186 | $ 17,671 |
Tier 1 capital (to average assets), to be capitalized, ratio | 0.050 | 0.050 |
Fair Value - Fair Value of Asse
Fair Value - Fair Value of Assets on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value | ||
Available for sale securities | $ 47,472 | $ 48,398 |
Obligations of the US government and US government sponsored agencies | ||
Fair Value | ||
Available for sale securities | 1,653 | 1,040 |
Obligations of states and political subdivisions | ||
Fair Value | ||
Available for sale securities | 12,316 | 14,624 |
Mortgage-backed securities | ||
Fair Value | ||
Available for sale securities | 23,366 | 26,056 |
Certificates of deposit | ||
Fair Value | ||
Available for sale securities | 491 | 772 |
Corporate debt securities | ||
Fair Value | ||
Available for sale securities | 9,646 | 5,906 |
Recurring | ||
Fair Value | ||
Available for sale securities | 47,472 | 48,398 |
Recurring | Obligations of the US government and US government sponsored agencies | ||
Fair Value | ||
Available for sale securities | 1,653 | 1,040 |
Recurring | Obligations of states and political subdivisions | ||
Fair Value | ||
Available for sale securities | 12,316 | 14,624 |
Recurring | Mortgage-backed securities | ||
Fair Value | ||
Available for sale securities | 23,366 | 26,056 |
Recurring | Certificates of deposit | ||
Fair Value | ||
Available for sale securities | 491 | 772 |
Recurring | Corporate debt securities | ||
Fair Value | ||
Available for sale securities | 9,646 | 5,906 |
Recurring | Level 1 | ||
Fair Value | ||
Available for sale securities | 0 | 0 |
Recurring | Level 1 | Obligations of the US government and US government sponsored agencies | ||
Fair Value | ||
Available for sale securities | 0 | 0 |
Recurring | Level 1 | Obligations of states and political subdivisions | ||
Fair Value | ||
Available for sale securities | 0 | 0 |
Recurring | Level 1 | Mortgage-backed securities | ||
Fair Value | ||
Available for sale securities | 0 | 0 |
Recurring | Level 1 | Certificates of deposit | ||
Fair Value | ||
Available for sale securities | 0 | 0 |
Recurring | Level 1 | Corporate debt securities | ||
Fair Value | ||
Available for sale securities | 0 | 0 |
Recurring | Level 2 | ||
Fair Value | ||
Available for sale securities | 47,472 | 48,398 |
Recurring | Level 2 | Obligations of the US government and US government sponsored agencies | ||
Fair Value | ||
Available for sale securities | 1,653 | 1,040 |
Recurring | Level 2 | Obligations of states and political subdivisions | ||
Fair Value | ||
Available for sale securities | 12,316 | 14,624 |
Recurring | Level 2 | Mortgage-backed securities | ||
Fair Value | ||
Available for sale securities | 23,366 | 26,056 |
Recurring | Level 2 | Certificates of deposit | ||
Fair Value | ||
Available for sale securities | 491 | 772 |
Recurring | Level 2 | Corporate debt securities | ||
Fair Value | ||
Available for sale securities | 9,646 | 5,906 |
Recurring | Level 3 | ||
Fair Value | ||
Available for sale securities | 0 | 0 |
Recurring | Level 3 | Obligations of the US government and US government sponsored agencies | ||
Fair Value | ||
Available for sale securities | 0 | 0 |
Recurring | Level 3 | Obligations of states and political subdivisions | ||
Fair Value | ||
Available for sale securities | 0 | 0 |
Recurring | Level 3 | Mortgage-backed securities | ||
Fair Value | ||
Available for sale securities | 0 | 0 |
Recurring | Level 3 | Certificates of deposit | ||
Fair Value | ||
Available for sale securities | 0 | 0 |
Recurring | Level 3 | Corporate debt securities | ||
Fair Value | ||
Available for sale securities | $ 0 | $ 0 |
Fair Value - Fair Value of As_2
Fair Value - Fair Value of Assets on Nonrecurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value | ||
Impaired loans requiring a write down to their estimated fair value | $ 0 | $ 0 |
Foreclosed assets | 0 | 0 |
Nonrecurring | ||
Fair Value | ||
Other equity investments | 503 | 503 |
Nonrecurring | Level 1 | ||
Fair Value | ||
Other equity investments | 0 | 0 |
Nonrecurring | Level 2 | ||
Fair Value | ||
Other equity investments | 503 | 503 |
Nonrecurring | Level 3 | ||
Fair Value | ||
Other equity investments | $ 0 | $ 0 |
Fair Value - Carrying value and
Fair Value - Carrying value and estimated fair value of financial instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financial assets | ||
Available for sale securities | $ 47,472 | $ 48,398 |
Carrying Value | ||
Financial assets | ||
Cash and cash equivalents | 16,049 | 67,002 |
Available for sale securities | 47,472 | 48,398 |
Loans held for sale | 500 | |
Loans | 228,300 | 222,104 |
Accrued interest receivable | 901 | 813 |
Cash value of life insurance | 10,238 | 10,029 |
Other equity investments | 1,463 | 1,353 |
Financial liabilities | ||
Deposits | 233,954 | 255,250 |
Advance payments by borrowers for taxes and insurance | 1,313 | 102 |
FHLB advances | 6,500 | |
Accrued interest payable | 139 | 7 |
Estimated Fair Value | Level 1 | ||
Financial assets | ||
Cash and cash equivalents | 16,049 | 67,002 |
Available for sale securities | 0 | 0 |
Loans held for sale | 0 | |
Loans | 0 | 0 |
Accrued interest receivable | 901 | 813 |
Cash value of life insurance | 10,238 | 10,029 |
Other equity investments | 0 | 0 |
Financial liabilities | ||
Deposits | 194,253 | 199,238 |
Advance payments by borrowers for taxes and insurance | 1,313 | 102 |
FHLB advances | 0 | |
Accrued interest payable | 139 | 7 |
Estimated Fair Value | Level 2 | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Available for sale securities | 47,472 | 48,398 |
Loans held for sale | 500 | |
Loans | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Cash value of life insurance | 0 | 0 |
Other equity investments | 503 | 503 |
Financial liabilities | ||
Deposits | 0 | 0 |
Advance payments by borrowers for taxes and insurance | 0 | 0 |
FHLB advances | 0 | |
Accrued interest payable | 0 | 0 |
Estimated Fair Value | Level 3 | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Available for sale securities | 0 | 0 |
Loans held for sale | 0 | |
Loans | 221,743 | 224,612 |
Accrued interest receivable | 0 | 0 |
Cash value of life insurance | 0 | 0 |
Other equity investments | 960 | 850 |
Financial liabilities | ||
Deposits | 46,179 | 55,970 |
Advance payments by borrowers for taxes and insurance | 0 | 0 |
FHLB advances | 6,489 | |
Accrued interest payable | $ 0 | $ 0 |