MUNCY COLUMBIA FINANCIAL CORPORATION 8-K/A
EXHIBIT 99.1
MUNCY BANK FINANCIAL, INC.
MUNCY, PENNSYLVANIA
SEPTEMBER 30, 2023
MUNCY BANK FINANCIAL, INC.
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2023
MUNCY BANK FINANCIAL, INC.
CONSOLIDATED BALANCE SHEET
| (In Thousands, Except Share and Per Share Data) (Unaudited) | | September 30, 2023 | | | December 31, 2022 | |
| ASSETS: | | | | | | | | |
| Cash and due from banks | | $ | 4,930 | | | $ | 4,928 | |
| Interest-bearing deposits in other financial institutions | | | 2,068 | | | | 1,496 | |
| Total cash and cash equivalents | | | 6,998 | | | | 6,424 | |
| | | | | | | | | |
| Interest-bearing time deposits | | | 989 | | | | 989 | |
| Available-for-sale debt securities, at fair value | | | 89,982 | | | | 99,140 | |
| Marketable equity securities, at fair value | | | 353 | | | | 383 | |
| Restricted investment in bank stocks, at cost | | | 5,245 | | | | 3,346 | |
| | | | | | | | | |
| Loans receivable | | | 515,388 | | | | 485,714 | |
| Allowance for credit losses | | | (5,153 | ) | | | (4,952 | ) |
| Loans, net | | | 510,235 | | | | 480,762 | |
| | | | | | | | | |
| Premises and equipment, net | | | 17,338 | | | | 17,363 | |
| Accrued interest receivable | | | 2,303 | | | | 2,086 | |
| Bank-owned life insurance | | | 17,752 | | | | 14,339 | |
| Deferred tax asset, net | | | 6,493 | | | | 5,169 | |
| Other assets | | | 2,777 | | | | 2,604 | |
| TOTAL ASSETS | | $ | 660,465 | | | $ | 632,605 | |
| | | | | | | | | |
| LIABILITIES: | | | | | | | | |
| Interest-bearing deposits | | $ | 414,575 | | | $ | 444,700 | |
| Noninterest-bearing deposits | | | 106,881 | | | | 106,913 | |
| Total deposits | | | 521,456 | | | | 551,613 | |
| | | | | | | | | |
| Short-term borrowings | | | 41,473 | | | | 27,369 | |
| Long-term borrowings | | | 46,401 | | | | — | |
| Accrued interest payable | | | 1,267 | | | | 366 | |
| Other liabilities | | | 5,986 | | | | 5,752 | |
| TOTAL LIABILITIES | | | 616,583 | | | | 585,100 | |
| | | | | | | | | |
| SHAREHOLDERS’ EQUITY: | | | | | | | | |
Common stock, par value $0.4167 per share; 3,626,684 shares authorized; 1,793,475 shares issued; 1,608,358 shares outstanding at September 30, 2023 and December 31, 2022
| | | 747 | | | | 747 | |
| Additional paid-in capital | | | 9,297 | | | | 9,297 | |
| Retained earnings | | | 56,611 | | | | 55,789 | |
| Accumulated other comprehensive loss | | | (18,791 | ) | | | (14,346 | ) |
Treasury stock, at cost; 185,117 shares at September 30, 2023 and December 31, 2022
| | | (3,982 | ) | | | (3,982 | ) |
| TOTAL SHAREHOLDERS’ EQUITY | | | 43,882 | | | | 47,505 | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 660,465 | | | $ | 632,605 | |
See accompanying notes to the unaudited consolidated financial statements.
MUNCY BANK FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
| | | Nine Months Ended September 30, | |
| (In Thousands, Except Per Share Data) (Unaudited) | | 2023 | | | 2022 | |
| INTEREST AND DIVIDEND INCOME: | | | | | | | | |
| Interest and fees on loans | | $ | 19,504 | | | $ | 15,243 | |
| Interest on balances with depository institutions | | | 82 | | | | 59 | |
| Investment securities: | | | | | | | | |
| Taxable | | | 614 | | | | 546 | |
| Tax-exempt | | | 1,244 | | | | 1,285 | |
| Dividends | | | 212 | | | | 77 | |
| TOTAL INTEREST AND DIVIDEND INCOME | | | 21,656 | | | | 17,210 | |
| | | | | | | | | |
| INTEREST EXPENSE: | | | | | | | | |
| Interest on deposits | | | 6,246 | | | | 2,205 | |
| Interest on short-term borrowings | | | 1,007 | | | | 37 | |
| Interest on long-term borrowings | | | 1,064 | | | | — | |
| TOTAL INTEREST EXPENSE | | | 8,317 | | | | 2,242 | |
| | | | | | | | | |
| NET INTEREST INCOME | | | 13,339 | | | | 14,968 | |
| | | | | | | | | |
| (Credit) provision for credit losses - loans | | | (120 | ) | | | 225 | |
| (Credit) provision for credit losses - off balance sheet credit exposures | | | (1 | ) | | | — | |
| TOTAL (CREDIT) PROVISION FOR CREDIT LOSSES | | | (121 | ) | | | 225 | |
| | | | | | | | | |
| NET INTEREST INCOME AFTER (CREDIT) PROVISION FOR CREDIT LOSSES | | | 13,460 | | | | 14,743 | |
| | | | | | | | | |
| NON-INTEREST INCOME: | | | | | | | | |
| Service charges on deposit accounts | | | 1,378 | | | | 1,323 | |
| Realized gains on available-for-sale debt securities, net | | | — | | | | 3 | |
| Losses on marketable equity securities | | | (31 | ) | | | (29 | ) |
| Earnings on bank-owned life insurance | | | 305 | | | | 214 | |
| Investment services income | | | 160 | | | | 110 | |
| Trust income | | | — | | | | 40 | |
| Gains on sale of loans | | | 73 | | | | 101 | |
| Other service charges and fees | | | 162 | | | | 202 | |
| Other non-interest income | | | 255 | | | | 308 | |
| TOTAL NON-INTEREST INCOME | | | 2,302 | | | | 2,272 | |
| | | | | | | | | |
| NON-INTEREST EXPENSE: | | | | | | | | |
| Salaries and employee benefits | | | 6,234 | | | | 6,263 | |
| Occupancy | | | 873 | | | | 635 | |
| Furniture and equipment | | | 320 | | | | 257 | |
| Data processing | | | 941 | | | | 978 | |
| Pennsylvania shares tax | | | 241 | | | | 321 | |
| Federal deposit insurance | | | 171 | | | | 133 | |
| Automated teller machine expense | | | 378 | | | | 495 | |
| Professional fees | | | 402 | | | | 511 | |
| Merger-related expenses | | | 355 | | | | — | |
| Other non-interest expense | | | 1,500 | | | | 1,701 | |
| TOTAL NON-INTEREST EXPENSE | | | 11,415 | | | | 11,294 | |
| | | | | | | | | |
| INCOME BEFORE INCOME TAX PROVISION | | | 4,347 | | | | 5,721 | |
| INCOME TAX PROVISION | | | 673 | | | | 891 | |
| NET INCOME | | $ | 3,674 | | | $ | 4,830 | |
| | | | | | | | | |
| EARNINGS PER SHARE - BASIC AND DILUTED | | $ | 2.28 | | | $ | 3.00 | |
See accompanying notes to the unaudited consolidated financial statements.
MUNCY BANK FINANCIAL, INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
| | | Nine Months Ended September 30, | |
| (In Thousands) (Unaudited) | | 2023 | | | 2022 | |
| Net income | | $ | 3,674 | | | $ | 4,830 | |
| Other comprehensive loss: | | | | | | | | |
| Unrealized holding loss on available-for-sale debt securities | | | (5,627 | ) | | | (23,963 | ) |
| Tax effect | | | 1,182 | | | | 5,032 | |
| Net realized gain included in net income | | | — | | | | 3 | |
| Tax effect | | | — | | | | (1 | ) |
| Total other comprehensive loss | | | (4,445 | ) | | | (18,929 | ) |
| Comprehensive loss | | $ | (771 | ) | | $ | (14,099 | ) |
See accompanying notes to the unaudited consolidated financial statements.
MUNCY BANK FINANCIAL, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the Nine Months Ended September 30, 2023 and 2022
| (In Thousands, Except Per Share Data) (Unaudited) | | COMMON STOCK | | | ADDITIONAL PAID-IN CAPITAL | | | RETAINED EARNINGS | | | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | | | TREASURY STOCK | | | TOTAL SHAREHOLDERS’ EQUITY | |
| For the nine months ended: | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, January 1, 2022 | | $ | 747 | | | $ | 9,297 | | | $ | 51,987 | | | $ | 1,058 | | | $ | (3,982 | ) | | $ | 59,107 | |
| Net income | | | — | | | | — | | | | 4,830 | | | | — | | | | — | | | | 4,830 | |
| Other comprehensive loss | | | — | | | | — | | | | — | | | | (18,929 | ) | | | — | | | | (18,929 | ) |
| Cash dividends declared, $1.15 per share | | | — | | | | — | | | | (1,849 | ) | | | — | | | | — | | | | (1,849 | ) |
| Balance, September 30, 2022 | | $ | 747 | | | $ | 9,297 | | | $ | 54,968 | | | $ | (17,871 | ) | | $ | (3,982 | ) | | $ | 43,159 | |
| Balance, January 1, 2023 | | $ | 747 | | | $ | 9,297 | | | $ | 55,789 | | | $ | (14,346 | ) | | $ | (3,982 | ) | | $ | 47,505 | |
| Adoption of ASU 2016-13 (CECL) | | | — | | | | — | | | | (311 | ) | | | — | | | | — | | | | (311 | ) |
| Net income | | | — | | | | — | | | | 3,674 | | | | — | | | | — | | | | 3,674 | |
| Other comprehensive loss | | | — | | | | — | | | | — | | | | (4,445 | ) | | | — | | | | (4,445 | ) |
| Cash dividends declared, $1.58 per share | | | — | | | | — | | | | (2,541 | ) | | | — | | | | — | | | | (2,541 | ) |
| Balance, September 30, 2023 | | $ | 747 | | | $ | 9,297 | | | $ | 56,611 | | | $ | (18,791 | ) | | $ | (3,982 | ) | | $ | 43,882 | |
See accompanying notes to the unaudited consolidated financial statements.
MUNCY BANK FINANCIAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
| | | Nine Months Ended September 30, | |
| (In Thousands) (Unaudited) | | 2023 | | | 2022 | |
| OPERATING ACTIVITIES: | | | | | | | | |
| Net income | | $ | 3,674 | | | $ | 4,830 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
| Depreciation | | | 548 | | | | 362 | |
| (Credit) provision for credit losses | | | (121 | ) | | | 225 | |
| Amortization and accretion of investment securities | | | 289 | | | | 321 | |
| Realized gains on available-for-sale debt securities, net | | | — | | | | (3 | ) |
| Losses on marketable equity securities | | | 31 | | | | 29 | |
| Earnings on bank-owned life insurance | | | (305 | ) | | | (215 | ) |
| Deferred income taxes | | | (142 | ) | | | (103 | ) |
| Origination of loans held for sale | | | (2,804 | ) | | | (4,058 | ) |
| Proceeds from sale of loans | | | 2,877 | | | | 4,397 | |
| Gains on sale of loans | | | (73 | ) | | | (101 | ) |
| Loss on sale of premises and equipment | | | 25 | | | | 11 | |
| Increase in accrued interest receivable and other assets | | | (390 | ) | | | (105 | ) |
| Increase in accrued interest payable and other liabilities | | | 491 | | | | 795 | |
| Net cash provided by operating activities | | | 4,100 | | | | 6,385 | |
| INVESTING ACTIVITIES: | | | | | | | | |
| Available-for-sale debt securities: | | | | | | | | |
| Proceeds from paydowns, calls and maturities | | | 4,044 | | | | 9,855 | |
| Purchases | | | (802 | ) | | | (17,922 | ) |
| Net increase in loans | | | (29,663 | ) | | | (23,515 | ) |
| Purchase of bank-owned life insurance | | | (3,108 | ) | | | — | |
| Purchases of restricted investment in bank stocks | | | (8,582 | ) | | | (1,311 | ) |
| Redemption of restricted investment in bank stocks | | | 6,683 | | | | 964 | |
| Acquisition of premises and equipment | | | (548 | ) | | | (4,720 | ) |
| Net cash used by investing activities | | | (31,976 | ) | | | (36,649 | ) |
| FINANCING ACTIVITIES: | | | | | | | | |
| Net (decrease) increase in interest-bearing deposits | | | (30,125 | ) | | | 35,099 | |
| Net decrease in noninterest-bearing deposits | | | (32 | ) | | | (2,331 | ) |
| Net increase in short-term borrowings | | | 14,104 | | | | 623 | |
| Proceeds of long-term borrowings | | | 46,401 | | | | — | |
| Cash dividends paid | | | (1,898 | ) | | | (1,849 | ) |
| Net cash provided by financing activities | | | 28,450 | | | | 31,542 | |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | | | 574 | | | | 1,278 | |
| CASH AND CASH EQUIVALENTS, BEGINNING | | | 6,424 | | | | 6,083 | |
| CASH AND CASH EQUIVALENTS, ENDING | | $ | 6,998 | | | $ | 7,361 | |
| | | | | | | | | |
| SUPPLEMENTAL CASH FLOW INFORMATION: | | | | | | | | |
| Interest paid | | $ | 7,416 | | | $ | 2,270 | |
| Income taxes paid | | $ | 775 | | | $ | 1,050 | |
See accompanying notes to the unaudited consolidated financial statements.
MUNCY BANK FINANCIAL, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Muncy Bank Financial, Inc. (“Company”), and its wholly-owned subsidiary, The Muncy Bank & Trust Company (“Bank”). All significant intercompany balances and transactions have been eliminated.
The consolidated financial information included herein, except the consolidated balance sheet dated December 31, 2022, is unaudited. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included.
The Company has evaluated events and transactions occurring subsequent to the consolidated balance sheet date of September 30, 2023 for items that should potentially be recognized or disclosed in these consolidated financial statements. The evaluation was conducted through the date these consolidated financial statements were issued.
NOTE 2 – SUMMARY OF SIGNFICANT ACCOUNTING POLICIES
Adoption of New Accounting Standards
On January 1, 2023, the Company adopted Accounting Standard Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU No. 2016-13 required financial assets measured at amortized cost to be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company took steps to prepare for the implementation over the past several years, such as: forming an internal committee, gathering pertinent data, consulting with outside professionals, subscribing to a new software system, and running existing and new methodologies concurrently through the period of implementation. The Company adopted the ASU’s provisions using the modified retrospective method and evaluated the impact the current expected credit loss (“CECL”) model had on the accounting for credit losses, and recognized a one-time, cumulative-effect adjustment to retained earnings at the beginning of the first reporting period in which the new standard became effective. The cumulative-effect adjustment resulted in a decrease to retained earnings of $311,000, as outlined in the table below. There was no impact on the securities portfolio upon adoption. This adoption method is considered a change in accounting principle requiring additional disclosure of the nature of and reason for the change, which is solely a result of the adoption of the required standard.
| (In Thousands) | | As Reported
Under
ASC 326
January 1, 2023 | | | Pre-ASC 326
Adoption
December 31, 2022 | | | Impact of
ASC 326
Adoption | |
| Allowance for credit losses on loans | | $ | 5,301 | | | $ | 4,952 | | | $ | 349 | |
| Allowance for credit losses on off-balance sheet exposures (included in other liabilities) | | | 45 | | | | — | | | | 45 | |
| Deferred tax asset, net | | | 1,123 | | | | 1,040 | | | | 83 | |
| Retained earnings | | | 55,478 | | | | 55,789 | | | | (311 | ) |
On January 1, 2023, the Company adopted ASU No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminated the accounting guidance on troubled debt restructurings (“TDRs”) by creditors that have adopted the CECL model and enhances disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The ASU also amended the guidance on “vintage disclosures” to require disclosure of current-period gross charge-offs by year of origination. The Company adopted the ASU’s provisions using the modified retrospective method in conjunction with the CECL adoption. The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements.
Accounting Policies
The Company’s significant accounting policies followed in the preparation of the unaudited consolidated financial statements are disclosed in Note 1 of the audited consolidated financial statements and notes for the year ended December 31, 2022. There have been no significant changes to the application of significant accounting policies since December 31, 2022, except for the following:
Allowance for Credit Losses – Available-for-Sale Debt Securities
For available-for-sale debt securities, management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, an allowance for credit losses is recorded.
If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. The Company has elected the practical expedient of zero credit loss estimates for securities issued or guaranteed by U.S. Government entities or agencies. In making the credit loss assessment of securities not issued or guaranteed by U.S. Government entities or agencies, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any excess is recorded as an allowance for credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any amount of unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income.
Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance for credit losses when management believes an available-for-sale debt security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. At September 30, 2023, there was no allowance for credit losses related to the available-for-sale portfolio.
Accrued interest receivable on available-for-sale debt securities totaled $604,000 at September 30, 2023 and was excluded from the estimate of credit losses.
Allowance for Credit Losses on Loans
The allowance for credit losses is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.
The allowance for credit losses represents management’s estimate of lifetime credit losses inherent in loans as of the balance sheet date. The allowance for credit losses is estimated by management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.
Accrued interest receivable on loans totaled $1,699,000 at September 30, 2023 and was excluded from the estimate of credit losses.
The allowance for credit losses (“ACL”) includes two primary components: (i) an allowance established on loans which share similar risk characteristics collectively evaluated for credit losses (collective basis), and (ii) an allowance established on loans which do not share similar risk characteristics with any loan segment and which are individually evaluated for credit losses (individual basis).
Loans evaluated on an individual basis are identified based on a detailed assessment of loan relationships, and their related credit risk ratings. The allowance will be determined on an individual basis using the present value of expected cash flows or, for collateral-dependent loans, the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable. If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will charge off the difference between the fair value of the collateral, less costs to sell at the reporting date and the amortized cost basis of the loan.
The Company measures expected credit losses for loans on a pooled basis when similar risk characteristics exist. The Company has identified the following portfolio segments and calculates the allowance for credit losses for each using the vintage method:
| Residential mortgage: |
| Residential mortgage loans - first liens |
| Residential mortgage loans - junior liens |
| Home equity lines of credit |
| 1-4 Family residential construction |
| Commercial: |
| Commercial loans secured by real estate |
| Commercial and industrial |
| Political subdivisions |
| Commercial construction and land |
| Loans secured by farmland |
| Multi-family (5 or more) residential |
| Agricultural loans |
| Other commercial loans |
| Consumer |
In determining the pools for collective evaluation, management used a combination of loan purpose, collateral and payment type (for example, lines of credit vs. amortizing) as well as weighted average lives. The pools identified are the same as the loan classes used in the Company’s financial reporting.
Estimation Method - Vintage
The vintage methodology under CECL measures the expected loss calculation for future periods based on historical performance by the origination period of loans with similar life cycles and risk characteristics. Loans are included in tracking historical losses in the period in which they originated. Upon renewal of a loan, a new vintage is created.
Loss rates applied in the Company’s vintage methodology start with historical loss rates for each vintage. Loss rates for future periods are based upon historical trends as well as factoring in any changes for current conditions and reasonable and supportable forecast periods, where these periods are different. When future years are no longer reasonably forecastable, loss rates are reverted to adjusted historical averages. To determine the ACL the Company applies the expected loss rates determined from the historical loss rates adjusted for qualitative and forecast factors for each vintage to the origination balance of each vintage pool as of the reporting date and sum the totals for each vintage to determine the current expected loss.
Qualitative Factors
The allowance for credit losses calculation includes subjective adjustments for qualitative risk factors that are deemed likely to cause estimated credit losses to differ from historical experience. These qualitative adjustments generally increase allowance levels and include adjustments for factors deemed relevant, including: lending policies and procedures; economic conditions; nature and volume of the portfolio and terms of loans; experience, ability and depth of lending management and staff; volume and severity of past due, classified and nonaccrual loans; loan review; underlying collateral; concentrations of credit, and; other external factors and conditions not already captured.
Allowance for Credit Losses on Off-Balance Sheet Exposures
Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.
The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for unfunded commitments in the Company’s statement of income. The allowance for credit losses on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model, taking into consideration the likelihood that funding will occur. The allowance for off-balance sheet exposures is included in other liabilities in the Company’s unaudited consolidated balance sheet and the related credit loss expense is recorded in the unaudited consolidated statement of income.
NOTE 3 – BUSINESS COMBINATION
On April 18, 2023, CCFNB Bancorp, Inc. (“CCFNB”) and the Company jointly announced the signing of a definitive merger agreement to combine the two companies in a strategic merger of equals. Effective November 11, 2023, the merger was completed. Under the terms of the Merger Agreement, (i) the Company merged with and into CCFNB, with CCFNB being the surviving entity, and (ii) the Bank merged with and into CCFNB's wholly-owned banking subsidiary, First Columbia Bank & Trust Co. ("First Columbia Bank"), with First Columbia Bank being the surviving bank (the "Mergers"). In connection with the Mergers, CCFNB changed its name to Muncy Columbia Financial Corporation ("MCFC"), and First Columbia Bank changed its name to Journey Bank.
At the effective time of the merger, the Company’s shareholders received a fixed exchange ratio of 0.9259 shares of MCFC for each Company share they owned, except to the extent of cash received for fractional shares at $41.47 per share.
NOTE 4 – SECURITIES
The amortized cost, gross unrealized gains and losses, and fair value of securities are as follows at September 30, 2023 and December 31, 2022:
| | | September 30, 2023 | |
| (In Thousands) | | Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
| State and political securities | | $ | 80,644 | | | $ | — | | | $ | (17,663 | ) | | $ | 62,981 | |
| Mortgage-backed securities | | | 21,819 | | | | — | | | | (4,108 | ) | | | 17,711 | |
| Collateralized mortgage obligations | | | 11,006 | | | | — | | | | (1,982 | ) | | | 9,024 | |
| Other debt securities | | | 300 | | | | — | | | | (34 | ) | | | 266 | |
| Total debt securities | | | 113,769 | | | | — | | | | (23,787 | ) | | | 89,982 | |
| Marketable equity securities | | | 375 | | | | — | | | | (22 | ) | | | 353 | |
| Restricted investment in bank stocks | | | 5,245 | | | | — | | | | — | | | | 5,245 | |
| Total investment securities | | $ | 119,389 | | | $ | — | | | $ | (23,809 | ) | | $ | 95,580 | |
| | | December 31, 2022 | |
| (In Thousands) | | Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
| State and political securities | | $ | 81,932 | | | $ | 1 | | | $ | (13,053 | ) | | $ | 68,880 | |
| Mortgage-backed securities | | | 23,466 | | | | 3 | | | | (3,368 | ) | | | 20,101 | |
| Collateralized mortgage obligations | | | 11,602 | | | | — | | | | (1,726 | ) | | | 9,876 | |
| Other debt securities | | | 300 | | | | — | | | | (17 | ) | | | 283 | |
| Total debt securities | | | 117,300 | | | | 4 | | | | (18,164 | ) | | | 99,140 | |
| Marketable equity securities | | | 375 | | | | 8 | | | | — | | | | 383 | |
| Restricted investment in bank stocks | | | 3,346 | | | | — | | | | — | | | | 3,346 | |
| Total investment securities | | $ | 121,021 | | | $ | 12 | | | $ | (18,164 | ) | | $ | 102,869 | |
The amortized cost and fair value of debt securities at September 30, 2023, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
| (In Thousands) | | Amortized Cost | | | Fair Value | |
| Due in one year or less | | $ | 310 | | | $ | 305 | |
| Due after 1 year to 5 years | | | 4,312 | | | | 3,978 | |
| Due after 5 years to 10 years | | | 16,451 | | | | 13,487 | |
| Due after 10 years | | | 59,871 | | | | 45,477 | |
| Sub-total | | | 80,944 | | | | 63,247 | |
| | | | | | | | | |
| Mortgage-backed securities | | | 21,819 | | | | 17,711 | |
| Collateralized mortgage obligations | | | 11,006 | | | | 9,024 | |
| Total debt securities | | $ | 113,769 | | | $ | 89,982 | |
The Company’s mortgage-backed securities and collateralized mortgage obligations have stated maturities that may differ from actual maturities due to borrowers’ ability to prepay obligations. Cash flows from such investments are dependent upon the performance of the underlying mortgage loans and are generally influenced by the level of interest rates. In the table above, mortgage-backed securities and collateralized mortgage obligations are shown in one period.
Investment securities with a carrying value of approximately $33,156,000 and $43,683,000 at September 30, 2023 and December 31, 2022, respectively, were pledged to secure public funds and certain other deposits and for other purposes as provided by law.
The following tables show gross unrealized losses and fair values, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at September 30, 2023 and December 31, 2022.
| | | September 30, 2023 | |
| | | Less than 12 Months | | | 12 Months or Greater | | | Total | |
| (In Thousands) | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | |
| State and political securities | | $ | 2,633 | | | $ | (182 | ) | | $ | 60,348 | | | $ | (17,481 | ) | | $ | 62,981 | | | $ | (17,663 | ) |
| Mortgage-backed securities | | | 844 | | | | (32 | ) | | | 16,867 | | | | (4,076 | ) | | | 17,711 | | | | (4,108 | ) |
| Collateralized mortgage obligations | | | 452 | | | | (15 | ) | | | 8,572 | | | | (1,967 | ) | | | 9,024 | | | | (1,982 | ) |
| Other debt securities | | | 87 | | | | (13 | ) | | | 179 | | | | (21 | ) | | | 266 | | | | (34 | ) |
| | | $ | 4,016 | | | $ | (242 | ) | | $ | 85,966 | | | $ | (23,545 | ) | | $ | 89,982 | | | $ | (23,787 | ) |
| | | December 31, 2022 | |
| | | Less than 12 Months | | | 12 Months or Greater | | | Total | |
| (In Thousands) | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | |
| State and political securities | | $ | 29,121 | | | $ | (3,652 | ) | | $ | 39,475 | | | $ | (9,401 | ) | | $ | 68,596 | | | $ | (13,053 | ) |
| Mortgage-backed securities | | | 7,929 | | | | (679 | ) | | | 11,709 | | | | (2,689 | ) | | | 19,638 | | | | (3,368 | ) |
| Collateralized mortgage obligations | | | 4,163 | | | | (332 | ) | | | 5,713 | | | | (1,394 | ) | | | 9,876 | | | | (1,726 | ) |
| Other debt securities | | | — | | | | — | | | | 183 | | | | (17 | ) | | | 183 | | | | (17 | ) |
| | | $ | 41,213 | | | $ | (4,663 | ) | | $ | 57,080 | | | $ | (13,501 | ) | | $ | 98,293 | | | $ | (18,164 | ) |
A summary of information management considered in evaluating debt and equity securities for credit losses at September 30, 2023 and December 31, 2022 is provided below.
Debt Securities
As reflected in the table above, gross unrealized holding losses on available-for-sale debt securities totaled $23,787,000 at September 30, 2023 and $18,164,000 at December 31, 2022. At September 30, 2023, the Company does not have the intent to sell, nor is it more likely than not it will be required to sell, these securities before it is able to recover the amortized cost basis. The unrealized holding losses were consistent with significant increases in market interest rates that occurred in 2022 and 2023.
At September 30, 2023 and December 31, 2022, management performed an assessment for possible credit losses of the Company’s debt securities on an issue-by-issue basis, relying on information obtained from various sources, including publicly available financial data, ratings by external agencies, brokers and other sources. At September 30, 2023 and December 31, 2022, all of the Company’s holdings of obligations of states and political subdivisions were investment grade and there have been no payment defaults.
Based on the results of the assessment, there was no ACL required on available-for-sale debt securities in an unrealized loss position at September 30, 2023. There was no other-than-temporary-impairment on available-for-sale debt securities in an unrealized loss position at December 31, 2022.
Equity Securities
The Bank is a member of the Federal Home Loan Bank of Pittsburgh (FHLB-Pittsburgh), which is one of 11 regional Federal Home Loan Banks. As a member, the Bank is required to purchase and maintain stock in FHLB-Pittsburgh. There is no active market for FHLB-Pittsburgh stock, and it must ordinarily be redeemed by FHLB-Pittsburgh in order to be liquidated. The Bank’s investment in FHLB-Pittsburgh stock was $5,180,000 at September 30, 2023 and $3,281,000 at December 31, 2022. The Company evaluated its holding of FHLB-Pittsburgh stock for impairment and deemed the stock to not be impaired at September 30, 2023 and December 31, 2022. In making this determination, management concluded that recovery of total outstanding par value, which equals the carrying value, is expected. The decision was based on review of financial information that FHLB-Pittsburgh has made publicly available.
The Company has marketable equity securities with a carrying value of $353,000 at September 30, 2023 and $383,000 at December 31, 2022, consisting exclusively of preferred stock of another financial institution. There was an unrealized loss of $22,000 at September 30, 2023 and an unrealized gain of $8,000 at December 31, 2022. Changes in the unrealized gains or losses on these securities are included in other noninterest income in the consolidated statement of income.
NOTE 5 – LOANS AND ALLOWANCE FOR CREDIT LOSSES
The loans receivable portfolio is segmented into residential mortgage, commercial and consumer loans. Loans outstanding at September 30, 2023 and December 31, 2022 are summarized by segment, and by classes within each segment, as follows:
| (In Thousands) | | September 30,
2023 | | | December 31,
2022 | |
| Residential mortgage: | | | | | | | | |
| Residential mortgage loans - first liens | | $ | 232,028 | | | $ | 220,586 | |
| Residential mortgage loans - junior liens | | | 12,211 | | | | 11,222 | |
| Home equity lines of credit | | | 53,089 | | | | 51,036 | |
| 1-4 Family residential construction | | | 18,021 | | | | 23,558 | |
| Total residential mortgage | | | 315,349 | | | | 306,402 | |
| Commercial: | | | | | | | | |
| Commercial loans secured by real estate | | | 106,824 | | | | 89,838 | |
| Commercial and industrial | | | 31,013 | | | | 30,346 | |
| Political subdivisions | | | 8,330 | | | | 9,275 | |
| Commercial construction and land | | | 2,677 | | | | 1,182 | |
| Loans secured by farmland | | | 10,969 | | | | 12,252 | |
| Multi-family (5 or more) residential | | | 26,817 | | | | 23,965 | |
| Agricultural loans | | | 1,205 | | | | 1,320 | |
| Other commercial loans | | | 1,418 | | | | 299 | |
| Total commercial | | | 189,253 | | | | 168,477 | |
| Consumer | | | 10,786 | | | | 10,835 | |
| Gross loans | | | 515,388 | | | | 485,714 | |
| Allowance for credit losses | | | (5,153 | ) | | | (4,952 | ) |
| Loans, net | | $ | 510,235 | | | $ | 480,762 | |
The following table summarizes the activity related to the allowance for credit losses for the nine months ended September 30, 2023 under the CECL methodology.
| (In Thousands) | | Balance, December 31, 2022 | | | Adoption of CECL | | | Charge-offs | | | Recoveries | | | Provision (Credit) | | | Balance, September 30, 2023 | |
| Residential mortgage: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans - first liens | | $ | 2,110 | | | $ | (1,095 | ) | | $ | — | | | $ | — | | | $ | 58 | | | $ | 1,073 | |
| Residential mortgage loans - junior liens | | | 108 | | | | (34 | ) | | | — | | | | — | | | | 6 | | | | 80 | |
| Home equity lines of credit | | | 453 | | | | (97 | ) | | | — | | | | — | | | | 6 | | | | 362 | |
| 1-4 Family residential construction | | | 226 | | | | (130 | ) | | | — | | | | — | | | | (38 | ) | | | 58 | |
| Total residential mortgage | | | 2,897 | | | | (1,356 | ) | | | — | | | | — | | | | 32 | | | | 1,573 | |
| Commercial: | | | | | | | | | | | | | | | | | | | — | | | | | |
| Commercial loans secured by real estate | | | 997 | | | | 548 | | | | — | | | | — | | | | 104 | | | | 1,649 | |
| Commercial and industrial | | | 336 | | | | 657 | | | | (4 | ) | | | 2 | | | | (103 | ) | | | 888 | |
| Political subdivisions | | | 56 | | | | (42 | ) | | | — | | | | — | | | | (2 | ) | | | 12 | |
| Commercial construction and land | | | 13 | | | | 8 | | | | — | | | | — | | | | 37 | | | | 58 | |
| Loans secured by farmland | | | 136 | | | | (89 | ) | | | — | | | | — | | | | (12 | ) | | | 35 | |
| Multi-family (5 or more) residential | | | 266 | | | | 267 | | | | — | | | | — | | | | 22 | | | | 555 | |
| Agricultural loans | | | 14 | | | | (8 | ) | | | — | | | | — | | | | (2 | ) | | | 4 | |
| Other commercial loans | | | 3 | | | | (2 | ) | | | — | | | | — | | | | 5 | | | | 6 | |
| Total commercial | | | 1,821 | | | | 1,339 | | | | (4 | ) | | | 2 | | | | 49 | | | | 3,207 | |
| Consumer | | | 128 | | | | 245 | | | | (30 | ) | | | 4 | | | | 26 | | | | 373 | |
| Unallocated | | | 106 | | | | 121 | | | | — | | | | — | | | | (227 | ) | | | — | |
| Total | | $ | 4,952 | | | $ | 349 | | | $ | (34 | ) | | $ | 6 | | | $ | (120 | ) | | $ | 5,153 | |
Prior to the adoption of ASC 326 on January 1, 2023, the Company calculated the allowance for loan losses under the incurred loss methodology. The following table is disclosed related to the allowance for loan losses in prior periods.
| (In Thousands) | | Balance, December 31, 2021 | | | Charge-offs | | | Recoveries | | | Provision (Credit) | | | Balance, March 31, 2022 | |
| Residential mortgage: | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans - first liens | | $ | 1,943 | | | $ | — | | | $ | — | | | $ | 39 | | | $ | 1,982 | |
| Residential mortgage loans - junior liens | | | 111 | | | | — | | | | — | | | | (5 | ) | | | 106 | |
| Home equity lines of credit | | | 416 | | | | — | | | | — | | | | 33 | | | | 449 | |
| 1-4 Family residential construction | | | 175 | | | | — | | | | — | | | | (20 | ) | | | 155 | |
| Total residential mortgage | | | 2,645 | | | | — | | | | — | | | | 47 | | | | 2,692 | |
| Commercial: | | | | | | | | | | | | | | | | | | | | |
| Commercial loans secured by real estate | | | 810 | | | | — | | | | — | | | | 87 | | | | 897 | |
| Commercial and industrial | | | 541 | | | | — | | | | 1 | | | | (203 | ) | | | 339 | |
| Political subdivisions | | | 22 | | | | — | | | | — | | | | (2 | ) | | | 20 | |
| Commercial construction and land | | | — | | | | — | | | | — | | | | 104 | | | | 104 | |
| Loans secured by farmland | | | 147 | | | | — | | | | — | | | | (10 | ) | | | 137 | |
| Multi-family (5 or more) residential | | | 242 | | | | — | | | | — | | | | 4 | | | | 246 | |
| Agricultural loans | | | 18 | | | | — | | | | — | | | | (3 | ) | | | 15 | |
| Other commercial loans | | | 5 | | | | — | | | | — | | | | — | | | | 5 | |
| Total commercial | | | 1,785 | | | | — | | | | 1 | | | | (23 | ) | | | 1,763 | |
| Consumer | | | 111 | | | | (23 | ) | | | 1 | | | | 22 | | | | 111 | |
| Unallocated | | | 197 | | | | — | | | | — | | | | 29 | | | | 226 | |
| Total | | $ | 4,738 | | | $ | (23 | ) | | $ | 2 | | | $ | 75 | | | $ | 4,792 | |
The following table is a summary of the Company’s nonaccrual loans by major categories for the periods indicated.
| | | September 30, 2023 | | | December 31, 2022 | |
| (dollars in thousands) | | Nonaccrual Loans with No Allowance | | | Nonaccrual Loans with an Allowance | | | Total Nonaccrual Loans | | | Nonaccrual Loans | |
| Residential mortgage | | $ | 775 | | | $ | 144 | | | $ | 919 | | | $ | 802 | |
| Commercial | | | — | | | | — | | | | — | | | | — | |
| Consumer | | | — | | | | — | | | | — | | | | — | |
| Total | | $ | 775 | | | $ | 144 | | | $ | 919 | | | $ | 802 | |
The Company recognized $55,000 of interest income on nonaccrual loans during the nine months ended September 30, 2023. All nonaccrual loans as of September 30, 2023 and December 31, 2022 were collateral-dependent and were collateralized by real estate.
The following table presents an analysis of past due loans as of September 30, 2023 and December 31, 2022:
| | | September 30, 2023 | |
| (In Thousands) | | Current | | | 30-89 Days Past Due | | | 90+ Days Past Due | | | Total Loans | | | 90+ Days & Accruing | |
| Residential mortgage: | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans - first liens | | $ | 230,061 | | | $ | 1,864 | | | $ | 103 | | | $ | 232,028 | | | $ | — | |
| Residential mortgage loans - junior liens | | | 12,139 | | | | 72 | | | | — | | | | 12,211 | | | | — | |
| Home equity lines of credit | | | 52,362 | | | | 512 | | | | 215 | | | | 53,089 | | | | 100 | |
| 1-4 Family residential construction | | | 18,021 | | | | — | | | | — | | | | 18,021 | | | | — | |
| Total residential mortgage | | | 312,583 | | | | 2,448 | | | | 318 | | | | 315,349 | | | | 100 | |
| Commercial: | | | | | | | | | | | | | | | | | | | | |
| Commercial loans secured by real estate | | | 106,824 | | | | — | | | | — | | | | 106,824 | | | | — | |
| Commercial and industrial | | | 30,964 | | | | 49 | | | | — | | | | 31,013 | | | | — | |
| Political subdivisions | | | 8,330 | | | | — | | | | — | | | | 8,330 | | | | — | |
| Commercial construction and land | | | 2,677 | | | | — | | | | — | | | | 2,677 | | | | — | |
| Loans secured by farmland | | | 10,969 | | | | — | | | | — | | | | 10,969 | | | | — | |
| Multi-family (5 or more) residential | | | 26,817 | | | | — | | | | — | | | | 26,817 | | | | — | |
| Agricultural loans | | | 1,205 | | | | — | | | | — | | | | 1,205 | | | | — | |
| Other commercial loans | | | 1,418 | | | | — | | | | — | | | | 1,418 | | | | — | |
| Total commercial | | | 189,204 | | | | 49 | | | | — | | | | 189,253 | | | | — | |
| Consumer | | | 10,728 | | | | 54 | | | | 4 | | | | 10,786 | | | | 4 | |
| Total | | $ | 512,515 | | | $ | 2,551 | | | $ | 322 | | | $ | 515,388 | | | $ | 104 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | December 31, 2022 | |
| (In Thousands) | | Current | | | 30-89 Days Past Due | | | 90+ Days Past Due | | | Total Loans | | | 90+ Days & Accruing | |
| Residential mortgage: | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans - first liens | | $ | 218,082 | | | $ | 1,885 | | | $ | 619 | | | $ | 220,586 | | | $ | 212 | |
| Residential mortgage loans - junior liens | | | 11,079 | | | | 143 | | | | — | | | | 11,222 | | | | — | |
| Home equity lines of credit | | | 50,653 | | | | 383 | | | | — | | | | 51,036 | | | | — | |
| 1-4 Family residential construction | | | 23,558 | | | | — | | | | — | | | | 23,558 | | | | — | |
| Total residential mortgage | | | 303,372 | | | | 2,411 | | | | 619 | | | | 306,402 | | | | 212 | |
| Commercial: | | | | | | | | | | | | | | | | | | | | |
| Commercial loans secured by real estate | | | 89,838 | | | | — | | | | — | | | | 89,838 | | | | — | |
| Commercial and industrial | | | 30,187 | | | | 159 | | | | — | | | | 30,346 | | | | — | |
| Political subdivisions | | | 9,275 | | | | — | | | | — | | | | 9,275 | | | | — | |
| Commercial construction and land | | | 1,182 | | | | — | | | | — | | | | 1,182 | | | | — | |
| Loans secured by farmland | | | 12,252 | | | | — | | | | — | | | | 12,252 | | | | — | |
| Multi-family (5 or more) residential | | | 23,965 | | | | — | | | | — | | | | 23,965 | | | | — | |
| Agricultural loans | | | 1,320 | | | | — | | | | — | | | | 1,320 | | | | — | |
| Other commercial loans | | | 299 | | | | — | | | | — | | | | 299 | | | | — | |
| Total commercial | | | 168,318 | | | | 159 | | | | — | | | | 168,477 | | | | — | |
| Consumer | | | 10,768 | | | | 62 | | | | 5 | | | | 10,835 | | | | 5 | |
| Total | | $ | 482,458 | | | $ | 2,632 | | | $ | 624 | | | $ | 485,714 | | | $ | 217 | |
Credit Quality Indicators
The Company categorized loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends and other factors. The Company analyzes loans individually to classify the loans as to credit risk. Management uses a nine-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first five categories are considered not criticized, and are aggregated as Pass rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. Special Mention loans have potential weaknesses that, if left uncorrected, may result in deterioration of the repayment prospects or in the Bank’s credit position at some future date. Substandard loans have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. Doubtful loans exhibit the same weaknesses found in the Substandard loans; however, the weaknesses are more pronounced. Such loans are static and collection in full is improbable. However, these loans are not yet rated as loss because certain events may occur which would salvage the debt. Loans classified Loss are considered uncollectible and charge-off is imminent.
To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Bank has a loan rating process with layers of internal and external oversight. Generally, residential mortgage and consumer loans are included in the pass category unless a specific action, such as bankruptcy, repossession, death, or significant delay in payment occurs to raise awareness of a possible credit event. An annual external loan review of large business relationships is performed, as well as a sample of smaller transactions.
Based on the most recent analysis performed, the risk category of loans by class of loans is as follows as of September 30, 2023:
| (In Thousands) | | Term Loans by Year of Origination | | | | | | | |
| | | 2023 | | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | Prior | | | Revolving | | | Total | |
| Residential mortgage loans - first liens | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | 23,461 | | | $ | 44,047 | | | $ | 33,763 | | | $ | 37,667 | | | $ | 15,932 | | | $ | 75,803 | | | $ | 463 | | | $ | 231,136 | |
| Substandard | | | 243 | | | | — | | | | 93 | | | | 103 | | | | 51 | | | | 402 | | | | — | | | | 892 | |
| Total residential mortgage loans - first liens | | $ | 23,704 | | | $ | 44,047 | | | $ | 33,856 | | | $ | 37,770 | | | $ | 15,983 | | | $ | 76,205 | | | $ | 463 | | | $ | 232,028 | |
| Current period gross charge-offs | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans - junior liens | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | 2,442 | | | $ | 969 | | | $ | 1,184 | | | $ | 526 | | | $ | 694 | | | $ | 6,241 | | | $ | — | | | $ | 12,056 | |
| Substandard | | | — | | | | — | | | | — | | | | — | | | | — | | | | 155 | | | | — | | | | 155 | |
| Total residential mortgage loans - junior liens | | $ | 2,442 | | | $ | 969 | | | $ | 1,184 | | | $ | 526 | | | $ | 694 | | | $ | 6,396 | | | $ | — | | | $ | 12,211 | |
| Current period gross charge-offs | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Home equity lines of credit | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 52,974 | | | $ | 52,974 | |
| Substandard | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 115 | | | | 115 | |
| Total home equity lines of credit | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 53,089 | | | $ | 53,089 | |
| Current period gross charge-offs | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1-4 residential construction | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | 2,778 | | | $ | 6,146 | | | $ | 5,893 | | | $ | 2,942 | | | $ | — | | | $ | 262 | | | $ | — | | | $ | 18,021 | |
| Substandard | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Total 1-4 family residential construction | | $ | 2,778 | | | $ | 6,146 | | | $ | 5,893 | | | $ | 2,942 | | | $ | — | | | $ | 262 | | | $ | — | | | $ | 18,021 | |
| Current period gross charge-offs | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial loans secured by real estate | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | 19,085 | | | $ | 22,782 | | | $ | 29,358 | | | $ | 6,131 | | | $ | 6,724 | | | $ | 18,156 | | | $ | 4,189 | | | $ | 106,425 | |
| Substandard | | | — | | | | — | | | | — | | | | — | | | | — | | | | 399 | | | | — | | | | 399 | |
| Total commercial loans secured by real estate | | $ | 19,085 | | | $ | 22,782 | | | $ | 29,358 | | | $ | 6,131 | | | $ | 6,724 | | | $ | 18,555 | | | $ | 4,189 | | | $ | 106,824 | |
| Current period gross charge-offs | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial and industrial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | 4,302 | | | $ | 5,308 | | | $ | 8,739 | | | $ | 2,342 | | | $ | 884 | | | $ | 1,259 | | | $ | 7,801 | | | $ | 30,635 | |
| Substandard | | | — | | | | — | | | | — | | | | — | | | | — | | | | 378 | | | | — | | | | 378 | |
| Total commercial and industrial | | $ | 4,302 | | | $ | 5,308 | | | $ | 8,739 | | | $ | 2,342 | | | $ | 884 | | | $ | 1,637 | | | $ | 7,801 | | | $ | 31,013 | |
| Current period gross charge-offs | | $ | — | | | $ | — | | | $ | — | | | $ | 4 | | | $ | — | | | $ | — | | | $ | — | | | $ | 4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Political subdivisions | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | — | | | $ | 6,273 | | | $ | — | | | $ | 15 | | | $ | 35 | | | $ | 2,007 | | | $ | — | | | $ | 8,330 | |
| Substandard | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Total political subdivisions | | $ | — | | | $ | 6,273 | | | $ | — | | | $ | 15 | | | $ | 35 | | | $ | 2,007 | | | $ | — | | | $ | 8,330 | |
| Current period gross charge-offs | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial construction and land | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | 893 | | | $ | 762 | | | $ | 416 | | | $ | 108 | | | $ | — | | | $ | 65 | | | $ | 433 | | | $ | 2,677 | |
| Substandard | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Total commercial construction and land | | $ | 893 | | | $ | 762 | | | $ | 416 | | | $ | 108 | | | $ | — | | | $ | 65 | | | $ | 433 | | | $ | 2,677 | |
| Current period gross charge-offs | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans secured by farmland | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | — | | | $ | 1,094 | | | $ | 40 | | | $ | 1,178 | | | $ | 170 | | | $ | 7,951 | | | $ | 536 | | | $ | 10,969 | |
| Substandard | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Total loans secured by farmland | | $ | — | | | $ | 1,094 | | | $ | 40 | | | $ | 1,178 | | | $ | 170 | | | $ | 7,951 | | | $ | 536 | | | $ | 10,969 | |
| Current period gross charge-offs | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Multi-family (5 or more) residential | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | 2,798 | | | $ | 5,020 | | | $ | 9,583 | | | $ | 1,659 | | | $ | 286 | | | $ | 5,723 | | | $ | 95 | | | $ | 25,164 | |
| Substandard | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,537 | | | | 116 | | | | 1,653 | |
| Total multi-family (5 or more) residential | | $ | 2,798 | | | $ | 5,020 | | | $ | 9,583 | | | $ | 1,659 | | | $ | 286 | | | $ | 7,260 | | | $ | 211 | | | $ | 26,817 | |
| Current period gross charge-offs | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Agricultural loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | 25 | | | $ | 146 | | | $ | 110 | | | $ | 298 | | | $ | 182 | | | $ | 4 | | | $ | 440 | | | $ | 1,205 | |
| Substandard | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Total agricultural loans | | $ | 25 | | | $ | 146 | | | $ | 110 | | | $ | 298 | | | $ | 182 | | | $ | 4 | | | $ | 440 | | | $ | 1,205 | |
| Current period gross charge-offs | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other commercial loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | — | | | $ | 1,129 | | | $ | 19 | | | $ | 71 | | | $ | 30 | | | $ | 66 | | | $ | 103 | | | $ | 1,418 | |
| Substandard | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Total other commercial loans | | $ | — | | | $ | 1,129 | | | $ | 19 | | | $ | 71 | | | $ | 30 | | | $ | 66 | | | $ | 103 | | | $ | 1,418 | |
| Current period gross charge-offs | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Consumer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | 2,620 | | | $ | 2,241 | | | $ | 1,907 | | | $ | 807 | | | $ | 389 | | | $ | 114 | | | $ | 2,708 | | | $ | 10,786 | |
| Substandard | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Total consumer loans | | $ | 2,620 | | | $ | 2,241 | | | $ | 1,907 | | | $ | 807 | | | $ | 389 | | | $ | 114 | | | $ | 2,708 | | | $ | 10,786 | |
| Current period gross charge-offs | | $ | — | | | $ | 4 | | | $ | — | | | $ | 7 | | | $ | — | | | $ | 19 | | | $ | — | | | $ | 30 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | $ | 58,404 | | | $ | 95,917 | | | $ | 91,012 | | | $ | 53,744 | | | $ | 25,326 | | | $ | 117,651 | | | $ | 69,742 | | | $ | 511,796 | |
| Substandard | | | 243 | | | | — | | | | 93 | | | | 103 | | | | 51 | | | | 2,871 | | | | 231 | | | | 3,592 | |
| Total loans | | $ | 58,647 | | | $ | 95,917 | | | $ | 91,105 | | | $ | 53,847 | | | $ | 25,377 | | | $ | 120,522 | | | $ | 69,973 | | | $ | 515,388 | |
| Total current period gross charge-offs | | $ | — | | | $ | 4 | | | $ | — | | | $ | 11 | | | $ | — | | | $ | 19 | | | $ | — | | | $ | 34 | |
The Company had no loans classified as special mention, doubtful or loss at September 30, 2023.
Credit quality indicators are as follows at December 31, 2022:
| (In Thousands) | | Pass | | | Special Mention | | | Substandard | | | Total | |
| Residential mortgage: | | | | | | | | | | | | | | | | |
| Residential mortgage loans - first liens | | $ | 219,821 | | | $ | — | | | $ | 765 | | | $ | 220,586 | |
| Residential mortgage loans - junior liens | | | 11,222 | | | | — | | | | — | | | | 11,222 | |
| Home equity lines of credit | | | 50,919 | | | | — | | | | 117 | | | | 51,036 | |
| 1-4 Family residential construction | | | 23,558 | | | | — | | | | — | | | | 23,558 | |
| Total residential mortgage | | | 305,520 | | | | — | | | | 882 | | | | 306,402 | |
| Commercial: | | | | | | | | | | | | | | | | |
| Commercial loans secured by real estate | | | 89,433 | | | | — | | | | 405 | | | | 89,838 | |
| Commercial and industrial | | | 29,866 | | | | — | | | | 480 | | | | 30,346 | |
| Political subdivisions | | | 9,275 | | | | — | | | | — | | | | 9,275 | |
| Commercial construction and land | | | 1,182 | | | | — | | | | — | | | | 1,182 | |
| Loans secured by farmland | | | 12,252 | | | | — | | | | — | | | | 12,252 | |
| Multi-family (5 or more) residential | | | 21,250 | | | | — | | | | 2,715 | | | | 23,965 | |
| Agricultural loans | | | 1,320 | | | | — | | | | — | | | | 1,320 | |
| Other commercial loans | | | 299 | | | | — | | | | — | | | | 299 | |
| Total commercial | | | 164,877 | | | | — | | | | 3,600 | | | | 168,477 | |
| Consumer | | | 10,835 | | | | — | | | | — | | | | 10,835 | |
| Total | | $ | 481,232 | | | $ | — | | | $ | 4,482 | | | $ | 485,714 | |
The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification.
Because the effect of most modifications made to borrowers experiencing financial difficulty, such as extensions of terms, insignificant payment delays and interest rate reductions, is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification.
Occasionally, the Company modifies loans to borrowers in distress by providing an other-than-insignificant payment delay. There were no loans modified to borrowers experiencing financial difficulty during the nine months ended September 30, 2023. The Company has not committed to lending any additional amounts on loans modified to borrowers experiencing financial difficulty at September 30, 2023. The Company experienced no payment defaults during the nine months ended September 30, 2023 on loans modified to borrowers experiencing financial difficulty.
NOTE 6 – DEPOSITS
Major segments of the deposit portfolio are summarized as follows as of September 30, 2023 and December 31, 2022:
| (In Thousands) | | September 30, 2023 | | | December 31, 2022 | |
| Noninterest-bearing | | $ | 106,881 | | | $ | 106,913 | |
| Interest-bearing demand | | | 112,201 | | | | 164,058 | |
| Savings | | | 56,596 | | | | 63,902 | |
| Money market | | | 59,675 | | | | 78,059 | |
| Time | | | 186,103 | | | | 138,681 | |
| | | $ | 521,456 | | | $ | 551,613 | |
Time deposits of $250,000 or more totaled approximately $30,322,000 and $33,014,000 at September 30, 2023 and December 31, 2022, respectively.
NOTE 7 – BORROWINGS
SHORT-TERM BORROWINGS
Short-term borrowings include repurchase agreements with customers and advances from the FHLB. As of September 30, 2023, the Bank was approved by the FHLB for borrowings of up to $257,254,000 of which $85,549,000 was outstanding in the form of advances and the FHLB had issued letters of credit on the Bank’s behalf totaling $46,900,000 against its borrowing capacity. Advances from the FHLB are secured by qualifying assets of the Bank. In addition to the outstanding balances noted below, the Bank also has additional lines of credit totaling $5,000,000 available from a correspondent bank other than the FHLB. The outstanding balances of short-term borrowings are summarized as follows:
| (In Thousands) | | September 30, | | | December 31, | |
| | | 2023 | | | 2022 | |
| FHLB-Pittsburgh borrowings | | $ | 39,148 | | | $ | 25,368 | |
| Customer repurchase agreements | | | 2,325 | | | | 2,001 | |
| Total short-term borrowings | | $ | 41,473 | | | $ | 27,369 | |
| | | | | | | | | |
The weighted average rate paid by the Company on customer repurchase agreements was 3.00% at September 30, 2023 and 1.40% at December 31, 2022. The carrying value of the underlying securities was $2,977,000 at September 30, 2023 and $2,278,000 at December 31, 2022.
At September 30, 2023, short-term FHLB-Pittsburgh borrowings were composed of overnight borrowings at an interest rate of 5.68%. At December 31, 2022, short-term FHLB-Pittsburgh borrowings were composed of overnight borrowings of $13,910,000 at an interest rate of 4.45%, as well as a short-term advances of $11,458,000 at a weighted average interest rate of 4.48%.
LONG-TERM BORROWINGS – FHLB ADVANCES
Long-term borrowings from FHLB-Pittsburgh are as follows:
| (In Thousands) | | September 30, | | | December 31, | |
| | | 2023 | | | 2022 | |
| Loans maturing in 2024 with a weighted-average rate of 5.30% | | $ | 10,209 | | | $ | — | |
| Loans maturing in 2025 with a weighted-average rate of 4.98% | | | 10,208 | | | | — | |
| Loans maturing in 2026 with a weighted-average rate of 4.04% | | | 10,359 | | | | — | |
| Loans maturing in 2027 with a weighted-average rate of 3.94% | | | 10,417 | | | | — | |
| Loan maturing in 2028 with a rate of 3.89% | | | 5,208 | | | | — | |
| Total long-term FHLB-Pittsburgh borrowings | | $ | 46,401 | | | $ | — | |
NOTE 8 – FAIR VALUE
The following disclosures show the hierarchal disclosure framework associated with the level of pricing observations utilized in measuring assets and liabilities at fair value. The three broad levels of pricing observations are as follows:
| Level I: | Quoted prices are available in active markets for identical assets or liabilities as of the reported date. |
| Level II: | Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed. |
| Level III: | Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
This hierarchy requires the use of observable market data when available.
The following tables present the assets reported on the Consolidated Balance Sheet at their fair value on a recurring basis as of September 30, 2023 and December 31, 2022, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
| | | September 30, 2023 | |
| (In Thousands) | | Level I | | | Level II | | | Level III | | | Total | |
| Available-for-sale debt securities: | | | | | | | | | | | | | | | | |
| State and political securities | | $ | — | | | $ | 62,981 | | | $ | — | | | $ | 62,981 | |
| Mortgage-backed securities | | | — | | | | 17,711 | | | | — | | | | 17,711 | |
| Collateralized mortgage obligations | | | — | | | | 9,024 | | | | — | | | | 9,024 | |
| Other debt securities | | | — | | | | 266 | | | | — | | | | 266 | |
| Total | | $ | — | | | $ | 89,982 | | | $ | — | | | $ | 89,982 | |
| | | | | | | | | | | | | | | | | |
| Marketable equity securities | | $ | 353 | | | $ | — | | | $ | — | | | $ | 353 | |
| | | | | | | | | | | | | | | | | |
| | | December 31, 2022 | |
| (In Thousands) | | Level I | | | Level II | | | Level III | | | Total | |
| Available-for-sale debt securities: | | | | | | | | | | | | | | | | |
| State and political securities | | $ | — | | | $ | 68,880 | | | $ | — | | | $ | 68,880 | |
| Mortgage-backed securities | | | — | | | | 20,101 | | | | — | | | | 20,101 | |
| Collateralized mortgage obligations | | | — | | | | 9,876 | | | | — | | | | 9,876 | |
| Other debt securities | | | — | | | | 283 | | | | — | | | | 283 | |
| Total | | $ | — | | | $ | 99,140 | | | $ | — | | | $ | 99,140 | |
| | | | | | | | | | | | | | | | | |
| Marketable equity securities | | $ | 383 | | | $ | — | | | $ | — | | | $ | 383 | |
| | | | | | | | | | | | | | | | | |
The following table presents the assets reported on the balance sheet at their fair value on a non-recurring basis as of September 30, 2023 and December 31, 2022, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
| | | September 30, 2023 | |
| (In Thousands) | | Level I | | | Level II | | | Level III | | | Total | |
| Loans individually evaluated for credit loss | | $ | — | | | $ | — | | | $ | 920 | | | $ | 920 | |
| | | | | | | | | | | | | | | | | |
| | | December 31, 2022 | |
| (In Thousands) | | Level I | | | Level II | | | Level III | | | Total | |
| Impaired loans | | $ | — | | | $ | — | | | $ | 617 | | | $ | 617 | |
The following table provides a listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques as of September 30, 2023 and December 31, 2022:
| | | September 30, 2023 | |
| | | | Quantitative Information about Level III Fair Value Measurements | |
| (In Thousands) | | | Fair Value Estimate | | | Valuation Technique | | Unobservable Input | | | Amount | | | | Weighted Average | |
| Loans individually evaluated for credit loss | | $ | 138 | | | Appraisal of collateral | | Discount to appraised value | | | 20% | | | | 20% | |
| | | | | | | | | | | | | | | | | |
| | | December 31, 2022 | |
| | | | Quantitative Information about Level III Fair Value Measurements | |
| (In Thousands) | | | Fair Value Estimate | | | Valuation Technique | | Unobservable Input | | | Amount | | | | Weighted Average | |
| Impaired loan | | $ | 142 | | | Appraisal of collateral | | Discount to appraised value | | | 26% | | | | 26% | |
| Impaired loan | | | 475 | | | Discounted cash flows | | Discount rate | | | 5% | | | | 5% | |
The significant unobservable input used in the fair value measurement of the Company’s impaired loans using the appraisal of collateral valuation technique include appraisal adjustments, which are adjustments to appraisals by management for qualitative factors such as economic conditions and estimated liquidation expenses.
The estimated fair values, and related carrying amounts, of the Company’s financial instruments that are not recorded at fair value in the consolidated financial statements at September 30, 2023 and December 31, 2022 are as follows:
| | | September 30, 2023 | |
| (In Thousands) | | Carrying Value | | | Fair Value | | | Level I | | | Level II | | | Level III | |
| Financial assets: | | | | | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | $ | 6,998 | | | $ | 6,998 | | | $ | 6,998 | | | $ | — | | | $ | — | |
| Interest-bearing time deposits | | | 989 | | | | 975 | | | | — | | | | 975 | | | | — | |
| Restricted equity securities | | | 5,245 | | | | 5,245 | | | | — | | | | 5,245 | | | | — | |
| Loans, net | | | 510,235 | | | | 504,504 | | | | — | | | | — | | | | 504,504 | |
| Accrued interest receivable | | | 2,303 | | | | 2,303 | | | | — | | | | 2,303 | | | | — | |
| Mortgage servicing rights | | | 453 | | | | 945 | | | | — | | | | — | | | | 945 | |
| | | | | | | | | | | | | | | | | | | | | |
| Financial liabilities: | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | 414,575 | | | | 346,973 | | | | — | | | | 161,124 | | | | 185,849 | |
| Noninterest-bearing deposits | | | 106,881 | | | | 106,881 | | | | — | | | | 106,881 | | | | — | |
| Short-term borrowings | | | 41,473 | | | | 41,473 | | | | — | | | | 41,473 | | | | — | |
| Long-term borrowings | | | 46,401 | | | | 45,327 | | | | — | | | | — | | | | 45,327 | |
| Accrued interest payable | | | 1,267 | | | | 1,267 | | | | — | | | | 1,267 | | | | — | |
| | | December 31, 2022 | |
| (In Thousands) | | Carrying Value | | | Fair Value | | | Level I | | | Level II | | | Level III | |
| Financial assets: | | | | | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | $ | 6,424 | | | $ | 6,424 | | | $ | 6,424 | | | $ | — | | | $ | — | |
| Interest-bearing time deposits | | | 989 | | | | 972 | | | | — | | | | 972 | | | | — | |
| Restricted equity securities | | | 3,346 | | | | 3,346 | | | | — | | | | 3,346 | | | | — | |
| Loans, net | | | 480,762 | | | | 458,147 | | | | — | | | | — | | | | 458,147 | |
| Accrued interest receivable | | | 2,086 | | | | 2,086 | | | | — | | | | 2,086 | | | | — | |
| Mortgage servicing rights | | | 488 | | | | 962 | | | | — | | | | — | | | | 962 | |
| | | | | | | | | | | | | | | | | | | | | |
| Financial liabilities: | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | 444,700 | | | | 378,697 | | | | — | | | | 240,309 | | | | 138,388 | |
| Noninterest-bearing deposits | | | 106,913 | | | | 106,913 | | | | — | | | | 106,913 | | | | — | |
| Short-term borrowings | | | 27,369 | | | | 27,369 | | | | — | | | | 27,369 | | | | — | |
| Accrued interest payable | | | 366 | | | | 366 | | | | — | | | | 366 | | | | — | |
