Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 30, 2023 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-12431 | |
Entity Registrant Name | Unity Bancorp, Inc. | |
Entity Incorporation, State or Country Code | NJ | |
Entity Tax Identification Number | 22-3282551 | |
Entity Address, Address Line One | 64 Old Highway 22 | |
Entity Address, City or Town | Clinton | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 08809 | |
City Area Code | 800 | |
Local Phone Number | 618-2265 | |
Title of 12(b) Security | Common stock | |
Trading Symbol | UNTY | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 10,068,593 | |
Entity Central Index Key | 0000920427 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and due from banks | $ 23,893 | $ 19,699 |
Interest-bearing deposits | 103,194 | 95,094 |
Cash and cash equivalents | 127,087 | 114,793 |
Securities: | ||
Debt securities available for sale | 94,113 | |
Debt securities available for sale | 95,393 | |
Debt securities held to maturity | 35,760 | |
Debt securities held to maturity | 35,824 | |
Equity securities with readily determinable fair values | 8,327 | 9,793 |
Total securities | 138,264 | 140,946 |
Loans: | ||
Total loans | 2,130,919 | |
Allowance for credit losses | (26,201) | |
Net loans | 2,104,718 | |
Loans: | ||
Total loans | 2,106,559 | |
Allowance for credit losses | (25,196) | |
Net loans | 2,081,363 | |
Premises and equipment, net | 19,868 | 20,002 |
Bank owned life insurance ("BOLI") | 26,856 | 26,776 |
Deferred tax assets, net | 12,360 | 12,345 |
Federal Home Loan Bank ("FHLB") stock | 18,688 | 19,064 |
Accrued interest receivable | 14,314 | 13,403 |
Other real estate owned ("OREO"), net | 176 | 0 |
Goodwill | 1,516 | 1,516 |
Prepaid expenses and other assets | 12,004 | 14,740 |
Total assets | 2,475,851 | 2,444,948 |
Deposits: | ||
Noninterest-bearing demand | 450,058 | 494,184 |
Interest-bearing demand | 289,451 | 276,218 |
Savings | 560,711 | 591,826 |
Brokered time deposits | 197,792 | 189,644 |
Time deposits | 325,909 | 235,656 |
Total deposits | 1,823,921 | 1,787,528 |
Borrowed funds | 374,000 | 383,000 |
Subordinated debentures | 10,310 | 10,310 |
Accrued interest payable | 932 | 691 |
Accrued expenses and other liabilities | 26,229 | 24,192 |
Total liabilities | 2,235,392 | 2,205,721 |
Shareholders' equity: | ||
Common stock | 98,197 | 97,204 |
Retained earnings | 165,335 | 156,958 |
Treasury stock | (19,894) | (11,675) |
Accumulated other comprehensive loss | (3,179) | (3,260) |
Total shareholders' equity | 240,459 | 239,227 |
Total liabilities and shareholders' equity | 2,475,851 | 2,444,948 |
SBA loans held for sale | ||
Loans: | ||
Total loans | 23,314 | |
Loans: | ||
Total loans | 23,314 | 27,928 |
SBA loans held for investment | ||
Loans: | ||
Total loans | 39,370 | |
Allowance for credit losses | (1,103) | |
Loans: | ||
Total loans | 38,468 | |
Allowance for credit losses | (875) | |
SBA PPP loans | ||
Loans: | ||
Total loans | 2,545 | |
Loans: | ||
Total loans | 5,908 | |
Commercial loans | ||
Loans: | ||
Total loans | 1,205,642 | |
Allowance for credit losses | (15,301) | |
Loans: | ||
Total loans | 1,187,543 | |
Allowance for credit losses | (15,254) | |
Residential mortgage loans | ||
Loans: | ||
Total loans | 619,140 | |
Allowance for credit losses | (6,135) | |
Loans: | ||
Total loans | 605,091 | |
Allowance for credit losses | (5,450) | |
Consumer loans | ||
Loans: | ||
Total loans | 76,784 | |
Allowance for credit losses | (1,020) | |
Loans: | ||
Total loans | 78,164 | |
Allowance for credit losses | (990) | |
Residential construction loans | ||
Loans: | ||
Total loans | 164,124 | |
Allowance for credit losses | $ (2,642) | |
Loans: | ||
Total loans | 163,457 | |
Allowance for credit losses | $ (2,627) |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares shares in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position | ||
Common stock, shares issued (in shares) | 11,335 | 11,289 |
Common stock, shares outstanding (in shares) | 10,292 | 10,584 |
Treasury shares | 1,043 | 705 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
INTEREST INCOME | ||
Interest-bearing deposits | $ 333 | $ 96 |
FHLB stock | 331 | 33 |
Securities: | ||
Taxable | 1,739 | 652 |
Tax-exempt | 19 | 6 |
Total securities | 1,758 | 658 |
Loans: | ||
SBA loans | 1,404 | 923 |
SBA PPP loans | 77 | 777 |
Commercial loans | 17,401 | 11,497 |
Residential mortgage loans | 8,109 | 4,390 |
Consumer loans | 1,354 | 921 |
Residential construction loans | 2,586 | 1,824 |
Total loans | 30,931 | 20,332 |
Total interest income | 33,353 | 21,119 |
INTEREST EXPENSE | ||
Interest-bearing demand deposits | 982 | 164 |
Savings deposits | 1,953 | 345 |
Time deposits | 2,709 | 480 |
Borrowed funds and subordinated debentures | 3,799 | 226 |
Total interest expense | 9,443 | 1,215 |
Net interest income | 23,910 | 19,904 |
Provision (benefit) for credit losses | 108 | (178) |
Net interest income after provision (benefit) for credit losses | 23,802 | 20,082 |
NONINTEREST INCOME | ||
Gain on sale of SBA loans held for sale, net | 309 | 852 |
Gain on sale of mortgage loans, net | 244 | 521 |
BOLI income | 80 | 163 |
Net security losses | (322) | (557) |
Other income | 368 | 401 |
Total noninterest income | 1,417 | 2,239 |
NONINTEREST EXPENSE | ||
Compensation and benefits | 7,090 | 6,508 |
Processing and communications | 804 | 752 |
Occupancy | 770 | 775 |
Furniture and equipment | 689 | 576 |
Professional services | 427 | 447 |
Advertising | 260 | 225 |
Other loan expenses | 128 | 135 |
Deposit insurance | 348 | 269 |
Director fees | 217 | 233 |
Loan collection expenses | 47 | 58 |
Other expenses | 648 | 432 |
Total noninterest expense | 11,428 | 10,410 |
Income before provision for income taxes | 13,791 | 11,911 |
Provision for income taxes | 3,504 | 2,803 |
Net income | $ 10,287 | $ 9,108 |
Net income per common share - Basic | $ 0.98 | $ 0.87 |
Net income per common share - Diluted | $ 0.96 | $ 0.85 |
Weighted average common shares outstanding - Basic | 10,538 | 10,446 |
Weighted average common shares outstanding - Diluted | 10,686 | 10,664 |
Branch fee income | ||
NONINTEREST INCOME | ||
Noninterest income | $ 235 | $ 275 |
Service and loan fee income | ||
NONINTEREST INCOME | ||
Noninterest income | $ 503 | $ 584 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income | ||
Net income, before tax amount | $ 13,791 | $ 11,911 |
Income tax expense (benefit) | 3,504 | 2,803 |
Net income | 10,287 | 9,108 |
Debt securities available for sale: | ||
Unrealized holding gains (losses) on securities arising during the period, before tax | 359 | (1,627) |
Unrealized holding gains (losses) on securities arising during the period, tax | 93 | (375) |
Unrealized holding gains (losses) on securities arising during the period, net | 266 | (1,252) |
Less: reclassification adjustment for losses on securities included in net income, before tax | (557) | |
Less: reclassification adjustment for losses on securities included in net income, tax | (118) | |
Less: reclassification adjustment for losses on securities included in net income, net of tax | (439) | |
Total unrealized gains (losses) on securities available for sale, before tax | 359 | (1,070) |
Total unrealized gains (losses) on securities available for sale, tax | 93 | (257) |
Total unrealized gains (losses) on securities available for sale, net of tax | 266 | (813) |
Net unrealized (losses) gains from cash flow hedges: | ||
Unrealized holding (losses) gains on cash flow hedges arising during the period, before tax | (433) | 1,533 |
Unrealized holding (losses) gains on cash flow hedges arising during the period, tax | (92) | 434 |
Unrealized holding (losses) gains on cash flow hedges arising during the period, net of tax | (341) | 1,099 |
Less: reclassification adjustment for gains on cash flow hedges included in net income, before tax | (198) | |
Less: reclassification adjustment for gains on cash flow hedges included in net income, tax | (42) | |
Less: reclassification adjustment for gains on cash flow hedges included in net income, net of tax | (156) | |
Total unrealized (losses) gains on cash flow hedges, before tax | (235) | 1,533 |
Total unrealized (losses) gains on cash flow hedges, tax | (50) | 434 |
Total unrealized (losses) gains on cash flow hedges, net of tax | (185) | 1,099 |
Total other comprehensive income, before tax | 124 | 463 |
Total other comprehensive income, tax | 43 | 177 |
Total other comprehensive income, net of tax | 81 | 286 |
Total comprehensive income, before tax | 13,915 | 12,374 |
Total comprehensive income, tax | 3,547 | 2,980 |
Total comprehensive income, net of tax | $ 10,368 | $ 9,394 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common stock | Retained earnings Cumulative Effect, Period of Adoption, Adjustment | Retained earnings | Treasury stock | Accumulated other comprehensive income (loss) | Cumulative Effect, Period of Adoption, Adjustment | Total | |
Beginning Balance (in shares) at Dec. 31, 2021 | 10,391 | |||||||
Beginning balance at Dec. 31, 2021 | $ 94,003 | $ 123,037 | $ (11,633) | $ 322 | $ 205,729 | |||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 9,108 | 9,108 | ||||||
Other comprehensive income, net of tax | 286 | 286 | ||||||
Dividends on common stock | $ 37 | (1,045) | (1,008) | |||||
Common stock issued & related tax effects (in shares) | [1] | 102 | ||||||
Common stock issued & related tax effects | [1] | $ 813 | 813 | |||||
Ending Balance (in shares) at Mar. 31, 2022 | 10,493 | |||||||
Ending balance at Mar. 31, 2022 | $ 94,853 | 131,100 | (11,633) | 608 | 214,928 | |||
Increase (Decrease) in Stockholders' Equity | ||||||||
Effect of adopting Accounting Standards Update ("ASU") No. 2016-13 ("CECL") | $ (156,958) | |||||||
Beginning Balance (in shares) at Dec. 31, 2022 | 10,584 | 10,584 | ||||||
Beginning balance at Dec. 31, 2022 | $ 97,204 | 156,958 | (11,675) | (3,260) | $ 239,227 | |||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 10,287 | 10,287 | ||||||
Other comprehensive income, net of tax | 81 | 81 | ||||||
Dividends on common stock (in shares) | 2 | |||||||
Dividends on common stock | $ 46 | (1,261) | (1,215) | |||||
Common stock issued & related tax effects (in shares) | [1] | 44 | ||||||
Common stock issued & related tax effects | [1] | $ 947 | 947 | |||||
Treasury stock purchased, at cost (in shares) | (338) | |||||||
Treasury stock purchased, at cost | (8,219) | $ (8,219) | ||||||
Ending Balance (in shares) at Mar. 31, 2023 | 10,292 | 10,292 | ||||||
Ending balance at Mar. 31, 2023 | $ 98,197 | $ 165,335 | $ (19,894) | $ (3,179) | $ 240,459 | |||
Increase (Decrease) in Stockholders' Equity | ||||||||
Effect of adopting Accounting Standards Update ("ASU") No. 2016-13 ("CECL") | $ (649) | $ (649) | $ (165,335) | |||||
[1] Includes the issuance of common stock under employee benefit plans, which includes nonqualified stock options and restricted stock expense related entries, employee option exercises and the tax benefit of options exercised. |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Stockholders' Equity | ||
Common stock, dividends, per share, cash paid (in dollars per share) | $ 0.12 | $ 0.10 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
OPERATING ACTIVITIES: | ||
Net income | $ 10,287,000 | $ 9,108,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision (benefit) for credit losses | 108,000 | (178,000) |
Net amortization of purchase premiums and discounts on securities | 36,000 | 11,000 |
Depreciation and amortization | (738,000) | 447,000 |
PPP deferred fees and costs | (68,000) | (686,000) |
Deferred income tax (benefit) expense | 91,000 | (63,000) |
Net realized security gains | (222,000) | 0 |
Stock compensation expense | 417,000 | 394,000 |
Valuation writedowns on OREO | 113,000 | 0 |
Gain on sale of mortgage loans, net | (244,000) | (521,000) |
Gain on sale of SBA loans held for sale, net | (309,000) | (852,000) |
BOLI income | (80,000) | (163,000) |
Net change in other assets and liabilities | 4,359,000 | 12,114,000 |
Net cash provided by operating activities | 13,750,000 | 19,611,000 |
INVESTING ACTIVITIES | ||
Purchases of securities held to maturity | 0 | (18,666,000) |
Purchases of equity securities | (126,000) | 0 |
Purchases of securities available for sale | 0 | (24,245,000) |
Proceeds from redemption of FHLB stock, at cost | 376,000 | 9,000 |
Maturities and principal payments on securities held to maturity | 0 | 2,584,000 |
Maturities, calls and principal payments on securities available for sale | 1,639,000 | 1,756,000 |
Proceeds from sales of equity securities | 1,269,000 | 0 |
Net decrease in SBA PPP loans | 3,431,000 | 18,521,000 |
Net increase in loans | (26,339,000) | (68,439,000) |
Proceeds from BOLI | 0 | 119,000 |
Purchases of premises and equipment | (195,000) | (41,000) |
Net cash used in investing activities | (19,945,000) | (88,402,000) |
FINANCING ACTIVITIES | ||
Net increase in deposits | 36,393,000 | 12,288,000 |
Repayments of borrowings | (9,000,000) | 0 |
Proceeds from exercise of stock options | 753,894 | 639,214 |
Fair market value of shares withheld to cover employee tax liability | (224,000) | (220,000) |
Dividends on common stock | (1,215,000) | (1,008,000) |
Purchase of treasury stock | (8,219,000) | 0 |
Net cash provided by financing activities | 18,489,000 | 11,699,000 |
Increase (decrease) in cash and cash equivalents | 12,294,000 | (57,092,000) |
Cash and cash equivalents, beginning of year | 114,793,000 | 244,818,000 |
Cash and cash equivalents, end of period | 127,087,000 | 187,726,000 |
SUPPLEMENTAL DISCLOSURES | ||
Interest paid | 9,202,000 | 1,213,000 |
Income taxes paid | 3,557,000 | 2,145,000 |
Noncash investing activities: | ||
Establishment of lease liability and right-of-use asset | 0 | 582,000 |
Capitalization of servicing rights | 159,000 | 131,000 |
Transfer of loans to OREO | $ 288,000 | $ 0 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Significant Accounting Policies | |
Significant Accounting Policies | NOTE 1. Significant Accounting Policies The accompanying Consolidated Financial Statements include the accounts of Unity Bancorp, Inc. (the "Parent Company") and its wholly-owned subsidiary, Unity Bank (the "Bank" or when consolidated with the Parent Company, the "Company"). The Bank has multiple subsidiaries used to hold part of its investment and loan portfolios. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation, with no impact on current earnings or shareholders’ equity. The financial information has been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and has not been audited. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues and expenses during the reporting periods. Actual results could differ from those estimates. Amounts requiring the use of significant estimates include the allowance for credit losses, valuation of deferred tax and servicing assets, the carrying value of loans held for sale and other real estate owned, the valuation of securities and the determination of impairment for securities and fair value disclosures. Management believes that the allowance for credit losses is adequate. While management uses available information to recognize credit losses, future additions to the allowance for credit losses may be necessary based on changes in economic conditions. The interim unaudited Consolidated Financial Statements included herein have been prepared in accordance with instructions for Form 10-Q and the rules and regulations of the Securities and Exchange Commission (“SEC”) and consist of normal recurring adjustments, that in the opnion of management, are necessary for the fair presentation of interim results. The results of operations for the three months ended March 31, 2023, are not necessarily indicative of the results which may be expected for the entire year. As used in this Form 10-Q, “we” and “us” and “our” refer to Unity Bancorp, Inc., and its consolidated subsidiary, Unity Bank, depending on the context. Certain information and financial disclosures required by U.S. GAAP have been condensed or omitted from interim reporting pursuant to SEC rules. Interim financial statements should be read in conjunction with the Company’s Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Risks and Uncertainties Overall, the markets and customers serviced by the Company may be significantly impacted by ongoing macro-economic trends, such as inflation and recessionary pressures created by a higher interest rate environment. The Company assesses the impact of inflation on an ongoing basis. Recent industry events transpired, including the failures of Silicon Valley Bank (“SVB”) headquartered in Santa Clara, California and Signature Bank headquartered in New York, New York in March 2023, have led to uncertainty and concerns regarding the liquidity positions of the banking sector. SVB was placed into receivership on March 10, 2023, marking the second largest bank failure in U.S. history. Signature Bank was placed into receivership on March 12, 2023, marking the third largest bank failure in U.S. history. Both banks appear to have had high ratios of uninsured deposits to total deposits, when compared to industry average. These failures underscore the importance of maintaining access to diverse sources of funding. The Company’s deposit base includes a combination of consumer, commercial and public funds deposits, without a high level of industry concentration. Market conditions and external factors may unpredictably impact the competitive landscape for deposits in the banking industry. Additionally, the rising interest rate environment has increased competition for liquidity and the premium at which liquidity is available to meet funding needs. The Company believes the sources of liquidity presented in the Unaudited Consolidated Financial Statements and the Notes to the Unaudited Consolidated Financial Statements are sufficient to meet its needs on the balance sheet date. An unexpected influx of withdrawals of deposits could adversely impact the Company's ability to rely on organic deposits to primarily fund its operations, potentially requiring greater reliance on secondary sources of liquidity to meet withdrawal demands or to fund continuing operations. These sources may include proceeds from Federal Home Loan Bank advances, sales of investment securities and loans, federal funds lines of credit from correspondent banks and out-of market time deposits. Such reliance on secondary funding sources could increase the Company's overall cost of funding and thereby reduce net income. While the Company believes its current sources of liquidity are adequate to fund operations, there is no guarantee they will suffice to meet future liquidity demands. This may necessitate slowing or discontinuing loan growth, capital expenditures or other investments, or liquidating assets. New Accounting Guidance adopted in the First Quarter 2023 Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” amends the accounting guidance on the impairment of financial instruments. The Financial Accounting Standards Board (“FASB”) issued an amendment to replace the incurred loss impairment methodology under prior accounting guidance with a new current expected credit loss (“CECL”) model. Under the new guidance, the Company is required to measure expected credit losses by utilizing forward-looking information to assess its allowance for credit losses. 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 measurement of expected credit losses under CECL methodology is applicable to financial assets measured at amortized cost, including loans and held to maturity debt securities. CECL also applies to certain off-balance sheet exposures. The Company adopted ASU 2016-13 on January 1, 2023, using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The Company established a governance structure to implement the CECL accounting guidance and has developed a methodology and set of models to be used upon adoption. At adoption, the Company recorded $0.8 million increase to its allowance for credit losses, entirely related to loans. Further the Company increased its reserve for unfunded credit commitments by $0.1 million. The reserve for unfunded credit commitments is recorded in Accrued expenses and other liabilities on the consolidated balance sheet. These increases in reserves were recorded through retained earnings and was $0.6 million, net of tax. For available for sale securities in an unrealized loss position, the Company first asseses whether it intends to sell, or is more likely than not that it will be required to sell the security before the recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the securiy’s amortized cost basis is written down to fair value through income. For securities available for sale that do not meet the above criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of tax. The Company elected the practical expedient of zero loss estimates for securities issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major agencies and have a long history of no credit losses. For other assets within the scope of the new CECL accounting guidance, such as held to maturity debt securities, available for sale securities and other receivables, management noted the impact from adoption to be inconsequential. Additionally, the Company noted the adoption of CECL had no significant impact on regulatory capital ratios of the Company and/or the Bank. ASU 2022-01, “Derivatives and Hedging (Topic 815)”: ASU 2022-01 was issued to clarify the guidance in ASC 815 on fair value hedge accounting of interest rate risk for portfolios and financial assets. Among other things, the amended guidance established the “last-of-layer” method for making the fair value hedge accounting for these portfolios more accessible and renamed that method the “portfolio layer” method. ASU 2022-01 is effective January 1, 2023. The Company adopted the guidance effective January 1, 2023, noting no material impact. ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326)”: ASU 2022-02 eliminates the guidance on troubled debt restructurings (“TDRs”) and requires entities to evaluate all loan modifications to determine if they result in a new loan or a continuation of the existing loan. ASU 2022-02 requires that entities disclose if the modifications result in a new loan or a continuation of the existing loan. ASU 2022-02 also requires that entities disclose current-period gross charge-offs by year of origination for loans and leases. The Company adopted ASU 2022-02 effective January 1, 2023, noting no material impact. New Accounting Guidance issued in the First Quarter 2023 There were no material ASUs to the Company issued in the first quarter of 2023. |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2023 | |
Litigation | |
Litigation | NOTE 2. Litigation The Company may, in the ordinary course of business, become a party to litigation involving collection matters, contract claims and other legal proceedings relating to the conduct of its business. In the best judgment of management, based upon consultation with counsel, the consolidated financial position and results of operations of the Company will not be affected materially by the final outcome of any pending legal proceedings or other contingent liabilities and commitments. |
Net Income per Share
Net Income per Share | 3 Months Ended |
Mar. 31, 2023 | |
Net Income per Share | |
Net Income per Share | NOTE 3. Net Income per Share Basic net income per common share is calculated as net income divided by the weighted average common shares outstanding during the reporting period. Common shares include vested and unvested restricted shares. Diluted net income per common share is computed similarly to that of basic net income per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, principally stock options, were issued during the reporting period utilizing the treasury stock method. The following is a reconciliation of the calculation of basic and diluted income per share: For the three months ended March 31, (In thousands, except per share amounts) 2023 2022 Net income $ 10,287 $ 9,108 Weighted average common shares outstanding - Basic 10,538 10,446 Plus: Potential dilutive common stock equivalents 148 218 Weighted average common shares outstanding - Diluted 10,686 10,664 Net income per common share - Basic $ 0.98 $ 0.87 Net income per common share - Diluted 0.96 0.85 Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive — — |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2023 | |
Other Comprehensive Income (Loss) | |
Other Comprehensive Income (Loss) | NOTE 4. Other Comprehensive Income (Loss) The following tables show the changes in other comprehensive (loss) income for the three months ended March 31, 2023 and 2022, net of tax: For the three months ended March 31, 2023 Accumulated Net unrealized Net unrealized other (losses) gains on gains (losses) from comprehensive (In thousands) securities cash flow hedges income (loss) Balance, beginning of period $ (4,381) $ 1,121 $ (3,260) Other comprehensive income before reclassifications 266 (341) (75) Less amounts reclassified from accumulated other comprehensive loss — (156) (156) Period change 266 (185) 81 Balance, end of period $ (4,115) $ 936 $ (3,179) For the three months ended March 31, 2022 Net unrealized Accumulated Net unrealized gains other gains (losses) on from cash flow comprehensive (In thousands) securities hedges income (loss) Balance, beginning of period $ 29 $ 293 $ 322 Other comprehensive (loss) income before reclassifications (1,252) 1,099 (153) Less amounts reclassified from accumulated other comprehensive loss (439) — (439) Period change (813) 1,099 286 Balance, end of period $ (784) $ 1,392 $ 608 |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value | |
Fair Value | NOTE 5. Fair Value Fair Value Measurement The Company follows FASB ASC Topic 820, “Fair Value Measurement and Disclosures,” Level 1 Inputs ● Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Generally, this includes debt and equity securities and derivative contracts that are traded in an active exchange market (i.e. New York Stock Exchange), as well as certain U.S. Treasury, U.S. Government and sponsored entity agency mortgage-backed securities that are highly liquid and are actively traded in over-the-counter markets. Level 2 Inputs ● Quoted prices for similar assets or liabilities in active markets. ● Quoted prices for identical or similar assets or liabilities in inactive markets. ● Inputs other than quoted prices that are observable, either directly or indirectly, for the term of the asset or liability (i.e. interest rates, yield curves, credit risks, prepayment speeds or volatilities) or “market corroborated inputs.” ● Generally, this includes U.S. Government and sponsored entity mortgage-backed securities, corporate debt securities and derivative contracts. Level 3 Inputs ● Prices or valuation techniques that require inputs that are both unobservable (i.e. supported by little or no market activity) and that are significant to the fair value of the assets or liabilities. ● These assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Fair Value on a Recurring Basis The following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis: Debt Securities Available for Sale The fair value of available for sale ("AFS") debt securities is the market value based on quoted market prices, when available, or market prices provided by recognized broker dealers (Level 1). If listed prices or quotes are not available, fair value is based upon quoted market prices for similar or identical assets or other observable inputs (Level 2) or externally developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3). As of March 31, 2023, the fair value of the Company’s AFS debt securities portfolio was $94.1 million. Most of the Company’s AFS debt securities were classified as Level 2 assets at March 31, 2023. The valuation of AFS debt securities using Level 2 inputs was primarily determined using the market approach, which uses quoted prices for similar assets or liabilities in active markets and all other relevant information. It includes model pricing, defined as valuing securities based upon their relationship with other benchmark securities. Included in the Company’s AFS debt securities are two corporate bonds which are classified as Level 3 assets at March 31, 2023. The valuation of these corporate bonds is determined using broker quotes or third-party vendor prices that are not adjusted by management. Market inputs used in the other valuation techniques or underlying third-party vendor prices or broker quotes include benchmark and government bond yield curves, credit spreads and trade execution data. Equity Securities with Readily Determinable Fair Values The fair value of equity securities is the market value based on quoted market prices, when available, or market prices provided by recognized broker dealers (Level 1). If listed prices or quotes are not available, fair value is based upon quoted market prices for similar or identical assets or other observable inputs (Level 2) or externally developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3). As of March 31, 2023, the fair value of the Company’s equity securities portfolio was $8.3 million. All of the Company’s equity securities were classified as Level 2 assets at March 31, 2023. The valuation of equity securities using Level 2 inputs was primarily determined using the market approach, which uses quoted prices for similar assets or liabilities in active markets and all other relevant information. There were no changes in the inputs or methodologies used to determine fair value during the period ended March 31, 2023, as compared to the periods ended December 31, 2022 and March 31, 2022. Interest Rate Swap Agreements The fair value of interest rate swap agreements is the market value based on quoted market prices, when available, or market prices provided by recognized broker dealers (Level 1). If listed prices or quotes are not available, fair value is based upon quoted market prices for similar or identical assets or other observable inputs (Level 2) or externally developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3). The Company’s derivative instruments are classified as Level 2 assets, as the readily observable market inputs to these models are validated to external sources, such as industry pricing services, or are corroborated through recent trades, dealer quotes, yield curves, implied volatility or other market-related data. The tables below present the balances of assets and liabilities measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022: Fair Value Measurements at March 31, 2023 Quoted Prices in Assets/Liabilities Active Markets Significant Other Significant Measured at Fair for Identical Observable Unobservable (In thousands) Value Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Measured on a recurring basis: Assets: Debt securities available for sale: U.S. Government sponsored entities $ 16,398 $ — $ 16,398 $ — State and political subdivisions 593 — 593 — Residential mortgage-backed securities 15,410 — 15,410 — Corporate and other securities 61,712 — 57,202 4,510 Total debt securities available for sale $ 94,113 $ — $ 89,603 $ 4,510 Equity securities with readily determinable fair values 8,327 — 8,327 — Total equity securities $ 8,327 $ — $ 8,327 $ — Interest rate swap agreements 1,302 — 1,302 — Total swap agreements $ 1,302 $ — $ 1,302 $ — Fair value Measurements at December 31, 2022 Quoted Prices in Assets/Liabilities Active Markets Significant Other Significant Measured at Fair for Identical Observable Unobservable (In thousands) Value Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Measured on a recurring basis: Assets: Debt securities available for sale: U.S. Government sponsored entities $ 16,305 $ — $ 16,305 $ — State and political subdivisions 613 — 613 — Residential mortgage-backed securities 15,475 — 15,475 — Corporate and other securities 63,000 — 58,325 4,675 Total debt securities available for sale $ 95,393 $ — $ 90,718 $ 4,675 Equity securities with readily determinable fair values 9,793 — 9,793 — Total equity securities $ 9,793 $ — $ 9,793 $ — Interest rate swap agreements 1,537 — 1,537 — Total swap agreements $ 1,537 $ — $ 1,537 $ — Fair Value on a Nonrecurring Basis The following tables present the assets and liabilities subject to fair value adjustments on a non-recurring basis carried on the balance sheet by caption and by level within the hierarchy (as described above): Fair Value Measurements at March 31, 2023 Quoted Prices Significant in Active Other Significant Assets/Liabilities Markets for Observable Unobservable Measured at Fair Identical Assets Inputs Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Measured on a non-recurring basis: Financial assets: Collateral-dependent loans & OREO $ 9,984 $ — $ — $ 9,984 Fair Value Measurements at December 31, 2022 Quoted Prices Significant in Active Other Significant Assets/Liabilities Markets for Observable Unobservable Measured at Fair Identical Assets Inputs Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Measured on a non-recurring basis: Financial assets: Collateral-dependent loans 8,803 — — 8,803 Certain assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following is a description of the valuation methodologies used for instruments measured at fair value on a nonrecurring basis: Collateral-Dependent Loans Fair value is determined based on the fair value of the collateral. Partially charged-off loans are measured for impairment based upon a third-party appraisal for collateral-dependent loans. When an updated appraisal is received for a nonperforming loan, the value on the appraisal may be discounted. If there is a deficiency in the value after the Company applies these discounts, management applies a specific reserve, and the loan remains in nonaccrual status. The receipt of an updated appraisal would not qualify as a reason to put a loan back into accruing status. The Company removes loans from nonaccrual status generally when the borrower makes six months of contractual payments and demonstrates the ability to service the debt going forward. Charge-offs are determined based upon the loss that management believes the Company will incur after evaluating collateral for impairment based upon the valuation methods described above and the ability of the borrower to pay any deficiency. The valuation allowance for individually evaluated loans is included in the allowance for credit losses in the consolidated balance sheets. At March 31, 2023, the valuation allowance for impaired loans was $1.7 million, compared to $1.8 million at December 31, 2022. Fair Value of Financial Instruments FASB ASC Topic 825, “Financial Instruments,” The following methods and assumptions were used to estimate the fair value of other financial instruments for which it is practicable to estimate that value: Cash and Cash Equivalents For these short-term instruments, the carrying value is a reasonable estimate of fair value. Securities The fair value of securities is based upon quoted market prices for similar or identical assets or other observable inputs (Level 2) or externally developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3). SBA Loans Held for Sale The fair value of SBA loans held for sale is estimated by using a market approach that includes significant other observable inputs. Loans The fair value of loans is estimated by discounting the future cash flows using current market rates that reflect the interest rate risk inherent in the loan, except for previously discussed impaired loans. Deposit Liabilities The fair value of demand deposits and savings accounts is the amount payable on demand at the reporting date (i.e. carrying value). The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using current market rates. Borrowed Funds and Subordinated Debentures The fair value of borrowings is estimated by discounting the projected future cash flows using current market rates. Standby Letters of Credit At March 31, 2023, the Bank had standby letters of credit outstanding of $5.8 million, as compared to $5.6 million at December 31, 2022. The fair value of these commitments is nominal. The table below presents the carrying amount and estimated fair values of the Company’s financial instruments presented as of March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 Fair value Carrying Estimated Carrying Estimated (In thousands) level amount fair value amount fair value Financial assets: Cash and cash equivalents Level 1 $ 127,087 $ 127,087 $ 114,793 $ 114,793 Securities (1) Level 2 138,264 132,272 140,946 133,764 SBA loans held for sale Level 2 23,314 25,031 27,928 30,141 Loans, net of allowance for credit losses (2) Level 2 2,081,404 2,022,666 2,053,435 1,990,010 Financial liabilities: Deposits Level 2 1,823,921 1,810,997 1,787,528 1,772,270 Borrowed funds and subordinated debentures Level 2 384,310 382,585 393,310 391,312 (1) Includes corporate securities that are considered Level 3 and reported separately in the table under the “Fair Value on a Recurring Basis” heading. These securities had book values of $5.3 million and market values of $4.7 million. (2) Includes collateral-dependent loans that are considered Level 3 and reported separately in the tables under the “Fair Value on a Nonrecurring Basis” heading. Collateral-dependent loans, net of specific reserves totaled $9.8 million and $8.8 million at March 31, 2023 and December 31, 2022, respectively. Limitations Fair value estimates are made at a point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing on- and off-statement of condition financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the effect of fair value estimates have not been considered in the above estimates. |
Securities
Securities | 3 Months Ended |
Mar. 31, 2023 | |
Securities | |
Securities | NOTE 6. Securities This table provides the major components of debt securities available for sale ("AFS") and held to maturity (“HTM”) at amortized cost and estimated fair value at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 Gross Gross Gross Gross Amortized unrealized unrealized Estimated Amortized unrealized unrealized Estimated (In thousands) cost gains losses fair value cost gains losses fair value Available for sale: U.S. Government sponsored entities $ 16,969 $ — $ (571) $ 16,398 $ 16,961 $ — $ (656) $ 16,305 State and political subdivisions 633 — (40) 593 635 — (22) 613 Residential mortgage-backed securities 16,734 31 (1,355) 15,410 17,097 32 (1,654) 15,475 Corporate and other securities 65,213 121 (3,622) 61,712 66,495 106 (3,601) 63,000 Total debt securities available for sale $ 99,549 $ 152 $ (5,588) $ 94,113 $ 101,188 $ 138 $ (5,933) $ 95,393 Held to maturity: U.S. Government sponsored entities $ 28,000 $ — $ (4,222) $ 23,778 $ 28,000 $ — $ (5,310) $ 22,690 State and political subdivisions 1,128 74 — 1,202 1,115 67 — 1,182 Residential mortgage-backed securities 6,696 — (1,844) 4,852 6,645 — (1,939) 4,706 Total securities held to maturity $ 35,824 $ 74 $ (6,066) $ 29,832 $ 35,760 $ 67 $ (7,249) $ 28,578 This table provides the remaining contractual maturities within the investment portfolios. The carrying value of securities at March 31, 2023 is distributed by contractual maturity. Mortgage-backed securities and other securities, which may have principal prepayment provisions, are distributed based on contractual maturity. Expected maturities will differ materially from contractual maturities as a result of early prepayments and calls. After one through After five through Total carrying Within one year five years ten years After ten years value (In thousands) Available for sale at fair value: U.S. Government sponsored entities $ 1,218 $ 15,180 $ — $ — $ 16,398 State and political subdivisions 201 160 — 232 593 Residential mortgage-backed securities 2 358 986 14,064 15,410 Corporate and other securities — 12,365 12,642 36,705 61,712 Total debt securities available for sale $ 1,421 $ 28,063 $ 13,628 $ 51,001 $ 94,113 Held to maturity at cost: U.S. Government sponsored entities $ — $ — $ 3,000 $ 25,000 $ 28,000 State and political subdivisions — — — 1,128 1,128 Residential mortgage-backed securities — — — 6,696 6,696 Total securities held to maturity $ — $ — $ 3,000 $ 32,824 $ 35,824 The fair value of debt securities with unrealized losses by length of time that the individual securities have been in a continuous unrealized loss position at March 31, 2023 and December 31, 2022 are as follows: March 31, 2023 Less than 12 months 12 months and greater Total Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) fair value loss fair value loss fair value loss Available for sale: U.S. Government sponsored entities $ 15,905 $ (567) $ 493 $ (4) $ 16,398 $ (571) State and political subdivisions — — 393 (40) 393 (40) Residential mortgage-backed securities 8,623 (665) 6,647 (690) 15,270 (1,355) Corporate and other securities 13,166 (466) 45,925 (3,156) 59,091 (3,622) Total $ 37,694 $ (1,698) $ 53,458 $ (3,890) $ 91,152 $ (5,588) Held to maturity: U.S. Government sponsored entities $ 10,394 $ (606) $ 13,384 $ (3,616) $ 23,778 $ (4,222) Residential mortgage-backed securities 150 $ (72) 4,702 (1,772) 4,852 (1,844) Total $ 10,544 $ (678) $ 18,086 $ (5,388) $ 28,630 $ (6,066) December 31, 2022 Less than 12 months 12 months and greater Total Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) fair value loss fair value loss fair value loss Available for sale: U.S. Government sponsored entities $ 15,817 $ (622) $ 1,432 $ (34) $ 17,249 $ (656) State and political subdivisions 160 (5) 253 (17) 413 (22) Residential mortgage-backed securities 14,023 (1,448) 1,311 (206) 15,334 (1,654) Corporate and other securities 23,445 (966) 31,948 (2,635) 55,393 (3,601) Total temporarily impaired AFS securities $ 53,445 $ (3,041) $ 34,944 $ (2,892) $ 88,389 $ (5,933) Held to maturity: U.S. Government sponsored entities $ 15,659 $ (2,341) $ 7,031 $ (2,969) $ 22,690 $ (5,310) Residential mortgage-backed securities 4,707 (1,939) — — 4,707 (1,939) Total temporarily impaired HTM securities $ 20,366 $ (4,280) $ 7,031 $ (2,969) $ 27,397 $ (7,249) Unrealized losses in each of the categories presented in the tables above were primarily driven by market interest rate fluctuations. Residential mortgage-backed securities are guaranteed by either Ginnie Mae, Freddie Mac or Fannie Mae. Allowance for Credit Losses The Company has zero-loss expectation for certain securities within the held to maturity and available for sale portfolios, and therefore is not required to estimate an allowance for credit losses related to these securities under the CECL standard. The Company does not provide credit quality indicators for held to maturity securities that have zero-loss expectation. After an evaluation of quantitative factors, the following securities types are believed to qualify for this exclusion: U.S Government sponsored entities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae or Freddie Mac. Management recognized no impairment for held to maturity debt securities during the three months ended March 31, 2023 and 2022. There was no allowance for credit losses for held to maturity debt securities at March 31, 2023 and 2022. Available for sale debt securities in unrealized loss positions are evaluated for impairment on a quarterly basis. The Company has evaluated available for sale securities that are in an unrealized loss position and has determined that the declines in fair value are attributable to market volatility, not credit quality or other factors. Management recognized no impairment during the three months ended March 31, 2023 and 2022. There was no allowance for credit losses for available for sale debt securities at March 31, 2023 and 2022. Realized Gains and Losses on Debt Securities Net realized gains are included in noninterest income in the Consolidated Statements of Income as net security gains. There were no realized gains or losses on available sale securities three months ended March 31, 2023 and March 31, 2022. There was no gross realized gain or loss for held for maturity debt securities during the three months ended March 31, 2023 and 2022. Equity Securities Included in this category are Community Reinvestment Act ("CRA") investments and the Company’s current other equity holdings of financial institutions. Equity securities are defined to include (a) preferred, common and other ownership interests in entities including partnerships, joint ventures and limited liability companies and (b) rights to acquire or dispose of ownership interests in entities at fixed or determinable prices. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three months ended March 31, 2023 and 2022: For the three months ended March 31, (In thousands) 2023 2022 Net unrealized losses occurring during the period on equity securities $ (544) $ (557) Net realized gains recognized during the period on equity securities sold during the period 222 — Net losses recognized during the reporting period on equity securities $ (322) $ (557) |
Loans
Loans | 3 Months Ended |
Mar. 31, 2023 | |
Loans | |
Loans | NOTE 7. Loans The following table sets forth the classification of loans by class, including unearned fees, deferred costs and excluding the allowance for loan losses as of March 31, 2023 and December 31, 2022: (In thousands) March 31, 2023 December 31, 2022 SBA loans held for investment $ 39,370 $ 38,468 SBA PPP loans 2,545 5,908 Commercial loans SBA 504 loans 34,678 35,077 Commercial other 117,428 117,566 Commercial real estate 907,260 903,126 Commercial real estate construction 146,276 131,774 Residential mortgage loans 619,140 605,091 Consumer loans Home equity 68,071 68,310 Consumer other 8,713 9,854 Residential construction loans 164,124 163,457 Total loans held for investment $ 2,107,605 $ 2,078,631 SBA loans held for sale 23,314 27,928 Total loans $ 2,130,919 $ 2,106,559 Loans held for investment are stated at the unpaid principal balance, net of unearned discounts and deferred loan origination fees and costs. In accordance with the level yield method, loan origination fees, net of direct loan origination costs, are deferred and recognized over the estimated life of the related loans as an adjustment to the loan yield. Interest is credited to operations primarily based upon the principal balance outstanding. Loans are reported as past due when either interest or principal is unpaid in the following circumstances: fixed payment loans when the borrower is in arrears for two or more monthly payments; open end credit for two or more billing cycles; and single payment notes if interest or principal remains unpaid for 30 days or more. Loans are charged off when collection is sufficiently questionable and when the Company can no longer justify maintaining the loan as an asset on the balance sheet. Loans qualify for charge-off when, after thorough analysis, all possible sources of repayment are insufficient. These include: 1) potential future cash flows, 2) value of collateral, and/or 3) strength of co-makers and guarantors. All unsecured loans are charged off upon the establishment of the loan’s nonaccrual status. Additionally, all loans classified as a loss or that portion of the loan classified as a loss is charged off. Loans are made to individuals as well as commercial entities. Specific loan terms vary as to interest rate, repayment and collateral requirements based on the type of loan requested and the credit worthiness of the prospective borrower. Credit risk tends to be geographically concentrated in that a majority of the loan customers are located in the markets serviced by the Bank. Loan performance may be adversely affected by factors impacting the general economy or conditions specific to the real estate market such as geographic location and/or property type. A description of the Company’s different loan segments follows: SBA Loans: Loans held for sale represent the guaranteed portion of SBA loans and are reflected at the lower of aggregate cost or market value. The net amount of loan origination fees on loans sold is included in the carrying value and in the gain or loss on the sale. When sales of SBA loans do occur, the premium received on the sale and the present value of future cash flows of the servicing assets are recognized in income. All criteria for sale accounting must be met in order for the loan sales to occur. Servicing assets represent the estimated fair value of retained servicing rights, net of servicing costs, at the time loans are sold. Servicing assets are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on stratifying the underlying financial assets by date of origination and term. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Serviced loans sold to others are not included in the accompanying Consolidated Balance Sheets. Income and fees collected for loan servicing are credited to noninterest income when earned, net of amortization on the related servicing assets. Commercial Loans: Residential Mortgage, Consumer and Residential Construction Loans: Inherent in the lending function is credit risk, which is the possibility a borrower may not perform in accordance with the contractual terms of their loan. A borrower’s inability to pay their obligations according to the contractual terms can create the risk of past due loans and, ultimately, credit losses, especially on collateral deficient loans. The Company minimizes its credit risk by loan diversification and adhering to credit administration policies and procedures. Due diligence on loans begins when the Company initiates contact regarding a loan with a borrower. Documentation, including a borrower’s credit history, materials establishing the value and liquidity of potential collateral, the purpose of the loan, the source of funds for repayment of the loan, and other factors, are analyzed before a loan is submitted for approval. The commercial loan portfolio is then subject to on-going internal reviews for credit quality which in part is derived from ongoing collection and review of borrowers’ financial information, as well as independent credit reviews by an outside firm. The Company’s extension of credit is governed by the Credit Risk Policy which was established to control the quality of the Company’s loans. This policy and the underlying procedures are reviewed and approved by the Board of Directors on a regular basis. Credit Ratings The Company places all SBA 7(a) and commercial loans into various credit risk rating categories based on an assessment of the expected ability of the borrowers to properly service their debt. The assessment considers numerous factors including, but not limited to, current financial information on the borrower, historical payment experience, strength of any guarantor, nature of and value of any collateral, acceptability of the loan structure and documentation, relevant public information and current economic trends. This credit risk rating analysis is performed when the loan is initially underwritten and then annually based on set criteria in the loan policy. The Company uses the following regulatory definitions for criticized and classified risk ratings: Pass: Special Mention: Substandard: Loss: These loans have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, based on currently existing facts, conditions and values. Once a borrower is deemed incapable of repayment of unsecured debt, the loan is termed a “Loss”, and charged off immediately. For residential mortgage, consumer and residential construction loans, management uses performing versus nonperforming as the best indicator of credit quality. Nonperforming loans consist of loans that are not accruing interest (nonaccrual loans) as a result of principal or interest being in default for a period of 90 days or more or when the ability to collect principal and interest according to the contractual terms is in doubt. These credit quality indicators are updated on an ongoing basis, as a loan is placed on nonaccrual status as soon as management believes there is sufficient doubt as to the ultimate ability to collect interest on a loan. At March 31, 2023, the Company owned $0.2 million in commercial properties that were included in OREO in the Consolidated Balance Sheets, compared to none at December 31, 2022. Additionally, there were $3.3 million in the process of foreclosure at March 31, 2023, compared to $2.1 million at December 31, 2022. Nonperforming and Past Due Loans Nonperforming loans consist of loans that are not accruing interest (nonaccrual loans) as a result of principal or interest being in default for a period of 90 days or more or when the ability to collect principal and interest according to the contractual terms is in doubt. Loans past due 90 days or more and still accruing interest are not included in nonperforming loans and generally represent loans that are well collateralized and in the process of collection. The following tables set forth an aging analysis of past due and nonaccrual loans as of March 31, 2023 and December 31, 2022: March 31, 2023 90+ days 30 ‑ 59 days 60 ‑ 89 days and still Total past (In thousands) past due past due accruing Nonaccrual due Current Total loans SBA loans held for investment $ — $ — $ — $ 4,325 $ 4,325 $ 35,045 $ 39,370 Commercial loans SBA 504 loans — — — — — 34,678 34,678 Commercial other — 1,675 — 975 2,650 114,778 117,428 Commercial real estate — — — 169 169 907,091 907,260 Commercial real estate construction — — — — — 146,276 146,276 Residential mortgage loans 2,800 — — 5,565 8,365 610,775 619,140 Consumer loans Home equity 697 — — — 697 67,374 68,071 Consumer other 50 — — — 50 8,663 8,713 Residential construction loans — — — 3,473 3,473 160,651 164,124 Total loans held for investment, excluding SBA PPP 3,547 1,675 — 14,507 19,729 2,085,331 2,105,060 SBA loans held for sale — — — — — 23,314 23,314 Total loans, excluding SBA PPP $ 3,547 $ 1,675 $ — $ 14,507 $ 19,729 $ 2,108,645 $ 2,128,374 At March 31, 2023 The Company had $3.5 million of nonaccrual loans with no related allowance for credit loss. December 31, 2022 90+ days 30 ‑ 59 days 60 ‑ 89 days and still Total past (In thousands) past due past due accruing Nonaccrual due Current Total loans SBA loans held for investment $ — $ 576 $ — $ 690 $ 1,266 $ 37,202 $ 38,468 Commercial loans SBA 504 loans — — — — — 35,077 35,077 Commercial other 198 300 — 777 1,275 116,291 117,566 Commercial real estate 22 188 — 805 1,015 902,111 903,126 Commercial real estate construction — — — — — 131,774 131,774 Residential mortgage loans — 982 — 3,361 4,343 600,748 605,091 Consumer loans Home equity — — — — — 68,310 68,310 Consumer other 18 7 — — 25 9,829 9,854 Residential construction loans — — — 3,432 3,432 160,025 163,457 Total loans held for investment, excluding SBA PPP 238 2,053 — 9,065 11,356 2,061,367 2,072,723 SBA loans held for sale 2,195 — — — 2,195 25,733 27,928 Total loans, excluding SBA PPP $ 2,433 $ 2,053 $ — $ 9,065 $ 13,551 $ 2,087,100 $ 2,100,651 At December 31, 2022, the Company had $1.4 million of SBA PPP loans past due. The Company is in process of working through these past due credits with the SBA and the relevant customers. The following table shows the internal loan classification risk by loan portfolio classification by origination year as of March 31, 2023: Term Loans Amortized Cost Basis by Origination Year (In thousands) 2023 2022 2021 2020 2019 2018 and Earlier Revolving Loans Amortized Cost Basis Total SBA loans held for investment Risk Rating: Pass $ 58 $ 7,186 $ 5,017 $ 6,289 $ 2,970 $ 12,006 $ - $ 33,526 Special Mention - - - 702 - 745 - 1,447 Substandard - 1,361 2,240 - - 796 - 4,397 Total SBA loans held for investment $ 58 $ 8,547 $ 7,257 $ 6,991 $ 2,970 $ 13,547 $ - $ 39,370 SBA loans held for investment Current-period gross writeoffs $ - $ - $ - $ - $ 113 $ - $ - $ 113 SBA PPP loans Risk Rating: Pass $ - $ - $ 2,545 $ - $ - $ - $ - $ 2,545 Special Mention - - - - - - - - Substandard - - - - - - - - Total SBA PPP loans $ - $ - $ 2,545 $ - $ - $ - $ - $ 2,545 Commercial loans Risk Rating: Pass $ 30,004 $ 343,451 $ 189,080 $ 141,544 $ 104,763 $ 298,849 $ 78,084 $ 1,185,775 Special Mention - 90 2,103 - 2,269 12,041 396 16,899 Substandard - - - 20 - 2,648 300 2,968 Total commercial loans $ 30,004 $ 343,541 $ 191,183 $ 141,564 $ 107,032 $ 313,538 $ 78,780 $ 1,205,642 Residential mortgage loans Risk Rating: Performing $ 40,533 $ 274,612 $ 80,711 $ 56,606 $ 34,653 $ 126,460 $ - $ 613,575 Nonperforming - 307 550 904 1,355 2,449 - 5,565 Total residential mortgage loans $ 40,533 $ 274,919 $ 81,261 $ 57,510 $ 36,008 $ 128,909 $ - $ 619,140 Consumer loans Risk Rating: Performing $ 3,089 $ 5,725 $ 6,188 $ 749 $ 3,607 $ 8,682 $ 48,744 $ 76,784 Nonperforming - - - - - - - - Total consumer loans $ 3,089 $ 5,725 $ 6,188 $ 749 $ 3,607 $ 8,682 $ 48,744 $ 76,784 Consumer loans Current-period gross writeoffs $ - $ 22 $ 98 $ - $ - $ - $ - $ 120 Residential construction Risk Rating: Performing $ 4,670 $ 87,778 $ 50,623 $ 12,672 $ 3,676 $ 1,232 $ - $ 160,651 Nonperforming - - 257 - - 1,781 1,435 3,473 Total residential construction loans $ 4,670 $ 87,778 $ 50,880 $ 12,672 $ 3,676 $ 3,013 $ 1,435 $ 164,124 Total loans held for investment $ 78,354 $ 720,510 $ 339,314 $ 219,486 $ 153,293 $ 467,689 $ 128,959 $ 2,107,605 The following table shows the internal loan classification risk by loan portfolio classification as of December 31, 2022: December 31, 2022 SBA & Commercial loans - Internal risk ratings (In thousands) Pass Special mention Substandard Total SBA loans held for investment $ 37,163 $ 558 $ 747 $ 38,468 SBA PPP loans 5,908 — — 5,908 Commercial loans SBA 504 loans 35,077 — — 35,077 Commercial other 110,107 6,220 1,239 117,566 Commercial real estate 894,110 6,228 2,788 903,126 Commercial real estate construction 131,774 — — 131,774 Total commercial loans 1,171,068 12,448 4,027 1,187,543 Total SBA and commercial loans $ 1,214,139 $ 13,006 $ 4,774 $ 1,231,919 Residential mortgage, Consumer & Residential construction loans - Performing/Nonperforming (In thousands) Performing Nonperforming Total Residential mortgage loans $ 601,730 $ 3,361 $ 605,091 Consumer loans Home equity 68,310 — 68,310 Consumer other 9,854 — 9,854 Total consumer loans 78,164 — 78,164 Residential construction loans 160,025 3,432 163,457 Total residential mortgage, consumer and residential construction loans $ 839,919 $ 6,793 $ 846,712 Modifications The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit Because the effect of most modifications made to borrowers experiencing financial difficulty 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 by providing principal forgiveness on certain of its real estate loans. When principal forgiveness is provided, the amortized cost basis of the asset is written off against the allowance for credit losses. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses. In some cases, the Company will modify a certain loan by providing multiple types of concessions. Typically, one type of concessions, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of gross loans and type of concession granted (numbers in thousands) during the three months ended March 31, 2023: Term Extension Amortized Cost Basis % of Total Class of at 3/31/2023 Gross Loans Commercial $ 743 0.06 % Modifications for the quarter made to borrowers exerpiencing financial difficulty added a weighted average of 5.7 years Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. No loans that were modified during the quarter had a payment default during the period and all loans were current as of March 31, 2023. |
Allowance for Credit Losses and
Allowance for Credit Losses and Reserve for Unfunded Loan Commitments | 3 Months Ended |
Mar. 31, 2023 | |
Allowance for Credit Losses and Reserve for Unfunded Loan Commitments | |
Allowance for Credit Losses and Reserve for Unfunded Loan Commitments | NOTE 8. Allowance for Credit Losses and Reserve for Unfunded Loan Commitments Allowance for Credit Losses The Company has an established methodology to determine the adequacy of the allowance for credit losses that assesses the risks and losses inherent in the loan portfolio. At a minimum, the adequacy of the allowance for credit losses is reviewed by management on a quarterly basis. The standardized methodology used to assess the adequacy of the allowance includes the allocation of specific and general reserves. The same standard methodology is used, regardless of loan type. Specific reserves are evaluated for individually evaluated loans. The general reserve is set based upon a representative average historical net charge-off rate adjusted for the following environmental factors: delinquency and impairment trends, charge-off and recovery trends, volume and loan term trends, changes in risk and underwriting policy trends, staffing and experience changes, national and local economic trends, industry conditions and credit concentration changes. Within the historical net charge-off rate, the Company weights the data dating back to 2015 on a straight line basis and projects the losses on a weighted average remaining maturity basis for each segment. All of the environmental factors are ranked and assigned a basis points value based on the following scale: low, low moderate, moderate, high moderate and high risk. Each environmental factor is evaluated separately for each class of loans and risk weighted based on its individual characteristics. ● For SBA and commercial loans, the estimate of loss based on pools of loans with similar characteristics is made through the use of a standardized loan grading system that is applied on an individual loan level and updated on a continuous basis. The loan grading system incorporates reviews of the financial performance of the borrower, including cash flow, debt-service coverage ratio, earnings power, debt level and equity position, in conjunction with an assessment of the borrower’s industry and future prospects. It also incorporates analysis of the type of collateral and the relative loan to value ratio. ● For residential mortgage, consumer and residential construction loans, the estimate of loss is based on pools of loans with similar characteristics. Factors such as credit score, delinquency status and type of collateral are evaluated. Factors are updated frequently to capture the recent behavioral characteristics of the subject portfolios, as well as any changes in loss mitigation or credit origination strategies, and adjustments to the reserve factors are made as needed. According to the Company’s policy, a loss (“charge-off”) is to be recognized and charged to the allowance for credit losses as soon as a loan is recognized as uncollectable. All credits which are 90 days past due must be analyzed for the Company’s ability to collect on the credit. Once a loss is known to exist, the charge-off approval process is immediately expedited. This charge-off policy is followed for all loan types. The following tables detail the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2023 and 2022: For the three months ended March 31, 2023 Residential (In thousands) SBA Commercial Residential Consumer construction Total Balance, beginning of period $ 875 $ 15,254 $ 5,450 $ 990 $ 2,627 $ 25,196 Effect of adopting Accounting Standards Update ("ASU") No. 2016-13 ("CECL") 163 171 376 101 36 847 Charge-offs (113) — — (120) — (233) Recoveries — 271 — 12 — 283 Net (charge-offs) recoveries (113) 271 — (108) — 50 Provision for (credit to) credit losses charged to expense 178 (395) 309 37 (21) 108 Balance, end of period $ 1,103 $ 15,301 $ 6,135 $ 1,020 $ 2,642 $ 26,201 For the three months ended March 31, 2022 Residential (In thousands) SBA Commercial Residential Consumer construction Total Balance, beginning of period $ 1,074 $ 15,053 $ 4,114 $ 671 $ 1,390 $ 22,302 Charge-offs — — — (6) — a (6) Recoveries 22 28 — — — 50 Net recoveries (charge-offs) 22 28 — (6) — 44 Provision for (credit to) credit losses charged to expense (155) (376) 170 (23) 206 (178) Balance, end of period $ 941 $ 14,705 $ 4,284 $ 642 $ 1,596 $ 22,168 The following tables present loans and their related allowance for credit losses, by portfolio segment, as of March 31, 2023 and December 31, 2022: March 31, 2023 Residential (In thousands) SBA Commercial Residential Consumer construction Total Allowance for credit losses ending balance: Individually evaluated $ 173 $ 331 $ 36 $ — $ 1,130 a $ 1,670 Collectively evaluated 930 14,970 6,099 1,020 1,512 24,531 Total $ 1,103 $ 15,301 $ 6,135 $ 1,020 $ 2,642 $ 26,201 Loan ending balances: Individually evaluated $ 658 $ 1,602 $ 5,760 $ — $ 3,458 $ 11,478 Collectively evaluated 64,571 1,204,040 613,380 76,784 160,666 2,119,441 Total $ 65,229 $ 1,205,642 $ 619,140 $ 76,784 $ 164,124 $ 2,130,919 December 31, 2022 Residential (In thousands) SBA Commercial Residential Consumer construction Total Allowance for credit losses ending balance: Individually evaluated for impairment $ 115 $ 516 $ 36 $ — $ 1,112 a $ 1,779 Collectively evaluated for impairment 760 14,738 5,414 990 1,515 23,417 Total $ 875 $ 15,254 $ 5,450 $ 990 $ 2,627 $ 25,196 Loan ending balances: Individually evaluated for impairment $ 690 $ 3,101 $ 3,361 $ — $ 3,432 $ 10,584 Collectively evaluated for impairment 71,614 1,184,442 601,730 78,164 160,025 2,095,975 Total $ 72,304 $ 1,187,543 $ 605,091 $ 78,164 $ 163,457 $ 2,106,559 Reserve for Unfunded Loan Commitments In addition to the allowance for credit losses, the Company maintains a reserve for unfunded loan commitments at a level that management believes is adequate to absorb estimated probable losses. Adjustments to the reserve are made through other expense and applied to the reserve which is classified as other liabilities. At March 31, 2023, a $0.6 million commitment reserve was reported on the balance sheet as “Accrued expenses and other liabilities”, compared to a $0.5 million commitment reserve at December 31, 2022. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Financial Instruments and Hedging Activities | |
Derivative Financial Instruments and Hedging Activities | NOTE 9. Derivative Financial Instruments and Hedging Activities Derivative Financial Instruments The Company has derivative financial instruments in the form of interest rate swap agreements, which derive their value from underlying interest rates. These transactions involve both credit and market risk. The notional amounts are amounts on which calculations, payments and the value of the derivatives are based. Notional amounts do not represent direct credit exposures. Direct credit exposure is limited to the net difference between the calculated amounts to be received and paid, if any. Such difference, which represents the fair value of the derivative instrument, is reflected on the Company’s balance sheet as “Prepaid expenses and other assets” or “Accrued expenses and other liabilities”. The Company is exposed to credit-related losses in the event of nonperformance by the counterparties to any derivative agreement. The Company controls the credit risk of its financial contracts through credit approvals, limits and monitoring procedures, and does not expect any counterparties to fail their obligations. The Company deals only with primary dealers. Derivative instruments are generally either negotiated over the counter (“OTC”) contracts or standardized contracts executed on a recognized exchange. Negotiated OTC derivative contracts are generally entered into between two counterparties that negotiate specific agreement terms, including the underlying instrument, amount, exercise prices and maturity. Risk Management Policies – Hedging Instruments The primary focus of the Company’s asset/liability management program is to monitor the sensitivity of the Company’s net portfolio value and net income under varying interest rate scenarios to take steps to control its risks. On a quarterly basis, the Company evaluates the effectiveness of entering into any derivative agreement by measuring the cost of such an agreement in relation to the reduction in net portfolio value and net income volatility within an assumed range of interest rates. Interest Rate Risk Management – Cash Flow Hedging Instruments The Company has variable rate debt as a source of funds for use in the Company’s lending and investment activities and for other general business purposes. These debt obligations expose the Company to variability in interest payments due to changes in interest rates. If interest rates increase, interest expense increases. Conversely, if interest rates decrease, interest expense decreases. Management believes it is prudent to limit the variability of a portion of its interest payments and, therefore hedges its variable-rate interest payments. To meet this objective, management enters into interest rate swap agreements whereby the Company receives variable interest rate payments and makes fixed interest rate payments during the contract period. A summary of the Company’s outstanding interest rate swap agreements used to hedge variable rate debt at March 31, 2023 and December 31, 2022, respectively is as follows: (In thousands, except percentages and years) March 31, 2023 December 31, 2022 Notional amount $ 20,000 $ 20,000 Fair value $ 1,302 $ 1,537 Weighted average pay rate 0.83 % 0.83 % Weighted average receive rate 4.75 % 1.50 % Weighted average maturity in years 1.95 2.57 Number of contracts 1 1 During the three months ended March 31, 2023, the Company received variable rate London Interbank Offered Rate ("LIBOR") payments from and paid fixed rates in accordance with its interest rate swap agreements. At March 31, 2023, the unrealized gain relating to interest rate swaps was recorded as a derivative asset and is included in “Prepaid expenses and other assets” on the Company’s Balance Sheet. Changes in the fair value of the interest rate swaps designated as hedging instruments of the variability of cash flows associated with long-term debt are reported in other comprehensive income. The following table presents the net gains and losses recorded in other comprehensive income and the consolidated financial statements relating to the cash flow derivative instruments at March 31, 2023 and 2022, respectively: For the three months ended March 31, (In thousands) 2023 2022 (Loss) Gain recognized in OCI $ (235) $ 1,534 Gain reclassified from AOCI into net income $ 198 $ 85 |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2023 | |
Employee Benefit Plans | |
Employee Benefit Plans | NOTE 10. Employee Benefit Plans Stock Option Plans The Company has maintained option plans and maintains an equity incentive plan, which allow for the grant of options to officers, employees and members of the Board of Directors. Grants of options under the Company’s plans generally vest over 3 years and must be exercised within 10 years of the date of grant. Transactions under the Company’s plans for the three months ended March 31, 2023 are summarized in the following table: Weighted Weighted average average remaining Aggregate exercise contractual intrinsic Shares price life in years value Outstanding at December 31, 2022 559,499 $ 18.09 5.9 $ 5,168,740 Options granted — — Options exercised (37,201) 20.27 Options forfeited (666) 18.64 Options expired — — Outstanding at March 31, 2023 521,632 $ 17.94 5.7 $ 2,542,366 Exercisable at March 31, 2023 481,142 $ 17.84 5.5 $ 2,390,353 On April 25, 2019, the Company adopted the 2019 Equity Compensation Plan providing for grants of up to 500,000 shares to be allocated between incentive and non-qualified stock options, restricted stock awards, performance units and deferred stock. The Plan replaced all previously approved and established equity plans then currently in effect. As of March 31, 2023, 281,500 options and 227,400 shares of restricted stock have been awarded from the plan. In addition, 16,162 unvested options and 14,000 unvested shares of restricted stock were cancelled and returned to the plan leaving 21,262 shares available for future grants. The fair values of the options granted are estimated on the date of grant using the Black-Scholes option-pricing model. There were no options granted during the three months ended March 31, 2023 or 2022. Upon exercise, the Company issues shares from its authorized but unissued common stock to satisfy the options. The following table presents information about options exercised during the three months ended March 31, 2023 and 2022: For the three months ended March 31, 2023 2022 Number of options exercised 37,201 47,374 Total intrinsic value of options exercised $ 241,904 $ 746,292 Cash received from options exercised $ 753,894 $ 639,214 Tax deduction realized from options $ 72,777 $ 224,522 The following table summarizes information about stock options outstanding and exercisable at March 31, 2023: Options outstanding Options exercisable Weighted average Weighted Weighted Options remaining contractual average Options average Range of exercise prices outstanding life (in years) exercise price exercisable exercise price $7.25 - 16.51 139,633 3.8 $ 11.96 139,633 $ 11.96 16.52 - 19.26 127,499 6.5 18.06 103,342 18.07 19.27 - 20.88 132,300 6.4 20.34 115,967 20.31 20.89 - 22.57 122,200 6.2 22.02 122,200 22.02 Total 521,632 5.7 $ 17.94 481,142 $ 17.84 Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") Topic 718, “Compensation - Stock Compensation,” For the three months ended March 31, (In thousands) 2023 2022 Compensation expense $ 85 $ 163 Income tax benefit $ 25 $ 47 As of March 31, 2023, unrecognized compensation costs related to nonvested share-based stock option compensation arrangements granted under the Company’s plans totaled approximately $260 thousand. That cost is expected to be recognized over a weighted average period of 0.9 years. Restricted Stock Awards Restricted stock is issued under the 2019 Equity Compensation Plan to reward employees and directors and to retain them by distributing stock over a period of time. Restricted stock awards granted to date vest over a period of 4 years and are recognized as compensation to the recipient over the vesting period. The awards are recorded at fair market value at the time of grant and amortized into salary expense on a straight line basis over the vesting period. The following table summarizes nonvested restricted stock activity for the three months ended March 31, 2023: Average grant Shares date fair value Nonvested restricted stock at December 31, 2022 164,570 $ 24.77 Granted 18,000 27.33 Cancelled (1,600) 25.94 Vested (34,973) 23.34 Nonvested restricted stock at March 31, 2023 145,997 $ 25.41 Restricted stock awards granted during the three months ended March 31, 2023 and 2022 were as follows: For the three months ended March 31, 2023 2022 Number of shares granted 18,000 70,000 Average grant date fair value $ 27.33 $ 27.52 Compensation expense related to restricted stock for the three months ended March 31, 2023 and 2022 is detailed in the following table: For the three months ended March 31, (In thousands) 2023 2022 Compensation expense $ 332 $ 231 Income tax benefit $ 80 $ 67 As of March 31, 2023, there was approximately $3.4 million of unrecognized compensation cost related to nonvested restricted stock awards granted under the Company’s equity plans. That cost is expected to be recognized over a weighted average period of 2.9 years. 401(k) Savings Plan The Bank has a 401(k) savings plan covering substantially all employees. Under the Plan, an employee can contribute up to 75 percent of their salary on a tax deferred basis. The Bank may also make discretionary contributions to the Plan. The Bank contributed $233 thousand and $203 thousand to the Plan during the three months ended March 31, 2023 and 2022, respectively. Deferred Compensation Plan The Company has a deferred fee plan for Directors and eligible management. Directors of the Company have the option to elect to defer up to 100 percent of their respective retainer and Board of Director fees, and each eligible member of management has the option to elect to defer up to 100 percent of their total compensation. Director and executive deferred compensation totaled $794 thousand and $535 thousand during the three months ended March 31, 2023 and 2022, respectively. The interest paid on the deferred balances totaled $91 thousand and $36 thousand during the three months ended March 31, 2023 and 2022, respectively. The fees distributed on the deferred balances totaled $3 thousand and $2 thousand during the three months ended March 31, 2023 and 2022, respectively. Benefit Plans In addition to the 401(k) savings plan which covers substantially all employees, in 2015 the Company established an unfunded supplemental defined benefit plan to provide additional retirement benefits for the President and Chief Executive Officer (“CEO”) and unfunded, non-qualified deferred retirement plans for certain other key executives. On June 4, 2015, the Company approved the Supplemental Executive Retirement Plan (“SERP”) pursuant to which the President and CEO is entitled to receive certain supplemental nonqualified retirement benefits. The retirement benefit under the SERP is an amount equal to sixty percent ( 60% ) of the average of the President and CEO’s base salary for the thirty-six (36) months immediately preceding the executive’s separation from service after age 66, adjusted annually thereafter by a percentage equal to the Consumer Price Index as reported by the U.S. Bureau of Labor Statistics for All Urban Consumers (CPI-U). The total benefit is to be made payable in fifteen annual installments. The future payments are estimated to total $7.2 million. A discount rate of four percent ( 4% ) was used to calculate the present value of the benefit obligation. The President and CEO commenced vesting in this retirement benefit on January 1, 2014, and vests an additional three percent (3%) each year until fully vested on January 1, 2024. In the event that the President and CEO’s separation from service from the Company were to occur prior to full vesting, the President and CEO would be entitled to and shall be paid the vested portion of the retirement benefit calculated as of the date of separation from service. Notwithstanding the foregoing, upon a Change in Control, and provided that within 6 months following the Change in Control the President and CEO is involuntarily terminated for reasons other than “cause” or the President and CEO resigns for “good reason,” as such is defined in the SERP, or the President and CEO voluntarily terminates his employment after being offered continued employment in a position that is not a “Comparable Position,” as such is also defined in the SERP, the President and CEO shall become one hundred percent (100%) vested in the full retirement benefit. No contributions or payments have been made during the three months ended March 31, 2023. The following table summarizes the components of the net periodic pension cost of the defined benefit plan recognized during the three months ended March 31, 2023 and 2022: For the three months ended March 31, (In thousands) 2023 2022 Service cost $ 39 $ 37 Interest cost 50 47 Net periodic benefit cost $ 89 $ 84 The following table summarizes the changes in benefit obligations of the defined benefit plan during the three months ended March 31, 2023 and 2022: For the three months ended March 31, (In thousands) 2023 2022 Benefit obligation, beginning of year $ 4,857 $ 4,521 Service cost 39 37 Interest cost 50 47 Benefit obligation, end of period $ 4,946 $ 4,605 On October 22, 2015, the Company entered into an Executive Incentive Retirement Plan (the “Plan”) with certain key executive officers other than the President and CEO. The Plan has an effective date of January 1, 2015. The Plan is an unfunded, nonqualified deferred compensation plan. For any Plan Year, a guaranteed annual Deferral Award percentage of seven and one half percent (7.5%) of the participant’s annual base salary will be credited to each Participant’s Deferred Benefit Account. A discretionary annual Deferral Award equal to seven and one half percent (7.5%) of the participant’s annual base salary may be credited to the Participant’s account in addition to the guaranteed Deferral Award, if the Bank exceeds the benchmarks set forth in the Annual Executive Bonus Matrix. The total Deferral Award shall never exceed fifteen percent (15%) of the participant’s base salary for any given Plan Year. Each Participant shall be one hundred percent (100%) vested in all Deferral Awards as of the date they are awarded. As of March 31, 2023, the Company had total year to date expenses of $34 thousand related to the Plan. The Plan is reflected on the Company’s balance sheet as accrued expenses. Certain members of management are also enrolled in a split-dollar life insurance plan with a post retirement death benefit of $250 thousand. Total expenses related to this plan were $1 thousand and $6 thousand for the three months ended March 31, 2023 and 2022, respectively. Additionally, $55 thousand of prior period expense was reversed during the three months ended March 31, 2022. This was related to changes to the members of management participating in the plan. |
Regulatory Capital
Regulatory Capital | 3 Months Ended |
Mar. 31, 2023 | |
Regulatory Capital | |
Regulatory Capital | NOTE 11. Regulatory Capital Under the Economic Growth, Regulatory Relief and Consumer Protection Act, the Bank is considered a qualifying community banking organization, which allows the Bank to elect to opt into the community bank leverage ratio (“CBLR”) in its regulatory filings. The Bank has opted into the CBLR, and is therefore is not required to comply with the Basel III capital requirements. The following table shows the CBLR ratio for the Company and the Bank as of March 31, 2023 and December 31, 2022: At March 31, 2023 At December 31, 2022 Company Bank Company Bank CBLR 10.38 % 9.96 % 10.88 % 10.34 % |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
Leases | NOTE 12. Leases Operating leases in which the Bank is the lessee and the term is greater than 12 months, are recorded as right of use (“ROU”) assets and lease liabilities, and are included in Prepaid expenses and other assets and Accrued expenses and other liabilities, respectively, on the Bank’s Consolidated Balance Sheets. The Bank does not currently have any finance leases in which it is the lessee. Operating lease ROU assets represent the Bank’s right to use an underlying asset during the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Bank’s incremental borrowing rate. The borrowing rate for each lease is unique based on the lease term. Operating lease expense is recognized on a straight-line basis over the lease term, and is recorded in occupancy expense in the Consolidated Statements of Income. The Bank’s leases relate primarily to bank branches, office space and equipment with remaining lease terms of generally 1 to 10 years. Certain lease arrangements contain extension options which typically range from 1 to 5 years at the then fair market rental rates. Certain real estate leases have lease payments that adjust based on annual changes in the Consumer Price Index ("CPI"). The leases that are dependent upon CPI are initially measured using the index or rate at the commencement date and are included in the measurement of the lease liability. Operating lease ROU assets totaled $5.4 million at March 31, 2023, compared to $5.6 million at December 31, 2022. As of March 31, 2023, operating lease liabilities totaled $5.5 million, compared to $5.6 million at December 31, 2022. The table below summarizes the Company’s net lease cost: For the three months ended March 31, (In thousands) 2023 2022 Operating lease cost $ 209 $ 188 The table below summarizes the cash and non-cash activities associated with the Company’s leases: For the three months ended March 31, (In thousands) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 199 $ 182 ROU assets obtain in exchange for new operating lease liabilities $ — $ 582 The table below summarizes other information related to the Company’s operating leases: (In thousands, except percentages and years) March 31, 2023 December 31, 2022 Weighted average remaining lease term in years 10.63 10.77 Weighted average discount rate 3.18 % 3.21 % The table below summarizes the future payments of remaining lease liabilities: (In thousands) March 31, 2023 2023 $ 538 2024 695 2025 691 2026 702 2027 656 2028 and thereafter 3,010 Total lease payments $ 6,292 Less: Imputed Interest (810) Present value of lease liabilities $ 5,482 As of March 31, 2023, the Company had not entered into any material leases that have not yet commenced. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events | |
Subsequent Events | NOTE 13. Subsequent Events The Company has evaluated all events or transactions that occurred through the date the Company issued these financial statements. On April 27, 2023 the Company announced that its Board of Directors approved a new Share Repurchase Program. Under this new program, the Company may repurchase up to 500,000 shares, or approximately 5.0% of its outstanding common stock. The timing and amount of purchases will be dicated by a number of factors. On April 27, 2023 the shareholders of the Company approved the 2023 Equity Compensation Plan (“The Plan”), which allows up to 500,000 shares of Common Stock or equivalents to be issued. The Plan will assist the Company in attracting and retaining the highest quality of experienced persons as directors and officers and in aligining the interest of such persons more closely with the interest of the Company’s shareholders by encouraging such parties to maintain an equity interest in the Company. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Significant Accounting Policies | |
Overview | The accompanying Consolidated Financial Statements include the accounts of Unity Bancorp, Inc. (the "Parent Company") and its wholly-owned subsidiary, Unity Bank (the "Bank" or when consolidated with the Parent Company, the "Company"). The Bank has multiple subsidiaries used to hold part of its investment and loan portfolios. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation, with no impact on current earnings or shareholders’ equity. The financial information has been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and has not been audited. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues and expenses during the reporting periods. Actual results could differ from those estimates. Amounts requiring the use of significant estimates include the allowance for credit losses, valuation of deferred tax and servicing assets, the carrying value of loans held for sale and other real estate owned, the valuation of securities and the determination of impairment for securities and fair value disclosures. Management believes that the allowance for credit losses is adequate. While management uses available information to recognize credit losses, future additions to the allowance for credit losses may be necessary based on changes in economic conditions. The interim unaudited Consolidated Financial Statements included herein have been prepared in accordance with instructions for Form 10-Q and the rules and regulations of the Securities and Exchange Commission (“SEC”) and consist of normal recurring adjustments, that in the opnion of management, are necessary for the fair presentation of interim results. The results of operations for the three months ended March 31, 2023, are not necessarily indicative of the results which may be expected for the entire year. As used in this Form 10-Q, “we” and “us” and “our” refer to Unity Bancorp, Inc., and its consolidated subsidiary, Unity Bank, depending on the context. Certain information and financial disclosures required by U.S. GAAP have been condensed or omitted from interim reporting pursuant to SEC rules. Interim financial statements should be read in conjunction with the Company’s Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
Risks and Uncertainties | Risks and Uncertainties Overall, the markets and customers serviced by the Company may be significantly impacted by ongoing macro-economic trends, such as inflation and recessionary pressures created by a higher interest rate environment. The Company assesses the impact of inflation on an ongoing basis. Recent industry events transpired, including the failures of Silicon Valley Bank (“SVB”) headquartered in Santa Clara, California and Signature Bank headquartered in New York, New York in March 2023, have led to uncertainty and concerns regarding the liquidity positions of the banking sector. SVB was placed into receivership on March 10, 2023, marking the second largest bank failure in U.S. history. Signature Bank was placed into receivership on March 12, 2023, marking the third largest bank failure in U.S. history. Both banks appear to have had high ratios of uninsured deposits to total deposits, when compared to industry average. These failures underscore the importance of maintaining access to diverse sources of funding. The Company’s deposit base includes a combination of consumer, commercial and public funds deposits, without a high level of industry concentration. Market conditions and external factors may unpredictably impact the competitive landscape for deposits in the banking industry. Additionally, the rising interest rate environment has increased competition for liquidity and the premium at which liquidity is available to meet funding needs. The Company believes the sources of liquidity presented in the Unaudited Consolidated Financial Statements and the Notes to the Unaudited Consolidated Financial Statements are sufficient to meet its needs on the balance sheet date. An unexpected influx of withdrawals of deposits could adversely impact the Company's ability to rely on organic deposits to primarily fund its operations, potentially requiring greater reliance on secondary sources of liquidity to meet withdrawal demands or to fund continuing operations. These sources may include proceeds from Federal Home Loan Bank advances, sales of investment securities and loans, federal funds lines of credit from correspondent banks and out-of market time deposits. Such reliance on secondary funding sources could increase the Company's overall cost of funding and thereby reduce net income. While the Company believes its current sources of liquidity are adequate to fund operations, there is no guarantee they will suffice to meet future liquidity demands. This may necessitate slowing or discontinuing loan growth, capital expenditures or other investments, or liquidating assets. |
New Accounting Guidance adopted and issued in the First Quarter 2023 | New Accounting Guidance adopted in the First Quarter 2023 Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” amends the accounting guidance on the impairment of financial instruments. The Financial Accounting Standards Board (“FASB”) issued an amendment to replace the incurred loss impairment methodology under prior accounting guidance with a new current expected credit loss (“CECL”) model. Under the new guidance, the Company is required to measure expected credit losses by utilizing forward-looking information to assess its allowance for credit losses. 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 measurement of expected credit losses under CECL methodology is applicable to financial assets measured at amortized cost, including loans and held to maturity debt securities. CECL also applies to certain off-balance sheet exposures. The Company adopted ASU 2016-13 on January 1, 2023, using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The Company established a governance structure to implement the CECL accounting guidance and has developed a methodology and set of models to be used upon adoption. At adoption, the Company recorded $0.8 million increase to its allowance for credit losses, entirely related to loans. Further the Company increased its reserve for unfunded credit commitments by $0.1 million. The reserve for unfunded credit commitments is recorded in Accrued expenses and other liabilities on the consolidated balance sheet. These increases in reserves were recorded through retained earnings and was $0.6 million, net of tax. For available for sale securities in an unrealized loss position, the Company first asseses whether it intends to sell, or is more likely than not that it will be required to sell the security before the recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the securiy’s amortized cost basis is written down to fair value through income. For securities available for sale that do not meet the above criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of tax. The Company elected the practical expedient of zero loss estimates for securities issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major agencies and have a long history of no credit losses. For other assets within the scope of the new CECL accounting guidance, such as held to maturity debt securities, available for sale securities and other receivables, management noted the impact from adoption to be inconsequential. Additionally, the Company noted the adoption of CECL had no significant impact on regulatory capital ratios of the Company and/or the Bank. ASU 2022-01, “Derivatives and Hedging (Topic 815)”: ASU 2022-01 was issued to clarify the guidance in ASC 815 on fair value hedge accounting of interest rate risk for portfolios and financial assets. Among other things, the amended guidance established the “last-of-layer” method for making the fair value hedge accounting for these portfolios more accessible and renamed that method the “portfolio layer” method. ASU 2022-01 is effective January 1, 2023. The Company adopted the guidance effective January 1, 2023, noting no material impact. ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326)”: ASU 2022-02 eliminates the guidance on troubled debt restructurings (“TDRs”) and requires entities to evaluate all loan modifications to determine if they result in a new loan or a continuation of the existing loan. ASU 2022-02 requires that entities disclose if the modifications result in a new loan or a continuation of the existing loan. ASU 2022-02 also requires that entities disclose current-period gross charge-offs by year of origination for loans and leases. The Company adopted ASU 2022-02 effective January 1, 2023, noting no material impact. New Accounting Guidance issued in the First Quarter 2023 There were no material ASUs to the Company issued in the first quarter of 2023. |
Benefit Plans | Benefit Plans In addition to the 401(k) savings plan which covers substantially all employees, in 2015 the Company established an unfunded supplemental defined benefit plan to provide additional retirement benefits for the President and Chief Executive Officer (“CEO”) and unfunded, non-qualified deferred retirement plans for certain other key executives. On June 4, 2015, the Company approved the Supplemental Executive Retirement Plan (“SERP”) pursuant to which the President and CEO is entitled to receive certain supplemental nonqualified retirement benefits. The retirement benefit under the SERP is an amount equal to sixty percent ( 60% ) of the average of the President and CEO’s base salary for the thirty-six (36) months immediately preceding the executive’s separation from service after age 66, adjusted annually thereafter by a percentage equal to the Consumer Price Index as reported by the U.S. Bureau of Labor Statistics for All Urban Consumers (CPI-U). The total benefit is to be made payable in fifteen annual installments. The future payments are estimated to total $7.2 million. A discount rate of four percent ( 4% ) was used to calculate the present value of the benefit obligation. The President and CEO commenced vesting in this retirement benefit on January 1, 2014, and vests an additional three percent (3%) each year until fully vested on January 1, 2024. In the event that the President and CEO’s separation from service from the Company were to occur prior to full vesting, the President and CEO would be entitled to and shall be paid the vested portion of the retirement benefit calculated as of the date of separation from service. Notwithstanding the foregoing, upon a Change in Control, and provided that within 6 months following the Change in Control the President and CEO is involuntarily terminated for reasons other than “cause” or the President and CEO resigns for “good reason,” as such is defined in the SERP, or the President and CEO voluntarily terminates his employment after being offered continued employment in a position that is not a “Comparable Position,” as such is also defined in the SERP, the President and CEO shall become one hundred percent (100%) vested in the full retirement benefit. |
Leases | Leases Operating leases in which the Bank is the lessee and the term is greater than 12 months, are recorded as right of use (“ROU”) assets and lease liabilities, and are included in Prepaid expenses and other assets and Accrued expenses and other liabilities, respectively, on the Bank’s Consolidated Balance Sheets. The Bank does not currently have any finance leases in which it is the lessee. Operating lease ROU assets represent the Bank’s right to use an underlying asset during the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Bank’s incremental borrowing rate. The borrowing rate for each lease is unique based on the lease term. Operating lease expense is recognized on a straight-line basis over the lease term, and is recorded in occupancy expense in the Consolidated Statements of Income. The Bank’s leases relate primarily to bank branches, office space and equipment with remaining lease terms of generally 1 to 10 years. Certain lease arrangements contain extension options which typically range from 1 to 5 years at the then fair market rental rates. Certain real estate leases have lease payments that adjust based on annual changes in the Consumer Price Index ("CPI"). The leases that are dependent upon CPI are initially measured using the index or rate at the commencement date and are included in the measurement of the lease liability. Operating lease ROU assets totaled $5.4 million at March 31, 2023, compared to $5.6 million at December 31, 2022. As of March 31, 2023, operating lease liabilities totaled $5.5 million, compared to $5.6 million at December 31, 2022. |
Net Income per Share (Tables)
Net Income per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Net Income per Share | |
Reconciliation of Calculation of Basic and Diluted Income Per Share | The following is a reconciliation of the calculation of basic and diluted income per share: For the three months ended March 31, (In thousands, except per share amounts) 2023 2022 Net income $ 10,287 $ 9,108 Weighted average common shares outstanding - Basic 10,538 10,446 Plus: Potential dilutive common stock equivalents 148 218 Weighted average common shares outstanding - Diluted 10,686 10,664 Net income per common share - Basic $ 0.98 $ 0.87 Net income per common share - Diluted 0.96 0.85 Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive — — |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Other Comprehensive Income (Loss) | |
Changes in Other Comprehensive (Loss) Income | The following tables show the changes in other comprehensive (loss) income for the three months ended March 31, 2023 and 2022, net of tax: For the three months ended March 31, 2023 Accumulated Net unrealized Net unrealized other (losses) gains on gains (losses) from comprehensive (In thousands) securities cash flow hedges income (loss) Balance, beginning of period $ (4,381) $ 1,121 $ (3,260) Other comprehensive income before reclassifications 266 (341) (75) Less amounts reclassified from accumulated other comprehensive loss — (156) (156) Period change 266 (185) 81 Balance, end of period $ (4,115) $ 936 $ (3,179) For the three months ended March 31, 2022 Net unrealized Accumulated Net unrealized gains other gains (losses) on from cash flow comprehensive (In thousands) securities hedges income (loss) Balance, beginning of period $ 29 $ 293 $ 322 Other comprehensive (loss) income before reclassifications (1,252) 1,099 (153) Less amounts reclassified from accumulated other comprehensive loss (439) — (439) Period change (813) 1,099 286 Balance, end of period $ (784) $ 1,392 $ 608 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value | |
Balances of Assets And Liabilities Measured at Fair Value on Recurring Basis | The tables below present the balances of assets and liabilities measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022: Fair Value Measurements at March 31, 2023 Quoted Prices in Assets/Liabilities Active Markets Significant Other Significant Measured at Fair for Identical Observable Unobservable (In thousands) Value Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Measured on a recurring basis: Assets: Debt securities available for sale: U.S. Government sponsored entities $ 16,398 $ — $ 16,398 $ — State and political subdivisions 593 — 593 — Residential mortgage-backed securities 15,410 — 15,410 — Corporate and other securities 61,712 — 57,202 4,510 Total debt securities available for sale $ 94,113 $ — $ 89,603 $ 4,510 Equity securities with readily determinable fair values 8,327 — 8,327 — Total equity securities $ 8,327 $ — $ 8,327 $ — Interest rate swap agreements 1,302 — 1,302 — Total swap agreements $ 1,302 $ — $ 1,302 $ — Fair value Measurements at December 31, 2022 Quoted Prices in Assets/Liabilities Active Markets Significant Other Significant Measured at Fair for Identical Observable Unobservable (In thousands) Value Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Measured on a recurring basis: Assets: Debt securities available for sale: U.S. Government sponsored entities $ 16,305 $ — $ 16,305 $ — State and political subdivisions 613 — 613 — Residential mortgage-backed securities 15,475 — 15,475 — Corporate and other securities 63,000 — 58,325 4,675 Total debt securities available for sale $ 95,393 $ — $ 90,718 $ 4,675 Equity securities with readily determinable fair values 9,793 — 9,793 — Total equity securities $ 9,793 $ — $ 9,793 $ — Interest rate swap agreements 1,537 — 1,537 — Total swap agreements $ 1,537 $ — $ 1,537 $ — |
Assets and Liabilities Carried on the Balance Sheet by Caption And By Level Within The Hierarchy | The following tables present the assets and liabilities subject to fair value adjustments on a non-recurring basis carried on the balance sheet by caption and by level within the hierarchy (as described above): Fair Value Measurements at March 31, 2023 Quoted Prices Significant in Active Other Significant Assets/Liabilities Markets for Observable Unobservable Measured at Fair Identical Assets Inputs Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Measured on a non-recurring basis: Financial assets: Collateral-dependent loans & OREO $ 9,984 $ — $ — $ 9,984 Fair Value Measurements at December 31, 2022 Quoted Prices Significant in Active Other Significant Assets/Liabilities Markets for Observable Unobservable Measured at Fair Identical Assets Inputs Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Measured on a non-recurring basis: Financial assets: Collateral-dependent loans 8,803 — — 8,803 |
Carrying Amount and Estimated Fair Values of Financial Instruments | The table below presents the carrying amount and estimated fair values of the Company’s financial instruments presented as of March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 Fair value Carrying Estimated Carrying Estimated (In thousands) level amount fair value amount fair value Financial assets: Cash and cash equivalents Level 1 $ 127,087 $ 127,087 $ 114,793 $ 114,793 Securities (1) Level 2 138,264 132,272 140,946 133,764 SBA loans held for sale Level 2 23,314 25,031 27,928 30,141 Loans, net of allowance for credit losses (2) Level 2 2,081,404 2,022,666 2,053,435 1,990,010 Financial liabilities: Deposits Level 2 1,823,921 1,810,997 1,787,528 1,772,270 Borrowed funds and subordinated debentures Level 2 384,310 382,585 393,310 391,312 (1) Includes corporate securities that are considered Level 3 and reported separately in the table under the “Fair Value on a Recurring Basis” heading. These securities had book values of $5.3 million and market values of $4.7 million. (2) Includes collateral-dependent loans that are considered Level 3 and reported separately in the tables under the “Fair Value on a Nonrecurring Basis” heading. Collateral-dependent loans, net of specific reserves totaled $9.8 million and $8.8 million at March 31, 2023 and December 31, 2022, respectively. |
Securities (Tables)
Securities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Securities | |
Reconciliation From Amortized Cost to Estimated Fair Value of Marketable Securities | This table provides the major components of debt securities available for sale ("AFS") and held to maturity (“HTM”) at amortized cost and estimated fair value at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 Gross Gross Gross Gross Amortized unrealized unrealized Estimated Amortized unrealized unrealized Estimated (In thousands) cost gains losses fair value cost gains losses fair value Available for sale: U.S. Government sponsored entities $ 16,969 $ — $ (571) $ 16,398 $ 16,961 $ — $ (656) $ 16,305 State and political subdivisions 633 — (40) 593 635 — (22) 613 Residential mortgage-backed securities 16,734 31 (1,355) 15,410 17,097 32 (1,654) 15,475 Corporate and other securities 65,213 121 (3,622) 61,712 66,495 106 (3,601) 63,000 Total debt securities available for sale $ 99,549 $ 152 $ (5,588) $ 94,113 $ 101,188 $ 138 $ (5,933) $ 95,393 Held to maturity: U.S. Government sponsored entities $ 28,000 $ — $ (4,222) $ 23,778 $ 28,000 $ — $ (5,310) $ 22,690 State and political subdivisions 1,128 74 — 1,202 1,115 67 — 1,182 Residential mortgage-backed securities 6,696 — (1,844) 4,852 6,645 — (1,939) 4,706 Total securities held to maturity $ 35,824 $ 74 $ (6,066) $ 29,832 $ 35,760 $ 67 $ (7,249) $ 28,578 |
Schedule of Marketable Securities By Contractual Maturity | This table provides the remaining contractual maturities within the investment portfolios. The carrying value of securities at March 31, 2023 is distributed by contractual maturity. Mortgage-backed securities and other securities, which may have principal prepayment provisions, are distributed based on contractual maturity. Expected maturities will differ materially from contractual maturities as a result of early prepayments and calls. After one through After five through Total carrying Within one year five years ten years After ten years value (In thousands) Available for sale at fair value: U.S. Government sponsored entities $ 1,218 $ 15,180 $ — $ — $ 16,398 State and political subdivisions 201 160 — 232 593 Residential mortgage-backed securities 2 358 986 14,064 15,410 Corporate and other securities — 12,365 12,642 36,705 61,712 Total debt securities available for sale $ 1,421 $ 28,063 $ 13,628 $ 51,001 $ 94,113 Held to maturity at cost: U.S. Government sponsored entities $ — $ — $ 3,000 $ 25,000 $ 28,000 State and political subdivisions — — — 1,128 1,128 Residential mortgage-backed securities — — — 6,696 6,696 Total securities held to maturity $ — $ — $ 3,000 $ 32,824 $ 35,824 |
Schedule of Marketable Securities In Unrealized Loss Position | The fair value of debt securities with unrealized losses by length of time that the individual securities have been in a continuous unrealized loss position at March 31, 2023 and December 31, 2022 are as follows: March 31, 2023 Less than 12 months 12 months and greater Total Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) fair value loss fair value loss fair value loss Available for sale: U.S. Government sponsored entities $ 15,905 $ (567) $ 493 $ (4) $ 16,398 $ (571) State and political subdivisions — — 393 (40) 393 (40) Residential mortgage-backed securities 8,623 (665) 6,647 (690) 15,270 (1,355) Corporate and other securities 13,166 (466) 45,925 (3,156) 59,091 (3,622) Total $ 37,694 $ (1,698) $ 53,458 $ (3,890) $ 91,152 $ (5,588) Held to maturity: U.S. Government sponsored entities $ 10,394 $ (606) $ 13,384 $ (3,616) $ 23,778 $ (4,222) Residential mortgage-backed securities 150 $ (72) 4,702 (1,772) 4,852 (1,844) Total $ 10,544 $ (678) $ 18,086 $ (5,388) $ 28,630 $ (6,066) December 31, 2022 Less than 12 months 12 months and greater Total Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) fair value loss fair value loss fair value loss Available for sale: U.S. Government sponsored entities $ 15,817 $ (622) $ 1,432 $ (34) $ 17,249 $ (656) State and political subdivisions 160 (5) 253 (17) 413 (22) Residential mortgage-backed securities 14,023 (1,448) 1,311 (206) 15,334 (1,654) Corporate and other securities 23,445 (966) 31,948 (2,635) 55,393 (3,601) Total temporarily impaired AFS securities $ 53,445 $ (3,041) $ 34,944 $ (2,892) $ 88,389 $ (5,933) Held to maturity: U.S. Government sponsored entities $ 15,659 $ (2,341) $ 7,031 $ (2,969) $ 22,690 $ (5,310) Residential mortgage-backed securities 4,707 (1,939) — — 4,707 (1,939) Total temporarily impaired HTM securities $ 20,366 $ (4,280) $ 7,031 $ (2,969) $ 27,397 $ (7,249) |
Equity Securities, Gains and Losses | The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three months ended March 31, 2023 and 2022: For the three months ended March 31, (In thousands) 2023 2022 Net unrealized losses occurring during the period on equity securities $ (544) $ (557) Net realized gains recognized during the period on equity securities sold during the period 222 — Net losses recognized during the reporting period on equity securities $ (322) $ (557) |
Loans (Tables)
Loans (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Loans | |
Classification of Loans By Class | The following table sets forth the classification of loans by class, including unearned fees, deferred costs and excluding the allowance for loan losses as of March 31, 2023 and December 31, 2022: (In thousands) March 31, 2023 December 31, 2022 SBA loans held for investment $ 39,370 $ 38,468 SBA PPP loans 2,545 5,908 Commercial loans SBA 504 loans 34,678 35,077 Commercial other 117,428 117,566 Commercial real estate 907,260 903,126 Commercial real estate construction 146,276 131,774 Residential mortgage loans 619,140 605,091 Consumer loans Home equity 68,071 68,310 Consumer other 8,713 9,854 Residential construction loans 164,124 163,457 Total loans held for investment $ 2,107,605 $ 2,078,631 SBA loans held for sale 23,314 27,928 Total loans $ 2,130,919 $ 2,106,559 |
Aging Analysis of Past Due And Nonaccrual Loans by Loan Class | The following tables set forth an aging analysis of past due and nonaccrual loans as of March 31, 2023 and December 31, 2022: March 31, 2023 90+ days 30 ‑ 59 days 60 ‑ 89 days and still Total past (In thousands) past due past due accruing Nonaccrual due Current Total loans SBA loans held for investment $ — $ — $ — $ 4,325 $ 4,325 $ 35,045 $ 39,370 Commercial loans SBA 504 loans — — — — — 34,678 34,678 Commercial other — 1,675 — 975 2,650 114,778 117,428 Commercial real estate — — — 169 169 907,091 907,260 Commercial real estate construction — — — — — 146,276 146,276 Residential mortgage loans 2,800 — — 5,565 8,365 610,775 619,140 Consumer loans Home equity 697 — — — 697 67,374 68,071 Consumer other 50 — — — 50 8,663 8,713 Residential construction loans — — — 3,473 3,473 160,651 164,124 Total loans held for investment, excluding SBA PPP 3,547 1,675 — 14,507 19,729 2,085,331 2,105,060 SBA loans held for sale — — — — — 23,314 23,314 Total loans, excluding SBA PPP $ 3,547 $ 1,675 $ — $ 14,507 $ 19,729 $ 2,108,645 $ 2,128,374 December 31, 2022 90+ days 30 ‑ 59 days 60 ‑ 89 days and still Total past (In thousands) past due past due accruing Nonaccrual due Current Total loans SBA loans held for investment $ — $ 576 $ — $ 690 $ 1,266 $ 37,202 $ 38,468 Commercial loans SBA 504 loans — — — — — 35,077 35,077 Commercial other 198 300 — 777 1,275 116,291 117,566 Commercial real estate 22 188 — 805 1,015 902,111 903,126 Commercial real estate construction — — — — — 131,774 131,774 Residential mortgage loans — 982 — 3,361 4,343 600,748 605,091 Consumer loans Home equity — — — — — 68,310 68,310 Consumer other 18 7 — — 25 9,829 9,854 Residential construction loans — — — 3,432 3,432 160,025 163,457 Total loans held for investment, excluding SBA PPP 238 2,053 — 9,065 11,356 2,061,367 2,072,723 SBA loans held for sale 2,195 — — — 2,195 25,733 27,928 Total loans, excluding SBA PPP $ 2,433 $ 2,053 $ — $ 9,065 $ 13,551 $ 2,087,100 $ 2,100,651 |
Schedule of Loan Classification Risk by Loan Portfolio Classification by Origination Year | Term Loans Amortized Cost Basis by Origination Year (In thousands) 2023 2022 2021 2020 2019 2018 and Earlier Revolving Loans Amortized Cost Basis Total SBA loans held for investment Risk Rating: Pass $ 58 $ 7,186 $ 5,017 $ 6,289 $ 2,970 $ 12,006 $ - $ 33,526 Special Mention - - - 702 - 745 - 1,447 Substandard - 1,361 2,240 - - 796 - 4,397 Total SBA loans held for investment $ 58 $ 8,547 $ 7,257 $ 6,991 $ 2,970 $ 13,547 $ - $ 39,370 SBA loans held for investment Current-period gross writeoffs $ - $ - $ - $ - $ 113 $ - $ - $ 113 SBA PPP loans Risk Rating: Pass $ - $ - $ 2,545 $ - $ - $ - $ - $ 2,545 Special Mention - - - - - - - - Substandard - - - - - - - - Total SBA PPP loans $ - $ - $ 2,545 $ - $ - $ - $ - $ 2,545 Commercial loans Risk Rating: Pass $ 30,004 $ 343,451 $ 189,080 $ 141,544 $ 104,763 $ 298,849 $ 78,084 $ 1,185,775 Special Mention - 90 2,103 - 2,269 12,041 396 16,899 Substandard - - - 20 - 2,648 300 2,968 Total commercial loans $ 30,004 $ 343,541 $ 191,183 $ 141,564 $ 107,032 $ 313,538 $ 78,780 $ 1,205,642 Residential mortgage loans Risk Rating: Performing $ 40,533 $ 274,612 $ 80,711 $ 56,606 $ 34,653 $ 126,460 $ - $ 613,575 Nonperforming - 307 550 904 1,355 2,449 - 5,565 Total residential mortgage loans $ 40,533 $ 274,919 $ 81,261 $ 57,510 $ 36,008 $ 128,909 $ - $ 619,140 Consumer loans Risk Rating: Performing $ 3,089 $ 5,725 $ 6,188 $ 749 $ 3,607 $ 8,682 $ 48,744 $ 76,784 Nonperforming - - - - - - - - Total consumer loans $ 3,089 $ 5,725 $ 6,188 $ 749 $ 3,607 $ 8,682 $ 48,744 $ 76,784 Consumer loans Current-period gross writeoffs $ - $ 22 $ 98 $ - $ - $ - $ - $ 120 Residential construction Risk Rating: Performing $ 4,670 $ 87,778 $ 50,623 $ 12,672 $ 3,676 $ 1,232 $ - $ 160,651 Nonperforming - - 257 - - 1,781 1,435 3,473 Total residential construction loans $ 4,670 $ 87,778 $ 50,880 $ 12,672 $ 3,676 $ 3,013 $ 1,435 $ 164,124 Total loans held for investment $ 78,354 $ 720,510 $ 339,314 $ 219,486 $ 153,293 $ 467,689 $ 128,959 $ 2,107,605 |
Schedule of Disaggregated by class of gross loans and type of concession granted | Term Extension Amortized Cost Basis % of Total Class of at 3/31/2023 Gross Loans Commercial $ 743 0.06 % |
Allowance for Credit Losses a_2
Allowance for Credit Losses and Reserve for Unfunded Loan Commitments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Allowance for Credit Losses and Reserve for Unfunded Loan Commitments | |
Activity in the Allowance for Loan Losses by Portfolio Segment | The following tables detail the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2023 and 2022: For the three months ended March 31, 2023 Residential (In thousands) SBA Commercial Residential Consumer construction Total Balance, beginning of period $ 875 $ 15,254 $ 5,450 $ 990 $ 2,627 $ 25,196 Effect of adopting Accounting Standards Update ("ASU") No. 2016-13 ("CECL") 163 171 376 101 36 847 Charge-offs (113) — — (120) — (233) Recoveries — 271 — 12 — 283 Net (charge-offs) recoveries (113) 271 — (108) — 50 Provision for (credit to) credit losses charged to expense 178 (395) 309 37 (21) 108 Balance, end of period $ 1,103 $ 15,301 $ 6,135 $ 1,020 $ 2,642 $ 26,201 For the three months ended March 31, 2022 Residential (In thousands) SBA Commercial Residential Consumer construction Total Balance, beginning of period $ 1,074 $ 15,053 $ 4,114 $ 671 $ 1,390 $ 22,302 Charge-offs — — — (6) — a (6) Recoveries 22 28 — — — 50 Net recoveries (charge-offs) 22 28 — (6) — 44 Provision for (credit to) credit losses charged to expense (155) (376) 170 (23) 206 (178) Balance, end of period $ 941 $ 14,705 $ 4,284 $ 642 $ 1,596 $ 22,168 |
Allowance for Credit Losses on Financing Receivables | The following tables present loans and their related allowance for credit losses, by portfolio segment, as of March 31, 2023 and December 31, 2022: March 31, 2023 Residential (In thousands) SBA Commercial Residential Consumer construction Total Allowance for credit losses ending balance: Individually evaluated $ 173 $ 331 $ 36 $ — $ 1,130 a $ 1,670 Collectively evaluated 930 14,970 6,099 1,020 1,512 24,531 Total $ 1,103 $ 15,301 $ 6,135 $ 1,020 $ 2,642 $ 26,201 Loan ending balances: Individually evaluated $ 658 $ 1,602 $ 5,760 $ — $ 3,458 $ 11,478 Collectively evaluated 64,571 1,204,040 613,380 76,784 160,666 2,119,441 Total $ 65,229 $ 1,205,642 $ 619,140 $ 76,784 $ 164,124 $ 2,130,919 December 31, 2022 Residential (In thousands) SBA Commercial Residential Consumer construction Total Allowance for credit losses ending balance: Individually evaluated for impairment $ 115 $ 516 $ 36 $ — $ 1,112 a $ 1,779 Collectively evaluated for impairment 760 14,738 5,414 990 1,515 23,417 Total $ 875 $ 15,254 $ 5,450 $ 990 $ 2,627 $ 25,196 Loan ending balances: Individually evaluated for impairment $ 690 $ 3,101 $ 3,361 $ — $ 3,432 $ 10,584 Collectively evaluated for impairment 71,614 1,184,442 601,730 78,164 160,025 2,095,975 Total $ 72,304 $ 1,187,543 $ 605,091 $ 78,164 $ 163,457 $ 2,106,559 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Financial Instruments and Hedging Activities | |
Summary of Interest Rate Swaps | A summary of the Company’s outstanding interest rate swap agreements used to hedge variable rate debt at March 31, 2023 and December 31, 2022, respectively is as follows: (In thousands, except percentages and years) March 31, 2023 December 31, 2022 Notional amount $ 20,000 $ 20,000 Fair value $ 1,302 $ 1,537 Weighted average pay rate 0.83 % 0.83 % Weighted average receive rate 4.75 % 1.50 % Weighted average maturity in years 1.95 2.57 Number of contracts 1 1 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | For the three months ended March 31, (In thousands) 2023 2022 (Loss) Gain recognized in OCI $ (235) $ 1,534 Gain reclassified from AOCI into net income $ 198 $ 85 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Transactions under the Company's stock option plans | Weighted Weighted average average remaining Aggregate exercise contractual intrinsic Shares price life in years value Outstanding at December 31, 2022 559,499 $ 18.09 5.9 $ 5,168,740 Options granted — — Options exercised (37,201) 20.27 Options forfeited (666) 18.64 Options expired — — Outstanding at March 31, 2023 521,632 $ 17.94 5.7 $ 2,542,366 Exercisable at March 31, 2023 481,142 $ 17.84 5.5 $ 2,390,353 |
Schedule of Information About Options Exercised | Upon exercise, the Company issues shares from its authorized but unissued common stock to satisfy the options. The following table presents information about options exercised during the three months ended March 31, 2023 and 2022: For the three months ended March 31, 2023 2022 Number of options exercised 37,201 47,374 Total intrinsic value of options exercised $ 241,904 $ 746,292 Cash received from options exercised $ 753,894 $ 639,214 Tax deduction realized from options $ 72,777 $ 224,522 |
Schedule of Stock Options, by Exercise Price Range | The following table summarizes information about stock options outstanding and exercisable at March 31, 2023: Options outstanding Options exercisable Weighted average Weighted Weighted Options remaining contractual average Options average Range of exercise prices outstanding life (in years) exercise price exercisable exercise price $7.25 - 16.51 139,633 3.8 $ 11.96 139,633 $ 11.96 16.52 - 19.26 127,499 6.5 18.06 103,342 18.07 19.27 - 20.88 132,300 6.4 20.34 115,967 20.31 20.89 - 22.57 122,200 6.2 22.02 122,200 22.02 Total 521,632 5.7 $ 17.94 481,142 $ 17.84 |
Summary of Nonvested Restricted Stock Activity | Average grant Shares date fair value Nonvested restricted stock at December 31, 2022 164,570 $ 24.77 Granted 18,000 27.33 Cancelled (1,600) 25.94 Vested (34,973) 23.34 Nonvested restricted stock at March 31, 2023 145,997 $ 25.41 |
Restricted Stock Grants | Restricted stock awards granted during the three months ended March 31, 2023 and 2022 were as follows: For the three months ended March 31, 2023 2022 Number of shares granted 18,000 70,000 Average grant date fair value $ 27.33 $ 27.52 |
Summary of Components of Net Periodic Pension Cost of Defined Benefit Plan Recognized | For the three months ended March 31, (In thousands) 2023 2022 Service cost $ 39 $ 37 Interest cost 50 47 Net periodic benefit cost $ 89 $ 84 |
Summary Of Changes In Benefit Obligations Of Defined Benefit Plan | The following table summarizes the changes in benefit obligations of the defined benefit plan during the three months ended March 31, 2023 and 2022: For the three months ended March 31, (In thousands) 2023 2022 Benefit obligation, beginning of year $ 4,857 $ 4,521 Service cost 39 37 Interest cost 50 47 Benefit obligation, end of period $ 4,946 $ 4,605 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Allocation of Share-based Compensation Costs | Compensation expense related to stock options and the related income tax benefit for the three months ended March 31, 2023 and 2022 are detailed in the following table: For the three months ended March 31, (In thousands) 2023 2022 Compensation expense $ 85 $ 163 Income tax benefit $ 25 $ 47 |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Allocation of Share-based Compensation Costs | Compensation expense related to restricted stock for the three months ended March 31, 2023 and 2022 is detailed in the following table: For the three months ended March 31, (In thousands) 2023 2022 Compensation expense $ 332 $ 231 Income tax benefit $ 80 $ 67 |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Regulatory Capital | |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | At March 31, 2023 At December 31, 2022 Company Bank Company Bank CBLR 10.38 % 9.96 % 10.88 % 10.34 % |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
Net Lease Cost | The table below summarizes the Company’s net lease cost: For the three months ended March 31, (In thousands) 2023 2022 Operating lease cost $ 209 $ 188 The table below summarizes the cash and non-cash activities associated with the Company’s leases: For the three months ended March 31, (In thousands) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 199 $ 182 ROU assets obtain in exchange for new operating lease liabilities $ — $ 582 |
Summary of Other Information for Operating Leases | The table below summarizes other information related to the Company’s operating leases: (In thousands, except percentages and years) March 31, 2023 December 31, 2022 Weighted average remaining lease term in years 10.63 10.77 Weighted average discount rate 3.18 % 3.21 % |
Summary of Maturity of Remaining Lease Liabilities | The table below summarizes the future payments of remaining lease liabilities: (In thousands) March 31, 2023 2023 $ 538 2024 695 2025 691 2026 702 2027 656 2028 and thereafter 3,010 Total lease payments $ 6,292 Less: Imputed Interest (810) Present value of lease liabilities $ 5,482 |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Jan. 01, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment | |||
Increase to allowance for credit losses | $ 26,201 | ||
Reserve for unfunded credit commitments | 26,229 | $ 24,192 | |
Retained earnings | 165,335 | $ 156,958 | |
Cumulative effect, period of adjustment | |||
Property, Plant and Equipment | |||
Increase to allowance for credit losses | 847 | ||
Retained earnings | 649 | ||
Accounting Standards Update No. 2016-13 | Cumulative effect, period of adjustment | |||
Property, Plant and Equipment | |||
Increase to allowance for credit losses | $ 800 | ||
Reserve for unfunded credit commitments | $ 100 | ||
Retained earnings | $ 600 |
Net Income per Share (Details)
Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net Income per Share | ||
Net income | $ 10,287 | $ 9,108 |
Weighted average common shares outstanding - Basic | 10,538 | 10,446 |
Plus: Potential dilutive common stock equivalents (in shares) | 148 | 218 |
Weighted average common shares outstanding - Diluted (in shares) | 10,686 | 10,664 |
Net income per common share - Basic | $ 0.98 | $ 0.87 |
Net income per common share - Diluted | $ 0.96 | $ 0.85 |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | $ 239,227 | $ 205,729 |
Period change | 81 | 286 |
Ending balance | 240,459 | 214,928 |
Net unrealized (losses) gains on securities | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (4,381) | 29 |
Other comprehensive income (loss) before reclassifications | 266 | (1,252) |
Less amounts reclassified from accumulated other comprehensive loss | (439) | |
Period change | 266 | (813) |
Ending balance | (4,115) | (784) |
Net unrealized gains (losses) from cash flow hedges | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | 1,121 | 293 |
Other comprehensive income (loss) before reclassifications | (341) | 1,099 |
Less amounts reclassified from accumulated other comprehensive loss | (156) | |
Period change | (185) | 1,099 |
Ending balance | 936 | 1,392 |
Accumulated other comprehensive income (loss) | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (3,260) | 322 |
Other comprehensive income (loss) before reclassifications | (75) | (153) |
Less amounts reclassified from accumulated other comprehensive loss | (156) | (439) |
Period change | 81 | 286 |
Ending balance | $ (3,179) | $ 608 |
Fair Value - Fair Value on Recu
Fair Value - Fair Value on Recurring Basis - Narrative (Details) $ in Thousands | Mar. 31, 2023 USD ($) security | Dec. 31, 2022 USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Securities available for sale | $ 94,113 | |
Equity securities | $ 8,327 | $ 9,793 |
Corporate Bond Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities classified as Level 3 assets | security | 2 |
Fair Value - Assets And Liabili
Fair Value - Assets And Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | $ 95,393 | |
Debt securities available-for-sale | $ 94,113 | |
Equity securities | 8,327 | 9,793 |
U.S. Government sponsored entities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 16,305 | |
Debt securities available-for-sale | 16,398 | |
State and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 613 | |
Debt securities available-for-sale | 593 | |
Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 15,475 | |
Debt securities available-for-sale | 15,410 | |
Corporate and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 63,000 | |
Debt securities available-for-sale | 61,712 | |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 95,393 | |
Debt securities available-for-sale | 94,113 | |
Equity securities | 8,327 | 9,793 |
Swap agreements | 1,302 | 1,537 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 90,718 | |
Debt securities available-for-sale | 89,603 | |
Equity securities | 8,327 | 9,793 |
Swap agreements | 1,302 | 1,537 |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 4,675 | |
Debt securities available-for-sale | 4,510 | |
Recurring | U.S. Government sponsored entities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 16,305 | |
Debt securities available-for-sale | 16,398 | |
Recurring | U.S. Government sponsored entities | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 16,305 | |
Debt securities available-for-sale | 16,398 | |
Recurring | State and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 613 | |
Debt securities available-for-sale | 593 | |
Recurring | State and political subdivisions | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 613 | |
Debt securities available-for-sale | 593 | |
Recurring | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 15,475 | |
Debt securities available-for-sale | 15,410 | |
Recurring | Residential mortgage-backed securities | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 15,475 | |
Debt securities available-for-sale | 15,410 | |
Recurring | Corporate and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 63,000 | |
Debt securities available-for-sale | 61,712 | |
Recurring | Corporate and other securities | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 58,325 | |
Debt securities available-for-sale | 57,202 | |
Recurring | Corporate and other securities | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 4,675 | |
Debt securities available-for-sale | 4,510 | |
Recurring | Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Swap agreements | 1,302 | 1,537 |
Recurring | Interest Rate Swap | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Swap agreements | $ 1,302 | $ 1,537 |
Fair Value - Assets and Liabi_2
Fair Value - Assets and Liabilities Subject to Fair Value Adjustments (Impairment) on a Nonrecurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Impaired collateral-dependent loans | $ 9,800 | $ 8,800 |
Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Collateral-dependent loans & OREO | 9,984 | 8,803 |
Nonrecurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Collateral-dependent loans & OREO | $ 9,984 | $ 8,803 |
Fair Value - Fair Value on a No
Fair Value - Fair Value on a Nonrecurring Basis Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Specific reserves | $ 1.7 | $ 1.8 |
Letters of Credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Standby letter of credit | $ 5.8 | $ 5.6 |
Fair Value - Carrying Amount an
Fair Value - Carrying Amount and Fair Values (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Significant Unobservable Inputs (Level 3) | ||
Financial liabilities: | ||
Impaired collateral-dependent loans | $ 9,800 | $ 8,800 |
Carrying amount | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities | 138,264 | 140,946 |
SBA loans held for sale | 23,314 | 27,928 |
Loans, net of allowance for loan losses | 2,081,404 | 2,053,435 |
Financial liabilities: | ||
Deposits | 1,823,921 | 1,787,528 |
Borrowed funds and subordinated debentures | 384,310 | 393,310 |
Carrying amount | Significant Unobservable Inputs (Level 3) | Recurring | Corporate and other securities | ||
Financial assets: | ||
Securities | 5,300 | |
Estimated fair value | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities | 132,272 | 133,764 |
SBA loans held for sale | 25,031 | 30,141 |
Loans, net of allowance for loan losses | 2,022,666 | 1,990,010 |
Financial liabilities: | ||
Deposits | 1,810,997 | 1,772,270 |
Borrowed funds and subordinated debentures | 382,585 | $ 391,312 |
Estimated fair value | Significant Unobservable Inputs (Level 3) | Recurring | Corporate and other securities | ||
Financial assets: | ||
Securities | $ 4,700 |
Securities - Amortized Cost to
Securities - Amortized Cost to Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Available for sale: | ||
Amortized cost | $ 99,549 | |
Amortized cost | $ 101,188 | |
Gross unrealized gains | 152 | 138 |
Gross unrealized losses | (5,588) | (5,933) |
Securities available for sale | 95,393 | |
Securities available for sale | 94,113 | |
Held to maturity: | ||
Amortized cost | 35,824 | |
Amortized cost | 35,760 | |
Gross unrealized gains | 74 | 67 |
Gross unrealized losses | (6,066) | (7,249) |
Estimated fair value | 29,832 | 28,578 |
Equity securities: | ||
Estimated fair value | 8,327 | 9,793 |
U.S. Government sponsored entities | ||
Available for sale: | ||
Amortized cost | 16,969 | |
Amortized cost | 16,961 | |
Gross unrealized losses | (571) | (656) |
Securities available for sale | 16,305 | |
Securities available for sale | 16,398 | |
Held to maturity: | ||
Amortized cost | 28,000 | |
Amortized cost | 28,000 | |
Gross unrealized losses | (4,222) | (5,310) |
Estimated fair value | 23,778 | 22,690 |
State and political subdivisions | ||
Available for sale: | ||
Amortized cost | 633 | |
Amortized cost | 635 | |
Gross unrealized losses | (40) | (22) |
Securities available for sale | 613 | |
Securities available for sale | 593 | |
Held to maturity: | ||
Amortized cost | 1,128 | |
Amortized cost | 1,115 | |
Gross unrealized gains | 74 | 67 |
Estimated fair value | 1,202 | 1,182 |
Residential mortgage-backed securities | ||
Available for sale: | ||
Amortized cost | 16,734 | |
Amortized cost | 17,097 | |
Gross unrealized gains | 31 | 32 |
Gross unrealized losses | (1,355) | (1,654) |
Securities available for sale | 15,475 | |
Securities available for sale | 15,410 | |
Held to maturity: | ||
Amortized cost | 6,696 | |
Amortized cost | 6,645 | |
Gross unrealized losses | (1,844) | (1,939) |
Estimated fair value | 4,852 | 4,706 |
Corporate and other securities | ||
Available for sale: | ||
Amortized cost | 65,213 | |
Amortized cost | 66,495 | |
Gross unrealized gains | 121 | 106 |
Gross unrealized losses | (3,622) | (3,601) |
Securities available for sale | $ 63,000 | |
Securities available for sale | $ 61,712 |
Securities - Securities By Cont
Securities - Securities By Contractual Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Available for sale at fair value: | ||
Within one year, Amount | $ 1,421 | |
After one through five years, Amount | 28,063 | |
After five through ten years, Amount | 13,628 | |
After ten years, Amount | 51,001 | |
Securities available for sale | $ 95,393 | |
Securities available for sale | 94,113 | |
Held to maturity at cost | ||
After five through ten years, Amount | 3,000 | |
After ten years, Amount | 32,824 | |
Securities held to maturity | 35,824 | |
Equity securities at fair value: | ||
Equity securities | 8,327 | 9,793 |
U.S. Government sponsored entities | ||
Available for sale at fair value: | ||
Within one year, Amount | 1,218 | |
After one through five years, Amount | 15,180 | |
Securities available for sale | 16,305 | |
Securities available for sale | 16,398 | |
Held to maturity at cost | ||
After five through ten years, Amount | 3,000 | |
After ten years, Amount | 25,000 | |
Securities held to maturity | 28,000 | |
State and political subdivisions | ||
Available for sale at fair value: | ||
Within one year, Amount | 201 | |
After one through five years, Amount | 160 | |
After ten years, Amount | 232 | |
Securities available for sale | 613 | |
Securities available for sale | 593 | |
Held to maturity at cost | ||
After ten years, Amount | 1,128 | |
Securities held to maturity | 1,128 | |
Residential mortgage-backed securities | ||
Available for sale at fair value: | ||
Within one year, Amount | 2 | |
After one through five years, Amount | 358 | |
After five through ten years, Amount | 986 | |
After ten years, Amount | 14,064 | |
Securities available for sale | 15,475 | |
Securities available for sale | 15,410 | |
Held to maturity at cost | ||
After ten years, Amount | 6,696 | |
Securities held to maturity | 6,696 | |
Corporate and other securities | ||
Available for sale at fair value: | ||
After one through five years, Amount | 12,365 | |
After five through ten years, Amount | 12,642 | |
After ten years, Amount | 36,705 | |
Securities available for sale | $ 63,000 | |
Securities available for sale | $ 61,712 |
Securities - Securities in Unre
Securities - Securities in Unrealized Loss Position (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Available for sale: | ||
Available for sale, Less than 12 months, Estimated fair value | $ 37,694 | $ 53,445 |
Available for sale, Less than 12 months, Unrealized loss | (1,698) | (3,041) |
Available for sale, 12 months and greater, Estimated fair value | 53,458 | 34,944 |
Available for sale, 12 Months and greater Unrealized loss | (3,890) | (2,892) |
Available for sale, Estimated fair value | 91,152 | 88,389 |
Available for sale, Unrealized loss | (5,588) | (5,933) |
Held to maturity: | ||
Held to maturity, Less than 12 months Estimated fair value | 10,544 | 20,366 |
Held to maturity, Less than 12 months Unrealized loss | (678) | (4,280) |
Held to maturity, 12 months and greater, Estimated fair value | 18,086 | 7,031 |
Held to maturity, 12 months and greater, Unrealized loss | (5,388) | (2,969) |
Held to maturity, Total Estimated fair value | 28,630 | 27,397 |
Held to maturity, Total Unrealized loss | (6,066) | (7,249) |
U.S. Government sponsored entities | ||
Available for sale: | ||
Available for sale, Less than 12 months, Estimated fair value | 15,905 | 15,817 |
Available for sale, Less than 12 months, Unrealized loss | (567) | (622) |
Available for sale, 12 months and greater, Estimated fair value | 493 | 1,432 |
Available for sale, 12 Months and greater Unrealized loss | (4) | (34) |
Available for sale, Estimated fair value | 16,398 | 17,249 |
Available for sale, Unrealized loss | (571) | (656) |
Held to maturity: | ||
Held to maturity, Less than 12 months Estimated fair value | 10,394 | 15,659 |
Held to maturity, Less than 12 months Unrealized loss | (606) | (2,341) |
Held to maturity, 12 months and greater, Estimated fair value | 13,384 | 7,031 |
Held to maturity, 12 months and greater, Unrealized loss | (3,616) | (2,969) |
Held to maturity, Total Estimated fair value | 23,778 | 22,690 |
Held to maturity, Total Unrealized loss | (4,222) | (5,310) |
State and political subdivisions | ||
Available for sale: | ||
Available for sale, Less than 12 months, Estimated fair value | 160 | |
Available for sale, Less than 12 months, Unrealized loss | (5) | |
Available for sale, 12 months and greater, Estimated fair value | 393 | 253 |
Available for sale, 12 Months and greater Unrealized loss | (40) | (17) |
Available for sale, Estimated fair value | 393 | 413 |
Available for sale, Unrealized loss | (40) | (22) |
Residential mortgage-backed securities | ||
Available for sale: | ||
Available for sale, Less than 12 months, Estimated fair value | 8,623 | 14,023 |
Available for sale, Less than 12 months, Unrealized loss | (665) | (1,448) |
Available for sale, 12 months and greater, Estimated fair value | 6,647 | 1,311 |
Available for sale, 12 Months and greater Unrealized loss | (690) | (206) |
Available for sale, Estimated fair value | 15,270 | 15,334 |
Available for sale, Unrealized loss | (1,355) | (1,654) |
Held to maturity: | ||
Held to maturity, Less than 12 months Estimated fair value | 150 | 4,707 |
Held to maturity, Less than 12 months Unrealized loss | (72) | (1,939) |
Held to maturity, 12 months and greater, Estimated fair value | 4,702 | |
Held to maturity, 12 months and greater, Unrealized loss | (1,772) | |
Held to maturity, Total Estimated fair value | 4,852 | 4,707 |
Held to maturity, Total Unrealized loss | (1,844) | (1,939) |
Corporate and other securities | ||
Available for sale: | ||
Available for sale, Less than 12 months, Estimated fair value | 13,166 | 23,445 |
Available for sale, Less than 12 months, Unrealized loss | (466) | (966) |
Available for sale, 12 months and greater, Estimated fair value | 45,925 | 31,948 |
Available for sale, 12 Months and greater Unrealized loss | (3,156) | (2,635) |
Available for sale, Estimated fair value | 59,091 | 55,393 |
Available for sale, Unrealized loss | $ (3,622) | $ (3,601) |
Securities - Realized Gains (Lo
Securities - Realized Gains (Losses) on Debt Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Available for sale: | ||
Impairment for available for sale | $ 0 | $ 0 |
Allowance for credit losses for available for sale | 0 | 0 |
Held to maturity: | ||
Realized gains | 0 | 0 |
Realized losses | 0 | 0 |
Impairment for held to maturity | 0 | 0 |
Allowance for credit losses for held to maturity | $ 0 | $ 0 |
Securities - Realized Gains (_2
Securities - Realized Gains (Losses) for Equity Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Securities | ||
Net unrealized losses occurring during the period on equity securities | $ (544) | $ (557) |
Net realized gains recognized during the period on equity securities sold during the period | 222 | |
Net losses recognized during the reporting period on equity securities | $ (322) | $ (557) |
Loans - Narrative (Details)
Loans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Residential loans in process of foreclosure | $ 3.3 | $ 2.1 |
Nonaccrual loans with no related allowance for credit loss | $ 3.5 | |
Maximum | ||
Guarantee percentage of SBA Loan | 90% | |
Commercial properties | ||
Other real estate owned | $ 0.2 | $ 0 |
Loans - Classification of Loans
Loans - Classification of Loans By Class (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | $ 2,106,559 | |
Total Loans | $ 2,130,919 | |
SBA 504 loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 35,077 | |
Total Loans | 34,678 | |
SBA loans held for investment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 38,468 | |
Total Loans | 39,370 | |
SBA PPP loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 5,908 | |
Total Loans | 2,545 | |
Commercial loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 1,187,543 | |
Total Loans | 1,205,642 | |
Commercial loans | Commercial real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 903,126 | |
Total Loans | 907,260 | |
Commercial loans | Commercial real estate construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 131,774 | |
Total Loans | 146,276 | |
Commercial loans | Consumer other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 117,566 | |
Total Loans | 117,428 | |
Residential mortgage loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 605,091 | |
Total Loans | 619,140 | |
Consumer loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 78,164 | |
Total Loans | 76,784 | |
Consumer loans | Home equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 68,310 | |
Total Loans | 68,071 | |
Consumer loans | Consumer other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 9,854 | |
Total Loans | 8,713 | |
Residential construction loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 163,457 | |
Total Loans | 164,124 | |
Total | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 2,078,631 | |
Total Loans | 2,107,605 | |
SBA loans held for sale | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 23,314 | $ 27,928 |
Total Loans | $ 23,314 |
Loans - Aging Analysis of Past
Loans - Aging Analysis of Past Due and Nonaccrual Loans by Class (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | $ 2,128,374 | $ 2,100,651 |
Total loans | 2,106,559 | |
SBA 504 loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 35,077 | |
30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 3,547 | 2,433 |
60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 1,675 | 2,053 |
Nonaccrual | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 14,507 | 9,065 |
Past Due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 19,729 | 13,551 |
Current | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 2,108,645 | 2,087,100 |
SBA loans held for investment | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 39,370 | 38,468 |
Total loans | 38,468 | |
SBA loans held for investment | 60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 576 | |
SBA loans held for investment | Nonaccrual | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 4,325 | 690 |
SBA loans held for investment | Past Due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 4,325 | 1,266 |
SBA loans held for investment | Current | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 35,045 | 37,202 |
SBA PPP loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 5,908 | |
SBA PPP loans | Past Due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,400 | |
Commercial loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,187,543 | |
Commercial loans | SBA 504 loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 34,678 | 35,077 |
Commercial loans | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 907,260 | 903,126 |
Total loans | 903,126 | |
Commercial loans | Commercial real estate construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 146,276 | 131,774 |
Total loans | 131,774 | |
Commercial loans | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 117,428 | 117,566 |
Total loans | 117,566 | |
Commercial loans | 30-59 days past due | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 22 | |
Commercial loans | 30-59 days past due | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 198 | |
Commercial loans | 60-89 days past due | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 188 | |
Commercial loans | 60-89 days past due | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 1,675 | 300 |
Commercial loans | Nonaccrual | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 169 | 805 |
Commercial loans | Nonaccrual | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 975 | 777 |
Commercial loans | Past Due | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 169 | 1,015 |
Commercial loans | Past Due | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 2,650 | 1,275 |
Commercial loans | Current | SBA 504 loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 34,678 | 35,077 |
Commercial loans | Current | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 907,091 | 902,111 |
Commercial loans | Current | Commercial real estate construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 146,276 | 131,774 |
Commercial loans | Current | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 114,778 | 116,291 |
Residential mortgage loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 619,140 | 605,091 |
Total loans | 605,091 | |
Residential mortgage loans | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 2,800 | |
Residential mortgage loans | 60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 982 | |
Residential mortgage loans | Nonaccrual | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 5,565 | 3,361 |
Residential mortgage loans | Past Due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 8,365 | 4,343 |
Residential mortgage loans | Current | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 610,775 | 600,748 |
Consumer loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 78,164 | |
Consumer loans | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 68,071 | 68,310 |
Total loans | 68,310 | |
Consumer loans | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 8,713 | 9,854 |
Total loans | 9,854 | |
Consumer loans | 30-59 days past due | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 697 | |
Consumer loans | 30-59 days past due | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 50 | 18 |
Consumer loans | 60-89 days past due | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 7 | |
Consumer loans | Past Due | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 697 | |
Consumer loans | Past Due | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 50 | 25 |
Consumer loans | Current | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 67,374 | 68,310 |
Consumer loans | Current | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 8,663 | 9,829 |
Residential construction loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 164,124 | 163,457 |
Total loans | 163,457 | |
Residential construction loans | Nonaccrual | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 3,473 | 3,432 |
Residential construction loans | Past Due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 3,473 | 3,432 |
Residential construction loans | Current | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 160,651 | 160,025 |
Total | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 2,105,060 | 2,072,723 |
Total loans | 2,078,631 | |
Total | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 3,547 | 238 |
Total | 60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 1,675 | 2,053 |
Total | Nonaccrual | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 14,507 | 9,065 |
Total | Past Due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 19,729 | 11,356 |
Total | Current | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 2,085,331 | 2,061,367 |
SBA loans held for sale | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 23,314 | 27,928 |
SBA loans held for sale | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 2,195 | |
SBA loans held for sale | Past Due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 2,195 | |
SBA loans held for sale | Current | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | $ 23,314 | $ 25,733 |
Loans - Risk by loan portfolio
Loans - Risk by loan portfolio (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
Total Loans | $ 2,130,919 |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |
Total loans | 233 |
SBA loans held for investment | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2023 | 58 |
2022 | 8,547 |
2021 | 7,257 |
2020 | 6,991 |
2019 | 2,970 |
2018 and Earlier | 13,547 |
Total Loans | 39,370 |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |
2019 | 113 |
Total loans | 113 |
SBA PPP loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2021 | 2,545 |
Total Loans | 2,545 |
Commercial loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2023 | 30,004 |
2022 | 343,541 |
2021 | 191,183 |
2020 | 141,564 |
2019 | 107,032 |
2018 and Earlier | 313,538 |
Revolving Loans Amortized Cost Basis | 78,780 |
Total Loans | 1,205,642 |
Residential mortgage loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2023 | 40,533 |
2022 | 274,919 |
2021 | 81,261 |
2020 | 57,510 |
2019 | 36,008 |
2018 and Earlier | 128,909 |
Total Loans | 619,140 |
Consumer loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2023 | 3,089 |
2022 | 5,725 |
2021 | 6,188 |
2020 | 749 |
2019 | 3,607 |
2018 and Earlier | 8,682 |
Revolving Loans Amortized Cost Basis | 48,744 |
Total Loans | 76,784 |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |
2022 | 22 |
2021 | 98 |
Total loans | 120 |
Residential construction loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2023 | 4,670 |
2022 | 87,778 |
2021 | 50,880 |
2020 | 12,672 |
2019 | 3,676 |
2018 and Earlier | 3,013 |
Revolving Loans Amortized Cost Basis | 1,435 |
Total Loans | 164,124 |
Total | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2023 | 78,354 |
2022 | 720,510 |
2021 | 339,314 |
2020 | 219,486 |
2019 | 153,293 |
2018 and Earlier | 467,689 |
Revolving Loans Amortized Cost Basis | 128,959 |
Total Loans | 2,107,605 |
Performing | Residential mortgage loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2023 | 40,533 |
2022 | 274,612 |
2021 | 80,711 |
2020 | 56,606 |
2019 | 34,653 |
2018 and Earlier | 126,460 |
Total Loans | 613,575 |
Performing | Consumer loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2023 | 3,089 |
2022 | 5,725 |
2021 | 6,188 |
2020 | 749 |
2019 | 3,607 |
2018 and Earlier | 8,682 |
Revolving Loans Amortized Cost Basis | 48,744 |
Total Loans | 76,784 |
Performing | Residential construction loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2023 | 4,670 |
2022 | 87,778 |
2021 | 50,623 |
2020 | 12,672 |
2019 | 3,676 |
2018 and Earlier | 1,232 |
Total Loans | 160,651 |
Nonperforming | Residential mortgage loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2022 | 307 |
2021 | 550 |
2020 | 904 |
2019 | 1,355 |
2018 and Earlier | 2,449 |
Total Loans | 5,565 |
Nonperforming | Residential construction loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2021 | 257 |
2018 and Earlier | 1,781 |
Revolving Loans Amortized Cost Basis | 1,435 |
Total Loans | 3,473 |
Pass | SBA loans held for investment | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2023 | 58 |
2022 | 7,186 |
2021 | 5,017 |
2020 | 6,289 |
2019 | 2,970 |
2018 and Earlier | 12,006 |
Total Loans | 33,526 |
Pass | SBA PPP loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2021 | 2,545 |
Total Loans | 2,545 |
Pass | Commercial loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2023 | 30,004 |
2022 | 343,451 |
2021 | 189,080 |
2020 | 141,544 |
2019 | 104,763 |
2018 and Earlier | 298,849 |
Revolving Loans Amortized Cost Basis | 78,084 |
Total Loans | 1,185,775 |
Special mention | SBA loans held for investment | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2020 | 702 |
2018 and Earlier | 745 |
Total Loans | 1,447 |
Special mention | Commercial loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2022 | 90 |
2021 | 2,103 |
2019 | 2,269 |
2018 and Earlier | 12,041 |
Revolving Loans Amortized Cost Basis | 396 |
Total Loans | 16,899 |
Substandard | SBA loans held for investment | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2022 | 1,361 |
2021 | 2,240 |
2018 and Earlier | 796 |
Total Loans | 4,397 |
Substandard | Commercial loans | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |
2020 | 20 |
2018 and Earlier | 2,648 |
Revolving Loans Amortized Cost Basis | 300 |
Total Loans | $ 2,968 |
Loans - Disaggregated by class
Loans - Disaggregated by class of gross loans and type of concession granted (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Financing Receivable, Recorded Investment [Line Items] | |
Weighted Average of years | 5 years 8 months 12 days |
Loans | $ 0 |
Commercial loans | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized Cost Basis | $ 743 |
Total Class of Gross Loans | 0.06% |
Allowance for Credit Losses a_3
Allowance for Credit Losses and Reserve for Unfunded Loan Commitments - Activity in the Allowance for Loan Losses by Portfolio Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Charge-offs | $ (233) | |
Recoveries | 283 | |
Net recoveries (charge-offs) | 50 | |
Provision for loan losses charged to expense | 108 | |
Balance, end of period | 26,201 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Balance, beginning of period | 25,196 | $ 22,302 |
Charge-offs | (6) | |
Recoveries | 50 | |
Net recoveries (charge-offs) | 44 | |
Provision for (credit to) loan losses charged to expense | (178) | |
Balance, end of period | 22,168 | |
Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Balance, end of period | 847 | |
SBA loans held for investment | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Charge-offs | (113) | |
Net recoveries (charge-offs) | (113) | |
Provision for loan losses charged to expense | 178 | |
Balance, end of period | 1,103 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Balance, beginning of period | 875 | 1,074 |
Recoveries | 22 | |
Net recoveries (charge-offs) | 22 | |
Provision for (credit to) loan losses charged to expense | (155) | |
Balance, end of period | 941 | |
SBA loans held for investment | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Balance, end of period | 163 | |
Commercial loans | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Recoveries | 271 | |
Net recoveries (charge-offs) | 271 | |
(Credit to) loan losses charged to expense | (395) | |
Balance, end of period | 15,301 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Balance, beginning of period | 15,254 | 15,053 |
Recoveries | 28 | |
Net recoveries (charge-offs) | 28 | |
Provision for (credit to) loan losses charged to expense | (376) | |
Balance, end of period | 14,705 | |
Commercial loans | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Balance, end of period | 171 | |
Residential mortgage loans | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Provision for loan losses charged to expense | 309 | |
Balance, end of period | 6,135 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Balance, beginning of period | 5,450 | 4,114 |
Provision for (credit to) loan losses charged to expense | 170 | |
Balance, end of period | 4,284 | |
Residential mortgage loans | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Balance, end of period | 376 | |
Consumer loans | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Charge-offs | (120) | |
Recoveries | 12 | |
Net recoveries (charge-offs) | (108) | |
Provision for loan losses charged to expense | 37 | |
Balance, end of period | 1,020 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Balance, beginning of period | 990 | 671 |
Charge-offs | (6) | |
Net recoveries (charge-offs) | (6) | |
Provision for (credit to) loan losses charged to expense | (23) | |
Balance, end of period | 642 | |
Consumer loans | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Balance, end of period | 101 | |
Residential construction loans | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
(Credit to) loan losses charged to expense | (21) | |
Balance, end of period | 2,642 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Balance, beginning of period | 2,627 | 1,390 |
Provision for (credit to) loan losses charged to expense | 206 | |
Balance, end of period | $ 1,596 | |
Residential construction loans | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Balance, end of period | $ 36 |
Allowance for Credit Losses a_4
Allowance for Credit Losses and Reserve for Unfunded Loan Commitments - Allowance for Credit Losses on Basis of Impairment Method (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Individually evaluated for impairment | $ 1,779 | |||
Collectively evaluated for impairment | 23,417 | |||
Individually evaluated | $ 1,670 | |||
Collectively evaluated | 24,531 | |||
Total | 25,196 | $ 22,168 | $ 22,302 | |
Total | 26,201 | |||
Individually evaluated for impairment | 11,478 | 10,584 | ||
Collectively evaluated for impairment | 2,119,441 | 2,095,975 | ||
Total loans | 2,106,559 | |||
Total Loans | 2,130,919 | |||
SBA held for investment | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Individually evaluated for impairment | 115 | |||
Collectively evaluated for impairment | 760 | |||
Individually evaluated | 173 | |||
Collectively evaluated | 930 | |||
Total | 875 | |||
Total | 1,103 | |||
Individually evaluated for impairment | 658 | 690 | ||
Collectively evaluated for impairment | 64,571 | 71,614 | ||
Total loans | 72,304 | |||
Total Loans | 65,229 | |||
Commercial loans | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Individually evaluated for impairment | 516 | |||
Collectively evaluated for impairment | 14,738 | |||
Individually evaluated | 331 | |||
Collectively evaluated | 14,970 | |||
Total | 15,254 | 14,705 | 15,053 | |
Total | 15,301 | |||
Individually evaluated for impairment | 1,602 | 3,101 | ||
Collectively evaluated for impairment | 1,204,040 | 1,184,442 | ||
Total loans | 1,187,543 | |||
Total Loans | 1,205,642 | |||
Residential mortgage loans | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Individually evaluated for impairment | 36 | |||
Collectively evaluated for impairment | 5,414 | |||
Individually evaluated | 36 | |||
Collectively evaluated | 6,099 | |||
Total | 5,450 | 4,284 | 4,114 | |
Total | 6,135 | |||
Individually evaluated for impairment | 5,760 | 3,361 | ||
Collectively evaluated for impairment | 613,380 | 601,730 | ||
Total loans | 605,091 | |||
Total Loans | 619,140 | |||
Consumer loans | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Collectively evaluated for impairment | 990 | |||
Collectively evaluated | 1,020 | |||
Total | 990 | 642 | 671 | |
Total | 1,020 | |||
Collectively evaluated for impairment | 76,784 | 78,164 | ||
Total loans | 78,164 | |||
Total Loans | 76,784 | |||
Residential construction loans | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Individually evaluated for impairment | 1,112 | |||
Collectively evaluated for impairment | 1,515 | |||
Individually evaluated | 1,130 | |||
Collectively evaluated | 1,512 | |||
Total | 2,627 | $ 1,596 | $ 1,390 | |
Total | 2,642 | |||
Individually evaluated for impairment | 3,458 | 3,432 | ||
Collectively evaluated for impairment | 160,666 | 160,025 | ||
Total loans | 163,457 | |||
Total Loans | 164,124 | |||
Total | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Total loans | $ 2,078,631 | |||
Total Loans | $ 2,107,605 |
Allowance for Credit Losses a_5
Allowance for Credit Losses and Reserve for Unfunded Loan Commitments - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Allowance for Credit Losses and Reserve for Unfunded Loan Commitments | ||
Reserve for commitments | $ 0.6 | $ 0.5 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities (Details) - Interest Rate Swap - Designated as hedging instrument $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 USD ($) contract | Dec. 31, 2022 USD ($) contract | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional amount | $ 20,000 | $ 20,000 |
Fair value | $ 1,302 | $ 1,537 |
Weighted average pay rate | 0.83% | 0.83% |
Weighted average receive rate | 4.75% | 1.50% |
Weighted average maturity in years | 1 year 11 months 12 days | 2 years 6 months 25 days |
Number of contracts | contract | 1 | 1 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging Activities - Gain (Loss) in AOCI (Details) - AOCI (loss) gain on cash flow derivative instruments - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
(Loss) Gain recognized in OCI | $ (235) | $ 1,534 |
Gain reclassified from AOCI into net income | $ 198 | $ 85 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Apr. 25, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Options granted (in shares) | 0 | 0 | |
Defined contribution plan, maximum annual contributions per employee, percent | 75% | ||
Deferred compensation | $ 794 | $ 535 | |
Interest paid on deferred fees | 91 | 36 | |
Deferred compensation arrangement with individual, distributions paid | 3 | 2 | |
Defined contribution plan employer discretionary contribution amount | 233 | $ 203 | |
Contributions | $ 0 | ||
SERP | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Description of defined contribution pension and other postretirement plans | The retirement benefit under the SERP is an amount equal to sixty percent (60%) of the average of the President and CEO’s base salary for the thirty-six (36) months immediately preceding the executive’s separation from service after age 66, adjusted annually thereafter by a percentage equal to the Consumer Price Index as reported by the U.S. Bureau of Labor Statistics for All Urban Consumers (CPI-U). | ||
SERP | President and CEO | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Annual vesting percentage | 3% | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Award vesting period | 3 years | ||
Award expiration period | 10 years | ||
Compensation cost not yet recognized | $ 260 | ||
Compensation cost recognition weighted average period | 10 months 24 days | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Award vesting period | 4 years | ||
Compensation cost recognition weighted average period | 2 years 10 months 24 days | ||
Nonvested awards, compensation not yet recognized, awards other than options | $ 3,400 | ||
2019 Equity Compensation Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Number of shares authorized (in shares) | 500,000 | ||
Number of shares available for grant (in shares) | 21,262 | ||
2019 Equity Compensation Plan | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Options granted (in shares) | 281,500 | ||
Unvested options cancelled and returned | 16,162 | ||
2019 Equity Compensation Plan | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Options granted (in shares) | 227,400 | ||
Unvested options cancelled and returned | 14,000 |
Employee Benefit Plans - Stock
Employee Benefit Plans - Stock Transactions - Stock Option Plans (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Shares | |||
Options Outstanding, beginning shares (in shares) | 559,499 | ||
Options granted (in shares) | 0 | 0 | |
Options exercised (in shares) | (37,201) | (47,374) | |
Options forfeited, shares | (666) | ||
Options Outstanding, ending shares (in shares) | 521,632 | 559,499 | |
Shares Exercisable | 481,142 | ||
Weighted average exercise price | |||
Weighted Average exercise Price: Options Outstanding, beginning (in usd per share) | $ 18.09 | ||
Weighted Average Exercise Price: Options exercised (in usd per share) | 20.27 | ||
Weighted Average Exercise Price: Options forfeited (in usd per share) | 18.64 | ||
Weighted Average exercise Price: Options Outstanding, ending (in usd per share) | 17.94 | $ 18.09 | |
Weighted average exercise price, Options Exercisable (in dollars per share) | $ 17.84 | ||
Weighted Average Remaining Contractual Life (in years): Options Outstanding | 5 years 8 months 12 days | 5 years 10 months 24 days | |
Weighted Average Remaining Contractual Life (in years): Options Exercisable | 5 years 6 months | ||
Aggregate Intrinsic Value: Options Outstanding | $ 2,542,366 | $ 5,168,740 | |
Aggregate Intrinsic Value: Options Exercisable | $ 2,390,353 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Information About Options Exercised (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Employee Benefit Plans | ||
Number of options exercised | 37,201 | 47,374 |
Total intrinsic value of options exercised | $ 241,904 | $ 746,292 |
Cash received from options exercised | 753,894 | 639,214 |
Tax deduction realized from options | $ 72,777 | $ 224,522 |
Employee Benefit Plans - Stoc_2
Employee Benefit Plans - Stock Transactions - Stock Options Outstanding And Exercisable (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Options outstanding (in shares) | shares | 521,632 |
Options outstanding, Weighted average remaining contractual life (in years) | 5 years 8 months 12 days |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 17.94 |
Options exercisable (in shares) | shares | 481,142 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 17.84 |
$7.25 - $16.51 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Range of exercise prices, lower | 7.25 |
Range of exercise prices, upper | $ 16.51 |
Options outstanding (in shares) | shares | 139,633 |
Options outstanding, Weighted average remaining contractual life (in years) | 3 years 9 months 18 days |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 11.96 |
Options exercisable (in shares) | shares | 139,633 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 11.96 |
$16.52 - $19.26 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Range of exercise prices, lower | 16.52 |
Range of exercise prices, upper | $ 19.26 |
Options outstanding (in shares) | shares | 127,499 |
Options outstanding, Weighted average remaining contractual life (in years) | 6 years 6 months |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 18.06 |
Options exercisable (in shares) | shares | 103,342 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 18.07 |
$19.27 - $20.88 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Range of exercise prices, lower | 19.27 |
Range of exercise prices, upper | $ 20.88 |
Options outstanding (in shares) | shares | 132,300 |
Options outstanding, Weighted average remaining contractual life (in years) | 6 years 4 months 24 days |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 20.34 |
Options exercisable (in shares) | shares | 115,967 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 20.31 |
$20.89 - $22.57 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Range of exercise prices, lower | 20.89 |
Range of exercise prices, upper | $ 22.57 |
Options outstanding (in shares) | shares | 122,200 |
Options outstanding, Weighted average remaining contractual life (in years) | 6 years 2 months 12 days |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 22.02 |
Options exercisable (in shares) | shares | 122,200 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 22.02 |
Employee Benefit Plans - Compen
Employee Benefit Plans - Compensation Expense Related To Stock Options (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Compensation expense | $ 85 | $ 163 |
Income tax benefit | 25 | 47 |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Compensation expense | 332 | 231 |
Income tax benefit | $ 80 | $ 67 |
Employee Benefit Plans - Restri
Employee Benefit Plans - Restricted Stock Activity (Details) - Restricted Stock - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Shares | ||
Nonvested restricted stock, beginning balance (in shares) | 164,570 | |
Granted (in shares) | 18,000 | 70,000 |
Cancelled (in shares) | (1,600) | |
Vested (in shares) | (34,973) | |
Nonvested restricted stock, ending balance (in shares) | 145,997 | |
Average grant date fair value | ||
Nonvested restricted stock, beginning balance (in dollars per share) | $ 24.77 | |
Granted (in dollars per share) | 27.33 | $ 27.52 |
Cancelled (in dollars per share) | 25.94 | |
Vested (in dollars per share) | 23.34 | |
Nonvested restricted stock, ending balance (in dollars per share) | $ 25.41 |
Employee Benefit Plans - Stoc_3
Employee Benefit Plans - Stock Transactions - Restricted Stock Awards (Details) - Restricted Stock - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Number of shares granted (in shares) | 18,000 | 70,000 |
Average grant date fair value (in usd per share) | $ 27.33 | $ 27.52 |
Employee Benefit Plans - SERP N
Employee Benefit Plans - SERP Narrative (Details) - President and CEO - SERP $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) installment | |
Defined Benefit Plan Disclosure | |
Percent of average executive base salary | 60% |
Payment term after separation | 36 months |
Number of annual payments after separation | installment | 15 |
Total estimated future payments | $ | $ 7.2 |
Assumptions used calculating benefit obligation, discount rate | 4% |
Annual vesting percentage | 3% |
Award vesting rights, percentage | 100% |
Employee Benefit Plans - Summar
Employee Benefit Plans - Summary of Components of Net Periodic Pension Cost of Defined Benefit Plan Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Employee Benefit Plans | ||
Service cost | $ 39 | $ 37 |
Interest cost | $ 50 | $ 47 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Labor and Related Expense | Labor and Related Expense |
Net periodic benefit cost | $ 89 | $ 84 |
Employee Benefit Plans - Summ_2
Employee Benefit Plans - Summary of Changes in Benefit Obligations of Defined Benefit Plan Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Employee Benefit Plans | ||
Benefit obligation, beginning of year | $ 4,857 | $ 4,521 |
Service cost | 39 | 37 |
Interest cost | 50 | 47 |
Benefit obligation, end of year | $ 4,946 | $ 4,605 |
Employee Benefit Plans - Execut
Employee Benefit Plans - Executive Incentive Retirement Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Executive Management | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits | ||
Deferred compensation arrangement, option to elect to defer fees and bonuses, percentage | 100% | |
Director | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits | ||
Deferred compensation arrangement, option to elect to defer fees and bonuses, percentage | 100% | |
Other Postretirement Benefits Plan | Executive Management | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits | ||
Deferred compensation arrangement, option to elect to defer fees and bonuses, percentage | 7.50% | |
Award vesting rights, percentage | 100% | |
Accrued employee benefits | $ 34 | |
Life insurance plan with a post retirement death benefit | 250 | |
Life insurance plan aggregate expenses | $ 1 | $ 6 |
Postemployment benefits prior period expense reversed | $ 55 | |
Other Postretirement Benefits Plan | Executive Management | Maximum | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits | ||
Deferred compensation arrangement, option to elect to defer fees and bonuses, percentage | 15% |
Regulatory Capital (Details)
Regulatory Capital (Details) | Mar. 31, 2023 | Dec. 31, 2022 |
Compliance with Regulatory Capital Requirements under Banking Regulations | ||
Leverage ratio | 0.1038 | 0.1088 |
Bank | ||
Compliance with Regulatory Capital Requirements under Banking Regulations | ||
Leverage ratio | 0.0996 | 0.1034 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
New Accounting Pronouncements or Change in Accounting Principle | ||
Operating lease right-of-use assets | $ 5,400 | $ 5,600 |
Lease liabilities | $ 5,482 | $ 5,600 |
Minimum | ||
New Accounting Pronouncements or Change in Accounting Principle | ||
Operating lease, remaining contract term | 1 year | |
Operating Lease renewal term | 1 year | |
Maximum | ||
New Accounting Pronouncements or Change in Accounting Principle | ||
Operating lease, remaining contract term | 10 years | |
Operating Lease renewal term | 5 years |
Leases - Leases Cost (Details)
Leases - Leases Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Leases | |||
Operating lease cost | $ 209 | $ 188 | |
Operating cash flows from operating leases | $ 199 | 182 | |
ROU assets obtained in exchange for new operating lease liabilities | $ 582 | ||
Weighted average remaining lease term in years | 10 years 7 months 17 days | 10 years 9 months 7 days | |
Weighted average discount rate | 3.18% | 3.21% |
Leases - Future Payments (Detai
Leases - Future Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Leases | ||
2023 | $ 538 | |
2024 | 695 | |
2025 | 691 | |
2026 | 702 | |
2027 | 656 | |
2028 and thereafter | 3,010 | |
Total lease payments | 6,292 | |
Less: Interest | (810) | |
Lease liabilities | $ 5,482 | $ 5,600 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Accrued Liabilities and Other Liabilities |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Events. | Apr. 27, 2023 shares |
Equity Compensation Plan, 2023 | |
Subsequent Event Line Items | |
Number of shares authorized (in shares) | 500,000 |
New Share Repurchase Program | |
Subsequent Event Line Items | |
Share repurchase authorized to be repurchased | 500,000 |
Percentage of number of shares authorized to be repurchased | 5% |