Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 30, 2024 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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 | 10,039,119 | |
Entity Central Index Key | 0000920427 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
ASSETS | ||
Cash and due from banks | $ 20,619 | $ 20,668 |
Interest-bearing deposits | 162,367 | 174,108 |
Cash and cash equivalents | 182,986 | 194,776 |
Securities: | ||
Debt securities available for sale, at market value | 94,682 | 91,765 |
Debt securities held to maturity, at amortized cost | 36,089 | 36,122 |
Equity securities, at market value | 7,931 | 7,802 |
Total securities | 138,702 | 135,689 |
Loans: | ||
Total loans | 2,174,457 | 2,172,063 |
Allowance for credit losses | (26,080) | (25,854) |
Net loans | 2,148,377 | 2,146,209 |
Premises and equipment, net | 19,281 | 19,567 |
Bank owned life insurance ("BOLI") | 25,295 | 25,230 |
Deferred tax assets, net | 12,681 | 12,552 |
Federal Home Loan Bank ("FHLB") stock | 15,896 | 18,435 |
Accrued interest receivable | 13,165 | 13,582 |
Goodwill | 1,516 | 1,516 |
Prepaid expenses and other assets | 10,189 | 10,951 |
Total assets | 2,568,088 | 2,578,507 |
Deposits: | ||
Noninterest-bearing demand | 395,520 | 419,636 |
Interest-bearing demand | 325,174 | 312,208 |
Savings | 504,210 | 497,491 |
Brokered deposits | 235,755 | 268,408 |
Time Deposits | 500,611 | 426,397 |
Total deposits | 1,961,270 | 1,924,140 |
Borrowed funds | 299,397 | 356,438 |
Subordinated debentures | 10,310 | 10,310 |
Accrued interest payable | 1,551 | 1,924 |
Accrued expenses and other liabilities | 28,799 | 24,265 |
Total liabilities | 2,301,327 | 2,317,077 |
Shareholders' equity: | ||
Common stock | 101,676 | 100,426 |
Retained earnings | 199,380 | 191,108 |
Treasury stock | (31,443) | (27,367) |
Accumulated other comprehensive loss | (2,852) | (2,737) |
Total shareholders' equity | 266,761 | 261,430 |
Total liabilities and shareholders' equity | 2,568,088 | 2,578,507 |
SBA loans held for sale | ||
Loans: | ||
Total loans | 18,439 | 18,242 |
SBA loans held for investment | ||
Loans: | ||
Total loans | 39,009 | 38,584 |
Allowance for credit losses | (1,209) | (1,221) |
SBA PPP loans | ||
Loans: | ||
Total loans | 2,168 | 2,318 |
Commercial loans | ||
Loans: | ||
Total loans | 1,291,319 | 1,277,460 |
Allowance for credit losses | (16,187) | (15,876) |
Residential mortgage loans | ||
Loans: | ||
Total loans | 627,464 | 631,506 |
Allowance for credit losses | (6,394) | (6,529) |
Consumer loans | ||
Loans: | ||
Total loans | 72,275 | 72,676 |
Allowance for credit losses | (922) | (1,022) |
Residential construction loans | ||
Loans: | ||
Total loans | 123,783 | 131,277 |
Allowance for credit losses | $ (1,368) | $ (1,206) |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares shares in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Consolidated Balance Sheets | ||
Common stock, shares issued (in shares) | 11,555 | 11,424 |
Common stock, shares outstanding (in shares) | 10,044 | 10,063 |
Treasury shares | 1,511 | 1,361 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
INTEREST INCOME | ||
Interest-bearing deposits | $ 420 | $ 333 |
FHLB stock | 280 | 331 |
Securities: | ||
Taxable | 1,849 | 1,739 |
Tax-exempt | 18 | 19 |
Total securities | 1,867 | 1,758 |
Loans: | ||
SBA loans | 1,333 | 1,404 |
SBA PPP loans | 8 | 77 |
Commercial loans | 20,830 | 17,401 |
Residential mortgage loans | 9,219 | 8,109 |
Consumer loans | 1,402 | 1,354 |
Residential construction loans | 2,578 | 2,586 |
Total loans | 35,370 | 30,931 |
Total interest income | 37,937 | 33,353 |
INTEREST EXPENSE | ||
Interest-bearing demand deposits | 1,710 | 965 |
Savings deposits | 3,144 | 1,554 |
Brokered deposits | 2,295 | 1,562 |
Time deposits | 4,699 | 1,563 |
Borrowed funds and subordinated debentures | 2,248 | 3,799 |
Total interest expense | 14,096 | 9,443 |
Net interest income | 23,841 | 23,910 |
Provision for credit losses, loans | 641 | 108 |
Provision for credit losses, off-balance sheet | 2 | |
Net interest income after provision for credit losses | 23,198 | 23,802 |
NONINTEREST INCOME | ||
Gain on sale of SBA loans held for sale, net | 238 | 309 |
Gain on sale of mortgage loans, net | 320 | 244 |
BOLI income | 65 | 80 |
Net security gains (losses) | 54 | (322) |
Other income | 341 | 368 |
Total noninterest income | 1,718 | 1,417 |
NONINTEREST EXPENSE | ||
Compensation and benefits | 7,357 | 7,090 |
Processing and communications | 906 | 804 |
Occupancy | 798 | 770 |
Furniture and equipment | 684 | 689 |
Professional services | 436 | 427 |
Advertising | 400 | 260 |
Loan related expenses | 384 | 175 |
Deposit insurance | 339 | 348 |
Director fees | 247 | 217 |
Other expenses | 581 | 648 |
Total noninterest expense | 12,132 | 11,428 |
Income before provision for income taxes | 12,784 | 13,791 |
Provision for income taxes | 3,198 | 3,504 |
Net income | $ 9,586 | $ 10,287 |
Net income per common share - Basic | $ 0.95 | $ 0.98 |
Net income per common share - Diluted | $ 0.93 | $ 0.96 |
Weighted average common shares outstanding - Basic | 10,127 | 10,538 |
Weighted average common shares outstanding - Diluted | 10,276 | 10,686 |
Branch fee income | ||
NONINTEREST INCOME | ||
Noninterest income | $ 243 | $ 235 |
Service and loan fee income | ||
NONINTEREST INCOME | ||
Noninterest income | $ 457 | $ 503 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Consolidated Statements of Comprehensive Income | ||
Net income, before tax amount | $ 12,784 | $ 13,791 |
Income tax expense (benefit) | 3,198 | 3,504 |
Net income | 9,586 | 10,287 |
Debt securities available for sale: | ||
Unrealized holding losses (gains) on securities arising during the period, before tax | (44) | 359 |
Unrealized holding losses (gains) on securities arising during the period, tax | (10) | 93 |
Unrealized holding losses (gains) on securities arising during the period, net | (34) | 266 |
Total unrealized losses on securities available for sale, before tax | (44) | 359 |
Total unrealized losses on securities available for sale, tax | (10) | 93 |
Total unrealized losses on securities available for sale, net of tax | (34) | 266 |
Net unrealized (losses) gains from cash flow hedges: | ||
Unrealized holding losses on cash flow hedges arising during the period, before tax | (351) | (433) |
Unrealized holding losses on cash flow hedges arising during the period, tax | (100) | (92) |
Unrealized holding losses on cash flow hedges arising during the period, net of tax | (251) | (341) |
Less: reclassification adjustment for gains on cash flow hedges included in net income, before tax | (238) | (198) |
Less: reclassification adjustment for gains on cash flow hedges included in net income, tax | (68) | (42) |
Less: reclassification adjustment for gains on cash flow hedges included in net income, net of tax | (170) | (156) |
Total unrealized losses on cash flow hedges, before tax | (113) | (235) |
Total unrealized losses on cash flow hedges, tax | (32) | (50) |
Total unrealized losses on cash flow hedges, net of tax | (81) | (185) |
Total other comprehensive (loss) income, before tax | (157) | 124 |
Total other comprehensive (loss) income, tax | (42) | 43 |
Total other comprehensive (loss) income, net of tax | (115) | 81 |
Total comprehensive income, before tax | 12,627 | 13,915 |
Total comprehensive income, tax | 3,156 | 3,547 |
Total comprehensive income, net of tax | $ 9,471 | $ 10,368 |
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 (loss) income | Cumulative Effect, Period of Adoption, Adjustment | Total | |
Beginning Balance (in shares) at Dec. 31, 2022 | 10,584 | |||||||
Beginning balance at Dec. 31, 2022 | $ 97,204 | $ (649) | $ 156,958 | $ (11,675) | $ (3,260) | $ (649) | $ 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) | |||||
Share-based compensation (in shares) | [1] | 44 | ||||||
Share-based compensation | [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 | |||||||
Ending balance at Mar. 31, 2023 | $ 98,197 | 165,335 | (19,894) | (3,179) | $ 240,459 | |||
Beginning Balance (in shares) at Dec. 31, 2023 | 10,063 | 10,063 | ||||||
Beginning balance at Dec. 31, 2023 | $ 100,426 | 191,108 | (27,367) | (2,737) | $ 261,430 | |||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 9,586 | 9,586 | ||||||
Other comprehensive income, net of tax | (115) | (115) | ||||||
Dividends on common stock (in shares) | 2 | |||||||
Dividends on common stock | $ 53 | (1,314) | (1,261) | |||||
Share-based compensation (in shares) | [1] | 129 | ||||||
Share-based compensation | [1] | $ 1,197 | 1,197 | |||||
Treasury stock purchased, at cost (in shares) | (150) | |||||||
Treasury stock purchased, at cost | (4,076) | $ (4,076) | ||||||
Ending Balance (in shares) at Mar. 31, 2024 | 10,044 | 10,044 | ||||||
Ending balance at Mar. 31, 2024 | $ 101,676 | $ 199,380 | $ (31,443) | $ (2,852) | $ 266,761 | |||
[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, 2024 | Mar. 31, 2023 | |
Consolidated Statements of Changes in Shareholders' Equity | ||
Common stock, dividends, per share, cash paid (in dollars per share) | $ 0.13 | $ 0.12 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
OPERATING ACTIVITIES: | ||
Net income | $ 9,586 | $ 10,287 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for credit losses, loans | 641 | 108 |
Net amortization of purchase premiums and discounts on securities | 34 | 36 |
Depreciation and amortization (accretion) | 554 | (738) |
PPP deferred fees and costs | (3) | (68) |
Deferred income tax (benefit) expense | (87) | 91 |
Net realized security gains | (21) | (222) |
Stock compensation expense | 476 | 417 |
Valuation writedowns on OREO | 113 | |
Gain on sale of mortgage loans, net | (320) | (244) |
Gain on sale of SBA loans held for sale, net | (238) | (309) |
BOLI income | (65) | (80) |
Net change in other assets and liabilities | 5,205 | 4,359 |
Net cash provided by operating activities | 15,762 | 13,750 |
INVESTING ACTIVITIES | ||
Purchases of equity securities | (166) | (126) |
Purchases of securities available for sale | (4,000) | |
Proceeds from redemption of FHLB stock, at cost, net | 2,539 | 376 |
Maturities and principal payments on securities held to maturity | 100 | |
Maturities and principal payments on securities available for sale | 1,041 | 1,639 |
Proceeds from sales of equity securities | 91 | 1,269 |
Net decrease in SBA PPP loans | 153 | 3,431 |
Net increase in loans | (2,705) | (26,339) |
Purchases of premises and equipment | (78) | (195) |
Net cash used in investing activities | (3,025) | (19,945) |
FINANCING ACTIVITIES | ||
Net increase in deposits | 37,130 | 36,393 |
Repayments of short-term borrowings | (61,400) | (14,000) |
Proceeds from long-term borrowings | 4,359 | 5,000 |
Proceeds from exercise of stock options | 721 | 530 |
Dividends on common stock | (1,261) | (1,215) |
Purchase of treasury stock, including exise tax accrual | (4,076) | (8,219) |
Net cash (used in) provided by financing activities | (24,527) | 18,489 |
(Decrease) increase in cash and cash equivalents | (11,790) | 12,294 |
Cash and cash equivalents, beginning of year | 194,776 | 114,793 |
Cash and cash equivalents, end of period | 182,986 | 127,087 |
SUPPLEMENTAL DISCLOSURES | ||
Interest paid | 14,469 | 9,202 |
Income taxes paid | 250 | 3,557 |
Noncash activities: | ||
Capitalization of servicing rights | $ 76 | 159 |
Transfer of loans to OREO | $ 288 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
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 servicing assets, 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 and the general credit quality of the loan portfolio. 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 opinion of management, are necessary for the fair presentation of interim results. The results of operations for the three months ended March 31, 2024 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, 2023. 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. Market conditions and external factors may unpredictably impact the competitive landscape for deposits in the banking industry. Additionally, the current high 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 as of 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 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 2024 Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” requires public entities to disclose detailed information about a reportable segment’s expenses on both an annual and interim basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The amendments in ASU 2023-07 should be applied retrospectively to all periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company adopted ASU 2023-07 effective January 1, 2024, noting no material impact. |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 | |
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) 2024 2023 Net income $ 9,586 $ 10,287 Weighted average common shares outstanding - Basic 10,127 10,538 Plus: Potential dilutive common stock equivalents 149 148 Weighted average common shares outstanding - Diluted 10,276 10,686 Net income per common share - Basic $ 0.95 $ 0.98 Net income per common share - Diluted 0.93 0.96 Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive — — |
Other Comprehensive (Loss) Inco
Other Comprehensive (Loss) Income | 3 Months Ended |
Mar. 31, 2024 | |
Other Comprehensive (Loss) Income | |
Other Comprehensive (Loss) Income | NOTE 4. Other Comprehensive (Loss) Income The following tables show the changes in other comprehensive (loss) income for the three months ended March 31, 2024 and 2023, net of tax: For the three months ended March 31, 2024 Accumulated Net unrealized Net unrealized other losses on gains (losses) from comprehensive (In thousands) securities cash flow hedges loss Balance, beginning of period $ (3,408) $ 671 $ (2,737) Other comprehensive loss before reclassifications (34) (251) (285) Less amounts reclassified from accumulated other comprehensive loss — (170) (170) Period change (34) (81) (115) Balance, end of period $ (3,442) $ 590 $ (2,852) For the three months ended March 31, 2023 Net unrealized Accumulated Net unrealized gains (losses) other (losses) gains on from cash flow comprehensive (In thousands) securities hedges (loss) income Balance, beginning of period $ (4,381) $ 1,121 $ (3,260) Other comprehensive income (loss) 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) |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value | |
Fair Value | NOTE 5. Fair Value Fair Value Measurement The Company follows Financial Accounting Standards Board 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 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, 2024, the fair value of the Company’s AFS debt securities portfolio was $94.7 million. Most of the Company’s AFS debt securities were classified as Level 2 assets at March 31, 2024. 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 third-party model pricing, defined as valuing securities based upon their relationship with other benchmark securities. Included in the Company’s AFS debt securities are select corporate bonds which are classified as Level 3 assets at March 31, 2024. 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. The following table presents a reconciliation of the Level 3 AFS debt securities measured at fair value on a recurring basis for the three months ended March 31, 2024 and 2023: Collateralized Debt Obligations (In thousands) 2024 2023 Balance of Recurring Level 3 assets at January 1 $ 7,979 $ 4,675 Activity Losses in other comprehensive income — (165) Balance of recurring Level 3 assets at March 31 $ 7,979 $ 4,510 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, 2024, the fair value of the Company’s equity securities portfolio was $7.9 million. All of the Company’s equity securities were classified as Level 1 assets at March 31, 2024. 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. There were no material changes in the inputs or methodologies used to determine fair value during the period ended March 31, 2024, as compared to the periods ended December 31, 2023 and March 31, 2023. The tables below present the balances of assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023: Fair Value Measurements at March 31, 2024 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 $ 15,264 $ — $ 15,264 $ — State and political subdivisions 350 — 350 — Residential mortgage-backed securities 13,532 — 13,532 — Corporate and other securities 65,536 — 57,557 7,979 Total debt securities available for sale $ 94,682 $ — $ 86,703 $ 7,979 Equity securities with readily determinable fair values $ 7,931 $ 7,931 $ — $ — Total equity securities $ 7,931 $ 7,931 $ — $ — Interest rate swap agreements $ 805 $ — $ 805 $ — Total swap agreements $ 805 $ — $ 805 $ — Fair value Measurements at December 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 $ 16,033 $ — $ 16,033 $ — State and political subdivisions 360 — 360 — Residential mortgage-backed securities 14,077 — 14,077 — Corporate and other securities 61,295 — 53,316 7,979 Total debt securities available for sale $ 91,765 $ — $ 83,786 $ 7,979 Equity securities with readily determinable fair values $ 7,802 $ 7,802 $ — $ — Total equity securities $ 7,802 $ 7,802 $ — $ — Interest rate swap agreements $ 918 $ — $ 918 $ — Total swap agreements $ 918 $ — $ 918 $ — There were no liabilities measured on a recurring basis as of March 31, 2024 or December 31, 2023. 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, 2024 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 $ 8,083 $ — $ — $ 8,083 Fair Value Measurements at December 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 $ 4,755 $ — $ — $ 4,755 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 and is measured for impairment based upon a third-party appraisal. 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/or 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, 2024, the valuation allowance for individually evaluated loans was $1.1 million, compared to $1.0 million at December 31, 2023. 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: 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 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. The table below presents the carrying amount and estimated fair values of the Company’s financial instruments presented as of March 31, 2024 and December 31, 2023: March 31, 2024 Carrying (In thousands) amount Level 1 Level 2 Level 3 Financial assets: Debt securities held to maturity $ 36,089 $ — $ 29,138 $ — SBA loans held for sale 18,439 — 19,383 — Loans, net of allowance for credit losses 2,129,938 — 2,018,402 8,083 Financial liabilities: Deposits 1,961,270 — 1,952,706 — Borrowed funds and subordinated debentures 309,707 — 308,640 — December 31, 2023 Carrying (In thousands) amount Level 1 Level 2 Level 3 Financial assets: Debt securities held to maturity $ 36,122 $ — $ 29,656 $ — SBA loans held for sale 18,242 — 19,175 — Loans, net of allowance for credit losses 2,127,967 — 2,027,084 4,755 Financial liabilities: Deposits 1,924,140 — 1,915,022 — Borrowed funds and subordinated debentures 366,748 — 365,879 — 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-balance sheet 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, 2024 | |
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, 2024 and December 31, 2023: March 31, 2024 Gross Gross Allowance Amortized unrealized unrealized for credit Estimated (In thousands) cost gains losses losses fair value Available for sale: U.S. Government sponsored entities $ 15,749 $ — $ (485) $ — $ 15,264 State and political subdivisions 379 — (29) — 350 Residential mortgage-backed securities 15,184 29 (1,681) — 13,532 Corporate and other securities 69,203 250 (2,634) (1,283) 65,536 Total debt securities available for sale $ 100,515 $ 279 $ (4,829) $ (1,283) $ 94,682 Held to maturity: U.S. Government sponsored entities $ 28,000 $ — $ (4,656) $ — $ 23,344 State and political subdivisions 1,187 75 — — 1,262 Residential mortgage-backed securities 6,902 — (2,370) — 4,532 Total debt securities held to maturity $ 36,089 $ 75 $ (7,026) $ — $ 29,138 December 31, 2023 Gross Gross Allowance Amortized unrealized unrealized for credit Estimated (In thousands) cost gains losses losses fair value Available for sale: U.S. Government sponsored entities $ 16,490 $ — $ (457) $ — $ 16,033 State and political subdivisions 388 — (28) — 360 Residential mortgage-backed securities 15,473 30 (1,426) — 14,077 Corporate and other securities 65,203 251 (2,876) (1,283) 61,295 Total debt securities available for sale $ 97,554 $ 281 $ (4,787) $ (1,283) $ 91,765 Held to maturity: U.S. Government sponsored entities $ 28,000 $ — $ (4,419) $ — $ 23,581 State and political subdivisions 1,272 90 — — 1,362 Residential mortgage-backed securities 6,850 — (2,137) — 4,713 Total debt securities held to maturity $ 36,122 $ 90 $ (6,556) $ — $ 29,656 For three months ended March 31, 2024 and 2023 there was no provision for credit loss on AFS debt securities. The contractual maturities of available for sale and held for maturity debt securities at March 31, 2024 are set forth in the following table. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary. Amortized Fair (In thousands) Cost Value Available for sale: Due in one year $ 749 $ 747 Due after one year through five years 33,780 31,358 Due after five years through ten years 13,289 11,558 Due after ten years 37,513 37,487 Residential mortgage-backed securities 15,184 13,532 Total $ 100,515 $ 94,682 Held to maturity: Due in one year $ — $ — Due after one year through five years — — Due after five years through ten years 3,000 2,897 Due after ten years 26,187 21,709 Residential mortgage-backed securities 6,902 4,532 Total $ 36,089 $ 29,138 Actual maturities of available for sale and held to maturity debt securities may differ from those presented above since certain obligations provide the issuer the right to call or prepay the obligation prior to scheduled maturitiy without penalty. 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, 2024 and December 31, 2023 are as follows: March 31, 2024 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 $ 747 $ (2) $ 14,517 $ (483) $ 15,264 $ (485) State and political subdivisions — — 350 (29) 350 (29) Residential mortgage-backed securities — — 13,415 (1,681) 13,415 (1,681) Corporate and other securities 4,696 (1,054) 33,526 (1,580) 38,222 (2,634) Total $ 5,443 $ (1,056) $ 61,808 $ (3,773) $ 67,251 $ (4,829) Held to maturity: U.S. Government sponsored entities $ — $ — $ 23,344 $ (4,656) $ 23,344 $ (4,656) Residential mortgage-backed securities — $ — 4,532 (2,370) 4,532 (2,370) Total $ — $ — $ 27,876 $ (7,026) $ 27,876 $ (7,026) December 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 $ — $ — $ 16,033 $ (457) $ 16,033 $ (457) State and political subdivisions — — 360 (28) 360 (28) Residential mortgage-backed securities — — 13,949 (1,426) 13,949 (1,426) Corporate and other securities — — 54,827 (2,876) 54,827 (2,876) Total temporarily impaired AFS securities $ — $ — $ 85,169 $ (4,787) $ 85,169 $ (4,787) Held to maturity: U.S. Government sponsored entities $ — $ — $ 23,581 $ (4,419) $ 23,581 $ (4,419) Residential mortgage-backed securities — — 4,713 (2,137) 4,713 (2,137) Total temporarily impaired HTM securities $ — $ — $ 28,294 $ (6,556) $ 28,294 $ (6,556) 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. The Company is using the practical expedient 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 for sale securities during the three months ended March 31, 2024 and 2023. There were no realized gains or losses for held to maturity debt securities during the three months ended March 31, 2024 and 2023. 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, 2024 and 2023: For the three months ended March 31, (In thousands) 2024 2023 Net unrealized gains (losses) occurring during the period on equity securities $ 33 $ (544) Net gains recognized during the period on equity securities sold during the period 21 222 Gains (losses) recognized during the reporting period on equity securities $ 54 $ (322) |
Loans
Loans | 3 Months Ended |
Mar. 31, 2024 | |
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 credit losses as of March 31, 2024 and December 31, 2023: (In thousands) March 31, 2024 December 31, 2023 SBA loans held for investment $ 39,009 $ 38,584 SBA PPP loans 2,168 2,318 Commercial loans SBA 504 loans 38,128 33,669 Commercial & industrial 133,409 128,402 Commercial real estate 977,437 986,230 Commercial real estate construction 142,345 129,159 Residential mortgage loans 627,464 631,506 Consumer loans Home equity 67,448 67,037 Consumer other 4,827 5,639 Residential construction loans 123,783 131,277 Total loans held for investment $ 2,156,018 $ 2,153,821 SBA loans held for sale 18,439 18,242 Total loans $ 2,174,457 $ 2,172,063 Loans are made to individuals and 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. 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, commercial and residential construction 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: For residential mortgage and consumer 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. Nonaccrual and Past Due Loans Nonaccrual loans consist of loans that are not accruing interest as a result of principal or interest being in default, typically 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. When a loan is classified as nonaccrual, interest accruals are discontinued and all past due interest previously recognized as income is reversed and charged against current period earnings. Generally, until the loan becomes current, any payments received from the borrower are applied to outstanding principal until such time as management determines that the financial condition of the borrower and other factors merit recognition of a portion of such payments as interest income. Loans may be returned to an accrual status when the ability to collect is reasonably assured and when the loan is brought current as to principal and interest. The risk of loss is difficult to quantify and is subject to fluctuations in collateral values, general economic conditions and other factors. The Company values its collateral through the use of appraisals, broker price opinions and knowledge of its local market. The following tables set forth an aging analysis of past due and nonaccrual loans as of March 31, 2024 and December 31, 2023: March 31, 2024 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 $ 169 $ 275 $ 138 $ 3,542 $ 4,124 $ 34,885 $ 39,009 Commercial loans SBA 504 loans — — — — — 38,128 38,128 Commercial & industrial 321 — — 112 433 132,976 133,409 Commercial real estate 4,324 384 — 2,303 7,011 970,426 977,437 Commercial real estate construction — — — — — 142,345 142,345 Residential mortgage loans 12,178 — — 7,440 19,618 607,846 627,464 Consumer loans Home equity — — — 366 366 67,082 67,448 Consumer other 52 38 — — 90 4,737 4,827 Residential construction loans 434 — — 3,127 3,561 120,222 123,783 Total loans held for investment, excluding SBA PPP 17,478 697 138 16,890 35,203 2,118,647 2,153,850 SBA loans held for sale 508 — — — 508 17,931 18,439 Total loans, excluding SBA PPP $ 17,986 $ 697 $ 138 $ 16,890 $ 35,711 $ 2,136,578 $ 2,172,289 December 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 $ 551 $ 185 $ — $ 3,444 $ 4,180 $ 34,404 $ 38,584 Commercial loans SBA 504 loans — — — — — 33,669 33,669 Commercial & industrial 288 78 — 283 649 127,753 128,402 Commercial real estate 1,732 — — 1,665 3,397 982,833 986,230 Commercial real estate construction — — — — — 129,159 129,159 Residential mortgage loans 8,719 1,378 946 10,326 21,369 610,137 631,506 Consumer loans Home equity 14 — — 381 395 66,642 67,037 Consumer other 28 55 — — 83 5,556 5,639 Residential construction loans 2,580 — — 2,141 4,721 126,556 131,277 Total loans held for investment, excluding SBA PPP 13,912 1,696 946 18,240 34,794 2,116,709 2,151,503 SBA loans held for sale — — — — — 18,242 18,242 Total loans, excluding SBA PPP $ 13,912 $ 1,696 $ 946 $ 18,240 $ 34,794 $ 2,134,951 $ 2,169,745 The Company is using the practical expedient Individually Evaluated Loans The Company has defined individually evaluated loans to be all nonperforming loans. Management individually evaluates a loan when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract. The following tables provide detail on the Company’s loans individually evaluated in the Company’s CECL evaluation with the associated allowance amount, if applicable, as of March 31, 2024 and December 31, 2023: March 31, 2024 Unpaid Allowance for principal Recorded Credit Losses (In thousands) balance investment Allocated With no related allowance: SBA loans held for investment $ 2,401 $ 2,323 $ — Commercial loans Commercial real estate 2,727 1,755 — Total commercial loans 2,727 1,755 — Residential mortgage loans 3,706 3,700 — Consumer loans Home equity 382 365 — Residential construction loans 547 547 — Total individually evaluated loans with no related allowance 9,763 8,690 — With an allowance: SBA loans held for investment 1,482 1,357 382 Commercial loans Commercial & industrial 718 112 112 Commercial real estate 699 548 225 Total commercial loans 1,417 660 337 Residential mortgage loans 3,772 3,740 300 Consumer loans Home equity 1 1 1 Residential construction loans 2,580 2,580 116 Total individually evaluated loans with a related allowance 9,252 8,338 1,136 Total individually evaluated loans: SBA loans held for investment 3,883 3,680 382 Commercial loans Commercial & industrial 718 112 112 Commercial real estate 3,426 2,303 225 Total commercial loans 4,144 2,415 337 Residential mortgage loans 7,478 7,440 300 Consumer loans Home equity 383 366 1 Residential construction loans 3,127 3,127 116 Total individually evaluated loans $ 19,015 $ 17,028 $ 1,136 December 31, 2023 Unpaid Allowance for principal Recorded Credit Losses (In thousands) balance investment Allocated With no related allowance: SBA loans held for investment $ 2,264 $ 2,186 $ — Commercial loans Commercial real estate 2,734 1,607 — Total commercial loans 2,734 1,607 — Residential mortgage loans 7,146 7,121 — Consumer loans Home equity 390 388 — Total consumer loans 390 388 — Residential construction loans 2,757 2,141 — Total individually evaluated loans with no related allowance 15,291 13,443 — With an allowance: SBA loans held for investment 1,383 1,258 348 Commercial loans Commercial & industrial 638 283 283 Commercial real estate 209 58 58 Total commercial loans 847 341 341 Residential mortgage loans 4,182 4,151 306 Total individually evaluated loans with a related allowance 6,412 5,750 995 Total individually evaluated loans: SBA loans held for investment 3,647 3,444 348 Commercial loans Commercial & industrial 638 283 283 Commercial real estate 2,943 1,665 58 Total commercial loans 3,581 1,948 341 Residential mortgage loans 11,328 11,272 306 Consumer loans Home equity 390 388 — Total consumer loans 390 388 — Residential construction loans 2,757 2,141 — Total individually evaluated loans $ 21,703 $ 19,193 $ 995 The following tables show the internal loan classification risk by loan portfolio classification by origination year as of March 31, 2024 and December 31, 2023, respectively: Term Loans Amortized Cost Basis by Origination Year, March 31, 2024 (In thousands) 2024 2023 2022 2021 2020 2019 and Earlier Revolving Loans Amortized Cost Basis Total SBA loans held for investment Risk Rating: Pass $ 964 $ 1,878 $ 5,241 $ 4,843 $ 5,778 $ 13,240 $ - $ 31,944 Special Mention - - 1,836 356 510 170 - 2,872 Substandard - - 1,256 2,186 176 575 - 4,193 Total SBA loans held for investment $ 964 $ 1,878 $ 8,333 $ 7,385 $ 6,464 $ 13,985 $ - $ 39,009 SBA PPP loans Risk Rating: Pass $ - $ - $ - $ 2,168 $ - $ - $ - $ 2,168 Total SBA PPP loans $ - $ - $ - $ 2,168 $ - $ - $ - $ 2,168 Commercial loans Risk Rating: Pass $ 14,828 $ 152,337 $ 336,287 $ 180,893 $ 126,845 $ 365,085 $ 103,292 $ 1,279,567 Special Mention - - 490 1,464 - 6,431 395 8,780 Substandard - - - 137 9 2,826 - 2,972 Total commercial loans $ 14,828 $ 152,337 $ 336,777 $ 182,494 $ 126,854 $ 374,342 $ 103,687 $ 1,291,319 Commercial loans Current-period gross writeoffs $ - $ - $ - $ - $ - $ 98 $ - $ 98 Residential mortgage loans Risk Rating: Performing $ 23,064 $ 85,980 $ 249,423 $ 70,123 $ 48,833 $ 142,601 $ - $ 620,024 Nonperforming - - 1,665 2,382 259 3,134 - 7,440 Total residential mortgage loans $ 23,064 $ 85,980 $ 251,088 $ 72,505 $ 49,092 $ 145,735 $ - $ 627,464 Consumer loans Risk Rating: Performing $ 693 $ 2,973 $ 4,400 $ 3,035 $ 644 $ 11,255 $ 48,908 $ 71,908 Nonperforming - - - - 109 1 257 367 Total consumer loans $ 693 $ 2,973 $ 4,400 $ 3,035 $ 753 $ 11,256 $ 49,165 $ 72,275 Consumer loans Current-period gross writeoffs $ - $ - $ 21 $ 49 $ - $ - $ - $ 70 Residential construction Risk Rating: Pass $ 6,595 $ 34,782 $ 64,368 $ 12,511 $ 1,418 $ - $ - $ 119,674 Special Mention - - - - - - - - Substandard - - - 2,580 547 982 - 4,109 Total residential construction loans $ 6,595 $ 34,782 $ 64,368 $ 15,091 $ 1,965 $ 982 $ - $ 123,783 Residential construction Current-period gross writeoffs $ - $ - $ - $ - $ - $ 277 $ - $ 277 Total loans held for investment $ 46,144 $ 277,950 $ 664,966 $ 282,678 $ 185,128 $ 546,300 $ 152,852 $ 2,156,018 Term Loans Amortized Cost Basis by Origination Year, December 31, 2023 (In thousands) 2023 2022 2021 2020 2019 2018 and Earlier Revolving Loans Amortized Cost Basis Total SBA loans held for investment Risk Rating: Pass $ 1,938 $ 5,339 $ 4,723 $ 6,083 $ 2,634 $ 10,996 $ - $ 31,713 Special Mention - 1,765 356 510 - 31 - 2,662 Substandard - 1,256 2,186 190 - 577 - 4,209 Total SBA loans held for investment $ 1,938 $ 8,360 $ 7,265 $ 6,783 $ 2,634 $ 11,604 $ - $ 38,584 SBA loans held for investment Current-period gross writeoffs $ - $ 100 $ - $ - $ 113 $ - $ - $ 213 SBA PPP loans Risk Rating: Pass $ - $ - $ 2,318 $ - $ - $ - $ - $ 2,318 Total SBA PPP loans $ - $ - $ 2,318 $ - $ - $ - $ - $ 2,318 Commercial loans Risk Rating: Pass $ 139,622 $ 343,755 $ 181,419 $ 128,165 $ 101,274 $ 271,469 $ 96,988 $ 1,262,692 Special Mention - - 1,815 - 1,570 7,423 395 11,203 Substandard - - 59 14 288 3,204 - 3,565 Total commercial loans $ 139,622 $ 343,755 $ 183,293 $ 128,179 $ 103,132 $ 282,096 $ 97,383 $ 1,277,460 Commercial loans Current-period gross writeoffs $ - $ - $ 150 $ - $ 350 $ 252 $ - $ 752 Residential mortgage loans Risk Rating: Performing $ 102,892 $ 253,919 $ 72,586 $ 51,999 $ 30,482 $ 109,302 $ - $ 621,180 Nonperforming - 2,964 2,714 1,054 945 2,649 - 10,326 Total residential mortgage loans $ 102,892 $ 256,883 $ 75,300 $ 53,053 $ 31,427 $ 111,951 $ - $ 631,506 Residential mortgage loans Current-period gross writeoffs $ - $ - $ 25 $ - $ - $ 68 $ - $ 93 Consumer loans Risk Rating: Performing $ 3,428 $ 4,777 $ 3,681 $ 670 $ 2,481 $ 7,507 $ 49,751 $ 72,295 Nonperforming - - - 125 - 256 - 381 Total consumer loans $ 3,428 $ 4,777 $ 3,681 $ 795 $ 2,481 $ 7,763 $ 49,751 $ 72,676 Consumer loans Current-period gross writeoffs $ - $ 26 $ 552 $ - $ - $ - $ - $ 578 Residential construction Risk Rating: Performing $ 28,827 $ 72,257 $ 25,395 $ 1,418 $ 491 $ 748 $ - $ 129,136 Nonperforming - - - 547 - 1,594 - 2,141 Total residential construction loans $ 28,827 $ 72,257 $ 25,395 $ 1,965 $ 491 $ 2,342 $ - $ 131,277 Residential construction Current-period gross writeoffs $ - $ - $ - $ - $ - $ 600 $ 400 $ 1,000 Total loans held for investment $ 276,707 $ 686,032 $ 297,252 $ 190,775 $ 140,165 $ 415,756 $ 147,134 $ 2,153,821 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 concession, 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 twelve months ended March 31, 2024: Principal Payment Term (In thousands) Forgiveness Delay Extension SBA loans held for investment $ 8 $ 99 $ — Commercial loans Commercial & industrial — — 813 Commercial real estate — 2,619 — Consumer loans Home equity — — 2,309 Balance, March 31, 2024 $ 8 $ 2,718 $ 3,122 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 twelve months ended March 31, 2024 had a payment default during the period and all loans were current as of March 31, 2024. |
Allowance for Credit Losses and
Allowance for Credit Losses and Reserve for Unfunded Loan Commitments | 3 Months Ended |
Mar. 31, 2024 | |
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. These environmental factors include reasonable and supportable forecasts. 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 7(a) 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 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, 2024 and 2023: For the three months ended March 31, 2024 SBA Residential (In thousands) Held for Investment Commercial Residential Consumer construction Total Balance, beginning of period $ 1,221 $ 15,876 $ 6,529 $ 1,022 $ 1,206 $ 25,854 Charge-offs — (98) — (70) (277) (445) Recoveries 8 12 — 10 — 30 Net recoveries (charge-offs) 8 (86) — (60) (277) (415) (Credit to) provision for credit losses charged to expense (20) 397 (135) (40) 439 641 Balance, end of period $ 1,209 $ 16,187 $ 6,394 $ 922 $ 1,368 $ 26,080 For the three months ended March 31, 2023 SBA Residential (In thousands) Held for Investment 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 The following tables present loans and their related allowance for credit losses, by portfolio segment, as of March 31, 2024 and December 31, 2023: March 31, 2024 SBA Residential (In thousands) Held for Investment Commercial Residential Consumer construction Total Allowance for credit losses ending balance: Individually evaluated $ 382 $ 337 $ 300 $ 1 $ 116 $ 1,136 Collectively evaluated 827 15,850 6,094 921 1,252 24,944 Total $ 1,209 $ 16,187 $ 6,394 $ 922 $ 1,368 $ 26,080 Loan ending balances: Individually evaluated $ 3,680 $ 2,415 $ 7,440 $ 366 $ 3,127 $ 17,028 Collectively evaluated 37,497 1,288,904 620,024 71,909 120,656 2,138,990 Total $ 41,177 $ 1,291,319 $ 627,464 $ 72,275 $ 123,783 $ 2,156,018 December 31, 2023 SBA Residential (In thousands) Held for Investment Commercial Residential Consumer construction Total Allowance for credit losses ending balance: Individually evaluated $ 348 $ 341 $ 306 $ — $ — $ 995 Collectively evaluated 873 15,535 6,223 1,022 1,206 24,859 Total $ 1,221 $ 15,876 $ 6,529 $ 1,022 $ 1,206 $ 25,854 Loan ending balances: Individually evaluated $ 3,444 $ 1,948 $ 11,272 $ 388 $ 2,141 $ 19,193 Collectively evaluated 37,458 1,275,512 620,234 72,288 129,136 2,134,628 Total $ 40,902 $ 1,277,460 $ 631,506 $ 72,676 $ 131,277 $ 2,153,821 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. At March 31, 2024 and December 31, 2023, a $0.6 million commitment reserve was reported on the balance sheet as “Accrued expenses and other liabilities” and reported on the income statement as “Provision for credit losses, off-balance sheet”. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2024 | |
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 via 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, 2024 and December 31, 2023, respectively is as follows: (In thousands, except percentages and years) March 31, 2024 December 31, 2023 Notional amount $ 20,000 $ 20,000 Fair value $ 805 $ 918 Weighted average pay rate 0.83 % 0.83 % Weighted average receive rate 5.62 % 5.27 % Weighted average maturity in years 0.94 1.57 Number of contracts 1 1 During the three months ended March 31, 2024, the Company received variable rate Secured Overnight Financing Rate ("SOFR") payments from and paid fixed rates in accordance with its interest rate swap agreements. At March 31, 2024, 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, 2024 and 2023, respectively: For the three months ended March 31, (In thousands) 2024 2023 Loss recognized in OCI Gross of tax $ (113) $ (235) Net of tax (81) (185) Gain reclassified from AOCI into net income Gross of tax 238 198 Net of tax 170 156 |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 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, 2023 471,132 $ 17.92 4.9 $ 5,500,080 Options granted — — Options exercised (59,100) 15.47 Options forfeited — — Options expired — — Outstanding at March 31, 2024 412,032 $ 18.27 4.8 $ 3,845,636 Exercisable at March 31, 2024 412,032 $ 18.27 4.8 $ 3,845,636 On May 5, 2023, the Company adopted the 2023 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, along with the 2019 Equity Compensation Plan adopted on April 25, 2019, replaced all previously approved and established equity plans then currently in effect. As of March 31, 2024, 281,500 options and 345,850 shares of restricted stock have been awarded from the plans. In addition, 16,162 unvested options and 17,187 unvested shares of restricted stock were cancelled and returned to the plans leaving 405,999 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, 2024 or 2023. 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, 2024 and 2023: For the three months ended March 31, 2024 2023 Number of options exercised 59,100 37,201 Total intrinsic value of options exercised $ 764,901 $ 241,904 Cash received from options exercised 412,791 753,894 Tax deduction realized from options 215,014 72,777 The following table summarizes information about stock options outstanding and exercisable at March 31, 2024: 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 $8.31-11.87 58,000 1.6 $ 9.63 58,000 $ 9.63 11.88-15.44 9,000 2.7 14.60 9,000 14.60 15.45-19.01 128,932 5.5 17.58 128,932 17.58 19.02-22.57 216,100 5.3 21.14 216,100 21.14 Total 412,032 4.8 $ 18.27 412,032 $ 18.27 FASB ASC Topic 718, “Compensation - Stock Compensation,” For the three months ended March 31, (In thousands) 2024 2023 Compensation expense $ 32 $ 85 Income tax benefit $ 9 $ 25 As of March 31, 2024, unrecognized compensation costs related to nonvested share-based stock option compensation arrangements granted under the Company’s plans was $0, due to all options being fully vested. Restricted Stock Awards Restricted stock is issued under the Company’s active Equity Compensation Plans to reward employees and directors and to retain them by distributing stock over a period of time. Restricted stock awards granted to date generally 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, 2024: Average grant Shares date fair value Nonvested restricted stock at December 31, 2023 164,634 $ 24.46 Granted 77,950 28.84 Cancelled (1,937) 27.55 Vested (32,875) 24.43 Nonvested restricted stock at March 31, 2024 207,772 $ 26.08 Restricted stock awards granted during the three months ended March 31, 2024 and 2023 were as follows: For the three months ended March 31, 2024 2023 Number of shares granted 77,950 18,000 Average grant date fair value $ 28.84 $ 27.33 Compensation expense related to restricted stock for the three months ended March 31, 2024 and 2023 is detailed in the following table: For the three months ended March 31, (In thousands) 2024 2023 Compensation expense $ 444 $ 332 Income tax benefit $ 125 $ 80 As of March 31, 2024, there was approximately $4.9 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 3.0 years. |
Regulatory Capital
Regulatory Capital | 3 Months Ended |
Mar. 31, 2024 | |
Regulatory Capital | |
Regulatory Capital | NOTE 11. Regulatory Capital The Bank is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s Consolidated Financial Statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s and consolidated Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting and other factors. The minimum capital level requirements include: (i) a Tier 1 leverage ratio of 4% (ii) common equity Tier 1 capital ratio of 4.5%; (iii) a Tier 1 risk weighted capital ratio of 6%; and (iv) a total risk weighted capital ratio of 8% for all institutions. The Bank and the consolidated Company are also required to maintain a “capital conservation buffer” of 2.5% above the regulatory minimum capital ratios which results in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0% ; (ii) a Tier 1 risk weighted capital ratio of 8.5% ; and (iii) a total risk weighted capital ratio of 10.5% . An institution will be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations will establish a maximum percentage of eligible retained income that could be utilized for such actions. The following table shows information regarding the Company’s and the Bank’s regulatory capital levels at March 31, 2024 and at December 31, 2023. Actual Required for Capital Adequacy Purposes To be Well Capitalized Under Prompt Corrective Action Regulations * Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) As of March 31, 2024 Total risk-based capital (to risk-weighted assets) Consolidated $ 303,846 14.63 % $ 166,101 8.00 % $ 207,627 10.00 % Bank 295,499 14.36 164,659 8.00 205,824 10.00 Common equity tier 1 (to risk-weighted assets) Consolidated 267,884 12.90 93,432 4.50 134,957 6.50 Bank 269,759 13.11 92,621 4.50 133,786 6.50 Tier 1 capital (to risk-weighted assets) Consolidated 277,884 13.38 124,576 6.00 166,101 8.00 Bank 269,759 13.11 123,495 6.00 164,659 8.00 Tier 1 capital (to average total assets) Consolidated 277,884 11.39 97,580 4.00 121,975 5.00 Bank 269,759 11.10 97,204 4.00 121,504 5.00 As of December 31, 2023 Total risk-based capital (to risk-weighted assets) Consolidated $ 298,293 14.43 % $ 165,370 8.00 % $ 206,712 10.00 % Bank 287,206 14.02 163,911 8.00 204,889 10.00 Common equity tier 1 (to risk-weighted assets) Consolidated 262,454 12.70 93,020 4.50 134,363 6.50 Bank 261,584 12.76 92,200 4.50 133,178 6.50 Tier 1 capital (to risk-weighted assets) Consolidated 272,454 13.18 124,027 6.00 165,370 8.00 Bank 261,584 12.76 122,934 6.00 163,911 8.00 Tier 1 capital (to average total assets) Consolidated 272,454 11.14 97,800 4.00 122,250 5.00 Bank 261,584 10.74 97,355 4.00 121,693 5.00 *Prompt Corrective Action requirements only apply to the Bank . |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events | |
Subsequent Events | NOTE 12. Subsequent Events The Company has evaluated all events or transactions that occurred through the date the Company issued these financial statements. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
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 servicing assets, 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 and the general credit quality of the loan portfolio. 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 opinion of management, are necessary for the fair presentation of interim results. The results of operations for the three months ended March 31, 2024 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, 2023. |
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. Market conditions and external factors may unpredictably impact the competitive landscape for deposits in the banking industry. Additionally, the current high 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 as of 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 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 2024 | New Accounting Guidance adopted in 2024 Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” requires public entities to disclose detailed information about a reportable segment’s expenses on both an annual and interim basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The amendments in ASU 2023-07 should be applied retrospectively to all periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company adopted ASU 2023-07 effective January 1, 2024, noting no material impact. |
Net Income per Share (Tables)
Net Income per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Net Income per Share | |
Reconciliation of Calculation of Basic and Diluted Income Per Share | For the three months ended March 31, (In thousands, except per share amounts) 2024 2023 Net income $ 9,586 $ 10,287 Weighted average common shares outstanding - Basic 10,127 10,538 Plus: Potential dilutive common stock equivalents 149 148 Weighted average common shares outstanding - Diluted 10,276 10,686 Net income per common share - Basic $ 0.95 $ 0.98 Net income per common share - Diluted 0.93 0.96 Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive — — |
Other Comprehensive (Loss) In_2
Other Comprehensive (Loss) Income (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Other Comprehensive (Loss) Income | |
Changes in Other Comprehensive (Loss) Income | The following tables show the changes in other comprehensive (loss) income for the three months ended March 31, 2024 and 2023, net of tax: For the three months ended March 31, 2024 Accumulated Net unrealized Net unrealized other losses on gains (losses) from comprehensive (In thousands) securities cash flow hedges loss Balance, beginning of period $ (3,408) $ 671 $ (2,737) Other comprehensive loss before reclassifications (34) (251) (285) Less amounts reclassified from accumulated other comprehensive loss — (170) (170) Period change (34) (81) (115) Balance, end of period $ (3,442) $ 590 $ (2,852) For the three months ended March 31, 2023 Net unrealized Accumulated Net unrealized gains (losses) other (losses) gains on from cash flow comprehensive (In thousands) securities hedges (loss) income Balance, beginning of period $ (4,381) $ 1,121 $ (3,260) Other comprehensive income (loss) 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) |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value | |
Reconciliation of Level 3 Available for Sale Debt Securities Measured at Fair Value on Recurring Basis | Collateralized Debt Obligations (In thousands) 2024 2023 Balance of Recurring Level 3 assets at January 1 $ 7,979 $ 4,675 Activity Losses in other comprehensive income — (165) Balance of recurring Level 3 assets at March 31 $ 7,979 $ 4,510 |
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, 2024 and December 31, 2023: Fair Value Measurements at March 31, 2024 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 $ 15,264 $ — $ 15,264 $ — State and political subdivisions 350 — 350 — Residential mortgage-backed securities 13,532 — 13,532 — Corporate and other securities 65,536 — 57,557 7,979 Total debt securities available for sale $ 94,682 $ — $ 86,703 $ 7,979 Equity securities with readily determinable fair values $ 7,931 $ 7,931 $ — $ — Total equity securities $ 7,931 $ 7,931 $ — $ — Interest rate swap agreements $ 805 $ — $ 805 $ — Total swap agreements $ 805 $ — $ 805 $ — Fair value Measurements at December 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 $ 16,033 $ — $ 16,033 $ — State and political subdivisions 360 — 360 — Residential mortgage-backed securities 14,077 — 14,077 — Corporate and other securities 61,295 — 53,316 7,979 Total debt securities available for sale $ 91,765 $ — $ 83,786 $ 7,979 Equity securities with readily determinable fair values $ 7,802 $ 7,802 $ — $ — Total equity securities $ 7,802 $ 7,802 $ — $ — Interest rate swap agreements $ 918 $ — $ 918 $ — Total swap agreements $ 918 $ — $ 918 $ — |
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, 2024 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 $ 8,083 $ — $ — $ 8,083 Fair Value Measurements at December 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 $ 4,755 $ — $ — $ 4,755 |
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, 2024 and December 31, 2023: March 31, 2024 Carrying (In thousands) amount Level 1 Level 2 Level 3 Financial assets: Debt securities held to maturity $ 36,089 $ — $ 29,138 $ — SBA loans held for sale 18,439 — 19,383 — Loans, net of allowance for credit losses 2,129,938 — 2,018,402 8,083 Financial liabilities: Deposits 1,961,270 — 1,952,706 — Borrowed funds and subordinated debentures 309,707 — 308,640 — December 31, 2023 Carrying (In thousands) amount Level 1 Level 2 Level 3 Financial assets: Debt securities held to maturity $ 36,122 $ — $ 29,656 $ — SBA loans held for sale 18,242 — 19,175 — Loans, net of allowance for credit losses 2,127,967 — 2,027,084 4,755 Financial liabilities: Deposits 1,924,140 — 1,915,022 — Borrowed funds and subordinated debentures 366,748 — 365,879 — |
Securities (Tables)
Securities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Securities | |
Reconciliation From Amortized Cost to Estimated Fair Value of Marketable Securities | March 31, 2024 Gross Gross Allowance Amortized unrealized unrealized for credit Estimated (In thousands) cost gains losses losses fair value Available for sale: U.S. Government sponsored entities $ 15,749 $ — $ (485) $ — $ 15,264 State and political subdivisions 379 — (29) — 350 Residential mortgage-backed securities 15,184 29 (1,681) — 13,532 Corporate and other securities 69,203 250 (2,634) (1,283) 65,536 Total debt securities available for sale $ 100,515 $ 279 $ (4,829) $ (1,283) $ 94,682 Held to maturity: U.S. Government sponsored entities $ 28,000 $ — $ (4,656) $ — $ 23,344 State and political subdivisions 1,187 75 — — 1,262 Residential mortgage-backed securities 6,902 — (2,370) — 4,532 Total debt securities held to maturity $ 36,089 $ 75 $ (7,026) $ — $ 29,138 December 31, 2023 Gross Gross Allowance Amortized unrealized unrealized for credit Estimated (In thousands) cost gains losses losses fair value Available for sale: U.S. Government sponsored entities $ 16,490 $ — $ (457) $ — $ 16,033 State and political subdivisions 388 — (28) — 360 Residential mortgage-backed securities 15,473 30 (1,426) — 14,077 Corporate and other securities 65,203 251 (2,876) (1,283) 61,295 Total debt securities available for sale $ 97,554 $ 281 $ (4,787) $ (1,283) $ 91,765 Held to maturity: U.S. Government sponsored entities $ 28,000 $ — $ (4,419) $ — $ 23,581 State and political subdivisions 1,272 90 — — 1,362 Residential mortgage-backed securities 6,850 — (2,137) — 4,713 Total debt securities held to maturity $ 36,122 $ 90 $ (6,556) $ — $ 29,656 |
Schedule of Marketable Securities By Contractual Maturity | Amortized Fair (In thousands) Cost Value Available for sale: Due in one year $ 749 $ 747 Due after one year through five years 33,780 31,358 Due after five years through ten years 13,289 11,558 Due after ten years 37,513 37,487 Residential mortgage-backed securities 15,184 13,532 Total $ 100,515 $ 94,682 Held to maturity: Due in one year $ — $ — Due after one year through five years — — Due after five years through ten years 3,000 2,897 Due after ten years 26,187 21,709 Residential mortgage-backed securities 6,902 4,532 Total $ 36,089 $ 29,138 |
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, 2024 and December 31, 2023 are as follows: March 31, 2024 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 $ 747 $ (2) $ 14,517 $ (483) $ 15,264 $ (485) State and political subdivisions — — 350 (29) 350 (29) Residential mortgage-backed securities — — 13,415 (1,681) 13,415 (1,681) Corporate and other securities 4,696 (1,054) 33,526 (1,580) 38,222 (2,634) Total $ 5,443 $ (1,056) $ 61,808 $ (3,773) $ 67,251 $ (4,829) Held to maturity: U.S. Government sponsored entities $ — $ — $ 23,344 $ (4,656) $ 23,344 $ (4,656) Residential mortgage-backed securities — $ — 4,532 (2,370) 4,532 (2,370) Total $ — $ — $ 27,876 $ (7,026) $ 27,876 $ (7,026) December 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 $ — $ — $ 16,033 $ (457) $ 16,033 $ (457) State and political subdivisions — — 360 (28) 360 (28) Residential mortgage-backed securities — — 13,949 (1,426) 13,949 (1,426) Corporate and other securities — — 54,827 (2,876) 54,827 (2,876) Total temporarily impaired AFS securities $ — $ — $ 85,169 $ (4,787) $ 85,169 $ (4,787) Held to maturity: U.S. Government sponsored entities $ — $ — $ 23,581 $ (4,419) $ 23,581 $ (4,419) Residential mortgage-backed securities — — 4,713 (2,137) 4,713 (2,137) Total temporarily impaired HTM securities $ — $ — $ 28,294 $ (6,556) $ 28,294 $ (6,556) |
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, 2024 and 2023: For the three months ended March 31, (In thousands) 2024 2023 Net unrealized gains (losses) occurring during the period on equity securities $ 33 $ (544) Net gains recognized during the period on equity securities sold during the period 21 222 Gains (losses) recognized during the reporting period on equity securities $ 54 $ (322) |
Loans (Tables)
Loans (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 credit losses as of March 31, 2024 and December 31, 2023: (In thousands) March 31, 2024 December 31, 2023 SBA loans held for investment $ 39,009 $ 38,584 SBA PPP loans 2,168 2,318 Commercial loans SBA 504 loans 38,128 33,669 Commercial & industrial 133,409 128,402 Commercial real estate 977,437 986,230 Commercial real estate construction 142,345 129,159 Residential mortgage loans 627,464 631,506 Consumer loans Home equity 67,448 67,037 Consumer other 4,827 5,639 Residential construction loans 123,783 131,277 Total loans held for investment $ 2,156,018 $ 2,153,821 SBA loans held for sale 18,439 18,242 Total loans $ 2,174,457 $ 2,172,063 |
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, 2024 and December 31, 2023: March 31, 2024 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 $ 169 $ 275 $ 138 $ 3,542 $ 4,124 $ 34,885 $ 39,009 Commercial loans SBA 504 loans — — — — — 38,128 38,128 Commercial & industrial 321 — — 112 433 132,976 133,409 Commercial real estate 4,324 384 — 2,303 7,011 970,426 977,437 Commercial real estate construction — — — — — 142,345 142,345 Residential mortgage loans 12,178 — — 7,440 19,618 607,846 627,464 Consumer loans Home equity — — — 366 366 67,082 67,448 Consumer other 52 38 — — 90 4,737 4,827 Residential construction loans 434 — — 3,127 3,561 120,222 123,783 Total loans held for investment, excluding SBA PPP 17,478 697 138 16,890 35,203 2,118,647 2,153,850 SBA loans held for sale 508 — — — 508 17,931 18,439 Total loans, excluding SBA PPP $ 17,986 $ 697 $ 138 $ 16,890 $ 35,711 $ 2,136,578 $ 2,172,289 December 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 $ 551 $ 185 $ — $ 3,444 $ 4,180 $ 34,404 $ 38,584 Commercial loans SBA 504 loans — — — — — 33,669 33,669 Commercial & industrial 288 78 — 283 649 127,753 128,402 Commercial real estate 1,732 — — 1,665 3,397 982,833 986,230 Commercial real estate construction — — — — — 129,159 129,159 Residential mortgage loans 8,719 1,378 946 10,326 21,369 610,137 631,506 Consumer loans Home equity 14 — — 381 395 66,642 67,037 Consumer other 28 55 — — 83 5,556 5,639 Residential construction loans 2,580 — — 2,141 4,721 126,556 131,277 Total loans held for investment, excluding SBA PPP 13,912 1,696 946 18,240 34,794 2,116,709 2,151,503 SBA loans held for sale — — — — — 18,242 18,242 Total loans, excluding SBA PPP $ 13,912 $ 1,696 $ 946 $ 18,240 $ 34,794 $ 2,134,951 $ 2,169,745 |
Individually Evaluated Loans with Associated Allowance Amount | March 31, 2024 Unpaid Allowance for principal Recorded Credit Losses (In thousands) balance investment Allocated With no related allowance: SBA loans held for investment $ 2,401 $ 2,323 $ — Commercial loans Commercial real estate 2,727 1,755 — Total commercial loans 2,727 1,755 — Residential mortgage loans 3,706 3,700 — Consumer loans Home equity 382 365 — Residential construction loans 547 547 — Total individually evaluated loans with no related allowance 9,763 8,690 — With an allowance: SBA loans held for investment 1,482 1,357 382 Commercial loans Commercial & industrial 718 112 112 Commercial real estate 699 548 225 Total commercial loans 1,417 660 337 Residential mortgage loans 3,772 3,740 300 Consumer loans Home equity 1 1 1 Residential construction loans 2,580 2,580 116 Total individually evaluated loans with a related allowance 9,252 8,338 1,136 Total individually evaluated loans: SBA loans held for investment 3,883 3,680 382 Commercial loans Commercial & industrial 718 112 112 Commercial real estate 3,426 2,303 225 Total commercial loans 4,144 2,415 337 Residential mortgage loans 7,478 7,440 300 Consumer loans Home equity 383 366 1 Residential construction loans 3,127 3,127 116 Total individually evaluated loans $ 19,015 $ 17,028 $ 1,136 December 31, 2023 Unpaid Allowance for principal Recorded Credit Losses (In thousands) balance investment Allocated With no related allowance: SBA loans held for investment $ 2,264 $ 2,186 $ — Commercial loans Commercial real estate 2,734 1,607 — Total commercial loans 2,734 1,607 — Residential mortgage loans 7,146 7,121 — Consumer loans Home equity 390 388 — Total consumer loans 390 388 — Residential construction loans 2,757 2,141 — Total individually evaluated loans with no related allowance 15,291 13,443 — With an allowance: SBA loans held for investment 1,383 1,258 348 Commercial loans Commercial & industrial 638 283 283 Commercial real estate 209 58 58 Total commercial loans 847 341 341 Residential mortgage loans 4,182 4,151 306 Total individually evaluated loans with a related allowance 6,412 5,750 995 Total individually evaluated loans: SBA loans held for investment 3,647 3,444 348 Commercial loans Commercial & industrial 638 283 283 Commercial real estate 2,943 1,665 58 Total commercial loans 3,581 1,948 341 Residential mortgage loans 11,328 11,272 306 Consumer loans Home equity 390 388 — Total consumer loans 390 388 — Residential construction loans 2,757 2,141 — Total individually evaluated loans $ 21,703 $ 19,193 $ 995 |
Schedule of Loan Classification Risk by Loan Portfolio Classification by Origination Year | Term Loans Amortized Cost Basis by Origination Year, March 31, 2024 (In thousands) 2024 2023 2022 2021 2020 2019 and Earlier Revolving Loans Amortized Cost Basis Total SBA loans held for investment Risk Rating: Pass $ 964 $ 1,878 $ 5,241 $ 4,843 $ 5,778 $ 13,240 $ - $ 31,944 Special Mention - - 1,836 356 510 170 - 2,872 Substandard - - 1,256 2,186 176 575 - 4,193 Total SBA loans held for investment $ 964 $ 1,878 $ 8,333 $ 7,385 $ 6,464 $ 13,985 $ - $ 39,009 SBA PPP loans Risk Rating: Pass $ - $ - $ - $ 2,168 $ - $ - $ - $ 2,168 Total SBA PPP loans $ - $ - $ - $ 2,168 $ - $ - $ - $ 2,168 Commercial loans Risk Rating: Pass $ 14,828 $ 152,337 $ 336,287 $ 180,893 $ 126,845 $ 365,085 $ 103,292 $ 1,279,567 Special Mention - - 490 1,464 - 6,431 395 8,780 Substandard - - - 137 9 2,826 - 2,972 Total commercial loans $ 14,828 $ 152,337 $ 336,777 $ 182,494 $ 126,854 $ 374,342 $ 103,687 $ 1,291,319 Commercial loans Current-period gross writeoffs $ - $ - $ - $ - $ - $ 98 $ - $ 98 Residential mortgage loans Risk Rating: Performing $ 23,064 $ 85,980 $ 249,423 $ 70,123 $ 48,833 $ 142,601 $ - $ 620,024 Nonperforming - - 1,665 2,382 259 3,134 - 7,440 Total residential mortgage loans $ 23,064 $ 85,980 $ 251,088 $ 72,505 $ 49,092 $ 145,735 $ - $ 627,464 Consumer loans Risk Rating: Performing $ 693 $ 2,973 $ 4,400 $ 3,035 $ 644 $ 11,255 $ 48,908 $ 71,908 Nonperforming - - - - 109 1 257 367 Total consumer loans $ 693 $ 2,973 $ 4,400 $ 3,035 $ 753 $ 11,256 $ 49,165 $ 72,275 Consumer loans Current-period gross writeoffs $ - $ - $ 21 $ 49 $ - $ - $ - $ 70 Residential construction Risk Rating: Pass $ 6,595 $ 34,782 $ 64,368 $ 12,511 $ 1,418 $ - $ - $ 119,674 Special Mention - - - - - - - - Substandard - - - 2,580 547 982 - 4,109 Total residential construction loans $ 6,595 $ 34,782 $ 64,368 $ 15,091 $ 1,965 $ 982 $ - $ 123,783 Residential construction Current-period gross writeoffs $ - $ - $ - $ - $ - $ 277 $ - $ 277 Total loans held for investment $ 46,144 $ 277,950 $ 664,966 $ 282,678 $ 185,128 $ 546,300 $ 152,852 $ 2,156,018 Term Loans Amortized Cost Basis by Origination Year, December 31, 2023 (In thousands) 2023 2022 2021 2020 2019 2018 and Earlier Revolving Loans Amortized Cost Basis Total SBA loans held for investment Risk Rating: Pass $ 1,938 $ 5,339 $ 4,723 $ 6,083 $ 2,634 $ 10,996 $ - $ 31,713 Special Mention - 1,765 356 510 - 31 - 2,662 Substandard - 1,256 2,186 190 - 577 - 4,209 Total SBA loans held for investment $ 1,938 $ 8,360 $ 7,265 $ 6,783 $ 2,634 $ 11,604 $ - $ 38,584 SBA loans held for investment Current-period gross writeoffs $ - $ 100 $ - $ - $ 113 $ - $ - $ 213 SBA PPP loans Risk Rating: Pass $ - $ - $ 2,318 $ - $ - $ - $ - $ 2,318 Total SBA PPP loans $ - $ - $ 2,318 $ - $ - $ - $ - $ 2,318 Commercial loans Risk Rating: Pass $ 139,622 $ 343,755 $ 181,419 $ 128,165 $ 101,274 $ 271,469 $ 96,988 $ 1,262,692 Special Mention - - 1,815 - 1,570 7,423 395 11,203 Substandard - - 59 14 288 3,204 - 3,565 Total commercial loans $ 139,622 $ 343,755 $ 183,293 $ 128,179 $ 103,132 $ 282,096 $ 97,383 $ 1,277,460 Commercial loans Current-period gross writeoffs $ - $ - $ 150 $ - $ 350 $ 252 $ - $ 752 Residential mortgage loans Risk Rating: Performing $ 102,892 $ 253,919 $ 72,586 $ 51,999 $ 30,482 $ 109,302 $ - $ 621,180 Nonperforming - 2,964 2,714 1,054 945 2,649 - 10,326 Total residential mortgage loans $ 102,892 $ 256,883 $ 75,300 $ 53,053 $ 31,427 $ 111,951 $ - $ 631,506 Residential mortgage loans Current-period gross writeoffs $ - $ - $ 25 $ - $ - $ 68 $ - $ 93 Consumer loans Risk Rating: Performing $ 3,428 $ 4,777 $ 3,681 $ 670 $ 2,481 $ 7,507 $ 49,751 $ 72,295 Nonperforming - - - 125 - 256 - 381 Total consumer loans $ 3,428 $ 4,777 $ 3,681 $ 795 $ 2,481 $ 7,763 $ 49,751 $ 72,676 Consumer loans Current-period gross writeoffs $ - $ 26 $ 552 $ - $ - $ - $ - $ 578 Residential construction Risk Rating: Performing $ 28,827 $ 72,257 $ 25,395 $ 1,418 $ 491 $ 748 $ - $ 129,136 Nonperforming - - - 547 - 1,594 - 2,141 Total residential construction loans $ 28,827 $ 72,257 $ 25,395 $ 1,965 $ 491 $ 2,342 $ - $ 131,277 Residential construction Current-period gross writeoffs $ - $ - $ - $ - $ - $ 600 $ 400 $ 1,000 Total loans held for investment $ 276,707 $ 686,032 $ 297,252 $ 190,775 $ 140,165 $ 415,756 $ 147,134 $ 2,153,821 |
Schedule of Amortized Cost Basis of Loans Modified, Disaggregated by Class of Gross Loans and Type of Concession 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 twelve months ended March 31, 2024: Principal Payment Term (In thousands) Forgiveness Delay Extension SBA loans held for investment $ 8 $ 99 $ — Commercial loans Commercial & industrial — — 813 Commercial real estate — 2,619 — Consumer loans Home equity — — 2,309 Balance, March 31, 2024 $ 8 $ 2,718 $ 3,122 |
Allowance for Credit Losses a_2
Allowance for Credit Losses and Reserve for Unfunded Loan Commitments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 and 2023: For the three months ended March 31, 2024 SBA Residential (In thousands) Held for Investment Commercial Residential Consumer construction Total Balance, beginning of period $ 1,221 $ 15,876 $ 6,529 $ 1,022 $ 1,206 $ 25,854 Charge-offs — (98) — (70) (277) (445) Recoveries 8 12 — 10 — 30 Net recoveries (charge-offs) 8 (86) — (60) (277) (415) (Credit to) provision for credit losses charged to expense (20) 397 (135) (40) 439 641 Balance, end of period $ 1,209 $ 16,187 $ 6,394 $ 922 $ 1,368 $ 26,080 For the three months ended March 31, 2023 SBA Residential (In thousands) Held for Investment 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 |
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, 2024 and December 31, 2023: March 31, 2024 SBA Residential (In thousands) Held for Investment Commercial Residential Consumer construction Total Allowance for credit losses ending balance: Individually evaluated $ 382 $ 337 $ 300 $ 1 $ 116 $ 1,136 Collectively evaluated 827 15,850 6,094 921 1,252 24,944 Total $ 1,209 $ 16,187 $ 6,394 $ 922 $ 1,368 $ 26,080 Loan ending balances: Individually evaluated $ 3,680 $ 2,415 $ 7,440 $ 366 $ 3,127 $ 17,028 Collectively evaluated 37,497 1,288,904 620,024 71,909 120,656 2,138,990 Total $ 41,177 $ 1,291,319 $ 627,464 $ 72,275 $ 123,783 $ 2,156,018 December 31, 2023 SBA Residential (In thousands) Held for Investment Commercial Residential Consumer construction Total Allowance for credit losses ending balance: Individually evaluated $ 348 $ 341 $ 306 $ — $ — $ 995 Collectively evaluated 873 15,535 6,223 1,022 1,206 24,859 Total $ 1,221 $ 15,876 $ 6,529 $ 1,022 $ 1,206 $ 25,854 Loan ending balances: Individually evaluated $ 3,444 $ 1,948 $ 11,272 $ 388 $ 2,141 $ 19,193 Collectively evaluated 37,458 1,275,512 620,234 72,288 129,136 2,134,628 Total $ 40,902 $ 1,277,460 $ 631,506 $ 72,676 $ 131,277 $ 2,153,821 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Financial Instruments and Hedging Activities | |
Summary of Interest Rate Swaps | (In thousands, except percentages and years) March 31, 2024 December 31, 2023 Notional amount $ 20,000 $ 20,000 Fair value $ 805 $ 918 Weighted average pay rate 0.83 % 0.83 % Weighted average receive rate 5.62 % 5.27 % Weighted average maturity in years 0.94 1.57 Number of contracts 1 1 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | For the three months ended March 31, (In thousands) 2024 2023 Loss recognized in OCI Gross of tax $ (113) $ (235) Net of tax (81) (185) Gain reclassified from AOCI into net income Gross of tax 238 198 Net of tax 170 156 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2023 471,132 $ 17.92 4.9 $ 5,500,080 Options granted — — Options exercised (59,100) 15.47 Options forfeited — — Options expired — — Outstanding at March 31, 2024 412,032 $ 18.27 4.8 $ 3,845,636 Exercisable at March 31, 2024 412,032 $ 18.27 4.8 $ 3,845,636 |
Schedule of Information About Options Exercised | For the three months ended March 31, 2024 2023 Number of options exercised 59,100 37,201 Total intrinsic value of options exercised $ 764,901 $ 241,904 Cash received from options exercised 412,791 753,894 Tax deduction realized from options 215,014 72,777 |
Schedule of Stock Options, by Exercise Price Range | 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 $8.31-11.87 58,000 1.6 $ 9.63 58,000 $ 9.63 11.88-15.44 9,000 2.7 14.60 9,000 14.60 15.45-19.01 128,932 5.5 17.58 128,932 17.58 19.02-22.57 216,100 5.3 21.14 216,100 21.14 Total 412,032 4.8 $ 18.27 412,032 $ 18.27 |
Schedule of Nonvested Share Activity | Average grant Shares date fair value Nonvested restricted stock at December 31, 2023 164,634 $ 24.46 Granted 77,950 28.84 Cancelled (1,937) 27.55 Vested (32,875) 24.43 Nonvested restricted stock at March 31, 2024 207,772 $ 26.08 |
Restricted Stock Grants | For the three months ended March 31, 2024 2023 Number of shares granted 77,950 18,000 Average grant date fair value $ 28.84 $ 27.33 |
Employee Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Allocation of Share-based Compensation Costs | For the three months ended March 31, (In thousands) 2024 2023 Compensation expense $ 32 $ 85 Income tax benefit $ 9 $ 25 |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Allocation of Share-based Compensation Costs | For the three months ended March 31, (In thousands) 2024 2023 Compensation expense $ 444 $ 332 Income tax benefit $ 125 $ 80 |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Regulatory Capital | |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | Actual Required for Capital Adequacy Purposes To be Well Capitalized Under Prompt Corrective Action Regulations * Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) As of March 31, 2024 Total risk-based capital (to risk-weighted assets) Consolidated $ 303,846 14.63 % $ 166,101 8.00 % $ 207,627 10.00 % Bank 295,499 14.36 164,659 8.00 205,824 10.00 Common equity tier 1 (to risk-weighted assets) Consolidated 267,884 12.90 93,432 4.50 134,957 6.50 Bank 269,759 13.11 92,621 4.50 133,786 6.50 Tier 1 capital (to risk-weighted assets) Consolidated 277,884 13.38 124,576 6.00 166,101 8.00 Bank 269,759 13.11 123,495 6.00 164,659 8.00 Tier 1 capital (to average total assets) Consolidated 277,884 11.39 97,580 4.00 121,975 5.00 Bank 269,759 11.10 97,204 4.00 121,504 5.00 As of December 31, 2023 Total risk-based capital (to risk-weighted assets) Consolidated $ 298,293 14.43 % $ 165,370 8.00 % $ 206,712 10.00 % Bank 287,206 14.02 163,911 8.00 204,889 10.00 Common equity tier 1 (to risk-weighted assets) Consolidated 262,454 12.70 93,020 4.50 134,363 6.50 Bank 261,584 12.76 92,200 4.50 133,178 6.50 Tier 1 capital (to risk-weighted assets) Consolidated 272,454 13.18 124,027 6.00 165,370 8.00 Bank 261,584 12.76 122,934 6.00 163,911 8.00 Tier 1 capital (to average total assets) Consolidated 272,454 11.14 97,800 4.00 122,250 5.00 Bank 261,584 10.74 97,355 4.00 121,693 5.00 *Prompt Corrective Action requirements only apply to the Bank . |
Net Income per Share (Details)
Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Net Income per Share | ||
Net income | $ 9,586 | $ 10,287 |
Weighted average common shares outstanding - Basic (in shares) | 10,127 | 10,538 |
Plus: Potential dilutive common stock equivalents (in shares) | 149 | 148 |
Weighted average common shares outstanding - Diluted (in shares) | 10,276 | 10,686 |
Net income per common share - Basic (in dollars per share) | $ 0.95 | $ 0.98 |
Net income per common share - Diluted (in dollars per share) | $ 0.93 | $ 0.96 |
Other Comprehensive (Loss) In_3
Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||
Beginning balance | $ 261,430 | $ 239,227 |
Period change | (115) | 81 |
Ending balance | 266,761 | 240,459 |
Net unrealized (losses) gains on securities | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||
Beginning balance | (3,408) | (4,381) |
Other comprehensive income (loss) before reclassifications | (34) | 266 |
Period change | (34) | 266 |
Ending balance | (3,442) | (4,115) |
Net unrealized gains (losses) from cash flow hedges | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||
Beginning balance | 671 | 1,121 |
Other comprehensive income (loss) before reclassifications | (251) | (341) |
Less amounts reclassified from accumulated other comprehensive loss | (170) | (156) |
Period change | (81) | (185) |
Ending balance | 590 | 936 |
Accumulated other comprehensive (loss) income | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||
Beginning balance | (2,737) | (3,260) |
Other comprehensive income (loss) before reclassifications | (285) | (75) |
Less amounts reclassified from accumulated other comprehensive loss | (170) | (156) |
Period change | (115) | 81 |
Ending balance | $ (2,852) | $ (3,179) |
Fair Value - Fair Value on Recu
Fair Value - Fair Value on Recurring Basis - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value | ||
Available of sale at fair value | $ 94,682 | $ 91,765 |
Equity securities | $ 7,931 | $ 7,802 |
Fair Value - Available for Sale
Fair Value - Available for Sale Debt Securities (Details) - Collateralized Debt Obligations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Fair value on a recurring basis | ||
Balance at beginning of period | $ 7,979 | $ 4,675 |
Losses in other comprehensive income | 0 | (165) |
Balance at end of period | $ 7,979 | $ 4,510 |
Fair Value - Assets And Liabili
Fair Value - Assets And Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | $ 94,682 | $ 91,765 |
Equity securities | 7,931 | 7,802 |
U.S. Government sponsored entities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 15,264 | 16,033 |
State and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 350 | 360 |
Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 13,532 | 14,077 |
Corporate and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 65,536 | 61,295 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 94,682 | 91,765 |
Equity securities | 7,931 | 7,802 |
Swap agreements | 805 | 918 |
Liabilities measured at fair value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Equity securities | 7,931 | 7,802 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 86,703 | 83,786 |
Swap agreements | 805 | 918 |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 7,979 | 7,979 |
Recurring | U.S. Government sponsored entities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 15,264 | 16,033 |
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 | 15,264 | 16,033 |
Recurring | State and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 350 | 360 |
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 | 350 | 360 |
Recurring | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 13,532 | 14,077 |
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 | 13,532 | 14,077 |
Recurring | Corporate and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities available-for-sale | 65,536 | 61,295 |
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 | 57,557 | 53,316 |
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 | 7,979 | 7,979 |
Recurring | Interest rate swap agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Swap agreements | 805 | 918 |
Recurring | Interest rate swap agreements | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Swap agreements | $ 805 | $ 918 |
Fair Value - Assets and Liabi_2
Fair Value - Assets and Liabilities Subject to Fair Value Adjustments on a Nonrecurring Basis (Details) - Nonrecurring - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Collateral-dependent loans | $ 8,083 | $ 4,755 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Collateral-dependent loans | $ 8,083 | $ 4,755 |
Fair Value - Carrying Amount an
Fair Value - Carrying Amount and Fair Values (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Financial assets: | ||
Held to maturity, Fair Value | $ 29,138 | $ 29,656 |
Level 2 | ||
Financial assets: | ||
Held to maturity, Fair Value | 29,138 | 29,656 |
SBA loans held for sale | 19,383 | 19,175 |
Loans, net of allowance for credit losses | 2,018,402 | 2,027,084 |
Financial liabilities: | ||
Deposits | 1,952,706 | 1,915,022 |
Borrowed funds and subordinated debentures | 308,640 | 365,879 |
Level 3 | ||
Financial assets: | ||
Loans, net of allowance for credit losses | 8,083 | 4,755 |
Carrying amount | ||
Financial assets: | ||
Held to maturity, Fair Value | 36,089 | 36,122 |
SBA loans held for sale | 18,439 | 18,242 |
Loans, net of allowance for credit losses | 2,129,938 | 2,127,967 |
Financial liabilities: | ||
Deposits | 1,961,270 | 1,924,140 |
Borrowed funds and subordinated debentures | $ 309,707 | $ 366,748 |
Securities - Amortized Cost to
Securities - Amortized Cost to Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Available for sale: | |||
Available for sale at amortized cost | $ 100,515 | $ 97,554 | |
Gross unrealized gains | 279 | 281 | |
Gross unrealized losses | (4,829) | (4,787) | |
Allowance for credit losses | (1,283) | (1,283) | |
Available of sale at fair value | 94,682 | 91,765 | |
Held to maturity: | |||
Held to maturity, Amortized cost | 36,089 | 36,122 | |
Gross unrealized gains | 75 | 90 | |
Gross unrealized losses | (7,026) | (6,556) | |
Estimated fair value | 29,138 | 29,656 | |
Provision recognized in current period | 0 | $ 0 | |
U.S. Government sponsored entities | |||
Available for sale: | |||
Available for sale at amortized cost | 15,749 | 16,490 | |
Gross unrealized losses | (485) | (457) | |
Available of sale at fair value | 15,264 | 16,033 | |
Held to maturity: | |||
Held to maturity, Amortized cost | 28,000 | 28,000 | |
Gross unrealized losses | (4,656) | (4,419) | |
Estimated fair value | 23,344 | 23,581 | |
State and political subdivisions | |||
Available for sale: | |||
Available for sale at amortized cost | 379 | 388 | |
Gross unrealized losses | (29) | (28) | |
Available of sale at fair value | 350 | 360 | |
Held to maturity: | |||
Held to maturity, Amortized cost | 1,187 | 1,272 | |
Gross unrealized gains | 75 | 90 | |
Estimated fair value | 1,262 | 1,362 | |
Residential mortgage-backed securities | |||
Available for sale: | |||
Available for sale at amortized cost | 15,184 | 15,473 | |
Gross unrealized gains | 29 | 30 | |
Gross unrealized losses | (1,681) | (1,426) | |
Available of sale at fair value | 13,532 | 14,077 | |
Held to maturity: | |||
Held to maturity, Amortized cost | 6,902 | 6,850 | |
Gross unrealized losses | (2,370) | (2,137) | |
Estimated fair value | 4,532 | 4,713 | |
Corporate and other securities | |||
Available for sale: | |||
Available for sale at amortized cost | 69,203 | 65,203 | |
Gross unrealized gains | 250 | 251 | |
Gross unrealized losses | (2,634) | (2,876) | |
Allowance for credit losses | (1,283) | (1,283) | |
Available of sale at fair value | $ 65,536 | $ 61,295 |
Securities - Securities By Cont
Securities - Securities By Contractual Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Available for sale at amortized cost | ||
Due in one year | $ 749 | |
Due after one year through five years | 33,780 | |
Due after five years through ten years | 13,289 | |
Due after ten years | 37,513 | |
Available for sale at amortized cost | 100,515 | $ 97,554 |
Available for sale at fair value | ||
Due in one year | 747 | |
Due after one year through five years | 31,358 | |
Due after five years through ten years | 11,558 | |
Due after ten years | 37,487 | |
Available of sale at fair value | 94,682 | 91,765 |
Held to maturity at amortized cost | ||
Due after five years through ten years | 3,000 | |
Due after ten years | 26,187 | |
Held to maturity, Amortized cost | 36,089 | 36,122 |
Held to maturity at fair value | ||
Due after five years through ten years | 2,897 | |
Due after ten years | 21,709 | |
Held to maturity, Fair Value | 29,138 | 29,656 |
Residential mortgage-backed securities | ||
Available for sale at amortized cost | ||
Residential mortgage-backed securities | 15,184 | |
Available for sale at amortized cost | 15,184 | 15,473 |
Available for sale at fair value | ||
Residential mortgage-backed securities | 13,532 | |
Available of sale at fair value | 13,532 | 14,077 |
Held to maturity at amortized cost | ||
Residential mortgage-backed securities | 6,902 | |
Held to maturity, Amortized cost | 6,902 | 6,850 |
Held to maturity at fair value | ||
Residential mortgage-backed securities | 4,532 | |
Held to maturity, Fair Value | $ 4,532 | $ 4,713 |
Securities - Securities in Unre
Securities - Securities in Unrealized Loss Position (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Available for sale: | ||
Available for sale, Less than 12 months, Estimated fair value | $ 5,443 | |
Available for sale, Less than 12 months, Unrealized loss | (1,056) | |
Available for sale, 12 months and greater, Estimated fair value | 61,808 | $ 85,169 |
Available for sale, 12 Months and greater Unrealized loss | (3,773) | (4,787) |
Available for sale, Estimated fair value | 67,251 | 85,169 |
Available for sale, Unrealized loss | (4,829) | (4,787) |
Held to maturity: | ||
Held to maturity, 12 months and greater, Estimated fair value | 27,876 | 28,294 |
Held to maturity, 12 months and greater, Unrealized loss | (7,026) | (6,556) |
Held to maturity, Total Estimated fair value | 27,876 | 28,294 |
Held to maturity, Total Unrealized loss | $ (7,026) | (6,556) |
Securities | ||
Held to maturity: | ||
Financing Receivable, Practical Expedient, Accrued Interest Exclusion [true false] | true | |
Accrued interest on securities | $ 1,500 | 1,500 |
U.S. Government sponsored entities | ||
Available for sale: | ||
Available for sale, Less than 12 months, Estimated fair value | 747 | |
Available for sale, Less than 12 months, Unrealized loss | (2) | |
Available for sale, 12 months and greater, Estimated fair value | 14,517 | 16,033 |
Available for sale, 12 Months and greater Unrealized loss | (483) | (457) |
Available for sale, Estimated fair value | 15,264 | 16,033 |
Available for sale, Unrealized loss | (485) | (457) |
Held to maturity: | ||
Held to maturity, 12 months and greater, Estimated fair value | 23,344 | 23,581 |
Held to maturity, 12 months and greater, Unrealized loss | (4,656) | (4,419) |
Held to maturity, Total Estimated fair value | 23,344 | 23,581 |
Held to maturity, Total Unrealized loss | (4,656) | (4,419) |
State and political subdivisions | ||
Available for sale: | ||
Available for sale, 12 months and greater, Estimated fair value | 350 | 360 |
Available for sale, 12 Months and greater Unrealized loss | (29) | (28) |
Available for sale, Estimated fair value | 350 | 360 |
Available for sale, Unrealized loss | (29) | (28) |
Residential mortgage-backed securities | ||
Available for sale: | ||
Available for sale, 12 months and greater, Estimated fair value | 13,415 | 13,949 |
Available for sale, 12 Months and greater Unrealized loss | (1,681) | (1,426) |
Available for sale, Estimated fair value | 13,415 | 13,949 |
Available for sale, Unrealized loss | (1,681) | (1,426) |
Held to maturity: | ||
Held to maturity, 12 months and greater, Estimated fair value | 4,532 | 4,713 |
Held to maturity, 12 months and greater, Unrealized loss | (2,370) | (2,137) |
Held to maturity, Total Estimated fair value | 4,532 | 4,713 |
Held to maturity, Total Unrealized loss | (2,370) | (2,137) |
Corporate and other securities | ||
Available for sale: | ||
Available for sale, Less than 12 months, Estimated fair value | 4,696 | |
Available for sale, Less than 12 months, Unrealized loss | (1,054) | |
Available for sale, 12 months and greater, Estimated fair value | 33,526 | 54,827 |
Available for sale, 12 Months and greater Unrealized loss | (1,580) | (2,876) |
Available for sale, Estimated fair value | 38,222 | 54,827 |
Available for sale, Unrealized loss | $ (2,634) | $ (2,876) |
Securities - Schedule Of Realiz
Securities - Schedule Of Realized Gains (Losses) For Marketable Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Available for sale: | |||
Allowance for credit losses for available for sale | $ 1,283 | $ 1,283 | |
Realized gains or losses | 0 | $ 0 | |
Held to maturity: | |||
Realized gains | 0 | 0 | |
Realized losses | $ 0 | $ 0 |
Securities - Realized an Unreal
Securities - Realized an Unrealized Gains (Losses) for Equity Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Securities | ||
Net unrealized gains (losses) occurring during the period on equity securities | $ 33 | $ (544) |
Net gains recognized during the period on equity securities sold during the period | 21 | 222 |
Net gains (losses) recognized during the reporting period on equity securities | $ 54 | $ (322) |
Loans - Narrative (Details)
Loans - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Prepaid expenses and other assets | $ 10,189 | $ 10,951 |
Loans | ||
Financing Receivable, Practical Expedient, Accrued Interest Exclusion [true false] | true | |
Accrued interest on loans | $ 11,300 | $ 11,700 |
Maximum | ||
Guarantee percentage of SBA Loan | 90% |
Loans - Classification of Loans
Loans - Classification of Loans By Class (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | $ 2,174,457 | $ 2,172,063 |
SBA 504 loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 38,128 | 33,669 |
SBA loans held for investment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 39,009 | 38,584 |
SBA PPP loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 2,168 | 2,318 |
Commercial loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 1,291,319 | 1,277,460 |
Commercial loans | Commercial & industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 133,409 | 128,402 |
Commercial loans | Commercial real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 977,437 | 986,230 |
Commercial loans | Commercial real estate construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 142,345 | 129,159 |
Residential mortgage loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 627,464 | 631,506 |
Consumer loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 72,275 | 72,676 |
Consumer loans | Home equity [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 67,448 | 67,037 |
Consumer loans | Consumer other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 4,827 | 5,639 |
Residential construction loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 123,783 | 131,277 |
Total loans held for investment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 2,156,018 | 2,153,821 |
SBA loans held for sale | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | $ 18,439 | $ 18,242 |
Loans - Aging Analysis of Past
Loans - Aging Analysis of Past Due and Nonaccrual Loans by Class (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | $ 2,174,457 | $ 2,172,063 |
SBA 504 loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 38,128 | 33,669 |
SBA loans held for investment | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 39,009 | 38,584 |
Total loans | 39,009 | 38,584 |
SBA loans held for investment | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 169 | 551 |
SBA loans held for investment | 60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 275 | 185 |
SBA loans held for investment | 90 days and still accruing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 138 | |
SBA loans held for investment | Nonaccrual | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 3,542 | 3,444 |
SBA loans held for investment | Past Due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 4,124 | 4,180 |
SBA loans held for investment | Current | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 34,885 | 34,404 |
SBA PPP loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2,168 | 2,318 |
Commercial loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,291,319 | 1,277,460 |
Commercial loans | SBA 504 loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 38,128 | 33,669 |
Commercial loans | Commercial & industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 133,409 | 128,402 |
Total loans | 133,409 | 128,402 |
Commercial loans | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 977,437 | 986,230 |
Total loans | 977,437 | 986,230 |
Commercial loans | Commercial real estate construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 142,345 | 129,159 |
Total loans | 142,345 | 129,159 |
Commercial loans | 30-59 days past due | Commercial & industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 321 | 288 |
Commercial loans | 30-59 days past due | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 4,324 | 1,732 |
Commercial loans | 60-89 days past due | Commercial & industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 78 | |
Commercial loans | 60-89 days past due | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 384 | |
Commercial loans | Nonaccrual | Commercial & industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 112 | 283 |
Commercial loans | Nonaccrual | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 2,303 | 1,665 |
Commercial loans | Past Due | Commercial & industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 433 | 649 |
Commercial loans | Past Due | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 7,011 | 3,397 |
Commercial loans | Current | SBA 504 loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 38,128 | 33,669 |
Commercial loans | Current | Commercial & industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 132,976 | 127,753 |
Commercial loans | Current | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 970,426 | 982,833 |
Commercial loans | Current | Commercial real estate construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 142,345 | 129,159 |
Residential mortgage loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 627,464 | 631,506 |
Total loans | 627,464 | 631,506 |
Residential mortgage loans | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 12,178 | 8,719 |
Residential mortgage loans | 60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 1,378 | |
Residential mortgage loans | 90 days and still accruing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 946 | |
Residential mortgage loans | Nonaccrual | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 7,440 | 10,326 |
Residential mortgage loans | Past Due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 19,618 | 21,369 |
Residential mortgage loans | Current | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 607,846 | 610,137 |
Consumer loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 72,275 | 72,676 |
Consumer loans | Home equity [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 67,448 | 67,037 |
Total loans | 67,448 | 67,037 |
Consumer loans | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 4,827 | 5,639 |
Total loans | 4,827 | 5,639 |
Consumer loans | 30-59 days past due | Home equity [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 14 | |
Consumer loans | 30-59 days past due | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 52 | 28 |
Consumer loans | 60-89 days past due | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 38 | 55 |
Consumer loans | Nonaccrual | Home equity [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 366 | 381 |
Consumer loans | Past Due | Home equity [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 366 | 395 |
Consumer loans | Past Due | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 90 | 83 |
Consumer loans | Current | Home equity [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 67,082 | 66,642 |
Consumer loans | Current | Consumer other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 4,737 | 5,556 |
Residential construction loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 123,783 | 131,277 |
Total loans | 123,783 | 131,277 |
Residential construction loans | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 434 | 2,580 |
Residential construction loans | Nonaccrual | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 3,127 | 2,141 |
Residential construction loans | Past Due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 3,561 | 4,721 |
Residential construction loans | Current | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 120,222 | 126,556 |
Total loans held for investment including PPP | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2,156,018 | 2,153,821 |
Total loans held for investment excluding SBA PPP | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 2,153,850 | 2,151,503 |
Total loans | 2,156,018 | 2,153,821 |
Total loans held for investment excluding SBA PPP | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 17,478 | 13,912 |
Total loans held for investment excluding SBA PPP | 60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 697 | 1,696 |
Total loans held for investment excluding SBA PPP | 90 days and still accruing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 138 | 946 |
Total loans held for investment excluding SBA PPP | Nonaccrual | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 16,890 | 18,240 |
Total loans held for investment excluding SBA PPP | Past Due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 35,203 | 34,794 |
Total loans held for investment excluding SBA PPP | Current | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 2,118,647 | 2,116,709 |
SBA loans held for sale | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 18,439 | 18,242 |
Total loans | 18,439 | 18,242 |
SBA loans held for sale | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 508 | |
SBA loans held for sale | Past Due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 508 | |
SBA loans held for sale | Current | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 17,931 | 18,242 |
Total loans excluding SBA PPP loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 2,172,289 | 2,169,745 |
Total loans excluding SBA PPP loans | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 17,986 | 13,912 |
Total loans excluding SBA PPP loans | 60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 697 | 1,696 |
Total loans excluding SBA PPP loans | 90 days and still accruing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 138 | 946 |
Total loans excluding SBA PPP loans | Nonaccrual | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 16,890 | 18,240 |
Total loans excluding SBA PPP loans | Past Due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | 35,711 | 34,794 |
Total loans excluding SBA PPP loans | Current | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans, excluding SBA PPP | $ 2,136,578 | $ 2,134,951 |
Loans - Individually Evaluated
Loans - Individually Evaluated Loans with Associated Allowance (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Unpaid principal balance | ||
With no related allowance | $ 9,763 | $ 15,291 |
With an allowance | 9,252 | 6,412 |
Total individually evaluated loans | 19,015 | 21,703 |
Recorded investment | ||
with no related allowance | 8,690 | 13,443 |
with an allowance | 8,338 | 5,750 |
Total individually evaluated loans | 17,028 | 19,193 |
Valuation allowance | 1,136 | 995 |
SBA loans held for investment | ||
Unpaid principal balance | ||
With no related allowance | 2,401 | 2,264 |
With an allowance | 1,482 | 1,383 |
Total individually evaluated loans | 3,883 | 3,647 |
Recorded investment | ||
with no related allowance | 2,323 | 2,186 |
with an allowance | 1,357 | 1,258 |
Total individually evaluated loans | 3,680 | 3,444 |
Valuation allowance | 382 | 348 |
Commercial loans | ||
Unpaid principal balance | ||
With no related allowance | 2,727 | 2,734 |
With an allowance | 1,417 | 847 |
Total individually evaluated loans | 4,144 | 3,581 |
Recorded investment | ||
with no related allowance | 1,755 | 1,607 |
with an allowance | 660 | 341 |
Total individually evaluated loans | 2,415 | 1,948 |
Valuation allowance | 337 | 341 |
Commercial loans | Real Estate Loan [Member] | ||
Unpaid principal balance | ||
With no related allowance | 2,727 | 2,734 |
With an allowance | 699 | 209 |
Total individually evaluated loans | 3,426 | 2,943 |
Recorded investment | ||
with no related allowance | 1,755 | 1,607 |
with an allowance | 548 | 58 |
Total individually evaluated loans | 2,303 | 1,665 |
Valuation allowance | 225 | 58 |
Commercial loans | Commercial & industrial | ||
Unpaid principal balance | ||
With an allowance | 718 | 638 |
Total individually evaluated loans | 718 | 638 |
Recorded investment | ||
with an allowance | 112 | 283 |
Total individually evaluated loans | 112 | 283 |
Valuation allowance | 112 | 283 |
Residential mortgage loans | ||
Unpaid principal balance | ||
With no related allowance | 3,706 | 7,146 |
With an allowance | 3,772 | 4,182 |
Total individually evaluated loans | 7,478 | 11,328 |
Recorded investment | ||
with no related allowance | 3,700 | 7,121 |
with an allowance | 3,740 | 4,151 |
Total individually evaluated loans | 7,440 | 11,272 |
Valuation allowance | 300 | 306 |
Consumer loans | ||
Unpaid principal balance | ||
With no related allowance | 390 | |
Total individually evaluated loans | 390 | |
Recorded investment | ||
with no related allowance | 388 | |
Total individually evaluated loans | 388 | |
Consumer loans | Home equity [Member] | ||
Unpaid principal balance | ||
With no related allowance | 382 | 390 |
With an allowance | 1 | |
Total individually evaluated loans | 383 | 390 |
Recorded investment | ||
with no related allowance | 365 | 388 |
with an allowance | 1 | |
Total individually evaluated loans | 366 | 388 |
Valuation allowance | 1 | |
Residential construction loans | ||
Unpaid principal balance | ||
With no related allowance | 547 | 2,757 |
With an allowance | 2,580 | |
Total individually evaluated loans | 3,127 | 2,757 |
Recorded investment | ||
with no related allowance | 547 | 2,141 |
with an allowance | 2,580 | |
Total individually evaluated loans | 3,127 | $ 2,141 |
Valuation allowance | $ 116 |
Loans - Risk by loan portfolio
Loans - Risk by loan portfolio (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | $ 2,174,457 | $ 2,172,063 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Total Loans | 2,174,457 | 2,172,063 | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |||
Total loans | 445 | $ 233 | |
SBA loans held for investment | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 39,009 | 38,584 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Current Year | 964 | 1,938 | |
One Year Prior to Current Year | 1,878 | 8,360 | |
Two Years Prior to Current Year | 8,333 | 7,265 | |
Three Years Prior to Current Year | 7,385 | 6,783 | |
Four Years Prior to Current Year | 6,464 | 2,634 | |
Five Years Prior to Current Year and Earlier | 13,985 | 11,604 | |
Total Loans | 39,009 | 38,584 | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |||
One Year Prior to Current Year | 100 | ||
Four Years Prior to Current Year | 113 | ||
Total loans | 113 | 213 | |
SBA PPP loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 2,168 | 2,318 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Two Years Prior to Current Year | 2,318 | ||
Three Years Prior to Current Year | 2,168 | ||
Total Loans | 2,168 | 2,318 | |
Commercial loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 1,291,319 | 1,277,460 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Current Year | 14,828 | 139,622 | |
One Year Prior to Current Year | 152,337 | 343,755 | |
Two Years Prior to Current Year | 336,777 | 183,293 | |
Three Years Prior to Current Year | 182,494 | 128,179 | |
Four Years Prior to Current Year | 126,854 | 103,132 | |
Five Years Prior to Current Year and Earlier | 374,342 | 282,096 | |
Revolving Loans Amortized Cost Basis | 103,687 | 97,383 | |
Total Loans | 1,291,319 | 1,277,460 | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |||
Two Years Prior to Current Year | 150 | ||
Four Years Prior to Current Year | 350 | ||
Five Years Prior to Current Year and Earlier | 98 | 252 | |
Total loans | 98 | 752 | |
Commercial loans | Commercial real estate | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 977,437 | 986,230 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Total Loans | 977,437 | 986,230 | |
Commercial loans | Commercial real estate construction | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 142,345 | 129,159 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Total Loans | 142,345 | 129,159 | |
Commercial loans | Commercial & industrial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 133,409 | 128,402 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Total Loans | 133,409 | 128,402 | |
Residential mortgage loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 627,464 | 631,506 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Current Year | 23,064 | 102,892 | |
One Year Prior to Current Year | 85,980 | 256,883 | |
Two Years Prior to Current Year | 251,088 | 75,300 | |
Three Years Prior to Current Year | 72,505 | 53,053 | |
Four Years Prior to Current Year | 49,092 | 31,427 | |
Five Years Prior to Current Year and Earlier | 145,735 | 111,951 | |
Total Loans | 627,464 | 631,506 | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |||
Two Years Prior to Current Year | 25 | ||
Five Years Prior to Current Year and Earlier | 68 | ||
Total loans | 93 | ||
Consumer loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 72,275 | 72,676 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Current Year | 693 | 3,428 | |
One Year Prior to Current Year | 2,973 | 4,777 | |
Two Years Prior to Current Year | 4,400 | 3,681 | |
Three Years Prior to Current Year | 3,035 | 795 | |
Four Years Prior to Current Year | 753 | 2,481 | |
Five Years Prior to Current Year and Earlier | 11,256 | 7,763 | |
Revolving Loans Amortized Cost Basis | 49,165 | 49,751 | |
Total Loans | 72,275 | 72,676 | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |||
One Year Prior to Current Year | 26 | ||
Two Years Prior to Current Year | 21 | 552 | |
Three Years Prior to Current Year | 49 | ||
Total loans | 70 | $ 120 | 578 |
Consumer loans | Home equity [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 67,448 | 67,037 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Total Loans | 67,448 | 67,037 | |
Consumer loans | Consumer other | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 4,827 | 5,639 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Total Loans | 4,827 | 5,639 | |
Residential construction loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 123,783 | 131,277 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Current Year | 6,595 | 28,827 | |
One Year Prior to Current Year | 34,782 | 72,257 | |
Two Years Prior to Current Year | 64,368 | 25,395 | |
Three Years Prior to Current Year | 15,091 | 1,965 | |
Four Years Prior to Current Year | 1,965 | 491 | |
Five Years Prior to Current Year and Earlier | 982 | 2,342 | |
Total Loans | 123,783 | 131,277 | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |||
Five Years Prior to Current Year and Earlier | 277 | 600 | |
Revolving Loans Amortized Cost Basis | 400 | ||
Total loans | 277 | 1,000 | |
Total loans held for investment including PPP | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 2,156,018 | 2,153,821 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Current Year | 46,144 | 276,707 | |
One Year Prior to Current Year | 277,950 | 686,032 | |
Two Years Prior to Current Year | 664,966 | 297,252 | |
Three Years Prior to Current Year | 282,678 | 190,775 | |
Four Years Prior to Current Year | 185,128 | 140,165 | |
Five Years Prior to Current Year and Earlier | 546,300 | 415,756 | |
Revolving Loans Amortized Cost Basis | 152,852 | 147,134 | |
Total Loans | 2,156,018 | 2,153,821 | |
Performing | Residential mortgage loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 620,024 | 621,180 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Current Year | 23,064 | 102,892 | |
One Year Prior to Current Year | 85,980 | 253,919 | |
Two Years Prior to Current Year | 249,423 | 72,586 | |
Three Years Prior to Current Year | 70,123 | 51,999 | |
Four Years Prior to Current Year | 48,833 | 30,482 | |
Five Years Prior to Current Year and Earlier | 142,601 | 109,302 | |
Total Loans | 620,024 | 621,180 | |
Performing | Consumer loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 71,908 | 72,295 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Current Year | 693 | 3,428 | |
One Year Prior to Current Year | 2,973 | 4,777 | |
Two Years Prior to Current Year | 4,400 | 3,681 | |
Three Years Prior to Current Year | 3,035 | 670 | |
Four Years Prior to Current Year | 644 | 2,481 | |
Five Years Prior to Current Year and Earlier | 11,255 | 7,507 | |
Revolving Loans Amortized Cost Basis | 48,908 | 49,751 | |
Total Loans | 71,908 | 72,295 | |
Performing | Residential construction loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 129,136 | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Current Year | 28,827 | ||
One Year Prior to Current Year | 72,257 | ||
Two Years Prior to Current Year | 25,395 | ||
Three Years Prior to Current Year | 1,418 | ||
Four Years Prior to Current Year | 491 | ||
Five Years Prior to Current Year and Earlier | 748 | ||
Total Loans | 129,136 | ||
Nonperforming | Residential mortgage loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 7,440 | 10,326 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
One Year Prior to Current Year | 2,964 | ||
Two Years Prior to Current Year | 1,665 | 2,714 | |
Three Years Prior to Current Year | 2,382 | 1,054 | |
Four Years Prior to Current Year | 259 | 945 | |
Five Years Prior to Current Year and Earlier | 3,134 | 2,649 | |
Total Loans | 7,440 | 10,326 | |
Nonperforming | Consumer loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 367 | 381 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Three Years Prior to Current Year | 125 | ||
Four Years Prior to Current Year | 109 | ||
Five Years Prior to Current Year and Earlier | 1 | 256 | |
Revolving Loans Amortized Cost Basis | 257 | ||
Total Loans | 367 | 381 | |
Nonperforming | Residential construction loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 2,141 | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Three Years Prior to Current Year | 547 | ||
Five Years Prior to Current Year and Earlier | 1,594 | ||
Total Loans | 2,141 | ||
Pass | SBA loans held for investment | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 31,944 | 31,713 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Current Year | 964 | 1,938 | |
One Year Prior to Current Year | 1,878 | 5,339 | |
Two Years Prior to Current Year | 5,241 | 4,723 | |
Three Years Prior to Current Year | 4,843 | 6,083 | |
Four Years Prior to Current Year | 5,778 | 2,634 | |
Five Years Prior to Current Year and Earlier | 13,240 | 10,996 | |
Total Loans | 31,944 | 31,713 | |
Pass | SBA PPP loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 2,168 | 2,318 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Two Years Prior to Current Year | 2,318 | ||
Three Years Prior to Current Year | 2,168 | ||
Total Loans | 2,168 | 2,318 | |
Pass | Commercial loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 1,279,567 | 1,262,692 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Current Year | 14,828 | 139,622 | |
One Year Prior to Current Year | 152,337 | 343,755 | |
Two Years Prior to Current Year | 336,287 | 181,419 | |
Three Years Prior to Current Year | 180,893 | 128,165 | |
Four Years Prior to Current Year | 126,845 | 101,274 | |
Five Years Prior to Current Year and Earlier | 365,085 | 271,469 | |
Revolving Loans Amortized Cost Basis | 103,292 | 96,988 | |
Total Loans | 1,279,567 | 1,262,692 | |
Pass | Residential construction loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 119,674 | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Current Year | 6,595 | ||
One Year Prior to Current Year | 34,782 | ||
Two Years Prior to Current Year | 64,368 | ||
Three Years Prior to Current Year | 12,511 | ||
Four Years Prior to Current Year | 1,418 | ||
Total Loans | 119,674 | ||
Special mention | SBA loans held for investment | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 2,872 | 2,662 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
One Year Prior to Current Year | 1,765 | ||
Two Years Prior to Current Year | 1,836 | 356 | |
Three Years Prior to Current Year | 356 | 510 | |
Four Years Prior to Current Year | 510 | ||
Five Years Prior to Current Year and Earlier | 170 | 31 | |
Total Loans | 2,872 | 2,662 | |
Special mention | Commercial loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 8,780 | 11,203 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Two Years Prior to Current Year | 490 | 1,815 | |
Three Years Prior to Current Year | 1,464 | ||
Four Years Prior to Current Year | 1,570 | ||
Five Years Prior to Current Year and Earlier | 6,431 | 7,423 | |
Revolving Loans Amortized Cost Basis | 395 | 395 | |
Total Loans | 8,780 | 11,203 | |
Substandard | SBA loans held for investment | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 4,193 | 4,209 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
One Year Prior to Current Year | 1,256 | ||
Two Years Prior to Current Year | 1,256 | 2,186 | |
Three Years Prior to Current Year | 2,186 | 190 | |
Four Years Prior to Current Year | 176 | ||
Five Years Prior to Current Year and Earlier | 575 | 577 | |
Total Loans | 4,193 | 4,209 | |
Substandard | Commercial loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 2,972 | 3,565 | |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Two Years Prior to Current Year | 59 | ||
Three Years Prior to Current Year | 137 | 14 | |
Four Years Prior to Current Year | 9 | 288 | |
Five Years Prior to Current Year and Earlier | 2,826 | 3,204 | |
Total Loans | 2,972 | $ 3,565 | |
Substandard | Residential construction loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans | 4,109 | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | |||
Three Years Prior to Current Year | 2,580 | ||
Four Years Prior to Current Year | 547 | ||
Five Years Prior to Current Year and Earlier | 982 | ||
Total Loans | $ 4,109 |
Loans - Disaggregated by class
Loans - Disaggregated by class of gross loans and type of concession granted (Details) $ in Thousands | 12 Months Ended |
Mar. 31, 2024 USD ($) | |
Financing Receivable, Modified [Line Items] | |
Loans modified that had subsequent payment default | $ 0 |
Principal Forgiveness | |
Financing Receivable, Modified [Line Items] | |
Amortized Cost Basis | 8 |
Principal Forgiveness | SBA loans | SBA loans held for investment | |
Financing Receivable, Modified [Line Items] | |
Amortized Cost Basis | 8 |
Payment Delay | |
Financing Receivable, Modified [Line Items] | |
Amortized Cost Basis | 2,718 |
Payment Delay | SBA loans | SBA loans held for investment | |
Financing Receivable, Modified [Line Items] | |
Amortized Cost Basis | 99 |
Payment Delay | Commercial real estate | Commercial loans | |
Financing Receivable, Modified [Line Items] | |
Amortized Cost Basis | 2,619 |
Term Extension | |
Financing Receivable, Modified [Line Items] | |
Amortized Cost Basis | 3,122 |
Term Extension | Commercial & industrial | Commercial loans | |
Financing Receivable, Modified [Line Items] | |
Amortized Cost Basis | 813 |
Term Extension | Home equity | Consumer loans | |
Financing Receivable, Modified [Line Items] | |
Amortized Cost Basis | $ 2,309 |
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 | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of period | $ 25,854 | $ 25,196 | $ 25,196 |
Charge-offs | (445) | (233) | |
Recoveries | 30 | 283 | |
Net recoveries (charge-offs) | (415) | 50 | |
Provision for loan losses charged to expense | 641 | 108 | |
Balance, end of period | 26,080 | 26,201 | 25,854 |
Cumulative Effect, Period of Adoption, Adjustment | |||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of period | 847 | 847 | |
SBA loans held for investment | |||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of period | 1,221 | 875 | 875 |
Charge-offs | (113) | (213) | |
Recoveries | 8 | ||
Net recoveries (charge-offs) | 8 | (113) | |
Provision for loan losses charged to expense | 178 | ||
(Credit to) loan losses charged to expense | (20) | ||
Balance, end of period | 1,209 | 1,103 | 1,221 |
SBA loans held for investment | Cumulative Effect, Period of Adoption, Adjustment | |||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of period | 163 | 163 | |
Commercial loans | |||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of period | 15,876 | 15,254 | 15,254 |
Charge-offs | (98) | (752) | |
Recoveries | 12 | 271 | |
Net recoveries (charge-offs) | (86) | 271 | |
Provision for loan losses charged to expense | 397 | ||
(Credit to) loan losses charged to expense | (395) | ||
Balance, end of period | 16,187 | 15,301 | 15,876 |
Commercial loans | Cumulative Effect, Period of Adoption, Adjustment | |||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of period | 171 | 171 | |
Residential mortgage loans | |||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of period | 6,529 | 5,450 | 5,450 |
Charge-offs | (93) | ||
Provision for loan losses charged to expense | 309 | ||
(Credit to) loan losses charged to expense | (135) | ||
Balance, end of period | 6,394 | 6,135 | 6,529 |
Residential mortgage loans | Cumulative Effect, Period of Adoption, Adjustment | |||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of period | 376 | 376 | |
Consumer loans | |||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of period | 1,022 | 990 | 990 |
Charge-offs | (70) | (120) | (578) |
Recoveries | 10 | 12 | |
Net recoveries (charge-offs) | (60) | (108) | |
Provision for loan losses charged to expense | 37 | ||
(Credit to) loan losses charged to expense | (40) | ||
Balance, end of period | 922 | 1,020 | 1,022 |
Consumer loans | Cumulative Effect, Period of Adoption, Adjustment | |||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of period | 101 | 101 | |
Residential construction loans | |||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of period | 1,206 | 2,627 | 2,627 |
Charge-offs | (277) | (1,000) | |
Net recoveries (charge-offs) | (277) | ||
Provision for loan losses charged to expense | 439 | ||
(Credit to) loan losses charged to expense | (21) | ||
Balance, end of period | $ 1,368 | 2,642 | 1,206 |
Residential construction loans | Cumulative Effect, Period of Adoption, Adjustment | |||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of period | $ 36 | $ 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, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Total | $ 26,080 | $ 25,854 | $ 26,201 | $ 25,196 |
Total Loans | 2,174,457 | 2,172,063 | ||
SBA held for investment including PPP loans | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Individually evaluated | 382 | 348 | ||
Collectively evaluated | 827 | 873 | ||
Total | 1,209 | 1,221 | ||
Individually evaluated for impairment | 3,680 | 3,444 | ||
Collectively evaluated for impairment | 37,497 | 37,458 | ||
Total Loans | 41,177 | 40,902 | ||
SBA loans held for investment | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Total | 1,209 | 1,221 | 1,103 | 875 |
Total Loans | 39,009 | 38,584 | ||
Commercial loans | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Individually evaluated | 337 | 341 | ||
Collectively evaluated | 15,850 | 15,535 | ||
Total | 16,187 | 15,876 | 15,301 | 15,254 |
Individually evaluated for impairment | 2,415 | 1,948 | ||
Collectively evaluated for impairment | 1,288,904 | 1,275,512 | ||
Total Loans | 1,291,319 | 1,277,460 | ||
Residential mortgage loans | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Individually evaluated | 300 | 306 | ||
Collectively evaluated | 6,094 | 6,223 | ||
Total | 6,394 | 6,529 | 6,135 | 5,450 |
Individually evaluated for impairment | 7,440 | 11,272 | ||
Collectively evaluated for impairment | 620,024 | 620,234 | ||
Total Loans | 627,464 | 631,506 | ||
Consumer loans | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Individually evaluated | 1 | |||
Collectively evaluated | 921 | 1,022 | ||
Total | 922 | 1,022 | 1,020 | 990 |
Individually evaluated for impairment | 366 | 388 | ||
Collectively evaluated for impairment | 71,909 | 72,288 | ||
Total Loans | 72,275 | 72,676 | ||
Residential construction loans | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Individually evaluated | 116 | |||
Collectively evaluated | 1,252 | 1,206 | ||
Total | 1,368 | 1,206 | $ 2,642 | $ 2,627 |
Individually evaluated for impairment | 3,127 | 2,141 | ||
Collectively evaluated for impairment | 120,656 | 129,136 | ||
Total Loans | 123,783 | 131,277 | ||
Total loans held for investment including PPP | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Total Loans | 2,156,018 | 2,153,821 | ||
Total loans held for investment excluding SBA PPP | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Individually evaluated | 1,136 | 995 | ||
Collectively evaluated | 24,944 | 24,859 | ||
Total | 26,080 | 25,854 | ||
Individually evaluated for impairment | 17,028 | 19,193 | ||
Collectively evaluated for impairment | 2,138,990 | 2,134,628 | ||
Total Loans | $ 2,156,018 | $ 2,153,821 |
Allowance for Credit Losses a_5
Allowance for Credit Losses and Reserve for Unfunded Loan Commitments - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Unfunded loan commitment | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Reserve for commitments | $ 0.6 | $ 0.6 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities (Details) - Interest rate swap agreements $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 USD ($) contract | Dec. 31, 2023 USD ($) contract | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional amount | $ 20,000 | $ 20,000 |
Fair value | $ 805 | $ 918 |
Weighted average pay rate | 0.83% | 0.83% |
Weighted average receive rate | 5.62% | 5.27% |
Weighted average maturity in years | 11 months 8 days | 1 year 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, 2024 | Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
(Loss) gain recognized in OCI gross | $ (113) | $ (235) |
(Loss) Gain recognized in OCI | (81) | (185) |
(Loss) gain reclassified from AOCI into net income gross | 238 | 198 |
Gain reclassified from AOCI into net income | $ 170 | $ 156 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | May 05, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Options granted (in shares) | 0 | 0 | |
Employee Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Award vesting period | 3 years | ||
Award expiration period | 10 years | ||
Compensation cost not yet recognized | $ 0 | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Award vesting period | 4 years | ||
Compensation cost not yet recognized | $ 4,900,000 | ||
Compensation cost recognition weighted average period | 3 years | ||
2023 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) | 405,999 | ||
2023 Equity Compensation Plan | Employee Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Options granted (in shares) | 281,500 | ||
Unvested options cancelled and returned | 16,162 | ||
2023 Equity Compensation Plan | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Options granted (in shares) | 345,850 | ||
Unvested options cancelled and returned | 17,187 |
Employee Benefit Plans - Stock
Employee Benefit Plans - Stock Transactions - Stock Option Plans (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Shares | |||
Options Outstanding, beginning shares (in shares) | 471,132 | ||
Options granted (in shares) | 0 | 0 | |
Options exercised (in shares) | (59,100) | (37,201) | |
Options Outstanding, ending shares (in shares) | 412,032 | 471,132 | |
Shares Exercisable | 412,032 | ||
Weighted average exercise price | |||
Weighted Average exercise Price: Options Outstanding, beginning (in usd per share) | $ 17.92 | ||
Weighted Average Exercise Price: Options exercised (in usd per share) | 15.47 | ||
Weighted Average exercise Price: Options Outstanding, ending (in usd per share) | 18.27 | $ 17.92 | |
Weighted average exercise price, Options Exercisable (in dollars per share) | $ 18.27 | ||
Weighted Average Remaining Contractual Life (in years): Options Outstanding | 4 years 9 months 18 days | 4 years 10 months 24 days | |
Weighted Average Remaining Contractual Life (in years): Options Exercisable | 4 years 9 months 18 days | ||
Aggregate Intrinsic Value: Options Outstanding | $ 3,845,636 | $ 5,500,080 | |
Aggregate Intrinsic Value: Options Exercisable | $ 3,845,636 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Information About Options Exercised (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Employee Benefit Plans | ||
Number of options exercised | 59,100 | 37,201 |
Total intrinsic value of options exercised | $ 764,901 | $ 241,904 |
Cash received from options exercised | 412,791 | 753,894 |
Tax deduction realized from options | $ 215,014 | $ 72,777 |
Employee Benefit Plans - Stoc_2
Employee Benefit Plans - Stock Transactions - Stock Options Outstanding And Exercisable (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Options outstanding (in shares) | shares | 412,032 |
Options outstanding, Weighted average remaining contractual life (in years) | 4 years 9 months 18 days |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 18.27 |
Options exercisable (in shares) | shares | 412,032 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 18.27 |
$7.25 - $16.51 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Range of exercise prices, lower | 8.31 |
Range of exercise prices, upper | $ 11.87 |
Options outstanding (in shares) | shares | 58,000 |
Options outstanding, Weighted average remaining contractual life (in years) | 1 year 7 months 6 days |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 9.63 |
Options exercisable (in shares) | shares | 58,000 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 9.63 |
$16.52 - $19.26 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Range of exercise prices, lower | 11.88 |
Range of exercise prices, upper | $ 15.44 |
Options outstanding (in shares) | shares | 9,000 |
Options outstanding, Weighted average remaining contractual life (in years) | 2 years 8 months 12 days |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 14.60 |
Options exercisable (in shares) | shares | 9,000 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 14.60 |
$19.27 - $20.88 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Range of exercise prices, lower | 15.45 |
Range of exercise prices, upper | $ 19.01 |
Options outstanding (in shares) | shares | 128,932 |
Options outstanding, Weighted average remaining contractual life (in years) | 5 years 6 months |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 17.58 |
Options exercisable (in shares) | shares | 128,932 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 17.58 |
$20.89 - $22.57 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Range of exercise prices, lower | 19.02 |
Range of exercise prices, upper | $ 22.57 |
Options outstanding (in shares) | shares | 216,100 |
Options outstanding, Weighted average remaining contractual life (in years) | 5 years 3 months 18 days |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 21.14 |
Options exercisable (in shares) | shares | 216,100 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 21.14 |
Employee Benefit Plans - Compen
Employee Benefit Plans - Compensation Expense Related To Stock Options (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Compensation expense | $ 32 | $ 85 |
Income tax benefit | 9 | 25 |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Compensation expense | 444 | 332 |
Income tax benefit | $ 125 | $ 80 |
Employee Benefit Plans - Restri
Employee Benefit Plans - Restricted Stock Activity (Details) - Restricted Stock - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Shares | ||
Nonvested restricted stock, beginning balance (in shares) | 164,634 | |
Granted (in shares) | 77,950 | 18,000 |
Cancelled (in shares) | (1,937) | |
Vested (in shares) | (32,875) | |
Nonvested restricted stock, ending balance (in shares) | 207,772 | |
Average grant date fair value | ||
Nonvested restricted stock, beginning balance (in dollars per share) | $ 24.46 | |
Granted (in dollars per share) | 28.84 | $ 27.33 |
Cancelled (in dollars per share) | 27.55 | |
Vested (in dollars per share) | 24.43 | |
Nonvested restricted stock, ending balance (in dollars per share) | $ 26.08 |
Employee Benefit Plans - Stoc_3
Employee Benefit Plans - Stock Transactions - Restricted Stock Awards (Details) - Restricted Stock - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Number of shares granted (in shares) | 77,950 | 18,000 |
Average grant date fair value (in usd per share) | $ 28.84 | $ 27.33 |
Regulatory Capital - Schedule o
Regulatory Capital - Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations (Details) $ in Thousands | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) |
Compliance with Regulatory Capital Requirements under Banking Regulations | ||
Capital conservation buffer | 0.025 | |
Total risk-based capital (to risk-weighted assets), Amount, Actual | $ 303,846 | $ 298,293 |
Total risk--based capital ratio | 0.1463 | 0.1443 |
Total risk-based capital (to risk-weighted assets), Required for Capital Adequacy Purposes, Amount | $ 166,101 | $ 165,370 |
Total risk-based capital ratio, Required for capital adequacy purposes effective | 0.0800 | 0.0800 |
Total risk-based capital (to risk-weighted assets), To be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 207,627 | $ 206,712 |
Total risk-based capital ratio, To be well-capitalized under prompt corrective action regulations | 0.1000 | 0.1000 |
Common equity tier 1 (to risk-weighted assets), Amount, Actual | $ 267,884 | $ 262,454 |
CET1, Required for capital adequacy purposes effective | 0.1290 | 0.1270 |
CEIT 1, Required for Capital Adequacy Purposes, Amount, Actual | $ 93,432 | $ 93,020 |
CEIT 1, Required for Capital Adequacy Purposes, Ratio, Actual | 0.0450 | 0.0450 |
CEIT 1, To be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 134,957 | $ 134,363 |
CEIT 1, To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.0650 | 0.0650 |
Assets | $ 277,884 | $ 272,454 |
Tier I risk-based capital ratio | 0.1338 | 0.1318 |
Tier 1 capital (to risk-weighted assets), Required for Capital Adequacy Purposes, Amount, Actual | $ 124,576 | $ 124,027 |
Tier I risk-based capital ratio, Required for capital adequacy purposes effective | 0.0600 | 0.0600 |
Tier 1 capital (to risk-weighted assets), To be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 166,101 | $ 165,370 |
Tier I risk-based capital ratio, To be well-capitalized under prompt corrective action regulations | 0.0800 | 0.0800 |
Tier 1 capital (to average total assets), Amount, Actual | $ 277,884 | $ 272,454 |
Leverage ratio | 0.1139 | 0.1114 |
Tier 1 capital (to average total assets), Required for Capital Adequacy Purposes, Amount, Actual | $ 97,580 | $ 97,800 |
Leverage ratio, Required for capital adequacy purposes effective | 0.0400 | 0.0400 |
Tier 1 capital (to average total assets), To be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 121,975 | $ 122,250 |
Leverage ratio, To be well-capitalized under prompt corrective action regulations | 0.0500 | 0.0500 |
Including capital conservation buffer | ||
Compliance with Regulatory Capital Requirements under Banking Regulations | ||
Total risk-based capital ratio, Required for capital adequacy purposes effective | 0.105 | |
CEIT 1, Required for Capital Adequacy Purposes, Ratio, Actual | 0.070 | |
Tier I risk-based capital ratio, Required for capital adequacy purposes effective | 0.085 | |
Bank | ||
Compliance with Regulatory Capital Requirements under Banking Regulations | ||
Capital conservation buffer | 0.025 | |
Total risk-based capital (to risk-weighted assets), Amount, Actual | $ 295,499 | $ 287,206 |
Total risk--based capital ratio | 0.1436 | 0.1402 |
Total risk-based capital (to risk-weighted assets), Required for Capital Adequacy Purposes, Amount | $ 164,659 | $ 163,911 |
Total risk-based capital ratio, Required for capital adequacy purposes effective | 0.0800 | 0.0800 |
Total risk-based capital (to risk-weighted assets), To be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 205,824 | $ 204,889 |
Total risk-based capital ratio, To be well-capitalized under prompt corrective action regulations | 0.1000 | 0.1000 |
Common equity tier 1 (to risk-weighted assets), Amount, Actual | $ 269,759 | $ 261,584 |
CET1, Required for capital adequacy purposes effective | 0.1311 | 0.1276 |
CEIT 1, Required for Capital Adequacy Purposes, Amount, Actual | $ 92,621 | $ 92,200 |
CEIT 1, Required for Capital Adequacy Purposes, Ratio, Actual | 0.0450 | 0.0450 |
CEIT 1, To be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 133,786 | $ 133,178 |
CEIT 1, To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.0650 | 0.0650 |
Assets | $ 269,759 | $ 261,584 |
Tier I risk-based capital ratio | 0.1311 | 0.1276 |
Tier 1 capital (to risk-weighted assets), Required for Capital Adequacy Purposes, Amount, Actual | $ 123,495 | $ 122,934 |
Tier I risk-based capital ratio, Required for capital adequacy purposes effective | 0.0600 | 0.0600 |
Tier 1 capital (to risk-weighted assets), To be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 164,659 | $ 163,911 |
Tier I risk-based capital ratio, To be well-capitalized under prompt corrective action regulations | 0.0800 | 0.0800 |
Tier 1 capital (to average total assets), Amount, Actual | $ 269,759 | $ 261,584 |
Leverage ratio | 0.1110 | 0.1074 |
Tier 1 capital (to average total assets), Required for Capital Adequacy Purposes, Amount, Actual | $ 97,204 | $ 97,355 |
Leverage ratio, Required for capital adequacy purposes effective | 0.0400 | 0.0400 |
Tier 1 capital (to average total assets), To be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 121,504 | $ 121,693 |
Leverage ratio, To be well-capitalized under prompt corrective action regulations | 0.0500 | 0.0500 |
Bank | Including capital conservation buffer | ||
Compliance with Regulatory Capital Requirements under Banking Regulations | ||
Total risk-based capital ratio, Required for capital adequacy purposes effective | 0.105 | |
CEIT 1, Required for Capital Adequacy Purposes, Ratio, Actual | 0.070 | |
Tier I risk-based capital ratio, Required for capital adequacy purposes effective | 0.085 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 9,586 | $ 10,287 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |