QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of In Company or organization) |
(IRS Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller Reporting Company | ||||
Emerging growth company |
Title | Outstanding | |||
Common Stock, $0.20 par value |
ITEM 1. | CONSOLIDATED FINANCIAL STATEMENTS. |
March 31, 2022 (Unaudited) |
December 31, 2021 (Audited) |
|||||||
ASSETS |
||||||||
Cash and due from banks |
$ | $ | ||||||
Interest bearing deposits with other banks |
||||||||
Cash and cash equivalents |
||||||||
Investment securities available for sale, at fair value |
||||||||
Loans held for investment (LHFI), net of unearned income |
||||||||
Less allowance for loan losses, LHFI |
||||||||
Net LHFI |
||||||||
Premises and equipment, net |
||||||||
Other real estate owned, net |
||||||||
Accrued interest receivable |
||||||||
Cash surrender value of life insurance |
||||||||
Deferred tax assets, net |
||||||||
Identifiable intangible assets, net |
||||||||
Other assets |
||||||||
TOTAL ASSETS |
$ | $ | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
LIABILITIES |
||||||||
Deposits: |
||||||||
Non-interest bearing deposits |
$ | $ | ||||||
Interest bearing deposits |
||||||||
Total deposits |
||||||||
Securities sold under agreement to repurchase |
||||||||
Borrowings on secured line of credit |
||||||||
Accrued interest payable |
||||||||
Deferred compensation payable |
||||||||
Other liabilities |
||||||||
Total liabilities |
||||||||
SHAREHOLDERS’ EQUITY |
||||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive loss, net of tax benefit of $ |
( |
) | ( |
) | ||||
Retained earnings |
||||||||
Total shareholders’ equity |
||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ | $ | ||||||
(Unaudited) For the Three Months Ended March 31, |
||||||||
2022 | 2021 | |||||||
INTEREST INCOME |
||||||||
Interest and fees on loans |
$ | $ | ||||||
Interest on securities |
||||||||
Taxable |
||||||||
Nontaxable |
||||||||
Other interest |
||||||||
Total interest income |
||||||||
INTEREST EXPENSE |
||||||||
Deposits |
||||||||
Other borrowed funds |
||||||||
Total interest expense |
||||||||
NET INTEREST INCOME |
||||||||
PROVISION FOR LOAN LOSSES |
||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |
||||||||
OTHER INCOME |
||||||||
Service charges on deposit accounts |
||||||||
Other service charges and fees |
||||||||
Net gains on sales of securities |
||||||||
Other operating income |
||||||||
Total other income |
||||||||
OTHER EXPENSES |
||||||||
Salaries and employee benefits |
||||||||
Occupancy expense |
||||||||
Other expense |
||||||||
Total other expenses |
||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES |
||||||||
PROVISION FOR INCOME TAXES |
||||||||
NET INCOME |
$ | $ | ||||||
NET INCOME PER SHARE -Basic |
$ | $ | ||||||
-Diluted |
$ | $ | ||||||
DIVIDENDS PAID PER SHARE |
$ | $ | ||||||
For the Three Months Ended March 31, |
||||||||
2022 | 2021 | |||||||
Net income |
$ | $ | ||||||
Other comprehensive loss |
||||||||
Securities available-for-sale |
||||||||
Net unrealized holding losses |
( |
) | ( |
) | ||||
Income tax effect |
||||||||
|
|
|
|
|||||
Net unrealized losses |
( |
) | ( |
) | ||||
Reclassification adjustment for gains included in net income |
||||||||
Income tax effect |
( |
) | ||||||
|
|
|
|
|||||
Net gains included in net income |
||||||||
|
|
|
|
|||||
Total other comprehensive loss |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Comprehensive loss |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
For the Three Months Ended March 31, |
||||||||
2022 | 2021 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net cash provided by operating activities |
$ | $ | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Proceeds from maturities and calls of securities available for sale |
||||||||
Proceeds from sale of investment securities |
||||||||
Purchases of investment securities available for sale |
( |
) | ( |
) | ||||
Purchases of bank premises and equipment |
( |
) | ( |
) | ||||
Purchases of federal home loan bank stock |
( |
) | ||||||
Proceeds from sale of other real estate owned |
||||||||
Net change in loans |
( |
) | ||||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Net change in deposits |
||||||||
(Decrease) increase in securities sold under agreement to repurchase |
( |
) | ||||||
Payment of federal home loan bank (FHLB) advances |
— | ( |
) | |||||
Payment of dividends |
( |
) | ( |
) | ||||
Net cash provided by financing activities |
||||||||
Net (decrease) increase in cash and cash equivalents |
( |
) | ||||||
Cash and cash equivalents, beginning of period |
||||||||
Cash and cash equivalents, end of period |
$ | $ | ||||||
For the Three Months Ended March 31, |
||||||||
2022 | 2021 | |||||||
Basic weighted average shares outstanding |
||||||||
Dilutive effect of granted options |
— | |||||||
Diluted weighted average shares outstanding |
||||||||
Net income |
$ | $ | ||||||
Net income per share-basic |
$ | $ | ||||||
Net income per share-diluted |
$ | $ |
Directors’ Plan | 2013 Plan | |||||||||||||||
Number of Shares |
Weighted Average Exercise Price |
Number of Shares |
Weighted Average Exercise Price |
|||||||||||||
Outstanding at December 31, 2021 |
$ | $ | ||||||||||||||
Granted |
||||||||||||||||
Exercised |
||||||||||||||||
Expired |
||||||||||||||||
Outstanding at March 31, 2022 |
$ | $ | ||||||||||||||
March 31, 2022 | Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
||||||||||||
Securities available-for-sale |
||||||||||||||||
Obligations of U.S. Government agencies |
$ | $ | $ | $ | ||||||||||||
Mortgage backed securities |
||||||||||||||||
State, County, Municipals |
||||||||||||||||
Other securities |
||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
December 31, 2021 | Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
||||||||||||
Securities available-for-sale |
||||||||||||||||
Obligations of U.S. Government agencies |
$ | $ | $ | $ | ||||||||||||
Mortgage backed securities |
||||||||||||||||
State, County, Municipals |
||||||||||||||||
Other securities |
||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
March 31, 2022 | December 31, 2021 | |||||||||||||||
Amortized Cost |
Estimated Fair Value |
Amortized Cost |
Estimated Fair Value |
|||||||||||||
Available-for-sale |
||||||||||||||||
Due in one year or less |
$ | $ | $ | $ | ||||||||||||
Due after one year through five years |
||||||||||||||||
Due after five years through ten years |
||||||||||||||||
Due after ten years |
||||||||||||||||
Residential mortgage backed securities |
||||||||||||||||
Commercial mortgage backed securities |
||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
March 31, 2022 | Less than 12 months | 12 months or more | Total | |||||||||||||||||||||
Description of Securities |
Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses |
||||||||||||||||||
Obligations of U.S. government agencies |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Mortgage backed securities |
||||||||||||||||||||||||
State, County, Municipal |
||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
December 31, 2021 | Less than 12 months | 12 months or more | Total | |||||||||||||||||||||
Description of Securities |
Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses |
||||||||||||||||||
Obligations of U.S. government agencies |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Mortgage backed securities |
||||||||||||||||||||||||
State, County, Municipal |
||||||||||||||||||||||||
Total |
$ | $ | $ | |
$ | |
$ | $ | ||||||||||||||||
March 31, 2022 | December 31, 2021 (1) |
|||||||
Real Estate: |
||||||||
Land Development and Construction |
$ | $ | ||||||
Farmland |
||||||||
1-4 Family Mortgages |
||||||||
Commercial Real Estate |
||||||||
Total Real Estate Loans |
||||||||
Business Loans: |
||||||||
Commercial and Industrial Loans (2) |
||||||||
Farm Production and Other Farm Loans |
||||||||
Total Business Loans |
||||||||
Consumer Loans: |
||||||||
Credit Cards |
||||||||
Other Consumer Loans |
||||||||
Total Consumer Loans |
||||||||
Total Gross Loans |
||||||||
Allowance for Loan Losses |
( |
) | ( |
) | ||||
Loans, net |
$ | $ | ||||||
(1) | Reclassifications from acquired loans to loans held for investment. |
(2) | Includes PPP loans of $ |
March 31, 2022 | December 31, 2021 | |||||||
Real Estate: |
||||||||
Land Development and Construction |
$ | $ | ||||||
Farmland |
||||||||
1-4 Family Mortgages |
||||||||
Commercial Real Estate |
||||||||
Total Real Estate Loans |
||||||||
Business Loans: |
||||||||
Commercial and Industrial Loans |
||||||||
Farm Production and Other Farm Loans |
||||||||
Total Business Loans |
||||||||
Consumer Loans: |
||||||||
Other Consumer Loans |
||||||||
Total Consumer Loans |
||||||||
Total Nonaccrual Loans |
$ | $ | ||||||
Loans 30-89 Days Past Due |
Loans 90 or more Days Past Due |
Total Past Due Loans |
Current Loans |
Total Loans |
Accruing Loans 90 or more Days Past Due |
|||||||||||||||||||
Real Estate: |
||||||||||||||||||||||||
Land Development and Construction |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Farmland |
— | — | ||||||||||||||||||||||
1-4 Family Mortgages |
— | |||||||||||||||||||||||
Commercial Real Estate |
— | |||||||||||||||||||||||
Total Real Estate Loans |
||||||||||||||||||||||||
Business Loans: |
||||||||||||||||||||||||
Commercial and Industrial Loans |
— | |||||||||||||||||||||||
Farm Production and Other Farm Loans |
— | — | ||||||||||||||||||||||
Total Business Loans |
— | |||||||||||||||||||||||
Consumer Loans: |
||||||||||||||||||||||||
Credit Cards |
||||||||||||||||||||||||
Other Consumer Loans |
— | — | ||||||||||||||||||||||
Total Consumer Loans |
||||||||||||||||||||||||
Total Loans |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Loans 30-89 Days Past Due |
Loans 90 or more Days Past Due |
Total Past Due Loans |
Current Loans |
Total Loans |
Accruing Loans 90 or more Days Past Due |
|||||||||||||||||||
Real Estate: |
||||||||||||||||||||||||
Land Development and Construction |
$ | $ | — | $ | $ | $ | $ | — | ||||||||||||||||
Farmland |
— | |||||||||||||||||||||||
1-4 Family Mortgages |
||||||||||||||||||||||||
Commercial Real Estate |
— | |||||||||||||||||||||||
Total Real Estate Loans |
||||||||||||||||||||||||
Business Loans: |
||||||||||||||||||||||||
Commercial and Industrial Loans |
— | |||||||||||||||||||||||
Farm Production and Other Farm Loans |
— | — | ||||||||||||||||||||||
Total Business Loans |
— | |||||||||||||||||||||||
Consumer Loans: |
||||||||||||||||||||||||
Credit Cards |
||||||||||||||||||||||||
Other Consumer Loans |
||||||||||||||||||||||||
Total Consumer Loans |
||||||||||||||||||||||||
Total Loans |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Unpaid Principal Balance |
Recorded Investment With No Allowance |
Recorded Investment With Allowance |
Total Recorded Investment |
Related Allowance |
Average Recorded Investment |
|||||||||||||||||||
Real Estate: |
||||||||||||||||||||||||
Land Development and Construction |
$ | $ | $ | — | $ | $ | — | $ | ||||||||||||||||
Farmland |
— | — | ||||||||||||||||||||||
1-4 Family Mortgages |
— | — | ||||||||||||||||||||||
Commercial Real Estate |
||||||||||||||||||||||||
Total Real Estate Loans |
$ | |||||||||||||||||||||||
Business Loans: |
||||||||||||||||||||||||
Commercial and Industrial Loans |
$ | |||||||||||||||||||||||
Total Business Loans |
$ | |||||||||||||||||||||||
Total Loans |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Unpaid Principal Balance |
Recorded Investment With No Allowance |
Recorded Investment With Allowance |
Total Recorded Investment |
Related Allowance |
Average Recorded Investment |
|||||||||||||||||||
Real Estate: |
||||||||||||||||||||||||
Land Development and Construction |
$ | $ | $ | — | $ | $ | — | $ | ||||||||||||||||
Farmland |
— | — | ||||||||||||||||||||||
1-4 Family Mortgages |
— | — | ||||||||||||||||||||||
Commercial Real Estate |
||||||||||||||||||||||||
Total Real Estate Loans |
$ | |||||||||||||||||||||||
Business Loans: |
||||||||||||||||||||||||
Commercial and Industrial Loans |
$ | |||||||||||||||||||||||
Total Business Loans |
$ | |||||||||||||||||||||||
Total Loans |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Number of Loans |
Recorded Investment |
|||||||
Totals at January 1, 2021 |
$ | |||||||
Reductions due to: |
||||||||
Principal paydowns |
( |
) | ||||||
Reclassification to OREO |
( |
) | ||||||
Totals at December 31, 2021 |
$ | |||||||
Reductions due to: |
||||||||
Principal paydowns |
( |
) | ||||||
Total at March 31, 2022 |
$ | |||||||
Satisfactory 1,2,3,4 |
Special Mention 5,6 |
Substandard 7 |
Doubtful 8 |
Loss 9 |
Total Loans |
|||||||||||||||||||
Real Estate: |
||||||||||||||||||||||||
Land Development and Construction |
$ | $ | $ | $ | — | $ | — | $ | ||||||||||||||||
Farmland |
— | — | ||||||||||||||||||||||
1-4 Family Mortgages |
— | — | ||||||||||||||||||||||
Commercial Real Estate |
— | — | ||||||||||||||||||||||
Total Real Estate Loans |
— | — | ||||||||||||||||||||||
Business Loans: |
||||||||||||||||||||||||
Commercial and Industrial Loans |
— | — | ||||||||||||||||||||||
Farm Production and Other Farm Loans |
— | — | ||||||||||||||||||||||
Total Business Loans |
— | |||||||||||||||||||||||
Consumer Loans: |
||||||||||||||||||||||||
Credit Cards |
— | — | — | |||||||||||||||||||||
Other Consumer Loans |
— | — | ||||||||||||||||||||||
Total Consumer Loans |
— | — | ||||||||||||||||||||||
Total Loans |
$ | $ | $ | $ | — | $ | $ | |||||||||||||||||
Satisfactory 1,2,3,4 |
Special Mention 5,6 |
Substandard 7 |
Doubtful 8 |
Loss 9 |
Total Loans |
|||||||||||||||||||
Real Estate: |
||||||||||||||||||||||||
Land Development and Construction |
$ | $ | $ | $ | — | $ | — | $ | ||||||||||||||||
Farmland |
— | — | ||||||||||||||||||||||
1-4 Family Mortgages |
— | — | ||||||||||||||||||||||
Commercial Real Estate |
— | — | ||||||||||||||||||||||
Total Real Estate Loans |
— | — | ||||||||||||||||||||||
Business Loans: |
||||||||||||||||||||||||
Commercial and Industrial Loans |
— | |||||||||||||||||||||||
Farm Production and Other Farm Loans |
— | — | ||||||||||||||||||||||
Total Business Loans |
— | |||||||||||||||||||||||
Consumer Loans: |
||||||||||||||||||||||||
Credit Cards |
— | — | — | |||||||||||||||||||||
Other Consumer Loans |
||||||||||||||||||||||||
Total Consumer Loans |
||||||||||||||||||||||||
Total Loans |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
March 31, 2022 |
Real Estate |
Business Loans |
Consumer | Total | ||||||||||||
Beginning Balance, January 1, 2022 |
$ | $ | $ | $ | ||||||||||||
Provision for (reversal of) loan losses |
( |
) | ||||||||||||||
Chargeoffs |
||||||||||||||||
Recoveries |
||||||||||||||||
Net (recoveries) chargeoffs |
( |
) | ( |
) | ( |
) | ||||||||||
Ending Balance |
$ | $ | $ | $ | ||||||||||||
Period end allowance allocated to: |
||||||||||||||||
Loans individually evaluated for impairment |
$ | $ | $ | — | $ | |||||||||||
Loans collectively evaluated for impairment |
||||||||||||||||
Ending Balance, March 31, 2022 |
$ | $ | $ | $ | ||||||||||||
March 31, 2021 |
Real Estate |
Business Loans |
Consumer | Total | ||||||||||||
Beginning Balance, January 1, 2021 |
$ | $ | $ | $ | ||||||||||||
Provision for loan losses |
||||||||||||||||
Chargeoffs |
||||||||||||||||
Recoveries |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net (recoveries) chargeoffs |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending Balance |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Period end allowance allocated to: |
||||||||||||||||
Loans individually evaluated for impairment |
$ | $ | $ | — | $ | |||||||||||
Loans collectively evaluated for impairment |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending Balance, March 31, 2021 |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
March 31, 2022 |
Real Estate |
Business Loans |
Consumer | Total | ||||||||||||
Loans individually evaluated for specific impairment |
$ | $ | $ | — | $ | |||||||||||
Loans collectively evaluated for general impairment |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | $ | $ | $ | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
December 31, 2021 |
Real Estate |
Business Loans |
Consumer | Total | ||||||||||||
Loans individually evaluated for specific impairment |
$ | $ | $ | — | $ | |||||||||||
Loans collectively evaluated for general impairment |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | $ | $ | $ | |||||||||||||
|
|
|
|
|
|
|
|
March 31, 2022 |
December 31, 2021 |
|||||||
Core deposit intangible |
$ | $ | ||||||
Accumulated amortization |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total finite-lived intangible assets |
$ | $ | ||||||
|
|
|
|
Year ending December 31, |
Amount |
|||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
|
|
|||
$ | ||||
|
|
March 31, 2022 |
December 31, 2021 |
|||||||
Funded balance |
$ | $ | ||||||
Unfunded balance |
||||||||
|
|
|
|
|||||
Total credit facility |
$ | $ | ||||||
|
|
|
|
Number of Shares Issued |
Common Stock |
Additional Paid-In Capital |
Accumulated Other Comprehensive (Loss) Income |
Retained Earnings |
Total |
|||||||||||||||||||
Balance, January 1, 2022 |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
Dividends paid ($0.24 per share) |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Options exercised |
— | — | — | — | ||||||||||||||||||||
Restricted stock granted |
— | — | — | |||||||||||||||||||||
Stock compensation expense |
— | — | — | — | ||||||||||||||||||||
Other comprehensive loss, net |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Balance, March 31, 2022 |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||||||
Number of Shares Issued |
Common Stock |
Additional Paid-In Capital |
Accumulated Other Comprehensive (Loss) Income |
Retained Earnings |
Total |
|||||||||||||||||||
Balance, January 1, 2021 |
$ | $ | $ | $ | $ | |||||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
Dividends paid ($0.24 per share) |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Options exercised |
— | — | — | — | ||||||||||||||||||||
Restricted stock granted |
— | — | — | |||||||||||||||||||||
Stock compensation expense |
— | — | — | — | ||||||||||||||||||||
Other comprehensive income, net |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Balance, March 31, 2021 |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||||||
Level 1 | Quoted prices (unadjusted) in active markets for identical assets or liabilities; | |
Level 2 | Inputs other than quoted prices in active markets for identical assets and liabilities included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active; or | |
Level 3 | Unobservable inputs for an asset or liability, such as discounted cash flow models or valuations. |
Quoted Prices in Active Markets for Identical Assets |
Significant Other Observable Inputs |
Significant Unobservable Inputs |
||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Totals | |||||||||||||
Securities available for sale |
||||||||||||||||
Obligations of U.S. |
||||||||||||||||
Government Agencies |
$ | — | $ | $ | — | $ | ||||||||||
Mortgage-backed securities |
— | — | ||||||||||||||
State, county and municipal |
— | — | ||||||||||||||
Other securities |
— | |||||||||||||||
Total |
$ | $ | — | $ | ||||||||||||
Quoted Prices in Active Markets for Identical Assets |
Significant Other Observable Inputs |
Significant Unobservable Inputs |
||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Totals | |||||||||||||
Securities available for sale |
||||||||||||||||
Obligations of U.S. |
||||||||||||||||
Government Agencies |
$ | — | $ | $ | — | $ | ||||||||||
Mortgage-backed securities |
— | — | ||||||||||||||
State, county and municipal |
— | — | ||||||||||||||
Other securities |
— | |||||||||||||||
Total |
$ | $ | — | $ | ||||||||||||
Quoted Prices in Active Markets for Identical Assets |
Significant Other Observable Inputs |
Significant Unobservable Inputs |
||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Totals | |||||||||||||
Impaired loans |
$ | — | $ | — | $ | $ | ||||||||||
Other real estate owned |
— | — | ||||||||||||||
Total |
$ | — | $ | — | $ | $ | ||||||||||
Fair Value Measurements Using: | ||||||||||||||||||||
March 31, 2022 | Carrying Value |
Quoted Prices in Active Markets for Identical Assets |
Significant Other Observable Inputs |
Significant Unobservable Inputs |
Total Fair Value |
|||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
Financial assets |
||||||||||||||||||||
Cash and due from banks |
$ | $ | $ | — | $ | — | $ | |||||||||||||
Interest bearing deposits with banks |
— | — | ||||||||||||||||||
Securities available-for-sale |
— | |||||||||||||||||||
Net LHFI |
— | — | ||||||||||||||||||
Financial liabilities |
||||||||||||||||||||
Deposits |
$ | $ | $ | $ | — | $ | ||||||||||||||
Securities sold under agreement to repurchase |
— | — | ||||||||||||||||||
Borrowings on secured line of credit |
— | — |
Fair Value Measurements Using: | ||||||||||||||||||||
December 31, 2021 | Carrying Value |
Quoted Prices in Active Markets for Identical Assets |
Significant Other Observable Inputs |
Significant Unobservable Inputs |
Total Fair Value |
|||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
Financial assets |
||||||||||||||||||||
Cash and due from banks |
$ | $ | $ | — | $ | — | $ | |||||||||||||
Interest bearing deposits with banks |
— | — | ||||||||||||||||||
Securities available-for-sale |
— | |||||||||||||||||||
Net LHFI |
— | — | ||||||||||||||||||
Financial liabilities |
||||||||||||||||||||
Deposits |
$ | $ | $ | $ | — | $ | ||||||||||||||
Securities sold under agreement to repurchase |
— | — | ||||||||||||||||||
Borrowings on secured line of credit |
— | — |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
• | expectations about the movement of interest rates, including actions that may be taken by the Federal Reserve Board in response to changing economic conditions; |
• | adverse changes in asset quality and loan demand, and the potential insufficiency of the allowance for loan losses and our ability to foreclose on delinquent mortgages; |
• | the risk of adverse changes in business conditions in the banking industry generally and in the specific markets in which the Company operates including, but not limited to, the effects of the emergence of widespread health emergencies or pandemics, including the duration of the COVID-19 pandemic and its impact on the Company’s and its customers’ business, results of operations, asset quality and financial condition; |
• | inflationary risks on the general economic, market or business conditions; |
• | extensive regulation, changes in the legislative and regulatory environment that negatively impact the Company and the Bank through increased operating expenses and the potential for regulatory enforcement actions, claims, or litigation; |
• | increased competition from other financial institutions and the risk of failure to achieve our business strategies; |
• | events affecting our business operations, including the effectiveness of our risk management framework, the accuracy of our estimates, our reliance on third party vendors, the risk of security breaches and potential fraud, and the impact of technological advances; |
• | climate change and societal responses to climate change could adversely affect the Company’s business and results of operations, including indirectly through impact to its customers; |
• | our ability to maintain sufficient capital and to raise additional capital when needed; |
• | our ability to maintain adequate liquidity to conduct business and meet our obligations; |
• | events affecting our ability to compete effectively and achieve our strategies, such as the risk of failure to achieve the revenue increases expected to result from our acquisitions, branch additions and in new product and service offerings, our ability to control expenses and our ability to attract and retain skilled people; |
• | events that adversely affect our reputation, and the resulting potential adverse impact on our business operations; |
• | risks arising from owning our common stock, such as the volatility and trading volume, our ability to pay dividends, the regulatory limitations on stock ownership, and provisions in our governing documents that may make it more difficult for another party to obtain control of us; and |
• | other risks detailed from time-to-time |
Actual | Minimum Capital Requirement to be Well Capitalized |
Minimum Capital Requirement to be Adequately Capitalized |
||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
March 31, 2022 |
||||||||||||||||||||||||
Citizens Holding Company |
||||||||||||||||||||||||
Tier 1 leverage ratio |
$ | 104,957 | 7.70 | % | $ | 68,117 | 5.00 | % | $ | 54,493 | 4.00 | % | ||||||||||||
Common Equity tier 1 capital ratio |
104,957 | 12.77 | % | 88,552 | 6.50 | % | 61,305 | 4.50 | % | |||||||||||||||
Tier 1 risk-based capital ratio |
104,957 | 12.77 | % | 65,750 | 8.00 | % | 49,313 | 6.00 | % | |||||||||||||||
Total risk-based capital ratio |
109,733 | 13.35 | % | 82,188 | 10.00 | % | 65,750 | 8.00 | % | |||||||||||||||
The Citizens Bank of Philadelphia |
||||||||||||||||||||||||
Tier 1 leverage ratio |
$ | 122,237 | 8.97 | % | $ | 68,104 | 5.00 | % | $ | 54,484 | 4.00 | % | ||||||||||||
Common Equity tier 1 capital ratio |
122,237 | 8.97 | % | 88,536 | 6.50 | % | 61,294 | 4.50 | % | |||||||||||||||
Tier 1 risk-based capital ratio |
122,237 | 14.88 | % | 65,738 | 8.00 | % | 49,304 | 6.00 | % | |||||||||||||||
Total risk-based capital ratio |
127,013 | 15.46 | % | 82,173 | 10.00 | % | 65,738 | 8.00 | % | |||||||||||||||
December 31, 2021 |
||||||||||||||||||||||||
Citizens Holding Company |
||||||||||||||||||||||||
Tier 1 leverage ratio |
$ | 104,181 | 7.80 | % | $ | 66,789 | 5.00 | % | $ | 53,431 | 4.00 | % | ||||||||||||
Common Equity tier 1 capital ratio |
104,181 | 13.16 | % | 86,826 | 6.50 | % | 60,110 | 4.50 | % | |||||||||||||||
Tier 1 risk-based capital ratio |
104,181 | 13.16 | % | 63,322 | 8.00 | % | 47,492 | 6.00 | % | |||||||||||||||
Total risk-based capital ratio |
108,694 | 13.73 | % | 79,153 | 10.00 | % | 63,322 | 8.00 | % | |||||||||||||||
The Citizens Bank of Philadelphia |
||||||||||||||||||||||||
Tier 1 leverage ratio |
$ | 121,421 | 9.09 | % | $ | 66,776 | 5.00 | % | $ | 53,421 | 4.00 | % | ||||||||||||
Common Equity tier 1 capital ratio |
121,421 | 9.09 | % | 86,808 | 6.50 | % | 60,098 | 4.50 | % | |||||||||||||||
Tier 1 risk-based capital ratio |
121,421 | 15.34 | % | 63,314 | 8.00 | % | 47,486 | 6.00 | % | |||||||||||||||
Total risk-based capital ratio |
125,934 | 15.91 | % | 79,143 | 10.00 | % | 63,314 | 8.00 | % |
• | Create a requirement to maintain a ratio of common equity Tier 1 capital to total risk-weighted assets of not less than 4.5%; |
• | Increase the minimum leverage capital ratio to 4% for all banking organizations (currently 3% for certain banking organizations); |
• | Increase the minimum Tier 1 risk-based capital ratio from 4% to 6%; and |
• | Maintain the minimum total risk-based capital ratio at 8%. |
For the Three Months Ended March 31, |
||||||||
2022 | 2021 | |||||||
Interest Income, including fees |
$ | 9,054 | $ | 9,079 | ||||
Interest Expense |
767 | 1,446 | ||||||
|
|
|
|
|||||
Net Interest Income |
8,287 | 7,633 | ||||||
Provision for loan losses |
93 | 87 | ||||||
|
|
|
|
|||||
Net Interest Income after |
||||||||
Provision for loan losses |
8,194 | 7,546 | ||||||
Other Income |
2,533 | 3,232 | ||||||
Other Expense |
8,301 | 8,468 | ||||||
|
|
|
|
|||||
Income Before Provision For |
||||||||
Income Taxes |
2,426 | 2,310 | ||||||
Provision for Income Taxes |
390 | 413 | ||||||
|
|
|
|
|||||
Net Income |
$ | 2,036 | $ | 1,897 | ||||
|
|
|
|
|||||
Net Income Per share - Basic |
$ | 0.36 | $ | 0.34 | ||||
|
|
|
|
|||||
Net Income Per Share-Diluted |
$ | 0.36 | $ | 0.34 | ||||
|
|
|
|
Three Months Ended March 31, | ||||||||||||||||||||||||
Average Balance | Income/Expense | Average Yield/Rate | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Loans: |
||||||||||||||||||||||||
Loans, net of unearned (1) |
$ | 578,127 | $ | 652,783 | $ | 6,426 | $ | 8,173 | 4.45 | % | 5.01 | % | ||||||||||||
Investment Securities |
||||||||||||||||||||||||
Taxable |
462,140 | 545,923 | 1,698 | 262 | 1.47 | % | 0.19 | % | ||||||||||||||||
Tax-exempt |
210,915 | 128,612 | 1,183 | 899 | 2.24 | % | 2.80 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Investment Securities |
673,055 | 674,535 | 2,881 | 1,161 | 1.71 | % | 0.69 | % | ||||||||||||||||
Federal Funds Sold and Other |
32,790 | 51,206 | 13 | 15 | 0.16 | % | 0.12 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Interest Earning Assets (1)(2) |
1,283,972 | 1,378,524 | 9,320 | 9,349 | 2.90 | % | 2.71 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Non-Earning Assets |
68,737 | 112,146 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total Assets |
$ | 1,352,709 | $ | 1,490,670 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Deposits: |
||||||||||||||||||||||||
Interest-bearing Demand Deposits (3) |
$ | 477,248 | $ | 513,117 | $ | 188 | $ | 518 | 0.16 | % | 0.40 | % | ||||||||||||
Savings |
129,694 | 107,314 | 31 | 27 | 0.10 | % | 0.10 | % | ||||||||||||||||
Time |
219,785 | 242,861 | 337 | 721 | 0.61 | % | 1.19 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Deposits |
826,727 | 863,292 | 556 | 1,266 | 0.27 | % | 0.15 | % | ||||||||||||||||
Borrowed Funds |
||||||||||||||||||||||||
Short-term Borrowings |
99,221 | 212,849 | 60 | 180 | 0.24 | % | 0.34 | % | ||||||||||||||||
Long-term Borrowings |
18,000 | — | 151 | — | 3.36 | % | 0.00 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Borrowed Funds |
117,221 | 212,849 | 211 | 180 | 0.72 | % | 0.34 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Interest-Bearing Liabilities (3) |
943,948 | 1,076,141 | 767 | 1,446 | 0.33 | % | 0.54 | % | ||||||||||||||||
Non-Interest Bearing Liabilities |
||||||||||||||||||||||||
Demand Deposits |
300,428 | 269,051 | ||||||||||||||||||||||
Other Liabilities |
12,871 | 27,866 | ||||||||||||||||||||||
Shareholders’ Equity |
95,462 | 117,612 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total Liabilities and Shareholders’ Equity |
$ | 1,352,709 | $ | 1,490,670 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Interest Rate Spread |
2.58 | % | 2.18 | % | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net Interest Margin |
$ | 8,553 | $ | 7,903 | 2.69 | % | 2.32 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Less |
||||||||||||||||||||||||
Tax Equivalent Adjustment |
266 | 270 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net Interest Income |
$ | 8,287 | $ | 7,633 | ||||||||||||||||||||
|
|
|
|
(1) | Overdrafts, while not considered an earning asset, are included in Loans, net of unearned in the average volume calculation due to the immaterial impact on the yield. |
(2) | Earnings Assets in the table above does include the dividend paying stock of the Federal Home Loan Bank. |
(3) | Demand deposits are not included in the average volume calculation as they are not interest bearing liabilities. They are included within the non-interest bearing liabilities section above. |
TABLE 2 - VOLUME/RATE ANALYSIS |
||||||||||||
(in thousands) | ||||||||||||
Three Months Ended March 31, 2022 | ||||||||||||
2022 Change from 2021 | ||||||||||||
Volume | Rate | Total | ||||||||||
INTEREST INCOME |
||||||||||||
Loans |
$ | (935 | ) | (812 | ) | $ | (1,747 | ) | ||||
Taxable Securities |
(40 | ) | 1,476 | 1,436 | ||||||||
Non-Taxable Securities |
579 | (291 | ) | 288 | ||||||||
Federal Funds Sold and Other |
(5 | ) | 3 | (2 | ) | |||||||
|
|
|
|
|
|
|||||||
TOTAL INTEREST INCOME |
$ | (401 | ) | $ | 376 | $ | (25 | ) | ||||
|
|
|
|
|
|
|||||||
INTEREST EXPENSE |
||||||||||||
Interest-bearing demand deposits |
$ | (36 | ) | (294 | ) | (330 | ) | |||||
Savings Deposits |
6 | (2 | ) | 4 | ||||||||
Time Deposits |
(69 | ) | (315 | ) | (384 | ) | ||||||
Short-term borrowings |
(96 | ) | (24 | ) | (120 | ) | ||||||
Long-term borrowings |
— | 151 | 151 | |||||||||
|
|
|
|
|
|
|||||||
TOTAL INTEREST EXPENSE |
$ | (195 | ) | $ | (484 | ) | (679 | ) | ||||
|
|
|
|
|
|
|||||||
NET INTEREST INCOME |
$ | (206 | ) | $ | 860 | $ | 654 | |||||
|
|
|
|
|
|
Quarter Ended March 31, 2022 |
Year Ended December 31, 2021 |
Amount of Increase (Decrease) |
Percent of Increase (Decrease) |
|||||||||||||
BALANCES: |
||||||||||||||||
Gross Loans |
$ | 583,194 | $ | 571,847 | $ | 11,347 | 1.98 | % | ||||||||
Allowance for Loan Losses |
4,776 | 4,513 | 263 | 5.83 | % | |||||||||||
Nonaccrual Loans |
3,545 | 3,826 | (281 | ) | -7.34 | % | ||||||||||
Ratios: |
||||||||||||||||
Allowance for loan losses to gross loans |
0.82 | % | 0.79 | % | ||||||||||||
Net loans (recovered) charged off to allowance for loan losses |
-3.56 | % | 20.56 | % |
For the Three Months Ended March 31, |
||||||||
Other operating income |
2022 | 2021 | ||||||
BOLI Income |
$ | 121 | $ | 130 | ||||
Mortgage Loan Origination Income |
204 | 395 | ||||||
Gain on sale of OREO |
65 | 323 | ||||||
Other Income |
173 | 69 | ||||||
|
|
|
|
|||||
Total Other Income |
$ | 563 | $ | 917 | ||||
|
|
|
|
For the Three Months Ended March 31, |
||||||||
Other Expense |
2022 | 2021 | ||||||
Advertising |
$ | 131 | $ | 141 | ||||
Office Supplies |
209 | 249 | ||||||
Professional Fees |
219 | 237 | ||||||
Technology expense |
116 | 155 | ||||||
Postage and Freight |
138 | 169 | ||||||
Loan Collection Expense |
7 | 54 | ||||||
Regulatory and related expense |
204 | 235 | ||||||
Debit Card/ATM expense |
188 | 168 | ||||||
Travel and Convention |
52 | 26 | ||||||
Other expenses |
823 | 649 | ||||||
|
|
|
|
|||||
Total Other Expense |
$ | 2,087 | $ | 2,083 | ||||
|
|
|
|
March 31, 2022 |
December 31, 2021 |
Amount of Increase (Decrease) |
Percent of Increase (Decrease) |
|||||||||||||
Cash and due from banks |
$ | 13,228 | $ | 10,673 | $ | 2,555 | 23.94 | % | ||||||||
Interest bearing deposits with other banks |
59,217 | 68,563 | (9,346 | ) | -13.63 | % | ||||||||||
Investment securities |
600,766 | 631,835 | (31,069 | ) | -4.92 | % | ||||||||||
Net LHFI |
578,418 | 567,334 | 11,084 | 1.95 | % | |||||||||||
Premises and equipment |
26,630 | 26,661 | (31 | ) | -0.12 | % | ||||||||||
Total assets |
1,348,692 | 1,361,309 | (12,617 | ) | -0.93 | % | ||||||||||
Total deposits |
1,149,580 | 1,111,892 | 37,688 | 3.39 | % | |||||||||||
Total shareholders’ equity |
62,950 | 105,900 | (42,950 | ) | -40.56 | % |
March 31, 2022 |
December 31, 2021 |
Amount of Increase (Decrease) |
Percent of Increase (Decrease) |
|||||||||||||
Noninterest-Bearing Deposits |
$ | 305,674 | $ | 302,707 | $ | 2,967 | 0.98 | % | ||||||||
Interest-Bearing Deposits |
503,497 | 451,809 | 51,688 | 11.44 | % | |||||||||||
Savings Deposits |
135,392 | 127,217 | 8,175 | 6.43 | % | |||||||||||
Certificates of Deposit |
205,017 | 230,159 | (25,142 | ) | -10.92 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total deposits |
$ | 1,149,580 | $ | 1,111,892 | $ | 37,688 | 3.39 | % | ||||||||
|
|
|
|
|
|
|
|
March 31, 2022 | December 31, 2021 | |||||||||||||||
Following 12 months |
Months 13-24 |
Following 12 months |
Months 13-24 |
|||||||||||||
+400 basis points |
-2.9 | % | 6.1 | % | -3.7 | % | 6.6 | % | ||||||||
+300 basis points |
-0.9 | % | 5.9 | % | -1.3 | % | 6.9 | % | ||||||||
+200 basis points |
0.9 | % | 5.5 | % | -0.1 | % | 5.8 | % | ||||||||
+100 basis points |
1.6 | % | 3.9 | % | -0.8 | % | 2.6 | % | ||||||||
Flat rates |
— | — | — | — | ||||||||||||
-100 basis points |
-1.3 | % | -3.1 | % | -5.5 | % | -7.7 | % | ||||||||
-200 basis points |
-3.6 | % | -6.2 | % | -10.9 | % | -13.6 | % |
Economic Value of Equity at Risk (%) | ||||||||
March 31, 2022 | December 31, 2021 | |||||||
+400 basis points |
-21.8 | % | -20.4 | % | ||||
+300 basis points |
-15.7 | % | -13.8 | % | ||||
+200 basis points |
-9.8 | % | -7.8 | % | ||||
+100 basis points |
-4.6 | % | -3.1 | % | ||||
Flat rates |
— | — | ||||||
-100 basis points |
-3.0 | % | -13.0 | % | ||||
-200 basis points |
-14.7 | % | -33.1 | % |
ITEM 1. | LEGAL PROCEEDINGS. |
ITEM 1A. | RISK FACTORS. |
ITEM 6. | EXHIBITS. |
Exhibits | ||
10(1) | Citizens Holding Company Revolving Credit Loan Agreement(1) | |
31(a) | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). | |
31(b) | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). | |
32(a) | Certification of the Chief Executive Officer pursuant to 18 U.S.C. § 1350. | |
32(b) | Certification of the Chief Financial Officer pursuant to 18 U.S.C. § 1350. | |
101 | Financial Statements submitted in Inline XBRL format. | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
(1) |
Filed as exhibit 10(1) to the Current Report on Form 8-K of the Company filed with the SEC on June 14, 2021 and incorporated herein by reference. |
CITIZENS HOLDING COMPANY | ||
BY: | /s/ Greg L. McKee | |
Greg L. McKee | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
BY: | /s/ Phillip R. Branch | |
Phillip R. Branch | ||
Treasurer and Chief Financial Officer | ||
(Principal Financial Officer and Chief Accounting Officer) | ||
DATE: May 6, 2022 |